Consumer Welfare Implications of Regulating Rent-to-Own Transactions
52 Pages Posted: 18 May 2012
Date Written: May 16, 2012
In this study, we analyze the consumer welfare implications of regulating Rent-to-Own (RTO) transactions. We conclude that the benefits and costs of mandatory disclosure and labeling regulations currently imposed by most states are likely small, and that the effects of imposing a Federal baseline for such regulations would also be relatively small. On the other hand, we conclude that regulations imposed by a handful of states which treat RTO agreements as credit sales, or directly regulate RTO prices, substantially reduce consumer welfare, and should be repealed.
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