This is the preview version of the Wisconsin State Legislature site.
Please see http://docs.legis.wisconsin.gov for the production version.
Register February 2004 No. 578
Chapter DFI-CU 71
LEASING OF PERSONAL PROPERTY
DFI-CU 71.01   Purpose and scope.
DFI-CU 71.02   Definitions.
DFI-CU 71.03   Authority to lease personal property.
DFI-CU 71.04   Recovery in the event of default.
DFI-CU 71.05   Application of other laws.
DFI-CU 71.06   Limitation on leasing concentrations.
Ch. DFI-CU 71 Note Note: Chapter CU 71 was renumbered chapter DFI-CU 71 under s. 13.93 (2m) (b) 1., Stats., and corrections made under s. 13.93 (2m) (b) 7., Stats., Register, October, 1997, No. 502.
DFI-CU 71.01 DFI-CU 71.01Purpose and scope. The purpose of this chapter is to permit Wisconsin-chartered credit unions to engage in the financing of leased personal property for members.
DFI-CU 71.01 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92.
DFI-CU 71.02 DFI-CU 71.02Definitions. In this chapter:
DFI-CU 71.02(1) (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:
DFI-CU 71.02(1)(a) (a) Rentals;
DFI-CU 71.02(1)(b) (b) Estimated tax benefits if applicable; and
DFI-CU 71.02(1)(c) (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.
DFI-CU 71.02(2) (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:
DFI-CU 71.02(2)(a) (a) The servicing, repair or maintenance of the leased property during the lease term;
DFI-CU 71.02(2)(b) (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;
DFI-CU 71.02(2)(c) (c) The loan of replacement or substitute property while the leased property is being serviced;
DFI-CU 71.02(2)(d) (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
DFI-CU 71.02(2)(e) (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.
DFI-CU 71.02 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92.
DFI-CU 71.03 DFI-CU 71.03Authority to lease personal property. Subject to the limitations in this chapter and provided the lease is a net, full-payout lease representing a noncancelable obligation of the lessee, notwithstanding the possible early termination of that lease, a credit union may:
DFI-CU 71.03(1)(a)(a) Become the legal or beneficial owner and lessor of specific personal property or otherwise acquire such property at the request of the lessee who wishes to lease it from the credit union; or
DFI-CU 71.03(1)(b) (b) Become the owner and lessor of personal property by purchasing the property from another lessor in connection with its purchase of the related lease; and
DFI-CU 71.03(2) (2) Incur obligations incidental to its position as the legal or beneficial owner and lessor of the leased property.
DFI-CU 71.03 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92.
DFI-CU 71.04 DFI-CU 71.04Recovery in the event of default. If, in good faith, a credit union determines that there has been an unanticipated change in conditions which threatens its financial position by significantly increasing its exposure to loss, the credit union may:
DFI-CU 71.04(1) (1) As the owner and lessor under a net, full-payout, lease, take reasonable and appropriate action to salvage or protect the value of the property or its interests arising under the lease, or
DFI-CU 71.04(2) (2) As the assignee of a lessor's interest in a lease, become the owner and lessor of the leased property pursuant to its contractual right, or take any reasonable and appropriate action to salvage or protect the value of the property or its interests arising under the lease.
DFI-CU 71.04 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92.
DFI-CU 71.05 DFI-CU 71.05Application of other laws. Nothing in this chapter shall be construed to be in conflict with the duties, liabilities and standards imposed by the Consumer Leasing Act of 1976, 15 USC 1667 et. seq. or the Wisconsin Consumer Act, chs. 421 to 427, Stats.
DFI-CU 71.05 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92.
DFI-CU 71.06 DFI-CU 71.06Limitation on leasing concentrations. Leases permissible under this chapter are subject to the limitation on obligations under s. 186.098 (5), Stats., and Part 701.21 (h), CFR.
DFI-CU 71.06 Note Note: 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.
DFI-CU 71.06 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92.
Loading...
Loading...
Published under s. 35.93, Stats. Updated on the first day of each month. Entire code is always current. The Register date on each page is the date the chapter was last published.