HB 3163 would establish consumer protections for tax refund anticipation loans
From article http://www.leg.state.or.us/press_releases/hdo_032709_II.html
SALEM – The House Consumer Protection Committee, chaired by Representative Paul Holvey (D-Eugene),
today held its first public hearing on HB 3163, which would establish consumer
protections for tax refund anticipation loans. With the majority
of tax filers turning to commercial tax preparers to help them complete and file
their tax return, there is a growing onslaught of misleading advertising from
tax preparers selling “fast refunds.”
“Those who offer payday anticipation loans market them as refunds,” said Holvey.
“In actuality they are short term loans that charge rates of fifty, and
sometimes up to five hundred, percent.”
The tax refund anticipation loans are sold through commercial tax preparers by banks, some of
which received funds through the federal taxpayer-funded bailout.
Oregon families lose millions to tax refund anticipation loans and
corresponding check fees every year. The vast majority of tax
refund anticipation loans are made to working families who receive the Earned
Income Tax Credit.
“The money that should go the families that most need their tax refunds to help pay the bills is
instead lining the pockets of commercial tax preparers,” said Representative
Nick Kahl (D-East County), a chief sponsor of the bill. “We need
to make sure that predatory lenders cannot sell these expensive loans under the
guise of convenience.”
The proposals heard in the Committee today include prohibiting excessive add-on fees tax preparers
charge for tax refund anticipation loans, regulating advertising in order to
strengthen consumer awareness of these high-interest loans and banning deceptive
sales practices.
HB 3163 now awaits further hearings and a possible work session.
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