There are alternatives to RALs: Taxpayers who file online and have their refunds deposited directly into their banking accounts can expect their refunds to be deposited in as little as 8 days.

The Internal Revenue Service continues to work hard on reducing refund processing time, and to find solutions for speeding refunds to unbanked taxpayers. For the 2011 tax season, 600,000 low and moderate income tax filers were invited to participate in a U.S. Treasury Department pilot program intended to offer a quick, safe and convenient alternatives, such as low-cost debit cards. Also, last year the IRS announced that it would no longer provide debt indicators used by tax preparers underwriting RALs. J.P. Morgan Chase, one of the top-three issuers of refund loans, voluntarily pulled out of the market.

An order from the Office of the Comptroller of the Currency forced HSBC to end its agreement H&R Block, who later announced it would stop offering refund anticipation loans.
The FDIC has told Republic Bancorp, the primary refund anticipation loan (RAL) provider for Jackson Hewitt and Liberty Tax Service, that the bank’s RALs are “unsafe and unsound.” The bank now faces a $2 million fine.

Refund Anticipation Loans Cut Deep into Taxpayers’ Due

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