KSTHANE

H&R Block: Stars Are Aligning

Ah, I read that but it didn't register the first time. I guess that is the key issue to the story then. I'm not a financials analyst or a legal expert so I think I just need more understanding regarding that APR calculation. Are application fees typically included in APR calculations?

Is there any reason that JTX couldn't get an agreement with HSBC or some other bank similar to HRB's agreement?

Regardless of all of these skeptical questions, I agree with your overall premise. I think that the bigger competitive threat is Intuit though, so I was pleased to hear on the last call that they are going to be more proactive with advertising.

H&R Block: Stars Are Aligning

Well, the sell-side isn't completely ignoring the issue. I just read a sell-side research article from Northcoast Research dated October 28 that discusses the implications of the banks reducing fees. Their response was that JTX will simply add an application charge (if a customer wants a RAL) that will be roughly equal to the profit the company earned when it was getting higher margins on the higher fees. While the charge would be separate, it would not mean that y/y pricing is any higher than past JTX customers received.

I guess if HRB was smart they would point out in advertising that their smaller competitors are charging these fees and that they have no such thing...or maybe they should charge the fees too.