Press Release

							Press Release

For Immediate Release
Tuesday, January 30, 2007

Contact:      Peter Skillern, Executive Director,
           Community Reinvestment Association of North Carolina
           919-667-1557 Ext 22.

Refund Anticipation Loans Cost North Carolina $44 million in 2005.

A report released today by the Community Reinvestment Association of North Carolina
estimates that more than $44 million in fees from Refund Anticipation Loans (RALs)
were charged to North Carolina tax filers in 2005 for 2004 tax year refunds. An
estimated 86% of RAL borrowers were low income households and 64% of RAL
borrowers are recipients of the Earned Income Tax Credit, a federal anti-poverty
program.

While 11% of all North Carolina tax filers applied for a RAL, borrowers
disproportionately are from zip codes that have a greater percentage of EITC recipients,
minority households, low income households and renters. Some zipcodes report 42% of
tax filers applying for a Refund Anticipation Loan. These are in some of the poorest
neighborhoods in North Carolina such as Rich Square, Wadesboro, Ahoskie and the
poorer sections of Charlotte.

Refund Anticipation Loans (RALs) are high cost loans with interest rates ranging from
36% to 700%, depending on the amount of the loan, the fees and time it takes to receive a
refund. The loans are secured by the anticipated tax refunds due tax filers.

This data analysis does not take into account the new development of holiday RALs and
paystub RALs that offer high cost loans as early as November based on the anticipated
tax refund of the borrower. If 25% of North Carolina RAL users in 2005 take an earlier
loan as well for the 2006 tax year an additional $11 million in fees to borrow their own
money will be generated.

These loans are marketed, originated and serviced by tax preparers such as H&R Block,
Jackson Hewitt, Liberty Tax Services and independents in cooperation with out of state
lenders such as HSBC, Santa Barbara Bank and Trust, JP Morgan Chase to pre-empt
North Carolina consumer protection laws. The North Carolina Commissioner of Banks
has launched a public education campaign to warn consumers of these high cost loans
and upon the request of consumer advocates and the North Carolina Treasurer Richard
Moore are investigating these lending practices.

The report (The High Cost of Refund Lending In North Carolina) is available at
www.cra-nc.org or by email. Media outlets who want an analysis of the RAL lending by
zip code in their area should contact CRA-NC directly.
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Peter Skillern, Executive Director
Community Reinvestment Association of NC
(919) 667-1557 ext. 22
PO Box 1929
Durham, NC 27702
http://www.cra-nc.org
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