[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 881 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 881

   To amend the Consumer Credit Protection Act to assure meaningful 
   disclosures of the terms of rental-purchase agreements, including 
disclosures of all costs to consumers under such agreements, to provide 
certain substantive rights to consumers under such agreements, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 4, 2011

 Ms. Landrieu (for herself, Mr. Wicker, and Mr. Blunt) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To amend the Consumer Credit Protection Act to assure meaningful 
   disclosures of the terms of rental-purchase agreements, including 
disclosures of all costs to consumers under such agreements, to provide 
certain substantive rights to consumers under such agreements, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Rental-Purchase Agreement 
Act of 2011''.

SEC. 2. FINDINGS AND DECLARATION OF PURPOSES.

    (a) Findings.--Congress finds that--
            (1) the rental-purchase industry provides a service that 
        meets and satisfies the demands of many consumers;
            (2) each year, approximately 2,300,000 United States 
        households enter into rental-purchase transactions, and over a 
        5-year period, approximately 4,900,000 United States households 
        will do so;
            (3) competition among the various firms engaged in the 
        extension of rental-purchase transactions would be strengthened 
        by informed use of rental-purchase transactions; and
            (4) the informed use of rental-purchase transactions 
        results from an awareness of the cost thereof by consumers.
    (b) Purposes.--The purposes of this Act are to assure the 
availability of rental-purchase transactions, to assure simple, 
meaningful, and consistent disclosure of rental-purchase terms so that 
consumers will be able to more readily compare the available rental-
purchase terms and avoid uninformed use of rental-purchase 
transactions, and to protect consumers against unfair rental-purchase 
practices.

SEC. 3. CONSUMER CREDIT PROTECTION ACT.

    The Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) is 
amended by adding at the end the following new title:

                ``TITLE X--RENTAL-PURCHASE TRANSACTIONS

``Sec. 1001. Short title; definitions.
``Sec. 1002. Exempted transactions.
``Sec. 1003. General disclosure requirements.
``Sec. 1004. Rental-purchase disclosures.
``Sec. 1005. Other agreement provisions.
``Sec. 1006. Right to acquire ownership.
``Sec. 1007. Prohibited provisions.
``Sec. 1008. Statement of accounts.
``Sec. 1009. Renegotiations and extensions.
``Sec. 1010. Point-of-rental disclosures.
``Sec. 1011. Rental-purchase advertising.
``Sec. 1012. Civil liability.
``Sec. 1013. Additional grounds for civil liability.
``Sec. 1014. Liability of assignees.
``Sec. 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. SHORT TITLE; DEFINITIONS.

    ``(a) Short Title.--This title may be cited as the `Rental-Purchase 
Protections Act'.
    ``(b) Definitions.--For purposes of this title, the following 
definitions shall apply:
            ``(1) Advertisement.--The term `advertisement' means a 
        commercial message in any medium that promotes, directly or 
        indirectly, a rental-purchase agreement, but does not include 
        price tags, window signs, or other in-store merchandising aids.
            ``(2) Agricultural purpose.--The term `agricultural 
        purpose' includes--
                    ``(A) the production, harvest, exhibition, 
                marketing, transformation, processing, or manufacture 
                of agricultural products by a natural person who 
                cultivates plants or propagates or nurtures 
                agricultural products; and
                    ``(B) the acquisition of farmlands, real property 
                with a farm residence, or personal property and 
                services used primarily in farming.
            ``(3) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.
            ``(4) Cash price.--The term `cash price' means the price at 
        which a merchant, in the ordinary course of business, offers to 
        sell for cash the property that is the subject of the rental-
        purchase transaction.
            ``(5) Consumer.--The term `consumer' means a natural person 
        who is offered or enters into a rental-purchase agreement.
            ``(6) Date of consummation.--The term `date of 
        consummation' means the date on which a consumer becomes 
        contractually obligated under a rental-purchase agreement.
            ``(7) Initial payment.--The term `initial payment' means 
        the amount to be paid before or at the time of consummation of 
        the agreement, or the time of delivery of the property covered 
        by the agreement if delivery occurs after consummation, 
        including--
                    ``(A) the rental payment;
                    ``(B) service, processing, or administrative 
                charges;
                    ``(C) any delivery fee;
                    ``(D) refundable security deposit;
                    ``(E) taxes;
                    ``(F) mandatory fees or charges; and
                    ``(G) any optional fees or charges agreed to by the 
                consumer.
            ``(8) Merchant.--The term `merchant' means a person who 
        provides the use of property through a rental-purchase 
        agreement in the ordinary course of business and to whom the 
        initial payment by the consumer under the agreement is payable.
            ``(9) Payment schedule.--The term `payment schedule' means 
        the amount and timing of the periodic payments and the total 
        number of all periodic payments that the consumer will make if 
        the consumer acquires ownership of the property by making all 
        periodic payments.
            ``(10) Periodic payment.--The term `periodic payment' means 
        the total payment that a consumer will make for a specific 
        rental period after the initial payment, including the rental 
        payment, taxes, mandatory fees or charges, and any optional 
        fees or charges agreed to by the consumer.
            ``(11) Property.--The term `property' means property that 
        is not real property under the laws of the State in which the 
        property is located when it is made available under a rental-
        purchase agreement.
            ``(12) Rental payment.--The term `rental payment' means 
        rent required to be paid by a consumer for the possession and 
        use of property for a specific rental period, but does not 
        include taxes or any fees or charges.
            ``(13) Rental period.--The term `rental period' means a 
        week, month, or other specific period of time, during which the 
        consumer has a right to possess and use property that is the 
        subject of a rental-purchase agreement after paying the rental 
        payment and any applicable taxes for such period.
            ``(14) Rental-purchase agreement.--
                    ``(A) In general.--The term `rental-purchase 
                agreement' means a contract in the form of a bailment 
                or lease for the use of property by a consumer for an 
                initial period of 4 months or less, that is renewable 
                with each payment by the consumer, and that permits but 
                does not obligate the consumer to become the owner of 
                the property.
                    ``(B) Exclusions.--The term `rental-purchase 
                agreement' does not include--
                            ``(i) a credit sale (as defined in section 
                        103(g) of the Truth in Lending Act);
                            ``(ii) a consumer lease (as defined in 
                        section 181(1) of the Truth in Lending Act); or
                            ``(iii) a transaction giving rise to a debt 
                        incurred in connection with the business of 
                        lending money or a thing of value.
            ``(15) Rental-purchase cost.--
                    ``(A) In general.--For purposes of sections 1010 
                and 1011, the term `rental-purchase cost' means the sum 
                of all rental payments and mandatory fees or charges 
                imposed by the merchant as a condition of entering into 
                a rental-purchase agreement or acquiring ownership of 
                property under a rental-purchase agreement, including--
                            ``(i) any service, processing, or 
                        administrative charge;
                            ``(ii) any fee for an investigation or 
                        credit report; and
                            ``(iii) any charge for delivery required by 
                        the merchant.
                    ``(B) Excluded items.--The following fees or 
                charges shall not be taken into account in determining 
                the rental-purchase cost with respect to a rental-
                purchase transaction:
                            ``(i) Fees and charges prescribed by law, 
                        which actually are or will be paid to public 
                        officials or government entities, such as sales 
                        tax.
                            ``(ii) Fees and charges for optional 
                        products and services offered in connection 
                        with a rental-purchase agreement.
            ``(16) State.--The term `State' means any State of the 
        United States, the District of Columbia, any territory of the 
        United States, Puerto Rico, Guam, American Samoa, the Trust 
        Territory of the Pacific Islands, the Virgin Islands, and the 
        Northern Mariana Islands.
            ``(17) Total cost.--The term `total cost' means the sum of 
        the initial payment and all periodic payments in the payment 
        schedule to be paid by the consumer to acquire ownership of the 
        property that is the subject of the rental-purchase agreement.

``SEC. 1002. EXEMPTED TRANSACTIONS.

    ``This title does not apply to rental-purchase agreements primarily 
for business, commercial, or agricultural purposes, or those made with 
agencies or instrumentalities of the Federal Government or a State or 
political subdivision thereof.

``SEC. 1003. GENERAL DISCLOSURE REQUIREMENTS.

    ``(a) Recipient of Disclosure.--A merchant shall disclose to any 
person who will be a signatory to a rental-purchase agreement the 
information required by sections 1004 and 1005.
    ``(b) Timing of Disclosure.--The disclosures required under 
sections 1004 and 1005 shall be made before the consummation of the 
rental-purchase agreement, and clearly and conspicuously in writing as 
part of the rental-purchase agreement to be signed by the consumer.
    ``(c) Clearly and Conspicuously.--As used in this section, the term 
`clearly and conspicuously' means that information required to be 
disclosed to the consumer shall be worded plainly and simply, and 
appear in a type size, prominence, and location as to be readily 
noticeable, readable, and comprehensible to an ordinary consumer.

``SEC. 1004. RENTAL-PURCHASE DISCLOSURES.

    ``(a) In General.--For each rental-purchase agreement, the merchant 
shall disclose to the consumer, to the extent applicable--
            ``(1) the date of consummation of the rental-purchase 
        transaction and the identities of the merchant and the 
        consumer;
            ``(2) a brief description of the rental property, which 
        shall be sufficient to identify the property to the consumer, 
        including an identification or serial number, if applicable, 
        and a statement indicating whether the property is new or used;
            ``(3) a description of any fee, charge, or penalty, in 
        addition to the periodic payment, that the consumer may be 
        required to pay under the agreement, which shall be separately 
        identified by type and amount;
            ``(4) a clear and conspicuous statement that the 
        transaction is a rental-purchase agreement and that the 
        consumer will not obtain ownership of the property until the 
        consumer has paid the total dollar amount necessary to acquire 
        ownership;
            ``(5) the amount of any initial payment, which includes the 
        first periodic payment, and the total amount of any fees, 
        taxes, or other charges, required to be paid by the consumer;
            ``(6) the amount of the cash price of the property that is 
        the subject of the rental-purchase agreement, and, if the 
        agreement involves the rental of 2 or more items as a set (as 
        may be defined by the Board in regulation) a statement of the 
        aggregate cash price of all items shall satisfy this 
        requirement;
            ``(7) the amount and timing of periodic payments, and the 
        total number of periodic payments necessary to acquire 
        ownership of the property under the rental-purchase agreement;
            ``(8) the total cost, using that term, and a brief 
        description, such as `This is the amount that you will pay the 
        merchant if you make all periodic payments to acquire ownership 
        of the property.';
            ``(9) a statement of the right of the consumer to terminate 
        the agreement without paying any fee or charge not previously 
        due under the agreement by voluntarily surrendering or 
        returning the property in good repair upon expiration of any 
        lease term; and
            ``(10) substantially the following statement: `other 
        important terms: See your rental-purchase agreement for 
        additional important information on early termination 
        procedures, purchase option rights, responsibilities for loss, 
        damage, or destruction of the property, warranties, maintenance 
        responsibilities, and other charges or penalties you may 
        incur.'.
    ``(b) Form of Disclosure.--The disclosures required by paragraphs 
(4) through (10) of subsection (a) shall--
            ``(1) be segregated from other information at the beginning 
        of the rental-purchase agreement;
            ``(2) contain only directly related information; and
            ``(3) be identified in boldface, upper-case letters as 
        follows: `important rental-purchase disclosures'.
    ``(c) Disclosure Requirements Relating to Insurance Premiums and 
Liability Waivers.--
            ``(1) In general.--A merchant shall clearly and 
        conspicuously disclose in writing to the consumer before the 
        consummation of a rental-purchase agreement that the purchase 
        of leased property insurance or liability waiver coverage is 
        not required as a condition for entering into the rental-
        purchase agreement.
            ``(2) Affirmative written request after cost disclosure.--A 
        merchant may provide insurance or liability waiver coverage, 
        directly or indirectly, in connection with a rental-purchase 
        transaction only if--
                    ``(A) the merchant clearly and conspicuously 
                discloses to the consumer the cost of each component of 
                such coverage before the consummation of the rental-
                purchase agreement; and
                    ``(B) the consumer signs an affirmative written 
                request for such coverage after receiving the 
                disclosures required under paragraph (1) and 
                subparagraph (A) of this paragraph.
    ``(d) Accuracy of Disclosure.--
            ``(1) In general.--The disclosures required to be made 
        under subsection (a) shall be accurate as of the date on which 
        the disclosures are made, based on the information available to 
        the merchant.
            ``(2) Information subsequently rendered inaccurate.--If 
        information required to be disclosed under subsection (a) is 
        subsequently rendered inaccurate as a result of any agreement 
        between the merchant and the consumer subsequent to the 
        delivery of the required disclosures, the resulting inaccuracy 
        shall not constitute a violation of this title.

``SEC. 1005. OTHER AGREEMENT PROVISIONS.

    ``(a) In General.--Each rental-purchase agreement shall--
            ``(1) provide a statement specifying whether the merchant 
        or the consumer is responsible for loss, theft, damage, or 
        destruction of the property;
            ``(2) provide a statement specifying whether the merchant 
        or the consumer is responsible for maintaining or servicing the 
        property, together with a brief description of the 
        responsibility;
            ``(3) provide that the consumer may terminate the agreement 
        without paying any charges not previously due under the 
        agreement by voluntarily surrendering or returning the property 
        that is the subject of the agreement upon expiration of any 
        rental period;
            ``(4) contain a provision for reinstatement of the 
        agreement, which at a minimum--
                    ``(A) permits a consumer who fails to make a timely 
                rental payment to reinstate the agreement, without 
                losing any rights or options which exist under the 
                agreement, by the payment of all past due rental 
                payments and any other charges then due under the 
                agreement and a payment for the next rental period 
                within 7 business days after failing to make a timely 
                rental payment if the consumer pays monthly, or within 
                3 business days after failing to make a timely rental 
                payment if the consumer pays more frequently than 
                monthly;
                    ``(B) if the consumer returns or voluntarily 
                surrenders the property covered by the agreement, other 
                than through judicial process, during the applicable 
                reinstatement period set forth in subparagraph (A), 
                permits the consumer to reinstate the agreement during 
                a period of at least 60 days after the date of the 
                return or surrender of the property by the payment of 
                all amounts previously due under the agreement, any 
                applicable fees, and a payment for the next rental 
                period;
                    ``(C) if the consumer has paid 50 percent or more 
                of the total cost necessary to acquire ownership and 
                returns or voluntarily surrenders the property, other 
                than through judicial process, during the applicable 
                reinstatement period set forth in subparagraph (A), 
                permits the consumer to reinstate the agreement during 
                a period of at least 120 days after the date of the 
                return of the property by the payment of all amounts 
                previously due under the agreement, any applicable 
                fees, and a payment for the next rental period; and
                    ``(D) permits the consumer, upon reinstatement of 
                the agreement, to receive the same property, if 
                available, that was the subject of the rental-purchase 
                agreement, or if the same property is not available, a 
                substitute item of comparable quality and condition, 
                except that the Board may, by regulation or order, 
                exempt any independent small business (as defined by 
                regulation of the Board) from the requirement of 
                providing the same or comparable product during the 
                extended reinstatement period provided in subparagraph 
                (C), if the Board determines, taking into account such 
                standards as the Board determines appropriate, that the 
                reinstatement right provided in subparagraph (C) would 
                provide excessive hardship for the independent small 
                business;
            ``(5) provide a statement specifying the terms under which 
        the consumer shall acquire ownership of the property that is 
        the subject of the rental-purchase agreement either by payment 
        of the total cost to acquire ownership, as provided in section 
        1006, or by exercise of any early purchase option provided in 
        the rental-purchase agreement;
            ``(6) provide a statement disclosing that if any part of a 
        manufacturer's express warranty covers the property at the time 
        the consumer acquires ownership of the property, the warranty 
        will be transferred to the consumer if allowed by the terms of 
        the warranty; and
            ``(7) provide, to the extent applicable, a description of 
        any grace period for making any periodic payment, the amount of 
        any security deposit, if any, to be paid by the consumer upon 
        initiation of the rental-purchase agreement, and the terms for 
        refund of such security deposit to the consumer upon return, 
        surrender or purchase of the property.
    ``(b) Repossession During Reinstatement Period.--Subsection (a)(4) 
shall not be construed so as to prevent a merchant from attempting to 
repossess property during the reinstatement period pursuant to 
subsection (a)(4)(A), but such a repossession does not affect the right 
of the consumer to reinstatement under subsection (a)(4).

``SEC. 1006. RIGHT TO ACQUIRE OWNERSHIP.

    ``(a) In General.--The consumer shall acquire ownership of the 
property that is the subject of the rental-purchase agreement, and the 
rental-purchase agreement shall terminate, upon compliance by the 
consumer with the requirements of subsection (b) or any early payment 
option provided in the rental purchase agreement, and upon payment of 
any past due payments and fees, as permitted by regulation of the 
Board.
    ``(b) Payment of Total Cost.--The consumer shall acquire ownership 
of the rental property upon payment of the total cost of the rental-
purchase agreement, as defined in section 1001(17), and as disclosed to 
the consumer in the rental-purchase agreement pursuant to section 
1004(a).
    ``(c) Additional Fees Prohibited.--A merchant shall not require the 
consumer to pay, as a condition for acquiring ownership of the property 
that is the subject of the rental-purchase agreement, any fee or charge 
in addition to, or in excess of, the regular periodic payments required 
by subsection (b), or any early purchase option amount provided in the 
rental-purchase agreement, as applicable. A requirement that the 
consumer pay an unpaid late charge or other fee or charge which the 
merchant has previously billed to the consumer shall not constitute an 
additional fee or charge for purposes of this subsection.
    ``(d) Transfer of Ownership Rights.--Upon payment by the consumer 
of all payments necessary to acquire ownership under subsection (b) or 
any early purchase option amount provided in the rental-purchase 
agreement, as applicable, the merchant shall--
            ``(1) deliver, or mail to the last known address of the 
        consumer, such documents or other instruments which the Board 
        has determined, by regulation, are necessary to acknowledge 
        full ownership by the consumer of the property acquired 
        pursuant to the rental-purchase agreement; and
            ``(2) transfer to the consumer the unexpired portion of any 
        warranties provided by the manufacturer, distributor, or seller 
        of the property, which shall apply as if the consumer were the 
        original purchaser of the property, except where such transfer 
        is prohibited by the terms of the warranty.

``SEC. 1007. PROHIBITED PROVISIONS.

    ``A rental-purchase agreement may not contain--
            ``(1) a confession of judgment;
            ``(2) a negotiable instrument;
            ``(3) a security interest or any other claim of a property 
        interest in any goods, except those goods, the use of which is 
        provided by the merchant pursuant to the agreement;
            ``(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 that 
        the property subject to the rental-purchase agreement is lost, 
        stolen, damaged, or destroyed, to pay an amount in excess of 
        the least of--
                    ``(A) the fair market value of the property, as 
                determined by regulation of the Board;
                    ``(B) any early purchase option amount provided in 
                the rental-purchase agreement; or
                    ``(C) the actual cost of repair, as appropriate;
            ``(7) a provision authorizing the merchant, or a person 
        acting on behalf of the merchant, to enter the dwelling of the 
        consumer or other premises without obtaining the consent of the 
        consumer, or to commit any breach of the peace in connection 
        with the repossession of the rental property or the collection 
        of any obligation or alleged obligation of the consumer arising 
        out of the rental-purchase agreement;
            ``(8) a provision requiring the purchase of insurance or 
        liability damage waiver to cover the property that is the 
        subject of the rental-purchase agreement, except as permitted 
        by regulation of the Board; or
            ``(9) a provision requiring the consumer to pay more than 1 
        late fee or charge for an unpaid or delinquent periodic 
        payment, regardless of the period in which the payment remains 
        unpaid or delinquent, or to pay a late fee or charge for any 
        periodic payment because a previously assessed late fee has not 
        been paid in full.

``SEC. 1008. STATEMENT OF ACCOUNTS.

    ``Upon request of a consumer, a merchant shall provide a statement 
of the account of the consumer. If a consumer requests a statement for 
an individual account more than 4 times in any 12-month period, the 
merchant may charge a reasonable fee for the additional statements 
requested in excess of 4 times during that 12-month period.

``SEC. 1009. RENEGOTIATIONS AND EXTENSIONS.

    ``(a) Renegotiations.--For purposes of this section, a 
`renegotiation' occurs when a rental-purchase agreement is satisfied 
and replaced by a new agreement undertaken by the same consumer. A 
renegotiation requires new disclosures under this title, except as 
provided in subsection (c).
    ``(b) Extensions.--For purposes of this section, an `extension' is 
an agreement by the consumer and the merchant to continue an existing 
rental-purchase agreement beyond the original end of the payment 
schedule, but does not include a continuation that is the result of a 
renegotiation.
    ``(c) Exceptions.--New disclosures under this title are not 
required for the following, even if they meet the definition of a 
renegotiation or an extension under this section:
            ``(1) A reduction in payments.
            ``(2) A deferment of 1 or more payments.
            ``(3) The extension of a rental-purchase agreement.
            ``(4) The substitution of property with property that has a 
        substantially equivalent or greater economic value, provided 
        that the rental-purchase cost does not increase.
            ``(5) The deletion of property in a multiple-item 
        agreement.
            ``(6) A change in the rental period, provided that the 
        rental-purchase cost does not increase.
            ``(7) An agreement resulting from a court proceeding.
            ``(8) Any other event described in regulations prescribed 
        by the Board.

``SEC. 1010. POINT-OF-RENTAL DISCLOSURES.

    ``(a) In General.--For any item of property or set of items 
displayed or offered for rental-purchase, the merchant shall display on 
or next to the item or set of items a card, tag, or label that clearly 
and conspicuously discloses--
            ``(1) a brief description of the property;
            ``(2) whether the property is new or used;
            ``(3) the cash price of the property;
            ``(4) the amount of each rental payment;
            ``(5) the total number of rental payments necessary to 
        acquire ownership of the property; and
            ``(6) the rental-purchase cost.
    ``(b) Form of Disclosure.--
            ``(1) In general.--A merchant may make the disclosures 
        required by subsection (a) in the form of a list or catalog 
        which is readily available to the consumer at the point of 
        rental if the merchandise is not displayed in the showroom of 
        the merchant, or if displaying a card, tag, or label would be 
        impractical due to the size of the merchandise.
            ``(2) Clearly and conspicuously.--As used in this section, 
        the term `clearly and conspicuously' means that information 
        required to be disclosed to the consumer shall appear in a type 
        size, prominence, and location as to be noticeable, readable, 
        and comprehensible to an ordinary consumer.

``SEC. 1011. RENTAL-PURCHASE ADVERTISING.

    ``(a) In General.--If an advertisement for a rental-purchase 
transaction refers to or states the amount of any payment for any 
specific item or set of items, the merchant making the advertisement 
shall also clearly and conspicuously state in the advertisement for the 
item or set of items advertised--
            ``(1) that the transaction advertised is a rental-purchase 
        agreement;
            ``(2) the amount, timing, and total number of rental 
        payments necessary to acquire ownership under the rental-
        purchase agreement;
            ``(3) the amount of the rental-purchase cost;
            ``(4) that to acquire ownership of the property, the 
        consumer must pay the rental-purchase cost plus applicable 
        taxes; and
            ``(5) whether the stated payment amount and advertised 
        rental-purchase cost is for new or used property.
    ``(b) Prohibition.--An advertisement for a rental-purchase 
agreement shall not state or imply that a specific item or set of items 
is available at specific amounts or terms, unless the merchant usually 
and customarily offers, or will offer, the item or set of items at the 
stated amounts or terms.
    ``(c) Clearly and Conspicuously.--
            ``(1) In general.--For purposes of this section, the term 
        `clearly and conspicuously' means that required disclosures 
        shall be presented in a type, size, shade, contrast, 
        prominence, location, and manner, as applicable to different 
        media for advertising, so as to be readily noticeable and 
        comprehensible to the ordinary consumer.
            ``(2) Regulatory guidance.--The Board shall prescribe 
        regulations on principles and factors to meet the clear and 
        conspicuous standard, as appropriate to print, video, audio, 
        and computerized advertising, reflecting the principles and 
        factors typically applied in each medium by the Federal Trade 
        Commission.
            ``(3) Limitation.--Nothing contrary to, inconsistent with, 
        or in mitigation of, the disclosures required by this section 
        shall be used in any advertisement in any medium, and no audio, 
        video, or print technique shall be used that is likely to 
        obscure or detract significantly from the communication of the 
        required disclosures.

``SEC. 1012. CIVIL LIABILITY.

    ``(a) In General.--Except as otherwise provided in section 1013, 
any merchant who fails to comply with any requirement of this title 
with respect to any consumer is liable to such consumer as provided for 
leases in section 130. For purposes of this section, the term 
`creditor' as used in section 130 shall include a `merchant', as 
defined in section 1001.
    ``(b) Jurisdiction of Courts; Limitation on Actions.--
            ``(1) In general.--Notwithstanding section 130(e), any 
        action under this section may be brought in any United States 
        district court, or in any other court of competent 
        jurisdiction, before the end of the 1-year period beginning on 
        the date on which the last payment was made by the consumer 
        under the rental-purchase agreement.
            ``(2) Recoupment or set-off.--This subsection shall not bar 
        a consumer from asserting a violation of this title in an 
        action to collect an obligation arising from a rental-purchase 
        agreement, which was brought after the end of the 1-year period 
        described in paragraph (1) as a matter of defense by recoupment 
        or set-off in such action, except as otherwise provided by 
        State law.

``SEC. 1013. ADDITIONAL GROUNDS FOR CIVIL LIABILITY.

    ``(a) Individual Cases With Actual Damages.--Any merchant who fails 
to comply with any requirement imposed under section 1010 or 1011 with 
respect to any consumer who suffers actual damage from the violation 
shall be liable to such consumer as provided in section 130.
    ``(b) Pattern or Practice of Violations.--If a merchant engages in 
a pattern or practice of violating any requirement imposed under 
section 1010 or 1011, the Federal Trade Commission or an appropriate 
State attorney general, in accordance with section 1016, may initiate 
an action to enforce sanctions against the merchant, including--
            ``(1) an order to cease and desist from such practices; and
            ``(2) a civil money penalty of such amount as the court may 
        impose, based on such factors as the court may determine to be 
        appropriate.

``SEC. 1014. LIABILITY OF ASSIGNEES.

    ``(a) Assignees Included.--For purposes of section 1013 and this 
section, the term `merchant' includes an assignee of a merchant.
    ``(b) Liabilities of Assignees.--
            ``(1) Apparent violation.--An action under section 1012 or 
        1013 for a violation of this title may be brought against an 
        assignee only if the violation is apparent on the face of the 
        rental-purchase agreement to which it relates.
            ``(2) Apparent violation defined.--For purposes of this 
        subsection, a violation that is apparent on the face of a 
        rental-purchase agreement includes, but is not limited to, a 
        disclosure that can be determined to be incomplete or 
        inaccurate from the face of the agreement.
            ``(3) Involuntary assignment.--An assignee has no liability 
        under this section in a case in which the assignment is 
        involuntary.
            ``(4) Rule of construction.--No provision of this section 
        shall be construed as limiting or altering the liability under 
        section 1012 or 1013 of a merchant assigning a rental-purchase 
        agreement.
    ``(c) Proof of Disclosure.--In an action by or against an assignee, 
the consumer's written acknowledgment of receipt of a disclosure, made 
as part of the rental-purchase agreement, shall be conclusive proof 
that the disclosure was made, if the assignee had no knowledge that the 
disclosure had not been made when the assignee acquired the rental-
purchase agreement to which it relates.

``SEC. 1015. REGULATIONS.

    ``(a) In General.--The Board shall prescribe regulations, as 
necessary to carry out this title, to prevent its circumvention, and to 
facilitate compliance with its requirements.
    ``(b) Model Disclosure Forms.--
            ``(1) Board authority.--The Board may publish model 
        disclosure forms and clauses for common rental-purchase 
        agreements to facilitate compliance with the disclosure 
        requirements of this title and to aid the consumer in 
        understanding the transaction by utilizing readily 
        understandable language to simplify the technical nature of the 
        disclosures.
            ``(2) Content.--In devising forms described in paragraph 
        (1), the Board shall consider the use by merchants of data 
        processing or similar automated equipment.
            ``(3) Use not mandatory.--Nothing in this title may be 
        construed to require a merchant to use any model form or clause 
        published by the Board under this section.
            ``(4) Determination of compliance.--A merchant shall be 
        deemed to be in compliance with the requirement to provide 
        disclosure under section 1003(a) if the merchant--
                    ``(A) uses any appropriate model form or clause 
                published by the Board under this section; or
                    ``(B) uses any such model form or clause, and 
                changes it by deleting any information which is not 
                required by this title or rearranging the format, if in 
                making such deletion or rearranging the format, the 
                merchant does not affect the substance, clarity, or 
                meaningful sequence of the disclosure.
    ``(c) Effective Date of Regulations.--
            ``(1) In general.--Any regulation prescribed by the Board, 
        or any amendment or interpretation thereof, shall not be 
        effective before the October 1 that follows the date of 
        publication of the regulation in final form by at least 6 
        months.
            ``(2) Authority to modify.--The Board may, at its 
        discretion--
                    ``(A) lengthen the period of time described in 
                paragraph (1) to permit merchants to adjust to 
                accommodate new requirements; or
                    ``(B) shorten that period of time, if the Board 
                makes a specific finding that such action is necessary 
                to comply with the findings of a court or to prevent 
                unfair or deceptive practices.
            ``(3) Voluntary compliance.--Notwithstanding paragraph (1) 
        or (2), a merchant may comply with any newly prescribed 
        disclosure requirement prior to its effective date.

``SEC. 1016. ENFORCEMENT.

    ``(a) Federal Enforcement.--Compliance with this title shall be 
enforced under the Federal Trade Commission Act (15 U.S.C. 41 et seq.), 
and a violation of any requirement imposed under this title shall be 
deemed a violation of a requirement imposed under that Act. All of the 
functions and powers of the Federal Trade Commission under the Federal 
Trade Commission Act are available to the Commission to enforce 
compliance by any person with the requirements of this title, 
irrespective of whether that person is engaged in commerce or meets any 
other jurisdictional test under the Federal Trade Commission Act.
    ``(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 civil action 
                described in paragraph (1) to the Federal Trade 
                Commission, and shall provide the Commission with a 
                copy of the complaint.
                    ``(B) Emergency action.--If prior notice required 
                by this paragraph is not feasible, the State attorney 
                general shall provide notice to the Commission 
                immediately upon instituting the action.
            ``(3) FTC intervention.--The Commission may--
                    ``(A) intervene in an action described in paragraph 
                (1);
                    ``(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 that person is 
required to disclose under the provisions of this title or any 
regulation issued under this title shall be subject to the penalty 
provisions as provided in section 112.

``SEC. 1018. RELATION TO OTHER LAWS.

    ``(a) Relation to State Law.--
            ``(1) No effect on consistent state laws.--Except as 
        otherwise provided in subsection (b), this title does not 
        annul, alter, or affect in any manner the meaning, scope, or 
        applicability of the laws of any State relating to rental-
        purchase agreements, except to the extent that those laws are 
        inconsistent with any provision of this title, and then only to 
        the extent of the inconsistency.
            ``(2) Determination of inconsistency.--Upon its own motion 
        or upon the request of an interested party, which is submitted 
        in accordance with procedures prescribed by regulation of the 
        Board, the Board shall determine whether any such inconsistency 
        exists. If the Board determines that a term or provision of a 
        State law is inconsistent with a provision of this title, 
        merchants located in that State shall not be required to comply 
        with that term or provision, and shall incur no liability under 
        the law of that State for failure to follow such term or 
        provision, notwithstanding that such determination is 
        subsequently amended, rescinded, or determined by judicial or 
        other authority to be invalid for any reason.
            ``(3) Greater protection under state law.--Except as 
        provided in subsection (b), for purposes of this section, a 
        term or provision of a State law is not inconsistent with the 
        provisions of this title if the term or provision affords 
        greater protection and benefit to the consumer than the 
        protection and benefit provided under this title, as determined 
        by the Board, on its own motion or upon the petition of any 
        interested party.
    ``(b) State Laws Relating to Characterization of Transaction.--
Notwithstanding subsection (a), this title shall supersede any State 
law, to the extent that such law--
            ``(1) regulates a rental-purchase agreement as a security 
        interest, credit sale, retail installment sale, conditional 
        sale, or any other form of consumer credit, or that imputes to 
        a rental-purchase agreement the creation of a debt or extension 
        of credit; or
            ``(2) requires the disclosure of a percentage rate 
        calculation, including a time-price differential, an annual 
        percentage rate, or an effective annual percentage rate.
    ``(c) Relation to Federal Trade Commission Act.--No provision of 
this title shall be construed as limiting, superseding, or otherwise 
affecting the applicability of the Federal Trade Commission Act to any 
merchant or rental-purchase transaction.

``SEC. 1019. EFFECT ON GOVERNMENT AGENCIES.

    ``No civil liability or criminal penalty under this title may be 
imposed on the United States or any of its departments or agencies, any 
State or political subdivision thereof, or any agency of a State or 
political subdivision thereof.

``SEC. 1020. COMPLIANCE DATE.

    ``Compliance with this title shall not be required until 6 months 
after the date of enactment of this title. In any case, a merchant may 
comply with this title at any time after such date of enactment.''.
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