S.C. Code Regs. § § 15-49

Current through Register Vol. 48, No. 11, November 22, 2024

Section 15-49 - Leasing of Personal Property by State-chartered Credit Union

State-chartered credit unions may engage in the leasing of personal property as follows:

(a) A state-chartered credit union may:

(1) Become the legal 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. A credit union cannot own an inventory of personal property for future lease.

(2) Incur obligations incidental to its position as the legal owner and lessor of the leased property if the lease is a net, full-payout lease representing a noncancelable obligation of the lessee, notwithstanding the possible early termination of that lease.

(b) A "net lease" is a lease under which the credit union will not, directly or indirectly, provide or be obligated to provide for:

(1) The servicing, repair or maintenance of the leased property during the lease term.

(2) The purchasing of parts and accessories for the leased property.

(3) The loan of replacement or substitute property when the leased property is being serviced.

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

(c) A "full-payout" lease is one 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 rentals and the estimated residual value of the property at the expiration of the initial term of the lease.

S.C. Code Regs. § 15-49

Added by State Register Volume 7, Issue No. 4, eff March 25, 1983.

Statutory Authority: 1976 Code Section 34-1-60