SB 637

This bill creates requirements that specifically apply to rental-purchase

agreements, imposes requirements on rental-purchase companies, and exempts

rental-purchase companies and rental-purchase agreements from the Wisconsin

Consumer Act (consumer act).

Under current law, a consumer credit transaction that is entered into for

personal, family, or household purposes is generally subject to the consumer act. The

consumer act grants consumers certain rights and remedies and contains notice and

disclosure requirements and prohibitions relating to consumer credit transactions,

including credit sales and consumer leases that have a term of more than four

months. In addition, the consumer act applies to any other consumer lease, if the

lessee pays or agrees to pay at least an amount that is substantially equal to the value

of the leased property and if the lessee will become, or for not more than a nominal

additional payment has the option to become, the owner of the leased property.

This bill defines a “rental-purchase agreement" as an agreement between a

rental-purchase company and a lessee for the use of rental property if all of the

following apply: 1) the rental property is to be used primarily for personal, family,

or household purposes; 2) the agreement has an initial term of four months or less

and is renewable with each payment after the initial term; 3) the agreement does not

obligate or require the lessee to renew the agreement beyond the initial term; and

4) the agreement permits, but does not obligate, the lessee to acquire ownership of

the rental property. For purposes of a rental-purchase agreement, “rental property"

does not include motor vehicles or musical instruments used in schools. A

“rental-purchase company" is defined as a person engaged in the business of

entering into rental-purchase agreements in this state or acquiring rental-purchase

agreements that are entered into in this state.

Under the bill, every rental-purchase agreement must contain certain

provisions, including the following, to the extent applicable:

1. A description of the rental property.

2. The cash price of the rental property.

3. The total amount of the rental payments necessary to acquire ownership of

the property.

4. The difference between the amount described under item 3., above, and the

cash price of the rental property.

5. The total amount of the initial payment due when the rental-purchase

agreement is executed or the rental property is delivered.

6. The rental payment necessary to renew the rental-purchase agreement.

7. An itemized description of any other charges or fees the rental-purchase

company may charge upon the occurrence of a contingency specified in the

rental-purchase agreement, such as late fees.

8. A statement of, and information related to, the lessee's early-purchase