The company ran into problems this month when Meta Financial Group, parent to Meta Bank, said that it had to receive written permission from the Office of Thrift Supervision to expand loan programs. RALs, in fact any loan based in potential income tax refunds, were specified in the order. Meta Bank funded the assisted transfers during the past tax season and had been expected to fund RALs.

However, the subprime mortgage market, which relied on securitized loans, had made those instruments difficult to sell, which was what cause Santa Barbara Bank & Trust problems. Without the ability to take the loans off its balance sheet, it was forced to lending that weakened its required ratios and it was ordered out of the market.

With HSBC Bank, which served only H&R Block, threatening Block's ability to provide RALs during the next tax season, according to a suit brought by the tax services chain, the only RAL providers in the market are Republic Bank, Ohio Valley Bank and River City Bank. Chase left the market voluntarily this year.

Republic's program looks far more secure as this form 10-Q filed this week for the third quarter ended September 30, its parent, Republic Bancorp said it expects to utilize on-balance sheet funding as it did during the 2010 tax season. Republic's Tax Refund Solutions reported net income of $967,000 for the quarter, compared to a loss of $608,000 a year earlier. The company attributed that turnaround to revised underwriting standards which resulted in better-than-expected payments.

Jackson Hewitt also faces big problems with the loan programs. Republic funded half of that chain's loans in the last season and has committed to doing so in 2011. However, under terms of its lending agreements, Jackson Hewitt must find funding for the other 50 percent of its operation by November 19.