We offer several convenient, fee-based services to meet the needs of our customers,
including short-term and medium-term consumer loans, check cashing, prepaid
debit cards, money transfers, bill payments, money orders, international and
domestic prepaid phone cards, tax preparation, auto insurance, motor vehicle
registration services and other ancillary retail financial services.
Consumer Loans. We offer a variety of consumer loan products and services which
we believe our customers find to be convenient, transparent and lower-cost alternatives
to other, more expensive options, such as incurring returned item fees, credit
card late fees, overdraft or overdraft protection fees, utility late payments,
disconnect and reconnect fees and other charges imposed by other financing sources
when they do not have sufficient funds to cover unexpected expenses or other
needs. Our customers often have limited access to more traditional sources of
consumer credit, such as credit cards.
The specific consumer loan products we offer vary by location, but generally
include the following types of consumer loans:
· Short-Term Consumer Loans. Short-term consumer loans can be unsecured
or secured with a maturity up to ninety days. Unsecured short-term products
are consumer loans that typically range in size from $100 to $1,000, whereby
a customer receives proceeds, typically in exchange for a post-dated personal
check or a pre-authorized debit from his or her bank account. We offer or facilitate
this product over the internet and in 497 of our 525 stores. We, as the lender
or third party lender, agree to defer deposit of the check or initiation of
the debit from the customer’s bank account until the mutually agreed upon
due date, which typically falls near the customer’s next payday. Principal
amounts of our short-term consumer loans can be up to $5,000 and averaged approximately
$384. Fees charged vary from state to state, generally ranging from $8 to $18
per $100 borrowed. Secured short-term products are asset-based loans whereby
the customer obtains cash and grants a security interest in collateral and the
loan may be secured with a lien on the collateral.
· Medium-Term Consumer Loans. In meeting our customers’ financial
needs, we also offer unsecured and secured medium-term consumer loans. Principal
amounts of unsecured medium-term products typically range from $100 to $5,000
and have maturities between three months and 36 months. These consumer loans
vary in their structure in order to conform to the specific regulatory requirements
of the various jurisdictions in which they are offered. The consumer loans may
have an installment repayment plan or provide for a line of credit with periodic
monthly payments. We offer these consumer loans over the internet and in 245
of our 525 stores. Secured medium-term products typically range from $750 to
$5,000 and are asset-based consumer loans whereby the customer obtains cash
and grants a security interest in collateral and consumer may be secured with
a lien on collateral.
Our consumer loan products are authorized by statute or rule in the various
states in which we offer them and are subject to extensive regulation. The scope
of that regulation, including the terms on which consumer loans may be made,
varies by jurisdiction. The states in which we offer consumer loan products
generally regulate the maximum allowable fees and other charges to consumers
and the maximum amount of the consumer loan, maturity and renewal or extension
terms of these consumer loans. Some of the states in which we operate impose
limits on the number of consumer loans a customer may have outstanding or on
the amount of time that must pass between consumer loans. To comply with the
laws and regulations of the states in which consumer loan products are offered,
the terms of our consumer loan products must vary from state to state.
We analyze the loan loss provision and our loan loss allowance in order to
determine whether our estimates of such allowance are adequate for each of our
consumer loan products. Our analysis is based on our understanding of our past
loan loss experience, current economic conditions, volume and growth of our
consumer loan portfolios, timing of maturity, as well as collections experience.
Credit Service Fees. The Company offers a fee-based credit service program (“CSO
Program”) to assist consumers in obtaining credit in certain markets through
limited agency agreements with unaffiliated third-party lenders. The agreements
govern the terms by which the Company refers customers to that lender, on a
non-exclusive basis, for a possible extension of credit, processes loan applications
and commits to reimburse the lender for any loans or related fees that were
not collected from such customers.
Check Cashing. We offer check cashing services in 483 of our 525 stores. Prior
to cashing a check, our customer service representatives verify the customer’s
identification and enter the payee’s tax identification number and the
payer’s bank account information in our internal, proprietary databases,
which match these fields to prior transactions in order to mitigate our risk
of loss. Subject to appropriate approvals, we accept all forms of checks, including
payroll, government, tax refund, insurance, money order, cashiers’ and
personal checks. Our check cashing fees vary depending upon the amount and type
of check cashed, applicable state regulations and local market conditions.
Prepaid Debit Card Services. We offer access to reloadable prepaid debit cards
that provide our customers with a convenient and secure method of accessing
their funds in a manner that meets their individual needs. The cards are provided
by Insight Card Services LLC, or Insight, and our stores serve as distribution
points where customers can purchase cards as well as load funds onto and withdraw
funds from their cards. Customers can elect to receive check cashing proceeds
on their cards without having to worry about security risks associated with
carrying cash. The cards can be used at most places where MasterCard® or
Visa® branded debit cards are accepted. These cards offer our customers
the ability to direct deposit all or a portion of their payroll checks onto
their cards, the benefit of an optional overdraft program, the ability to receive
real-time wireless alerts for transactions and account balances, and the availability
of in-store and online bill payment services.
Other Products and Services. Introducing new products into our markets has historically
created profitable revenue expansion. Other products and services offered through
our stores include money transfer, bill payment, money orders, insurance, and,
international and domestic prepaid phone cards. Additionally, in certain states
we provide customers with access to tax preparation services and an automotive
insurance program. These other products and services provide revenues and help
drive additional traffic to our stores, resulting in increased volume across
all of our product offerings.