Household HSBC Watch

From the February 4 edition of Accounting News:

“These fees transfer billions in wealth, paid out of the U.S. Treasury, from working poor families to multimillion-dollar corporations,” Chi Chi Wu, an attorney with the National Consumer Law Center, told the AP.

Next week, the Senate will begin work on a bill to require companies that issue loans on anticipated tax refunds to register with the IRS. The bill would also give the Treasury Department the ability to set guidelines for disclosure of lender fees.

Estimates place the current loan fee amounts at $20 to $105 plus another $28 to $58 in administrative fees, with the effective annual percentage rate ranging from 70 percent to 700 percent, the groups said.

Household International, the company that services the most refund anticipation loans, told the AP that its loan rates run the gamut from 34 percent to 129 percent, which they say is about the same as a cash advance on a credit card.

Full article: http://www.tscpa.org/welcome/AcctWeb/acctweb020604.asp#2