Today's Date: December 4, 2023
For A Bright Future Foundation Awards 2023 Veterans and Families Scholarship to Anderson Espinal Gervacio of Virginia   •   Disneyland Resort is a Must-Visit Vacation Destination, Featuring Limited-Time Celebrations and New Fun in 2024   •   Salem Podcast Network Welcomes “Man in America with Seth Holehouse” to Its Line-Up   •   3 Ways to Support Veterans in Your Community   •   Cushman & Wakefield Earns Top Score in Human Rights Campaign Foundation's 2023-2024 Corporate Equality Index   •   Health Net's Support for California's First Black Birth Justice Coalition Leads to Release of First Agenda   •   Swickard Auto Group Announces "Nominate a Hero" at Swickard Anchorage: Rewarding an Alaskan Veteran, Active Military, or First R   •   Fourth Edition of ‘Women’s International Champions Cup Best XI Presented by Ally’ Team Announced   •   Survey: Social isolation critically impacts people living in urban areas, lower-income Americans, and Black and Hispanic communi   •   University of Cincinnati and University of International Business and Economics Attain Prestigious Global Centers of Insurance E   •   Amplify Her® Foundation Announces Inaugural Grantee Partners   •   NY NOW Celebrates a Century of Innovation: Marking Its 100th Year Anniversary   •   TotalEnergies, Adani Green Energy, and Brookfield Renewable Partners Emerge as Top Large-Scale Solar Developers in Mercom Capita   •   Financial information platform Finimize partners with CFA Institute to empower investors through education   •   Food And Drug Administration Grants Two New Label Changes To Tirosint®-Sol (Levothyroxine Sodium) Oral Solution   •   Argonne and Idaho National Laboratories Partner with CMBlu Energy for Innovative Long-Duration Energy Storage Project   •   Minister Anandasangaree announces funding for 31 Indigenous-led projects that will contribute to ending violence against Indigen   •   Medical Device First to Enter the European Market with Sustainable, Innovative Sterilization Approach with Chlorine Dioxide Gas   •   Government of Canada celebrates the launch of the Canadian Business Disability Network to help advance the inclusion of persons   •   Playaway Products New Spanish-language Audiobooks Will Help Libraries and Schools Serve Multilingual Communities
Bookmark and Share

Group Calls on Banking Agencies and Congress to Crack Down on Abusive Loans







Group Calls on Banking Agencies and Congress to Crack Down on Abusive Loans

Tax refund anticipation loans (RALs) siphoned $54.7 million from the pockets of low income New Yorkers in just one year, according to a report issued today by the Neighborhood Economic Development Advocacy Project (NEDAP), a New York City-based financial justice group.

Based on its analysis of recently-released IRS data for tax filing year 2007, NEDAP found that RALs were overwhelmingly concentrated in New York City's low- and moderate-income neighborhoods of color. RALs drained millions of dollars from neighborhoods in the South Bronx, Central and East Harlem, and Central and Northeast Brooklyn. The report includes maps that show the percentage of tax returns with a RAL, and fees paid, by zip code.

RALs are high-cost loans, secured by taxpayers’ projected tax refunds and Earned Income Tax Credits (EITC).  Aggressively marketed to lower income taxpayers as a way to obtain fast cash, RALs carry interest rates from 50% to 500%, according to the National Consumer Law Center and Consumer Federation of America. 

“RALs are nothing more than a junk loan product designed to drain assets from the working poor,” said Sarah Ludwig, co-director of NEDAP, which has published an annual report on RALs since 2006.  “Tax preparers lure customers with the promise of these rapid refunds, but people can now get their full tax refunds and tax credits from the IRS within a matter of days,” she added.

According to the report, some of the world’s largest financial institutions, including HSBC and JPMorgan Chase, dominate the RALs market.  As national banks, they circumvent New York State’s usury law, which limits the interest rate on small loans to 25%.  Tax prep outfits, including H&R Block, Jackson Hewitt, and independent tax preparers, serve as brokers for these lucrative loans. 

The report includes specific recommendations for policy and legislative reforms, and calls on the Office of the Comptroller of the Currency, the national bank regulator that oversees virtually all of the banks that make RALs, to crack down on the industry.

NEDAP recommends that low income New Yorkers call 311, the City’s info line, to find free tax prep sites throughout the five boroughs.  “There are hundreds of sites in New York City that provide free, high-quality tax preparation to EITC recipients and other working families,” said Alexis Iwanisziw, a program associate at NEDAP and co-author of the report. 


“RALs represent just one of a spectrum of abusive, high-cost credit products that target low income people.  In the debate over financial regulatory reform, eliminating predatory RALs and other financial abuses should be a no-brainer,” Ludwig said.

NEDAP’s report coincides with reports on RALs issued today by groups around the country, includingCommunity Reinvestment Association of NC (CRA-NC) and the Chicago-based Woodstock Institute.   The Consumer Federation of America and National Consumer Law Center also issued annual findings on RALs today, highlighting national data.  

# # #

NEDAP | 176 Grand Street, Suite 300 | New York, NY | 10013 | Telephone: (212) 680-5100 | Fax: (212) 680-5104



Back to top
| Back to home page

White House Live Stream
alsharpton Rev. Al Sharpton
9 to 11 am EST
jjackson Rev. Jesse Jackson
10 to noon CST


Sounds Make the News ®
Atlanta - WAOK-Urban
Berkley / San Francisco - KPFA-Progressive
Chicago - WVON-Urban
KJLH - Urban
Los Angeles - KJLH - Urban
WKDM-Mandarin Chinese
New York - WKDM-Mandarin Chinese
New York - WADO-Spanish
WBAI - Progressive
New York - WBAI - Progressive
Washington - WOL-Urban

Listen to United Natiosns News