Green Dot (GDOT) has agreed to acquire the Wal-Mart-branded prepaid card business from GE Capital Retail Bank.
Green Dot Bank will acquire the deposits underlying the Wal-Mart MoneyCard program from GE at par and will issue future deposits on the cards, it said in a filing with the Securities and Exchange Commission on Monday. The deal is expected to close in the second half of the year, pending regulatory approval.
The filing did not disclose the dollar amount of the deposits or the consideration paid to GE, if any. Both Wal-Mart and GE Bank agreed to the change. Green Dot will issue the Wal-Mart cards through May 2015, it said.
Green Dot had been service provider and program manager of the Wal-Mart prepaid cards, with GE Bank serving as the issuing bank, since the cards were introduced in 2006. Making Green Dot the issuer will exempt the cards from interchange-fee cap proposed by the Durbin Amendment, which limits fees for prepaid cards issued by banks with more than $10 billion of assets, according to a research report from Janney Capital Markets analyst Thomas McCrohan. The Provo, Utah-based Green Dot Bank has $389 million of assets; GE Capital Retail Bank in Draper, Utah, has approximately $34 billion of assets.
GE Capital is "focused on its core business model of providing consumer credit through retailer and dealer relationships" and "believes that the Wal-Mart MoneyCard program can best achieve its full potential" with Green Dot as the issuer, it said in the filing.