6 unchanged sentences
While such staffing issues have been resolved, it is possible that we may continue to experience similar issues in the future due to the pandemic.
−Removed: The business and operations of our retail distributors and our BaaS and other partners have likewise been disrupted, with many experiencing reduced foot traffic or usage of their services.
−Removed: The duration and magnitude of the effects of COVID-19 remain uncertain and dependent on various factors, including the continued severity and transmission rate of the virus and new variants of the virus, the nature of and duration for which the preventative measures remain in place, the extent and effectiveness of containment and mitigation efforts, including vaccination programs, the type of stimulus measures and other policy responses that the U.S.
−Removed: government may further adopt, and the impact of these and other factors on our employees, customers, retail distributors, partners and vendors.
−Removed: In 2020, the conditions caused by the COVID-19 pandemic adversely affected our customers’ spending levels and ability or willingness to purchase our products and services through our retail distributors, lowered the volume of transactions of certain programs and delayed the launching of new products and services, although governmental actions such as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) helped mitigate the effects of COVID-19 on our business in 2020, and in December 2020 and March 2021, two economic stimulus packages totaling $2.8 trillion were signed into law, providing for additional direct payments and enhanced unemployment benefits through September 2021.
+Added: The business and operations of our retail distributors and our BaaS and other partners were likewise disrupted, with many having experienced reduced foot traffic or usage of their services.
+Added: The duration and magnitude of the effects of COVID-19 remain uncertain and dependent on various factors, including the continued severity and transmission rate of the virus and new variants of the virus, the nature of and duration for which the preventative measures remain in place, the extent and effectiveness of containment and mitigation efforts, including vaccination programs and mandates, the type of stimulus measures and other policy responses that the U.S.
+Added: government may further adopt, if any, and the impact of these and other factors on our employees, customers, retail distributors, partners and vendors.
+Added: In 2020, the conditions caused by the COVID-19 pandemic adversely affected our customers’ spending levels and ability or willingness to purchase our products and services through our retail distributors, lowered the volume of transactions of certain programs and delayed the launching of new products and services, although governmental actions such as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) helped mitigate the effects of COVID-19 on our business in 2020, and in December 2020 and March 2021, two economic stimulus packages totaling $2.8 trillion were signed into law, providing for additional direct payments and enhanced unemployment benefits which expired in September 2021.
As a result of the pandemic, we have experienced and may continue to experience increased costs, including higher call center costs and disputed transaction losses, which could continue to adversely affect our business, results of operations, and financial condition in future periods.
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A significant portion of our operating revenues are derived from the products and services sold at our four largest retail distributors.
−Removed: As a percentage of total operating revenues, operating revenues derived from products and services sold at the store locations of Walmart was approximately 23.0% and 24.0% for the three and six months ended June 30, 2021, respectively.
+Added: As a percentage of total operating revenues, operating revenues derived from products and services sold at the store locations of Walmart was approximately 23.0% for each of the three and nine months ended September 30, 2021, respectively.
We expect that Walmart will continue to have a significant impact on our operating revenues in future periods, particularly in our Consumer Services segment.
It would be difficult to replace Walmart and the operating revenues derived from products and services sold at their stores.
−Removed: Accordingly, the loss of Walmart or any significant decrease in customers’ spending levels and ability or willingness to purchase our account products through Walmart, for any reason, including due to the COVID-19 pandemic, would have a material adverse effect on our business and results of operations.
+Added: Accordingly, the loss of
+Added: Walmart or any significant decrease in customers’ spending levels and ability or willingness to purchase our account products through Walmart, for any reason, including due to the COVID-19 pandemic, would have a material adverse effect on our business and results of operations.
In addition, any publicity associated with the loss of any of our large retail distributors could harm our reputation, making it more difficult to attract and retain consumers and other retail distributors, and could lessen our negotiating power with our remaining and prospective retail distributors.
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Our base of tax preparation partners is concentrated, and the performance of our Money Movement Services segment depends in part on our ability to retain existing partners.
−Removed: If one or more of our major tax preparation partners were to substantially reduce or stop offering our services to their customers, our tax refund processing services business, a component of our Money Movement Services segment, results of operations and financial condition would be harmed.
+Added: If one or more of our major tax preparation partners were to substantially reduce or stop offering our services to their customers, our tax refund processing services business, a component of our Money Movement Services segment, would be harmed.
Substantially all the revenues we generate from our tax refund processing services business have come from sales through a relatively small number of tax preparation firms.
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Accordingly, losing the support of our retail distributors and tax preparation partners might limit or reduce the sales of our products and services.
−Removed: Our operating revenues and operating expenses may also be negatively affected by the operational decisions by our retail distributors and tax preparation partners.
−Removed: For example, if a retail distributor reduces shelf space for our products or implements changes in its systems that disrupt the integration between its systems and ours, our product sales could be reduced or decline and we may incur additional merchandising costs
−Removed: to ensure our products are appropriately stocked.
−Removed: Similarly, for a variety of reasons, many of our tax preparation partners that provide commercial income tax preparation software offer their customers several types for tax refund processing services, including those of our competitors.
+Added: Our operating revenues and operating expenses may also be negatively affected by the operational decisions of our retail distributors and tax preparation partners.
+Added: For example, if a retail distributor reduces shelf space for our products or implements changes in its systems that disrupt the integration between its systems and ours, our product sales could be reduced or decline, and we may incur additional merchandising costs to ensure our products are appropriately stocked.
+Added: Similarly, for a variety of reasons, many of our tax preparation partners that provide commercial income tax preparation software offer their customers several alternatives for tax refund processing services, including those of our competitors.
Even if our retail distributors and tax preparation partners actively and effectively promote our products and services, there can be no assurance that their efforts will maintain or result in growth of our operating revenues.
1 unchanged sentence
Our prospects for growth depend on our ability to innovate by offering new, and adding value to our existing, product and service offerings and on our ability to effectively commercialize such innovations.
−Removed: For example, in January 2021, we launched GO2bank, a new mobile bank account aimed at serving the low-and moderate-income market.
+Added: For example, in January 2021, we launched GO2bank, a new mobile bank account aimed at serving the low-and moderate-income
We will continue to make investments in research, development, and marketing for new products and services.
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We maintain reserves to cover the risk that we may not recover these receivables due from our cardholders, but our exposure may increase above these reserves for a variety of reasons, including our failure to predict the actual recovery rate accurately.
−Removed: To the extent we incur losses from overdrafts above our reserves or we determine that it is necessary to increase our reserves substantially, our business, results of operations and financial condition could be materially and adversely affected.
+Added: the extent we incur losses from overdrafts above our reserves or we determine that it is necessary to increase our reserves substantially, our business, results of operations and financial condition could be materially and adversely affected.
We face settlement risks from our distributors and banking partners, which may increase during an economic recession.
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If a retail distributor becomes insolvent, files for bankruptcy, commits fraud or otherwise fails to remit proceeds to our card issuing bank from the sales of our products and services, we are liable for any amounts owed to our customers.
−Removed: As of June 30, 2021, we had assets subject to settlement risk of $384.2 million.
+Added: As of September 30, 2021, we had assets subject to settlement risk of $452.6 million.
Given the possibility of recurring volatility in global financial markets, the approaches we use to assess and monitor the creditworthiness of our retail distributors may be inadequate, and we may be unable to detect and take steps to mitigate an increased credit risk in a timely manner.
−Removed: Economic recessions, such as the current recession due to the COVID-19 pandemic, could result in settlement losses, whether or not directly related to our business.
+Added: Economic recessions could result in settlement losses, whether or not directly related to our business.
We are not insured against these risks.
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The electronic payments industry, including the prepaid financial services segment within that industry, depends heavily upon the overall level of consumer spending.
−Removed: According to the National Bureau of Economic Research the United States has been in an economic recession since June 2020.
−Removed: A prolonged recession may result in us experiencing a reduction in the number of our accounts that are purchased or reloaded, the number of transactions involving our cards and the use of our reload network and related services.
+Added: An economic recession may result in us experiencing a reduction in the number of our accounts that are purchased or reloaded, the number of transactions involving our cards and the use of our reload network and related services.
A sustained reduction in the use of our products and related services, either as a result of a general reduction in consumer spending or as a result of a disproportionate reduction in the use of card-based payment systems, would materially harm our business, results of operations and financial condition.
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As the prepaid financial services industry evolves, consumers may find prepaid financial services to be less attractive than traditional or other financial services.
−Removed: Consumers might not use prepaid financial services for any number of reasons, including the general perception of our industry, new technologies, a decrease in our distribution partners’ willingness to sell these products as a result of a more challenging regulatory environment or other factors outside of our control such as the current economic recession due to the COVID-19 pandemic.
+Added: Consumers might not use prepaid financial services for any number of reasons, including the general perception of our industry, new technologies, a decrease in our distribution partners’ willingness to sell these products as a result of a more challenging regulatory environment or other factors outside of our control such as an economic recession.
If consumers do not continue or increase their usage of prepaid cards, including making changes in the way prepaid cards are loaded, our operating revenues may decline.
Any projected growth for the industry may not occur or may occur more slowly than estimated.
−Removed: If consumer acceptance of prepaid financial services does not continue to develop or develops
−Removed: more slowly than expected or if there is a shift in the mix of payment forms, such as cash, credit cards, traditional debit cards and prepaid cards, away from our products and services, it could have a material adverse effect on our financial position and results of operations.
+Added: If consumer acceptance of prepaid financial services does not continue to develop or develops more slowly than expected or if there is a shift in the mix of payment forms, such as cash, credit cards, traditional debit cards and prepaid cards, away from our products and services, it could have a material adverse effect on our financial position and results of operations.
RISKS RELATED TO OUR OPERATIONS
2 unchanged sentences
Our business involves the movement of large sums of money, the processing of large numbers of transactions and the management of the data necessary to do both.
−Removed: Our success in our account programs, including our BaaS programs, as well as our money movement services, depends upon the efficient and error-free handling of the money that is collected, remitted or deposited in connection with the provision of our products and services.
+Added: Our success in our account programs, including our BaaS programs, as well as our money movement services,
+Added: depends upon the efficient and error-free handling of the money that is collected, remitted or deposited in connection with the provision of our products and services.
We rely on the ability of our employees, systems and processes and those of the banks that issue our cards, our retail distributors, tax refund preparation partners, other business partners and third-party processors to process and facilitate these transactions in an efficient, uninterrupted and error-free manner.
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The risk of unauthorized circumvention of our security measures has been heightened by advances in computer capabilities and the increasing sophistication of hackers, including state sponsored hackers.
−Removed: Our retail distributors, tax preparation partners, network acceptance members, other business partners, third-party processors and the merchants that accept our cards also may experience similar security breaches involving the receipt, transmission and storage of our confidential customer and other information.
+Added: Our retail distributors, tax preparation partners, network acceptance members, other business partners, third-party processors and the merchants that accept our cards also may experience similar security breaches or discover securities vulnerabilities involving the receipt, transmission and storage of our confidential customer and other information.
Improper access to our or these third parties’ systems or databases could result in the theft, publication, deletion or modification of confidential customer and other information.
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Further, a significant data security breach could lead to additional regulation, which could impose new and costly compliance obligations.
−Removed: In addition, a data security breach at one of the third-party banks that issue our cards or at our retail distributors, tax preparation partners, network acceptance members, other business partners, third-party processors or the merchants that accept our cards could result in significant reputational harm to us and cause the use and acceptance of our cards or other products and services to decline, either of which could have a significant adverse impact on our operating revenues and future growth prospects.
+Added: In addition, a data security breach or perceived security vulnerability at one of the third-party banks that issue our cards or at our retail distributors, tax preparation partners, network acceptance members, other business partners, third-party processors or the merchants that accept our cards could result in significant reputational harm to us and cause the use and acceptance of our cards or other products and services to
+Added: decline, either of which could have a significant adverse impact on our operating revenues and future growth prospects.
Moreover, it may require substantial financial resources to address and remediate any such breach, including additional costs for replacement cards, manufacturing, distribution, re-stocking fees, fraud monitoring and other added security measures, among others, which could have a significant adverse impact on our operating results.
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If we fail to comply with the applicable capital and leverage requirements, or if our subsidiary bank fails to comply with its applicable capital and leverage commitments, the Federal Reserve Board may limit our ability to pay dividends or fund stock repurchases, or if we become less than adequately capitalized, require us to raise additional capital.
−Removed: In addition, as a bank holding company and a financial holding company, we are generally prohibited from engaging, directly or indirectly, in any activities other than those permissible for bank holding companies and financial holding companies.
−Removed: For example, if at any time we or Green Dot Bank fail to be “well capitalized” or “well managed,” we may not commence, or acquire any shares of a company engaged in, any activities only permissible for an FHC, without prior Federal Reserve approval.
+Added: As a bank holding company and a financial holding company, we are generally prohibited from engaging, directly or indirectly, in any activities other than those permissible for bank holding companies and financial holding companies.
+Added: In addition, if at any time we or Green Dot Bank fail to be “well capitalized” or “well managed,” we may not commence, or acquire any shares of a company engaged in, any activities only permissible for an FHC, without prior Federal Reserve approval.
The restriction on our ability to commence, or acquire any shares of a company engaged in, any activities only permissible for an FHC, without prior Federal Reserve approval would also generally apply if Green Dot Bank received a CRA rating of less than “Satisfactory.” Any such restriction might limit our ability to pursue future business opportunities which we might otherwise consider, but which might fall outside the scope of permissible activities.
3 unchanged sentences
Such restrictions may include not being able to engage in certain categories of new activities or acquire shares or control of other companies.
−Removed: We would not expect these restrictions to materially restrict us from engaging in activities that are currently contemplated by our business plan.
The failure by Green Dot Bank to maintain its status as a "well-capitalized" institution could have a serious adverse effect on its ability to conduct key portions of its current deposit-taking activity.
2 unchanged sentences
In such a case, the FDIC’s refusal to grant consent to our accepting, renewing or rolling over brokered deposits could materially adversely affect the financial condition and operations of Green Dot Bank and the Company and could effectively restrict the ability of Green Dot Bank to operate its business lines as presently conducted.
−Removed: In December 2020, the FDIC issued a final rule relating to the brokered deposits restrictions that apply to less than well capitalized insured depository institutions.
−Removed: The final rule establishes a new framework for analyzing certain provisions of the “deposit broker” definition, including “placing deposits,” “facilitating the placement of deposits” and “primary purpose.” The final rule became effective on April 1, 2021, with full compliance with the brokered deposit part of the regulation extended to January 1, 2022.
−Removed: The extended compliance date is intended to provide sufficient time for financial institutions to put in place systems to implement the new regulatory regime and to allow the FDIC to develop internal processes and systems to ensure a consistent and robust review process.
+Added: The FDIC issued a final rule relating to the brokered deposits restrictions that apply to less than well capitalized insured depository institutions, which became effective on April 1, 2021, with full compliance with the brokered deposit part of the regulation extended to January 1, 2022.
+Added: The final rule establishes a new framework for analyzing certain provisions of the “deposit broker” definition, including “placing deposits,” “facilitating the placement of deposits” and “primary purpose.” The extended compliance date is intended to provide sufficient time for financial institutions to put in place systems to implement the new regulatory regime and to allow the FDIC to develop internal processes and systems to ensure a consistent and robust review process.
We cannot predict how the FDIC will implement the new rule and whether it will result in a change in the way our deposits are classified.
Failure by us and our business partners to comply with applicable laws and regulations could have an adverse effect on our business, financial position and results of operations.
−Removed: The banking, financial technology, transaction processing and tax refund processing services industries are highly regulated, and failure by us, the banks that issue our cards or the businesses that participate in our reload network or other business partners to comply with the laws and regulations to which we are subject could negatively
−Removed: impact our business.
+Added: The banking, financial technology, transaction processing and tax refund processing services industries are highly regulated, and failure by us, the banks that issue our cards or the businesses that participate in our reload network or other business partners to comply with the laws and regulations to which we are subject could negatively impact our business.
We are subject to state money transmission licensing requirements and a wide range of federal and other state laws and regulations.
1 unchanged sentence
For example, we are subject to the anti-money laundering reporting and recordkeeping requirements of the Bank Secrecy Act (“BSA”), as amended by the PATRIOT Act.
−Removed: In addition, legal requirements relating to the collection, storage, handling, use, disclosure, transfer, and security of personal data continue to increase, along with enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations.
+Added: In addition, legal requirements relating to the collection, storage, handling, use, disclosure, transfer, and security of
+Added: personal data continue to increase, along with enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations.
From time to time, federal and state legislators and regulatory authorities, including state attorney generals, increase their focus on the banking, consumer financial services and tax preparation industries and may propose and adopt new legislation or guidance that could result in significant adverse changes in the regulatory landscape for financial institutions and financial services companies.
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Furthermore, a substantial portion of our operating revenues is derived from interchange fees.
−Removed: For the three months ended June 30, 2021, interchange revenues represented 27% of our total operating revenues, and we expect interchange revenues to continue to represent a significant percentage of our total operating revenues.
+Added: For the three months ended September 30, 2021, interchange revenues represented 25% of our total operating revenues, and we expect interchange revenues to continue to represent a significant percentage of our total operating revenues.
The amount of interchange revenues that we earn is highly dependent on the interchange rates that the payment networks set and adjust from time to time.
1 unchanged sentence
While the interchange rates that may be earned by us and our subsidiary bank are exempt from the limitations imposed by the Dodd-Frank Act, there can be no assurance that future regulation or changes by the payment networks will not impact our interchange revenues substantially.
−Removed: If interchange rates decline, whether due to actions by the payment networks or future regulation, we would likely need to change our fee structure to offset the loss of interchange revenues.
+Added: If interchange rates decline, whether due to actions by the payment networks or future regulation, we would likely
+Added: need to change our fee structure to offset the loss of interchange revenues.
However, our ability to make these changes is limited by the terms of our contracts and other commercial factors, such as price competition.
4 unchanged sentences
We are subject to regulatory oversight in the normal course of our business and have been and from time to time may be subject to securities class actions and other litigation or regulatory or judicial proceedings or investigations.
−Removed: The outcome of litigation and regulatory or judicial proceedings or investigations is difficult to predict.
+Added: For example, on October 5, 2021, Republic Bank & Trust Company ("Republic Bank") brought a lawsuit against us in the Court of Chancery of the State of Delaware.
+Added: The lawsuit claims that we breached the contract in which we agreed, subject to certain conditions, to purchase Republic Bank's Tax Refund Solutions business.
+Added: The lawsuit seeks, among other forms of relief, an order of specific performance requiring that we close the transaction or, in the alternative, monetary damages.
+Added: The outcome of this litigation, and any other litigation and regulatory or judicial proceedings or investigations is difficult to predict.
Plaintiffs or regulatory agencies or authorities in these matters may seek recovery of very large or indeterminate amounts, seek to have aspects of our business suspended or modified or seek to impose sanctions, including significant monetary fines.
5 unchanged sentences
In addition, such proceedings or investigations could increase the risk that we will be involved in litigation.
−Removed: The outcome of any such litigation is difficult to predict and the cost to defend, settle or otherwise resolve these matters may be significant.
−Removed: For the foregoing reasons, if regulatory or judicial proceedings or investigations were to be initiated against us by private or governmental entities, our business, results of operations and financial condition could be adversely affected or our stock price could decline.
+Added: For the foregoing reasons, any regulatory or judicial proceedings or investigations that are initiated against us by private or governmental entities, could adversely affect our business, results of operations and financial condition or could cause our stock price to decline.
We may be unable to adequately protect our brand and our intellectual property rights related to our products and services or third parties may allege that we are infringing their intellectual property rights.
42 unchanged sentences
• the timing and volume of purchases and use of our products and services;
−Removed: • the timing and volume of tax refunds or other government payments (including stimulus payments related to the COVID-19 pandemic) processed by us;
+Added: • the timing and volume of tax refunds or other government payments processed by us;
• the timing and success of new product or service introductions by us or our competitors;
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• changes in the political or regulatory environment affecting the banking, electronic payments or tax refund processing industries;
−Removed: • economic recessions or uncertainty in financial markets, including those recently caused by the COVID-19 pandemic, and the impact of inflation;
+Added: • economic recessions or uncertainty in financial markets, and the impact of inflation;
• the impact of the U.S.
3 unchanged sentences
From time to time, we issue guidance in our quarterly earnings conference calls, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release.
−Removed: Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will prove to be incorrect or will vary significantly from actual results.
−Removed: For example, on a number of occasions over the last several years we adjusted our revenue guidance when actual results varied from our assumptions.
−Removed: Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release.
+Added: Guidance is necessarily speculative in nature, and is only an estimate of what management believes is realizable as of the date of release, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will prove to be incorrect or will vary significantly from actual results.
Actual results will vary from our guidance and the variations may be material, especially in times of economic uncertainty.
5 unchanged sentences
In order to attract and retain personnel in a competitive marketplace, we must provide competitive pay packages, including cash and equity-based compensation and the volatility in our stock price may from time to time adversely affect our ability to recruit or retain employees.
−Removed: Acquisitions or investments could disrupt our business and harm our financial condition.
+Added: Acquisitions or investments, or the failure to consummate such transactions, could disrupt our business and harm our financial condition.
We have in the past acquired, and we expect to acquire in the future, other businesses and technologies.
−Removed: The process of integrating an acquired business, product, service or technology can involve a number of special risks and challenges, including:
+Added: Identifying suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to identify suitable candidates or successfully complete identified acquisitions.
+Added: Failure to complete an acquisition could adversely affect our business as we could be required to pay a termination fee under certain circumstances or be subject to litigation (such as in the case of the recent transaction involving Republic Bank), and our stock price may also suffer as the failure to consummate the acquisition may result in negative perception in the investment community.
+Added: Further, the process of integrating an acquired business, product, service or technology can involve a number of special risks and challenges, including:
• increased regulatory and compliance requirements;
8 unchanged sentences
• increased litigation or other claims in connection with the acquired company, including claims brought by terminated employees, customers, former stockholders or other third parties.
−Removed: If we are unable to successfully integrate an acquired business or technology or otherwise address these special risks and challenges or other problems encountered in connection with an acquisition, we might not realize the anticipated benefits of that acquisition, we might incur unanticipated liabilities, or we might otherwise suffer harm to our business generally.
+Added: If we are unable to successfully integrate an acquired business or technology or otherwise address these special risks and challenges or other problems encountered in connection with an acquisition, we might not realize the anticipated benefits of that acquisition, we might incur unanticipated liabilities, or we might otherwise suffer harm
+Added: to our business generally.
Furthermore, acquisitions and investments are often speculative in nature and the actual benefits we derive from them could be lower or take longer to materialize than we expect.
−Removed: In addition, to the extent we pay the consideration for any future acquisitions or investments in cash, it would reduce the amount of cash
−Removed: available to us for other purposes.
+Added: In addition, to the extent we pay the consideration for any future acquisitions or investments in cash, it would reduce the amount of cash available to us for other purposes.
Future acquisitions or investments could also result in dilutive issuances of our equity securities or the incurrence of debt, contingent liabilities, amortization expenses, or goodwill impairment charges, any of which could harm our financial condition and negatively impact our stockholders.
1 unchanged sentence
Because we have grown in part through acquisitions, our net goodwill and intangible assets represent a significant portion of our consolidated assets.
−Removed: Our net goodwill and intangible assets were $476.9 million as of June 30, 2021.
+Added: Our net goodwill and intangible assets were $474.3 million as of September 30, 2021.
Under accounting principles generally accepted in the United States, or U.S.
18 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.