Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Consumer Rental Pur-
chase 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 trans-
actions and over a 5-year period approximately
4,900,000 United States households will do so.
(3) Competition among the various firms en-
gaged in the extension of rental-purchase trans-
actions would be strengthened by informed use of
rental-purchase transactions.
(4) The informed use of rental-purchase trans-
actions 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 as-
sure simple, meaningful, and consistent disclosure of rent-
al-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 prac-
tices.
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.
‘‘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.
‘‘SEC. 1001. DEFINITIONS.
‘‘For purposes of this title, the following definitions
shall apply:
‘‘(1) ADVERTISEMENT.—The term ‘advertise-
ment’ means a commercial message in any medium
that promotes, directly or indirectly, a rental-pur-
chase agreement but does not include price tags,
window signs, or other in-store merchandising aids.
‘‘(2) AGRICULTURAL PURPOSE.—The term ‘ag-
ricultural purpose’ includes—
‘‘(A) the production, harvest, exhibition,
marketing, transformation, processing, or man-
ufacture 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 farm-
ing.
‘‘(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 ordi-
nary 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 rent-
al-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) INITIAL PAYMENT.—The term ‘initial pay-
ment’ means the amount to be paid before or at the
consummation of the agreement or the delivery of
the property if delivery occurs after consummation,
including the rental payment; service, processing, or
administrative charges; delivery fee; refundable secu-
rity deposit; taxes; mandatory fees or charges; and
any optional fees or charges agreed to by the con-
sumer.
‘‘(8) 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 pay-
ment under the agreement is payable.
‘‘(9) PAYMENT
SCHEDULE.—The term ‘pay-
ment schedule’ means the amount and timing of the
periodic payments and the total number of all peri-
odic payments that the consumer will make if the
consumer acquires ownership of the property by
making all periodic payments.
‘‘(10) PERIODIC PAYMENT.—The term ‘periodic
payment’ means the total payment a consumer will
make for a specific rental period after the initial
payment, including the rental payment, taxes, man-
datory fees or charges, and any optional fees or
charges agreed to by the consumer.
‘‘(11) 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.
‘‘(12) RENTAL
PAYMENT.—The term ‘rental
payment’ means rent required to be paid by a con-
sumer for the possession and use of property for a
specific rental period, but does not include taxes or
any fees or charges.
‘‘(13) RENTAL PERIOD.—The term ‘rental pe-
riod’ 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.
‘‘(14) RENTAL-PURCHASE AGREEMENT.—
‘‘(A) IN GENERAL.—The term ‘rental-pur-
chase 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-pur-
chase 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 busi-
ness of lending money or a thing of value.
‘‘(15) RENTAL-PURCHASE COST.—
‘‘(A) IN GENERAL.—For purposes of sec-
tions 1010 and 1011, the term ‘rental-purchase
cost’ means the sum of all rental payments and
mandatory fees or charges imposed by the mer-
chant as a condition of entering into a rental-
purchase agreement or acquiring ownership of
property under a rental-purchase agreement,
such as the following:
‘‘(i) Service, processing, or adminis-
trative charge.
‘‘(ii) Fee for an investigation or credit
report.
‘‘(iii) Charge for delivery required by
the merchant.
‘‘(B) EXCLUDED
ITEMS.—The following
fees or charges shall not be taken into account
in determining the rental-purchase cost with re-
spect to a rental-purchase transaction:
‘‘(i) Fees and charges prescribed by
law, which actually are or will be paid to
public officials or government entities, such
as sales tax.
‘‘(ii) Fees and charges for optional
products and services offered in connection
with a rental-purchase agreement.
‘‘(16) 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.
‘‘(17) TOTAL
COST.—The term ‘total cost’
means the sum of the initial payment and all peri-
odic payments in the payment schedule to be paid by
the consumer to acquire ownership of the property
that is the subject of the rental-purchase agreement.
or more items as a set (as may be defined by the
Board in regulation) a statement of the aggregate
cash price of all items shall satisfy this requirement.
‘‘(7) The amount and timing of periodic pay-
ments, and the total number of periodic payments
necessary to acquire ownership of the property
under the rental-purchase agreement.
‘‘(8) The total cost, using that term, and a
brief description, such as ‘This is the amount you
will pay the merchant if you make all periodic pay-
ments to acquire ownership of the property.’.
‘‘(9) A statement of the consumer’s right to ter-
minate the agreement without paying any fee or
charge not previously due under the agreement by
voluntarily surrendering or returning the property in
good repair upon expiration of any lease term.
‘‘(10) Substantially the following statement:
‘OTHER IMPORTANT TERMS: See your
rental-purchase agreement for additional important
information on early termination procedures, pur-
chase option rights, responsibilities for loss, damage
or destruction of the property, warranties, mainte-
nance responsibilities, and other charges or penalties
you may incur.’.
‘‘(b) FORM OF DISCLOSURE.—The disclosures re-
quired by paragraphs (4) through (10) of subsection (a)
shall be segregated from other information at the begin-
ning of the rental-purchase agreement and shall contain
only directly related information, and shall be identified
in boldface, upper-case letters as follows: ‘‘IMPOR-
TANT RENTAL-PURCHASE DISCLOSURES’.
‘‘(c) DISCLOSURE REQUIREMENTS RELATING TO IN-
SURANCE PREMIUMS AND LIABILITY WAIVERS.—
‘‘(1) IN GENERAL.—A merchant shall clearly
and conspicuously disclose in writing to the con-
sumer before the consummation of a rental-purchase
agreement that the purchase of leased property in-
surance or liability waiver coverage is not required
as a condition for entering into the rental-purchase
agreement.
‘‘(2) AFFIRMATIVE WRITTEN REQUEST AFTER
COST DISCLOSURE.—A merchant may provide insur-
ance or liability waiver coverage, directly or indi-
rectly, in connection with a rental-purchase trans-
action only if—
‘‘(A) the merchant clearly and conspicu-
ously discloses to the consumer the cost of each
component of such coverage before the con-
summation of the rental-purchase agreement;
and
‘‘(B) the consumer signs an affirmative
written request for such coverage after receiving
the disclosures required under subparagraph
paragraph (A) of this paragraph and paragraph
(1).
‘‘(d) ACCURACY OF DISCLOSURE.—
‘‘(1) IN GENERAL.—The disclosures required to
be made under subsection (a) shall be accurate as of
the date the disclosures are made, based on the in-
formation available to the merchant.
‘‘(2) INFORMATION SUBSEQUENTLY RENDERED
INACCURATE.—If information required to be dis-
closed under subsection (a) is subsequently rendered
inaccurate as a result of any agreement between the
merchant and the consumer subsequent to the deliv-
ery of the required disclosures, the resulting inaccu-
racy shall not constitute a violation of this title.
‘‘SEC. 1005. 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 main-
taining 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 pre-
viously due under the agreement by voluntarily sur-
rendering or returning the property that is the sub-
ject 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 agree-
ment, without losing any rights or options
which exist under the agreement, by the pay-
ment 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 agree-
ment, other than through judicial process, dur-
ing the applicable reinstatement period set forth
in subparagraph (A), permits the consumer to
reinstate the agreement during a period of at
least 60 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;
‘‘(C) if the consumer has paid 50 percent
or more of the total cost necessary to acquire
ownership and returns or voluntarily surrenders
the property, other than through judicial proc-
ess, during the applicable reinstatement period
set forth in subparagraph (A), permits the con-
sumer to reinstate the agreement during a pe-
riod of at least 120 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; and
‘‘(D) permits the consumer, upon rein-
statement of the agreement to receive the same
the property at the time the consumer acquires own-
ership of the property, the warranty will be trans-
ferred to the consumer if allowed by the terms of the
warranty; and
‘‘(7) provide, to the extent applicable, a descrip-
tion of any grace period for making any periodic
payment, the amount of any security deposit, if any,
to be paid by the consumer upon initiation of the
rental-purchase agreement, and the terms for refund
of such security deposit to the consumer upon re-
turn, surrender or purchase of the property.
‘‘(b) REPOSSESSION DURING REINSTATEMENT PE-
RIOD.—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 con-
sumer’s right to reinstate.
‘‘SEC. 1006. RIGHT TO ACQUIRE OWNERSHIP.
‘‘(a) IN GENERAL.—The consumer shall acquire own-
ership of the property that is the subject of the rental-
purchase agreement, and the rental-purchase agreement
shall terminate, upon compliance by the consumer with the
requirements of subsection (b) or any early payment op-
tion provided in the rental purchase agreement, and upon
payment of any past due payments and fees, as permitted
in regulation by the Board.
‘‘(b) PAYMENT
OF TOTAL COST.—The consumer
shall acquire ownership of the rental property upon pay-
ment of the total cost of the rental-purchase agreement,
as such term is defined in section 1001(17), and as dis-
closed to the consumer in the rental-purchase agreement
pursuant to section 1004(a).
‘‘(c) ADDITIONAL FEES PROHIBITED.—A merchant
shall not require the consumer to pay, as a condition for
acquiring ownership of the property that is the subject of
the rental-purchase agreement, any fee or charge in addi-
tion to, or in excess of, the regular periodic payments re-
quired by subsection (b), or any early purchase option
amount provided in the rental-purchase agreement, as ap-
plicable. A requirement that the consumer pay an unpaid
late charge or other fee or charge which the merchant has
previously billed to the consumer shall not constitute an
additional fee or charge for purposes of this subsection.
‘‘(d) TRANSFER
OF OWNERSHIP RIGHTS.—Upon
payment by the consumer of all payments necessary to ac-
quire ownership under subsection (b) or any early pur-
chase option amount provided in the rental-purchase
agreement, as appropriate, the merchant shall—
‘‘(1) deliver, or mail to the consumer’s last
known address, such documents or other instru-
ments, which the Board has determined by regula-
tion, are necessary to acknowledge full ownership by
the consumer of the property acquired pursuant to
the rental-purchase agreement; and
‘‘(2) transfer to the consumer the unexpired
portion of any warranties provided by the manufac-
turer, distributor, or seller of the property, which
shall apply as if the consumer were the original pur-
chaser of the property, except where such transfer is
prohibited by the terms of the warranty.
‘‘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 pursu-
ant to the agreement;
‘‘(4) a wage assignment;
‘‘(5) a provision requiring the waiver of any
legal claim or remedy created by this title or other
provision of Federal or State law;
‘‘(6) a provision requiring the consumer, in the
event the property subject to the rental-purchase
agreement is lost, stolen, damaged, or destroyed, to
pay an amount in excess of the least of—
‘‘(A) the fair market value of the property,
as determined by the Board in regulation;
‘‘(B) any early purchase option amount
provided in the rental-purchase agreement; or
‘‘(C) the actual cost of repair, as appro-
priate;
‘‘(7) a provision authorizing the merchant, or a
person acting on behalf of the merchant, to enter the
consumer’s dwelling or other premises without ob-
taining the consumer’s consent or to commit any
breach of the peace in connection with the reposses-
sion of the rental property or the collection of any
obligation or alleged obligation of the consumer aris-
ing out of the rental-purchase agreement;
‘‘(8) a provision requiring the purchase of in-
surance or liability damage waiver to cover the prop-
erty that is the subject of the rental-purchase agree-
ment, except as permitted by the Board in regula-
tion;
‘‘(9) a provision requiring the consumer to pay
more than 1 late fee or charge for an unpaid or de-
linquent periodic payment, regardless of the period
in which the payment remains unpaid or delinquent,
or to pay a late fee or charge for any periodic pay-
ment because a previously assessed late fee has not
been paid in full.
‘‘SEC. 1008. STATEMENT OF ACCOUNTS.
‘‘Upon request of a consumer, a merchant shall pro-
vide 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 re-
placed by a new agreement undertaken by the same con-
sumer. 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 re-
negotiation or an extension:
‘‘(1) A reduction in payments.
‘‘(2) A deferment of 1 or more payments.
‘‘(3) The extension of a rental-purchase agree-
ment.
‘‘(4) The substitution of property with property
that has a substantially equivalent or greater eco-
nomic 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 pro-
ceeding.
‘‘(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 mer-
chant shall display on or next to the item or set of items
a card, tag, or label that clearly and conspicuously dis-
closes 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 nec-
essary to acquire ownership of the property.
‘‘(6) The rental-purchase cost.
‘‘(b) FORM OF DISCLOSURE.—
‘‘(1) IN GENERAL.—A merchant may make the
disclosure required by subsection (a) in the form of
a list or catalog which is readily available to the con-
sumer at the point of rental if the merchandise is
not displayed in the merchant’s showroom or if dis-
playing a card, tag, or label would be impractical
due to the size of the merchandise.
‘‘(2) CLEARLY AND CONSPICUOUSLY.—As used
in this section, the term ‘clearly and conspicuously’
means that information required to be disclosed to
the consumer shall appear in a type size, promi-
nence, and location as to be noticeable, readable,
and comprehensible to an ordinary consumer.
‘‘SEC. 1011. RENTAL-PURCHASE ADVERTISING.
‘‘(a) IN GENERAL.—If an advertisement for a rental-
purchase transaction refers to or states the amount of any
payment for any specific item or set of items, the mer-
chant making the advertisement shall also clearly and con-
spicuously state in the advertisement the following for the
item, or set of items, advertised:
‘‘(1) The transaction advertised is a rental-pur-
chase agreement.
‘‘(2) The amount, timing, and total number of
rental payments necessary to acquire ownership
under the rental-purchase agreement.
‘‘(3) The amount of the rental-purchase cost.
‘‘(4) To acquire ownership of the property the
consumer must pay the rental-purchase cost plus ap-
plicable taxes.
‘‘(5) Whether the stated payment amount and
advertised rental-purchase cost is for new or used
property.
‘‘(b) PROHIBITION.—An advertisement for a rental-
purchase agreement shall not state or imply that a specific
item, or set of items, is available at specific amounts or
terms unless the merchant usually and customarily offers,
or will offer, the item or set of items at the stated amounts
or terms.
‘‘(c) CLEARLY AND CONSPICUOUSLY.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘clearly and conspicuously’ means that
required disclosures shall be presented in a type,
size, shade, contrast, prominence, location, and man-
ner, as applicable to different mediums for adver-
tising, so as to be readily noticeable and comprehen-
sible to the ordinary consumer.
‘‘(2) REGULATORY
GUIDANCE.—The Board
shall prescribe regulations on principles and factors
to meet the clear and conspicuous standard as ap-
propriate to print, video, audio, and computerized
advertising, reflecting the principles and factors typi-
cally applied in each medium by the Federal Trade
Commission.
‘‘(3) LIMITATION.—Nothing contrary to, incon-
sistent with, or in mitigation of, the required disclo-
sures shall be used in any advertisement in any me-
dium, and no audio, video, or print technique shall
be used that is likely to obscure or detract signifi-
cantly from the communication of the disclosures.
‘‘SEC. 1012. CIVIL LIABILITY.
‘‘(a) IN GENERAL.—Except as otherwise provided in
section 1013, any merchant who fails to comply with any
requirement of this title with respect to any consumer is
liable to such consumer as provided for leases in section
130. For purposes of this section, the term ‘creditor’ as
used in section 130 shall include a ‘merchant’, as defined
in section 1001.
‘‘(b) JURISDICTION OF COURTS; LIMITATION ON AC-
TIONS.—
‘‘(1) IN
GENERAL.—Notwithstanding section
130(e), any action under this section may be
brought in any United States district court, or in
any other court of competent jurisdiction, before the
end of the 1-year period beginning on the date the
last payment was made by the consumer under the
rental-purchase agreement.
‘‘(2) RECOUPMENT
OR
SET-OFF.—This sub-
section shall not bar a consumer from asserting a
violation of this title in an action to collect an obli-
gation arising from a rental-purchase agreement,
which was brought after the end of the 1-year period
described in paragraph (1) as a matter of defense by
recoupment or set-off in such action, except as oth-
erwise provided by State law.
‘‘SEC. 1013. ADDITIONAL GROUNDS FOR CIVIL LIABILITY.
‘‘(a) INDIVIDUAL CASES WITH ACTUAL DAMAGES.—
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
shall be liable to such consumer as provided in section
130.
‘‘(b) PATTERN OR PRACTICE OF VIOLATIONS.—If a
merchant engages in a pattern or practice of violating any
requirement imposed under section 1010 or 1011, the
Federal Trade Commission or an appropriate State attor-
ney general, in accordance with section 1016, may initiate
an action to enforce sanctions against the merchant,
including—
‘‘(1) an order to cease and desist from such
practices; and
‘‘(2) a civil money penalty of such amount as
the court may impose, based on such factors as the
court may determine to be appropriate.
‘‘SEC. 1014. LIABILITY OF ASSIGNEES.
‘‘(a) ASSIGNEES INCLUDED.—For purposes of sec-
tion 1013, and this section, the term ‘merchant’ includes
an assignee of a merchant.
‘‘(b) LIABILITIES OF ASSIGNEES.—
‘‘(1) APPARENT VIOLATION.—An action under
section 1012 or 1013 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 agree-
ment to which it relates.
‘‘(2) APPARENT
VIOLATION
DEFINED.—For
purposes of this subsection, a violation that is appar-
ent on the face of a rental-purchase agreement in-
cludes, but is not limited to, 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 alter-
ing the liability under section 1012 or 1013 of a
merchant assigning a rental-purchase agreement.
‘‘(b) PROOF OF DISCLOSURE.—In an action by or
against an assignee, the consumer’s written acknowledg-
ment of receipt of a disclosure, made as part of the rental-
purchase agreement, shall be conclusive proof that the dis-
closure was made, if the assignee had no knowledge that
the disclosure had not been made when the assignee ac-
quired the rental-purchase agreement to which it relates.
‘‘SEC. 1015. REGULATIONS.
‘‘(a) IN GENERAL.—The Board shall prescribe regu-
lations as necessary to carry out the purposes of this title,
to prevent its circumvention, and to facilitate compliance
with its requirements.
‘‘(b) MODEL DISCLOSURE FORMS.—The Board may
publish model disclosure forms and clauses for common
rental-purchase agreements to facilitate compliance with
the disclosure requirements of this title and to aid the con-
sumer in understanding the transaction by utilizing read-
ily understandable language to simplify the technical na-
ture of the disclosures. In devising such forms, the Board
shall consider the use by merchants of data processing or
similar automated equipment. Nothing in this title may
be construed to require a merchant to use any such model
form or clause prescribed by the Board under this section.
A merchant shall be deemed to be in compliance with the
requirement to provide disclosure under section 1003(a)
if the merchant—
‘‘(1) uses any appropriate model form or clause
as published by the Board; or
‘‘(2) uses any such model form or clause and
changes it by—
‘‘(A) deleting any information which is not
required by this title; or
‘‘(B) rearranging the format, if in making
such deletion or rearranging the format, the
merchant does not affect the substance, clarity,
or meaningful sequence of the disclosure.
‘‘(c) EFFECTIVE DATE OF REGULATIONS.—Any reg-
ulation prescribed by the Board, or any amendment or in-
terpretation thereof, shall not be effective before the Octo-
ber 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 mer-
chants to adjust to accommodate new requirements. The
Board may also shorten that period of time, notwith-
standing 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 pre-
scribed 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 require-
ment imposed under that Act. All of the functions and
powers of the Federal Trade Commission under the Fed-
eral Trade Commission Act are available to the Commis-
sion to enforce compliance by any person with the require-
ments 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 re-
quirements 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 Commis-
sion 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 appro-
priate 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 KNOW-
ING VIOLATION.
‘‘Whoever willfully and knowingly gives false or inac-
curate 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 subject to the
penalty provisions as provided in section 112.
‘‘SEC. 1018. RELATION TO OTHER LAWS.
‘‘(a) RELATION TO STATE LAW.—
‘‘(1) NO
EFFECT
ON
CONSISTENT
STATE
LAWS.—Except as otherwise provided in subsection
(b), this title does not annul, alter, or affect in any
manner the meaning, scope or applicability of the
laws of any State relating to rental-purchase agree-
ments, except to the extent those laws are incon-
sistent with any provision of this title, and then only
to the extent of the inconsistency.
‘‘(2) DETERMINATION
OF
INCONSISTENCY.—
Upon its own motion or upon the request of an in-
terested party, which is submitted in accordance
with procedures prescribed in regulations of the
Board, the Board shall determine whether any such
inconsistency exists. If the Board determines that a
term or provision of a State law is inconsistent, mer-
chants located in that State need not follow such
term or provision and shall incur no liability under
the law of that State for failure to follow such term
or provision, notwithstanding that such determina-
tion is subsequently amended, rescinded, or deter-
mined by judicial or other authority to be invalid for
any reason.
‘‘(3) GREATER
PROTECTION
UNDER
STATE
LAW.—Except as provided in subsection (b), for pur-
poses of this section, a term or provision of a State
law is not inconsistent with the provisions of this
title if the term or provision affords greater protec-
tion and benefit to the consumer than the protection
and benefit provided under this title as determined
by the Board, on its own motion or upon the peti-
tion of any interested party.
‘‘(b) STATE LAWS RELATING TO CHARACTERIZATION
OF TRANSACTION.—Notwithstanding the provisions of
subsection (a), this title shall supersede any State law to
the extent that such law—
‘‘(1) regulates a rental-purchase agreement as a
security interest, credit sale, retail installment sale,
conditional sale or any other form of consumer cred-
it, or that imputes to a rental-purchase agreement
the creation of a debt or extension of credit, or
‘‘(2) requires the disclosure of a percentage rate
calculation, including a time-price differential, an
annual percentage rate, or an effective annual per-
centage rate.
‘‘(c) RELATION TO FEDERAL TRADE COMMISSION
ACT.—No provision of this title shall be construed as lim-
iting, superseding, or otherwise affecting the applicability
of the Federal Trade Commission Act to any merchant
or 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 depart-
ments 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.’’.
Passed the House of Representatives September 18,
2002.
Attest:
Clerk.