Cash America 2012 Annual Report Download - page 54

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plus certain loan fees allowed by the statute. The Municipal Court held that short-term, single-payment consumer loans
made by Cashland are not authorized under the OMLA, and instead should have been offered under the Ohio Short-
Term Lender Law, which was passed by the Ohio legislature in 2008 for consumer loans with similar terms. Due to a
cap on interest and loan fees at an amount that is less than permitted under OMLA, the Company does not offer loans
under the Ohio Short-Term Lender Law.
On December 3, 2012, the Ohio Ninth District Court of Appeals affirmed the Municipal Court’s ruling in a 2-1
decision. Although this court decision is only legally binding in the Ninth District of Ohio, which includes four counties
in northern Ohio where Cashland operates seven stores, other Ohio courts may consider this decision.
The Company filed an appeal of the Ninth District Court’s decision with the Ohio Supreme Court on January
17, 2013 because it believes that this decision is contrary to the language of the OMLA, and the Ohio Supreme Court
has not yet determined whether it will hear the appeal. If the Ninth District Court’s decision is upheld by the Ohio
Supreme Court on appeal, the Company’s Ohio operations may be adversely affected. The Company relies on the
OMLA to make short-term loans in its retail services locations in Ohio, and if the Company is unable to continue
making short-term loans under this law, it will have to alter its short-term loan product in Ohio. In addition, the
Company has received, and may in the future receive, claims that it improperly made loans under the OMLA, which
could result in material losses to the Company or require the Company to make refunds in connection with certain short-
term loans made under the OMLA.
Adverse court interpretations of the various laws and regulations under which the Company operates could
require the Company to alter the products that it offers or cease doing business in the jurisdiction where the court
interpretation is applicable. Any of these events could have a material adverse effect on the Company’s business,
prospects, results of operations and financial condition.
The failure of third-parties who provide products, services or support to the Company to maintain their
products, services or support could disrupt Company operations or result in a loss of revenue.
The Company’s consumer loan revenues depend in part on the willingness and ability of unaffiliated third-party
lenders to make loans to customers and other third parties to provide services to facilitate lending and loan underwriting
in both the storefront and online lending consumer loan channels. The loss of the relationship with any of these third
parties, and an inability to replace them or the failure of these third parties to maintain quality and consistency in their
programs or services or to have the ability to provide their products and services, could cause the Company to lose
customers and substantially decrease the revenues and earnings of the Company’s consumer loan business. The
Company offers other services provided by various third-party vendors available to its customers. If a third-party
provider fails to provide its products or services, does not maintain its quality and consistency or fails to have the ability
to provide its products and services, the Company could lose customers and related revenue from those products or
services. The Company also uses third parties to support and maintain certain of its communication systems and
computerized point-of-sale and information systems. The failure of such third parties to fulfill their support and
maintenance obligations could disrupt the Company’s operations. Any of these events could result in a loss of revenue
and could have a material adverse effect on the Company’s business, prospects, results of operations and financial
condition.
A decreased demand for the Company’s products and specialty financial services and failure of the Company to
adapt to such decrease could result in a loss of revenue and could have a material adverse effect on the Company.
Although the Company’s products and services are a staple of its customer base, the demand for a particular
product or service may decrease due to a variety of factors, such as regulatory restrictions that reduce customer access to
particular products, the availability of competing products or changes in customers’ financial conditions. Should the
Company fail to adapt to a significant change in its customers’ demand for, or access to, its products, the Company’s
revenues could decrease significantly. Even if the Company does make adaptations or introduce new products to fulfill