Cash America 2010 Annual Report Download - page 43

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also has been tasked with clearing up misconceptions and myths surrounding the online lending industry and educating
the public, legislators and regulators about the demand for and importance of consumer loan products on the internet.
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 consumer loan 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 have adopted ceilings on check cashing fees. 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 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 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 when the Company denies an application for credit, which, among
other things, informs the applicant of the action taken regarding the credit application and of their right to learn the
specific reasons for the denial of credit.
The Company is also subject to the Federal Truth in Lending Act (and its underlying regulations, known as
Regulation Z) and the Fair Credit Reporting Act. These laws require the Company to provide certain disclosures to
prospective borrowers and protect against unfair credit practices. The principal disclosures required under the Truth in
Lending Act are intended to promote the informed use of consumer credit. Under the Truth in Lending Act, the
Company, when acting as a lender, is required to disclose certain material terms related to a credit transaction,
including, but not limited to, the annual percentage rate, finance charge, amount financed, total of payments, the
number and amount of payments and payment due dates to repay the indebtedness. The Fair Credit Reporting Act
regulates the collection, dissemination and use of consumer information, including consumer credit information. The
Fair Credit Reporting Act requires the Company to (a) provide certain information to consumers whose credit
applications are not approved on the basis of a report obtained from a consumer reporting agency, (b) promptly update
any credit information reported to a credit reporting agency about a consumer and (c) allow a process by which
consumers may inquire about credit information furnished by the Company to a consumer reporting agency.
The Company is also subject to the USA PATRIOT Act under which 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. In addition, the U.S. Treasury
Department’s Office of Foreign Assets Control requires that assets and transactions involving target countries and their
nationals be frozen.
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