Consumer Rental Purchase Agreement Act - Prescribes 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 legal claims or remedies, and other specified 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 enforcement powers to the Federal Trade Commission (FTC) and requires violations of this Act to be treated as unfair or deceptive acts or practices under the Federal Trade Commission 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 FTC, 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 agencies and any state, state agency, or state political subdivision.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1208 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1208
To require 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 SENATE OF THE UNITED STATES
June 20, 2013
Mr. Tester (for himself and Mr. Moran) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To require 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.--Congress finds that--
(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; and
(4) the informed use of rental-purchase transactions
results from an awareness of the cost thereof by consumers.
(b) Purpose.--The purpose of this Act is to ensure the availability
of rental-purchase transactions and to ensure 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. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) Advertisement.--The term ``advertisement'' means--
(A) a commercial message in any medium that
promotes, directly or indirectly, a rental-purchase
agreement; and
(B) does not include any price tag, window sign, or
other in-store merchandising aid.
(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) 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.
(4) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(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--
(A) the rental payment;
(B) service, processing, or administrative charges;
(C) any delivery fee;
(D) any refundable security deposit;
(E) taxes;
(F) mandatory fees or charges; and
(G) 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 an
initial payment by the consumer 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 that 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 in which 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'' shall not be construed to be, nor be
governed by laws regulating, any of the following:
(i) A credit sale (as defined in section
103(g) of the Truth in Lending Act (15 U.S.C.
1602(g))).
(ii) A consumer lease (as defined in
section 181(1) of the Truth in Lending Act (15
U.S.C. 1667(1))).
(iii) An extension of credit or a
transaction giving rise to a debt incurred in
connection with the purchase of 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--
(i) a service, processing, or
administrative charge;
(ii) a fee for an investigation or credit
report; or
(iii) a 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 a rental-purchase agreement.
SEC. 4. EXEMPTED TRANSACTIONS.
This Act shall not apply to rental-purchase agreements primarily
for business, commercial, or agricultural purposes, or those made with
Government agencies or instrumentalities.
SEC. 5. 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 6 and 7.
(b) Timing of Disclosure.--The disclosures required under sections
6 and 7 shall be made--
(1) before the consummation of the rental-purchase
agreement; and
(2) 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. 6. RENTAL-PURCHASE DISCLOSURES.
(a) In General.--For each rental-purchase agreement, the merchant
shall clearly and conspicuously disclose to the consumer, 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
at the time of the agreement;
(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 statement that--
(A) the transaction is a rental-purchase agreement;
and
(B) 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;
(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 Commission, by regulation) a statement of
the aggregate cash price of all items shall satisfy this
requirement;
(7) the payment schedule;
(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 right of the consumer 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
rental period;
(10) a description of the reinstatement periods of
terminated rental-purchase agreements; and
(11) 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 (12) of subsection (a)--
(1) shall be segregated from other information at the
beginning of the rental-purchase agreement;
(2) shall contain only directly related information; and
(3) shall be identified in boldface, upper-case letters as
follows: ``important rental-purchase disclosures''.
(c) Disclosure Requirements Relating to Insurance Premiums and
Liability Waivers.--
(1) In general.--The 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 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 paragraph (1) and
subparagraph (A) of this paragraph.
(d) Accuracy of Disclosure.--
(1) In general.--The disclosures required to be made under
subsection (a) shall be accurate as of the date on which 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
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 Act.
SEC. 7. 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) 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--
(i) within 7 business days after failing to
make a timely rental payment, if the consumer
pays monthly; or
(ii) 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;
(D) if the consumer is a member of the Armed Forces
and returns or voluntarily surrenders property as set
forth in subparagraph (A) due to a permanent change of
station or other relocation of the member, provides
that the applicable reinstatement period set forth in
subparagraph (B) or (C) be tolled or otherwise
suspended until such time as the consumer returns to
the area where the property is located; and
(E) 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 Commission
may, by regulation or order, exempt any independent
small business (as defined by the Commission, by
regulation) from the requirement of providing the same
or comparable product during the extended reinstatement
period provided in subparagraph (C), if the Commission
determines, taking into account such standards as the
Commission determines to be appropriate, that the
reinstatement right provided in such subparagraph would
provide excessive hardship for such independent small
business;
(4) 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
8, or by exercise of any early purchase option provided in the
rental-purchase agreement;
(5) provide a statement disclosing that if any part of an
express warranty of the manufacturer 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
(6) provide, to the extent applicable, a description of--
(A) any grace period for making any periodic
payment;
(B) the amount of any security deposit, to be paid
by the consumer upon initiation of the rental-purchase
agreement; and
(C) 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)(3)
may not be construed so as to prevent a merchant from attempting to
repossess property during the reinstatement period pursuant to
subsection (a)(3)(A), but such a repossession does not affect the
consumer's right to reinstate in accordance with this Act.
SEC. 8. RIGHT TO ACQUIRE OWNERSHIP.
(a) In General.--The consumer shall acquire ownership of the
property that is the subject of a 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
Commission.
(b) Payment of Total Cost.--The consumer shall acquire ownership of
the rental property upon payment of the total cost of the subject
rental-purchase agreement, as disclosed to the consumer in the rental-
purchase agreement pursuant to section 6(a).
(c) Additional Fees Prohibited.--
(1) In general.--A merchant shall not require the consumer
to pay, as a condition for acquiring ownership of the property
that is the subject of a 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.
(2) Rule of construction.--A requirement that the consumer
pay an unpaid late charge or other fee that is past due 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 to the consumer, or mail to the consumer's last
known address, such documents or other instruments, which the
Commission 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. 9. 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 rental-purchase
agreement;
(4) a wage assignment;
(5) a provision requiring the waiver of any legal claim or
remedy created by this Act or other provision of Federal or
State law;
(6) a provision requiring the consumer, in the event that
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 Commission, by 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--
(A) to enter the consumer's dwelling or other
premises without obtaining the consumer's consent; or
(B) 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 Commission, by regulation; or
(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. 10. 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. 11. RENEGOTIATIONS AND EXTENSIONS.
(a) Renegotiations.--With respect to any rental-purchase agreement,
a renegotiation occurs when the agreement is satisfied and replaced by
a new agreement undertaken by the same consumer. A renegotiation
requires new disclosures in accordance with this Act, except as
provided in subsection (c).
(b) Extensions.--With respect to any rental-purchase agreement, 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 under this Act are not required in
connection with a rental-purchase agreement for the following events,
even if the event meets 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 Commission.
SEC. 12. 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--
(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; and
(6) the rental-purchase cost.
(b) Form of Disclosure.--
(1) In general.--A merchant may make the disclosures
required by subsection (a) in the form of a list, catalog, or
electronic facsimile of the card, tag, or label 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. 13. 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, for
the item or set of items advertised--
(1) that 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) that, to acquire ownership of the property, the
consumer must pay the rental-purchase cost plus applicable
taxes; and
(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 Commission 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 such medium by the
Commission.
(3) Limitation.--Nothing contrary to, inconsistent with, or
in mitigation of, the disclosures required by this section
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. 14. ENFORCEMENT BY COMMISSION.
(a) Unfair or Deceptive Acts or Practices.--A violation of a
provision of this Act or a rule or regulation prescribed pursuant to
this Act shall be treated as a violation of a rule defining an unfair
or deceptive act or practice described under section 18(a)(1)(B) of the
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(b) Powers of Commission.--
(1) In general.--Except as provided in paragraph (3), the
Commission shall enforce this Act in the same manner, by the
same means, and with the same jurisdiction, powers, and duties
as though all applicable terms and provisions of the Federal
Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated
into and made a part of this Act.
(2) Privileges and immunities.--Except as provided in
paragraph (3), any person who violates this Act shall be
subject to the penalties and entitled to the privileges and
immunities provided in the Federal Trade Commission Act (15
U.S.C. 41 et seq.).
SEC. 15. REGULATIONS.
(a) In General.--
(1) Commission action.--The Commission shall prescribe
regulations as necessary to carry out this Act.
(2) Content.--Regulations required by this subsection may
contain such additional requirements, classifications,
differentiations, or other provisions, and may provide for such
adjustments and exceptions for all or any class of
transactions, as in the judgment of the Commission are
necessary or proper to effectuate the purposes of this Act, to
prevent circumvention or evasion thereof, or to facilitate
compliance therewith.
(b) Model Disclosure Forms.--
(1) In general.--The Commission may publish model
disclosure forms and clauses for common rental-purchase
agreements to facilitate compliance with the disclosure
requirements of this Act and to aid the consumer in
understanding the transaction by utilizing readily
understandable language to simplify the technical nature of the
disclosures.
(2) Considerations.--In devising model forms under this
subsection, the Commission shall consider the use by merchants
of data processing or similar automated equipment.
(3) Voluntary use of model forms.--Nothing in this Act may
be construed to require a merchant to use any model form or
clause prescribed by the Commission under this section.
(4) Presumption.--A merchant shall be deemed to be in
compliance with the requirement to provide disclosure under
section 5(a), if the merchant--
(A) uses any appropriate model form or clause as
published by the Commission under this section; or
(B) uses any such model form or clause and changes
it by--
(i) deleting any information which is not
required by this Act; or
(ii) 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.
SEC. 16. EFFECTIVE DATE OF REGULATIONS.
(a) In General.--Any regulation prescribed by the Commission under
this Act, 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.
(b) Authority To Extend Time.--The Commission may, at its
discretion--
(1) lengthen the period of time described in subsection (a)
to permit merchants to adjust to accommodate new requirements;
or
(2) shorten that period of time, if the Commission makes a
specific finding that such action is necessary to comply with
the findings of a court or to prevent unfair or deceptive
practices.
(c) Early Compliance Authorized.--Notwithstanding the time periods
established under subsection (a) or (b), a merchant may comply with any
newly prescribed disclosure requirement prior to such established date.
SEC. 17. RELATION TO OTHER LAWS.
(a) Relation to State Law.--
(1) No effect on consistent state laws.--Except as provided
in subsection (b), this Act 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 that those laws are inconsistent with any provision of
this Act, 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
Commission, the Commission shall determine whether any such
inconsistency exists. If the Commission 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 Act if the term or provision affords greater
protection and benefit to the consumer than the protection and
benefit provided under this Act, as determined by the
Commission, on its own motion or upon the petition of any
interested party.
(b) State Laws Relating to Characterization of Transaction.--
Notwithstanding subsection (a), this Act shall supersede any provision
of 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
Act shall be construed as limiting, superseding, or otherwise affecting
the applicability of the Federal Trade Commission Act (15 U.S.C. 41 et
seq.) to any merchant or rental-purchase transaction.
SEC. 18. EFFECT ON GOVERNMENT AGENCIES.
No civil liability or criminal penalty under this Act 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. 19. COMPLIANCE DATE.
Compliance with this Act and regulations issued under this Act is
not required until 6 months after the date of enactment of this Act. In
any case, merchants may comply with this Act at any time after such
date of enactment.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line