September 13, 2011 / 1:36 PM / 6 years ago

H&R Block says no refund anticipation loans in 2012

(Reuters) - Tax services provider H&R Block said it will not offer refund anticipation loans during the 2012 tax season, but will continue to provide other low-cost financial products.

<p>A worker at H&amp;R Block tax return services in his office in Annandale, Virginia April 8, 2010. The deadline for Americans to file their 2009 income tax returns in April 15th. REUTERS/Kevin Lamarque</p>

A refund anticipation loan (RAL) is a short-term loan based on a taxpayer’s anticipated federal tax refund and is a highly profitable business for tax preparers. The loans usually last 7-14 days until taxpayers receive their refunds from the U.S. Internal Revenue Service.

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

H&R Block was unable to offer RALs in 2011 after regulators directed its third-party lending bank to stop funding the product.

The Kansas city, Missouri-based company said it will continue to offer other low-cost financial services such as refund anticipation checks (RACs).

RACs allow taxpayers to deduct the cost of tax preparation from their tax refund.

Shares of the company closed at $13.26 on Monday on the New York Stock Exchange. (Reporting by Satyanarayan Iyer in Bangalore; Editing by Supriya Kurane)

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