S 881
112th CONGRESS
1st Session
S. 881
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 SENATE OF THE UNITED STATES
May 4, 2011
Ms. LANDRIEU (for herself, Mr. WICKER, and Mr. BLUNT) introduced the
following bill; which was read twice and referred to the Committee on
Banking, Housing, and Urban Affairs
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
of 2011'.
SEC. 2. FINDINGS AND DECLARATION OF PURPOSES.
(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) Purposes- The purposes of this Act are to assure the availability
of rental-purchase transactions, 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 (15 U.S.C. 1601 et seq.) is amended
by adding at the end the following new title:
`TITLE X--RENTAL-PURCHASE TRANSACTIONS
`Sec. 1001. Short title; 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. 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. SHORT TITLE; DEFINITIONS.
`(a) Short Title- This title may be cited as the `Rental-Purchase Protections
Act'.
`(b) 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 time of consummation of the agreement,
or the time of delivery of the property covered by the agreement if
delivery occurs after consummation, including--
`(B) service, processing, or administrative charges;
`(D) refundable security deposit;
`(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 the 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' 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 the Truth
in Lending 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, including--
`(i) any service, processing, or administrative charge;
`(ii) any fee for an investigation or credit report; and
`(iii) any 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 does not apply to rental-purchase agreements primarily for
business, commercial, or agricultural purposes, or those made with agencies
or instrumentalities of the Federal Government or a State or political
subdivision thereof.
`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, to the extent applicable--
`(1) the date of 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 that 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 lease term; and
`(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--
`(1) be segregated from other information at the beginning of the
rental-purchase agreement;
`(2) contain only directly related information; and
`(3) 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- 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 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 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,
except that the Board may, by regulation or order, exempt any independent
small business (as defined by regulation of the Board) 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 appropriate, that the reinstatement right provided in
subparagraph (C) would provide excessive hardship for the 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 right of the consumer to
reinstatement under subsection (a)(4).
`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 by regulation of 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 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 applicable, the merchant shall--
`(1) deliver, or mail to the last known address of the consumer, 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;
`(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 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 regulation
of the Board;
`(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 dwelling of the consumer or other premises
without obtaining the consent of the consumer, 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 regulation of the Board; 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. 1008. STATEMENT OF ACCOUNTS.
`Upon request of a consumer, a merchant shall provide a statement of
the account of the consumer. 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 requested
in excess of 4 times during that 12-month period.
`SEC. 1009. RENEGOTIATIONS AND EXTENSIONS.
`(a) Renegotiations- For purposes of this section, 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 under this title, except as provided in subsection (c).
`(b) Extensions- For purposes of this section, 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 title are not required for
the following, even if they meet the definition of a renegotiation or
an extension under this section:
`(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 that the rental-purchase
cost does not increase.
`(5) The deletion of property in a multiple-item agreement.
`(6) A change in the rental period, provided that 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--
`(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.
`(1) IN GENERAL- A merchant may make the disclosures 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 showroom of the merchant, 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 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 media 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 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 required 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 on which 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 requirement 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 under this
section 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 this title, to prevent its circumvention, and to facilitate
compliance with its requirements.
`(b) Model Disclosure Forms-
`(1) BOARD AUTHORITY- 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.
`(2) CONTENT- In devising forms described in paragraph (1), the Board
shall consider the use by merchants of data processing or similar
automated equipment.
`(3) USE NOT MANDATORY- Nothing in this title may be construed to
require a merchant to use any model form or clause published by the
Board under this section.
`(4) DETERMINATION OF COMPLIANCE- A merchant shall be deemed to be
in compliance with the requirement to provide disclosure under section
1003(a) if the merchant--
`(A) uses any appropriate model form or clause published by the
Board under this section; or
`(B) uses any such model form or clause, and changes it by deleting
any information which is not required by this title or 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-
`(1) IN GENERAL- 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.
`(2) AUTHORITY TO MODIFY- The Board may, at its discretion--
`(A) lengthen the period of time described in paragraph (1) to permit
merchants to adjust to accommodate new requirements; or
`(B) shorten that period of time, if the Board makes a specific
finding that such action is necessary to comply with the findings
of a court or to prevent unfair or deceptive practices.
`(3) VOLUNTARY COMPLIANCE- Notwithstanding paragraph (1) or (2), a
merchant may comply with any newly prescribed disclosure requirement
prior to its effective date.
`SEC. 1016. ENFORCEMENT.
`(a) Federal Enforcement- Compliance with this title shall be enforced
under the Federal Trade Commission Act (15 U.S.C. 41 et seq.), and a
violation of any requirement 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 under
the Federal Trade Commission Act.
`(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 civil action described in paragraph (1) to
the Federal Trade Commission, and shall provide the Commission with
a copy of the complaint.
`(B) EMERGENCY ACTION- If prior notice required by this paragraph
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 an action described in paragraph (1);
`(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 that person is required to disclose
under the provisions of this title or any regulation issued under this
title 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
that 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 by regulation 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 with a provision
of this title, merchants located in that State shall not be required
to comply with that 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
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 thereof, or any agency of a State or political
subdivision thereof.
`SEC. 1020. COMPLIANCE DATE.
`Compliance with this title shall not be required until 6 months after
the date of enactment of this title. In any case, a merchant may comply
with this title at any time after such date of enactment.'.
END
