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The Treasury Department is expected to announce a pilot program Thursday for distributing 2010 tax refunds on a reloadable prepaid card.
January 13
The Treasury Department's plan to let tax filers receive their refunds on a prepaid card could boost revenue for Green Dot Corp., the program's manager, by as much as 10% in 2012.
"We believe this represents a material opportunity for Green Dot in 2012," Gil Luria, a senior vice president with Wedbush Securities in Los Angeles, wrote in a research note Thursday.
The Treasury announced Thursday that it is testing a process for offering tax refunds on reloadable prepaid cards for low- to moderate-income individuals this year. The agency seeks to cut payments processing costs and encourage underbanked consumers to use mainstream financial products. It is sending out letters next week to 600,000 individuals inviting them to participate. It selected Green Dot of Monrovia, Calif., to manage the program and Bonneville Bank, a subsidiary of the Provo, Utah, bank holding company Bonneville Bancorp, to issue the cards. Green Dot is waiting on regulatory approval of its deal to buy Bonneville.
