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WASHINGTON – NCUA Board Member Debbie Matz attended the opening of Lower East Side People’s Federal Credit Union’s third free tax preparation and financial education site for people of low-to-moderate income. LESPFCU is the first credit union to request a grant from NCUA to help offset the costs of opening a Volunteer Income Tax Assistance site. More grants are available for credit unions with predominantly low-income fields of membership. “Insidious refund anticipation loans are portrayed as assistance to taxpayers who can’t wait several weeks for their refunds. In reality, they are hurting the people who need those refunds the most,” Matz, a native New Yorker, stated. “For just a 10-day advance on a $2,000 refund, major tax preparers charge an average loan fee of $75, plus a $40 fee for e-filing – even though e-filing is free for taxpayers who don’t need a loan. These fees do not, at first, appear excessive. In fact, however, they result in an Annual Percentage Rate of over 200%. Since refund anticipation loans are largely unregulated, the vast majority of victims are unaware that they’re paying these usurious rates and fees.” Because the VITA program is offered at the credit union, it also encourages low-income workers to join up by starting a savings account. Program volunteers are trained through a partnership with the Internal Revenue Service to help low-income workers file their income tax returns, claim tax credits, and avoid refund anticipation loans. VITA also helps low-income workers claim their Earned Income Tax Credit worth up to $4,400 a year. According to Matz, 25% of low-income families do not claim the credit. “That’s $7 billion that could be used for food, clothing, and homes in low-income communities,” she said. Also attending the VITA grand opening were Congresswoman Nydia Velazquez (D-N.Y.), New York City Councilwoman Margarita Lopez, New York City Housing Authority Chairman Tino Hernandez, New York City Consumer Affairs Commissioner Gretchen Dykstra, and Internal Revenue Service Territory Manager Michael McCormick. [email protected]

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