Escrow protections under the federal truth-in-leasing regulations


As they say, knowledge is power. The best way to leverage your power with motor carriers is to understand the federal truth-in-leasing regulations. They can help you avoid getting into a bad lease or help you decide whether you are being treated fairly by your current carrier.

The federal truth-in-leasing regulations found in 49 CFR 376 establish specific rules that govern the owner-operator/motor carrier relationship. These rules were enacted in 1979, yet only in 1996 were individual drivers given the right to enforce the requirements of the regulations directly in federal court.

Since Congress granted a private right of action, OOIDA has filed numerous class action lawsuits to develop the law protecting driver rights under these regulations. OOIDA has achieved notable success in these cases regarding the protection of owner-operator funds collected from drivers for various escrow accounts required by the motor carrier through the leasing agreement.

For starters, you should know what the regulations require. The escrow provisions of the leasing regulations are relatively straightforward:

1. The lease must specify the amount of any escrow fund or performance bond to be established with the owner-operator’s money.
2. The lease must also identify what specific items or repairs can be paid for with escrow funds.
3. The lease must specify how the motor carrier will inform you of every transaction affecting your escrow. Carriers must either clearly indicate on your settlement sheet the amount and description of each escrow deduction or addition or provide a separate monthly accounting of all escrow transactions.
4. In addition to this periodic accounting requirement, you can demand an accounting of escrow transactions at any time. If you don’t know what is going on, you should exercise this right in order to keep your carrier honest.
5. The motor carrier is also required to pay you interest on your escrow funds. To be specific, the interest must be at least equal to the average yield or equivalent coupon issue yield on the 91-day, 13-week Treasury bill as established in the weekly auction by the U.S. Treasury. The current interest rate can usually be found in the business section of your newspaper.
6. Finally, and perhaps most importantly, the regulations require that the carrier return your escrow funds to you within 45 days from the date the lease is terminated. There are no exceptions to this rule.

more here >> Escrow protections under the federal truth-in-leasing regulations

On these lease purchase programs, they pay for any repairs, right? Since you don't own the truck, they do, they pay for the repairs, right? That should be built into the cost of the lease.

An non-profit youth group I drove for the past couple of summers leases a couple of trucks (pulling their own trailers), and it was somewhere around $480 a week, plus a small mileage fee.

Another company I drove for had some trucks they leased from Ryder, and they pay all the repairs as well, since it's built into the cost of the lease.

Are you telling me that these companies that do lease-purchases make the driver pay the repairs?