Crackdown on MetaBank Casts a Shadow on NetSpend’s IPO
Federal banking regulators this thirty days cracked straight straight down on MetaBank, a significant card that is prepaid, an action that tossed into concern the pending initial general public providing of prepaid credit card system supervisor NetSpend Corp.
Austin, Texas-based NetSpend is planned to cost its long-planned IPO on Thursday, based on reports regarding the monetary cables. But its close ties to MetaBank caused rounds of conjecture about if the IPO will in truth take place. A NetSpend representative claims he can’t comment.
On Tuesday, MetaBank’s moms and dad business, Storm Lake, Iowa-based Meta Financial Group Inc., reported towards the Securities and Exchange Commission that any office of Thrift Supervision had taken enforcement actions against MetaBank. The OTS banned MetaBank from issuing any brand new loans under its iAdvance item at the time of Wednesday, and in addition it put settings on its company of issuing loans prior to clients’ receipt of tax refunds, so-called tax-refund expectation loans.
“The OTS recommended us on Oct. 6 so it has determined that the lender involved with unfair or misleading functions or methods in breach of the Federal Trade Commission Act and OTS marketing laws relating to the bank’s operation for the iAdvance system and needed the lender to discontinue all iAdvance line-of-credit origination task by Oct. 13, 2010,” Meta Financial’s filing claims.
The filing will not provide facts about exactly what the OTS bought at fault with iAdvance, which can be a short-term loan product which MetaBank calls a “microloan” although some news reports call it a pay day loan. MetaBank supplies the solution to NetSpend as well as other consumers for whom it issues cards that are prepaid. Read more