Pacific Capital Bancorp (PCBC) got $181 million in TARP funds in November.  This California firm includes Santa Barbara Bank & Trust.  Santa Barbara Bank is one of the four banks in the United States (JP Morgan, HSBC, and River City are the others) that provides funds for Refund Anticipation Loans (RALs), through its subsidiary SBBT RAL Funding Corp.

RALs are something that you may never have heard about, unless you have a very high discount rate.  They are very expensive, but many people get them because they (more…)

Think about what kind of implicit statement is made by a policy that provides taxpayer monies to create liquidity for a privately-held bank to provide funds so that income tax preparers can provide refund anticipation loans to consumers.  What are we doing if we borrow money so that a business can write loans to consumers to get their tax credit-driven refunds 10 days earlier? Why do we need to pay a private bank to speed up refunds of the Earned Income Tax Credit?  Is that efficient?

This is the process that is occuring when the US Treasury Department’s Troubled Asset Relief Program (TARP) invests $181 million in Pacific Capital Bancorp (PCBC), a Santa Barbara, California lender.  PCBC supplies money to Jackson Hewitt and other tax (more…)