Daniel Akaka: “I originally filed an amendment that would prohibit the use of funds within this appropriations bill for the Debt…”

“I originally filed an amendment that would prohibit the use of funds within this appropriations bill for the Debt Indicator program. The Debt Indicator program is an acknowledgment from the Internal Revenue Service, IRS, to tax preparers stating whether the taxpayer's refund will be paid or intercepted for Government debts. I continue to be outraged that the IRS provides the service of the Debt Indicator program to predatory refund anticipation loan, RAL, originators while cutting essential services to low-income taxpayers. The Earned Income Tax Credit, EITC, is a refundable Federal income tax credit that is of great benefit to low-income working individuals and families. Many taxpayers who earn the EITC receive their tax refunds through predatory RALs. The excessive interest rates and fees charged on RALs are not justified because of the short duration of these loans and the minimal risk of repayment that they present. The IRS Debt Indicator program further reduces risk by assuring RAL lenders that the taxpayer's refund be issued and thus the loan will be repaid. The EITC was diminished by an estimated $1.75 billion in 1999. I am concerned about the aggressive marketing of RALs in low-income neighborhoods where EITC recipients often live. These loans take money away from the day-to-day needs of lower-income families.…”