Councilman Gioia Joins the Protest Against Rent-A-Center; Two ArrestedNYC 06 Dec 2008 01:08 GMT
Councilman Gioia conducted his own investigation of rent-to-own stores last year and discovered that consumers who buy products from these stores could pay up to 300% more than the retail price.
“Rent-to-own stores are nothing more than loan sharks by another name,” he said. “Do the math. When you walk into that store, the deck is stacked against you.”
Although New York State usury laws cap interest rates, rent-to-own stores are able to avoid this cap. Rent-to-own stores are allowed to set a cash price at their discretion, without taking into account the manufacturer’s suggested retail price. This cash price can be doubled if a customer decides to make payments.
Councilman Gioia also emphasized the importance of consumer responsibility and awareness. “Get the word out,” he said. ‘Don’t even walk through the door.”
After Councilman Gioia spoke, community activist Taharka Robinson urged the state legislature to pass Assembly Bill 66, which would provide greater protection for customers at rent-to-own stores. The bill is a first step in that it mandates the creation of a formula to determine a fair cash price.
Josh Lockwood, Executive Director for Habitat for Humanity, also spoke. Though Habitat-NYC focuses on building housing for low-income families, they are also involved in addressing root causes of poverty. One of these root causes is the prevalence of fringe financial services in low-income neighborhoods.
“We see exorbitant interest rates charged to lower income communities of color,” Lockwood said. Of the 38 Rent-a-Centers in New York City, 32 are located in predominately African American and Hispanic neighborhoods, where the median income is over $10,000 less than the citywide average.
Lockwood also addressed the legislation that has been passed in New Jersey, which caps interest rates for the rent-to-own industry at 30 percent. Far from shutting down the industry, “the end result was five new rent-to-own stores,” he said.
“These are the facts,” activist Kirsten Foy said. “We are in the most troubled economy since the Great Depression because of lending practices like Rent-A-Center’s.” Foy compared the typical Rent-A-Center contract to the kind of predatory lending that created the subprime mortgage crisis.
“This is blood money squeezed out of our community,” he said.
Foy vowed to take this fight across the country, as a part of the struggle to stop “unfettered corporate capitalism.”
“Change has come to Washington, change has come to Albany, and change will come to the corporate offices of Rent-A-Center,” he said.
Foy and Robinson sat down in the street in front of Rent-A-Center until they were arrested by the NYPD.