There goes your transparency. In Wisconsin, Governor Scott Walker has added provisions that exempt rent-to-own companies from that state's consumer protection act requiring lenders to disclose interest rates, according to The Associated Press.
Companies such as Rent-A-Center argue that consumer protection laws should not apply because buyers are paying higher prices for goods factoring in services such as delivery, opt-out clauses and pick-up. The companies say they are not charging interest.
"You're paying for the ability to take something home. You're paying for the access, you're paying for the embedded value. Therein lies your price. There is no interest rate. There is no credit," Xavier Dominicis, a spokesperson for Rent-A-Center, told the AP.
Mr. Walker has gotten pushback from within his own party on the provision. Sen. Glenn Grothman, a Republican representing West Bend, told the AP, "I'm in general not in favor of policy in the budget. I'm particularly concerned when the policy seems designed to help what I would describe as a sleazy industry that preys on the poor by giving them contracts that no mathematically literate person would sign."
Mary Jacobson, director of St. Lawrence Community Services, a part of Catholic Charities USA, told WXOW that consumers who rent-to-own can often pay up to double what a product is worth.
All but three states, New Jersey, North Carolina and Wisconsin, have separate laws that govern the practices of rent-to-own businesses.