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8-K - LIVE FILING - DFC GLOBAL CORP. | htm_48008.htm |
Contact:
ICR
Investor Relations
Garrett Edson: (484) 320-5800
Media
Phil Denning: (203) 682-8200
FOR IMMEDIATE RELEASE
DFC GLOBAL CORP. ANNOUNCES SETTLEMENT WITH REGULATOR FROM REVIEW OF THE COMPANYS DEALERS
FINANCIAL SERVICES BUSINESS
Berwyn, Pennsylvania June 27, 2013 DFC Global Corp. (NASDAQ: DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, today announced that its subsidiary Dealers Financial Services, LLC (DFS) has reached a settlement with the Consumer Financial Protection Bureau (CFPB) regarding certain aspects of its business.
As previously disclosed, the CFPB conducted a review of the Military Installment Loans and Educational Services (MILES) program, an automobile finance program whereby the Companys subsidiary, Dealers Financial Services, LLC, is a service provider for third party lenders. The CFPB cited violations by DFS of the Consumer Financial Protection Act for deceptively marketing the prices and scope of certain add-on products. Without admitting or denying any of the facts or conclusions of the review, DFS agreed to a consent order with the CFPB to amend its practices in line with recommendations made by the CFPB, and to provide financial redress in the form of a $3.3 million restitution fund to be distributed to past and current DFS customers. The Company established a reserve for the restitution fund in a previous quarter.
We cooperated completely in the CFPB examination of our DFS business, said Jeff Weiss, DFC Global Corp. Chairman and Chief Executive Officer. DFS is already in the process of modifying its compliance management system and communication procedures with customers to take into account these issues. In addition, we have refocused our attention on negotiations with new potential lending partners that the Company believes will provide more competitive financing alternatives to our service member customers. We are satisfied to have completed this review process enabling us to once again focus on serving DFS service member customers and growing the DFS business in this significant market.
The Company also previously disclosed that the CFPB had completed a review of its U.S. retail operations in early fiscal 2013. The Company confirmed that, as a result of that review, it is taking steps to improve its operating and compliance procedures, controls and systems.
About DFC Global Corp.
DFC Global Corp. is a leading international diversified financial services company serving
primarily unbanked and under-banked consumers who, for reasons of convenience and accessibility,
purchase some or all of their financial services from the Company rather than from banks and other
financial institutions. As of March 31, 2013, the Companys global retail operations consisted of
1,457 retail storefront locations, of which 1,420 are company-owned stores, conducting business
primarily under the names The Money Shop®, Money Mart®,
Insta-Cheques®, Suttons and Robertsons®, The Check Cashing Store®,
Sefina®, Helsingin PanttiSM, Optima®,
MoneyNow!®, and Super Efectivo®. In addition to its retail stores, the
Company also offers Internet-based short-term single-payment consumer loans in the United Kingdom
primarily under the brand names Payday Express® and PaydayUK®, in Canada
under the Money Mart name, in Finland, Sweden, Poland, Czech Republic and Spain under the
Risicum®, OK Money® and MoneyNow!® brand names. For more
information, please visit the Companys website at www.dfcglobalcorp.com.
The Companys products and services, principally its short-term single-payment consumer loans, secured pawn loans, check cashing services and gold buying services, provide customers with immediate access to cash for living expenses or other needs. The Company strives to offer its customers additional high-value ancillary services, including Western Union® money order and money transfer products, foreign currency exchange, reloadable VISA® and MasterCard® prepaid debit cards and electronic tax filing. In addition to its core retail products, the Company also provides fee-based services in the United States to enlisted military personnel applying for loans to purchase new and used vehicles that are funded and serviced under agreements with third-party lenders through the Companys branded Military Installment Loan and Education Services, or MILES® program.
Forward-Looking Statements
This news release contains forward-looking statements, including, among other things, statements
regarding the following: pending or recent acquisitions and their expected benefits; the Companys
future results, growth, guidance and operating strategy; the global economy; the effects of
currency exchange rates on reported operating results; the regulatory environment in Canada, the
United Kingdom, the United States, Scandinavia and other countries; the impact of future
development strategy, new stores and acquisitions; litigation matters; financing initiatives; and
the performance of new products and services. These forward-looking statements involve risks and
uncertainties, including risks related to: the regulatory environments, including reviews of our
operations by the CFPB in the U.S. and the Office of Fair Trading in the U.K., and the effect of
legislation in Finland that will restrict our current business in that country; current and
potential future litigation; the identification of acquisition targets; the consummation of pending
acquisitions; the integration and performance of acquired stores and businesses; the performance of
new stores and internet businesses; the impact of debt and equity financing transactions; the
results of certain ongoing income tax appeals; the effects of new products and services on the
Companys business, results of operations, financial condition, prospects and guidance; the effect
of the termination of our relationship with the third-party national bank that currently funds a
portion of the MILES program loans and our ability to replace such lending source on acceptable
terms; and uncertainties related to the effects of changes in the value of the U.S. Dollar compared
to foreign currencies. There can be no assurance that the Company will attain its expected results,
successfully consummate pending acquisitions, successfully integrate and achieve anticipated
synergies from any of its acquisitions, obtain acceptable financing, or attain its published
guidance metrics, or that ongoing and potential future litigation or the various FDIC, CFPB, U.S.
Federal or state, U.K., Canadian, Scandinavian, European Union, or other foreign legislative or
regulatory activities affecting the Company or the banks with which the Company does business will
not negatively impact the Companys operations. A more complete description of these and other
risks, uncertainties and assumptions is included in the Companys filings with the Securities and
Exchange Commission, including those described under the heading Risk Factors on the Companys
Annual Report on Form 10-K for the Companys fiscal year ended June 30, 2012. You should not place
any undue reliance on any forward-looking statements. The Company disclaims any obligation to
update any such factors or to publicly announce results of any revisions to any of the
forward-looking statements contained herein to reflect future events or developments.