Cash America 2014 Annual Report Download - page 33

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18
compliance risk review before introducing or implementing new or changed products or services. This requirement
could result in additional delay or cost when introducing or implementing new or changed products or services, or a
decision not to proceed with such initiatives. In addition, Enova is also subject to the Consent Order because it was
part of the Company when the Consent Order was issued. The Company cannot assure that Enova will continue to
comply with the Consent Order now that it is a separate publicly traded company. If Enova does not comply with
the consent order, the Company could be held liable for Enova’s noncompliance. See “Risk Factors Related to the
Enova Spin-off—In connection with the Enova Spin-off, Enova and the Company have agreed to indemnify each
other for certain liabilities; if the Company is required to act on these indemnities to Enova, it may need to divert
cash to meet those obligations, and Enovaʼs indemnity could be insufficient or Enova could be unable to satisfy its
indemnification obligations” for information regarding risks related to indemnification by Enova. Any
noncompliance with the Consent Order or similar orders or agreements from other regulators could lead to further
regulatory penalties and could have a Material Adverse Effect.
The adoption of new laws or regulations or adverse changes in, or the interpretation or enforcement of, existing
laws or regulations affecting the Company’s products and services could have a Material Adverse Effect.
Governments at the national, state and local levels, may seek to impose new laws, regulatory restrictions or
licensing requirements that affect the Company’s products or services it offers, the terms on which it may offer
them, and the disclosure, compliance and reporting obligations it must fulfill in connection with its business. They
may also interpret or enforce existing requirements in new ways that could restrict the Company’s ability to
continue its current methods of operation or to expand operations, impose significant additional compliance costs,
and could have a Material Adverse Effect. In some cases these measures could even directly prohibit some or all of
the Company’s current business activities in certain jurisdictions, or render them unprofitable and/or impractical to
continue. For example, the Department of Defense is considering expanding the application of the Military Lending
Act, and such expansion could include all types of loans made to consumers, including pawn loans and installment
loans offered by the Company that are not currently covered, and such expansion could restrict both the pawn and
consumer loans that the Company is able to make by placing a cap on the rates that may be charged to active
members of the military and their dependents and this expansion could be costly to the Company to ensure
compliance. Additionally, the CFPB has also announced that it has been conducting a review of the short-term
small dollar loan industry, which includes a review of payday loans, and has indicated that its “findings raised
substantial consumer protection concerns” related to the sustained use of payday loans. The CFPB recently
announced that it is in the late stages of considering the formulation of rules regarding consumer loans, and these
rules may impose limitations on payday lending, such as additional underwriting requirements, cooling-off periods
between payday loans and limitations on sustained use of payday loans, among other things. If the CFPB adopts
any rules or regulations that significantly restrict the conduct of the Company’s consumer loan business, any such
rules or regulations could reduce revenue from that product or make the continuance of that product impractical or
unprofitable. The Company does not currently know the nature and extent of the rules the CFPB will adopt, but
those rules could be proposed and adopted during 2015. The Company closely monitors proposed legislation being
discussed in the states where it offers its products and services. Legislative or regulatory actions that affect the
products or services offered by the Company at the national, state and local level could have a Material Adverse
Effect.