Green Dot Fined $44 Million by Fed Over Prepaid Debit Cards (1)

The Federal Reserve fined Green Dot Corp. $44 million over the firm’s handling of prepaid debit cards and tax preparation payment services. The stock fell as much as 6.1%.

Green Dot broke consumer laws with its marketing, selling and servicing of prepaid debit card products, as well as with its offering of tax return preparation payment services, the central bank said in a statement Friday.

In some cases from November 2017 through January 2021, Green Dot allegedly told consumers that their prepaid debit card accounts would be closed after they spent their balances down to zero. Instead Green Dot kept ...