NetSpend 2011 Annual Report Download - page 13

Table of Contents
The principal means upon which we compete in the GPR and payroll card market are the experience we have gained in serving
underbanked consumers over the last ten years and the understanding we have of the purchasing habits and needs of this demographic, price,
the robustness of our distribution and reload network and familiarity with the regulatory environment. We also have scale advantages over
some of our smaller and newer competitors. In addition, we believe that the fact that we use our own technology platform is unique among the
leading GPR card providers. Having our own technology infrastructure enhances our product development capabilities and speed to market
with differentiated product offerings. Processing transactions on our own platform also gives us insight into the attitudes, characteristics and
purchasing behavior of underbanked consumers that we use to better tailor the products and services offered to this consumer segment.
Regulation
Our industry is heavily regulated. We, and the products and services that we market and provide processing services for, are subject to a
variety of federal and state laws and regulations, including, but not limited to:
• Banking laws and regulations;
• Money transmitter and payment instrument laws and regulations;
• State wage payment laws and regulations;
• Anti-money laundering laws;
• Privacy and data security laws and regulations;
• Consumer protection laws and regulations;
• Unclaimed property laws; and
• Card association and network organization rules.
Banking Laws and Regulations
The cards we market are the products of our Issuing Banks and are subject to various federal and state laws and regulations, including
those discussed below. MetaBank is a federal savings banks primarily regulated by the Office of the Comptroller of the Currency, or the OCC.
INB and USB are national banks primarily regulated by the OCC, and their respective holding companies are primarily regulated by the Board
of Governors of the Federal Reserve System, or the FRB. Bancorp is a Delaware state-chartered bank principally regulated by the Delaware
Office of the State Bank Commissioner and the FRB, and its holding company is also principally regulated by the FRB. SunTrust is a Georgia
state-chartered bank principally regulated by the Georgia Department of Banking and Finance and the FRB, and its holding company is also
principally regulated by the FRB. As the deposits of each of our Issuing Banks are insured by the Federal Deposit Insurance Corporation, or the
FDIC, up to the applicable limit, the FDIC also serves as the secondary federal regulator for each of our Issuing Banks. As an agent of, and
third-party service provider to, our Issuing Banks, we are subject to indirect regulation and direct audit and examination by the agencies that
regulate them.
The GPR cards we market through corporate employers as payroll cards are subject to certain portions of the FRB's Regulation E, which
implements the Electronic Fund Transfers Act, or the EFTA. Additionally, while our other GPR cards are not expressly subject to the
provisions of the EFTA and Regulation E, with the exception of those provisions comprising the CARD Act described below, we, and our
Issuing Banks, treat our GPR cards as being subject to certain provisions of the EFTA and Regulation E, such as those related to disclosure
requirements, periodic reporting, error resolution procedures and liability limitations.
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