California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 3 - Commercial Financing Disclosures › Section 915 - Lease Financing Disclosure Formatting and Contents

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Disclosures for lease financing provided
				in accordance with section
				22802 of the code shall comply
				with the following requirements.
(1) The
				provider shall present the disclosures in a table consisting of eight rows and
				three columns.
(2) The first row of
				the table shall include only the following information:
(A) In the first column: "Funding
				Provided".
(B) In the second
				column, the amount financed.
(C) In
				the third column: "This is how much funding [name of financer] will
				provide."
(3) The second
				row of the table shall include only the following information:
(A) In first column: "Annual Percentage Rate
				(APR)".
(B) In second column, the
				annual percentage rate calculated in accordance with section
				940.
(C) In the third column:
"APR is the cost of your financing expressed as a yearly
				  rate. APR incorporates the amount and timing of the funding you receive, fees
				  you pay, the periodic payments you make, and the anticipated cost for you to
				  acquire the property at the end of the lease term.
Your APR is not an interest rate."
(4) The third row of the table shall include
				only the following information:
(A) In first
				column: "Finance Charge".
(B) In
				second column, the total finance charge, calculated in accordance with section
				943.
(C) In the third column, the provider's
				calculation of the finance charge, with the amount and description of each
				expense included in the finance charge.
(5) The fourth row of the table shall include
				only the following information:
(A) In the
				first column: "Total Payment Amount".
(B) In the second column, the total dollar
				amount of payments the recipient will make during the term of the contract if
				the recipient makes minimum required payments and exercises the purchase option
				under the agreement.
(C) In the
				third column: "This is the total dollar amount of payments you will make during
				the term of the contract (including the cost of the purchase
				option)."
(6) The fifth
				row of the table shall include only the following information:
(A) In the first column: "Payment".
(B) If periodic payments during the term of
				the transaction will not vary:
(i) In the
				second column, the amount of each periodic payment followed by a forward slash
				(/) and the frequency of each periodic payment (e.g., month, day, or other
				period), followed by the date and amount of any irregular payments listed in
				chronological order, followed by the price of the purchase option.
(ii) In the third column, a short explanation
				of the payment and purchase option. For example: "This is how much you will pay
				each month, the $300 maintenance fee due 12 months after you receive funding,
				and the purchase price you may pay at the end of the lease to acquire the
				property." The provider may also include a short explanation describing when
				each payment will become due. For example: "Your monthly payments are due on
				the 1st day of every month."
(C) If periodic payments during the term of
				the transaction vary, the second and third column in the fourth row shall be
				combined and the provider shall list the periodic payment amounts and when each
				amount will become due, followed by the date and amount of any irregular
				payments listed in chronological order, followed by the price of the purchase
				option. For example:
Months 1-12: $600/month
Months 13-24: $1200/month
Maintenance Fee Due 2/1/2021: $500.
Maintenance Fee Due 8/1/2022: $300.
Purchase Price: $1000.
Or
Payments 1-23: $600/month
Payment 24: $2000.
Maintenance Fee Due 2/1/2021: $500.
Maintenance Fee Due 8/1/2022: $300.
Purchase Price: $1000.
(7) The sixth row of the table shall include
				no information in the third column, and the remaining columns shall include
				only the following information:
(A) In first
				column: "Term".
(B) In second
				column, the term of the transaction.
(8) In the first column, the seventh and
				eighth rows shall be combined and shall include the following language:
				"Prepayment".
(9) In the seventh
				row, the second and third columns shall be combined and include only:
(A) If, at any time during the term of the
				transaction, prepayment of the outstanding balance due will require the
				recipient to pay finance charges other than interest accrued since the
				recipient's last payment, the following statement: "If you pay off the
				financing before the end of the term, you will be required to pay all or a
				portion of the finance charge other than accrued and unpaid interest, up to
				$[maximum non-interest finance charge]."
(B) In all other cases, the following
				statement: "If you pay off the financing before the end of the term, you will
				not be required to pay any portion of the finance charge other than unpaid
				interest accrued."
(10)
				In the eighth row, the second and third columns shall be combined and shall
				include only:
(A) If, at any time during the
				term of the transaction, prepayment of the outstanding balance due will require
				the recipient to pay additional fees and charges not included in the finance
				charge, the following statement: "If you pay off the financing before the end
				of the term, you must pay additional fees or charges, including" followed by a
				description of any prepayment charges.
(B) In all other cases, the following
				statement: "If you pay off the financing before the end of the term, you will
				not be required to pay additional fees or charges."
(11) If the contract provides for periodic
				payments that are not monthly, the provider shall insert one additional row
				below the fourth row, and the additional row shall include only the following
				information:
(A) In the first column:
				"Average Monthly Cost".
(B) In the
				second column, the average monthly cost that the recipient will pay over the
				term of the transaction.
(C) In the
				third column, language explaining that the recipient will not be required to
				make monthly payments and explaining how the provider has calculated the
				monthly cost. For example: "Although you do not make payments on a monthly
				basis, this is our calculation of your average monthly cost based upon the
				payment amounts disclosed below."