Refund Anticipation Loans (RAL)

Used mostly by low and moderate income consumers, tax refund anticipation loans are extremely high-cost bank loans secured by the taxpayer' s expected refund -- loans that last 7-14 days until the actual IRS refund repays the loan. Even without the costly loan, most taxpayers could have their refund in two weeks or less. RALs are aggressively marketed by income-tax preparation companies. They advertise "Instant Refunds" or "Quick Cash" for their cash-strapped customers who need money in a hurry, and disguise the fact that they are selling advance loans on anticipated tax refunds.

NCLC Special Reports and Press Releases

Press Release: Consumer Advocates to Bank Regulator: Enforce Rules for Quickie Refund Loans, February 8, 2010

Update on Quick Tax Refund Loans, January 19, 2010

2009 Refund Anticipation Loan Report: Big Business, Big Bucks: Quickie Tax Loans Generate Profits for Banks and Tax Preparers While Putting Low-Income Taxpayers At Risk, February 27, 2009

Press Release PDF 69KB
Report PDF 630KB
Special Companion Report: RALs, Tax Fraud, and Fringe Preparers PDF 220KB

Press Release: Consumers Urged to Keep More of Their Tax Refunds by Avoiding Quickie Loans, January 21, 2009 PDF 99KB

Press Release: Consumer Advocates Decry Use of Bailout Money to Make Predatory Loans to Working Poor Families, January 5, 2009 PDF 137KB

Comments and Press Release:Consumer Advocates Urge IRS to Stop Preparers from Using Confidential Tax Returns to Sell Refund Anticipation Loans, April 2008 PDF

Report and Press Release: Tax Preparers Take a Bite out of Refunds: Mystery Shopper Test Exposes Refund Anticipation Loan Abuses in Durham and Philadelphia, April 2008 PDF

2008 Refund Anticipation Loan Report and Press Release: Coming Down: Fewer Refund Anticipation Loans, Lower Prices from Some Providers, But Quickie Tax Refund Loans Still Burden the Working Poor, March 31, 2008 PDF

Press Release: IRS Takes One Step Forward on RALs, But Takes One Big Step Back On Privacy, January 7, 2008

Letter to Congress Regarding RAL Reform Agenda, April 9, 2007 PDF (71KB)

Report: One Step Forward, One Step Back: Progress Seen in Efforts
Against High-Priced Refund Anticipation Loans, but Even
More Abusive Products Introduced, February 5, 2007 PDF (1.6MB)

Press Release: Down, But Not Gone: Quick Tax Refund Loans Continue to Gouge Taxpayers and Military, February 5, 2007 PDF (138KB)

Report and Press Release: Pay Stub and Holiday RALs: Faster, Costlier, Riskier in the Race to the Bottom, November 28, 2006 PDF (186KB)

2006 Refund Anticipation Loan Report PDF (373KB) and Press Release - Another Year of Losses: High-Priced Refund Anticipation Loans Continue to Take a Chunk Out of Americans' Tax Refunds, February 2, 2006

Press Release: Debt Indicator Report - Corporate Welfare for the RAL Industry PDF (177KB) and Letter to Treasury and IRS, July 2005 PDF 31KB

Report - Picking Taxpayers’ Pockets, Draining Tax Relief Dollars: Refund Anticipation Loans Still Slicing Into Low-Income Americans’ Hard-Earned Tax Refunds, January 2005 PDF 557KB

Press Release: Still a Bad Deal: Beware Quick Tax Refund Loans, January 2005

Archive: RAL Reports and Press Releases (2002-2004)

Policy Analysis

Revised Model Refund Anticipation Loan Act with Commentary, December 2008 PDF 149KB

Objection of Consumer Groups to RAL-Lending Bank Republic Bancorp's Application to Switch Charter from FDIC to Office of Thrift Supervision, September 12, 2008 PDF 858KB

Letter to Comptroller Dugan regarding Pay Stub and Holiday RALs, PDF (118KB), December 18, 2006

Consumer Groups Support Free Direct Electronic Filing With IRS, April 21, 2006 PDF (112KB)

Letter to Senator Akaka is support of the Free Direct Electronic Filing With IRS, April 21, 2006 PDF (87KB)

Comments to IRS on Proposed Changes to Privacy Rule for Tax Preparers with Press Release and Sample Short-Form Letter, March 8, 2006 PDF

Letter to IRS Concerning Rescinded "Gag Rule" for VITA Volunteers on RAL, October 5, 2005 PDF (86KB)

Archive: Policy Analysis (2002-2003)

Impact Litigation

Complaint and Press Release in Hood v. Santa Barbara Bank & Trust, March 18, 2003

Consumer Information

Don't Pay to Borrow Your Own Money: The risks and costs of Tax Refund Anticipation Loans PDF (72KB)

National RAL Platform, October 2004 PDF (133KB)

Summary: Tax Refund Products and VITA Sites: Issues and Options, November 2004 PDF (169KB)

Primer on RALs and Fringe Products PDF (111KB)

Building a Better Refund Anticipation Loan (RAL) PDF (164KB)

Building a Better Refund Anticipation Check (RAC) PDF (143 KB)

Selecting a Better Stored Value Card PDF (150KB)