Ron Paul
2002 Ron Paul Chapter 88

Rent-To-Own Contracts

18 September 2002

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Congressional Record (Page H6328)   Cached

2002 Ron Paul 88:1
Mr. PAUL. Mr. Chairman, H.R. 1701, the Consumer Rental Purchase Agreement bill, rewriters every rent-to-own contract in the nation to conform to the dictates of federal politicians and bureaucrats. This bill thus represents another usurpation by Congress of powers reserved by the 9th and 10th amendments of the Constitution to the states and the people.

2002 Ron Paul 88:2
Rent-to-own transactions provide many lowincome individuals an affordable means of obtaining durable goods, such as furniture, appliances and computers. Rent-to-own also provides a way of obtaining luxury items for a short time. For example, someone who cannot afford a big screen TV can use a rent-to-own contract to obtain such a TV to watch the Super Bowl.

2002 Ron Paul 88:3
Proponents of H.R. 1701 admit the benefits of rent-to-own but fret that rent-to-own transactions are regulated by the states, not the federal government. Proponents of this legislation claim that state regulations are inadequate, thus making federal regulations necessary. My well-intentioned colleagues ignore the fact that Congress has no legitimate authority to judge whether or not state regulations are adequate. This is because the Constitution gives the federal government no authority to regulate this type of transaction. Thus, whether or not state regulations are adequate is simply not for Congress to judge.

2002 Ron Paul 88:4
Some may claim that H.R. 1701 respects states’ rights, because it does not preempt those state regulations acceptable to federal regulators. However, Mr. Chairman, this turns the constitutional meaning of federalism on its head. After all, the 10th amendment does not limit its protections to state laws approved of by the federal bureaucracy.

2002 Ron Paul 88:5
In addition to exceeding Congress’s constitutional authority, H.R. 1701, like all federal regulatory schemes, could backfire and harm the very people it was intended to help. This is because any regulation inevitably raises the cost of doing business. These higher costs are passed along to the consumer in the form of either higher prices or fewer choices. The result of this is that marginal customers are priced out of the market. These consumers may prefer to sign contracts that do not meet federal standards as opposed to not having access to any rent-to-own contracts, but the Congress will deny them that option. According to the proponents of H.R. 1701, if people cannot obtain desired goods and services under terms satisfactory to the government, they are better off being denied those goods and services. Mr. Chairman, this type of “government knows best” legislation represents the worst type of paternalism and is totally inappropriate for a free society.

2002 Ron Paul 88:6
In conclusion, H.R. 1701 exceeds Congress’s constitutional authority by regulating areas constitutionally left to the states. It also raises the cost of forming rent-to-own contracts and thus will deny those contracts to consumers who desire them. I therefore urge my colleagues to reject this paternalistic and unconstitutional bill.

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