12659--6/30/2008--H&R_BLOCK

related topics

{financial, litigation, operation}

{regulation, change, law}

{system, service, information}

{condition, economic, financial}

{regulation, government, change}

{loan, real, estate}

{product, market, service}

{personnel, key, retain}

{tax, income, asset}

The financial services industry faces substantial litigation risks, and such litigation may damage our reputation or result in material liabilities and losses. Failure to comply with laws and regulations that protect our customers personal and financial information could result in significant fines, penalties and damages and could harm our brand and reputation. We are subject to operational risk, which may result in incurring financial and reputational losses. Government initiatives that simplify tax return preparation could reduce the need for our services as a third-party tax return preparer. Federal and state legislators and regulators have increasingly taken an active role in regulating, and third-party financial institutions may cease or significantly reduce the offering of, financial products such as RALs. These trends or potential developments could impede our ability to facilitate these financial products, reduce demand for our services and harm our business. Increased competition for tax preparation clients in our retail offices, online and software channels could adversely affect our current market share and profitability, and could limit our ability to grow our client base. Our alternative practice structure involves relationships with Attest Firms that are subject to regulatory restrictions and other constraints. Failure to comply with these restrictions, or operational difficulties involving the Attest Firms, could damage our brand reputation, lead to reduced earnings and impair our investment in RSM. We are subject to extensive government regulation, including banking and securities rules and regulations. If we fail to comply with applicable securities and banking laws, rules and regulations, we could be subject to disciplinary actions, damages, penalties or restrictions that could significantly harm our business. Economic conditions that negatively affect housing prices and the job market may result in deterioration in credit quality of our loan portfolio, and such deterioration could have a negative impact on our business. Downturns in the securities markets increase the credit risk associated with margin lending and stock loan transactions. Our ability to retain and attract qualified financial advisors is critical to the success of our business and the failure to do so may materially adversely affect our performance. Changes in interest rates may adversely affect our business, including net interest income and earnings. OOMC is subject to potential contingent liabilities stemming from discontinued mortgage operations, which may result in significant financial losses.

Full 10-K form ▸

12659--6/30/2008--H&R_BLOCK_INC