[Congressional Record Volume 152, Number 33 (Wednesday, March 15, 2006)]
[Extensions of Remarks]
[Page E374]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    IN OPPOSITION TO TARGETED MARKETING OF REFUND-ANTICIPATION LOANS

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                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                       Wednesday, March 15, 2006

  Mr. RANGEL. Mr. Speaker, I rise today to express my deep concern at 
reports of the apparent harmful impact of the marketing of high-cost 
refund-anticipation loans, RALs, to underserved communities.
  While RALs are advertised as giving consumers quicker access to their 
hard-earned tax refund, it has been brought to my attention that tax 
refunds can be obtained almost as fast by the taxpayer to whom the 
refund is due as if taxpayers file online. It appears that not only are 
refunds not delivered with any greater expediency, but with interest 
rates between 40 to 700 percent and additional fees, these loans are so 
excessively priced that they deny the taxpayer full use of their money.
  This issue is of particular interest to me as some of my constituents 
seem to be feeling the brunt of these loans, I have recently been 
informed that one of the highest concentration of refund loans in 2003 
was made within the 15th Congressional District in my home community, 
central Harlem. Also as the Ranking Member of the Ways and Means 
Committee, I am concerned because according to a recent study 
undertaken by the Neighborhood Economic Development Advocacy Project, 
one quarter of New Yorkers who claimed the Earned Income Tax Credit in 
2003 paid large amounts of their wages in fees related to RALs.
  Low-income families need not be exploited for the gains of corporate 
entities. According to the IRS, 79 percent of RAL recipients in 2003 
had incomes of $35,000 or less. In contrast, as the nation's largest 
tax-preparation chain, H&R Block experienced an 8.5 percent increase in 
RAL revenue for Fiscal Year 2003. While RALs are one of H&R Block's 
products, I expect the company to practice due diligence not only in 
promoting these products equally among your many locations but also in 
informing clients of their rights and product terms.
  Mr. Speaker, I urge you during this tax season to lend your support 
in holding H&R Block and other tax-preparing companies responsible to 
equitable targeting of these high-cost loans and full disclosure of 
their terms.

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