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A full explanation of these laws and their remedies is discussed in NCLC, Fair Credit Reporting, § 15

A full explanation of these laws and their remedies is discussed in NCLC, Fair Credit Reporting, § 15

Based on IRS data, we estimate there were approximately 5 million RALs made in 2010. IRS data shows that there were 6.85 million RAL applications in 2009. However, not all RAL applications result in loans, as a certain percentage of applications are rejected.

Check into Cash does not promote tax preparation for 2012, but does cash checks

RALs are mostly marketed to low-income taxpayers. According to IRS data, 92% of taxpayers who applied for a RAL in 2010 were low-income. A study from the Urban Institute found that the median adjusted gross income of RAL borrowers is under $20,000, and that one in four taxpayers earning $10,000 to $25,000 use a RAL. In fact, this study found that “taxpayers living in extremely low-income communities are an astonishing 560 percent more likely to use RALs and 215 percent more likely to use RACs-controlling for their family characteristics and their income.” In other words, RAL users are typically not just poor; they live in poor communities. The authors of the study theorized that this phenomenon could be due to targeting by tax preparation chains, particularly in placement of store locations, or due to significant “peer effects.”

In 2010, RACs generally cost $30. This year H&R Block offered a free RAC for the first three weeks of the 2012 tax season, if the taxpayer used the Block Emerald Card. An H&R Block customer who obtained a free RAC could receive his or her refund in 8-15 days, pay for tax preparation out of his or her refund, and pay only those fees incurred by using the Emerald Card. After February 4, the price of an H&R Block RAC was increased to $.