[Congressional Record (Bound Edition), Volume 148 (2002), Part 12]
[Extensions of Remarks]
[Pages 17363-17364]
[From the U.S. Government Publishing Office, www.gpo.gov]




         H.R. 1701, THE CONSUMER RENTAL PURCHASE AGREEMENT ACT

                                 ______
                                 

                         HON. JAMES H. MALONEY

                             of connecticut

                    in the house of representatives

                      Thursday, September 19, 2002

  Mr. MALONEY of Connecticut. Mr. Speaker, I urge my colleagues to 
support the Consumer Rental Purchase Agreement Act, H.R. 1701. The bill 
before us is the product of the many months of hard work by several 
Members. I want to especially thank Congressman Walter Jones and my 
Financial Service Committee colleagues on both sides of the aisle for 
their constructive input in producing a bipartisan, consumer friendly 
piece of legislation.
  Let me make it clear, this bill establishes a federal floor for Rent-
to-Own disclosures and consumer rights, and preserves states' options 
to regulate costs and other disclosures. That is, States can still 
apply further economic and substantive safeguards, such as regulating 
maximum rental costs, allowable fees, and fair collection practices 
should they decide to do so.
  In April of 2000, the Federal Trade Commission (FTC) issued a staff 
report that addresses many of the issues surrounding the rent-to-own 
industry. Generally speaking, the FTC report concluded that clear and 
comprehensive disclosures of the rental-purchase transaction would 
benefit both the industry and consumers. In that report, the FTC made 
some recommendations regarding the types of disclosure that would 
benefit consumers. The ``Consumer Rental Purchase Agreement Act'' is an 
effort to begin to implement those recommendations.
  I think that everyone will agree that giving consumers the 
information they need to make

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informed decisions is both good public policy and ultimately good 
economic policy as well. The consumer safeguards provided in this 
legislation include the prohibition of certain fees, improved consumer 
disclosures, expanded civil liability, prohibition of abusive 
practices, and the preservation of existing rights.
  H.R. 1701 requires several clear and conspicuous disclosures that 
assure merchants will not present information in such a way that 
conceals or misleads consumers as to the true cost of the transaction. 
The proposal includes a plain language requirement for use in 
contracts. Specifically, the bill requires that all merchandise bear a 
label or tag that discloses specific cost and merchandise information, 
such as the price to purchase the merchandise for cash, the rental 
payment amount, the total number of payments to acquire ownership, and 
the total cost of ownership. Additionally, H.R. 1701 requires that 
price tags and label disclosures (as well as contracts) include the 
total cost for ownership, which consists of the sum of all rental 
payments and any mandatory fees or charges, per the FTC report 
recommendation. The bill also requires that price tags and labels (and 
contracts) identify whether merchandise is new or used.
  The Consumer Rental Purchase Agreement Act also prohibits the 
imposition of any special fees to acquire ownership, including a 
prohibition on balloon payments. The bill prohibits merchants from 
charging more than one late fee for a delinquent rental payment, or 
charge for an unpaid late fee. This will ensure that consumers are not 
charged with unfair or over-burdensome penalties and fees for simply 
missing a payment.
  Importantly, H.R. 1701 clarifies civil liabilities protections for 
consumers in Rent to Own transactions. H.R. 1701 expands civil 
liability and penalties to allow actions based on a ``pattern or 
practice'' of advertising violations. The bill explicitly provides for 
civil action and expanded penalties for enforcement by the FTC and 
State attorneys general, based on a pattern or practice of violations 
by a merchant.
  Additionally, the bill ties criminal and civil liability and 
penalties for violations to the requirements of the Truth in Lending 
Act and Consumer Leasing Act.
  Mr. Speaker, this bill establishes an important federal floor for 
consumer protection, and create a framework for additional consumer 
protection in the future. In sum, this legislation will give consumers 
the information they need to make informed decisions. It will also 
create a uniform regulatory baseline that will help with the growth of 
the industry and its contributions to our economy. I urge my colleagues 
to support this far-sighted legislation.

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