Amendment AA2-ASA1-AB133

AB133-ASA1-AA2,461,8 " Section 2818r. 409.104 (12m) of the statutes is created to read:

AB133-ASA1-AA2,461,10 409.104 (12m) To a transfer of an interest under a rent-to-own agreement under ch. 435; or".

AB133-ASA1-AA2,461,11 969. Page 1362, line 23: after that line insert:

AB133-ASA1-AA2,461,12 " Section 2822no. 421.202 (7m) of the statutes is created to read:

AB133-ASA1-AA2,461,13 421.202 (7m) A rent-to-own agreement under ch. 435;

AB133-ASA1-AA2, s. 2822nt Section 2822nt. 421.301 (9) of the statutes is amended to read:

AB133-ASA1-AA2,461,24 421.301 (9) "Consumer credit sale" means a sale of goods, services or an interest in land to a customer on credit where the debt is payable in instalments or a finance charge is imposed and includes any agreement in the form of a bailment of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the goods or real property involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the goods or real property upon full compliance with the terms of the agreement. "Consumer credit sale" does not include a rent-to-own agreement under ch. 435.

AB133-ASA1-AA2, s. 2822nu Section 2822nu. 421.301 (10) of the statutes is amended to read:

AB133-ASA1-AA2,462,9 421.301 (10) "Consumer credit transaction" means a consumer transaction between a merchant and a customer in which real or personal property, services or money is acquired on credit and the customer's obligation is payable in instalments or for which credit a finance charge is or may be imposed, whether such transaction is pursuant to an open-end credit plan or is a transaction involving other than open-end credit. The term includes consumer credit sales, consumer loans, consumer leases and transactions pursuant to open-end credit plans. "Consumer credit transaction" does not include a rent-to-own agreement under ch. 435.

AB133-ASA1-AA2, s. 2822nv Section 2822nv. 421.301 (11) of the statutes is amended to read:

AB133-ASA1-AA2,462,13 421.301 (11) "Consumer lease" means a lease of goods which a merchant makes to a customer for a term exceeding 4 months. "Consumer lease" does not include a rent-to-own agreement under ch. 435.".

AB133-ASA1-AA2,462,14 970. Page 1363, line 15: after that line insert:

AB133-ASA1-AA2,462,15 " Section 2822y. 423.201 of the statutes is amended to read:

AB133-ASA1-AA2,463,3 423.201 Definition. "Consumer approval transaction" means a consumer transaction other than a sale or lease or listing for sale of real property or a sale of goods at auction 1) which is initiated by face-to-face solicitation away from a regular place of business of the merchant or by mail or telephone solicitation directed to the particular customer and 2) which is consummated or in which the customer's offer to contract or other writing evidencing the transaction is received by the merchant away from a regular place of business of the merchant and involves the extension of credit or is a cash transaction in which the amount the customer pays exceeds $25. "Consumer approval transaction" shall in no event include a catalog sale which is not accompanied by any other solicitation or a consumer loan conducted and consummated entirely by mail. "Consumer approval transaction" does not include a rent-to-own agreement under ch. 435.

AB133-ASA1-AA2, s. 2822z Section 2822z. Chapter 435 of the statutes is created to read:

AB133-ASA1-AA2,463,6 CHAPTER 435 RENT-TO-OWN AGREEMENTS

AB133-ASA1-AA2,463,9 435.102 Scope. (1) Inapplicability of other laws. A rent-to-own agreement under this chapter is not governed by the laws relating to a security interest, as defined in s. 401.201 (37), or a lease, as defined in s. 411.103 (1) (j).

AB133-ASA1-AA2,463,10 (2) Exclusions. This chapter does not apply to any of the following:

AB133-ASA1-AA2,463,12 (a) Any agreement between a rental-purchase company and any person other than a lessee.

AB133-ASA1-AA2,463,14 (b) A lease or bailment of personal property if the property is intended to be used primarily for business, commercial or agricultural purposes.

AB133-ASA1-AA2,463,16 (c) A lease or bailment of personal property which is incidental to the lease of real property.

AB133-ASA1-AA2,463,17 (d) A lease of a motor vehicle, as defined in s. 218.01 (1) (m).

AB133-ASA1-AA2,463,19 (e) A credit sale, as defined in 15 USC 1602 (g) and in the regulations promulgated under that section.

AB133-ASA1-AA2,463,21 (f) A consumer lease, as defined in 15 USC 1667 (1) and in the regulations promulgated under that section.

AB133-ASA1-AA2,463,22 435.201 Definitions. In this chapter:

AB133-ASA1-AA2,463,23 (1) "Department" means the department of financial institutions.

AB133-ASA1-AA2,463,25 (2) "Lessee" means an individual who rents personal property under a rent-to-own agreement.

AB133-ASA1-AA2,464,1 (3) "Rental property" means property rented under a rent-to-own agreement.

AB133-ASA1-AA2,464,4 (4) "Rental-purchase company" means a person who regularly provides the use of property through rent-to-own agreements and to whom rental payments are initially payable under the terms of a particular rent-to-own agreement.

AB133-ASA1-AA2,464,7 (5) "Rent-to-own agreement" means an agreement between a rental-purchase company and a lessee for the use of personal property if all of the following conditions are met:

AB133-ASA1-AA2,464,9 (a) The personal property is to be used primarily for personal, family or household purposes.

AB133-ASA1-AA2,464,11 (b) The agreement has an initial term of 4 months or less and is automatically renewable with each payment after the initial term.

AB133-ASA1-AA2,464,13 (c) The agreement does not obligate or require the lessee to renew the agreement beyond the initial term.

AB133-ASA1-AA2,464,15 (d) The agreement permits, but does not obligate, the lessee to acquire ownership of the personal property.

AB133-ASA1-AA2,464,24 435.301 Registration. (1) Requirement; application. Every person engaging in business as a rental-purchase company in this state shall file a registration statement with the department within 30 days after the date on which the person commences business in this state and no later than February 28 of each year thereafter. Except during the first 30 days after the date on which the person commences business in this state, no person may engage in business as a rental-purchase company in this state without a valid unsuspended registration filed under this subsection. A registration statement under this section shall include all of the following information:

AB133-ASA1-AA2,464,25 (a) The name of the rental-purchase company.

AB133-ASA1-AA2,465,1 (b) The name under which the rental-purchase company transacts business.

AB133-ASA1-AA2,465,2 (c) The address of the rental-purchase company's principal office.

AB133-ASA1-AA2,465,4 (d) The addresses of all stores or other retail locations in this state at which the rental-purchase company offers rent-to-own agreements to potential lessees.

AB133-ASA1-AA2,465,6 (e) The address of the rental-purchase company's designated agent upon whom service of process may be made in this state.

AB133-ASA1-AA2,465,8 (2) Rules. The department shall promulgate rules and prescribe forms for the efficient administration of this section.

AB133-ASA1-AA2,465,12 435.302 Registration fees. (1) When due. Any rental-purchase company required to register under s. 435.301 shall pay a registration fee to the department when the rental-purchase company files the registration statement required under s. 435.301.

AB133-ASA1-AA2,465,16 (2) Amount. The amount of the registration fee shall be $25 per store or other retail location in this state at which the rental-purchase company offers rent-to-own agreements to potential lessees. However, the registration fee shall not be less than $50 nor more than $750.

AB133-ASA1-AA2,465,19 435.303 Examination of books and records. (1) Purpose of examination. The department may examine the books and records of any rental-purchase company for the purpose of determining compliance with this chapter.

AB133-ASA1-AA2,466,2 (2) Availability of books and records. A rental-purchase company shall make its books and records reasonably available for inspection by the department. If the rental-purchase company's books and records are located outside of this state, the rental-purchase company shall, at the rental-purchase company's option, either make the books and records available to the department at a convenient location in this state or pay the reasonable and necessary expenses for the department to examine the books and records at the location where they are maintained.

AB133-ASA1-AA2,466,6 (3) Method of bookkeeping. A rental-purchase company shall use generally accepted accounting principles and practices in keeping its books and records so that the department may determine if the rental-purchase company is in compliance with this chapter.

AB133-ASA1-AA2,466,11 (4) Destruction of records; when authorized. A rental-purchase company shall keep records relating to each rent-to-own agreement entered into by the rental-purchase company and the payments made under each rent-to-own agreement for at least 2 years after the date on which the rent-to-own agreement is terminated.

AB133-ASA1-AA2,466,14 435.304 Suspension or revocation of registration. (1) Grounds. The department may issue an order suspending or revoking a rental-purchase company's registration if any of the following conditions is met:

AB133-ASA1-AA2,466,17 (a) The rental-purchase company has violated any provision of this chapter, the violation is not isolated or inadvertent, and the department determines that the violation justifies the suspension or revocation of the registration.

AB133-ASA1-AA2,466,21 (b) The department becomes aware that any fact or condition exists which, if it had existed at the time that the rental-purchase company first filed the registration statement, would have warranted the department's refusal to honor the registration.

AB133-ASA1-AA2,466,23 (c) The rental-purchase company has failed to pay the registration fee under s. 435.302.

AB133-ASA1-AA2,466,25 (2) Procedure. The following procedure applies to every order of the department that suspends or revokes a registration under this chapter:

AB133-ASA1-AA2,467,4 (a) The department shall provide a written notice to the rental-purchase company registered under s. 435.301 of the department's intent to issue an order suspending or revoking the rental-purchase company's registration. The notice shall specify the grounds for and the effective date of the proposed order.

AB133-ASA1-AA2,467,9 (b) The rental-purchase company shall file with the department a written response to the allegations contained in the notice within 20 days after receiving the notice. The rental-purchase company's written response may contain a request for a hearing pursuant to s. 227.42. If the written response does not contain a request for a hearing pursuant to s. 227.42, the right to a hearing is waived.

AB133-ASA1-AA2,467,14 (c) If a written response containing a request for a hearing pursuant to s. 227.42 is received by the department within the time provided under par. (b) and if, in the opinion of the department, the matter satisfies one of the conditions under s. 227.42 (1) (a) to (d), the matter shall be scheduled for a contested hearing to commence within 60 days after the date on which the department receives the written response.

AB133-ASA1-AA2,467,22 (d) If the rental-purchase company fails to file a written response within the time provided under par. (b) or if the rental-purchase company files a timely written response but fails to request a hearing pursuant to s. 227.42, the department may issue an order suspending or revoking the rental-purchase company's registration under sub. (1). If the rental-purchase company files a timely written response containing a request for a hearing pursuant to s. 227.42, any order of the department suspending or revoking the rental-purchase company's registration shall be stayed pending completion of proceedings under ch. 227.

AB133-ASA1-AA2,467,25 435.401 General requirements of disclosure. (1) Form, location, size and time of disclosure. All information required under s. 435.402 shall satisfy all of the following:

AB133-ASA1-AA2,468,1 (a) The information shall be clearly and conspicuously disclosed.

AB133-ASA1-AA2,468,2 (b) The information shall be disclosed in writing.

AB133-ASA1-AA2,468,4 (c) The information shall be disclosed on the face of the rent-to-own agreement above the line for the lessee's signature.

AB133-ASA1-AA2,468,5 (d) The information shall be disclosed in not less than 8-point standard type.

AB133-ASA1-AA2,468,7 (e) The information shall be disclosed at or before the time that the lessee becomes legally obligated under the rent-to-own agreement.

AB133-ASA1-AA2,468,11 (2) Accuracy of disclosure. All information required under s. 435.402 must be accurate as of the time that it is disclosed. If any information subsequently becomes inaccurate as a result of any act, occurrence or agreement by the lessee, the resulting inaccuracy is not a violation of this chapter.

AB133-ASA1-AA2,468,16 (3) Copy of rent-to-own agreement. The rental-purchase company shall provide the lessee with a copy of the completed rent-to-own agreement signed by the lessee. If more than one lessee is legally obligated under the same rent-to-own agreement, delivery of a copy of the completed rent-to-own agreement to one of the lessees shall satisfy this subsection.

AB133-ASA1-AA2,468,19 435.402 Required provisions of rent-to-own agreement. A rental-purchase company shall include all of the following information, to the extent applicable, in every rent-to-own agreement:

AB133-ASA1-AA2,468,24 (1) Description. A brief description of the rental property, sufficient to identify the rental property to the lessee and the rental-purchase company, including an identification number, and a statement indicating whether the rental property is new or used. A statement that incorrectly indicates that new rental property is used is not a violation of this chapter.

AB133-ASA1-AA2,469,3 (2) Cash price. The price at which the rental-purchase company would have sold the rental property to the lessee for cash on the date on which the rent-to-own agreement is executed.

AB133-ASA1-AA2,469,4 (3) Rental Payment. The periodic rental payment for the rental property.

AB133-ASA1-AA2,469,9 (4) Up-front payment. The payment required of the lessee at the time that the agreement is executed or the rental property is delivered, whichever is later, including the initial rental payment, any application or processing charge, any delivery fee, any charge for a liability damage waiver or for other optional services agreed to by the lessee, and the applicable tax.

AB133-ASA1-AA2,469,11 (5) Payment to acquire ownership. The total number, total dollar amount and due date of all rental payments necessary to acquire ownership of the rental property.

AB133-ASA1-AA2,469,17 (6) Other charges. A statement that the total dollar amount of all rental payments necessary to acquire ownership of the rental property does not include other charges that a lessee may incur, such as application, processing or delivery charges, and late payment, reinstatement, default and pickup fees. These charges shall be separately identified in the rental-purchase agreement and the amount of each charge and fee disclosed.

AB133-ASA1-AA2,469,20 (7) Rental, not purchase. A statement that the lessee will not own the rental property until the lessee has made the total amount of payments necessary to acquire ownership or has exercised the lessee's early-purchase option.

AB133-ASA1-AA2,469,25 (8) Summary of early-purchase option. A statement summarizing the terms of the lessee's option to acquire ownership of the rental property, including a statement indicating that the lessee has the right to exercise an early purchase option and indicating the price, or the formula or method for determining the price, at which the rental property may be purchased under the early-purchase option.

AB133-ASA1-AA2,470,5 (9) Responsibility for theft or damage. A statement that, unless otherwise agreed, the lessee is responsible for the fair market value of the rental property, determined according to the early-purchase option formula or method, if, and as of the time, the rental property is stolen, damaged or destroyed while in the possession of or subject to the control of the lessee.

AB133-ASA1-AA2,470,12 (10) Service and warranty. A statement identifying the party responsible for maintaining or servicing the rental property during the term of the rent-to-own agreement, together with a description of that responsibility, and a statement that if any part of a manufacturer's express warranty covers the rental property when the lessee acquires ownership of the rental property the manufacturer's express warranty will be transferred to the lessee, if the transfer is allowed by the terms of the manufacturer's express warranty.

AB133-ASA1-AA2,470,16 (11) Termination at option of lessee. A statement that the lessee may terminate the agreement at any time without penalty by voluntarily surrendering or returning the rental property in good repair along with any past-due rental payments, fees and charges.

AB133-ASA1-AA2,470,18 (12) Right to reinstate. A brief explanation of the lessee's right to reinstate a rent-to-own agreement under s. 435.405.

AB133-ASA1-AA2,470,24 (13) General notice. A notice reading substantially as follows: "You are renting this property. You will not own the property until you make all of the regularly scheduled rental payments necessary to acquire ownership or until you exercise your early-purchase option. If you do not make your rental payments as scheduled or exercise your early-purchase option, the lessor may repossess the property."

AB133-ASA1-AA2,471,4 (14) Information about rental-purchase company and lessee. The names of the rental-purchase company and the lessee, the rental-purchase company's business address and telephone number, the lessee's address and the date on which the rent-to-own agreement is executed.

AB133-ASA1-AA2,471,6 435.403 Prohibited provisions of rent-to-own agreement. A rent-to-own agreement may not contain any of the following:

AB133-ASA1-AA2,471,7 (1) Confession. A confession of judgment.

AB133-ASA1-AA2,471,10 (2) Security. A provision granting the rental-purchase company a security interest in any property except rental property delivered by the rental-purchase company pursuant to the rent-to-own agreement.

AB133-ASA1-AA2,471,14 (3) Repossession. A provision authorizing a rental-purchase company or an agent of the rental-purchase company to enter the lessee's premises or to commit a breach of the peace in the repossession of rental property delivered by the rental-purchase company pursuant to the rent-to-own agreement.

AB133-ASA1-AA2,471,17 (4) Waiver. A waiver of a defense or counterclaim, or a waiver of any right to assert any claim that the lessee may have against the rental-purchase company or an agent of the rental-purchase company or a waiver of any provision of this chapter.

AB133-ASA1-AA2,471,20 (5) Overpayment. A provision requiring rental payments totaling more than the total dollar amount of all rental payments necessary to acquire ownership, as disclosed in the rental-purchase agreement.

AB133-ASA1-AA2,471,22 (6) Insurance. A provision requiring the purchase of insurance from the rental-purchase company to cover the rental property.

AB133-ASA1-AA2,472,7 435.404 Late payment, grace period and late fees. (1) Late fee; generally. If a lessee fails to make any payment when due under a rent-to-own agreement or if, at the end of any rental term, the lessee fails to return the rental property or to renew the rent-to-own agreement for an additional term, the rental-purchase company may require the lessee to pay a late fee. However, except as provided under sub. (4), this subsection does not apply if the lessee's failure to return rental property or failure to renew the rent-to-own agreement at the end of the rental term is due to the lessee's exercise of an early-purchase option under the rent-to-own agreement or due to the lessee's making all payments necessary to acquire ownership of the rental property.

AB133-ASA1-AA2,472,9 (2) Grace periods. The following grace periods shall apply to rental payments made with respect to a rental-purchase agreement:

AB133-ASA1-AA2,472,12 (a) For an agreement that is renewed on a weekly basis, no late fee may be assessed for a payment that is made within 2 days after the date on which the scheduled payment is due.