AB133-ASA1-AA2,461,1313
421.202
(7m) A rent-to-own agreement under ch. 435;
AB133-ASA1-AA2,461,2415
421.301
(9) "Consumer credit sale" means a sale of goods, services or an
16interest in land to a customer on credit where the debt is payable in instalments or
17a finance charge is imposed and includes any agreement in the form of a bailment
18of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay
19as compensation for use a sum substantially equivalent to or in excess of the
20aggregate value of the goods or real property involved and it is agreed that the bailee
21or lessee will become, or for no other or a nominal consideration has the option to
22become, the owner of the goods or real property upon full compliance with the terms
23of the agreement.
"Consumer credit sale" does not include a rent-to-own agreement
24under ch. 435.
AB133-ASA1-AA2,462,92
421.301
(10) "Consumer credit transaction" means a consumer transaction
3between a merchant and a customer in which real or personal property, services or
4money is acquired on credit and the customer's obligation is payable in instalments
5or for which credit a finance charge is or may be imposed, whether such transaction
6is pursuant to an open-end credit plan or is a transaction involving other than
7open-end credit. The term includes consumer credit sales, consumer loans,
8consumer leases and transactions pursuant to open-end credit plans.
"Consumer
9credit transaction" does not include a rent-to-own agreement under ch. 435.
AB133-ASA1-AA2,462,1311
421.301
(11) "Consumer lease" means a lease of goods which a merchant makes
12to a customer for a term exceeding 4 months.
"Consumer lease" does not include a
13rent-to-own agreement under ch. 435.".
AB133-ASA1-AA2,463,3
16423.201 Definition. "Consumer approval transaction" means a consumer
17transaction other than a sale or lease or listing for sale of real property or a sale of
18goods at auction 1) which is initiated by face-to-face solicitation away from a regular
19place of business of the merchant or by mail or telephone solicitation directed to the
20particular customer and 2) which is consummated or in which the customer's offer
21to contract or other writing evidencing the transaction is received by the merchant
22away from a regular place of business of the merchant and involves the extension of
23credit or is a cash transaction in which the amount the customer pays exceeds $25.
24"Consumer approval transaction" shall in no event include a catalog sale which is not
1accompanied by any other solicitation or a consumer loan conducted and
2consummated entirely by mail.
"Consumer approval transaction" does not include
3a rent-to-own agreement under ch. 435.
AB133-ASA1-AA2,463,65
CHAPTER 435
6
RENT-TO-OWN AGREEMENTS
AB133-ASA1-AA2,463,9
7435.102 Scope. (1) Inapplicability of other laws. A rent-to-own agreement
8under this chapter is not governed by the laws relating to a security interest, as
9defined in s. 401.201 (37), or a lease, as defined in s. 411.103 (1) (j).
AB133-ASA1-AA2,463,10
10(2) Exclusions. This chapter does not apply to any of the following:
AB133-ASA1-AA2,463,1211
(a) Any agreement between a rental-purchase company and any person other
12than a lessee.
AB133-ASA1-AA2,463,1413
(b) A lease or bailment of personal property if the property is intended to be
14used primarily for business, commercial or agricultural purposes.
AB133-ASA1-AA2,463,1615
(c) A lease or bailment of personal property which is incidental to the lease of
16real property.
AB133-ASA1-AA2,463,1717
(d) A lease of a motor vehicle, as defined in s. 218.01 (1) (m).
AB133-ASA1-AA2,463,1918(e) A credit sale, as defined in
15 USC 1602 (g) and in the regulations
19promulgated under that section.
AB133-ASA1-AA2,463,2120(f) A consumer lease, as defined in
15 USC 1667 (1) and in the regulations
21promulgated under that section.
AB133-ASA1-AA2,463,22
22435.201 Definitions. In this chapter:
AB133-ASA1-AA2,463,23
23(1) "Department" means the department of financial institutions.
AB133-ASA1-AA2,463,25
24(2) "Lessee" means an individual who rents personal property under a
25rent-to-own agreement.
AB133-ASA1-AA2,464,1
1(3) "Rental property" means property rented under a rent-to-own agreement.
AB133-ASA1-AA2,464,4
2(4) "Rental-purchase company" means a person who regularly provides the use
3of property through rent-to-own agreements and to whom rental payments are
4initially payable under the terms of a particular rent-to-own agreement.
AB133-ASA1-AA2,464,7
5(5) "Rent-to-own agreement" means an agreement between a
6rental-purchase company and a lessee for the use of personal property if all of the
7following conditions are met:
AB133-ASA1-AA2,464,98
(a) The personal property is to be used primarily for personal, family or
9household purposes.
AB133-ASA1-AA2,464,1110
(b) The agreement has an initial term of 4 months or less and is automatically
11renewable with each payment after the initial term.
AB133-ASA1-AA2,464,1312
(c) The agreement does not obligate or require the lessee to renew the
13agreement beyond the initial term.
AB133-ASA1-AA2,464,1514
(d) The agreement permits, but does not obligate, the lessee to acquire
15ownership of the personal property.
AB133-ASA1-AA2,464,24
16435.301 Registration. (1) Requirement; application. Every person engaging
17in business as a rental-purchase company in this state shall file a registration
18statement with the department within 30 days after the date on which the person
19commences business in this state and no later than February 28 of each year
20thereafter. Except during the first 30 days after the date on which the person
21commences business in this state, no person may engage in business as a
22rental-purchase company in this state without a valid unsuspended registration
23filed under this subsection. A registration statement under this section shall include
24all of the following information:
AB133-ASA1-AA2,464,2525
(a) The name of the rental-purchase company.
AB133-ASA1-AA2,465,1
1(b) The name under which the rental-purchase company transacts business.
AB133-ASA1-AA2,465,22
(c) The address of the rental-purchase company's principal office.
AB133-ASA1-AA2,465,43
(d) The addresses of all stores or other retail locations in this state at which the
4rental-purchase company offers rent-to-own agreements to potential lessees.
AB133-ASA1-AA2,465,65
(e) The address of the rental-purchase company's designated agent upon whom
6service of process may be made in this state.
AB133-ASA1-AA2,465,8
7(2) Rules. The department shall promulgate rules and prescribe forms for the
8efficient administration of this section.
AB133-ASA1-AA2,465,12
9435.302 Registration fees. (1) When due. Any rental-purchase company
10required to register under s. 435.301 shall pay a registration fee to the department
11when the rental-purchase company files the registration statement required under
12s. 435.301.
AB133-ASA1-AA2,465,16
13(2) Amount. The amount of the registration fee shall be $25 per store or other
14retail location in this state at which the rental-purchase company offers
15rent-to-own agreements to potential lessees. However, the registration fee shall not
16be less than $50 nor more than $750.
AB133-ASA1-AA2,465,19
17435.303 Examination of books and records. (1) Purpose of examination.
18The department may examine the books and records of any rental-purchase
19company for the purpose of determining compliance with this chapter.
AB133-ASA1-AA2,466,2
20(2) Availability of books and records. A rental-purchase company shall make
21its books and records reasonably available for inspection by the department. If the
22rental-purchase company's books and records are located outside of this state, the
23rental-purchase company shall, at the rental-purchase company's option, either
24make the books and records available to the department at a convenient location in
1this state or pay the reasonable and necessary expenses for the department to
2examine the books and records at the location where they are maintained.
AB133-ASA1-AA2,466,6
3(3) Method of bookkeeping. A rental-purchase company shall use generally
4accepted accounting principles and practices in keeping its books and records so that
5the department may determine if the rental-purchase company is in compliance
6with this chapter.
AB133-ASA1-AA2,466,11
7(4) Destruction of records; when authorized. A rental-purchase company
8shall keep records relating to each rent-to-own agreement entered into by the
9rental-purchase company and the payments made under each rent-to-own
10agreement for at least 2 years after the date on which the rent-to-own agreement
11is terminated.
AB133-ASA1-AA2,466,14
12435.304 Suspension or revocation of registration. (1) Grounds. The
13department may issue an order suspending or revoking a rental-purchase
14company's registration if any of the following conditions is met:
AB133-ASA1-AA2,466,1715
(a) The rental-purchase company has violated any provision of this chapter,
16the violation is not isolated or inadvertent, and the department determines that the
17violation justifies the suspension or revocation of the registration.
AB133-ASA1-AA2,466,2118
(b) The department becomes aware that any fact or condition exists which, if
19it had existed at the time that the rental-purchase company first filed the
20registration statement, would have warranted the department's refusal to honor the
21registration.
AB133-ASA1-AA2,466,2322
(c) The rental-purchase company has failed to pay the registration fee under
23s. 435.302.
AB133-ASA1-AA2,466,25
24(2) Procedure. The following procedure applies to every order of the
25department that suspends or revokes a registration under this chapter:
AB133-ASA1-AA2,467,4
1(a) The department shall provide a written notice to the rental-purchase
2company registered under s. 435.301 of the department's intent to issue an order
3suspending or revoking the rental-purchase company's registration. The notice
4shall specify the grounds for and the effective date of the proposed order.
AB133-ASA1-AA2,467,95
(b) The rental-purchase company shall file with the department a written
6response to the allegations contained in the notice within 20 days after receiving the
7notice. The rental-purchase company's written response may contain a request for
8a hearing pursuant to s. 227.42. If the written response does not contain a request
9for a hearing pursuant to s. 227.42, the right to a hearing is waived.
AB133-ASA1-AA2,467,1410
(c) If a written response containing a request for a hearing pursuant to s. 227.42
11is received by the department within the time provided under par. (b) and if, in the
12opinion of the department, the matter satisfies one of the conditions under s. 227.42
13(1) (a) to (d), the matter shall be scheduled for a contested hearing to commence
14within 60 days after the date on which the department receives the written response.
AB133-ASA1-AA2,467,2215
(d) If the rental-purchase company fails to file a written response within the
16time provided under par. (b) or if the rental-purchase company files a timely written
17response but fails to request a hearing pursuant to s. 227.42, the department may
18issue an order suspending or revoking the rental-purchase company's registration
19under sub. (1). If the rental-purchase company files a timely written response
20containing a request for a hearing pursuant to s. 227.42, any order of the department
21suspending or revoking the rental-purchase company's registration shall be stayed
22pending completion of proceedings under ch. 227.
AB133-ASA1-AA2,467,25
23435.401 General requirements of disclosure. (1) Form, location, size and
24time of disclosure. All information required under s. 435.402 shall satisfy all of the
25following:
AB133-ASA1-AA2,468,1
1(a) The information shall be clearly and conspicuously disclosed.
AB133-ASA1-AA2,468,22
(b) The information shall be disclosed in writing.
AB133-ASA1-AA2,468,43
(c) The information shall be disclosed on the face of the rent-to-own agreement
4above the line for the lessee's signature.
AB133-ASA1-AA2,468,55
(d) The information shall be disclosed in not less than 8-point standard type.
AB133-ASA1-AA2,468,76
(e) The information shall be disclosed at or before the time that the lessee
7becomes legally obligated under the rent-to-own agreement.
AB133-ASA1-AA2,468,11
8(2) Accuracy of disclosure. All information required under s. 435.402 must
9be accurate as of the time that it is disclosed. If any information subsequently
10becomes inaccurate as a result of any act, occurrence or agreement by the lessee, the
11resulting inaccuracy is not a violation of this chapter.
AB133-ASA1-AA2,468,16
12(3) Copy of rent-to-own agreement. The rental-purchase company shall
13provide the lessee with a copy of the completed rent-to-own agreement signed by the
14lessee. If more than one lessee is legally obligated under the same rent-to-own
15agreement, delivery of a copy of the completed rent-to-own agreement to one of the
16lessees shall satisfy this subsection.
AB133-ASA1-AA2,468,19
17435.402 Required provisions of rent-to-own agreement. A
18rental-purchase company shall include all of the following information, to the extent
19applicable, in every rent-to-own agreement:
AB133-ASA1-AA2,468,24
20(1) Description. A brief description of the rental property, sufficient to identify
21the rental property to the lessee and the rental-purchase company, including an
22identification number, and a statement indicating whether the rental property is
23new or used. A statement that incorrectly indicates that new rental property is used
24is not a violation of this chapter.
AB133-ASA1-AA2,469,3
1(2) Cash price. The price at which the rental-purchase company would have
2sold the rental property to the lessee for cash on the date on which the rent-to-own
3agreement is executed.
AB133-ASA1-AA2,469,4
4(3) Rental Payment. The periodic rental payment for the rental property.
AB133-ASA1-AA2,469,9
5(4) Up-front payment. The payment required of the lessee at the time that the
6agreement is executed or the rental property is delivered, whichever is later,
7including the initial rental payment, any application or processing charge, any
8delivery fee, any charge for a liability damage waiver or for other optional services
9agreed to by the lessee, and the applicable tax.
AB133-ASA1-AA2,469,11
10(5) Payment to acquire ownership. The total number, total dollar amount and
11due date of all rental payments necessary to acquire ownership of the rental property.
AB133-ASA1-AA2,469,17
12(6) Other charges. A statement that the total dollar amount of all rental
13payments necessary to acquire ownership of the rental property does not include
14other charges that a lessee may incur, such as application, processing or delivery
15charges, and late payment, reinstatement, default and pickup fees. These charges
16shall be separately identified in the rental-purchase agreement and the amount of
17each charge and fee disclosed.
AB133-ASA1-AA2,469,20
18(7) Rental, not purchase. A statement that the lessee will not own the rental
19property until the lessee has made the total amount of payments necessary to acquire
20ownership or has exercised the lessee's early-purchase option.
AB133-ASA1-AA2,469,25
21(8) Summary of early-purchase option. A statement summarizing the terms
22of the lessee's option to acquire ownership of the rental property, including a
23statement indicating that the lessee has the right to exercise an early purchase
24option and indicating the price, or the formula or method for determining the price,
25at which the rental property may be purchased under the early-purchase option.
AB133-ASA1-AA2,470,5
1(9) 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 or method, if, and as of
4the time, the rental property is stolen, damaged or destroyed while in the possession
5of or subject to the control of the lessee.
AB133-ASA1-AA2,470,12
6(10) Service and warranty. A statement identifying the party responsible for
7maintaining or servicing the rental property during the term of the rent-to-own
8agreement, together with a description of that responsibility, and a statement that
9if any part of a manufacturer's express warranty covers the rental property when the
10lessee acquires ownership of the rental property the manufacturer's express
11warranty will be transferred to the lessee, if the transfer is allowed by the terms of
12the manufacturer's express warranty.
AB133-ASA1-AA2,470,16
13(11) Termination at option of lessee. A statement that the lessee may
14terminate the agreement at any time without penalty by voluntarily surrendering
15or returning the rental property in good repair along with any past-due rental
16payments, fees and charges.
AB133-ASA1-AA2,470,18
17(12) Right to reinstate. A brief explanation of the lessee's right to reinstate
18a rent-to-own agreement under s. 435.405.
AB133-ASA1-AA2,470,24
19(13) General notice. A notice reading substantially as follows: "You are
20renting this property. You will not own the property until you make all of the
21regularly scheduled rental payments necessary to acquire ownership or until you
22exercise your early-purchase option. If you do not make your rental payments as
23scheduled or exercise your early-purchase option, the lessor may repossess the
24property."
AB133-ASA1-AA2,471,4
1(14) Information about rental-purchase company and lessee. The names of
2the rental-purchase company and the lessee, the rental-purchase company's
3business address and telephone number, the lessee's address and the date on which
4the rent-to-own agreement is executed.
AB133-ASA1-AA2,471,6
5435.403 Prohibited provisions of rent-to-own agreement. A
6rent-to-own agreement may not contain any of the following:
AB133-ASA1-AA2,471,7
7(1) Confession. A confession of judgment.
AB133-ASA1-AA2,471,10
8(2) Security. A provision granting the rental-purchase company a security
9interest in any property except rental property delivered by the rental-purchase
10company pursuant to the rent-to-own agreement.
AB133-ASA1-AA2,471,14
11(3) Repossession. A provision authorizing a rental-purchase company or an
12agent of the rental-purchase company to enter the lessee's premises or to commit a
13breach of the peace in the repossession of rental property delivered by the
14rental-purchase company pursuant to the rent-to-own agreement.
AB133-ASA1-AA2,471,17
15(4) Waiver. A waiver of a defense or counterclaim, or a waiver of any right to
16assert any claim that the lessee may have against the rental-purchase company or
17an agent of the rental-purchase company or a waiver of any provision of this chapter.
AB133-ASA1-AA2,471,20
18(5) Overpayment. A provision requiring rental payments totaling more than
19the total dollar amount of all rental payments necessary to acquire ownership, as
20disclosed in the rental-purchase agreement.
AB133-ASA1-AA2,471,22
21(6) Insurance. A provision requiring the purchase of insurance from the
22rental-purchase company to cover the rental property.
AB133-ASA1-AA2,472,7
23435.404 Late payment, grace period and late fees. (1)
Late fee;
24generally. If a lessee fails to make any payment when due under a rent-to-own
25agreement or if, at the end of any rental term, the lessee fails to return the rental
1property or to renew the rent-to-own agreement for an additional term, the
2rental-purchase company may require the lessee to pay a late fee. However, except
3as provided under sub. (4), this subsection does not apply if the lessee's failure to
4return rental property or failure to renew the rent-to-own agreement at the end of
5the rental term is due to the lessee's exercise of an early-purchase option under the
6rent-to-own agreement or due to the lessee's making all payments necessary to
7acquire ownership of the rental property.
AB133-ASA1-AA2,472,9
8(2) Grace periods. The following grace periods shall apply to rental payments
9made with respect to a rental-purchase agreement:
AB133-ASA1-AA2,472,1210
(a) For an agreement that is renewed on a weekly basis, no late fee may be
11assessed for a payment that is made within 2 days after the date on which the
12scheduled payment is due.
AB133-ASA1-AA2,472,1513
(b) For an agreement that is renewed for a term that is longer than one week,
14no late fee may be assessed for a payment that is made within 5 days after the date
15on which the scheduled payment is due.
AB133-ASA1-AA2,472,17
16(3) Collection, recording and limitation of late fees. Late fees are subject
17to all of the following limitations:
AB133-ASA1-AA2,472,1818
(a) A late fee may not exceed $5 for each past-due rental payment.
AB133-ASA1-AA2,472,2019
(b) A late fee may be collected only once on each rental payment due, regardless
20of how long the payment remains past due.