This "Analysis" is Not Even Close
Reader comment on: HSBC, H&R Block, and Refund Anticipation Loans
Submitted by Clare CPA (United States), Dec 27, 2010 22:38
Bank charges have come down on these in the past 2 years or so but preparers have traditionally padded the bank fee by $100 or more, and gotten kickbacks of $50 or so from the banks. I've seen APR's in excess of 300% for a 2-week loan, on top of ridiculous tax prep fees for simple tax returns.
And this year IRS eliminated the "debt indicator." They've been ensuring at e-file that the banks will get their money in 10-14 days. There was going to be a high level of credit risk in the loans this year; that's what the OCC was reacting to.
H&R Block has been ripping people off for years with the assistance of IRS & the banks, who have also been well compensated. IRS agreed because it increased e-filing rates & cut their processing costs. Now that stops.
BTW, IRS is speeding up refund processing, and within a couple of years, 2 or 3 days will be more like it.
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