Certified Regulatory Compliance Manager (CRCM) — Question 42

Under Renegotiations, extensions, and assumptions-12 CFR 213.5; any lease that is renegotiated or extended by longer than six months is considered to be a new lease, subject to new disclosure requirements, except when:

Answer options

• A. One or more payments are deferred, whether or not there is a charge for the deferral
• B. Lease property is substituted with property of substantially equivalent or greater value, if no other lease terms are changed
• C. In a multiple-item lease, property is added, deleted, or substituted provided the average periodic payment does not change by more than 35 percent
• D. There is an agreement resulting from a pre-order

Correct answer: A, B

Explanation

The correct answer is A, as deferring payments does not trigger new lease disclosure requirements. Option B is incorrect because substituting property of greater value with no other changes does not exempt the lease from being considered new. Option C is also wrong because changes in property with a limitation on payment adjustment still classify the lease as a new one. Option D is irrelevant to the criteria for new lease classification.