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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1701 Introduced in House (IH)]

107th CONGRESS
  1st Session
                                H. R. 1701

   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

                              May 3, 2001

 Mr. Jones of North Carolina (for himself, Mr. Maloney of Connecticut, 
  Mr. Frost, Mr. Boehner, Mr. Jefferson, Mr. Kanjorski, Mr. Watts of 
Oklahoma, Mr. Ross, Mr. Ford, Mr. Sessions, Mr. Sandlin, Mr. Wamp, Mr. 
   Baker, and Mr. Isakson) 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.

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

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 rental-purchase 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.
    (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. 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.

    ``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) 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.
            ``(8) Periodic payment.--The term `periodic payment' means 
        the total payment a consumer will make for a specific rental 
        period, including the rental payment, taxes, and fees or 
        charges that may be excluded from the rental-purchase cost.
            ``(9) 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.
            ``(10) Rental payment.--The term `rental payment' means a 
        payment required to be made by a consumer for the possession 
        and use of property for a specific rental period, but does not 
        include taxes that may be imposed on such payment.
            ``(11) 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.
            ``(12) 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' does not include--
                            ``(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); or
                            ``(iii) a transaction giving rise to a debt 
                        incurred in connection with the business of 
                        lending money or a thing of value.
            ``(13) 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.

``SEC. 1002. DETERMINATION OF RENTAL-PURCHASE COST.

    ``(a) In General.--
            ``(1) Basis for determination.--Except as otherwise 
        provided in this section, the amount of the rental-purchase 
        cost in connection with a rental-purchase transaction shall be 
        determined as the sum of all charges that are payable directly 
        or indirectly by the person to whom the rental-purchase 
        transaction is extended, and are imposed directly or indirectly 
        by the merchant as a condition of entering into a rental-
        purchase agreement or acquiring ownership of property under a 
        rental-purchase agreement.
            ``(2) Taxes and other costs not included.--The amount of 
        any charge, cost, or fee of a type that is imposed on or 
        otherwise payable by, a consumer in a cash transaction for 
        comparable property shall not be taken into account for 
        purposes of the determination under paragraph (1) with respect 
        to any rental-purchase transaction.
            ``(3) Examples of charges, costs, and fees taken into 
        account.--The following are examples of charges, costs, and 
        fees that shall be taken into account in determining in the 
        rental-purchase cost with respect to any rental-purchase 
        transaction:
                    ``(A) Rental payment.
                    ``(B) Service, processing, or administrative 
                charge.
                    ``(C) Fee for an investigation or credit report.
                    ``(D) Charge for delivery required by the merchant.
                    ``(E) Charge for waiver of the consumer's liability 
                in the event of loss, damage, or destruction of the 
                property.
                    ``(F) Premium or other charge for insurance.
    ``(b) Insurance Premiums and Charges for Liability Waiver.--
            ``(1) Inclusion in rental-purchase cost.--Charges or 
        premiums for insurance or liability waiver written in 
        connection with any rental-purchase agreement shall be included 
        in determining the rental-purchase cost with respect to any 
        rental-purchase transaction unless--
                    ``(A) coverage of the consumer by the insurance or 
                liability waiver is not a factor in the merchant's 
                approval of the rental-purchase transaction, and this 
                fact is clearly disclosed in writing to the consumer at 
                or before consummation of the rental-purchase 
                transaction; and
                    ``(B) before obtaining the insurance or liability 
                waiver, the consumer has initialed or signed an 
                affirmative written request for the insurance or 
                liability waiver after receiving a written disclosure 
                of the cost thereof.
            ``(2) Manner of disclosure.--The disclosures required under 
        paragraph (1) with respect to rental-purchase transaction may 
        be included in the rental-purchase agreement or made on a 
        separate form that the consumer may keep.
    ``(c) Restatement of Certain 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:
            ``(1) Fees and charges prescribed by law, which actually 
        are or will be paid to public officials or government entities 
        need not be included in the computation of the rental-purchase 
        cost, such as sales tax.
            ``(2) Fees and charges for optional products and services 
        made available in connection with a rental-purchase agreement.

``SEC. 1003. 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. 1004. GENERAL DISCLOSURE REQUIREMENTS.

    ``(a) Recipient of Disclosure.--A merchant shall disclose to the 
person who will be obligated on a rental-purchase agreement the 
information required by sections 1005 and 1006. In a transaction 
involving more than 1 person who will be obligated on a rental-purchase 
agreement, a merchant need not disclose to more than 1 of such persons.
    ``(b) Timing of Disclosure.--The disclosures required under 
sections 1005 and 1006 shall be made at or before the date of 
consummation of the rental-purchase agreement and clearly and 
conspicuously in writing and in a form that the consumer may keep.
    ``(c) Information Subsequently Rendered Inaccurate.--If information 
disclosed in accordance with this title is subsequently rendered 
inaccurate as a result of any act, occurrence, or agreement subsequent 
to the delivery of the required disclosures, the resulting inaccuracy 
does not constitute a violation of this title.

``SEC. 1005. RENTAL-PURCHASE DISCLOSURES.

    ``(a) In General.--For each rental-purchase agreement, the merchant 
shall disclose to the consumer the following, to the extent applicable:
            ``(1) The date of consummation of the transaction and the 
        identities of the merchant and consumer.
            ``(2) A description of the property and a statement 
        indicating whether the property is new or used,  except a 
statement indicating that new property is used property is not a 
violation of this title.
            ``(3) A statement of the rental payment for each item of 
        property and the total rental payment if multiple items are 
        rented. If 2 or more items are rented as a set, a statement of 
        the aggregate rental payment of all items satisfies this 
        requirement.
            ``(4) A statement of the cash price of each item of 
        property and the total cash price if multiple items are rented. 
        If 2 or more items are rented as a set, a statement of the 
        aggregate cash price of all items satisfies this requirement.
            ``(5) The amount to be paid before or at the consummation 
        of the agreement or the delivery of the property, using the 
        phrase `initial payment'. The merchant shall itemize each 
        component of the initial payment by type and amount, including 
        any service, processing, or administrative charge, delivery 
        fee, refundable security deposit, rental payment, and fees or 
        charges that may be excluded from the rental-purchase cost.
            ``(6) A statement of the amount of the periodic payment 
        including an itemization of each component of the periodic 
        payment by type and amount, using the phrase `periodic 
        payment'. If the final periodic payment is less than the 
        regular periodic payments, the components of the final periodic 
        payment need not be itemized. A merchant may disclose 
        alternative periodic payments based on different rental 
        periods.
            ``(7) The `rental-purchase cost', using that term, and a 
        brief description such as `The amount you will pay the merchant 
        to acquire ownership of the property. This amount excludes 
        taxes and other charges not imposed by the merchant as a 
        condition of acquiring ownership.'
            ``(8) The difference between the cash price and the rental-
        purchase cost, using the term `cost of rental services', and a 
        brief description such as `the difference between the cash 
        price and the rental-purchase cost'.
            ``(9) Substantially the following statement in boldface, 
        uppercase letters: `YOU ARE RENTING THE PROPERTY. TO ACQUIRE 
        OWNERSHIP OF THE PROPERTY YOU MUST MAKE ALL PAYMENTS NECESSARY 
        TO ACQUIRE OWNERSHIP.'
            ``(10) Substantially the following statement: `Other 
        Important Terms. See your rental-purchase agreement for 
        additional important information on termination, purchase 
        option rights, reinstatement rights, warranties, maintenance 
        responsibilities, your liability for loss, theft, damage, or 
        destruction of the property, and other charges and fees you may 
        incur.'
            ``(11) Using the term `payment schedule', the amount, 
        number, and timing of all periodic payments the consumer will 
        make if the consumer acquires ownership of the property by 
        making all periodic payments, the total of the initial payment 
        and all periodic payments, and a brief description such as 
        `This is the amount you will have paid, including the rental-
        purchase cost, taxes, and charges for other products or 
        services you may have elected to purchase, if you make all 
        Periodic Payments as scheduled.' A merchant may disclose 
        alternative payment schedules based on different rental 
        periods.
    ``(b) Form of Disclosure.--The disclosures required by paragraphs 
(5) through (11) of subsection (a) shall be segregated from other 
information and shall contain only directly related information, and 
shall be identified in boldface, uppercase letters as `RENTAL-PURCHASE 
DISCLOSURES'.

``SEC. 1006. 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) provide that the consumer may terminate the agreement 
        without paying any charges not previously due under the 
        agreement by voluntarily surrendering or returning the property 
        that is the subject of the agreement upon expiration of any 
        rental period;
            ``(4) 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 30 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; and
                    ``(C) if the consumer has paid 60 percent or more 
                of the rental-purchase cost 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 90 
                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;
            ``(5) if the merchant offers a purchase option, provide a 
        statement of the consumer's purchase option rights under the 
        agreement, including the method of determining the purchase 
        price at any point in time if the property is acquired through 
        the exercise of the purchase option;
            ``(6) 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
            ``(7) provide, to the extent applicable, a statement of any 
        payment grace period, the amount of any late payment fee, any 
        additional fees or requirements for reinstatement, and the 
        amount of any other charges and fees the consumer may incur.
    ``(b) Repossession During Reinstatement Period.--Subsection (a)(4) 
shall not be construed so as to prevent a merchant from attempting to 
repossess property during the reinstatement period pursuant to 
subsection (a)(4)(A), but such a repossession does not affect the 
consumer's right to reinstate. Upon reinstatement, the merchant shall 
provide the consumer with the same property, if available; if it is not 
available, the merchant shall substitute property of comparable quality 
and condition.

``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 waiver by the consumer of a claim or defense; or
            ``(6) a provision requiring the consumer to pay in excess 
        of the lesser of the fair market value, any purchase option 
        amount, remaining rent, or cost of repair if the property is 
        lost, stolen, damaged, or destroyed.

``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 the 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.--A merchant may make the disclosure 
required by subsection (a) in the form of a list or catalog 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.

``SEC. 1011. RENTAL-PURCHASE ADVERTISING.

    ``(a) In General.--If an advertisement 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:
            ``(1) The transaction advertised is a rental-purchase 
        agreement.
            ``(2) The amount, timing, and total number of rental 
        payments necessary to acquire ownership.
            ``(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 advertised rental-purchase cost is for 
        new or used property.
    ``(b) Radio and Television Advertising.--
            (1) In general.--An advertisement made through television 
        or radio, which states the amount of any payment for any 
        specific item or set of items, complies with this section if 
        the advertisement lists a toll-free telephone number along with 
        a reference that such number may be used by consumers to obtain 
        the additional information required by subsection (a).
            ``(2) Availability of number.--The toll-free telephone 
        number required under subsection what shall be available 
        beginning on the date of the broadcast and continue until the 
        earlier of--
                    ``(A) the end of the 10-day period beginning on the 
                day of the last broadcast; or
                    ``(B) if the offer expires before the end of such 
                10-day period and the advertisement discloses that the 
                offer expires before the end of such period, the date 
                the offer expires.

``SEC. 1012. CIVIL LIABILITY.

    ``(a) Individual or Class Action for Damages; Amount of Award; 
Factors Determining Amount of Award.--Except as otherwise provided in 
this section, any merchant who fails to comply with any requirement 
imposed by section 1004, 1005, 1006, 1007, or 1008, with respect to any 
consumer is liable to such consumer in an amount equal to the sum of--
            ``(1) any actual damage sustained by such consumer as a 
        result of the failure;
            ``(2)(A) in the case of an individual action, 25 percent of 
        the rental-purchase cost under the rental-purchase agreement, 
        except that the liability under this subparagraph shall not be 
        less than $100 nor greater than $1,000;
            ``(B) in the case of a class action, such amount as the 
        court may allow, except that as to each member of the class no 
        minimum recovery shall be applicable, and the total recovery 
        under this subparagraph in any class action or series of class 
        actions arising out of the same failure to comply by the same 
        merchant shall not be more than the lesser of $500,000 or 1 
        percent of the net worth of the merchant; and
            ``(3) in the case of any successful action to enforce the 
        foregoing liability, the costs of the action, together with a 
        reasonable attorney's fee as determined by the court.
    ``(b) Factors To Be Considered in Class Actions.--In determining 
the amount of award in any class action, the court shall consider, 
among other relevant factors, the amount of any actual damages awarded, 
the frequency and persistence of failures of compliance by the 
merchant, the resources of the merchant, the number of persons 
adversely affected, and the extent to which the merchant's failure of 
compliance was intentional. With respect to any failure to make 
disclosures required under this title, liability shall be imposed only 
upon the merchant required to make disclosure, except as provided in 
section 1014.
    ``(c) Correction of Errors.--A merchant or assignee has no 
liability under this section or section 1016 or 1017 for any failure to 
comply with any requirement imposed under this title, if within 60 days 
after discovering an error, and prior to the institution of an action 
under this section or the receipt of written notice of the error from 
the consumer, the merchant or assignee notifies the consumer concerned 
of the error and makes whatever adjustments in the appropriate account 
are necessary to assure that the person will not be required to pay an 
amount in excess of the charge actually disclosed.
    ``(d) Unintentional Violations; Bona Fide Errors.--
            ``(1) In general.--A merchant or assignee may not be held 
        liable in any action brought under this title for a violation 
        of this title if the merchant or assignee shows by a 
        preponderance of evidence that the violation was not 
        intentional and resulted from a bona fide error notwithstanding 
        the maintenance of procedures reasonably adapted to avoid any 
        such error.
            ``(2) Examples of bona fide errors.--Examples of a bona 
        fide error include clerical, calculation, computer malfunction 
        and programming, and printing errors, except that an error of 
        legal judgment with respect to a person's obligations under 
        this title is not a bona fide error.
    ``(e) Liability in Transactions Involving Multiple Consumers.--When 
there are multiple consumers in a single rental-purchase agreement 
there shall be no more than 1 recovery of damages under subsection 
(a)(2) of this section for a violation of this title.
    ``(f) Jurisdiction of Courts; Limitation of Actions.--Any action 
under this section may be brought in any United States district court, 
or in any other court of competent jurisdiction, within 1 year from the 
date of the occurrence of the violation. 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 more than 1 year from the date of the occurrence of the 
violation as a matter of defense by recoupment or set-off in such 
action, except as otherwise provided by State law.
    ``(g) Good Faith Compliance With Rule, Regulation, or 
Interpretation of Board.--No provision of this section or section 1016 
or 1017 imposing any liability shall apply to any act done or omitted 
in good faith in conformity with any rule, regulation, or 
interpretation thereof by the Board or in conformity with any 
interpretation or approval by an official or employee of the Board duly 
authorized by the Board to issue such interpretations or approvals 
under such procedures as the Board may prescribe therefor, 
notwithstanding that after such act or omission has occurred, such 
rule, regulation, interpretation, or approval is amended, rescinded, or 
determined by judicial or other authority to be invalid for any reason.
    ``(h) Recovery for Multiple Failures To Disclose.--The multiple 
failure to disclose to any person any information required under this 
title in connection with a single rental-purchase transaction shall 
entitle the person to a single recovery under this section but 
continued failure to disclose after a recovery has been granted shall 
give rise to rights to additional recoveries.
    ``(i) Offset From Amount Owed to Merchant or Assignee; Rights of 
Consumer.--A person may not take any action to offset any amount for 
which a merchant or assignee is potentially liable to such person under 
subsection (a)(2) of this section against any amount owed by such 
person, unless the amount of the merchant's or assignee's liability 
under this section has been determined by judgment of a court of 
competent jurisdiction in an action of which such person was a party. 
This subsection does not bar a consumer from asserting a violation of 
this title as an original action, or as a defense or counterclaim  to 
an action to collect amounts owed by the consumer brought by a person 
liable under this section.

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

    ``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 is liable to such consumer as provided 
in section 1012.

``SEC. 1014. LIABILITY OF ASSIGNEES.

    ``(a) Assignees Included.--For purposes of section 1012, and this 
section, the term `merchant' includes an assignee of a merchant.
    ``(b) Liabilities of Assignees.--
            ``(1) Apparent violation.--An action under section 1012 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 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 of a merchant assigning a rental-purchase 
        agreement.
    ``(b) Proof of Disclosure.--In an action by or against an assignee, 
the consumer's written acknowledgment of receipt of a disclosure 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 may prescribe regulations to carry out 
the purposes of this title, to prevent its circumvention, and to 
facilitate compliance with its requirements.
    ``(b) 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 fined not more than $5,000 or imprisoned not more 
than one year, or both.

``SEC. 1018. RELATION TO STATE LAW.

    ``(a) Except as provided in subsection (b), this title shall not be 
construed as annulling, altering, or affecting in any manner the 
meaning, scope, or applicability of the laws of any State relating to 
rental-purchase agreements, except to the extent that those laws are 
inconsistent with any provision of this title, and then only to the 
extent of the inconsistency. The Board is authorized to determine 
whether such inconsistencies exist. Any State law that regulates a 
rental-purchase agreement as a security interest, credit sale, retail 
installment sale, conditional sale, or other form of credit or imputes 
to such agreements the creation of a debt or extension of credit, or 
requires the disclosure of a time-price differential, an annual 
percentage rate, an effective annual percentage rate or a percentage 
rate of any kind, or similar disclosure that might suggest the 
existence of a debt, an extension of credit, or the payment of 
interest, is inconsistent with this title.
    ``(b) Certain Disclosure Requirements Superseded.--The disclosures 
required by paragraphs (5), (6), (7), (8), and (11) of subsection (a) 
of section 1005 shall supersede any provisions of any State law 
relating to disclosure of the cost of a 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.''.
                                 <all>
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