he rent-to-own industry is an established part of the American economy. Since the industry’s inception in the 1960s and its rapid growth in the past 27 years, consumers, businesses, legislators and litigators have grappled with the inevitable growing pains of a maturing industry. As a consequence, since 1983 rent-to-own businesses—using the collective resources of the Association of Progressive Rental Organizations—have approached state legislators and members of Congress asking for a legal definition and consumer protection regulation of the rent-to-own industry.
    Ethical rent-to-own operators in the 1980s realized that if their small business was to continue to thrive, they had to be proactive in passing legislation mandating ethical treatment to customers and defining such a unique transaction. Throughout the next two decades, rent-to-own dealers united, passing rent-to-own legislation that mandated rent-to-own consumer and advertising disclosures, reinstatement rights and rent-to-own lease definition. In every state where a law was passed, virtually all consumer complaints were eliminated and the rent-to-own small business operators were free to improve services, modernize their business and create a climate that is driving rent-to-own prices down throughout the country.
    Forty-seven state legislatures, the Internal Revenue Service and the Federal Trade Commission have studied, debated and acted to define the transaction and pass comprehensive consumer protections. Congress partially addressed the lease definition issue with passage of the Taxpayers Relief Act of 1997.

Federal rent-to-own legislation
he rent-to-own transaction is one of the most widely used consumer transactions undefined at the federal level. In 1983, APRO dealers successfully passed a federal rent-to-own definition bill from the Senate, but that bill later died before being signed into law. In 1993, the U.S. House Banking Committee held a hearing on the rent-to-own industry, prompting APRO dealers to focus on a federal legislative effort.
    Since 1993, APRO dealers have been working with members of Congress on the necessity of federal legislation and the value of the rent-to-own industry in America. Rent-to-own industry leaders have worked with Democrats and Republicans for the past decade crafting a bi-partisan supported bill that provides valuable consumer protections and disclosures while defining the transaction as a lease.
    In the past 13 years, APRO-supported federal legislation has garnered the support and co-sponsorship of congressional members, including House Leader Dick Armey and Senate Leaders Harry Reid and Tom Daschle. Each bill has generated hundreds of co-sponsors and in 2002, federal rent-to-own legislation passed out of the House of Representatives. In 2004 and 2005, the Senate Banking Committee held hearings regarding the rent-to-own federal legislation.

State rent-to-own legislation
inety-five percent of the U.S. population, living in 47 states, is subject to state laws that both define the rent-to-own transaction as a lease and also provide meaningful disclosures to consumers. Typical consumer protection legislation mandates that the rent-to-own business disclose in writing and verbally to the consumer every penny the customer may or may not pay when entering into a rent-to-own contract. Clear communication between rent-to-own businesses and their customers is the key to a successful relationship for both. Statistics show that once a law has passed in a state, nearly all consumer complaints vanish. Listed below are the states currently without a working rent-to-own law:

• Minnesota: Although Minnesota does have a state rent-to-own statute, the Minnesota Supreme Court ruled that rent-to-own transactions are also credit sales in the state and are limited to a finance charge rate of eight percent per year. The result of the court’s ruling was to do away with the RTO industry in that state.
• New Jersey: Its rent-to-own business climate has been severely restricted due to state court interpretations in the vacuum of a state rent-to-own statute.
• North Carolina
• Wisconsin: Its rent-to-own business climate has been severely restricted due to state court interpretations in the vacuum of a state rent-to-own statute.