Oregon Watchdog: House Committee Hears Taxpayer Protection Bill

Oregon Legislature
House Majority Office

FOR IMMEDIATE RELEASE: March 27, 2009
CONTACT: Michael Cox (503) 986-1904

House Committee Hears Taxpayer Protection Bill
HB 3163 would establish consumer protections for tax refund anticipation loans

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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