UPDATE: JFC blocks rent-to-own plan - WQOW TV: Eau Claire, WI NEWS18 News, Weather, and Sports

UPDATE: JFC blocks rent-to-own plan

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MADISON (WKOW) -- The state Joint Finance Committee voted Thursday to block Gov. Walker's proposal to exempt rent-to-own businesses from Wisconsin's consumer protection laws.

The committee voted 10-6 to eliminate the plan.

Wisconsin's consumer protection laws require creditors to disclose interest rates in rent-to-own contracts. Rent-to-own critics maintain the industry preys on the poor with exorbitant interest rates and the consumer statutes help protect them. Industry advocates counter their contracts aren't credit transactions and shouldn't fall under the consumer laws.

Walker's budget would create a new section of law governing the industry that wouldn't require the businesses to disclose interest rates.

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MADISON (WKOW) -- One of the most controversial parts of Gov. Scott Walker's budget proposal is set to come up for a vote in the Legislature's Joint Finance Committee Thursday.

The provision would exclude rent-to-own agreements from the Wisconsin Consumer Act.

It faces a lot of opposition from liberal and religious groups, as well as conservative State Senator Glenn Grothman (R-West Bend), who calls it an "embarrassment."

Rent-to-own businesses offer customers a chance to rent items without a credit check with an option to buy the items when they fulfill the terms.  Sen. Grothman and other critics say the businesses prey on the poor and charge high interest rates, but advocates maintain the contracts aren't credit transactions and shouldn't fall under the state's consumer protection laws. 

Governor Walker's budget would create a new section of state law governing the industry, which wouldn't require the businesses to disclose interest rates.

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