NACOGDOCHES, TX (KTRE) - Normally chairs at the Nacogdoches H&R Block office would be filled with customers anxiously thinking,"Oh boy, I could have money in my hand," exclaimed office manager Cindy Hearne.
H&R Block is no longer in the business of selling loans against an anticipated refund. Federal regulators instructed the company's partner bank to stop fronting the money. It's too risky following an IRS decision made earlier this year.
"They no longer are giving out private information on whether or not our clients owe back government debts," explained Hearne.
That would be something like delinquent child support and student debts. The kind of thing that prompts the government to keep that refund which leaves the tax preparation service holding the note.
"And now they have no way of knowing this, so the banks will be out a lot of money with no way to collect it," said Hearne.
Increased regulatory pressure is evident in other areas. Beginning soon, all tax preparers must prove continuing tax education hours. The days of furniture stores and car insurance businesses offering free tax service to lure customers in may be numbered as well.
Some of H&R's competitors still offer refund anticipation loans, but high fees remain. Now H&R Block is joining what consumer advisors have been saying all along.
"The 8-15 day period is not that far away and by the time you look at how much money they saved by just waiting that few extra days, it's a whole lot better for the consumer right now," said Hearne.
It's money that would otherwise be going toward fees so you can borrow your own money.