An Act relating to lease-purchases of personal property.

Lease-purchases or Rental-purchases is one of the fastest growing customer service industries today, with over 8,000 stores in all fifty states. Most of the stores are owned and operated by small businessmen and women. Rental-purchase contracts and required disclosures may vary greatly from one business to the next. In order to ensure an earnest and level playing field for the consumer and small businessman alike, I have introduced House Bill 128.

The rental-purchase industry leases durable household merchandise - such as furniture, major appliances and electronic goods -- on a short-term basis (i.e. four months or less) and offers ownership options for consumers. A rental-purchase agreement typically begins with a customer leasing merchandise for a week or a month and making an advance rental payment. At the end of the initial rental period, customers have several options: they can, 1) renew the agreement by making another advance rental payment; 2) terminate the agreement and arrange for return of the merchandise to the store; or 3) exercise an early purchase option.

Forty-four states have laws that comprehensively regulate rental-purchase as a unique transaction independent from retail installment sales. In 1991, the Council of State Governments published the Virginia Lease Purchase Act in its volume of Suggested State Legislation. These comprehensive consumer protection laws typically include provisions requiring full disclosure to the consumer of contractual terms such as the number and total payments necessary to acquire ownership, the cash price of the merchandise and reinstatement rights for lapsed agreements.

Rental-purchase is a growing industry in Alaska. As such, Alaskan consumers of this industry deserve up front, complete disclosure of all payments and purchase options involved with a lease-purchase transaction. So that all parties are on an even playing field I ask for your support of House Bill 128.