Cash America 2014 Annual Report Download - page 26

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State and Local Regulations
The Company’s pawn and consumer loan businesses are subject to state and local regulations as described
below.
Pawn Regulations
The Company’s pawn lending locations are regulated by the states and local jurisdictions where its pawn
lending locations are located and generally must be licensed by the state. The statutes and regulations applicable to
pawn lending locations vary from state to state and in each local jurisdiction. In general, these statutes and
regulations establish licensing requirements for pawnbrokers and pawn lending locations and regulate various
aspects of the pawn loan and the purchase and sale of used merchandise, such as the service charges and interest
rates that a pawn lending location may charge, the maximum amount of a pawn loan, the minimum and/or
maximum term of a pawn loan, the content and format of the pawn ticket, and the length of time after a loan default
that a pawn lending location must hold defaulted pawned collateral or purchased items before disposing of the
merchandise. Failure to observe a state’s legal requirements for pawnbroking could result in, among other things, a
loss of pawn licenses in that state, the imposition of fines or refunds, and other civil and/or criminal penalties.
Many of the Company’s pawn lending locations are also subject to ordinances in their local jurisdictions that
may require, for example, local licenses or permits and specified recordkeeping procedures, among other things.
Most of the Company’s pawn lending locations voluntarily, or pursuant to applicable laws, work with local law
enforcement agencies and other pawn lenders to determine conflicting claims of rightful ownership. Goods held to
secure pawn loans or goods purchased that are determined to belong to an owner other than the borrower or seller
are subject to recovery by the rightful owner. The Company historically has not experienced a material number of
claims of this nature, and the claims experienced have not had Material Adverse Effect.
Consumer Loan Regulations
The Company’s consumer loan business is regulated under a variety of enabling state statutes. The scope of
state regulation, including the fees and terms of the Company’s products and services, varies from state to state. The
terms of the Company’s consumer loan products and services vary from state to state in order to comply with the
laws and regulations of the states in which it operates. In addition, the Company’s advertising and marketing
activities and disclosures are subject to review under various state consumer protection laws and other applicable
laws and regulations.
The states with laws that specifically regulate the Company’s consumer loan products and services typically
limit the principal amount of a consumer loan and set maximum fees or interest rates that customers may be
charged. Most states also limit a customer’s ability to renew a short-term consumer loan and require various
disclosures to consumers. State statutes often specify minimum and maximum maturity dates for consumer loans
and, in some cases, specify mandatory cooling-off periods between transactions. The Company’s collection
activities regarding past due amounts are subject to consumer protection laws and state regulations relating to debt
collection practices. In addition, some states require certain disclosures or content to accompany the Company’s
advertising and marketing materials. Also, some states require the Company to report loan activity to state-wide
databases and restrict the number and/or principal amount of loans a consumer may have outstanding at any
particular time or over the course of a particular period of time, typically twelve months.
In states or jurisdictions where the Company offers its CSO programs, the Company complies with that
jurisdiction’s Credit Services Organization Act, Credit Access Business law or a similar statute. These laws
generally define the services that the Company can provide to consumers and require the Company to provide a
contract to the customer outlining the Company’s services and the cost of those services to the customer. In
addition, these laws may require additional disclosures to consumers and may require the Company to be registered
with the jurisdiction and/or be bonded.
Over the last few years, legislation that prohibits or severely restricts the Company’s consumer loan
products and services or the profitability of the loan products and services has been introduced or adopted in a