Rent to Own Bill Falls Short

As the days of the N.J. Legislative session grew short, on January 10, Assembly Speaker Jack Collins posted rent to own special interest bill A.1097 for a vote. But the vote never came, because the rent to own "wish-list" bill did not have enough supporters anymore.

The great victory for low income consumers must be credited to the hard work of NJPIRG. Of course Consumers League helped battle the RTO lobbyists for eleven years CLNJ has gone to the State Legislature to fight the legalization of 100% interest in rent to own. New Jersey is somewhat unique in defeating the high powered RTO lobbyists.

The next step is to enact the pro-consumer RTO reform. The elements needed for reform are: limit RTO to the 30% criminal usury law, disclose the annual percentage rate, and figure the rate on a fair market value (no price inflation).

Thank you also to the NAACP for opposing the RTO industry. Rent to own is a civil rights issue, and those now opposing the RTO industry are like the abolitionists: truth and justice are more powerful than greed, and will overcome someday.

For details of the legislative battles, and links to newspaper editorials which denounced rent to own bill A.1097 see: www.consumersleague.org/rto_hot.htm. For information about the Consumers League RTO educational campaign see www.consumersleague.org/rentown.htm

From 1985 onward CLNJ continued to fight for consumer rights and basic justice.

Interest Rate Fairness:
For fifteen years CLNJ promoted lower interest rates by publicizing lower interest credit cards. CLNJ gave away tens of thousands of credit card pamphlets. CLNJ lamented bank mergers which resulted in fewer choices, higher prices for consumers, and interest rates which never went down. CLNJ supported the Fair Lending Coalition. CLNJ helped NJPIRG get N.J.'s Basic Banking law enacted.

Federal Reserve Board:
From 1986-89, CLNJ's President was a member of the Federal Reserve Board's Consumer Advisory Council. We opposed checkhold delays. When the FRB did not appreciate our advice, the common ground discovered between CL and bankers proved to be the formula which Congress enacted into law: the Federal Reserve must process checks quicker, and banks must end the long holds. We supported Truth in Savings, also enacted. Paul Volker listened to our talk on the increasing consumer debt load.

Mortgages & Predatory Lending:
With John Thurber of the Public Advocate, and Rob Stuart of NJPIRG, CLNJ fought against weakening N.J.'s Secondary Mortgage Loan Act. When the Legislature legalized abuses, less than one year later, CLNJ testified before the U.S. Senate in 1987 about home equity loans, or as CLNJ put it "charge a blouse, put a lien on your house." Congress banned what N.J. had approved: the "rate rise surprise" (the power to change a home equity contract after you borrowed significant funds).