An Act To Promote Consumer Fairness in Tax Refund Anticipation Loans
Maine Legislature, Session 124, LD 1343
Committee: Insurance and Financial Services
Sponsors: PRATT

FIRST REGULAR SESSIOr~-2009 
Legislative Document 
No. 1343 
H.P.944 
House of Representatives, March 31,2009 
An Act To Promote Consumer Fairness in Tax Refund Anticipation 
Loans 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative PRATT of Eddington. 
Printed on recycled paper 
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MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 9-A MRS A art. 13 is enacted to read: 
ARTICLE 13 
T AX REFUND ANTICIPATION LOANS 
§13-101. Short title 
This article may be mown and cited as "the Maine Consumer Credit Code Tax 
Refund Anticipation Loans." 
§13-102. Definitions 
As used in this article, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. 
"Creditor" means any person who makes a refund anticipation loan or who takes 
assignment of a refund anticipation loan. 
2. 
"Facilitator" means a person who individually or in conjunction or cooperation 
with another person: 
A. Solicits the execution of, processes, receives or accepts application or agreement 
for a refund anticipation loan or refund anticipation check; 
B. Services or collects upon a refund anticipation loan or refund anticipation check; 
or 
C. Facilitates the making of a refund anticipation loan or refund anticipation check in 
any other manner. 
If there is no 3rd-party facilitator because a creditor directly solicits the execution of, 
receives or accepts application or agreement for a refund anticipation loan or refund 
anticipation check, that creditor is considered a facilitator for purposes of this subsection. 
3. 
"Refund anticipation check" means a check, stored value card or other payment 
mechanism representing the proceeds of the consumer's tax refund that was issued by a 
depository institution or other person that received a direct deposit of the consumer's tax 
refund or tax credits and for which the consumer has paid a fee or other consideration. 
4. 
"Refund anticipation loan" means a loan that is secured by or that the creditor 
arranges to be repaid directly or indirectly from the proceeds of the consumer's income 
tax refund or tax credits. A refund anticipation loan also includes any sale, assignment or 
purchase of a consumer's tax refund at a discount or for a fee, whether or not the 
consumer is required to repay the buyer or assignee if the federal Internal Revenue 
Service reduces the consumer's tax refund. 
5. 
"Refund anticipation loan fee" means the charges, fees or other consideration 
charged or imposed directly or indirectly by the creditor for the making of or in 
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connection with a refund anticipation loan. "Refund anticipation loan fee" includes any 
charge, fee or other consideration for a deposit account if the deposit account is used for 
the receipt of the consumer's tax refund to repay the amount owed on the loan. 
6. 
"Refund anticipation loan interest rate" means the interest rate for a refund 
anticipation loan calculated by taking the total amount of refund anticipation loan fees 
divided by the loan amount nrinus any loan fees, then divided by the number of days in 
the loan term multiplied by 365 and expressed as a percentage. The total amount of the 
refund anticipation loan fee used in this calculation must include any refund anticipation 
loan fees. If a deposit account is established or maintained in whole or in part for the 
purpose of receiving the consumer's tax refund to repay the amount owed on a refund 
anticipation loan, the maturity of the loan for the purposes of deternrining the refund 
anticipation loan interest must be assumed to be the estimated date when the tax refund 
will be deposited in the deposit account and any fee charged to the consumer for such 
deposit account must be considered a loan fee and included in the calculation of the 
refund anticipation loan interest rate. If no deposit account is established or maintained 
for repayment of the loan, the maturity date of the loan is assumed to be the estimated 
date when the tax refund is received by the creditor. 
§13-103. Registration and bonding 
1. 
A person may not solicit the execution of, process, receive or accept an 
application or. agreement for a refund anticipation loan .or refund anticipation check 
without registering as a facilitator with the adnrinistrator and meeting the requirements of 
this article. Registration must be filed in the manner prescribed by the adnrinistrator and 
must contain the information the adnrinistrator requires to make an evaluation of the 
character, fitness and financial responsibility of the applicant. The initial application must 
be accompanied by a $500 fee. A renewal registration must include a $200 fee. A 
regis'tration must be renewed every 2 years and expires on September 30th. 
2. A facilitator shall post a bond with the adnrinistrator in the amount of $50,000 to 
pay damages and penalties associated with violations of this article. The bond must 
remain in effect for 5 years after the facilitator ceases operation in the State. 
3. This article does not apply to: 
A. A supervised lender or supervised financial organization; 
B. An attorney licensed in this State; and 
C. A person employed by or serving as a volunteer with a nonprofit organization that 
provides free tax preparation services to taxpayers. 
§13-104. Required disclosures 
A facilitator shall make the following disclosures in accordance with this section. 
1. A facilitator shall pronrinently display a schedule showing the current fees for 
refund anticipation loans or refund anticipation checks at its place of business. Each fee 
schedule must include at least 5 examples of refund anticipation loans in different 
amounts ranging from $300 to $5,000. 
2. A facilitator shall post the following notice to consumers: "When you take out a 
refund anticipation loan, you are borrowing money against your tax refund. If your tax 
refund is less than expected, you will still owe the entire amount of the loan. If your 
refund is delayed, you may have to pay additional costs. You can get your refund in 8 to 
days without paying any extra fees and taking out a refund anticipation loan. You can 
have your tax return filed electronically and your refund deposited directly into your own 
bank account without obtaining a refund anticipation loan or paying fees for an extra 
product." 
3. At the time a person applies for a refund anticipation loan or refund anticipation 
check, the facilitator shall disclose on a form separate from the application the refund 
anticipation loan fee or refund anticipation check fee, the fee for tax preparation or any 
other fee; the time within which the proceeds of the refund anticipation loan or refund 
anticipation check will be paid if the loan or check is approved; and the interest rate if the 
person is applying for a refund anticipation loan. 
4. Prior to the consummation of the refund anticipation loan or refund anticipation 
check transaction, the facilitator shall also provide a copy of the completed loan or check 
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application and agreement and, for refund anticipation loans, the disclosures required by 
the Federal Truth in Lending Act. 
5. If a person applies for a refund anticipation loan, the facilitator shall orally inform 
the applicant that the product is a loan that lasts only one to 2 weeks, that the applicant is 
liable for the full amount of the loan if the anticipated tax refund is less than expected, the 
amount of any loan fees and the interest rate for the loan. If a person applies for a refund 
anticipation check, the facilitator shall orally inform the applicant of any check fee and 
that the applicant can receive a refund in the same amount of time if the refund is filed 
electronically and the applicant chooses direct deposit to the applicant's own bank 
account. 
§13-105. Prohibited activities 
1. A facilitator may not charge or impose any fee, charge or other consideration in 
the making of. a refund anticipation loan or refund anticipation check apart from the 
refund anticipation fee charged by the creditor or bank that provides the loan or check. A 
facilitator may charge a fee for tax preparation if the same fee in the same amount is 
charged to customers who do not receive refund anticipation loans, refund anticipation 
checks or any other tax-related [mancial product. 
2. 
A facilitator may not engage in unfair or deceptive acts or practices in the 
facilitating of a refund anticipation loan or refund anticipation check, including making 
any oral statements contradicting any of the information required to be disclosed under 
this article. 
3. A facilitator may not threaten to take any action prohibited by this article in 
facilitating a refund anticipation loan or refund anticipation check. 
4. A facilitator may not directly or indirectly arrange for any 3rd party to charge any 
interest, fee or charge related to a refund anticipation loan or refund anticipation check, 
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including but not limited to charges for insurance, check cashing or attorney's fees or 
other collection costs. 
5. 
A facilitator may not include any of the following provisions in a refund 
anticipation loan application or agreement: 
A. A hold-harmless clause; 
B. A confession-of-judgment clause; 
C. A waiver of the right to a jury trial in any action; 
D. Any assignment of or order for payment of wages or other compensation for 
services; 
E. All agreement that the consmner will not assert any claim or defense arising out of 
the contract or to seek any remedies pursuant to this Title; 
F. A waiver of any provision of this article; 
G. A waiver of the right to injunctive, declaratory, other equitable relief or relief on a 
classwide basis; or 
H. A requirement that any aspect of a resolution of a dispute between the parties to 
the agreement be kept confidential. 
6. A facilitator I11ay not take or arrange for a creditor to take a security interest in any 
property of the consumer other than the proceeds of the consumer's tax refund to secure 
payment of a refund anticipation loan. 
7. 
A facilitator may not directly or indirectly engage in the collection of an 
outstanding or delinquent refund anticipation loan for any creditor or assignee. 
8. A facilitator may not refer, facilitate or solicit consumers on behalf of a 3rd party 
engaged in check cashing for a fee or permit 3rd-party check cashing for a fee in any 
place of business in which refund anticipation loans or refund anticipation checks are 
facilitated. 
9. A facilitator may not facilitate any refund anticipation loan that is secured by or 
that the creditor arranges to be repaid directly from the proceeds of the consumer's state 
tax refund. 
10. A facilitator may not make a misrepresentation of fact in obtaining or attempting 
to obtain a registration as a facilitator. 
§13-106. Interest rate cap for nonbank refund anticipation loans 
A person may not facilitate or make a refund anticipation loan for which the refund 
anticipation loan interest rate is greater than 36% per annum. The refund anticipation loan 
interest rate must be calculated as set forth in section 13-102, subsection 7. 
§13-107. Advertising and marketing 
1. A person may not advertise or market a refund anticipation loan without including 
in the advertising or marketing materials a disclosure that the product is a loan and that 
tax refunds can be obtained without a loan or extra fees if tax returns are electronically 
filed with direct deposit. 
2. 
A person may not advertise or market a refund anticipation check without 
including in the advertising or marketing materials a disclosure that there is a fee 
associated with the check and that tax refunds can be obtained without a loan or extra fees 
if tax returns are electronically filed with direct deposit. 
§13-10S. Administration and enforcement 
1. The powers and functions of the administrator are as set forth in article 6, except 
that references to consumer credit transactions in article 6 are considered to be references 
to refund anticipation loans. 
2. The administrator shall maintain a list of all registered companies and make that 
list available to consumers, attorneys and others on a publicly accessible website. 
3. The administrator shall require a facilitator registered pursuant to section 13-103 
to annually submit certain data, in a form and manner acceptable to the administrator, 
regarding the facilitator's refund anticipation loan activities. 
4. Beginning March 1, 2010 and annually thereafter, the administrator shall report on 
the status of refund anticipation loan activities in the State. The report must be submitted 
to the joint standing committee of the Legislature having jurisdiction over insurance and 
financial services matters. 
§13-109. Private right of action 
1. A person may bring a private right of action against a facilitator for any violation 
of this article in accordance with this section. 
2. A person may sue for injunctive or other equitable relief. 
3. A person may be awarded actual and consequential damages and reasonable 
attorney's fees and costs. A person may also be awarded statutory damages of $2,500 or 3 
times the amount of the refund anticipation loan fee or the refund anticipation check fee 
or other unauthorized charges. 
SUMMARY 
This bill regulates businesses that provide refund anticipation loans or refund 
anticipation checks associated with tax refunds or tax credits. The bill requires those 
acting as facilitators of refund anticipation loans to register with the Bureau of Consumer 
Credit Protection and post bonds for the protection of consumers. The bill requires 
disclosures to consumers who enter into these transactions and prohibits certain practices 
by facilitators of refund anticipation loans. 
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