---
kind: "section"
citation: "12 C.F.R. § 714.3"
title: "12"
number: "714.3"
heading: "Must you own the leased property in an indirect leasing arrangement?"
url: "https://uscodex.org/cfr/12/714.3"
---

# §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.

## Notes

### Authority

Authority: 12 U.S.C. 1756, 1757, 1766, 1785, 1789.

### Source

Source: 65 FR 34585, May 31, 2000, unless otherwise noted.