You are here

Block Says "No RALs in 2012"

Adam Rust's picture

Posted September 13, 2011

H&R Block confirmed that it will not offer refund anticipation loans during the 2012 tax season. Block did not have RALs last year.

New Block CEO Bill Cobb attributed the preparers willingness to go into the season without RALs to

the success that the company experienced in 2011 without a refund loan product.

Block said that it would continue to offer other financial products.

"Knowing we had a strong 2011 tax season without RALs," said Cobb, "our analysis did not present a compelling reason to bring back the product in 2012."

Block did not give up its RALs easily. HSBC sent Block a letter that it would no longer partner to offer the loans last fall. At the time, Block had a contract with HSBC to have a loan program. Block sought remedy through the courts.

Block expected that the loss of a RAL product would translate into less traffic for their services. Contrary to that prediction, Block had a good year in 2011. Block filed 24.5 million returns in 2011, which represented an increase over 2010 of 5.6 percent. They filed one of every six returns in the entire country. Those gains were more impressive given that lower rates of household formation and a slumbering economy contributed to a  flat change (up 4/100ths of one percent) in total returns nationwide.

In their September 10-q, Block reported that it had $11 million in revenues from its Emerald Card. For the three months ending on June 30th, 2011, NetSpend reported approximately $75 million in revenues.