Cash America 2011 Annual Report Download - page 35

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In addition, a ballot initiative has been filed in the State of Missouri that, if passed, would likely require the
Company to cease offering its consumer loan products in that state. If this ballot initiative is passed, the Company does
not expect that a loss of consumer loans in Missouri would have a material effect on the Company in the current fiscal
year, including its consolidated revenues or operations.
The Company offers consumer loans over the internet in the United Kingdom where the Company must follow
the Irresponsible Lending Guidance of the Office of Fair Trading (the “OFT”). In October 2011, the OFT issued new
debt collection guidance that could restrict the number of times and the amounts that short-term consumer lenders such
as the Company are allowed to debit a customer’s account, which includes debits to both bank accounts and debit cards.
The Company is in the early stages of interpreting the guidance and assessing its potential impact on the Company’s
business and current practices. In addition, in February 2012, the OFT announced that it had launched an extensive
review of the payday lending sector in the United Kingdom to assess the sector's compliance with the Consumer Credit
Act of 2006 (the "CCA"), the OFT's Irresponsible Lending Guidelines and other relevant guidance and legal obligations.
In connection with this review, the Company has received formal notice from the OFT indicating that the Company is
one of 50 companies that will be subject to on-site inspections by the OFT. However, the OFT has not yet established
when it plans to visit the Company's premises to assess the Company's United Kingdom business and compliance
activities. The OFT has announced that these inspections could be used to assess a licensee's fitness to hold a consumer
credit license and could result in formal enforcement action where appropriate. For further discussion of the OFT, see
“Significant changes in, or a deterioration of, the political, regulatory or economic environment of Mexico, Australia,
Canada or the United Kingdom could affect the Company’s operations in these countries.”
In July 2010, the U.S. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (the “Dodd-Frank Act”), and Title X of the Dodd-Frank Act created the Consumer Financial Protection Bureau
(the “CFPB”). The CFPB became operational in certain respects in July 2011, although it did not have the ability to
oversee and exercise its full authority over non-depository institutions and implement related rules until a permanent
director was installed. On January 4, 2012, President Obama appointed a Director of the CFPB in a recess appointment
bypassing Senate confirmation. Although there remain doubts about the legality of this appointment and the appointment
may be subject to legal challenge, the CFPB has announced that it will now exercise full regulatory, supervisory and
enforcement powers over certain non-bank providers of consumer financial products and services such as the Company.
These powers include explicit supervisory authority to examine and require registration of such providers of consumer
financial products and services, including providers of consumer loans such as the Company; the authority to adopt rules
describing specified acts and practices as being “unfair,” “deceptive” or “abusive,” and hence unlawful; and the
authority to impose record-keeping obligations. The Company does not currently know the nature and extent of the rules
that the CFPB will consider with respect to consumer loan products and services such as those offered by the Company
or the timeframe in which the CFPB may consider such rules. Although the CFPB does not have the authority to
regulate interest rates, it is possible that at some time in the future the CFPB could propose and adopt rules making
short-term consumer lending products and services materially less profitable or even impractical to offer, which could
force the Company to modify or terminate certain of its product offerings. The CFPB could also adopt rules imposing
new and potentially burdensome requirements and limitations with respect to other consumer loan products and services.
Any such rules could have a material adverse effect on the Company’s business, results of operations and financial
condition or could make the continuance of all or part of its U.S. consumer loan business impractical or unprofitable.
For further discussion of the CFPB see “Item 1A. Risk Factors—Risks Related to the Company’s Business and
Industry—The Consumer Financial Protection Bureau that was created by the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 has announced the commencement of regulatory, supervisory and enforcement powers
over non-bank providers of consumer credit such as the Company.”