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Tax Preparers Want NY Restrained From|Going After Refund Anticipation Loans

MANHATTAN (CN) - Jackson Hewitt Tax Service wants the State of New York restrained from its "broad campaign to halt or limit the market of (tax) refund anticipation loans". The state's campaign is based "on the theory that RALs are marketed to minorities and military personnel," and that they are "abusive, high cost loans," but Jackson Hewitt says the loans are legal.

Jackson Hewitt sued the New York Commissioner of Human Rights in Federal Court. It claims the commissioner "has commenced investigations against tax preparation companies that facilitate RALs, including the three major tax preparation companies: H&R Block, Jackson Hewitt, and Liberty Tax Service. While ostensibly proceeding against tax preparers on the theory that RALs are marketed to minorities and military personnel, the target of the Division's investigation is clear: the existence and the availability of RALs in New York, which the Division believes are 'abusive, high cost loan(s)' and which the Division has repeatedly advised all consumers in New York to boycott."

But Jackson Hewitt says, "RALs are lawfully made in each of the fifty states." And it says the National Bank Act of 1864, 12 USC § 21 pre-empts state regulation.

Jackson Hewitt's lead counsel is Skadden Arps.

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