Cash America 2011 Annual Report Download - page 49

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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 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 promptly update any credit information reported to a credit reporting agency
about a consumer and to allow a process by which consumers may inquire about credit information furnished by the
Company to a consumer reporting agency. In addition, the Fair Credit Reporting Act requires that 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. In addition, 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 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 records
for five years for purchases of monetary instruments for cash in amounts from $3,000 to $10,000. In addition, multiple
currency transactions must be treated as single transactions if the financial institution has knowledge that the
transactions are by, or on behalf of, any person or entity and result in either cash in or cash out totaling more than
$10,000 during any one day. In addition, federal regulations require the Company to report suspicious transactions
involving at least $2,000 in a single day to the Financial Crimes Enforcement Network of the Treasury Department
(“FinCEN”). The regulations generally describe three classes of reportable suspicious transactions—one or more related
transactions that the business knows, suspects, or has reason to suspect (1) involve funds derived from illegal activity or
are intended to hide or disguise such funds, (2) are designed to evade the requirements of the Bank Secrecy Act, or (3)
appear to serve no legitimate business or lawful purpose. Certain subsidiaries of the Company are registered as money
services businesses with the U.S. Treasury Department and must re-register with FinCEN at least every two years. The
Company must also maintain a list of names and addresses of, and other information about, the Company’s stores and
must make that list available to any requesting law enforcement agency. The store list must be updated at least annually.
Since October 2007, federal law caps the annual percentage rate that may be charged on loans made to active
duty military personnel, active duty reservists, and members of the National Guard and their immediate families at 36%.