Account Now is bringing a new line of credit to holders of its prepaid debit cards. The new card is known as the Account Now Gold Visa Prepaid Card.
The catch is that account holders have to establish direct deposit on to their card.
The Gold Visa Prepaid Card is marketed by Account Now, but it is issued by MetaBank. MetaBank is a small bank in Storm Lake, Iowa. They issue cards through many different marketing groups, including NetSpend and Account Now. They also have partnerships with payday lenders, online poker sites, and pawn shops.
Unofficially, they have indicated that they intend to fund refund anticipation loans for Jackson Hewitt in the coming year.
MetaBank is regulated by the Office of Thrift Supervision. My sense is that they have no where need the equity to fund all of these high-risk products. Jackson Hewitt used to get its RAL funding through a relationship with Pacific Capital Bank. Their RAL loans were the frequent opportunity for fraud, as well as high loan losses.
Back to the card, but this seems like an incredible amount of credit to offer to the kinds of consumers that use the Account Now products. Moreover, underwriting would appear to be altogether non-existent. On the promotional site, Account Now promises that there will be no credit check and no review with ChexSystems. Heck, they are even offering new customers a $25 sign up bonus. The lack of underwriting would not matter to everyone, but they make a big difference to people that have not paid their bills in the past.
I spoke with a representative at MetaBank this morning. She was not aware of any new product from Account Now. She suggested that if I wanted to know what cards MetaBank was issuing, that I should talk to Account Now.
What is the OTS going to say?