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.
