AB582,3,42 409.109 (4) (n) Any rental-purchase company that has filed notice as provided
3under s. 420.02 (1) and any rental-purchase agreement entered into by such a
4rental-purchase company.
AB582, s. 2 5Section 2. Chapter 420 of the statutes is created to read:
AB582,3,66 CHAPTER 420
AB582,3,77 RENTAL-PURCHASE COMPANIES
AB582,3,8 8420.01Definitions. In this chapter:
AB582,4,4
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
4executed.
AB582,4,5 5(2) "Department" means the department of financial institutions.
AB582,4,7 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).
AB582,4,10 8(4) "Rental-purchase agreement" means an agreement between a
9rental-purchase company and a lessee for the use of rental property if all of the
10following apply:
AB582,4,1211 (a) The rental property is to be used primarily for personal, family, or household
12purposes.
AB582,4,1413 (b) The agreement has an initial term of 4 months or less and is renewable with
14each payment after the initial term.
AB582,4,1615 (c) The agreement does not obligate or require the lessee to renew the
16agreement beyond the initial term.
AB582,4,1817 (d) The agreement permits, but does not obligate, the lessee to acquire
18ownership of the rental property.
AB582,4,21 19(5) "Rental-purchase company" means a person engaged in the business of
20entering into rental-purchase agreements in this state or acquiring rental-purchase
21agreements that are entered into in this state.
AB582,5,2 22420.02 Notice to the department. (1) Notice required. A rental-purchase
23company shall file notice with the department, in the form and manner prescribed
24by the department, within 30 days after commencing business in this state. A

1separate notice is required for each place of business maintained by the
2rental-purchase company.
AB582,5,6 3(2) Fee. For each location for which a notice is filed under sub. (1), the
4rental-purchase company shall pay to the department an annual fee of $1,000. If a
5rental-purchase company fails to timely pay the annual fee, the department shall
6order the rental-purchase company to cease operating until the annual fee is paid.
AB582,5,9 7420.03 Price and cost limitations. (1) Limits on cash prices. The cash price
8for rental property offered by a rental-purchase company may not exceed the greater
9of the following:
AB582,5,1110 (a) An amount equal to twice the actual purchase price of the rental property,
11including any applicable freight charges, paid by the rental-purchase company.
AB582,5,1412 (b) The price at which property of like type and quality is offered, in the
13ordinary course of business, for sale for cash in the market area of the
14rental-purchase store where the property is offered for rental purchase.
AB582,5,19 15(2) Limits on cost of rental services and other charges. The total amount
16charged by the rental-purchase company for all required charges or fees, excluding
17applicable taxes and any late fees or reinstatement fees, in a rental-purchase
18transaction shall not exceed twice the maximum cash price of the property as
19determined under sub. (1).
AB582,6,4 20(3) Acquisition of ownership. At any time after the initial rental period under
21a rental-purchase agreement, if a lessee affirmatively elects an early-purchase
22option, the lessee may acquire ownership of the rental property by tendering an
23amount not to exceed 55 percent of the difference between the total of rental
24payments necessary to acquire ownership of the rental property and the total
25amount of rental payments paid for use of the rental property at that time, plus

1applicable taxes, except that the lessee's early-purchase option amount may not be
2less than the amount of one rental payment. Before a lessee acquires ownership of
3the rental property as provided under this subsection, a rental-purchase company
4may first require the lessee to pay any accrued unpaid rental payments and fees.
AB582,6,8 5(4) Annual percentage rate disclosure not required. A rental-purchase
6company shall not disclose, in a rental-purchase agreement or otherwise, any
7percentage rate calculation, including a time-price differential, an annual
8percentage rate, or an effective annual percentage rate.
AB582,6,12 9420.04 Reinstatement of a rental-purchase agreement. (1)
10Reinstatement generally. Subject to sub. (2), a lessee may reinstate a
11rental-purchase agreement that has ended without losing any rights or options
12previously acquired if all of the following apply:
AB582,6,1413 (a) The lessee voluntarily returned or surrendered the rental property within
147 days after the expiration of the rental-purchase agreement.
AB582,6,1615 (b) Not more than 120 days have passed after the date on which the
16rental-purchase agreement ended.
AB582,6,20 17(2) Authorized conditions on reinstatement. As a condition of reinstatement
18under sub. (1), the rental-purchase company may require the payment of all
19past-due rental charges, any applicable late fees, a reinstatement fee not to exceed
20$5, and the rental payment for the next term.
AB582,6,25 21(3) Effect of repossession on reinstatement. Nothing in this section prohibits
22a rental-purchase company from repossessing or attempting to repossess rental
23property when a rental-purchase agreement ends, but such efforts do not affect the
24lessee's right to reinstate as long as the rental property is voluntarily returned or
25surrendered within 7 days after the rental-purchase agreement ends.
AB582,7,5
1(4) Property available upon reinstatement. Upon reinstatement, the
2rental-purchase company shall provide the lessee with the same rental property, if
3the property is available and is in the same condition as when it was returned to the
4rental-purchase company, or with substitute property of comparable quality and
5condition.
AB582,7,9 6(5) Notice of reinstatement rights. If the lessee is entitled to reinstatement
7under subs. (1) and (2), within 15 days of repossession or voluntary return or
8surrender of the rental property, the rental-purchase company shall provide written
9notice to the lessee of the lessee's rights and obligations under this section.
AB582,7,14 10420.05 Rule making; enforcement. (1) Rule making. The department may
11promulgate rules relating to rental-purchase company disclosure requirements in
12connection with rental-purchase agreements as well as rules relating to any
13requirement by the department for rental-purchase companies to maintain records
14and make reports to the department.
AB582,7,16 15(2) Enforcement. The department shall administer and enforce this chapter,
16and any rule promulgated under, or order issued under, this chapter.
AB582,7,20 17420.06 Penalties. (1) Award of damages. Subject to sub. (3), a
18rental-purchase company that violates any provision of this chapter, rule
19promulgated under this chapter, or order issued under this chapter pertaining to a
20lessee is liable to the lessee in an amount equal to the greater of the following:
AB582,7,2121 (a) The actual damages sustained by the lessee as a result of the violation.
AB582,7,2422 (b) If the action is not brought as a class action, 25 percent of the total payments
23necessary for the lessee to acquire ownership of the rental property, but not less than
24$100 nor more than $1,000.
AB582,8,2
1(c) If the action is brought as a class action, the amount the court determines
2to be appropriate, subject to sub. (2).
AB582,8,10 3(2) Damage limitations in class actions. The total recovery by all lessees in
4any class action or series of class actions arising out of the same violation may not
5be more than the lesser of $500,000 or 1 percent of the net worth of the
6rental-purchase company. In determining the amount of any award in a class action,
7the court shall consider, among other relevant factors, the amount of actual damages
8awarded, the frequency and persistence of the violation, the rental-purchase
9company's resources, and the extent to which the rental-purchase company's
10violation was intentional.
AB582,8,15 11(3) Unintentional violations. A rental-purchase company is not liable for any
12violation of this chapter if the rental-purchase company shows by a preponderance
13of the evidence that the violation was not intentional and resulted from a bona fide
14error, and the rental-purchase company maintained procedures reasonably adapted
15to avoid such an error.
AB582,8,19 16(4) Costs and attorney fees. If a court awards any monetary amount under
17sub. (1) to a lessee, the rental-purchase company shall also be liable to the lessee for
18the costs of the action and, notwithstanding s. 814.04 (1), for reasonable attorney fees
19as determined by the court.
AB582,9,2 20420.07 Inapplicability of Consumer Act and ch. 409. A rental-purchase
21company that has filed notice as provided under s. 420.02 (1) is not subject to the
22Wisconsin consumer act, chs. 421 to 427, or any related rule or order adopted under
23chs. 421 to 427, or to any provision of ch. 409, and any rental-purchase agreement
24entered into by such a rental-purchase company may not be construed or regulated
25as a security interest, credit sale, retail installment sale, conditional sale, or any

1other form of consumer credit, nor considered to be the creation of a debt or extension
2of credit.
AB582, s. 3 3Section 3. 421.202 (11) of the statutes is created to read:
AB582,9,64 421.202 (11) Any rental-purchase company that has filed notice as provided
5under s. 420.02 (1) and any rental-purchase agreement entered into by a such a
6rental-purchase company.
AB582, s. 4 7Section 4. Initial applicability.
AB582,9,98 (1) This act first applies to rental-purchase agreements, and conduct pursuant
9to those agreements, that are entered into on the effective date of this subsection.
AB582, s. 5 10Section 5. Effective date.
AB582,9,1111 (1) This act takes effect on the 90th day after publication.
AB582,9,1212 (End)
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