Prohibits a rental-purchase agreement from containing: (1) a confession of judgment; (2) a negotiable instrument; (3) a wage assignment; (4) a claim of a property interest in any goods, except those provided by the agreement; (5) a waiver of legal claim or remedy; (6) a requirement that, in the event the property subject to the agreement is lost, stolen, damaged, or destroyed, the consumer pay an amount exceeding certain guidelines; (7) an authorization for the merchant or an agent to enter the consumer's premises without the consumer's consent or to commit any other breach of the peace in connection with repossession of the rental property or collection of any alleged obligation due under the agreement; (8) a requirement that the consumer purchase insurance or a liability damage waiver covering the subject property, except as regulations permit; or (9) a requirement that the consumer pay more than one late fee for an unpaid or delinquent periodic payment.
Sets forth consumer protections governing: (1) statements of accounts; (2) renegotiations and extensions; (3) point of sale disclosures; and (4) rental purchase advertising.
Establishes civil and criminal liability for violations of this Act.
Declares that an action for civil liability may be brought against a merchant's assignee only if the violation is apparent on the face of a rental-purchase agreement to which it relates, including, but not limited to, a disclosure that can be determined to be incomplete or inaccurate from the face of the agreement.
Grants enforcement powers to the Federal Trade Commission and to State attorneys general.
Preempts State laws relating to characterization of a transaction to the extent that they: (1) are inconsistent with this Act; (2) regulate a rental-purchase agreement as a form of consumer credit; (3) impute to a rental-purchase agreement the creation of a debt or extension of credit, or (4) require the disclosure of a percentage rate calculation, including a time-price differential, an annual percentage rate, or an effective annual percentage rate.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1701 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 1701
To amend the Consumer Credit Protection Act to assure meaningful
disclosures of the terms of rental-purchase agreements, including
disclosures of all costs to consumers under such agreements, to provide
certain substantive rights to consumers under such agreements, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 3, 2001
Mr. Jones of North Carolina (for himself, Mr. Maloney of Connecticut,
Mr. Frost, Mr. Boehner, Mr. Jefferson, Mr. Kanjorski, Mr. Watts of
Oklahoma, Mr. Ross, Mr. Ford, Mr. Sessions, Mr. Sandlin, Mr. Wamp, Mr.
Baker, and Mr. Isakson) introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Consumer Credit Protection Act to assure meaningful
disclosures of the terms of rental-purchase agreements, including
disclosures of all costs to consumers under such agreements, to provide
certain substantive rights to consumers under such agreements, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Consumer Rental Purchase Agreement
Act''.
SEC. 2. FINDINGS AND DECLARATION OF PURPOSE.
(a) Findings.--The Congress finds as follows:
(1) The rental-purchase industry provides a service that
meets and satisfies the demands of many consumers.
(2) Each year, approximately 2,300,000 United States
households enter into rental-purchase transactions and over a
5-year period approximately 4,900,000 United States households
will do so.
(3) Competition among the various firms engaged in the
extension of rental-purchase transactions would be strengthened
by informed use of rental-purchase transactions.
(4) The informed use of rental-purchase transactions
results from an awareness of the cost thereof by consumers.
(b) Purpose.--The purpose of this title is to assure the
availability of rental-purchase transactions and to assure simple,
meaningful, and consistent disclosure of rental-purchase terms so that
consumers will be able to more readily compare the available rental-
purchase terms and avoid uninformed use of rental-purchase
transactions, and to protect consumers against unfair rental-purchase
practices.
SEC. 3. CONSUMER CREDIT PROTECTION ACT.
The Consumer Credit Protection Act is amended by adding at the end
the following new title:
``TITLE X--RENTAL-PURCHASE TRANSACTIONS
``SEC. 1001. DEFINITIONS.
``For purposes of this title, the following definitions shall
apply:
``(1) Advertisement.--The term `advertisement' means a
commercial message in any medium that promotes, directly or
indirectly, a rental-purchase agreement but does not include
price tags, window signs, or other in-store merchandising aids.
``(2) Agricultural purpose.--The term `agricultural
purpose' includes--
``(A) the production, harvest, exhibition,
marketing, transformation, processing, or manufacture
of agricultural products by a natural person who
cultivates plants or propagates or nurtures
agricultural products; and
``(B) the acquisition of farmlands, real property
with a farm residence, or personal property and
services used primarily in farming.
``(3) Board.--The term `Board' means the Board of Governors
of the Federal Reserve System.
``(4) Cash price.--The term `cash price' means the price at
which a merchant, in the ordinary course of business, offers to
sell for cash the property that is the subject of the rental-
purchase transaction.
``(5) Consumer.--The term `consumer' means a natural person
who is offered or enters into a rental-purchase agreement.
``(6) Date of consummation.--The term `date of
consummation' means the date on which a consumer becomes
contractually obligated under a rental-purchase agreement.
``(7) Merchant.--The term `merchant' means a person who
provides the use of property through a rental-purchase
agreement in the ordinary course of business and to whom a
consumer's initial payment under the agreement is payable.
``(8) Periodic payment.--The term `periodic payment' means
the total payment a consumer will make for a specific rental
period, including the rental payment, taxes, and fees or
charges that may be excluded from the rental-purchase cost.
``(9) Property.--The term `property' means property that is
not real property under the laws of the State where the
property is located when it is made available under a rental-
purchase agreement.
``(10) Rental payment.--The term `rental payment' means a
payment required to be made by a consumer for the possession
and use of property for a specific rental period, but does not
include taxes that may be imposed on such payment.
``(11) Rental period.--The term `rental period' means a
week, month, or other specific period of time, during which the
consumer has a right to possess and use property that is the
subject of a rental-purchase agreement after paying the rental
payment and any applicable taxes for such period.
``(12) Rental-purchase agreement.--
``(A) In general.--The term `rental-purchase
agreement' means a contract in the form of a bailment
or lease for the use of property by a consumer for an
initial period of 4 months or less, that is renewable
with each payment by the consumer, and that permits but
does not obligate the consumer to become the owner of
the property.
``(B) Exclusions.--The term `rental-purchase
agreement' does not include--
``(i) a credit sale (as defined in section
103(g) of the Truth in Lending Act);
``(ii) a consumer lease (as defined in
section 181(1) of such Act); or
``(iii) a transaction giving rise to a debt
incurred in connection with the business of
lending money or a thing of value.
``(13) State.--The term `State' means any State of the
United States, the District of Columbia, any territory of the
United States, Puerto Rico, Guam, American Samoa, the Trust
Territory of the Pacific Islands, the Virgin Islands, and the
Northern Mariana Islands.
``SEC. 1002. DETERMINATION OF RENTAL-PURCHASE COST.
``(a) In General.--
``(1) Basis for determination.--Except as otherwise
provided in this section, the amount of the rental-purchase
cost in connection with a rental-purchase transaction shall be
determined as the sum of all charges that are payable directly
or indirectly by the person to whom the rental-purchase
transaction is extended, and are imposed directly or indirectly
by the merchant as a condition of entering into a rental-
purchase agreement or acquiring ownership of property under a
rental-purchase agreement.
``(2) Taxes and other costs not included.--The amount of
any charge, cost, or fee of a type that is imposed on or
otherwise payable by, a consumer in a cash transaction for
comparable property shall not be taken into account for
purposes of the determination under paragraph (1) with respect
to any rental-purchase transaction.
``(3) Examples of charges, costs, and fees taken into
account.--The following are examples of charges, costs, and
fees that shall be taken into account in determining in the
rental-purchase cost with respect to any rental-purchase
transaction:
``(A) Rental payment.
``(B) Service, processing, or administrative
charge.
``(C) Fee for an investigation or credit report.
``(D) Charge for delivery required by the merchant.
``(E) Charge for waiver of the consumer's liability
in the event of loss, damage, or destruction of the
property.
``(F) Premium or other charge for insurance.
``(b) Insurance Premiums and Charges for Liability Waiver.--
``(1) Inclusion in rental-purchase cost.--Charges or
premiums for insurance or liability waiver written in
connection with any rental-purchase agreement shall be included
in determining the rental-purchase cost with respect to any
rental-purchase transaction unless--
``(A) coverage of the consumer by the insurance or
liability waiver is not a factor in the merchant's
approval of the rental-purchase transaction, and this
fact is clearly disclosed in writing to the consumer at
or before consummation of the rental-purchase
transaction; and
``(B) before obtaining the insurance or liability
waiver, the consumer has initialed or signed an
affirmative written request for the insurance or
liability waiver after receiving a written disclosure
of the cost thereof.
``(2) Manner of disclosure.--The disclosures required under
paragraph (1) with respect to rental-purchase transaction may
be included in the rental-purchase agreement or made on a
separate form that the consumer may keep.
``(c) Restatement of Certain Excluded Items.--The following fees or
charges shall not be taken into account in determining the rental-
purchase cost with respect to a rental-purchase transaction:
``(1) Fees and charges prescribed by law, which actually
are or will be paid to public officials or government entities
need not be included in the computation of the rental-purchase
cost, such as sales tax.
``(2) Fees and charges for optional products and services
made available in connection with a rental-purchase agreement.
``SEC. 1003. EXEMPTED TRANSACTIONS.
``This title shall not apply to rental-purchase agreements
primarily for business, commercial, or agricultural purposes, or those
made with Government agencies or instrumentalities.
``SEC. 1004. GENERAL DISCLOSURE REQUIREMENTS.
``(a) Recipient of Disclosure.--A merchant shall disclose to the
person who will be obligated on a rental-purchase agreement the
information required by sections 1005 and 1006. In a transaction
involving more than 1 person who will be obligated on a rental-purchase
agreement, a merchant need not disclose to more than 1 of such persons.
``(b) Timing of Disclosure.--The disclosures required under
sections 1005 and 1006 shall be made at or before the date of
consummation of the rental-purchase agreement and clearly and
conspicuously in writing and in a form that the consumer may keep.
``(c) Information Subsequently Rendered Inaccurate.--If information
disclosed in accordance with this title is subsequently rendered
inaccurate as a result of any act, occurrence, or agreement subsequent
to the delivery of the required disclosures, the resulting inaccuracy
does not constitute a violation of this title.
``SEC. 1005. RENTAL-PURCHASE DISCLOSURES.
``(a) In General.--For each rental-purchase agreement, the merchant
shall disclose to the consumer the following, to the extent applicable:
``(1) The date of consummation of the transaction and the
identities of the merchant and consumer.
``(2) A description of the property and a statement
indicating whether the property is new or used, except a
statement indicating that new property is used property is not a
violation of this title.
``(3) A statement of the rental payment for each item of
property and the total rental payment if multiple items are
rented. If 2 or more items are rented as a set, a statement of
the aggregate rental payment of all items satisfies this
requirement.
``(4) A statement of the cash price of each item of
property and the total cash price if multiple items are rented.
If 2 or more items are rented as a set, a statement of the
aggregate cash price of all items satisfies this requirement.
``(5) The amount to be paid before or at the consummation
of the agreement or the delivery of the property, using the
phrase `initial payment'. The merchant shall itemize each
component of the initial payment by type and amount, including
any service, processing, or administrative charge, delivery
fee, refundable security deposit, rental payment, and fees or
charges that may be excluded from the rental-purchase cost.
``(6) A statement of the amount of the periodic payment
including an itemization of each component of the periodic
payment by type and amount, using the phrase `periodic
payment'. If the final periodic payment is less than the
regular periodic payments, the components of the final periodic
payment need not be itemized. A merchant may disclose
alternative periodic payments based on different rental
periods.
``(7) The `rental-purchase cost', using that term, and a
brief description such as `The amount you will pay the merchant
to acquire ownership of the property. This amount excludes
taxes and other charges not imposed by the merchant as a
condition of acquiring ownership.'
``(8) The difference between the cash price and the rental-
purchase cost, using the term `cost of rental services', and a
brief description such as `the difference between the cash
price and the rental-purchase cost'.
``(9) Substantially the following statement in boldface,
uppercase letters: `YOU ARE RENTING THE PROPERTY. TO ACQUIRE
OWNERSHIP OF THE PROPERTY YOU MUST MAKE ALL PAYMENTS NECESSARY
TO ACQUIRE OWNERSHIP.'
``(10) Substantially the following statement: `Other
Important Terms. See your rental-purchase agreement for
additional important information on termination, purchase
option rights, reinstatement rights, warranties, maintenance
responsibilities, your liability for loss, theft, damage, or
destruction of the property, and other charges and fees you may
incur.'
``(11) Using the term `payment schedule', the amount,
number, and timing of all periodic payments the consumer will
make if the consumer acquires ownership of the property by
making all periodic payments, the total of the initial payment
and all periodic payments, and a brief description such as
`This is the amount you will have paid, including the rental-
purchase cost, taxes, and charges for other products or
services you may have elected to purchase, if you make all
Periodic Payments as scheduled.' A merchant may disclose
alternative payment schedules based on different rental
periods.
``(b) Form of Disclosure.--The disclosures required by paragraphs
(5) through (11) of subsection (a) shall be segregated from other
information and shall contain only directly related information, and
shall be identified in boldface, uppercase letters as `RENTAL-PURCHASE
DISCLOSURES'.
``SEC. 1006. OTHER AGREEMENT PROVISIONS.
``(a) In General.--Each rental-purchase agreement shall--
``(1) provide a statement specifying whether the merchant
or the consumer is responsible for loss, theft, damage, or
destruction of the property;
``(2) provide a statement specifying whether the merchant
or the consumer is responsible for maintaining or servicing the
property, together with a brief description of the
responsibility;
``(3) provide that the consumer may terminate the agreement
without paying any charges not previously due under the
agreement by voluntarily surrendering or returning the property
that is the subject of the agreement upon expiration of any
rental period;
``(4) contain a provision for reinstatement of the
agreement, which at a minimum--
``(A) permits a consumer who fails to make a timely
rental payment to reinstate the agreement, without
losing any rights or options which exist under the
agreement, by the payment of all past due rental
payments and any other charges then due under the
agreement and a payment for the next rental period
within 7 business days after failing to make a timely
rental payment if the consumer pays monthly, or within
3 business days after failing to make a timely rental
payment if the consumer pays more frequently than
monthly;
``(B) if the consumer returns or voluntarily
surrenders the property covered by the agreement, other
than through judicial process, during the applicable
reinstatement period set forth in subparagraph (A),
permits the consumer to reinstate the agreement during
a period of at least 30 days after the date of the
return or surrender of the property by the payment of
all amounts previously due under the agreement, any
applicable fees, and a payment for the next rental
period; and
``(C) if the consumer has paid 60 percent or more
of the rental-purchase cost and returns or voluntarily
surrenders the property, other than through judicial
process, during the applicable reinstatement period set
forth in subparagraph (A), permits the consumer to
reinstate the agreement during a period of at least 90
days after the date of the return of the property by
the payment of all amounts previously due under the
agreement, any applicable fees, and a payment for the
next rental period;
``(5) if the merchant offers a purchase option, provide a
statement of the consumer's purchase option rights under the
agreement, including the method of determining the purchase
price at any point in time if the property is acquired through
the exercise of the purchase option;
``(6) provide a statement disclosing that if any part of a
manufacturer's express warranty covers the property at the time
the consumer acquires ownership of the property, the warranty
will be transferred to the consumer if allowed by the terms of
the warranty; and
``(7) provide, to the extent applicable, a statement of any
payment grace period, the amount of any late payment fee, any
additional fees or requirements for reinstatement, and the
amount of any other charges and fees the consumer may incur.
``(b) Repossession During Reinstatement Period.--Subsection (a)(4)
shall not be construed so as to prevent a merchant from attempting to
repossess property during the reinstatement period pursuant to
subsection (a)(4)(A), but such a repossession does not affect the
consumer's right to reinstate. Upon reinstatement, the merchant shall
provide the consumer with the same property, if available; if it is not
available, the merchant shall substitute property of comparable quality
and condition.
``SEC. 1007. PROHIBITED PROVISIONS.
``A rental-purchase agreement may not contain--
``(1) a confession of judgment;
``(2) a negotiable instrument;
``(3) a security interest or any other claim of a property
interest in any goods, except those goods the use of which is
provided by the merchant pursuant to the agreement;
``(4) a wage assignment;
``(5) a waiver by the consumer of a claim or defense; or
``(6) a provision requiring the consumer to pay in excess
of the lesser of the fair market value, any purchase option
amount, remaining rent, or cost of repair if the property is
lost, stolen, damaged, or destroyed.
``SEC. 1008. STATEMENT OF ACCOUNTS.
``Upon request of a consumer, a merchant shall provide a statement
of the consumer's account. If a consumer requests a statement for an
individual account more than 4 times in any 12-month period, the
merchant may charge a reasonable fee for the additional statements.
``SEC. 1009. RENEGOTIATIONS AND EXTENSIONS.
``(a) Renegotiations.--A renegotiation occurs when a rental-
purchase agreement is satisfied and replaced by a new agreement
undertaken by the same consumer. A renegotiation requires new
disclosures, except as provided in subsection (c).
``(b) Extensions.--An extension is an agreement by the consumer and
the merchant, to continue an existing rental-purchase agreement beyond
the original end of the payment schedule, but does not include a
continuation that is the result of a renegotiation.
``(c) Exceptions.--New disclosures are not required for the
following, even if they meet the definition of a renegotiation or an
extension:
``(1) A reduction in payments.
``(2) A deferment of 1 or more payments.
``(3) The extension of a rental-purchase agreement.
``(4) The substitution of property with property that has a
substantially equivalent or greater economic value provided the
rental-purchase cost does not increase.
``(5) The deletion of property in a multiple-item
agreement.
``(6) A change in rental period provided the rental-
purchase cost does not increase.
``(7) An agreement resulting from a court proceeding.
``(8) Any other event described in regulations prescribed
by the Board.
``SEC. 1010. POINT-OF-RENTAL DISCLOSURES.
``(a) In General.--For any item of property or set of items
displayed or offered for rental-purchase, the merchant shall display on
or next to the item or set of items a card, tag, or label the clearly
and conspicuously discloses the following:
``(1) A brief description of the property.
``(2) Whether the property is new or used.
``(3) The cash price of the property.
``(4) The amount of each rental payment.
``(5) The total number of rental payments necessary to
acquire ownership of the property.
``(6) The rental-purchase cost.
``(b) Form of Disclosure.--A merchant may make the disclosure
required by subsection (a) in the form of a list or catalog which is
readily available to the consumer at the point of rental if the
merchandise is not displayed in the merchant's showroom or if
displaying a card, tag, or label would be impractical due to the size
of the merchandise.
``SEC. 1011. RENTAL-PURCHASE ADVERTISING.
``(a) In General.--If an advertisement refers to or states the
amount of any payment for any specific item or set of items, the
merchant making the advertisement shall also clearly and conspicuously
state in the advertisement the following:
``(1) The transaction advertised is a rental-purchase
agreement.
``(2) The amount, timing, and total number of rental
payments necessary to acquire ownership.
``(3) The amount of the rental-purchase cost.
``(4) To acquire ownership of the property the consumer
must pay the rental-purchase cost plus applicable taxes.
``(5) Whether the advertised rental-purchase cost is for
new or used property.
``(b) Radio and Television Advertising.--
(1) In general.--An advertisement made through television
or radio, which states the amount of any payment for any
specific item or set of items, complies with this section if
the advertisement lists a toll-free telephone number along with
a reference that such number may be used by consumers to obtain
the additional information required by subsection (a).
``(2) Availability of number.--The toll-free telephone
number required under subsection what shall be available
beginning on the date of the broadcast and continue until the
earlier of--
``(A) the end of the 10-day period beginning on the
day of the last broadcast; or
``(B) if the offer expires before the end of such
10-day period and the advertisement discloses that the
offer expires before the end of such period, the date
the offer expires.
``SEC. 1012. CIVIL LIABILITY.
``(a) Individual or Class Action for Damages; Amount of Award;
Factors Determining Amount of Award.--Except as otherwise provided in
this section, any merchant who fails to comply with any requirement
imposed by section 1004, 1005, 1006, 1007, or 1008, with respect to any
consumer is liable to such consumer in an amount equal to the sum of--
``(1) any actual damage sustained by such consumer as a
result of the failure;
``(2)(A) in the case of an individual action, 25 percent of
the rental-purchase cost under the rental-purchase agreement,
except that the liability under this subparagraph shall not be
less than $100 nor greater than $1,000;
``(B) in the case of a class action, such amount as the
court may allow, except that as to each member of the class no
minimum recovery shall be applicable, and the total recovery
under this subparagraph in any class action or series of class
actions arising out of the same failure to comply by the same
merchant shall not be more than the lesser of $500,000 or 1
percent of the net worth of the merchant; and
``(3) in the case of any successful action to enforce the
foregoing liability, the costs of the action, together with a
reasonable attorney's fee as determined by the court.
``(b) Factors To Be Considered in Class Actions.--In determining
the amount of award in any class action, the court shall consider,
among other relevant factors, the amount of any actual damages awarded,
the frequency and persistence of failures of compliance by the
merchant, the resources of the merchant, the number of persons
adversely affected, and the extent to which the merchant's failure of
compliance was intentional. With respect to any failure to make
disclosures required under this title, liability shall be imposed only
upon the merchant required to make disclosure, except as provided in
section 1014.
``(c) Correction of Errors.--A merchant or assignee has no
liability under this section or section 1016 or 1017 for any failure to
comply with any requirement imposed under this title, if within 60 days
after discovering an error, and prior to the institution of an action
under this section or the receipt of written notice of the error from
the consumer, the merchant or assignee notifies the consumer concerned
of the error and makes whatever adjustments in the appropriate account
are necessary to assure that the person will not be required to pay an
amount in excess of the charge actually disclosed.
``(d) Unintentional Violations; Bona Fide Errors.--
``(1) In general.--A merchant or assignee may not be held
liable in any action brought under this title for a violation
of this title if the merchant or assignee shows by a
preponderance of evidence that the violation was not
intentional and resulted from a bona fide error notwithstanding
the maintenance of procedures reasonably adapted to avoid any
such error.
``(2) Examples of bona fide errors.--Examples of a bona
fide error include clerical, calculation, computer malfunction
and programming, and printing errors, except that an error of
legal judgment with respect to a person's obligations under
this title is not a bona fide error.
``(e) Liability in Transactions Involving Multiple Consumers.--When
there are multiple consumers in a single rental-purchase agreement
there shall be no more than 1 recovery of damages under subsection
(a)(2) of this section for a violation of this title.
``(f) Jurisdiction of Courts; Limitation of Actions.--Any action
under this section may be brought in any United States district court,
or in any other court of competent jurisdiction, within 1 year from the
date of the occurrence of the violation. This subsection shall not bar
a consumer from asserting a violation of this title in an action to
collect an obligation arising from a rental-purchase agreement, which
was brought more than 1 year from the date of the occurrence of the
violation as a matter of defense by recoupment or set-off in such
action, except as otherwise provided by State law.
``(g) Good Faith Compliance With Rule, Regulation, or
Interpretation of Board.--No provision of this section or section 1016
or 1017 imposing any liability shall apply to any act done or omitted
in good faith in conformity with any rule, regulation, or
interpretation thereof by the Board or in conformity with any
interpretation or approval by an official or employee of the Board duly
authorized by the Board to issue such interpretations or approvals
under such procedures as the Board may prescribe therefor,
notwithstanding that after such act or omission has occurred, such
rule, regulation, interpretation, or approval is amended, rescinded, or
determined by judicial or other authority to be invalid for any reason.
``(h) Recovery for Multiple Failures To Disclose.--The multiple
failure to disclose to any person any information required under this
title in connection with a single rental-purchase transaction shall
entitle the person to a single recovery under this section but
continued failure to disclose after a recovery has been granted shall
give rise to rights to additional recoveries.
``(i) Offset From Amount Owed to Merchant or Assignee; Rights of
Consumer.--A person may not take any action to offset any amount for
which a merchant or assignee is potentially liable to such person under
subsection (a)(2) of this section against any amount owed by such
person, unless the amount of the merchant's or assignee's liability
under this section has been determined by judgment of a court of
competent jurisdiction in an action of which such person was a party.
This subsection does not bar a consumer from asserting a violation of
this title as an original action, or as a defense or counterclaim to
an action to collect amounts owed by the consumer brought by a person
liable under this section.
``SEC. 1013. ADDITIONAL GROUNDS FOR CIVIL LIABILITY.
``Any merchant who fails to comply with any requirements imposed
under section 1010 or 1011 with respect to any consumer who suffers
actual damage from the violation is liable to such consumer as provided
in section 1012.
``SEC. 1014. LIABILITY OF ASSIGNEES.
``(a) Assignees Included.--For purposes of section 1012, and this
section, the term `merchant' includes an assignee of a merchant.
``(b) Liabilities of Assignees.--
``(1) Apparent violation.--An action under section 1012 for
a violation of this title may be brought against an assignee
only if the violation is apparent on the face of the rental-
purchase agreement to which it relates.
``(2) Apparent violation defined.--For purposes of this
subsection, a violation that is apparent on the face of a
rental-purchase agreement includes a disclosure that can be
determined to be incomplete or inaccurate from the face of the
agreement.
``(3) Involuntary assignment.--An assignee has no liability
in a case in which the assignment is involuntary.
``(4) Rule of construction.--No provision of this section
shall be construed as limiting or altering the liability under
section 1012 of a merchant assigning a rental-purchase
agreement.
``(b) Proof of Disclosure.--In an action by or against an assignee,
the consumer's written acknowledgment of receipt of a disclosure shall
be conclusive proof that the disclosure was made, if the assignee had
no knowledge that the disclosure had not been made when the assignee
acquired the rental-purchase agreement to which it relates.
``SEC. 1015. REGULATIONS.
``(a) In General.--The Board may prescribe regulations to carry out
the purposes of this title, to prevent its circumvention, and to
facilitate compliance with its requirements.
``(b) Effective Date of Regulations.--Any regulation prescribed by
the Board, or any amendment or interpretation thereof, shall not be
effective before the October 1 that follows the date of publication of
the regulation in final form by at least 6 months. The Board may at its
discretion lengthen that period of time to permit merchants to adjust
to accommodate new requirements. The Board may also shorten that period
of time, notwithstanding the first sentence, if it makes a specific
finding that such action is necessary to comply with the findings of a
court or to prevent unfair or deceptive practices. In any case,
merchants may comply with any newly prescribed disclosure requirement
prior to its effective date.
``SEC. 1016. ENFORCEMENT.
``(a) Federal Enforcement.--Compliance with the requirements
imposed under this title shall be enforced under the Federal Trade
Commission Act (15 U.S.C. 41 et seq.), and a violation of any
requirements imposed under this title shall be deemed a violation of a
requirement imposed under that Act. All of the functions and powers of
the Federal Trade Commission under the Federal Trade Commission Act are
available to the Commission to enforce compliance by any person with
the requirements of this title, irrespective of whether that person is
engaged in commerce or meets any other jurisdictional test in the
Federal Trade Commission Act.
``(b) State Enforcement.--
``(1) In general.--An action to enforce the requirements
imposed by this title may also be brought by the appropriate
State attorney general in any appropriate United States
district court, or any other court of competent jurisdiction.
``(2) Prior written notice.--
``(A) In general.--The State attorney general shall
provide prior written notice of any such civil action
to the Federal Trade Commission and shall provide the
Commission with a copy of the complaint.
``(B) Emergency action.--If prior notice is not
feasible, the State attorney general shall provide
notice to the Commission immediately upon instituting
the action.
``(3) FTC intervention.--The Commission may--
``(A) intervene in the action;
``(B) upon intervening--
``(i) remove the action to the appropriate
United States district court, if it was not
originally brought there; and
``(ii) be heard on all matters arising in
the action; and
``(C) file a petition for appeal.
``SEC. 1017. CRIMINAL LIABILITY FOR WILLFUL AND KNOWING VIOLATION.
``Whoever willfully and knowingly gives false or inaccurate
information or fails to provide information which he is required to
disclose under the provisions of this title or any regulation issued
thereunder shall be fined not more than $5,000 or imprisoned not more
than one year, or both.
``SEC. 1018. RELATION TO STATE LAW.
``(a) Except as provided in subsection (b), this title shall not be
construed as annulling, altering, or affecting in any manner the
meaning, scope, or applicability of the laws of any State relating to
rental-purchase agreements, except to the extent that those laws are
inconsistent with any provision of this title, and then only to the
extent of the inconsistency. The Board is authorized to determine
whether such inconsistencies exist. Any State law that regulates a
rental-purchase agreement as a security interest, credit sale, retail
installment sale, conditional sale, or other form of credit or imputes
to such agreements the creation of a debt or extension of credit, or
requires the disclosure of a time-price differential, an annual
percentage rate, an effective annual percentage rate or a percentage
rate of any kind, or similar disclosure that might suggest the
existence of a debt, an extension of credit, or the payment of
interest, is inconsistent with this title.
``(b) Certain Disclosure Requirements Superseded.--The disclosures
required by paragraphs (5), (6), (7), (8), and (11) of subsection (a)
of section 1005 shall supersede any provisions of any State law
relating to disclosure of the cost of a rental-purchase transaction.
``SEC. 1019. EFFECT ON GOVERNMENT AGENCIES.
``No civil liability or criminal penalty under this title may be
imposed on the United States or any of its departments or agencies, any
State or political subdivision, or any agency of a State or political
subdivision.
``SEC. 1020. COMPLIANCE DATE.
``Compliance with this title shall not be required until 6 months
after the date of the enactment of the Consumer Rental Purchase
Agreement Act. In any case, merchants may comply with this title at any
time after such date of enactment.''.
<all>
Considered under the provisions of rule H. Res. 528. (consideration: CR H6320-6341)
Rule provides for consideration of H.R. 1701 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Specified amendments are in order.
House resolved itself into the Committee of the Whole House on the state of the Union pursuant to H. Res. 528 and Rule XXIII.
The Speaker designated the Honorable Johnny Isakson to act as Chairman of the Committee.
GENERAL DEBATE - The Committee of the Whole proceeded with one hour of general debate on H.R. 1701.
DEBATE - Pursuant to the provisions of H. Res. 528, the Committee proceeded with 20 minutes of debate on the amendment offered by Mr. LaFalce.
POSTPONED VOTE - At the conclusion of debate the Chair put the question on the adoption of the LaFalce amendment and by voice vote, the Chair announced that the noes had prevailed. Mr. LaFalce demanded a recorded vote and the Chair postponed further proceedings on the amendment.
DEBATE - Pursuant to the provisions of H. Res. 528, the Committee proceeded with 20 minutes of debate on the amendment offered by Ms. Waters.
POSTPONED VOTE - At the conclusion of debate the Chair put the question on the adoption of the Waters amendment and by voice vote, the Chair announced that the noes had prevailed. Mrs. Waters demanded a recorded vote and the Chair postponed further proceedings on the amendment.
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UNFINISHED BUSINESS - The Chair announced that the unfinished business was the question of adoption of amendments which had been debated earlier and on which further proceedings had been postponed.
The House rose from the Committee of the Whole House on the state of the Union to report H.R. 1701.
The previous question was ordered pursuant to the rule.
Ms. Waters moved to recommit with instructions to Financial Services. (consideration: CR H6339-6341)
Floor summary: DEBATE - The House proceeded with 10 minutes of debate on the Waters motion to recommit with instructions.
The previous question on the motion to recommit with instructions was ordered without objection.
On motion to recommit with instructions Failed by recorded vote: 190 - 227 (Roll no. 394). (text: CR H6339)
Roll Call #394 (House)Passed/agreed to in House: On passage Passed by recorded vote: 215 - 201, 1 Present (Roll no. 395).(text: CR H6329-6332)
Roll Call #395 (House)On passage Passed by recorded vote: 215 - 201, 1 Present (Roll no. 395). (text: CR H6329-6332)
Roll Call #395 (House)Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.