Even with these declines, Jackson Hewitt continues to derive a large percentage of its profits from financial products. In 2010, it earned $46.3 million in such fees, or 22% of revenues. In 2010, Jackson Hewitt’s tax preparation volume declined 8% in markets where it had RALs available versus 21% in markets where it did not have RALs.
The president of SGS Credit Services is Eugene L
Because of the loss of RALs in 2010, as well as other factors, Jackson Hewitt has struggled over the past few years. In , Hewitt filed for bankruptcy protection from its creditors, from which it emerged a few months later.
Liberty Tax is the third significant commercial tax preparation chain in the country, with 3,900 locations. Liberty Tax prepared 1.9 million returns in 2010 and 2 million in 2011. The chain is well-known for hiring people to stand outside stores, dressed up in Statue of Liberty costumes as a form of advertisement during tax season.
The company is planning to go public, and filed a prospectus with the Securities and Exchange Commission in ) revealing that it plans to partner with a non-bank lender to make RALs
Liberty earned $14.2 million in RAL and RAC fees in 2010 or 17% of its revenue. It earned $16.5 million in RAL and RAC fees in 2011, again constituting 17% of net revenue.
In 2010, Liberty sold about 783,000 financial products to its customers, of which 300,000 were RALs. Thus, Liberty sold a financial product to about 40% of its customers, and made a RAL to about 16%. In 2011, Liberty sold financial products to 902,000 customers – nearly half of its customer base. However, it only sold a RAL to 5.6% of its customers in 2011, or about 112,000.
Subsequently, Liberty’s website showed that it has partnered with SGS Credit Services, Inc. as its lender in Arizona or Texas, and with a number of entities with similar names in Louisiana, Michigan, Missouri, and Washington State. McKenzie, Jr., with a listed address of Arlington, TX. Mr. McKenzie is connected to companies such as Infinity Specialty Finance, LLC, and MKS Financial Services, Inc. He has served as the treasurer for the Texas Consumer Lenders PAC, and both he and the PAC are top donors amongst payday lenders to Texas politicians.
Republic made 837,000 RALs in 2010, which is a slight increase from 2009. Republic did not report how many RALs it made in 2011; however, its CEO stated that Republic made 3.5 million RALs and RACs in 2011. Since Republic earned $88 million in RAC fees in 2011, at the cost of $30 per RAC, it made about 2.9 million RACs and thus about 600,000 RALs.
Republic earned $44.2 million in net income from RALs and RACs in 2010, or a whopping about 68% of the bank’s income. This compares with $20 million in net income from RALs and RACs in 2009, al title loans and thus represents a 121% increase.
The tax preparation industry contains a number of smaller chains. Two of the most notable are Mo’ Money Taxes and Instant Tax Service. Both have been the subject of controversy, including incidents this year in which they were accused of failing to give customers their refunds.
MoneyCo USA, known as Mo’ Money Taxes, is a smaller chain of over 100 stores in 18 states. Mo’ Money has been the subject of enforcement action by the North Carolina Commissioner of Banks and the Arkansas Attorney General, whose settlement is discussed in Section III.B below. Several years ago, Mo’ Money produced outlandish advertisements that could be considered to be racial stereotyping and offensive.