Cash America 2015 Annual Report Download - page 117

claims that Cash America was the true lender with respect to the loans made to Georgia borrowers and that First
National Bank of Brookings, South Dakota and Community State Bank of Milbank, South Dakota’s involvement in
the process is “a mere subterfuge.” Based on this claim, the suit alleged that Cash America was the “de facto” lender
and was illegally operating in Georgia. The complaint sought unspecified compensatory damages, attorney’s fees,
punitive damages and the trebling of any compensatory damages. In November 2009, the case was certified as a
class action lawsuit.
ThiscasewasscheduledtogototrialinNovember2013,butonOctober9,2013,thepartiesagreedtoa
settlementthatwasapprovedbythetrialcourtonJanuary16,2014.InaccordancewithASC 450, Contingencies,
the Company recognized a liability in 2013 in the amount of $18.0 million. The liability was recorded in “Accounts
payable and accrued liabilities” in the consolidated balance sheets and “Operations and administration expense” in
theconsolidatedstatementsofincomefortheyearendedDecember31,2013.InFebruary2014,theamounttobe
paid in connection with the settlement was substantially finalized, and the amount was not materially different than
theliabilityaccruedbytheCompanyatDecember31,2013.The final payments in connection with the settlement
were paid during the first six months of 2014. The Company denies all of the material allegations of the lawsuit and
denies any and all liability or wrongdoing in connection with the conduct described in the lawsuit, but the Company
agreed to the settlement to eliminate the uncertainty, distraction, burden and expense of further litigation.
See “Debt Agreement Compliance” in Note 11 for information on a lawsuit filed against the Company
related to the 2018 Senior Notes.
The Company is also a defendant in certain routine litigation matters encountered in the ordinary course of
its business. Certain of these matters are covered to an extent by insurance. In the opinion of management, the
resolution of these matters is not expected to have a material adverse effect on the Company’s financial position,
results of operations or liquidity.
Consumer Financial Protection Bureau
OnNovember20,2013,theCompanyconsentedtotheissuanceofaConsentOrderbytheCFPBpursuant
to which it agreed, without admitting or denying any of the facts or conclusions made by the CFPB from its 2012
review of the Company, to pay a civil money penalty of $5.0 million ($2.5 million was allocated to each of the
Company’s retail services and e-commerce segments that existed at the time) (the “Regulatory Penalty”), which is
non-deductible for tax purposes. The Company also agreed to set aside $8.0 million of cash for a period of 180 days
to fund any further payments to any remaining eligible Ohio customers in connection with the Ohio Reimbursement
Program.
The $8.0 million of cash set aside was classified as restricted cash on the Company’s consolidated balance
sheets beginning in November 2013. In June 2014, following the expiration of the 180-day extended claims period,
the Company released $7.9 million of the restricted cash. As of December 31, 2015, the remaining balance in
restricted cash was approximately $27 thousand, reflecting the amount of refunds that were still outstanding as of
that date.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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