Tri Tax of San Pedro, Calif., is offering a debit card for customers to receive tax refunds and paycheck deposits, which the tax-preparation franchisor called a draw for underbanked consumers.
"Workers who currently pay high check-cashing fees may save hundreds of dollars by using the Tri Tax Debit Card, while also avoiding banking hassles or waiting weeks for checks to arrive by mail," the company said Friday. It did not identify the bank issuing the card.
"With the average check-cashing fee at about 3%, cashing a $4,000 refund will result in charges of $120," Frank Montano, Tri Tax's president and chief executive, said in a press release.
"The Hispanic community which Tri Tax prides itself on servicing is the largest growing segment of our population and also one of the most underserved by the banking industry."
The card has helped Tri Tax's franchisees prepare more returns during a tax season when "the inability of many preparers to offer bank products" has left those competitors "scrambling," Montano said.
Banking regulators this year have been cracking down on some of the few financial institutions that still fund refund-anticipation loans. For example, Jackson Hewitt Tax Service Inc. has said that this year it can arrange only half as many RALs it did last year, after regulators blocked its main bank partner, Pacific Capital Bancorp Inc., from funding the products.
Regulators also summoned Republic Bancorp Inc. in Louisville to a meeting this month "to review the future viability" of its tax loan program beyond the upcoming tax season, the company has said.