Meta Financial Settles Case Related to iAdvance Program

Meta Financial Group (CASH) of Storm Lake, Iowa, has agreed to pay $2.1 million to settle a class-action lawsuit with investors related its former high-interest, small-balance loan program, iAdvance.

The class includes those who acquired Meta's common stock between May 14, 2009 and Oct. 18, 2010, the plaintiffs' law firm, Kahn Swick & Foti, said in a news release on Tuesday. The lawsuit was settled in early January in the U.S. District Court in the Northern District of Iowa.

The plaintiffs alleged that Meta intentionally marketed tax-refund anticipation loans and the iAdvance loan program to low-income and less-educated customers and disguised high interest rates as "advance fees," according to the proposed settlement. This led to an investigation by the now defunct Office of Thrift Supervision.

The plaintiffs alleged that the Meta provided investors with financial information that reflected earnings based on "deceptive and federally prohibited practices" and that it disregarded that the OTS was conducting an investigation, according to the settlement.

The OTS ordered Meta to discontinue the iAdvance program and any loans where the anticipated source of repayment was a tax refund in October 2010.

Meta denied any wrongdoing in the proposed settlement. A hearing will be held in June to determine whether the class can be certified and if the proposed settlement is adequate, the plaintiffs' law firm said Tuesday.

Meta previously agreed to pay $4.8 million to customers of the iAdvance program under an order from regulators, in addition to a $400,000 civil penalty to the OTS.