Cash America 2013 Annual Report Download - page 52

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Any of these regulatory changes could have a material adverse effect on the Company’s business, prospects,
results of operations, financial conditions and cash flows and could impair the Company’s ability to continue current
operations in the United Kingdom.
The OFT is reviewing the payday lending sector in the United Kingdom, including the Company, which could result
in changes to the Company’s business processes or payday lending products.
In February 2012, the OFT announced that it had launched a review of the payday lending sector to assess the
sector’s compliance with the CCA, the Irresponsible Lending Guidelines and other relevant guidance and legal
obligations. As part of this review, the OFT conducted examinations of a number of U.K. payday lenders, including the
Company, to assess individual company compliance with these laws and guidelines. The OFT has announced that these
inspections will be used to assess a licensee’s fitness to hold a consumer credit license and could result in formal
enforcement action, including potential license revocation or significant fines or penalties where appropriate. The OFT
announced the findings of its review during the first quarter of 2013 and enumerated a number of expectations it has for
payday lenders related to affordability assessments, rollover practices, advertising, debt collection practices and
consumer disclosures, among other expectations.
On May 3, 2013, the OFT sent the Company a letter of findings related to its examination of the Company’s
U.K. short-term consumer loan (or payday) business, which indicated that the Company may not be complying fully
with all aspects of the Irresponsible Lending Guidelines, the CCA and other relevant laws and guidance. This letter
indicated the OFT’s general and specific concerns in the following categories: advertising and marketing, pre-contract
information and explanations, affordability assessments, rollovers, including deferred refinance and extended loans,
forbearance and debt collection, and regulatory and other compliance issues. The OFT asked the Company to provide an
independent audit of the Company’s compliance in relation to each concern identified in the letter by July 29, 2013. The
Company believes it has addressed the concerns identified by the OFT, and the Company provided this audit to the OFT
by the required date. This audit is intended to evidence how the Company has rectified the areas of concern identified by
the OFT. Based upon the Company’s response to the OFT, the Company does not expect any of the changes it
implemented in its business to have a material adverse effect on the Company’s future operations and financial
condition. However, the Company continues to receive additional requests for data and documentation from the OFT,
and the Company is complying with those requests. The Company can provide no assurance as to whether it will
successfully resolve the concerns expressed by the OFT or whether, in addressing these concerns, the Company will
need to change its business processes or payday lending products in the United Kingdom in a manner that could
materially adversely affect the Company’s business, prospects, results of operations, financial condition and cash flows.
Significant changes in foreign laws or regulations 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.
Significant changes in foreign laws or regulations or a deterioration of the political, regulatory or economic
environment of Mexico, Australia, Canada or the United Kingdom could restrict the ability of the Company to sustain or
expand its operations in these countries, which could materially adversely affect the Company’s business, prospects,
results of operations, financial condition and cash flows and could impair the Company’s ability to continue operations
in these countries. In addition, the failure of key service providers to fulfill their obligations as a result of regulatory,
political, economic or other factors could disrupt the Company’s operations in Mexico, Australia, Canada or the United
Kingdom.
In Mexico, restrictions and regulations affecting pawn services, including licensing restrictions, disclosure
requirements and limits on interest rates have been and likely will in the future be proposed from time to time. The
Company also maintains business relationships with third-party service providers. The Company’s business in Mexico is
also subject to other potential risks and uncertainties that are beyond the Company’s control, such as violence, social
unrest, enforcement of property rights and public safety and security, which could restrict or eliminate the ability to
operate some or all of its locations in Mexico or significantly reduce customer traffic or demand.
In addition, the Company offers consumer loans over the internet to customers in Australia, Canada and the
United Kingdom. Australia and the United Kingdom have recently increased regulation of the Company’s industry as
well as demonstrated an increasing interest in considering legislation or regulations that could further regulate or restrict