Cash America 2008 Annual Report Download - page 26

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3
On July 26, 2008, the Pennsylvania Department of Banking (“PDOB”) issued a notice announcing a
“change in policy,” effective February 1, 2009. The notice concluded that out-of-state lenders such as the
Company were lending “in” Pennsylvania. Accordingly, the notice purported to subject such lenders to the
licensing requirements of the Pennsylvania Consumer Discount Company Act (the “CDCA”), which sets the
maximum permissible interest at a level well below the interest rate the Company charges on its online cash
advance loans. On January 8, 2009, the Company brought suit against the PDOB in Pennsylvania
Commonwealth Court, arguing that the notice was invalid because it was adopted in violation of applicable
procedural requirements and because it conflicted with the plain language of the CDCA. After a hearing on
the Company’s initial request for a preliminary injunction, the judge expressed the view that the matter
should be heard by all the judges of the Commonwealth Court. Accordingly, the Company agreed to stay its
request for a preliminary injunction, and the Court scheduled a final injunction hearing for April 1, 2009.
As a part of these proceedings, the PDOB filed a counterclaim against the Company seeking a declaratory
judgment that the Company’s online lending activities to Pennsylvania consumers is not authorized by
Pennsylvania law, however, the PDOB represented that it “has no intent to pursue a retroactive financial
remedy” against the Company or any similarly situated lender for loans made prior to the date of the
ultimate decision in this case. The Company is actively pursuing its original claim and will vigorously
defend the PDOB’s counterclaim, which the Company believes is without merit. The Company does not
expect a final decision in this case prior to the summer of 2009. However, there can be no assurance as to
the timing of the decision or the ultimate decision on the merits.
Similarly, on September 5, 2008, the Minnesota Department of Commerce (the “Department”)
announced a change in its governance of online cash advance products that could have caused a material
change to the economics of the product offered in that state. On November 5, 2008, a trade association filed
a petition against the Department seeking for the Department to cease the planned application of this new
policy change due to the Department’s failure to comply with the requisite procedures for promulgating new
rules. On November 26, 2008, the Minnesota Office of Administrative Hearings issued an order requiring
the Department to cease enforcement of their September 5, 2008 policy change. The Department has not
taken any further action on this matter as of the date of this report.
The Company’s principal executive offices are located at 1600 West 7th Street, Fort Worth, Texas
76102-2599, and its telephone number is (817) 335-1100. As used in this report, the term “Company”
includes Cash America International, Inc. and its subsidiaries, unless the context otherwise requires.
Access to Reports. Through its home page at www.cashamerica.com, the Company provides free
access to its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
and all amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934 as soon as reasonably practicable after such reports are electronically filed with or
furnished to the Securities and Exchange Commission (the “SEC”).
These reports may also be read and copied at the SEC’s Public Reference Room at 100 F Street,
NE, Washington, D.C. 20549, or at the SEC website at www.sec.gov. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.
Pawn Lending and Merchandise Disposition Activities
Pawnshops are convenient sources of consumer loans. They also sell previously-owned
merchandise acquired from customers who do not redeem their pawned goods or purchased directly from
customers. A pawnshop may also sell items purchased from third-party vendors.
Lending. When receiving a pawn loan from the Company, a customer pledges personal property to
the Company as security for the loan. The Company delivers a pawn transaction agreement, commonly
referred to as a pawn ticket, to the customer, along with the proceeds of the loan. If the customer does not
repay the loan or redeem the property, the customer forfeits the property to the Company, and the Company
sells the property.