Thursday, July 7, 2011
Green Dot stock rises in wake of Durbin ruling
An Associated Press report said Green Dot Corp. stock rose after the Federal Reserve Board of Governors announced the proposed final debit card cap rule on June 29, 2011. On the news of the ruling to implement the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, an analyst at Janney Capital Markets upgraded Green Dot's position as a publicly traded company, which prompted a rise in Green Dot's shares.
The AP said the Fed's exemption of prepaid cards from the debit card interchange restrictions eased uncertainty in the prepaid card industry and may facilitate a move by banks to increase prepaid card issuance to offset potential revenue losses brought on by lower interchange fees banks can charge merchants for accepting debit cards.
Thomas C. McCrohan, Managing Director, Financial Technology/Trust Banks at Janney Capital Markets, said Green Dot may shut down the bill paying function on some of its cards and eliminate maintenance fees on its cards as a result of the Durbin amendment ruling, according to the AP report.
Green Dot is currently trading at about $35 per share, from a high of around $65 per share in December 2010.
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