What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-03-01 · 57 added, 63 removed, 334 unchanged (26% of the section changed)

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.

Founded in 1999, 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.

Green Dot Bank is a wholly owned subsidiary of Green Dot Corporation and member of the Federal Deposit Insurance Corporation.

Our Products and Services

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• 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.

Throughout our history, we have offered several branded deposit programs through our various channels, however, 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.

Our deposit account programs are generally issued by Green Dot Bank, but we also manage programs issued by third-party issuing banks as a result of several acquisitions we made several years ago.

While we continue to offer several legacy branded deposit programs, since 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.

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Our tax processing services are designed for participants in the tax industry and include:

• Tax refund transfers that provide the processing technology to facilitate receipt of a taxpayers' refund proceeds.

• Tax refund transfers that provide the processing technology to facilitate receipt of a taxpayer's refund proceeds.

When a customer of a third-party tax preparation provider chooses to pay their tax preparation fees using our processing services, we deduct the tax preparation service fee and our processing service fee from the customer's refund and remit the remaining balance to the customer's account;

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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 (the "Banking-as-a-Service", or "BaaS channel"), and (ii) a comprehensive payroll platform that we offer to corporate enterprises (the "Employer channel"), to facilitate payments for today’s workforce.

Our B2B Services segment consists of revenues and expenses derived from (i) our partnerships with 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 (the "Banking-as-a-Service", or "BaaS channel"), and (ii) a comprehensive payroll platform that we offer to corporate enterprises (the "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, 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.

In our BaaS channel, our partners make our banking products and services available to their consumers, partners and workforce in the United States through integration with our banking platform, expanding our addressable market 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.

Some of our largest customers include Apple, Inc., Intuit, Inc., and Amazon.com, Inc., amongst others.

Our largest customers include Apple, Inc., Intuit, Inc., and Amazon.com, Inc., among others.

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

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Our vertically integrated technology and banking platform utilizes a combination of proprietary and third-party technologies and services to power a large ecosystem of financial service solutions through numerous distribution channels.

The technology infrastructure supporting our platform is designed to minimize service disruptions, provide reasonable assurance of business continuity in the event of catastrophic occurrences and defend against data breaches and cyber security incidents.

We continuously invest in security tools and other security technologies to protect our data and help keep our customers and partners safe.

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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.

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We believe our products and services compete favorably with respect to these factors.

The risks associated with our competitors are more fully discussed in “Item 1A.

The risks associated with our competitors are more fully discussed in “Part I, Item 1A.

Risk Factors.”

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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 GO2bank.

We own several trademarks, including Green Dot.

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, 2 published patents and 1 patent application pending.

Our patent portfolio currently consists of 17 issued patents and 1 patent application pending.

The current remaining terms for the patents we hold vary between approximately 2 and 16 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.

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

The industries in which we compete are characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding patent and other intellectual property rights.

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In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the United States.

The risks associated with patents and intellectual property are more fully discussed in “Item 1A.

The risks associated with patents and intellectual property are more fully discussed in “Part I, Item 1A.

Risk Factors.”

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Our business is highly regulated under federal and state laws.

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 (the “DIF”), the U.S.

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

This discussion is not intended to describe all laws and regulations applicable to Green Dot Corporation, Green

Dot Bank and our other subsidiaries and is qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretive letters and other written guidance that are described.

This discussion is not intended to describe all laws and regulations applicable to Green Dot Corporation, Green Dot Bank and our other subsidiaries and is qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretive letters and other written guidance that are described.

Regulatory Agencies

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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.

The regulators may also take action if they determine that the banking organization or its management is violating or has violated any law or regulation.

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As the percentage of ownership increases, fewer indicia of control are permitted without falling outside of the presumption of noncontrol.

These indicia of control include nonvoting equity ownership, director representation, management interlocks, business relationship and restrictive contractual covenants.

Under the Federal Reserve’s rules, investors

can hold up to 24.9% of the voting securities and up to 33% of the total equity of a company without necessarily having a controlling influence.

These indicia of control include nonvoting equity ownership, director representation, management

interlocks, business relationship and restrictive contractual covenants.

Under the Federal Reserve’s rules, investors can hold up to 24.9% of the voting securities and up to 33% of the total equity of a company without necessarily having a controlling influence.

Utah Change in C o ntrol Restrictions .

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Under the U.S.

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.

regulatory capital rules to implement 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.

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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.

The Federal Reserve may require BHCs, including us, to maintain capital substantially in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile and growth plans.

The Federal Reserve may require BHCs, which include us, to maintain capital substantially in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile and growth plans.

The Federal Reserve may also require BHCs or their subsidiaries to make other capital or liquidity commitments.

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Brokered Deposits

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.

The FDIC issued a final rule relating to the classification of brokered deposits, with full compliance required in the beginning of fiscal year 2022.

The final rule established a 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 final rule, Green Dot Bank reclassified most of its deposits as non-brokered.

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

Risk Factors."

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Green Dot Corporation is required to serve as a source of financial and managerial strength to Green Dot Bank and, under appropriate conditions, to commit resources to support Green Dot Bank.

This support may be required by the Federal Reserve at times when we might otherwise determine not to provide it or when doing so is not

otherwise in the interests of Green Dot Corporation or our shareholders or creditors.

This support may be required

by the Federal Reserve at times when we might otherwise determine not to provide it or when doing so is not otherwise in the interests of Green Dot Corporation or our shareholders or creditors.

The Federal Reserve may require a BHC to make capital injections into a troubled subsidiary bank and may charge the BHC with engaging in unsafe and unsound practices if the BHC fails to commit resources to such a subsidiary bank or if it undertakes actions that the Federal Reserve believes might jeopardize the BHC’s ability to commit resources to such subsidiary bank.

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Depositor Preference

The Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, including Green Dot Bank, the claims of depositors of the institution (including the claims of the FDIC as subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver would have priority over other general unsecured claims against the institution.

The Bank Merger Act provides that, in the event of the liquidation or other resolution of an insured depository institution, including Green Dot Bank, the claims of depositors of the institution (including the claims of the FDIC as subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver would have priority over other general unsecured claims against the institution.

If Green Dot Bank were to fail, insured and uninsured depositors, along with the FDIC, would have priority in payment ahead of unsecured, non-deposit creditors, including Green Dot Bank if it were a creditor at that time, with respect to any extensions of credit they have made to such insured depository institution.

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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 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.

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.

The Federal Reserve Board, along with the FDIC and the Office of the Comptroller of the Currency, issued a Notice of Proposed Rulemaking (“NPR”) on May 5, 2022.

The deadline for submitting comments on the NPR was August 5, 2022.

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.

Green Dot Bank is currently seeking regulatory approval for a new strategic plan covering the period from 2024 through 2028.

The proposed plan 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.

On October 24, 2023, the Federal Reserve Board joined the FDIC and Office of the Comptroller of the Currency in issuing a new final rule seeking to strengthen and modernize the regulations that implement the CRA.

As most of the changes implemented by the new rule will not take effect until January 1, 2026, we cannot yet predict what impact such changes will have on our CRA strategic plan.

Insurance of Deposit Accounts

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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 (the "CPRA"), passed in California which amended the California Consumer Privacy Act (the “CCPA”) as of January 1, 2023.

Enforcement of these changes to the CCPA are scheduled to begin July 1, 2023.

We will continue to monitor developments related to the CPRA.

In addition, laws similar to the CPRA may be adopted by other states where we do business and the federal government may also pass data privacy or data security legislation.

For example, effective January 1, 2023, the California Privacy Rights Act (the "CPRA") amended and significantly expanded the California Consumer Privacy Act (the “CCPA”), which originally provided California residents certain privacy rights in the collection and disclosure of their personal information and required businesses to make certain disclosures and take certain other acts in furtherance of those rights.

The CPRA also created a new agency, the California Privacy Protection Agency, authorized to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information security regulatory actions.

states have considered and/or enacted similar privacy laws.

For example, Virginia, Utah, Connecticut, and Colorado have passed new consumer privacy laws with effective dates in 2023, and Delaware, Indiana, Iowa, Montana, Oregon, Tennessee, and Texas have passed consumer privacy laws that will become effective in 2024, 2025, or 2026.

In addition, the federal government may also pass data privacy or data security legislation.

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

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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 NCG Committee’s duties in this regard include reviewing and evaluating our programs, policies and practices relating to ESG issues and related disclosures and recommending to our Board of Directors (our "Board of Directors" or "Board") our overall strategy with respect to ESG matters.

In 2022, we continued to advance our ESG strategy by establishing a management-level ESG Steering Committee comprised of employees across our company from human resources to legal to business development (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.

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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.

We will endeavor to provide transparent disclosures on the progress of this work and to this end we published our inaugural Environmental, Social and Governance Report in 2023.

More detailed information about the progress of our work can be found in that report located at https://ir.greendot.com/corporate-governance/highlights.

The information in the ESG report and on our website is not part of this report or incorporated in this report by reference.

Human Capital

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We offer industry specific training regarding regulatory standards and compliance, as well as self-directed learning through LinkedIn’s learning platform.

In 2023, we intend to launch a manager specific training that is designed to increase managerial capability in the areas of communication, engagement, coaching, inclusion and diversity, hiring and on-boarding, business skills, and ensuring an ethical and supportive work environment free from bias and harassment.

In 2023, we launched a manager specific training that is designed to increase managerial capability in the areas of communication, engagement, coaching, inclusion and diversity, hiring and on-boarding, business skills, and ensuring an ethical and supportive work environment free from bias and harassment.

As employees advance in their careers, our training framework seeks to build new capabilities with foundational leadership skills.

Our leaders are further empowered to design bespoke learning experiences catered to their specific needs.

Our leaders have and will continue to be further empowered to design bespoke learning experiences catered to their specific needs.

Employee Experience

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

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

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.

We have historically used annual employee engagement surveys to track and enhance employee sentiment and satisfaction, and in 2023 added monthly climate surveys to better understand employee well-being and leadership opportunities.

We continuously seek to identify ways to instill our mission, vision, values, and business objectives throughout our organization, and build a performance-driven culture in a continually evolving remote and virtual environment.

We use these surveys to solicit feedback about members of our senior leadership up to and including our Chief Executive Officer from employees at all levels of our organization.

The three highest rated categories were how employees felt about their managers, DEIB, and overall job satisfaction.

The three highest rated categories were manager respect and trust for their teams, meaningful work, and organizational equality.

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

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We are committed to improving representation and inclusion for employees at all levels of the organization.

We conducted a DEIB analysis of our workforce in 2022 and are actively working to further enhance recruitment strategies and career development strategies in support of our initiatives.

We conducted a DEIB analysis of our workforce in 2022 and since then have been actively working to further enhance recruitment strategies and career development strategies in support of our initiatives.

We made additional improvements in closing the gender gap in 2023, ending the year with a workforce comprised of 55% male and 45% female employees.

We grew our Employee Resources Groups by over 200% and implemented enterprise-wide events to create new levels of knowledge, empathy and community connection for our people.

In 2023, we intend to further our diversity through hiring, career development, succession planning and leadership education.

We also intend to introduce an educational platform for all employees to access that includes a variety of educational topics related to DEIB.

We grew our Employee Resources Group memberships by 24%, and the number of groups increased approximately 29%.

We also delivered 10 enterprise-wide events to create new levels of knowledge, empathy and community connection for our people.

We focused on furthering diversity through hiring, career development, succession planning and leadership education.

We also introduced an educational platform for all employees to access that includes a variety of educational topics related to DEIB.

In 2024, we intend to continue to pursue enterprise efforts in DEIB, employee lifecycle design, talent development and culture transformation.

Total Rewards

To ensure our pay and benefits programs are consistent with our total rewards philosophy, we maintain best practices aimed at delivering 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 benchmark against market practices, and regularly review our compensation against the market to ensure it remains competitive.

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

Employee Health and Safety

The health and well-being of our workforce is one of our top priorities.

Our team members in Shanghai, China experienced the strictest COVID measures throughout the pandemic.

Our office in China reopened in June 2022 and we continue 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.

Organizational Culture and Ethics

To promote the highest standards of honest and ethical business conduct and compliance with applicable laws, we have adopted codes of business conduct and ethics that apply to all of our board members, officers and employees and which are posted on the Investor Relations section of our website located at http://ir.greendot.com, by clicking on “Governance.”

In 2022, we launched GO2give, an employee giving (donation and volunteerism) platform that provides resources and opportunities for employees to support charitable causes that are meaningful to them.

In 2023, we continued our philanthropic giving program launched in 2022, "Green Dot Gives," an employee giving (donation and volunteerism) platform that provides resources and opportunities for employees to support charitable causes that are meaningful to them.

As part of the initiative, we began offering employees one paid time off day per year to volunteer, we introduced corporate donation matching, and we created programs encouraging employee connection and collaboration through charitable activities.

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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