Regulation M was “issued by the Board of Governors of the Federal Reserve System to implement the consumer leasing provisions of the Truth in Lending Act.” The three purposes of Regulation M are:
“(1) To ensure that lessees of personal property receive meaningful disclosures that enable them to compare lease terms with other leases and, where appropriate, with credit transactions;
(2) To limit the amount of balloon payments in consumer lease transactions; and
(3) To provide for the accurate disclosure of lease terms in advertising.” 
Penalties for non-compliance: As a part of the Truth in Lending Act, criminal liability for willful and knowing violation is a maximum fine of $5,000 and/or maximum imprisonment of one year. 
Please note: This is not legal advice and dealers should always seek the assistance of qualified legal counsel.
From "19 Laws, Rules and Regulations That Can Cost You More Than Money" in the September 2010 issue of Auto Dealer Monthly.
Originally posted on Auto Dealer Today