CONSUMER LEASING ACT AMENDMENTS.

SEC. 2605. CONSUMER LEASING ACT AMENDMENTS. (a) Congressional Findings and Declaration of Purposes.— (1) Findings.— The Congress finds that— (A) competition among the various financial institutions and other firms engaged in the business of consumer leasing is greatest when there is informed use of leasing; (B) the informed use of leasing results from an awareness of the cost of leasing by consumers; and (C) there has been a continued trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that leasing product advances have occurred such that lessors have been unable to provide consistent industry-wide disclosures to fully account for the competitive progress that has occurred. (2) Purposes.— The purposes of this section are— (A) to assure a simple, meaningful disclosure of leasing terms so that the consumer will be able to compare more readily the various leasing terms available to the consumer and avoid the uninformed use of leasing, and to protect the consumer against inaccurate and unfair leasing practices; (B) to provide for adequate cost disclosures that reflect the marketplace without impairing competition and the development of new leasing products; and (C) to provide the Board with the regulatory authority to assure a simplified, meaningful definition and disclosure of the terms of certain leases of personal property for personal, family, or household purposes so as to— (i) enable the lessee to compare more readily the various lease terms available to the lessee; (ii) enable comparison of lease terms with credit terms, as appropriate; and (iii) assure meaningful and accurate disclosures of lease terms in advertisements. (b) Regulations.— 110 STAT. 3009–472 (1) In general.— Chapter 5 of the Truth in Lending Act (15 U.S.C. 1667 et seq.) is amended by adding at the end the following new section: “SEC. 187. REGULATIONS. “(a) Regulations Authorized.— “(1) In general.— The Board shall prescribe regulations to update and clarify the requirements and definitions applicable to lease disclosures and contracts, and any other issues specifically related to consumer leasing, to the extent that the Board determines such action to be necessary— “(A) to carry out this chapter; “(B) to prevent any circumvention of this chapter; or “(C) to facilitate compliance with the requirements of the chapter. “(2) Classifications, adjustments.— Any regulations prescribed under paragraph (1) may contain classifications and differentiations, and may provide for adjustments and exceptions for any class of transactions, as the Board considers appropriate. “(b) Model Disclosure.— “(1) Publication.— The Board shall establish and publish model disclosure forms to facilitate compliance with the disclosure requirements of this chapter and to aid the consumer in understanding the transaction to which the subject disclosure form relates. “(2) Use of automated equipment.— In establishing model forms under this subsection, the Board shall consider the use by lessors of data processing or similar automated equipment. “(3) Use optional.— A lessor may utilize a model disclosure form established by the Board under this subsection for purposes of compliance with this chapter, at the discretion of the lessor. “(4) Effect of use.— Any lessor who properly uses the material aspects of any model disclosure form established by the Board under this subsection shall be deemed to be in compliance with the disclosure requirements to which the form relates.”. (2) Effective date.— (A) In general.— Any regulation of the Board, or any amendment or interpretation of any regulation of the Board issued pursuant to section 187 of the Truth in Lending Act (as added by paragraph (1) of this subsection), shall become effective on the first October 1 that follows the date of promulgation of that regulation, amendment, or interpretation by not less than 6 months. (B) Longer period.— The Board may, at the discretion of the Board, extend the time period referred to in subparagraph (A) in accordance with subparagraph (C), to permit lessors to adjust their disclosure forms to accommodate the requirements of section 127 of the Truth in Lending Act (as added by paragraph (1) of this subsection). (C) Shorter period.— The Board may shorten the time period referred to in subparagraph (A), if the Board makes a specific finding that such action is necessary to comply with the findings of a court or to prevent an unfair or deceptive practice. 110 STAT. 3009–473 (D) Compliance before effective date.— Any lessor may comply with any means of disclosure provided for in section 127 of the Truth in Lending Act (as added by paragraph (1) of this subsection) before the effective date of such requirement. (E) Definitions.— For purposes of this subsection, the term “lessor” has the same meaning as in section 181 of the Truth in Lending Act. (3) Clerical amendment.— The table of sections for chapter 5 of title I of the Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after the item relating to section 186 the following new item: “187. Regulations.”. (c) Consumer Lease Advertising.— Section 184 of the Truth in Lending Act (15 U.S.C. 1667c) is amended— (1) by striking subsections (a) and (c); (2) by redesignating subsection (b) as subsection (c); and (3) by inserting before subsection (c), as so redesignated, the following: “(a) In General.— If an advertisement for a consumer lease includes a statement of the amount of any payment or a statement that any or no initial payment is required, the advertisement shall clearly and conspicuously state, as applicable— “(1) the transaction advertised is a lease; “(2) the total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later; “(3) that a security deposit is required; “(4) the number, amount, and timing of scheduled payments; and “(5) with respect to a lease in which the liability of the consumer at the end of the lease term is based on the anticipated residual value of the property, that an extra charge may be imposed at the end of the lease term. “(b) Advertising Medium Not Liable.— No owner or employee of any entity that serves as a medium in which an advertisement appears or through which an advertisement is disseminated, shall be liable under this section.”.