Rent-to-own News - Iowa bill would set price caps, RTO industry prepares vigorous response

By Murlin Evans

A bill introduced in the Iowa House of Representatives February 19 that would amend the Iowa Rental Purchase Act and cap prices for rent-to-own dealers across the state will not go unchallenged.

Iowa District 43 Rep. Mark Smith

APRO Executive Director Bill Keese says H.F 2308 -- introduced by Democratic Rep. Mark Smith -- would be detrimental to the industry because it proposes to change the definition of "cash price" to one of "retail value."

Keese says the situation presents an opportunity to educate the Iowa House of Representatives about rent-to-own and why the proposed legislation would be damaging not only to dealers but to their customers as well.

"Essentially it would change the definition of 'cash price'," Keese says. "The Iowa dealers, APRO and the rent-to-own industry as a whole are poised to raise legitimate reasons why this bill isn't beneficial for Iowa."

Tom Bernau, owner of Arona Corp., an Aaron Rents franchisee with 23 stores in four states including Iowa, says H.F 2308 would essentially cap prices and set up an "unworkable" situation for dealers.

Bernau, an attorney and Iowa Rental Dealers Association member, is working with Iowa lobbyist Jim Carney and APRO to formulate a response.

In a recent e-mail, Bernau summarizes the essence of H.F. 2308 as follows:

"The legislation proposes to strike 'Cash Price' ("the price at which the lessor... would offer to sell the personal property to the lessee...") and replace it with 'Retail Value' ("the price at which personal property of like type, quality and quantity would change hands between a willing seller and a willing buyer, at retail, for cash, in the particular market area...)."

"Obviously, this would cap our prices  and require us to constantly monitor the market and set prices at whatever the "market" dictated," Bernau says. "A totally unworkable proposal. My response to the Iowa house and senate will make that clear."