Democratic outside groups raise more than $25M in second quarter

Five of the nation's largest outside political groups supporting Democrats raised more than $25 million in the second quarter, the organizations announced Friday.

The disclosure comes from four super PACs, including one formed by former aides to President Barack Obama called Priorities USA Action, and one non-profit, American Bridge 21st Century Foundation. The super PACs are required by law to reveal their donors and can promote individual candidates for public office, while the non-profit is not legally required to reveal its funding base. All told the five groups raised $25.5 million.

"Together we're ensuring that Democrats will have the resources to level the playing field and fight back against the right's attacks in order to keep the White House, maintain a majority in the Senate and take back the House," representatives from all five groups said in a joint statement.

The amount is only a fraction of the money raised by prominent conservative groups in the past. American Crossroads, a super PAC co-founded by Republican strategists Karl Rove and Ed Gillespie, raised $4.6 million in the month of May alone. Restore Our Future, which supports Mitt Romney's presidential campaign, raised about $5 million in the same month.

More details about the fundraising numbers, including the sources of the funding for the super PACs, will be released next week.

Here's the breakdown:

Priorities USA Action: $11.7 million

Majority PAC: $5.4 million

House Majority PAC: $4.3 million

American Bridge 21st Century/American Bridge 21st Century Foundation: $4.1 million (combined)

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Say 'No' to Tax Refund Anticipation Loans, Consumer Groups Advise (ContributorNetwork)

Illinois ' Attorney General Lisa Madigan is the latest consumer advocate to warn the public that refund anticipation loans are a bad deal. Madigan told Illinoisans Tuesday that consumers should not mistake these loans for advances on tax refunds. The high-cost short-term loans typically come packaged with attached fees for tax preparation, tax filing, electronic filing, and even check cashing. RALs previously have been identified as predatory by numerous consumer advocates including the National Consumer Law Center and the Consumer Federation of America.

What is the alternative for taxpayers who say "no" to RALs? Consumer advocates say it's filing a return electronically and getting a tax refund direct deposited from the IRS in as little as 10 days. Some states issue their tax refunds even more quickly.

Changes in the RAL Market

Smart Money looked at the RAL market last month after federal regulators knocked one of the big players- H&R Block- out of the game. The Office of the Comptroller of the Currency ordered H&R Block's banking partner HSBC to cease issuing RALs. Tax preparer Jackson Hewitt is set to assume the lead as the primary RAL issuer as federal tax season goes into full swing.

With the removal of HSBC from the RAL market, Jackson Hewitt's lender Republic BankCorp. Inc is now the only major player left. The Federal Deposit Insurance Corporation warned Republic earlier this month that its RAL practices were "unsafe and unsound," a warning that came to light when the bank made a required disclosure to the Securities and Exchange Commission.

The Advantages and Disadvantages of RALs

The advantages of RALs are legion- for the bank issuing them. The disadvantages are equally legion for consumers who at best obtain some of their tax refund a few weeks early at an excessive cost. Consider:

* Republic's $61.22 fee for a $1500 loan is the equivalent of 149 percent Annual Percentage Rate interest.

* Banks issuing RALs took $600 million from 7.2 million taxpayer refunds in 2009 (a decrease from 2008 when they took $738 million from 8.4 million taxpayers.)

* Not only is the charge for RAL issuance typically excessive, it is paid upfront before the remainder of the refund is released to the taxpayer. Wisconsin 's Dept. of Revenue warns that state's consumers that if the tax refund falls short of the expected amount, the consumer is on the hook for the balance of the loan.

* Banks may cite checking account costs as reasons a consumer should agree to an RAL rather than simply open an account and have a tax refund direct deposited. However, government agencies say that free bank accounts are widely available. Simply typing "free checking no minimum balance account" into a search engine will turn up a variety of potential free bank account options.

The Internal Revenue Service is considering a ban on RALs. But unsurprisingly, the IRS's concern is not abuse of taxpayers by predatory lenders. Instead, the IRS is concerned that the potential for receiving an RAL may encourage fraud, either by the taxpayer himself or unscrupulous tax preparers.

Carol Bengle Gilbert writes about consumer issues for the Yahoo! Contributor Network.

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