Comments on: Debt Indicator Controversy

By: samsondoggie

samsondoggie — Fri, 28 May 2010 16:05:54 +0000

That's an interesting point. Maybe the banks do stop some fraud. Certainly, they also experience losses, too.

The pressing question is what is the IRS going to do next.

Thanks for sharing the humor on web traffic!

By: Joe Sica

Joe Sica — Thu, 27 May 2010 19:11:16 +0000

And if RALs evaporated and there was only a RAC type of world, what incentive would banks have to guard the tax system as they do now? In protecting their loans, the banks employ sophisticated screens and staff dedicated to finding fruad. The banks return tens of millions in suspect fraud refunds to the IRS annualy. Thats not going to happen when there is no loan to protect. There is so much win, win, win that doesn't get discussed. Again, lets talk about solutions that empower the taxpayer…and then, let them make the choice not you or I…. and I hear you on Pacific's website…Too funny… scary actually.

By: Joe Sica

Joe Sica — Thu, 27 May 2010 19:10:12 +0000

With a customer's consent, the IRS releases tax transcripts to a mortgage lender. The transcripts are an important part to underwriting the loan (else why ask for them). With a customer's consent the DI provides the same function for RALs. How then does the government decide who it wants to help or not? Or should it be preoccupied with making sure the customer is "aware" of the transaction they are entering into? Without the DI, counter to where they just got to, costs will increase. Without RALs the need doesn't evaporate. "Someone" will offer a product to fill that need – and it probably will proliferate in an unregulated environment. So, would government just be turning a blinds eye in driving RALs out? How does any of that help the taxpayer in need? RALs are in a highly regulated area now where regulators get to …well, regulate them. Why chance going underground?

By: samsondoggie

samsondoggie — Thu, 27 May 2010 16:45:05 +0000

Joe —
You know, I agree with you that there is a pressing problem with how some tax payers are going to settle the costs of their tax preparation. If the IRS is going to change the debt indicator, then they should probably do it as soon as possible. It is a very important point and it is very relevant to any conversation about RALs right now.

I'd also concede that Block is going to have a very powerful advantage in the market going forward.

Is 36 percent fair? It is legal, I'll give you that.

About Bank Talk – it looks to me like Bank Talk is about four to five times more popular than Pacific Capital's web site. We're ranked 123,000 in US sites, whereas PCBC is about 460,000th. So in terms of a place for getting out a message, this is the forum.

By: Joe Sica

Joe Sica — Thu, 27 May 2010 16:27:17 +0000

So no, its not that I just get mine, really. I've been a RAL reform advocate for years before you guys discovered them. Only I have been shocked by the resistance to change in and out of government – as if kicking them around rather then fixing any issues is a good vote getter, or maybe a nice issue for consumer groups to latch on to and/or yes, a fair amount industry greed. RAL pricing is pretty much contained…. and next fees will be severely curtailed … Beyond that the IRS really then needs to collect the industry fee data itself (and real time like banks already do) to analyze any abuse areas… And finally – taxpayers who need their money quickly can get it fairly with a bank product until IRS delivers refunds more efficiently. Unless all you can see is to ban them, I don't think we are far apart… again, I guess collectively finding solutions isn't fashionable. I'm always available to talk open and honestly….else my mother would be ashamed of me. Joe

By: Joe Sica

Joe Sica — Thu, 27 May 2010 16:26:18 +0000

HA… I'm not classic anybody really… But you are correct! Its what benefits the consumer/taxpayer that counts the most. And it seems we agree that the cost of credit itself is fair. At less than $2.50 per $100 loaned for a short term period I would be hard pressed to get those terms from any of my credit sources. How about you? Then fees are your concern….Again, we agree. "Two years" ago I brought up ancilary fees as a concern directly to Nina, then David Williams and finally asked Senate Banking staff to ask GAO to do a study on them. I hawked a bill in congress for, at minimum, full disclosure "up front" so the taxpayer was empowered. Seems RALs are to complex to understand and simply robbing taxpayers, many who really need the money, by banning them is an easier solution. There ARE ways to combat out of control ancilary fees … and we are working on that.

By: Michael De Los Santos

Michael De Los Santos — Thu, 27 May 2010 15:08:05 +0000

Joe,

Stop just looking at it from a bank's perspective and their bottom line. The key here is how it affects consumers. With all the fees added on by the tax preparers the 36% is negated, therefore more money being lost by the consumer that has no bearing at all on what the bank gets.

I guess as long as you get yours that's all that matters right? Who cares about the people you are supposed to be serving. I don't know you, but you sound like a classic bank guy.

By: samsondoggie

samsondoggie — Thu, 27 May 2010 14:47:13 +0000

Joe —

Maybe there is an important distinction between your calculation and our calculation. We're factoring in what the consumer experiences. RALs come with add-in fees. That's part of the problem – the consumer gets dinged by the tax preparer once the RAL account has been established. I know that the banks don't get all of that RAL money. Mo' Money, for instance, was charging a technology fee and an e-file fee on top of the RAL interest that Chase charged. Sure, the RAL is only 36 percent from the bank's perspective, but it is much higher from the consumer's perspective.

Bank Talk gets about 1000 hits a day.