I’ve got a sister-in-law that used to manage one of those rent-to-own stores. Some of her customers were people that wanted to change out the livingroom furniture every 6 months. Some were only going to be living in the area for a year, and didn’t want to buy furniture. Some had the refrigerator break down, and didn’t have a couple hundred dollars on hand to buy a new one.
As mentioned with the payday loan places, the terms are all clearly set out. You get the washing machine and pay us $xxx per month for it.
That’s not ripping people off. That’s dealing with a different market segment then Citibank, Wells Fargo, or even a JC Penney’s card.
It’s not ripping people off the way you describe it, but when lots of people end up in fine-print deals where they pay thousands of dollars for shit furniture worth dozens of dollars, it’s ripping people off.
This bill would eliminate, or at least reduce the ability to do that. In order to appease the powers that be, the payday loan industry eliminated the ability to cycle your loans by repaying it and then immediately taking out another one. There’s now a mandatory gap included in the language of the initiative.
I’m voting in favor of it. While I don’t like the way the stores have sprouted up here in Phoenix in the last 8 years, they serve a useful purpose to a decent portion of the citizenry, a portion that should be allowed to make their own decisions about their finances without having to resort to illegal loan sharks.
The payday loan businesses that I am familiar with work essentially the way the bank does… They will only give a loan to someone who has direct deposit, and when you get the loan you give them permission to take either the full amount or a partial payment out of your bank account on the due date,. But, (unlike your employer?) if you opt for a partial payment, it is not all interest - part of it pays down the principle, so it is impossible for someone to keep paying interest on one loan forever.