SB637,4,32 409.109 (4) (n) Rental-purchase agreements entered into by a rental-purchase
3company in compliance with ch. 420.
SB637,2 4Section 2. Chapter 420 of the statutes is created to read:
SB637,4,55 CHAPTER 420
SB637,4,66 RENTAL-PURCHASE COMPANIES
SB637,4,7 7420.01Definitions. In this chapter:
SB637,5,2 8(1) “Cash price" means the price at which a rental-purchase company would
9sell rental property to the lessee of the rental property if the lessee were to pay for

1the rental property in full on the date on which the rental-purchase agreement is
2executed.
SB637,5,3 3(2) “Department" means the department of financial institutions.
SB637,5,6 4(3) “Displayed or offered primarily for rental-purchase,” with respect to rental
5property, means rental property displayed or offered at a physical location that
6derives 50 percent or more of its revenues from rental-purchase agreements.
SB637,5,10 7(4) “Rental property" means property rented under a rental-purchase
8agreement but does not include any motor vehicle, as defined in s. 340.01 (35), or any
9musical instrument that is intended to be used in whole or in part in an elementary
10school or high school.
SB637,5,13 11(5) “Rental-purchase agreement" means an agreement between a
12rental-purchase company and a lessee for the use of rental property if all of the
13following apply:
SB637,5,1514 (a) The rental property is to be used primarily for personal, family, or household
15purposes.
SB637,5,1716 (b) The agreement has an initial term of 4 months or less and is renewable with
17each payment after the initial term.
SB637,5,1918 (c) The agreement does not obligate or require the lessee to renew the
19agreement beyond the initial term.
SB637,5,2120 (d) The agreement permits, but does not obligate, the lessee to acquire
21ownership of the rental property.
SB637,5,24 22(6) “Rental-purchase company" means a person engaged in the business of
23entering into rental-purchase agreements in this state or acquiring rental-purchase
24agreements that are entered into in this state.
SB637,6,3
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:
SB637,6,44 (a) The information shall be clearly and conspicuously disclosed.
SB637,6,55 (b) The information shall be disclosed in writing.
SB637,6,106 (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
10lessee.
SB637,6,1211 (d) Except as provided in par. (f), the information shall be disclosed in not less
12than 8-point standard type.
SB637,6,1413 (e) The information shall be disclosed before the time that the lessee becomes
14legally obligated under the rental-purchase agreement.
SB637,6,1815 (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
18department.
SB637,6,23 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.
SB637,7,3 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.
SB637,7,6 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:
SB637,7,11 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.
SB637,7,12 12(2) Cash price. The cash price of the rental property.
SB637,7,16 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.
SB637,7,23 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."
SB637,8,3
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.
SB637,8,8 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.
SB637,8,11 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 late fees.
SB637,8,16 12(8) Summary of early-purchase option. A statement that the lessee has an
13early purchase option to purchase the property at any time during the period that
14the rental-purchase agreement is in effect. The statement must specify the price or
15the formula or other method for determining the price at which the property may be
16purchased.
SB637,8,22 17(9) Responsibility for theft or damage. A statement that, unless otherwise
18agreed, in the event the rental property is stolen, damaged, or destroyed while in the
19possession of, or subject to the control of, the lessee, the lessee is responsible for an
20amount equal to the lesser of the amount required to exercise the early-purchase
21option as provided in sub. (8) or 55 percent of the scheduled remaining periodic
22payments, but in no event in an amount greater than the cash price.
SB637,9,6 23(10) Service and warranty. A statement that, during the term of the rental-
24purchase agreement, the rental-purchase company is required to service the rental
25property and maintain it in good working condition, as long as no other person has

1serviced the rental property. In lieu of servicing the rental property, the
2rental-purchase company may, at its option, replace the rental property with
3substitute property of comparable quality and condition. The rental-purchase
4company's obligation to provide service is limited to defects in the property not
5caused by improper use or neglect by the lessee or harmful conditions outside the
6control of the rental-purchase company or manufacturer.
SB637,9,9 7(11) Termination at option of lessee. A statement that the lessee may
8terminate the agreement at any time without penalty by voluntarily surrendering
9or returning the rental property in good repair.
SB637,9,11 10(12) Right to reinstate. A brief explanation of the lessee's right to reinstate
11a rental-purchase agreement under s. 420.06.
SB637,9,16 12(13) Rental, not purchase. A statement reading substantially as follows: “You
13are renting this property. You will not own the property until you make all payments
14necessary to acquire ownership or until you exercise your early-purchase option. If
15you do not make your payments as scheduled or exercise your early-purchase option,
16the rental-purchase company is entitled to immediate possession of the property."
SB637,9,20 17(14) Information about rental-purchase company and lessee. The names of
18the rental-purchase company and the lessee, the rental-purchase company's
19business address and telephone number, the lessee's address, and the date on which
20the rental-purchase agreement is executed.
SB637,9,25 21(15) Optional services. Space for a specific, separately signed or initialed,
22affirmative, written indication of the lessee's desire for any optional service for which
23a charge is assessed. The lessee's request must be obtained after a written disclosure
24of the cost of the optional service is made, and the disclosure of the cost and purpose
25of such service must be listed at or near the affirmation space. This requirement is

1satisfied by a separate written agreement for an optional service that meets the
2requirements of this subsection.
SB637,10,4 3420.04 Prohibited provisions of rental-purchase agreements. A
4rental-purchase agreement may not contain any of the following:
SB637,10,5 5(1) Confession. A confession of judgment.
SB637,10,10 6(2) Repossession. A provision authorizing a rental-purchase company, or an
7agent of the rental-purchase company, to enter the lessee's residence without the
8lessee's permission, or to commit a breach of the peace in the repossession of rental
9property provided by the rental-purchase company under the rental-purchase
10agreement.
SB637,10,14 11(3) Waiver. A waiver of a defense or counterclaim, a waiver of any right to
12assert any claim that the lessee may have against the rental-purchase company or
13an agent of the rental-purchase company, or a waiver of any provision of this chapter
14relating to rental-purchase agreements.
SB637,10,17 15(4) Overpayment. A provision requiring rental payments totaling more than
16the total dollar amount of all rental payments necessary to acquire ownership, as
17disclosed in the rental-purchase agreement.
SB637,10,19 18(5) Insurance. A provision requiring the lessee to purchase insurance from the
19rental-purchase company to insure the rental property.
SB637,10,24 20420.05 Disclosures for certain rental-purchase agreements. (1)
21Disclosure for property not displayed or offered primarily for rental-purchase.
22When property that is not displayed or offered primarily for rental-purchase is
23offered for rental-purchase, all of the following shall be separately disclosed prior to
24displaying or presenting a rental-purchase agreement to a lessee for execution:
SB637,10,2525 (a) The cash price of the property.
SB637,11,1
1(b) The amount of the periodic renewal payment.
SB637,11,32 (c) The total dollar amount of all periodic rental payments necessary to acquire
3ownership if the lessee makes all scheduled payments.
SB637,11,9 4(2) Additional disclosures for property not displayed or offered primarily
5for rental-purchase.
In addition to the disclosures required by s. 420.03, if the
6property that is the subject of a rental-purchase agreement was not displayed or
7offered primarily for rental-purchase prior to the rental-purchase transaction, all
8of the following additional disclosures shall be made on a separate page titled
9“Acknowledgment of Rental-Purchase Transaction” and signed by the lessee:
SB637,11,1210 (a) The agreement is a rental-purchase agreement and the lessee does not own
11the property, but can obtain ownership by using ownership options provided in the
12agreement.
SB637,11,1313 (b) The agreement is not a credit transaction.
SB637,11,1614 (c) The lessee has the right to return the property to the lessor without
15additional charge or penalty at any time and will owe nothing further except unpaid
16rental charges and fees.
SB637,11,1917 (d) If the lessee returns the property, the agreement offers reinstatement rights
18that allow the lessee to get the property back if the lessee has complied with the
19agreement and the law.
SB637,11,2120 (e) The lessee has reviewed and understands the agreement, including the
21purchase option rights and the total cost if all scheduled payments are made.
SB637,11,25 22420.06 Reinstatement of a rental-purchase agreement. (1)
23Reinstatement generally. Subject to sub. (2), a lessee may reinstate a
24rental-purchase agreement that has ended without losing any rights or options
25previously acquired if all of the following apply:
SB637,12,2
1(a) The lessee voluntarily returned or surrendered the rental property within
27 days after the expiration of the rental-purchase agreement.
SB637,12,43 (b) Not more than 120 days have passed after the date on which the
4rental-purchase agreement ended.
SB637,12,9 5(2) Authorized conditions on reinstatement. As a condition of reinstatement
6under sub. (1), the rental-purchase company may require the payment of all
7past-due rental charges, any applicable late fees, the rental payment for the next
8term and a reinstatement fee not to exceed $8 for agreements renewed on a monthly
9basis or $5 for agreements renewed more frequently than monthly.
SB637,12,15 10(3) Effect of repossession on reinstatement. Subject to s. 420.04 (2), nothing
11in this section prohibits a rental-purchase company from repossessing or attempting
12to repossess rental property when a rental-purchase agreement is not renewed, but
13such efforts do not affect the lessee's right to reinstate as long as the rental property
14is voluntarily returned or surrendered within 7 days after the rental-purchase
15agreement expires.
SB637,12,20 16(4) Property available upon reinstatement. Upon reinstatement, the
17rental-purchase company shall provide the lessee with the same rental property, if
18the property is available and is in the same condition as when it was returned to the
19rental-purchase company, or with substitute property of comparable quality and
20condition.
SB637,12,23 21420.07 Receipts and statements. (1) Receipts. A rental-purchase company
22shall provide a written receipt to the lessee for any payment made by the lessee in
23cash or, upon the request of the lessee, for any other type of payment.
SB637,13,7 24(2) Statement due to lessee. Subject to sub. (4), upon the request of a lessee,
25a rental-purchase company shall provide a written statement to the lessee showing

1the lessee's payment history on each rental-purchase agreement between the lessee
2and the rental-purchase company. A rental-purchase company is not required to
3provide a statement covering any rental-purchase agreement that ended more than
4one year prior to the date of the lessee's request. A rental-purchase company may
5provide a single statement covering all rental-purchase agreements or separate
6statements for each rental-purchase agreement, at the rental-purchase company's
7option.
SB637,13,12 8(3) Statement due to other parties. Subject to sub. (4), upon the written
9request of a lessee, made during the term of or no later than one year after the
10rental-purchase agreement ended, a rental-purchase company shall provide a
11written statement to any person the lessee designates, showing the lessee's payment
12history under the rental-purchase agreement.
SB637,13,17 13(4) Fee for statement. A lessee or, if appropriate, a lessee's designee, is entitled
14to receive one statement under subs. (2) and (3) without charge once every 12
15months. A rental-purchase company shall provide an additional statement if the
16lessee pays the rental-purchase company's reasonable costs of preparing and
17furnishing the statement.
SB637,13,21 18420.08 Liability damage waiver. (1) Waiver permissible. A
19rental-purchase company and a lessee may contract for a liability damage waiver.
20A rental-purchase company may charge a periodic fee for a liability damage waiver
21in an amount not to exceed 10 percent of the periodic rental payment.
SB637,13,23 22(2) Requirements for waiver. A rental-purchase company may not sell a
23liability damage waiver unless all of the following apply:
SB637,14,3
1(a) The contract containing the waiver is provided to the lessee in writing,
2either by incorporating it into the rental-purchase agreement or by providing it as
3a separate document.
SB637,14,54 (b) The face of the writing under par. (a) clearly discloses that the lessee is not
5required to purchase the waiver.
SB637,14,76 (c) The contract clearly discloses the dollar amount of the fee to be paid with
7each rental payment.
SB637,14,88 (d) The lessee expressly agrees to the waiver in writing.
SB637,14,13 9(3) Scope of waiver. The liability damage waiver may exclude only loss or
10damage to the property that is the subject of the rental-purchase agreement caused
11by moisture, scratches, mysterious disappearance, vandalism, abandonment of the
12property, or any other damage intentionally caused by the lessee or that results from
13the lessee's willful or wanton misconduct.
SB637,14,15 14(4) Waiver cancellation. The lessee is entitled to cancel the waiver at the end
15of any rental term.
SB637,14,16 16(5) Waiver is not insurance. A liability damage waiver is not insurance.
SB637,14,20 17420.09 Advertising disclosure required. If an advertisement for a
18rental-purchase agreement states the amount of a payment for a specific item of
19property, the advertisement shall also clearly and conspicuously state all of the
20following:
SB637,14,21 21(1) That the transaction advertised is a rental-purchase agreement.
SB637,14,23 22(2) The total number and total dollar amount of all rental payments necessary
23to acquire ownership of the property.
SB637,14,25 24(3) That the lessee does not acquire ownership of the property if the lessee fails
25to make all payments necessary to acquire ownership of the property.
SB637,15,4
1420.10 Price cards displayed. (1) Price cards generally. Except as
2provided in sub. (2), a card or tag that clearly and conspicuously states all of the
3following shall be displayed on or next to any property displayed or offered by a
4rental-purchase company for rent under a rental-purchase agreement:
SB637,15,55 (a) The cash price that a lessee would pay to purchase the property.
SB637,15,66 (b) The amount and timing of the rental payments.
SB637,15,87 (c) The total number and total amount of all rental payments necessary to
8acquire ownership of the property under a rental-purchase agreement.
SB637,15,99 (d) Whether the property is new or used.
SB637,15,15 10(2) Exceptions. If property is offered for rent under a rental-purchase
11agreement through a catalog, whether print or electronic, or if the size of the property
12is such that displaying a card or tag on or next to the property would be impractical,
13a rental-purchase company may make the disclosures required under sub. (1) in a
14catalog, list, or disclosure sheet if the catalog, list, or disclosure sheet is readily
15available to prospective lessees and provided upon request.
SB637,15,17 16420.11 Rule making. The department may promulgate rules to administer
17and enforce the requirements of this chapter.
SB637,15,21 18420.12 Penalties. (1) Award of damages. Subject to sub. (3), a
19rental-purchase company that violates any provision of this chapter, rule
20promulgated under this chapter, or order issued under this chapter pertaining to a
21lessee is liable to the lessee in an amount equal to the greater of the following:
SB637,15,2222 (a) The actual damages sustained by the lessee as a result of the violation.
SB637,15,2523 (b) If the action is not brought as a class action, 25 percent of the total payments
24necessary for the lessee to acquire ownership of the rental property, but not less than
25$100 nor more than $1,000.
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