1.1                          A bill for an act
  1.2             relating to commerce; rental-purchase agreements; 
  1.3             regulating cash price and finance charges; providing 
  1.4             for the application of certain other law; amending 
  1.5             Minnesota Statutes 1994, sections 325F.84, subdivision 
  1.6             3; 325F.91, subdivision 1, and by adding a 
  1.7             subdivision; and 325F.97, subdivision 2; proposing 
  1.8             coding for new law in Minnesota Statutes, chapter 
  1.9             325F; repealing Minnesota Statutes 1994, section 
  1.10            325F.91, subdivision 2. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 325F.84, 
  1.13  subdivision 3, is amended to read: 
  1.14     Subd. 3.  [CASH PRICE.] "Cash price" means ~~an amount equal~~ 
  1.15  ~~to~~ the ~~equivalent~~ fair market value ~~for goods offered under a~~ 
  1.16  ~~consumer credit sale as provided under section 325G.15~~ of the 
  1.17  property.  "Fair market value" means the price at which retail 
  1.18  sellers are selling and retail buyers are buying the same or 
  1.19  substantially similar property for cash in the same trade area 
  1.20  in which the lessor's place of business is located.  Cash price 
  1.21  may be evidenced as provided in section 325F.931. 
  1.22     Sec. 2.  Minnesota Statutes 1994, section 325F.91, 
  1.23  subdivision 1, is amended to read: 
  1.24     Subdivision 1.  [PROHIBITED RENTAL AGREEMENT PROVISIONS.] A 
  1.25  rental-purchase agreement may not contain a provision: 
  1.26     (1) requiring a confession of judgment; 
  1.27     (2) authorizing a lessor or an agent of the lessor to 
  1.28  commit a breach of the peace in the repossession of property; 
  2.1      (3) waiving a defense, counterclaim, or right the lessee 
  2.2   may have against the lessor or an agent of the lessor; 
  2.3      (4) requiring the payment of a late charge unless a lease 
  2.4   payment is delinquent for more than two business days for a 
  2.5   weekly lease or three business days for a monthly lease, and the 
  2.6   charge or fee shall not be in an amount more than the greater of 
  2.7   five percent of the delinquent lease payment or $3; 
  2.8      (5) requiring a separate payment in addition to lease 
  2.9   payments in order to acquire ownership of the property, other 
  2.10  than by exercising an early purchase option pursuant to section 
  2.11  325F.93; ~~and~~ 
  2.12     (6) authorizing a lessor to charge a penalty for early 
  2.13  termination of a rental-purchase agreement; or 
  2.14     (7) disclosing or requiring a cash price not complying with 
  2.15  section 325F.84, subdivision 3. 
  2.16     Sec. 3.  Minnesota Statutes 1994, section 325F.91, is 
  2.17  amended by adding a subdivision to read: 
  2.18     Subd. 2a.  [FINANCE CHARGES.] A lessor may contract for and 
  2.19  receive a finance charge on the cash price only in an amount not 
  2.20  to exceed an annual percentage rate of 36 percent, including the 
  2.21  cost of lease services. 
  2.22     Sec. 4.  [325F.931] [RECORDS AND EVIDENCE OF CASH PRICE.] 
  2.23     (a) A lessor shall maintain records that establish that the 
  2.24  price disclosed as the cash price in a rental-purchase agreement 
  2.25  is the cash price as defined in section 325F.84, subdivision 3.  
  2.26  A copy of each rental-purchase agreement and of the records 
  2.27  required by this subdivision must be maintained for two years 
  2.28  following the termination of the agreement. 
  2.29     (b) Evidence of the cash price of new property may include 
  2.30  published prices or advertisements by retailers of substantially 
  2.31  similar products selling in the same trade area in which the 
  2.32  lessor's business is located, if the prices were published or 
  2.33  disseminated within the 90-day period preceding the date of the 
  2.34  rental-purchase agreement, or an amount equal to twice the 
  2.35  documented actual cost, including freight charges, of the rental 
  2.36  purchase property from an unaffiliated wholesaler, distributor, 
  3.1   or manufacturer. 
  3.2      Sec. 5.  Minnesota Statutes 1994, section 325F.97, 
  3.3   subdivision 2, is amended to read: 
  3.4      Subd. 2.  [APPLICATION OF OTHER LAW.] A violation of 
  3.5   section 325F.90, 325F.91, or 325F.93 shall be treated as a 
  3.6   violation of section 325F.69.  The remedies provided by section 
  3.7   325F.90, 325F.91, or 325F.93 are cumulative and shall not be 
  3.8   construed as restricting any remedy that is otherwise available. 
  3.9   Section 334.01 does not apply to rental-purchase agreements made 
  3.10  pursuant to sections 325F.84 to 325F.97. 
  3.11     Sec. 6.  [REPEALER.] 
  3.12     Minnesota Statutes 1994, section 325F.91, subdivision 2, is 
  3.13  repealed.