H&R Block Loses Funding Bank

By Richard Gibson
Dec 27 2010

H&R Block, the largest income tax preparation company in the US, announced this morning that they have lost the funding partner bank for their popular rapid refund loan service.

The H&R Block officials said that the bank that was normally used to offer customers instant tax refund loans has been forced by federal regulators to end the practice of offering the loans. The bank was taken over by the federal regulators earlier this year after their assets became unstable and they were at risk of failing as many other banks did.

Now H&R Block is in danger of losing millions of customers to competing tax preparation firms that still offer the loan service. Tax refund loans are often considered a risky venture because there are times when the loans are not repaid after the IRS denies the refunds. This is a common occurrence for those that have been trying to avoid paying back taxes.

H&R Block is not likely going to be able to recover this year for the busy tax season. It takes months to find a bank willing to take the risk with the refund loans. This could mean that H&R Block could suffer a tremendous blow to their bottom line this season during the time where they would normally make millions of dollars.

Company leaders have said that they will attempt to find a new bank to takeover for the current bank before the tax season gets under way but they are not sure that they will be able to make this happen.