Green Dot receives proposed consent order from US Federal Reserve
US-based digital bank and fintech Green Dot has received a proposed consent order from the US Federal Reserve, which the firm says relates “principally to various aspects of compliance risk management, including consumer compliance and compliance with anti-money laundering regulations”.
Green Dot hit with proposed consent order by the Federal Reserve
In its recently published Q4 and full year financial results for 2023, Green Dot states that the matters addressed in the proposed consent order “relate to activities and practices that commenced prior to the company’s Chief Executive Officer transition in 2020”.
The company adds that the consent order includes “proposals for civil money penalties related to these issues” and it is “still in discussions with the Federal Reserve Board regarding these proposals”.
Green Dot says it has “accrued as part of its GAAP financial results an estimated liability of $20 million related to the proposed consent order during the quarter ended December 31, 2023”, adding that “the estimate of the aggregate range of reasonably possible losses” could be up to $50 million.
The company’s Q4 and full year financial results for 2023 also showed a 4% year-on-year increase in its total operating revenues, which came in at $1.5 billion. Elsewhere, its adjusted EBITDA fell 28% to $170.87 million and its non-GAAP net income fell 39% to $85.21 million.
Jess Unruh, Green Dot’s CFO, says the company faced “numerous headwinds” throughout 2023 that are now reflected in its latest financial performance, namely “higher interest rates, client de-conversions and elevated spending on a variety of initiatives, including our processor conversions”.
“As I look at 2024, I expect to return to growth in the second half of the year as we lap tough comparisons, and more fully realise the benefit of new partner launches, expense management initiatives and other measures that we undertook in 2023,” Unruh adds.
Earlier this month, Canadian payroll software firm Dayforce, formerly known as Ceridian, has selected Green Dot as its Banking-as-a-Service (BaaS) partner for its new on-demand pay offering.
