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Crackdown on MetaBank Casts a Shadow on NetSpend’s IPO

Crackdown on MetaBank Casts a Shadow on NetSpend’s IPO

Federal banking regulators this thirty days cracked straight down on MetaBank, an important card that is prepaid, an action that tossed into concern the pending initial general public providing of prepaid credit card system supervisor NetSpend Corp.

Austin, Texas-based NetSpend is scheduled to cost its long-planned IPO on Thursday, relating to reports in the economic cables. But its ties that are close MetaBank caused rounds of conjecture about whether or not the IPO will in truth take place. A NetSpend representative states he can’t comment.

On Tuesday, MetaBank’s moms and dad business, Storm Lake, Iowa-based Meta Financial Group Inc., reported to your Securities and Exchange Commission that any office of Thrift Supervision had taken enforcement actions against MetaBank. The OTS banned MetaBank from issuing any new loans under its iAdvance item at the time of Wednesday, and in addition it put settings on its company of issuing loans prior to clients’ receipt of income income income tax refunds, alleged tax-refund expectation loans.

“The OTS suggested us on Oct. 6 so it has determined that the lender involved with unfair or misleading functions or methods in breach of the Federal Trade Commission Act and OTS marketing laws relating to the bank’s operation associated with the iAdvance program and needed the financial titleloansmaryland.net review institution to discontinue all iAdvance line-of-credit origination task by Oct. 13, 2010,” Meta Financial’s filing states.

The filing will not offer information about just just what the OTS bought at fault with iAdvance, that will be a short-term loan item that MetaBank calls a “microloan” while some news reports call it a loan that is payday.