2017 - 2018 LEGISLATURE
March 12, 2018 - Offered by Senator Moulton.
SB637-SSA1,1,4 1An Act to amend 20.144 (1) (g); and to create 20.144 (1) (jm), 409.109 (4) (n),
2chapter 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:
SB637-SSA1,1d 5Section 1d. 20.144 (1) (g) of the statutes, as affected by 2017 Wisconsin Act
, is amended to read:
SB637-SSA1,2,47 20.144 (1) (g) General program operations. The amounts in the schedule for
8the general program operations of the department of financial institutions. Except
9as provided in pars. (a), (h), (i), (j), (jm), and (u) and sub. (3), all moneys received by
10the department, other than by the office of credit unions and the division of banking,
11and 88 percent of all moneys received by the office of credit unions and the

1department's division of banking shall be credited to this appropriation, but any
2balance at the close of a fiscal year under this appropriation shall lapse to the general
3fund. Annually, $150,000 of the amounts received under this appropriation account
4shall be transferred to the appropriation account under s. 20.575 (1) (g).
SB637-SSA1,1g 5Section 1g. 20.144 (1) (jm) of the statutes is created to read:
SB637-SSA1,2,76 20.144 (1) (jm) Rental-purchase company payments funding financial literacy.
7All moneys received under s. 420.12 (4) for promoting financial literacy.
SB637-SSA1,1m 8Section 1m. 409.109 (4) (n) of the statutes is created to read:
SB637-SSA1,2,119 409.109 (4) (n) Rental-purchase agreements entered into by a rental-purchase
10company that has provided notice to the department of financial institutions under
11ch. 420.
SB637-SSA1,2 12Section 2. Chapter 420 of the statutes is created to read:
SB637-SSA1,2,1313 CHAPTER 420
SB637-SSA1,2,15 15420.01Definitions. In this chapter:
SB637-SSA1,2,19 16(1g) “Balloon payment” means any payment for the purchase or use of rental
17property that is more than the regularly scheduled periodic payment amount but not
18including any optional fees or charges permitted under the rental-purchase
SB637-SSA1,2,23 20(1m) “Cash price" means the price at which a rental-purchase company would
21sell rental property to the lessee of the rental property if the lessee were to pay for
22the rental property in full on the date on which the rental-purchase agreement is
SB637-SSA1,2,25 24(2) “Charge-back fee” means a charge or fee for a payment that is denied or
25dishonored by a credit card provider.
1(3) “Department" means the department of financial institutions.
SB637-SSA1,3,4 2(4) “Displayed or offered primarily for rental-purchase,” with respect to rental
3property, means rental property displayed or offered at a physical location that
4derives 50 percent or more of its revenues from rental-purchase agreements.
SB637-SSA1,3,6 5(5) “Insufficient funds fee” means a charge or fee for the return of a check,
6electronic funds transfer, or other payment instrument that is denied or dishonored.
SB637-SSA1,3,8 7(6) “Rental property" means property rented under a rental-purchase
8agreement but does not include any motor vehicle, as defined in s. 340.01 (35).
SB637-SSA1,3,11 9(7) “Rental-purchase agreement" means an agreement between a
10rental-purchase company and a lessee for the use of rental property if all of the
11following apply:
SB637-SSA1,3,1312 (a) The rental property is of the type typically used for personal, family, or
13household purposes.
SB637-SSA1,3,1514 (b) The agreement has an initial term of 4 months or less and is renewable with
15each payment after the initial term.
SB637-SSA1,3,1716 (c) The agreement does not obligate or require the lessee to renew the
17agreement beyond the initial term.
SB637-SSA1,3,1918 (d) The agreement permits, but does not obligate, the lessee to acquire
19ownership of the rental property.
SB637-SSA1,3,24 20(8) “Rental-purchase company" means a person engaged in the business of
21entering into rental-purchase agreements in this state or acquiring rental-purchase
22agreements that are entered into in this state, but does not include a person only in
23the business of renting musical instruments that are intended to be used in whole
24or 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
3shall satisfy all of the following:
SB637-SSA1,4,44 (a) The information shall be clearly and conspicuously disclosed.
SB637-SSA1,4,55 (b) The information shall be disclosed in writing.
SB637-SSA1,4,106 (c) Except as provided in par. (f), the information shall be disclosed in the
7rental-purchase agreement above the line for the lessee's signature. Multiple pages
8or backs of pages may be used as long as the final page of the rental-purchase
9agreement is signed by the lessee and other pages are signed or initialed by the
SB637-SSA1,4,1211 (d) Except as provided in par. (f), the information shall be disclosed in not less
12than 8-point standard type.
SB637-SSA1,4,1413 (e) The information shall be disclosed before the time that the lessee becomes
14legally obligated under the rental-purchase agreement.
SB637-SSA1,4,1815 (f) The disclosures required by s. 420.03 (2), (3), (4), and (5) shall be printed in
16at least 10-point boldface type on the face of the rental-purchase agreement, and
17shall be grouped together in a box, in the form and order prescribed by the
SB637-SSA1,4,23 19(2) Accuracy of disclosure. The information required under s. 420.03 must
20be accurate as of the time that it is disclosed to the lessee. If any information
21subsequently becomes inaccurate as a result of any act, occurrence, or agreement by
22the lessee, the resulting inaccuracy is not a violation of any provision of this chapter
23relating to rental-purchase agreements.
SB637-SSA1,5,3 24(3) Copy of rental-purchase agreement. The rental-purchase company shall
25provide the lessee with a copy of the completed rental-purchase agreement signed

1by the lessee. If more than one lessee is legally obligated under the same
2rental-purchase agreement, delivery of a copy of the completed rental-purchase
3agreement to one of the lessees shall satisfy this subsection.
SB637-SSA1,5,6 4420.03 Required provisions of rental-purchase agreement. A
5rental-purchase company shall include all of the following information, to the extent
6applicable, in every rental-purchase agreement:
SB637-SSA1,5,11 7(1) Description. A brief description of the rental property, sufficient to identify
8the rental property to the lessee and the rental-purchase company, including any
9identification number, and a statement indicating whether the rental property is
10new or used. A statement that new rental property is used shall not be a violation
11of this chapter.
SB637-SSA1,5,12 12(2) Cash price. The cash price of the rental property.
SB637-SSA1,5,16 13(3) Rental payments to acquire ownership. The total number, total dollar
14amount, and timing of all rental payments necessary to acquire ownership of the
15rental property, excluding any applicable taxes, application or processing charge,
16delivery fee, liability damage waiver fee, and fees for optional services.
SB637-SSA1,5,23 17(4) Cost of rental services. The difference between the total dollar amount
18of payments necessary to acquire ownership of the rental property disclosed under
19sub. (3) and the cash price of the property disclosed under sub. (2). The
20rental-purchase company shall also include a statement substantially similar to the
21following: “The cost of rental services is the amount you will pay in addition to the
22cash price if you acquire ownership of the rented goods by making all payments
23necessary to acquire ownership."
1(5) Periodic renewal payment. The rental payment necessary to renew the
2rental-purchase agreement, not including any applicable taxes and fees for optional
3services to which the lessee agrees.
SB637-SSA1,6,8 4(6) Initial payment. The total amount of the initial payment to be made by the
5lessee at the time that the rental-purchase agreement is executed or the rental
6property is delivered, including the initial rental payment, any application or
7processing charge, any delivery fee, and fees for other optional services to which the
8lessee agrees.
SB637-SSA1,6,15 9(7) Other charges. An itemized description of any other charges or fees that
10the rental-purchase company may charge upon the occurrence of a contingency
11specified in the rental-purchase agreement, such as, subject to s. 420.06 (2), a
12reinstatement fee or, subject to s. 420.07 (1), a charge-back fee or insufficient funds
13fee, as well as any applicable taxes, fees for optional services, application or
14processing charges, and delivery fees that are not included in the initial payment
15under sub. (6).
SB637-SSA1,6,20 16(8) Summary of early-purchase option. A statement that the lessee has an
17early purchase option to purchase the property at any time during the period that
18the rental-purchase agreement is in effect. The statement must specify the price or
19the formula or other method for determining the price at which the property may be
SB637-SSA1,7,2 21(9) Responsibility for theft or damage. A statement that, unless otherwise
22agreed, in the event the rental property is stolen, damaged, or destroyed while in the
23possession of, or subject to the control of, the lessee, the lessee is responsible for an
24amount equal to the lesser of the amount required to exercise the early-purchase

1option as provided in sub. (8) or 55 percent of the scheduled remaining periodic
2payments, but in no event in an amount greater than the cash price.
SB637-SSA1,7,11 3(10) Service and warranty. A statement that, during the term of the rental-
4purchase agreement, the rental-purchase company is required to service the rental
5property and maintain it in good working condition, as long as no other person has
6serviced the rental property. In lieu of servicing the rental property, the
7rental-purchase company may, at its option, replace the rental property with
8substitute property of comparable quality and condition. The rental-purchase
9company's obligation to provide service is limited to defects in the property not
10caused by improper use or neglect by the lessee or harmful conditions outside the
11control of the rental-purchase company or manufacturer.
SB637-SSA1,7,14 12(11) Termination at option of lessee. A statement that the lessee may
13terminate the agreement at any time without penalty by voluntarily surrendering
14or returning the rental property in good repair.