RTO Legislative Activity - Why the Rent-to-Own Industry is Seeking Federal Legislation

Why federal rent-to-own legislation?

Passage of a federal rent-to-own bill will benefit consumers, businesses and the American economy

*****Download the full text of the Consumer Rental Purchase Agreement Act here.

The Clay/Landrieu Bill Defines the Rent-to-own Transaction as a Lease

The rent-to-own transaction provides millions of consumers with a flexible, debt-free opportunity to acquire household products—customers can return the product at any time, for any reason, with no penalty. There is no other transaction like it in the marketplace; however, rent-to-own is the most widely used transaction not defined at the federal level. While 47 state legislatures have defined rent-to-own as a lease, the U.S. Congress remains one of the last arenas to define the transaction. With a thriving industry, competition will be enhanced and, as a result, rent-to-own’s more than 3.2 million customers will continue to see improvements in service, pricing and payment options.

The Clay/Landrieu Bill is a Consumer Protection Bill

Passage of the rent-to-own bill by the U.S. Congress is good for consumers because it creates federal regulations for pricing and payment disclosures and strengthens consumer protection in 33 states. Also, it mandates reinstatement rights for the consumer. With reinstatement rights, a customer who cannot continue to make payments and has to return a product, can later resume the transaction and reinstate his or her payment history toward ownership of the product. While most rent-to-own companies already offer lifetime reinstatement rights as a part of their business practices, the federal bill requires a minimum time for payment reinstatement as a guaranteed consumer protection. The federal bill mandates full disclosure—both verbally and in writing—of every penny the customer will pay to a rent-to-own business. The rent-to-own store must disclose all costs, including total rent-to-own costs compared to the cost of the merchandise if bought in one cash transaction. The federal bill mandates pricing disclosures in rent-to-own advertising as well. An informed consumer is a powerful consumer and virtually all customer complaints and legal actions disappear when communication is open and clear.

The Clay/Landrieu Bill Creates Jobs and nurtures economic growth

Passage of a federal rent-to-own bill will provide security for the $6.3-billion industry to expand and create jobs. Federal legislation will secure the future of rent-to-own businesses—both small and large—and more than 50,000 employees who work within the industry. With industry growth, the value of rent-to-own will increase on Wall Street and provide lending confidence for small businesses nationwide.

For more information on APRO’s federal legislative effort, please contact APRO Public Affairs Director Richard May by e-mail or phone at 512/225-1051.