Cash America 2014 Annual Report Download - page 27

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number of states. As a result, the Company has ceased doing business in various states where it formerly conducted
business, and it has also modified its business operations in other states where restrictive legislation has been
enacted. The Company offers consumer loans in 11 states. The Company closely monitors proposed legislation
being discussed in the states where it offers consumer loans and is currently monitoring proposed legislation in
Texas, Missouri and Tennessee.
The Company’s consumer loan business is also subject to various local rules and regulations. These local
rules and regulations are subject to change and vary widely from city to city. The most restrictive local rules and
regulations relate to zoning and land use restrictions; however, local jurisdictions’ efforts to regulate or restrict the
terms of a consumer loan product have been increasing, predominantly in the State of Texas. As a result of
restrictive local city ordinances passed since 2011 that had the effect of reducing the profitability and volume of
short-term consumer loans, the Company closed 36 retail services locations in Texas in 2013 in connection with the
Texas Consumer Loan Store Closures. Additionally, during 2014, in connection with the Company’s strategy to de-
emphasize the consumer loan product in many of its pawn lending locations, the Company removed consumer
lending activities from 311 of its retail services locations. See “Recent Developments” for additional information
regarding the reduction in short-term consumer lending operations.
U.S. Federal Regulation
In addition to the state and local regulations discussed above, the Company’s business is subject to U.S.
federal regulations as described below.
Lending Laws. The company’s business is subject to the federal Truth in Lending Act and its underlying
regulations, known as Regulation Z, the Fair Credit Reporting Act and the Equal Credit Opportunity 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, when acting as a lender, the Company 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 federal Equal Credit Opportunity Act prohibits
the Company from discriminating 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.
Consumer Reports and Information. The use of consumer reports and other personal data used in credit
underwriting is governed by the Fair Credit Reporting Act and similar state laws governing the use of consumer
credit information. The Fair Credit Reporting Act establishes requirements that apply to the use of “consumer
reports” and similar data, including certain notifications to consumers where their loan application has been denied
because of information contained in their consumer report. 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.
Information-Sharing Laws. The Company is also subject to the federal Fair and Accurate Credit
Transactions Act, which limits the sharing of information with affiliates for marketing purposes and requires the
Company to adopt written guidance and procedures for detecting, preventing and responding appropriately to
mitigate identity theft and to adopt various policies and procedures and provide training and materials that address
the importance of protecting non-public personal information and aid the Company in detecting and responding to
suspicious activity, including suspicious activity that may suggest a possible identity theft red flag, as appropriate.
Marketing Laws. The Company’s advertising and marketing activities are subject to several federal laws
and regulations including the FTC Act, which prohibits unfair or deceptive acts or practices and false or misleading
advertisements in all aspects of the Company’s business. In furtherance of consumer protection, the FTC provides
guidance and enforces federal laws concerning truthful advertising and marketing practices; fair financial practices