Federal Reserve Now Investigating A Massive Bank For Fraud

April 5, 2024

The Federal Reserve is now investigating a massive bank for fraud after numerous complaints prompted its regulator to take action.

Green Dot Bank, best known for partnering with Walmart to provide basic digital banking services to customers, said it has received a proposed consent order from the Federal Reserve over allegedly faulty consumer protection and anti-money laundering practices.

In a filing this week, Green Dot said the consent order — a type of agreement with a regulator that can entail increased monitoring, specific directives and enforcement — relates to activities that stretch back as far as 2017.

It noted new leadership had begun arriving in 2020, with current CEO George Gresham appointed in 2022 — but did not specify whether the order covered issues that had occurred since.

Green Dot estimated that its liability related to the proposed order could be $20 million, but warned investors that losses could reach as much as $50 million, according to the filing.

“I have been fighting with Green Dot Bank since Feb 23rd! It’s been a nightmare! I filed 2 police reports. I’ve filed complaints with CFPB, FTC, IC3, MN Dept of financial institutions, MN Attorney General’s office, Systemic Advocacy Management, Walmart ethics, MN Dept of commerce! EVERYONE! They all said the same thing… Its the federal reserve who regulates green dot bank & forwarded my complaint to federal reserve,” reported Rosa, a Green Dot Bank customer to FrankNez.

“I had $4149.65 on my acct when it was originally blocked! My acct was blocked for a MONTH when they finally unblocked my account WITHOUT notifying me like they said they would with an email.”

“My account was emptied out in less than an hr! I filed disputes & I’m supposedly getting a refund check in 10 business days. I’ve been told nothing but lies & been giving the runaround since Feb 23rd so im not too confident about that check showing up.

I’ve found hundreds of complaints on multiple websites of people in my same situation who said they NEVER received their refund checks or if they did it wasn’t the full amount they were supposed to get.”

Cassandra Walker says “Green Dot bank has stolen thousands of dollars from my multiple Green Dot Bank accounts from my disability benefits checks and I have repeatedly contacted them and begged them to give me back my money.”

“The last disability benefits checks they have stolen was on February 26, 2024 and I have no Massachusetts ID valid one but I have repeatedly sent them multiple Government issue documents that can prove my identity information and they are refusing to release my money.”

“I have cancer and I have no medications and they took my money that I need to pay for my medications.”

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A massive discount retailer is now closing all 371 stores and wind down its business operations after more than four decades.

99 Cents Only Stores will close all of 371 stores according to the City of Commerce discount chain.

“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” interim Chief Executive Mike Simoncic said in a statement.

“Unfortunately, the last several years have presented significant and lasting challenges in the retail environment.”

He cited multiple factors, including the “unprecedented impact” of the COVID-19 pandemic, shifting consumer demand, persistent inflationary pressures and rising levels of shrink — an industry term that refers to loss of inventory attributed to reasons such as shoplifting, employee theft and administrative errors.

Combined, those issues “have greatly hindered the company’s ability to operate,” Simoncic said.

99 Cents Only has stores in California, Arizona, Nevada and Texas and has about 14,000 employees. The privately held company said it had reached an agreement with Hilco Global to liquidate all of its merchandise and dispose of fixtures, furnishings and equipment at its stores. Sales are expected to begin Friday.

Hilco Real Estate is managing the sale of the company’s real estate assets, which are owned or leased, reports The LA Times.

The announcement by 99 Cents Only reflects a larger weakness in the dollar-store category, said Brad Thomas, equity research analyst at KeyBanc Capital Markets.

Dollar Tree, a Chesapeake, Va.-based retailer, announced last month that it was closing 600 of its Family Dollar stores this year and an additional 370 in the next few years, he noted.

“It’s been trying times for many, many retailers,” he said.

“What’s interesting is that what started out as a boon to retailers in the pandemic, with all those stimulus checks, quickly turned into a very troublesome time.”

Rising wages, inflation and higher losses due to shrinkage have reduced profits for retailers in a deep-discount sector where margins are already extremely low.

99 Cents Only, with its large base of California stores, has been under particular wage pressure, he said.

And it’s at a disadvantage compared with larger chains such as market leader Dollar General, which has a store count close to 20,000 — “a sales base and a store base that is multiple times larger than 99 Cents,” Thomas said.

Last week, Bloomberg reported that 99 Cents Only was considering a bankruptcy filing as it contended with a liquidity shortfall.

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