In short, LHPH and BHPH do not fall under the same regulatory standards. If you are a BHPH dealer, you are probably familiar with Regulation Z, but leasing falls under a standard called Regulation M.

Regulation M was created under the Federal Consumer Lending Act and covers topics such as general disclosure requirements, renegotiations and extensions, purchase option disclosures, advertising, and more. Its purpose is to provide minimum requirements to help protect consumers when signing a lease. The document itself is very detailed in explaining the regulations of leasing whether it is addressing how lessors can communicate with consumers (phone, social media, text, email, etc.), how often they can contact them, or defining lease specific terms.

Although Reg M is a federal regulation, be sure to stay up to date with your local laws as each state has its own regulatory standards when it comes to leasing. This will ensure your compliance on all levels.

Here is a link to read though the details of Reg M.  If you want to offer leasing at your dealership, understanding Reg M is the place to start.

Our E-book is also a great resource in directly comparing the vocabulary used in Reg M to Reg Z.

Have additional questions? Contact Trevor Watson at TWatson@LHPH.com.