H. Rept. 112-565 - 112th Congress (2011-2012)

Report text available as:

Formatting necessary for an accurate reading of this legislative text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.


House Report 112-565 - CONSUMER RENTAL PURCHASE AGREEMENT ACT

[House Report 112-565]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-565

======================================================================



 
                 CONSUMER RENTAL PURCHASE AGREEMENT ACT

                                _______
                                

 June 29, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Bachus, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1588]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (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, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

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' shall not be construed to be, nor governed 
                by laws regulating any of the following:
                          ``(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).
                          ``(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 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 clearly and conspicuously 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 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.
          ``(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 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 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 rental 
        period.
          ``(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, 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 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) 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;
          ``(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 
        1006, or by exercise of any early purchase option provided in 
        the rental-purchase agreement;
          ``(5) 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
          ``(6) 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)(3) 
shall 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.

``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 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 
        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; 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 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, 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. 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, and for purposes of this title, the term 
`total amount of monthly payments under the lease' as used in section 
130 shall mean the sum of all fees, periodic payments, initial payment, 
and any other charges paid by the consumer since the date of 
consummation.
  ``(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. Such regulations 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 Board 
are necessary or proper to effectuate the purposes of this title, to 
prevent circumvention or evasion thereof, or to facilitate compliance 
therewith.
  ``(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.''.

                          Purpose and Summary

    The purpose of H.R. 1588, the Consumer Rental Purchase 
Agreement Act, is to set a federal regulatory floor for 
consumer protection in rental-purchase transactions. Although 
most states currently regulate rental-purchase transactions as 
leases, the scope and consumer protection requirements of these 
laws vary significantly from state to state.
    Currently, there is no federal oversight or regulation of 
the rent-to-own industry. This bill amends the Consumer Credit 
Protection Act (CCPA) to provide such oversight and regulation. 
The bill defines a number of terms pertaining to rental 
purchase transactions, including a ``rental-purchase 
agreement,'' which excludes credit sales and consumer leases 
(as defined by the Truth in Lending Act). H.R. 1588 also 
includes the following provisions: (1) requires rent-to-own 
merchants to include certain disclosures about the transaction 
in their rental-purchase agreements; (2) specifies the rights 
of consumers to acquire ownership of the property that is the 
subject of the rental-purchase agreement and to request 
statements of their accounts; (3) specifies provisions that are 
prohibited from appearing in rental-purchase agreements; (4) 
includes standards governing renegotiations and extensions of 
rental-purchase agreements; (5) mandates disclosures for both 
point-of-rental and advertising; (6) permits consumers to take 
civil action against merchants that fail to comply with the 
requirements in the bill; and (7) establishes criminal 
liability for merchants that willfully and knowingly give false 
or inaccurate information or fail to make disclosures required 
by the bill. H.R. 1588 authorizes the Board of Governors of the 
Federal Reserve System to promulgate implementing regulations 
and grants enforcement powers to the Federal Trade Commission 
and to state attorneys general.
    While the consumer protections contained in H.R. 1588 
generally exceed those contained in existing state laws, the 
bill does not preempt stronger state laws. The bill does, 
however, preclude states from treating rental-purchase 
transactions as credit sales and from requiring the disclosure 
of an annual percentage rate.

                  Background and Need for Legislation

    In April 2000, the Federal Trade Commission (FTC) issued a 
staff report titled ``Survey of Rent-to-Own Customers,'' which 
concluded that potential rental-purchase customers should have 
clear and accurate information about the total cost of the 
transaction to allow them to compare rental-purchase 
transactions to other alternatives. The FTC also noted that 
inadequacies exist in many state rental-purchase disclosure 
laws. This bill cures those inadequacies.
    Federal legislation to regulate this industry has been 
considered by Congress for more than a decade. H.R. 1588 brings 
greater stability and consistency to rental-purchase 
transactions nationally and adds substantive consumer 
protections consistent with that of a majority of the states 
that have adopted rental-purchase legislation. In addition, 
H.R. 1588 helps to eliminate claims and litigation by providing 
a clear statement of Congressional policy regarding these 
transactions.

                                Hearings

    On July 26, 2011, the Subcommittee on Financial 
Institutions and Consumer Credit held a hearing entitled 
``Examining Rental Purchase Agreements and the Potential Role 
for Federal Regulation,'' to examine H.R. 1588. This was a two-
panel hearing, and the following witnesses testified:
           Mr. Charles Harwood, Deputy Director, Bureau 
        of Consumer Protection, Federal Trade Commission
           Mr. Jim Hawkins, Assistant Professor of Law, 
        University of Houston Law Center
           Mr. Roy Soto, Owner, Premier Rental Purchase
           Ms. Vivian Saunders, rent-to-own customer 
        from Lewiston Woodville, NC
           Ms. Margot Freeman Saunders, Of Counsel, 
        National Consumer Law Center

                        Committee Consideration

    The Subcommittee on Financial Institutions and Consumer 
Credit met in open session on November 17, 2011, and ordered 
H.R. 1588, as amended, favorably reported to the full Committee 
by voice vote.
    The Committee on Financial Services met in open session on 
May 31, 2012, and ordered H.R. 1588, as amended, favorably 
reported to the House by a record vote of 33 yeas and 21 nays 
(Record vote no. FC-80).

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Chairman Bachus to report the bill, as amended, to 
the House with a favorable recommendation was agreed to by a 
record vote of 33 yeas and 21 nays (Record vote no. FC-80). The 
names of Members voting for and against follow:

                                              RECORD VOTE NO. FC-80
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................        X   ........  .........  Mr. Frank (MA)...  ........        X   .........
Mr. Hensarling.................        X   ........  .........  Ms. Waters.......  ........        X   .........
Mr. King (NY)..................        X   ........  .........  Mrs. Maloney.....  ........        X   .........
Mr. Royce......................        X   ........  .........  Mr. Gutierrez....  ........        X   .........
Mr. Lucas......................        X   ........  .........  Ms. Velazquez....  ........  ........  .........
Mr. Paul.......................  ........  ........  .........  Mr. Watt.........  ........        X   .........
Mr. Manzullo...................        X   ........  .........  Mr. Ackerman.....        X   ........  .........
Mr. Jones......................  ........  ........  .........  Mr. Sherman......        X   ........  .........
Mrs. Biggert...................        X   ........  .........  Mr. Meeks........        X   ........  .........
Mr. Gary G. Miller (CA)........  ........        X   .........  Mr. Capuano......  ........        X   .........
Mrs. Capito....................        X   ........  .........  Mr. Hinojosa.....        X   ........  .........
Mr. Garrett....................  ........        X   .........  Mr. Clay.........  ........  ........  .........
Mr. Neugebauer.................        X   ........  .........  Mrs. McCarthy            X   ........  .........
                                                                 (NY).
Mr. McHenry....................        X   ........  .........  Mr. Baca.........        X   ........  .........
Mr. Campbell...................        X   ........  .........  Mr. Lynch........  ........        X   .........
Mrs. Bachmann..................  ........        X   .........  Mr. Miller (NC)..  ........        X   .........
Mr. McCotter...................        X   ........  .........  Mr. David Scott          X   ........  .........
                                                                 (GA).
Mr. McCarthy (CA)..............  ........  ........  .........  Mr. Al Green (TX)  ........        X   .........
Mr. Pearce.....................  ........        X   .........  Mr. Cleaver......        X   ........  .........
Mr. Posey......................  ........        X   .........  Ms. Moore........  ........        X   .........
Mr. Fitzpatrick................        X   ........  .........  Mr. Ellison......  ........  ........  .........
Mr. Westmoreland...............        X   ........  .........  Mr. Perlmutter...        X   ........  .........
Mr. Luetkemeyer................        X   ........  .........  Mr. Donnelly.....        X   ........  .........
Mr. Huizenga...................  ........        X   .........  Mr. Carson.......  ........        X   .........
Mr. Duffy......................        X   ........  .........  Mr. Himes........  ........        X   .........
Ms. Hayworth...................        X   ........  .........  Mr. Peters.......  ........        X   .........
Mr. Renacci....................  ........        X   .........  Mr. Carney.......        X   ........  .........
Mr. Hurt.......................        X   ........  .........
Mr. Dold.......................        X   ........  .........
Mr. Schweikert.................  ........        X   .........
Mr. Grimm......................  ........  ........  .........
Mr. Canseco....................        X   ........  .........
Mr. Stivers....................        X   ........  .........
Mr. Fincher....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    During consideration of H.R. 1588 by the Committee, the 
following amendments were considered:
    1. An amendment offered by Ms. Moore and Mr. Ellison, no. 
3, to allow states to permit rental-purchase agreements to 
disclose annual percentage rates and to classify rental-
purchase transactions as credit sales, was not agreed to by a 
record vote of 19 yeas and 32 nays (Record vote no. FC-78).

                                              RECORD VOTE NO. FC-78
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................  ........        X   .........  Mr. Frank (MA)...        X   ........  .........
Mr. Hensarling.................  ........        X   .........  Ms. Waters.......        X   ........  .........
Mr. King (NY)..................  ........        X   .........  Mrs. Maloney.....        X   ........  .........
Mr. Royce......................  ........        X   .........  Mr. Gutierrez....        X   ........  .........
Mr. Lucas......................  ........        X   .........  Ms. Velazquez....  ........  ........  .........
Mr. Paul.......................  ........  ........  .........  Mr. Watt.........        X   ........  .........
Mr. Manzullo...................  ........        X   .........  Mr. Ackerman.....  ........        X   .........
Mr. Jones......................  ........  ........  .........  Mr. Sherman......  ........        X   .........
Mrs. Biggert...................  ........        X   .........  Mr. Meeks........  ........        X   .........
Mr. Gary G. Miller (CA)........  ........        X   .........  Mr. Capuano......        X   ........  .........
Mrs. Capito....................  ........        X   .........  Mr. Hinojosa.....  ........  ........  .........
Mr. Garrett....................  ........        X   .........  Mr. Clay.........  ........  ........  .........
Mr. Neugebauer.................  ........        X   .........  Mrs. McCarthy            X   ........  .........
                                                                 (NY).
Mr. McHenry....................  ........        X   .........  Mr. Baca.........  ........        X   .........
Mr. Campbell...................  ........        X   .........  Mr. Lynch........        X   ........  .........
Mrs. Bachmann..................        X   ........  .........  Mr. Miller (NC)..        X   ........  .........
Mr. McCotter...................  ........        X   .........  Mr. David Scott    ........        X   .........
                                                                 (GA).
Mr. McCarthy (CA)..............  ........  ........  .........  Mr. Al Green (TX)        X   ........  .........
Mr. Pearce.....................  ........        X   .........  Mr. Cleaver......  ........  ........  .........
Mr. Posey......................  ........        X   .........  Ms. Moore........        X   ........  .........
Mr. Fitzpatrick................  ........        X   .........  Mr. Ellison......  ........  ........  .........
Mr. Westmoreland...............  ........        X   .........  Mr. Perlmutter...  ........        X   .........
Mr. Luetkemeyer................  ........        X   .........  Mr. Donnelly.....  ........        X   .........
Mr. Huizenga...................  ........        X   .........  Mr. Carson.......        X   ........  .........
Mr. Duffy......................        X   ........  .........  Mr. Himes........        X   ........  .........
Ms. Hayworth...................  ........  ........  .........  Mr. Peters.......        X   ........  .........
Mr. Renacci....................        X   ........  .........  Mr. Carney.......        X   ........  .........
Mr. Hurt.......................  ........        X   .........
Mr. Dold.......................        X   ........  .........
Mr. Schweikert.................  ........        X   .........
Mr. Grimm......................  ........  ........  .........
Mr. Canseco....................  ........        X   .........
Mr. Stivers....................  ........        X   .........
Mr. Fincher....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    2. An amendment offered by Mr. Watt and Ms. Moore, no. 4, 
to limit the applicability of the bill to interstate 
transactions, was not agreed to by a record vote of 20 yeas and 
33 nays (Record vote no. FC-79).

                                              RECORD VOTE NO. FC-79
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................  ........        X   .........  Mr. Frank (MA)...        X   ........  .........
Mr. Hensarling.................  ........        X   .........  Ms. Waters.......        X   ........  .........
Mr. King (NY)..................  ........        X   .........  Mrs. Maloney.....        X   ........  .........
Mr. Royce......................  ........        X   .........  Mr. Gutierrez....        X   ........  .........
Mr. Lucas......................  ........        X   .........  Ms. Velazquez....  ........  ........  .........
Mr. Paul.......................  ........  ........  .........  Mr. Watt.........        X   ........  .........
Mr. Manzullo...................  ........        X   .........  Mr. Ackerman.....  ........        X   .........
Mr. Jones......................  ........  ........  .........  Mr. Sherman......  ........        X   .........
Mrs. Biggert...................  ........        X   .........  Mr. Meeks........  ........        X   .........
Mr. Gary G. Miller (CA)........  ........        X   .........  Mr. Capuano......        X   ........  .........
Mrs. Capito....................  ........        X   .........  Mr. Hinojosa.....  ........  ........  .........
Mr. Garrett....................        X   ........  .........  Mr. Clay.........  ........  ........  .........
Mr. Neugebauer.................  ........        X   .........  Mrs. McCarthy            X   ........  .........
                                                                 (NY).
Mr. McHenry....................  ........        X   .........  Mr. Baca.........  ........        X   .........
Mr. Campbell...................  ........        X   .........  Mr. Lynch........        X   ........  .........
Mrs. Bachmann..................        X   ........  .........  Mr. Miller (NC)..        X   ........  .........
Mr. McCotter...................  ........        X   .........  Mr. David Scott    ........        X   .........
                                                                 (GA).
Mr. McCarthy (CA)..............  ........  ........  .........  Mr. Al Green (TX)        X   ........  .........
Mr. Pearce.....................  ........        X   .........  Mr. Cleaver......        X   ........  .........
Mr. Posey......................  ........        X   .........  Ms. Moore........        X   ........  .........
Mr. Fitzpatrick................  ........        X   .........  Mr. Ellison......  ........  ........  .........
Mr. Westmoreland...............  ........        X   .........  Mr. Perlmutter...        X   ........  .........
Mr. Luetkemeyer................  ........        X   .........  Mr. Donnelly.....  ........        X   .........
Mr. Huizenga...................        X   ........  .........  Mr. Carson.......  ........        X   .........
Mr. Duffy......................  ........        X   .........  Mr. Himes........        X   ........  .........
Ms. Hayworth...................  ........        X   .........  Mr. Peters.......        X   ........  .........
Mr. Renacci....................        X   ........  .........  Mr. Carney.......        X   ........  .........
Mr. Hurt.......................  ........        X   .........
Mr. Dold.......................  ........        X   .........
Mr. Schweikert.................  ........        X   .........
Mr. Grimm......................  ........  ........  .........
Mr. Canseco....................  ........        X   .........
Mr. Stivers....................  ........        X   .........
Mr. Fincher....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    The following amendments and motion were also considered by 
the Committee:
    1. An amendment offered by Mr. Canseco and Mrs. Maloney, 
No. 1, to allow the Federal Reserve to conduct consumer testing 
of disclosure forms and other documents in order to determine 
the most effective way to communicate such disclosures to 
rental-purchase customers--similar to the Federal Reserve's 
authority under the Truth in Lending Act--was agreed to by 
voice vote.
    2. An amendment offered by Mrs. Maloney and Ms. Moore, No. 
2, to provide that the amount of civil penalties shall be 
twenty-five percent of the sum of all fees, periodic payments, 
initial payment, and any other charges paid by the consumer 
since the date of consummation, was agreed to by voice vote.
    3. A motion offered by Mrs. Capito to move the previous 
question on H.R. 1588 was agreed to by voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The objective of H.R. 1588 is to set a federal regulatory 
floor for consumer protection in rental-purchase transactions. 
There is no federal oversight or regulation of the rent-to-own 
industry. Currently, most states regulate rental-purchase 
transactions as leases; however, the scope and consumer 
protection requirements of these laws vary significantly by 
state. This bill would amend the Consumer Credit Protection Act 
(CCPA) to provide such oversight and regulation by (1) defining 
a number of terms pertaining to rental purchase transactions, 
including a ``rental-purchase agreement,'' which excludes 
credit sales and consumer leases (as defined by the Truth in 
Lending Act); (2) requiring rent-to-own merchants to include 
certain disclosures about the transaction in their rental-
purchase agreements; (3) specifying the rights of consumers to 
acquire ownership of the property and to request statements of 
their accounts; (4) specifying provisions that are prohibited 
from appearing in rental-purchase agreements; (5) 
includingstandards governing renegotiations and extensions of rental-
purchase agreements; (6) mandating disclosures for both point-of-rental 
and advertising; (7) permitting consumers to take civil action against 
a merchant that fails to comply with the requirements in the bill; (8) 
establishing criminal liability for merchants that willfully and 
knowingly give false or inaccurate information or fail to make any 
required disclosures under the bill; and (9) authorizing the Board of 
Governors of the Federal Reserve System to promulgate implementing 
regulations and granting enforcement powers to the Federal Trade 
Commission and to state attorneys general.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                     June 22, 2012.
Hon. Spencer Bachus,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1588, the Consumer 
Rental Purchase Agreement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1588--Consumer Rental Purchase Agreement Act

    Estimated Impact on the Federal Budget: H.R. 1588 would 
require certain information to be disclosed by a merchant 
before a consumer finalizes a rent-to-own agreement--a contract 
that allows a consumer to lease certain property with the 
option, but not the obligation, to buy the property. The bill 
would require the Board of Governors of the Federal Reserve 
System to develop regulations as necessary to carry out the 
purposes of H.R. 1588. The regulations would stipulate, among 
other things, information that must be provided to a consumer 
before completing the transaction and information that must be 
included in advertisements for rent-to-own contracts. The bill 
would authorize the Federal Trade Commission (FTC) to enforce 
the new regulations and would provide for criminal penalties in 
cases of willful failure to disclose the required information.
    Based on information from the FTC, CBO estimates that 
implementing H.R. 1588 would not significantly increase 
discretionary costs. The FTC expects that most affected 
businesses would comply with the new regulations.
    Enacting H.R. 1588 would affect revenues and direct 
spending; therefore, pay-as-you-go procedures apply. Any 
increase in costs to the Federal Reserve that would result from 
the bill's provisions requiring the Federal Reserve to develop 
new regulations would be recorded as changes in revenues. 
However, CBO expects that any such effects would be negligible.
    Because H.R. 1588 would allow for criminal fines to be 
collected in certain instances, the federal government might 
collect additional fines if the legislation is enacted. 
Criminal fines are recorded as revenues, deposited in the Crime 
Victims Fund, and later spent. CBO expects that any additional 
revenues and direct spending would not be significant because 
of the small number of cases likely to be affected.
    Estimated impact on State, local, and tribal governments: 
H.R. 1588 contains intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) because it would preempt 
state laws that provide less protection to consumers that enter 
into rent-to-own agreements than the federal standard. The bill 
also would impose notification requirements and limitations on 
state attorneys general. Because the limits on state authority 
would not require the expenditure of funds and because the 
notification requirements would result in minimal additional 
spending, CBO estimates that the costs of the intergovernmental 
mandates would be small and would not exceed the threshold 
established in UMRA ($73 million in 2012, adjusted annually for 
inflation).
    Estimated impact on the private sector: H.R. 1588 contains 
private-sector mandates as defmed in UMRA. The bill would 
require merchants who provide the use of property through a 
rent-to-own agreement to provide certain disclosures to 
consumers in those agreements and in advertisements. Under the 
bill, such merchants also would be required to provide specific 
information in merchandise labeling and to furnish statements 
of account to customers upon request. In addition, the bill 
would prohibit those merchants from charging certain fees 
related to acquiring ownership through a rent-to-own agreement 
and from entering the premises of customers to reclaim property 
without the customer's permission.
    According to the Federal Trade Commission, 47 states and 
the District of Columbia currently have laws that require some 
type of disclosure and labeling for such merchants. Industry 
representatives indicate that, because most merchants already 
comply with similar requirements in state laws, the incremental 
cost to comply with the mandates in the bill would be small. 
Therefore, CBO estimates that the direct cost to comply with 
the mandates in the bill would fall below the annual threshold 
established in UMRA for private-sector mandates ($146 million 
in 2012, adjusted annually for inflation).
    Staff contacts: The CBO staff contacts for this estimate 
are Susan Willie (for federal costs), Barbara Edwards (for 
federal revenues), Elizabeth Cove Delisle (for the impact on 
state and local governments), and Paige Piper/Bach (for the 
private-sector impact). The estimate was approved by Theresa 
Gullo, Deputy Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 1588 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This Act may be cited as the ``Consumer Rental Purchase 
Agreement Act.''

Section 2. Findings and declaration of purpose

    This section sets forth certain facts concerning the 
rental-purchase industry and also declares the purposes of the 
Act.

Section 3. Rental-purchase transactions covered under the Consumer 
        Credit Protection Act

    This section amends the Consumer Credit Protection Act by 
adding a new title X to the Consumer Credit Protection Act.

                 TITLE X--RENTAL-PURCHASE TRANSACTIONS

Section 1001. Definitions

    This section defines the following terms used in the Act: 
advertisement, agricultural purpose, Board, cash price, 
consumer, date of consummation, initial payment, merchant, 
payment schedule, periodic payment, property, rental payment, 
rental period, rental-purchase agreement, rental-purchase cost, 
state, and total cost.

Section 1002. Exempted transactions

    This section exempts from the provisions of the Act rental-
purchase agreements used primarily for business, commercial, or 
agricultural purposes, or those involving the government.

Section 1003. General disclosure requirements

    This section requires merchants to disclose the information 
required by Sections 1004 and 1005 to any customer before the 
consummation of a transaction, and also requires that the 
disclosures be displayed ``clearly and conspicuously'' in a 
``type size, prominence, and location as to be readily 
noticeable'' to the customer.

Section 1004. Rental purchase disclosures

    This section requires that for each rental-purchase 
agreement, the merchant clearly and conspicuously disclose to 
the consumer: (1) the date of the transaction and identities of 
merchant and consumer; (2) a description of the rental 
property, including an identification number and whether the 
property is new or used; (3) a description and amount of each 
fee, charge or penalty, in addition to the periodic payment; 
(4) a statement that a consumer will not obtain ownership of 
the property until he or she has paid the total cost to acquire 
ownership; (5) the amount of the initial payment; (6) the 
amount of the cash price of the property; (7) the payment 
schedule; (8) the total cost to acquire ownership; (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 returning the property; and (10) a 
statement that the consumer should refer to the agreement for 
additional information on early termination procedures, 
purchase option rights, responsibilities for loss or damage, 
warranties, maintenance responsibilities, and other charges or 
penalties the consumer may incur. Disclosures 4-10 of the above 
list are required to be placed at the beginning of the rental-
purchase agreement and to be identified as ``IMPORTANT RENTAL-
PURCHASE DISCLOSURES.''
    This section also requires the merchant to disclose to the 
customer that the purchase of leased property insurance or 
liability waiver coverage is not required. This section permits 
the merchant to offer liability coverage to the customer as 
long as the price and terms of the coverage are disclosed.
    This section also requires that the above disclosures be 
accurate as of the date the disclosures are made, based on the 
information available to the merchant. This section provides 
that information subsequently rendered inaccurate as a result 
of an agreement between the merchant and consumer subsequent to 
the delivery of the required disclosures shall not constitute a 
violation of the Act.

Section 1005. Other agreement provisions

    This section mandates that each rental-purchase agreement 
shall provide a statement (1) specifying the party responsible 
for damage or loss, theft, damage, or destruction of the 
property; (2) specifying the party responsible for maintaining 
or servicing the property; (3) specifying the terms by which 
the customer can obtain ownership of the product by paying the 
total cost or via an early purchase option; (4) disclosing that 
any remaining portion of a manufacturer's warranty shall be 
transferred to the consumer upon purchase if allowed by the 
terms of the warranty; and (5) providing a description of any 
grace period for making the periodic payment, the amount of any 
security deposit, and the terms for a security deposit refund.
    This section also requires that the rental-purchase 
agreement include a provision for reinstatement of the 
agreement with the same property, or if it is unavailable, a 
comparable substitute. Specifically, this section would permit 
consumers that rent merchandise on a monthly basis seven 
business days in which to cure any default under the agreement 
without losing any rights or options. For consumers that pay 
more frequently than monthly, the statutory cure period is 
three business days. This section also provides that if a 
consumer returns the property within the prescribed default 
cure periods, then the right to reinstate the terminated 
agreement, without losing any rights or options previously 
acquired, is extended from 60 to 120 days, depending upon how 
long the consumer has been renting the item.

Section 1006. Right to acquire ownership

    This section provides that the customer has the right to 
obtain ownership of the product by making all required payments 
in the agreement or through an early payment option. A merchant 
is prohibited from requiring the customer to pay any fee or 
charge in addition to the regular periodic payments or any 
early purchase option amount provided for in the agreement. As 
soon as the consumer makes all payments necessary to acquire 
ownership of the property, the merchant is required to deliver 
to the consumer any document to acknowledge full ownership of 
the property, as well as the unexpired portions of any 
warranties provided by the manufacturer, distributor, or seller 
of the property.

Section 1007. Prohibited provisions

    This section prohibits a rental-purchase agreement from 
containing the following provisions: confession of judgment; a 
negotiable instrument; a security interest in other property; a 
wage assignment; or a waiver of any claim or defenses. This 
section also prohibits provisions requiring the consumer--in 
the event the property is lost, stolen, damaged or destroyed--
to pay an amount in excess of the lesser of the fair market 
value, an early purchase option, or the actual cost of repair.
    This section also prohibits a rental-purchase agreement 
from containing provisions that authorize the merchant to enter 
the consumer's dwelling without their permission to repossess 
merchandise; require the consumer to purchase insurance or 
liability damage waiver; or require the consumer to pay more 
than one late fee or charge for an unpaid or delinquent 
periodic payment.

Section 1008. Statement of accounts

    This section requires a merchant to provide a consumer with 
a statement of his or her account upon request. It also permits 
the merchant to assess the consumer a reasonable fee if he or 
she requests a statement more than four times in a 12-month 
period.

Section 1009. Renegotiations and Extensions

    This section requires that new disclosures be made at the 
time a rental-purchase agreement is renegotiated, except when 
payments are reduced; one or more payments are deferred; the 
rental-purchase agreement is extended; the property is 
substituted with property of equal or greater value, provided 
the rental-purchase cost does not increase; the property is 
deleted from a multi-item agreement; the rental period is 
changed, but the rental-purchase cost does not increase; a 
court proceeding results in a new agreement; or any other event 
described in regulations prescribed by the Federal Reserve 
occurs.

Section 1010. Point-of-rental disclosures

    This section requires that for any items displayed or 
offered for rental-purchase, the merchant display on or next to 
the item a card, tag, or label that discloses the following: a 
brief description of the property; whether the property is new 
or used; the cash price of the property; the amount of each 
rental payment; the total number of rental payments required to 
obtain ownership of the property; and the rental-purchase cost. 
These disclosures are permitted to be made in the form of a 
list, catalog, or electronic facsimile of the card, tag, or 
label if the merchandise is not displayed in the showroom.

Section 1011. Rental-purchase advertising

    This section mandates that if an advertisement for a 
rental-purchase transaction refers to the amount of any payment 
for a specific item, the merchant clearly and conspicuously 
disclose the following: that the transaction advertised is a 
rental-purchase agreement; the amount, timing, and total number 
of payments necessary to obtain ownership of the property; the 
amount of the rental-purchase cost; that the customer must pay 
the rental-purchase cost plus applicable taxes in order to 
obtain ownership of the property; and whether the stated 
payment amount and advertised rental-purchase cost is for new 
or used property. The section prohibits a merchant from 
advertising items at amounts or terms that they do not 
regularly offer. The section also requires the Federal Reserve 
to prescribe regulations on principles and factors to meet the 
``clear and conspicuous'' standard for print, video, audio and 
computerized advertising.

Section 1012. Civil liability

    This section provides that if a merchant fails to comply 
with the requirements contained in the Act, the individual 
consumer is entitled to statutory damages equal to 25% of the 
sum of all fees, periodic payments, initial payment, and any 
other charges paid by the consumer since the date of 
consummation. It also provides that any action under Section 
1012 of the Act 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.

Section 1013. Additional grounds for civil liability

    This section provides that any merchant that fails to 
comply with the requirements imposed in Sections 1010 and 1011 
shall be liable to any consumer that suffers actual damages 
resulting from the violation. It also states that if a merchant 
engages in a pattern of violating requirements imposed in 
Sections 1010 and 1011, the Federal Trade Commission or State 
attorney general may initiate an action to enforce sanctions 
against the merchant, including an order to cease and desist 
and a civil money penalty.

Section 1014. Liability of assignees

    This section permits actions under Sections 1012 and 1013 
to be taken against assignees of the merchant if the violation 
was apparent on the face of the rental-purchase agreement, 
including incomplete or inaccurate disclosures.

Section 1015. Regulations

    This section directs the Federal Reserve to prescribe 
regulations as necessary to carry out the provisions included 
in the Act. Those regulations may contain additional 
requirements, classifications, and differentiations, as well as 
provide for such adjustments and exceptions as the Federal 
Reserve deems necessary to effectuate the purposes of the Act, 
to prevent its circumvention or evasion, or to facilitate 
compliance with the Act. This section also permits the Federal 
Reserve to publish model disclosure forms and clauses for 
rental-purchase agreements in order to facilitate compliance 
with the disclosure requirements of the Act and to aid the 
consumer in understanding the transaction. The section states 
that any regulation prescribed by the Federal Reserve shall not 
be effective before the October 1 that follows the date of 
publication of the final regulation by at least 6 months.

Section 1016. Enforcement

    This section grants enforcement authority under the Act to 
the Federal Trade Commission. This section also permits state 
attorneys general to bring actions to enforce the Act in any 
U.S. district court, as long as they provide prior written 
notice to the Federal Trade Commission. The Federal Trade 
Commission may intervene in the action, remove it to an 
appropriate U.S. district court, be heard on all matters 
arising in the action, and file a petition for appeal.

Section 1017. Criminal liability for willful and knowing violation

    This section provides that merchants who willfully and 
knowingly give false information or fail to provide disclosures 
required by the Act or subsequent regulations are subject to 
the penalty provisions of Section 112 of the Consumer Credit 
Protection Act, which requires those individuals to be fined 
not more than $5,000 or imprisoned not more than one year, or 
both.

Section 1018. Relation to other laws

    This section clarifies that the Act does not annul, alter, 
or affect any state laws relating to rental-purchase 
agreements, except when those state laws are inconsistent with 
this bill, and then only to the extent of the inconsistency, as 
determined by the Federal Reserve. If the Federal Reserve 
determines that a provision of a state law is inconsistent, 
then merchants in that state are not required to follow that 
provision of the state law, and will not incur any liability 
under the state law. This section provides that a state law 
should not be considered inconsistent if the term or provision 
affords greater protection and benefit to the consumer, as 
determined by the Federal Reserve.
    This section provides that the Act shall supersede any 
state law that (1) regulates a rental-purchase transaction as a 
security interest, credit sale, retail installment sale, 
conditional sale, or any other form of consumer 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. It clarifies that no 
provision of the Act shall be construed as limiting or 
superseding the applicability of the Federal Trade Commission 
Act to any merchant or rental-purchase transaction.

Section 1019. Effect on government agencies

    This section provides that no civil liability or criminal 
penalty under the Act may be imposed on any federal or state 
government entities.

Section 1020. Compliance date

    This section requires compliance with the Act six months 
after its enactment.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

CONSUMER CREDIT PROTECTION ACT

           *       *       *       *       *       *       *



                 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'' shall not be construed to be, nor 
                governed by laws regulating any of the 
                following:
                          (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).
                          (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 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 clearly and conspicuously 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 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.
          (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 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 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 rental period.
          (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, 
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 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) 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;
          (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 1006, or by 
        exercise of any early purchase option provided in the 
        rental-purchase agreement;
          (5) 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
          (6) 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)(3) shall 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.

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 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 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; 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 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, 
        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. 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, and 
for purposes of this title, the term ``total amount of monthly 
payments under the lease'' as used in section 130 shall mean 
the sum of all fees, periodic payments, initial payment, and 
any other charges paid by the consumer since the date of 
consummation.
  (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. Such 
regulations 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 Board are 
necessary or proper to effectuate the purposes of this title, 
to prevent circumvention or evasion thereof, or to facilitate 
compliance therewith.
  (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.

                             MINORITY VIEWS

                      Minority Views on H.R. 1588

    We believe that state consumer protection laws should be 
preserved. We object to the defeat of two amendments that would 
have specifically protected the laws of four states--New 
Jersey, Minnesota, Wisconsin and Vermont. We do not believe in 
preempting these state laws when no economic argument has even 
been presented that one national approach to this law is 
required. Rent to own transactions can be performed according 
to the rules of the state with no impact on any other state.

                                   Barney Frank.
                                   Melvin L. Watt.
                                   Michael E. Capuano.
                                   Andre Carson.
                                   Gwen Moore.
                                   Carolyn B. Maloney.
                                   Maxine Waters.
                                   Stephen F. Lynch.
                                   Keith Ellison.