II 

113TH CONGRESS 

1ST SESSION S. 1208 

To require 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. 

IN THE SENATE OF THE UNITED STATES 

JUNE 20, 2013 

Mr. TESTER (for himself and Mr. MORAN) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

To require meaningful disclosures of the terms of rentalpurchase 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Consumer Rental Pur5 chase Agreement Act’’. 

6 SEC. 2. FINDINGS AND DECLARATION OF PURPOSE. 

7 (a) FINDINGS.—Congress finds that— 


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1 (1) the rental-purchase industry provides a 

2 service that meets and satisfies the demands of 

3 many consumers; 

4 (2) each year, approximately 2,300,000 United 

5 States households enter into rental-purchase trans6 actions, and over a 5-year period, approximately 

7 4,900,000 United States households will do so; 

8 (3) competition among the various firms en9 gaged in the extension of rental-purchase trans10 actions would be strengthened by informed use of 

11 rental-purchase transactions; and 

12 (4) the informed use of rental-purchase trans13 actions results from an awareness of the cost thereof 

14 by consumers. 

15 (b) PURPOSE.—The purpose of this Act is to ensure 

16 the availability of rental-purchase transactions and to en17 sure simple, meaningful, and consistent disclosure of rent18 al-purchase terms so that consumers will be able to more 

19 readily compare the available rental-purchase terms and 

20 avoid uninformed use of rental-purchase transactions, and 

21 to protect consumers against unfair rental-purchase prac22 tices. 

23 SEC. 3. DEFINITIONS. 

24 For purposes of this Act, the following definitions 

25 shall apply: 


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1 (1) ADVERTISEMENT.—The term ‘‘advertise2 ment’’ means— 

3 (A) a commercial message in any medium 

4 that promotes, directly or indirectly, a rental5 purchase agreement; and 

6 (B) does not include any price tag, window 

7 sign, or other in-store merchandising aid. 

8 (2) AGRICULTURAL PURPOSE.—The term ‘‘agri9 cultural purpose’’ includes— 

10 (A) the production, harvest, exhibition, 

11 marketing, transformation, processing, or man12 ufacture of agricultural products by a natural 

13 person who cultivates plants or propagates or 

14 nurtures agricultural products; and 

15 (B) the acquisition of farmlands, real prop16 erty with a farm residence, or personal property 

17 and services used primarily in farming. 

18 (3) CASH PRICE.—The term ‘‘cash price’’ 

19 means the price at which a merchant, in the ordi20 nary course of business, offers to sell for cash the 

21 property that is the subject of the rental-purchase 

22 transaction. 

23 (4) COMMISSION.—The term ‘‘Commission’’ 

24 means the Federal Trade Commission. 


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1 (5) CONSUMER.—The term ‘‘consumer’’ means 

2 a natural person who is offered or enters into a rent3 al-purchase agreement. 

4 (6) DATE OF CONSUMMATION.—The term ‘‘date 

5 of consummation’’ means the date on which a con6 sumer becomes contractually obligated under a rent7 al-purchase agreement. 

8 (7) INITIAL PAYMENT.—The term ‘‘initial pay9 ment’’ means the amount to be paid before or at the 

10 consummation of the agreement, or the delivery of 

11 the property, if delivery occurs after consummation, 

12 including— 

13 (A) the rental payment; 

14 (B) service, processing, or administrative 

15 charges; 

16 (C) any delivery fee; 

17 (D) any refundable security deposit; 

18 (E) taxes; 

19 (F) mandatory fees or charges; and 

20 (G) any optional fees or charges agreed to 

21 by the consumer. 

22 (8) MERCHANT.—The term ‘‘merchant’’ means 

23 a person who provides the use of property through 

24 a rental-purchase agreement in the ordinary course 


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1 of business and to whom an initial payment by the 

2 consumer under the agreement is payable. 

3 (9) PAYMENT SCHEDULE.—The term ‘‘payment 

4 schedule’’ means the amount and timing of the peri5 odic payments and the total number of all periodic 

6 payments that the consumer will make if the con7 sumer acquires ownership of the property by making 

8 all periodic payments. 

9 (10) PERIODIC PAYMENT.—The term ‘‘periodic 

10 payment’’ means the total payment that a consumer 

11 will make for a specific rental period after the initial 

12 payment, including the rental payment, taxes, man13 datory fees or charges, and any optional fees or 

14 charges agreed to by the consumer. 

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

16 property that is not real property under the laws of 

17 the State in which the property is located when it 

18 is made available under a rental-purchase agree19 ment. 

20 (12) RENTAL PAYMENT.—The term ‘‘rental 

21 payment’’ means rent required to be paid by a con22 sumer for the possession and use of property for a 

23 specific rental period, but does not include taxes or 

24 any fees or charges. 


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1 (13) RENTAL PERIOD.—The term ‘‘rental pe2 riod’’ means a week, month, or other specific period 

3 of time, during which the consumer has a right to 

4 possess and use property that is the subject of a 

5 rental-purchase agreement after paying the rental 

6 payment and any applicable taxes for such period. 

7 (14) RENTAL-PURCHASE AGREEMENT.— 

8 (A) IN GENERAL.—The term ‘‘rental-pur9 chase agreement’’ means a contract in the form 

10 of a bailment or lease for the use of property 

11 by a consumer for an initial period of 4 months 

12 or less, that is renewable with each payment by 

13 the consumer, and that permits but does not 

14 obligate the consumer to become the owner of 

15 the property. 

16 (B) EXCLUSIONS.—The term ‘‘rental-pur17 chase agreement’’ shall not be construed to be, 

18 nor be governed by laws regulating, any of the 

19 following: 

20 (i) A credit sale (as defined in section 

21 103(g) of the Truth in Lending Act (15 

22 U.S.C. 1602(g))). 

23 (ii) A consumer lease (as defined in 

24 section 181(1) of the Truth in Lending Act 

25 (15 U.S.C. 1667(1))). 


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1 (iii) An extension of credit or a trans2 action giving rise to a debt incurred in 

3 connection with the purchase of a thing of 

4 value. 

5 (15) RENTAL-PURCHASE COST.— 

6 (A) IN GENERAL.—For purposes of sec7 tions 1010 and 1011, the term ‘‘rental-purchase 

8 cost’’ means the sum of all rental payments and 

9 mandatory fees or charges imposed by the mer10 chant as a condition of entering into a rental11 purchase agreement or acquiring ownership of 

12 property under a rental-purchase agreement, 

13 such as— 

14 (i) a service, processing, or adminis15 trative charge; 

16 (ii) a fee for an investigation or credit 

17 report; or 

18 (iii) a charge for delivery required by 

19 the merchant. 

20 (B) EXCLUDED ITEMS.—The following fees 

21 or charges shall not be taken into account in 

22 determining the rental-purchase cost with re23 spect to a rental-purchase transaction: 

24 (i) Fees and charges prescribed by 

25 law, which actually are or will be paid to 


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1 public officials or government entities, such 

2 as sales tax. 

3 (ii) Fees and charges for optional 

4 products and services offered in connection 

5 with a rental-purchase agreement. 

6 (16) STATE.—The term ‘‘State’’ means any 

7 State of the United States, the District of Columbia, 

8 any territory of the United States, Puerto Rico, 

9 Guam, American Samoa, the Trust Territory of the 

10 Pacific Islands, the Virgin Islands, and the Northern 

11 Mariana Islands. 

12 (17) TOTAL COST.—The term ‘‘total cost’’ 

13 means the sum of the initial payment and all peri14 odic payments in the payment schedule to be paid by 

15 the consumer to acquire ownership of the property 

16 that is the subject of a rental-purchase agreement. 

17 SEC. 4. EXEMPTED TRANSACTIONS. 

18 This Act shall not apply to rental-purchase agree19 ments primarily for business, commercial, or agricultural 

20 purposes, or those made with Government agencies or in21 strumentalities. 

22 SEC. 5. GENERAL DISCLOSURE REQUIREMENTS. 

23 (a) RECIPIENT OF DISCLOSURE.—A merchant shall 

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1 purchase agreement the information required by sections 

2 6 and 7. 

3 (b) TIMING OF DISCLOSURE.—The disclosures re4 quired under sections 6 and 7 shall be made— 

5 (1) before the consummation of the rental-pur6 chase agreement; and 

7 (2) clearly and conspicuously, in writing, as 

8 part of the rental-purchase agreement to be signed 

9 by the consumer. 

10 (c) CLEARLY AND CONSPICUOUSLY.—As used in this 

11 section, the term ‘‘clearly and conspicuously’’ means that 

12 information required to be disclosed to the consumer shall 

13 be worded plainly and simply, and appear in a type size, 

14 prominence, and location as to be readily noticeable, read15 able, and comprehensible to an ordinary consumer. 

16 SEC. 6. RENTAL-PURCHASE DISCLOSURES. 

17 (a) IN GENERAL.—For each rental-purchase agree18 ment, the merchant shall clearly and conspicuously dis19 close to the consumer, to the extent applicable— 

20 (1) the date of the consummation of the rental21 purchase transaction and the identities of the mer22 chant and the consumer; 

23 (2) a brief description of the rental property, 

24 which shall be sufficient to identify the property to 

25 the consumer, including an identification or serial 


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1 number, if applicable, and a statement indicating 

2 whether the property is new or used at the time of 

3 the agreement; 

4 (3) a description of any fee, charge, or penalty, 

5 in addition to the periodic payment, that the con6 sumer may be required to pay under the agreement, 

7 which shall be separately identified by type and 

8 amount; 

9 (4) a statement that— 

10 (A) the transaction is a rental-purchase 

11 agreement; and 

12 (B) the consumer will not obtain ownership 

13 of the property until the consumer has paid the 

14 total dollar amount necessary to acquire owner15 ship; 

16 (5) the amount of any initial payment; 

17 (6) the amount of the cash price of the property 

18 that is the subject of the rental-purchase agreement, 

19 and, if the agreement involves the rental of 2 or 

20 more items as a set (as may be defined by the Com21 mission, by regulation) a statement of the aggregate 

22 cash price of all items shall satisfy this requirement; 

23 (7) the payment schedule; 

24 (8) the total cost, using that term, and a brief 

25 description, such as ‘‘This is the amount you will 


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1 pay the merchant if you make all periodic payments 

2 to acquire ownership of the property.’’; 

3 (9) a statement of the right of the consumer to 

4 terminate the agreement without paying any fee or 

5 charge not previously due under the agreement, by 

6 voluntarily surrendering or returning the property in 

7 good repair upon expiration of any rental period; 

8 (10) a description of the reinstatement periods 

9 of terminated rental-purchase agreements; and 

10 (11) substantially the following statement: 

11 ‘‘OTHER IMPORTANT TERMS: See your rental-pur12 chase agreement for additional important informa13 tion on early termination procedures, purchase op14 tion rights, responsibilities for loss, damage, or de15 struction of the property, warranties, maintenance 

16 responsibilities, and other charges or penalties you 

17 may incur.’’. 

18 (b) FORM OF DISCLOSURE.—The disclosures re19 quired by paragraphs (4) through (12) of subsection (a)— 

20 (1) shall be segregated from other information 

21 at the beginning of the rental-purchase agreement; 

22 (2) shall contain only directly related informa23 tion; and 


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1 (3) shall be identified in boldface, upper-case 

2 letters as follows: ‘‘IMPORTANT RENTAL-PUR3 CHASE DISCLOSURES’’. 

4 (c) DISCLOSURE REQUIREMENTS RELATING TO IN5 SURANCE PREMIUMS AND LIABILITY WAIVERS.— 

6 (1) IN GENERAL.—The merchant shall clearly 

7 and conspicuously disclose in writing to the con8 sumer before the consummation of a rental-purchase 

9 agreement that the purchase of leased property in10 surance or liability waiver coverage is not required 

11 as a condition for entering into the rental-purchase 

12 agreement. 

13 (2) AFFIRMATIVE WRITTEN REQUEST AFTER

14 COST DISCLOSURE.—A merchant may provide insur15 ance or liability waiver coverage, directly or indi16 rectly, in connection with a rental-purchase trans17 action only if— 

18 (A) the merchant clearly and conspicuously 

19 discloses to the consumer the cost of such cov20 erage before the consummation of the rental21 purchase agreement; and 

22 (B) the consumer signs an affirmative 

23 written request for such coverage after receiving 

24 the disclosures required under paragraph (1) 

25 and subparagraph (A) of this paragraph. 


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1 (d) ACCURACY OF DISCLOSURE.— 

2 (1) IN GENERAL.—The disclosures required to 

3 be made under subsection (a) shall be accurate as of 

4 the date on which the disclosures are made, based 

5 on the information available to the merchant. 

6 (2) INFORMATION SUBSEQUENTLY RENDERED

7 INACCURATE.—If information required to be dis8 closed under subsection (a) is rendered inaccurate as 

9 a result of any agreement between the merchant and 

10 the consumer subsequent to the delivery of the re11 quired disclosures, the resulting inaccuracy shall not 

12 constitute a violation of this Act. 

13 SEC. 7. OTHER AGREEMENT PROVISIONS. 

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

15 shall— 

16 (1) provide a statement specifying whether the 

17 merchant or the consumer is responsible for loss, 

18 theft, damage, or destruction of the property; 

19 (2) provide a statement specifying whether the 

20 merchant or the consumer is responsible for main21 taining or servicing the property, together with a 

22 brief description of the responsibility; 

23 (3) contain a provision for reinstatement of the 

24 agreement, which, at a minimum— 


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1 (A) permits a consumer who fails to make 

2 a timely rental payment to reinstate the agree3 ment, without losing any rights or options 

4 which exist under the agreement, by the pay5 ment of all past due rental payments and any 

6 other charges then due under the agreement 

7 and a payment for the next rental period— 

8 (i) within 7 business days after failing 

9 to make a timely rental payment, if the 

10 consumer pays monthly; or 

11 (ii) within 3 business days after fail12 ing to make a timely rental payment, if the 

13 consumer pays more frequently than 

14 monthly; 

15 (B) if the consumer returns or voluntarily 

16 surrenders the property covered by the agree17 ment, other than through judicial process, dur18 ing the applicable reinstatement period set forth 

19 in subparagraph (A), permits the consumer to 

20 reinstate the agreement during a period of at 

21 least 60 days after the date of the return or 

22 surrender of the property by the payment of all 

23 amounts previously due under the agreement, 

24 any applicable fees, and a payment for the next 

25 rental period; 


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1 (C) if the consumer has paid 50 percent or 

2 more of the total cost necessary to acquire own3 ership and returns or voluntarily surrenders the 

4 property, other than through judicial process, 

5 during the applicable reinstatement period set 

6 forth in subparagraph (A), permits the con7 sumer to reinstate the agreement during a pe8 riod of at least 120 days after the date of the 

9 return of the property by the payment of all 

10 amounts previously due under the agreement, 

11 any applicable fees, and a payment for the next 

12 rental period; 

13 (D) if the consumer is a member of the 

14 Armed Forces and returns or voluntarily sur15 renders property as set forth in subparagraph 

16 (A) due to a permanent change of station or 

17 other relocation of the member, provides that 

18 the applicable reinstatement period set forth in 

19 subparagraph (B) or (C) be tolled or otherwise 

20 suspended until such time as the consumer re21 turns to the area where the property is located; 

22 and 

23 (E) permits the consumer, upon reinstate24 ment of the agreement to receive the same 

25 property, if available, that was the subject of 


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1 the rental-purchase agreement, or if the same 

2 property is not available, a substitute item of 

3 comparable quality and condition may be pro4 vided to the consumer, except that, the Com5 mission may, by regulation or order, exempt 

6 any independent small business (as defined by 

7 the Commission, by regulation) from the re8 quirement of providing the same or comparable 

9 product during the extended reinstatement pe10 riod provided in subparagraph (C), if the Com11 mission determines, taking into account such 

12 standards as the Commission determines to be 

13 appropriate, that the reinstatement right pro14 vided in such subparagraph would provide ex15 cessive hardship for such independent small 

16 business; 

17 (4) provide a statement specifying the terms 

18 under which the consumer shall acquire ownership of 

19 the property that is the subject of the rental-pur20 chase agreement, either by payment of the total cost 

21 to acquire ownership, as provided in section 8, or by 

22 exercise of any early purchase option provided in the 

23 rental-purchase agreement; 

24 (5) provide a statement disclosing that if any 

25 part of an express warranty of the manufacturer 


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1 covers the property at the time the consumer ac2 quires ownership of the property, the warranty will 

3 be transferred to the consumer, if allowed by the 

4 terms of the warranty; and 

5 (6) provide, to the extent applicable, a descrip6 tion of— 

7 (A) any grace period for making any peri8 odic payment; 

9 (B) the amount of any security deposit, to 

10 be paid by the consumer upon initiation of the 

11 rental-purchase agreement; and 

12 (C) the terms for refund of such security 

13 deposit to the consumer upon return, surrender, 

14 or purchase of the property. 

15 (b) REPOSSESSION DURING REINSTATEMENT PE16 RIOD.—Subsection (a)(3) may not be construed so as to 

17 prevent a merchant from attempting to repossess property 

18 during the reinstatement period pursuant to subsection 

19 (a)(3)(A), but such a repossession does not affect the con20 sumer’s right to reinstate in accordance with this Act. 

21 SEC. 8. RIGHT TO ACQUIRE OWNERSHIP. 

22 (a) IN GENERAL.—The consumer shall acquire own23 ership of the property that is the subject of a rental-pur24 chase agreement, and the rental-purchase agreement shall 

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1 quirements of subsection (b) or any early payment option 

2 provided in the rental-purchase agreement, and upon pay3 ment of any past due payments and fees, as permitted 

4 in regulation by the Commission. 

5 (b) PAYMENT OF TOTAL COST.—The consumer shall 

6 acquire ownership of the rental property upon payment 

7 of the total cost of the subject rental-purchase agreement, 

8 as disclosed to the consumer in the rental-purchase agree9 ment pursuant to section 6(a). 

10 (c) ADDITIONAL FEES PROHIBITED.— 

11 (1) IN GENERAL.—A merchant shall not require 

12 the consumer to pay, as a condition for acquiring 

13 ownership of the property that is the subject of a 

14 rental-purchase agreement, any fee or charge in ad15 dition to, or in excess of, the regular periodic pay16 ments required by subsection (b), or any early pur17 chase option amount provided in the rental-purchase 

18 agreement, as applicable. 

19 (2) RULE OF CONSTRUCTION.—A requirement 

20 that the consumer pay an unpaid late charge or 

21 other fee that is past due shall not constitute an ad22 ditional fee or charge for purposes of this sub23 section. 

24 (d) TRANSFER OF OWNERSHIP RIGHTS.—Upon pay25 ment by the consumer of all payments necessary to acquire 


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1 ownership under subsection (b) or any early purchase op2 tion amount provided in the rental-purchase agreement, 

3 as appropriate, the merchant shall— 

4 (1) deliver to the consumer, or mail to the con5 sumer’s last known address, such documents or 

6 other instruments, which the Commission has deter7 mined, by regulation, are necessary to acknowledge 

8 full ownership by the consumer of the property ac9 quired pursuant to the rental-purchase agreement; 

10 and 

11 (2) transfer to the consumer the unexpired por12 tion of any warranties provided by the manufac13 turer, distributor, or seller of the property, which 

14 shall apply as if the consumer were the original pur15 chaser of the property, except where such transfer is 

16 prohibited by the terms of the warranty. 

17 SEC. 9. PROHIBITED PROVISIONS. 

18 A rental-purchase agreement may not contain— 

19 (1) a confession of judgment; 

20 (2) a negotiable instrument; 

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

22 property interest in any goods, except those goods, 

23 the use of which is provided by the merchant pursu24 ant to the rental-purchase agreement; 

25 (4) a wage assignment; 


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1 (5) a provision requiring the waiver of any legal 

2 claim or remedy created by this Act or other provi3 sion of Federal or State law; 

4 (6) a provision requiring the consumer, in the 

5 event that the property subject to the rental-pur6 chase agreement is lost, stolen, damaged, or de7 stroyed, to pay an amount in excess of the least of— 

8 (A) the fair market value of the property, 

9 as determined by the Commission, by regula10 tion; 

11 (B) any early purchase option amount pro12 vided in the rental-purchase agreement; or 

13 (C) the actual cost of repair, as appro14 priate; 

15 (7) a provision authorizing the merchant, or a 

16 person acting on behalf of the merchant— 

17 (A) to enter the consumer’s dwelling or 

18 other premises without obtaining the con19 sumer’s consent; or 

20 (B) to commit any breach of the peace in 

21 connection with the repossession of the rental 

22 property or the collection of any obligation or 

23 alleged obligation of the consumer arising out 

24 of the rental-purchase agreement; 


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1 (8) a provision requiring the purchase of insur2 ance or liability damage waiver to cover the property 

3 that is the subject of the rental-purchase agreement, 

4 except as permitted by the Commission, by regula5 tion; or 

6 (9) a provision requiring the consumer to pay 

7 more than 1 late fee or charge for an unpaid or de8 linquent periodic payment, regardless of the period 

9 in which the payment remains unpaid or delinquent, 

10 or to pay a late fee or charge for any periodic pay11 ment because a previously assessed late fee has not 

12 been paid in full. 

13 SEC. 10. STATEMENT OF ACCOUNTS. 

14 Upon request of a consumer, a merchant shall pro15 vide a statement of the consumer’s account. If a consumer 

16 requests a statement for an individual account more than 

17 4 times in any 12-month period, the merchant may charge 

18 a reasonable fee for the additional statements. 

19 SEC. 11. RENEGOTIATIONS AND EXTENSIONS. 

20 (a) RENEGOTIATIONS.—With respect to any rental21 purchase agreement, a renegotiation occurs when the 

22 agreement is satisfied and replaced by a new agreement 

23 undertaken by the same consumer. A renegotiation re24 quires new disclosures in accordance with this Act, except 

25 as provided in subsection (c). 


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1 (b) EXTENSIONS.—With respect to any rental-pur2 chase agreement, an extension is an agreement by the con3 sumer and the merchant, to continue an existing rental4 purchase agreement beyond the original end of the pay5 ment schedule, but does not include a continuation that 

6 is the result of a renegotiation. 

7 (c) EXCEPTIONS.—New disclosures under this Act 

8 are not required in connection with a rental-purchase 

9 agreement for the following events, even if the event meets 

10 the definition of a renegotiation or an extension: 

11 (1) A reduction in payments. 

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

13 (3) The extension of a rental-purchase agree14 ment. 

15 (4) The substitution of property with property 

16 that has a substantially equivalent or greater eco17 nomic value, provided the rental-purchase cost does 

18 not increase. 

19 (5) The deletion of property in a multiple-item 

20 agreement. 

21 (6) A change in rental period, provided the 

22 rental-purchase cost does not increase. 

23 (7) An agreement resulting from a court pro24 ceeding. 


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1 (8) Any other event described in regulations 

2 prescribed by the Commission. 

3 SEC. 12. POINT-OF-RENTAL DISCLOSURES. 

4 (a) IN GENERAL.—For any item of property or set 

5 of items displayed or offered for rental-purchase, the mer6 chant shall display on or next to the item or set of items 

7 a card, tag, or label that clearly and conspicuously dis8 closes— 

9 (1) a brief description of the property; 

10 (2) whether the property is new or used; 

11 (3) the cash price of the property; 

12 (4) the amount of each rental payment; 

13 (5) the total number of rental payments nec14 essary to acquire ownership of the property; and 

15 (6) the rental-purchase cost. 

16 (b) FORM OF DISCLOSURE.— 

17 (1) IN GENERAL.—A merchant may make the 

18 disclosures required by subsection (a) in the form of 

19 a list, catalog, or electronic facsimile of the card, 

20 tag, or label which is readily available to the con21 sumer at the point of rental if the merchandise is 

22 not displayed in the merchant’s showroom or if dis23 playing a card, tag, or label would be impractical 

24 due to the size of the merchandise. 


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1 (2) CLEARLY AND CONSPICUOUSLY.—As used 

2 in this section, the term ‘‘clearly and conspicuously’’ 

3 means that information required to be disclosed to 

4 the consumer shall appear in a type size, promi5 nence, and location as to be noticeable, readable, 

6 and comprehensible to an ordinary consumer. 

7 SEC. 13. RENTAL-PURCHASE ADVERTISING. 

8 (a) IN GENERAL.—If an advertisement for a rental9 purchase transaction refers to or states the amount of any 

10 payment for any specific item or set of items, the mer11 chant making the advertisement shall also clearly and con12 spicuously state in the advertisement, for the item or set 

13 of items advertised— 

14 (1) that the transaction advertised is a rental15 purchase agreement; 

16 (2) the amount, timing, and total number of 

17 rental payments necessary to acquire ownership 

18 under the rental-purchase agreement; 

19 (3) the amount of the rental-purchase cost; 

20 (4) that, to acquire ownership of the property, 

21 the consumer must pay the rental-purchase cost plus 

22 applicable taxes; and 

23 (5) whether the stated payment amount and ad24 vertised rental-purchase cost is for new or used 

25 property. 


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1 (b) PROHIBITION.—An advertisement for a rental2 purchase agreement shall not state or imply that a specific 

3 item or set of items is available at specific amounts or 

4 terms, unless the merchant usually and customarily offers, 

5 or will offer, the item or set of items at the stated amounts 

6 or terms. 

7 (c) CLEARLY AND CONSPICUOUSLY.— 

8 (1) IN GENERAL.—For purposes of this section, 

9 the term ‘‘clearly and conspicuously’’ means that re10 quired disclosures shall be presented in a type, size, 

11 shade, contrast, prominence, location, and manner, 

12 as applicable to different mediums for advertising, 

13 so as to be readily noticeable and comprehensible to 

14 the ordinary consumer. 

15 (2) REGULATORY GUIDANCE.—The Commission 

16 shall prescribe regulations on principles and factors 

17 to meet the clear and conspicuous standard, as ap18 propriate to print, video, audio, and computerized 

19 advertising, reflecting the principles and factors typi20 cally applied in each such medium by the Commis21 sion. 

22 (3) LIMITATION.—Nothing contrary to, incon23 sistent with, or in mitigation of, the disclosures re24 quired by this section shall be used in any advertise25 ment in any medium, and no audio, video, or print 


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1 technique shall be used that is likely to obscure or 

2 detract significantly from the communication of the 

3 disclosures. 

4 SEC. 14. ENFORCEMENT BY COMMISSION. 

5 (a) UNFAIR OR DECEPTIVE ACTS OR PRACTICES.— 

6 A violation of a provision of this Act or a rule or regulation 

7 prescribed pursuant to this Act shall be treated as a viola8 tion of a rule defining an unfair or deceptive act or prac9 tice described under section 18(a)(1)(B) of the Federal 

10 Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). 

11 (b) POWERS OF COMMISSION.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (3), the Commission shall enforce this Act in 

14 the same manner, by the same means, and with the 

15 same jurisdiction, powers, and duties as though all 

16 applicable terms and provisions of the Federal Trade 

17 Commission Act (15 U.S.C. 41 et seq.) were incor18 porated into and made a part of this Act. 

19 (2) PRIVILEGES AND IMMUNITIES.—Except as 

20 provided in paragraph (3), any person who violates 

21 this Act shall be subject to the penalties and entitled 

22 to the privileges and immunities provided in the 

23 Federal Trade Commission Act (15 U.S.C. 41 et 

24 seq.). 


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1 SEC. 15. REGULATIONS. 

2 (a) IN GENERAL.— 

3 (1) COMMISSION ACTION.—The Commission 

4 shall prescribe regulations as necessary to carry out 

5 this Act. 

6 (2) CONTENT.—Regulations required by this 

7 subsection may contain such additional require8 ments, classifications, differentiations, or other pro9 visions, and may provide for such adjustments and 

10 exceptions for all or any class of transactions, as in 

11 the judgment of the Commission are necessary or 

12 proper to effectuate the purposes of this Act, to pre13 vent circumvention or evasion thereof, or to facilitate 

14 compliance therewith. 

15 (b) MODEL DISCLOSURE FORMS.— 

16 (1) IN GENERAL.—The Commission may pub17 lish model disclosure forms and clauses for common 

18 rental-purchase agreements to facilitate compliance 

19 with the disclosure requirements of this Act and to 

20 aid the consumer in understanding the transaction 

21 by utilizing readily understandable language to sim22 plify the technical nature of the disclosures. 

23 (2) CONSIDERATIONS.—In devising model 

24 forms under this subsection, the Commission shall 

25 consider the use by merchants of data processing or 

26 similar automated equipment. 


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1 (3) VOLUNTARY USE OF MODEL FORMS.—Noth2 ing in this Act may be construed to require a mer3 chant to use any model form or clause prescribed by 

4 the Commission under this section. 

5 (4) PRESUMPTION.—A merchant shall be 

6 deemed to be in compliance with the requirement to 

7 provide disclosure under section 5(a), if the mer8 chant— 

9 (A) uses any appropriate model form or 

10 clause as published by the Commission under 

11 this section; or 

12 (B) uses any such model form or clause 

13 and changes it by— 

14 (i) deleting any information which is 

15 not required by this Act; or 

16 (ii) rearranging the format, if in mak17 ing such deletion or rearranging the for18 mat, the merchant does not affect the sub19 stance, clarity, or meaningful sequence of 

20 the disclosure. 

21 SEC. 16. EFFECTIVE DATE OF REGULATIONS. 

22 (a) IN GENERAL.—Any regulation prescribed by the 

23 Commission under this Act, or any amendment or inter24 pretation thereof, shall not be effective before the October 


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1 1 that follows the date of publication of the regulation in 

2 final form by at least 6 months. 

3 (b) AUTHORITY TO EXTEND TIME.—The Commis4 sion may, at its discretion— 

5 (1) lengthen the period of time described in 

6 subsection (a) to permit merchants to adjust to ac7 commodate new requirements; or 

8 (2) shorten that period of time, if the Commis9 sion makes a specific finding that such action is nec10 essary to comply with the findings of a court or to 

11 prevent unfair or deceptive practices. 

12 (c) EARLY COMPLIANCE AUTHORIZED.—Notwith13 standing the time periods established under subsection (a) 

14 or (b), a merchant may comply with any newly prescribed 

15 disclosure requirement prior to such established date. 

16 SEC. 17. RELATION TO OTHER LAWS. 

17 (a) RELATION TO STATE LAW.— 

18 (1) NO EFFECT ON CONSISTENT STATE

19 LAWS.—Except as provided in subsection (b), this 

20 Act does not annul, alter, or affect in any manner 

21 the meaning, scope, or applicability of the laws of 

22 any State relating to rental-purchase agreements, 

23 except to the extent that those laws are inconsistent 

24 with any provision of this Act, and then only to the 

25 extent of the inconsistency. 


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1 (2) DETERMINATION OF INCONSISTENCY.— 

2 Upon its own motion or upon the request of an in3 terested party, which is submitted in accordance 

4 with procedures prescribed in regulations of the 

5 Commission, the Commission shall determine wheth6 er any such inconsistency exists. If the Commission 

7 determines that a term or provision, of a State law 

8 is inconsistent, merchants located in that State need 

9 not follow such term or provision and shall incur no 

10 liability under the law of that State for failure to fol11 low such term or provision, notwithstanding that 

12 such determination is subsequently amended, re13 scinded, or determined by judicial or other authority 

14 to be invalid for any reason. 

15 (3) GREATER PROTECTION UNDER STATE

16 LAW.—Except as provided in subsection (b), for pur17 poses of this section, a term or provision of a State 

18 law is not inconsistent with the provisions of this 

19 Act if the term or provision affords greater protec20 tion and benefit to the consumer than the protection 

21 and benefit provided under this Act, as determined 

22 by the Commission, on its own motion or upon the 

23 petition of any interested party. 

24 (b) STATE LAWS RELATING TO CHARACTERIZATION

25 OF TRANSACTION.—Notwithstanding subsection (a), this 


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1 Act shall supersede any provision of State law, to the ex2 tent that such law— 

3 (1) regulates a rental-purchase agreement as a 

4 security interest, credit sale, retail installment sale, 

5 conditional sale or any other form of consumer cred6 it, or that imputes to a rental-purchase agreement 

7 the creation of a debt or extension of credit; or 

8 (2) requires the disclosure of a percentage rate 

9 calculation, including a time-price differential, an 

10 annual percentage rate, or an effective annual per11 centage rate. 

12 (c) RELATION TO FEDERAL TRADE COMMISSION

13 ACT.—No provision of this Act shall be construed as lim14 iting, superseding, or otherwise affecting the applicability 

15 of the Federal Trade Commission Act (15 U.S.C. 41 et 

16 seq.) to any merchant or rental-purchase transaction. 

17 SEC. 18. EFFECT ON GOVERNMENT AGENCIES. 

18 No civil liability or criminal penalty under this Act 

19 may be imposed on the United States or any of its depart20 ments or agencies, any State or political subdivision, or 

21 any agency of a State or political subdivision. 

22 SEC. 19. COMPLIANCE DATE. 

23 Compliance with this Act and regulations issued 

24 under this Act is not required until 6 months after the 

25 date of enactment of this Act. In any case, merchants may 


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1 comply with this Act at any time after such date of enact2 ment. 

Æ 


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