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PEEWAUKEE, Wis. – In line with a new program to aid low-income tax filers, the Wisconsin Credit Union League has announced a linkup with the Wisconsin Department of Revenue to promote Volunteer Income Tax Assistance sites. The joint project, said the league, is aimed at helping the underserved file electronic tax rebates and to reduce the number of high-interest refund anticipation loans, often promoted by tax-help and payday outlets. In promoting its participation with the state, league staffers during the first week of the new year visited with editorial boards at newspapers and radio stations in Milwaukee and Kenosha as part of a media tour. In a statement, the league stressed that its program is designed to help consumers avoid losing large sums on refund anticipation loans (RALs). The league estimates $28.5 million was lost in Wisconsin last year. “Credit unions want to see that low-income people don’t get taken advantage of this tax season,” said Brett Thompson, league president/CEO. “Low-income people who don’t have an account with a financial institution may see a RAL as their only option to get a fast refund. That’s what needs to change.” Under the VITA linkup, CUs in Milwaukee, Madison, Dodgeville, Fond du Lac, Eau Claire, Wausau, Hayward and near the Menominee reservation will be opening deposit accounts for low-income tax filers to receive their tax rebates electronically. Credit union staffers work alongside volunteers from the Wisconsin Department of Revenue at the VITA sites which offer free tax preparation, education and asset-building strategies to the low-income, elderly, disabled and individuals with limited English proficiency. In warning about RALs, the league maintained that in Wisconsin the instruments siphoned as much as $8 million from Earned Income Tax Credits which would have been claimed by recipients during 2003. “The estimated $3 million in RAL fees by federal EITC recipients in Milwaukee denied the city as much as $6 million in economic activity that could have resulted had consumers been spared those costs,” said the League. “RALs are just one example of how predatory services hurt Wisconsin,” Thompson declared. “Just look at the payday lenders popping out of just about every strip mall.” Apart from this project, the league noted that CUs in the state are developing other low cost alternatives for low income individuals under its Real Solutions program launched last year under guidance of Filene Research Institute of Madison. -

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