Cash America 2010 Annual Report Download - page 46

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ITEM 1A. RISK FACTORS
The Company’s business and future results may be affected by a number of risks and uncertainties that should
be considered carefully in evaluating the Company. There may be additional risks and uncertainties to those listed
below that are not currently known to the Company or that management currently deems immaterial that may also
impair the Company’s business operations. The occurrence of one or more of the events listed below could have a
significant adverse affect on the Company’s business, prospects, financial condition, results of operations and cash
flows.
Risks Related to the Company’s Business and Industry
Adverse changes in laws or regulations affecting the Company’s short-term consumer loan services could
negatively impact the Company’s operations.
The Company’s products and services are subject to extensive regulation and supervision under various
federal, state, local and foreign laws, ordinances and regulations. In addition, as the Company develops new products
and services, it will become subject to additional federal, state, local and foreign laws, ordinances and regulations.
Failure to comply with applicable laws and regulations could subject the Company to regulatory enforcement action
that could result in the assessment against the Company of civil, monetary or other penalties. The Company faces the
risk that restrictions or limitations resulting from the enactment, change, or interpretation of laws and regulations could
negatively affect the Company’s business activities or effectively eliminate some of the Company’s current loan
products.
In particular, consumer loans have come under increased regulatory scrutiny in the United States in recent
years that has resulted in increasingly restrictive regulations and legislation that makes offering such loans less
profitable or unattractive to the Company. Regulations adopted by some states require that all borrowers of certain
short-term loan products be listed on a database and limit the number of such loans a borrower may have outstanding.
Other regulations adversely impact the availability of the Company’s consumer loan products to active duty military
personnel. Legislative or regulatory activities may also limit the amount of interest and fees to levels that do not
permit the offering of consumer loans to be feasible or may limit the number of consumer loans that customers may
receive or have outstanding.
Certain consumer advocacy groups and federal and state legislators have also asserted that laws and
regulations should be tightened so as to severely limit, if not eliminate, the availability of certain short-term products to
consumers, despite the significant demand for it. In particular, both the executive and legislative branches of the
federal government have recently exhibited an increased interest in debating legislation that could further regulate
short-term consumer loan products. The U.S. Congress has debated, and may in the future debate, proposed legislation
that could, among other things, place a cap on the effective annual percentage rate on consumer loan transactions
(which could encompass both the Company’s consumer loan and pawn businesses), place a cap on the dollar amount
of fees that may be charged for consumer loans, ban rollovers (payment of a fee to extend the term of a consumer
loan), require the Company to offer an extended payment plan, allow for minimal origination fees for advances, limit
refinancings and the rates to be charged for refinancings and require short-term lenders to be bonded.
In addition, the United States Congress recently passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010. This legislation authorizes the creation of a consumer financial protection bureau with broad
regulatory powers over consumer credit products such as those offered by the Company. The Company cannot
currently predict whether the Bureau will impose additional regulations that could affect the credit products offered by
the Company. However, if the Bureau were to promulgate regulations that adversely impact the credit products
offered by the Company, such regulations could have a material adverse effect on the Company’s business, prospects,
results of operations and financial condition.
The Company follows legislative and regulatory developments in each state where it does business. In
addition, recent legislative changes that have been enacted in Arizona, Colorado, Illinois, Maryland, Montana and
Wisconsin impact the consumer loan products the Company has historically offered in those states. Due to these