19–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 112–565 

CONSUMER RENTAL PURCHASE AGREEMENT ACT 

JUNE 29, 2012.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BACHUS, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 1588] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 1588) to amend the Consumer Credit Protection Act to 

assure meaningful disclosures of the terms of rental-purchase 

agreements, including disclosures of all costs to consumers under 

such agreements, to provide certain substantive rights to consumers under such agreements, and for other purposes, having considered the same, report favorably thereon with an amendment and 

recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Consumer Rental Purchase Agreement Act’’. 

SEC. 2. FINDINGS AND DECLARATION OF PURPOSE. 

(a) FINDINGS.—The Congress finds as follows: 

(1) The rental-purchase industry provides a service that meets and satisfies 

the demands of many consumers. 

(2) Each year, approximately 2,300,000 United States households enter into 

rental-purchase transactions and over a 5-year period approximately 4,900,000 

United States households will do so. 

(3) Competition among the various firms engaged in the extension of rentalpurchase transactions would be strengthened by informed use of rental-purchase transactions. 

(4) The informed use of rental-purchase transactions results from an awareness of the cost thereof by consumers. 


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(b) PURPOSE.—The purpose of this title is to assure the availability of rental-purchase transactions and to assure simple, meaningful, and consistent disclosure of 

rental-purchase terms so that consumers will be able to more readily compare the 

available rental-purchase terms and avoid uninformed use of rental-purchase transactions, and to protect consumers against unfair rental-purchase practices. 

SEC. 3. RENTAL-PURCHASE TRANSACTIONS COVERED UNDER THE CONSUMER CREDIT PROTECTION ACT. 

The Consumer Credit Protection Act is amended by adding at the end the following new title: 

‘‘TITLE X—RENTAL-PURCHASE TRANSACTIONS 

‘‘Sec. 1001. Definitions. 

‘‘Sec. 1002. Exempted transactions. 

‘‘Sec. 1003. General disclosure requirements. 

‘‘Sec. 1004. Rental-purchase disclosures. 

‘‘Sec. 1005. Other agreement provisions. 

‘‘Sec. 1006. Right to acquire ownership. 

‘‘Sec. 1007. Prohibited provisions. 

‘‘Sec. 1008. Statement of accounts. 

‘‘Sec. 1009. Renegotiations and extensions. 

‘‘Sec. 1010. Point-of-rental disclosures. 

‘‘Sec. 1011. Rental-purchase advertising. 

‘‘Sec. 1012. Civil liability. 

‘‘Sec. 1013. Additional grounds for civil liability. 

‘‘Sec. 1014. Liability of assignees. 

‘‘Sec. 1015. Regulations. 

‘‘Sec. 1016. Enforcement. 

‘‘Sec. 1017. Criminal liability for willful and knowing violation. 

‘‘Sec. 1018. Relation to other laws. 

‘‘Sec. 1019. Effect on Government agencies. 

‘‘Sec. 1020. Compliance date. 

‘‘SEC. 1001. DEFINITIONS. 

‘‘For purposes of this title, the following definitions shall apply: 

‘‘(1) ADVERTISEMENT.—The term ‘advertisement’ means a commercial message 

in any medium that promotes, directly or indirectly, a rental-purchase agreement but does not include price tags, window signs, or other in-store merchandising aids. 

‘‘(2) AGRICULTURAL PURPOSE.—The term ‘agricultural purpose’ includes— 

‘‘(A) the production, harvest, exhibition, marketing, transformation, processing, or manufacture of agricultural products by a natural person who 

cultivates plants or propagates or nurtures agricultural products; and 

‘‘(B) the acquisition of farmlands, real property with a farm residence, or 

personal property and services used primarily in farming. 

‘‘(3) BOARD.—The term ‘Board’ means the Board of Governors of the Federal 

Reserve System. 

‘‘(4) CASH PRICE.—The term ‘cash price’ means the price at which a merchant, 

in the ordinary course of business, offers to sell for cash the property that is 

the subject of the rental-purchase transaction. 

‘‘(5) CONSUMER.—The term ‘consumer’ means a natural person who is offered 

or enters into a rental-purchase agreement. 

‘‘(6) DATE OF CONSUMMATION.—The term ‘date of consummation’ means the 

date on which a consumer becomes contractually obligated under a rental-purchase agreement. 

‘‘(7) INITIAL PAYMENT.—The term ‘initial payment’ means the amount to be 

paid before or at the consummation of the agreement or the delivery of the 

property if delivery occurs after consummation, including the rental payment; 

service, processing, or administrative charges; delivery fee; refundable security 

deposit; taxes; mandatory fees or charges; and any optional fees or charges 

agreed to by the consumer. 

‘‘(8) MERCHANT.—The term ‘merchant’ means a person who provides the use 

of property through a rental-purchase agreement in the ordinary course of business and to whom a consumer’s initial payment under the agreement is payable. 

‘‘(9) PAYMENT SCHEDULE.—The term ‘payment schedule’ means the amount 

and timing of the periodic payments and the total number of all periodic payments that the consumer will make if the consumer acquires ownership of the 

property by making all periodic payments. 

‘‘(10) PERIODIC PAYMENT.—The term ‘periodic payment’ means the total payment a consumer will make for a specific rental period after the initial payVerDate Mar 15 2010 13:42 Jul 03, 2012 Jkt 019006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6621 E:\HR\OC\HR565.XXX HR565

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ment, including the rental payment, taxes, mandatory fees or charges, and any 

optional fees or charges agreed to by the consumer. 

‘‘(11) PROPERTY.—The term ‘property’ means property that is not real property under the laws of the State where the property is located when it is made 

available under a rental-purchase agreement. 

‘‘(12) RENTAL PAYMENT.—The term ‘rental payment’ means rent required to 

be paid by a consumer for the possession and use of property for a specific rental period, but does not include taxes or any fees or charges. 

‘‘(13) RENTAL PERIOD.—The term ‘rental period’ means a week, month, or 

other specific period of time, during which the consumer has a right to possess 

and use property that is the subject of a rental-purchase agreement after paying 

the rental payment and any applicable taxes for such period. 

‘‘(14) RENTAL-PURCHASE AGREEMENT.— 

‘‘(A) IN GENERAL.—The term ‘rental-purchase agreement’ means a contract in the form of a bailment or lease for the use of property by a consumer for an initial period of 4 months or less, that is renewable with each 

payment by the consumer, and that permits but does not obligate the consumer to become the owner of the property. 

‘‘(B) EXCLUSIONS.—The term ‘rental-purchase agreement’ shall not be 

construed to be, nor governed by laws regulating any of the following: 

‘‘(i) A credit sale (as defined in section 103(g) of the Truth in Lending 

Act). 

‘‘(ii) A consumer lease (as defined in section 181(1) of such Act). 

‘‘(iii) An extension of credit or a transaction giving rise to a debt incurred in connection with the purchase of a thing of value. 

‘‘(15) RENTAL-PURCHASE COST.— 

‘‘(A) IN GENERAL.—For purposes of sections 1010 and 1011, the term 

‘rental-purchase cost’ means the sum of all rental payments and mandatory 

fees or charges imposed by the merchant as a condition of entering into a 

rental-purchase agreement or acquiring ownership of property under a rental-purchase agreement, such as the following: 

‘‘(i) Service, processing, or administrative charge. 

‘‘(ii) Fee for an investigation or credit report. 

‘‘(iii) Charge for delivery required by the merchant. 

‘‘(B) EXCLUDED ITEMS.—The following fees or charges shall not be taken 

into account in determining the rental-purchase cost with respect to a rental-purchase transaction: 

‘‘(i) Fees and charges prescribed by law, which actually are or will be 

paid to public officials or government entities, such as sales tax. 

‘‘(ii) Fees and charges for optional products and services offered in 

connection with a rental-purchase agreement. 

‘‘(16) STATE.—The term ‘State’ means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and 

the Northern Mariana Islands. 

‘‘(17) TOTAL COST.—The term ‘total cost’ means the sum of the initial payment 

and all periodic payments in the payment schedule to be paid by the consumer 

to acquire ownership of the property that is the subject of the rental-purchase 

agreement. 

‘‘SEC. 1002. EXEMPTED TRANSACTIONS. 

‘‘This title shall not apply to rental-purchase agreements primarily for business, 

commercial, or agricultural purposes, or those made with Government agencies or 

instrumentalities. 

‘‘SEC. 1003. GENERAL DISCLOSURE REQUIREMENTS. 

‘‘(a) RECIPIENT OF DISCLOSURE.—A merchant shall disclose to any person who will 

be a signatory to a rental-purchase agreement the information required by sections 

1004 and 1005. 

‘‘(b) TIMING OF DISCLOSURE.—The disclosures required under sections 1004 and 

1005 shall be made before the consummation of the rental-purchase agreement and 

clearly and conspicuously in writing as part of the rental-purchase agreement to be 

signed by the consumer. 

‘‘(c) CLEARLY AND CONSPICUOUSLY.—As used in this section, the term ‘clearly and 

conspicuously’ means that information required to be disclosed to the consumer 

shall be worded plainly and simply, and appear in a type size, prominence, and location as to be readily noticeable, readable, and comprehensible to an ordinary consumer. 


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‘‘SEC. 1004. RENTAL-PURCHASE DISCLOSURES. 

‘‘(a) IN GENERAL.—For each rental-purchase agreement, the merchant shall clearly and conspicuously disclose to the consumer the following, to the extent applicable: 

‘‘(1) The date of the consummation of the rental-purchase transaction and the 

identities of the merchant and the consumer. 

‘‘(2) A brief description of the rental property, which shall be sufficient to 

identify the property to the consumer, including an identification or serial number, if applicable, and a statement indicating whether the property is new or 

used. 

‘‘(3) A description of any fee, charge or penalty, in addition to the periodic 

payment, that the consumer may be required to pay under the agreement, 

which shall be separately identified by type and amount. 

‘‘(4) A statement that the transaction is a rental-purchase agreement and that 

the consumer will not obtain ownership of the property until the consumer has 

paid the total dollar amount necessary to acquire ownership. 

‘‘(5) The amount of any initial payment. 

‘‘(6) The amount of the cash price of the property that is the subject of the 

rental-purchase agreement, and, if the agreement involves the rental of 2 or 

more items as a set (as may be defined by the Board in regulation) a statement 

of the aggregate cash price of all items shall satisfy this requirement. 

‘‘(7) The payment schedule. 

‘‘(8) The total cost, using that term, and a brief description, such as ‘This is 

the amount you will pay the merchant if you make all periodic payments to acquire ownership of the property.’. 

‘‘(9) A statement of the consumer’s right to terminate the agreement without 

paying any fee or charge not previously due under the agreement by voluntarily 

surrendering or returning the property in good repair upon expiration of any 

rental period. 

‘‘(10) Substantially the following statement: ‘OTHER IMPORTANT TERMS: 

See your rental-purchase agreement for additional important information on 

early termination procedures, purchase option rights, responsibilities for loss, 

damage or destruction of the property, warranties, maintenance responsibilities, 

and other charges or penalties you may incur.’. 

‘‘(b) FORM OF DISCLOSURE.—The disclosures required by paragraphs (4) through 

(10) of subsection (a) shall be segregated from other information at the beginning 

of the rental-purchase agreement and shall contain only directly related information, and shall be identified in boldface, upper-case letters as follows: ‘IMPORTANT 

RENTAL-PURCHASE DISCLOSURES’. 

‘‘(c) DISCLOSURE REQUIREMENTS RELATING TO INSURANCE PREMIUMS AND LIABILITY WAIVERS.— 

‘‘(1) IN GENERAL.—A merchant shall clearly and conspicuously disclose in 

writing to the consumer before the consummation of a rental-purchase agreement that the purchase of leased property insurance or liability waiver coverage 

is not required as a condition for entering into the rental-purchase agreement. 

‘‘(2) AFFIRMATIVE WRITTEN REQUEST AFTER COST DISCLOSURE.—A merchant 

may provide insurance or liability waiver coverage, directly or indirectly, in connection with a rental-purchase transaction only if— 

‘‘(A) the merchant clearly and conspicuously discloses to the consumer the 

cost of such coverage before the consummation of the rental-purchase agreement; and 

‘‘(B) the consumer signs an affirmative written request for such coverage 

after receiving the disclosures required under subparagraph (A) of this 

paragraph and paragraph (1). 

‘‘(d) ACCURACY OF DISCLOSURE.— 

‘‘(1) IN GENERAL.—The disclosures required to be made under subsection (a) 

shall be accurate as of the date the disclosures are made, based on the information available to the merchant. 

‘‘(2) INFORMATION SUBSEQUENTLY RENDERED INACCURATE.—If information required to be disclosed under subsection (a) is subsequently rendered inaccurate 

as a result of any agreement between the merchant and the consumer subsequent to the delivery of the required disclosures, the resulting inaccuracy shall 

not constitute a violation of this title. 

‘‘SEC. 1005. OTHER AGREEMENT PROVISIONS. 

‘‘(a) IN GENERAL.—Each rental-purchase agreement shall— 

‘‘(1) provide a statement specifying whether the merchant or the consumer is 

responsible for loss, theft, damage, or destruction of the property; 


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‘‘(2) provide a statement specifying whether the merchant or the consumer is 

responsible for maintaining or servicing the property, together with a brief description of the responsibility; 

‘‘(3) contain a provision for reinstatement of the agreement, which at a minimum— 

‘‘(A) permits a consumer who fails to make a timely rental payment to 

reinstate the agreement, without losing any rights or options which exist 

under the agreement, by the payment of all past due rental payments and 

any other charges then due under the agreement and a payment for the 

next rental period within 7 business days after failing to make a timely 

rental payment if the consumer pays monthly, or within 3 business days 

after failing to make a timely rental payment if the consumer pays more 

frequently than monthly; 

‘‘(B) if the consumer returns or voluntarily surrenders the property covered by the agreement, other than through judicial process, during the applicable reinstatement period set forth in subparagraph (A), permits the 

consumer to reinstate the agreement during a period of at least 60 days 

after the date of the return or surrender of the property by the payment 

of all amounts previously due under the agreement, any applicable fees, 

and a payment for the next rental period; 

‘‘(C) if the consumer has paid 50 percent or more of the total cost necessary to acquire ownership and returns or voluntarily surrenders the property, other than through judicial process, during the applicable reinstatement period set forth in subparagraph (A), permits the consumer to reinstate the agreement during a period of at least 120 days after the date of 

the return of the property by the payment of all amounts previously due 

under the agreement, any applicable fees, and a payment for the next rental period; and 

‘‘(D) permits the consumer, upon reinstatement of the agreement to receive the same property, if available, that was the subject of the rental-purchase agreement, or if the same property is not available, a substitute item 

of comparable quality and condition may be provided to the consumer; except that, the Board may, by regulation or order, exempt any independent 

small business (as defined by the Board by regulation) from the requirement of providing the same or comparable product during the extended reinstatement period provided in subparagraph (C), if the Board determines, 

taking into account such standards as the Board determines to be appropriate, that the reinstatement right provided in such subparagraph would 

provide excessive hardship for such independent small business; 

‘‘(4) provide a statement specifying the terms under which the consumer shall 

acquire ownership of the property that is the subject of the rental-purchase 

agreement either by payment of the total cost to acquire ownership, as provided 

in section 1006, or by exercise of any early purchase option provided in the rental-purchase agreement; 

‘‘(5) provide a statement disclosing that if any part of a manufacturer’s express warranty covers the property at the time the consumer acquires ownership of the property, the warranty will be transferred to the consumer if allowed 

by the terms of the warranty; and 

‘‘(6) provide, to the extent applicable, a description of any grace period for 

making any periodic payment, the amount of any security deposit, if any, to be 

paid by the consumer upon initiation of the rental-purchase agreement, and the 

terms for refund of such security deposit to the consumer upon return, surrender or purchase of the property. 

‘‘(b) REPOSSESSION DURING REINSTATEMENT PERIOD.—Subsection (a)(3) shall not 

be construed so as to prevent a merchant from attempting to repossess property 

during the reinstatement period pursuant to subsection (a)(3)(A), but such a repossession does not affect the consumer’s right to reinstate. 

‘‘SEC. 1006. RIGHT TO ACQUIRE OWNERSHIP. 

‘‘(a) IN GENERAL.—The consumer shall acquire ownership of the property that is 

the subject of the rental-purchase agreement, and the rental-purchase agreement 

shall terminate, upon compliance by the consumer with the requirements of subsection (b) or any early payment option provided in the rental purchase agreement, 

and upon payment of any past due payments and fees, as permitted in regulation 

by the Board. 

‘‘(b) PAYMENT OF TOTAL COST.—The consumer shall acquire ownership of the rental property upon payment of the total cost of the rental-purchase agreement, as 

such term is defined in section 1001(17), and as disclosed to the consumer in the 

rental-purchase agreement pursuant to section 1004(a). 


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‘‘(c) ADDITIONAL FEES PROHIBITED.—A merchant shall not require the consumer 

to pay, as a condition for acquiring ownership of the property that is the subject 

of the rental-purchase agreement, any fee or charge in addition to, or in excess of, 

the regular periodic payments required by subsection (b), or any early purchase option amount provided in the rental-purchase agreement, as applicable. A requirement that the consumer pay an unpaid late charge or other fee that is past due 

shall not constitute an additional fee or charge for purposes of this subsection. 

‘‘(d) TRANSFER OF OWNERSHIP RIGHTS.—Upon payment by the consumer of all 

payments necessary to acquire ownership under subsection (b) or any early purchase option amount provided in the rental-purchase agreement, as appropriate, the 

merchant shall— 

‘‘(1) deliver to the consumer, or mail to the consumer’s last known address, 

such documents or other instruments, which the Board has determined by regulation, are necessary to acknowledge full ownership by the consumer of the 

property acquired pursuant to the rental-purchase agreement; and 

‘‘(2) transfer to the consumer the unexpired portion of any warranties provided by the manufacturer, distributor, or seller of the property, which shall 

apply as if the consumer were the original purchaser of the property, except 

where such transfer is prohibited by the terms of the warranty. 

‘‘SEC. 1007. PROHIBITED PROVISIONS. 

‘‘A rental-purchase agreement may not contain— 

‘‘(1) a confession of judgment; 

‘‘(2) a negotiable instrument; 

‘‘(3) a security interest or any other claim of a property interest in any goods, 

except those goods the use of which is provided by the merchant pursuant to 

the agreement; 

‘‘(4) a wage assignment; 

‘‘(5) a provision requiring the waiver of any legal claim or remedy created by 

this title or other provision of Federal or State law; 

‘‘(6) a provision requiring the consumer, in the event the property subject to 

the rental-purchase agreement is lost, stolen, damaged, or destroyed, to pay an 

amount in excess of the least of— 

‘‘(A) the fair market value of the property, as determined by the Board 

in regulation; 

‘‘(B) any early purchase option amount provided in the rental-purchase 

agreement; or 

‘‘(C) the actual cost of repair, as appropriate; 

‘‘(7) a provision authorizing the merchant, or a person acting on behalf of the 

merchant, to enter the consumer’s dwelling or other premises without obtaining 

the consumer’s consent or to commit any breach of the peace in connection with 

the repossession of the rental property or the collection of any obligation or alleged obligation of the consumer arising out of the rental-purchase agreement; 

‘‘(8) a provision requiring the purchase of insurance or liability damage waiver to cover the property that is the subject of the rental-purchase agreement, 

except as permitted by the Board in regulation; or 

‘‘(9) a provision requiring the consumer to pay more than 1 late fee or charge 

for an unpaid or delinquent periodic payment, regardless of the period in which 

the payment remains unpaid or delinquent, or to pay a late fee or charge for 

any periodic payment because a previously assessed late fee has not been paid 

in full. 

‘‘SEC. 1008. STATEMENT OF ACCOUNTS. 

‘‘Upon request of a consumer, a merchant shall provide a statement of the consumer’s account. If a consumer requests a statement for an individual account more 

than 4 times in any 12-month period, the merchant may charge a reasonable fee 

for the additional statements. 

‘‘SEC. 1009. RENEGOTIATIONS AND EXTENSIONS. 

‘‘(a) RENEGOTIATIONS.—A renegotiation occurs when a rental-purchase agreement 

is satisfied and replaced by a new agreement undertaken by the same consumer. 

A renegotiation requires new disclosures, except as provided in subsection (c). 

‘‘(b) EXTENSIONS.—An extension is an agreement by the consumer and the merchant, to continue an existing rental-purchase agreement beyond the original end 

of the payment schedule, but does not include a continuation that is the result of 

a renegotiation. 

‘‘(c) EXCEPTIONS.—New disclosures are not required for the following, even if they 

meet the definition of a renegotiation or an extension: 

‘‘(1) A reduction in payments. 

‘‘(2) A deferment of 1 or more payments. 


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‘‘(3) The extension of a rental-purchase agreement. 

‘‘(4) The substitution of property with property that has a substantially equivalent or greater economic value provided the rental-purchase cost does not increase. ‘‘(5) The deletion of property in a multiple-item agreement. 

‘‘(6) A change in rental period provided the rental-purchase cost does not in- crease. ‘‘(7) An agreement resulting from a court proceeding. 

‘‘(8) Any other event described in regulations prescribed by the Board. 

‘‘SEC. 1010. POINT-OF-RENTAL DISCLOSURES. 

‘‘(a) IN GENERAL.—For any item of property or set of items displayed or offered 

for rental-purchase, the merchant shall display on or next to the item or set of items 

a card, tag, or label that clearly and conspicuously discloses the following: 

‘‘(1) A brief description of the property. 

‘‘(2) Whether the property is new or used. 

‘‘(3) The cash price of the property. 

‘‘(4) The amount of each rental payment. 

‘‘(5) The total number of rental payments necessary to acquire ownership of 

the property. 

‘‘(6) The rental-purchase cost. 

‘‘(b) FORM OF DISCLOSURE.— 

‘‘(1) IN GENERAL.—A merchant may make the disclosure required by subsection (a) in the form of a list, catalog, or electronic facsimile of the card, tag, 

or label which is readily available to the consumer at the point of rental if the 

merchandise is not displayed in the merchant’s showroom or if displaying a 

card, tag, or label would be impractical due to the size of the merchandise. 

‘‘(2) CLEARLY AND CONSPICUOUSLY.—As used in this section, the term ‘clearly 

and conspicuously’ means that information required to be disclosed to the consumer shall appear in a type size, prominence, and location as to be noticeable, 

readable, and comprehensible to an ordinary consumer. 

‘‘SEC. 1011. RENTAL-PURCHASE ADVERTISING. 

‘‘(a) IN GENERAL.—If an advertisement for a rental-purchase transaction refers to 

or states the amount of any payment for any specific item or set of items, the merchant making the advertisement shall also clearly and conspicuously state in the 

advertisement the following for the item, or set of items, advertised: 

‘‘(1) The transaction advertised is a rental-purchase agreement. 

‘‘(2) The amount, timing, and total number of rental payments necessary to 

acquire ownership under the rental-purchase agreement. 

‘‘(3) The amount of the rental-purchase cost. 

‘‘(4) To acquire ownership of the property the consumer must pay the rentalpurchase cost plus applicable taxes. 

‘‘(5) Whether the stated payment amount and advertised rental-purchase cost 

is for new or used property. 

‘‘(b) PROHIBITION.—An advertisement for a rental-purchase agreement shall not 

state or imply that a specific item, or set of items, is available at specific amounts 

or terms unless the merchant usually and customarily offers, or will offer, the item 

or set of items at the stated amounts or terms. 

‘‘(c) CLEARLY AND CONSPICUOUSLY.— 

‘‘(1) IN GENERAL.—For purposes of this section, the term ‘clearly and conspicuously’ means that required disclosures shall be presented in a type, size, shade, 

contrast, prominence, location, and manner, as applicable to different mediums 

for advertising, so as to be readily noticeable and comprehensible to the ordinary consumer. 

‘‘(2) REGULATORY GUIDANCE.—The Board shall prescribe regulations on principles and factors to meet the clear and conspicuous standard as appropriate to 

print, video, audio, and computerized advertising, reflecting the principles and 

factors typically applied in each medium by the Federal Trade Commission. 

‘‘(3) LIMITATION.—Nothing contrary to, inconsistent with, or in mitigation of, 

the required disclosures shall be used in any advertisement in any medium, and 

no audio, video, or print technique shall be used that is likely to obscure or detract significantly from the communication of the disclosures. 

‘‘SEC. 1012. CIVIL LIABILITY. 

‘‘(a) IN GENERAL.—Except as otherwise provided in section 1013, any merchant 

who fails to comply with any requirement of this title with respect to any consumer 

is liable to such consumer as provided for leases in section 130. For purposes of this 

section, the term ‘creditor’ as used in section 130 shall include a ‘merchant’, as defined in section 1001, and for purposes of this title, the term ‘total amount of monthVerDate Mar 15 2010 13:42 Jul 03, 2012 Jkt 019006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6621 E:\HR\OC\HR565.XXX HR565

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ly payments under the lease’ as used in section 130 shall mean the sum of all fees, 

periodic payments, initial payment, and any other charges paid by the consumer 

since the date of consummation. 

‘‘(b) JURISDICTION OF COURTS; LIMITATION ON ACTIONS.— ‘‘(1) IN GENERAL.—Notwithstanding section 130(e), any action under this section may be brought in any United States district court, or in any other court 

of competent jurisdiction, before the end of the 1-year period beginning on the 

date the last payment was made by the consumer under the rental-purchase 

agreement. 

‘‘(2) RECOUPMENT OR SET-OFF.—This subsection shall not bar a consumer from 

asserting a violation of this title in an action to collect an obligation arising 

from a rental-purchase agreement, which was brought after the end of the 1- 

year period described in paragraph (1) as a matter of defense by recoupment 

or set-off in such action, except as otherwise provided by State law. 

‘‘SEC. 1013. ADDITIONAL GROUNDS FOR CIVIL LIABILITY. 

‘‘(a) INDIVIDUAL CASES WITH ACTUAL DAMAGES.—Any merchant who fails to comply with any requirements imposed under section 1010 or 1011 with respect to any 

consumer who suffers actual damage from the violation shall be liable to such consumer as provided in section 130. 

‘‘(b) PATTERN OR PRACTICE OF VIOLATIONS.—If a merchant engages in a pattern 

or practice of violating any requirement imposed under section 1010 or 1011, the 

Federal Trade Commission or an appropriate State attorney general, in accordance 

with section 1016, may initiate an action to enforce sanctions against the merchant, 

including— 

‘‘(1) an order to cease and desist from such practices; and 

‘‘(2) a civil money penalty of such amount as the court may impose, based on 

such factors as the court may determine to be appropriate. 

‘‘SEC. 1014. LIABILITY OF ASSIGNEES. 

‘‘(a) ASSIGNEES INCLUDED.—For purposes of section 1013, and this section, the 

term ‘merchant’ includes an assignee of a merchant. 

‘‘(b) LIABILITIES OF ASSIGNEES.— 

‘‘(1) APPARENT VIOLATION.—An action under section 1012 or 1013 for a violation of this title may be brought against an assignee only if the violation is apparent on the face of the rental-purchase agreement to which it relates. 

‘‘(2) APPARENT VIOLATION DEFINED.—For purposes of this subsection, a violation that is apparent on the face of a rental-purchase agreement includes, but 

is not limited to, a disclosure that can be determined to be incomplete or inaccurate from the face of the agreement. 

‘‘(3) INVOLUNTARY ASSIGNMENT.—An assignee has no liability in a case in 

which the assignment is involuntary. 

‘‘(4) RULE OF CONSTRUCTION.—No provision of this section shall be construed 

as limiting or altering the liability under section 1012 or 1013 of a merchant 

assigning a rental-purchase agreement. 

‘‘(c) PROOF OF DISCLOSURE.—In an action by or against an assignee, the consumer’s written acknowledgment of receipt of a disclosure, made as part of the rental-purchase agreement, shall be conclusive proof that the disclosure was made, if 

the assignee had no knowledge that the disclosure had not been made when the assignee acquired the rental-purchase agreement to which it relates. 

‘‘SEC. 1015. REGULATIONS. 

‘‘(a) IN GENERAL.—The Board shall prescribe regulations as necessary to carry out 

the purposes of this title. Such regulations may contain such additional requirements, classifications, differentiations, or other provisions, and may provide for such 

adjustments and exceptions for all or any class of transactions, as in the judgment 

of the Board are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. 

‘‘(b) MODEL DISCLOSURE FORMS.—The Board may publish model disclosure forms 

and clauses for common rental-purchase agreements to facilitate compliance with 

the disclosure requirements of this title and to aid the consumer in understanding 

the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures. In devising such forms, the Board shall consider the 

use by merchants of data processing or similar automated equipment. Nothing in 

this title may be construed to require a merchant to use any such model form or 

clause prescribed by the Board under this section. A merchant shall be deemed to 

be in compliance with the requirement to provide disclosure under section 1003(a) 

if the merchant— 

‘‘(1) uses any appropriate model form or clause as published by the Board; or 

‘‘(2) uses any such model form or clause and changes it by— 


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‘‘(A) deleting any information which is not required by this title; or 

‘‘(B) rearranging the format, if in making such deletion or rearranging 

the format, the merchant does not affect the substance, clarity, or meaningful sequence of the disclosure. 

‘‘(c) EFFECTIVE DATE OF REGULATIONS.—Any regulation prescribed by the Board, 

or any amendment or interpretation thereof, shall not be effective before the October 1 that follows the date of publication of the regulation in final form by at least 

6 months. The Board may at its discretion lengthen that period of time to permit 

merchants to adjust to accommodate new requirements. The Board may also shorten 

that period of time, notwithstanding the first sentence, if it makes a specific finding 

that such action is necessary to comply with the findings of a court or to prevent 

unfair or deceptive practices. In any case, merchants may comply with any newly 

prescribed disclosure requirement prior to its effective date. 

‘‘SEC. 1016. ENFORCEMENT. 

‘‘(a) FEDERAL ENFORCEMENT.—Compliance with the requirements imposed under 

this title shall be enforced under the Federal Trade Commission Act (15 U.S.C. 41 

et seq.), and a violation of any requirements imposed under this title shall be 

deemed a violation of a requirement imposed under that Act. All of the functions 

and powers of the Federal Trade Commission under the Federal Trade Commission 

Act are available to the Commission to enforce compliance by any person with the 

requirements of this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional test in the Federal Trade Commission Act. 

‘‘(b) STATE ENFORCEMENT.— 

‘‘(1) IN GENERAL.—An action to enforce the requirements imposed by this title 

may also be brought by the appropriate State attorney general in any appropriate United States district court, or any other court of competent jurisdiction. 

‘‘(2) PRIOR WRITTEN NOTICE.— 

‘‘(A) IN GENERAL.—The State attorney general shall provide prior written 

notice of any such civil action to the Federal Trade Commission and shall 

provide the Commission with a copy of the complaint. 

‘‘(B) EMERGENCY ACTION.—If prior notice is not feasible, the State attorney general shall provide notice to the Commission immediately upon instituting the action. 

‘‘(3) FTC INTERVENTION.—The Commission may— 

‘‘(A) intervene in the action; 

‘‘(B) upon intervening— 

‘‘(i) remove the action to the appropriate United States district court, 

if it was not originally brought there; and 

‘‘(ii) be heard on all matters arising in the action; and 

‘‘(C) file a petition for appeal. 

‘‘SEC. 1017. CRIMINAL LIABILITY FOR WILLFUL AND KNOWING VIOLATION. 

‘‘Whoever willfully and knowingly gives false or inaccurate information or fails to 

provide information which he is required to disclose under the provisions of this title 

or any regulation issued thereunder shall be subject to the penalty provisions as 

provided in section 112. 

‘‘SEC. 1018. RELATION TO OTHER LAWS. 

‘‘(a) RELATION TO STATE LAW.— 

‘‘(1) NO EFFECT ON CONSISTENT STATE LAWS.—Except as otherwise provided in 

subsection (b), this title does not annul, alter, or affect in any manner the 

meaning, scope, or applicability of the laws of any State relating to rental-purchase agreements, except to the extent those laws are inconsistent with any 

provision of this title, and then only to the extent of the inconsistency. 

‘‘(2) DETERMINATION OF INCONSISTENCY.—Upon its own motion or upon the request of an interested party, which is submitted in accordance with procedures 

prescribed in regulations of the Board, the Board shall determine whether any 

such inconsistency exists. If the Board determines that a term or provision of 

a State law is inconsistent, merchants located in that State need not follow such 

term or provision and shall incur no liability under the law of that State for 

failure to follow such term or provision, notwithstanding that such determination is subsequently amended, rescinded, or determined by judicial or other authority to be invalid for any reason. 

‘‘(3) GREATER PROTECTION UNDER STATE LAW.—Except as provided in subsection (b), for purposes of this section, a term or provision of a State law is 

not inconsistent with the provisions of this title if the term or provision affords 

greater protection and benefit to the consumer than the protection and benefit 

provided under this title as determined by the Board, on its own motion or upon 

the petition of any interested party. 


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‘‘(b) STATE LAWS RELATING TO CHARACTERIZATION OF TRANSACTION.—Notwithstanding the provisions of subsection (a), this title shall supersede any State law 

to the extent that such law— 

‘‘(1) regulates a rental-purchase agreement as a security interest, credit sale, 

retail installment sale, conditional sale or any other form of consumer credit, 

or that imputes to a rental-purchase agreement the creation of a debt or extension of credit; or 

‘‘(2) requires the disclosure of a percentage rate calculation, including a timeprice differential, an annual percentage rate, or an effective annual percentage 

rate. 

‘‘(c) RELATION TO FEDERAL TRADE COMMISSION ACT.—No provision of this title 

shall be construed as limiting, superseding, or otherwise affecting the applicability 

of the Federal Trade Commission Act to any merchant or rental-purchase transaction. 

‘‘SEC. 1019. EFFECT ON GOVERNMENT AGENCIES. 

‘‘No civil liability or criminal penalty under this title may be imposed on the 

United States or any of its departments or agencies, any State or political subdivision, or any agency of a State or political subdivision. 

‘‘SEC. 1020. COMPLIANCE DATE. 

‘‘Compliance with this title shall not be required until 6 months after the date 

of the enactment of the ‘Consumer Rental Purchase Agreement Act’. In any case, 

merchants may comply with this title at any time after such date of enactment.’’. 

PURPOSE AND SUMMARY

The purpose of H.R. 1588, the Consumer Rental Purchase Agreement Act, is to set a federal regulatory floor for consumer protection in rental-purchase transactions. Although most states currently regulate rental-purchase transactions as leases, the scope 

and consumer protection requirements of these laws vary significantly from state to state. 

Currently, there is no federal oversight or regulation of the rentto-own industry. This bill amends the Consumer Credit Protection 

Act (CCPA) to provide such oversight and regulation. The bill defines a number of terms pertaining to rental purchase transactions, 

including a ‘‘rental-purchase agreement,’’ which excludes credit 

sales and consumer leases (as defined by the Truth in Lending 

Act). H.R. 1588 also includes the following provisions: (1) requires 

rent-to-own merchants to include certain disclosures about the 

transaction in their rental-purchase agreements; (2) specifies the 

rights of consumers to acquire ownership of the property that is the 

subject of the rental-purchase agreement and to request statements 

of their accounts; (3) specifies provisions that are prohibited from 

appearing in rental-purchase agreements; (4) includes standards 

governing renegotiations and extensions of rental-purchase agreements; (5) mandates disclosures for both point-of-rental and advertising; (6) permits consumers to take civil action against merchants 

that fail to comply with the requirements in the bill; and (7) establishes criminal liability for merchants that willfully and knowingly 

give false or inaccurate information or fail to make disclosures required by the bill. H.R. 1588 authorizes the Board of Governors of 

the Federal Reserve System to promulgate implementing regulations and grants enforcement powers to the Federal Trade Commission and to state attorneys general. 

While the consumer protections contained in H.R. 1588 generally 

exceed those contained in existing state laws, the bill does not preempt stronger state laws. The bill does, however, preclude states 

from treating rental-purchase transactions as credit sales and from 

requiring the disclosure of an annual percentage rate. 


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BACKGROUND AND NEED FOR LEGISLATION

In April 2000, the Federal Trade Commission (FTC) issued a 

staff report titled ‘‘Survey of Rent-to-Own Customers,’’ which concluded that potential rental-purchase customers should have clear 

and accurate information about the total cost of the transaction to 

allow them to compare rental-purchase transactions to other alternatives. The FTC also noted that inadequacies exist in many state 

rental-purchase disclosure laws. This bill cures those inadequacies. 

Federal legislation to regulate this industry has been considered 

by Congress for more than a decade. H.R. 1588 brings greater stability and consistency to rental-purchase transactions nationally 

and adds substantive consumer protections consistent with that of 

a majority of the states that have adopted rental-purchase legislation. In addition, H.R. 1588 helps to eliminate claims and litigation 

by providing a clear statement of Congressional policy regarding 

these transactions. 

HEARINGS

On July 26, 2011, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Examining Rental 

Purchase Agreements and the Potential Role for Federal Regulation,’’ to examine H.R. 1588. This was a two-panel hearing, and the 

following witnesses testified: 

• Mr. Charles Harwood, Deputy Director, Bureau of Consumer Protection, Federal Trade Commission 

• Mr. Jim Hawkins, Assistant Professor of Law, University 

of Houston Law Center 

• Mr. Roy Soto, Owner, Premier Rental Purchase 

• Ms. Vivian Saunders, rent-to-own customer from Lewiston 

Woodville, NC 

• Ms. Margot Freeman Saunders, Of Counsel, National Consumer Law Center 

COMMITTEE CONSIDERATION

The Subcommittee on Financial Institutions and Consumer Credit met in open session on November 17, 2011, and ordered H.R. 

1588, as amended, favorably reported to the full Committee by 

voice vote. 

The Committee on Financial Services met in open session on 

May 31, 2012, and ordered H.R. 1588, as amended, favorably reported to the House by a record vote of 33 yeas and 21 nays 

(Record vote no. FC–80). 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Chairman Bachus to report the bill, as amended, to the House with a 

favorable recommendation was agreed to by a record vote of 33 

yeas and 21 nays (Record vote no. FC–80). The names of Members 

voting for and against follow: 


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RECORD VOTE NO. FC–80 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Bachus ........................... X ........... ............. Mr. Frank (MA) ..................... ........... X .............

Mr. Hensarling ...................... X ........... ............. Ms. Waters ........................... ........... X .............

Mr. King (NY) ........................ X ........... ............. Mrs. Maloney ........................ ........... X .............

Mr. Royce .............................. X ........... ............. Mr. Gutierrez ........................ ........... X .............

Mr. Lucas .............................. X ........... ............. Ms. Vela ́zquez ...................... ........... ........... .............

Mr. Paul ................................ ........... ........... ............. Mr. Watt ............................... ........... X .............

Mr. Manzullo ......................... X ........... ............. Mr. Ackerman ....................... X ........... .............

Mr. Jones ............................... ........... ........... ............. Mr. Sherman ........................ X ........... .............

Mrs. Biggert .......................... X ........... ............. Mr. Meeks ............................. X ........... .............

Mr. Gary G. Miller (CA) ......... ........... X ............. Mr. Capuano ........................ ........... X .............

Mrs. Capito ........................... X ........... ............. Mr. Hinojosa ......................... X ........... .............

Mr. Garrett ............................ ........... X ............. Mr. Clay ................................ ........... ........... .............

Mr. Neugebauer .................... X ........... ............. Mrs. McCarthy (NY) .............. X ........... .............

Mr. McHenry .......................... X ........... ............. Mr. Baca .............................. X ........... .............

Mr. Campbell ........................ X ........... ............. Mr. Lynch ............................. ........... X .............

Mrs. Bachmann .................... ........... X ............. Mr. Miller (NC) ..................... ........... X .............

Mr. McCotter ......................... X ........... ............. Mr. David Scott (GA) ............ X ........... .............

Mr. McCarthy (CA) ................ ........... ........... ............. Mr. Al Green (TX) ................. ........... X .............

Mr. Pearce ............................. ........... X ............. Mr. Cleaver ........................... X ........... .............

Mr. Posey .............................. ........... X ............. Ms. Moore ............................. ........... X .............

Mr. Fitzpatrick ....................... X ........... ............. Mr. Ellison ............................ ........... ........... .............

Mr. Westmoreland ................. X ........... ............. Mr. Perlmutter ...................... X ........... .............

Mr. Luetkemeyer .................... X ........... ............. Mr. Donnelly ......................... X ........... .............

Mr. Huizenga ......................... ........... X ............. Mr. Carson ........................... ........... X .............

Mr. Duffy ............................... X ........... ............. Mr. Himes ............................. ........... X .............

Ms. Hayworth ........................ X ........... ............. Mr. Peters ............................. ........... X .............

Mr. Renacci ........................... ........... X ............. Mr. Carney ............................ X ........... .............

Mr. Hurt ................................ X ........... .............

Mr. Dold ................................ X ........... .............

Mr. Schweikert ...................... ........... X .............

Mr. Grimm ............................. ........... ........... .............

Mr. Canseco .......................... X ........... .............

Mr. Stivers ............................ X ........... .............

Mr. Fincher ............................ X ........... .............

During consideration of H.R. 1588 by the Committee, the following amendments were considered: 

1. An amendment offered by Ms. Moore and Mr. Ellison, no. 3, 

to allow states to permit rental-purchase agreements to disclose annual percentage rates and to classify rental-purchase transactions 

as credit sales, was not agreed to by a record vote of 19 yeas and 

32 nays (Record vote no. FC–78). 

RECORD VOTE NO. FC–78 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Bachus ........................... ........... X ............. Mr. Frank (MA) ..................... X ........... .............

Mr. Hensarling ...................... ........... X ............. Ms. Waters ........................... X ........... .............

Mr. King (NY) ........................ ........... X ............. Mrs. Maloney ........................ X ........... .............

Mr. Royce .............................. ........... X ............. Mr. Gutierrez ........................ X ........... .............

Mr. Lucas .............................. ........... X ............. Ms. Vela ́zquez ...................... ........... ........... .............

Mr. Paul ................................ ........... ........... ............. Mr. Watt ............................... X ........... .............

Mr. Manzullo ......................... ........... X ............. Mr. Ackerman ....................... ........... X .............

Mr. Jones ............................... ........... ........... ............. Mr. Sherman ........................ ........... X .............

Mrs. Biggert .......................... ........... X ............. Mr. Meeks ............................. ........... X .............

Mr. Gary G. Miller (CA) ......... ........... X ............. Mr. Capuano ........................ X ........... .............

Mrs. Capito ........................... ........... X ............. Mr. Hinojosa ......................... ........... ........... .............

Mr. Garrett ............................ ........... X ............. Mr. Clay ................................ ........... ........... .............

Mr. Neugebauer .................... ........... X ............. Mrs. McCarthy (NY) .............. X ........... .............

Mr. McHenry .......................... ........... X ............. Mr. Baca .............................. ........... X .............

Mr. Campbell ........................ ........... X ............. Mr. Lynch ............................. X ........... .............

Mrs. Bachmann .................... X ........... ............. Mr. Miller (NC) ..................... X ........... .............


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RECORD VOTE NO. FC–78—Continued 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. McCotter ......................... ........... X ............. Mr. David Scott (GA) ............ ........... X .............

Mr. McCarthy (CA) ................ ........... ........... ............. Mr. Al Green (TX) ................. X ........... .............

Mr. Pearce ............................. ........... X ............. Mr. Cleaver ........................... ........... ........... .............

Mr. Posey .............................. ........... X ............. Ms. Moore ............................. X ........... .............

Mr. Fitzpatrick ....................... ........... X ............. Mr. Ellison ............................ ........... ........... .............

Mr. Westmoreland ................. ........... X ............. Mr. Perlmutter ...................... ........... X .............

Mr. Luetkemeyer .................... ........... X ............. Mr. Donnelly ......................... ........... X .............

Mr. Huizenga ......................... ........... X ............. Mr. Carson ........................... X ........... .............

Mr. Duffy ............................... X ........... ............. Mr. Himes ............................. X ........... .............

Ms. Hayworth ........................ ........... ........... ............. Mr. Peters ............................. X ........... .............

Mr. Renacci ........................... X ........... ............. Mr. Carney ............................ X ........... .............

Mr. Hurt ................................ ........... X .............

Mr. Dold ................................ X ........... .............

Mr. Schweikert ...................... ........... X .............

Mr. Grimm ............................. ........... ........... .............

Mr. Canseco .......................... ........... X .............

Mr. Stivers ............................ ........... X .............

Mr. Fincher ............................ ........... X .............

2. An amendment offered by Mr. Watt and Ms. Moore, no. 4, to 

limit the applicability of the bill to interstate transactions, was not 

agreed to by a record vote of 20 yeas and 33 nays (Record vote no. 

FC–79). 

RECORD VOTE NO. FC–79 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Bachus ........................... ........... X ............. Mr. Frank (MA) ..................... X ........... .............

Mr. Hensarling ...................... ........... X ............. Ms. Waters ........................... X ........... .............

Mr. King (NY) ........................ ........... X ............. Mrs. Maloney ........................ X ........... .............

Mr. Royce .............................. ........... X ............. Mr. Gutierrez ........................ X ........... .............

Mr. Lucas .............................. ........... X ............. Ms. Vela ́zquez ...................... ........... ........... .............

Mr. Paul ................................ ........... ........... ............. Mr. Watt ............................... X ........... .............

Mr. Manzullo ......................... ........... X ............. Mr. Ackerman ....................... ........... X .............

Mr. Jones ............................... ........... ........... ............. Mr. Sherman ........................ ........... X .............

Mrs. Biggert .......................... ........... X ............. Mr. Meeks ............................. ........... X .............

Mr. Gary G. Miller (CA) ......... ........... X ............. Mr. Capuano ........................ X ........... .............

Mrs. Capito ........................... ........... X ............. Mr. Hinojosa ......................... ........... ........... .............

Mr. Garrett ............................ X ........... ............. Mr. Clay ................................ ........... ........... .............

Mr. Neugebauer .................... ........... X ............. Mrs. McCarthy (NY) .............. X ........... .............

Mr. McHenry .......................... ........... X ............. Mr. Baca .............................. ........... X .............

Mr. Campbell ........................ ........... X ............. Mr. Lynch ............................. X ........... .............

Mrs. Bachmann .................... X ........... ............. Mr. Miller (NC) ..................... X ........... .............

Mr. McCotter ......................... ........... X ............. Mr. David Scott (GA) ............ ........... X .............

Mr. McCarthy (CA) ................ ........... ........... ............. Mr. Al Green (TX) ................. X ........... .............

Mr. Pearce ............................. ........... X ............. Mr. Cleaver ........................... X ........... .............

Mr. Posey .............................. ........... X ............. Ms. Moore ............................. X ........... .............

Mr. Fitzpatrick ....................... ........... X ............. Mr. Ellison ............................ ........... ........... .............

Mr. Westmoreland ................. ........... X ............. Mr. Perlmutter ...................... X ........... .............

Mr. Luetkemeyer .................... ........... X ............. Mr. Donnelly ......................... ........... X .............

Mr. Huizenga ......................... X ........... ............. Mr. Carson ........................... ........... X .............

Mr. Duffy ............................... ........... X ............. Mr. Himes ............................. X ........... .............

Ms. Hayworth ........................ ........... X ............. Mr. Peters ............................. X ........... .............

Mr. Renacci ........................... X ........... ............. Mr. Carney ............................ X ........... .............

Mr. Hurt ................................ ........... X .............

Mr. Dold ................................ ........... X .............

Mr. Schweikert ...................... ........... X .............

Mr. Grimm ............................. ........... ........... .............

Mr. Canseco .......................... ........... X .............

Mr. Stivers ............................ ........... X .............

Mr. Fincher ............................ ........... X .............


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The following amendments and motion were also considered by 

the Committee: 

1. An amendment offered by Mr. Canseco and Mrs. Maloney, No. 

1, to allow the Federal Reserve to conduct consumer testing of disclosure forms and other documents in order to determine the most 

effective way to communicate such disclosures to rental-purchase 

customers—similar to the Federal Reserve’s authority under the 

Truth in Lending Act—was agreed to by voice vote. 

2. An amendment offered by Mrs. Maloney and Ms. Moore, No. 

2, to provide that the amount of civil penalties shall be twenty-five 

percent of the sum of all fees, periodic payments, initial payment, 

and any other charges paid by the consumer since the date of consummation, was agreed to by voice vote. 

3. A motion offered by Mrs. Capito to move the previous question 

on H.R. 1588 was agreed to by voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held hearings and made 

findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

The objective of H.R. 1588 is to set a federal regulatory floor for 

consumer protection in rental-purchase transactions. There is no 

federal oversight or regulation of the rent-to-own industry. Currently, most states regulate rental-purchase transactions as leases; 

however, the scope and consumer protection requirements of these 

laws vary significantly by state. This bill would amend the Consumer Credit Protection Act (CCPA) to provide such oversight and 

regulation by (1) defining a number of terms pertaining to rental 

purchase transactions, including a ‘‘rental-purchase agreement,’’ 

which excludes credit sales and consumer leases (as defined by the 

Truth in Lending Act); (2) requiring rent-to-own merchants to include certain disclosures about the transaction in their rental-purchase agreements; (3) specifying the rights of consumers to acquire 

ownership of the property and to request statements of their accounts; (4) specifying provisions that are prohibited from appearing 

in rental-purchase agreements; (5) including standards governing 

renegotiations and extensions of rental-purchase agreements; (6) 

mandating disclosures for both point-of-rental and advertising; (7) 

permitting consumers to take civil action against a merchant that 

fails to comply with the requirements in the bill; (8) establishing 

criminal liability for merchants that willfully and knowingly give 

false or inaccurate information or fail to make any required disclosures under the bill; and (9) authorizing the Board of Governors of 

the Federal Reserve System to promulgate implementing regulations and granting enforcement powers to the Federal Trade Commission and to state attorneys general. 


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NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

JUNE 22, 2012. 

Hon. SPENCER BACHUS, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1588, the Consumer 

Rental Purchase Agreement Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 1588—Consumer Rental Purchase Agreement Act 

Estimated Impact on the Federal Budget: H.R. 1588 would require certain information to be disclosed by a merchant before a 

consumer finalizes a rent-to-own agreement—a contract that allows 

a consumer to lease certain property with the option, but not the 

obligation, to buy the property. The bill would require the Board 

of Governors of the Federal Reserve System to develop regulations 

as necessary to carry out the purposes of H.R. 1588. The regulations would stipulate, among other things, information that must 

be provided to a consumer before completing the transaction and 

information that must be included in advertisements for rent-toown contracts. The bill would authorize the Federal Trade Commission (FTC) to enforce the new regulations and would provide for 

criminal penalties in cases of willful failure to disclose the required 

information. 

Based on information from the FTC, CBO estimates that implementing H.R. 1588 would not significantly increase discretionary 

costs. The FTC expects that most affected businesses would comply 

with the new regulations. 


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Enacting H.R. 1588 would affect revenues and direct spending; 

therefore, pay-as-you-go procedures apply. Any increase in costs to 

the Federal Reserve that would result from the bill’s provisions requiring the Federal Reserve to develop new regulations would be 

recorded as changes in revenues. However, CBO expects that any 

such effects would be negligible. 

Because H.R. 1588 would allow for criminal fines to be collected 

in certain instances, the federal government might collect additional fines if the legislation is enacted. Criminal fines are recorded 

as revenues, deposited in the Crime Victims Fund, and later spent. 

CBO expects that any additional revenues and direct spending 

would not be significant because of the small number of cases likely 

to be affected. 

Estimated impact on State, local, and tribal governments: H.R. 

1588 contains intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) because it would preempt 

state laws that provide less protection to consumers that enter into 

rent-to-own agreements than the federal standard. The bill also 

would impose notification requirements and limitations on state attorneys general. Because the limits on state authority would not require the expenditure of funds and because the notification requirements would result in minimal additional spending, CBO estimates 

that the costs of the intergovernmental mandates would be small 

and would not exceed the threshold established in UMRA ($73 million in 2012, adjusted annually for inflation). 

Estimated impact on the private sector: H.R. 1588 contains private-sector mandates as defmed in UMRA. The bill would require 

merchants who provide the use of property through a rent-to-own 

agreement to provide certain disclosures to consumers in those 

agreements and in advertisements. Under the bill, such merchants 

also would be required to provide specific information in merchandise labeling and to furnish statements of account to customers 

upon request. In addition, the bill would prohibit those merchants 

from charging certain fees related to acquiring ownership through 

a rent-to-own agreement and from entering the premises of customers to reclaim property without the customer’s permission. 

According to the Federal Trade Commission, 47 states and the 

District of Columbia currently have laws that require some type of 

disclosure and labeling for such merchants. Industry representatives indicate that, because most merchants already comply with 

similar requirements in state laws, the incremental cost to comply 

with the mandates in the bill would be small. Therefore, CBO estimates that the direct cost to comply with the mandates in the bill 

would fall below the annual threshold established in UMRA for private-sector mandates ($146 million in 2012, adjusted annually for 

inflation). 

Staff contacts: The CBO staff contacts for this estimate are 

Susan Willie (for federal costs), Barbara Edwards (for federal revenues), Elizabeth Cove Delisle (for the impact on state and local governments), and Paige Piper/Bach (for the private-sector impact). 

The estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 


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FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 1588 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This Act may be cited as the ‘‘Consumer Rental Purchase Agreement Act.’’ 

Section 2. Findings and declaration of purpose 

This section sets forth certain facts concerning the rental-purchase industry and also declares the purposes of the Act. 

Section 3. Rental-purchase transactions covered under the Consumer Credit Protection Act 

This section amends the Consumer Credit Protection Act by adding a new title X to the Consumer Credit Protection Act. 

TITLE X—RENTAL-PURCHASE TRANSACTIONS

Section 1001. Definitions 

This section defines the following terms used in the Act: advertisement, agricultural purpose, Board, cash price, consumer, date of 

consummation, initial payment, merchant, payment schedule, periodic payment, property, rental payment, rental period, rental-purchase agreement, rental-purchase cost, state, and total cost. 

Section 1002. Exempted transactions 

This section exempts from the provisions of the Act rental-purchase agreements used primarily for business, commercial, or agricultural purposes, or those involving the government. 

Section 1003. General disclosure requirements 

This section requires merchants to disclose the information required by Sections 1004 and 1005 to any customer before the consummation of a transaction, and also requires that the disclosures 


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be displayed ‘‘clearly and conspicuously’’ in a ‘‘type size, prominence, and location as to be readily noticeable’’ to the customer. 

Section 1004. Rental purchase disclosures 

This section requires that for each rental-purchase agreement, 

the merchant clearly and conspicuously disclose to the consumer: 

(1) the date of the transaction and identities of merchant and consumer; (2) a description of the rental property, including an identification number and whether the property is new or used; (3) a description and amount of each fee, charge or penalty, in addition to 

the periodic payment; (4) a statement that a consumer will not obtain ownership of the property until he or she has paid the total 

cost to acquire ownership; (5) the amount of the initial payment; 

(6) the amount of the cash price of the property; (7) the payment 

schedule; (8) the total cost to acquire ownership; (9) a statement of 

the consumer’s right to terminate the agreement without paying 

any fee or charge not previously due under the agreement by voluntarily returning the property; and (10) a statement that the consumer should refer to the agreement for additional information on 

early termination procedures, purchase option rights, responsibilities for loss or damage, warranties, maintenance responsibilities, 

and other charges or penalties the consumer may incur. Disclosures 4–10 of the above list are required to be placed at the beginning of the rental-purchase agreement and to be identified as ‘‘IMPORTANT RENTAL-PURCHASE DISCLOSURES.’’ 

This section also requires the merchant to disclose to the customer that the purchase of leased property insurance or liability 

waiver coverage is not required. This section permits the merchant 

to offer liability coverage to the customer as long as the price and 

terms of the coverage are disclosed. 

This section also requires that the above disclosures be accurate 

as of the date the disclosures are made, based on the information 

available to the merchant. This section provides that information 

subsequently rendered inaccurate as a result of an agreement between the merchant and consumer subsequent to the delivery of 

the required disclosures shall not constitute a violation of the Act. 

Section 1005. Other agreement provisions 

This section mandates that each rental-purchase agreement shall 

provide a statement (1) specifying the party responsible for damage 

or loss, theft, damage, or destruction of the property; (2) specifying 

the party responsible for maintaining or servicing the property; (3) 

specifying the terms by which the customer can obtain ownership 

of the product by paying the total cost or via an early purchase option; (4) disclosing that any remaining portion of a manufacturer’s 

warranty shall be transferred to the consumer upon purchase if allowed by the terms of the warranty; and (5) providing a description 

of any grace period for making the periodic payment, the amount 

of any security deposit, and the terms for a security deposit refund. 

This section also requires that the rental-purchase agreement include a provision for reinstatement of the agreement with the same 

property, or if it is unavailable, a comparable substitute. Specifically, this section would permit consumers that rent merchandise 

on a monthly basis seven business days in which to cure any default under the agreement without losing any rights or options. For 


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consumers that pay more frequently than monthly, the statutory 

cure period is three business days. This section also provides that 

if a consumer returns the property within the prescribed default 

cure periods, then the right to reinstate the terminated agreement, 

without losing any rights or options previously acquired, is extended from 60 to 120 days, depending upon how long the consumer has been renting the item. 

Section 1006. Right to acquire ownership 

This section provides that the customer has the right to obtain 

ownership of the product by making all required payments in the 

agreement or through an early payment option. A merchant is prohibited from requiring the customer to pay any fee or charge in addition to the regular periodic payments or any early purchase option amount provided for in the agreement. As soon as the consumer makes all payments necessary to acquire ownership of the 

property, the merchant is required to deliver to the consumer any 

document to acknowledge full ownership of the property, as well as 

the unexpired portions of any warranties provided by the manufacturer, distributor, or seller of the property. 

Section 1007. Prohibited provisions 

This section prohibits a rental-purchase agreement from containing the following provisions: confession of judgment; a negotiable instrument; a security interest in other property; a wage assignment; or a waiver of any claim or defenses. This section also 

prohibits provisions requiring the consumer—in the event the property is lost, stolen, damaged or destroyed—to pay an amount in excess of the lesser of the fair market value, an early purchase option, or the actual cost of repair. 

This section also prohibits a rental-purchase agreement from 

containing provisions that authorize the merchant to enter the consumer’s dwelling without their permission to repossess merchandise; require the consumer to purchase insurance or liability damage waiver; or require the consumer to pay more than one late fee 

or charge for an unpaid or delinquent periodic payment. 

Section 1008. Statement of accounts 

This section requires a merchant to provide a consumer with a 

statement of his or her account upon request. It also permits the 

merchant to assess the consumer a reasonable fee if he or she requests a statement more than four times in a 12-month period. 

Section 1009. Renegotiations and Extensions 

This section requires that new disclosures be made at the time 

a rental-purchase agreement is renegotiated, except when payments are reduced; one or more payments are deferred; the rentalpurchase agreement is extended; the property is substituted with 

property of equal or greater value, provided the rental-purchase 

cost does not increase; the property is deleted from a multi-item 

agreement; the rental period is changed, but the rental-purchase 

cost does not increase; a court proceeding results in a new agreement; or any other event described in regulations prescribed by the 

Federal Reserve occurs. 


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Section 1010. Point-of-rental disclosures 

This section requires that for any items displayed or offered for 

rental-purchase, the merchant display on or next to the item a 

card, tag, or label that discloses the following: a brief description 

of the property; whether the property is new or used; the cash price 

of the property; the amount of each rental payment; the total number of rental payments required to obtain ownership of the property; and the rental-purchase cost. These disclosures are permitted 

to be made in the form of a list, catalog, or electronic facsimile of 

the card, tag, or label if the merchandise is not displayed in the 

showroom. 

Section 1011. Rental-purchase advertising 

This section mandates that if an advertisement for a rental-purchase transaction refers to the amount of any payment for a specific item, the merchant clearly and conspicuously disclose the following: that the transaction advertised is a rental-purchase agreement; the amount, timing, and total number of payments necessary 

to obtain ownership of the property; the amount of the rental-purchase cost; that the customer must pay the rental-purchase cost 

plus applicable taxes in order to obtain ownership of the property; 

and whether the stated payment amount and advertised rentalpurchase cost is for new or used property. The section prohibits a 

merchant from advertising items at amounts or terms that they do 

not regularly offer. The section also requires the Federal Reserve 

to prescribe regulations on principles and factors to meet the ‘‘clear 

and conspicuous’’ standard for print, video, audio and computerized 

advertising. 

Section 1012. Civil liability 

This section provides that if a merchant fails to comply with the 

requirements contained in the Act, the individual consumer is entitled to statutory damages equal to 25% of the sum of all fees, periodic payments, initial payment, and any other charges paid by the 

consumer since the date of consummation. It also provides that any 

action under Section 1012 of the Act may be brought in any United 

States district court or in any other court of competent jurisdiction, 

before the end of the 1-year period beginning on the date the last 

payment was made by the consumer. 

Section 1013. Additional grounds for civil liability 

This section provides that any merchant that fails to comply with 

the requirements imposed in Sections 1010 and 1011 shall be liable 

to any consumer that suffers actual damages resulting from the 

violation. It also states that if a merchant engages in a pattern of 

violating requirements imposed in Sections 1010 and 1011, the 

Federal Trade Commission or State attorney general may initiate 

an action to enforce sanctions against the merchant, including an 

order to cease and desist and a civil money penalty. 

Section 1014. Liability of assignees 

This section permits actions under Sections 1012 and 1013 to be 

taken against assignees of the merchant if the violation was apparent on the face of the rental-purchase agreement, including incomplete or inaccurate disclosures. 


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Section 1015. Regulations 

This section directs the Federal Reserve to prescribe regulations 

as necessary to carry out the provisions included in the Act. Those 

regulations may contain additional requirements, classifications, 

and differentiations, as well as provide for such adjustments and 

exceptions as the Federal Reserve deems necessary to effectuate 

the purposes of the Act, to prevent its circumvention or evasion, or 

to facilitate compliance with the Act. This section also permits the 

Federal Reserve to publish model disclosure forms and clauses for 

rental-purchase agreements in order to facilitate compliance with 

the disclosure requirements of the Act and to aid the consumer in 

understanding the transaction. The section states that any regulation prescribed by the Federal Reserve shall not be effective before 

the October 1 that follows the date of publication of the final regulation by at least 6 months. 

Section 1016. Enforcement 

This section grants enforcement authority under the Act to the 

Federal Trade Commission. This section also permits state attorneys general to bring actions to enforce the Act in any U.S. district 

court, as long as they provide prior written notice to the Federal 

Trade Commission. The Federal Trade Commission may intervene 

in the action, remove it to an appropriate U.S. district court, be 

heard on all matters arising in the action, and file a petition for 

appeal. 

Section 1017. Criminal liability for willful and knowing violation 

This section provides that merchants who willfully and knowingly give false information or fail to provide disclosures required 

by the Act or subsequent regulations are subject to the penalty provisions of Section 112 of the Consumer Credit Protection Act, which 

requires those individuals to be fined not more than $5,000 or imprisoned not more than one year, or both. 

Section 1018. Relation to other laws 

This section clarifies that the Act does not annul, alter, or affect 

any state laws relating to rental-purchase agreements, except when 

those state laws are inconsistent with this bill, and then only to the 

extent of the inconsistency, as determined by the Federal Reserve. 

If the Federal Reserve determines that a provision of a state law 

is inconsistent, then merchants in that state are not required to follow that provision of the state law, and will not incur any liability 

under the state law. This section provides that a state law should 

not be considered inconsistent if the term or provision affords 

greater protection and benefit to the consumer, as determined by 

the Federal Reserve. 

This section provides that the Act shall supersede any state law 

that (1) regulates a rental-purchase transaction as a security interest, credit sale, retail installment sale, conditional sale, or any 

other form of consumer credit, or (2) requires the disclosure of a 

percentage rate calculation, including a time-price differential, an 

annual percentage rate, or an effective annual percentage rate. It 

clarifies that no provision of the Act shall be construed as limiting 

or superseding the applicability of the Federal Trade Commission 

Act to any merchant or rental-purchase transaction. 


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Section 1019. Effect on government agencies 

This section provides that no civil liability or criminal penalty 

under the Act may be imposed on any federal or state government 

entities. 

Section 1020. Compliance date 

This section requires compliance with the Act six months after 

its enactment. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

CONSUMER CREDIT PROTECTION ACT 

* * * * * * * 

TITLE X—RENTAL-PURCHASE 

TRANSACTIONS 

Sec. 1001. Definitions. 

Sec. 1002. Exempted transactions. 

Sec. 1003. General disclosure requirements. 

Sec. 1004. Rental-purchase disclosures. 

Sec. 1005. Other agreement provisions. 

Sec. 1006. Right to acquire ownership. 

Sec. 1007. Prohibited provisions. 

Sec. 1008. Statement of accounts. 

Sec. 1009. Renegotiations and extensions. 

Sec. 1010. Point-of-rental disclosures. 

Sec. 1011. Rental-purchase advertising. 

Sec. 1012. Civil liability. 

Sec. 1013. Additional grounds for civil liability. 

Sec. 1014. Liability of assignees. 

Sec. 1015. Regulations. 

Sec. 1016. Enforcement. 

Sec. 1017. Criminal liability for willful and knowing violation. 

Sec. 1018. Relation to other laws. 

Sec. 1019. Effect on Government agencies. 

Sec. 1020. Compliance date. 

SEC. 1001. DEFINITIONS. 

For purposes of this title, the following definitions shall apply: 

(1) ADVERTISEMENT.—The term ‘‘advertisement’’ means a 

commercial message in any medium that promotes, directly or 

indirectly, a rental-purchase agreement but does not include 

price tags, window signs, or other in-store merchandising aids. 

(2) AGRICULTURAL PURPOSE.—The term ‘‘agricultural purpose’’ includes— 

(A) the production, harvest, exhibition, marketing, transformation, processing, or manufacture of agricultural products by a natural person who cultivates plants or propagates or nurtures agricultural products; and 


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(B) the acquisition of farmlands, real property with a 

farm residence, or personal property and services used primarily in farming. 

(3) BOARD.—The term ‘‘Board’’ means the Board of Governors 

of the Federal Reserve System. 

(4) CASH PRICE.—The term ‘‘cash price’’ means the price at 

which a merchant, in the ordinary course of business, offers to 

sell for cash the property that is the subject of the rental-purchase transaction. 

(5) CONSUMER.—The term ‘‘consumer’’ means a natural person who is offered or enters into a rental-purchase agreement. 

(6) DATE OF CONSUMMATION.—The term ‘‘date of consummation’’ means the date on which a consumer becomes contractually obligated under a rental-purchase agreement. 

(7) INITIAL PAYMENT.—The term ‘‘initial payment’’ means the 

amount to be paid before or at the consummation of the agreement or the delivery of the property if delivery occurs after consummation, including the rental payment; service, processing, 

or administrative charges; delivery fee; refundable security deposit; taxes; mandatory fees or charges; and any optional fees 

or charges agreed to by the consumer. 

(8) MERCHANT.—The term ‘‘merchant’’ means a person who 

provides the use of property through a rental-purchase agreement in the ordinary course of business and to whom a consumer’s initial payment under the agreement is payable. 

(9) PAYMENT SCHEDULE.—The term ‘‘payment schedule’’ 

means the amount and timing of the periodic payments and the 

total number of all periodic payments that the consumer will 

make if the consumer acquires ownership of the property by 

making all periodic payments. 

(10) PERIODIC PAYMENT.—The term ‘‘periodic payment’’ means 

the total payment a consumer will make for a specific rental period after the initial payment, including the rental payment, 

taxes, mandatory fees or charges, and any optional fees or 

charges agreed to by the consumer. 

(11) PROPERTY.—The term ‘‘property’’ means property that is 

not real property under the laws of the State where the property 

is located when it is made available under a rental-purchase 

agreement. 

(12) RENTAL PAYMENT.—The term ‘‘rental payment’’ means 

rent required to be paid by a consumer for the possession and 

use of property for a specific rental period, but does not include 

taxes or any fees or charges. 

(13) RENTAL PERIOD.—The term ‘‘rental period’’ means a 

week, month, or other specific period of time, during which the 

consumer has a right to possess and use property that is the 

subject of a rental-purchase agreement after paying the rental 

payment and any applicable taxes for such period. 

(14) RENTAL-PURCHASE AGREEMENT.— (A) IN GENERAL.—The term ‘‘rental-purchase agreement’’ 

means a contract in the form of a bailment or lease for the 

use of property by a consumer for an initial period of 4 

months or less, that is renewable with each payment by the 

consumer, and that permits but does not obligate the consumer to become the owner of the property. 


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(B) EXCLUSIONS.—The term ‘‘rental-purchase agreement’’ 

shall not be construed to be, nor governed by laws regulating any of the following: 

(i) A credit sale (as defined in section 103(g) of the 

Truth in Lending Act). 

(ii) A consumer lease (as defined in section 181(1) of 

such Act). 

(iii) An extension of credit or a transaction giving 

rise to a debt incurred in connection with the purchase 

of a thing of value. 

(15) RENTAL-PURCHASE COST.— 

(A) IN GENERAL.—For purposes of sections 1010 and 

1011, the term ‘‘rental-purchase cost’’ means the sum of all 

rental payments and mandatory fees or charges imposed by 

the merchant as a condition of entering into a rental-purchase agreement or acquiring ownership of property under 

a rental-purchase agreement, such as the following: 

(i) Service, processing, or administrative charge. 

(ii) Fee for an investigation or credit report. 

(iii) Charge for delivery required by the merchant. 

(B) EXCLUDED ITEMS.—The following fees or charges 

shall not be taken into account in determining the rentalpurchase cost with respect to a rental-purchase transaction: 

(i) Fees and charges prescribed by law, which actually are or will be paid to public officials or government entities, such as sales tax. 

(ii) Fees and charges for optional products and services offered in connection with a rental-purchase agreement. 

(16) STATE.—The term ‘‘State’’ means any State of the United 

States, the District of Columbia, any territory of the United 

States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern 

Mariana Islands. 

(17) TOTAL COST.—The term ‘‘total cost’’ means the sum of the 

initial payment and all periodic payments in the payment 

schedule to be paid by the consumer to acquire ownership of the 

property that is the subject of the rental-purchase agreement. 

SEC. 1002. EXEMPTED TRANSACTIONS. 

This title shall not apply to rental-purchase agreements primarily 

for business, commercial, or agricultural purposes, or those made 

with Government agencies or instrumentalities. 

SEC. 1003. GENERAL DISCLOSURE REQUIREMENTS. 

(a) RECIPIENT OF DISCLOSURE.—A merchant shall disclose to any 

person who will be a signatory to a rental-purchase agreement the 

information required by sections 1004 and 1005. 

(b) TIMING OF DISCLOSURE.—The disclosures required under sections 1004 and 1005 shall be made before the consummation of the 

rental-purchase agreement and clearly and conspicuously in writing 

as part of the rental-purchase agreement to be signed by the consumer. 

(c) CLEARLY AND CONSPICUOUSLY.—As used in this section, the 

term ‘‘clearly and conspicuously’’ means that information required 

to be disclosed to the consumer shall be worded plainly and simply, 


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and appear in a type size, prominence, and location as to be readily 

noticeable, readable, and comprehensible to an ordinary consumer. 

SEC. 1004. RENTAL-PURCHASE DISCLOSURES. 

(a) IN GENERAL.—For each rental-purchase agreement, the merchant shall clearly and conspicuously disclose to the consumer the 

following, to the extent applicable: 

(1) The date of the consummation of the rental-purchase 

transaction and the identities of the merchant and the consumer. 

(2) A brief description of the rental property, which shall be 

sufficient to identify the property to the consumer, including an 

identification or serial number, if applicable, and a statement 

indicating whether the property is new or used. 

(3) A description of any fee, charge or penalty, in addition to 

the periodic payment, that the consumer may be required to pay 

under the agreement, which shall be separately identified by 

type and amount. 

(4) A statement that the transaction is a rental-purchase 

agreement and that the consumer will not obtain ownership of 

the property until the consumer has paid the total dollar 

amount necessary to acquire ownership. 

(5) The amount of any initial payment. 

(6) The amount of the cash price of the property that is the 

subject of the rental-purchase agreement, and, if the agreement 

involves the rental of 2 or more items as a set (as may be defined by the Board in regulation) a statement of the aggregate 

cash price of all items shall satisfy this requirement. 

(7) The payment schedule. 

(8) The total cost, using that term, and a brief description, 

such as ‘‘This is the amount you will pay the merchant if you 

make all periodic payments to acquire ownership of the property.’’. 

(9) A statement of the consumer’s right to terminate the agreement without paying any fee or charge not previously due under 

the agreement by voluntarily surrendering or returning the 

property in good repair upon expiration of any rental period. 

(10) Substantially the following statement: ‘‘OTHER IMPORTANT TERMS: See your rental-purchase agreement for 

additional important information on early termination procedures, purchase option rights, responsibilities for loss, damage 

or destruction of the property, warranties, maintenance responsibilities, and other charges or penalties you may incur.’’. 

(b) FORM OF DISCLOSURE.—The disclosures required by paragraphs (4) through (10) of subsection (a) shall be segregated from 

other information at the beginning of the rental-purchase agreement 

and shall contain only directly related information, and shall be 

identified in boldface, upper-case letters as follows: ‘‘IMPORTANT 

RENTAL-PURCHASE DISCLOSURES’’. 

(c) DISCLOSURE REQUIREMENTS RELATING TO INSURANCE PREMIUMS AND LIABILITY WAIVERS.— 

(1) IN GENERAL.—A merchant shall clearly and conspicuously 

disclose in writing to the consumer before the consummation of 

a rental-purchase agreement that the purchase of leased property insurance or liability waiver coverage is not required as a 

condition for entering into the rental-purchase agreement. 


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(2) AFFIRMATIVE WRITTEN REQUEST AFTER COST DISCLO- SURE.—A merchant may provide insurance or liability waiver 

coverage, directly or indirectly, in connection with a rental-purchase transaction only if— 

(A) the merchant clearly and conspicuously discloses to 

the consumer the cost of such coverage before the consummation of the rental-purchase agreement; and 

(B) the consumer signs an affirmative written request for 

such coverage after receiving the disclosures required under 

subparagraph (A) of this paragraph and paragraph (1). 

(d) ACCURACY OF DISCLOSURE.— (1) IN GENERAL.—The disclosures required to be made under 

subsection (a) shall be accurate as of the date the disclosures 

are made, based on the information available to the merchant. 

(2) INFORMATION SUBSEQUENTLY RENDERED INACCURATE.—If 

information required to be disclosed under subsection (a) is subsequently rendered inaccurate as a result of any agreement between the merchant and the consumer subsequent to the delivery of the required disclosures, the resulting inaccuracy shall 

not constitute a violation of this title. 

SEC. 1005. OTHER AGREEMENT PROVISIONS. 

(a) IN GENERAL.—Each rental-purchase agreement shall— 

(1) provide a statement specifying whether the merchant or 

the consumer is responsible for loss, theft, damage, or destruction of the property; 

(2) provide a statement specifying whether the merchant or 

the consumer is responsible for maintaining or servicing the 

property, together with a brief description of the responsibility; 

(3) contain a provision for reinstatement of the agreement, 

which at a minimum— 

(A) permits a consumer who fails to make a timely rental 

payment to reinstate the agreement, without losing any 

rights or options which exist under the agreement, by the 

payment of all past due rental payments and any other 

charges then due under the agreement and a payment for 

the next rental period within 7 business days after failing 

to make a timely rental payment if the consumer pays 

monthly, or within 3 business days after failing to make a 

timely rental payment if the consumer pays more frequently 

than monthly; 

(B) if the consumer returns or voluntarily surrenders the 

property covered by the agreement, other than through judicial process, during the applicable reinstatement period set 

forth in subparagraph (A), permits the consumer to reinstate the agreement during a period of at least 60 days 

after the date of the return or surrender of the property by 

the payment of all amounts previously due under the agreement, any applicable fees, and a payment for the next rental period; 

(C) if the consumer has paid 50 percent or more of the 

total cost necessary to acquire ownership and returns or 

voluntarily surrenders the property, other than through judicial process, during the applicable reinstatement period 

set forth in subparagraph (A), permits the consumer to reinstate the agreement during a period of at least 120 days 


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after the date of the return of the property by the payment 

of all amounts previously due under the agreement, any applicable fees, and a payment for the next rental period; and 

(D) permits the consumer, upon reinstatement of the 

agreement to receive the same property, if available, that 

was the subject of the rental-purchase agreement, or if the 

same property is not available, a substitute item of comparable quality and condition may be provided to the consumer; except that, the Board may, by regulation or order, 

exempt any independent small business (as defined by the 

Board by regulation) from the requirement of providing the 

same or comparable product during the extended reinstatement period provided in subparagraph (C), if the Board determines, taking into account such standards as the Board 

determines to be appropriate, that the reinstatement right 

provided in such subparagraph would provide excessive 

hardship for such independent small business; 

(4) provide a statement specifying the terms under which the 

consumer shall acquire ownership of the property that is the 

subject of the rental-purchase agreement either by payment of 

the total cost to acquire ownership, as provided in section 1006, 

or by exercise of any early purchase option provided in the rental-purchase agreement; 

(5) provide a statement disclosing that if any part of a manufacturer’s express warranty covers the property at the time the 

consumer acquires ownership of the property, the warranty will 

be transferred to the consumer if allowed by the terms of the 

warranty; and 

(6) provide, to the extent applicable, a description of any 

grace period for making any periodic payment, the amount of 

any security deposit, if any, to be paid by the consumer upon 

initiation of the rental-purchase agreement, and the terms for 

refund of such security deposit to the consumer upon return, 

surrender or purchase of the property. 

(b) REPOSSESSION DURING REINSTATEMENT PERIOD.—Subsection 

(a)(3) shall not be construed so as to prevent a merchant from attempting to repossess property during the reinstatement period pursuant to subsection (a)(3)(A), but such a repossession does not affect 

the consumer’s right to reinstate. 

SEC. 1006. RIGHT TO ACQUIRE OWNERSHIP. 

(a) IN GENERAL.—The consumer shall acquire ownership of the 

property that is the subject of the rental-purchase agreement, and 

the rental-purchase agreement shall terminate, upon compliance by 

the consumer with the requirements of subsection (b) or any early 

payment option provided in the rental purchase agreement, and 

upon payment of any past due payments and fees, as permitted in 

regulation by the Board. 

(b) PAYMENT OF TOTAL COST.—The consumer shall acquire ownership of the rental property upon payment of the total cost of the 

rental-purchase agreement, as such term is defined in section 

1001(17), and as disclosed to the consumer in the rental-purchase 

agreement pursuant to section 1004(a). 

(c) ADDITIONAL FEES PROHIBITED.—A merchant shall not require 

the consumer to pay, as a condition for acquiring ownership of the 

property that is the subject of the rental-purchase agreement, any fee 


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or charge in addition to, or in excess of, the regular periodic payments required by subsection (b), or any early purchase option 

amount provided in the rental-purchase agreement, as applicable. A 

requirement that the consumer pay an unpaid late charge or other 

fee that is past due shall not constitute an additional fee or charge 

for purposes of this subsection. 

(d) TRANSFER OF OWNERSHIP RIGHTS.—Upon payment by the consumer of all payments necessary to acquire ownership under subsection (b) or any early purchase option amount provided in the 

rental-purchase agreement, as appropriate, the merchant shall— 

(1) deliver to the consumer, or mail to the consumer’s last 

known address, such documents or other instruments, which 

the Board has determined by regulation, are necessary to acknowledge full ownership by the consumer of the property acquired pursuant to the rental-purchase agreement; and 

(2) transfer to the consumer the unexpired portion of any warranties provided by the manufacturer, distributor, or seller of 

the property, which shall apply as if the consumer were the 

original purchaser of the property, except where such transfer is 

prohibited by the terms of the warranty. 

SEC. 1007. PROHIBITED PROVISIONS. 

A rental-purchase agreement may not contain— 

(1) a confession of judgment; 

(2) a negotiable instrument; 

(3) a security interest or any other claim of a property interest 

in any goods, except those goods the use of which is provided 

by the merchant pursuant to the agreement; 

(4) a wage assignment; 

(5) a provision requiring the waiver of any legal claim or 

remedy created by this title or other provision of Federal or 

State law; 

(6) a provision requiring the consumer, in the event the property subject to the rental-purchase agreement is lost, stolen, 

damaged, or destroyed, to pay an amount in excess of the least 

of— 

(A) the fair market value of the property, as determined 

by the Board in regulation; 

(B) any early purchase option amount provided in the 

rental-purchase agreement; or 

(C) the actual cost of repair, as appropriate; 

(7) a provision authorizing the merchant, or a person acting 

on behalf of the merchant, to enter the consumer’s dwelling or 

other premises without obtaining the consumer’s consent or to 

commit any breach of the peace in connection with the repossession of the rental property or the collection of any obligation or 

alleged obligation of the consumer arising out of the rental-purchase agreement; 

(8) a provision requiring the purchase of insurance or liability damage waiver to cover the property that is the subject of 

the rental-purchase agreement, except as permitted by the 

Board in regulation; or 

(9) a provision requiring the consumer to pay more than 1 

late fee or charge for an unpaid or delinquent periodic payment, 

regardless of the period in which the payment remains unpaid 

or delinquent, or to pay a late fee or charge for any periodic 


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payment because a previously assessed late fee has not been 

paid in full. 

SEC. 1008. STATEMENT OF ACCOUNTS. 

Upon request of a consumer, a merchant shall provide a statement of the consumer’s account. If a consumer requests a statement 

for an individual account more than 4 times in any 12-month period, the merchant may charge a reasonable fee for the additional 

statements. 

SEC. 1009. RENEGOTIATIONS AND EXTENSIONS. 

(a) RENEGOTIATIONS.—A renegotiation occurs when a rental-purchase agreement is satisfied and replaced by a new agreement undertaken by the same consumer. A renegotiation requires new disclosures, except as provided in subsection (c). 

(b) EXTENSIONS.—An extension is an agreement by the consumer 

and the merchant, to continue an existing rental-purchase agreement beyond the original end of the payment schedule, but does not 

include a continuation that is the result of a renegotiation. 

(c) EXCEPTIONS.—New disclosures are not required for the following, even if they meet the definition of a renegotiation or an extension: 

(1) A reduction in payments. 

(2) A deferment of 1 or more payments. 

(3) The extension of a rental-purchase agreement. 

(4) The substitution of property with property that has a substantially equivalent or greater economic value provided the 

rental-purchase cost does not increase. 

(5) The deletion of property in a multiple-item agreement. 

(6) A change in rental period provided the rental-purchase 

cost does not increase. 

(7) An agreement resulting from a court proceeding. 

(8) Any other event described in regulations prescribed by the 

Board. 

SEC. 1010. POINT-OF-RENTAL DISCLOSURES. 

(a) IN GENERAL.—For any item of property or set of items displayed or offered for rental-purchase, the merchant shall display on 

or next to the item or set of items a card, tag, or label that clearly 

and conspicuously discloses the following: 

(1) A brief description of the property. 

(2) Whether the property is new or used. 

(3) The cash price of the property. 

(4) The amount of each rental payment. 

(5) The total number of rental payments necessary to acquire 

ownership of the property. 

(6) The rental-purchase cost. 

(b) FORM OF DISCLOSURE.— 

(1) IN GENERAL.—A merchant may make the disclosure required by subsection (a) in the form of a list, catalog, or electronic facsimile of the card, tag, or label which is readily available to the consumer at the point of rental if the merchandise 

is not displayed in the merchant’s showroom or if displaying a 

card, tag, or label would be impractical due to the size of the 

merchandise. 

(2) CLEARLY AND CONSPICUOUSLY.—As used in this section, 

the term ‘‘clearly and conspicuously’’ means that information reVerDate Mar 15 2010 13:42 Jul 03, 2012 Jkt 019006 PO 00000 Frm 00029 Fmt 6659 Sfmt 6603 E:\HR\OC\HR565.XXX HR565

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quired to be disclosed to the consumer shall appear in a type 

size, prominence, and location as to be noticeable, readable, and 

comprehensible to an ordinary consumer. 

SEC. 1011. RENTAL-PURCHASE ADVERTISING. 

(a) IN GENERAL.—If an advertisement for a rental-purchase transaction refers to or states the amount of any payment for any specific 

item or set of items, the merchant making the advertisement shall 

also clearly and conspicuously state in the advertisement the following for the item, or set of items, advertised: 

(1) The transaction advertised is a rental-purchase agreement. 

(2) The amount, timing, and total number of rental payments 

necessary to acquire ownership under the rental-purchase agreement. 

(3) The amount of the rental-purchase cost. 

(4) To acquire ownership of the property the consumer must 

pay the rental-purchase cost plus applicable taxes. 

(5) Whether the stated payment amount and advertised rental-purchase cost is for new or used property. 

(b) PROHIBITION.—An advertisement for a rental-purchase agreement shall not state or imply that a specific item, or set of items, 

is available at specific amounts or terms unless the merchant usually and customarily offers, or will offer, the item or set of items at 

the stated amounts or terms. 

(c) CLEARLY AND CONSPICUOUSLY.— 

(1) IN GENERAL.—For purposes of this section, the term ‘‘clearly and conspicuously’’ means that required disclosures shall be 

presented in a type, size, shade, contrast, prominence, location, 

and manner, as applicable to different mediums for advertising, 

so as to be readily noticeable and comprehensible to the ordinary consumer. 

(2) REGULATORY GUIDANCE.—The Board shall prescribe regulations on principles and factors to meet the clear and conspicuous standard as appropriate to print, video, audio, and 

computerized advertising, reflecting the principles and factors 

typically applied in each medium by the Federal Trade Commission. 

(3) LIMITATION.—Nothing contrary to, inconsistent with, or in 

mitigation of, the required disclosures shall be used in any advertisement in any medium, and no audio, video, or print technique shall be used that is likely to obscure or detract significantly from the communication of the disclosures. 

SEC. 1012. CIVIL LIABILITY. 

(a) IN GENERAL.—Except as otherwise provided in section 1013, 

any merchant who fails to comply with any requirement of this title 

with respect to any consumer is liable to such consumer as provided 

for leases in section 130. For purposes of this section, the term ‘‘creditor’’ as used in section 130 shall include a ‘‘merchant’’, as defined 

in section 1001, and for purposes of this title, the term ‘‘total 

amount of monthly payments under the lease’’ as used in section 

130 shall mean the sum of all fees, periodic payments, initial payment, and any other charges paid by the consumer since the date 

of consummation. 

(b) JURISDICTION OF COURTS; LIMITATION ON ACTIONS.— 


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(1) IN GENERAL.—Notwithstanding section 130(e), any action 

under this section may be brought in any United States district 

court, or in any other court of competent jurisdiction, before the 

end of the 1-year period beginning on the date the last payment 

was made by the consumer under the rental-purchase agreement. 

(2) RECOUPMENT OR SET-OFF.—This subsection shall not bar 

a consumer from asserting a violation of this title in an action 

to collect an obligation arising from a rental-purchase agreement, which was brought after the end of the 1-year period described in paragraph (1) as a matter of defense by recoupment 

or set-off in such action, except as otherwise provided by State 

law. 

SEC. 1013. ADDITIONAL GROUNDS FOR CIVIL LIABILITY. 

(a) INDIVIDUAL CASES WITH ACTUAL DAMAGES.—Any merchant 

who fails to comply with any requirements imposed under section 

1010 or 1011 with respect to any consumer who suffers actual damage from the violation shall be liable to such consumer as provided 

in section 130. 

(b) PATTERN OR PRACTICE OF VIOLATIONS.—If a merchant engages 

in a pattern or practice of violating any requirement imposed under 

section 1010 or 1011, the Federal Trade Commission or an appropriate State attorney general, in accordance with section 1016, may 

initiate an action to enforce sanctions against the merchant, including— 

(1) an order to cease and desist from such practices; and 

(2) a civil money penalty of such amount as the court may 

impose, based on such factors as the court may determine to be 

appropriate. 

SEC. 1014. LIABILITY OF ASSIGNEES. 

(a) ASSIGNEES INCLUDED.—For purposes of section 1013, and this 

section, the term ‘‘merchant’’ includes an assignee of a merchant. 

(b) LIABILITIES OF ASSIGNEES.— 

(1) APPARENT VIOLATION.—An action under section 1012 or 

1013 for a violation of this title may be brought against an assignee only if the violation is apparent on the face of the rentalpurchase agreement to which it relates. 

(2) APPARENT VIOLATION DEFINED.—For purposes of this subsection, a violation that is apparent on the face of a rental-purchase agreement includes, but is not limited to, a disclosure 

that can be determined to be incomplete or inaccurate from the 

face of the agreement. 

(3) INVOLUNTARY ASSIGNMENT.—An assignee has no liability 

in a case in which the assignment is involuntary. 

(4) RULE OF CONSTRUCTION.—No provision of this section 

shall be construed as limiting or altering the liability under section 1012 or 1013 of a merchant assigning a rental-purchase 

agreement. 

(c) PROOF OF DISCLOSURE.—In an action by or against an assignee, the consumer’s written acknowledgment of receipt of a disclosure, made as part of the rental-purchase agreement, shall be conclusive proof that the disclosure was made, if the assignee had no 

knowledge that the disclosure had not been made when the assignee 

acquired the rental-purchase agreement to which it relates. 


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SEC. 1015. REGULATIONS. 

(a) IN GENERAL.—The Board shall prescribe regulations as necessary to carry out the purposes of this title. Such regulations may 

contain such additional requirements, classifications, differentiations, or other provisions, and may provide for such adjustments 

and exceptions for all or any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes 

of this title, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. 

(b) MODEL DISCLOSURE FORMS.—The Board may publish model 

disclosure forms and clauses for common rental-purchase agreements to facilitate compliance with the disclosure requirements of 

this title and to aid the consumer in understanding the transaction 

by utilizing readily understandable language to simplify the technical nature of the disclosures. In devising such forms, the Board 

shall consider the use by merchants of data processing or similar 

automated equipment. Nothing in this title may be construed to require a merchant to use any such model form or clause prescribed 

by the Board under this section. A merchant shall be deemed to be 

in compliance with the requirement to provide disclosure under section 1003(a) if the merchant— 

(1) uses any appropriate model form or clause as published 

by the Board; or 

(2) uses any such model form or clause and changes it by— 

(A) deleting any information which is not required by 

this title; or 

(B) rearranging the format, if in making such deletion or 

rearranging the format, the merchant does not affect the 

substance, clarity, or meaningful sequence of the disclosure. 

(c) EFFECTIVE DATE OF REGULATIONS.—Any regulation prescribed 

by the Board, or any amendment or interpretation thereof, shall not 

be effective before the October 1 that follows the date of publication 

of the regulation in final form by at least 6 months. The Board may 

at its discretion lengthen that period of time to permit merchants to 

adjust to accommodate new requirements. The Board may also 

shorten that period of time, notwithstanding the first sentence, if it 

makes a specific finding that such action is necessary to comply 

with the findings of a court or to prevent unfair or deceptive practices. In any case, merchants may comply with any newly prescribed 

disclosure requirement prior to its effective date. 

SEC. 1016. ENFORCEMENT. 

(a) FEDERAL ENFORCEMENT.—Compliance with the requirements 

imposed under this title shall be enforced under the Federal Trade 

Commission Act (15 U.S.C. 41 et seq.), and a violation of any requirements imposed under this title shall be deemed a violation of 

a requirement imposed under that Act. All of the functions and powers of the Federal Trade Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance 

by any person with the requirements of this title, irrespective of 

whether that person is engaged in commerce or meets any other jurisdictional test in the Federal Trade Commission Act. 

(b) STATE ENFORCEMENT.— 

(1) IN GENERAL.—An action to enforce the requirements imposed by this title may also be brought by the appropriate State 


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attorney general in any appropriate United States district court, 

or any other court of competent jurisdiction. 

(2) PRIOR WRITTEN NOTICE.— 

(A) IN GENERAL.—The State attorney general shall provide prior written notice of any such civil action to the Federal Trade Commission and shall provide the Commission 

with a copy of the complaint. 

(B) EMERGENCY ACTION.—If prior notice is not feasible, 

the State attorney general shall provide notice to the Commission immediately upon instituting the action. 

(3) FTC INTERVENTION.—The Commission may— 

(A) intervene in the action; 

(B) upon intervening— 

(i) remove the action to the appropriate United States 

district court, if it was not originally brought there; 

and 

(ii) be heard on all matters arising in the action; and 

(C) file a petition for appeal. 

SEC. 1017. CRIMINAL LIABILITY FOR WILLFUL AND KNOWING VIOLATION. 

Whoever willfully and knowingly gives false or inaccurate information or fails to provide information which he is required to disclose under the provisions of this title or any regulation issued 

thereunder shall be subject to the penalty provisions as provided in 

section 112. 

SEC. 1018. RELATION TO OTHER LAWS. 

(a) RELATION TO STATE LAW.— 

(1) NO EFFECT ON CONSISTENT STATE LAWS.—Except as otherwise provided in subsection (b), this title does not annul, alter, 

or affect in any manner the meaning, scope, or applicability of 

the laws of any State relating to rental-purchase agreements, 

except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. 

(2) DETERMINATION OF INCONSISTENCY.—Upon its own motion or upon the request of an interested party, which is submitted in accordance with procedures prescribed in regulations 

of the Board, the Board shall determine whether any such inconsistency exists. If the Board determines that a term or provision of a State law is inconsistent, merchants located in that 

State need not follow such term or provision and shall incur no 

liability under the law of that State for failure to follow such 

term or provision, notwithstanding that such determination is 

subsequently amended, rescinded, or determined by judicial or 

other authority to be invalid for any reason. 

(3) GREATER PROTECTION UNDER STATE LAW.—Except as provided in subsection (b), for purposes of this section, a term or 

provision of a State law is not inconsistent with the provisions 

of this title if the term or provision affords greater protection 

and benefit to the consumer than the protection and benefit provided under this title as determined by the Board, on its own 

motion or upon the petition of any interested party. 


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(b) STATE LAWS RELATING TO CHARACTERIZATION OF TRANS- ACTION.—Notwithstanding the provisions of subsection (a), this title 

shall supersede any State law to the extent that such law— 

(1) regulates a rental-purchase agreement as a security interest, credit sale, retail installment sale, conditional sale or any 

other form of consumer credit, or that imputes to a rental-purchase agreement the creation of a debt or extension of credit; or 

(2) requires the disclosure of a percentage rate calculation, including a time-price differential, an annual percentage rate, or 

an effective annual percentage rate. 

(c) RELATION TO FEDERAL TRADE COMMISSION ACT.—No provision of this title shall be construed as limiting, superseding, or otherwise affecting the applicability of the Federal Trade Commission 

Act to any merchant or rental-purchase transaction. 

SEC. 1019. EFFECT ON GOVERNMENT AGENCIES. 

No civil liability or criminal penalty under this title may be imposed on the United States or any of its departments or agencies, 

any State or political subdivision, or any agency of a State or political subdivision. 

SEC. 1020. COMPLIANCE DATE. 

Compliance with this title shall not be required until 6 months 

after the date of the enactment of the ‘‘Consumer Rental Purchase 

Agreement Act’’. In any case, merchants may comply with this title 

at any time after such date of enactment. 


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MINORITY VIEWS 

MINORITY VIEWS ON H.R. 1588 

We believe that state consumer protection laws should be preserved. We object to the defeat of two amendments that would have 

specifically protected the laws of four states—New Jersey, Minnesota, Wisconsin and Vermont. We do not believe in preempting 

these state laws when no economic argument has even been presented that one national approach to this law is required. Rent to 

own transactions can be performed according to the rules of the 

state with no impact on any other state. 

BARNEY FRANK. MELVIN L. WATT. MICHAEL E. CAPUANO. ANDRE ́ CARSON. GWEN MOORE. CAROLYN B. MALONEY. MAXINE WATERS. STEPHEN F. LYNCH. KEITH ELLISON. 

Æ 


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