‘‘paragraphs (1) and (2)’’ and inserting ‘‘subpara-
graphs (A) and (B)’’.
(b) 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.—
No advertisement to promote or assist, directly or indi-
rectly, any consumer lease for personal use of an auto-
mobile shall—
‘‘(1) state that no downpayment is required on
the lease when the lessor requires a capitalized cost
reduction payment, acquisition fee, vehicle trade-in,
or other payment upon initiation of the lease, except
that payment of the first monthly payment on the
lease and any refundable deposit shall not be consid-
ered a downpayment;
‘‘(2) incorporate within the same advertisement
the amounts of any payment, downpayment, interest
rate, or other term pertaining to both a lease trans-
action and to an alternative installment credit trans-
action;
‘‘(3) include the amounts of any payment,
downpayment, interest rate, or other term of leases
that the lessor does not customarily provide or will
offer only to selected consumers, or the amounts of
any payment, downpayment, interest rate, or other
term of leases of automobile models that the lessor
does not have in sufficient quantities to meet reason-
ably anticipated consumer demand for the vehicle at
such advertised terms; and
‘‘(4) display any lease term, including the
amount of any monthly payment, interest rate, or
downpayment or no downpayment more prominently
than the term ‘lease’ or more prominently than the
amount of the total payment required to be paid at
the inception of the lease.
‘‘(e) LEASE BOX.—
‘‘(1) IN GENERAL.—A written advertisement to
promote a lease for personal use of an automobile
that—
‘‘(A) appears in a general circulation publi-
cation, printed newsletter, commercial mailing,
or printed flier, and
‘‘(B) includes a statement about the pay-
ment required for such lease,
shall not be required to include the information re-
quired by subsection (a)(1) but shall state clearly
and conspicuously that the transaction advertised is
a lease and shall provide separately for each auto-
mobile which is promoted in such advertisement and
for which a payment amount, downpayment amount,
or other payment is stated the following items of in-
formation, as applicable:
‘‘(A) The amount due at lease signing
which amount shall include all charges and fees
to be paid by the lessee at or before the lease
signing and upon delivery of the automobile.
‘‘(B) The automobile capitalized cost which
cost shall—
‘‘(i) include the automobile price for
the advertised automobile model with the
most common options offered or leased by
the advertiser or lessor and all charges for
taxes, insurance, service contracts, and
other costs to be added to the automobile
price and not paid separately by the lessee;
and
‘‘(ii) be stated as a dollar amount that
represents the average capitalized cost as a
percentage of manufacturer’s suggested re-
tail price of all similar automobiles leased
by the advertiser or lessor during the most
recent 6 month period ending either De-
cember 31 or June 30.
‘‘(C) The amount financed by the lease
which amount shall be a dollar amount rep-
resenting the automobile capatalized cost as set
forth in subparagraph (B) reduced by—
‘‘(i) the amount of any downpayment
amount, capitalized cost reduction pay-
ment, or trade-in amount required to be
paid by the lessee at lease signing; and
‘‘(ii) the residual value of the model
advertised as established by the Auto-
motive Lease Guide or other industry pub-
lication which the Board shall stipulate in
regulation for comparable automobile mod-
els with a lease term as set forth in sub-
paragraph (E) and a maximum mileage al-
lowance of 12,000 miles per year for such
lease term for determining excess mileage
charges, if any.
‘‘(D) The lease annual interest rate.
‘‘(E) The term of the lease which shall be
either 24 months or 36 months whichever is of-
fered by the lessor or whichever is more typical
for leases for the automobile model advertised.
‘‘(F) The amount of each monthly pay-
ment under the lease which shall be a dollar
amount calculated using the amounts stated
pursuant to subparagraphs (C), (D), and (E).
‘‘(2) SEPARATION OF INFORMATION.—The in-
formation required to be provided under paragraph
(1) shall be separated conspicuously from other in-
formation in the advertisement, be presented in close
proximity to any monthly payment amount, down-
payment amount, or other payment amounts stated
for each automobile model promoted, and be of suffi-
cient type size to be legible to and easily read by
consumers.
‘‘(3) ADVERTISEMENT REQUIREMENT.—A writ-
ten advertisement described in paragraph (1) shall—
‘‘(A) disclose separately and in close prox-
imity to the information required by paragraph
(1) the amount of any additional charge, fee, or
penalty to be paid by the lessee that are not in-
cluded in the automobile capitalized cost or paid
separately by the lessee at lease signing;
‘‘(B) include a statement that the lessee
may be required to pay a substantial penalty
for terminating the lease prior to the expiration
of the lease term; and
‘‘(C) include no monthly payment amount,
downpayment amount, interest rate, or other
payment for a automobile model that is dif-
ferent from any amount required to be stated
under paragraph (1) or used to compute any
amount required to be stated under paragraph
(1).’’.
(c) ALTERNATIVE DISCLOSURES.—Section 184(b)
(15 U.S.C. 1667c(b)) is amended—
(1) by striking ‘‘RADIO’’ in the subsection head-
ing and inserting ‘‘BROADCAST’’;
(2) by striking ‘‘radio broadcast’’ each place it
occurs and inserting ‘‘radio or television broadcast’’;
(3) in paragraph (1)(A), by striking ‘‘para-
graphs (1) and (2)’’ and inserting ‘‘subparagraphs
(A), (B), and (F) of subsection (a)(1)’’;
(4) in paragraph (2)(A)(iii), by striking ‘‘pro-
vide the’’ and inserting the following: ‘‘provide a re-
corded message which provides, in a uniform manner
and in a form which is easily understood and capa-
ble of being repeated, the’’;
(5) in paragraph (2)(A), by striking ‘‘and’’ at
the end of clause (ii), by striking the period at the
end of clause (iii) and inserting ‘‘; and’’, and by add-
ing after clause (iii) the following:
‘‘(iv) exclude from the information
provided by such toll-free telephone all
marketing and sales promotional informa-
tion.’’; and
(6) by amending paragraph (2)(B) to read as
follows:
‘‘(B) WRITTEN INFORMATION.—A toll-free
number established in accordance with subpara-
graph (A) shall include an option that permits
consumers to request the information required
to be provided under subparagraph (A)(iii) in
written form and by mail.’’.
(d) DEFINITION.—Section 184 (15 U.S.C. 1667c), as
amended by subsection (b), is 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
disclosure shall appear in a type size, shade,
contrast, prominence, and location as to be
readily noticeable, 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
consumer;
‘‘(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 advertisements on the internet, the
required disclosures shall appear in a type size,
shade, contrast, prominence, and location as to
be readily readable and comprehensible to users
and shall be separated from marketing and pro-
motional information and easily accessible
under the label or heading ‘Important Informa-
tion for Consumers’.
‘‘(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, videos, or print technique shall
be used that is likely to obscure or detract signifi-
cantly from the communication of the disclosures.’’.
SEC. 7. CIVIL LIABILITY.
(a) SECTION 185.—Section 185 (15 U.S.C. 1667d)
is amended by adding at the end the following:
‘‘(d) No stipulation, provision, or term of any lease
contract may waive any liability of a lessor under this sec-
tion or deprive a lessee of any other right or benefit under
Federal or State law.’’.
(b) SECTION 130.—Section 130(a)(2) of the Truth
in Lending Act (15 U.S.C. 1640) is amended by striking
‘‘or’’ at the end of subparagraph (A), by inserting ‘‘or’’
at the end of subparagraph (B), and by adding after sub-
paragraph (B) the following:
‘‘(C) in the case of calculating the total civil li-
ability for violation of any requirement of chapter 5,
the liability under this subparagraph shall not be
greater than $10,000;’’.
SEC. 8. REGULATIONS.
(a) IN GENERAL.—The Federal Reserve Board, not
later than 12 months after the date of the enactment of
this Act, shall issue regulations to implement the amend-
ments made by this Act. The Board shall also issue regula-
tions, 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 which the Board
shall recommend pursuant to the study required by section
9, to prevent the circumvention of the amendments made
by this Act, and to facilitate compliance with the require-
ments in the amendments.
(b) MODEL FORMS.—The Federal Reserve Board
shall publish model disclosure forms and clauses to facili-
tate and simplify compliance with the disclosure require-
ments in the amendments made by this Act, to aid the
consumer in understanding lease transactions, and to as-
sist the consumer in comparing different leases and lease
and credit purchase options. The Board shall require that
such model forms be used by lessors to meet the require-
ments of sections 182 and 184 of the Consumer Credit
Protection Act. Lessors that properly use the model forms
in providing disclosure shall be deemed in compliance with
the requirements of sections 182 and 184 of the Consumer
Credit Protection Act, except that use of such forms shall
not exempt the lessor from liability for penalties or admin-
istrative sanctions for false or inaccurate disclosures under
sections 108 and 112 of the Truth in Lending Act or from
civil liability under section 185 of the Consumer Credit
Protection Act.
(c) EFFECTIVE DATE.—Any regulation of the Fed-
eral Reserve Board which requires changes in disclosures
to be made under the Consumer Credit Protection Act
shall become effective no sooner than 6 months following
the promulgation of a final rule, except that the Board
may shorten the effective date if the Board determines
that such shorter date is necessary to prevent unfair or
deceptive practices or to comply with a court ruling. A
lessor may comply with a new regulation of the Board be-
fore its effective date.
SEC. 9. STUDY.
(a) IN GENERAL.—The Board of Governors of the
Federal Reserve System shall conduct a study on the fea-
sibility of instituting, for purposes of consumer disclosures
under section 182 and 184 of the Consumer Credit Pro-
tection Act, a procedure for standardizing the terms and
costs of automobile leases to be disclosed in automobile
promotions and advertising that would be similar in intent
to the unit pricing concept used for consumer perishable
goods in providing uniform standards of pricing and dis-
closure that permit comparison of the basic or core costs
to a lease transaction with other similar lease offerings
and that enhance consumer understanding and compari-
son of costs associated with additional lease options and
financial arrangements.
(b) CONSULTATIONS.—For purposes of the study au-
thorized by subsection (a), the Board shall consult with
State officials, businesses involved in automobile leasing,
and consumer organizations and shall conduct consumer
research to assess consumer attitudes and responses to
standardized lease disclosure concepts.
(c) REPORT.—Not later than 12 months after the
date of the enactment of this Act, the Board shall submit
to the Congress a written report of its findings and rec-
ommendations from the study.
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