Tax Refund Anticipation Loans Are Dying

Tax refund anticipation loans are very short-term, high-interest loans provided by tax preparers to taxpayers in anticipation of their tax refunds. When taxpayers are provided with accurate information, generally they will conclude that these loans are a bad idea because the IRS can provide refunds very promptly (and at no charge!). We have blogged about tax refund anticipation loans -- here, here, here, here, and here -- including about why, because of the advocacy of public interest organizations and resulting federal regulatory policy, the refund loan industry was dying an appropriate death. Sunday's Washington Post confirms the trend.

Comments

[Law Firm of Kevin D. Judd]

I appreciate your advocacy about this issue and could not agree more with calling the demise of these high-interest loans as “an appropriate death.” While there will always be taxpayers who want to receive their refunds as soon as possible, these loans shamelessly take advantage of the desperate situations of struggling or low-income families. It is astonishing to read that more than 12 million people took out these anticipation loans to the tune of more than $1 billion in fees, but it is encouraging to see that this practice is on its way out.