The banking company did not quantify the change in its independent business when it filed its form 10-K with the SEC this week. However, it called the move a "strategic reduction in the Company’s independent tax-preparer base." That coincides with what H&R Block has reported as a significant increase in the number of independents in the market, which also coincided wih more difficulty in finding financial institutions to underwrite the loans after federal regulators forced Santa Barbara Bank & Trust out of the RAL business in Deceber.

Republic's RAL business grew sharply from 2008 to 2009 as it took on more indepedents and more of Liberty and Jackson Hewitt's loan programs. It expects that for 2010 that income will grow with the significant increase in business from those two chains. However, while Liberty got funding for its entire program, Jackson Hewitt got backing for only about 50 pecent of its anticipated loan volume and available loans were not spread evenly among its sites.

An agreement between Republic and Jackson Hewitt, dated December 29, suggests the reason for this. Under its terms, Republic agreement to be the exclusive provider of RALs and Asisted Refunds to the chain's customers through 2012 for all locations in.Arkansas, Florida, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas and Virginia. That's an expansion from the number of states previously served. The states selected represented about 45 percent of the returns prepared by Jackson Hewitt in 2009.

Republic's continued participation in the RAL market depends on the approval of regulators. It had been summoned to a February meeting with the Federal Deposit Insurance Corp. to discuss the program's viability. However, the meeting was postponed to this month and during H&R Block's Webcast regarding its financial results for the January quarter, Block executives said they believed the mood among regulators is more favorable to RALs and than it had been not long ago.