ELECTION RESULTS FORCE CASH AMERICA TO MAKE TOUGH DECISIONS
Fort Worth, Texas (November 5, 2008) – Votes to repeal a portion of Ohio’s new short-term loan statute fell short of the amount necessary to leave the existing cash advance product in place for Ohio consumers. As a result of this vote, Cash America International, Inc. (NYSE: CSH) will proceed with its previously announced plans and intends to close approximately one-third of its Ohio lending locations over the next few months. The locations slated for closure are in various markets throughout the state and operate under the trade name, Cashland. (emphasis added)
“We respect the democratic process and thank the voters who came out to the polls to support the cash advance product,” said Daniel R. Feehan, president and chief executive officer of Cash America International, Inc. “Sadly, this outcome will force us to close about 43 of our Cashland lending locations, leaving about 150 of our hard-working coworkers without jobs.”
The Cashland locations that remain open will begin offering customers alternative services including short-term unsecured loans governed by a different statute and, in most shops, both gold-buying and/or pawn lending services.
“This was a hard fought loss for the industry, but more importantly it will hurt consumers who have nowhere else to turn for short-term credit and they will incur higher costs associated with bank overdraft fees, late fees and penalties on items such as utility bills and credit cards,” said Feehan. “As an industry, we did everything we could through efforts like the ‘Vote NO on Issue 5’ campaign to avoid loss of jobs and credit options, as well as to prevent negative economic impacts in the State through the loss of jobs and the closing of many places of business.”
Calling for the repeal of a portion of Ohio HB 545 was necessary, said Feehan. The bill calls for an annual rate cap of 28 percent, which isn’t economically feasible for store front providers of small short-term loans to customers. The new law reduces the fee charged on a $100 two week loan to $1.08 (less than 10 cents a day). “There is no way to sustain a viable store front business by offering small, short-term unsecured consumer credit at this rate,” said Feehan.
“As a Company committed to helping people, we will do our best to continue doing business in Ohio by offering other products and services. We assured our coworkers in Ohio that we would do everything we could to save their jobs,” said Feehan.