N.D. Admin. Code 13-03-19-02
For purposes of this rule, the following definitions will apply:
1. "Closed-end lease" means the credit union assumes the risk and responsibility for any difference in the estimated residual value and the actual value of the property at lease end. However, the member is responsible for any excess wear and tear and excess mileage charges as established under the lease.
2. "Direct lease" means the credit union purchases personal property from a vendor, becoming the owner of the property at the request of a member of the credit union and then leases the property to that member
3. "Full payout lease" means a lease in which the lessor's service is limited to the financing of the asset, with the lessee paying all other costs, including maintenance and taxes, and has the option of purchasing the asset at the end of the lease for a nominal price. The lease shall be fully amortized over the term of the lease or lifetime of the asset, whichever is less.
4. "Inception of the lease" means the date of the lease agreement or commitment, if earlier, or the date the lease is purchased by the credit union. For purposes of this definition, a commitment shall be in writing, signed by the parties in interest to the transaction, and shall specifically set forth the principal terms of the transaction.
5. "Independent third-party appraiser" means an individual not involved with the lease transaction, except as the appraiser, with no direct or indirect interest, financial or otherwise, in the property appraised or the parties involved with the transaction. The credit union shall take appropriate steps to ensure the appraiser exercises independent judgment and that the appraisal is adequate.
6. "Indirect lease" means a third party leases property to a member of the credit union and the credit union then purchases the lease from the third party for the purposes of leasing the property to the member.
7. "Lease servicer" means the entity that collects monthly principal and interest payments from the lessee and then forwards the payments to the purchasing credit union or maintains lease records for a fee.
8. "Leasing company" means the enterprise that makes leases or assembles leases for resale to a credit union.
9. "Lessee" means the party using the leased property.
10. "Lessor" means the party owning the leased property.
11. "Open-end lease" means the member of the credit union assumes the risk and responsibility for any difference in the estimated residual value and the actual value of the property at lease end.
12. "Residual value" means the estimated fair value of the leased property at the end of the lease term.
N.D. Admin Code 13-03-19-02
General Authority: NDCC 6-01-04
Law Implemented: NDCC 6-06-06