I 

109TH CONGRESS 

1ST SESSION H. R. 1651 

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. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 14, 2005 

Mr. JONES of North Carolina (for himself, Mr. KANJORSKI, Ms. HOOLEY, 

Mrs. KELLY, Mr. HENSARLING, and Mr. SAM JOHNSON of Texas) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

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. 

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’’ . 
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1 SEC. 2. FINDINGS AND DECLARATION OF PURPOSE. 

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

3 (1) The rental-purchase industry provides a 

4 service that meets and satisfies the demands of 

5 many consumers. 

6 (2) Each year, approximately 2,300,000 United 

7 States households enter into rental-purchase trans8 actions and over a 5-year period approximately 

9 4,900,000 United States households will do so. 

10 (3) Competition among the various firms en11 gaged in the extension of rental-purchase trans12 actions would be strengthened by informed use of 

13 rental-purchase transactions. 

14 (4) The informed use of rental-purchase trans15 actions results from an awareness of the cost thereof 

16 by consumers. 

17 (b) PURPOSE.—The purpose of this title is to assure 

18 the availability of rental-purchase transactions and to as19 sure simple, meaningful, and consistent disclosure of rent20 al-purchase terms so that consumers will be able to more 

21 readily compare the available rental-purchase terms and 

22 avoid uninformed use of rental-purchase transactions, and 

23 to protect consumers against unfair rental-purchase prac24 tices. 
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1 SEC. 3. CONSUMER CREDIT PROTECTION ACT. 

2 The Consumer Credit Protection Act is amended by 

3 adding at the end the following new title: 

4 ‘‘TITLE X—RENTAL-PURCHASE 

5 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. 

6 ‘‘SEC. 1001. DEFINITIONS. 

7 ‘‘For purposes of this title, the following definitions 

8 shall apply: 

9 ‘‘(1) ADVERTISEMENT.—The term ‘advertise10 ment’ means a commercial message in any medium 

11 that promotes, directly or indirectly, a rental-pur12 chase agreement but does not include price tags, 

13 window signs, or other in-store merchandising aids. 

14 ‘‘(2) AGRICULTURAL PURPOSE.—The term ‘ag15 ricultural purpose’ includes— 
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1 ‘‘(A) the production, harvest, exhibition, 

2 marketing, transformation, processing, or man3 ufacture of agricultural products by a natural 

4 person who cultivates plants or propagates or 

5 nurtures agricultural products; and 

6 ‘‘(B) the acquisition of farmlands, real 

7 property with a farm residence, or personal 

8 property and services used primarily in farm9 ing. 

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

11 Board of Governors of the Federal Reserve System. 

12 ‘‘(4) CASH PRICE.—The term ‘cash price’ 

13 means the price at which a merchant, in the ordi14 nary course of business, offers to sell for cash the 

15 property that is the subject of the rental-purchase 

16 transaction. 

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

18 a natural person who is offered or enters into a rent19 al-purchase agreement. 

20 ‘‘(6) DATE OF CONSUMMATION.—The term 

21 ‘date of consummation’ means the date on which a 

22 consumer becomes contractually obligated under a 

23 rental-purchase agreement. 

24 ‘‘(7) INITIAL PAYMENT.—The term ‘initial pay25 ment’ means the amount to be paid before or at the 
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1 consummation of the agreement or the delivery of 

2 the property if delivery occurs after consummation, 

3 including the rental payment; service, processing, or 

4 administrative charges; delivery fee; refundable secu5 rity deposit; taxes; mandatory fees or charges; and 

6 any optional fees or charges agreed to by the con7 sumer. 

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

9 a person who provides the use of property through 

10 a rental-purchase agreement in the ordinary course 

11 of business and to whom a consumer’s initial pay12 ment under the agreement is payable. 

13 ‘‘(9) PAYMENT SCHEDULE.—The term ‘pay14 ment schedule’ means the amount and timing of the 

15 periodic payments and the total number of all peri16 odic payments that the consumer will make if the 

17 consumer acquires ownership of the property by 

18 making all periodic payments. 

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

20 payment’ means the total payment a consumer will 

21 make for a specific rental period after the initial 

22 payment, including the rental payment, taxes, man23 datory fees or charges, and any optional fees or 

24 charges agreed to by the consumer. 
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1 ‘‘(11) PROPERTY.—The term ‘property’ means 

2 property that is not real property under the laws of 

3 the State where the property is located when it is 

4 made available under a rental-purchase agreement. 

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

6 payment’ means rent required to be paid by a con7 sumer for the possession and use of property for a 

8 specific rental period, but does not include taxes or 

9 any fees or charges. 

10 ‘‘(13) RENTAL PERIOD.—The term ‘rental pe11 riod’ means a week, month, or other specific period 

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

13 possess and use property that is the subject of a 

14 rental-purchase agreement after paying the rental 

15 payment and any applicable taxes for such period. 

16 ‘‘(14) RENTAL-PURCHASE AGREEMENT.— 

17 ‘‘(A) IN GENERAL.—The term ‘rental-pur18 chase agreement’ means a contract in the form 

19 of a bailment or lease for the use of property 

20 by a consumer for an initial period of 4 months 

21 or less, that is renewable with each payment by 

22 the consumer, and that permits but does not 

23 obligate the consumer to become the owner of 

24 the property. 
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1 ‘‘(B) EXCLUSIONS.—The term ‘rental-pur2 chase agreement’ does not include— 

3 ‘‘(i) a credit sale (as defined in section 

4 103(g) of the Truth in Lending Act); 

5 ‘‘(ii) a consumer lease (as defined in 

6 section 181(1) of such Act); or 

7 ‘‘(iii) a transaction giving rise to a 

8 debt incurred in connection with the busi9 ness of lending money or a thing of value. 

10 ‘‘(15) RENTAL-PURCHASE COST.— 

11 ‘‘(A) IN GENERAL.—For purposes of sec12 tions 1010 and 1011, the term ‘rental-purchase 

13 cost’ means the sum of all rental payments and 

14 mandatory fees or charges imposed by the mer15 chant as a condition of entering into a rental16 purchase agreement or acquiring ownership of 

17 property under a rental-purchase agreement, 

18 such as the following: 

19 ‘‘(i) Service, processing, or adminis20 trative charge. 

21 ‘‘(ii) Fee for an investigation or credit 

22 report. 

23 ‘‘(iii) Charge for delivery required by 

24 the merchant. 
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1 ‘‘(B) EXCLUDED ITEMS.—The following 

2 fees or charges shall not be taken into account 

3 in determining the rental-purchase cost with re4 spect to a rental-purchase transaction: 

5 ‘‘(i) Fees and charges prescribed by 

6 law, which actually are or will be paid to 

7 public officials or government entities, such 

8 as sales tax. 

9 ‘‘(ii) Fees and charges for optional 

10 products and services offered in connection 

11 with a rental-purchase agreement. 

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

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

14 any territory of the United States, Puerto Rico, 

15 Guam, American Samoa, the Trust Territory of the 

16 Pacific Islands, the Virgin Islands, and the Northern 

17 Mariana Islands. 

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

19 means the sum of the initial payment and all peri20 odic payments in the payment schedule to be paid by 

21 the consumer to acquire ownership of the property 

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

23 ‘‘SEC. 1002. EXEMPTED TRANSACTIONS. 

24 ‘‘This title shall not apply to rental-purchase agree25 ments primarily for business, commercial, or agricultural 
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1 purposes, or those made with Government agencies or in2 strumentalities. 

3 ‘‘SEC. 1003. GENERAL DISCLOSURE REQUIREMENTS. 

4 ‘‘(a) RECIPIENT OF DISCLOSURE.—A merchant shall 

5 disclose to any person who will be a signatory to a rental6 purchase agreement the information required by sections 

7 1004 and 1005. 

8 ‘‘(b) TIMING OF DISCLOSURE.—The disclosures re9 quired under sections 1004 and 1005 shall be made before 

10 the consummation of the rental-purchase agreement and 

11 clearly and conspicuously in writing as part of the rental12 purchase agreement to be signed by the consumer. 

13 ‘‘(c) CLEARLY AND CONSPICUOUSLY.—As used in 

14 this section, the term ‘clearly and conspicuously’ means 

15 that information required to be disclosed to the consumer 

16 shall be worded plainly and simply, and appear in a type 

17 size, prominence, and location as to be readily noticeable, 

18 readable, and comprehensible to an ordinary consumer. 

19 ‘‘SEC. 1004. RENTAL-PURCHASE DISCLOSURES. 

20 ‘‘(a) IN GENERAL.—For each rental-purchase agree21 ment, the merchant shall disclose to the consumer the fol22 lowing, to the extent applicable: 

23 ‘‘(1) The date of the consummation of the rent24 al-purchase transaction and the identities of the 

25 merchant and the consumer. 
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1 ‘‘(2) A brief description of the rental property, 

2 which shall be sufficient to identify the property to 

3 the consumer, including an identification or serial 

4 number, if applicable, and a statement indicating 

5 whether the property is new or used. 

6 ‘‘(3) A description of any fee, charge or penalty, 

7 in addition to the periodic payment, that the con8 sumer may be required to pay under the agreement, 

9 which shall be separately identified by type and 

10 amount. 

11 ‘‘(4) A clear and conspicuous statement that 

12 the transaction is a rental-purchase agreement and 

13 that the consumer will not obtain ownership of the 

14 property until the consumer has paid the total dollar 

15 amount necessary to acquire ownership. 

16 ‘‘(5) The amount of any initial payment, which 

17 includes the first periodic payment, and the total 

18 amount of any fees, taxes, or other charges, required 

19 to be paid by the consumer. 

20 ‘‘(6) The amount of the cash price of the prop21 erty that is the subject of the rental-purchase agree22 ment, and, if the agreement involves the rental of 2 

23 or more items as a set (as may be defined by the 

24 Board in regulation) a statement of the aggregate 

25 cash price of all items shall satisfy this requirement. 
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1 ‘‘(7) The amount and timing of periodic pay2 ments, and the total number of periodic payments 

3 necessary to acquire ownership of the property 

4 under the rental-purchase agreement. 

5 ‘‘(8) The total cost, using that term, and a 

6 brief description, such as ‘This is the amount you 

7 will pay the merchant if you make all periodic pay8 ments to acquire ownership of the property.’. 

9 ‘‘(9) A statement of the consumer’s right to ter10 minate the agreement without paying any fee or 

11 charge not previously due under the agreement by 

12 voluntarily surrendering or returning the property in 

13 good repair upon expiration of any lease term. 

14 ‘‘(10) Substantially the following statement: 

15 ‘OTHER IMPORTANT TERMS: See your rental-pur16 chase agreement for additional important informa17 tion on early termination procedures, purchase op18 tion rights, responsibilities for loss, damage or de19 struction of the property, warranties, maintenance 

20 responsibilities, and other charges or penalties you 

21 may incur.’. 

22 ‘‘(b) FORM OF DISCLOSURE.—The disclosures re23 quired by paragraphs (4) through (10) of subsection (a) 

24 shall be segregated from other information at the begin25 ning of the rental-purchase agreement and shall contain 
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1 only directly related information, and shall be identified 

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

3 RENTAL-PURCHASE DISCLOSURES’. 

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

6 ‘‘(1) IN GENERAL.—A 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 conspicu19 ously discloses to the consumer the cost of each 

20 component of such coverage before the con21 summation of the rental-purchase agreement; 

22 and 

23 ‘‘(B) the consumer signs an affirmative 

24 written request for such coverage after receiving 
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1 the disclosures required under subparagraph 

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

3 ‘‘(d) ACCURACY OF DISCLOSURE.— 

4 ‘‘(1) IN GENERAL.—The disclosures required to 

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

6 the date the disclosures are made, based on the in7 formation available to the merchant. 

8 ‘‘(2) INFORMATION SUBSEQUENTLY RENDERED

9 INACCURATE.—If information required to be dis10 closed under subsection (a) is subsequently rendered 

11 inaccurate as a result of any agreement between the 

12 merchant and the consumer subsequent to the deliv13 ery of the required disclosures, the resulting inaccu14 racy shall not constitute a violation of this title. 

15 ‘‘SEC. 1005. OTHER AGREEMENT PROVISIONS. 

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

17 shall— 

18 ‘‘(1) provide a statement specifying whether the 

19 merchant or the consumer is responsible for loss, 

20 theft, damage, or destruction of the property; 

21 ‘‘(2) provide a statement specifying whether the 

22 merchant or the consumer is responsible for main23 taining or servicing the property, together with a 

24 brief description of the responsibility; 
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1 ‘‘(3) provide that the consumer may terminate 

2 the agreement without paying any charges not pre3 viously due under the agreement by voluntarily sur4 rendering or returning the property that is the sub5 ject of the agreement upon expiration of any rental 

6 period; 

7 ‘‘(4) contain a provision for reinstatement of 

8 the agreement, which at a minimum— 

9 ‘‘(A) permits a consumer who fails to make 

10 a timely rental payment to reinstate the agree11 ment, without losing any rights or options 

12 which exist under the agreement, by the pay13 ment of all past due rental payments and any 

14 other charges then due under the agreement 

15 and a payment for the next rental period within 

16 7 business days after failing to make a timely 

17 rental payment if the consumer pays monthly, 

18 or within 3 business days after failing to make 

19 a timely rental payment if the consumer pays 

20 more frequently than monthly; 

21 ‘‘(B) if the consumer returns or voluntarily 

22 surrenders the property covered by the agree23 ment, other than through judicial process, dur24 ing the applicable reinstatement period set forth 

25 in subparagraph (A), permits the consumer to 
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1 reinstate the agreement during a period of at 

2 least 60 days after the date of the return or 

3 surrender of the property by the payment of all 

4 amounts previously due under the agreement, 

5 any applicable fees, and a payment for the next 

6 rental period; 

7 ‘‘(C) if the consumer has paid 50 percent 

8 or more of the total cost necessary to acquire 

9 ownership and returns or voluntarily surrenders 

10 the property, other than through judicial proc11 ess, during the applicable reinstatement period 

12 set forth in subparagraph (A), permits the con13 sumer to reinstate the agreement during a pe14 riod of at least 120 days after the date of the 

15 return of the property by the payment of all 

16 amounts previously due under the agreement, 

17 any applicable fees, and a payment for the next 

18 rental period; and 

19 ‘‘(D) permits the consumer, upon rein20 statement of the agreement to receive the same 

21 property, if available, that was the subject of 

22 the rental-purchase agreement, or if the same 

23 property is not available, a substitute item of 

24 comparable quality and condition may be pro25 vided to the consumer; except that, the Board 
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1 may, by regulation or order, exempt any inde2 pendent small business (as defined by the 

3 Board by regulation) from the requirement of 

4 providing the same or comparable product dur5 ing the extended reinstatement period provided 

6 in subparagraph (C), if the Board determines, 

7 taking into account such standards as the 

8 Board determines to be appropriate, that the 

9 reinstatement right provided in such subpara10 graph would provide excessive hardship for such 

11 independent small business; 

12 ‘‘(5) provide a statement specifying the terms 

13 under which the consumer shall acquire ownership of 

14 the property that is the subject of the rental-pur15 chase agreement either by payment of the total cost 

16 to acquire ownership, as provided in section 1006, or 

17 by exercise of any early purchase option provided in 

18 the rental-purchase agreement; 

19 ‘‘(6) provide a statement disclosing that if any 

20 part of a manufacturer’s express warranty covers 

21 the property at the time the consumer acquires own22 ership of the property, the warranty will be trans23 ferred to the consumer if allowed by the terms of the 

24 warranty; and 
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1 ‘‘(7) provide, to the extent applicable, a descrip2 tion of any grace period for making any periodic 

3 payment, the amount of any security deposit, if any, 

4 to be paid by the consumer upon initiation of the 

5 rental-purchase agreement, and the terms for refund 

6 of such security deposit to the consumer upon re7 turn, surrender or purchase of the property. 

8 ‘‘(b) REPOSSESSION DURING REINSTATEMENT PE9 RIOD.—Subsection (a)(4) shall not be construed so as to 

10 prevent a merchant from attempting to repossess property 

11 during the reinstatement period pursuant to subsection 

12 (a)(4)(A), but such a repossession does not affect the con13 sumer’s right to reinstate. 

14 ‘‘SEC. 1006. RIGHT TO ACQUIRE OWNERSHIP. 

15 ‘‘(a) IN GENERAL.—The consumer shall acquire own16 ership of the property that is the subject of the rental17 purchase agreement, and the rental-purchase agreement 

18 shall terminate, upon compliance by the consumer with the 

19 requirements of subsection (b) or any early payment op20 tion provided in the rental purchase agreement, and upon 

21 payment of any past due payments and fees, as permitted 

22 in regulation by the Board. 

23 ‘‘(b) PAYMENT OF TOTAL COST.—The consumer 

24 shall acquire ownership of the rental property upon pay25 ment of the total cost of the rental-purchase agreement, 
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1 as such term is defined in section 1001(17), and as dis2 closed to the consumer in the rental-purchase agreement 

3 pursuant to section 1004(a). 

4 ‘‘(c) ADDITIONAL FEES PROHIBITED.—A merchant 

5 shall not require the consumer to pay, as a condition for 

6 acquiring ownership of the property that is the subject of 

7 the rental-purchase agreement, any fee or charge in addi8 tion to, or in excess of, the regular periodic payments re9 quired by subsection (b), or any early purchase option 

10 amount provided in the rental-purchase agreement, as ap11 plicable. A requirement that the consumer pay an unpaid 

12 late charge or other fee or charge which the merchant has 

13 previously billed to the consumer shall not constitute an 

14 additional fee or charge for purposes of this subsection. 

15 ‘‘(d) TRANSFER OF OWNERSHIP RIGHTS.—Upon 

16 payment by the consumer of all payments necessary to ac17 quire ownership under subsection (b) or any early pur18 chase option amount provided in the rental-purchase 

19 agreement, as appropriate, the merchant shall— 

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

21 known address, such documents or other instru22 ments, which the Board has determined by regula23 tion, are necessary to acknowledge full ownership by 

24 the consumer of the property acquired pursuant to 

25 the rental-purchase agreement; and 
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1 ‘‘(2) transfer to the consumer the unexpired 

2 portion of any warranties provided by the manufac3 turer, distributor, or seller of the property, which 

4 shall apply as if the consumer were the original pur5 chaser of the property, except where such transfer is 

6 prohibited by the terms of the warranty. 

7 ‘‘SEC. 1007. PROHIBITED PROVISIONS. 

8 ‘‘A rental-purchase agreement may not contain— 

9 ‘‘(1) a confession of judgment; 

10 ‘‘(2) a negotiable instrument; 

11 ‘‘(3) a security interest or any other claim of a 

12 property interest in any goods, except those goods 

13 the use of which is provided by the merchant pursu14 ant to the agreement; 

15 ‘‘(4) a wage assignment; 

16 ‘‘(5) a provision requiring the waiver of any 

17 legal claim or remedy created by this title or other 

18 provision of Federal or State law; 

19 ‘‘(6) a provision requiring the consumer, in the 

20 event the property subject to the rental-purchase 

21 agreement is lost, stolen, damaged, or destroyed, to 

22 pay an amount in excess of the least of— 

23 ‘‘(A) the fair market value of the property, 

24 as determined by the Board in regulation; 
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1 ‘‘(B) any early purchase option amount 

2 provided in the rental-purchase agreement; or 

3 ‘‘(C) the actual cost of repair, as appro4 priate; 

5 ‘‘(7) a provision authorizing the merchant, or a 

6 person acting on behalf of the merchant, to enter the 

7 consumer’s dwelling or other premises without ob8 taining the consumer’s consent or to commit any 

9 breach of the peace in connection with the reposses10 sion of the rental property or the collection of any 

11 obligation or alleged obligation of the consumer aris12 ing out of the rental-purchase agreement; 

13 ‘‘(8) a provision requiring the purchase of in14 surance or liability damage waiver to cover the prop15 erty that is the subject of the rental-purchase agree16 ment, except as permitted by the Board in regula17 tion; 

18 ‘‘(9) a provision requiring the consumer to pay 

19 more than 1 late fee or charge for an unpaid or de20 linquent periodic payment, regardless of the period 

21 in which the payment remains unpaid or delinquent, 

22 or to pay a late fee or charge for any periodic pay23 ment because a previously assessed late fee has not 

24 been paid in full. 
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1 ‘‘SEC. 1008. STATEMENT OF ACCOUNTS. 

2 ‘‘Upon request of a consumer, a merchant shall pro3 vide a statement of the consumer’s account. If a consumer 

4 requests a statement for an individual account more than 

5 4 times in any 12-month period, the merchant may charge 

6 a reasonable fee for the additional statements. 

7 ‘‘SEC. 1009. RENEGOTIATIONS AND EXTENSIONS. 

8 ‘‘(a) RENEGOTIATIONS.—A renegotiation occurs 

9 when a rental-purchase agreement is satisfied and re10 placed by a new agreement undertaken by the same con11 sumer. A renegotiation requires new disclosures, except as 

12 provided in subsection (c). 

13 ‘‘(b) EXTENSIONS.—An extension is an agreement by 

14 the consumer and the merchant, to continue an existing 

15 rental-purchase agreement beyond the original end of the 

16 payment schedule, but does not include a continuation 

17 that is the result of a renegotiation. 

18 ‘‘(c) EXCEPTIONS.—New disclosures are not required 

19 for the following, even if they meet the definition of a re20 negotiation or an extension: 

21 ‘‘(1) A reduction in payments. 

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

23 ‘‘(3) The extension of a rental-purchase agree24 ment. 

25 ‘‘(4) The substitution of property with property 

26 that has a substantially equivalent or greater eco-
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1 nomic value provided the rental-purchase cost does 

2 not increase. 

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

4 agreement. 

5 ‘‘(6) A change in rental period provided the 

6 rental-purchase cost does not increase. 

7 ‘‘(7) An agreement resulting from a court pro8 ceeding. 

9 ‘‘(8) Any other event described in regulations 

10 prescribed by the Board. 

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

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

13 of items displayed or offered for rental-purchase, the mer14 chant shall display on or next to the item or set of items 

15 a card, tag, or label that clearly and conspicuously dis16 closes the following: 

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

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

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

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

21 ‘‘(5) The total number of rental payments nec22 essary to acquire ownership of the property. 

23 ‘‘(6) The rental-purchase cost. 

24 ‘‘(b) FORM OF DISCLOSURE.— 
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1 ‘‘(1) IN GENERAL.—A merchant may make the 

2 disclosure required by subsection (a) in the form of 

3 a list or catalog which is readily available to the con4 sumer at the point of rental if the merchandise is 

5 not displayed in the merchant’s showroom or if dis6 playing a card, tag, or label would be impractical 

7 due to the size of the merchandise. 

8 ‘‘(2) CLEARLY AND CONSPICUOUSLY.—As used 

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

10 means that information required to be disclosed to 

11 the consumer shall appear in a type size, promi12 nence, and location as to be noticeable, readable, 

13 and comprehensible to an ordinary consumer. 

14 ‘‘SEC. 1011. RENTAL-PURCHASE ADVERTISING. 

15 ‘‘(a) IN GENERAL.—If an advertisement for a rental16 purchase transaction refers to or states the amount of any 

17 payment for any specific item or set of items, the mer18 chant making the advertisement shall also clearly and con19 spicuously state in the advertisement the following for the 

20 item, or set of items, advertised: 

21 ‘‘(1) The transaction advertised is a rental-pur22 chase agreement. 

23 ‘‘(2) The amount, timing, and total number of 

24 rental payments necessary to acquire ownership 

25 under the rental-purchase agreement. 
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1 ‘‘(3) The amount of the rental-purchase cost. 

2 ‘‘(4) To acquire ownership of the property the 

3 consumer must pay the rental-purchase cost plus ap4 plicable taxes. 

5 ‘‘(5) Whether the stated payment amount and 

6 advertised rental-purchase cost is for new or used 

7 property. 

8 ‘‘(b) PROHIBITION.—An advertisement for a rental9 purchase agreement shall not state or imply that a specific 

10 item, or set of items, is available at specific amounts or 

11 terms unless the merchant usually and customarily offers, 

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

13 or terms. 

14 ‘‘(c) CLEARLY AND CONSPICUOUSLY.— 

15 ‘‘(1) IN GENERAL.—For purposes of this sec16 tion, the term ‘clearly and conspicuously’ means that 

17 required disclosures shall be presented in a type, 

18 size, shade, contrast, prominence, location, and man19 ner, as applicable to different mediums for adver20 tising, so as to be readily noticeable and comprehen21 sible to the ordinary consumer. 

22 ‘‘(2) REGULATORY GUIDANCE.—The Board 

23 shall prescribe regulations on principles and factors 

24 to meet the clear and conspicuous standard as ap25 propriate to print, video, audio, and computerized 
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1 advertising, reflecting the principles and factors typi2 cally applied in each medium by the Federal Trade 

3 Commission. 

4 ‘‘(3) LIMITATION.—Nothing contrary to, incon5 sistent with, or in mitigation of, the required disclo6 sures shall be used in any advertisement in any me7 dium, and no audio, video, or print technique shall 

8 be used that is likely to obscure or detract signifi9 cantly from the communication of the disclosures. 

10 ‘‘SEC. 1012. CIVIL LIABILITY. 

11 ‘‘(a) IN GENERAL.—Except as otherwise provided in 

12 section 1013, any merchant who fails to comply with any 

13 requirement of this title with respect to any consumer is 

14 liable to such consumer as provided for leases in section 

15 130. For purposes of this section, the term ‘creditor’ as 

16 used in section 130 shall include a ‘merchant’, as defined 

17 in section 1001. 

18 ‘‘(b) JURISDICTION OF COURTS; LIMITATION ON AC19 TIONS.— 

20 ‘‘(1) IN GENERAL.—Notwithstanding section 

21 130(e), any action under this section may be 

22 brought in any United States district court, or in 

23 any other court of competent jurisdiction, before the 

24 end of the 1-year period beginning on the date the 
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1 last payment was made by the consumer under the 

2 rental-purchase agreement. 

3 ‘‘(2) RECOUPMENT OR SET-OFF.—This sub4 section shall not bar a consumer from asserting a 

5 violation of this title in an action to collect an obli6 gation arising from a rental-purchase agreement, 

7 which was brought after the end of the 1-year period 

8 described in paragraph (1) as a matter of defense by 

9 recoupment or set-off in such action, except as oth10 erwise provided by State law. 

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

12 ‘‘(a) INDIVIDUAL CASES WITH ACTUAL DAMAGES.— 

13 Any merchant who fails to comply with any requirements 

14 imposed under section 1010 or 1011 with respect to any 

15 consumer who suffers actual damage from the violation 

16 shall be liable to such consumer as provided in section 

17 130. 

18 ‘‘(b) PATTERN OR PRACTICE OF VIOLATIONS.—If a 

19 merchant engages in a pattern or practice of violating any 

20 requirement imposed under section 1010 or 1011, the 

21 Federal Trade Commission or an appropriate State attor22 ney general, in accordance with section 1016, may initiate 

23 an action to enforce sanctions against the merchant, in24 cluding— 
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1 ‘‘(1) an order to cease and desist from such 

2 practices; and 

3 ‘‘(2) a civil money penalty of such amount as 

4 the court may impose, based on such factors as the 

5 court may determine to be appropriate. 

6 ‘‘SEC. 1014. LIABILITY OF ASSIGNEES. 

7 ‘‘(a) ASSIGNEES INCLUDED.—For purposes of sec8 tion 1013, and this section, the term ‘merchant’ includes 

9 an assignee of a merchant. 

10 ‘‘(b) LIABILITIES OF ASSIGNEES.— 

11 ‘‘(1) APPARENT VIOLATION.—An action under 

12 section 1012 or 1013 for a violation of this title may 

13 be brought against an assignee only if the violation 

14 is apparent on the face of the rental-purchase agree15 ment to which it relates. 

16 ‘‘(2) APPARENT VIOLATION DEFINED.—For 

17 purposes of this subsection, a violation that is appar18 ent on the face of a rental-purchase agreement in19 cludes, but is not limited to, a disclosure that can 

20 be determined to be incomplete or inaccurate from 

21 the face of the agreement. 

22 ‘‘(3) INVOLUNTARY ASSIGNMENT.—An assignee 

23 has no liability in a case in which the assignment is 

24 involuntary. 
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1 ‘‘(4) RULE OF CONSTRUCTION.—No provision 

2 of this section shall be construed as limiting or alter3 ing the liability under section 1012 or 1013 of a 

4 merchant assigning a rental-purchase agreement. 

5 ‘‘(b) PROOF OF DISCLOSURE.—In an action by or 

6 against an assignee, the consumer’s written acknowledg7 ment of receipt of a disclosure, made as part of the rental8 purchase agreement, shall be conclusive proof that the dis9 closure was made, if the assignee had no knowledge that 

10 the disclosure had not been made when the assignee ac11 quired the rental-purchase agreement to which it relates. 

12 ‘‘SEC. 1015. REGULATIONS. 

13 ‘‘(a) IN GENERAL.—The Board shall prescribe regu14 lations as necessary to carry out the purposes of this title, 

15 to prevent its circumvention, and to facilitate compliance 

16 with its requirements. 

17 ‘‘(b) MODEL DISCLOSURE FORMS.—The Board may 

18 publish model disclosure forms and clauses for common 

19 rental-purchase agreements to facilitate compliance with 

20 the disclosure requirements of this title and to aid the con21 sumer in understanding the transaction by utilizing read22 ily understandable language to simplify the technical na23 ture of the disclosures. In devising such forms, the Board 

24 shall consider the use by merchants of data processing or 

25 similar automated equipment. Nothing in this title may 
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1 be construed to require a merchant to use any such model 

2 form or clause prescribed by the Board under this section. 

3 A merchant shall be deemed to be in compliance with the 

4 requirement to provide disclosure under section 1003(a) 

5 if the merchant— 

6 ‘‘(1) uses any appropriate model form or clause 

7 as published by the Board; or 

8 ‘‘(2) uses any such model form or clause and 

9 changes it by— 

10 ‘‘(A) deleting any information which is not 

11 required by this title; or 

12 ‘‘(B) rearranging the format, if in making 

13 such deletion or rearranging the format, the 

14 merchant does not affect the substance, clarity, 

15 or meaningful sequence of the disclosure. 

16 ‘‘(c) EFFECTIVE DATE OF REGULATIONS.—Any reg17 ulation prescribed by the Board, or any amendment or in18 terpretation thereof, shall not be effective before the Octo19 ber 1 that follows the date of publication of the regulation 

20 in final form by at least 6 months. The Board may at 

21 its discretion lengthen that period of time to permit mer22 chants to adjust to accommodate new requirements. The 

23 Board may also shorten that period of time, notwith24 standing the first sentence, if it makes a specific finding 

25 that such action is necessary to comply with the findings 
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1 of a court or to prevent unfair or deceptive practices. In 

2 any case, merchants may comply with any newly pre3 scribed disclosure requirement prior to its effective date. 

4 ‘‘SEC. 1016. ENFORCEMENT. 

5 ‘‘(a) FEDERAL ENFORCEMENT.—Compliance with 

6 the requirements imposed under this title shall be enforced 

7 under the Federal Trade Commission Act (15 U.S.C. 41 

8 et seq.), and a violation of any requirements imposed 

9 under this title shall be deemed a violation of a require10 ment imposed under that Act. All of the functions and 

11 powers of the Federal Trade Commission under the Fed12 eral Trade Commission Act are available to the Commis13 sion to enforce compliance by any person with the require14 ments of this title, irrespective of whether that person is 

15 engaged in commerce or meets any other jurisdictional 

16 test in the Federal Trade Commission Act. 

17 ‘‘(b) STATE ENFORCEMENT.— 

18 ‘‘(1) IN GENERAL.—An action to enforce the re19 quirements imposed by this title may also be 

20 brought by the appropriate State attorney general in 

21 any appropriate United States district court, or any 

22 other court of competent jurisdiction. 

23 ‘‘(2) PRIOR WRITTEN NOTICE.— 

24 ‘‘(A) IN GENERAL.—The State attorney 

25 general shall provide prior written notice of any 
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1 such civil action to the Federal Trade Commis2 sion and shall provide the Commission with a 

3 copy of the complaint. 

4 ‘‘(B) EMERGENCY ACTION.—If prior notice 

5 is not feasible, the State attorney general shall 

6 provide notice to the Commission immediately 

7 upon instituting the action. 

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

9 may— 

10 ‘‘(A) intervene in the action; 

11 ‘‘(B) upon intervening— 

12 ‘‘(i) remove the action to the appro13 priate United States district court, if it 

14 was not originally brought there; and 

15 ‘‘(ii) be heard on all matters arising in 

16 the action; and 

17 ‘‘(C) file a petition for appeal. 

18 ‘‘SEC. 1017. CRIMINAL LIABILITY FOR WILLFUL AND KNOW19 ING VIOLATION. 

20 ‘‘Whoever willfully and knowingly gives false or inac21 curate information or fails to provide information which 

22 he is required to disclose under the provisions of this title 

23 or any regulation issued thereunder shall be subject to the 

24 penalty provisions as provided in section 112. 
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1 ‘‘SEC. 1018. RELATION TO OTHER LAWS. 

2 ‘‘(a) RELATION TO STATE LAW.— 

3 ‘‘(1) NO EFFECT ON CONSISTENT STATE

4 LAWS.—Except as otherwise provided in subsection 

5 (b), this title does not annul, alter, or affect in any 

6 manner the meaning, scope or applicability of the 

7 laws of any State relating to rental-purchase agree8 ments, except to the extent those laws are incon9 sistent with any provision of this title, and then only 

10 to the extent of the inconsistency. 

11 ‘‘(2) DETERMINATION OF INCONSISTENCY.— 

12 Upon its own motion or upon the request of an in13 terested party, which is submitted in accordance 

14 with procedures prescribed in regulations of the 

15 Board, the Board shall determine whether any such 

16 inconsistency exists. If the Board determines that a 

17 term or provision of a State law is inconsistent, mer18 chants located in that State need not follow such 

19 term or provision and shall incur no liability under 

20 the law of that State for failure to follow such term 

21 or provision, notwithstanding that such determina22 tion is subsequently amended, rescinded, or deter23 mined by judicial or other authority to be invalid for 

24 any reason. 

25 ‘‘(3) GREATER PROTECTION UNDER STATE

26 LAW.—Except as provided in subsection (b), for pur-
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1 poses of this section, a term or provision of a State 

2 law is not inconsistent with the provisions of this 

3 title if the term or provision affords greater protec4 tion and benefit to the consumer than the protection 

5 and benefit provided under this title as determined 

6 by the Board, on its own motion or upon the peti7 tion of any interested party. 

8 ‘‘(b) STATE LAWS RELATING TO CHARACTERIZATION

9 OF TRANSACTION.—Notwithstanding the provisions of 

10 subsection (a), this title shall supersede any State law to 

11 the extent that such law— 

12 ‘‘(1) regulates a rental-purchase agreement as a 

13 security interest, credit sale, retail installment sale, 

14 conditional sale or any other form of consumer cred15 it, or that imputes to a rental-purchase agreement 

16 the creation of a debt or extension of credit, or 

17 ‘‘(2) requires the disclosure of a percentage rate 

18 calculation, including a time-price differential, an 

19 annual percentage rate, or an effective annual per20 centage rate. 

21 ‘‘(c) RELATION TO FEDERAL TRADE COMMISSION

22 ACT.—No provision of this title shall be construed as lim23 iting, superseding, or otherwise affecting the applicability 

24 of the Federal Trade Commission Act to any merchant 

25 or rental-purchase transaction. 
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1 ‘‘SEC. 1019. EFFECT ON GOVERNMENT AGENCIES. 

2 ‘‘No civil liability or criminal penalty under this title 

3 may be imposed on the United States or any of its depart4 ments or agencies, any State or political subdivision, or 

5 any agency of a State or political subdivision. 

6 ‘‘SEC. 1020. COMPLIANCE DATE. 

7 ‘‘Compliance with this title shall not be required until 

8 6 months after the date of the enactment of the ‘Con9 sumer Rental Purchase Agreement Act’. In any case, mer10 chants may comply with this title at any time after such 

11 date of enactment.’’. 

Æ