9-1136.Powers; authority to lease certain personal property;
definitions.
In addition to powers and limitations conferred or imposed
on any bank by K.S.A. 9-1101 and amendments thereto, any bank is hereby
authorized to exercise by its board of directors or duly authorized officers or
agents, subject to law, all such powers including incidental powers as shall be
necessary or convenient to do what is authorized by this section:
(a) (1) A bank may become the legal or beneficial owner of tangible
personal property for the purpose of leasing such property;
(2) to obtain an assignment of a lessor's interest in a lease of such
property; or
(3) to incur obligations incidental to its position as the legal or
beneficial owner and lessor of the leased property;
so long as each lease entered into by the bank is a net, full-payout lease.
(b) A bank may acquire specific property to be leased only after the bank
has entered into either:
(1) A legally binding written agreement to lease the property on terms which
comply with this section; or
(2) a legally binding written agreement which indemnifies the bank against
loss in connection with its acquisition of the property.
(c) In the event of the lessee's default, early termination of a lease or at
the expiration of the lease, the bank's interest in the property shall be
liquidated or re-leased in accordance with this section as soon as practicable,
but in no case shall the off-lease property be carried on the bank's books for
a period exceeding one year.
(d) Each lease financing transaction entered into by the bank pursuant to
this section shall be considered a loan for the purposes of applying all legal
lending limitations and prior approval requirements contained in K.S.A. 9-1104
and amendments thereto.
(e) For purposes of this section:
(1) (A) "Net lease" means a lease under which the bank will not, directly
or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during the
lease term;
(ii) the purchasing of parts and accessories for the leased property,
except that improvements and additions to the leased property may be leased to
the lessee upon such lessee's request in accordance with the full-payout
requirements of this section;
(iii) the loan of replacement or substitute property while the leased
property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee has
failed to discharge a contractual obligation to purchase or maintain insurance;
or
(v) the renewal of any license, registration or filing for the property
unless such action by the bank is necessary to protect the bank's interest as
an owner or financier of the property;
(B) if, in good faith, a bank believes there has been an unanticipated
change in conditions which threaten its financial position by significantly
increasing its exposure to loss, the provisions of (e)(1)(A) shall not
prevent the bank:
(i) As the owner and lessor under a net, full-payout lease, from taking
reasonable and appropriate action to salvage or protect the value of the
property of its interest arising under the lease;
(ii) as the assignee of a lessor's interest in a lease, from becoming the
owner and lessor of the leased property pursuant to its contractual right, or
from taking any reasonable and appropriate action to salvage or protect the
value of the property or its interest arising under the lease; or
(iii) from including any provisions in a lease, or from making any
additional agreements, to protect its financial position or investment in the
circumstances set forth in provisions (i) or (ii).
(2) (A) "Full-payout lease" means a lease from which the lessor can
reasonably expect to realize a return of its full investment in the leased
property, plus the estimated cost of financing the property over the term of
the lease, from rentals, estimated tax benefits and the estimated residual
value of the property at the expiration of the initial term of the lease.
(B) Except as provided in subsection (f), the estimated residual value of
the property shall not exceed 25% of the original cost of the property to the
lessor unless the estimated residual value is guaranteed by a manufacturer, a
lessee or a third party not an affiliate of the bank and the bank properly
documents that the guarantor has the resources to meet the guarantee. In all
cases both the estimated residual value of the property and that portion of the
estimated residual value relied upon by the lessor to satisfy the requirements
of a full-payout lease must be reasonable in light of the nature of the leased
property and all relevant circumstances so that realization of the bank's full
investment plus the cost of financing the property depends primarily on the
creditworthiness of the lessee and of any guarantor of the residual value, and
not on the residual market value of the leased property.
(f) Notwithstanding the limit on residual value contained in
(e)(2)(B), the bank may enter into lease financing transactions in which the
residual value relied upon for realization of a return of its full investment
plus costs of financing exceeds 25% of the original cost of the property
provided:
(1) The lease financing transaction conforms with all other requirements of
this section;
(2) the lease financing transaction has a term in excess of 90 days;
(3) the records relating to lease financing transactions entered into
pursuant to this provision are clearly segregated and specifically identified
to distinguish
them from the records relating to lease financing transactions entered into
pursuant to the other provisions; and
(4) the aggregate book value of all tangible personal property held for
lease pursuant to this subsection does not exceed 10% of the consolidated
assets of the bank.
(g) This section shall not apply to any leases executed by a bank prior to
the effective date of this act. Any lease which was entered into in good faith
prior to the effective date of this act that does not comply with the
provisions of this section may be renewed only if there is a binding agreement
in the expiring lease which requires the bank to renew the lease at the
lessee's option, and the bank cannot otherwise reasonably or properly avoid its
commitment to renew. Except for those leases renewed pursuant to such a
binding agreement, any prior lease renewed after the effective date of this act
shall be included for purposes of determining compliance with the legal lending
limitations contained in K.S.A. 9-1104 and amendments thereto and subsection
(d).
9-1136.Powers; authority to lease certain personal property;
definitions.
In addition to powers and limitations conferred or imposed
on any bank by K.S.A. 9-1101 and amendments thereto, any bank is hereby
authorized to exercise by its board of directors or duly authorized officers or
agents, subject to law, all such powers including incidental powers as shall be
necessary or convenient to do what is authorized by this section:
(a) (1) A bank may become the legal or beneficial owner of tangible
personal property for the purpose of leasing such property;
(2) to obtain an assignment of a lessor's interest in a lease of such
property; or
(3) to incur obligations incidental to its position as the legal or
beneficial owner and lessor of the leased property;
so long as each lease entered into by the bank is a net, full-payout lease.
(b) A bank may acquire specific property to be leased only after the bank
has entered into either:
(1) A legally binding written agreement to lease the property on terms which
comply with this section; or
(2) a legally binding written agreement which indemnifies the bank against
loss in connection with its acquisition of the property.
(c) In the event of the lessee's default, early termination of a lease or at
the expiration of the lease, the bank's interest in the property shall be
liquidated or re-leased in accordance with this section as soon as practicable,
but in no case shall the off-lease property be carried on the bank's books for
a period exceeding one year.
(d) Each lease financing transaction entered into by the bank pursuant to
this section shall be considered a loan for the purposes of applying all legal
lending limitations and prior approval requirements contained in K.S.A. 9-1104
and amendments thereto.
(e) For purposes of this section:
(1) (A) "Net lease" means a lease under which the bank will not, directly
or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during the
lease term;
(ii) the purchasing of parts and accessories for the leased property,
except that improvements and additions to the leased property may be leased to
the lessee upon such lessee's request in accordance with the full-payout
requirements of this section;
(iii) the loan of replacement or substitute property while the leased
property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee has
failed to discharge a contractual obligation to purchase or maintain insurance;
or
(v) the renewal of any license, registration or filing for the property
unless such action by the bank is necessary to protect the bank's interest as
an owner or financier of the property;
(B) if, in good faith, a bank believes there has been an unanticipated
change in conditions which threaten its financial position by significantly
increasing its exposure to loss, the provisions of (e)(1)(A) shall not
prevent the bank:
(i) As the owner and lessor under a net, full-payout lease, from taking
reasonable and appropriate action to salvage or protect the value of the
property of its interest arising under the lease;
(ii) as the assignee of a lessor's interest in a lease, from becoming the
owner and lessor of the leased property pursuant to its contractual right, or
from taking any reasonable and appropriate action to salvage or protect the
value of the property or its interest arising under the lease; or
(iii) from including any provisions in a lease, or from making any
additional agreements, to protect its financial position or investment in the
circumstances set forth in provisions (i) or (ii).
(2) (A) "Full-payout lease" means a lease from which the lessor can
reasonably expect to realize a return of its full investment in the leased
property, plus the estimated cost of financing the property over the term of
the lease, from rentals, estimated tax benefits and the estimated residual
value of the property at the expiration of the initial term of the lease.
(B) Except as provided in subsection (f), the estimated residual value of
the property shall not exceed 25% of the original cost of the property to the
lessor unless the estimated residual value is guaranteed by a manufacturer, a
lessee or a third party not an affiliate of the bank and the bank properly
documents that the guarantor has the resources to meet the guarantee. In all
cases both the estimated residual value of the property and that portion of the
estimated residual value relied upon by the lessor to satisfy the requirements
of a full-payout lease must be reasonable in light of the nature of the leased
property and all relevant circumstances so that realization of the bank's full
investment plus the cost of financing the property depends primarily on the
creditworthiness of the lessee and of any guarantor of the residual value, and
not on the residual market value of the leased property.
(f) Notwithstanding the limit on residual value contained in
(e)(2)(B), the bank may enter into lease financing transactions in which the
residual value relied upon for realization of a return of its full investment
plus costs of financing exceeds 25% of the original cost of the property
provided:
(1) The lease financing transaction conforms with all other requirements of
this section;
(2) the lease financing transaction has a term in excess of 90 days;
(3) the records relating to lease financing transactions entered into
pursuant to this provision are clearly segregated and specifically identified
to distinguish
them from the records relating to lease financing transactions entered into
pursuant to the other provisions; and
(4) the aggregate book value of all tangible personal property held for
lease pursuant to this subsection does not exceed 10% of the consolidated
assets of the bank.
(g) This section shall not apply to any leases executed by a bank prior to
the effective date of this act. Any lease which was entered into in good faith
prior to the effective date of this act that does not comply with the
provisions of this section may be renewed only if there is a binding agreement
in the expiring lease which requires the bank to renew the lease at the
lessee's option, and the bank cannot otherwise reasonably or properly avoid its
commitment to renew. Except for those leases renewed pursuant to such a
binding agreement, any prior lease renewed after the effective date of this act
shall be included for purposes of determining compliance with the legal lending
limitations contained in K.S.A. 9-1104 and amendments thereto and subsection
(d).
9-1136.Powers; authority to lease certain personal property;
definitions.
In addition to powers and limitations conferred or imposed
on any bank by K.S.A. 9-1101 and amendments thereto, any bank is hereby
authorized to exercise by its board of directors or duly authorized officers or
agents, subject to law, all such powers including incidental powers as shall be
necessary or convenient to do what is authorized by this section:
(a) (1) A bank may become the legal or beneficial owner of tangible
personal property for the purpose of leasing such property;
(2) to obtain an assignment of a lessor's interest in a lease of such
property; or
(3) to incur obligations incidental to its position as the legal or
beneficial owner and lessor of the leased property;
so long as each lease entered into by the bank is a net, full-payout lease.
(b) A bank may acquire specific property to be leased only after the bank
has entered into either:
(1) A legally binding written agreement to lease the property on terms which
comply with this section; or
(2) a legally binding written agreement which indemnifies the bank against
loss in connection with its acquisition of the property.
(c) In the event of the lessee's default, early termination of a lease or at
the expiration of the lease, the bank's interest in the property shall be
liquidated or re-leased in accordance with this section as soon as practicable,
but in no case shall the off-lease property be carried on the bank's books for
a period exceeding one year.
(d) Each lease financing transaction entered into by the bank pursuant to
this section shall be considered a loan for the purposes of applying all legal
lending limitations and prior approval requirements contained in K.S.A. 9-1104
and amendments thereto.
(e) For purposes of this section:
(1) (A) "Net lease" means a lease under which the bank will not, directly
or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during the
lease term;
(ii) the purchasing of parts and accessories for the leased property,
except that improvements and additions to the leased property may be leased to
the lessee upon such lessee's request in accordance with the full-payout
requirements of this section;
(iii) the loan of replacement or substitute property while the leased
property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee has
failed to discharge a contractual obligation to purchase or maintain insurance;
or
(v) the renewal of any license, registration or filing for the property
unless such action by the bank is necessary to protect the bank's interest as
an owner or financier of the property;
(B) if, in good faith, a bank believes there has been an unanticipated
change in conditions which threaten its financial position by significantly
increasing its exposure to loss, the provisions of (e)(1)(A) shall not
prevent the bank:
(i) As the owner and lessor under a net, full-payout lease, from taking
reasonable and appropriate action to salvage or protect the value of the
property of its interest arising under the lease;
(ii) as the assignee of a lessor's interest in a lease, from becoming the
owner and lessor of the leased property pursuant to its contractual right, or
from taking any reasonable and appropriate action to salvage or protect the
value of the property or its interest arising under the lease; or
(iii) from including any provisions in a lease, or from making any
additional agreements, to protect its financial position or investment in the
circumstances set forth in provisions (i) or (ii).
(2) (A) "Full-payout lease" means a lease from which the lessor can
reasonably expect to realize a return of its full investment in the leased
property, plus the estimated cost of financing the property over the term of
the lease, from rentals, estimated tax benefits and the estimated residual
value of the property at the expiration of the initial term of the lease.
(B) Except as provided in subsection (f), the estimated residual value of
the property shall not exceed 25% of the original cost of the property to the
lessor unless the estimated residual value is guaranteed by a manufacturer, a
lessee or a third party not an affiliate of the bank and the bank properly
documents that the guarantor has the resources to meet the guarantee. In all
cases both the estimated residual value of the property and that portion of the
estimated residual value relied upon by the lessor to satisfy the requirements
of a full-payout lease must be reasonable in light of the nature of the leased
property and all relevant circumstances so that realization of the bank's full
investment plus the cost of financing the property depends primarily on the
creditworthiness of the lessee and of any guarantor of the residual value, and
not on the residual market value of the leased property.
(f) Notwithstanding the limit on residual value contained in
(e)(2)(B), the bank may enter into lease financing transactions in which the
residual value relied upon for realization of a return of its full investment
plus costs of financing exceeds 25% of the original cost of the property
provided:
(1) The lease financing transaction conforms with all other requirements of
this section;
(2) the lease financing transaction has a term in excess of 90 days;
(3) the records relating to lease financing transactions entered into
pursuant to this provision are clearly segregated and specifically identified
to distinguish
them from the records relating to lease financing transactions entered into
pursuant to the other provisions; and
(4) the aggregate book value of all tangible personal property held for
lease pursuant to this subsection does not exceed 10% of the consolidated
assets of the bank.
(g) This section shall not apply to any leases executed by a bank prior to
the effective date of this act. Any lease which was entered into in good faith
prior to the effective date of this act that does not comply with the
provisions of this section may be renewed only if there is a binding agreement
in the expiring lease which requires the bank to renew the lease at the
lessee's option, and the bank cannot otherwise reasonably or properly avoid its
commitment to renew. Except for those leases renewed pursuant to such a
binding agreement, any prior lease renewed after the effective date of this act
shall be included for purposes of determining compliance with the legal lending
limitations contained in K.S.A. 9-1104 and amendments thereto and subsection
(d).