District Circular Letters
December 26, 1997
REGULATION M:
PAMPHLET REGARDING VEHICLE LEASING
To Member and Nonmember Banks
And Others Concerned
In the Twelfth Federal Reserve District
Educational Brochure Detailing Revisions to Leasing Rules in
Regulation M
On January 1, 1998, compliance with the provisions
of the revised Regulation M implementing the Consumer Leasing Act will
become mandatory. The revised regulation establishes new disclosures to
facilitate consumer understanding of the details of automobile and other
lease transactions.
To help publicize these revisions, and to help consumers more easily
understand car leasing rules and the new disclosure requirements, the
Federal Reserve Board, the Federal Trade Commission, the Office of the
Florida Attorney General, the National Automobile Dealers Association,
and the Association of Consumer Vehicle Lessors, have initiated a special
educational program. Central to this government/industry effort is the
enclosed Keys to Vehicle Leasing, a brochure explaining consumers'
rights and responsibilities in leasing transactions.
The highlights to Keys to Vehicle Leasing include
- An overview, including an annotated sample, of a closed-end lease,
the most common type of vehicle lease used by the automotive industry.
Under a closed-end lease, a consumer may return the leased automobile,
pay any specified end-of-lease costs, and walk away.
- A comparison of the most important facets of both buying and leasing
vehicles, a designed to help consumers make more informed decisions
between the two.
- An enumeration of those leasing terms that a dealer must disclose
to a consumer. For example, lessors are required to tell individuals
about fees, taxes, and insurance requirements, standards for wear and
use, and early termination charges.
Copies
To request additional copies of Keys to Vehicle Leasing,
please contact our Public Information Department, at (415)
974-2561. The brochures are available free of charge.
Additional information
For additional information about Keys to Vehicle Leasing or
about the revised provisions of Regulation M, please contact our Banking
Supervision and Regulation Department, at (415) 974-2967.
FEDERAL RESERVE BANK OF SAN FRANCISCO
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