“We Cater To The Hood”


The Aughts were a big decade for tax refund anticipation loans, geared towards lower income clientele:

Customers wanting a RAL [refund anticipation loan] paid [the company] Jackson Hewitt a $24 application fee, a $25 processing fee, and a $2 electronic-filing fee, plus 4 percent of the loan amount. On a $2,000 refund, that meant $131 in charges—equivalent to an annual interest rate of about 170 percent—not to mention the few hundred bucks you might spend for tax preparation. "Essentially, they're charging people triple-digit interest rates to borrow their own money," says Chi Chi Wu, a staff attorney at the National Consumer Law Center.

Regulators are finally cracking down.

(Photo: "Refund Anticipation Loans and a Local Congressman – Broad Street in Philadelphia, PA" by Flickr user Paul Saberman)