Kansas City, Mo. ? A proposed settlement of a class-action lawsuit over tax-refund loans made by H&R Block Inc. includes provisions to explain the costs and options of that service to customers.

In the lawsuit, plaintiffs contended the nation’s largest tax preparer and other companies affiliated with its quick tax-refund loans were charging high interest rates without adequate disclosure of the terms.

This week, Block and its banking partner, HSBC Taxpayer Financial Services Inc., announced they had reached a tentative settlement of the lawsuit for $110 million in cash plus coupons, worth $250 million, to be used for tax return services from Block.

The settlement is subject to approval by U.S. District Judge Elaine Bucklo of Chicago, who rejected another proposed settlement in 2003.

“There’s a lot of assumptions yet, but this was the first step,” plaintiff attorney Steve Angstreich said. “We think the settlement is a very good one, not only for the present class but for future customers of Block because of prospective relief.”

He said the plan called for Block to establish and maintain a six-step process for disclosing information to customers who obtained loans in anticipation of their income tax refunds.

Mark A. Ernst, Block’s chairman and CEO, said in a statement that the company believed its practices “can become the foundation for establishing the industry standard in how to responsibly meet the needs to those consumers who choose a refund anticipation loan.”

Block said customers would be told all their tax filing options and costs and how long it would take to receive refunds.

Angstreich’s Philadelphia-based law firm is co-lead counsel for the plaintiffs with a New York firm, Kirby, McInerney and Squire.

Angstreich said that if the judge gave preliminary approval, notice would be sent to members of the class before a hearing to determine if the settlement was fair. The agreement would cover more than 55 million refund anticipation loan transactions.