Although these OCC actions come too late to protect millions of consumers who have already been harmed by deceptive marketing and high-cost RALs this tax season, Woodstock Institute welcomes the OCC efforts as a step in the right direction. The new OCC Policy will be effective only if it is rigorously enforced, however. The new Policy’s disclosure requirements and prohibition of deceptive marketing practices are only slightly stronger than an OCC policy that has been on the books since 2007 but never widely publicized or enforced. Woodstock and allies have been pressing OCC to implement effective oversight of bank RAL practices and products.
The new OCC Consumer Advisory entitled “Consumer Alternatives for Receiving Income Tax Refunds” and public service announcements prepared by OCC correctly advise consumers of better options for obtaining their tax refunds than obtaining RALs through paid tax preparers, such as using free tax preparation sites and direct deposit of refunds into bank accounts. We hope that these messages will help some consumers avoid products such as RALs this tax season, but ultimately public service announcements and financial education are insufficient tools to protect consumers and communities from these wealth-draining products.