Now that the Senate floor debate on financial reform has started in earnest, supporters are ofering a number of amendments to strengthen the bill so that it better protects consumers from unsafe financial products and creates new rules to stop banks from getting so big that they could threaten the financial system.
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Tags: car titles, checks, debit cards, loans, overdrafts, Payday Loans, tax refunds
Tax season is in full swing–which means it’s time for that reminder to STAY AWAY from RALs, or Refund Anticipation Loans. They are sold as fast, easy, instant money options by tax preparers like H&R Block and Jackson Hewitt.
Are you in debt with small, short-term loans?
Refund anticipation loans are loans secured by taxpayers’ anticipated tax refund. RALs cost 50 to over 500% effective APR and are repaid in less than two weeks by deposit of tax refunds from the IRS.
With credit card interest rates going up, you may be considering an advance on your tax refund. Called a tax refund anticipation loan (RAL), this is not exactly an advance, but a loan, and millions of people are signing up.
Money Mom says: Stay away from offers to get your tax refund instantly. This is not a faster tax refund, it is a high cost loan.
Consumer groups ask federal bank regulator to keep banks out of the business of abusive and high-priced “paystub” and holiday RALs
Refund anticipation loans (RALs) are made by tax preparers and banks prior to the tax filing season and before taxpayers have received their IRS Form W-2s. Since a taxpayer cannot file a tax return without a W-2, pay stub RALs are made based upon an estimated tax refund calculated from the consumer’s most recent pay stub.
Consumer groups have long advocated for the ability of taxpayers to electronically file their returns without the need for a third party intermediary.
Letter to the IRS and Secretary of the Treasury regarding RALs.