The Scholar: St. Mary's Law Review on Race and Social Justice


David Ray Papke


Rent-to-own outlets, payday lenders, and title pawns should be banned. These industries exploit the urban poor by trapping them into a ceaseless debt cycle and are making the urban poor even poorer. Title pawns provide high-interest loans if would-be borrowers can produce the title to a motor vehicle. Payday lending allows consumers to get cash to buy commodities but are charged high interest rates. The rent-to-own business plays into the idea that consumer goods bring happiness and deceives urban poor with a way to close the gap in order to claim some degree of status. The urban poor who shop and borrow at these outlets pay exorbitant amounts that are much higher than what they would pay for goods at ordinary retail shops. Rent-to-own outlets, payday lenders, and title pawns employ business models well suited to exploiting members of the urban poor. These businesses are broadening the gap between the wealthy and the poor. State legislatures have scrutinized these businesses, but reform efforts have continually fallen short. In 2010, Wisconsin became the last state to enact at least some form of payday lending legislation. Although all states have passed legislation concerning payday lending, courtroom decisions and regulatory legislation implicitly recognize the businesses’ right to continue their operations. The rent-to-own, payday lending, and title pawn businesses have found and secured their places in the contemporary economy as viable American enterprises. Efforts by courts and legislatures to limit the exploitive practices of rent-to-own outlets, payday lenders, and title pawns have proven ineffective.

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