Regulating rent-to-own

Jim Hawkins, Renting the Good Life: Using behavioral economics and interviews with people from rent-to-own firms, Hawkins argues against aggressive regulation of the rent-to-own business, but identifies several measures that he argues would assist consumers without driving firms out of the market. I liked this piece; one interesting argument is that mandatory disclosures of annual APRs lead companies to abandon the rent-to-own business in favor of other models, mostly for legal reasons having to do with the odd position rent-to-own occupies between credit and lease. That mandatory disclosures impose costs is an important point, often overlooked by those who propose disclosures as the remedy for all sorts of problematic consumer transactions.

The piece would benefit from a better discussion of its methodology -- asking people on the rental side about the business naturally produces a rosier view of the costs & benefits of the industry for consumers. Why should we believe sellers who say they're only selling good products? To the extent that Hawkins's article complements an existing literature examining the rent-to-own transaction from the consumer side, as some of the footnotes suggested it does, I would have appreciated more attention to disagreements in the research. Nonetheless, the piece is informative and cleanly written, and recommended for those with an interest in consumer protection and credit markets.