Wis. Admin. Code Department of Financial Institutions DFI-CU 71.06
Leases permissible under this chapter are subject to the limitation on obligations under s. 186.098(5), Stats., and Part 701.21 (h), CFR.
Wis. Admin. Code Department of Financial Institutions DFI-CU 71.06
In operating under this chapter it is anticipated that credit unions will estimate the total cost of financing the property over the term of the lease to reflect, among other factors, the term of the lease, the modes of financing available to the lessor, the credit rating of each lessor and lessee involved in the transaction and prevailing rates in the money and capital markets. Where the calculation of the cost of financing according to this formula is not reasonably determinable, a lease may be considered to have met the test for recovering the cost financing if the credit union's yield from the lease is equivalent to what the yield would be on a similar loan. In all cases, both the estimated residual value of the property and that portion of the estimated residual value relied upon by the lessor to satisfy the requirements of a full-payout lease must be reasonable in light of the nature of the leased property and all relevant circumstances so that realization of the lessor's full investment plus the cost of financing the property primarily depends on the creditworthiness of the lessee and any guarantor of the residual value, and not on the residual market value of the leased item.