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October 28, 2010


Joe Sica

Good post ... and almost accurate. Cetainly, RALs are not for everyone and there have been some in the industry who have made poor choices. But the fact remains RALs are associated with high annual repeat rates... demonstrating, despite claims to the contrary, people do understand what they are asking for and are making the best choices for themselves. What is left out in your post is that government, namely the IRS, has decided to side with consumer groups who have pretty much thrown twisted truths and some outright lies (like 500% aprs) at the wall to see what sticks. And the IRS has decided not to ask the RAL banks directly about their programs. Why is that? Regulators who have found fault with banks offering RALs have found fault with ancillary issues surrounding the program, not the RALs directly. Why is that? An ex-H&R Block executive joined the IRS, headed a cross government team that decided on their own with no published findings to remove the DI. Why is that? And now that ex-executive is leaving the IRS. Hmmm. Consumer groups attacking RALs claim to represent 50 million americans ... yet couldn't produce a list of them. If asked, I can produce a list of names of over 8 million taxpayers who "do not" complain about RALs, yet nobody demonizing RALs wants to ask those customers. Why is that? Do they realy think 8+ million people are dumb and not worthy to be included in deciding whats good for them? So, lets not ask the RAL banks, lets not ask the RAL customers and lets deamonize EROS who offer RALs and "only" listen to consumer groups. Anybody see a problem with that recipe? Agree, RALs are on life support... and anyone really needing one I guess should call up the CFA or NCLC or maybe the IRS and ask if any of them could help them out? Here is the answer they will get - open a savings account...or better yet, buy a savings bond with your anticipated refund that won't help you until years after you froze in your home or got evicted - let alone put bread on your table. So your surface data is mostly correct - but the underlying facts never seem to get said openly. Nor is the simple question ever posed, "who, other then consumer groups, have complained about RALs?" ...certainly not the people who need them. This is both an anti-business and anti-consumer process that should never allowed to be repeated.

Well said, Trish--and Joe.

BTW, River City also requires a minimum number of prior year RALs in order to offer them for this coming tax season.

I think this is a fascinating political move. The timing is excellent for avoiding immediate voter consequence. The question becomes: do RAL customers vote and will they remember which Congress people got in their business in 2012?

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