South Carolina Code of Regulations
Chapter 15 - STATE BOARD OF FINANCIAL INSTITUTIONS CONSUMER FINANCE DIVISION
Article 2 - COOPERATIVE CREDIT UNIONS
Section 15-49 - Leasing of Personal Property by State-chartered Credit Union

Universal Citation: SC Code Regs 15-49

Current through Register Vol. 48, No. 9, September 27, 2024

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.

Statutory Authority: 1976 Code Section 34-1-60

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