Costello Pushes Bill to Crack Down on Refund Anticipation Loan Lenders

</element><element id="paragraph-1" type="body"><![CDATA[State Rep. Jerry Costello (D-Smithton) is backing legislation to protect consumers from the exorbitant costs of tax refund anticipation loans, which are advertised as a quick method to receive an income tax refund.

"Like payday loans, tax refund anticipation loans are sold by lenders who charge excessive fees that slash a taxpayer's refund before they even receive it," Costello said. "These lenders often charge interest rates running as high as 150 percent. Rates and fees in the fine print are often overlooked, causing consumers who may already be down on their luck to dole out additional fees they weren't anticipating and can't afford."

Costello is supporting Senate Bill 3523, which caps interest rates on refund anticipation loans and requires lenders to clearly display the terms of the loan. In addition, lenders must inform customers that a refund anticipation loan may not be necessary as filing a tax return electronically and using direct deposit will allow the customer to receive their refund in eight to 15 days with no extra fees. The legislation, which was approved unanimously by the Senate last month, is supported by Attorney General Lisa Madigan.

"Some lenders make a business out of taking advantage of people in tough situations," Costello said. "Predatory lending played a role in bringing down the economy and lenders must be closely regulated to protect the financial well-being of our community. I'm working to reduce state spending and put more money in taxpayers' pockets so Illinoisans won't have to turn to last resort loans like these, but when there are no other options, consumers should not be taken advantage of."

To stay informed on this or other legislation, please contact Costello's constituent service office at 618-443-5757, email him at HYPERLINK "mailto:staterepcostello@gmail.com" staterepcostello@gmail.com, or on Facebook at HYPERLINK "http://www.facebook.com/staterepcostello" www.facebook.com/staterepcostello.