FOR IMMEDIATE RELEASE: Thursday 12 July 01
CONTACT: Ed Mierzwinski, 202-546-9707
Rent-To-Own Bill Good For Industry, Bad For Consumers
Statement of U.S. PIRG Consumer Program Director Ed Mierzwinski
Hearing on HR 1701, Jones (R-NC) House Financial Services Committee
The predatory rent-to-own industry looks forward to passage of HR 1701, which will make it easier for them to gouge consumers with unfair rent-to-own contracts on televisions and furniture at interest rates as high as 300-500% APR or more. Of course, no one would pay those interest rates if they knew about them. Thatís why the predatory rent-to-own industry doesnít tell consumers the APR and thatís why the rent to own industry ignores ceilings on interest rates in states that regulate small loans. If HR 1701 passes, it would preempt all stronger state consumer laws regulating the predatory rent-to-own industry.
Incredibly, the proposed bill would even preempt modest protections in a number of states that have already passed industry-supported laws, and replace those with weaker provisions. See testimony of Margot Saunders, National Consumer Law Center, today, on behalf of NCLC, U.S. PIRG and other groups.
The industry's goal today, however, is not to get rid of those 46 modest industry-supported RTO state laws. Actually, it is to block continued enforcement of stronger laws in Vermont, New Jersey, Wisconsin, and Minnesota, where consumers are protected much better now, but would lose protection if HR 1701 passes.
The rent-to-own industry should change its name to Ripping-Them-Off. Instead of weak disclosures, consumers need strong protections, including disclosure of APRs so prices can be compared, and caps on allowable interest rates. This bill aids and abets a predatory industry that wonít tell the truth now, and wonít need to tell the truth if the bill passes.
U.S. PIRG is the national association and lobbying office for state Public Interest Research Groups. PIRGs are non-profit, non-partisan advocacy groups active around the country.
PIRG's 1997 National Survey of Rent-to-own fees