Hosed by SBBT

[BulldogTom]

Just got the e-mail from SBBT. They will not offer RAL's this year. Only RT's. Not able to get another bank. Advertising is already printed and going out in this week's paper. No way to change that either.

What a crappy day. I wish there were no RALs. I wish taxpayers did not want them. I wish I could win the lottery tonight and say screw it all.

Tom

Lodi, CA

[Julie]

Well, I ran into a problem like that last year. I couldn't get approved by any RAL banks because HSBC wouldn't give me the necessary report. So I didn't do them at all last year. Looks like I won't this year, either.

I'm with you....I wish they didn't exist and that clients didn't want them.

[jasdlm]

I'm not sure what any of your acronyms stand for, but I'm sorry you're having such a crappy day! (I know it has to do with refund loans . . . )

[Chowdahead]

I'm not sure what any of your acronyms stand for, but I'm sorry you're having such a crappy day! (I know it has to do with refund loans . . . )

I got the letter too. This is total B.S. This is going to take a a bite out of my business. I only do about 30-40 RALS a year, but still, this leaves me at a disadvantage compared to my competitors. What really pisses me off is that I decided to go only with SBBT this year because last year I was signed up for both River City and SBBT and I found SBBT to be much quiicker so I decided to stick with them. I have also been receiving solicitations from Republic Bank and decided to stick with SBBT because I had minimal problems with them. Now this.

I just called Republic Bank and their cutoff date to sign up was Dec. 20. There is no indication that they will extend it. The representative said that every call that she took today has been from SBBT customers looking to switch. This would be a golden opportunity for them to get alot of new customers because I definately won't be returning to SBBT. This was a knife in the back.

The reason this is a even worse is because the last deadline for RAL sign-ups was yesterday with Chase, and SBBT decided to wait until 4:00 EST to drop this info on us? This is a debacle.

[BulldogTom]

I don't do a lot of Ral's. But I put it in my advertising this year. Can't change it, the inserts are already run.

I wonder what is going to happen with Jackson Hewitt? This is their bank as well. They are going to lose a lot of customers to the green box if they can't deliver the loans. I wonder if MetaBank will be processing loans for JH, just not us?

You would think some bank would extend their deadline for SBBT customers.

I just sent and e-mail to ATX/CCH customer support to see how I go about dropping SB and to see if I can still get enrolled in Fee Collect. RT's make no sense at all with a $32 set up fee and a $10 transmitter fee to ATX and an $11 technology fee to ATX. That is a $53 fee to give the client the same thing you could give them for $15 with Fee Collect.

I will do no bank products at all this year if I can't get to another bank. And if ATX will not allow me into Fee Collect, I will just do post dated checks.

Tom

Lodi, CA

[BulldogTom]

Wow, that was fast. This is the e-mail I recieved from Customer Support. Looks like this is a viable option if there is no bank willing to take on the rejects from SBBT.

Good Evening Thomas,

This is Candice, contacting you in response to the e-mail you sent in. You can switch to Fee Collect by going to the Support Site and going to Fee Collect on the left hand side of the Home Page. I am also including the Fee Collect FAQs for your convenience.

Tom

Lodi, CA

[Chowdahead]

Wow, I was wondering about FeeCollect since I remember it was alot cheaper than RTs from the banks. But I had to use the banks for RTs because it was required by them if I wanted to do RALs. Does anyone know the exact cutoff date to sign up for FeeCollect? I want to wait a few days to see if another bank extends their deadline. I called Chase tonight and they said no. But I waited on the line for 25 minutes to talk to someone, and when the guy answered he said that the phones were off the hook with calls from SBBT customers.

I would be surprised if Republic, Chase, or Riverz City don't extend their deadlines. They would be crazy not too. Metabank chose the worst time to buy SBBT's Tax Division.. because it will be abandoned after this tax year.

[BulldogTom]

<<Does anyone know the exact cutoff date to sign up for FeeCollect?>>

I got a second e-mail (Candice in Customer Support is ON tonight) after I asked that same question. No cut off date. You can sign up any time you want.

My employee/spouse just called the local Jackson Hewitt office and asked if they were going to have Ral's this year. They said they did not know. Their response was "with all the bailouts and bank troubles, we don't know for sure if loans will be offered this year."

Tom

Lodi, CA

[Karen Lee]

Just received this e-mail from TRX

Hello,

TRX has been working hard on making sure that you are able to offer bank products. If you’re not approved for RAL’S, TRX does have another Bank (Advent Bank). Here is the website if you would like to apply for Advent Bank

https://www.trxprotwsupport.com/advent/

Also, If you want to offer RT’S (ERC) ONLY SBBT is still offering this bank product. You may apply at www.trxprotwsupport.com

We look forward to a great tax season.

[Jack from Ohio]

Fee collect has worked for me for the past 3 years. Before that I did 2 RALs a year because customers "demanded" them. When I told them I would only do FeeCollect and it was only $15, they decided that 8-14 days to save a couple hundred bucks was ok. I lost 0 clients by only using FeeCollect.

The banks dug their own hole concerning the RALs. And dishonest taxpayers/preparers claiming fraudulent First Time Home Buyers credit just blasted it deeper.

I use ATX and do all the signup from the program. It is not too late.

[David1980]

Just received this e-mail from TRX

Hello,

TRX has been working hard on making sure that you are able to offer bank products. If you’re not approved for RAL’S, TRX does have another Bank (Advent Bank). Here is the website if you would like to apply for Advent Bank

https://www.trxprotwsupport.com/advent/

And I was so sure the SBBT thing would blow over. So wrong... not that I like RALs anyway. One comfort is that anyone else with SBBT is just as screwed. So yeah, it is a disadvantage over non-SBBT preparers. But the SBBT preparers are on equal footing.

I tried the link there for advent, and the ERO app only had SBBT as an option. They must have forgotten to update it or something,... Interesting though, if Advent is still taking apps I wonder if one possibility to get around the SBBT problem is to sign on with TRX? Though, I know CCH has problems with the same EFIN being used on both ATX and TRX. Still, since TRX is just TaxWise, you'd think if TaxWise works with Advent Bank that CCH could move people to Advent. A google search didn't help trying to pull up information on the Advent Bank.

As far as Republic, I'm sure they would love to expand their business. But can't, due to the stricter regulations as far as how much money they must have on reserve in order to offer RALs. They probably just can't come up with the funds to take people on for RALs. So same problem as SBBT, except they are able to do the ones they already have, just not more.

[Chowdahead]

My problem with this whole situation was that SBBT wasn't clear on the entire situation. They sent out an e-mail on Jan. 6 saying that everything would be the same, nothing would change, and that we would have to sign a new agreement. They would be using the same facilities, same staff, and sames systems under the new name. They made no mention of RALs.

Then yesterday they sent out an e-mail at 3:56 EST saying everything has received approval. But then they sneak into one of the paragraphs "RT Only", and reference a Dec. 24 press release that I never received a letter regarding or received an e-mail regarding.

If on Dec. 24 I would have known that SBBT would not be offering RALs, I would I went back to River City or tried Republic. But now is when SBBT decides to inform its preparers of this? This is just wrong on so many levels...

[joanmcq]

The SBBT problems have been in the news on sites like Accountant's World for quite some time now, mostly regarding Jackson Hewitt and how they are up a creek since SBBT was not offering them RALs anymore. 45% of their RAL biz was through SBBT. Big news today; in this area we are expecting Block & Liberty to get all the JH business. In fact, in my neighborhood a new Liberty opened in the same strip mall as a JH franchise. I don't offer RALs, so I'm not affected in any way.

[David1980]

I tried the link there for advent, and the ERO app only had SBBT as an option. They must have forgotten to update it or something,...

Was looking at it again today, they now have Advent showing.

They also have "ADVENT BANK is OFFERING REFUND TRANSFERS ONLY and they are still accepting applications additional applicable fees may apply." on their main page. Oops, guess Advent wasn't doing RALs after all.

[Chowdahead]

Already lost 2 customers yesterday who wanted RALs. I tried to explain that they would save money by going RT or regular DD, and they said they needed the money now. One girl had to pay her college by the Monday or they were going to yank her out of class.

What many people don't realize about RALs is that sometimes in this cruel world they are the lesser poison. If a person has no cash, and needs to pay the mortgage, credit cards, etc or face hundreds of dollars in late fees if they wait 2 weeks for their refund, they would rather pay the RAL fee and pay their bills.

[JohnH]

Just out of my personal curiosity and without intending to make any value judgment, what would the RAL cost on average in each of the following situations?:

1) $ 500 refund

2) $1,000 refund

3) $2,000 refund

4) $4,000 refund

I'm thinking of additional cost over and above a regular return preparation & filing, unless there are some RAL-related charges embedded in the basic fee.

[Booger]

Just out of my personal curiosity and without intending to make any value judgment, what would the RAL cost on average in each of the following situations?:

1) $ 500 refund

2) $1,000 refund

3) $2,000 refund

4) $4,000 refund

I'm thinking of additional cost over and above a regular return preparation & filing, unless there are some RAL-related charges embedded in the basic fee.

JohnH, can't answer your question directly since I do not offer RAL's. However, my understanding is that

people who go the RAL route would be better off getting a loan from their friendly neighborhood loan shark.

Booger

[BulldogTom]

Just out of my personal curiosity and without intending to make any value judgment, what would the RAL cost on average in each of the following situations?:

1) $ 500 refund

2) $1,000 refund

3) $2,000 refund

4) $4,000 refund

I'm thinking of additional cost over and above a regular return preparation & filing, unless there are some RAL-related charges embedded in the basic fee.

The rate for SBBT before they went belly up was a little over 1% for all loans from $300 - $7000. The max fee was $87.

The additional fees are: $32 account set up fee to SBBT, $10 CCH Transmission fee, $11 CCH technology fee, and the preparer's add on fee for the application (I charge $19). So in my office, for a $7000 refund, the fee is $159.

Tom

Lodi, CA

[JohnH]

That's interesting, because I was under the impression that the fees were much higher (don't know why I thought that).

I dropped in on a local preparer last week to ask about his fees. I have one or two every year whom I just send to JH or HRB, but I thought it might be better to give them a name if I felt comfortable with the preparer. This is a small local chain with about 6 storefronts. He offered me a $50 kickback, and when I told him I really wasn't working that angle he said he'd discount the prep fee for the client in the first year. He gave me a few of his business cards and said to write my name on the back of the card & have the client give it to him for the discount.

His basic fees seemed to be about in line with what I charge, so that was OK. I then asked him about RAL's and he said he tries to discourage them but the extra cost is usually around $120 - $150. Based on my previous (erroneous) assumptions, I thought maybe he was low-balling me, so I'm pleased to know he was probably being straight with me on that matter as well.

[jasdlm]

What's a Refund Transfer?

[BulldogTom]

It does not happen as fast. The bank takes the application, and when the taxpayer's refund arrives at the bank, the bank takes its fees, forwards the preparers fees, and then forwards what is left to the taxpayer's bank account or authorizes the preparer to write a check to the taxpayer. It is not a loan. It is basically a way to make sure the preparer gets paid, with the bank taking a fee to broker the deal.

It is fee collect except it can be paid in a check as well as a direct deposit.

Tom

Lodi, CA

[David1980]

Just out of my personal curiosity and without intending to make any value judgment, what would the RAL cost on average in each of the following situations?:

1) $ 500 refund

2) $1,000 refund

3) $2,000 refund

4) $4,000 refund

I'm thinking of additional cost over and above a regular return preparation & filing, unless there are some RAL-related charges embedded in the basic fee.

TaxWorks has a decent page for rates. Not sure it's current.

http://www.taxworks.com/BankEnrollment.aspx

Looks like Chase is the most expensive of the banks they have there. It also has a very convenient interest rate to work with (1% of refund).

1.

$32 fixed bank fee

$50 interest charge. (I suspect they might actually consider the amount financed to be less the $32 fixed bank fee, but it isn't clear.)

$82 Chase fees.

$10 transmitter fee

$14 technology fee

$98 total fees.

2.

$32 fixed bank fee

$100 interest charge.

$132 chase fees.

$10 transmitter fee

$14 technology fee

$156 total fees.

3.

$32 fixed bank fee

$132 interest charge ($132 max fee)

$164 chase fees.

$10 transmitter fee

$14 technology fee

$188 total fees.

4.

$32 fixed bank fee

$132 interest charge ($132 max fee)

$164 chase fees.

$10 transmitter fee

$14 technology fee

$188 total fees.

So looks like it's the most expensive APR for the small refunds. As it increases upto $1320 refund the fees gradually fall as a percentage of refund. They fall dramatically faster after $1320, as the fees are already capped so the % falls.

Also makes me wonder if Chase approves a lot of RALs for about $1320 of the total refund ... since if the taxpayer were to apply for a $10,000 RAL and only get approved for $1320 chase makes exactly the same amount of money with a lot less money held up on the loan.

The cheapest RAL you can get? Reduce withholding... get AEIC if you qualify. Wish the taxpayers would listen to me...

[David1980]

That's interesting, because I was under the impression that the fees were much higher (don't know why I thought that).

I think you get a lot of people in some of the chains who would have prepared it themselves if it was not for the RAL. So perhaps they qualify for free tax prep due to low income or EIC, but don't want to wait a week or two... In which case the $200 or $300 a big chain charges for a couple kids with child tax credit and EIC could be considered part of the RAL. After all, the taxpayer treats it that way.

I also think the interest rates fell quite a bit from last year due to some change in the regulations. Pretty sure the "technology fee" did not exist for any of the tax prep softwares, yet they all have it now. The reason being the software companies were getting rebated money from those bank finance fees. It made it look like a bank fee to trick us into thinking it was the big bad bank and not the big bad software company. This year everyone's got a technology fee of some kind. Speculation here, but I think the banks had to drop the rates to meet the regulation and as a result stopped paying the software companies out of the bank interest charges. So the software companies simply took their fee and called it a "technology fee" so that they keep getting paid.

[taxguy057]

Just out of my personal curiosity and without intending to make any value judgment, what would the RAL cost on average in each of the following situations?:

1) $ 500 refund

2) $1,000 refund

3) $2,000 refund

4) $4,000 refund

I'm thinking of additional cost over and above a regular return preparation & filing, unless there are some RAL-related charges embedded in the basic fee.

I'm with Republic Bank and their fee is like 0.78% of refund plus 29.95 acct set-up, 21.00 cch tech fee, 10.00 transmitter fee then preparer fees.

I've have actually built my biz on RAL's! No matter what opinions we have about them, they are a neccessary evil in our field. People want their money and want it asap. Not worried about the fee b/c the need for the refund sooner outweighs that in their mind. And in business you have to compete for the clients that are out there to survive. Now my next question is; How do I pick up those newly neglected JH customers??!! :scratch_head:

[jasdlm]

Thanks, Tom. This is going to sound really dense, but why would any customer agree to a Refund Transfer? What's in it for them?

Thanks.