January 4, 2011 / 11:22 PM / 7 years ago

UPDATE1-Meta Financial says may be served cease-and-desist order

* Says OTS is preparing cease-and-desist orders

* OTS to require it to reimburse iAdvance customers

* OTS also considering civil penalties

* Says legal and compliance costs to rise

* Shares fall 3 pct after market

Jan 4 (Reuters) - Meta Financial Group Inc (CASH.O) said it may be put under cease-and-desist orders by its regulator and will be required to reimburse customers of its iAdvance loan program, sending its shares down 3 percent after market.

In a regulatory filing, Meta Financial said the Office of Thrift Supervision (OTS) advised that it is presently preparing a cease-and-desist order against both the company and its banking unit, MetaBank.

The company also said the OTS will require the bank to reimburse iAdvance loan customers an amount that is yet to be determined.

In October, the OTS -- which regulates federal savings associations -- found that MetaBank engaged in unfair or deceptive acts and asked it to stop disbursement of loans under the program. [ID:nSGE69C0IX]

The OTS is also currently considering the need to assess civil money penalties against the banking unit, Meta Financial said, adding it expects its legal and compliance costs to increase as a result of the OTS actions.

Shares of the Storm Lake, Iowa-based company, which have lost more than half their value since the OTS order in October, were down 3 percent at $13.86 after market.

They closed at $14.30 on Tuesday on Nasdaq. (Reporting by Jochelle Mendonca in Bangalore; Editing by Unnikrishnan Nair)

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