Bob Lawless over at Credit Slips is reporting an interesting development that tosses a wrench in the gears for H&R Block and their continued promotion of Refund Anticipation Loans for people that believe they will get a tax refund.
Lawless said in his post:
I used to think of these firms as tax preparers with a high-priced lending product attached to them. Now, I wonder whether they have not become high-priced consumer lenders with a tax preparation service attached. – Source
The Wall Street Journal reported:
H&R Block Gets Cut Off on Funding For Refund Anticipation Loans by Steve Rhode
Analysts have estimated the elimination of the refund loans could lower H&R Block’s operating profitability by 10%, but that may be partly priced into the stock already. RAL-participation and related revenue made up just 3.8% of total revenue in fiscal 2010. The company prepared 20.1 million U.S. returns in fiscal year 2010, and 16.8% also purchased a RAL. – Source