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NPOV alert: 70.69.239.136 (talk · contribs) has been systematically removing information unfavorable to H&R Block. —Quarl (talk) 2006-03-02 04:35Z
Where are the 'supporter' arguements drawn from?
For example, supporters supposedly say that: "loans allow people access to funds immediately in cases of an emergency such as overdue medical bills, credit payments, and other debts while they wait for the IRS to process their income tax return" & "high fees are justified by the high risk associated with these loans, since there is a possibility that the IRS will issue a reduced refund or none at all, depending on whether the taxpayer followed the correct procedures in calculating his or her tax".
Any citations for these statements? Are is this just hearsay? —Preceding unsigned comment added by Econmists (talk • contribs) 06:30, 2 July 2008 (UTC)Reply
There is ample media coverage on Ronald Smith on CNN, Dateline, USA Today, etc. --Cool10191 (talk) 13:01, 29 January 2008 (UTC)Reply
I added an NPOV tag to this article because I only see one sentence that talks about the support for this product. Everthing else in this article seems to be against the marketing or sale of this product.
I work for a tax preparation company, and do not push these on people, though we offer them. I explain to a customer all of their options, and let them chose the one that best fits their needs. The Georgetown study that is referenced in the article states in the Executive Summary that there are people who need this type of product, and, for the most part, they are the ones buying it.
I welcome all discussion on this topic. Thanks.--Keith 17:01, 22 August 2006 (UTC)Reply
I notice that the neutrality tag has apparently been on the article for quite a while. I don't see a strong need for the tag at this point. Any comments, anyone? Famspear 20:17, 2 May 2007 (UTC)Reply
Regarding the invention of refund anticipation loans, the patent was issued to an executive of Beneficial Corporation, which later merged with Household International, which in turn was acquired by HSBC. Beneficial worked closely with the IRS's electronic filing initiative, and the term "refund anticipation loan"(or RALS)was actually coined by the IRS in their initial document permitting the loans in 1987. The patent was granted on December 26, 1989, patent # 4,890,228, titled "Electronic Income Tax Refund Early Payment System". Three subsequent patents were issued in the 1990's. HSBC continues to be the major provider of these loans. While sometimes controversial, the longevity of the program and the millions of annual borrowers certainly attest to its popularity. Newjersyan 00:05, 30 July 2007 (UTC)Reply
I've added extensive information that I believe rebalances the article in terms of neutrality, also provides some more specific information and examples. —Preceding unsigned comment added by 75.176.171.32 (talk) 08:10, 11 October 2007 (UTC)Reply
I have added several citations to this page. One in particular - the one where it says certain banks are stopping pre-seasons loans because of pressure is definitely inaccurate. They are stopping the products because they are very unprofitable and because they are loosing money on them. I work in the lending industry and I hear things. —Preceding unsigned comment added by Cool10191 (talk • contribs) 21:30, 27 January 2008 (UTC)Reply
Hey guys here is a chase bank application: [1]. Interest rates are sited on the app. In the case of chase they use 11 days as the repayment date, that is theoretically the earliest the irs will deposit. (this is not the case in 5% of returns being proccesed by CADE) Also see the IRS refund cycle chart, [2]. The repayment date is variable between 10-21 days, some calculate it at 10 days because that reflects the highest possible number when the average repayment date would be more like 14 days (this does drop the apr number significantly). And, technically repayment at 10 days would be based on ACH Pre-notes, not actual funding, that might be noteworthy too - no online reference for that, but when money is ACHed, as anyone in banking knows, it does clear the fed for about 2 days, however you do receive pre-notes the same day, typically. This is the only bank application i can find online. I wish i could link the bank apps of Republic Bank and Trust and RCB Tax Division, their rates are based on 14 day repayment periods. I am not sure what SBBT bases theirs on. As far a fee on defaulting, I have checked that out; also stated in the chase application there is no static fee but a 16%+prime apr charged to balances outstanding after 90 days so in extreme cases the repayment APR could be based on 90 days, which would lower it to the point of less than 10% anually in some cases. SBBT and HSBC no longer charge any fee like that due to lawsuits. I will look for those court records, they were sued in california. RCB Tax Division and RBT refund solutions never charged defaulting fees. Also when you calculate the APRs be sure to note on the application (the same as the other banks) that they charge a standard fee for each product they process, including non-loan products like RACs or RADs, so using standing lending standards that fee should not be calculated into the APR imho. Expressed as apr, rates are still high, between 40% and 200% apr, but still lower than what is stated in calculations in this article. And fisler, thank you understand that adding and subtracting is not original research. :) I think it ok to calculate the APR at 10 days, but i think 14 days is better, and at the least it should be mentioned that repayment date is variable , the apr could fluctuate by about 35% depending on what day they file their taxes even though the fee paid is the same. My central point here is that the repayment date is variable, therefore the APR fee is not static and should be represented as such in the article. And secondly, in the case of defaulted loans no penalty is applied by chase until 90 days, so in that situation it is a 90 day loan, not 10, and the fee is still the same. While the other banks do not charge any fee at all. For these two reason I think it is entirely unfair to use APRs to describe the fees without in someway explaining the repayment process and repayment date being variable, etc. (the banks don't need to charge late fees or press for collections, the losses are expected and recovery is built into the fee structure.)
Let me put it this way, maybe will make it clearer: If a person does their taxes on Friday then the apr is say 100%, if they had did it the day before on thursday it would have been 60%, if the IRS has to double check their return (common) then there is another 7 day delay and apr is now 30%, if direct deposit is not honored (not uncommon) then there is another 10 day wait APR is 20%, if their eic is audited (about 20% are) then there is a 3 week delay - apr is now about 12%, if they falsified information and get to refund, (according to chase) they are not responsible for repayment for 90 days, now their apr is about 8%. You see, the APR fluctuates quite a bit, even though the fee they pay is th exact same dollar amount.
fsiler I do see your point about adding blank citations, but I did that so the reader would know that those statements are possible inaccurate since they are not sourced (and I am quite certain they are incorrect) See my posts below.
I removed the content of this section as it seems to only promote info and links that would not survive in main article without WP:RS and provides no real concrete ways for uninvolved editors to make changes. As discussed before, the talk page should be about improving the article, not discussing the subject or skirting WP:COI issues. Flowanda | Talk 01:39, 12 March 2008 (UTC)Reply
This is innaccurate: "RAL fees are generally calculated as 3% of the loan, while credit card advance fees vary from 2-5% of the amount advanced, making them clearly comparable." Only Chase Bank calculates the fees based on 3% of the loan. SBBT calculates on a variable precentage based on the refund amount between 1.07% and 2.5%. The other two banks in charge tiered fees based on the refund amount. tiered: http://www.rcbral.com/pricing.html, https://www.republicrefund.com/Products/Pricing.aspx. Chase and SBBT don't list their pricing but i can upload pdfs of their brochures. Not sure if that is against wiki rules though..
Another incorrect thing is this: "In 2006, firms like Jackson Hewitt and H&R Block were making refund anticipation loans as early as October 15, 2006,[citation needed] aimed at providing money to individuals for Christmas. These were RALs and encouraged (but did not require) the individuals to return to file their taxes 4-5 months later with that tax company." These were NOT refund anticipation loans. a RAL cannot be calculated until a refund is established. How can a refund be calculated in october? These products where called holiday loans and wer enot much different than a short term un-secured loan. The idea was that the person would take the loan then come back in January and THEN get the refund aniticpation loan and use those proceeds to pay for the holiday loan. Cool10191 (talk) 18:58, 16 February 2008 (UTC)Reply
I have added multiple citations to this article. Several things said are clearly opnion, others, if fact need to point to a source.Cool10191 (talk) 19:23, 16 February 2008 (UTC)Reply
Edits I made to this article removing primary and promotional/POV links and the info they were supporting were reverted. The sources do not meet WP:RS because they are a press release from a bank saying it was the first RAL retailer, a PDF of a lawsuit on a website that tracks back to a trademark attorney's blog site, a bunch of uploaded pages on Google about patents, and a 93-page research paper funded by a major tax service. These sources do not meet the requirements for third-party, independent sources, especially in an article that is as contested as this one is. It would make the article a lot stronger to find mainstream articles that quote these websites (and in the case of a 93-page book, distill the info so it's more easily understood by casual readers)...are there any articles we can use to support this info? Flowanda | Talk 05:09, 23 February 2008 (UTC)Reply
From the article: "By the early 1990s the system became being exploited; filers would misreport their income to inflate their refund. As a result and also to discourage filers from this rather uneconomical offer, in 1994 the IRS stopped providing tax preparers a confirmation that a deposit would take place for a certain amount and that it would begin sending refunds directly to taxpayers instead of banks that made the loan.[4]"
This is kinda of a bad stopping point for the history of RALs. The confirmation of deposit (officially called an acknowledgment), was re-instated shortly after if was stopped. It had the oposite effect the IRS hoped, it instead caused RAL prices to increase significantly to cover the additional risk and caused the banks offering them to link the loan more directly to the customers credit report and less to the tax return. So then the customers where taking out loans, the IRS was not always honoring direct deposit so people would get a RAl and then their IRS check in the mail and end up owing a bank thousand of dollars because the IRS didn't send the funds to the bank.. This of course did not make the taxpayers happy and acknowledgments were re-instated the next year. And to be most specific, acknowledgments where never completed stopped, just a the debt indicator and confirmation of deposit portion of the acknowledgments. I am going to add just a bit of this to the article. —Preceding unsigned comment added by Cool10191 (talk • contribs) 15:04, 3 March 2008 (UTC)Reply
I have also added a little bit on CADE. I think it is very relevant to this article. Once it is online there will be no need for refund anticipation loans and this article can be committed to history! CADE is a the new IRS processing system. Once online it will process tax returns within one day and be able to deposit money within 48-72 hours! So taxpayers can get their money back as in the same time as getting a RAL. I know I am baised on this artcile.. So I won't put anything controversialCool10191 (talk) 15:30, 3 March 2008 (UTC).Reply
I have removed a section of edits that constitute original research or discussion of the subject rather than the article. Running your own numbers and wishing you could link to your company's website are not helpful additions for other editors wanting to improve this article. None of the info added can be added to the article, so what are we supposed to do with it? And yes, adding and subtracting is original research when you draw conclusions from it. Let the media do that, and then we can quote them. Flowanda | Talk 02:21, 21 March 2008 (UTC)Reply
Something like this:
A Refund Anticipation Loan (RAL) is a short term loan from a bank using an expected tax refund as collateral. The product is offered through professional tax preparation firms that offer E-File to their customers. When a consumer has there taxes prepared they can request the loan product in order to access funds 10-35 days quicker than if they there where to wait for the IRS to direct deposit or mail their tax refund. Consumers who receive RALs are usually charged an application or documentation fee by their tax preparation firm in addition to the the loan's service and financing fees. Fees are variable depending upon the bank financing the loan, most banks charge approximately $110 for a $2800 refund anticipation loan[1].[2][3] ($2800 is the average refund amount, that would be a good number to use in the article [5]) Expressed as an APR the loan fee for a $2800 can between 120%-57% depending on the day of the week the the tax return is filed and length of time it takes the IRS to process the tax return. The loan requests can be denied based upon certain forms that may be filed as well as in a credit check for delinquent government obligations. In cases where the loans are not fully repaid by the tax refund within 90 days, consumers then become responsible for repayment.
The benefit of this product would be for customers who are in immediate need of funds. Since the product is a unsecured loan it can also boost credit scores after it's payoff. The product also allows consumers to have there taxes prepared with no up front fees, the client can optionally have them deducted from their tax refund.
There are several drawbacks to the product. One is that if the loan is declined the client in most cases will be unable to have their check mailed or direct deposited to their account, they will still have to receive their check through their tax preparation firm. Another drawback is that in some cases if the client owes a loan balance from a prior year RAL then their refund can be seized as a cross-collections repayment.[4]
I removed a statement early in the article that a RAL loan has a 100% chance of being paid by IRS. Obviously the chance is not 100%, otherwise the fees would be much lower. In my experience approved RAL loans have about an 85% chance of being paid on time. I substituted the word significant instead of 100%.
Also, I added a good bit of information under the recent state regulation subhead that covers precisely why RALs are legal and why state actions against them always take the form of alleging overpromotion or fraudulent presentation of the product.
Further, I added some limited information regarding the "Advance Notice of Proposed Rulemaking" that was issued by the IRS in January 2008 which is a hint towards potential future regulation of RALs by the IRS.
Finally, in reading the article I still have concerns that the NPV flag might should come back. The article is considerably out of balance in terms of the quantity of information slanted against RALs and the quantity of information slanted for RALs. Consider this: if 10% of RALs are oversold then using the legacy numbers in the current article of 12 million RALs per year, there are over 10 million properly sold, happy, and very satisfied purchasers of RALs in the United States every year. Does that warrant an article with such a negative slant.
As always, to my own detriment, I have written almost completely from memory, with very little documentation.
72.254.22.168 (talk) 07:58, 5 June 2008 (UTC)Reply
I have moved this statment here:
A 2006 study by the NCLC and the Consumer Federation of America found that "based on national averages, an EITC borrower could expect to pay $900 in fees for refund loan, electronic filing, check cashing and tax preparation fees to obtain a $2,150 refund."[5]
This statement is very misleading and should be changed or removed. This is talking about the total cost of tax filing plus a refund anticipation loan. Refund anticipation loan fees do not exceed $150, and for a $2,150 the cost would be more like $100. A quick review or the pricing on RAL websites will show this. The person would have to pay the tax prepareration fees and filing fees even if they did not get a RAL and that accounts for 80% of the cost. If you read the report it is talking about it shows that the average ral fee charged in 2006 was $100.16 and that the average application fee charged by the preparer was $29.08. The way this statement read it sounds as if it is trying to say the entire $900, or at least the big chunk is for rals.[6] To insinuate that tax preparation and filing fees are related to the amount of the refund is very misleading, and to link preparation fees and filing fees to the refund amount is illegal. The fees are charged for services rendered, not financing. Charles Edward 13:40, 5 June 2008 (UTC)Reply
Based upon the prices for RALs in 2006, a consumer can expect to pay about $100 in order to get a RAL for the average refund of about $2,150 from a commercial tax preparation chain this year. This loan fee includes the fee supposedly for the “dummy” bank account used to receive the consumer’s tax refund from IRS to repay the RAL. The effective APR on this RAL would be 178%.29 This does not sound like $900, the source used is misrepresenting this report.
consumeraffairs.com, Paul of Cincinnati OH (01/28/07):
"Me and my family came here to file out taxes, like we have done for the last 15 years. This time the person servicing us stated that WE have a new bank product this year. Your ral in 1-2 days guaranteed! we have used there services for years and allways have gotten rapid refund in as little as 3-6 days. We trusted their product and tried it this year. on 1-26-07 the HR branch stated that we didn't qualify for RAL. This is a first in 15 years!!!! We were denied for internal bank reasons! They would give any contact numbers for the bank. And they also couldn't or wouldn't look into a refund of $346.76 in tax and bank fees. This has cost our family a lot of financial grief this time. This has never happened before and it wont happen again. These services that this company is offering is geared toward people with low income who cannot afford to pay the $100 upfront to get there taxes done and a refund in 10 days." [8]
National Taxpayer Advocate's 2007 Objectives Report to Congress, Volume II, The Role of the IRS in the Refund Anticipation Loan Industry:
"[pages 11-12] . . . At the very least, banks should be barred from transferring EITC under a cross-collection arrangement to satisfy a debt owed to a third party bank . . . " [9]
National Taxpayer Advocate 2005 Annual Report to Congress, Executive Summary, The Most Serious Problems Encountered by Taxpayers:
"8. Refund Anticipation Loans: Oversight of the Industry, Cross-Collection Techniques, and Payment Alternatives . . . The IRS contributes to the demand for Refund Anticipation Loans (RALs) by: (1) failing to deliver refunds in the quickest manner possible and (2) failing to provide RAL alternatives for the 'unbanked.' . . . " [10]
Illinois, Office of Attorney General Lisa Madigan:
" . . . In 2002, these customers paid an average of $248 in costs and fees to receive an RAL on expected tax refunds that averaged $1,980 . . . " [11]
Hood v. Santa Barbara Bank & Trust (2006), Cal.App.4th:
" . . . Santa Barbara denied Hood's loan application because a third party bank claimed that she owed it money for a preexisting RAL. After the IRS deposited Hood's 2001 refund into the Santa Barbara account, Santa Barbara paid it to the third party bank. . . . " http://fsnews.findlaw.com/cases/ca/caapp4th/slip/2006/b184489.html
consumer-action.org, Feb. 5, 2007:
“ . . . Thus, in 2007, a consumer can expect to pay from $57 to $104 to $111 in order to get a RAL for a typical refund of about $2,500. The effective APR for this RAL would be 85% to 150% to 170%. The RAL loan fee is in addition to tax preparation fees averaging $150 and, in some cases, an application fee of about $40. The major commercial chains have stopped charging this fee, but independent tax preparers may charge a fee and they have a substantial portion of the tax preparation market. . .” [12]
California Attorney General sues H&R Block, February 2006:
“ . . . H&R Block does not adequately tell such customers about any alleged debts, or that when they sign the new RAL application, they agree to automatic debt collection – including collection on alleged RAL-related debts from other tax preparers or banks. These applications are denied, and the customer’s anticipated refund is used to pay off the debt, plus a fee . . . " [13]
2nd Story Software, HSBC loan application, 2005:
"9. Payment of Other Debt . . . With respect to any delinquent debt I owe to JP Morgan Chase Bank, Bank One, First Security Bank, Republic Bank, Santa Barbara Bank & Trust, First Bank of Delaware, or County Bank and/or their assigns (the "Other RAL Lenders"), relating to a RAL or similar financial product made in prior years . . . " [14]
Bank One, RAL application, 2006:
" . . . COLLECTION OF OUTSTANDING RAL DEBT—If you owe money for a RAL from any prior year to Bank One or another RAL lender, including HSBC Bank USA, N.A., Beneficial National Bank, Household Bank, f.s.b., Santa Barbara Bank and Trust, County Bank, First Bank of Delaware, First Republic Bank, First Security Bank, Republic Bank & Trust Co., Republic First Bank, Imperial Capital Bank, or any of their successors or assigns, you acknowledge such prior obligations and authorize Bank One to deduct . . . "
This cross-collection provision is from the second page of the four-page loan application, which is included in the industry publication "Your Key to Our Program, Bank One Tax Related Products, 2006."
page 44 (49 in PDF file) http://www.petzent.com/crosslink/formsdocs/2006KeyBook.pdf <-- broken link
Bank One, non-loan bank products ("RACs") can also be cross-collected from, 2006:
" . . . This provision applies to any Bonu$ Deposit Account, whether or not you apply for a RAL. If you have an outstanding RAL, you understand that Bank One will be acting as a debt collector . . . "
page 44 (49 in PDF file) http://www.petzent.com/crosslink/formsdocs/2006KeyBook.pdf <-- broken link
Bank One, binding arbitration, 2006:
" . . . ARBITRATION REPLACES THE RIGHT TO GO TO COURT. YOU WILL NOT BE ABLE TO BRING A CLASS ACTION OR OTHER REPRESENTATIVE ACTION . . . "
page 44 (49 in PDF file) http://www.petzent.com/crosslink/formsdocs/2006KeyBook.pdf <-- broken link
IRS time frame for e-file:
". . . in as little as 10 days with Direct Deposit."--from page 5, 1040 Instructions, 2008.
http://www.irs.gov/pub/irs-pdf/i1040.pdf
essay by filmmaker Danny Schechter:
" . . . I saw this first hand when making my film In Debt We Trust. We were shooting in Brooklyn's black community outside a small H&R Block tax prep store advertising 'instant money' in the form of tax rebate loans. I was with Sarah Ludwig, an organizer with NEDAP, an economic justice organization who explained:
'The interest rate is anywhere between 40 and 700 percent, annual percentage rate. Because these are very short term loans, that are being made by some of the largest banks in the world, which netted $1.6 billion in profits.'
That surprised me. What banks? All I could see was a grubby little ghetto store.
Her response: 'You don't see the banks. And what you really should see behind this storefront looming are some of the largest financial institutions in the world. Particularly HSBC' . . "
Danny Schechter, who directed the documentary In Debt We Trust (2006), recounted this conversation in his essay "Media, Big Business And the Economic Squeeze." [15]
Financial Aid Podcast, Aug. 11, 2008:
"+ A cautionary note about using tax filing services - avoid at all costs the “refund anticipation loans” such as Rapid Refund, etc. - there’s some whammies in there that can eat your entire refund. For example, if you don’t qualify for the loan, you get a bank account product instead and still pay high fees. Also, some of these companies also do debt collection enforcement, so if you have an outstanding debt that is registered with one of these companies, they can legally seize your refund. It’s buried in the contract you sign when you agree to the refund anticipation loan."[16]
Florida, Office of Attorney General Bill McCollum, Jan. 31, '08:
" . . . Consumers are also cautioned about taking out 'Refund Anticipation Loans,' as the fees will still be required even if the loan is not approved . . . " [17] —Preceding unsigned comment added by FriendlyRiverOtter (talk • contribs) 21:06, 22 July 2009 (UTC)Reply
(Outdent) :) You are right, and I certainly appreciate your dialogue. The applications are not public domain, and in now way could they be uploaded under any fair use rationale that I can think of. So as far as putting them on wikipedia, I don't think that is anything that could be done. I could email them to you directly though. Is your email enabled in your preferences? Heres some more links you might also find useful in improving the article:
—Charles Edward (Talk | Contribs) 17:49, 8 September 2009 (UTC)Reply
According to this 9/13/09 article, HSBC got out of all its RAL contracts except for H&R Block. (The info is under the 'Hard Decisions' section). I didn't add it to the main article. Flowanda | Talk 21:35, 15 September 2009 (UTC)Reply
NATIONAL TAXPAYER ADVOCATE: 2005 ANNUAL REPORT TO CONGRESS, VOLUME 1, 31 December 2005, page 166 (174 in PDF file):
"Delays in Refund Delivery
"Currently, if a taxpayer does not purchase a bank product, the quickest way to receive a tax refund is to file electronically and request a direct deposit into a bank account. As discussed above, the refund turnaround time for this method is as few as 10 days. In fact, with the implementation of the Customer Account Data Engine (CADE), the IRS can turn around a refund within two to three days, but pursuant to its Revenue Protection Strategy (RPS), the IRS first runs the refunds through Criminal Investigation screens and the Dependent Database, increasing the turnaround time to five days. For taxpayers who purchase bank products due to the speed of the refund turnaround time, shortening the time to three days might make a world of difference, especially if the taxpayers are sufficiently informed about their options and the cost of alternatives. Given that the RPS delays the delivery of refunds, competing tax administration concerns contribute to the demand for RALs. It is incumbent on the IRS, then, to review the timeframes for RPS screening and shorten them as much as possible."
Your Key to Our Program, 2010 Program Handbook for the Chase Tax Related Products programs, page 42:
“COLLECTION OF OUTSTANDING RAL DEBT – If you owe money for a RAL from any prior year to Chase (including Bank One), you acknowledge such prior obligations and authorize Chase to deduct the amount of the outstanding RAL obligation(s) from your Bonu$ Deposit Account and apply such funds to your outstanding RAL obligation(s) with Chase. This provision applies to any Bonu$ Deposit Account, whether or not you apply for a RAL. If you have an outstanding RAL, you understand that Chase will be acting as a debt collector under the terms of this Application/Agreement and that any information obtained will be used for that purpose. . . ”
http://www.aarp.org/content/dam/aarp/aarp_foundation/litigation/amicus_brief_pdfs/Harper_Jackson%20Hewitt.pdf
Amici Curiae Brief in West Virginia, Dec. 23, 2009.
The following is from Hood vs. Santa Barbara Bank & Trust http://fsnews.findlaw.com/cases/ca/caapp4th/slip/2006/b184489.html "On January 31, 2002, Hood went to a Jackson Hewitt office for tax preparation service. A Jackson Hewitt employee told Hood that she had two options for a quick refund--a "rapid refund" that she could receive the next day, or another refund that would be payable within 48 hours. The Jackson Hewitt employee did not explain that these options were loans. . . . Santa Barbara sent Hood a letter dated February 3, 2002, stating that her RAL was denied because Santa Barbara had "been informed of an outstanding [RAL] debt with [Household Bank]." Santa Barbara's letter stated that Hood's 2001 tax refund would be used to satisfy the Household Bank RAL debt and that Santa Barbara would send Hood any funds remaining after the Household Bank RAL debt was satisfied. Hood did not receive her 2001 tax refund. Nor did she receive the Accelerated Check Refund described in the RAL application as an alternative product for applicants who were ineligible for RAL's." FriendlyRiverOtter (talk) 00:45, 17 December 2009 (UTC)Reply
I don't have the time, and not sure how much sourcing would be available, but there have been major developments in the last four monthes. One of the Major RAL banks was forced out of business by the OCC due to sub-prime mortgage problems. There was not enough funding during this season so significant percentage of firms, including many large franchises, where unable to offer the loans this year. FDIC is proposing a plan to bank state chartered banks from originating the loans in the future. There has been a major downward shift in pricing over the last year as well. There is also no information on the OTS and FDIC findings at Republic Bank. There are probably only primary sources available on any of this. —Charles Edward (Talk | Contribs) 15:31, 1 February 2010 (UTC)Reply
BTW, I still feel that the lack good sources, heavy reliance on hostile consumer groups for sourcing, and the failure to show the benefits of this product result in a very POV article in its current state. —Charles Edward (Talk | Contribs) 15:41, 1 February 2010 (UTC)Reply
Heres a story on SBBT. [22]. —Charles Edward (Talk | Contribs) 16:22, 4 February 2010 (UTC)Reply
From History:
This is highly unlikely. The revenue from RALs goes to the financial institutions, not the IRS. The cost of operating e-file would have been incident on the IRS. Am I missing something? Pnm (talk) 01:11, 30 May 2010 (UTC)Reply
I think this is more a question of interpretation than factual dubiousness. I believe the intent is to convey that the introduction of electronic filing facilitated efficient collection of the information necessary to offer RALs. The bit about cost reduction being the reason for introducing electronic filing is extraneous. Tubamaster (talk) 23:37, 24 July 2014 (UTC)Reply
IRS to end release of taxpayer debt information, Associated Press, EILEEN AJ CONNELLY, Friday, August 6, 2010.
“The indicators served as a warning that some or all of a person's refund might be held to cover old debt, including back taxes, unpaid child support or delinquent federal student loans.
“They are typically used by the banks that fund refund anticipation loans to decide whether to loan taxpayers money backed by their expected refunds.”
And the IRS news release itself:
IRS Removes Debt Indicator for 2011 Tax Filing Season, IR-2010-89, Aug. 5, 2010.
'WASHINGTON — The Internal Revenue Service today announced that starting with next year’s tax filing season it will no longer provide tax preparers and associated financial institutions with the “debt indicator,” which is used to facilitate refund anticipation loans (RALs). . .
' . . . The IRS announcement would remove the debt indicator starting with the upcoming 2011 tax filing season. The IRS noted that taxpayers will continue to have access to information about their tax refunds and any offsets through the “Where’s My Refund?” service on IRS.gov. . . '
IRS Removes 'Debt Indicator' for 2011 Tax Filing Season,
By James Limbach,ConsumerAffairs.Com,
August 10, 2010.
‘Starting with next year's tax filing season, the Internal Revenue Service (IRS) will no longer provide tax preparers and associated financial institutions with the "debt indicator," which is used to facilitate refund anticipation loans (RALs).
'The "debt indicator" acts as a form of credit check, telling tax preparers whether a taxpayer's refund will be paid or will be intercepted for government debts. . .
‘ . . . The NCLC and CFA have been urging the IRS to end the debt indicator since 2005, when they published a report entitled "Corporate Welfare for the RAL Industry: The Debt Indicator, IRS Subsidy, And Tax Fraud." . . ’
I was getting ready to add the same info that FRO has already added...great furry brains think alike. The AP article is much better, but articles are sometimes removed after a certain period of time, so here's another source of similar info in case the other link goes dead: http://www.americanbanker.com/bulletins/-1023886-1.html. Flowanda | Talk 22:29, 11 August 2010 (UTC)Reply
In a 2006, the office of the Attorney General for the state of California described this as a “deceptive debt collection scheme.”
In 2006, the IRS Taxpayer Advocate stated that “At the very least, banks should be barred from transferring EITC under a cross-collection arrangement to satisfy a debt owed to a third party bank.”
Instead, clients are often not even informed of this practice (and also IRS Taxpayer Advocate as above).
(page 5)
“A. Business Practices to Be Followed
“1. Defendant Santa Barbara and Cross-Defendants agree not to engage in Cross-Collection during the 2009 calendar year . . .
“2. For future years in which Cross-Collection may occur, Defendants agree to provide a notice to Jackson Hewitt customers regarding collection of taxpayer refunds to pay RAL debts from prior years. . . ”
(page 6)
“B. Monetary Relief
“Defendant Santa Barbara’s records show that there are over 100,000 members of the Class. Defendants and Cross-Defendants will pay a total of $8,500,000 pursuant to the Allocation Agreement amongst Defendants and Cross-Defendants. . .
“2. . . . each Class Member will receive a minimum of 5.5% of the total amount of his or her tax refund that was collected by Santa Barbara and paid to a Third-Party Creditor. . . ”
http://www.nclc.org/images/pdf/litigation/closed/hood-settlement-agreement.pdf
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“The Sturdevant Law Firm and the National Consumer Law Center in Boston represented Canieva Hood, Tyree Bowman, and a proposed class of individuals who have had their tax refunds seized to pay back alleged debts to other banks. . .
“ . . . On April 29, 2009, the Court approved a final settlement that secured 8.5 million in compensation to individuals whose RALS were seized as well as comprehensive injunctive relief that ceased SBBT’s practice of cross-collection for a limited time and ensured consumers are provided adequate notice of the potential of cross-collection.”
http://www.sturdevantlaw.com/cases-hood.html
I want to continue to work on this, maybe adding some more, in part making this section more readable. FriendlyRiverOtter (talk) 23:14, 5 February 2012 (UTC) FriendlyRiverOtter (talk) 20:32, 6 February 2012 (UTC)Reply
Refund Anticipation Loans Come With Risks, Better Business Bureau, 2/26/2013. “ . . . The Federal Deposit Insurance Corporation has forced all major national banks to discontinue these types of loans. Be wary of sketchy lenders, both online and off.”
Tax refund offers include extra fees, KGET [California], Feb. 7, 2013. ‘ . . . "It's still the same animal, it's just packaged differently. Before people weren't aware that it was a loan, so they did do away with that. They had to restructure how they were selling it to the consumer because there is interest, there are fees associated with it that people need to be aware of," said Hudson. . . ’
Action Line: Tax-time 'refund anticipation loans' to no longer be widespread, Tulsa World [Oklahoma], By PHIL MULKINS World Action Line Editor, Jan. 20, 2013. ' . . . "Even with the end of RALs, low-income taxpayers still remain vulnerable to profiteering," says the center's report. "Tax preparers and banks continue offering a related product - 'refund anticipation checks' (RACs) - which are subject to significant add-on fees and represent high-cost loans of the tax preparation fees. Tax preparation fees can often be opaque and expensive, with taxpayers unable to obtain estimates of fees to comparison shop. [Center for Responsible Lending] . . "
http://money.cnn.com/2013/03/06/pf/taxes/tax-refund-loans/ <-- And this last one looks like a hodge-podge of financial products taking the place of the traditional RAL. FriendlyRiverOtter (talk) 18:22, 8 March 2013 (UTC)Reply
New tax refund loans carry sky-high fees and rates, CNNMoney, Blake Ellis, March 6, 2013:
" . . . Jackson Hewitt is offering tax-time credit lines ranging from $200 to $1,000, which come with a 35% interest rate, a $6.25 monthly fee and a fee of 3% or $10 every time the credit line is accessed, according to its website. . . "
" . . . AIT Financial Group, for example, launched a product this year that pays $600 to someone expecting a refund of $700 to $725 and will pay $1,250 for a $1,500 to $1,600 refund. . . "
" . . . The NCLC [National Consumer Law Center] also found that some shady tax preparers are even offering tax refund loans to lure taxpayers into their offices, but have no intention of lending them the money. . . "
I having been the patent owner of the software at question here, and having been approached on February eighth of the year nineteen hundred eighty eight, by a representative who acted on behalf of the Internal Revenue Service, a person who is named Melody Moody Press, who asked for my permission to use my patented software for their own use for the electronic processing of tax refunds, they offered me patent protection and three dollars for every tax refund that was processed using my patented software. I opened up my 401k for the royalties and the account was soley in my maiden name. I have paperwork to prove this fact. The permission for tax accountants and the banks who would be processing the loans were the named few entities who would be given my permission to know the information surrounding my authorship of this and many other softwares as the information pertaining to me was top secret government contracts and considered governmental secrets of various trades. One of the bank who had been listed and specified on the documents to be processing the software was HSBC bank but they are not and were never the patent owner or author this was already a valid patent one of many in my portfolio that was already valid on February eighth of the year nineteen hundred eighty eight, at the time if my contract signing pertaining to my patented software and these various entities being able to use my patents with my permission. 2600:387:F:5734:0:0:0:3 (talk) 22:29, 8 December 2021 (UTC)Reply