Hey all,

Just found out during a conversion exercise that we have historically had commercial lease and their information stored in an outside system. I was asked if we should be collecting CIP/BO information to put into our new document storage system.

Commercial leases do fall under the BO exemption if I recall correctly? Any CIP Exceptions?

This is the information I was provided on my initial ask to the leasing team: "We have various pieces of equipment and vehicles. The customer wants to lease equipment and we purchase that equipment/vehicle from a vendor. The customer pays us monthly payments for that equipment/vehicle monthly. At the end, they buyout the lease from us."

What further questions do I need to ask to that department? Are they considered accounts requiring CIP/BO? What am I missing here?

To me, its essentially a loan with collateral they are calling a lease, but I know the exemption exists for BO.

Here is another discussion on this issue: https://www.bankersonline.com/forum/ubbthreads.php/topics/2157686/beneficial-ownership-on-leases

Ok, so BO is exempt based on that thread and how it operates, black and white. Is a lease agreement considered an "account" when it's made by a financial institution for purposes of CIP? Since it's a lease, not financing or a loan, although this seems like an entry level question, I do not believe this would even be considered an account correct?

Bumping one more time if anyone has input on the CIP side of things.

Well, it all comes down to the definition of an account. Do you think they are establishing one? If you have doubts, call your EIC and have a chat with them.

(a) Account. For purposes of §1020.220:

(1) Account means a formal banking relationship established to provide or engage in services, dealings, or other financial transactions including a deposit account, a transaction or asset account, a credit account, or other extension of credit. Account also includes a relationship established to provide a safety deposit box or other safekeeping services, or cash management, custodian, and trust services.