Interpretation ID: nht78-3.47

DATE: 04/19/78

FROM: AUTHOR UNAVAILABLE; John Womack; NHTSA

TO: Cary C. Boyden

TITLE: FMVSR INTERPRETATION

TEXT: This is in response to your letter of February 22, 1978, concerning the Federal odometer requirements.

The question you raised was whether the lessor can leave the transferee's name and address on the odometer disclosure statement blank in cases where the transferee is a bank who has not yet determined whether the vehicle will be leased or the subject of a secured lending arrangement.

As defined in 49 CFR @ 580.3, "Transferee" means "any person to whom the ownership in a motor vehicle is transferred by purchase, gift, or any means other than by creation of a security interest." Therefore, if the bank is taking possession of the vehicle in order to lease it, the lessor should indicate that the bank is the transferee. If the bank is taking possession of the vehicle in order to make it the subject of a secured lending arrangement, the bank's customer, and not the bank, should appear on the disclosure statement as transferee.

You indicated that additional paper work would result if the bank were required to be listed as the transferee in both of the above situations until it decided how to dispose of the vehicle. As a result, you suggested that it be acceptable to list as transferee the bank or its customer as their respective interest may appear. You stated that "this alternative would allow the bank either to retain the statement on its own behalf or to forward the disclosures to the ultimate debtor at the time it is determined to consummate the transaction as a secured loan rather than a lease."

It is our opinion that your proposed alternative is acceptable under 49 CFR Part 580, so long as the bank transmits the disclosure to the transferee. The lessor, as transferor, would be responsible for furnishing the transferee with the statement. Should the bank fail to transmit the statement, the lessor could be held responsible for the bank's negligence.