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October 29, 2009



I have been offering RALs for many years and have a good relationship with the bank I work with. Some of your statements here just don't hold true. Where did you get your information? My bank cut the fee they pay me ($8) and the fee they pay my software provider ($16), and they cut their own prices ($35). To me that math shows the bank is making $17 less per RAL, and you are making $8 less. What kills me is that you are upset about the high price, but are unwilling to give up your share of the fee. How does that make you better than the bank you critisize? And its really unfair to say you do all the work. It is the bank risking thousands of dollars on your customers, it is the bank providing you a free service, and the bank providing you with free training, free marketing support, and my bank even helps me with getting training credits with the IRS.


Frank you are full of it. The banks did drop their interest rate due to pressure from the IRS, but they did not drop their fees. Their account fees still range from $29 to $35 dollars. They made up for the lost revenue from interest by cutting the rebates given to tax preparers and software developers. Most developers have replaced the rebates with new technology fees and most prepares are increasing their doc prep fees to offset their revenue loss. Still on a $3,000 dollar loan the bank makes about $65 dollars. This equates to an APR of 26% for a fairly safe loan. Remember the banks wait until the IRS accepts the returns.


I am starting out new for this season and I have been unable to find a bank for RALs. I would be interested in learing what kind of replacment you came up with.


We as the people have to understand that banks are here to make profits. By being responsible with your money you can make the correct financial decisions when it comes time for taxes

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    A reader should seek advice from an independent tax adviser with respect to the information on this blog based on the reader’s particular circumstances. This advice is intended to be general information and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS regarding the transaction or matters discussed here.
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