RTO has enjoyed relative regulatory peace for a while. But now is not the time for the industry to lower its guard.
Some politicians are fond of talking about “the long arc of history” – code for “we may not be winning at the moment, but we will eventually, because we are better and we are right. History will prove it.” The rent-toown industry has had some arcs over the years – moments of relative quiet followed by moments of intense regulatory scrutiny.
We have gone through a period of relative calm until recently. The latest serious interest at the federal level was around 2016, when a U.S. House bill was introduced to put RTO under the jurisdiction of the Consumer Financial Protection Bureau (CFPB). Luckily, the bill went nowhere. The last comprehensive state rent-toown activity that went anywhere was in 2015, when Vermont passed its RTO law. Here and there, minor amendments have been proposed to rent-to-own statutes; examples include tweaks to the price tag disclosure rules, price-controls bills, Indiana’s 15th amendment to its RTO law, and some efforts with mixed results to declare that stealing rent-to-own products is not actually a crime. But all in all, we have avoided existential threats to the survival of the RTO transaction as a choice for consumers in the marketplace – until late last spring.
Last May, companion bills were introduced into the New York Assembly and Senate which would have declared rent-to-own transactions to be credit sales for all purposes and also would have repealed the existing safe-harbor provisions in the state’s RTO statute. This was essentially the first time there had been an effort to undo a rent-to-own state statute. (Wyoming, a licensing state, had considered repealing its RTO statute in 2018 – not because of pressure from consumer advocates, but rather because in 25 years, there had never been a complaint lodged against a rent-to-own company, and the licensing body proposed streamlining the statutes.)
The New York bills died with no activity in either house, but rental dealers have been told the bills are likely to be reintroduced in 2025. There will be an election between the time I’m writing this and then, so there is no way to predict the level of interest or activity in this sort of decidedly anti-RTO legislative proposal. The New York dealers are well-organized, with lobby boots on the ground in Albany and money in the bank, and are ready and willing to do battle as necessary. But the bills’ introduction should serve as an important reminder that while the tension between rental dealers and consumer advocates may wax and wane over time, it never goes away altogether – and it never will.
For the moment, the score remains rent-to-own industry: 47; consumer advocates: 3. This is an enviable record in any arena; the arc of RTO history for the past 50 years has bent in favor of the industry because of the proven value of the transaction to consumers over time. But you need to keep paying close attention to the issues that can affect your ability to do business; APRO is here to help with this, by the way. And keep providing valuable goods and services to your customers, treating them with the respect and attention they deserve.
Ed Winn III serves as APRO General Counsel. For legal advice, members in good standing can email legal@rtohq.org.
