09-16-02
RTO Online
The House is scheduled to consider H.R. 1701,
on Wednesday, September 18, 2002. The
Rules Committee is scheduled to meet on
Tuesday, September 17, 2002, at 5:30 p.m. to consider a rule for this measure.
The 'rules' govern how, and for how long, debate will occur. Rules Committee is
Chaired by DAVID DREIER, CA.
Don't miss our new feature (9-16-02) on HR1701
(Click
here for complete list of Rules Committee Members)
Following is from a summary of the action distributed by
the GOP today.
Summary
H.R. 1701 sets a "Federal floor" for consumer protection in rental-purchase
transactions. Most States currently regulate rental-purchase transactions as
leases, however, the scope and consumer protection requirements of these laws
vary significantly by State. H.R. 1701 improves consumer protections in 32
States, while allowing other States to adopt more stringent protections.
Currently, there is no Federal oversight or regulation of the rent-to-own
industry. H.R. 1701 amends the Consumer Credit Protection Act (CCPA) to provide
such oversight and regulation. It provides meaningful and consistent disclosure
of all rental-purchase agreement terms and provides substantive rights to
consumers under these agreements. This legislation provides a uniform method of
disclosing the cost of the rental-purchase transactions in advertisements,
product tags, and rental-purchase agreements; it will fill disclosure gaps that
exist in many State laws and provide important substantive consumer protections.
It also ensures consistent treatment of the transaction as a lease and not a
credit sale.
Background
In April 2000, the Federal Trade Commission (FTC) issued a staff report
entitled, "Survey of Rent-to-Own Customers" which concluded that potential
rental-purchase customers should have clear and accurate information about the
total cost of the transaction in order to allow customers to compare
rental-purchase transactions to other alternatives. The FTC also noted that
inadequacies exist in many State rental-purchase disclosure laws.
Federal legislation to regulate this industry has been considered by Congress
for more than a decade. Prior attempts to pass legislation failed largely over
the issue of the appropriate level of consumer protections as part of a package
that classifies these transactions as leases, as opposed to credit sales. The
Consumer Rental Purchase Agreement Act addresses these concerns by adding
consumer protections that are more substantive than prior bills and are in line
with a majority of the States that have adopted rental-purchase legislation.
Legislative History
H.R. 1701 was introduced by Rep. Jones on May 3, 2001. It was reported from the
Financial Services Committee by a vote of 29 - 9 on June 27, 2002.
Cost Estimate
CBO estimates that implementing H.R. 1701 will cost the FTC about $650,000 a
year. Because the bill will create new civil and criminal penalties and will
impose costs on the Federal Reserve, CBO also estimates that the bill will have
negligible effects on both direct spending and revenues. Therefore,
pay-as-you-go procedures will apply.
end
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