Key Points:
- Reason for Fine:
- Unfair and Deceptive Practices: Violations in marketing, selling, and servicing of prepaid debit card products.
- Deficient Consumer Compliance Risk Management Program: Failures in compliance and risk management.
- Specific Violations:
- Tax Refund Processing Fees: Failure to disclose full costs of tax refund processing fees on Santa Barbara Tax Products Group (SBTPG) services.
- Access to Unemployment Benefits: Hindering access to prepaid debit card accounts for state unemployment benefits recipients due to inadequate policies between May and June 2020.
- Authorization Holds: A data migration error caused delays in authorizing transactions for general purpose reloadable (GPR) prepaid debit cards, affecting available account balances.
- Compliance Failures:
- Deficiencies in consumer compliance and anti-money laundering (AML) compliance.
- Corrective Measures:
- Independent Third-Party Oversight: Required to strengthen consumer compliance risk management and address root causes of consumer complaints.
- Develop Effective AML Program: Hire an independent third party to review transaction activities.
- Company Response:
- CEO Statement: George Gresham, Green Dot’s director, CEO, and president, acknowledged the issues and outlined steps taken to correct and remediate them, including updates to processes, product packaging, marketing, management team, and compliance programs.
- Commitment to Compliance: Green Dot is committed to cooperating with regulators to ensure all concerns are addressed and to protect customers.
This summary outlines the key points of Green Dot’s $44 million fine, the reasons for the fine, specific violations, corrective measures, and the company’s response.
