We have a legal entity borrower that directly leases equipment to commercial customers. We loan them money to finance those leases, and take the lease receivable as collateral. Each lease is financed by an individual loan that matches the terms of the lease behind it. We originate multiple loans a week to this customer. Lease payments are made to our legal entity customer who then makes the payments on their loan with us.

Would this customer qualify under the equipment purchase and leasing exemption under 31 CFR 1010.230(h)(1)(iv)? I don't think it does, but I don't want to create unnecessary work either.

No. You are not making payments directly to a vendor or lessor.

The equipment lease and purchase exemption would apply because the account
established at the covered financial institution meets all of the requirements of the
exemption, which are that (1) the account’s purpose is to finance the purchase or
leasing of equipment, (2) payments are remitted directly by the financial institution
to the vendor or lessor, and (3) there is no possibility of a cash refund on the
account activity

Thanks Randy. That was my interpretation, but how FAQ #31 was written made me second guess myself.

Same scenario as above - but the lessee makes the payment directly to the loan. Making it overly complicated - but the company that we have the Note with is who we perform CDDBO - the lessee is not our customer for purposes of the beneficial ownership rules