H&R Block Blocked?

October 19, 2010

Today’s Wall Street Journal reports that H&R Block has filed suit against a unit of HSBC that is balking at its commitment to provide refund anticipation loans for Block’s customers. As we reported in August, the IRS has announced it will no longer provide “debt indicators” that are a key piece in the processing of these loans because the loans are unnecessary now that the IRS is able to process refunds in a matter of days. Block’s suit alleges that HSBC is using this development as an excuse to get out of a prior commitment when the real reason is that the bank simply doesn’t want to be in this business.

The RAL industry is highly profitable but often criticized for persuading people, especially those with modest income, to take expensive loans that make tax refund money available only a few days faster.