Legal & Regulatory Compliance Flashcards

Which Uniform Commercial Code (UCC) article specifically governs leases of personal property, including most equipment leases?

Answer: Article 2A

UCC Article 2A was enacted specifically to govern leases of personal property, providing a comprehensive framework for equipment and other personal property leases.

Under UCC Article 9, a lessor wishing to protect its interest in leased equipment against a lessee's bankruptcy would typically file a:

Answer: UCC-1 financing statement

Filing a UCC-1 financing statement perfects a security interest in personal property, protecting the lessor's interest against third-party claims and the lessee's bankruptcy estate.

The USA PATRIOT Act primarily impacts equipment lessors by requiring them to implement:

Answer: Customer Identification Programs (CIP) and enhanced due diligence procedures

The PATRIOT Act requires financial institutions, including some equipment lessors, to implement Customer Identification Programs to verify the identity of customers and prevent money laundering and terrorist financing.

OFAC compliance in equipment leasing primarily requires lessors to:

Answer: Screen customers and transactions against lists of sanctioned individuals, entities, and countries

OFAC (Office of Foreign Assets Control) administers U.S. economic sanctions programs, and lessors must screen customers and transactions against OFAC's Specially Designated Nationals (SDN) list and other sanctioned parties lists.

The Equal Credit Opportunity Act (ECOA) prohibits equipment lessors from discriminating against credit applicants based on:

Answer: Race, color, religion, national origin, sex, marital status, or age

ECOA prohibits creditors, including equipment lessors, from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

The Truth in Lending Act (TILA) and its companion Consumer Leasing Act disclosure requirements apply primarily to:

Answer: Consumer lease transactions with individual lessees

TILA and the Consumer Leasing Act (implemented by Regulation M) apply to consumer lease transactions, not commercial or business-purpose leases.

Which regulatory agency administers the Bank Secrecy Act (BSA) and oversees anti-money laundering compliance for many non-bank financial companies involved in equipment leasing?

Answer: FinCEN (Financial Crimes Enforcement Network)

FinCEN, a bureau of the U.S. Treasury Department, administers the BSA and oversees AML compliance for financial institutions, including many non-bank financial companies involved in equipment leasing.