Rent-to-Own Industry Lost in Court, Is Trying Again in
the Legislature
Trenton
– Today the Assembly Consumer Affairs Committee to passed A695 over the
opposition of the state’s leading consumer groups-- NJPIRG, AARP, Citizen
Action, Consumers League, and Legal Services.
A695 would legitimize triple digit interest rates in Rent-to-Own
industry purchases two years after New
Jersey’s Supreme Court confirmed that more than 30%
interest is criminal. “This bill strips consumers of the strongest protection
they currently have,” explained Allison Cairo, Executive Director of
NJPIRG. “While the bill has some
pro-consumer provisions, in sum they don’t come close to balancing the harm
caused by letting the industry charge inflated prices and loan shark interest
rates.”
As written, A695 provides for inflated “cash prices” and
interest rates that can be 152% or more, depending on the length of the
Rent-to-Own contract. (152% is based on a one year contract.) The
bill also allows for a number of additional fees, including application fees,
processing fees, insurance related fees, late payment fees, default fees, pick
up fees, and reinstatement fees. In
short, the bill gives the Rent-to-Own industry power to exploit consumers it
couldn’t get from the Court, even though Rent-A-Center admitted during the
lawsuit that it didn’t need interest above 30%.
The bill’s prime sponsor is Asw. Spencer, and has 12
cosponsors, including Speaker Roberts.
“Why is A695 being considered now, given that the NJ Supreme
Court ruling two years ago protected consumers?” wondered Cairo. “It’s not like people have been
marching in the streets demanding the right to be charged triple digit
interest.”
