Comments on: IRS Drops the Debt Indicator

By: sdoggie

sdoggie — Fri, 06 Aug 2010 21:46:42 +0000

I agree with you that there will still be RALs next year. Ohio Valleyl, Republic, River City, HSBC, even perhaps MetaBank – none of them have said that they are stepping away. What we don\’t know is what the new product will look like. It seems likely that ti will have a new risk price.
On the second point, I need you to clarify. It sounds like you are saying that the government is intruding into the marketplace. Do you mean that they were intruding, when they supplied the underwriting to the private marketplace, or now, where they are no longer doing so?

By: Esquire

Esquire — Fri, 06 Aug 2010 14:50:27 +0000

the IRS essentially washed their hands of their complicity in the RAL business. Now, it will all fall back to private businesses and old fashioned under-writing to get these loans to people who want them. Unfortunately, those who want them are often the most desperate and the least financially astute. Bank Talk probably is right that MetaBank will profit handsomely because they will reap huge fees to make the tax pro fee a line of credit, and the wolves in the tax prep business will tax their cuts, too.

By: The Facts

The Facts — Fri, 06 Aug 2010 13:18:01 +0000

Even though the approval rate will drop, RALs will still be available at a higher cost to the consumers. No matter if you are pro or con RAL, the alarming issue is the Fed's intrusion in the oper market of doing business and making it difficult for the consumer to get the product that they need or want..

By: Adam Rust

Adam Rust — Thu, 05 Aug 2010 21:35:42 +0000

Consumers might “need” this product for two reasons: a) they can’t wait to get their money. b) they don’t have a means of paying the cost of their tax prep.
One option would have been to say that no portion of an EITC payment can be used as collateral for a RAL. That would have reduced a lot of RAL demand, perhaps to the point where the fixed costs made the whole thing questionable. For the second, they can get a RAC. Hey, in 2012, they might be able to use a split refund to pay for their tax prep. That would be the best outcome.
Sooner or later, the IRS was going to get fast enough to make the RAL a bad call for even a consumer with the highest discount rate.

By: Tweets that mention IRS Drops the Debt Indicator | Bank Talk -- Topsy.com

Tweets that mention IRS Drops the Debt Indicator | Bank Talk -- Topsy.com — Thu, 05 Aug 2010 20:49:19 +0000

[...] This post was mentioned on Twitter by CRA-NC, Mike De Los Santos. Mike De Los Santos said: IRS Drops the Debt Indicator http://bit.ly/98VjkC Great news for Consumers and Bad News for RAL providers! [...]

By: Guest

Guest — Thu, 05 Aug 2010 20:16:25 +0000

I understand that the IRS is encouraging taxpayers to e-file with direct deposit, but what happens to the taxpayers who still feel they "need" this product? Are they winners or losers? Isn't the consumer supposed to be who we're gauging the winning vs losing on?