Green Dot Bank is Apple’s partner for some financial services, such as Apple Cash.
Green Dot Bank, an Apple financial partner for Apple Cash and other services, has been fined $44 million by the Federal Reserve over its tax-preparation service. The penalty is unrelated to its role in any Apple services.
Green Dot, based in Utah, is one of the banks used by companies such as Apple and Walmart to provide backing for financial services. Despite enormous cash reserves, Apple is legally required to use bank partners for offerings such as financing instalment payments, or Apple Cash transactions.
The US government found that Green Dot engaged in “numerous unfair and deceptive practices and a deficient consumer compliance risk management program” related to services the bank itself offered. The bank was penalized for failing to disclose fees related to processing tax refunds for customers using its tax-preparation services.
Gresham added that the company had taken “meaningful steps to correct and remediate those issues,” including better disclosure of potential fees. This includes “significant updates to our processes, our product packaging and marketing.”
In addition to the $44 million fine, the Federal Reserve ordered Green Dot to hire an independent third party firm to review its transaction practices. Another independent company will also be brought on to help the bank develop stronger anti-money laundering and consumer law compliance programs.
Importantly for the bank’s relationship with other large businesses, the Fed did not place any penalty restrictions on Green Dot’s ability to serve existing clients. The fine is slightly below the bank’s expectations, and the money to pay it has already been set aside.
Other Apple financial partners have included Goldman Sachs, originally its partner for the US-only Apple Card, and Affirm for Canadian financing. Apple and Goldman Sachs look to be parting ways in 2025, with no new partner yet announced.