Company: GDOT
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001386278-25-000076
Chunk: 246

Company: GREEN DOT CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 2
Chunk 246
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 and Money Movement segments, adding new features and functionality to our Arc platform, cost-effectively re-engaging in strategic marketing initiatives in support of our GO2bank product, and other initiatives across our account programs with the objective of returning to active account growth.

We have created synergies from our processor conversion and expect the implementation of our card management platform will allow us to continue to realize reductions in our processing expenses as we seek to expand account programs. In March 2025, we also initiated a re-alignment of teams and resources across the enterprise in a continual effort to better support our strategic priorities and growth channels, and improve our operating efficiency. We expect these re-alignments, including the exit from our operational activities in China, to further improve our cost structure year-over-year. 

Despite the meaningful reductions to our cost structure we have achieved across our organization through our various initiatives, we are incurring increased expenses in other areas as we conduct our strategic review process, incur or accrue for additional retention and interim officer compensation expenses and incur additional expenses in connection with our ongoing investments in our AML program, including improvements to our compliance controls, policies and procedures. While expenses related to our AML programs decreased through the first half of 2025 on a year-over-year basis, this was in part a timing matter, and we have incurred and expect will continue to incur higher expenses in this area during the second half of the year. We believe investments in our AML program will ultimately help us continue to remediate matters identified in the Consent Order from the previous year, reduce our fraud losses over the long term and cost-efficiently scale our compliance and regulatory programs as we look to grow our business.

In October 2025, the Federal Reserve decreased interest rates by an additional 25 basis points to a current range of 3.75% to 4.00%. The Federal Reserve's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future. In general, while higher short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested. Accordingly, the net effect has had and we expect will continue to have a negative impact on our consolidated financial statements and will be