Wis. Admin. Code Department of Financial Institutions DFI-CU 71.02

Current through November 25, 2024

Section DFI-CU 71.02 - Definitions

In this chapter:

(1) "Full-payout lease" means a lease from which the lessor can reasonably expect to realize a return of its full investment in the leased property plus the estimated cost of financing the property over the term of the lease from:

(a) Rentals;

(b) Estimated tax benefits if applicable; and

(c) The estimated residual value of the property at the expiration of the initial term of the lease, provided any unguaranteed portion of the estimated residual value relied upon by the credit union to yield a full return under this subsection does not exceed 25% of the original cost of the property to the lessor.

(2) "Net lease" means a lease under which the credit union will not, directly or indirectly, provide or be obligated to provide for any of the following:

(a) The servicing, repair or maintenance of the leased property during the lease term;

(b) The purchasing of parts and accessories for the leased property. However, improvements and additions to the leased property may be leased to the lessee upon its request in accordance with the full-payout requirements of this chapter;

(c) The loan of replacement or substitute property while the leased property is being serviced;

(d) The purchasing of insurance for the lessee, except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; or

(e) The renewal of any license or registration for the property unless the renewal by the credit union is clearly necessary to protect its interest as an owner or financier of the property.

Wis. Admin. Code Department of Financial Institutions DFI-CU 71.02

CR Register, January, 1992, No. 433, eff. 2-1-92.