Who’s Losing Out From RALs? Low-income working households are the largest group that would benefit from HB 3163 refund anticipation loan reform

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Who’s Losing Out From RALs? Low-income working households are the largest group that would benefit from HB 3163 refund anticipation loan reform

InsideCapitolDome

Who’s Losing Out From RALs? Low-income working households are the largest group that would benefit from HB 3163 refund anticipation loan reform

Refunded tax dollars that could help low-income families make ends meet and boost local economies are instead ending up in the pockets of tax preparation companies. That is the result of refund anticipation loans (RALs), short-term and often high-cost loans advertised as rapid tax refunds. Tax preparers often collect the RALs fees out of the federal Earned Income Tax Credit (EITC) refunds anticipated by low-income taxpayers.

The federal EITC is targeted at low-income working families and is designed to honor work, keep families together, reduce poverty and offset the payroll taxes of workers in low-paying jobs. In Oregon, nearly two-thirds of RAL customers in 2006 were federal EITC recipients, and 18 percent of federal EITC recipients used RALs.

HB 3163 would establish consumer protections for RALs. The tables below show, by state House and Senate districts, the share of Oregon’s RAL recipients in 2006 who claimed the federal EITC and the share of federal EITC recipients using RALs.

RALs by Oregon Senate District

Senate District Senator Total # of RALs # EIC recipients with RALs % of RALS going to EIC recipients % of EIC recipients getting RALs
1 Kruse 2,703 1,766 65% 21%
2 Atkinson 2,623 1,774 68% 19%
3 Bates 2,247 1,555 69% 17%
4 Prozanski 1,744 1,090 63% 15%
5 Verger 2,792 1,786 64% 22%
6 Morrisette 2,286 1,528 67% 19%
7 Walker 2,001 1,266 63% 16%
8 Morse 1,610 1,029 64% 16%
9 Girod 2,388 1,438 60% 20%
10 Winters 2,312 1,497 65% 22%
11 Courtney 3,117 2,111 68% 22%
12 Boquist 2,225 1,416 64% 19%
13 George 1,835 1,090 59% 17%
14 Haas 1,405 802 57% 14%
15 Starr 1,651 985 60% 15%
16 Johnson 2,392 1,324 55% 19%
17 Bonamici 1,314 761 58% 14%
18 Burdick 989 528 53% 11%
19 Devlin 665 351 53% 10%
20 Schrader 1,742 1,023 59% 17%
21 Rosenbaum 1,601 892 56% 12%
22 Carter 2,285 1,495 65% 17%
23 Dingfelder 1,738 1,076 62% 15%
24 Monroe 2,872 1,882 66% 19%
25 Monnes Anderson 2,443 1,495 61% 19%
26 Metsger 1,748 959 55% 13%
27 Telfer 2,700 1,620 60% 18%
28 Whitsett 2,431 1,673 69% 18%
29 Nelson 2,819 1,820 65% 21%
30 Ferrioli 2,690 1,849 69% 21%
Senate District Average 2,112 1,329 63% 18%

Source: OCPP presentation of IRS data for the 2006 tax year compiled and sorted by legislative districts by the Brookings Institution.

 

RALs by Oregon House District

House District Representative Total # of RALs # EIC recipients with RALs % of RALS going to EIC recipients % of EIC recipients getting RALs
1 Kreiger 1,207 792 66% 19%
2 Freeman 1,496 974 65% 23%
3 Maurer 1,396 977 70% 20%
4 Richardson 1,227 797 65% 17%
5 Buckley 908 634 70% 14%
6 Esquivel 1,338 921 69% 21%
7 Hanna 1,167 748 64% 18%
8 Holvey 577 342 59% 11%
9 Roblan 1,490 978 66% 23%
10 Cowan 1,302 808 62% 20%
11 Barnhart 843 523 62% 15%
12 Beyer 1,443 1,005 70% 21%
13 Nathanson 805 497 62% 14%
14 Edwards, C. 1,196 769 64% 17%
15 Olson 1,200 772 64% 20%
16 Gelser 409 257 63% 11%
17 Sprenger 1,360 854 63% 22%
18 Gilliam 1,027 584 57% 17%
19 Cameron 1,161 734 63% 22%
20 Berger 1,151 764 66% 21%
21 Clem 1,662 1,127 68% 23%
22 Komp 1,457 985 68% 21%
23 Thompson 1,194 745 62% 20%
24 Weidner 1,031 671 65% 18%
25 Thatcher 1,159 718 62% 19%
26 Wingard 676 372 55% 15%
27 Read 632 365 58% 14%
28 Barker 775 436 56% 14%
29 Riley 820 502 61% 16%
30 Edwards, D. 832 482 58% 15%
31 Witt 1,088 615 57% 18%
32 Boone 1,304 709 54% 19%
33 Greenlick 462 257 56% 11%
34 Harker 852 505 59% 16%
35 Galizio 673 398 59% 16%
36 Nolan 315 130 41% 6%
37 Bruun 468 254 54% 13%
38 Garrett 197 97 49% 7%
39 Kennemer 794 451 57% 16%
40 Hunt 948 572 60% 18%
41 Tomei 971 572 59% 15%
42 Bailey 630 320 51% 9%
43 Shields 896 568 63% 14%
44 Kotek 1,389 927 67% 20%
45 Dembrow 878 565 64% 16%
46 Cannon 860 511 59% 14%
47 Smith, J. 1,420 939 66% 19%
48 Schaufler 1,451 943 65% 19%
49 Kahl 1,366 859 63% 20%
50 Matthews 1,078 636 59% 18%
51 Barton 994 558 56% 15%
52 VanOrman 754 402 53% 12%
53 Whisnant 1,474 897 61% 19%
54 Stiegler 1,226 723 59% 17%
55 Gilman 1,179 765 65% 17%
56 Garrard 1,253 908 72% 19%
57 Smith, G. 1,268 822 65% 19%
58 Jenson 1,551 998 64% 23%
59 Huffman 1,464 983 67% 21%
60 Bentz 1,226 866 71% 20%
House District Average 1,056 665 63% 18%

Source: OCPP presentation of IRS data for the 2006 tax year compiled and sorted by legislative districts by the Brookings Institution.

OCPP

OCPP

Written by staff at the Oregon Center for Public Policy.

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