Amendment SSA1-SB637

SB637-SSA1,8,7 (15) Optional services. Space for a specific, separately signed or initialed, affirmative, written indication of the lessee's desire for any optional service for which a charge is assessed. The lessee's request must be obtained after a written disclosure of the cost of the optional service is made, and the disclosure of the cost and purpose of such service must be listed at or near the affirmation space. This requirement is satisfied by a separate written agreement for an optional service that meets the requirements of this subsection.

SB637-SSA1,8,9 420.04 Prohibited provisions of rental-purchase agreements. A rental-purchase agreement may not contain any of the following:

SB637-SSA1,8,10 (1) Confession. A confession of judgment.

SB637-SSA1,8,15 (2) Repossession. A provision authorizing a rental-purchase company, or an agent of the rental-purchase company, to enter the lessee's residence without the lessee's permission, or to commit a breach of the peace in the repossession of rental property provided by the rental-purchase company under the rental-purchase agreement.

SB637-SSA1,8,19 (3) Waiver. A waiver of a defense or counterclaim, 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 relating to rental-purchase agreements.

SB637-SSA1,8,22 (4) 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.

SB637-SSA1,8,24 (5) Insurance. A provision requiring the lessee to purchase insurance from the rental-purchase company to insure the rental property.

SB637-SSA1,9,3 (6) Balloon payments. Any provision that requires the lessee to make a balloon payment to acquire ownership of the rental property, not including any payment necessary to exercise an early-purchase option.

SB637-SSA1,9,8 420.05 Disclosures for certain rental-purchase agreements. (1) Disclosure for property not displayed or offered primarily for rental-purchase. When property that is not displayed or offered primarily for rental-purchase is offered for rental-purchase, all of the following shall be separately disclosed prior to displaying or presenting a rental-purchase agreement to a lessee for execution:

SB637-SSA1,9,9 (a) The cash price of the property.

SB637-SSA1,9,10 (b) The amount of the periodic renewal payment.

SB637-SSA1,9,12 (c) The total dollar amount of all periodic rental payments necessary to acquire ownership if the lessee makes all scheduled payments.

SB637-SSA1,9,18 (2) Additional disclosures for property not displayed or offered primarily for rental-purchase. In addition to the disclosures required by s. 420.03, if the property that is the subject of a rental-purchase agreement was not displayed or offered primarily for rental-purchase prior to the rental-purchase transaction, all of the following additional disclosures shall be made on a separate page titled “Acknowledgment of Rental-Purchase Transaction” and signed by the lessee:

SB637-SSA1,9,21 (a) The agreement is a rental-purchase agreement and the lessee does not own the property, but can obtain ownership by using ownership options provided in the agreement.

SB637-SSA1,9,22 (b) The agreement is not a credit transaction.

SB637-SSA1,9,25 (c) The lessee has the right to return the property to the lessor without additional charge or penalty at any time and will owe nothing further except unpaid rental charges and fees.

SB637-SSA1,10,3 (d) If the lessee returns the property, the agreement offers reinstatement rights that allow the lessee to get the property back if the lessee has complied with the agreement and the law.

SB637-SSA1,10,5 (e) The lessee has reviewed and understands the agreement, including the purchase option rights and the total cost if all scheduled payments are made.

SB637-SSA1,10,9 420.06 Reinstatement of a rental-purchase agreement. (1) Reinstatement generally. Subject to sub. (2), a lessee may reinstate a rental-purchase agreement that has ended without losing any rights or options previously acquired if all of the following apply:

SB637-SSA1,10,11 (a) The lessee voluntarily returned or surrendered the rental property within 7 days after the expiration of the rental-purchase agreement.

SB637-SSA1,10,13 (b) Not more than 365 days have passed after the date on which the rental-purchase agreement ended.

SB637-SSA1,10,21 (2) Authorized conditions on reinstatement. As a condition of reinstatement under sub. (1), the rental-purchase company may require the payment of all past-due rental charges, the rental payment for the next term, and a reinstatement fee not to exceed $8 for agreements renewed on a monthly basis or $5 for agreements renewed more frequently than monthly. However, no reinstatement fee may be charged unless a periodic payment is delinquent for more than 7 days if the payment is due monthly or unless a periodic payment is delinquent for more than 3 days if the payment is due more frequently than monthly.

SB637-SSA1,11,2 (3) Effect of repossession on reinstatement. Subject to s. 420.04 (2), and except as provided in s. 420.16, nothing in this section prohibits a rental-purchase company from repossessing or attempting to repossess rental property when a rental-purchase agreement is not renewed, but such efforts do not affect the lessee's right to reinstate as long as the rental property is voluntarily returned or surrendered within 7 days after the rental-purchase agreement expires.

SB637-SSA1,11,7 (4) Property available upon reinstatement. Upon reinstatement, the rental-purchase company shall provide the lessee with the same rental property, if the property is available and is in the same condition as when it was returned to the rental-purchase company, or with substitute property of comparable quality and condition.

SB637-SSA1,11,13 420.07 Limitation on certain fees and returned payments. (1) Certain fees prohibited. A rental-purchase company may not charge a lessee any late fee in connection with any past-due rental charges or reinstatement of a rental-purchase agreement and may not charge a lessee any charge-back fee or insufficient funds fee that exceeds $15 for each attempted payment that is denied or dishonored.

SB637-SSA1,11,18 (2) Limitation on resubmission of certain payment transactions. If a payment under a rental-purchase agreement processed through the Automated Clearing House network is returned for reasons of insufficient or uncollected funds, the transaction may be reinitiated a maximum of 2 times in an attempt to collect the funds.

SB637-SSA1,11,21 420.08 Receipts and statements. (1) Receipts. A rental-purchase company shall provide a written receipt to the lessee for any payment made by the lessee in cash or, upon the request of the lessee, for any other type of payment.

SB637-SSA1,12,5 (2) Statement due to lessee. Subject to sub. (4), upon the request of a lessee, a rental-purchase company shall provide a written statement to the lessee showing the lessee's payment history on each rental-purchase agreement between the lessee and the rental-purchase company. A rental-purchase company is not required to provide a statement covering any rental-purchase agreement that ended more than one year prior to the date of the lessee's request. A rental-purchase company may provide a single statement covering all rental-purchase agreements or separate statements for each rental-purchase agreement, at the rental-purchase company's option.

SB637-SSA1,12,10 (3) Statement due to other parties. Subject to sub. (4), upon the written request of a lessee, made during the term of or no later than one year after the rental-purchase agreement ended, a rental-purchase company shall provide a written statement to any person the lessee designates, showing the lessee's payment history under the rental-purchase agreement.

SB637-SSA1,12,15 (4) Fee for statement. A lessee or, if appropriate, a lessee's designee, is entitled to receive one statement under subs. (2) and (3) without charge once every 12 months. A rental-purchase company shall provide an additional statement if the lessee pays the rental-purchase company's reasonable costs of preparing and furnishing the statement.

SB637-SSA1,12,19 420.09 Liability damage waiver. (1) Waiver permissible. A rental-purchase company and a lessee may contract for a liability damage waiver. A rental-purchase company may charge a periodic fee for a liability damage waiver in an amount not to exceed 10 percent of the periodic rental payment.

SB637-SSA1,12,21 (2) Requirements for waiver. A rental-purchase company may not sell a liability damage waiver unless all of the following apply:

SB637-SSA1,12,24 (a) The contract containing the waiver is provided to the lessee in writing, either by incorporating it into the rental-purchase agreement or by providing it as a separate document.

SB637-SSA1,13,2 (b) The face of the writing under par. (a) clearly discloses that the lessee is not required to purchase the waiver.

SB637-SSA1,13,4 (c) The contract clearly discloses the dollar amount of the fee to be paid with each rental payment.

SB637-SSA1,13,5 (d) The lessee expressly agrees to the waiver in writing.

SB637-SSA1,13,10 (3) Scope of waiver. The liability damage waiver may exclude only loss or damage to the property that is the subject of the rental-purchase agreement caused by moisture, scratches, mysterious disappearance, vandalism, abandonment of the property, or any other damage intentionally caused by the lessee or that results from the lessee's willful or wanton misconduct.

SB637-SSA1,13,12 (4) Waiver cancellation. The lessee is entitled to cancel the waiver at the end of any rental term.

SB637-SSA1,13,13 (5) Waiver is not insurance. A liability damage waiver is not insurance.

SB637-SSA1,13,17 420.10 Advertising disclosure required. If an advertisement for a rental-purchase agreement states the amount of a payment for a specific item of property, the advertisement shall also clearly and conspicuously state all of the following:

SB637-SSA1,13,18 (1) That the transaction advertised is a rental-purchase agreement.

SB637-SSA1,13,20 (2) The total number and total dollar amount of all rental payments necessary to acquire ownership of the property.

SB637-SSA1,13,22 (3) That the lessee does not acquire ownership of the property if the lessee fails to make all payments necessary to acquire ownership of the property.

SB637-SSA1,14,2 420.11 Price cards displayed. (1) Price cards generally. Except as provided in sub. (2), a card or tag that clearly and conspicuously states all of the following shall be displayed on or next to any property displayed or offered primarily for rental-purchase by a rental-purchase company for rent under a rental-purchase agreement:

SB637-SSA1,14,3 (a) The cash price that a lessee would pay to purchase the property.

SB637-SSA1,14,4 (b) The amount and timing of the rental payments.

SB637-SSA1,14,6 (c) The total number and total amount of all rental payments necessary to acquire ownership of the property under a rental-purchase agreement.

SB637-SSA1,14,7 (d) Whether the property is new or used.

SB637-SSA1,14,13 (2) Exceptions. If property is offered for rent under a rental-purchase agreement through a catalog, whether print or electronic, or if the size of the property is such that displaying a card or tag on or next to the property would be impractical, a rental-purchase company may make the disclosures required under sub. (1) in a catalog, list, or disclosure sheet if the catalog, list, or disclosure sheet is readily available to prospective lessees and provided upon request.

SB637-SSA1,14,18 420.12 Notice to the department. (1) Initial notice. A rental-purchase company shall file notice with the department, in the form and manner prescribed by the department, within 30 days after commencing business in this state. The notice shall set forth the location of each place of business in this state where the rental-purchase company conducts any operations regulated under this chapter.

SB637-SSA1,14,23 (2) Annual notice. After filing the initial notice in sub. (1), a rental-purchase company shall file annually, on or before January 31 of each year, in the form and manner prescribed by the department, a list setting forth the location of each place of business in this state where the rental-purchase company conducts any operations regulated under this chapter.

SB637-SSA1,15,3 (3) Annual fee. (a) A rental-purchase company shall remit an annual fee with the report required by sub. (2). The amount of the annual fee shall be calculated according to the sum of the following, but may not exceed $2,500:

SB637-SSA1,15,4 1. One hundred dollars for each of the first 10 locations in the state.

SB637-SSA1,15,5 2. Fifty dollars for each additional location in this state.

SB637-SSA1,15,10 (b) If a rental-purchase company fails to timely pay the annual fee on or before January 31, the department shall provide written notice to the rental-purchase company. If the rental-purchase company fails to pay within 30 days after issuance of this notice, the department may order the rental-purchase company to cease operating until the annual fee is paid.

SB637-SSA1,15,17 (4) Additional payment funding financial literacy. In addition to the annual fee under sub. (3), a rental-purchase company shall pay to the department with the annual fee an amount equal to $1 for each original rental-purchase agreement, not including reinstatement of a rental-purchase agreement, entered into by the rental-purchase company during the 12-month period covered by the report under sub. (2). All payments received under this subsection shall be credited to the appropriation account under s. 20.144 (1) (jm).

SB637-SSA1,15,20 420.13 Rule making. (1) Generally. Subject to subs. (2) and (3), the department may promulgate rules under ch. 227 necessary to administer and enforce the requirements of this chapter.

SB637-SSA1,15,25 (2) Model agreement. A rule promulgated by the department may include a model rental-purchase agreement that meets the requirements of this chapter. The department may not require a rental-purchase company to use this form, but if a rental-purchase company does use this form, the form is conclusively presumed to have been executed in compliance with ss. 420.02, 420.03, and 420.04.

SB637-SSA1,16,2 (3) Prohibited rules. No rule promulgated by the department may do any of the following:

SB637-SSA1,16,3 (a) Require disclosures not explicitly required or permitted by this chapter.

SB637-SSA1,16,5 (b) Establish a requirement for, or limitation on, the pricing offered to a consumer by a rental-purchase company.

SB637-SSA1,16,8 (c) Establish any other requirement for, or limitation on, a rental-purchase agreement not explicitly required or permitted by this chapter or that is more restrictive than this chapter.

SB637-SSA1,16,12 420.14 Penalties. (1) Award of damages. Subject to subs. (3) and (6), a rental-purchase company that violates any provision of this chapter, rule promulgated under this chapter, or order issued under this chapter pertaining to a lessee is liable to the lessee in an amount equal to the greater of the following:

SB637-SSA1,16,13 (a) The actual damages sustained by the lessee as a result of the violation.

SB637-SSA1,16,16 (b) If the action is not brought as a class action, 25 percent of the total payments necessary for the lessee to acquire ownership of the rental property, but not less than $100 nor more than $1,000.

SB637-SSA1,16,18 (c) If the action is brought as a class action, the amount the court determines to be appropriate, subject to sub. (2).

SB637-SSA1,17,2 (2) Damage limitations in class actions. The total recovery by all lessees in any class action or series of class actions arising out of the same violation may not be more than the lesser of $500,000 or 1 percent of the net worth of the rental-purchase company. In determining the amount of any award in a class action, the court shall consider, among other relevant factors, the amount of actual damages awarded, the frequency and persistence of the violation, the rental-purchase company's resources, and the extent to which the rental-purchase company's violation was intentional.

SB637-SSA1,17,7 (3) Unintentional violations. A rental-purchase company is not liable for any violation of this chapter if the rental-purchase company shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error, and the rental-purchase company maintained procedures reasonably adapted to avoid such an error.

SB637-SSA1,17,11 (4) Costs and attorney fees. If a court awards any monetary amount under sub. (1) to a lessee, the rental-purchase company shall also be liable to the lessee for the costs of the action and, notwithstanding s. 814.04 (1), for reasonable attorney fees as determined by the court.

SB637-SSA1,17,17 (5) Exclusive penalties for violations of this chapter; applicability of other laws. (a) The penalties under this section and ss. 100.18 and 100.20 provide the exclusive remedies for a violation of any provision of this chapter, rule promulgated under this chapter, or order issued under this chapter. The application of the penalties under this section and ss. 100.18 and 100.20 are all subject to subs. (3) and (6).

SB637-SSA1,17,20 (b) Except as provided in par. (a) and s. 420.15, laws other than this chapter that relate to a transaction governed by this chapter are not preempted by this chapter.

SB637-SSA1,18,2 (6) Cure of noncompliance. A rental-purchase company is not liable for any violation of any provision of this chapter, rule promulgated under this chapter, or order issued under this chapter if the rental-purchase company notifies the consumer of its noncompliance with this chapter, rule promulgated under this chapter, or order issued under this chapter and corrects the noncompliance within 45 days of the earliest of any of the following:

SB637-SSA1,18,3 (a) The receipt of a written notice of the noncompliance from the consumer.

SB637-SSA1,18,4 (b) The discovery of the noncompliance by the rental-purchase company.

SB637-SSA1,18,13 420.15 Inapplicability of Consumer Act and ch. 409. A rental-purchase company that has provided notice to the department under this chapter is not, with respect to rental-purchase agreements entered into by the rental-purchase company, subject to the Wisconsin Consumer Act, chs. 421 to 427, or any related rule or order adopted under chs. 421 to 427, or to any provision of ch. 409, and any rental-purchase agreement entered into by such a rental-purchase company shall not be construed or regulated as a security interest, credit sale, retail installment sale, conditional sale, or any other form of consumer credit, nor considered to be the creation of a debt or extension of credit.

SB637-SSA1,18,16 420.16 Notice to lessee prior to replevin. (1) Before a rental-purchase company may commence a replevin action, the rental-purchase company must deliver a written notice to the lessee at least 7 days prior to the filing of the action.

SB637-SSA1,18,17 (2) The notice under sub. (1) shall include all of the following information:

SB637-SSA1,18,18 (a) The date the rental-purchase agreement expired.

SB637-SSA1,18,19 (b) The amount of any reinstatement fee that has been or may be assessed.

SB637-SSA1,18,22 (c) The total amount of periodic payments necessary to reinstate the rental-purchase agreement as of the date of the notice, including any reinstatement fee.

SB637-SSA1,18,25 (d) That the lessee may voluntarily surrender the rental property to the rental-purchase company at the lessee's residence or other location as agreed upon by both parties.

SB637-SSA1,19,2 (e) That the rental-purchase company is requesting that the rental property be voluntarily surrendered prior to seeking legal action for return of the property.

SB637-SSA1,3 Section 3. 421.202 (11) of the statutes is created to read:

SB637-SSA1,19,6 421.202 (11) Rental-purchase agreements entered into by a rental-purchase company that has provided notice to the department of financial institutions under ch. 420.

SB637-SSA1,4 Section 4. Initial applicability.

SB637-SSA1,19,9 (1) This act first applies to rental-purchase agreements, and conduct pursuant to those agreements, that are entered into on the effective date of this subsection.

SB637-SSA1,5 Section 5. Effective date.

SB637-SSA1,19,12 (1) This act takes effect on the first day of the 7th month beginning after publication.

SB637-SSA1,19,13 (End)