The best-known name in tax-related services said it is planning a significant push to partner with the best known name in trust.
Kansas City-based H&R Block, through its subsidiary H&R Block Services, Inc., has finished piloting its program and now intends to more than double CU participants this year with continued expansion in future years. Moreover, H&R Block may look to expand into credit unions with a mortgage program targeting subprime borrowers.
The program the company is offering credit unions has two pieces: in-person tax preparation with one of its agents, and an online preparation/filing service on which new benefits are being offered. H&R Block had considered approaching banks with a similar offer, but has now decided against working with banks after focus group research uncovered significant negative attitudes toward banks by consumers, said matt Kerr, director of channel marketing/business development.
How direct is H&R Block being in approaching credit unions? The materials it distributed during CUNA's Symposeum here were headlined, "Partner with us."
"We have been trying to find an organization with credibility," said Kerr, explaining that he was impressed by the affinity members expressed for their CUs in focus groups.
H&R Block is looking to partner with credit unions to drive members seeking tax preparation or filing assistance to any of its offices. Kerr said it is not seeking to place advisors inside credit union offices, as H&R Block already has a significant retail presence with 9,000 offices nationally. The company's representatives will also host tax-related seminars with those CUs wishing to do so.
To entice members to become involved in the program, discounts are being offered. H&R Block will provide marketing materials, and either the credit union or its CUSO can earn commission income depending on the number of members who use H&R Block, and on the level of marketing assistance the CU provides.
Additional incentives are being offered to members to get them to use the Online Tax program, which can be co- branded to the credit union, with links from the credit union's website to the H&R Block Tax Center site. The standard $19.99 fee for members filing federal returns online is being waived.
"We're trying to get stronger recognition that we are a provider," said Kerr. "Most people, when they think of online tax preparation, think of TurboTax. We're also trying to reach people who are still uncomfortable with filing tax information online. Working through the security of a financial institution helps to overcome that."
Under both the in-person and online components there are several other options. In both cases, members/filers can ask for additional levels of assistance. With the online option, for instance, members can e-mail information to a tax advisor to help answer questions. In both cases, when members/filers use H&R Block for tax preparation, the company offers its "peace of mind" guarantee, which includes free audit assistance, and payment of any penalty and interest due to its error, up to $5,000.
Kerr said H&R Block has spent the past two years working on eliminating operational bugs and bringing its 90,000 tax professionals in the field up to speed on the credit union program. The 15 credit unions with which H&R Block initially piloted its credit union program represented 1.4-million members, and of those Kerr said approximately 125,000 used H&R Block's services. He said the company anticipates it will continue to see similar usage rates. He added that credit unions have the option of extending loans to members who e-file and who anticipate a return.
"We want to grow the scale," Kerr said. "Our goal is 30 to 35 credit unions next year representing approximately four-million members."
Separately, Kerr said, as the company makes inroads with its tax preparation services it also plans to expand an on- prime mortgage program into credit unions. H&R Block has in the past two years purchased two mortgage lenders concentrated in that field. "This is a core business of ours, and we do it in an ethical way," said Kerr. "There's been a lot of interest in the mortgage program. We want to offer more services to members and have it come from the credit union. People trust our brand and our name."