JPMorgan Chase will stop financing tax-refund loans for about 13,000 independent preparers, sources said, in a move that could drive customers toward H&R Block.
Refund-anticipation loans are used by clients who want cash immediately and take short-term loans based on the expected amount of their refunds.
But consumer groups say the loans put people deeper in debt, with interest rates that can exceed 100% on an annualized basis.
"It gets a lot of bad press," said Stephens analyst David Burtzlaff. "The consumer groups hate it. It falls under the same stigma as payday loans and I don't think banks want the attention it brings."
"Bankers don't like the consumer advocacy groups picketing outside their offices," added John Hewitt, CEO of Liberty Tax Service.
The National Consumer Law Center estimated 8.7 million taxpayers took out such loans in 2008, paying $738 million in fees. H&R Block controlled 45% of the market last year, according to Northcoast Research.
No. 2 tax preparer Jackson Hewitt said in December that it wouldn't receive approval to originate new refund-anticipation loans.
http://liveconcerns-waleed.blogspot.com/
No comments:
Post a Comment