First Nations Development Institute partnered with the Center for Responsible Lending to examine the use of Refund Anticipation Loans (RALs) in Native communities. RALs are one to two week loans made by banks on behalf of filers, facilitated by tax preparers, and secured by the taxpayer’s expected tax refund.  RALs are marketed as a way to “get your money quickly” and result in the user paying substantial fees to access their tax return usually only five to 10 days faster than they would if they filed electronically. RALs can be extremely costly to the applicant. The average expense of the one to two week loan can be the equivalent of 50-500 percent APR, depending on the total fee and loan term. RALs are considered by many to be a form of predatory lending because they are often made to individuals who do not understand the terms of the loan or the true cost of the service.  

The research conducted by First Nations Development Institute and the Center for Responsible Lending resulted in a paper titled “Borrowed Time: Use of Refund Anticipation Loans among EITC Filers in Native Communities.” Download this document using our publication ordering system – the publication is available free of charge but you must provide us with information by following the prompts.  The research also generated state-by-state data table with county-level data that provides information about RAL usage, number of EITC filers, and number of filers using a paid preparer for each county. To download these data tables, click on the links below.

• Arizona
• New Mexico
• North Dakota
• Minnesota
• Montana
• Oklahoma
• Oregon
• South Dakota
• Washington
• Wisconsin