H&R Block will not offer
Refund
Anticipation Loans in 2012
September 14, 2011
H&R
Block announced today that it
will not offer refund anticipation loans (RAL) during the 2012 tax
season.
However, the company will continue providing low-cost financial
solutions next
year.
“We
evaluated our options to determine
what was best for our clients, the business and our shareholders,” said
Bill
Cobb, H&R Block president and CEO. “Knowing we had a strong
2011 tax season
without RALs, our analysis did not present a compelling reason to bring
back
the product in 2012.”
A
RAL is a short-term loan based on a
taxpayer’s anticipated federal tax refund. RALs were critical to
taxpayers when
IRS refund delivery times took up to eight weeks. But, with recent
modernization efforts, the IRS estimates taxpayers will wait two weeks
or less
for their refunds in 2012, reducing the financial necessity for
choosing a RAL.
H&R
Block will continue offering
its clients low-cost financial solutions such as, refund anticipation
checks
(RAC). A RAC is not a loan. It is a convenient product for taxpayers
who want
to deduct the cost of tax preparation from their refund. The customer’s
RAC
proceeds can be deposited onto a reloadable H&R Block Emerald
Card that is
accepted at more than 1 million ATMs nationwide. It is an especially
useful
product for unbanked taxpayers looking for a low-cost way to establish
a
year-round banking relationship.
H&R
Block, which was a leader in
reducing the overall cost of RALs, did not offer RALs in 2011 after
regulators
directed its third-party lending bank to stop funding the product.
However,
some smaller tax preparation firms were still able to offer RALs due to
different regulations imposed on their lending banks. H&R Block
strongly
believes this regulation should be consistent across the tax
preparation
industry.
“The
expertise of our tax professionals and
our superior client service resulted in H&R Block growing new
clients by
nearly 19 percent last year -- even without a RAL,” said Cobb. “With
our consistently
strong lineup of products, we believe 2012 will be another great tax
season for
H&R Block.”
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