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106TH CONGRESS
2D SESSION
H. R. 4540
To amend the Consumer Credit Protection Act to enhance the advertising
of the terms and costs of consumer automobile leases, to permit consumer
comparison of advertised lease offerings, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 25, 2000
Mr. LAFALCE introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To amend the Consumer Credit Protection Act to enhance
the advertising of the terms and costs of consumer auto-
mobile leases, to permit consumer comparison of adver-
tised lease offerings, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Consumer Automobile Lease Advertising Improvement
Act of 2000’’.
(b) REFERENCE.—Whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
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to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Consumer Credit Protection Act.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) There has been a continuing trend toward
leasing of automobiles by consumers as an alter-
native to installment credit sales, with automobile
leases now constituting over one-third of all new
automobile transactions.
(2) Current automobile leasing practices do not
provide consumers with consistent or adequate infor-
mation to permit comparison shopping among lease
offerings. Important information about lease costs
and terms are not available until the consumer visits
an automobile dealership, are typically provided only
as part of lease negotiations, and often are not fully
disclosed until the signing of the lease documents.
(3) Automobile lease advertisements tend to
confuse and mislead consumers by highlighting the
most attractive terms of leases, by minimizing or
omitting additional costs, terms or penalties, and by
advertising monthly payment amounts based on
lease terms that are different from those customarily
offered to or selected by consumers.
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(4) With leases accounting for a large and
growing percentage of all new automobile trans-
actions, there is increasing need for automobile man-
ufacturers, automobile dealers and other firms in-
volved in leasing to provide more relevant and easily
understood information in advertising and in writing
at the auto dealership to permit consumers to evalu-
ate intelligently the attractiveness of leases offered
by an automobile dealership, to compare terms of
leases offered and advertised by competing dealer-
ships, and to compare the benefits of automobile
leases with alternative purchase transactions.
(b) PURPOSE.—The purpose of the amendments
made by this Act is to provide consumers with more rel-
evant and easily understood information regarding the
terms and costs of lease offerings earlier in the leasing
process to permit consumers to compare lease and pur-
chase options and to comparison shop among competing
lease opportunities.
SEC. 3. APPLICABLE CONSUMER LEASES.
Section 181(1) of the Consumer Credit Protection
Act (15 U.S.C. 1667(1)) is amended—
(1) by striking ‘‘$25,000’’ and inserting
‘‘$50,000’’; and
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(2) by adding at the end the following: ‘‘The
limit on the contractual obligation which comes with-
in such term shall be adjusted annually based upon
the change reported in the Consumer Price Index by
the Department of Labor in June of the preceding
year.’’.
SEC. 4. GENERAL LEASE ADVERTISING.
(a) AMENDMENTS.—Section 184(a) (15 U.S.C.
1667c) is amended—
(1) by striking ‘‘(a)’’ and inserting ‘‘(a)(1)’’;
(2) by redesignating paragraphs (1) through
(5) as subparagraphs (A) through (E), respectively;
(3) by adding at the end the following:
‘‘(2) Identification in a television advertisement
of the advertised transaction as a lease, as required
by paragraph (1)(A), shall be included in both the
audio and video portions of the television advertise-
ment.
‘‘(3) The requirements of this subsection shall
apply to all advertisements for a consumer lease, in-
cluding advertisements on television, radio and vid-
eotape; print advertisements in publications, news-
letters and fliers; advertisements by toll-free tele-
phone numbers; and advertisements in electronic
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media, including internet webpages, e-mail, CD–
ROMs and interactive computer services.’’.
(b) CONFORMING AMENDMENTS.—Section 184(c)
(15 U.S.C. 1667c(c)) is amended by striking ‘‘subsection
(a)’’ each time it occurs and inserting ‘‘subsection (a)(1)’’
and in paragraph (1) by striking ‘‘paragraphs (1) and
(2)’’ and inserting ‘‘subparagraphs (A) and (B)’’.
SEC. 5. ADVERTISEMENT FOR AUTOMOBILE LEASE.
Section 184 (15 U.S.C. 1667c) is amended by adding
at the end the following:
‘‘(d) ADVERTISEMENT FOR AUTOMOBILE LEASE.—
‘‘(1) IN GENERAL.—An advertisement to pro-
mote a lease for an automobile that includes a
scheduled lease payment amount that applies only to
a single vehicle, or to a limited number of vehicles
of the same vehicle make, model and year, shall
clearly and conspicuously state that the advertised
payment amount applies only to a single vehicle, or
shall clearly and conspicuously state the number of
vehicles of the same vehicle make and model to be
made available for lease at the advertised payment
amount.
‘‘(2) LEASE PAYMENT AMOUNTS.—
‘‘(A) An advertisement to promote a lease
for an automobile that states a lease payment
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amount, or must state a lease payment amount
under subsection (a)(1)(D), shall calculate such
payment amount on the basis of a lease pay-
ment formula which the Board shall set forth in
regulation and which shall be based on the fol-
lowing information—
‘‘(i) the total capitalized cost of the
vehicle model advertised, which shall not be
reduced or adjusted by any down payment
amount, capitalized cost reduction, vehicle
trade-in amount or other required pay-
ment;
‘‘(ii) a lease term of twenty-four (24)
months, or such other lease term that the
Board may determine in regulation as rep-
resentative of prevailing industry practice;
and
‘‘(iii) a mileage allowance before any
excess mileage charge may be imposed of
12,000 miles for each year of the lease
term, or such other annual mileage allow-
ance which the Board may determine in
regulation as providing a more representa-
tive estimate of vehicle use and potential
costs to the consumer.
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and in such format as the Board shall determine in regula-
tion, the following information:
‘‘(1) CUSTOMER INCENTIVES.—A written and
dated statement that shall be placed in a con-
spicuous and prominent location in the dealership
that sets out clearly and accurately for each vehicle
model offered by the dealer, as applicable, the incen-
tives, special offers or promotions available for the
benefit of consumers in conjunction with consumer
lease, purchase and installment credit transactions,
that shall include—
‘‘(A) special interest rates that are offered
by automobile manufacturers, financial institu-
tions and leasing companies;
‘‘(B) special incentives, including cash re-
bates and vehicle residual percentages that are
offered by automobile manufacturers directly to
consumers; and
‘‘(C) special incentives and lease terms, in-
cluding vehicle discounts, residual value per-
centages and other vehicle promotions that are
offered to consumers by the dealer.
‘‘(2) AVAILABLE LEASES.—A written and dated
statement for each vehicle model that the dealer
makes available for lease to consumers that shall be
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placed in a conspicuous and prominent location in
the dealership, and copies of which shall be made
available to individual consumers upon request, that
sets out clearly and accurately the following terms
applicable to leases for such vehicle models—
‘‘(A) the rebates and other incentives avail-
able for consumers;
‘‘(B) the money factor, or lease interest
factor, that shall be stated as a decimal number
and as an equivalent approximate annual per-
centage rate; and
‘‘(C) the vehicle residual value, that shall
be stated as a percentage of the retail price
(MSRP) of such vehicle model.’’.
SEC. 7. DEFINITIONS.
Section 184 (15 U.S.C. 1667c), as amended by sec-
tions 6 and 7, is further amended by adding at the end
the following:
‘‘(f) CLEARLY AND CONSPICUOUSLY.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘clearly and conspicuously’ means—
‘‘(A) in print advertisements, the required
disclosures and explanations of lease terms shall
appear in a type size, shade, contrast, promi-
nence, and location as to be readily noticeable,
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readable, and comprehensible to an ordinary
consumer;
‘‘(B) in the video portion of television or
videotaped advertisements, the required disclo-
sures shall appear on the screen in a type size,
shade, contrast, prominence, and location and
for a duration as to be readily noticeable, read-
able, and comprehensible to an ordinary con-
sumer;
‘‘(C) in the audio portion of television,
videotaped, and radio advertisements, the re-
quired disclosures shall be delivered in a vol-
ume, cadence, and location and for a duration
as to be readily noticeable, hearable, and com-
prehensible to an ordinary consumer; and
‘‘(D) in promotions and advertising in
internet webpages, CD–ROMs, or interactive
computer services, the required disclosures shall
appear in a type size, shade, contrast, promi-
nence, and location as to be readily readable
and comprehensible to users and shall be sepa-
rated from marketing and promotional informa-
tion and easily accessible under the label or
heading 
‘Important 
Information 
for 
Con-
sumers’.
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‘‘(2) 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. 8. ADMINISTRATIVE ENFORCEMENT.
Chapter 5 of the Consumer Credit Protection Act is
further amended by adding the following new section:
‘‘SEC. 187. ADMINISTRATIVE ENFORCEMENT.
‘‘Compliance with section 184 of this chapter shall
be enforced by the Federal Trade Commission, except to
the extent that enforcement of the requirements imposed
under such section is specifically committed to another
agency under section 108(a) of this title. For purposes of
the exercise by the Commission of its functions and powers
under the Federal Trade Commission Act, a violation of
section 184 shall be deemed an unfair or deceptive act or
practice in violation of that Act. All of the functions of
and powers of the Commission under the Federal Trade
Commission Act are available to the Commission to en-
force compliance by any person with such section, irrespec-
tive of whether that person is engaged in commerce or
meets any other jurisdictional tests in the Federal Trade
Commission Act, including the power to enforce the provi-
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sions of such section in the same manner as if the violation
had been a violation of a Federal Trade Commission trade
regulation rule.’’.
SEC. 9. REGULATIONS.
The Federal Reserve Board, not later than 6 months
after the date of the enactment of this Act, shall issue
regulations to implement the amendments made by this
Act. The Board shall also issue regulations, together with
staff commentary if appropriate, to update and clarify the
requirements and definitions for lease disclosures and any
other issue relating to consumer leasing to carry out the
intent of the amendments made by this Act, to implement
any initiative to prevent the circumvention of the amend-
ments made by this Act, and to facilitate compliance with
the requirements in the amendments.
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