When Must Disclosures on Consumer Leasing Transactions Be Made?

B

Regulation M, issued by the Consumer Financial Protection Bureau (CFPB), applies to consumer leasing transactions. It requires lessors to make certain disclosures to consumers before consummation of the lease.

The correct answer to the question is B. Before the consummation of the lease.

"Consummation of the lease" means when the lessee becomes contractually obligated to enter into the lease. At or before that time, lessors must provide the following disclosures to the consumer:

1. The total amount of payments and their timing
2. A statement of whether or not a security deposit is required
3. A description of any charges imposed at the beginning or end of the lease term
4. A statement of the consumer's liability in the event of early termination
5. A statement of the lessor's liability if the leased property is lost, stolen, or damaged

The lessor must also disclose certain other items either before or at consummation. These include:

1. The "capitalized cost" of the leased property (i.e., the total cost of the property being leased)
2. The "residual value" of the leased property (i.e., its expected value at the end of the lease term)
3. The interest rate used to calculate the lease payments
4. The total amount of any charges imposed in connection with the lease

In summary, Regulation M requires lessors to make a number of disclosures to consumers before consummation of the lease. These disclosures provide the consumer with information about the cost and terms of the lease, as well as their rights and obligations under the lease. The correct answer to the question is B. Before the consummation of the lease.