Green Dot 2010 Annual Report Download - page 24

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regulatory authorities to evaluate a bank’s record in meeting the needs of its service area when consid-
ering applications to establish new offices or consummate any merger or acquisition transaction. The
federal banking agencies are required to rate each insured institution’s performance under the CRA and to
make that information publicly available. Our proposed subsidiary bank intends to comply with the CRA
through investments and other activities that it believes will benefit the needs of low and moderate income
communities. If banking regulatory authorities do not approve the bank’s compliance plan, the bank could
be required to engage in lending and other community outreach activities in the community in which it is
located.
Restrictions on Transactions with Affiliates and Insiders. Transactions between a bank and its
nonbanking affiliates are regulated by the Federal Reserve Board. These regulations limit the types and
amount of these transactions, require certain levels of collateral for loans to affiliated parties and generally
require those transactions to be on an arm’s-length basis. As a bank holding company, our transactions
with our proposed subsidiary bank could be limited by these regulations, although we do not anticipate that
these restrictions will adversely affect our ability to conduct our current operations or materially prohibit us
from engaging in activities that are currently contemplated by our business strategies.
Other. The policies of regulatory authorities, including the monetary policy of the Federal Reserve
Board, have a significant effect on the operating results of bank holding companies and their subsidiaries.
Moreover, additional changes to banking laws and regulations are possible in the near future. The Dodd-
Frank Act made numerous changes to the regulatory framework governing banking organizations, and
many of the provisions must be implemented by regulation. These regulations could likewise substantially
affect our business and operations. In addition, the U.S. Congress is considering various proposals relating
to the activities and supervision of banks and bank holding companies, some of which could materially
affect our operations and those of the bank we are seeking to acquire. Although there can be no assurance
regarding the ultimate impact that adoption of these proposalswill have on us, if the proposals are enacted,
we expect that the benefits we seek to realize from our pending bank acquisition will be reduced.
Consumer Protection Laws
We are subject to state and federal consumer protection laws, including laws prohibiting unfair and
deceptive practices, regulating electronic fund transfers and protecting consumer nonpublic information.
We believe that we have appropriate procedures in place for compliance with these consumer protection
laws, but many issues regarding our service have not yet been addressed by the federal and state
agencies charged with interpreting the applicable laws.
Although not expressly required to do so under the Electronic Fund Transfer Act and Regulation E of
the Federal Reserve Board, we disclose, consistent with banking industry practice, the terms of our
electronic fund transfer services to consumers prior to their use of the service, provide 21 days’ advance
notice of material changes, establish specific error resolution procedures and timetables, and limit
customer liability for transactions that are not authorized by the consumer.
Card Associations
In order to provide our products and services, we, as well as the banks that issue our cards, must
register with Visa and MasterCard and, as a result, are subject to card association rules that could subject
us to a variety of fines or penalties that may be levied by the card association or network for certain acts or
omissions. The banks that issue our cards are specifically registered as “members” of the Visa and/or
MasterCard card associations. Visa and MasterCard set the standards with which we and the card issuing
banks must comply.
Employees
As of December 31, 2010, we had 352 employees, including 307 in general and administrative, 37 in
sales and marketing and 8 in research and product development. None of our employees is represented by
a labor union or is covered by a collective bargaining agreement. We have never experienced any
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