Green Dot 2011 Annual Report Download - page 19

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requires the aggregation of information over multiple transactions;
• gather and, in certain circumstances, report customer information;
• comply with consumer disclosure requirements;
• and register or obtain licenses with state and federal agencies in the United States and seek registration of
our retail distributors and network acceptance members when necessary.
Anti-money laundering regulations are constantly evolving. We continuously monitor our compliance with anti-
money laundering regulations and implement policies and procedures in order to comply with the most current legal
requirements. We cannot predict how these future regulations might affect us. Complying with future regulation could
be expensive or require us to change the way we operate our business. For example, in July 2011, the Financial Crimes
Enforcement Network, or FinCEN, of the U.S. Department of Treasury published final rules regarding, among other
things, the applicability of the Bank Secrecy Act’s anti-money laundering provisions to prepaid products such as ours.
Although we believe these regulations have not adversely impacted prepaid products such as ours or required material
operational changes by prepaid financial services providers such as us or our retail distributors, there can be no
assurance that the interpretation or enforcement of these regulations will not adversely impact our products or require
operational changes by us or our retail distributors.
We are registered with FinCEN as a money services business. As a result of being so registered, we have
established anti-money laundering compliance programs that include: (i) internal policies and controls; (ii) designation
of a compliance officer; (iii) ongoing employee training and (iv) an independent review function. We have developed
and implemented compliance programs comprised of policies, procedures, systems and internal controls to monitor
and address various legal requirements and developments. To assist in managing and monitoring money laundering
risks, we continue to enhance our anti-money laundering compliance program. We offer our services largely through
our retail distributor and network acceptance member relationships. We have developed an anti-money laundering
training manual and a program to assist in educating our retail distributors on applicable anti-money laundering laws
and regulations.
Money Transfer and Payment Instrument Licensing Regulations
We are subject to money transfer and payment instrument licensing regulations. We have obtained licenses to
operate as a money transmitter in 40 U.S. jurisdictions. The remaining U.S. jurisdictions either do not currently regulate
money transmitters or have rendered a regulatory determination or a legal interpretation that the money services laws
of that jurisdiction do not require us to obtain a license in connection with the conduct of our business. As a licensee,
we are subject to certain restrictions and requirements, including reporting, net worth and surety bonding requirements
and requirements for regulatory approval of controlling stockholders, agent locations and consumer forms and
disclosures. We are also subject to inspection by the regulators in the jurisdictions in which we are licensed, many of
which conduct regular examinations.
In addition, we must at all times maintain “permissible investments” in an amount equivalent to all “outstanding
payment obligations.” While, technically, the outstanding payment obligations represented by the balances on our card
products are liabilities of the issuing bank, it is possible that some states will require us to maintain permissible
investments in an amount equal to the outstanding payment obligations of the bank that issues our cards. The types
of securities that are considered “permissible investments” vary from state to state, but generally include cash and
cash equivalents, U.S. government securities and other highly rated debt instruments.
Escheatment Laws
Unclaimed property laws of every U.S. jurisdiction require that we track certain information on our card products
and services and that, if customer funds are unclaimed at the end of an applicable statutory abandonment period, the
proceeds of the unclaimed property be remitted to the appropriate jurisdiction. We have agreed with the banks that
issue our cards to manage escheatment law compliance with respect to our card products and services and have an
ongoing program to comply with those laws. Statutory abandonment periods applicable to our card products and
services typically range from three to seven years.
Privacy and Information Safeguard Laws
In the ordinary course of our business, we collect certain types of data, which subjects us to certain privacy and
information security laws in the United States, including, for example, the Gramm-Leach-Bliley Act of 1999, or the GLB
Act, and other laws or rules designed to regulate consumer information and mitigate identity theft. We are also subject
to privacy laws of various states. These state and federal laws impose obligations with respect to the collection,
processing, storage, disposal, use and disclosure of personal information, and require that financial institutions have
in place policies regarding information privacy and security. In addition, under federal and certain state financial privacy