Consumer Rental Purchase Agreement Act - (Sec. 3) Amends the Consumer Credit Protection Act to prescribe consumer protection guidelines for rental-purchase transactions, including: (1) the determination of rental-purchase cost and a payment schedule; (2) disclosure requirements; (3) prohibitions against confessions of judgment, wage assignments, waiver of consumer claims or defenses, and other specified kinds of provisions; (4) furnishing of statements of account; (5) point-of-rental disclosures; and (6) clear and conspicuous rental-purchase advertising disclosures.
Shields "rental-purchase agreements" from laws regulating: (1) a credit sale and a consumer lease as defined in the Truth in Lending Act, or (2) an extension of credit or a transaction giving rise to a debt incurred in connection with the purchase of a thing of value.
Exempts from jurisdiction of this Act rental-purchase agreements primarily for business, commercial, or agricultural purposes, or those made with government agencies or instrumentalities.
Declares that the consumer shall acquire ownership of a property that is the subject of the rental-purchase agreement, and the rental-purchase agreement shall terminate, upon the consumer's compliance with specified total cost payment requirements ,or any early payment option provided in the rental purchase agreement, and upon payment of any past due payments and fees.
Grants federal district courts jurisdiction over actions brought under this Act.
Permits an action for civil liability 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.
Authorizes the Board of Governors of the Federal Reserve System to promulgate implementing regulations.
Grants enforcement powers to the Federal Trade Commission (FTC) and to state attorneys general.
Subjects to criminal penalties any willful and knowing violation of the information disclosure requirements of this Act.
Provides that a term or provision of state law is not inconsistent with this Act if it affords greater protection and benefit to the consumer than is provided under this Act as determined by the Board, on its own motion or upon the petition of any interested party.
Declares this Act to supersede 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 credit, 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 percentage rate.
Shields from civil or criminal liability under this Act the United States and its departments or agencies, and any state, state agency, or state political subdivision.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1588 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 1588
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
April 15, 2011
Mr. Canseco (for himself, Mr. Clay, Mr. Manzullo, Mr. Dold, Mr.
Westmoreland, Mr. Hensarling, Mr. McIntyre, Mr. Jones, Mr. Ross of
Arkansas, Mr. Baca, Mr. Holden, Mr. Sessions, Mr. Davis of Illinois,
Mr. Meeks, and Mr. Towns) 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. RENTAL-PURCHASE TRANSACTIONS COVERED UNDER THE 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 `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) Initial payment.--The term `initial payment' 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
security deposit; taxes; mandatory fees or charges; and any
optional fees or charges agreed to by the consumer.
``(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 payment under the agreement is payable.
``(9) Payment schedule.--The term `payment schedule' means
the amount and timing of the periodic payments and the total
number of all periodic 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, mandatory 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 consumer 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 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.
``(14) 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.
``(15) Rental-purchase cost.--
``(A) In general.--For purposes of sections 1010
and 1011, the term `rental-purchase cost' means the sum
of all rental payments and mandatory fees or charges
imposed by the merchant 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
administrative 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 respect 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 periodic 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.
``SEC. 1002. 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. 1003. GENERAL DISCLOSURE REQUIREMENTS.
``(a) Recipient of Disclosure.--A merchant shall disclose to any
person who will be a signatory to a rental-purchase agreement the
information required by sections 1004 and 1005.
``(b) Timing of Disclosure.--The disclosures required under
sections 1004 and 1005 shall be made before the consummation of the
rental-purchase agreement and clearly and conspicuously in writing as
part of the rental-purchase agreement to be signed by the consumer.
``(c) Clearly and Conspicuously.--As used in this section, the term
`clearly and conspicuously' means that information required to be
disclosed to the consumer shall be worded plainly and simply, and
appear in a type size, prominence, and location as to be readily
noticeable, readable, and comprehensible to an ordinary consumer.
``SEC. 1004. 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 the consummation of the rental-purchase
transaction and the identities of the merchant and the
consumer.
``(2) A brief description of the rental property, which
shall be sufficient to identify the property to the consumer,
including an identification or serial number, if applicable,
and a statement indicating whether the property is new or used.
``(3) A description of any fee, charge or penalty, in
addition to the periodic payment, that the consumer may be
required to pay under the agreement, which shall be separately
identified by type and amount.
``(4) A clear and conspicuous statement that the
transaction is a rental-purchase agreement and that the
consumer will not obtain ownership of the property until the
consumer has paid the total dollar amount necessary to acquire
ownership.
``(5) The amount of any initial payment, which includes the
first periodic payment, and the total amount of any fees,
taxes, or other charges, required to be paid by the consumer.
``(6) The amount of the cash price of the property that is
the subject of the rental-purchase agreement, and, if the
agreement involves the rental of 2 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 payments, 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 payments to acquire ownership
of the property.'.
``(9) A statement of the consumer's right to terminate 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, purchase option rights, responsibilities for loss,
damage or destruction of the property, warranties, maintenance
responsibilities, and other charges or penalties you may
incur.'.
``(b) Form of Disclosure.--The disclosures required by paragraphs
(4) through (10) of subsection (a) shall be segregated from other
information at the beginning of the rental-purchase agreement and shall
contain only directly related information, and shall be identified in
boldface, uppercase letters as follows: `important rental-purchase
disclosures'.
``(c) Disclosure Requirements Relating to Insurance Premiums and
Liability Waivers.--
``(1) In general.--A merchant shall clearly and
conspicuously disclose in writing to the consumer before the
consummation of a rental-purchase agreement that the purchase
of leased property insurance 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 insurance or liability waiver coverage,
directly or indirectly, in connection with a rental-purchase
transaction only if--
``(A) the merchant clearly and conspicuously
discloses to the consumer the cost of each component of
such coverage before the consummation of the rental-
purchase agreement; and
``(B) the consumer signs an affirmative written
request for such coverage after receiving the
disclosures required under subparagraph (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 information available to the
merchant.
``(2) Information subsequently rendered inaccurate.--If
information required to be disclosed under subsection (a) is
subsequently rendered inaccurate as a result of any agreement
between the merchant and the consumer subsequent to the
delivery of the required disclosures, the resulting inaccuracy
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 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 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 process, during the applicable
reinstatement period set forth in subparagraph (A),
permits the consumer to reinstate the agreement during
a period 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 reinstatement of
the agreement to receive the same property, if
available, that was the subject of the rental-purchase
agreement, or if the same property is not available, a
substitute item of comparable quality and condition may
be provided to the consumer; except that, the Board
may, by regulation or order, exempt any independent
small business (as defined by the Board by regulation)
from the requirement of providing the same or
comparable product during the extended reinstatement
period provided in subparagraph (C), if the Board
determines, taking into account such standards as the
Board determines to be appropriate, that the
reinstatement right provided in such subparagraph would
provide excessive hardship for such independent small
business;
``(5) provide a statement specifying the terms under which
the consumer shall acquire ownership of the property that is
the subject of the rental-purchase agreement either by payment
of the total cost to acquire ownership, as provided in section
1006, or by exercise of any early purchase option provided in
the rental-purchase agreement;
``(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 description 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 return,
surrender or purchase of the property.
``(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.
``SEC. 1006. RIGHT TO ACQUIRE OWNERSHIP.
``(a) In General.--The consumer shall acquire ownership 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
option 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 payment of the total cost of the rental-
purchase agreement, as such term is defined in section 1001(17), and as
disclosed 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 addition to, or in excess of, the regular periodic payments required
by subsection (b), or any early purchase option amount provided in the
rental-purchase agreement, as applicable. 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 acquire ownership under subsection (b) or
any early purchase 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 instruments, which the Board
has determined by regulation, 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 manufacturer, distributor, or seller
of the property, which shall apply as if the consumer were the
original purchaser 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 pursuant 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 appropriate;
``(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 obtaining the consumer's
consent or to commit any breach of the peace in connection with
the repossession of the rental property or the collection of
any obligation or alleged obligation of the consumer arising
out of the rental-purchase agreement;
``(8) a provision requiring the purchase of insurance or
liability damage waiver to cover the property that is the
subject of the rental-purchase agreement, except as permitted
by the Board in regulation;
``(9) a provision requiring the consumer to pay more than 1
late fee or charge for an unpaid or delinquent 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 payment 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 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 that 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.--
``(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 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.
``(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, prominence, 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 merchant making the advertisement
shall also clearly and conspicuously state in the advertisement the
following for the item, or set of items, advertised:
``(1) The transaction advertised is a rental-purchase
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 applicable 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 section, the term
`clearly and conspicuously' means that required disclosures
shall be presented in a type, size, shade, contrast,
prominence, location, and manner, as applicable to different
mediums for advertising, so as to be readily noticeable and
comprehensible to the ordinary consumer.
``(2) Regulatory guidance.--The Board shall prescribe
regulations on principles and factors to meet the clear and
conspicuous standard as appropriate to print, video, audio, and
computerized advertising, reflecting the principles and factors
typically applied in each medium by the Federal Trade
Commission.
``(3) Limitation.--Nothing contrary to, inconsistent with,
or in mitigation of, the required disclosures shall be used in
any advertisement in any medium, and no audio, video, or print
technique shall be used that is likely to obscure or detract
significantly 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 Actions.--
``(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 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 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 otherwise 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 attorney 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 section 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 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, 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 altering the liability under
section 1012 or 1013 of a merchant assigning a rental-purchase
agreement.
``(c) Proof of Disclosure.--In an action by or against an assignee,
the consumer's written acknowledgment of receipt of a disclosure, made
as part of the rental-purchase agreement, 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 shall prescribe regulations 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 consumer in understanding the transaction by utilizing
readily understandable language to simplify the technical nature 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 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 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 agreements, except to the extent those laws are
inconsistent 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 interested 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, merchants 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 determination is
subsequently amended, rescinded, or determined by judicial or
other authority to be invalid for any reason.
``(3) Greater protection under state law.--Except as
provided in subsection (b), for purposes 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 protection 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 petition 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 credit, 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 percentage rate.
``(c) Relation to Federal Trade Commission Act.--No provision of
this title shall be construed as limiting, 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 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>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Referred to the Subcommittee on Financial Institutions and Consumer Credit.
Subcommittee Hearings Held.
Subcommittee Consideration and Mark-up Session Held.
Forwarded by Subcommittee to Full Committee (Amended) by Voice Vote .
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 33 - 21.
Reported (Amended) by the Committee on Financial Services. H. Rept. 112-565.
Reported (Amended) by the Committee on Financial Services. H. Rept. 112-565.
Placed on the Union Calendar, Calendar No. 405.
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