H&R Block Gets Cut Off on Funding For Refund Anticipation Loans

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:

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

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