The FDIC had alleged that Republic was engaging in unsound banking practices when it continued to offer the loans after the Internal Revenue Service stopped providing the direct deposit indicator before the 2011 tax season. It had issued a cease-and-desist order that also blocked the bank from expanding its operations. The order was lifted and the bank agreed to drop its suit against the federal agency. Since the parent banking corporation had reserved $2 million during the second quarter, it will now recognize a $1.1 million pre-tax credit during the current quarter.

For its last year in the RAL business, Republic has developed an Electronic Return Originator Oversight Plan that has been approved by the FDIC. That plan calls for EROs to affirm their training of individual tax preparers about regulatory requirements for bank products. There must be an annual audit covering 10 percent of active ERO locations along with significant sampling of applications for bank products. Audits would include onsite visits, document reviews, mystery shops of tax preparation offices, and tax product customer surveys;

EROs must be monitored for income tax return quality and offices must be monitored for their adherence to what were termed acceptable tax preparation fee parameters. The bank must also approve all tax preparer advertising in advance.