RTO Legislative Activity - Seeking the Support of Congress

Why federal rent-to-own legislation?

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

The rent-to-own federal bill defines the rent-to-own transaction as a lease

The rent-to-own transaction provides millions of consumers a debt-free, flexible way to acquire products. There’s no other transaction like it in the marketplace. You can return the product at any time for any reason with no penalty. Rent-to-own is the most widely used transaction that has yet to be defined in the federal code. While 47 states have defined the rent-to-own transaction as a lease, Congress remains one of the last legislative arenas to define the transaction. A federal lease definition will secure rent-to-own’s economic future, thus enhancing small business and corporate competition that will continue to lower prices and improve customer service.

The rent-to-own federal bill is a consumer protection bill

A rent-to-own federal bill is good for consumers because it creates federal regulations for disclosures and strengthens consumer protection in 33 states. The federal bill mandates reinstatement rights for the consumer. Reinstatement rights protect the customer who cannot continue to make payments and has to return the product, but does not want to lose payments already made toward a purchase. The customer can reinstate his/her payment history to count fully for the ultimate ownership of the product.

While most rent-to-own companies 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 when doing business with a rent-to-own store. The rent-to-own store must disclose all costs, including total rent-to-own costs vs. 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 rent-to-own businesses thrive when communication is clear with their customers.

The rent-to-own federal bill is good for business

By defining the largest undefined transaction in the economy today, Congress gives rental dealers the security that their rent-to-own stores are finally sanctioned as valid American businesses. The value of their business will increase. Investor and lending security will increase. Increased competition will motivate rental dealers to improve their business and provide customer service that is better than retail.

The rent-to-own federal bill is good for the economy

Congressional passage of a rent-to-own definition will provide investor security, thus allowing rent-to-own business to grow, compete and improve services to the American public. The value of rent-to-own will increase on Wall Street while providing lending confidence to the small business of rent-to-own. A federal definition will open business to potential rental dealers in Wisconsin, Minnesota and New Jersey—states that currently have no rent-to-own transaction definition—contributing hundreds of millions of dollars annually to those economies and provide consumers an option that does not exist in those states.

The rent-to-own federal bill is about the American free-market system

The federal bill provides valid, honest free-market enterprise in Minnesota, Wisconsin and New Jersey—states with courts that have thus far prevented a rent-to-own transaction definition. The federal bill does not change state law—it changes court rulings. Courts should not be making law; legislators make law. That’s why the rent-to-own industry is seeking the help of Congress with a federal initiative.

Please review the following website - Rent-to-Own Congressional Web Site - for the current legislative context, issues and history for the rent-to-own industry and the U.S. Congress.