CASH 2018 Annual Report

76 Risks Related to Marketing Program Agreements Program agreements that the Bank has entered into, and expects to enter into from time to time in the future, with third parties to market and service consumer loans originated by the Bank may subject the Bank to claims from regulatory agencies and other third parties that, if successful, could negatively impact the Bank’s current and future business. The Bank has entered into various agreements with unaffiliated third parties (“Marketers”), whereby the Marketers will market and service unsecured consumer loans underwritten and originated by the Bank. We expect the Bank to enter into additional similar program agreements with other third parties to market and service loans originated by the Bank, from time to time in the future. Certain types of these arrangements have been challenged both in the courts and in regulatory actions. In these actions, plaintiffs have generally argued that the “true lender” is the marketer and that the intent of such lending program is to evade state usury and loan licensing laws. Other cases have also included other claims, including racketeering and other state law claims, in their challenge of such programs. There can be no assurance that lawsuits or regulatory actions in connection with any such lending programs the Bank enters into will not be brought in the future. If a regulatory agency, consumer advocate group, or other third party were to bring an action against the Bank or any of the third parties with which the Bank operates such lending programs, and such actions were successful, such an outcome could have a material adverse effect on our financial condition and results of operation. Agreements with Marketers, whereby the Bank will originate and hold unsecured consumer loans, may result in increased exposure to credit risk and fraud and may present certain additional risks. Although the Bank has historically offered unsecured consumer loans to its customers through its brick-and-mortar branch network, the Bank’s entry into program agreements with other third parties to market and service loans originated by the Bank, such as its program agreement with Liberty Lending, LLC, represents a new area of the consumer credit market for the Bank, which presents potential increased credit, operational, and reputational risks. Because the loans originated under such programs are unsecured, in the event a borrower does not repay the loan in accordance with its terms or otherwise defaults on the loan, the Bank may not be able to recover from the borrower an amount sufficient to pay any remaining balance on the loan. See “--If our actual loan losses exceed our allowance for loan and lease losses, our net income will decrease.” We may also become subject to claims by regulatory agencies, customers, or other third parties due to the conduct of the third parties with which the Bank operates such lending programs if such conduct is deemed to not comply with applicable laws in connection with the marketing and servicing of loans originated pursuant to these programs. Risks Related to Our Common Stock The price of our common stock may be volatile, which may result in losses for investors. The market price for shares of our common stock has been volatile in the past, and several factors could cause the price to fluctuate substantially in the future. These factors include: • announcements of developments related to our business; • the initiation, pendency or outcome of litigation, regulatory reviews, inquiries and investigations, and any related adverse publicity; • fluctuations in our results of operations; • sales of substantial amounts of our securities into the marketplace; • general conditions in the banking industry or the worldwide economy; • a shortfall in revenues or earnings compared to securities analysts’ expectations; • lack of an active trading market for the common stock; • changes in analysts’ recommendations or projections; and