Cash America 2007 Annual Report Download - page 31

Download and view the complete annual report

Please find page 31 of the 2007 Cash America annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

11
require check cashers to be licensed and the Company maintains licenses in states where it cashes checks
and that require check cashing licenses. Additionally, some states have adopted ceilings on check cashing
fees, those ceilings are in excess of or equal to the fees charged by the Company. Depending upon the
severity of a violation, failure to observe a state’s legal requirements for check cashing could result, among
other things, in a loss of the check cashing license in that state, the imposition of fines or customer refunds,
and other civil and/or criminal penalties. In addition to state regulations applicable to check cashing
companies, the Company’s check cashing activities also must comply with applicable federal regulations.
The principal federal regulations governing check cashing operations include the Bank Secrecy Act, the
USA PATRIOT Act and the Gramm-Leach-Bliley Act, each of which are described in Other Regulations
Affecting Lending Operations below.
Other Regulations Affecting Lending Operations
Under the federal Gramm-Leach-Bliley Act and its underlying regulations as well as under various
state laws and regulations relating to privacy and data security, the Company must disclose to its customers
its privacy policy and practices, including those relating to the sharing of customers’ nonpublic personal
information with third parties. This disclosure must be made to customers when the customer relationship is
established and, in some cases, at least annually thereafter. These regulations also require the Company to
ensure that its systems are designed to protect the confidentiality of customers’ nonpublic personal
information and many of these regulations dictate certain actions the Company must take to notify
consumers if their personal information is disclosed in an unauthorized manner.
The federal Equal Credit Opportunity Act ("ECOA") prohibits discrimination against any credit
applicant on the basis of any protected category, such as race, color, religion, national origin, sex, marital
status, or age, and requires the Company to notify credit applicants of any action taken on the individual’s
credit application. The Company must provide a loan applicant a Notice of Adverse Action ("NOAA") when
the Company denies an application for credit. The NOAA must inform the applicant of: the action taken
regarding the credit application; a statement of the ECOA’s prohibition on discrimination; the name and
address of both the creditor and the federal agency that monitors compliance with the ECOA; and the
applicant’s right to learn the specific reasons for the denial of credit and the contact information for the
parties the applicant can contact to obtain those reasons. The Company provides NOAA letters and
maintains records of all such letters as required by the ECOA and its implementing regulations.
Under the USA PATRIOT Act, the Company must maintain an anti-money laundering compliance
program covering certain of its business activities. The program must include: (1) the development of
internal policies, procedures, and controls; (2) designation of a compliance officer; (3) an ongoing employee
training program; and (4) an independent audit function to test the program. The United States Department
of the Treasury is expected to issue regulations clarifying the requirements for anti-money laundering
compliance programs for the pawnbroking and cash advance industries, but as of February 1, 2008 these
regulations had not yet been issued.
Under the Bank Secrecy Act and regulations of the U.S. Department of the Treasury, the Company
must report transactions occurring in a single day involving currency in an amount greater than $10,000, and
also must retain records for five years for purchases of monetary instruments for cash in amounts from
$3,000 to $10,000. In addition, multiple currency transactions must be treated as single transactions if the
financial institution has knowledge that the transactions are by, or on behalf of, any person or entity and
result in either cash in or cash out totaling more than $10,000 during any one day. In addition, federal
regulations require the Company to report suspicious transactions involving at least $2,000 in a single day to
the Financial Crimes Enforcement Network of the Treasury Department (“FinCen”). The regulations
generally describe three classes of reportable suspicious transactions—one or more related transactions that
the business knows, suspects, or has reason to suspect (1) involve funds derived from illegal activity or are
intended to hide or disguise such funds, (2) are designed to evade the requirements of the Bank Secrecy Act,
or (3) appear to serve no legitimate business or lawful purpose. Management believes that the Company’s