SB268,15,107 220.02 (2) (b) The lending of money under s. 138.09 or those relating to finance
8companies, motor vehicle dealers, adjustment service companies, community
9currency exchanges, rental-purchase companies, and collection agencies under ch.
10218.
SB268, s. 3 11Section 3. 220.02 (3) of the statutes is amended to read:
SB268,15,2012 220.02 (3) It is the intent of sub. (2) to give the division jurisdiction to enforce
13and carry out all laws relating to banks or banking in this state, including those
14relating to state banks, savings banks, savings and loan associations, and trust
15company banks, and also all laws relating to small loan companies or other loan
16companies or agencies, finance companies, motor vehicle dealers, adjustment service
17companies, community currency exchanges, rental-purchase companies, and
18collection agencies and those relating to sellers of checks under ch. 217, whether
19doing business as corporations, individuals, or otherwise, but to exclude laws
20relating to credit unions.
SB268, s. 4 21Section 4. 409.109 (4) (n) of the statutes is created to read:
SB268,15,2322 409.109 (4) (n) The transfer of an interest under a rental-purchase agreement,
23as defined in s. 421.301 (37u).
SB268, s. 5 24Section 5. 421.301 (7) (intro.) of the statutes is amended to read:
SB268,16,3
1421.301 (7) (intro.) "Cash price" means in chs. 421 to 427, other than subch. VI
2of ch. 422,
the price at which property or services are offered, in the ordinary course
3of business, for sale for cash, and may include:
SB268, s. 6 4Section 6. 421.301 (9) of the statutes is amended to read:
SB268,16,145 421.301 (9) "Consumer credit sale" means a sale of goods, services or an
6interest in land to a customer on credit where the debt is payable in installments or
7a finance charge is imposed and includes any agreement in the form of a bailment
8of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay
9as compensation for use a sum substantially equivalent to or in excess of the
10aggregate value of the goods or real property involved and it is agreed that the bailee
11or lessee will become, or for no other or a nominal consideration has the option to
12become, the owner of the goods or real property upon full compliance with the terms
13of the agreement. "Consumer credit sale" does not include a rental-purchase
14agreement.
SB268, s. 7 15Section 7. 421.301 (10) of the statutes is amended to read:
SB268,16,2316 421.301 (10) "Consumer credit transaction" means a consumer transaction
17between a merchant and a customer in which real or personal property, services or
18money is acquired on credit and the customer's obligation is payable in installments
19or for which credit a finance charge is or may be imposed, whether such transaction
20is pursuant to an open-end credit plan or is a transaction involving other than
21open-end credit. The term includes consumer credit sales, consumer loans,
22consumer leases and transactions pursuant to open-end credit plans. "Consumer
23credit transaction" does not include a rental-purchase agreement.
SB268, s. 8 24Section 8. 421.301 (11) of the statutes is amended to read:
SB268,17,3
1421.301 (11) "Consumer lease" means a lease of goods which a merchant makes
2to a customer for a term exceeding 4 months, but does not include a rental-purchase
3agreement
.
SB268, s. 9 4Section 9. 421.301 (12) of the statutes is amended to read:
SB268,17,95 421.301 (12) "Consumer loan" means a loan made by a lender to a customer
6which is payable in installments or for which a finance charge is or may be imposed,
7and includes transactions pursuant to an open-end credit plan other than a seller
8credit card, but does not include a transaction relating to a rental-purchase
9agreement
.
SB268, s. 10 10Section 10. 421.301 (20) (intro.) of the statutes is amended to read:
SB268,17,1911 421.301 (20) (intro.) "Finance charge" means the sum of all charges, payable
12directly or indirectly by the customer as an incident to or as a condition of the
13extension of credit, whether paid or payable by the customer, the creditor or any other
14person on behalf of the customer to the creditor or to a 3rd party unless the creditor
15had no notice or knowledge of the charges paid or payable to the 3rd party. The term
16does not include any charge with respect to a motor vehicle consumer lease or to a
17rental-purchase agreement
. The term includes the following types of charges to the
18extent they are not permitted additional charges under s. 422.202, delinquency
19charges under s. 422.203 or deferral charges under s. 422.204:
SB268, s. 11 20Section 11. 421.301 (21) of the statutes is amended to read:
SB268,17,2421 421.301 (21) "Goods" has the meaning given in s. 409.102 (1) (ks) and includes
22goods not in existence at the time the transaction is entered into and goods which are
23or are to become fixtures, but does not include any goods under a rental-purchase
24agreement
.
SB268, s. 12 25Section 12. 421.301 (34) of the statutes is amended to read:
SB268,18,2
1421.301 (34) "Personal property" includes but is not limited to goods, and does
2not include rental property
.
SB268, s. 13 3Section 13. 421.301 (37t) of the statutes is created to read:
SB268,18,64 421.301 (37t) "Rental property" means property rented under a
5rental-purchase agreement but does not include any motor vehicle, as defined in s.
6340.01 (35).
SB268, s. 14 7Section 14. 421.301 (37u) of the statutes is created to read:
SB268,18,108 421.301 (37u) "Rental-purchase agreement" means an agreement between a
9rental-purchase company and a lessee for the use of rental property if all of the
10following apply:
SB268,18,1211 (a) The rental property is to be used primarily for personal, family, or household
12purposes.
SB268,18,1413 (b) The agreement has an initial term of 4 months or less and is automatically
14renewable with each payment after the initial term.
SB268,18,1615 (c) The agreement does not obligate or require the lessee to renew the
16agreement beyond the initial term.
SB268,18,1817 (d) The agreement permits, but does not obligate, the lessee to acquire
18ownership of the rental property.
SB268, s. 15 19Section 15. 421.301 (37v) of the statutes is created to read:
SB268,18,2220 421.301 (37v) "Rental-purchase company" means a person engaged in the
21business of entering into rental-purchase agreements in this state or acquiring or
22servicing rental-purchase agreements that are entered into in this state.
SB268, s. 16 23Section 16. 421.301 (40) of the statutes is amended to read:
SB268,19,324 421.301 (40) "Security interest" means a real property mortgage, deed of trust,
25seller's interest in real estate under a land contract, any interest in property which

1secures payment or performance of an obligation under ch. 409 or any other
2consensual or confessed lien whether or not recorded, but does not include an interest
3in any property relating to a rental-purchase agreement
.
SB268, s. 17 4Section 17. 422.102 of the statutes is repealed and recreated to read:
SB268,19,5 5422.102 Scope. (1) Subchapters I to V apply to consumer credit transactions.
SB268,19,6 6(2) Subchapter VI applies to rental-purchase agreements.
SB268, s. 18 7Section 18. Subchapter VI of chapter 422 [precedes 422.601] of the statutes
8is created to read:
SB268,19,99 CHAPTER 422
SB268,19,1010 Subchapter VI
SB268,19,1111 rental-purchase agreements
SB268,19,12 12422.601 Scope. This subchapter applies only to rental-purchase agreements.
SB268,19,15 13422.602 General requirements of disclosure. (1) Form, location, size, and
14time of disclosure.
The information that is required to be disclosed under s. 422.603
15shall satisfy all of the following:
SB268,19,1616 (a) The information shall be clearly and conspicuously disclosed.
SB268,19,1717 (b) The information shall be disclosed in writing.
SB268,19,1918 (c) The information shall be disclosed on the face of the rental-purchase
19agreement above the line for the lessee's signature.
SB268,19,2120 (d) Except as provided in par. (f), the information shall be disclosed in not less
21than 8-point standard type.
SB268,19,2322 (e) The information shall be disclosed before the time that the lessee becomes
23legally obligated under the rental-purchase agreement.
SB268,20,3
1(f) The disclosures required by s. 422.603 (2), (4), (7), and (8) shall be printed
2in at least 10-point boldface type, and shall be grouped together in a box, in the form
3and order prescribed by the administrator.
SB268,20,8 4(2) Accuracy of disclosure. The information required under s. 422.603 must
5be accurate as of the time that it is disclosed to the lessee. If any information
6subsequently becomes inaccurate as a result of any act, occurrence, or agreement by
7the lessee, the resulting inaccuracy is not a violation of any provision of chs. 421 to
8427 relating to rental-purchase agreements.
SB268,20,13 9(3) Copy of rental-purchase agreement. The rental-purchase company shall
10provide the lessee with a copy of the completed rental-purchase agreement signed
11by the lessee. If more than one lessee is legally obligated under the same
12rental-purchase agreement, delivery of a copy of the completed rental-purchase
13agreement to one of the lessees shall satisfy this subsection.
SB268,20,17 14(4) Single instrument. In a rental-purchase agreement, the lessee's rental
15payment obligations shall be evidenced by a single instrument, which shall include
16the signature of the rental-purchase company, the signature of the lessee, and the
17date on which the instrument is signed.
SB268,20,20 18422.603 Required provisions of rental-purchase agreement. A
19rental-purchase company shall include all of the following information, to the extent
20applicable, in every rental-purchase agreement:
SB268,20,24 21(1) Description. A brief description of the rental property, sufficient to identify
22the rental property to the lessee and the rental-purchase company, including any
23identification number, and a statement indicating whether the rental property is
24new or used.
SB268,21,6
1(2) Cash price. The price at which the rental-purchase company would sell the
2rental property to the lessee if the lessee were to pay for the rental property in full
3on the date on which the rental-purchase agreement is executed, along with a
4statement that, if the lessee intends to acquire ownership of the rental property and
5is able to pay for the property in full or is able to obtain credit to finance the purchase,
6the lessee may be able to purchase similar property from a retailer at a lower cost.
SB268,21,10 7(3) Rental payments to acquire ownership. The total number, total dollar
8amount, and timing of all rental payments necessary to acquire ownership of the
9rental property, excluding any applicable taxes, application or processing charge,
10delivery fee, liability damage waiver fee, and fees for optional services.
SB268,21,17 11(4) Cost of rental services. The difference between the total dollar amount
12of payments necessary to acquire ownership of the rental property disclosed under
13sub. (3) and the cash price of the property disclosed under sub. (2). The
14rental-purchase company shall also include a statement substantially similar to the
15following: "The cost of rental services is the amount you will pay in addition to the
16cash price if you acquire ownership of the rented goods by making all payments
17necessary to acquire ownership."
SB268,21,20 18(5) Rental payment. The periodic rental payment for the rental property,
19including any applicable taxes, liability damage waiver fees, and fees for optional
20services.
SB268,21,24 21(6) Up-front payment. Any payment required of the lessee at the time that the
22agreement is executed or the rental property is delivered, including the initial rental
23payment, any application or processing charge, any delivery fee, and any charge for
24a liability damage waiver or for other optional services to which the lessee agrees.
SB268,22,6
1(7) Other charges and fees to acquire ownership. The dollar amount, both
2itemized and in total, of all taxes, liability damage waiver fees, fees for optional
3services, processing fees, application fees, and delivery charges that the lessee would
4incur if the lessee were to rent the rental property until the lessee acquires
5ownership, assuming that the lessee does not add or decline the liability damage
6waiver or optional services after signing the rental-purchase agreement.
SB268,22,14 7(8) Total payments to acquire ownership. The total of all charges required to
8be paid by the lessee to acquire ownership of the rental property, which shall consist
9of the total dollar amount of all rental payments disclosed under sub. (3), and the
10total dollar amount of all other charges and fees disclosed under sub. (7), along with
11a statement that this is the amount a lessee will pay to acquire ownership of the
12rental property if the tax rates do not change and if the lessee does not add or decline
13the liability damage waiver or optional services after signing the rental-purchase
14agreement.
SB268,22,17 15(9) Other charges. An itemized description of any other charges or fees that
16the rental-purchase company may charge the lessee that are not otherwise disclosed
17in the rental-purchase agreement.
SB268,22,20 18(10) Summary of early-purchase option. A statement summarizing the terms
19of the lessee's options to acquire ownership of the rental property as provided in s.
20422.607.
SB268,23,2 21(11) Responsibility for theft or damage. A statement that, unless otherwise
22agreed, the lessee is responsible for the fair market value of the rental property,
23determined according to the early-purchase option formula under sub. (10), if the
24rental property is stolen, damaged, or destroyed while in the possession of or subject
25to the control of the lessee. The statement shall indicate that the fair market value

1will be determined as of the date on which the rental property is stolen, damaged,
2or destroyed.
SB268,23,10 3(12) 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. The
8rental-purchase company's obligation to provide service is limited to defects in the
9property not caused by improper use or neglect by the lessee or harmful conditions
10outside the control of the rental-purchase company or manufacturer.
SB268,23,13 11(13) Termination at option of lessee. A statement that the lessee may
12terminate the agreement at any time without penalty by voluntarily surrendering
13or returning the rental property in good repair.
SB268,23,15 14(14) Right to reinstate. A brief explanation of the lessee's right to reinstate
15a rental-purchase agreement under s. 422.614.
SB268,23,23 16(15) Rental, not purchase. A statement that the lessee will not own the rental
17property until the lessee has made all payments necessary to acquire ownership or
18has exercised the lessee's early-purchase option. The rental-purchase company
19shall also include a notice reading substantially as follows: "You are renting this
20property. You will not own the property until you make all payments necessary to
21acquire ownership or until you exercise your early-purchase option. If you do not
22make your payments as scheduled or exercise your early-purchase option, the
23rental-purchase company may repossess the property."
SB268,24,2 24(16) Information about rental-purchase company and lessee. The names of
25the rental-purchase company and the lessee, the rental-purchase company's

1business address and telephone number, the lessee's address, and the date on which
2the rental-purchase agreement is executed.
SB268,24,7 3(17) Optional services. Space for a specific, separately signed, affirmative,
4written indication of the lessee's desire for any optional service for which a charge
5is assessed. The lessee's request must be obtained after a written disclosure of the
6cost of the optional service is made, and the cost and term of such service must be
7listed at or near the signature space.
SB268,24,9 8422.604 Prohibited provisions of rental-purchase agreements. (1) A
9rental-purchase agreement may not contain any of the following:
SB268,24,1010 (a) Confession. A confession of judgment.
SB268,24,1311 (b) Security. A provision granting the rental-purchase company a security
12interest in any property, except rental property delivered by the rental-purchase
13company under the rental-purchase agreement.
SB268,24,1814 (c) Repossession. A provision authorizing a rental-purchase company, or an
15agent of the rental-purchase company, to enter the lessee's premises without the
16lessee's contemporaneous permission, or to commit a breach of the peace in the
17repossession of rental property provided by the rental-purchase company under the
18rental-purchase agreement.
SB268,24,2219 (d) Waiver. A waiver of a defense or counterclaim, a waiver of any right to assert
20any claim that the lessee may have against the rental-purchase company or an agent
21of the rental-purchase company, or a waiver of any provision of chs. 421 to 427
22relating to rental-purchase agreements.
SB268,24,2523 (e) Overpayment. A provision requiring rental payments totaling more than
24the total dollar amount of all rental payments necessary to acquire ownership, as
25disclosed in the rental-purchase agreement.
SB268,25,2
1(f) Insurance. A provision requiring the lessee to purchase insurance from the
2rental-purchase company to insure the rental property.
SB268,25,33 (g) Attorney fees. A provision requiring the lessee to pay any attorney fees.
SB268,25,4 4(2) A violation of this section is subject to s. 425.305.
SB268,25,11 5422.605 Liability waiver. A rental-purchase company may offer a liability
6waiver to the lessee. The terms of the waiver must be provided to the lessee in
7writing, incorporated into the rental-purchase agreement or on a separate
8document. The face of the writing shall clearly disclose that the lessee is not required
9to purchase the waiver. The fee for the waiver may not exceed 10 percent of the rental
10payment due under the rental-purchase agreement. The lessee shall be entitled to
11cancel the waiver at the end of any rental term.
SB268,25,15 12422.606 Price and cost limitations. (1) Limits on cash prices. The cash
13price for rental property may not exceed an amount equal to twice the actual
14purchase price of the rental property, including any applicable freight charges, paid
15by the rental-purchase company to a manufacturer or wholesaler.
SB268,25,19 16(2) Limits on cost of rental services and other charges. The total amount
17charged by the rental-purchase company for the cost of rental services and all
18required charges or fees, excluding applicable taxes, in a rental-purchase
19transaction shall not exceed the cash price of the property.
SB268,25,21 20(3) Unconscionability. A court may not find that a rental-purchase
21transaction that complies with this section is unconscionable under s. 425.107 (3) (c).
SB268,26,4 22422.607 Acquisition of ownership. At any time after the initial rental
23period, a lessee may acquire ownership of the property that is the subject of the
24rental-purchase agreement by tendering an amount not to exceed an amount equal
25to the cash price of the rental property multiplied by a fraction that has as its

1numerator the number of periodic rental payments remaining under the
2rental-purchase agreement and that has as its denominator the total number of
3periodic rental payments. A rental-purchase company may also require the lessee
4to pay any accrued unpaid rental payments and fees.
SB268,26,7 5422.608 Receipts and statements. (1) Receipts. A rental-purchase
6company shall provide a written receipt to the lessee for any payment made by the
7lessee in cash or, upon the request of the lessee, for any other type of payment.
SB268,26,16 8(2) Statement due to lessee. Subject to sub. (4), upon the request of a lessee,
9a rental-purchase company shall provide a written statement to the lessee showing
10the lessee's payment history on each rental-purchase agreement between the lessee
11and the rental-purchase company. A rental-purchase company is not required to
12provide a statement covering any rental-purchase agreement that was terminated
13more than one year prior to the date of the lessee's request. A rental-purchase
14company may provide a single statement covering all rental-purchase agreements
15or separate statements for each rental-purchase agreement, at the rental-purchase
16company's option.
SB268,26,21 17(3) Statement due to other parties. Subject to sub. (4), upon the written
18request of a lessee, made during the term of or no later than one year after the
19termination of a rental-purchase agreement, a rental-purchase company shall
20provide a written statement to any person the lessee designates, showing the lessee's
21payment history under the rental-purchase agreement.
SB268,27,2 22(4) Fee for statement. A lessee or, if appropriate, a lessee's designee, is entitled
23to receive one statement under subs. (2) and (3) without charge once every 12
24months. A rental-purchase company shall provide an additional statement if the

1lessee pays the rental-purchase company's reasonable costs of preparing and
2furnishing the statement.
SB268,27,6 3422.609 Advertising disclosure required. If an advertisement for a
4rental-purchase agreement refers to or states the amount of a payment for a specific
5item of property, the advertisement shall also clearly and conspicuously state all of
6the following:
SB268,27,7 7(1) That the transaction advertised is a rental-purchase agreement.
Loading...
Loading...