The Office of Thrift Supervision has put a halt to Meta Financial Group Inc.'s tax-refund-anticipation loans.
The $960 million-asset company in Storm Lake, Iowa, disclosed in a Securities and Exchange Commission filing on Oct. 12 that the OTS has barred the company from originating any loans where the anticipated source of repayment is a tax refund.
The OTS also prohibited Meta Financial from offering income tax refund transfer-processing services during the 2011 tax season.
Also, the OTS ruled that Meta Financial's iAdvance program, which is its refund lending business, had engaged in unfair or deceptive practices that violated the Federal Trade Commission Act.
As a result, it required the company to halt originations by Oct. 13.
Meta Financial said the OTS is still deciding if the company must reimburse any borrowers.
The company said it expects the program's discontinuance will eliminate a substantial portion of its profit.
Meta Financial added that the elimination of the program also could cause more borrowers to default on their loans.
