2011 - 2012 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO 2011 ASSEMBLY BILL 582
March 13, 2012 - Offered by Representative Petryk.
1An Act to create
409.109 (4) (n), chapter 420 and 421.202 (11) of the statutes; 2relating to: regulation of rental-purchase agreements and granting
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB582-ASA1, s. 1
409.109 (4) (n) of the statutes is created to read:
(n) Any rental-purchase company that has filed notice as provided 6
under s. 420.02 (1) and any rental-purchase agreement entered into by such a 7
In this chapter:
"Cash price" means the price at which a rental-purchase company would 2
sell rental property to the lessee of the rental property if the lessee were to pay for 3
the rental property in full on the date on which the rental-purchase agreement is 4
"Department" means the department of financial institutions.
"Rental property" means property rented under a rental-purchase 7
agreement but does not include any motor vehicle, as defined in s. 340.01 (35), or any 8
musical instrument that is intended to be used in whole or in part in an elementary 9
school or high school.
"Rental-purchase agreement" means an agreement between a 11
rental-purchase company and a lessee for the use of rental property if all of the 12
(a) The rental property is to be used primarily for personal, family, or household 14
(b) The agreement has an initial term of 4 months or less and is renewable with 16
each payment after the initial term.
(c) The agreement does not obligate or require the lessee to renew the 18
agreement beyond the initial term.
(d) The agreement permits, but does not obligate, the lessee to acquire 20
ownership of the rental property.
"Rental-purchase company" means a person engaged in the business of 22
entering into rental-purchase agreements in this state or acquiring rental-purchase 23
agreements that are entered into in this state.
24420.02 Notice to the department. (1)
. (a) Except as provided in 25
par. (b), a rental-purchase company shall file notice with the department, in the form
and manner prescribed by the department, within 30 days after commencing 2
business in this state. A separate notice is required for each place of business 3
maintained by the rental-purchase company.
(b) A rental-purchase company that generates less than 75 percent of its total 5
revenues in this state from transactions involving rental-purchase agreements may 6
elect not to file notice with the department under par. (a) and, upon informing the 7
department of this election in a manner prescribed by the department, shall not be 8
governed by the provisions of this chapter.
. For each location for which a notice is filed under sub. (1), the 10
rental-purchase company shall pay to the department an annual fee of $1,000. If a 11
rental-purchase company fails to timely pay the annual fee, the department shall 12
order the rental-purchase company to cease operating until the annual fee is paid.
13420.03 General requirements of disclosure. (1) Form, location, size, and
14time of disclosure.
The information that is required to be disclosed under s. 420.04 15
shall satisfy all of the following:
(a) The information shall be clearly and conspicuously disclosed.
(b) The information shall be disclosed in writing.
(c) The information shall be disclosed in the rental-purchase agreement above 19
the line for the lessee's signature. Multiple pages or backs of pages may be used as 20
long as the face of the rental-purchase agreement is signed by the lessee and other 21
pages are signed or initialed by the lessee.
(d) Except as provided in par. (f), the information shall be disclosed in not less 23
than 8-point standard type.
(e) The information shall be disclosed before the time that the lessee becomes 25
legally obligated under the rental-purchase agreement.
(f) The disclosures required by s. 420.04 (2), (3), (4), and (7) shall be printed in 2
at least 10-point boldface type on the face of the rental-purchase agreement, and 3
shall be grouped together in a box, in the form and order prescribed by the 4
5(2) Accuracy of disclosure.
The information required under s. 420.04 must 6
be accurate as of the time that it is disclosed to the lessee. If any information 7
subsequently becomes inaccurate as a result of any act, occurrence, or agreement by 8
the lessee, the resulting inaccuracy is not a violation of any provision of this chapter 9
relating to rental-purchase agreements.
10(3) Copy of rental-purchase agreement.
The rental-purchase company shall 11
provide the lessee with a copy of the completed rental-purchase agreement signed 12
by the lessee. If more than one lessee is legally obligated under the same 13
rental-purchase agreement, delivery of a copy of the completed rental-purchase 14
agreement to one of the lessees shall satisfy this subsection.
15420.04 Required provisions of rental-purchase agreement.
rental-purchase company shall include all of the following information, to the extent 17
applicable, in every rental-purchase agreement:
A brief description of the rental property, sufficient to identify 19
the rental property to the lessee and the rental-purchase company, including any 20
identification number, and a statement indicating whether the rental property is 21
new or used. A statement that new rental property is used shall not be a violation 22
of this subchapter.
23(2) Cash price.
The cash price of the rental property.
24(3) Rental payments to acquire ownership.
The total number, total dollar 25
amount, and timing of all rental payments necessary to acquire ownership of the
rental property, excluding any applicable taxes, application or processing charge, 2
delivery fee, liability damage waiver fee, and fees for optional services.
3(4) Cost of rental services.
The difference between the total dollar amount 4
of payments necessary to acquire ownership of the rental property disclosed under 5
sub. (3) and the cash price of the property disclosed under sub. (2). The 6
rental-purchase company shall also include a statement substantially similar to the 7
following: "The cost of rental services is the amount you will pay in addition to the 8
cash price if you acquire ownership of the rented goods by making all payments 9
necessary to acquire ownership."
10(5) Periodic payment.
The rental payment and any applicable taxes and fees 11
for optional services to which the lessee agrees.
12(6) Up-front payment.
The total amount of the initial payment to be made by 13
the lessee at the time that the agreement is executed or the rental property is 14
delivered, including the initial rental payment, any application or processing charge, 15
any delivery fee, and fees for other optional services to which the lessee agrees.
16(7) Total payments to acquire ownership.
The total of all charges to be paid 17
by the lessee to acquire ownership of the rental property, which shall consist of the 18
total dollar amount of all rental payments disclosed under sub. (3), and the total 19
dollar amount of all required fees and taxes.
20(8) Other charges.
An itemized description of any other charges or fees that 21
the rental-purchase company may charge upon the occurrence of a contingency 22
specified in the rental-purchase agreement, such as late fees.
23(9) Summary of early-purchase option.
A statement summarizing the terms 24
of the lessee's options to acquire ownership of the rental property as provided in s. 25
1(10) Responsibility for theft or damage.
A statement that, unless otherwise 2
agreed, the lessee is responsible for the fair market value of the rental property, 3
determined according to the early-purchase option formula under sub. (9), if the 4
rental property is stolen, damaged, or destroyed while in the possession of or subject 5
to the control of the lessee. The statement shall indicate that the fair market value 6
will be determined as of the date on which the rental property is stolen, damaged, 7
8(11) Service and warranty.
A statement that during the term of the rental- 9
purchase agreement, the rental-purchase company is required to service the rental 10
property and maintain it in good working condition, as long as no other person has 11
serviced the rental property. In lieu of servicing the rental property, the 12
rental-purchase company may, at its option, replace the rental property with 13
substitute property of comparable quality and condition. The rental-purchase 14
company's obligation to provide service is limited to defects in the property not 15
caused by improper use or neglect by the lessee or harmful conditions outside the 16
control of the rental-purchase company or manufacturer.
17(12) Termination at option of lessee.
A statement that the lessee may 18
terminate the agreement at any time without penalty by voluntarily surrendering 19
or returning the rental property in good repair.
20(13) Right to reinstate.
A brief explanation of the lessee's right to reinstate 21
a rental-purchase agreement under s. 420.07.
22(14) Rental, not purchase.
A statement reading substantially as follows: "You 23
are renting this property. You will not own the property until you make all payments 24
necessary to acquire ownership or until you exercise your early-purchase option. If
you do not make your payments as scheduled or exercise your early-purchase option, 2
the rental-purchase company may repossess the property."
3(15) Information about rental-purchase company and lessee.
The names of 4
the rental-purchase company and the lessee, the rental-purchase company's 5
business address and telephone number, the lessee's address, and the date on which 6
the rental-purchase agreement is executed.
7(16) Optional services.
Space for a specific, separately signed or initialed, 8
affirmative, written indication of the lessee's desire for any optional service for which 9
a charge is assessed. The lessee's request must be obtained after a written disclosure 10
of the cost of the optional service is made, and the disclosure of the cost and purpose 11
of such service must be listed at or near the affirmation space. This requirement is 12
satisfied by a separate written agreement for an optional service that meets the 13
requirements of this subsection.