Green Dot said on Thursday (May 12) that it is launching Green Dot Money, which it has billed as an online marketplace that will match low- and moderate-income consumers with what it called “a curated set of lending partners” that specialize in those consumer segments.
The firm stated that the loans are to be made by third parties who are members of the aforementioned marketplace. Green Dot’s own balance sheet will not come into play, and the company will not fund the loans and will not assume any risk tied to nonpayment of loans.
In a press release harkening the launch, the firm stated that consumers with poor credit history have limited loan options, and loans that they do take out are usually marked by sky-high rates. This new solution, according to Green Dot, will offer loan terms that are more realistic and affordable for these borrowers.
The loans are being offered in 46 states and are not limited to existing Green Dot customers, though the loans can indeed be funded on Green Dot cards or an individual’s checking account.
CEO Steve Streit said in a statement: “We’re excited to launch Green Dot Money, a service that is designed to help low- and moderate-income consumers find a fair and affordable loan that meets their needs. The low-income lending segment is in the early stages of unprecedented changes stemming from proposed new regulation putting pressure on the loan product itself, while new technologies and customer acquisition preferences are putting pressure on traditional customer marketing strategies and cost per funded loan. Our goal is to capitalize on these fundamental changes in the lending industry to take advantage of Green Dot’s natural assets of a large customer base, a rich data stream on that customer base, a collection of market-leading FinTech capabilities and assets, combined with a deeply valued national brand name, to create something special.”