2017 - 2018 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 637
March 12, 2018 - Offered by Senator
1An Act to amend
20.144 (1) (g); and
20.144 (1) (jm), 409.109 (4) (n), 2
chapter 420 and 421.202 (11) of the statutes; relating to: regulation of
3rental-purchase agreements, granting rule-making authority, and making an
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
(g) General program operations.
The amounts in the schedule for 8
the general program operations of the department of financial institutions. Except 9
as provided in pars. (a), (h), (i), (j), (jm),
and (u) and sub. (3), all moneys received by 10
the department, other than by the office of credit unions and the division of banking, 11
and 88 percent of all moneys received by the office of credit unions and the
department's division of banking shall be credited to this appropriation, but any 2
balance at the close of a fiscal year under this appropriation shall lapse to the general 3
fund. Annually, $150,000 of the amounts received under this appropriation account 4
shall be transferred to the appropriation account under s. 20.575 (1) (g).
20.144 (1) (jm) of the statutes is created to read:
(jm) Rental-purchase company payments funding financial literacy. 7
All moneys received under s. 420.12 (4) for promoting financial literacy.
409.109 (4) (n) of the statutes is created to read:
(n) Rental-purchase agreements entered into by a rental-purchase 10
company that has provided notice to the department of financial institutions under 11
Chapter 420 of the statutes is created to read:
In this chapter:
“Balloon payment” means any payment for the purchase or use of rental 17
property that is more than the regularly scheduled periodic payment amount but not 18
including any optional fees or charges permitted under the rental-purchase 19
“Cash price" means the price at which a rental-purchase company would 21
sell rental property to the lessee of the rental property if the lessee were to pay for 22
the rental property in full on the date on which the rental-purchase agreement is 23
“Charge-back fee” means a charge or fee for a payment that is denied or 25
dishonored by a credit card provider.
“Department" means the department of financial institutions.
“Displayed or offered primarily for rental-purchase,” with respect to rental 3
property, means rental property displayed or offered at a physical location that 4
derives 50 percent or more of its revenues from rental-purchase agreements.
“Insufficient funds fee” means a charge or fee for the return of a check, 6
electronic funds transfer, or other payment instrument that is denied or dishonored.
“Rental property" means property rented under a rental-purchase 8
agreement but does not include any motor vehicle, as defined in s. 340.01 (35).
“Rental-purchase agreement" means an agreement between a 10
rental-purchase company and a lessee for the use of rental property if all of the 11
(a) The rental property is of the type typically used for personal, family, or 13
(b) The agreement has an initial term of 4 months or less and is renewable with 15
each payment after the initial term.
(c) The agreement does not obligate or require the lessee to renew the 17
agreement beyond the initial term.
(d) The agreement permits, but does not obligate, the lessee to acquire 19
ownership of the rental property.
“Rental-purchase company" means a person engaged in the business of 21
entering into rental-purchase agreements in this state or acquiring rental-purchase 22
agreements that are entered into in this state, but does not include a person only in 23
the business of renting musical instruments that are intended to be used in whole 24
or in part in an elementary school or high school.
1420.02 General requirements of disclosure. (1) Form, location, size, and
2time of disclosure.
The information that is required to be disclosed under s. 420.03 3
shall satisfy all of the following:
(a) The information shall be clearly and conspicuously disclosed.
(b) The information shall be disclosed in writing.
(c) Except as provided in par. (f), the information shall be disclosed in the 7
rental-purchase agreement above the line for the lessee's signature. Multiple pages 8
or backs of pages may be used as long as the final page of the rental-purchase 9
agreement is signed by the lessee and other pages are signed or initialed by the 10
(d) Except as provided in par. (f), the information shall be disclosed in not less 12
than 8-point standard type.
(e) The information shall be disclosed before the time that the lessee becomes 14
legally obligated under the rental-purchase agreement.
(f) The disclosures required by s. 420.03 (2), (3), (4), and (5) shall be printed in 16
at least 10-point boldface type on the face of the rental-purchase agreement, and 17
shall be grouped together in a box, in the form and order prescribed by the 18
19(2) Accuracy of disclosure.
The information required under s. 420.03 must 20
be accurate as of the time that it is disclosed to the lessee. If any information 21
subsequently becomes inaccurate as a result of any act, occurrence, or agreement by 22
the lessee, the resulting inaccuracy is not a violation of any provision of this chapter 23
relating to rental-purchase agreements.
24(3) Copy of rental-purchase agreement.
The rental-purchase company shall 25
provide the lessee with a copy of the completed rental-purchase agreement signed
by the lessee. If more than one lessee is legally obligated under the same 2
rental-purchase agreement, delivery of a copy of the completed rental-purchase 3
agreement to one of the lessees shall satisfy this subsection.
4420.03 Required provisions of rental-purchase agreement.
rental-purchase company shall include all of the following information, to the extent 6
applicable, in every rental-purchase agreement:
A brief description of the rental property, sufficient to identify 8
the rental property to the lessee and the rental-purchase company, including any 9
identification number, and a statement indicating whether the rental property is 10
new or used. A statement that new rental property is used shall not be a violation 11
of this chapter.
12(2) Cash price.
The cash price of the rental property.
13(3) Rental payments to acquire ownership.
The total number, total dollar 14
amount, and timing of all rental payments necessary to acquire ownership of the 15
rental property, excluding any applicable taxes, application or processing charge, 16
delivery fee, liability damage waiver fee, and fees for optional services.
17(4) Cost of rental services.
The difference between the total dollar amount 18
of payments necessary to acquire ownership of the rental property disclosed under 19
sub. (3) and the cash price of the property disclosed under sub. (2). The 20
rental-purchase company shall also include a statement substantially similar to the 21
following: “The cost of rental services is the amount you will pay in addition to the 22
cash price if you acquire ownership of the rented goods by making all payments 23
necessary to acquire ownership."
1(5) Periodic renewal payment.
The rental payment necessary to renew the 2
rental-purchase agreement, not including any applicable taxes and fees for optional 3
services to which the lessee agrees.
4(6) Initial payment.
The total amount of the initial payment to be made by the 5
lessee at the time that the rental-purchase agreement is executed or the rental 6
property is delivered, including the initial rental payment, any application or 7
processing charge, any delivery fee, and fees for other optional services to which the 8
9(7) Other charges.
An itemized description of any other charges or fees that 10
the rental-purchase company may charge upon the occurrence of a contingency 11
specified in the rental-purchase agreement, such as, subject to s. 420.06 (2), a 12
reinstatement fee or, subject to s. 420.07 (1), a charge-back fee or insufficient funds 13
fee, as well as any applicable taxes, fees for optional services, application or 14
processing charges, and delivery fees that are not included in the initial payment 15
under sub. (6).
16(8) Summary of early-purchase option.
A statement that the lessee has an 17
early purchase option to purchase the property at any time during the period that 18
the rental-purchase agreement is in effect. The statement must specify the price or 19
the formula or other method for determining the price at which the property may be 20
21(9) Responsibility for theft or damage.
A statement that, unless otherwise 22
agreed, in the event the rental property is stolen, damaged, or destroyed while in the 23
possession of, or subject to the control of, the lessee, the lessee is responsible for an 24
amount equal to the lesser of the amount required to exercise the early-purchase
option as provided in sub. (8) or 55 percent of the scheduled remaining periodic 2
payments, but in no event in an amount greater than the cash price.
3(10) Service and warranty.
A statement that, during the term of the rental- 4
purchase agreement, the rental-purchase company is required to service the rental 5
property and maintain it in good working condition, as long as no other person has 6
serviced the rental property. In lieu of servicing the rental property, the 7
rental-purchase company may, at its option, replace the rental property with 8
substitute property of comparable quality and condition. The rental-purchase 9
company's obligation to provide service is limited to defects in the property not 10
caused by improper use or neglect by the lessee or harmful conditions outside the 11
control of the rental-purchase company or manufacturer.
12(11) Termination at option of lessee.
A statement that the lessee may 13
terminate the agreement at any time without penalty by voluntarily surrendering 14
or returning the rental property in good repair.