Republican state lawmakers are asking for changes in how the Rent-to-Own industry is regulated in Wisconsin, which a Democratic lawmakers argues would allow a predatory business model to greatly expand in the state.
The bill from state Senator Terry Moulton (R-Chippewa Falls) and Representative Warren Petryk (R-Eleva) would stop regulating the industry under the Wisconsin Consumer Act, setting up a system they say is used by most other states. While rent-to-own stores would still have to disclose the cash price of the item and the total number of payments needed to own it, they would not have to show the interest rate consumers are paying – which is currently required in Wisconsin.
In their co-sponsorship memo, Moulton and Petryk say the industry serves a distinct population of consumers, who may not otherwise be able to afford household items like a washer and dryer. Assembly Democratic Leader Gordon (D-Oshkosh) argues it’s an industry that thrives on people with poor financial literacy though. “They’re asking to hide the actual cost of the interest rate that they’re gouging consumers with,” he says.
Hintz says not having to show interest rates is a big change, and it’s something rent-to-own advocates have previously said is keeping the industry from expanding in Wisconsin.
At a hearing in 2012 on a similar bill, he says industry experts testified that Wisconsin currently only had 38 rent-to-own businesses, but changing the regulations could increase that number to more than 300 stores. “If the only way you can expand the business and the only way you can increase profits is by taking advantage of people, I don’t that’s the kind of business that Governor Walker and Republicans are talking about – we shouldn’t have to prey upon people to grow business in Wisconsin,” he argues.
The bill is currently being circulated for co-sponsors at the Capitol.