[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1208 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1208

   To require meaningful disclosures of the terms of rental-purchase 
agreements, including disclosures of all costs to consumers under such 
 agreements, to provide certain substantive rights to consumers under 
                such agreements, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 20, 2013

 Mr. Tester (for himself and Mr. Moran) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To require meaningful disclosures of the terms of rental-purchase 
agreements, including disclosures of all costs to consumers under such 
 agreements, to provide certain substantive rights to consumers under 
                such agreements, and for other purposes.

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

SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS AND DECLARATION OF PURPOSE.

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

SEC. 3. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Advertisement.--The term ``advertisement'' means--
                    (A) a commercial message in any medium that 
                promotes, directly or indirectly, a rental-purchase 
                agreement; and
                    (B) does not include any price tag, window sign, or 
                other in-store merchandising aid.
            (2) Agricultural purpose.--The term ``agricultural 
        purpose'' includes--
                    (A) the production, harvest, exhibition, marketing, 
                transformation, processing, or manufacture of 
                agricultural products by a natural person who 
                cultivates plants or propagates or nurtures 
                agricultural products; and
                    (B) the acquisition of farmlands, real property 
                with a farm residence, or personal property and 
                services used primarily in farming.
            (3) Cash price.--The term ``cash price'' means the price at 
        which a merchant, in the ordinary course of business, offers to 
        sell for cash the property that is the subject of the rental-
        purchase transaction.
            (4) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (5) Consumer.--The term ``consumer'' means a natural person 
        who is offered or enters into a rental-purchase agreement.
            (6) Date of consummation.--The term ``date of 
        consummation'' means the date on which a consumer becomes 
        contractually obligated under a rental-purchase agreement.
            (7) Initial payment.--The term ``initial payment'' means 
        the amount to be paid before or at the consummation of the 
        agreement, or the delivery of the property, if delivery occurs 
        after consummation, including--
                    (A) the rental payment;
                    (B) service, processing, or administrative charges;
                    (C) any delivery fee;
                    (D) any refundable security deposit;
                    (E) taxes;
                    (F) mandatory fees or charges; and
                    (G) any optional fees or charges agreed to by the 
                consumer.
            (8) Merchant.--The term ``merchant'' means a person who 
        provides the use of property through a rental-purchase 
        agreement in the ordinary course of business and to whom an 
        initial payment by the consumer under the agreement is payable.
            (9) Payment schedule.--The term ``payment schedule'' means 
        the amount and timing of the periodic payments and the total 
        number of all periodic payments that the consumer will make if 
        the consumer acquires ownership of the property by making all 
        periodic payments.
            (10) Periodic payment.--The term ``periodic payment'' means 
        the total payment that a consumer will make for a specific 
        rental period after the initial payment, including the rental 
        payment, taxes, mandatory fees or charges, and any optional 
        fees or charges agreed to by the consumer.
            (11) Property.--The term ``property'' means property that 
        is not real property under the laws of the State in which the 
        property is located when it is made available under a rental-
        purchase agreement.
            (12) Rental payment.--The term ``rental payment'' means 
        rent required to be paid by a consumer for the possession and 
        use of property for a specific rental period, but does not 
        include taxes or any fees or charges.
            (13) Rental period.--The term ``rental period'' means a 
        week, month, or other specific period of time, during which the 
        consumer has a right to possess and use property that is the 
        subject of a rental-purchase agreement after paying the rental 
        payment and any applicable taxes for such period.
            (14) Rental-purchase agreement.--
                    (A) In general.--The term ``rental-purchase 
                agreement'' means a contract in the form of a bailment 
                or lease for the use of property by a consumer for an 
                initial period of 4 months or less, that is renewable 
                with each payment by the consumer, and that permits but 
                does not obligate the consumer to become the owner of 
                the property.
                    (B) Exclusions.--The term ``rental-purchase 
                agreement'' shall not be construed to be, nor be 
                governed by laws regulating, any of the following:
                            (i) A credit sale (as defined in section 
                        103(g) of the Truth in Lending Act (15 U.S.C. 
                        1602(g))).
                            (ii) A consumer lease (as defined in 
                        section 181(1) of the Truth in Lending Act (15 
                        U.S.C. 1667(1))).
                            (iii) An extension of credit or a 
                        transaction giving rise to a debt incurred in 
                        connection with the purchase of a thing of 
                        value.
            (15) Rental-purchase cost.--
                    (A) In general.--For purposes of sections 1010 and 
                1011, the term ``rental-purchase cost'' means the sum 
                of all rental payments and mandatory fees or charges 
                imposed by the merchant as a condition of entering into 
                a rental-purchase agreement or acquiring ownership of 
                property under a rental-purchase agreement, such as--
                            (i) a service, processing, or 
                        administrative charge;
                            (ii) a fee for an investigation or credit 
                        report; or
                            (iii) a charge for delivery required by the 
                        merchant.
                    (B) Excluded items.--The following fees or charges 
                shall not be taken into account in determining the 
                rental-purchase cost with respect to a rental-purchase 
                transaction:
                            (i) Fees and charges prescribed by law, 
                        which actually are or will be paid to public 
                        officials or government entities, such as sales 
                        tax.
                            (ii) Fees and charges for optional products 
                        and services offered in connection with a 
                        rental-purchase agreement.
            (16) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, any territory of the 
        United States, Puerto Rico, Guam, American Samoa, the Trust 
        Territory of the Pacific Islands, the Virgin Islands, and the 
        Northern Mariana Islands.
            (17) Total cost.--The term ``total cost'' means the sum of 
        the initial payment and all periodic payments in the payment 
        schedule to be paid by the consumer to acquire ownership of the 
        property that is the subject of a rental-purchase agreement.

SEC. 4. EXEMPTED TRANSACTIONS.

    This Act shall not apply to rental-purchase agreements primarily 
for business, commercial, or agricultural purposes, or those made with 
Government agencies or instrumentalities.

SEC. 5. GENERAL DISCLOSURE REQUIREMENTS.

    (a) Recipient of Disclosure.--A merchant shall disclose to any 
person who will be a signatory to a rental-purchase agreement the 
information required by sections 6 and 7.
    (b) Timing of Disclosure.--The disclosures required under sections 
6 and 7 shall be made--
            (1) before the consummation of the rental-purchase 
        agreement; and
            (2) clearly and conspicuously, in writing, as part of the 
        rental-purchase agreement to be signed by the consumer.
    (c) Clearly and Conspicuously.--As used in this section, the term 
``clearly and conspicuously'' means that information required to be 
disclosed to the consumer shall be worded plainly and simply, and 
appear in a type size, prominence, and location as to be readily 
noticeable, readable, and comprehensible to an ordinary consumer.

SEC. 6. RENTAL-PURCHASE DISCLOSURES.

    (a) In General.--For each rental-purchase agreement, the merchant 
shall clearly and conspicuously disclose to the consumer, to the extent 
applicable--
            (1) the date of the consummation of the rental-purchase 
        transaction and the identities of the merchant and the 
        consumer;
            (2) a brief description of the rental property, which shall 
        be sufficient to identify the property to the consumer, 
        including an identification or serial number, if applicable, 
        and a statement indicating whether the property is new or used 
        at the time of the agreement;
            (3) a description of any fee, charge, or penalty, in 
        addition to the periodic payment, that the consumer may be 
        required to pay under the agreement, which shall be separately 
        identified by type and amount;
            (4) a statement that--
                    (A) the transaction is a rental-purchase agreement; 
                and
                    (B) the consumer will not obtain ownership of the 
                property until the consumer has paid the total dollar 
                amount necessary to acquire ownership;
            (5) the amount of any initial payment;
            (6) the amount of the cash price of the property that is 
        the subject of the rental-purchase agreement, and, if the 
        agreement involves the rental of 2 or more items as a set (as 
        may be defined by the Commission, by regulation) a statement of 
        the aggregate cash price of all items shall satisfy this 
        requirement;
            (7) the payment schedule;
            (8) the total cost, using that term, and a brief 
        description, such as ``This is the amount you will pay the 
        merchant if you make all periodic payments to acquire ownership 
        of the property.'';
            (9) a statement of the right of the consumer to terminate 
        the agreement without paying any fee or charge not previously 
        due under the agreement, by voluntarily surrendering or 
        returning the property in good repair upon expiration of any 
        rental period;
            (10) a description of the reinstatement periods of 
        terminated rental-purchase agreements; and
            (11) substantially the following statement: ``other 
        important terms: See your rental-purchase agreement for 
        additional important information on early termination 
        procedures, purchase option rights, responsibilities for loss, 
        damage, or destruction of the property, warranties, maintenance 
        responsibilities, and other charges or penalties you may 
        incur.''.
    (b) Form of Disclosure.--The disclosures required by paragraphs (4) 
through (12) of subsection (a)--
            (1) shall be segregated from other information at the 
        beginning of the rental-purchase agreement;
            (2) shall contain only directly related information; and
            (3) shall be identified in boldface, upper-case letters as 
        follows: ``important rental-purchase disclosures''.
    (c) Disclosure Requirements Relating to Insurance Premiums and 
Liability Waivers.--
            (1) In general.--The merchant shall clearly and 
        conspicuously disclose in writing to the consumer before the 
        consummation of a rental-purchase agreement that the purchase 
        of leased property insurance or liability waiver coverage is 
        not required as a condition for entering into the rental-
        purchase agreement.
            (2) Affirmative written request after cost disclosure.--A 
        merchant may provide insurance or liability waiver coverage, 
        directly or indirectly, in connection with a rental-purchase 
        transaction only if--
                    (A) the merchant clearly and conspicuously 
                discloses to the consumer the cost of such coverage 
                before the consummation of the rental-purchase 
                agreement; and
                    (B) the consumer signs an affirmative written 
                request for such coverage after receiving the 
                disclosures required under paragraph (1) and 
                subparagraph (A) of this paragraph.
    (d) Accuracy of Disclosure.--
            (1) In general.--The disclosures required to be made under 
        subsection (a) shall be accurate as of the date on which the 
        disclosures are made, based on the information available to the 
        merchant.
            (2) Information subsequently rendered inaccurate.--If 
        information required to be disclosed under subsection (a) is 
        rendered inaccurate as a result of any agreement between the 
        merchant and the consumer subsequent to the delivery of the 
        required disclosures, the resulting inaccuracy shall not 
        constitute a violation of this Act.

SEC. 7. OTHER AGREEMENT PROVISIONS.

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

SEC. 8. RIGHT TO ACQUIRE OWNERSHIP.

    (a) In General.--The consumer shall acquire ownership of the 
property that is the subject of a rental-purchase agreement, and the 
rental-purchase agreement shall terminate, upon compliance by the 
consumer with the requirements of subsection (b) or any early payment 
option provided in the rental-purchase agreement, and upon payment of 
any past due payments and fees, as permitted in regulation by the 
Commission.
    (b) Payment of Total Cost.--The consumer shall acquire ownership of 
the rental property upon payment of the total cost of the subject 
rental-purchase agreement, as disclosed to the consumer in the rental-
purchase agreement pursuant to section 6(a).
    (c) Additional Fees Prohibited.--
            (1) In general.--A merchant shall not require the consumer 
        to pay, as a condition for acquiring ownership of the property 
        that is the subject of a rental-purchase agreement, any fee or 
        charge in addition to, or in excess of, the regular periodic 
        payments required by subsection (b), or any early purchase 
        option amount provided in the rental-purchase agreement, as 
        applicable.
            (2) Rule of construction.--A requirement that the consumer 
        pay an unpaid late charge or other fee that is past due shall 
        not constitute an additional fee or charge for purposes of this 
        subsection.
    (d) Transfer of Ownership Rights.--Upon payment by the consumer of 
all payments necessary to acquire ownership under subsection (b) or any 
early purchase option amount provided in the rental-purchase agreement, 
as appropriate, the merchant shall--
            (1) deliver to the consumer, or mail to the consumer's last 
        known address, such documents or other instruments, which the 
        Commission has determined, by regulation, are necessary to 
        acknowledge full ownership by the consumer of the property 
        acquired pursuant to the rental-purchase agreement; and
            (2) transfer to the consumer the unexpired portion of any 
        warranties provided by the manufacturer, distributor, or seller 
        of the property, which shall apply as if the consumer were the 
        original purchaser of the property, except where such transfer 
        is prohibited by the terms of the warranty.

SEC. 9. PROHIBITED PROVISIONS.

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

SEC. 10. STATEMENT OF ACCOUNTS.

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

SEC. 11. RENEGOTIATIONS AND EXTENSIONS.

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

SEC. 12. POINT-OF-RENTAL DISCLOSURES.

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

SEC. 13. RENTAL-PURCHASE ADVERTISING.

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

SEC. 14. ENFORCEMENT BY COMMISSION.

    (a) Unfair or Deceptive Acts or Practices.--A violation of a 
provision of this Act or a rule or regulation prescribed pursuant to 
this Act shall be treated as a violation of a rule defining an unfair 
or deceptive act or practice described under section 18(a)(1)(B) of the 
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
    (b) Powers of Commission.--
            (1) In general.--Except as provided in paragraph (3), the 
        Commission shall enforce this Act in the same manner, by the 
        same means, and with the same jurisdiction, powers, and duties 
        as though all applicable terms and provisions of the Federal 
        Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated 
        into and made a part of this Act.
            (2) Privileges and immunities.--Except as provided in 
        paragraph (3), any person who violates this Act shall be 
        subject to the penalties and entitled to the privileges and 
        immunities provided in the Federal Trade Commission Act (15 
        U.S.C. 41 et seq.).

SEC. 15. REGULATIONS.

    (a) In General.--
            (1) Commission action.--The Commission shall prescribe 
        regulations as necessary to carry out this Act.
            (2) Content.--Regulations required by this subsection may 
        contain such additional requirements, classifications, 
        differentiations, or other provisions, and may provide for such 
        adjustments and exceptions for all or any class of 
        transactions, as in the judgment of the Commission are 
        necessary or proper to effectuate the purposes of this Act, to 
        prevent circumvention or evasion thereof, or to facilitate 
        compliance therewith.
    (b) Model Disclosure Forms.--
            (1) In general.--The Commission may publish model 
        disclosure forms and clauses for common rental-purchase 
        agreements to facilitate compliance with the disclosure 
        requirements of this Act and to aid the consumer in 
        understanding the transaction by utilizing readily 
        understandable language to simplify the technical nature of the 
        disclosures.
            (2) Considerations.--In devising model forms under this 
        subsection, the Commission shall consider the use by merchants 
        of data processing or similar automated equipment.
            (3) Voluntary use of model forms.--Nothing in this Act may 
        be construed to require a merchant to use any model form or 
        clause prescribed by the Commission under this section.
            (4) Presumption.--A merchant shall be deemed to be in 
        compliance with the requirement to provide disclosure under 
        section 5(a), if the merchant--
                    (A) uses any appropriate model form or clause as 
                published by the Commission under this section; or
                    (B) uses any such model form or clause and changes 
                it by--
                            (i) deleting any information which is not 
                        required by this Act; or
                            (ii) rearranging the format, if in making 
                        such deletion or rearranging the format, the 
                        merchant does not affect the substance, 
                        clarity, or meaningful sequence of the 
                        disclosure.

SEC. 16. EFFECTIVE DATE OF REGULATIONS.

    (a) In General.--Any regulation prescribed by the Commission under 
this Act, or any amendment or interpretation thereof, shall not be 
effective before the October 1 that follows the date of publication of 
the regulation in final form by at least 6 months.
    (b) Authority To Extend Time.--The Commission may, at its 
discretion--
            (1) lengthen the period of time described in subsection (a) 
        to permit merchants to adjust to accommodate new requirements; 
        or
            (2) shorten that period of time, if the Commission makes a 
        specific finding that such action is necessary to comply with 
        the findings of a court or to prevent unfair or deceptive 
        practices.
    (c) Early Compliance Authorized.--Notwithstanding the time periods 
established under subsection (a) or (b), a merchant may comply with any 
newly prescribed disclosure requirement prior to such established date.

SEC. 17. RELATION TO OTHER LAWS.

    (a) Relation to State Law.--
            (1) No effect on consistent state laws.--Except as provided 
        in subsection (b), this Act does not annul, alter, or affect in 
        any manner the meaning, scope, or applicability of the laws of 
        any State relating to rental-purchase agreements, except to the 
        extent that those laws are inconsistent with any provision of 
        this Act, and then only to the extent of the inconsistency.
            (2) Determination of inconsistency.--Upon its own motion or 
        upon the request of an interested party, which is submitted in 
        accordance with procedures prescribed in regulations of the 
        Commission, the Commission shall determine whether any such 
        inconsistency exists. If the Commission determines that a term 
        or provision, of a State law is inconsistent, merchants located 
        in that State need not follow such term or provision and shall 
        incur no liability under the law of that State for failure to 
        follow such term or provision, notwithstanding that such 
        determination is subsequently amended, rescinded, or determined 
        by judicial or other authority to be invalid for any reason.
            (3) Greater protection under state law.--Except as provided 
        in subsection (b), for purposes of this section, a term or 
        provision of a State law is not inconsistent with the 
        provisions of this Act if the term or provision affords greater 
        protection and benefit to the consumer than the protection and 
        benefit provided under this Act, as determined by the 
        Commission, on its own motion or upon the petition of any 
        interested party.
    (b) State Laws Relating to Characterization of Transaction.--
Notwithstanding subsection (a), this Act shall supersede any provision 
of State law, to the extent that such law--
            (1) regulates a rental-purchase agreement as a security 
        interest, credit sale, retail installment sale, conditional 
        sale or any other form of consumer credit, or that imputes to a 
        rental-purchase agreement the creation of a debt or extension 
        of credit; or
            (2) requires the disclosure of a percentage rate 
        calculation, including a time-price differential, an annual 
        percentage rate, or an effective annual percentage rate.
    (c) Relation to Federal Trade Commission Act.--No provision of this 
Act shall be construed as limiting, superseding, or otherwise affecting 
the applicability of the Federal Trade Commission Act (15 U.S.C. 41 et 
seq.) to any merchant or rental-purchase transaction.

SEC. 18. EFFECT ON GOVERNMENT AGENCIES.

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

SEC. 19. COMPLIANCE DATE.

    Compliance with this Act and regulations issued under this Act is 
not required until 6 months after the date of enactment of this Act. In 
any case, merchants may comply with this Act at any time after such 
date of enactment.
                                 <all>