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

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

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

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

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

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)

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

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

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

Policy Analysis

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

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

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

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

Letter to IRS Concerning Rescinded "Gag Rule" for VITA Volunteers on RAL PDF (86KB) (October 5, 2005)

Archive: Policy Analysis (2002-2004)

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)