{"id":5155,"date":"2009-12-25t18:03:40","date_gmt":"2009-12-25t22:03:40","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/2009\/12\/25\/jackson-hewitt-loses-bank-funding-for-rals\/"},"modified":"2015-10-23t03:22:12","modified_gmt":"2015-10-23t07:22:12","slug":"jackson-hewitt-loses-bank-funding-for-rals","status":"publish","type":"post","link":"\/\/www.g005e.com\/2009\/12\/25\/jackson-hewitt-loses-bank-funding-for-rals\/","title":{"rendered":"jackson hewitt loses bank funding for ral’s"},"content":{"rendered":"

jackson hewitt’s key bank has reportedly cut off most of the money it used for tax refund loans.<\/strong><\/p>\n

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. <\/p>\n

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.<\/p>\n

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.<\/p>\n