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

---
identifier: "/us/cfr/t12/s714.5"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 714.5 - What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?"
title_number: 12
title_name: "Banks and Banking"
section_number: "714.5"
section_name: "What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?"
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"
---


# 714.5 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.