An End to Refund Anticipation Loans?
Baltimore Sun
January 19, 2010
Ambrose, Eileen
Consumer groups say 8.4 million Americans obtained refund anticipation loans (RALs) last year, which cost them $738 million in loan fees and $68 million in other charges. They warn about spending a good deal of money to pay for quick access to tax refunds, especially when the IRS Free File program allows taxpayers to file electronically at no cost and receive their refunds in about 10 days. The Consumer Federation of America and the National Consumer Law Center hope that federal regulators ordering Santa Barbara Bank & Trust to cease writing RALs spells the beginning of the end of this product. Other indications include another RAL lender reducing prices to align with H&R Block and JPMorgan Chase and reports that lenders' hesitance to issue loan advances mean RALs are taking as many as three weeks to be issued -- which eliminates the incentive for taking them out in the first place.
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