Green Dot 2013 Annual Report Download - page 19

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arm’s-length basis. As a bank holding company, our transactions with our subsidiary bank are 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.
Issuing Banks. All of the GPR cards that we provide and the Walmart gift cards we service are issued by Green
Dot Bank or either a federally- or state-chartered third-party bank. Thus, we are subject to the oversight of the regulators
for, and certain laws applicable to, these card issuing banks. These banking laws require us, as a servicer to the banks
that issue our cards, among other things, to undertake compliance actions similar to those described under “Anti-
Money Laundering Laws” above and to comply with the privacy regulations promulgated under the GLB Act as discussed
under “Privacy and Information Safeguard Laws” above. Our subsidiary bank is subject to the additional regulatory
oversight and legal obligations described above, in its capacity as issuing bank of our GPR cards.
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 these changes require rulemakings by
regulators, only a portion of which have been completed. 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
our subsidiary bank. Although there can be no assurance regarding the ultimate impact that adoption of these proposals
will have on us, if the proposals are enacted, we expect that the benefits we seek to realize from our recent 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.
In order to permit the direct deposit of Federal benefits and other Federal funds to our products, we comply with
the requirements of the Electronic Fund Transfer Act of the Federal Reserve Board, or Regulation E, as they relate to
payroll cards, including disclosure of the terms of our electronic fund transfer services to consumers prior to their use
of the service, 21 days' advance notice of material changes, specific error resolution procedures and timetables, and
limits on customer liability for transactions that are not authorized by the consumer.
In June 2011, the Consumer Financial Protection Bureau, or CFPB, issued a notice and request for comment on
defining what kinds of companies should be included as “larger participants” for its nonbank supervision program. The
CFPB subsequently published its first "larger participant" proposed rule, in February 2012, defining nonbank “larger
participants” as entities engaged in consumer debt collection and consumer reporting. The CFPB published final rules
regarding “larger participants” engaged in consumer reporting and consumer debt collection in, respectively, July 2012
and October 2012. Although the CFPB did not include prepaid card issuers in these rules, the CFPB may take actions
in the future, including other rulemakings, that subject us or our products and services to its oversight and regulation.
In May 2012, the CFPB issued an Advanced Notice of Proposed Rulemaking seeking information from the public
regarding GPR cards. Although rules were not published in the Advanced Notice of Proposed Rulemaking, we believe
that the CFPB is focused on whether some or all of the provisions of Regulation E should apply to GPR cards and on
the product fees, disclosures and product features of GPR cards.
Payment Networks
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 payment network rules that could subject us to a variety of fines
or penalties that may be levied by the payment networks for certain acts or omissions. The banks that issue our cards
are specifically registered as “members” of the Visa and/or MasterCard payment networks. Visa and MasterCard set
the standards with which we and the card issuing banks must comply.
Employees
As of December 31, 2013, we had 562 employees, including 331 in general and administrative, 80 in sales and
marketing, and 151 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 employment-related work stoppages
and consider relations with our employees to be good. As of December 31, 2013, we also had arrangements with third-