Tuesday, November 29, 2011
Fed approves Green Dot bank purchase
Green Dot Corp. reported that the Board of Governors of the Federal Reserve System approved the general-purpose, reloadable prepaid card company's application to acquire Bonneville Bancorp of Provo, Utah, and thereby become a bank holding company under the Bank Holding Company Act of 1956. The Utah Department of Financial Institutions also approved the Bonneville acquisition, Green Dot said.
Green Dot expected to close the $15.7 million acquisition after expiration of the statutory 15-day waiting period following the Federal Reserve Board's approval. "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 Steve Streit, Chief Executive Officer at Green Dot. "This allows us to become a bank truly dedicated to serving the needs of the large and growing population of consumers who are looking for a better way to bank."
In connection with the application process, entities affiliated with Green Dot investor Sequoia Capital, which collectively hold approximately 51 percent of Green Dot's publicly traded shares, agreed to reduce their shares to less than 10 percent and convert the shares to a kind that do not confer voting rights on the shareholders.
Green Dot's move to become a bank holding company will reportedly streamline the company's business by allowing it to issue its own GPR cards. Bonneville is expected to be renamed Green Dot Bank.
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