Under Regulation M, what is a "consumer lease"?
Click on the arrows to vote for the correct answer
A. B. C. D.C
Regulation M is a regulation issued by the Federal Reserve Board (FRB) to protect consumers from unfair practices related to consumer leasing. A "consumer lease" under Regulation M is defined as a lease transaction where the lessor (the person who owns the property being leased) regularly engages in leasing transactions and the lessee (the person who is leasing the property) is an individual who leases the property for personal, family, or household purposes.
Answer (B) is correct. Specifically, a "consumer lease" under Regulation M is a lease of personal property to an individual for personal, family, or household purposes that does not exceed $25,000, and has a contractual provision that gives the lessee an option to buy the property at the end of the lease term.
Answer (A) is incorrect because it only specifies a dollar amount and does not include the condition that the lease must be for personal, family, or household purposes.
Answer (C) is incorrect because it only specifies that the lease is for personal property, but does not include the condition that the lease must have an option to buy and the amount must not exceed $25,000.
Answer (D) is incorrect because it includes agricultural leases, which are not considered "consumer leases" under Regulation M.
In summary, a "consumer lease" under Regulation M is a lease of personal property to an individual for personal, family, or household purposes that does not exceed $25,000, and has a contractual provision that gives the lessee an option to buy the property at the end of the lease term.