H&R Block released an update on its lawsuit against its refund anticipation loan provider, HSBC, saying the two have been “in discussions.”

“H&R Block confirmed that while its lawsuit is pending with its RAL provider, the parties have been engaged in discussions in an attempt to settle the litigation to confirm the availability of settlement products,” said the statement. “The company did not disclose any details of the discussions, which are confidential, and there is no assurance that any settlement can be reached. In the meantime, the company is continuing to prepare to vigorously pursue its claims at the hearing scheduled for next Monday, November 15.”

Block sued HSBC last month, seeking to require the bank to provide the funding for RALs and refund anticipation checks next tax season (see H&R Block Sues HSBC over RALs). Block said in its lawsuit against HSBC that it had no comparable alternative source for providing the RALs for the 2011 tax season.

HSBC told Block it could not provide funding for the RALs and refund anticipation checks because the IRS has decided to stop providing a debt indicator next tax season that would say whether a taxpayer has liens outstanding, and that would make the loans too risky to provide. HSBC has been in the process of withdrawing from the RAL business since 2007 and Block is its only remaining customer.

Block claims that instant RALs and refund checks don’t need a debt indicator from the IRS. It filed suit against HSBC seeking to require the bank to perform its contractual obligations under a 2005 agreement between the two companies.

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