|
STOP
H&R
BLOCK'S PLAN TO OPEN BANK AND OVER CHARGE MORE CONSUMERS!
The
Office of Thrift Supervision (OTS) announced its approval
of H&R Block’s application for a savings bank
charter on March 15, the same day New York Attorney
General Eliot Spitzer filed a $250 million civil lawsuit
against H&R Block for
fraudulent marketing of its Express Individual Retirement
Account (IRA) product.
85% of Express IRA customers lost money.
The
approval of a bank charter for Block is one of the first
actions taken by new OTS Director
John Reich. Once again,
the Bush Administration has abandoned consumers in favor
of big corporations.
In
testimony during an OTS hearing
in October 2005, H&R
Block repeatedly used the company’s Express IRA program to justify the need for a Block bank. In the OTS Director’s Order approving
the bank, the agency disclosed that H&R Block plans to transfer “a
significant portion of the present Express IRA and money
market account funds to the Savings Bank,” and that
Block’s bank “will be the custodian of new Express IRA
accounts.”
Conditions
imposed by the OTS state that the application can be
blocked if new information comes to light with a
"material, adverse bearing" on the bank’s
proposed operations. New
York State’s lawsuit makes it clear H&R Block
can not be allowed to expand its abusive
practices.
Send
a letter
via e-mail asking
the OTS to reverse its decision!
Just follow the below directions.
1. Below is a
sample form letter. Copy
(Ctrl+C) and paste (Ctrl+V) this text into your e-mail.
2. Address the e-mail to the
Midwest Regional Director of the OTS, Frederick Casteel: "frederick.casteel@ots.treas.gov"
3.
CC your e-mail to the OTS Director, John Reich:
"john.reich@ots.treas.gov"
4. Type in your name and address at the bottom of the
letter.
5. Include the
following subject line - "New Information Calls for
Denial of H&R Block Bank".
SAMPLE
FORM LETTER:
Frederick
Casteel, Midwest Regional Director
Office
of Thrift Supervision, Midwest Region
PO
Box 619027
Dallas,
Fort Worth, Texas 75261-9027
(927)
277-9501 FAX
Attention:
New Information Calls for Denial of
H&R Block Bank
Dear
Mr. Casteel:
On March
15, the
Office of Thrift Supervision (OTS) announced its approval
of H&R Block’s application for a federal savings
bank charter (Director’s Order 2006-07).
The charter was approved subject to 13 conditions that must be complied with in a
manner satisfactory to you, the OTS Midwest Regional
Director.
Condition #3 states
that on the business day before this proposed transaction
is finalized, H&R Block “must certify in writing to
the Regional Director that no material adverse changes
have occurred with respect to the financial condition or
operation of the Applicants and the Savings Bank,
respectively, as disclosed in the Applications.”
If additional information having a “material
adverse bearing on any feature of the Applications”
comes to light, “the transaction must not be consummated
unless…the Regional Director provides written
non-objection.”
Also on March 15, New
York Attorney General Eliot Spitzer filed a $250 million
civil suit against H&R Block for
fraudulent marketing of its Express Individual Retirement
Account (IRA) product.
As revealed in New York State’s lawsuit, Block
advised customers to buy an "unsuitable, fraudulently
marketed, poorly performing, fee-ridden 'retirement
vehicle' called the Express IRA" that shrinks over
time. 85% of Express IRA customers lost money because their only
investment option was a money market account paying an
interest rate too low to cover the program’s
unadvertised fees.
According
to Director’s Order 2006-07, H&R Block plans to
transfer “a significant portion of the present Express
IRA and money market account funds to the Savings Bank,”
and that Block’s bank “will be the custodian of new
Express IRA accounts.”
Clearly, the nature of H&R Block’s Express
IRA product poses
a significant safety and soundness concern to H&R
Block’s proposed savings bank operations.
In
testimony during an OTS hearing on its bank charter
application in October, 2005, H&R Block Vice President
Bernard M. Wilson repeatedly used the company’s Express
IRA program to justify the need for a Block bank.
He said Block had opened 500,000 Express IRA’s in
the past five years, which proved the company “can act
really in a way that most traditional banks are not
choosing to…we think we can fill that gap for low income
consumers.”
In
light of this new information about H&R Block’s
proposed operation of its savings bank, I am writing to
urge you to withhold your approval of this bank
application and advise OTS Director John Reich to reverse
his decision to grant H&R Block a bank charter.
Sincerely,
Name:
Address:
City:
State:
Zip:
For
more information on this campaign, read the on-line press
release from the National Consumer Law Center, the
California Reinvestment Coalition, Inner City Press / Fair
Finance Watch, the Woodstock Institute, and the Community
Reinvestment Association of North Carolina.
|
