H&R Block, a tax services provider said that it would sell its banking assets. The proposed sale would be made to a subsidiary of Republic Bancorp Inc. The company said that the move was to avoid intense increase of costs associated with stricter banking rules required by the Federal Reserve.

Last October, H&R Block said that it would weigh its options regarding its banking unit. This was after the Federal Reserve proposed rules to raise capital as a part of savings and loan holding requirements. The changes should be implemented as required by the Dodd-Frank Act.

H&R Block CFO Greg Macfarlane said that the proposed rules would require the company to hold additional capital. The said proposed rules do not align properly with the firm's capital light business model, he added.

H&R Block Bank would sell some of its assets and transfer some liabilities to Republic Bank and Trust Co.  Goldman Sachs & Co and First Annapolis Consulting Inc were appointed as financial advisers. Stinson Morrison Hecker and Morrison & Foerster LLP were chosen as the company's legal advisers.