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Terms Used In New Jersey Statutes 17:11D-3

  • Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
  • Forbearance: A means of handling a delinquent loan. A
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC
3. a. Any tax preparer offering, facilitating, or making refund anticipation loans shall comply with the provisions of the “New Jersey Consumer Finance Licensing Act,” sections 1 through 49 of P.L.1996, c.157 (C. 17:11C-1 et seq.), N.J.S.2C:21-19, and R.S.31:1-1 et seq. The interest rate for any loan shall include any rate, fee, charge, consideration, or other thing of value received or retained by, or credited to, the lender, directly or indirectly, for the loan or forbearance.

b. At the time a tax preparer offers or facilitates a refund anticipation loan to the client, the tax preparer shall provide, and verbally explain, to the client the following statement, to be printed in at least 14-point type:

NOTICE TO BORROWER

THIS IS A LOAN. THE ANNUAL PERCENTAGE RATE (APR), BASED ON THE ESTIMATED PAYMENT PERIOD IS (fill in estimated APR). YOUR TAX REFUND WILL BE USED TO REPAY THE LOAN. AS A RESULT, THE AMOUNT OF YOUR REFUND WILL BE REDUCED BY (fill in the dollar amount) FOR FEES, INTEREST AND OTHER CHARGES.

AS AN ALTERNATIVE TO THIS LOAN, YOU CAN RECEIVE YOUR FULL REFUND IN APPROXIMATELY TWO WEEKS IF YOU FILE YOUR RETURN ELECTRONICALLY AND THE INTERNAL REVENUE SERVICE WILL SEND YOUR FULL REFUND TO YOUR BANK ACCOUNT.

c. If, under the terms of the refund anticipation loan, the client is subject to additional interest when a refund is delayed, the following statement shall also be included in the notice:

IF YOU CHOOSE TO TAKE THIS LOAN AND YOUR REFUND IS DELAYED, YOU MAY HAVE TO PAY ADDITIONAL INTEREST.

d. A tax preparer may use an alternative disclosure in lieu of the disclosure set forth in subsections b. and c. provided that:

(1) the information provided to the taxpayer in the alternative disclosure includes information substantially equivalent in scope and content to the specific language set forth in subsections b. and c.;

(2) the alternative disclosure includes a chart listing examples of the refund anticipation loan fees and Annual Percentage Rates, calculated using the guidelines established under the federal Truth in Lending Act, title I of Pub.L.90-321 (15 U.S.C.s.1601 et seq.), for loans of at least three different representative loan amounts; and

(3) the alternative disclosure includes a chart listing the estimated timelines for the delivery of funds to the taxpayer under various delivery methods, including Internal Revenue Service mailed check, Internal Revenue Service direct deposit into a taxpayer’s preexisting bank account, and through a refund anticipation loan.

L.2007, c.258, s.3; amended 2009, c.53, s.67.

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