AN ACT TO ENACT THE LEASE-PURCHASE AGREEMENT ACT.
Adds new GS Chapter 25D, the North Carolina Lease-Purchase Agreement Act. Sets out definitions and exceptions. Defines a lease-purchase agreement as an agreement for the use of personal property by a consumer for an initial period of four months or less that contains automatic periodic renewals with each payment after the initial period, no provision obligating the consumer to continue use of the property beyond the initial period, and a provision permitting the consumer to become the owner of the property. Makes any agreement meeting this Chapter's requirements exempt from statutes related to a home solicitation sale, a closed-end installment loan, a security interest, or a consumer credit sale. Requires the lessor to make 12 disclosures including the attributes of the payments, a clear statement of the terms of the agreement, and a statement that the consumer may terminate the agreement without penalty. Prohibits lease-purchase agreements from containing a confession of judgment, a negotiable instrument, a security interest, a wage assignment, a waiver of claims or defenses by the consumer, or an authorization to enter the consumer's premises for repossession purposes. Provides for reinstatement of the agreement. Allows parties to renegotiate and extend existing agreements. Provides for advertisement of agreements. Lessors who fail to comply with a requirement imposed with respect to a consumer are liable for specified civil damages. Also sets out liability for failing to comply with the advertising requirements. Requires the lessor to preserve evidence of compliance with the Chapter for at least two years from the date the lease-purchase agreement was executed. Requires actions under the Chapter to commence within one year of the date of the violation, or within six months of the date of the lease-purchase agreement, together with any renewals or extensions, ceases to be in effect, whichever is greater. Sets out allowable defenses.
The above provisions are effective January 1, 2020, and apply to all agreements entered on or after this date.
Establishes the Consumer Lease-Purchase Information Fund in the Office of Consumer Protection of the Department of Justice to be used to enable that Office to provide information and education to consumers regarding the disclosure obligations created by this act.
Appropriates $25,000 in nonrecurring funds for 2019-20 from the General Fund to the Consumer Lease-Purchase Information Fund. Effective July 1, 2019.