UPDATE 1-Meta Financial says OTS norms to hit tax products sale

Thu Dec 2, 2010 7:56am EST

* Cites tough regulatory directives

* Termination of iAdvance program to hit Q1

Dec 2 (Reuters) - Meta Financial Group Inc (CASH.O) said it will not be able to offer refund anticipation loans and income tax refund transfer programs during the 2011 tax season, citing stringent directives by the Office of Thrift Supervision (OTS).

iAdvance and other tax-related programs contribute more than a third of Meta Payment Systems unit's yearly gross profit.

In a regulatory filing, the company also said the discontinuation of its iAdvance payday loan program will result in loan-loss provisions of about $50,000 for the quarter ending Dec. 31.

In October, Meta Financial said the regulators temporarily blocked its MetaBank unit from entering into contracts that could have a material adverse effect on the company's operations. [ID:nSGE69H0HS]

Meta Financial had also said the OTS found that it had engaged in unfair or deceptive acts in connection with MetaBank's iAdvance payday loan program. [ID:nSGE69C0IX]

Shares of the company closed at $13.02 on Wednesday on Nasdaq. Storm Lake, Iowa-based Meta Financial has seen the value of its shares more than halve since the regulator temporarily blocked its unit from entering into contracts on Oct. 18. (Reporting by Archana Shankar in Bangalore; Editing by Vyas Mohan)

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