H&R Block may not be able to offer Refund Anticipation Loans (RAL) for 2011 tax season

Last week H&R Blocks stocks plummeted to the lowest they’ve been since 2001, after news that the national chain may not be able to offer Refund Anticipation Loans (R.A.L.) for the upcoming tax season.  More recently the stocks are teetering up and down as news about their legal dispute with H.S.B.C., the bank they use to offer Refund Anticipation Loans, continues to be discussed.

The shares have fallen 52 percent this year, the worst in the Standard & Poor’s 500 Index.                                                                              – David Scheer, Bloomberg.com

All of this began when the Internal Revenue Service announced that they will not issue debt indicators to banks anymore.  The debt indicator would notify the bank  when taxpayers qualify for refunds claimed on their tax forms.  Without this indicator some banks are finding that offering Refund Anticipation Loans may be a little too risky.

“Absent performance by HSBC during the next two months, Block will not be able to offer these products” during the 2011 tax season, Kansas City, Missouri-based H&R Block said in an Oct. 15 lawsuit…                                                          – David Scheer, Bloomberg.com

H.S.B.C does not want to uphold their contractual obligations and allow H&R Block to offer Refund Anticipation Loans for the coming tax season and this will seriously impact their ability to maintain client relationships with taxpayers who choose to use these products.

H&R Block said it cannot find a comparable alternative source of financing for these products at such a late date…

For its most recent fiscal year, which ended April 30, H&R Block reported $146.2 million in revenue from loan participation fees and related revenue. About 40 percent of its tax preparation clients bought a settlement product in fiscal 2010.                                        – James Dornbrook, Kansas City Business Journal

R&G Brenner will continue to offer  bank products including Refund Anticipation Loans* for the coming tax season 2011.  We do not suggest the use of these products as the interest rates are exorbitant, however we understand that our clients want the ability to choose from several options when submitting their tax returns.  Though the I.R.S. changes have made it increasingly difficult to offer these types of products, we strive for customer satisfaction and continue to provide the options our clients desire.

Sources:  Bloomberg.comKansas City Business Journal

* loans offered through Republic Bank

  • jennifer

    i dont think its right. i had my taxes done at hrblock for years and i gone to them because i trust them and i get my money faster and we our refund when we need it so we can get out of debt. we did our taxes last week and we were not aware of all of this until they asked us how would we like our refund and the option we alwasys had available wasnt then. and we were scared and hopeless with no money that we thought we were going to get and we werent told by hrblock assoc. while doing taxes we were thinking everything was fine. i wont go back to hrblock. they didnt inform their customers that there was no ral. that is not right i felt like i was sucked in by then.

  • manager

    We understand what you mean and it is unfortunate that you had to experience the let down of not being able to get a product you were accustomed to receiving. Their television advertisements also mentioned “Get Money Fast” which would imply that they do still offer the Refund Anticipation Loan. However the truth is they can only offer Refund Anticipation Checks which do not get refunds back any faster than a regular electronically filed return. We would be happy to assist you in the future and if you would like we also offer a Free Tax Review of your last three years income tax returns at no charge and with no obligations.

  • bestonlinedatingsites.org

    This is your best post yet!

  • patsy rambo

    which h and r block doing the ral loan…heard one in paris texas is who else near oklahoma call me 5803148042

  • I am unaware of any HRB location offering any RAL’s.