99–008

107TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 2d Session 107–661

PROVIDING FOR CONSIDERATION OF H.R. 1701, CONSUMER 

RENTAL PURCHASE AGREEMENT ACT

SEPTEMBER 17, 2002.—Referred to the House Calendar and ordered to be printed 

Mr. LINDER, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 528]

The Committee on Rules, having had under consideration House 

Resolution 528, by a nonrecord vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for the consideration of H.R. 1701, the 

Consumer Rental Purchase Agreement Act, under a structured 

rule. The rule provides one hour of general debate, with 50 minutes 

equally divided and controlled by the chairman and ranking minority member of the Committee on Financial Services and 10 minutes 

equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary. 

The rule provides that the amendment in the nature of a substitute recommended by the Committee on Financial Services, as 

amended by the amendment recommended by the Committee on 

the Judiciary, now printed in the bill shall be considered as an 

original bill for the purpose of amendment and shall be considered 

as read. 

The rule makes in order only those amendments printed in this 

report. The rule provides that the amendments printed in this report shall be considered only in the order printed, may be offered 

only by a Member designated in this report, shall be considered as 

read, shall be debatable for the time specified in this report equally 

divided and controlled by the proponent and an opponent, shall not 

be subject to amendment, and shall not be subject to a demand for 

division of the question in the House or in the Committee of the 

Whole. The rule waives all points of order against the amendments 

printed in this report. 

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Finally, the rule provides one motion to recommit with or without instructions. 

SUMMARY OF AMENDMENTS MADE IN ORDER UNDER THE RULE

1. LaFalce: Incorporates the standard for limiting the total purchase price of rental-purchase merchandise from New York, Ohio 

and Nebraska state law, and establishes a process for determining 

standards in regulation for determining the cash price of rentalpurchase merchandise. (20 minutes) 

2. Waters: Prohibits the shifting of liability for loss, damage or 

destruction of the property subject to rental-purchase agreement to 

the consumer. The liability remains with the merchant. (20 minutes) 

TEXT OF AMENDMENTS MADE IN ORDER UNDER THE RULE

1. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE LAFALCE

OF NEW YORK, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 5, strike line 5 and all that follows through line 8, and insert the following new paragraph: ‘‘(4) CASH PRICE.— ‘‘(A) IN GENERAL.—The term ‘cash price’ means the price 

at which a merchant, in the ordinary course of business, 

would offer to sell for cash the property that is the subject 

of the rental-purchase agreement, as determined by the 

Board pursuant to this paragraph. ‘‘(B) DETERMINATION OF CASH PRICE.—The Board shall 

determine in regulation the formula or criteria for calculating the cash price of a product that is the subject of the 

rental-purchase agreement, which shall approximate the 

equivalent fair market value of the product if offered 

under a cash or credit sale, as adjusted to reflect additional charges or services, if any, that the Board determines are appropriate for purposes of rental-purchase 

transactions. 

‘‘(C) MINIMUM CASH PRICE.—Notwithstanding subparagraph (B), the cash price determined by the Board pursuant to subparagraph (B) shall not be less than an amount 

equal to twice the documented actual acquisition cost of 

the property to the merchant, which shall include the cost 

of shipment, refurbishing or other charges, as determined 

by the Board; except that, a merchant shall not be precluded from selling a product for cash for an amount that 

is less than the cash price determined under this paragraph. ‘‘(D) ADJUSTMENT FOR USED PROPERTY.—The cash price 

of used or previously rented property that is the subject of 

the rental-purchase agreement shall be determined by adjustment of the cash price determined under this paragraph according to such formula or criteria as the Board 

shall prescribe by regulation. ‘‘(E) PERIODIC ADJUSTMENT REQUIRED.—The Board shall, 

by regulation, periodically review and revise, as necessary, 

the formula or criteria for determining cash price under 

this paragraph in response to changes in merchant costs, 

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market conditions, or other factors determined by the 

Board. 

Page 17, beginning on line 4, strike ‘‘either by payment of the 

total cost’’ and all that follows through line 7, and insert ‘‘in accordance with section 1006;’’

Page 18, beginning on line 8, strike ‘‘ or any early payment option provided in the rental purchase agreement,’’. 

Page 18, strike line 12 and all that follows through line 17 and 

insert the following new subsection: 

‘‘(b) TRANSFER OF OWNERSHIP.—

‘‘(1) SCHEDULED PAYMENTS.—The consumer shall acquire 

ownership of the rental property upon payment of periodic payments totaling more than an amount, 50 percent of which 

equals the cash price of the rental property. 

‘‘(2) EARLY PAYMENT OPTION.—The consumer shall acquire 

ownership of the rental property, at any time after the initial 

payment, upon payment by the consumer of an amount equal 

to the amount by which the cash price of the leased property 

exceeds 50 percent of all previous payments under the rentalpurchase agreement. 

Page 18, beginning on line 23, strike ‘‘, or any early purchase option amount provided in the rental-purchase agreement, as applicable’’. 

Page 19, line 4, strike ‘‘RIGHTS’’ and insert ‘‘DOCUMENTS’’. 

Page 19, beginning on line 6, strike ‘‘ or any early purchase option amount provided in the rental-purchase agreement, as appropriate’’. 

2. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE WATERS OF

CALIFORNIA, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 19, line 22, strike ‘‘ ‘A rental-purchase agreement’’ and insert ‘‘ ‘(a) IN GENERAL.—A rental-purchase agreement’’. 

Page 21, after line 13, insert the following new subsection:

‘‘(b) CONTINUED APPLICABILITY OF EXISTING LAW.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the 

risk of any loss, damage, or destruction of the property that is 

the subject of a rental-purchase agreement shall remain with 

the merchant throughout the period such agreement is in effect 

and any rental-purchase agreement, or any waiver or other 

form of agreement between the merchant and the consumer, 

that purports to shift the burden of any such risk, and the cost 

of insuring against any such risk, to the consumer shall be null 

and void. 

‘‘(2) EXCEPTION FOR LOSS, DAMAGE, OR DESTRUCTION FOR

WHICH THE CONSUMER IS DIRECTLY RESPONSIBLE.—Paragraph 

(1) shall not apply with respect to any loss, damage, or destruction that was deliberately caused by the consumer or that occurred due to the negligence of the consumer.

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