H&R Block Gets Green Light on Federal Bank Charter

In another example of our government not protecting us when it comes to national bank practices, the Office of Thrift Supervision has granted H&R Block a federal bank charter, at the same time that New York Attorney General Eliot Spitzer is going after H&R Block for fraudulent marketing of individual retirement accounts, California Attorney General Bill Lockyer is suing the company for refund anticipation loans that target low income families.   

We shouldn't be surprised. After all, the Office of Thrift Supervision (regulator of savings banks, and savings and loans) and the Office of the Comptroller of the Currency (which regulates national banks) haven't been impressing consumer groups with their consumer protection efforts.

"Block has had a long history of selling high cost, abusive products using questionable tactics," warned Chi Chi Wu, a staff attorney for the National Consumer Law Center in a press release today. "Despite lawsuit after lawsuit claiming consumer abuse, including one by the New York Attorney General on the same day Block's bank charter approval was announced, the OTS seems to think this is the kind of company fit to be a bank."

Consumer groups are criticizing H&R Block for high cost refund anticipation loans, high-cost IRA's, and subprime loans offered through its mortgage company Option One.

"Given all of Block's corporate missteps and gouging of low-income consumers, it leads us to wonder exactly who can't get a federal charter from the OTS," said Kevin Stein, Associate Director of the California Reinvestment Coalition in the same press release.

Good question, indeed.