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Truth in Lending: 15 U.S.C. § 1667d. Civil liability of lessors

(a) Grounds for maintenance of action

Any lessor who fails to comply with any requirement imposed under section 1667a or 1667b of this title with respect to any person is liable to such person as provided in section 1640 of this title.

(b) Additional grounds for maintenance of action; “creditor” defined

Truth in Lending: 15 U.S.C. § 1667e. Applicability of State laws; exemptions by Bureau from leasing requirements

(a) This part does not annul, alter, or affect, or exempt any person subject to the provisions of this part from complying with, the laws of any State with respect to consumer leases, except to the extent that those laws are inconsistent with any provision of this part, and then only to the extent of the inconsistency. The Bureau is authorized to determine whether such inconsistencies exist.

Truth in Lending: 15 U.S.C. § 1667f. Regulations.

(a) Regulations authorized.—

(1) In general

The Bureau shall prescribe regulations to update and clarify the requirements and definitions applicable to lease disclosures and contracts, and any other issues specifically related to consumer leasing, to the extent that the Bureau determines such action to be necessary—

(A) to carry out this part;

Truth in Lending: Correlation Table Between FRB and CFPB Versions

The Consumer Financial Protection Bureau version of Regulation M, 12 C.F.R. pt. 1013, as amended through 72 Fed. Reg. 63,461 (Nov. 1, 2012). The table below show the corresponding Federal Reserve Board numbers. The online companion material to this treatise contains other Regulation M material.

CFPB numbering FRB numbering

Sec.

Truth in Lending: Section 1013.1 Authority, scope, purpose, and enforcement. [213.1]

(a) Authority. The regulation in this part, known as Regulation M, is issued by the Bureau of Consumer Financial Protection to implement the consumer leasing provisions of the Truth in Lending Act, which is Title I of the Consumer Credit Protection Act, as amended (15 U.S.C. 1601 et seq.). Information collection requirements contained in this part have been approved by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned OMB control number 3170–0006.

Truth in Lending: Section 1013.2 Definitions. [213.2]

For the purposes of this part the following definitions apply:

(a) Act means the Truth in Lending Act (15 U.S.C. 1601 et seq.) and the Consumer Leasing Act is Chapter 5 of the Truth in Lending Act.

(b) Advertisement means a commercial message in any medium that directly or indirectly promotes a consumer lease transaction.

(c) Bureau refers to the Bureau of Consumer Financial Protection.

Truth in Lending: Section 1013.3 General disclosure requirements. [213.3]

(a) General requirements. A lessor shall make the disclosures required by § 1013.4, as applicable. The disclosures shall be made clearly and conspicuously in writing in a form the consumer may keep, in accordance with this section. The disclosures required by this part may be provided to the lessee in electronic form, subject to compliance with the consumer consent and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. 7001 et seq.).

Truth in Lending: Section 1013.6 [Reserved] [213.6]

[66 Fed. Reg. 17,338 (Mar. 30, 2001) COMPLIANCE DATE NOTE: At 66 Fed. Reg. 41,440 (Aug. 8, 2001) the Oct. 1, 2001, mandatory compliance date for the interim final rules published at 66 Fed. Reg. 17,311 (Mar. 30, 2001) was lifted; 72 Fed. Reg. 63,461 (Nov. 9, 2007); 76 Fed. Reg. 44,242 (July 22, 2011); 76 Fed. Reg. 78,502 (Dec. 19, 2011)]

Truth in Lending: Section 1013.7 Advertising. [213.7]

(a) General rule. An advertisement for a consumer lease may state that a specific lease of property at specific amounts or terms is available only if the lessor usually and customarily leases or will lease the property at those amounts or terms.

(b) Clear and conspicuous standard. Disclosures required by this section shall be made clearly and conspicuously.

Truth in Lending: Section 1013.8 Record retention. [213.8]

A lessor shall retain evidence of compliance with the requirements imposed by this part, other than the advertising requirements under § 1013.7, for a period of not less than two years after the date the disclosures are required to be made or an action is required to be taken.

[76 Fed. Reg. 44,242 (July 22, 2011); 76 Fed. Reg. 78,502 (Dec. 19, 2011)]

Truth in Lending: Section 1013.9 Relation to state laws. [213.9]

(a) Inconsistent state law. A state law that is inconsistent with the requirements of the Act and this part is preempted to the extent of the inconsistency. If a lessor cannot comply with a state law without violating a provision of this part, the state law is inconsistent within the meaning of section 186(a) of the Act and is preempted, unless the state law gives greater protection and benefit to the consumer.

Truth in Lending: Appendix C to Part 1013 [Part 213] Issuance of Official Interpretations

Interpretations of this part issued by officials of the Bureau provide the formal protection afforded under section 130(f) of the Act. Except in unusual circumstances, interpretations will not be issued separately but will be incorporated in an official commentary to Regulation M (Supplement I of this part), which will be amended periodically. No official interpretations will be issued approving a lessor’s forms, statements, or calculation tools or methods.

[76 Fed. Reg. 44,242 (July 22, 2011); 76 Fed. Reg. 78,502 (Dec. 19, 2011)]

Truth in Lending: Regulatory History

The Consumer Financial Protection Bureau (CFPB) Official Interpretations on Regulation M, as amended by: 62 Fed. Reg. 16,058 (Apr. 4, 1997); 63 Fed. Reg. 52,115 (Sept. 29, 1998); 64 Fed. Reg. 16,613, 16,614 (Apr. 6, 1999); 66 Fed. Reg. 17,328 Mar. 30, 2001); 66 Fed. Reg. 41,440 (Aug. 8, 2001); 72 Fed. Reg. 63,461 (Nov. 9, 2007); 76 Fed. Reg. 18353 (Apr. 4, 2011); 76 Fed. Reg. 35,721 (June 20, 2011); 76 Fed. Reg. 44,242 (July 22, 2011); 76 Fed. Reg. 78,502 (Dec. 19, 2011); 76 Fed. Reg. 81,790 (Dec. 29, 2011); 77 Fed. Reg. 69,736 (Nov. 21, 2012); 78 Fed. Reg. 70,194 (Nov. 25, 2013); 79 Fed.

Truth in Lending: Introduction

INTRODUCTION

1. Official status. The commentary in Supplement I is the vehicle by which the Bureau of Consumer Financial Protection issues official interpretations of Regulation M (12 CFR part 1013). Good faith compliance with this commentary affords protection from liability under section 130(f) of the Truth in Lending Act (15 U.S.C. 1640(f)). Section 130(f) protects lessors from civil liability for any act done or omitted in good faith in conformity with any interpretation issued by the Bureau.

Truth in Lending: Section 1013.1 Authority, Scope, Purpose, and Enforcement [213.1]

1. Foreign applicability. Regulation M applies to all persons (including branches of foreign banks or leasing companies located in the United States) that offer consumer leases to residents of any state (including foreign nationals) as defined in § 1013.2(p), except persons excluded from coverage of this part by section 1029 of the Consumer Financial Protection Act of 2010, title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub.L. 111-203, 124 Stat. 1376. The regulation does not apply to a foreign branch of a U.S.

Truth in Lending: 2(b) Advertisement

1. Coverage. The term advertisement includes messages inviting, offering, or otherwise generally announcing to prospective customers the availability of consumer leases, whether in visual, oral, print or electronic media. Examples include:

i. Messages in newspapers, magazines, leaflets, catalogs, and fliers.

ii. Messages on radio, television, and public address systems.

iii. Direct mail literature.

Truth in Lending: 2(d) Closed-End Lease

1. General. In closed-end leases, sometimes referred to as “walk-away” leases, the lessee is not responsible for the residual value of the leased property at the end of the lease term.

Truth in Lending: 2(e) Consumer Lease

1. Primary purposes. A lessor must determine in each case if the leased property will be used primarily for personal, family, or household purposes. If a question exists as to the primary purpose for a lease, the fact that a lessor gives disclosures is not controlling on the question of whether the transaction is covered. The primary purpose of a lease is determined before or at consummation and a lessor need not provide Regulation M disclosures where there is a subsequent change in the primary use.

Truth in Lending: 2(h) Lessor

1. Arranger of a lease. To “arrange” for the lease of personal property means to provide or offer to provide a lease that is or will be extended by another person under a business or other relationship pursuant to which the person arranging the lease (a) receives or will receive a fee, compensation, or other consideration for the service or (b) has knowledge of the lease terms and participates in the preparation of the contract documents required in connection with the lease. To illustrate: