Section 13-03-19-04 - Lease policy requiredThe board of directors of the credit union will formulate and maintain a written lease policy. At a minimum, the lease policy should address the following:
1. Identify acceptable lease servicers and lessors, for purchased leases only. 2. Establish aggregate volume of paper to be purchased from approved servicers and lessors, for purchased leases only. 3. Identify the geographic area where the credit union will consider purchasing or originating leases. 4. Establish lease portfolio diversification standards. 5. Set appropriate terms and conditions by type of leases. 6. Establish lease approval and origination procedures. 7. Establish prudent underwriting standards. 8. Establish lease administration procedures. 9. Establish appraisal and evaluation programs. 10. Monitor the lease portfolio and provide timely reports to the board of directors. 11. Set forth permitted exceptions to policy. 12. Require an independent credit analysis of the lessee. 13. Require the credit union to obtain collateral values, lien status, lease agreements, participation agreements, and title documentation within forty-five calendar days from the date of inception with original documentation to be maintained in the credit file. 14. Require a credit union officer or an independent third-party appraiser to conduct at inception, and annually thereafter, an inspection of the leased tangible property for all leases greater than one hundred thousand dollars and to document the credit file with the inspection report. 15. Require rental payments to be made on a periodic basis no less frequently than annually. 16. Require the term of the lease not to exceed seven years. 17. Require an annual analysis of the financial condition of the leasing company or lease servicer. This will include the review of an annual opinion audit by a certified public accountant. N.D. Admin Code 13-03-19-04
Effective January 1, 2007.General Authority: NDCC 6-01-04
Law Implemented: NDCC 6-06-06