Spokane-based Sterling Bank, the principal subsidiary of Sterling Financial Corp., has ventured into prepaid products by launching its first two prepaid cards on Oct. 1.

The prepaid cards offer a variety of options for those who want the convenience of a debit or credit card but not the risks, says Patricia Baughman, senior vice president and director of corporate product management and market research.

"It works exactly like a debit card, except it's pre-loaded," Baughman says. "It allows customers to manage spending and not incur additional credit if they don't wish to."

The bank decided to begin offering prepaid cards because of the popularity of Starbucks and other prepaid gift cards, Baughman says.

"Gift cards have taken off, and it indicates people want to be in control of their spending," she says.

Baughman says that Sterling also is planning to introduce prepaid gift, travel, and payroll cards in the next few months.

The two cards available now are the everyday cash card and a student cash card. Both cards are accepted anywhere Visa debit cards are accepted and can be used to withdraw money from ATMs.

The card can be used until it hits a zero balance, and after that the transaction would show as not approved. The cards don't have a minimum balance or pre-defined spending limit, Baughman says.

"Because there is no credit involved in it, it's not meant to be restrictive," she says.

The student card, Baughman says, allows parents to have access to the account and transfer money to their child's card. Other than that, she says, the two cards are similar.

Separately, a Los Angeles-based law firm has announced that it's investigating claims that Sterling Bank's board of directors breached its fiduciary duties to stockholders by failing to shop the company around properly before agreeing to the upcoming merger of Sterling Financial with Umpqua Holdings Corp., of Portland. Representatives of the law firm, Glancy, Binkow & Goldberg PPS, didn't respond to requests for comment, so it is unclear whether any stockholders of Sterling Bank have actually been in contact with that firm.

The merger between the two companies was announced in September. A press release distributed by Umpqua and Sterling states that the value of the merger is approximately $2 billion.