MetaBank Reports Cost of OTS Order
MetaBank says that the Office of Thrift Supervision’s cease and desist order against the Iowa thrift resulted in an after-tax loss of $3.4 million. MetaBank was cited for a number of significant legal problems. The OTS said that MetaBank had engaged in unfair and deceptive practices in its i-advance credit program. The i-advance offered credit to holders of certain MetaBank-issued debit cards. When consumersestablished a direct deposit on their debit card, they were able to add the i-advance. The i-advance charges $2.50 for each $20 loan increment. The advances had a term of no more than 35 days. The civil money penalty is part of a package of terms to the agreement between MetaBank and the OTS that was announced on July 15th. There terms state that:
- The bank will cease to do anything that would violate the law or the regulations outlined in the OTS’ April report.
- The bank will provide $4.8 million in restitution for i-advance consumers.
- The bank cannot offer an i-advance product with OTS approval.
- The bank cannot originate refund anticipation loans or refund anticipation checks with OTS approval.
- The bank cannot enter into third-party relationships to do either a credit-on-debit product, a RAL or RAC, or a new debit card with OTS approval.
- The bank has to submit a report to the OTS about its third party relationships. If they cannot demonstrate that they are satisfactory to the OTS, then the OTS may require that they are terminated.
- Neither the bank nor its third-party partners can use advertising to deceive the public.
- No golden parachutes until the bank has cleared things up with the OTS.
- The bank needs the approval (the “non-objection”) of the OTS Regional Director in order to issue dividends, pay interest on outstanding debt, or buy back stock.
Shares in MetaBank are up slightly today, which may reflect the coat-tails of the larger market or a positive judgement from investors. Sometimes the announcement of a civil money penalty becomes the basis for a gain, because the penalty amount may be lower than the price that investors had written in to the existing valuation. Some of these terms are not very significant, but others will be painful.
The ability to receive a dividend was one of the best reasons to own MetaBank shares. The shares had been paying 52 cents each, which amounted to slightly less than 3 percent at today’s price. For now, the dividend is probably safe.
The OTS has taken the option of holding back a dividend, but they have not promised to do so.
A more important issue is the opportunity for MetaBank to establish relationships with new sales organizations for prepaid debit cards. Meta has to satisfy the OTS before it can get new debit card business.
This would seem to be the stick that gets MetaBank to move.
MetaBank has a significant relationship with AccountNow and with NetSpend, but the latter is trying to branch out beyond MetaBank and recently announced plans to do more with Bancorp Bank.There are some good opportunities for growth in the prepaid sector. The Mango Card is issued by Horizon Bank and by Inter National Bank. As Mango grows, it would become an attractive partner for a debit card issuer.
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Observations:
- J. Tyler Haahr’s annual income is very high even when META FINANCIAL/METABANK’s product are risky.
- As a consumer you may be dealing with METABANK because it partners with other corporate institutions who then market their PREPAID CARD for them.
- Also METABANK appears to be creating teaching seminars to promote their PREPAID CARD as a normative practice. The METABANK PREPAID CARD is awful for consumers who must give up all control of their own money which includes giving an anonymous entity like METABANK an interest free loan. This interest free loan is most often at the expense of those who can least afford to give out loans. METABANK promises that their PREPAID BANK CARD is safer and more secure than using cash for their customers. In reality, the PREPAID CARDS are a huge “cash cow” for METABANK and horrible for consumers.
- Consumers would be best advised to simply pay in cash and to pay directly, avoiding the middleman METABANK.
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J. Tyler HaahrFirst Midwest Financial (CASH)Salary, Compensation, Stock Options
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Copyright ©2013 CompanyPay.com ( The data given above is current as of 2013)
**”First Midwest Financial” will bring you to this information, i.e. First Midwest Financial is META FINANCIAL GROUP
Meta Financial Group Inc
Executive Salaries, Bonuses, Stock Options, and Other Compensation
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The problem with METABANK for consumers is that consumers report repeatedly that METABANK has abused them and held their money so that they couldn’t access even their own cash money which they placed on the METABANK CARD…. “Savings Institution” isn’t the way that most consumers experience META FINANCIAL GROUP INC.
State of Incorporation is “Delaware; Del.; DE” and not Iowa/IA but everything else is based in Storm Lake, Iowa…. What accounts for this discrepancy?
Why would anyone invest in META FINANCIAL GROUP INC?
Why would anyone become a partner of META FINANCIAL GROUP INC?
Perhaps for short term quick income, but the way that METABANK/META FINANCIAL GROUP INC does business doesn’t actually serve their customer base in a life affirming and positive way, and who would want to be a part of such a scam????
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October 11, 2011
You may call Iadvance tommorrow to find out if you going to be receiving a payment. Only 14000 customers has been selected to receive restitution payments.
jc
December 29, 2011
I received the email unfortunately my account now card was closed and they had to mail me a check. I had a name change and address so they told me to fax my updated information. I had to fax the info 6 times my first fax was sent 11/01/11. Im still waiting !!!!!!!!
Mrnd5's Blog 
October 4, 2011
I also received an email from Metabank that states that only certain customers will get restitution payments. Customer service refuses to tell me if I will get restitution payment. I requested the list of borrowers that will receive restitution. I requested this list pursuant to Freedom of Information Act. I even made clear to OCC that all customers names including their payment can be black out and I just want the page that has my name. My request is still in the assigned to be process stage. Metabanks email address is iadvance@metapay.com.