MADISON, Wis. (AP) -- Republican Gov. Scott Walker has quietly tucked provisions into his executive budget that would free rent-to-own businesses from Wisconsin's consumer protection act, ensuring they wouldn't have to disclose what industry opponents say are exorbitant interest rates.

The proposal promises to re-ignite a fight percolating for more than 20 years between the industry and advocates for the poor in Wisconsin. Rent-to-own businesses insist their contracts aren't credit transactions and the state's consumer act shouldn't apply to them. Opponents contend the businesses prey on the poor and charge exorbitant interest rates similar to payday lenders; they maintain people deserve to see exactly what they're paying for when they sign rent-to-own contracts. Even some of Walker's fellow Republicans are hedging on the budget language.

"I'm in general not in favor of policy in the budget. I'm particularly concerned when the policy seems designed to help what I would describe as a sleazy industry that preys on the poor by giving them contracts that no mathematically literate person would sign," said Sen. Glenn Grothman, R-West Bend, a member of the Legislature's powerful finance committee.

Rent-to-own businesses offer customers a chance to rent items such as appliances, electronics, computers and furniture with no credit check. Typically, customers can exit and rejoin the deals as they wish with no effect on their credit rating. People who complete their contracts can exercise options to buy the items.

Proponents say the industry offers low-income people or people who need something for a short time a way to obtain goods. More than 8,500 rent-to-own storefronts were operating in all 50 states and Canada in 2009, generating more than $7 billion and employing more than 50,000 people, according to research by Columbia University economics instructor Alejo Czerwonko. Walker's office says about 50 rent-to-own businesses currently operate in Wisconsin.

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Consumer advocates contend the industry targets the poor. They maintain the businesses grossly overcharge needy customers and collect far more than what the item is worth. Some critics contend the businesses charge interest rates three to four times higher than credit card buyers pay, according to Czerwonko's analysis.

Forty-seven states have separate laws governing rent-to-own businesses; Wisconsin, New Jersey and North Carolina do not, according to Czerwonko's research.

A Wisconsin appeals court ruling in 1993 affirmed the state's consumer protection act governs the industry here, agreeing with a circuit court judge that rent-to-own deals are indeed credit transactions. In 1999 the state Department of Justice filed a lawsuit against Rent-A-Center, Inc. The agency accused the company of not abiding by provisions in the act requiring the businesses to disclose all the terms of the deal to customers, including finance charges and interest rates. Three years later, a Milwaukee County judge sided with DOJ and ordered Rent-A-Center to pay the state $7 million in restitution and $1.4 million in penalties and fees, according to court documents.

Industry officials still insist the consumer act shouldn't apply to them because their contracts aren't credit deals. Rent-A-Center spokesman Xavier Dominicis said businesses do disclose their costs and contracts contain no interest rates to report. As for the higher prices, he said customers are paying for "embedded value" such as delivery and pick-up and opt-out clauses.

"You're paying for the ability to take something home. You're paying for the access, you're paying for the embedded value. Therein lies your price. There is no interest rate. There is no credit," he said. "You can't do business under that model."

Then-Gov. Scott McCallum, a Republican, vetoed language in the 2001-2003 state budget that would have exempted the industry from the consumer act and created new rules. McCallum's successor, Democrat Jim Doyle, vetoed another exemption bill in 2006. Doyle led the Justice Department through the Rent-A-Center lawsuit as attorney general.

Republican legislators tried again last year with yet another bill that would have created new statutes for the industry and ensured no interest rate disclosures. That measure died in the Senate.

Walker's budget language parallels that bill. His plan would exempt rent-to-own from the consumer act and set up new statutes governing them.

Businesses would be required to disclose an item's price and the total number of payments needed to own it. Prices would be capped at twice the actual purchase price or the price of similar items for sale at the business, whichever is more. Businesses would have to pay the state $1,000 annually.

The bill also would cap damages in individual lawsuits at $1,000. Class action damages would be limited to $500,000 or 1 percent of the net worth of the rent-to-own company, whichever is less. And the industry would not have to disclose annual percentage rates.

Walker's spokesman, Cullen Werwie, said the governor included the changes in the budget so rent-to-own businesses would be registered and regulated, giving customers more confidence in them.

Jeff Lebakken serves as president of the Wisconsin Rental Dealers Association and runs about a dozen rent-to-own operations across the state. He said he's all for Walker's changes. He reiterated rent-to-own deals aren't credit transactions and predicted once guidelines based on fact are adopted more businesses will spring up in Wisconsin.

"Once they have a true outline of how rent-to-own should be run, they'll come," he said.

Consumer advocates lamented the proposal. They contend the consumer act provides much stronger protections for rent-to-own customers and the industry doesn't want to disclose interest rates because customers would be shocked.

"They engage in transactions that look like credit transactions and smell like credit transactions," said Mary Fons, a Stoughton-based personal injury attorney. "Anybody who wants to get themselves out of the important protections of the Wisconsin consumer act is suspect in my mind."

The Legislature's finance committee is about to begin revisions on the spending plan before forwarding it on to the full Legislature later this spring. Republicans control the committee, but it's unclear how much support Walker has for the rent-to-own proposal.

Rep. John Nygren, R-Marinette, released a statement saying rent-to-own could offer choices for a "niche of the community." A spokesman for the committee's other co-chair Sen. Alberta Darling, R-River Hills, however, referred questions to Grothman.

"So far," Grothman said, "the Legislature has felt no need to help these dubious stores."