What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?

1. Law
2. CFR 12
3. Banks and Banking
4. National Credit Union Administration
5. Regulations Affecting Credit Unions
6. Leasing
7. What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?

§ 714.5 What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?

If the amount of the estimated residual value you rely upon to satisfy the full payout lease requirement of § 714.4(b) exceeds 25% of the original cost of the leased property, a financially capable party must guarantee the excess. The guarantor may be the manufacturer. The guarantor may also be an insurance company with an A.M. Best rating of at least a B + , or with at least the equivalent of an A.M. Best B + rating from another major rating company. You must obtain or have on file financial documentation demonstrating that the guarantor has the resources to meet the guarantee.

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