H&R Block won't be offering any short term loans against tax refund checks this year. Image: MoneyBlogNewz/Flickr.com/CC-BY

This year, H&R Block will not be offering any short term loans against tax refunds. Refund Anticipation Loans, or RALs, are loans lent by a preparer against a potential refund, less a fee. The banking partner of the company was forced out of offering the loans by regulatory bodies.

No more short term loans from H&R Block

The nation’s largest tax preparation service, H&R Block, previously offered a credit product to customers called a Refund Anticipation Loan. The loans, RALs for short, are offered by many tax preparation services. It’s a short term loan against an anticipated tax refund, with a fee subtracted from the refund total. The preparer cuts a check or dispenses instant cash, and the refund check is turned over to the preparation service. In other words, if a person should hypothetically get an $800 tax refund, but needs money now, he or she can get an RAL for $725 against the $800 return. The return check goes to the preparer, if the return is accepted. Recent regulatory action has forced H&R Block to stop offering the loans.

HSBC forced out of bankrolling the loans

According to USA Today, the former partner of H&R Block in funding the cash advances against tax refund checks was HSBC. HSBC was ordered not to proceed with funding any of this type of quick loan to customers by the Office of the Comptroller of the Currency, part of the Department  of the Treasury. This forces HSBC to withdraw from its agreement with H&R Block. H&R Block tried to sue to keep HSBC in the agreement, but was not successful. H&R insists it will have alternatives, but there is likely to be some loss in business as customers from Kansas City to Chicago to San Diego will have to seek RALs from other preparers.

IRS cautions against using RALs

The Internal Revenue Service has long cautioned people not to take RALs against tax refunds. The IRS recommends that people use e-filing, as e-filing through the IRS or affiliated E-file programs is free for some taxpayers, and refund checks can be direct deposited in a couple weeks.

Source

USA Today

Many Toyota drivers are concerned for their safety. Image from Flickr.

Just days after Akio Toyoda apologized to Congress for the multiple recalls of over 10 million Toyota vehicles, a runaway Prius in San Diego is making headlines. While some buyers are looking into auto financing to get the now-reduced cost vehicles, Toyota has recalled several models of its popular Prius hybrid. Toyota has also recalled Avalon, Camry, Corolla, Highlander, Matrix, RAV4, Tacoma, Tundra, Sequoia, and VENZA vehicles. These recalls threaten not only driver’s safety, but is costing the company millions of dollars.

The runaway Prius in San Diego

As reported by the Los Angeles Times article, Toyta Prius owner James Sikes was accelerating to pass another vehicle when “I pushed the gas pedal to pass a car and it did something kind of funny . . . it jumped and it just stuck there.” Mr. Sikes tried to get control of his runaway Prius in several ways, including stomping the brakes, attempting to manually move the accelerator pedal, and putting the vehicle in neutral.

Runaway Prius tailed by California Highway Patrol

Eventually, he called the California Highway Patrol, who sent officers that talked him through cutting power to the vehicle and getting it off the road. The runaway Prius is now going to be examined by a Toyota “field technical specialist” as well as National Highway Safety officials. Mr. Sike’s runaway Prius had been recently taken to the dealer, where he was informed that his Prius was not subject to the Toyota recall.

Runaway vehicles blamed for 56 fatal accidents

The U.S. government has recently launched an investigation into the “timeliness” of Toyota recalls. There have been up to 56 fatal accidents blamed on the alleged acceleration problems with Toyota vehicles. Toyota claims the “sticky” acceleration pedals are due to pedal and floor mat design issues. Toyota claims that the recall fixes these problems, and they are ready for auto loans once again. There are some, though, that blame the problem on Toyota’s electronic acceleration system.

What to do if you are in a runaway vehicle

If you find yourself in a runaway Prius (or any other runaway vehicle) there are a few things that you definitely should and should not do. Thanks to the Washington Post for these pointers.
You should NOT:

• Use your hands to try and adjust the accelerator pedal. This could cause you to lose control of your vehicle.
• Immediately cut power to the vehicle. This seems a logical thing to try, but turning off the vehicle cuts power to the steering and braking system as well, and can lead to accidents.

You SHOULD:

• Put the vehicle in neutral. This will disengage the wheels from the engine, and slow down the car.
• Turn on your emergency flashers. This will let other drivers know there is something wrong.
• Steer carefully to avoid other vehicles.