Without Chris Korst and the efforts of his legal and lobbying teams, the legislative environment of today’s rental industry would be vastly different.

Cover: Chris Korst; RTO Magazine 2007 Man of the Year

Chris Korst, Rent-A-Center’s Senior Vice President, General Counsel and Secretary, and RTO Magazine 2007 Man of the Year.

For 20 years, Rent-A-Center (RCII) Senior Vice President, General Counsel and Secretary Chris Korst has stood up to vigorously defend the rental-purchase industry before lawmakers, critics, and consumer groups. He has faced confrontational consumer advocates and truculent policymakers. He has appeared before countless legislatures, committees and assemblies. He has testified hundreds of times before the people who decide the legislative fate of our industry, often as our only advocate. Because of the widespread impact of his accomplishments both this year and throughout the two decade course of his career, RTO Magazine is proud to name Korst its 2007 Man of the Year.



Without Chris Korst and the efforts of his legal and lobbying teams, the legislative environment of today’s rental industry would be vastly different. It is entirely possible that there would be much less favorable legislation at the state level, with as much as 40% of states passing anti-rental laws or possessing no rental statues at all. As it stands today, thanks to years of hard work, Korst can boast that no state has ruled us out of business.



While there are several examples of how Chris Korst has worked tirelessly over two decades to further the cause of rental dealers across the county, the most recent example affects every rental dealer who rents products to our nation’s military personnel. And it is this accomplishment that led most directly to selecting Korst as this year’s honoree.

Korst’s office is filled with legislative memorabilia from his 20 plus year career.

When complaints about payday lenders caused the Department of Defense to write a report about how financial transactions were harming United States military personnel, the DoD’s main source of information was national consumer groups.



“Their primary reference point was groups like the Consumer Federation of America, the National Consumer Law Center, the Center for Responsible Lending, and the Public Interest Research Group. To get this report done, they basically said to these folks ‘Tell us who’s bad’”, explains Korst.



In the end, the report contained a brief but very critical reference to rent-to-own. As a result, Congress passed interest rate caps on credit extended to members of the military leaving the Department of Defense to create the regulations defining who was to be covered by these new restrictions.



“The obvious concern we had was that they felt we were a credit transaction under this report and they were going to loop RTO in under this new statute. Before publishing their report, they never contacted anyone in our industry. All they did was listen to the consumer groups throw up on us, so the DoD got way off base.”



Korst embarked on a campaign to meet face-to-face with Department of Defense officials. Half a dozen times between January and April of 2007, he met with various representatives. After being repeatedly educated by Korst, the DoD eventually decided that RTO was not an appropriate subject matter for either the report or the new law, and rental dealers across the country were spared a significant blow.



“Telling our story can change minds. When policymakers learn what it is we do and why it’s different and how that report was wrong and how the consumer groups were wrong, they get it. It takes a little bit of time and a little bit of education, but they get it.”



There is perhaps no one in the RTO industry that tells and sells the rental-purchase story better than Korst.



“It’s a very simple business. I don’t know that there is a more straight-forward, simple business. It’s an easy story to tell, really. The reality is that we get criticized mostly out of ignorance. It often comes from people who have never been to one of our stores and frankly don’t understand what we do and make assumptions. It’s been my experience that if we’re given enough time to tell our story, people acknowledge RTO for what it is which is a valuable option in the marketplace.”

Rent-A-Center CEO Mark Speese with Chris Korst at the company’s Plano, Texas headquarters.

That’s not to say that lawmakers have always been so open-minded. In fact, Korst says one of the most challenging times the industry faced was back in the mid-to-late 1980’s, when a legislative trick put RTO out of business in the state of Pennsylvania.



“Back then, Pennsylvania state credit laws did not apply to rental agreements so long as merchants were willing to include a balloon purchase option of $100 or $150 at the end. Well, in February of 1988, the Chairman of the Consumer Affairs Committee in the House took a piece of legislation that had already been through the state senate, had the leadership pull it off the floor, amended it in his committee of about 5 lawmakers from his side of the aisle and then placed it back on the floor. The amendment eliminated the distinction so that any rental transaction would fall under the state’s credit laws. It was all done within about an hour and a half. The bill passed and there was nothing we could do.”



Korst says that legislative trick taught him a valuable lesson - the importance of an active state lobbying network. Since then, and for the past twenty years, Korst has worked with Connie Campanella of Stateside Associates Inc., a legislative consulting company that helps Korst keep the pulse on any and all legislation up for consideration at the state level that might impact the rental industry.



Campanella has high praise for the work Korst has done on behalf of rental dealers.



“Chris Korst has put in the programs and procedures that have enabled this industry to operate in a positive legislative environment. Nobody has been more important to that than Chris. He’s not reactive, he is proactive and he embraces the possibilities of new ways to ensure this industry is protected. He understands it’s about the total environment and so he’s worked in very small states because he gets the importance of filling in the map with good public policy. That helps when you need it in the big states.”

Since it’s impossible for Korst to be everywhere where RTO needs to be represented, a network of lobbyists on both the federal level and in about twenty key states is constantly building the relationships necessary to maintain a positive image with lawmakers.



“Lobbyists are very important at the federal level because they have great relationships that allow us to walk in with them and immediately have credibility. If you hire the right people, like we’ve been fortunate to do, you also have good storytellers. So I’m not in Washington this week, but I know our team of lobbyists is talking about rent-to-own and they know the story and they’re continuing to work even in our absence.”

“Chris Korst is a great person and a good friend. For the last 20 years, Chris has been a tremendous voice for the industry and an asset for public policy makers in New York State.” -Dean G. Skelos, New York State Senate Deputy Majority Leader

“On the state level, in many respects, lobbyists are even more important. In our experience, picking the right lobbyist is not a guarantee we will get what we want, but it’s probably the most critical element in getting accomplished what we want to accomplish. I can point to half a dozen lobbyists who are huge in terms of our being able to overcome some real difficulties, to manage the legislative process, to establish the right relationships with the key players, and to get our industry to the place where we need to be.”



It’s important for rental dealers to note that the multi-million dollar lobbying and legislative effort headed by Korst benefits much more than just his company.



“A lot of people will probably say well of course with 3,400 stores Rent-A-Center ought to be out there doing this, and they’re right about that. But what’s unusual about us relative to other industries and other big players is that even though we hand them a card that says Rent-A-Center we talk about rent-to-own. This is not about Rent-A-Center this is about rent-to-own.”



One of the ways Korst’s team reaches out to lawmakers is via their involvement in what Connie Campanella calls ‘the groups’. These groups include the Republican Governors Association; the Democratic Governors Association; the Democratic Attorney Generals Association; the Republican Attorney Generals Association, and a myriad of others.



According to Korst, “Connie Campanella coordinates these efforts on our behalf. There is a financial aspect to our support, but it’s also a very personal thing, being at the meeting, reminding them who you are. That translates to real credibility when it matters.”



Attending just one of these gatherings might mean the chance to meet one-on-one with 15 or 20 key Governors or Attorney Generals.



“(Rent-A-Center Assistant General Counsel) Dwight Dumler, for instance, is our coordinator for the Democratic Attorney Generals Association. He will go to their annual meeting and have dinner with them. He’ll meet their staff. He’ll exchange business cards. He’ll develop relationships with those folks that we otherwise would not have the opportunity to have.”



“I’m going to the Republican Governors meeting in early December. Rent-A-Center provides a break room with computers, big screen televisions and furniture during the meeting. It’s a private room where the Governors can go and keep track of the news and what’s going on back home. We’ll play golf and we’ll have dinner and develop and maintain those relationships on a one-on-one basis.”



Korst says there’s no question that these face-to-face meetings, whether they are legislative hearings or one-on-one meetings with lawmakers’ staff, are much more effective than submitting written testimony or participating in phone conferences.



Last year, when the New York General Assembly requested testimony in support of the rental industry, it was Chris Korst alone who stood up and defended the rent-to-own industry. He was the only representative from the industry who personally answered the very difficult questions posed by state lawmakers.



“I don’t know a lot of small businessmen or businesswomen who would be willing to put themselves on the firing line for what is often a very hostile questioning panel or committee. There are any number of rental dealers in New York state who are great dealers and great, quality people. But do they really want to expose themselves and their businesses to the criticism and the occasional ugliness that can come out of these hearings? I wouldn’t if I were in their shoes. One of the reasons Rent-A-Center has emerged as a leader in this area is that we have learned it. It’s what we do for a living, and it relieves the individual rental dealer from having to testify and explain himself or herself.”



So how does Korst maintain his composure when asked to testify before an unsympathetic panel of lawmakers?



“The best way not to be intimidated is to know your business. Know what you want to say and always answer questions honestly. People will ask difficult questions about this industry and the more honest that we can be about those answers the more credibility we have in the long run. I’ve never shied away from the price issue. It’s a hard question. This is an expensive method of acquiring ownership, if the consumer takes the transaction from start to finish. There is little doubt about that. But there are very rational business reasons for why we have to charge what we charge. Being prepared to tell that story is the greatest confidence builder I can think of.”

But doesn’t Korst ever get the slightest bit defensive?



“I am a firm believer that there are appropriate times to be justifiably angry. When people accuse my company of doing things I know we didn’t do, I’m going to get mad and I’m going to let people know I’m mad about it. But we’re there to help people learn.”



Korst says educating the consumer groups that like to portray the rental industry in a negative light is probably the most difficult task.

“Public interest groups like the Center for Responsible Lending or the Consumer Federation of America don’t care where whether they’re telling facts. They have a point of view and they try to present that point of view as a statement of fact. We kill them every time with facts. They don’t know what they’re talking about when it comes to rent-to-own, but they want to make people believe they do. Sooner or later the facts come out and we prevail.”



Korst says the maturation of the industry, coupled with the extensive legislative groundwork done over the years has created an environment that is much different today than when he first joined Thorn Americas, Rent-A-Center’s former parent company, back in 1985.



“I have a greater appreciation for our reputation today than most people because I remember throughout 1985, 1986, 1987, 1988, there was an air of illegitimacy around this business. It was ugly until we beat Henry Gonzalez and the Democratic Congress that tried to put us out of business in the mid-90’s. Having accomplished that, seeing the state laws that were passed in increasing numbers of states, weeding out the bad actors in our industry, we have prevailed. There is a legitimacy that was not there before. We’re in a place today that’s frankly extraordinary.”



The fact that this ‘place’ does not yet include federal legislation protecting the rental industry and its consumers is not lost on Korst. He feels in some respect, the rental industry is a victim of its own successes at the state level.



“One of the first questions even friendly lawmakers have when we go to Congress, is ‘What are you doing here?’ Most say that we’ve got all these state laws in place so what does a federal law accomplish. That’s one of the issues that hounds us. Also, because our business is in a relative sense a small one, it’s difficult to get a lot of attention on the part of the members of Congress. We’re not like the banking industry, which is essential to the ongoing function of our nation’s economy. At the end of the day, if RTO went away, the economy is able to absorb the blow that an $8 billion industry would represent.”



That being said, Korst feels optimistic about securing the passage of positive legislation.



“Certainly this is a critical time in an opportunistic sense. I think we have an historic opportunity to get federal legislation passed in the next nine to twelve months if we all pull together and do the things we need to do and if we catch a break or two in Washington. It’s certainly possible that bad things can happen to this industry from a legislative perspective. But I think it’s not very probable any more because of the existence of all these state laws and the emergence and continued maturation of rental dealers both small and large who are committed to ethical business practices and high quality products and high levels of customer service. That’s what this industry has become about. We give customers the opportunity to have the things they need and want and wouldn’t otherwise have. That’s always been true, but now we do it in a way that’s very affirming for both us as business people and for our customers.”



So what ever happened to remedy the 1988 legislative trick pulled in Pennsylvania? If you’re a dealer operating in the keystone state today, you owe a special debt of gratitude to Korst.



“For a few years afterward, the situation in Pennsylvania still looked pretty bleak. In 1991, I went to Bud Gates who was the Rent-A-Center CEO at the time, and Dave Egan who was the General Counsel, and let them know I had some thoughts about Pennsylvania that I wanted to try. They said they’d back me and so we started at the bottom. From 1992 through 1995 I visited Harrisburg about ten times each year. We visited legislator after legislator. We educated them one by one. It helped that we always had a great opening story that worked to our advantage. We were able to explain that the only reason we were put out of business was due to a legislative trick. We got to know the dynamics and we were patient. We didn’t push legislation until we knew we were ready. In the end, we built so much support for our bill in Pennsylvania that it passed by a margin of 201 – 0 in the House and 50 – 0 in the Senate.”



Was that an unusual vote count?



“Let’s just say we don’t see many of those,” laughed Korst.

Perhaps we don’t. But by now even the unanimous passing of a favorable state statute seems par for the Korst.

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RTO Magazine is the leading rent to own industry print publication.