Jackson Hewitt Loses Bank Funding for RAL’s

Jackson Hewitt’s key bank has reportedly cut off most of the money it used for tax refund loans.

Regulators ordered Santa Barbara Bank & Trust to stop providing the loan money, which covered about 75 percent of Jackson Hewitt’s financial products program, according to a regulatory filing by Jackson Hewitt reported by Bloomberg. Shares of the company, the No. 2 tax preparer behind H&R Block, dropped $1.34 to $4.50 on Thursday.

The Office of the Comptroller of the Currency told Santa Barbara Bank & Trust on Dec. 18 that the lender would not receive regulatory approval to originate the refund anticipation loans in 2010, according to a statement from the bank’s parent, the Pacific Capital Bancorp. A bank spokesman, Tony Rossi, said that “the tax refund loan business is a sort of niche business that falls outside of what would be considered core banking operations.” The bank signed a nonbinding letter of intent with a private equity firm to sell the tax business, the statement said.

Tax preparers are locked in a battle for customers, with Jackson Hewitt vowing this month to regain market share from H&R Block. Firms can attract clients with refund anticipation loans, in which customers who need cash immediately can get a short-term loan, typically lasting a few weeks, that is based on the expected amount of their tax refund. Jackson Hewitt, with 6,600 outlets and almost 3 million clients, has been losing customers to H&R Block and Intuit, which makes TurboTax software. It suspended its dividend in March and has hired Goldman Sachs to explore “strategic alternatives,” language that typically means a company may be sold.

9 Responses to “Jackson Hewitt Loses Bank Funding for RAL’s”

  1. Anonymous

    It’s never too late, talk your papers and walk away…

  2. Bridgette Price

    I think Jackson Hewitt is basically a wash now. I could have done my taxes on my own for free and got my money sooner. They still have a sign up saying get your money in as little as one day, so that is why I went there instead. They did not tell me they don’t offer that service no more until it way too late to back down. I do not think there services are really of use. I did a RAL however I don’t get my money til irs gives it to them so why am I paying interest on something I don’t have?? And still I will have to wait 2 to 3 days after the irs gives them my money before I get a check. Really, they should be paying me the interest for holding it. Once again, Jackson Hewitt has lost another customer for good.

  3. Rickey Long

    My daughter Shonda use JH ral the same night we did our taxes and she got her but we didnt. Shonda will be 19 on the 20th and the lady told her she wouldnt get her back. JH doesnt know the bank’s # so i can call them. I dont own irs anything and JH said that is all irs doing. JH just dont want to stand up at the base and face me and let know why i got decline so the hell with yall at JH

  4. Janice

    I like those that filed with Jackson Hewett thought that I was going to receive money in 1 to 3 days. Well we all know it did not happened. I am pretty upset that they did not have courage to let the customer know that there would not be any RAL loans this year. When I called the young lady told me that she did not know why I was denied. That the reason why was not disclosed. Why did they lead me on. I had to go on the internet to find out for myself that the bank went under, and to find all the disappointed people. I did ask if I would get refunded for the RAL loan, they did tell me yes but now I don’t beleve them. If I don’t I will go to the BBB for help and see what I can do to get my hard earned money back. Good luck to those that filed with Jackson Hewett. I am going to file my taxes with someone else next year.

  5. RENE

    They (Jackson Hewitt) knew this was going to happen and never once even mentioned it. I do my own taxes and just go to those morons to e-file and get ether the instant loan or RAL. I have been doing this for the past couple of years and will never put myself in another bind like this again. Evene if I have to pimp my kids’ father. I will never trust those Jackson Hewitt crooks again. Magic Johnson should be ashamed for owning even one red cent in this corrupt company!!!

  6. Morgan

    JH did not let their customers know that their was a problem and that we were not going to get the RAL, I paid for RAL 1-3 days, got denied, they said i had to wait 8-15 days for my money. Im a single parent and desperatley needed the money. I’m sooo disappointted in JH. I have never been declined a RAL in my 6 years with them. All JH cares about is trying to get their share of our money, for the extremely high tax prep fees. My fees were about $400. They just lost another customer.

  7. Kauanna Robinson

    Baby my sentiments exactly….. Thats alright at least the smaller firms are in the same boat with the big guys! I recieved an email from Santa Barbara thanking “us” for our support durning this transition to Meta Bank! I responded “Fuck that you all could have done this transaction a litte better. To leave us hanging WEEK OF going LIVE…A MESS UNDRESSED!” I am being up front with clients and letting them know the IRS refund schedule…Take it from there..NO purchase for expensive software…Why should I… Just use the free software and file them and let them get their checks, or direct deposit straight from the IRS and they pay me NOW..which sucks..!!!!!!!!! I am thankful for the business I do have ….keep it moving…

  8. Anonymous

    fuckers

  9. Anonymous

    to the hell with santa barbra