H&R Block Plans to Shed Banking Unit

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By Trey Thoelcke Published

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H&R Block Inc. (NYSE: HRB) fell 6% in early trading after announcing that it is exploring strategic alternatives for its banking unit. The tax-preparation company wants to avoid new capital requirements under the Dodd-Frank Act by no longer being regulated by the Federal Reserve as a savings and loan holding company.

H&R Block CEO Bill Cobb said:

We are a tax preparation company that offers financial products and related services as an added value to our clients, but operating within the regulatory constraints of these proposed rules would be cumbersome.

Goldman Sachs Group Inc. (NYSE: GS) is advising H&R Block on its options.

The company has divested its brokerage and mortgage-lending operations as part of this efforts to return focus back to its core tax-preparation business.

Insurer MetLife Inc. (NYSE: MET) has also said it plans to sell its banking business to General Electric Co. (NYSE: GE) in order to shed its bank-holding-company status and avoid the capital constraints imposed by the Federal Reserve.

Shares of H&R Block fell from the opening price of $17.00 to as low as $16.53 in early trading, erasing about three-weeks worth of gains. The 52-week range is $14.02 to $18.04.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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