NEW YORK-Get your W2s ready.it's officially tax season. It's also the time of year when we see advertisements from commercial tax preparers offering "instant" money back on your tax return. To combat what are considered predatory lending practices by commercial tax preparers, Lower East Side People's FCU has announced that it will offer an alternative to Refund Anticipation Loans used by lower-income people who seek instant access to tax refunds. LESPFCU announced its "Fair and Fast Tax Refund Loan" at a press conference kicking off its fourth year of free tax-preparation services to New Yorkers as part of the Internal Revenue Service's Volunteer Income Tax Assistance Program. "In spite of its size, LESPFCU has made a positive impact on the lives of thousands of people who, without the access to affordable financial and development services that we offer, would have no other alternative than to go to predatory lenders, check cashers and abusive tax-preparation operators," said Pablo DeFilippi, LESPFCU board member. "People in this community are now better off because of our efforts and commitment to the underserved." According to figures released by the National Consumer Law Center and the Consumer Federation of America-nonprofit organizations focusing on consumer issues and advocacy, particularly in relation to low-income people-consumers paid $1.24 billion in RAL fees during the 2004 tax-filing season (the most recent year for which data is available) and $360 million in "administrative" or "application" fees. While RAL fees are up from an estimated $1 billion the year before, administrative/application fees are down from $389 million and are expected to continue to decline because of pressure placed on the largest commercial tax preparers to eliminate the charge. NCLC/CFA data shows RAL fees ranging from $29 to $120 per application, with an additional $29 to $39 for "instant" funds. Based on these fees, the effective annual interest rate for an RAL ranges from around 40% (for a loan of $9,999-the maximum allowed) to more than 700% (for a loan of $200). In addition, consumers using commercial tax preparers can expect to pay an average of $146 for tax-preparation fees and $65 to cash their RAL check. In comparison, LESPFCU is prepared to offer for its refund loans a $25 flat fee and an APR of 10% over the life of the loan, which generally lasts seven to 14 days. As a partner in the IRS VITA Program, LESPFCU offers free tax preparation, including e-Filing and direct deposit-which in combination may result in a refund being received in two weeks or less. "Last year, we did a survey," DeFilippi said. "Many people who wanted the money immediately went somewhere else-like an H&R Block-even if they had to pay. This year, we wanted to make sure they didn't walk away." Since it began as a partner in the VITA Program in 2003, LESPFCU has processed 2,849 tax forms, resulting in nearly $4 million in refunds available largely through the Earned Income Tax Credit. It also has gained nearly 200 new members through the process. In 2005, LESPFCU expanded its free tax-preparation service through additional hours and a second location. [email protected]