12 CFR § 714.3 - Must you own the leased property in an indirect leasing arrangement?

---
identifier: "/us/cfr/t12/s714.3"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 714.3 - Must you own the leased property in an indirect leasing arrangement?"
title_number: 12
title_name: "Banks and Banking"
section_number: "714.3"
section_name: "Must you own the leased property in an indirect leasing arrangement?"
chapter_name: "NATIONAL CREDIT UNION ADMINISTRATION"
subchapter_number: "A"
subchapter_name: "REGULATIONS AFFECTING CREDIT UNIONS"
part_number: "714"
part_name: "LEASING"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1756, 1757, 1766, 1785, 1789."
regulatory_source: "65 FR 34585, May 31, 2000, unless otherwise noted."
cfr_part: "714"
---


# 714.3 Must you own the leased property in an indirect leasing arrangement?

You do not have to own the leased property in an indirect leasing arrangement if:

(a) You obtain a full assignment of the lease. A full assignment is the assignment of all the rights, interests, obligations, and title in a lease to you, that is, you become the owner of the lease;

(b) You are named as the sole lienholder of the leased property;

(c) You receive a security agreement, signed by the leasing company, granting you a sole lien in the leased property and the right to take possession and dispose of the leased property in the event of a default by the lessee, a default in the leasing company's obligations to you, or a material adverse change in the leasing company's financial condition; and

(d) You take all necessary steps to record and perfect your security interest in the leased property. Your state's Commercial Code may treat the automobiles as inventory, and require a filing with the Secretary of State.