| Office Of Thrift Supervision Waives H&R Block's "Option One" 3% Capital Rule |
 Office Of Thrift Supervision Waives H&R Block's "Option One" 3% Capital Rule
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May. 9th, 2008 @ 04:57 pm 
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H&R Block Inc. achieved another goal toward repositioning itself, announcing Friday that the Office of Thrift Supervision has eliminated a financing requirement related to H&R Block Bank.
The OTS previously required Kansas City-based H&R Block (NYSE: HRB) to keep 3 percent of its tangible capital at all times, as long as it owned H&R Block Bank. Tangible capital is physical assets, such as machinery, buildings and land, according to Investopedia.com.
Significant losses from its Option One Mortgage Corp. subsidiary had put H&R Block out of compliance with the rule, and as a result, the company was not allowed to repurchase its shares in the market.
In a letter Wednesday, the OTS said the shutdown of mortgage loan origination and the sale of Option One's servicing rights reduced Block's risk profile for operating a bank. The OTS said it rescinded the 3 percent requirement as of April 30.
"We are elated with the OTS action, which eliminates a significant constraint on the structure of H&R Block's balance sheet," Block Chairman Richard Breeden in a release. "We are now able to plan for the future of H&R Block Bank with much greater certainty and to look at ways to utilize the highly flexible thrift charter to the advantage of our consumer clients without disadvantaging our shareholders." |
Waived to avoid the expense of bailout, believe it.
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