Republic Bancorp said Friday that it had received a notice from the Federal Deposit Insurance Corp. characterizing its practice of funding loans in advance of income tax refunds as "unsafe and unsound."
Republic, a Louisville, Ky., company that offers the funding via a relationship with Jackson Hewitt Tax Service Inc., said it would request a hearing before an administrative law judge to dispute the FDIC determination.
The $3.6 billion-asset company, which charges customers $61.22 for the product, said in a regulatory filing that it has been in the tax refund business for 15 years. It hires 400 people to handle funding applications during the peak tax season, the filing said.
