Cash America 2009 Annual Report Download - page 42

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In addition to the federal, state and local regulatory requirements applicable to cash advance products,
the Company, as a leading member of the Community Financial Services Association of America (the
“CFSA”), also adheres to the guidelines for responsible lending promulgated by the CFSA. The CFSA is a
national association of responsible lenders that encourages responsible industry practices and promotes cash
advance legislation and regulation to provide cash advance customers with substantive consumer protections
while preserving their access to short-term credit options. The CFSA requires its members to follow the
CFSA’s guidelines for responsible lending, to promote responsible lending practices in the cash advance
industry, and to ensure that customers have complete information about their loan and are treated fairly and in
compliance with the laws applicable to their loan. Among other things, the guidelines developed by the
CFSA include:
• Fully and clearly disclosing the terms of each loan, including prominent disclosure of the service fee
amount as both a dollar amount and as an annual percentage rate, as required by the Federal Truth in
Lending Act and applicable state laws;
• Providing customers who are unable to repay a loan according to its original terms an opportunity, at least
once in a 12-month period, to repay the loan in installments over an extended period at no extra cost;
• Limiting loan rollovers (or extensions of outstanding cash advances) to four, or less if required by
applicable state law;
• Requiring compliance with applicable laws, including limiting rates or fees charged to those permitted by
applicable state or federal law;
• Providing customers a one-day right to rescind any cash advance transaction without incurring any
additional charges;
• Encouraging consumer responsibility by promoting responsible use of cash advances;
• Collecting past due amounts in a professional, fair and lawful manner, and utilizing the FDCPA as
guidance for collection activities;
• Prohibiting the taking or threatening of criminal action against a customer as a result of the customer’s
check being returned unpaid or the customer’s account not being paid;
• Participating in self-policing the industry and reporting violations of CFSA’s Best Practices to the CFSA,
including agreeing to maintain and post a toll-free consumer hotline number; and
• Requiring that lenders providing payday advances through the internet must be licensed in each state
where its payday advance customers reside and must comply with the disclosure, rollover, rate, and other
requirements imposed by each such state, unless such state does not require the lender to be licensed or to
comply with such provisions.
Check Cashing Regulations
The Company offers check cashing services at its Mr. Payroll branded check cashing facilities and at
many of its pawn lending locations and cash advance storefront locations. Some states require check cashing
companies to meet minimum bonding or capital requirements and to comply with record-keeping
requirements. Some states require check cashers to be licensed and the Company maintains licenses in states
where it cashes checks that require check cashing licenses. Additionally, some states have adopted ceilings
on check cashing fees, which are in excess of or equal to the fees charged by the Company. 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