Payday lender Cash America International Inc. said it may change a cash advance product in Florida due to an administrative review of a similar product by a competitor.
The Fort Worth-based company said any change would not affect its 2008 earnings forecast. Last week, it forecast first-quarter earnings of 80 cents to 82 cents a share, compared with earnings of 63 cents a share a year ago.
Cash America said the competitor, which it did not name, acts as a credit services organization, or CSO, in Florida to arrange short-term cash advances for customers with an independent third-party lender. Cash America offers a CSO product in Florida is similar to the competitor's Florida CSO product.
Cash America said although recommendations by Florida regulators are not final and the company is not a party to the administrative proceeding, the recommendations could lead to a change in its Florida CSO product.
"While a change would reduce the amount of revenue and earnings related to this portion of its cash advance portfolio, management's outlook for higher revenue and profitability going forward, based on the growth and performance in earning assets during the first quarter of 2008, overcome the projected economic impact of such a change in future quarters," Cash America said.
Cash America provides secured non-recourse loans to individuals, commonly referred to as pawn loans, through 499 locations in 23 states under the brand names Cash America Pawn and SuperPawn. The company also offers short-term cash advances in many of its locations including 304 locations that offer this service under the brand names Cash America Payday Advance and Cashland.
