Who Will Take Pacific Capital’s Place Who is going to do that business instead?
It is important, because both Liberty and Jackson Hewitt derive all of their profit from these RALs. At JTX, Ral revenue accounted for 32 percent of all revenue, and amounted to 3 times net income. They can’t do the RALs without the money, and they can’t get their customers without the RALs. Republic is under a cease-and-desist order from the FDIC. They can’t make new commitments to make RALs. They have been allowing a lot of fraud, and the FDIC won’t take it. So, there’s no new money there. HSBC is out. They don’t want the reputational risk, and their going to bow out after 2011. River City – too small. Republic isn’t allowed. That only leaves Chase. Chase probably wants the business. There is one hurdle, though. Jackson Hewitt and Liberty are used to getting a kickback from PCBC on RALs. For every RAL that those places sell, Pacific Capital has been giving the tax prep franchisees $3. Chase refuses to do that. Right now, there are about 60 days before the beginning of the next tax pr
