II 

109TH CONGRESS 

1ST SESSION S. 603 

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 SENATE OF THE UNITED STATES 

MARCH 11, 2005 

Ms. LANDRIEU (for herself, Mr. JOHNSON, Mr. BAUCUS, Mrs. LINCOLN, and 

Mr. SHELBY) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

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 of 2005’’. 
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1 SEC. 2. FINDINGS AND DECLARATION OF PURPOSES. 

2 (a) FINDINGS.—Congress finds that— 

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; and 

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

16 by consumers. 

17 (b) PURPOSES.—The purposes of this Act are to as18 sure the availability of rental-purchase transactions; and 

19 to assure simple, meaningful, and consistent disclosure of 

20 rental-purchase terms so that consumers will be able to 

21 more readily compare the available rental-purchase terms 

22 and avoid uninformed use of rental-purchase transactions, 

23 and to protect consumers against unfair rental-purchase 

24 practices. 
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1 SEC. 3. CONSUMER CREDIT PROTECTION ACT. 

2 The Consumer Credit Protection Act (15 U.S.C. 

3 1601 et seq.) is amended by adding at the end the fol4 lowing new title: 

5 ‘‘TITLE X—RENTAL-PURCHASE 

6 TRANSACTIONS

‘‘Sec. 1001. Short title; 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.

7 ‘‘SEC. 1001. SHORT TITLE; DEFINITIONS. 

8 ‘‘(a) SHORT TITLE.—This title may be cited as the 

9 ‘Rental-Purchase Protections Act’. 

10 ‘‘(b) DEFINITIONS.—For purposes of this title, the 

11 following definitions shall apply: 

12 ‘‘(1) ADVERTISEMENT.—The term ‘advertise13 ment’ means a commercial message in any medium 

14 that promotes, directly or indirectly, a rental-pur15 chase agreement, but does not include price tags, 

16 window signs, or other in-store merchandising aids. 
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1 ‘‘(2) AGRICULTURAL PURPOSE.—The term ‘ag2 ricultural purpose’ includes— 

3 ‘‘(A) the production, harvest, exhibition, 

4 marketing, transformation, processing, or man5 ufacture of agricultural products by a natural 

6 person who cultivates plants or propagates or 

7 nurtures agricultural products; and 

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

9 property with a farm residence, or personal 

10 property and services used primarily in farm11 ing. 

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

13 Board of Governors of the Federal Reserve System. 

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

15 means the price at which a merchant, in the ordi16 nary course of business, offers to sell for cash the 

17 property that is the subject of the rental-purchase 

18 transaction. 

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

20 a natural person who is offered or enters into a rent21 al-purchase agreement. 

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

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

24 consumer becomes contractually obligated under a 

25 rental-purchase agreement. 
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1 ‘‘(7) INITIAL PAYMENT.—The term ‘initial pay2 ment’ means the amount to be paid before or at the 

3 time of consummation of the agreement, or the time 

4 of delivery of the property covered by the agreement 

5 if delivery occurs after consummation, including— 

6 ‘‘(A) the rental payment; 

7 ‘‘(B) service, processing, or administrative 

8 charges; 

9 ‘‘(C) any delivery fee; 

10 ‘‘(D) refundable security deposit; 

11 ‘‘(E) taxes; 

12 ‘‘(F) mandatory fees or charges; and 

13 ‘‘(G) any optional fees or charges agreed to 

14 by the consumer. 

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

16 a person who provides the use of property through 

17 a rental-purchase agreement in the ordinary course 

18 of business and to whom the initial payment by the 

19 consumer under the agreement is payable. 

20 ‘‘(9) PAYMENT SCHEDULE.—The term ‘pay21 ment schedule’ means the amount and timing of the 

22 periodic payments and the total number of all peri23 odic payments that the consumer will make if the 

24 consumer acquires ownership of the property by 

25 making all periodic payments. 
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1 ‘‘(10) PERIODIC PAYMENT.—The term ‘periodic 

2 payment’ means the total payment that a consumer 

3 will make for a specific rental period after the initial 

4 payment, including the rental payment, taxes, man5 datory fees or charges, and any optional fees or 

6 charges agreed to by the consumer. 

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

8 property that is not real property under the laws of 

9 the State in which the property is located when it 

10 is made available under a rental-purchase agree11 ment. 

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

13 payment’ means rent required to be paid by a con14 sumer for the possession and use of property for a 

15 specific rental period, but does not include taxes or 

16 any fees or charges. 

17 ‘‘(13) RENTAL PERIOD.—The term ‘rental pe18 riod’ means a week, month, or other specific period 

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

20 possess and use property that is the subject of a 

21 rental-purchase agreement after paying the rental 

22 payment and any applicable taxes for such period. 

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

24 ‘‘(A) IN GENERAL.—The term ‘rental-pur25 chase agreement’ means a contract in the form 
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1 of a bailment or lease for the use of property 

2 by a consumer for an initial period of 4 months 

3 or less, that is renewable with each payment by 

4 the consumer, and that permits but does not 

5 obligate the consumer to become the owner of 

6 the property. 

7 ‘‘(B) EXCLUSIONS.—The term ‘rental-pur8 chase agreement’ does not include— 

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

10 103(g) of the Truth in Lending Act); 

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

12 section 181(1) of the Truth in Lending 

13 Act); or 

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

15 debt incurred in connection with the busi16 ness of lending money or a thing of value. 

17 ‘‘(15) RENTAL-PURCHASE COST.— 

18 ‘‘(A) IN GENERAL.—For purposes of sec19 tions 1010 and 1011, the term ‘rental-purchase 

20 cost’ means the sum of all rental payments and 

21 mandatory fees or charges imposed by the mer22 chant as a condition of entering into a rental23 purchase agreement or acquiring ownership of 

24 property under a rental-purchase agreement, in25 cluding— 
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1 ‘‘(i) any service, processing, or admin2 istrative charge; 

3 ‘‘(ii) any fee for an investigation or 

4 credit report; and 

5 ‘‘(iii) any charge for delivery required 

6 by the merchant. 

7 ‘‘(B) EXCLUDED ITEMS.—The following 

8 fees or charges shall not be taken into account 

9 in determining the rental-purchase cost with re10 spect to a rental-purchase transaction: 

11 ‘‘(i) Fees and charges prescribed by 

12 law, which actually are or will be paid to 

13 public officials or government entities, such 

14 as sales tax. 

15 ‘‘(ii) Fees and charges for optional 

16 products and services offered in connection 

17 with a rental-purchase agreement. 

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

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

20 any territory of the United States, Puerto Rico, 

21 Guam, American Samoa, the Trust Territory of the 

22 Pacific Islands, the Virgin Islands, and the Northern 

23 Mariana Islands. 

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

25 means the sum of the initial payment and all peri-
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1 odic payments in the payment schedule to be paid by 

2 the consumer to acquire ownership of the property 

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

4 ‘‘SEC. 1002. EXEMPTED TRANSACTIONS. 

5 ‘‘This title does not apply to rental-purchase agree6 ments primarily for business, commercial, or agricultural 

7 purposes, or those made with agencies or instrumentalities 

8 of the Federal Government or a State or political subdivi9 sion thereof. 

10 ‘‘SEC. 1003. GENERAL DISCLOSURE REQUIREMENTS. 

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

12 disclose to any person who will be a signatory to a rental13 purchase agreement the information required by sections 

14 1004 and 1005. 

15 ‘‘(b) TIMING OF DISCLOSURE.—The disclosures re16 quired under sections 1004 and 1005 shall be made before 

17 the consummation of the rental-purchase agreement, and 

18 clearly and conspicuously in writing as part of the rental19 purchase agreement to be signed by the consumer. 

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

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

22 that information required to be disclosed to the consumer 

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

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

25 readable, and comprehensible to an ordinary consumer. 
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1 ‘‘SEC. 1004. RENTAL-PURCHASE DISCLOSURES. 

2 ‘‘(a) IN GENERAL.—For each rental-purchase agree3 ment, the merchant shall disclose to the consumer, to the 

4 extent applicable— 

5 ‘‘(1) the date of consummation of the rental6 purchase transaction and the identities of the mer7 chant and the consumer; 

8 ‘‘(2) a brief description of the rental property, 

9 which shall be sufficient to identify the property to 

10 the consumer, including an identification or serial 

11 number, if applicable, and a statement indicating 

12 whether the property is new or used; 

13 ‘‘(3) a description of any fee, charge, or pen14 alty, in addition to the periodic payment, that the 

15 consumer may be required to pay under the agree16 ment, which shall be separately identified by type 

17 and amount; 

18 ‘‘(4) a clear and conspicuous statement that the 

19 transaction is a rental-purchase agreement and that 

20 the consumer will not obtain ownership of the prop21 erty until the consumer has paid the total dollar 

22 amount necessary to acquire ownership; 

23 ‘‘(5) the amount of any initial payment, which 

24 includes the first periodic payment, and the total 

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

26 to be paid by the consumer; 
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1 ‘‘(6) the amount of the cash price of the prop2 erty that is the subject of the rental-purchase agree3 ment, and, if the agreement involves the rental of 2 

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

5 Board in regulation) a statement of the aggregate 

6 cash price of all items shall satisfy this requirement; 

7 ‘‘(7) the amount and timing of periodic pay8 ments, and the total number of periodic payments 

9 necessary to acquire ownership of the property 

10 under the rental-purchase agreement; 

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

12 description, such as ‘This is the amount that you 

13 will pay the merchant if you make all periodic pay14 ments to acquire ownership of the property.’; 

15 ‘‘(9) a statement of the right of the consumer 

16 to terminate the agreement without paying any fee 

17 or charge not previously due under the agreement by 

18 voluntarily surrendering or returning the property in 

19 good repair upon expiration of any lease term; and 

20 ‘‘(10) substantially the following statement: 

21 ‘OTHER IMPORTANT TERMS: See your rental-pur22 chase agreement for additional important informa23 tion on early termination procedures, purchase op24 tion rights, responsibilities for loss, damage, or de25 struction of the property, warranties, maintenance 
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1 responsibilities, and other charges or penalties you 

2 may incur.’. 

3 ‘‘(b) FORM OF DISCLOSURE.—The disclosures re4 quired by paragraphs (4) through (10) of subsection (a) 

5 shall— 

6 ‘‘(1) be segregated from other information at 

7 the beginning of the rental-purchase agreement; 

8 ‘‘(2) contain only directly related information; 

9 and 

10 ‘‘(3) be identified in boldface, upper-case letters 

11 as follows: ‘IMPORTANT RENTAL-PURCHASE DIS12 CLOSURES’. 

13 ‘‘(c) DISCLOSURE REQUIREMENTS RELATING TO IN14 SURANCE PREMIUMS AND LIABILITY WAIVERS.— 

15 ‘‘(1) IN GENERAL.—A merchant shall clearly 

16 and conspicuously disclose in writing to the con17 sumer before the consummation of a rental-purchase 

18 agreement that the purchase of leased property in19 surance or liability waiver coverage is not required 

20 as a condition for entering into the rental-purchase 

21 agreement. 

22 ‘‘(2) AFFIRMATIVE WRITTEN REQUEST AFTER

23 COST DISCLOSURE.—A merchant may provide insur24 ance or liability waiver coverage, directly or indi-
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1 rectly, in connection with a rental-purchase trans2 action only if— 

3 ‘‘(A) the merchant clearly and conspicu4 ously discloses to the consumer the cost of each 

5 component of such coverage before the con6 summation of the rental-purchase agreement; 

7 and 

8 ‘‘(B) the consumer signs an affirmative 

9 written request for such coverage after receiving 

10 the disclosures required under paragraph (1) 

11 and subparagraph (A) of this paragraph. 

12 ‘‘(d) ACCURACY OF DISCLOSURE.— 

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

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

15 the date on which the disclosures are made, based 

16 on the information available to the merchant. 

17 ‘‘(2) INFORMATION SUBSEQUENTLY RENDERED

18 INACCURATE.—If information required to be dis19 closed under subsection (a) is subsequently rendered 

20 inaccurate as a result of any agreement between the 

21 merchant and the consumer subsequent to the deliv22 ery of the required disclosures, the resulting inaccu23 racy shall not constitute a violation of this title. 
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1 ‘‘SEC. 1005. OTHER AGREEMENT PROVISIONS. 

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

3 shall— 

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

5 merchant or the consumer is responsible for loss, 

6 theft, damage, or destruction of the property; 

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

8 merchant or the consumer is responsible for main9 taining or servicing the property, together with a 

10 brief description of the responsibility; 

11 ‘‘(3) provide that the consumer may terminate 

12 the agreement without paying any charges not pre13 viously due under the agreement by voluntarily sur14 rendering or returning the property that is the sub15 ject of the agreement upon expiration of any rental 

16 period; 

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

18 the agreement, which at a minimum— 

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

20 a timely rental payment to reinstate the agree21 ment, without losing any rights or options 

22 which exist under the agreement, by the pay23 ment of all past due rental payments and any 

24 other charges then due under the agreement 

25 and a payment for the next rental period within 

26 7 business days after failing to make a timely 
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1 rental payment if the consumer pays monthly, 

2 or within 3 business days after failing to make 

3 a timely rental payment if the consumer pays 

4 more frequently than monthly; 

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

6 surrenders the property covered by the agree7 ment, other than through judicial process, dur8 ing the applicable reinstatement period set forth 

9 in subparagraph (A), permits the consumer to 

10 reinstate the agreement during a period of at 

11 least 60 days after the date of the return or 

12 surrender of the property by the payment of all 

13 amounts previously due under the agreement, 

14 any applicable fees, and a payment for the next 

15 rental period; 

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

17 or more of the total cost necessary to acquire 

18 ownership and returns or voluntarily surrenders 

19 the property, other than through judicial proc20 ess, during the applicable reinstatement period 

21 set forth in subparagraph (A), permits the con22 sumer to reinstate the agreement during a pe23 riod of at least 120 days after the date of the 

24 return of the property by the payment of all 

25 amounts previously due under the agreement, 
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1 any applicable fees, and a payment for the next 

2 rental period; and 

3 ‘‘(D) permits the consumer, upon rein4 statement of the agreement, to receive the same 

5 property, if available, that was the subject of 

6 the rental-purchase agreement, or if the same 

7 property is not available, a substitute item of 

8 comparable quality and condition, except that 

9 the Board may, by regulation or order, exempt 

10 any independent small business (as defined by 

11 regulation of the Board) from the requirement 

12 of providing the same or comparable product 

13 during the extended reinstatement period pro14 vided in subparagraph (C), if the Board deter15 mines, taking into account such standards as 

16 the Board determines appropriate, that the re17 instatement right provided in subparagraph (C) 

18 would provide excessive hardship for the inde19 pendent small business; 

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

21 under which the consumer shall acquire ownership of 

22 the property that is the subject of the rental-pur23 chase agreement either by payment of the total cost 

24 to acquire ownership, as provided in section 1006, or 
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1 by exercise of any early purchase option provided in 

2 the rental-purchase agreement; 

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

4 part of a manufacturer’s express warranty covers 

5 the property at the time the consumer acquires own6 ership of the property, the warranty will be trans7 ferred to the consumer if allowed by the terms of the 

8 warranty; and 

9 ‘‘(7) provide, to the extent applicable, a descrip10 tion of any grace period for making any periodic 

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

12 to be paid by the consumer upon initiation of the 

13 rental-purchase agreement, and the terms for refund 

14 of such security deposit to the consumer upon re15 turn, surrender or purchase of the property. 

16 ‘‘(b) REPOSSESSION DURING REINSTATEMENT PE17 RIOD.—Subsection (a)(4) shall not be construed so as to 

18 prevent a merchant from attempting to repossess property 

19 during the reinstatement period pursuant to subsection 

20 (a)(4)(A), but such a repossession does not affect the right 

21 of the consumer to reinstatement under subsection (a)(4). 

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

23 ‘‘(a) IN GENERAL.—The consumer shall acquire own24 ership of the property that is the subject of the rental25 purchase agreement, and the rental-purchase agreement 
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1 shall terminate, upon compliance by the consumer with the 

2 requirements of subsection (b) or any early payment op3 tion provided in the rental purchase agreement, and upon 

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

5 by regulation of the Board. 

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

7 shall acquire ownership of the rental property upon pay8 ment of the total cost of the rental-purchase agreement, 

9 as defined in section 1001(17), and as disclosed to the 

10 consumer in the rental-purchase agreement pursuant to 

11 section 1004(a). 

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

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

14 acquiring ownership of the property that is the subject of 

15 the rental-purchase agreement, any fee or charge in addi16 tion to, or in excess of, the regular periodic payments re17 quired by subsection (b), or any early purchase option 

18 amount provided in the rental-purchase agreement, as ap19 plicable. A requirement that the consumer pay an unpaid 

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

21 previously billed to the consumer shall not constitute an 

22 additional fee or charge for purposes of this subsection. 

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

24 payment by the consumer of all payments necessary to ac25 quire ownership under subsection (b) or any early pur-
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1 chase option amount provided in the rental-purchase 

2 agreement, as applicable, the merchant shall— 

3 ‘‘(1) deliver, or mail to the last known address 

4 of the consumer, such documents or other instru5 ments which the Board has determined, by regula6 tion, are necessary to acknowledge full ownership by 

7 the consumer of the property acquired pursuant to 

8 the rental-purchase agreement; and 

9 ‘‘(2) transfer to the consumer the unexpired 

10 portion of any warranties provided by the manufac11 turer, distributor, or seller of the property, which 

12 shall apply as if the consumer were the original pur13 chaser of the property, except where such transfer is 

14 prohibited by the terms of the warranty. 

15 ‘‘SEC. 1007. PROHIBITED PROVISIONS. 

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

17 ‘‘(1) a confession of judgment; 

18 ‘‘(2) a negotiable instrument; 

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

20 property interest in any goods, except those goods, 

21 the use of which is provided by the merchant pursu22 ant to the agreement; 

23 ‘‘(4) a wage assignment; 
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1 ‘‘(5) a provision requiring the waiver of any 

2 legal claim or remedy created by this title or other 

3 provision 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 regulation of the Board; 

10 ‘‘(B) any early purchase option amount 

11 provided in the rental-purchase agreement; or 

12 ‘‘(C) the actual cost of repair, as appro13 priate; 

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

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

16 dwelling of the consumer or other premises without 

17 obtaining the consent of the consumer, or to commit 

18 any breach of the peace in connection with the re19 possession of the rental property or the collection of 

20 any obligation or alleged obligation of the consumer 

21 arising out of the rental-purchase agreement; 

22 ‘‘(8) a provision requiring the purchase of in23 surance or liability damage waiver to cover the prop24 erty that is the subject of the rental-purchase agree-
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1 ment, except as permitted by regulation of the 

2 Board; or 

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

4 more than 1 late fee or charge for an unpaid or de5 linquent periodic payment, regardless of the period 

6 in which the payment remains unpaid or delinquent, 

7 or to pay a late fee or charge for any periodic pay8 ment because a previously assessed late fee has not 

9 been paid in full. 

10 ‘‘SEC. 1008. STATEMENT OF ACCOUNTS. 

11 ‘‘Upon request of a consumer, a merchant shall pro12 vide a statement of the account of the consumer. If a con13 sumer requests a statement for an individual account more 

14 than 4 times in any 12-month period, the merchant may 

15 charge a reasonable fee for the additional statements re16 quested in excess of 4 times during that 12-month period. 

17 ‘‘SEC. 1009. RENEGOTIATIONS AND EXTENSIONS. 

18 ‘‘(a) RENEGOTIATIONS.—For purposes of this sec19 tion, a ‘renegotiation’ occurs when a rental-purchase 

20 agreement is satisfied and replaced by a new agreement 

21 undertaken by the same consumer. A renegotiation re22 quires new disclosures under this title, except as provided 

23 in subsection (c). 

24 ‘‘(b) EXTENSIONS.—For purposes of this section, an 

25 ‘extension’ is an agreement by the consumer and the mer-
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1 chant to continue an existing rental-purchase agreement 

2 beyond the original end of the payment schedule, but does 

3 not include a continuation that is the result of a renegoti4 ation. 

5 ‘‘(c) EXCEPTIONS.—New disclosures under this title 

6 are not required for the following, even if they meet the 

7 definition of a renegotiation or an extension under this 

8 section: 

9 ‘‘(1) A reduction in payments. 

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

11 ‘‘(3) The extension of a rental-purchase agree12 ment. 

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

14 that has a substantially equivalent or greater eco15 nomic value, provided that the rental-purchase cost 

16 does not increase. 

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

18 agreement. 

19 ‘‘(6) A change in the rental period, provided 

20 that the rental-purchase cost does not increase. 

21 ‘‘(7) An agreement resulting from a court pro22 ceeding. 

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

24 prescribed by the Board. 
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1 ‘‘SEC. 1010. POINT-OF-RENTAL DISCLOSURES. 

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

3 of items displayed or offered for rental-purchase, the mer4 chant shall display on or next to the item or set of items 

5 a card, tag, or label that clearly and conspicuously dis6 closes— 

7 ‘‘(1) a brief description of the property; 

8 ‘‘(2) whether the property is new or used; 

9 ‘‘(3) the cash price of the property; 

10 ‘‘(4) the amount of each rental payment; 

11 ‘‘(5) the total number of rental payments nec12 essary to acquire ownership of the property; and 

13 ‘‘(6) the rental-purchase cost. 

14 ‘‘(b) FORM OF DISCLOSURE.— 

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

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

17 a list or catalog which is readily available to the con18 sumer at the point of rental if the merchandise is 

19 not displayed in the showroom of the merchant, or 

20 if displaying a card, tag, or label would be imprac21 tical due to the size of the merchandise. 

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

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

24 means that information required to be disclosed to 

25 the consumer shall appear in a type size, promi-
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1 nence, and location as to be noticeable, readable, 

2 and comprehensible to an ordinary consumer. 

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

4 ‘‘(a) IN GENERAL.—If an advertisement for a rental5 purchase transaction refers to or states the amount of any 

6 payment for any specific item or set of items, the mer7 chant making the advertisement shall also clearly and con8 spicuously state in the advertisement for the item or set 

9 of items advertised— 

10 ‘‘(1) that the transaction advertised is a rental11 purchase agreement; 

12 ‘‘(2) the amount, timing, and total number of 

13 rental payments necessary to acquire ownership 

14 under the rental-purchase agreement; 

15 ‘‘(3) the amount of the rental-purchase cost; 

16 ‘‘(4) that to acquire ownership of the property, 

17 the consumer must pay the rental-purchase cost plus 

18 applicable taxes; and 

19 ‘‘(5) whether the stated payment amount and 

20 advertised rental-purchase cost is for new or used 

21 property. 

22 ‘‘(b) PROHIBITION.—An advertisement for a rental23 purchase agreement shall not state or imply that a specific 

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

25 terms, unless the merchant usually and customarily offers, 
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1 or will offer, the item or set of items at the stated amounts 

2 or terms. 

3 ‘‘(c) CLEARLY AND CONSPICUOUSLY.— 

4 ‘‘(1) IN GENERAL.—For purposes of this sec5 tion, the term ‘clearly and conspicuously’ means that 

6 required disclosures shall be presented in a type, 

7 size, shade, contrast, prominence, location, and man8 ner, as applicable to different media for advertising, 

9 so as to be readily noticeable and comprehensible to 

10 the ordinary consumer. 

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

12 shall prescribe regulations on principles and factors 

13 to meet the clear and conspicuous standard, as ap14 propriate to print, video, audio, and computerized 

15 advertising, reflecting the principles and factors typi16 cally applied in each medium by the Federal Trade 

17 Commission. 

18 ‘‘(3) LIMITATION.—Nothing contrary to, incon19 sistent with, or in mitigation of, the disclosures re20 quired by this section shall be used in any advertise21 ment in any medium, and no audio, video, or print 

22 technique shall be used that is likely to obscure or 

23 detract significantly from the communication of the 

24 required disclosures. 
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1 ‘‘SEC. 1012. CIVIL LIABILITY. 

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

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

4 requirement of this title with respect to any consumer is 

5 liable to such consumer as provided for leases in section 

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

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

8 in section 1001. 

9 ‘‘(b) JURISDICTION OF COURTS; LIMITATION ON AC10 TIONS.— 

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

12 130(e), any action under this section may be 

13 brought in any United States district court, or in 

14 any other court of competent jurisdiction, before the 

15 end of the 1-year period beginning on the date on 

16 which the last payment was made by the consumer 

17 under the rental-purchase agreement. 

18 ‘‘(2) RECOUPMENT OR SET-OFF.—This sub19 section shall not bar a consumer from asserting a 

20 violation of this title in an action to collect an obli21 gation arising from a rental-purchase agreement, 

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

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

24 recoupment or set-off in such action, except as oth25 erwise provided by State law. 
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1 ‘‘SEC. 1013. ADDITIONAL GROUNDS FOR CIVIL LIABILITY. 

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

3 Any merchant who fails to comply with any requirement 

4 imposed under section 1010 or 1011 with respect to any 

5 consumer who suffers actual damage from the violation 

6 shall be liable to such consumer as provided in section 

7 130. 

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

9 merchant engages in a pattern or practice of violating any 

10 requirement imposed under section 1010 or 1011, the 

11 Federal Trade Commission or an appropriate State attor12 ney general, in accordance with section 1016, may initiate 

13 an action to enforce sanctions against the merchant, in14 cluding— 

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

16 practices; and 

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

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

19 court may determine to be appropriate. 

20 ‘‘SEC. 1014. LIABILITY OF ASSIGNEES. 

21 ‘‘(a) ASSIGNEES INCLUDED.—For purposes of sec22 tion 1013 and this section, the term ‘merchant’ includes 

23 an assignee of a merchant. 

24 ‘‘(b) LIABILITIES OF ASSIGNEES.— 

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

26 section 1012 or 1013 for a violation of this title may 
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1 be brought against an assignee only if the violation 

2 is apparent on the face of the rental-purchase agree3 ment to which it relates. 

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

5 purposes of this subsection, a violation that is appar6 ent on the face of a rental-purchase agreement in7 cludes, but is not limited to, a disclosure that can 

8 be determined to be incomplete or inaccurate from 

9 the face of the agreement. 

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

11 has no liability under this section in a case in which 

12 the assignment is involuntary. 

13 ‘‘(4) RULE OF CONSTRUCTION.—No provision 

14 of this section shall be construed as limiting or alter15 ing the liability under section 1012 or 1013 of a 

16 merchant assigning a rental-purchase agreement. 

17 ‘‘(c) PROOF OF DISCLOSURE.—In an action by or 

18 against an assignee, the consumer’s written acknowledg19 ment of receipt of a disclosure, made as part of the rental20 purchase agreement, shall be conclusive proof that the dis21 closure was made, if the assignee had no knowledge that 

22 the disclosure had not been made when the assignee ac23 quired the rental-purchase agreement to which it relates. 
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1 ‘‘SEC. 1015. REGULATIONS. 

2 ‘‘(a) IN GENERAL.—The Board shall prescribe regu3 lations, as necessary to carry out this title, to prevent its 

4 circumvention, and to facilitate compliance with its re5 quirements. 

6 ‘‘(b) MODEL DISCLOSURE FORMS.— 

7 ‘‘(1) BOARD AUTHORITY.—The Board may 

8 publish model disclosure forms and clauses for com9 mon rental-purchase agreements to facilitate compli10 ance with the disclosure requirements of this title 

11 and to aid the consumer in understanding the trans12 action by utilizing readily understandable language 

13 to simplify the technical nature of the disclosures. 

14 ‘‘(2) CONTENT.—In devising forms described in 

15 paragraph (1), the Board shall consider the use by 

16 merchants of data processing or similar automated 

17 equipment. 

18 ‘‘(3) USE NOT MANDATORY.—Nothing in this 

19 title may be construed to require a merchant to use 

20 any model form or clause published by the Board 

21 under this section. 

22 ‘‘(4) DETERMINATION OF COMPLIANCE.—A 

23 merchant shall be deemed to be in compliance with 

24 the requirement to provide disclosure under section 

25 1003(a) if the merchant— 
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1 ‘‘(A) uses any appropriate model form or 

2 clause published by the Board under this sec3 tion; or 

4 ‘‘(B) uses any such model form or clause, 

5 and changes it by deleting any information 

6 which is not required by this title or rear7 ranging the format, if in making such deletion 

8 or rearranging the format, the merchant does 

9 not affect the substance, clarity, or meaningful 

10 sequence of the disclosure. 

11 ‘‘(c) EFFECTIVE DATE OF REGULATIONS.— 

12 ‘‘(1) IN GENERAL.—Any regulation prescribed 

13 by the Board, or any amendment or interpretation 

14 thereof, shall not be effective before the October 1 

15 that follows the date of publication of the regulation 

16 in final form by at least 6 months. 

17 ‘‘(2) AUTHORITY TO MODIFY.—The Board may, 

18 at its discretion— 

19 ‘‘(A) lengthen the period of time described 

20 in paragraph (1) to permit merchants to adjust 

21 to accommodate new requirements; or 

22 ‘‘(B) shorten that period of time, if the 

23 Board makes a specific finding that such action 

24 is necessary to comply with the findings of a 
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1 court or to prevent unfair or deceptive prac2 tices. 

3 ‘‘(3) VOLUNTARY COMPLIANCE.—Notwith4 standing paragraph (1) or (2), a merchant may com5 ply with any newly prescribed disclosure requirement 

6 prior to its effective date. 

7 ‘‘SEC. 1016. ENFORCEMENT. 

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

9 this title shall be enforced under the Federal Trade Com10 mission Act (15 U.S.C. 41 et seq.), and a violation of any 

11 requirement imposed under this title shall be deemed a 

12 violation of a requirement imposed under that Act. All of 

13 the functions and powers of the Federal Trade Commis14 sion under the Federal Trade Commission Act are avail15 able to the Commission to enforce compliance by any per16 son with the requirements of this title, irrespective of 

17 whether that person is engaged in commerce or meets any 

18 other jurisdictional test under the Federal Trade Commis19 sion Act. 

20 ‘‘(b) STATE ENFORCEMENT.— 

21 ‘‘(1) IN GENERAL.—An action to enforce the re22 quirements imposed by this title may also be 

23 brought by the appropriate State attorney general in 

24 any appropriate United States district court, or any 

25 other court of competent jurisdiction. 
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1 ‘‘(2) PRIOR WRITTEN NOTICE.— 

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

3 general shall provide prior written notice of any 

4 civil action described in paragraph (1) to the 

5 Federal Trade Commission, and shall provide 

6 the Commission with a copy of the complaint. 

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

8 required by this paragraph is not feasible, the 

9 State attorney general shall provide notice to 

10 the Commission immediately upon instituting 

11 the action. 

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

13 may— 

14 ‘‘(A) intervene in an action described in 

15 paragraph (1); 

16 ‘‘(B) upon intervening— 

17 ‘‘(i) remove the action to the appro18 priate United States district court, if it 

19 was not originally brought there; and 

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

21 the action; and 

22 ‘‘(C) file a petition for appeal. 
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1 ‘‘SEC. 1017. CRIMINAL LIABILITY FOR WILLFUL AND KNOW2 ING VIOLATION. 

3 ‘‘Whoever willfully and knowingly gives false or inac4 curate information, or fails to provide information which 

5 that person is required to disclose under the provisions 

6 of this title or any regulation issued under this title shall 

7 be subject to the penalty provisions as provided in section 

8 112. 

9 ‘‘SEC. 1018. RELATION TO OTHER LAWS. 

10 ‘‘(a) RELATION TO STATE LAW.— 

11 ‘‘(1) NO EFFECT ON CONSISTENT STATE

12 LAWS.—Except as otherwise provided in subsection 

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

14 manner the meaning, scope, or applicability of the 

15 laws of any State relating to rental-purchase agree16 ments, except to the extent that those laws are in17 consistent with any provision of this title, and then 

18 only to the extent of the inconsistency. 

19 ‘‘(2) DETERMINATION OF INCONSISTENCY.—

20 Upon its own motion or upon the request of an in21 terested party, which is submitted in accordance 

22 with procedures prescribed by regulation of the 

23 Board, the Board shall determine whether any such 

24 inconsistency exists. If the Board determines that a 

25 term or provision of a State law is inconsistent with 

26 a provision of this title, merchants located in that 
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1 State shall not be required to comply with that term 

2 or provision, and shall incur no liability under the 

3 law of that State for failure to follow such term or 

4 provision, notwithstanding that such determination 

5 is subsequently amended, rescinded, or determined 

6 by judicial or other authority to be invalid for any 

7 reason. 

8 ‘‘(3) GREATER PROTECTION UNDER STATE

9 LAW.—Except as provided in subsection (b), for pur10 poses of this section, a term or provision of a State 

11 law is not inconsistent with the provisions of this 

12 title if the term or provision affords greater protec13 tion and benefit to the consumer than the protection 

14 and benefit provided under this title, as determined 

15 by the Board, on its own motion or upon the peti16 tion of any interested party. 

17 ‘‘(b) STATE LAWS RELATING TO CHARACTERIZATION

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

19 title shall supersede any State law, to the extent that such 

20 law— 

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

22 security interest, credit sale, retail installment sale, 

23 conditional sale, or any other form of consumer 

24 credit, or that imputes to a rental-purchase agree-
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1 ment the creation of a debt or extension of credit; 

2 or 

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

4 calculation, including a time-price differential, an 

5 annual percentage rate, or an effective annual per6 centage rate. 

7 ‘‘(c) RELATION TO FEDERAL TRADE COMMISSION

8 ACT.—No provision of this title shall be construed as lim9 iting, superseding, or otherwise affecting the applicability 

10 of the Federal Trade Commission Act to any merchant 

11 or rental-purchase transaction. 

12 ‘‘SEC. 1019. EFFECT ON GOVERNMENT AGENCIES. 

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

14 may be imposed on the United States or any of its depart15 ments or agencies, any State or political subdivision there16 of, or any agency of a State or political subdivision there17 of. 

18 ‘‘SEC. 1020. COMPLIANCE DATE. 

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

20 6 months after the date of enactment of this title. In any 

21 case, a merchant may comply with this title at any time 

22 after such date of enactment.’’.

Æ