Houston City Controller Annise Parker is warning Houstonians to stay away from costly tax refund anticipation loans offered by commercial tax preparation services. “Refund anticipation loans carry hefty fees and annualized interest rates estimated to be 60 to 650 percent or more,” said Controller Parker.

Refund anticipation loans are short-term cash advances arranged by tax preparers for people who file their returns electronically. The money is paid back to the lender when the tax refund arrives. “These high-cost loans are marketed to those who can least afford them, the working poor,” said Parker. “A tax refund is money rightfully owed to you by Uncle Sam due to overpayment of income taxes in the previous year. There is no need to pay someone else a big fee to get it back a couple of days sooner.”

In Houston , low-to-moderate-income residents have access to free tax preparation services at 17 Neighborhood Tax Centers (NTC) operated by Neighborhood Centers Incorporated. Controller Parker urges qualifying residents not to miss the opportunity to claim the Earned Income Tax Credit. It is estimated that working Houston families lose between $15 and $35 million in unclaimed EITC dollars. Taxpayers who file their returns electronically can expect to receive their refunds in three weeks. The wait will be two weeks or less if utilizing direct deposit. For more information, please call 2-1-1 , the Texas United Way/HELPLINE.

Controller Parker believes her advocacy on behalf of the working poor is a natural extension of her responsibility as Houston 's financial watchdog. Her Bank on Houston program is aimed at convincing residents to open accounts at mainstream banks and credit unions and to stop utilizing expensive check-cashers, pawn shops and payday loan outlets. 20 banks and credit unions are participating. The program also offers access to free financial education classes. More information is available at www.bankonhouston.org .

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