We come not to bury refund anticipation loans, but to talk about the way it was done. And whether you were a fan of the bank products, the process ought to leave a bad taste in your mouth.The FDIC went after Republic with hammer and tongs and stopped short of claiming the bank was harboring trolls. One of its charges was that the bank engaged in bad behavior by telling its offices how to deal with FDIC visits. This comes into the classic response of tennis player John McEnroe "Surely, you can't be serious". The agency initially sought a $2 million civil money penalty from Republic, but settled for $900,000 and a series of stringent rules for operating the program in its last year.
The joke in this is that Republic improved its performance on RALs for the first quarter ended March 31. It improved them by implementing stricter underwriting rules and handing out less money than before. The estimated loan loss for RALS for the last season was 1.40 percent, down from 1.58 percent in 2011. So much for unsound banking practices.
It seemed obvious as the FDI Cand the Office of the Comptroller of the Currency went after RAL lenders over the last two years that there was a federal decision to halt the RAL program and that any available tool was used to do that. It would have been nice if that agenda - the fact that this was a policy decision- had been made public.
