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7 years ago
UPDATE 1-Regulator stops MetaBank from entering into contracts
October 18, 2010 / 12:12 PM / 7 years ago

UPDATE 1-Regulator stops MetaBank from entering into contracts

2 Min Read

* Meta Fin sees adverse impact from OTS move

* Meta Fin unit not permitted to amend earlier contracts

* OTS refusal includes agreements on Simplexes card program

Oct 18 (Reuters) - Meta Financial Group Inc (CASH.O) said the Office of Thrift Supervision (OTS) temporarily blocked its unit, MetaBank, from entering into contracts, including adding new banks for selling cards under its Simplexes program.

The company said there could be a material adverse effect on Meta Financial's operations, if its program managers migrate to other issuing banks.

In a regulatory filing last week, the company said the OTS had found Meta Financial of having engaged in unfair or deceptive acts in connection with MetaBank's iAdvance payday loan program. [ID:nSGE69C0IX]

The regulator has already stopped Meta Financial from making short-term, high-interest payday loans to customers, who have its prepaid cards. [ID:nN13260949].

Meta Financial was informed by the OTS on Oct 14 that MetaBank cannot amend existing agreements or enter into new ones with third parties.

Shares of Meta Financial closed at $18.95 Friday on Nasdaq. Their value has plunged 75 percent since OTS blocked Meta Financial last Tuesday from issuing payday loans to customers. (Reporting by Rachel Chitra in Bangalore; Editing by Prem Udayabhanu)

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