Bank Agrees To Stop Tax Refund Loans To End FDIC Suit

Law360, New York (December 9, 2011, 7:44 PM EST) -- Republic Bank & Trust Co. has settled its dispute with the Federal Deposit Insurance Corp. and agreed to stop funding refund anticipation loans after April, according to documents filed with the U.S. Securities and Exchange Commission on Thursday.

The short-term loans, which allow taxpayers to borrow against their anticipated tax refunds, have come under fire from the FDIC and consumer groups. Consumer advocates say the loans often have exorbitant interest rates and prey on low-income taxpayers. The FDIC has pressured banks to stop funding the loans,...
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