BOAR D OF GOVERNOR S 

OF THE 

FEDERAL RESERVE SYSTEM 

WASHINGTON, D. C. 3055 1 

ADDRESS OFFICIAL CORRESPONDENCE 

TO THE BOARD 

April 24, 2012 

Mr. Jeffrey T. Brown 

Chief Financial Officer 

and Senior Vice President 

H&R Block, Inc. 

One H&R Block Way 

Kansas City, Missouri 64105 

Dear Mr. Brown: 

This is in response to your letter dated February 14, 2012, requesting that 

H&R Block, Inc. and Block Financial LLC, both of Kansas City, Missouri, and H&R 

Block Group, Inc., Nassau, The Bahamas (collectively, "HRB"), be granted an exemption 

from the Board's regulatory reporting requirements for savings and loan holding 

companies ("SLHCs"). Specifically, you requested that HRB be granted the same 

exemption from complying with the Board's reporting requirements that was granted to 

commercial grandfathered unitary SLHCs in the Board's final notice outlining the 

regulatory reporting requirements for SLHCs. 

[footntoe] 1

 76 Federal Register 81933 (December 29, 2011) ("December Notice"). [end of footnote 1.] 

In the December Notice, the Board exempted certain SLHCs from 

transitioning to the Board's reports if (1) the SLHC is a grandfathered unitary SLHC, 

(2) its savings association subsidiaries' consolidated assets make up less than 5 percent 

of the total consolidated assets of the grandfathered unitary SLHC, and (3) more than 

50 percent of the assets of the grandfathered unitary SLHC are derived from activities 

that are not otherwise permissible under the Home Owners' Loan Act. Your request 

acknowledges that HRB does not qualify for the exemption provided in the December 

Notice but argues that it should be exempted from the Board's regulatory reporting 

requirements because HRB would incur an unusually high compliance burden while 

providing little information useful to the Board. HRB also contends that tax preparation 

should be considered a commercial activity, that tax preparation services are not asset 

intensive, and that its subsidiary, H&R Block Bank, is a small part of HRB's overall 

business. 
HRB's arguments for a complete exemption from transitioning to the 

Board's reports are not persuasive. HRB has not explained why it should be treated 

differently than other SLHCs and bank holding companies ("BHCs") that derive 

significant revenue from sources other than their subsidiary thrifts or banks. HRB's 

primary business operations include tax preparation and investment advisory and 

mortgage services. Relevant statutes and regulations consider these activities to be 

"closely related to banking" and are permissible for BHCs, as well as for SLHCs. 

[footnote] 2

 12 U.S.C. § 1843(c)(8); 12 U.S.C. § 1467a(c)(2)(F); and 12 CFR 225.28(b)(1) and 

(b)(6); 12 CFR 23 8.51(b)(6). [end of footnote 2.] 

Additionally, the Board specifically addressed the issue of burden and compliance costs 

in the December Notice when it acknowledged those effects but concluded that the 

transition period granted was appropriate. 

HRB has stated, however, that it cannot establish the necessary systems to 

meet the deadline for submitting the FR Y-9C/LP for the March 31, 2012, reporting 

period. As a result, based on all the facts of record, the Director of the Division of 

Banking Supervision and Regulation, acting pursuant to authority delegated by the 

Board, and after consulting with the General Counsel, has determined that it is 

appropriate to grant HRB a temporary exemption from the Board's regulatory reporting 

requirements. 

HRB will be exempted from filing the FR Y-9C/LP until the 

September 30, 2012, reporting period and may submit the reports at that time on a 

best-efforts basis. These reports will be granted confidential treatment. 

[footnote] 3

 HRB should submit all reports on a calendar-year basis if required in the reporting 

instructions. Certain reports, such as the FR 2320, H-(b)11, and the FR Y-6 can be 

submitted on a fiscal-year basis. [end of footnote 3.] 

HRB is 

expected to be in full compliance with the FR Y-9C/LP filing requirements for the 

reporting period ending on December 31, 2012. The reporting deadlines for other 

reports, including the H-(b)11 and the FR Y-6, will not change. 

[footnote] 4

 As outlined in the December Notice, HRB should submit the first FR Y-6 for year-end 

2012. HRB should submit other reports required under the notice, such as the 

FR Y-1 land FR Y-12 (nonbank subsidiaries and investments), FR Y-8 (affiliate 

transactions), and FR 2314 (foreign subsidiaries), beginning in 2013. The December 

Notice did not extend the FR Y-10 report (organizational structure and activities) to 

SLHCs but indicated that the Board would issue a separate notice on that form shortly. [end of footnote 4.] 

HRB should continue to 

submit the FR 2320 report during the temporary exemption period (i.e., for the March 31 

and June 30, 2012, reporting periods). 

Board and Reserve Bank staff believe that a two-quarter delay is an 

appropriate amount of time to allow HRB to rationalize data sources, design regulatory 
reporting tools, and establish a regulatory governance framework that will yield a more 

reliable and stable regulatory reporting infrastructure with better quality data. HRB has 

been granted additional flexibility to provide best estimates for the first reporting period 

to assist with the transition. These terms are consistent with the regulatory reporting 

relief that the Board has granted to investment banks and other companies transitioning to 

bank holding company status 

[footnote] 5

 In 2009, the Board granted several investment banks and other companies that recently 

converted to bank holding company status exemptions from and permitted modifications 

to the Board's reporting requirements. See, e.g., Board letters dated February 5, 2009, to 

Colm Kelleher (Morgan Stanley) and to Sarah Smith (The Goldman Sachs Group, Inc.). [end of footnote 5.] 

and to other SLHCs transitioning to Board regulatory 

reporting. 

[footnote] 6

See, e.g., Board letter dated March 30, 2012, to David Nason (General Electric 

Company). [end of footnote 6.] 

If you have any questions, please contact Kevin Moore, Senior Vice 

President at 816-881-2559, or Todd Offenbacker, Vice President at (816) 881-2657, 

Federal Reserve Bank of Kansas City. 

Very truly yours, 

[signed] 

Deputy Secretary of the Board 

cc: Kevin Moore, Senior Vice President 

Todd Offenbacker, Vice President 

Federal Reserve Bank of Kansas City