Act, how cited.
Sections 69-2101 to 69-2119 shall be known
and may be cited as the Consumer Rental Purchase Agreement Act.
Laws 1989, LB 681, § 1; Laws 1993, LB 111, § 1.
The Legislature finds that a significant
number of consumers have sought to acquire ownership of personal
property through consumer rental purchase agreements. Often
consumer rental purchase agreements have been offered without
adequate cost disclosures. It is the purpose of the Consumer
Rental Purchase Agreement Act to assure meaningful disclosure of
the terms of consumer rental purchase agreements, to make
consumers aware of the total cost attendant with such agreements,
to inform the consumer when ownership will transfer, and to
assure accurate disclosures of rental purchase terms in
Laws 1989, LB 681, § 2.
For purposes of the Consumer Rental Purchase
(1) Advertisement shall mean a commercial message in
any medium that aids, promotes, or assists directly or indirectly
a consumer rental purchase agreement but shall not include
in-store merchandising aids such as window signs and ceiling
(2) Cash price shall mean the price at which the lessor
would have sold the property to the consumer for cash on the date
of the consumer rental purchase agreement for the property;
(3) Consumer shall mean a natural person who rents
property under a consumer rental purchase agreement;
(4) Consumer rental purchase agreement shall mean an
agreement which is for the use of property by a consumer
primarily for personal, family, or household purposes, which is
for an initial period of four months or less, whether or not
there is any obligation beyond the initial period, which is
automatically renewable with each payment, and which permits the
consumer to become the owner of the property. A consumer rental
purchase agreement in compliance with the act shall not be
construed to be a lease or agreement which constitutes a credit
sale as defined in 12 C.F.R. 226.2(a)(16), as such regulation
existed on September 1, 2001, and 15 U.S.C 1602(g), as such
section existed on September 1, 2001, or a lease which
constitutes a consumer lease as defined in 12 C.F.R. 213.2(e),
as such regulation existed on September 1, 2001. Consumer rental
purchase agreement shall not include:
(a) Any lease for agricultural, business, or commercial
(b) Any lease made to an organization;
(c) A lease or agreement which constitutes an
installment sale or installment contract as defined in section
(d) A security interest as defined in section 1-201,
Uniform Commercial Code; and
(e) A home solicitation sale as defined in section
(5) Consummation shall mean the occurrence of an event
which causes a consumer to become contractually obligated on a
consumer rental purchase agreement;
(6) Department shall mean the Department of Banking and
(7) Lease payment shall mean a payment to be made by
the consumer for the right of possession and use of the property
for a specific lease period but shall not include taxes imposed
on such payment;
(8) Lease period shall mean a week, month, or other
specific period of time, during which the consumer has the right
to possess and use the property after paying the lease payment
and applicable taxes for such period;
(9) Lessor shall mean a person who in the ordinary
course of business operates a commercial outlet which regularly
leases, offers to lease, or arranges for the leasing of property
under a consumer rental purchase agreement;
(10) Property shall mean any property that is not real
property under the laws of this state when made available for a
consumer rental purchase agreement; and
(11) Total of payments to acquire ownership shall mean
the total of all charges imposed by the lessor and payable by the
consumer as a condition of acquiring ownership of the property.
Total of payments to acquire ownership shall include lease
payments and any initial nonrefundable administrative fee or
required delivery charge but shall not include taxes, late
charges, reinstatement fees, or charges for optional products or
Laws 1989, LB 681, § 3; Laws 1993, LB 111, § 2;
Laws 2001, LB 641, § 1.
Lessor; disclosures required.
(1) Before entering into any consumer rental
purchase agreement, the lessor shall disclose to the consumer the
following items as applicable:
(a) A brief description of the leased property
sufficient to identify the property to the consumer and lessor;
(b) The number, amount, and timing of all payments
included in the total of payments to acquire ownership;
(c) The total of payments to acquire ownership;
(d) A statement that the consumer will not own the
property until the consumer has paid the total of payments to
acquire ownership plus applicable taxes;
(e) A statement that the total of payments to acquire
ownership does not include other charges such as taxes, late
charges, reinstatement fees, or charges for optional products or
services the consumer may have elected to purchase and that the
consumer should see the rental purchase agreement for an
explanation of these charges;
(f) A statement that the consumer is responsible for
the fair market value, remaining rent, early purchase option
amount, or cost of repair of the property, whichever is less, if
it is lost, stolen, damaged, or destroyed;
(g) A statement indicating whether the property is new
or used. A statement that indicates that new property is used
shall not be a violation of the Consumer Rental Purchase
(h) A statement of the cash price of the property.
When the agreement involves a lease for two or more items, a
statement of the aggregate cash price of all items shall satisfy
the requirement of this subdivision;
(i) The total amount of the initial payments required
to be paid before consummation of the agreement or delivery of
the property, whichever occurs later, and an itemization of the
components of the initial payment, including any initial
nonrefundable administrative fee or delivery charge, lease
payment, taxes, or fee or charge for optional products or
(j) A statement clearly summarizing the terms of the
consumer's options to purchase, including a statement that at any
time after the first periodic payment is made the consumer may
acquire ownership of the property by tendering an amount which
may not exceed fifty-five percent of the difference between the
total of payments to acquire ownership and the total of lease
payments the consumer has paid on the property at that time;
(k) A statement identifying the party responsible for
maintaining or servicing the property while it is being leased,
together with a description of that responsibility and a
statement that if any part of a manufacturer's warranty covers
the leased property at the time the consumer acquires ownership
of the property, such warranty shall be transferred to the
consumer if allowed by the terms of the warranty; and
(l) The date of the transaction and the names of the
lessor and the consumer.
(2) With respect to matters specifically governed by
the Consumer Credit Protection Act, 15 U.S.C. 1635 et seq., as
such act existed on September 1, 2001, compliance with such act
shall satisfy the requirements of this section.
(3) Subsection (1) of this section shall not apply to a
lessor who complies with the disclosure requirements of the
Consumer Credit Protection Act, 15 U.S.C. 1667a, as such section
existed on September 1, 2001, with respect to a consumer rental
purchase agreement entered into with a consumer.
Laws 1989, LB 681, § 4; Laws 2001, LB 641, § 2.
Disclosures; how made; rules and regulations; agreement;contents.
(1) In a consumer rental purchase agreement
involving more than one consumer, a lessor need disclose the
items required by the Consumer Rental Purchase Agreement Act to
only one of the consumers who is primarily obligated. In a
consumer rental purchase agreement involving more than one
lessor, only one lessor need make the required disclosures.
(2) The disclosures required under the act shall be
made at or before consummation of the consumer rental purchase
(3) The disclosures shall be made using words and
phrases of common meaning in a form that the consumer may keep.
For purposes of satisfying the disclosure requirements of the
act, the terms lease and rent shall be considered synonymous.
The required disclosures shall be set forth clearly and
conspicuously. The disclosures shall be placed all together on
the front side of the consumer rental purchase agreement or on a
separate form. The form setting forth the required disclosures
shall contain spaces for the consumer's signature and the date
appearing immediately below the disclosures. If the disclosures
are made on more than one page, each page shall be signed by the
consumer. The requirements of this section shall not have been
complied with unless the consumer signs the statement and
receives at the time the disclosures are made a legible copy of
the signed statement. The inclusion in the required disclosures
of a statement that the consumer received a legible copy of those
disclosures shall create a rebuttable presumption of receipt.
(4) Information required to be disclosed may be given
in the form of estimates. Estimates shall be identified as such.
(5) If a disclosure becomes inaccurate as the result of
any act, occurrence, or agreement after delivery of the required
disclosures, the resulting inaccuracy shall not be a violation of
(6) Information in addition to that required by section
69-2104 may be disclosed if the additional information is not
stated, utilized, or placed in a manner which will contradict,
obscure, or detract attention from the required information.
(7) The department shall adopt and promulgate rules and
regulations establishing requirements for the order,
acknowledgment by initialing, and conspicuous placement of the
disclosures set forth in section 69-2104. Such rules and
regulations may allow the disclosures to be made in accordance
with model forms prepared by the department.
(8) The terms of the consumer rental purchase
agreement, except as otherwise provided in the Consumer Rental
Purchase Agreement Act, shall be set forth in not less than
eight-point standard type or such similar type as prescribed in
rules and regulations adopted and promulgated by the department.
(9) Every consumer rental purchase agreement shall
contain, immediately above or adjacent to the place for the
signature of the consumer, a clear, conspicuous, printed or
typewritten notice, in boldface, ten-point type, in substantially
the following language:
NOTICE TO CONSUMER -- READ BEFORE SIGNING
a. DO NOT SIGN THIS BEFORE YOU READ THE ENTIRE
AGREEMENT, INCLUDING ANY WRITING ON THE REVERSE SIDE, EVEN IF
b. DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.
c. YOU ARE ENTITLED TO AN EXACT COPY OF ANY AGREEMENT
Laws 1989, LB 681, § 5; Laws 2001, LB 641, § 3.
Written receipt; required; when.
The lessor shall furnish the consumer upon
request with an itemized written receipt for payment in cash or
any other method of payment which itself does not provide
evidence of payment.
Laws 1989, LB 681, § 6.
Agreements; prohibited provisions.
A consumer rental purchase agreement may not
contain a provision:
(1) Requiring a confession of judgment;
(2) Requiring a garnishment of wages;
(3) Granting authorization to the lessor or a person
acting on the lessor's behalf to enter unlawfully upon the
consumer's premises or to commit any breach of the peace in the
repossession of property;
(4) Requiring the consumer to waive any defense,
counterclaim, or right of action against the lessor or a person
acting on the lessor's behalf in collection of payment under the
consumer rental purchase agreement or in the repossession of
(5) Requiring purchase of insurance from the lessor to
cover the property.
Laws 1989, LB 681, § 7.
Each consumer rental purchase agreement
(1) Provide that the consumer may terminate the
agreement without penalty by voluntarily surrendering or
returning the property upon expiration of any lease term; and
(2) Contain a provision for reinstatement which shall
include, but not be limited to:
(a) Permitting a consumer who fails to make a timely
lease payment to reinstate the agreement without losing any
rights or options which exist under the agreement by the payment
of all past-due lease charges, the reasonable costs of pickup,
redelivery, and any refurbishing, and any applicable late fee
within five business days of the renewal date of the agreement if
the consumer pays monthly or within three business days of the
renewal date of the agreement if the consumer pays more
frequently than monthly; and
(b) Permitting the consumer to reinstate the agreement
during a period of not less than thirty days after the date of
the return of the property if the consumer promptly returns or
voluntarily surrenders the property upon request by the lessor or
its agent. In the event the consumer has paid not less than
sixty percent and not more than eighty percent of the total of
payments to acquire ownership, the reinstatement period shall be
extended to a total of ninety days after the date of the return
of the property. In the event the consumer has paid eighty
percent or more of the total of payments to acquire ownership,
the reinstatement period shall be extended to a total of one
hundred eighty days after the date of the return of the property.
Nothing in this section shall prevent a lessor from
attempting to repossess property during the reinstatement period,
but such repossession shall not affect the consumer's right to
reinstate. Upon reinstatement, the lessor shall provide the
consumer with the same property or substitute property of
comparable quality and condition.
Laws 1989, LB 681, § 8; Laws 2001, LB 641, § 4.
Lessor; prohibited acts.
A lessor shall not:
(1) Charge a penalty for early termination of a
consumer rental purchase agreement or for the return of an item
at any point except for those charges authorized by section
(2) Require payment by a cosigner of the consumer
rental purchase agreement of any fees or charges which could not
be imposed upon the consumer as part of the consumer rental
(3) Require payment of any charges unless specifically
authorized by subsection (1) of section 69-2110; or
(4) Increase the lease payment or the total of payments
to acquire ownership as a result of a consumer's declining to
purchase liability damage waiver.
Laws 1989, LB 681, § 9; Laws 1993, LB 111, § 3;
Laws 2001, LB 641, § 5.
Fees; deposits; charges.
(1) The lessor may contract for and receive:
(a) An initial nonrefundable administrative fee of not
more than ten dollars;
(b) A security deposit, if the amount of the deposit
and the conditions under which all or a part of the deposit will
be returned is disclosed with the disclosures required by
sections 69-2104 and 69-2105;
(c) A delivery charge of not more than ten dollars or,
in the case of a consumer rental purchase agreement covering more
than five items, a delivery charge of not more than twenty-five
(i) the lessor actually delivers the items to the
place designated by the consumer,
(ii) the delivery charge is
disclosed with the disclosures required by sections 69-2104 and
(iii) such charge is in lieu of and not in addition
to the administrative fee in subsection (1) of this section;
(d) Late fees as follows:
(i) For consumer rental purchase agreements with
monthly renewal dates, a late fee of not more than five dollars
may be assessed on any payment not made within five business days
after the payment is due;
(ii) For consumer rental purchase agreements with more
frequent than monthly renewal dates, a late fee of not more than
three dollars may be assessed on any payment not made within
three business days after payment is due; and
(iii) A late fee on a consumer rental purchase
agreement may be collected only once on any accrued payment no
matter how long such payment remains unpaid, may be collected at
the time it accrues or at any time thereafter, and shall not be
assessed against a payment that is timely made even though an
earlier late fee has not been paid in full; and
(e) In addition to any applicable late fee, a
reinstatement fee of not more than five dollars which may be
assessed only if the consumer exercises the reinstatement
provision of the agreement.
(2) The parties may contract for fees for liability
damage waiver or similar products or services if:
(a) Purchasing the product or service is optional and
is not a factor in the approval of the lessor of the consumer
rental purchase transaction and such facts are clearly disclosed
in writing to the consumer; and
(b) The consumer has signed or initialed an affirmative
written request to purchase the product or service after
receiving a written disclosure of the cost of such product or
(3) In addition to the requirements in subsection (2)
of this section a contract containing fees for liability damage
waiver shall include the following:
(a) For a consumer rental purchase agreement with
scheduled lease payments more frequent than monthly, the amount
of the liability damage waiver shall not exceed eight percent of
any lease payment or two dollars for each scheduled lease
payment, whichever is greater; and
(b) For a consumer rental purchase agreement with
monthly lease payments, the amount of the liability damage waiver
shall not exceed eight percent of any lease payment or five
dollars for each scheduled lease payment, whichever is greater.
(4) The parties may contract for other products or
services incidental to the consumer rental purchase transaction
which do not evade the provisions of the Consumer Rental Purchase
Laws 1989, LB 681, § 10; Laws 1993, LB 111, § 4;
Laws 2001, LB 641, § 6.
Renegotiation; when; extension; effect.
(1) A renegotiation shall be deemed to occur
when an existing consumer rental purchase agreement is satisfied
and replaced by a new agreement undertaken by the same consumer.
A renegotiation shall be considered a new agreement requiring new
disclosures. Renegotiation shall not include:
(a) The addition or return of property in a
multiple-item agreement or the substitution of leased property if
in either case the average payment allocable to a payment period
is not changed by more than twenty-five percent;
(b) Deferral or extension of one or more periodic
payments or portions of a periodic payment;
(c) A reduction in charges in the agreement;
(d) An agreement involving a court proceeding; and
(e) Any other event described in rules and regulations
adopted and promulgated by the department.
(2) No disclosures shall be required for any extension
of a consumer rental purchase agreement.
Laws 1989, LB 681, § 11.
(1) Any advertisement for a consumer rental
purchase agreement which refers to or states the amount of any
payment or the right to acquire ownership for any specific item
shall also state clearly and conspicuously the following if
(a) That the transaction advertised is a consumer
rental purchase agreement;
(b) The total of payments to acquire ownership; and
(c) That the consumer acquires no ownership rights
until the total of payments to acquire ownership is paid.
(2) Any owner or employee of any medium in which an
advertisement appears or through which it is disseminated shall
not be liable under this section.
(3) Subsection (1) of this section shall not apply to
an advertisement which does not refer to a specific item of
property, which does not refer to or state the amount of any
payment, or which is published in the yellow pages of a telephone
directory or any similar directory of business.
(4) With respect to matters specifically governed by
the Consumer Credit Protection Act, 15 U.S.C. 1635 et seq., as
such act existed on September 1, 2001, compliance with such act
shall satisfy the requirements of this section.
Laws 1989, LB 681, § 12; Laws 2001, LB 641, § 7.
Lessor; liability; offset, not permitted; lessor; preserve
(1) A lessor who fails to comply with the
requirements of sections 69-2104 to 69-2110 with respect to a
consumer shall be liable to the consumer for:
(a) The greater of the actual damages sustained by the
consumer as a result of the violation or, in the case of an
individual action, twenty-five percent of the total of payments
to acquire ownership but not less than one hundred dollars nor
more than one thousand dollars; and
(b) The costs of the action and reasonable attorney's
(2) In the case of an advertisement, any lessor who
fails to comply with the requirements of section 69-2112 with
regard to any person shall be liable to that person for actual
damages suffered from the violation, the costs of the action, and
reasonable attorney's fees.
(3) When there is more than one lessor, liability shall
be imposed only on the lessor who made the disclosures. When no
disclosures have been made, liability shall be imposed jointly
and severally on all lessors.
(4) When there is more than one consumer, there shall
be only one recovery of damages under subsection (1) of this
section for a violation of the Consumer Rental Purchase Agreement
(5) Multiple violations in connection with a single
consumer rental purchase agreement shall entitle the consumer to
a single recovery under this section.
(6) A consumer shall not take any action to offset any
amount for which a lessor is potentially liable under subsection
(1) of this section against any amount owed by the consumer
unless the amount of the lessor's liability has been determined
by judgment of a court of competent jurisdiction in an action to
which the lessor was a party. This subsection shall not bar a
consumer then in default on the obligation from asserting a
violation of the act as an original action or as a defense or
counterclaim to an action brought by the lessor to collect an
amount owed by the consumer.
(7) In connection with any transaction covered under
the act, the lessor shall preserve evidence of compliance with
the provisions of the act for not less than two years from the
date of consummation of the agreement.
Laws 1989, LB 681, § 13; Laws 1990, LB 1217, § 1;
Laws 2001, LB 641, § 8.
Lessor; not liable; when.
(1) A lessor shall not be liable for a
violation under section 69-2113 if the lessor proves by a
preponderance of the evidence that the violation was not
intentional, that the violation resulted from a bona fide error,
and that the lessor maintained procedures reasonably adapted to
avoid such an error. A bona fide error shall include, but not be
limited to, clerical, calculation, computer malfunction and
programming, and printing errors. An error of legal judgment
with respect to requirements of the Consumer Rental Purchase
Agreement Act shall not be considered a bona fide error.
(2) A lessor shall not be liable under the act for any
act done or omitted in good faith in conformity with any rule,
regulation, or interpretation issued, adopted, or promulgated by
the Attorney General, by the department, or by an official duly
authorized by the Attorney General or the department even if
after the act or omission has occurred the rule, regulation, or
interpretation is amended, rescinded, or determined by judicial
or other authority to be invalid for any reason.
(3) With respect to the dollar amount of any disclosure
required by the act, a lessor shall not be liable if the dollar
amount actually disclosed is greater than the dollar amount
required to be disclosed by the act.
Laws 1989, LB 681, § 15; Laws 2001, LB 641, § 9.
Director of Banking and Finance; investigations; other
(a) The Director of Banking and Finance in
his or her discretion may make such investigations within or
without this state as he or she deems necessary to determine
whether any person has violated or is about to violate the
Consumer Rental Purchase Agreement Act or to aid in the
enforcement of the act or in the adopting and promulgating of
rules, regulations, and forms under the act. In the discretion
of the director, the actual expense of any such investigation may
be charged to the person who is the subject of the investigation.
(b) The director may publish information concerning any
violation of the act or any rule, regulation, or order of the
(c) For the purpose of any investigation or proceeding
under the act, the director or any officer designated by him or
her may administer oaths and affirmations, subpoena witnesses,
compel their attendance, take evidence, and require the
production of any books, papers, correspondence, memoranda,
agreements, or other documents or records which the director
deems relevant or material to the inquiry.
(2) In case of contumacy by or refusal to obey a
subpoena issued to any person, any court of competent
jurisdiction, upon application by the director, may issue to that
person an order requiring him or her to appear before the
director or the officer designated by the director to produce
documentary evidence if so ordered or to give evidence touching
on the matter under investigation or in question. Any failure to
obey the order of the court may be punished by the court as a
contempt of court. The request for an order of compliance may be
addressed to either
(a) the district court of Lancaster County or
the district court in the county where service may be obtained on
the person refusing to testify or produce, if the person is
within this state, or
(b) the appropriate district court of the
state having jurisdiction over the person refusing to testify or
produce, if the person is outside this state.
Laws 1993, LB 111, § 5.
Cease and desist order; fine; injunction; procedures; appeal.
(1) The Director of Banking and Finance may
summarily order a lessor to cease and desist from the use of
certain forms or practices relating to consumer rental purchase
agreements if he or she finds that (a) there has been a
substantial failure to comply with any of the provisions of the
Consumer Rental Purchase Agreement Act or (b) the continued use
of certain forms or practices relating to consumer rental
purchase agreements would constitute misrepresentation to or
deceit or fraud on the consumer.
(2) If the director believes, whether or not based upon
an investigation conducted under section 69-2116, that any person
or lessor has engaged in or is about to engage in any act or
practice constituting a violation of any provision of the
Consumer Rental Purchase Agreement Act or any rule, regulation,
or order under the act, the director may:
(a) Issue a cease and desist order;
(b) Impose a fine of not to exceed one thousand dollars
per violation, in addition to costs of the investigation; or
(c) Initiate an action in any court of competent
jurisdiction to enjoin such acts or practices and to enforce
compliance with the act or any order under the act.
(3) Upon a proper showing a permanent or temporary
injunction, restraining order, or writ of mandamus shall be
granted. The director shall not be required to post a bond.
(4) Any fine and costs imposed pursuant to this section
shall be in addition to all other penalties imposed by the laws
of this state and shall be collected by the director and remitted
to the State Treasurer. Costs shall be credited to the
Securities Act Cash Fund, and fines shall be credited to the
permanent school fund. If a person fails to pay the fine or
costs of the investigation referred to in this subsection, a lien
in the amount of the fine and costs shall be imposed upon all of
the assets and property of such person in this state and may be
recovered by suit by the director. Failure of the person to pay
a fine and costs shall constitute a separate violation of the
(5) Upon entry of an order pursuant to this section,
the director shall promptly notify all persons to whom such order
is directed that it has been entered and of the reasons for such
order and that any person to whom the order is directed may
request a hearing in writing within fifteen business days of the
issuance of the order. Upon a receipt of a written request, the
matter shall be set down for hearing to commence within thirty
business days after the receipt unless the parties consent to a
later date or the hearing officer sets a later date for good
cause. If a hearing is not requested within fifteen business
days and none is ordered by the director, the order shall
automatically become final and shall remain in effect until it is
modified or vacated by the director. If a hearing is requested
or ordered, the director after notice and hearing shall enter his
or her written findings of fact and conclusions of law and may
affirm, modify, or vacate the order.
(6) The director may vacate or modify a cease and
desist order if he or she finds that the conditions which caused
its entry have changed or that it is otherwise in the public
interest to do so.
(7) Any person aggrieved by a final order of the
director may appeal the order. The appeal shall be in accordance
with the Administrative Procedure Act.
Laws 1993, LB 111, § 6; Laws 2001, LB 53, § 111.
Administrative Procedure Act,see section 84-920.
Examination of books and records.
To aid in the enforcement of the Consumer
Rental Purchase Agreement Act, the Director of Banking and
Finance may examine the books and records of any lessor at least
once a year. The expense of the examination shall be assessed
against such lessor.
Laws 1993, LB 111, § 7.
Personal jurisdiction over lessor.
Leasing or offering to lease or arrange for a
leasing of property under a consumer rental purchase agreement in
this state shall constitute sufficient contact with this state
for the exercise of personal jurisdiction over the lessor in any
action arising under the Consumer Rental Purchase Agreement Act.
Laws 1993, LB 111, § 8.