Federal Reserve Board – The Federal Reserve Board is taking action to address Green Dot’s consumer compliance failures, fining the company $44 million for numerous unfair and deceptive practices and a flawed consumer compliance risk management program.

The Federal Reserve on Friday took action to address Green Dot’s consumer compliance failures, fining the company $44 million for numerous unfair and deceptive practices and a flawed consumer compliance risk management program.

Green Dot violated consumer protection law in its marketing, sale, and service of prepaid debit card products and its provision of tax preparation payment services. For example, Green Dot failed to adequately disclose tax refund processing fees for tax preparation services offered on a third-party website. The company also blocked access to the accounts of legitimate customers receiving unemployment benefits and lacked reasonable policies and procedures to help those customers overcome these barriers. In addition, Green Dot did not maintain effective consumer compliance risk management and anti-money laundering programs.

The Board is asking the company to take several steps to improve these programs. Green Dot must hire an independent third party to strengthen its consumer compliance risk management program and address the root causes of consumer complaints. The company must also develop an effective anti-money laundering program and hire an independent third party to conduct an audit of certain transaction activities.

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