Cash America 2015 Annual Report Download - page 11

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Short-term loans generally have a loan term of seven to 45 days and are usually payable on the customer’s
next payday, unless the loan is renewed or extended in accordance with applicable laws. The fees the Company
charges on short-term loans in the United States vary according to applicable state laws governing the product but
typically range between $10 to $25 per $100 borrowed. Due to the credit risk and high transaction costs of serving
the Company’s customer segment, the fees the Company charges are generally higher than the fees charged to
customers with top-tier credit histories by commercial banks and similar lenders.
Unsecured installment loans that the Company guarantees have terms of up to 12 months. The Company
previously offered and guaranteed installment loans secured by a customer’s vehicle. The Company ceased offering
secured installment loans in the latter half of 2015, but the loans that remain outstanding that the Company
guarantees have remaining terms of up to 30 months. Both unsecured and secured installment loans require the
repayment of principal, interest and fees in installments over the term of the loan.
The Company typically experiences seasonal growth in its consumer loan balances, with increases during
each of the second, third and fourth quarters of the year following lower balances in the first quarter of the year due
to the heavy repayment of loans with tax refund proceeds received by customers. In addition, due to the nature of
the short-term loan product and the high velocity of loans written and renewed, seasonal trends are evidenced in the
quarter-to-quarter performance of the consumer loan loss provision. In the typical business cycle, the consumer loan
loss provision as a percent of combined consumer loans written and renewed for short-term consumer loans is
usually lowest in the first quarter and increases throughout the year.
Collection activities are an important aspect of the consumer loan product offering. The Company operates
a centralized collection center to facilitate regulatory compliance and coordinate a consistent approach to its
collections activities.
Check Cashing and Other Financial Services
The Company franchises its stand-alone check cashing business, Mr.Payroll,andeachfranchiseepays
royalties based on the gross revenue of check cashing services provided within the franchisee’s facility. In addition,
in some of its Company-owned lending locations, the Company offers check cashing services, as well as prepaid
debt cards that are issued and serviced through a third party, although these products were eliminated in many
locations during 2014 and 2015. These check cashing and other services represent a portion of the amounts included
in “Other” revenue in the consolidated statements of income. Total revenue from check cashing and other ancillary
products and services accounted for less than 1% of consolidated total revenue for the years ended December 31,
2015, 2014 and 2013, respectively.
7