What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-02-26 · 121 added, 111 removed, 261 unchanged (47% of the section changed)

Green Dot Corporation is a financial technology and registered bank holding company focused on making modern banking and money movement accessible for all.

Our goal is to deliver trusted, best-in-class money management and payment solutions to our customers and partners, seamlessly connecting people to their money.

Our proprietary technology enables faster, more efficient electronic payments and money management, powering intuitive and seamless ways for people to spend, send, control and save their money.

Through our bank, we offer a suite of financial products to consumers and businesses including debit, prepaid, checking, credit and payroll cards, as well as robust money processing services, such as tax refund processing, cash deposits and disbursements.

As the regulated entity and issuing bank for the substantial majority of products and services we provide, whether our own or on behalf of our platform partners, we are directly accountable for all aspects of each program’s integrity, inclusive of ensuring the program’s compliance with all applicable banking regulations, state and federal law and our various internal governance policies and procedures, in addition to deploying enterprise-class risk management practices and procedures to ensure each program’s initial and ongoing safety and soundness.

Green Dot Corporation (“we,” “our,” or “us” refer to Green Dot Corporation and its consolidated subsidiaries) is a financial technology and registered bank holding company committed to giving all people the power to bank seamlessly, affordably, and with confidence.

Our technology platform enables us to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money, and making financial empowerment more accessible for all.

As the regulated entity and issuing bank for the substantial majority of products and services we provide, whether our own or on behalf of our partners, we are directly accountable for all aspects of each program’s integrity, inclusive of ensuring the program’s compliance with all applicable banking regulations, state and federal law and our various internal governance policies and procedures, in addition to deploying enterprise-class risk management practices and procedures to ensure each program’s initial and ongoing safety and soundness.

Our Products and Services

Our products and services are divided among our two reportable segments:

1) Account Services and 2) Processing and Settlement Services.

Account Services

We offer a broad set of financial services to consumers and businesses including debit, checking, credit, prepaid, and payroll cards, as well as robust money movement services, such as tax refunds, cash deposits and disbursements.

We offer several deposit account programs, including:

• Innovative consumer and small business checking account products that allow customers to acquire and manage their checking account entirely through a mobile application available on smartphone devices;

• Network-branded reloadable prepaid debit cards marketed under several leading consumer brand names, collectively referred to as General Purpose Reloadable or GPR cards;

• Network-branded reloadable prepaid debit cards marketed under several leading consumer brand names;

• Network-branded gift cards (known as open-loop) that are sold at participating retail stores;

• Secured credit programs designed to help people establish or rehabilitate their national credit bureau score.

We earn revenues primarily through:

We earn revenues from these deposit account programs primarily through:

• Fees assessed to merchants for purchase transactions initiated by our cardholders (commonly known as interchange);

• Card revenues and other fees, principally consisting of fees charged to cardholders for certain transactions and usage of our products and platform fees we earn from our partners for use of our technology platform and our program management capabilities;

• Interest income earned from the investment of deposits held at Green Dot Bank (our wholly-owned subsidiary bank).

Products within our Account Services segment are generally issued by Green Dot Bank.

As a result of acquisitions over the past few years, we also manage programs issued by third-party issuing banks.

Processing and Settlement Services

We offer several products and services that specialize in facilitating the movement of funds on behalf of consumers and businesses, referred to as Money Processing and Tax Processing services.

• Card revenues and other fees, principally consisting of fees charged to cardholders for certain transactions and usage of our products and platform management fees we earn from our partners for use of our technology platform and our program management capabilities;

• Interest income earned from the investment of deposits held at Green Dot Bank.

Our deposit account programs are generally issued by Green Dot Bank.

We also manage programs issued by third-party issuing banks as a result of several acquisitions we have made over the past few years.

Prior to 2021, we offered several branded deposit programs through our various channels.

Beginning in 2021, we have focused our consumer deposit account programs on our flagship product, GO2bank, offering consumers simple and accessible mobile banking designed to help improve financial health over time.

GO2bank offers features such as consumer friendly overdraft protection, high-value rewards, high-interest savings, and opportunities to establish, build, and track credit, regardless of credit history.

We also offer a variety of products and services that specialize in facilitating the movement of funds on behalf of consumers and businesses, referred to as money processing and tax processing services.

Our money processing services include:

• Cash transfer services that enable consumers to add funds directly to an account at the point-of-sale at any participating retailer.

• Cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer.

We offer this service to our deposit account programs and any third-party bank or program manager (which we refer to as network acceptance members) that has enabled its cards to accept funds through our processing system.

We refer to this retail cash transaction network as the Green Dot Network;

• Simply Paid Disbursement services that enable wages and any type of authorized funds disbursement to be sent to our deposit account programs and accounts issued by any third-party bank or program manager.

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We earn revenues primarily through fees charged to consumers on a per transaction basis for cash transfer services, tax refund transfers and Simply Paid disbursements.

Our Market Strategy

Account Services

We offer our Account Services products to a broad group of consumers, ranging from never-banked to fully-banked consumers.

We focus our sales and marketing efforts on acquisition of long-term users of our products, enhancing our brands and image, building market adoption and awareness of our products, improving customer retention, and increasing card usage.

We offer the products and services in our Account Services segment through our omni-channel “branchless" distribution platform.

We utilize distribution arrangements with more than 90,000 retail locations, which we refer to as “retail distributors,” and thousands of neighborhood Financial Service Center locations.

We operate a supply chain comprised of proprietary technology and third-party vendors to design, manufacture and distribute packaging containing ready-to-use debit cards to our network of retail locations.

Our Distribution Strategy

We offer our products and services to a broad group of consumers, ranging from never-banked to fully-banked consumers.

We focus our sales and marketing efforts on acquisition of long-term users of our products and services, enhancing our brands and image, building market adoption and awareness of our products and services, improving customer retention, and increasing overall usage.

Our products and services are distributed and organized under our three reportable segments:

1) Consumer Services, 2) Business to Business ("B2B") Services, and 3) Money Movement Services.

Consumer Services

Our Consumer Services segment consists of revenues and expenses derived from deposit account programs, such as consumer checking accounts, prepaid cards, secured credit cards, and gift cards that we offer to consumers (i) through distribution arrangements with more than 90,000 retail locations and thousands of neighborhood Financial Service Center locations, which we refer to as our "Retail Channel", and (ii) directly through various marketing channels, such as online search engine optimization, online displays, direct mail campaigns, mobile advertising, and affiliate referral programs, which we refer to as our "Direct Channel".

In our Retail Channel, we operate a supply chain comprised of proprietary technology and third-party vendors to design, manufacture and distribute packaging containing ready-to-use debit cards to our network of retail locations.

Consumers can purchase these debit cards and initially load funds to the account in-store.

Once consumers register their account with us, the account can be loaded through a variety of funding mechanisms, such as payroll direct deposit or utilizing our processing and settlement services.

Direct-to-consumer

We market directly to consumers through various marketing channels, such as online search engine optimization, online displays, direct mail campaigns, mobile advertising, and affiliate referral programs.

Consumers may visit our websites to open a deposit account (our "Direct" programs).

Prior to 2021, we offered several branded deposit programs through multiple websites.

Beginning in 2021, we have focused our efforts around a single product, GO2bank, a new mobile bank designed to help the majority of Americans living paycheck to paycheck build a stronger financial foundation.

GO2bank is designed to help our customers lower the cost of accessing and managing their money and offers features such as overdraft protection, high-value rewards, high-interest savings, and opportunities to establish, build, and track credit, regardless of credit history.

This new product strategy allows us to optimize the efficiency of our marketing spend and add features and functionality to the product over time to meet the growing demands of consumers.

We offer a comprehensive payroll platform to corporate enterprises (our "PayCard" programs) to facilitate payments made for today’s workforce, including:

• Paycard programs that help corporate enterprise eliminates paper checks, reduces costs and improves efficiency;

• Employee access earned wages on demand;

• Affordable instant digital pay options that replace slow and costly traditional pay methods.

Banking-as-a-Service

We partner with America's most prominent consumer and technology companies to design and deploy their own bespoke fintech banking solutions through our banking platform.

In our Direct Channel, consumers can open an account online or through our mobile app.

Once consumers register their account with us, the account can be loaded through a variety of funding mechanisms, such as payroll direct deposit or utilizing our money processing services.

Our B2B Services segment consists of revenues and expenses derived from (i) our partnerships with some of the United States' most prominent consumer and technology companies that make our banking products and services available to their consumers, partners and workforce through integration with our banking platform, which we refer to as our "Banking-as-a-Service", or "BaaS Channel", and (ii) a comprehensive payroll platform that we offer to corporate enterprises, which we refer to as our "Employer Channel", to facilitate payments for today’s workforce.

Our products and services in this segment include deposit account programs, such as consumer and small business checking accounts and prepaid cards, as well as our Simply Paid Disbursements services utilized by our partners.

In our BaaS Channel, also referred to as our Banking Platform Services, our partners make our banking products and services available to their consumers, partners and workforce through integration with our banking platform, and in doing so, our addressable market expands to a broader spectrum of consumers as well as small businesses.

Our banking platform includes an integrated bank, full program management services and enterprise-grade technology.

Our partners make our banking products and services available to their consumers, partners and workforce through integration with our banking platform (our "BaaS" account programs).

In doing so, our addressable market expands to a broader spectrum of consumers as well as small businesses.

Our partners currently include Apple, Inc., Uber Technologies, Inc., Intuit, Inc., Amazon.com, Inc., Stash Financial, Inc.

amongst others.

Processing and Settlement Services

Our Money Processing services are marketed to third-party banks, program managers, and other companies seeking cash deposit and disbursement capabilities for their customers.

Those customers, including our own cardholders, have the ability to access our cash deposit and disbursement services at any of the locations within our network of retail distributors and neighborhood Financial Service Centers.

We market our tax-related financial services through a network of tax preparation franchises, independent tax professionals and online tax preparation providers, which are sometimes referred to as electronic return originators, or “EROs.” We also offer these consumers the option to deposit their tax refund proceeds onto one of our debit account products, which further expands the reach of our Account Services.

In our Employer Channel, we offer a comprehensive payroll platform to corporate enterprises to facilitate payments made for today’s workforce, including:

• PayCard programs that help corporate enterprises eliminate paper checks, reduce costs and improve efficiency;

• On demand employee wage access;

• Affordable instant digital pay options that replace slow and costly traditional pay methods.

Money Movement Services

Our Money Movement Services segment consists of revenues and expenses generated on a per transaction basis from our services that specialize in facilitating the movement of cash on behalf of consumers and businesses, such as money processing services and tax refund processing services.

Our money processing services, such as cash deposit and disbursements, are marketed to third-party banks, program managers, and other companies seeking cash deposit and disbursement capabilities for their customers.

Those customers, including our own cardholders, can access our cash deposit and disbursement services at any of the locations within our network of retail distributors and neighborhood Financial Service Centers.

Our tax processing services are marketed through a network of tax preparation franchises, independent tax professionals and online tax preparation providers, which are sometimes referred to as electronic return originators, or “EROs.” We also offer these consumers the option to deposit their tax refund proceeds onto one of our debit account products, which further expands the reach of our deposit account programs.

ESG Management

We are committed to making modern banking and money movement accessible for all, and we believe that managing our business in a sustainable manner is an important part of this goal.

At the board level, our Nominating and Corporate Governance Committee (the “NCG Committee”) oversees our environmental, social and governance (“ESG”) programs, policies and practices.

The NCG Committee’s duties in this regard include reviewing and evaluating the Company’s programs, policies and practices relating to ESG issues and related disclosures and recommending to the Board of Directors the company’s overall strategy with respect to ESG matters.

In 2022, we continued to advance our ESG strategy by establishing a management-level ESG Steering Committee (the "ESG Steering Committee").

The purpose of the ESG Steering Committee is to assist the NCG Committee in fulfilling its oversight responsibilities with respect to ESG matters, including by reviewing and approving programs, policies and practices relating to ESG issues and overseeing and monitoring the implementation of our ESG program.

We intend to continue to examine the ESG topics that are most relevant for our business and stakeholders as we further develop and advance our ESG strategy.

We believe this approach to ESG management helps to enable us to create value for both our stockholders and our other stakeholders, including our customers, partners, employees and communities.

We will endeavor to provide transparent disclosures on the progress of this work.

Our Technology Platform

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Walmart is our largest retail distributor.

Green Dot Corporation is the provider of Walmart-branded GPR cards sold at Walmart and Green Dot Bank is the issuer of those card accounts.

Pursuant to our agreement with Walmart, Green Dot designs and delivers the Walmart MoneyCard product and provides all ongoing program support, including network IT, regulatory and legal compliance, website functionality, customer service and loss management.

Walmart provides us with shelf space to display and offer the card accounts to consumers.

As the issuing bank, Green Dot Bank holds the associated FDIC-insured deposits.

We are the provider of the Walmart MoneyCard product sold at Walmart, and Green Dot Bank is the issuer of those card accounts.

As the issuing bank, Green Dot Bank holds the associated Federal Deposit Insurance Corporation ("FDIC") insured deposits.

Pursuant to our agreement with Walmart, we design and deliver the Walmart MoneyCard product and provide all ongoing program support, including network IT, regulatory and legal compliance, website functionality, customer service and loss management.

In addition to Walmart MoneyCard products, we offer our Green Dot-branded and GO2bank deposit account products at Walmart, providing consumers the choice to purchase either Green Dot-branded products or Walmart MoneyCard products.

We are also the provider of certain Walmart-branded open loop gift cards.

Walmart provides us with shelf space to display and offer the deposit accounts to consumers.

All Walmart MoneyCard products are reloadable exclusively on the Green Dot Network.

In addition to Walmart MoneyCards, we offer our Green Dot-branded cards and our GoBank checking account product at Walmart, providing consumers the choice to purchase either Green Dot-branded products or Walmart MoneyCard products.

Additionally, Walmart enables cash transfer services for our deposit account programs and third-party programs through the Green Dot Network.

Our operating revenues derived from the several products and services we offer through Walmart stores and other Walmart distribution avenues in aggregate represented approximately 24%, 27%, and 34% of our total operating revenues for the years ended December 31, 2021, 2020, and 2019, respectively.

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We rely on a combination of patent, trademark and copyright laws and trade secret protections in the United States, as well as confidentiality procedures and contractual provisions, to protect the intellectual property rights related to our products and services.

We own several trademarks, including Green Dot and GoBank.

We own several trademarks, including Green Dot and GO2bank.

Through agreements with our network acceptance members, retail distributors and customers, we authorize and monitor the use of our trademarks in connection with their activities with us.

Our patent portfolio currently consists of 13 issued patents and 5 patent applications pending.

The current remaining terms for the patents we hold vary between 5 and 16 years .

Our patent portfolio currently consists of 13 issued patents, 2 published patents and 1 patent application pending.

The current remaining terms for the patents we hold vary between approximately 4 and 20 years .

We feel our patents and applications are important to our business and help to differentiate our products and services from those of our competitors.

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We and our subsidiaries are subject to supervision, regulation and examination by various federal and state regulators, including the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Utah Department of Financial Institutions (the “Utah DFI”) and various other state regulatory agencies.

The statutory and regulatory framework that governs us is generally intended to protect depositors and customers, the FDIC’s Deposit Insurance Fund (“DIF”), the U.S.

The statutory and regulatory framework that governs us is generally intended to protect depositors and customers, the FDIC’s Deposit Insurance Fund (the “DIF”), the U.S.

banking and financial system, and financial markets as a whole.

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Many of these changes occurred as a result of the Dodd-Frank Wall Street Reform and Consumer Protect Act (the “Dodd-Frank Act”) and its implementing regulations, most of which are now in place.

While the regulatory environment has entered a period of tailoring and rebalancing of the

post financial crisis framework, we expect that our business will remain subject to extensive regulation and supervision.

We are also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, both as administered by the SEC, as well as the rules of the New York Stock Exchange that apply to companies with securities listed on the New York Stock Exchange.

While the regulatory environment has entered a period of tailoring and rebalancing of the post financial crisis framework, we expect that our business will remain subject to extensive regulation and supervision.

We are also subject to the disclosure and regulatory requirements of the Securities Act and the Exchange Act both as administered by the SEC, as well as the rules of the New York Stock Exchange that apply to companies with securities listed on the New York Stock Exchange.

The following discussion describes certain elements of the comprehensive regulatory framework applicable to us.

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Regulatory Agencies

In 2011 we completed our acquisition of Bonneville Bancorp and became a bank holding company (“BHC”) registered with the Federal Reserve under the Bank Holding Company Act of 1956 (“BHC Act”).

We are a bank holding company (a “BHC”) registered with the Federal Reserve under the Bank Holding Company Act of 1956 (the “BHC Act”).

As a BHC, Green Dot Corporation is subject to the requirements of the BHC Act as well as supervision, regulation and examination by the Federal Reserve, which serves as the primary federal banking regulator of our consolidated organization.

As an FDIC-insured commercial bank that is chartered under the laws of Utah and a member of the Federal Reserve System, Green Dot Bank and its subsidiaries are subject to regulation, supervision and examination by the Federal Reserve and the Utah DFI.

The Consumer Financial Protection Bureau (“CFPB”) has broad rulemaking authority over a wide range of federal consumer protection laws applicable to the business of Green Dot Bank.

The Consumer Financial Protection Bureau (the “CFPB”) has broad rulemaking authority over a wide range of federal consumer protection laws applicable to the business of Green Dot Bank.

Because Green Dot Bank currently has less than $10 billion in total consolidated assets, Green Dot Bank is subject to regulations adopted by the CFPB, but the Federal Reserve is primarily responsible for examining Green Dot Bank’s compliance with federal consumer financial laws and those CFPB regulations.

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In general, the BHC Act limits the business of BHCs to banking, managing or controlling banks and other activities that the Federal Reserve has determined to be so closely related to banking as to be a proper incident thereto.

Under the BHC Act, BHCs that have qualified and elected to be treated as a financial holding company (“FHC”) generally may engage in a broader range of additional activities that are (i) financial in nature or incidental to such financial activities or (ii) complementary to a financial activity and do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.

A BHC qualifies to become an FHC if it and its subsidiary depository institutions are “well capitalized” and “well managed” and its subsidiary depository institutions have a rating under the Community Reinvestment Act (“CRA”) of at least “Satisfactory” at their most recent examination.

Under the BHC Act, BHCs that have qualified and elected to be treated as a financial holding company (an “FHC”) generally may engage in a broader range of additional activities that are (i) financial in nature or incidental to such financial activities or (ii) complementary to a financial activity and do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.

A BHC qualifies to become an FHC if it and its subsidiary depository institutions are “well capitalized” and “well managed” and its subsidiary depository institutions have a rating under the Community Reinvestment Act (a “CRA”) of at least “Satisfactory” at their most recent examination.

We have qualified and elected to be an FHC under the BHC Act, although all the activities we currently conduct are permissible for a BHC.

If at any time we or Green Dot Bank fail to be “well capitalized” or “well managed,” the Federal Reserve may impose limitations or conditions on the conduct of our activities and 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.

In connection with our acquisition of Bonneville Bancorp in 2011 and our subsequent acquisition of certain assets and certain deposit liabilities of GE Capital Retail Bank in 2013, we submitted business plans to the Federal Reserve.

Under commitments made to the Federal Reserve and the Utah DFI, we must obtain prior approval from the Federal Reserve for any major deviation or material change from the business plan we submitted in 2013.

Accordingly, commitments made in connection with our business plan may limit our activities.

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.” Currently, under the BHC Act, we may not be able to engage in new activities or acquire shares or control of other businesses.

Such restrictions might limit our ability to pursue future business opportunities which we might otherwise consider but which might fall outside the scope of permissible activities.

Permissible Activities for Banks

The activities of Green Dot Bank are limited to those specifically authorized under Utah banking laws and Utah DFI regulations and permissible under applicable federal law and Federal Reserve regulations.

Accordingly, commitments made in connection with Green Dot Bank's business plan may limit Green Dot Bank's ability to engage in certain activities.

Supervision, Examination and Enforcement

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In addition, BHCs and banks are subject to periodic reporting and filing requirements.

The Federal Reserve and Utah DFI have broad supervisory and enforcement authority with regard to

BHCs and banks, including the power to conduct examinations and investigations, impose nonpublic supervisory agreements, issue cease and desist orders, impose fines and other civil and criminal penalties, terminate deposit insurance and appoint a conservator or receiver.

The Federal Reserve and Utah DFI have broad supervisory and enforcement authority with regard to BHCs and banks, including the power to conduct examinations and investigations, impose nonpublic supervisory agreements, issue cease and desist orders, impose fines and other civil and criminal penalties, terminate deposit insurance and appoint a conservator or receiver.

Bank regulators have various remedies available if they determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of a banking organization’s operations are unsatisfactory.

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Any “company,” as defined in the BHC Act, other than a BHC is required to obtain the approval of the Federal Reserve before acquiring "control" of us.

"Control" generally means (i) the ownership or control of 25% or more of a class of voting securities, (ii) the ability to elect a majority of the directors or (iii) the ability otherwise to exercise a controlling influence over management and policies.

management and policies.

An entity that controls us for purposes of the BHC Act is subject to regulation and supervision as a BHC under the BHC Act.

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Utah’s Financial Institutions Act generally requires prior approval of the Utah DFI before a person or entity may acquire, directly or indirectly, control of a depository institution or a depository institution holding company subject to its jurisdiction.

The Utah DFI defines control to include, among other things, the power, directly or indirectly, or through or in concert with one or more persons, to vote more than

10% of any class of voting securities by a person other than an individual or to vote 20% or more of any class of voting securities by an individual.

The Utah DFI defines control to include, among other things, the power, directly or indirectly, or through or in concert with one or more persons, to vote more than 10% of any class of voting securities by a person other than an individual or to vote 20% or more of any class of voting securities by an individual.

Capital and Liquidity Requirements

banking agencies have adopted regulatory capital rules to implement the Basel III regulatory capital framework developed by the Basel Committee on Banking Supervision and related provisions in the Dodd-Frank Act (“U.S.

Basel III Rules”).

Under the U.S.

Basel III Rules, Green Dot Corporation and Green Dot Bank are required to maintain minimum risk-based and leverage capital ratios.

regulatory capital rules to implementing the Basel III regulatory capital framework, Green Dot Corporation and Green Dot Bank are required to maintain minimum risk-based and leverage capital ratios.

Green Dot Corporation and Green Dot Bank must also maintain a capital conservation buffer of 2.5% to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management.

Either or both of Green Dot Corporation and Green Dot Bank may qualify for and opt to use, from time to time, the community bank leverage ratio framework under the Federal Reserve’s version of the U.S.

Basel III Rules.

Under the community bank leverage ratio framework, a qualifying community banking organization may generally satisfy its capital requirements (and capital conservation buffer) under the U.S.

Basel III Rules provided that it has a Tier 1 leverage ratio greater than 9% and satisfies other applicable conditions.

In 2021, Green Dot Corporation and Green Dot Bank qualified for (including, in the case of Green Dot Bank, through grace periods) and opted to use the community bank leverage ratio framework.

Going forward, we expect that Green Dot Corporation will continue to qualify for and use the community bank leverage ratio framework, and that Green Dot Bank will calculate and disclose its risk-based capital ratios and Tier 1 leverage ratio under the standardized approach of the U.S.

Basel III Rules.

For a discussion of applicable regulatory minimum and well-capitalized minimum capital ratios, as well as a description of relevant definitions related to capital amounts and ratios, see “Management's Discussion and Analysis of Financial Condition and Results of Operations — Capital Requirements for Bank Holding Companies” and Note 23—Regulatory Requirements to the Consolidated Financial Statements included herein, which are incorporated by reference in this Item 1.

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As of December 31, 2021, our and Green Dot Bank’s regulatory capital ratios were above the well-capitalized standards and met the then-applicable capital conservation buffer.

Based on current estimates, we believe that Green Dot Corporation and Green Dot Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer, on a fully phased-in basis.

FDICIA and Prompt Corrective Action

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Such restrictions may include a prohibition on capital distributions, restrictions on asset growth or restrictions on the ability to receive regulatory approval of applications.

FDICIA also provides for enhanced supervisory authority over undercapitalized institutions, including authority for the appointment of a conservator or receiver for the institution.

FDICIA also provides for enhanced supervisory authority over undercapitalized institutions, including

authority for the appointment of a conservator or receiver for the institution.

In certain instances, a BHC may be required to guarantee the performance of an undercapitalized subsidiary bank’s capital restoration plan.

Brokered Deposits

As discussed below under “Part I, Item 1A.

Risk Factors,” current FDIC guidance requires the majority of Green Dot Bank’s deposits to be classified as brokered deposits.

Under FDIC regulations, only banks that are well-capitalized may accept brokered deposits without restriction.

A bank that is adequately capitalized may not accept, renew or roll over any brokered deposit unless it has been granted a waiver by the FDIC.

If such waiver is granted, the bank may not pay an interest rate on any deposit in excess of 75 basis points over certain prevailing market rates.

Undercapitalized banks may not accept, renew or roll over any brokered deposits.

Because a majority of Green Dot Bank’s deposits are brokered deposits, failure by Green Dot Bank to remain well-capitalized could negatively affect our operations or financial condition.

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.

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 will be effective on April 1, 2021, with full compliance with the brokered deposit part of the regulation extended to January 1, 2022.

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 are evaluating the final rule and whether it will result in a change in the way our deposits are classified.

The FDIC issued a final rule relating to the classification of brokered deposits, which became effective on April 1, 2021, with full compliance with certain provisions extended to January 1, 2022.

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,” for purposes of the classification of deposits as brokered deposits and exemptions from such a classification.

As a result of the new rule, Green Dot Bank reclassified its deposits as non-brokered.

The risks associated with the failure to properly classify deposits are more fully discussed in "Item 1A.

Risk Factors."

Safety and Soundness Guidelines

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There are limitations on the payment of dividends by Green Dot Bank to Green Dot Corporation, as well as by Green Dot Corporation to its shareholders, under applicable banking laws and regulations.

In addition, under the U.S.

Basel III Rules we must obtain prior approval from the Federal Reserve before we may redeem or repurchase our common stock.

Federal banking regulators are authorized to determine, under certain circumstances relating to the financial condition of a BHC or a bank, that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof.

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Under Utah’s Financial Institutions Act, Utah-chartered commercial banks, such as Green Dot Bank, may, subject to certain conditions, declare and pay dividends out of their net profits, after providing for all expenses, losses, interest, and taxes accrued or due from the bank.

Green Dot Corporation and Green Dot Bank must maintain the applicable capital conservation buffer to avoid becoming subject to restrictions on capital distributions, including dividends and share repurchases.

To the extent that we do not qualify for the community bank leverage framework under the Federal Reserve’s version of the U.S.

Basel III Rules, Green Dot Corporation or Green Dot Bank, as applicable, must maintain the applicable capital conservation buffer to avoid becoming subject to restrictions on capital distributions, including dividends and share repurchases.

The capital conservation buffer is currently at its fully phased-in level of 2.5%.

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Green Dot Bank’s CRA compliance is currently evaluated under a CRA strategic plan.

Green Dot Bank’s strategic plan for 2018 through 2020 focuses on supporting the credit needs of its defined assessment area primarily through direct community development lending, small business lending, and investments and services in Green Dot Bank’s designated Metropolitan Statistical Area of Utah and Juab Counties and the state of Utah.

Leaders of the federal banking agencies recently have indicated their support for revising the CRA regulatory framework, and on September 21, 2020, the Federal Reserve issued an Advance Notice of Proposed Rulemaking to modernize the regulations that implement the CRA.

We cannot predict whether any changes will be made to applicable CRA requirements.

Green Dot Bank’s strategic plan for 2021 through 2023 is focused on supporting the credit needs of its defined assessment area primarily through direct community development lending and investment, small business lending, and services in Green Dot Bank’s designated CRA Assessment Area of Utah and Juab Counties, as well as the broader surrounding geographic region.

Leaders of the federal banking agencies have indicated their support for revising the CRA regulatory framework.

On September 21, 2020, the Federal Reserve issued an Advance Notice of Proposed Rulemaking to modernize the regulations that implement the CRA, and the public comment period ended on February 16, 2021.

We cannot predict whether any changes will be made to applicable CRA requirements, and what impact any such changes will have on our CRA strategic plan.

Insurance of Deposit Accounts

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The FDIC has authority to raise or lower assessment rates on insured deposits in order to achieve statutorily required reserve ratios in the DIF and to impose special additional assessments.

There is a risk that Green Dot Bank’s deposit insurance premiums will increase if failures of insured depository institutions deplete the DIF or if the FDIC changes its view of the risk Green Dot Bank poses to the DIF or increases the assessment rate adjustment applicable to Green Dot Bank’s brokered deposits.

Relationships with Third-Party Issuing Banks

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Anti-Money Laundering Rules

The Bank Secrecy Act (“BSA”), the USA PATRIOT Act of 2001 and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering (“AML”) program and file suspicious activity and currency transaction reports when appropriate.

The Bank Secrecy Act (the “BSA”), the USA PATRIOT Act of 2001 (the "PATRIOT Act") and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering (“AML”) program and file suspicious activity and currency transaction reports when appropriate.

Among other things, these laws and regulations require Green Dot Corporation and Green Dot Bank to take steps to prevent the use of Green Dot Bank to facilitate the flow of illegal or illicit money, to report large currency transactions and to file suspicious activity reports.

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OFAC-administered sanctions take many different forms.

OFAC also publishes lists of persons, organizations and countries suspected of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons.

OFAC also publishes lists of persons, organizations and countries suspected

of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons.

Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC.

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Green Dot Bank is subject to a variety of federal and state privacy and data security laws, which govern the collection, safeguarding, sharing and use of customer information, and require that financial institutions have in place policies regarding information privacy and security.

For example, the Gramm-Leach-Bliley Act of 1999 (“GLBA”) requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and practices for sharing nonpublic information with third parties, provide advance notice of any changes to the policies and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties.

For example, the Gramm-Leach-Bliley Act of 1999 requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and practices for sharing nonpublic information with third parties, provide advance notice of any changes to the policies and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties.

It also requires banks to safeguard personal information of consumer customers.

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Data privacy and data security are areas of increasing state legislative focus.

For example, in November 2020, a ballot initiative called the California Privacy Rights Act ("CPRA"), passed in California.

For example, in November 2020, a ballot initiative called the California Privacy Rights Act (the "CPRA"), passed in California.

The CPRA will create additional obligations relating to personal information that would take effect on January 1, 2023 (with certain provisions having retroactive effect to January 1, 2022).

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Like other lenders, Green Dot Bank and other of our subsidiaries use credit bureau data in their underwriting activities.

Use of such data is regulated under the Fair Credit Reporting Act (“FCRA”), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates and using affiliate data for marketing purposes.

Use of such data is regulated under the Fair Credit Reporting Act (the “FCRA”), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates and using affiliate data for marketing purposes.

Similar state laws may impose additional requirements on Green Dot Corporation and Green Dot Bank.

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• the Electronic Fund Transfer Act and Regulation E issued by the CFPB, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.

The CFPB has also adopted amendments to Regulation E and Regulation Z to add protections for prepaid accounts (“CFPB Prepaid Rule”).

The CFPB has also adopted amendments to Regulation E and Regulation Z to add protections for prepaid accounts (the “CFPB Prepaid Rule”).

The CFPB Prepaid Rule includes requirements related to treatment of funds on lost or stolen cards, error resolution and investigation, upfront fee disclosures, access to account information, and overdraft features if offered in conjunction with prepaid accounts.

The CFPB Prepaid Rule became effective April 1, 2019.

Because Green Dot Bank has less than $10 billion in total consolidated assets, the Federal Reserve, and not the CFPB, is responsible for examining and supervising Green Dot Bank’s compliance with these and other federal consumer financial laws and regulations.

consumer financial laws and regulations.

In addition, the Dodd-Frank Act authorizes state attorneys general and state regulators to enforce consumer protection rules issued by the CFPB.

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Therefore, we and Green Dot Bank are subject to Visa and MasterCard’s respective payment network rules and standards.

of a data breach) and providing rules governing how consumers and merchants may use their cards.

These rules and standards implicate a variety of our activities and services, including by imposing data security obligations, allocating liability for certain acts or omissions (including liability in the event of a data breach) and providing rules governing how consumers and merchants may use their cards.

Payment networks may, and routinely do, modify these rules and standards as they determine in their sole discretion and with or without advance notice to us.

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During the COVID-19 pandemic, our primary focus has been on the safety and well-being of our employees and their families.

In response to the pandemic, we mandated that our employees work from home, required contractors to work remotely and implemented strict travel restrictions.

Our offices in China have since reopened consistent with local guidelines.

We have shifted to a remote workforce strategy for most of our U.S.

In addition, to reinforce a deep connection and establish clear direction with our employees, we have significantly increased leadership updates and management outreach.

In response to the ongoing pandemic and after assessing our business, we have shifted to a remote workforce strategy for most of our U.S.

Our offices in China have all reopened and we have made significant efforts to comply with local health and safety guidelines.

To reinforce a deep connection and establish clear direction with our employees, we continue to provide regular leadership updates and management outreach.

As the pandemic continues, the health and well-being of our workforce remains our top priority while we ensure productivity while working from home.

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Talent Acquisition and Retention

Our workforce is representative of the industry we serve.

We are highly technical, enjoy pushing the boundaries of what is possible and are individually innovative.

We work to retain employees in a number of ways, including providing exciting and challenging assignments, having strong leadership and management, providing the opportunity to learn new skills and advance careers, having strong technology, customer relationships and business, along with providing competitive and equitable total rewards.

To ensure a compelling total rewards philosophy and practice, we have practices in place to deliver fair and equitable compensation for employees based on their contribution and performance.

We strive to maintain a workforce that is representative of the industry we serve, comprised of highly technical individuals, who enjoy pushing the boundaries of what is possible and are individually innovative.

We work to retain employees in a number of ways, including having strong leadership and management, providing the opportunity to learn new skills and advance careers, having strong technology, customer relationships and business, along with providing competitive and equitable total rewards.

To ensure a compelling total rewards philosophy and practice, we have practices in place, which aim to deliver fair and equitable compensation for employees based on their contribution and performance.

We benchmark for market practices, and regularly review our compensation against the market to ensure it remains competitive.

We also offer a comprehensive and tailored set of benefits for employees and their families, providing protection from unexpected losses or medical expenses.

Our benefits programs are tailored to the various geographies in which we operate, and include a variety of competitive health plans, a 401(k) plan with company match, an employee stock purchase plan and employee assistance program.

Our benefits programs are tailored to the various geographies in which we operate, and include a variety of competitive health plans, dependent care flexible spending accounts, a 401(k) plan with a company match and auto-enrollment, an employee stock purchase plan and an employee assistance program.

We have recently expanded our benefits to include enhanced leave offerings, flexible work arrangements with our remote work model, and added virtual primary care including mental health services.

Employee Feedback

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We embrace an open-door policy where collaboration between all levels of team members and across multiple departments is encouraged and celebrated.

We use engagement surveys to track and enhance employee sentiment, satisfaction, and engagement;

identify opportunities to instill our mission, vision, values, and business objectives throughout the organization;

and build a performance-driven culture in a continually evolving remote and virtual environment.

In addition, during 2021, we conducted several surveys to understand our employees’ well-being during the COVID-19 pandemic and to more effectively guide our response.

We also believe that ongoing performance feedback encourages greater engagement in our business and improved individual performance.

We utilize an annual survey to solicit feedback from employees at all levels of the organization about members of Green Dot’s senior leadership up to and including the CEO.

Diversity, Equity, and Inclusion (DEI)

We believe that a diverse, equitable and inclusive working environment helps to drive Green Dot’s mission forward and provides our workforce with the best opportunities for success.

As a company, we are committed to improving representation and inclusion for employees across all levels of the organization.

We are conducting a DEI analysis of our workforce in 2022, and are actively working to further enhance recruitment strategies in support of our DEI initiatives.

Empowering Our Workforce

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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.

What changed 10-K

Item 1. Business