Consumer Credit Regulation: 15.2.1.3 TILA and RACs
Banks claim that TILA does not apply to RACs, arguing that RACs are not loans because no monies are disbursed until the bank actually receives the tax refund. However, in many cases, consumers purchase a RAC solely for the purpose of deferring payment of the tax preparation fee until the refund arrives. In such cases, the RAC really represents a loan of the tax preparation fee and TILA disclosures should be made if there is a charge to defer payment.