On Monday, Governor Shumlin announced something or other. Everybody paid attention.
On Tuesday, he signed a bill that will help a lot of people. Pretty much nobody paid any attention.
S.73 is a consumer protection bill whose primary purpose is to prevent rent-to-own stores from preying on the working poor. When I was a guest on the Mark Johnson Show after the legislative session and he asked me which piece of legislation would have the most impact, I said that for some, it wouldn’t be education reform or RESET or the budget or Lake Champlain; it’d be S.73.
Rent-to-own stores, at their worst, are a lot like payday lenders: they allow the poor to acquire consumer goods like furniture, electronics, and appliances with little or no money up front. Instead, they charge monthly lease rates. In some cases, a consumer will pay far more over the life of a lease than they would have if they’d paid cash (or had a credit card) up front. Like 200% more.
It’s usury by another name.
S.73 sets reasonable limits on rent-to-own terms. On a two-year lease, the stores will be able to charge a maximum interest rate of 24.5%, which would seem to allow plenty of room for profit.
Some Republicans supported the bill. Indeed, Sen. Kevin Mullin sponsored and promoted the bill, and deserves full credit for that. Others acknowledged the abuses of rent-to-own but disagreed with the idea of regulating an industry even if it was guilty of usury. I guess those folks are happy with caveat emptor.
And of course, none of them are in a financial position to resort to a rent-to-own deal, so it’s no skin off their backs.
This is one of the small graces of living in a Democratic majority state. If businesses are ripping people off, our government is likely to take action. And if businesses complain, well, they’ve only got themselves to blame.
So raise a glass to S.73. It’ll probably never benefit you or me, but it will help some of our most vulnerable residents avoid getting taken advantage of.