Refund Anticipation Loans

http://www.futureofcapitalism.com/2011/02/refund-anticipation-loans

Having succeeded in preventing H&R Block and HSBC from offering refund anticipation loans, the left is now going after another tax preparer, Jackson Hewitt. A Bloomberg news article participates in the pile-on:

To qualify for a $1,561.22 loan at Jackson Hewitt, a taxpayer needs a minimum federal tax refund of $2,000. The finance charge is $61.22 with an estimated annualized percentage rate of 124 percent. There's an additional $49.95 in fees for the bank's administration and Jackson Hewitt's transmission, according to the signage in the office.

My favorite answer to the complaint about the annualized percentage rate came in a comment on an earlier post here about H&R Block:

Last month I had to attend a business meeting in Charlotte where I stayed overnight at the downtown Marriott at a cost of $244 (yikes, and that was with the corporate discount). If I were to write an anti-Marriott article saying, "those rip-off artists at Marriott charge $7,320 for one month's rent!" or "those shysters at Marriott charged me the same amount as a rich person pays for their mortgage payment on a $1.6 million dollar mansion!" the charges would seem pretty expensive. But the truth of the matter is that I only needed to spend one night there....

if you file your Federal Tax Return 60 days late, the minimum penalty begins at $100 (if you only owe $500 in taxes, that's an APR of 122% !!! ). It is the federal government who should be ashamed and held as villainous.

by Ira Stoll  |  Feb 8, 2011 at 8:29 am Related Topics:  Banking, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list