EDMONTON, June 12, 2013 /PRNewswire/ - The Cash Store Financial Services Inc.
("Cash Store Financial" or the "Company") (TSX: CSF; NYSE: CSFS) today
announced that the Ontario Ministry of Consumer Services has filed an
application to start legal proceedings against the Company in relation
to the Company's Basic line of credit product offering that was
introduced on February 1, 2013.
In February 2013, the Company ceased offering payday loans in Ontario
and began brokering the Basic line of credit as part of a wider
initiative to offer a risk-based suite of Line of Credit products
allowing customers to build credit and gain access to less costly
funding.
The Company has pending an application for judicial review, seeking a
declaration that certain provisions of the regulations made under the
Ontario Payday Loans Act are void and unenforceable, which application
is scheduled to be heard on October 2, 2013. The new application by
Ontario seeks a declaration that the Basic line of credit is subject to
the Payday Loans Act and that the Company must obtain a broker license
to offer this product, irrespective of the validity of the regulations.
The Company remains committed to maintaining ongoing dialogue with the
Ontario Ministry of Consumer Services with respect to its concerns and
to making changes that further benefit consumers by helping them to
build a better credit score, by providing them opportunities to reduce
their short-term borrowing costs, and by allowing them greater
flexibility than payday loans. Furthermore, the Company believes that
its practice to offer the funding of advances by electronic methods
provides a safer and friendlier environment for its customers and
staff. However, the Company maintains that its operations in Ontario
are in compliance with all applicable laws and intends to oppose the
application by the Ontario Ministry of Consumer Services.
The Company will continue to provide further updates on material
developments to regulatory matters as they occur.
About Cash Store Financial
Cash Store Financial is the only lender and broker of short-term
advances and provider of other financial services in Canada that is
listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial
also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store
Financial operates 513 branches across Canada under the banners "Cash
Store Financial", "Instaloans" and "The Title Store". Cash Store
Financial also operates 27 branches in the United Kingdom.
Cash Store Financial and Instaloans primarily act as lenders and brokers
to facilitate short-term advances and provide other financial services
to income-earning consumers who may not be able to obtain them from
traditional banks. Cash Store Financial also provides a private-label
debit card (the "Freedom" card) and a prepaid credit card (the "Freedom
MasterCard") as well as other financial services, including bank
accounts.
Cash Store Financial employs approximately 1,900 associates and is
headquartered in Edmonton, Alberta.
Cash Store Financial is a Canadian corporation that is not affiliated
with Cottonwood Financial Ltd. or the outlets Cottonwood Financial
Ltd. operates in the United States under the name "Cash Store." Cash
Store Financial does not do business under the name "Cash Store" in the
United States and does not own or provide any consumer lending services
in the United States.
Forward-Looking Information
This news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning of United States
federal securities legislation, which we refer to herein, collectively,
as "forward-looking information". Forward-looking information includes,
but is not limited to, information with respect to our objectives,
strategies, operations and financial results, competition, as well as
initiatives to grow revenue or reduce retention payments. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "estimates", "plans", "expects", or
"does not expect", "is expected", "budget", "scheduled", "forecasts",
"intends", "anticipates", or "does not anticipate", or "believes" or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might", or "will be taken",
"occur", or "be achieved". In particular, this news release contains
forward-looking information with respect to our goals and strategic
priorities, introduction of products, share repurchase initiatives,
branch openings and competition, as well as initiatives to grow revenue
or reduce retention payments. Forward-looking information is subject
to known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of Cash Store Financial, to be materially different from
those expressed or implied by such forward-looking information,
including, but not limited to, changes in economic and political
conditions, legislative or regulatory developments, technological
developments, third-party arrangements, competition, litigation, risks
associated with but not limited to, market conditions, and other
factors described under the heading "Risk Factors" in our Annual MD&A,
which is on file with Canadian provincial securities regulatory
authorities, and in our Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission. All material assumptions used in
providing forward-looking information are based on management's
knowledge of current business conditions and expectations of future
business conditions and trends, including our knowledge of the current
credit, interest rate and liquidity conditions affecting us and the
general economic conditions in Canada, the United Kingdom and
elsewhere. Although we believe the assumptions used to make such
statements are reasonable at this time and have attempted to identify
in our continuous disclosure documents important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. Certain
material factors or assumptions are applied by us in making
forward-looking information, including without limitation, factors and
assumptions regarding our continued ability to fund our payday loan
business, rates of customer defaults, relationships with, and payments
to, third party lenders, demand for our products, as well as our
operating cost structure and current consumer protection regulations.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should
not place undue reliance on forward-looking information. We do not
undertake to update any forward-looking information, except in
accordance with applicable securities laws.
SOURCE The Cash Store Financial Services Inc.