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27 Dec 2010 14:34


Biz: H&R Block can’t loan you your tax refund early anymore, guys

  • situation H&R Block offered instant loans to those who didn’t want to wait a couple of weeks to get their tax refund – which often benefited low-income customers.
  • conflictUnfortunately for them, the US government stepped in and forced the bank backing the loans, HSBC, to stop offering them, in part due to their very high interest rates.
  • defeatThe decision was made very late last week, and now H&R Block’s stock is down by a solid 10 percent, because they don’t have a backup for HSBC’s loans. source
  • » A weakened competitive position: Unfortunately for H&R block, that 10 percent drop isn’t the only bad news they have to deal with. See, the IRS informed HSBC and Republic Bancorp that they wouldn’t be underwriting the controversial loans anymore, and wouldn’t be informing tax services which consumers were eligible for said loans. But their top competitor, Jackson Hewitt Tax Service, managed to find other banks to offer the service, so as a result, they’ll have a significant competitive advantage over H&R Block next year – which has caused H&R Block’s stock to lose nearly half its value and Jackson Hewitt to skyrocket 37 percent in recent weeks. Just a tip to our friends who use these loans – their interest rates are predatory in nature, so be careful.