Consider the impact this type of comparison shopping would have on tax refund lending. In Illinois, 38 percent of low-wealth people take out tax refund anticipation loans when they file tax returns, spending nearly $64 million per year in fees. If offered a lower-cost alternative at the point of sale, such as direct deposit, consumers would be presented with a straightforward choice—wait a few days for a free refund or pay high fees and get a refund a few days earlier. Sadly, this type of choice has not been widely available in the marketplace.
Under the disastrous, hands-off regulatory approach of the past decade, Illinois communities saw millions of dollars in wealth stripped away by deceptive-by-design products that were unclear and unfair. Encouraging financial institutions to compete for customers by offering the best-priced, most consumer-friendly product (without the reams of fine print) makes perfect sense.