News Release


Peter Skopec,

Faith Leaders, Low-Income Advocates, Consumer Groups Call Out Rent-to-Own Exemptions in State Budget

Last-Minute Industry Carve-Out Would Weaken Crucial Protections for Wisconsin Consumers
For Immediate Release

MADISON -- At a Monday press conference, a broad coalition of faith groups, low-income advocates and public interest organizations warned against 11th-hour additions to the state budget that would exempt the rent-to-own industry from Wisconsin’s consumer protection laws. Predatory lenders are reportedly seeking last-minute, back-door changes through the budget process, after bipartisan opposition defeated past legislative efforts to water down Wisconsin consumer protections in RTO transactions.

“Make no mistake: These special interest carve-outs would make the financial marketplace less transparent for Wisconsin consumers,” said Peter Skopec, WISPIRG Director. “Rent-to-own businesses trap consumers in a cycle of high-cost, perpetual debt by hiding the outrageous interest rates that come with RTO products. Wisconsin’s laws provide us with important protections from such predatory financial practices, and the rent-to-own industry deserves no exception.”

Rent-to-own transactions are high-interest loans that require customers to make weekly or monthly payments in order to immediately take home merchandise – usually furniture, appliances or consumer electronics. Consumers have the option of owning the merchandise outright after a required number of payments, with astronomical interest rates. A 2013 WISPIRG survey found that rent-to-own businesses routinely charge customers 1½ to 12 times what cash customers would pay in a traditional retail store for the same merchandise.

The Wisconsin Consumer Act (WCA) requires RTO businesses to disclose interest rates under RTO agreements. The industry has long sought exemption from the WCA by redefining RTO agreements as leases rather than credit products. Doing so would allow RTO businesses to leave astronomical interest rates undisclosed, stripping the market of the most basic transparency.

“Special interest lobbyists for the Rent-to-Own industry are working hard, out of the public eye and without the knowledge of the majority of our legislators or the media,” added Caryl Terrell with the League of Women Voters Wisconsin. “There is no opportunity for anyone to evaluate, review or comment on their proposals at public hearings before they are slipped into the largest bill that comes before any Legislature – the State Budget. Furthermore, these type measures are not fiscal matters at all, and they have no place in the State Budget.”   

Predatory RTO practices prey on and are marketed primarily towards low-income consumers, including military families. RTO stores do not require down payments nor perform credit checks, making these agreements particularly attractive to customers with poor or no credit.

The coalition also sent a letter to all members of the Joint Finance Committee and Senate and Assembly leaders today, urging the legislature oppose any budget motion to weaken consumer protections related to rent-to-own financial transactions. The letter was signed by the Wisconsin Catholic Conference, WISDOM, Madison-Area Urban Ministry, Catholic Charities of the Milwaukee Archdiocese, Diocese of Superior Catholic Charities Bureau, Diocese of Green Bay Catholic Charities, Diocese of La Crosse Catholic Charities, Diocese of Madison Catholic Charities, Society of St. Vincent de Paul Archdiocesan Council of Milwaukee, Society of St. Vincent de Paul Diocesan Council of Madison, Legal Aid Society of Milwaukee, University of Wisconsin Law School Consumer Law Clinic, Fair Housing Center of Greater Madison, Fair Housing Center of Northeast Wisconsin, Metropolitan Milwaukee Fair Housing Council, Community Advocates Public Policy Institute, Urban Economic Development Association of Wisconsin, Inc., End Domestic Abuse Wisconsin, Wisconsin Community Action Program Association (WISCAP), League of Women Voters of Wisconsin, WISPIRG, Citizen Action of Wisconsin and One Wisconsin Now.

The full coalition letter can be found here.

WISPIRG’s 2013 report “The Rent-to-Own Rip-Off” can be found here.

WISPIRG’s  full press conference statement can be found here, and the League of Women Voters’ statement here.

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