Terms of loans will vary with the lending laws of each state. Hewitt described the program as providing proceeds that are half cash and half secured debit card. He did not guarantee the program, backed by Meta Financial, would launch prior to tax season. But he noted, "There is a 75-percent chance it will be ready by January 20," when the electronic filing season kicks off. The annual interest rate would be about 19 percent, far lower than the often-criticized levels of interest on RALs.

The company also provided more details on the Instant Cash Advance program that operated in seven states this year. Those averaged about $2,000 per filer with an interest rate of 4.5 points, according to CFO Mark Baumgartner. Filers could receive loans for up to half the amount of their refunds, subject to state limits.

Under the ICA program, JTH agreed to purchase from the lender any loans that were more than 60 days past due and that amounted to $1.1 million during the last filing season. Baumgartner noted that it was possible for Liberty to purchase loans for which refunds were later approved by the Internal Revenue Service. But he did not provide details on such loans. Hewitt said that 70 percent of applicants were approved for ICA loans, as opposed to 60 percent approved by Republic Bank for RALs issued in 2012.

Hewitt hopes to have its combined loan programs available in 26 states that would represent about 64 percent of Liberty's business.

Liberty also anticipates significant cuts to fees for assisted refund transfers. Processing fees will drop to $9 per return from $18 for the 2012 tax season and Hewitt believes those levels will decline across the industry over the next few years. Fees associated with the transfers include setup fees. That will remain at $29 each for those involving third parties.That rate does not apply to setup by JTH Financial.

However, setup fees will be more lucrative for the company. Baumgartner explained that when RALs were involved the third parties kept the entire set up fee. However, Liberty will split those fees for setting up the surviving bank products.

Hewitt dismissed efforts by rivals, particularly Jackson Hewitt, to offer new programs. While Jackson Hewitt have been advertising loans will be available in 2013. Hewitt said that they would be "Payday type loans, not related to the refund."

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind