Thanks to Chuck Schumer for introducing legislation that would reign in the predatory “Rent-to-Own” business, which contributes to the cycle of poverty by leasing products for as much as three times their market value to consumers unable to pay in full or unable to obtain credit. I wonder if he read that Brookings Institute Report that I wrote about last week.

In essence, customers are paying huge interest on items that they don’t technically own and that could be immediately repossessed, even if they miss their last payment. “Leasing” the items, rather than selling them on credit, allows Rent-A-Centers to skirt state usury laws that limit interest to 30%. It also allows these predators to easily repossess items even if they’re almost entirely paid off. Contract terms are not always fully disclosed or easily accessible, which makes those with the least consumer education vulnerable to what is essentially fraud. If consumers understood that they were paying as much as 200% interest to buy that washing machine that they need, they might decide, instead, to continue using the laundromat.

These rent-to-own scams hurt cash-strapped consumers tremendously because they dig themselves into a deeper hole, one that they sometimes can’t get out of and that they pass on to their children and grandchildren. The perpetuation of poverty hurts the whole economy.

It’s really rather sad to think that a single mother, for example, who only wants to see her child have a computer for his schoolwork, might have to work two jobs in order to pay off this and similar kinds of debts. Sure, she should pay interest, but 200%? That is the worst kind of exploitation. The greed of this industry is unfathomable.


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