Tax Anticipation Business

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    We have a “good” business customer who has requested that we set up checking accounts for his tax anticipation customers through our bank. There would be an agreement with the customer to allow an account to be set up in their name to receive their tax refund from IRS and waive any rights they have to that deposit when it comes it and allow the withdrawal of that money by the “good” customer to repay a tax anticipation loan with the business. The account would then be closed. We would receive a fee for this process. I know we would have the issue of BSA identification to handle, but where else could be be crossing into territory that we do not want? Would this make us the lender and require us to disclose as if we are actually doing the tax refund anticipation loan…ie truth-in-lending disclosures?

    It just does not ring good bells anywhere for me, but I have been asked to give a “why not” to this request!


    It appears that your customer is making the loan. If your customer makes more than 25 loans per year, then the customer is covered by the Truth in Lending Act and Regulation Z, and is responsible for providing a Truth in Lending disclosure.

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