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MADISON, Wis. - A Republican legislative proposal would exempt rent-to-own stores from key provisions of the state consumer protection laws.
Under current law, rent-to-own companies are required to provide customers with the interest rates they charge for furniture and appliances. The proposal would require only that customers be told the cost of the item and the number of payments needed to own it, rather than the interest rate.
Matt Rothschild, executive director of the Wisconsin Democracy Campaign, says such interest rates typically range from 138 percent to 370 percent. "This is usury," he states. "This should be totally outlawed. And certainly the fact that right now these companies have to disclose what they're charging people in interest in Wisconsin is important. "The consumer should know that they're being charged through the teeth for these appliances."
The Republican sponsors of the proposal say the bill would create more jobs in Wisconsin by incentivizing the establishment of more rent-to-own stores in the state. They say those stores serve a distinct consumer population that may not otherwise be able to afford common household items.
Rothschild sides with critics of the industry who say rent-to-own stores prey on the poor, who should at least be given adequate information to guide them in making a buying decision. "But if this bill goes through, the consumer is not going to know that they're being charged 300 percent for their TV," he stresses. "You know, at some point, we've got to look at the industries that are just preying on the poor, and it's outrageous the number of industries that exist simply to prey on the poor."
Rothschild points out that a large coalition of churches, charities and the Wisconsin Public Interest Research Group also opposes the legislation.