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Fighting Refund Anticipation Loans RALS are high-cost loans on tax refunds targeted at low-income families Refund Anticipation Loans drain the assets of those least able to afford high fees. What's more, most RALs go hand in hand with the Earned Income Tax Credit. The EITC is an excellent program, but RALs thwart its inspired and well-implemented mission to reward work and support low-income households. Fast Cash, Less Filling: Refund Anticipation Loans in North Carolina March 24, 2009 This report documents the impact of RALs in North Carolina. We show the most affected zip codes in the state, the communities with the highest rates of RAL usage (both in terms of all residents and low-income households), as well as the impact of the EITC. Our paper includes a set of easily actionable policy ideas that would alter the scourge of RALs in our state. Read the full report here. Read the Executive Summary here. More CRA-NC research on RALs: Mystery Shopper Test Exposes Refund Anticipation Loan Abuses in Durham and Philadelphia 2006 RAL Report 2009 RAL Report 2010 RAL Report CRANC Comment Letter RAL Usage prevalent in Low Income Zones (MAP) Refund Anticipation Loan Offices in North Carolina (MAP) RAL Usage Often Highest in Minority Zip Codes (MAP) Latest News on RALs JP Morgan Chase exited the refund anticipation loan (RAL) business this spring.Chase supplied refund anticipation loans to approximately 13,000 independent tax prep firms. Junk fees, where the tax preparer adds their own additional charges on to the price of the RAL itself, mean that those consumers pay a high price to file their taxes. Chase' partners included Mo' Money Taxes. CRA-NC's advocacy ultimately led the North Carolina Attorney General to force Mo' Money to withdraw their refund anticipation loan licensce. The OCC asked Pacific Capital to cease its funding for refund loans in January 2010. The EITC, often sapped by RALs, can be an effective means for savings. CRA-NC supports the split refund, a new rule by the IRS that allows filers to allocate portions of their refund to different accounts. Deceptive Marketing: Would you get medical advice from a baseball player? No! Don't let a basketball player tell you where to get your taxes done. Especially if that player is more worried about tax treatment on his hedge fund investing. TARP funding for RALs? MSNBC calls out Pacific Capital Bancorp (PCBC), having found that TARP funds will provide liquidity for its Refund Anticipation Loans (RALs). Our partners in the fight: • National Consumer Law Center • EITC Carolinas • Americans for Fairness in Lending • California Reinvestment Coalition •NC Justice and Community Development Center • NC NAACP • North Carolina Department of Labor• The City of Durham •The County of Durham The IDA and Asset Building Collaborative of North Carolina |
Community Reinvestment Association of North Carolina | | Post Office Box 1929 | | Durham, NC 27701 | | (919) 667-1557 tel | | (919) 667-1558 fax Home | | Faq | | Glossary of Terms | | Disclaimer/Linking Policy | | Site Map | | EMAIL Webmaster |
Community Reinvestment Association of North Carolina |
…promoting and protecting community wealth |
