Cash America 2012 Annual Report Download - page 43

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Lending Guidance of the OFT, which provides greater clarity for lenders as to business practices that the OFT believes
constitute irresponsible lending under the CCA. In April 2014, the FCA will take over responsibility for regulating
consumer credit from the OFT and may change the way consumer loans are regulated in the United Kingdom. The
Company is also subject to the requirements of the Data Protection Act 1988 (the “DPA”) and is required to be fully
registered as a data-controller under the DPA. The Company is also required to be certified under the European Union
Safe Harbor provisions, which allows European Union data to be passed to non-European Union countries.
In Australia, the Company acts as a finance broker, offering the lending products of unaffiliated third-party
lenders, which is similar to the Company’s CSO programs in the United States. In Australia, the Company follows the
responsible lending guidelines under the National Consumer Credit Protection Act (2010) (the “NCCPA”). In Canada,
all regulation of the consumer lending industry is conducted at the provincial level. In general, the regulations require
lenders to be licensed, set maximum fees and regulate collection practices.
For recent developments related to and a further discussion of the OFT, including the transition to regulation by
the FCA, and the NCCPA, see “Recent Developments—Recent Regulatory and Other Developments—UK Office of
Fair Trading” and “Item 1A. Risk Factors—Risks Related to the Company’s Business and Industry—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.”
Industry Best Practices
The Company is a member of the Community Financial Services Association of America (the “CFSA”) in the
U.S., the Online Lenders Alliance (“OLA”) in the U.S. and the Consumer Finance Association (the “CFA”) in the U.K.
These associations have developed guidelines or best practices for responsible lending for their members to follow that
often have more extensive requirements than federal, state and local regulatory requirements with which the Company is
required to comply. The Company endeavors to adhere to the guidelines or best practices of these associations, which
are summarized below.
The CFSA is a national association of lenders that encourages responsible industry practices and promotes
consumer loan legislation and regulation to provide consumer loan 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 consumer loan 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 four equal installments over an extended period at no extra cost;
•Limiting loan rollovers (or extensions of outstanding consumer loans) to four, or less if required by applicable state
law;
•Complying 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 consumer loan transaction without incurring any additional
charges;
•Encouraging consumer responsibility by promoting responsible use of consumer loans;
•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;