Wisconsin Assembly votes to loosen rent-to-own laws; bill's fate in Senate unclear

Milwaukee Journal Sentinel

MADISON - The Wisconsin Assembly late Tuesday passed legislation loosening state regulations on rent-to-own stores.

Republicans passed the bill on a 59-35 party-line vote, sending the bill to the Senate where it faces an uphill fight in the last days of the legislative session.

Also Tuesday, the Assembly and Senate advanced a big chunk of GOP Gov. Scott Walker's election-year agenda. Among those items: a $200 million fix for Obamacare that the Senate passed Tuesday, 23-9, and the Assembly passed 79-16, sending it to Walker.

The Senate also sent the GOP governor his bills to limit welfare, and the Assembly approved a small town jobs bill and money for recruiting out-of-state workers to businesses like Foxconn Technology Group.

The rent-to-own measure, Assembly Bill 759, has raised concerns from consumer advocates opposed to removing the protections of the Wisconsin Consumer Act from these transactions.

"These (changes) not only will prevent consumers from standing up for their rights but also allow unscrupulous rent-to-own businesses to open and thrive in Wisconsin," said Sarah Orr, director of the Consumer Law Litigation Clinic at the University of Wisconsin Law School.

For their part, the bill's largely Republican backers say it would allow for an expanded industry and more options for consumers.

Assembly Speaker Robin Vos (R-Rochester) said that allowing consumers to rent products and then return them is "kind of the way of the future."

"The goal is to create certainty for the industry and also have world-class protections (for consumers)," Vos said.

The legislation would drop the requirement that those retailers disclose the cost of their transactions in the form of an annual interest rate, which is typically well over 100%. Instead, the stores would have to disclose the cash purchase price, the cost for rental services and the total amount that would have to be paid to take ownership of an item.

The legislation would also cap how much wronged customers could get if they sued rent-to-own stores. In class-action lawsuits, rent-to-own companies could not be forced to pay more than $500,000 or 1% of their net worth, whichever was less.

In hopes of passing the legislation, national rent-to-own chain Aaron’s in November hired as one of its lobbyists former Assembly Speaker Jeff Fitzgerald (R-Horicon) — the brother of Senate Majority Leader Scott Fitzgerald (R-Juneau).

Aaron’s does not operate in Wisconsin but hopes to establish itself here if the state adopts policies more favorable to the industry, such as freeing it from having to tell consumers about the interest rates applied to its services.

The Assembly also unanimously passed a bill that would set aside $50 million a year for rural jobs programs in 56 of the state's 72 counties. Under Assembly Bill 912, Outagamie and Sheboygan counties would not receive any of the money but Fond du Lac and Manitowoc counties would, at least for now.

The bill now goes to the Senate. If approved there and allowed to continue for the next decade, the plan could potentially pump $500 million into rural areas.

That bill comes as Democrats have criticized Walker and GOP lawmakers for approving along with local officials roughly $4 billion in public subsidies for the planned Foxconn factory in Racine County.

That flat-screen plant could eventually employ as many as 13,000 workers and draw down $200 million or more a year in public subsidies, or several times more than the rural jobs plan.

With unemployment in Wisconsin at 3% and some businesses already complaining about a lack of skilled workers, skeptics have questioned whether the state will be able to supply enough workers for Foxconn and its potential suppliers.

To help provide enough workers for businesses, Walker proposed spending nearly $7 million to lure out-of-state workers to Wisconsin. Assembly Bill 811 was approved Tuesday on a bipartisan 67-28 vote, sending the bill to the Senate.

The Assembly also sent to the Senate on a voice vote a bill to block local governments from restricting the use of small private aircraft known as drones.

Assembly Bill 855 would allow drones to be flown over most lands and waters in Wisconsin but would prohibit landing drones on private property without permission or flying so low as to harass or endanger others.