City of Philadelphia - File #: 040042

• File #: 040042
• Version: 0
• Type: Resolution
• Status: ADOPTED
• File created: 1/22/2004
• In control: Committee on Public Health and Human Services
• Title: Calling on the Pennsylvania Attorney General, the Secretary of Banking and the General Assembly to carefully scrutinize the conduct of tax preparers in connection with Refund Anticipation Loans ("RALs"), and to take appropriate action to ensure that these business practices are consistent with State law.
• Sponsors: Councilmember Tasco, Council President Verna, Councilmember DiCicco, Councilmember Mariano, Councilmember Nutter, Councilmember Clarke, Councilmember Miller, Councilmember Ramos, Councilmember Blackwell, Councilmember Rizzo, Councilmember Cohen, Councilmember Kenney, Councilmember Krajewski, Councilmember O'Neill, Councilmember Kelly, Councilmember Goode

Date	Ver.	Action By	Action	Result	Tally
3/10/2004	0	Committee on Public Health and Human Services	HEARING NOTICES SENT
3/10/2004	0	Committee on Public Health and Human Services	HEARING HELD
3/10/2004	0	Committee on Public Health and Human Services	RECESSED
1/22/2004	0	CITY COUNCIL	Introduced	Pass
1/22/2004	0	CITY COUNCIL	READ
1/22/2004	0	CITY COUNCIL	ADOPTED & REFERRED

Title
Calling on the Pennsylvania Attorney General, the Secretary of Banking and the General Assembly to carefully scrutinize the conduct of tax preparers in connection with Refund Anticipation Loans ("RALs"), and to take appropriate action to ensure that these business practices are consistent with State law.
Body
WHEREAS, Refund Anticipation Loans ("RALs") or "Rapid Refunds" cost consumers well over a billion dollars in 2002; and

WHEREAS, Increasing numbers of families claiming the federal Earned Income Tax Credit ("EITC") lose some portion of their EITC to high cost RAL loans every year; and

WHEREAS, RALs siphon large sums of dollars from the tax refunds of Philadelphia taxpayers, especially low and moderate income households, which can least afford to lose these dollars; and

WHEREAS, Annual Percentage Rates ("APR") on these loans typically range from 97 to 800 percent; and

WHEREAS, These products result in families being charged $100 - $200 dollars, and sometimes more, to prepare their taxes and receive their refunds. However, these families could make a free electronic filing at one of the many Volunteer Income Tax Assistance ("VITA") program sites; and

WHEREAS, Most RAL providers do not prominently disclose the fees they charge to process RALs, loan rates for RALs, the fact that RALs are loans, or other fees they charge for tax preparation services; and

WHEREAS, These are dollars lost to Philadelphia families and to the economy of our City as a whole, and

WHEREAS, These products are aggressively marketed in lower income neighborhoods; and

WHEREAS, There is documented evidence of major providers of RALs, repeatedly misleading taxpayers about the existence of cheaper alternatives to RALs, and failing to inform taxpayers about the option of filing their taxes electronically without having to obtain a loan; now therefore

RESOLVED, BY THE COUNCI...