Green Dot Corp. said that banking regulators have signed off its plan to buy a small bank in Utah, an acquisition that will allow the Monrovia prepaid debit card company to streamline its business.
The company late Wednesday said the U.S. Federal Reserve and the Utah Department of Financial Institutions have approved Green Dot’s $15.7 million purchase of Bonneville Bancorp in Provo, a deal first announced in March. The bank will be renamed Green Dot Bank, and be used to issue and administer most of the company’s debit cards.
Green Dot’s debit cards are mainly sold at retail outlets and can be recharged there. They currently are not linked to bank accounts, although customers can arrange for direct deposits to the cards. Most Green Dot cards now are issued by a third party in Georgia, Synovus Financial Corp.
Buying and converting the Utah bank will enable Green Dot to issue and administer cards from a financial institution it controls. “This acquisition will give us the flexibility to better control our own destiny, by allowing us to create products that best suit the needs of our current and future customers,” said Chief Executive Steve Streit in a statement.
The change will not affect Green Dot cards sold at Wal-Mart Stores Inc., which are issued through GE Money Bank.
Shares earlier closed up $2.11, or 7.7 percent, to $2963 on the New York Stock Exchange.