H&R Block loses tax refund loan banking partner

[The Straight Story]

H&R Block loses tax refund loan banking partner

Millions of H&R Block Inc. customers who relied on short-term loans backed by their anticipated tax refunds will not have that option this year since Block's banking partner was forced by federal regulators to stop offering the loans.

Block could lose millions of dollars in revenue, because a large percentage of its customers use refund anticipation loans.

RALs, typically used by low-income customers who file their taxes early in the season, are short-term loans backed by an expected federal income tax refund.

It's a blow to Block, which one analyst said could lose up to 7 percent of its customers to competitors still offering the loans.


http://www.businessweek.com/ap/financialnews/D9KCD3900.htm

[Statistical]

1. Yeah. No ripoff loans to poor and lower middle income Americans.

The APR on so called "rapid refunds" is well over 100% often more expensive than payday loans.

Bad news is other providers still have them so many low income Americans will likely just switch to where they can get their money "the fastest" and get ripped off there.

[Travis_0004]

5. I think we will start seeing less of these anyway

In the past, a tax preparer could log onto the IRS website, and see if a person owed the IRS money (unpaid taxes, deliquent on student loans etc). If so, then the IRS will not issue a refund, so the preparer knew upfront not to offer a loan.

This year, the IRS is not providing that information, so a refund anticipation loan is a lot more risky. A company could issue out a big check, then when the IRS gets the tax refund, they will keep it to pay back money owed, and the refund company looses out big, so I think we may see less of them anyway.

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[hobbit709]

3. If you file early-like before the end of Feb.

It usually just takes 3-4 weeks to get your refund. That's what I always did. Why would I pay loan shark rates to get MY money.

[meegbear]

4. One glaring omission in the article; it doesn't say which bank they've used

[Ruby the Liberal]

6. HSBC

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4674803

[meegbear]

7. Thank you!

:hi:

[Lakerstan]

8. HSBC has been trying to get out of this type of loan for a while

but they had a contract with H&R Block (HSBC bought Household Bank). The new law and a ruling by the OCC allowed them to get out of this contract, and now they won't be doing this type of loan anymore.

[Ruby the Liberal]

9. Well, I have to say - good for them

Usury is evil.