Dallas Morning News: Cash America International ready to exit the payday loan business
July 21, 2014
A decade ago, Cash America International collected $21 million from payday loans. Last year, those fees totaled $878 million, and now include loans that are sold online, in foreign countries, and backed by car titles.
Sounds like a great business — to get out of.
Despite the remarkable growth, Cash America is poised to spin off most of its consumer loan operation by the end of the year. The Fort Worth company wants to refocus on pawnshops, the old-school segment that made Cash America a high flier on Wall Street.
A nearby rival, First Cash Financial Services in Arlington, has been de-emphasizing payday loans for several years. The pawnbroker said payday fees generate about 5 percent of revenue today, down from a peak of about 20 percent.
The retrenchments come as regulators are cracking down on payday lenders in the U.S. and abroad, and even in some Texas cities. Tough municipal restrictions have cut into profits and revenue, and prompted Cash America to close 36 storefronts in the state.
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