RALs Day

Newark        Jordan Ash, director of the ACORN Financial Justice Center, and I joke about a day last fall in Orange County, called “Sup-Prime Day,” when we hit 3-4 sub-prime companies all over the county in one gasp.  Today was “RALs Day” in New Jersey. In the same way, we (Jordan, me, and Pedro Rivas, NJ ACORN state chair) met our partners, Jackson-Hewitt, H&R Block, and their financier for the RALs (refund anticipation loans), HSBC.  A day spent talking about progress being made in moving away from a tax product that in the worst case is by definition predatory (i.e. if people were not DESPERATE for the money then why would they pay 200%+ interest?) and in the best case is a “necessary evil” that we are all (in various ways and to various degrees) trying to make as good as we can.

    Jackson Hewitt was more a catch-up courtesy call because we were in the neighborhood, but with HSBC and H&R Block we got down to hard rock and serious business.  Amazingly, in what could have been one of the more depressing days of the year, it is delightful to really be leaving Jersey feeling like there is both solid progress being made and, perhaps more importantly, that we are on the verge of even more progress.  

    Why?

    Different reasons in different cases, but in each case it boils down to something very interesting and momentous, which says to us that we better get hard on the job and start being creative because our partners are moving forward.

    HSBC is doing a total and complete review of its business with these products.  Ok, you say.  Blah, blah, blah, and, hey, Wade, can I interest you in a bridge going across the Mississippi?  But, we have already seen something important when HSBC walked away from “pay stub” loans, which were a viperous product that Jackson Hewitt tried out with HSBC’s financing, which allowed a customer to try to get a loan before the end of the year and their receipt of their w-2 based on their pay stubs.  HSBC calls this a “pre-file” loan, which must be like a pre-owned car or something.  Anyway, HSBC decided that the product was too sketchy for them, called us so that we were able to comment (and APPLAUD) immediately, and walked away from the product — and the money.  Why?  Because they are looking to make sure they don’t HURT THEIR GLOBAL brand.  Now you see why we are optimistic.  Their interests and ours now align, because if they don’t want to hurt the brand, then they are going to be listening carefully to us before they get some of this on their shoes where they can not easily rub it off.  We felt like we took a great step forward.

    In the H&R Block case we have had a partnership for the last 3 years that came out of a contentious campaign, and both of us felt like we have come to a better place with something to show for it all.  The meeting was a real dialogue and very encouraging to all of us because H&R Block seems to be getting it:  they really want to understand how to serve (I know this sounds corny, but they are developing a sustainable model here!) the low- and moderate-income constituency.   They want to live and die with our people, and they understand that our partnership could be vital and critical for both of us.  They had great ideas and some fascinating products for both pilot and widespread rollout.  It was very exciting and encouraging to be there.

    The best thing about door knocking at all levels, whether street-by-street in the neighborhood or running around New Jersey, is that no matter what you expect and no matter how hard you prepare, you still never know how to measure the progress until you put the knuckle to the wood, hit that door, and let the ask roll off your tongue.  Sometimes, the surprises make the work worthwhile!

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