2011 - 2012 LEGISLATURE
March 13, 2012 - Offered by Representative Petryk.
AB582-ASA1,1,3 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
3rule-making authority.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB582-ASA1, s. 1 4Section 1. 409.109 (4) (n) of the statutes is created to read:
AB582-ASA1,1,75 409.109 (4) (n) Any rental-purchase company that has filed notice as provided
6under s. 420.02 (1) and any rental-purchase agreement entered into by such a
7rental-purchase company.
AB582-ASA1, s. 2 8Section 2. Chapter 420 of the statutes is created to read:
AB582-ASA1,1,99 CHAPTER 420
AB582-ASA1,1,11 11420.01Definitions. In this chapter:
1(1) "Cash price" means the price at which a rental-purchase company would
2sell rental property to the lessee of the rental property if the lessee were to pay for
3the rental property in full on the date on which the rental-purchase agreement is
AB582-ASA1,2,5 5(2) "Department" means the department of financial institutions.
AB582-ASA1,2,9 6(3) "Rental property" means property rented under a rental-purchase
7agreement but does not include any motor vehicle, as defined in s. 340.01 (35), or any
8musical instrument that is intended to be used in whole or in part in an elementary
9school or high school.
AB582-ASA1,2,12 10(4) "Rental-purchase agreement" means an agreement between a
11rental-purchase company and a lessee for the use of rental property if all of the
12following apply:
AB582-ASA1,2,1413 (a) The rental property is to be used primarily for personal, family, or household
AB582-ASA1,2,1615 (b) The agreement has an initial term of 4 months or less and is renewable with
16each payment after the initial term.
AB582-ASA1,2,1817 (c) The agreement does not obligate or require the lessee to renew the
18agreement beyond the initial term.
AB582-ASA1,2,2019 (d) The agreement permits, but does not obligate, the lessee to acquire
20ownership of the rental property.
AB582-ASA1,2,23 21(5) "Rental-purchase company" means a person engaged in the business of
22entering into rental-purchase agreements in this state or acquiring rental-purchase
23agreements that are entered into in this state.
AB582-ASA1,3,3 24420.02 Notice to the department. (1) Notice. (a) Except as provided in
25par. (b), a rental-purchase company shall file notice with the department, in the form

1and manner prescribed by the department, within 30 days after commencing
2business in this state. A separate notice is required for each place of business
3maintained by the rental-purchase company.
AB582-ASA1,3,84 (b) A rental-purchase company that generates less than 75 percent of its total
5revenues in this state from transactions involving rental-purchase agreements may
6elect not to file notice with the department under par. (a) and, upon informing the
7department of this election in a manner prescribed by the department, shall not be
8governed by the provisions of this chapter.
AB582-ASA1,3,12 9(2) Fee. For each location for which a notice is filed under sub. (1), the
10rental-purchase company shall pay to the department an annual fee of $1,000. If a
11rental-purchase company fails to timely pay the annual fee, the department shall
12order the rental-purchase company to cease operating until the annual fee is paid.
AB582-ASA1,3,15 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
15shall satisfy all of the following:
AB582-ASA1,3,1616 (a) The information shall be clearly and conspicuously disclosed.
AB582-ASA1,3,1717 (b) The information shall be disclosed in writing.
AB582-ASA1,3,2118 (c) The information shall be disclosed in the rental-purchase agreement above
19the line for the lessee's signature. Multiple pages or backs of pages may be used as
20long as the face of the rental-purchase agreement is signed by the lessee and other
21pages are signed or initialed by the lessee.
AB582-ASA1,3,2322 (d) Except as provided in par. (f), the information shall be disclosed in not less
23than 8-point standard type.
AB582-ASA1,3,2524 (e) The information shall be disclosed before the time that the lessee becomes
25legally obligated under the rental-purchase agreement.
1(f) The disclosures required by s. 420.04 (2), (3), (4), and (7) shall be printed in
2at least 10-point boldface type on the face of the rental-purchase agreement, and
3shall be grouped together in a box, in the form and order prescribed by the
AB582-ASA1,4,9 5(2) Accuracy of disclosure. The information required under s. 420.04 must
6be accurate as of the time that it is disclosed to the lessee. If any information
7subsequently becomes inaccurate as a result of any act, occurrence, or agreement by
8the lessee, the resulting inaccuracy is not a violation of any provision of this chapter
9relating to rental-purchase agreements.
AB582-ASA1,4,14 10(3) Copy of rental-purchase agreement. The rental-purchase company shall
11provide the lessee with a copy of the completed rental-purchase agreement signed
12by the lessee. If more than one lessee is legally obligated under the same
13rental-purchase agreement, delivery of a copy of the completed rental-purchase
14agreement to one of the lessees shall satisfy this subsection.
AB582-ASA1,4,17 15420.04 Required provisions of rental-purchase agreement. A
16rental-purchase company shall include all of the following information, to the extent
17applicable, in every rental-purchase agreement:
AB582-ASA1,4,22 18(1) Description. A brief description of the rental property, sufficient to identify
19the rental property to the lessee and the rental-purchase company, including any
20identification number, and a statement indicating whether the rental property is
21new or used. A statement that new rental property is used shall not be a violation
22of this subchapter.
AB582-ASA1,4,23 23(2) Cash price. The cash price of the rental property.
AB582-ASA1,5,2 24(3) Rental payments to acquire ownership. The total number, total dollar
25amount, and timing of all rental payments necessary to acquire ownership of the

1rental property, excluding any applicable taxes, application or processing charge,
2delivery fee, liability damage waiver fee, and fees for optional services.
AB582-ASA1,5,9 3(4) Cost of rental services. The difference between the total dollar amount
4of payments necessary to acquire ownership of the rental property disclosed under
5sub. (3) and the cash price of the property disclosed under sub. (2). The
6rental-purchase company shall also include a statement substantially similar to the
7following: "The cost of rental services is the amount you will pay in addition to the
8cash price if you acquire ownership of the rented goods by making all payments
9necessary to acquire ownership."
AB582-ASA1,5,11 10(5) Periodic payment. The rental payment and any applicable taxes and fees
11for optional services to which the lessee agrees.
AB582-ASA1,5,15 12(6) Up-front payment. The total amount of the initial payment to be made by
13the lessee at the time that the agreement is executed or the rental property is
14delivered, including the initial rental payment, any application or processing charge,
15any delivery fee, and fees for other optional services to which the lessee agrees.
AB582-ASA1,5,19 16(7) Total payments to acquire ownership. The total of all charges to be paid
17by the lessee to acquire ownership of the rental property, which shall consist of the
18total dollar amount of all rental payments disclosed under sub. (3), and the total
19dollar amount of all required fees and taxes.
AB582-ASA1,5,22 20(8) Other charges. An itemized description of any other charges or fees that
21the rental-purchase company may charge upon the occurrence of a contingency
22specified in the rental-purchase agreement, such as late fees.
AB582-ASA1,5,25 23(9) Summary of early-purchase option. A statement summarizing the terms
24of the lessee's options to acquire ownership of the rental property as provided in s.
25420.06 (3).
1(10) Responsibility for theft or damage. A statement that, unless otherwise
2agreed, the lessee is responsible for the fair market value of the rental property,
3determined according to the early-purchase option formula under sub. (9), if the
4rental property is stolen, damaged, or destroyed while in the possession of or subject
5to the control of the lessee. The statement shall indicate that the fair market value
6will be determined as of the date on which the rental property is stolen, damaged,
7or destroyed.
AB582-ASA1,6,16 8(11) Service and warranty. A statement that during the term of the rental-
9purchase agreement, the rental-purchase company is required to service the rental
10property and maintain it in good working condition, as long as no other person has
11serviced the rental property. In lieu of servicing the rental property, the
12rental-purchase company may, at its option, replace the rental property with
13substitute property of comparable quality and condition. The rental-purchase
14company's obligation to provide service is limited to defects in the property not
15caused by improper use or neglect by the lessee or harmful conditions outside the
16control of the rental-purchase company or manufacturer.
AB582-ASA1,6,19 17(12) Termination at option of lessee. A statement that the lessee may
18terminate the agreement at any time without penalty by voluntarily surrendering
19or returning the rental property in good repair.
AB582-ASA1,6,21 20(13) Right to reinstate. A brief explanation of the lessee's right to reinstate
21a rental-purchase agreement under s. 420.07.
AB582-ASA1,7,2 22(14) Rental, not purchase. A statement reading substantially as follows: "You
23are renting this property. You will not own the property until you make all payments
24necessary to acquire ownership or until you exercise your early-purchase option. If

1you do not make your payments as scheduled or exercise your early-purchase option,
2the rental-purchase company may repossess the property."
AB582-ASA1,7,6 3(15) Information about rental-purchase company and lessee. The names of
4the rental-purchase company and the lessee, the rental-purchase company's
5business address and telephone number, the lessee's address, and the date on which
6the rental-purchase agreement is executed.
AB582-ASA1,7,13 7(16) Optional services. Space for a specific, separately signed or initialed,
8affirmative, written indication of the lessee's desire for any optional service for which
9a charge is assessed. The lessee's request must be obtained after a written disclosure
10of the cost of the optional service is made, and the disclosure of the cost and purpose
11of such service must be listed at or near the affirmation space. This requirement is
12satisfied by a separate written agreement for an optional service that meets the
13requirements of this subsection.