RTO Legislative Activity - Independent Research on Rent-to-Own

In chronological order...

The Federal Government and the Fringe Economy
By University of Houston Assistant Professor of Law Jim Hawkins

Published by the Chapman Law Review in Winter 2011.  The paper explores the Dodd-Frank Act’s creation of the Consumer Financial Protection Bureau and specifically assesses the Bureau’s new power to regulate alternative financial services providers like payday lenders, rent-to-own companies, pawnshops, and auto title lenders.

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Regulating on the fringe:  Reexamining the link between fringe banking and financial distress
By University of Houston Assistant Professor of Law Jim Hawkins

Published by the Indiana Law Journal Spring 2010. This Article represents the first attempt to uncover the relationship between fringe banking and financial distress by systematically analyzing the structure of fringe credit markets and characteristics of specific fringe credit transactions.

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Rent-to-own agreements: Customer characteristics and contract outcomes
By UMASS Finance Professor Dr. Michael H. Anderson and California Polytechnic State University Finance and Economics Professor Dr. Sanjiv Jaggia

Published in the Journal of Economics and Business in January 2008. The rent-to-own (RTO) industry is popular among low income consumers in part because it offers immediate access to merchandise along with the ability to cancel a transaction at any point without adverse consequence. This paper studies consumer use of RTO using a unique data base of more than 11,000 completed transactions originating between 2001 and 2004.

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Asset-Limited, Income-Constrained Consumers: A Macromarketing Perspective

By Clemson Sociology Professors Dr. James C. Witte and Dr. John D. Mittelstaedt

Published as a part of the "Macromarketing and Development: Building Bridges and Forging Alliances" study in Summer 2007. The purpose of this paper is to report on an ongoing study to understand the production, consumption and family life cycle of households that possess limited assets, and face limited prospects for income growth.  The paper applies a macromarketing perspective to understanding the family structure and consumption contexts of households with income between $25,000 and $45,000, with heads of households between 25 and 55 years of age.  Based on data from the US Bureau of Labor Statistics, preliminary findings suggest that these asset limited, income constrained (ALIC) households differ from higher and lower income households in terms of household structure, employment and consumption.

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Renting the Good Life

By Jim Hawkins, J.D. University of Texas School of Law

Published in the University School of Law and Economics Journal in Summer 2007. This article examines the theoretical justifications for regulating the rent-to-own industry against the backdrop with key participants in the market, recent empirical data about the industry, and the industry’s unique business model. 

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Managing High Risk in a Retail Operation: The Rent-to-Own Business

By UMASS Finance Professors Dr. Michael H. Anderson and Dr. Raymond Jackson

Published in the Southern Business and Economics Journal in Spring 2006. Many types of retail businesses, including rent-to-own (RTO), serve an economically disadvantaged, high financial risk segment of the population.  Using a large transactional database, the outcomes of rent-to-own contracts are examined to see whether the findings can be incorporated into a risk management system for a retailer serving these subprime clients.  The incidence of positive and negative outcomes of RTO contracts is examined from the retailer’s perspective using a variety of possible predictive variables.
 

Rent-to-Own Agreements: Purchases or Rentals?

By UMASS Finance Professors Dr. Michael H. Anderson and Dr. Raymond Jackson

Published in the Journal of Applied Business Research in spring 2003. The authors of this study examine the nature of rent-to-own agreements by using a unique data set of more than 350,000 transactions drawn from 100 rent-to-own stores in 46 states. The main result is that rent-to-own agreements are more frequently used for short-term needs rather than as a method of acquisition. Legislative and legal efforts to classify rent-to-own agreements as primarily installment contracts cannot be justified by their statistically proven pattern of use in the marketplace.

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A Reconsideration of Rent-to-Own

By UMASS Finance Professors Dr. Michael H. Anderson and Dr. Raymond Jackson

Published in the Journal of Consumer Affairs in winter 2001. This published academic paper is the introduction of Dr. Anderson and Dr. Jackson's financial analysis that investigates the market value and customer pattern rent-to-own provides in the American economy.

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Corporate Social Responsibility: The Rent to Own Industry

By Rice University Business and Government Relations Professor Dr. Doug Schuler

Published as a chapter in the College Textbook "Cases in Business Ethics" in 2001. The chapter explores the public relations and political crises the rent-to-own industry faced in the early 1990s. The chapter uses contemporary conflicts for business and political science students to better understand the relationship between business, government entities, the media and the effects thereof.

FTC Survey of Rent-to-Own Customers

Published by the Federal Trade Commission’s Bureau of Economics between December 1998 and February 1999

More than 12,000 randomly selected U.S. households were surveyed, identifying more than 500 rent-to-own customers who were interviewed about their experience with rent-to-own stores. The survey is the first study on rent-to-own customers and the industry by a federal governmental body.

Click here to download this survey.

For more information on these studies, please contact APRO Public Affairs Director Richard May by e-mail or phone at 512/225-1051.

APRO: The Association of Progressive Rental Organizations— the official voice of the rent-to-own industry Founded in 1980, APRO is the national, non-profit trade association advocating and representing the rent-to-own industry before the U.S. Congress, state legislatures, courts, media, Wall Street and the public.