What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2020-12-14 compared with 2019-12-05 · 121 added, 96 removed, 119 unchanged (65% of the section changed)

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is a Delaware corporation headquartered in Austin, Texas.

We are a leading provider of pawn loans in the United States and Latin America with approximately 6,800 team members.

Our vision is to be the market leader in responsibly and respectfully meeting our customers’ desire for access to cash when they want it.

That vision is supported by four key imperatives:

Market Leading Customer Satisfaction;

Exceptional Staff Engagement;

Most Efficient Provider of Cash;

Attractive Shareholder Returns.

As of September 30, 2019 , we operated a total of 1,014 locations, consisting of:

512 United States pawn stores (operating primarily as EZPAWN or Value Pawn & Jewelry);

We are a leading provider of pawn loans in the United States and Latin America with over 1,000 locations and approximately 5,900 team members.

Our vision is to be our customers’ first and best choice for their short-term cash needs.

This vision is supported by a customer-centric strategy that includes the following:

• Providing fast, easy and simple access to cash;

• Serving our customers in a friendly and respectful way;

• Always being competitive and fair;

• Passionately solving customer needs;

• Building enduring relationships;

• Recognizing and rewarding customer loyalty.

At September 30, 2020, we operated a total o f 1,005 locations, consisting of:

pawn stores (operating primarily as EZPAWN or Value Pawn & Jewelry);

• 368 Mexico pawn stores (operating primarily as Empeño Fácil);

• 132 pawn stores in Guatemala, El Salvador, Honduras and Peru (operating as GuatePrenda and MaxiEfectivo).

22 financial services stores in Canada (operating as CASHMAX).

At our pawn stores, we offer pawn loans, which are non-recourse loans collateralized by tangible personal property, and sell merchandise to customers looking for good value.

The merchandise we sell consists of second-hand collateral forfeited from our pawn lending activities or purchased from customers.

By store count, we are the second largest pawn store owner and operator in the U.S.

At our pawn stores, we offer non-recourse pawn loans collateralized by tangible personal property, and sell merchandise to customers looking for good value.

The merchandise we sell primarily consists of second-hand collateral forfeited from our pawn lending activities or merchandise purchased from customers.

By store count, we ar e the second la rgest pawn store owner and operator in the U.S.

and one of the largest in Latin America.

During fiscal 2019, we opened 22 de novo stores in Latin America, acquired twelve pawn stores in Mexico and Nevada and completed rollout of our POS2 system across all stores in the U.S.

and Mexico through October 2019.

We began development of a mobile application providing banking and pawn related services on a differentiated digital customer-centric engagement platform (“Lana,” previously described as “Evergreen”).

We believe this platform will allow us to leverage our existing store and pawn customer base footprint to expand customer acquisition and retention and enable rapid deployment of new products.

We also offer a web-based application called Lana that allows customers to manage their pawn loans in one place.

In addition to our core pawn business in the U.S.

and Latin America, we operate CASHMAX financial services locations in Canada.

We also own 34.75% of Cash Converters International Limited (“Cash Converters International”), a publicly traded company (ASX:

and Latin America, we own 34.75% of Cash Converters International Limited (“Cash Converters International”), a publicly traded company (ASX:

CCV) headquartered in Perth, Western Australia.

Cash Converters International and its controlled companies comprise a diverse group generating revenues from franchising, store operations, personal finance and vehicle finance, with operations in Australia and the United Kingdom, a 25% equity interest in Cash Converters New Zealand and a franchise presence in a 15 other countries around the world.

We remain focused on growing our balance of pawn loans outstanding (“PLO”) and the resulting higher pawn service charges (“PSC”).

The following charts present sources of net revenues, including PSC, merchandise sales gross profit (“Merchandise sales GP”) and jewelry scrapping gross profit (“Jewelry scrapping GP”):

We also own approximately 13% of Rich Data Corporation (RDC), a Singapore-based software-as-a-service company that utilizes global financial services expertise, advanced artificial intelligence and non-traditional data to deliver a next-generation credit scoring and decisioning platform.

We generate revenues primarily from pawn services charges (“PSC”) on pawn loans outstanding (“PLO”), merchandise sales and jewelry scrapping.

We remain focused on optimizing our balance of PLO and the resulting higher pawn service charges (“PSC”).

The fo llowing charts present sources of net revenues, including PSC, merchandise sales gross profit (“Merchandise sales GP”) and jewelry scrapping gross profit (“Jewelry scrapping GP”):

Segment and Geographic Information

Our business consists of the following three reportable segments:

Pawn” — Includes our EZPAWN, Value Pawn & Jewelry and other branded pawn operations in the United States;

“Latin America Pawn” — Includes our Empeño Fácil and other branded pawn operations in Mexico, as well as our GuatePrenda and MaxiEfectivo pawn operations in Guatemala, El Salvador, Honduras and Peru;

“Other International” — Includes primarily our CASHMAX financial services operations in Canada and our equity interest in the net income of Cash Converters International.

The following table presents store data by segments included in our continuing operations:

Latin America Pawn

Other International

We conduct our business globally and manage our business by geography.

Our business is organized into the following reportable segments:

Pawn, which includes our EZPAWN, Value Pawn & Jewelry and other branded pawn operations in the United States;

• Latin America Pawn, which includes our Empeño Fácil and other branded pawn operations in Mexico, as well as our GuatePrenda and MaxiEfectivo pawn operations in Guatemala, El Salvador, Honduras and Peru;

• Lana, which is our customer-centric web-based engagement platform;

• Other International, which includes the consumer finance activities in Canada that we closed in the fourth quarter and our equity interests in Cash Converters International and RDC.

We began reporting separate financial results for our Lana business in the first quarter of fiscal 2020, and our historical segment results have been recast to conform to current presentation.

The following table presents store data by segment (excluding Lana, which has no separate physical store locations), included in our continuing operations:

Company-owned Stores

Pawn Latin America Pawn Other International Consolidated

As of September 30, 2017

513 246 27 786

New locations opened — 12 — 12

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As of September 30, 2018

508 453 27 988

New locations opened — 22 — 22

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As of September 30, 2019

512 480 22 1,014

New locations opened — 23 — 23

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As of September 30, 2020

505 500 — 1,005

For additional information about our segments and geographic areas, see Note 14 of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.”

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At our pawn stores, we offer pawn loans, which are typically small, non-recourse loans collateralized by tangible personal property.

We earn pawn service charges on our pawn loans, which varies by state and loan size.

Collateral for our pawn loans consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods and musical instruments.

Security for our pawn loans is provided via the estimated resale value of the collateralized personal property and the perceived probability of the loans' redemption.

As of September 30, 2020, we had a closing pawn loan principal balance of $131.3 million, from which we earn pawn service charges.

In fiscal 2020, pawn service charges accounted for approximately 33% of our total revenues and 61% of our net revenues.

While allowable pawn service charges vary by state and loan size, our U.S.

pawn loans primarily earn 13% to 25% per month as permitted by applicable law, excluding forfeitures.

The total U.S.

pawn loan term generally ranges between 30 and 90 days.

Individual loans vary depending on the valuation of each item pawned, but our U.S.

While individual loans vary depending on the valuation of each item pawned, our U.S.

pawn loans typically average between $100 and $120.

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The Mexico pawn loan primary term is 30 days.

Individual loans are made in Mexican pesos and vary depending on the valuation of each item pawned, but our Mexico pawn loans typically average between 1,100 and 1,300 Mexican pesos, or approximately $60 on average using the average exchange rate for fiscal 2019 .

Individual loans are made in Mexican pesos and vary depending on the valuation of each item pawned.

Mexico pawn loans typically average between 1,100 and 1,300 Mexican pesos, or approximately $50 to $60 on average using the average exchange rate for fiscal 2020.

In Guatemala, El Salvador, Honduras and Peru, pawn loans earn 12% to 18% per month as permitted by applicable law, excluding forfeitures.

The pawn loan primary term in these countries is 30 days.

Individual loans are made in the local currency of the country and vary depending on the valuation of each item pawned, but our pawn loans in these countries typically average between $100 and $120 using the average exchange rates for fiscal 2019 .

The average loan amounts tend to be higher in these countries than in Mexico due to the higher concentration of jewelry loans in these countries.

Collateral for our pawn loans consists of tangible personal property, generally jewelry, consumer electronics, power tools, sporting goods and musical instruments.

We generally lend from 40% to 70% of the collateral’s estimated resale value depending on a subjective evaluation of a variety of factors, including the estimated probability of the loan’s redemption, and we may additionally offer to purchase the product outright.

We consider general merchandise more susceptible to obsolescence while jewelry generally retains commodity value.

Individual loans are made in the local currency of the country and vary depending on the valuation of each item pawned.

Our pawn loans in these countries typically average between $100 and $120 using the average exchange rates for fiscal 2020.

The average loan amounts tend to be higher in these countries than in Mexico due to the higher concentration of jewelry loans.

If a customer chooses not to repay, renew or extend a pawn loan, the collateral is forfeited and becomes inventory available for sale.

We do not record loan losses or charge-offs of pawn loans because the principal amount of an unpaid loan becomes the inventory carrying cost of the forfeited collateral.

If the subsequent sale of the forfeited collateral is less than the loan value, this is reflected in gross margin.

The difference between the subsequent sale of the forfeited collateral and the loan value is reflected in merchandise sales gross margin.

The redemption rate represents the percentage of loans made that are repaid, renewed or extended, including loans that may extend multiple times in a given time period.

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Redemption Rate 2020 2019 2018

Pawn 88 % 84 % 84 %

Latin America Pawn 78 % 78 % 79 %

Our ability to offer quality second-hand goods at prices significantly lower than original retail prices attracts value-conscious customers.

The gross profit on sales of inventory depends primarily on our assessment of the loan or purchase value at the time the property is either accepted as loan collateral or purchased.

As our inventory and sales involve gold and jewelry, our results can be heavily influenced by the market price of gold.

The gross profit on sales of inventory depends primarily on our assessment of the loan or purchase value at the time the property is either accepted as loan collateral or purchased and our ability to sell that merchandise in a timely manner.

As a significant portion of our inventory and sales involve gold and jewelry, our results can be influenced by the market price of gold and diamonds.

Customers in the United States and the majority of our Latin America stores may purchase a product protection plan that allows them to exchange certain general merchandise (non-jewelry) sold through our retail pawn operations within six months of purchase.

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If a payment is missed, we hold the item for a maximum of 30 days, after which it is returned to active inventory for sale.

CASHMAX Financial Services

We operate 22 financial services stores in Canada under the CASHMAX brand.

All of the stores are located in the Ontario province, in and around Toronto.

These small footprint locations have historically offered primarily short-term, single-payment loans with due dates corresponding to the customer’s next payday (known as “payday loans”).

In response to regulatory changes effective January 1, 2018, which reduced the economic returns of the payday lending model, we introduced installment loan products to meet the broader needs of our customers.

In addition to payday loans, all CASHMAX stores are now offering installment loans with terms ranging from six to 18 months and average yields of 47% per annum.

In November 2018, we entered into a financing arrangement with a third-party lender to provide up to CAD $25 million to fund originations of installment loans through November 2019.

As of September 30, 2019, our obligation under the financing facility was CAD $0.8 million (USD $0.6 million).

Our pawn operations are designed to provide the optimum level of support to the store teams, supplying coaching, mentoring and problem solving to identify opportunities to better serve our customers and position us to be the leader in customer service and satisfaction.

Our risk management structure consists of asset protection and compliance departments, which monitor the inventory system, lending practices, regulatory compliance and compliance with our policies and procedures.

We perform full physical audits of inventory at each store at least annually, and more often in higher risk stores or those recently experiencing higher shrinkage.

Closure of CASHMAX

We operated 22 fina ncial services stores in Canada under the CASHMAX brand during the fiscal year.

All of the stores were located in the Ontario province, in and around Toronto.

During the fourth quarter, as part of a review of our growth strategies and cost optimization initiatives, we closed our CASHMAX business.

Operations and Risk Management

Our pawn operations are designed to provide the optimum level of support to the store teams, providing coaching, mentoring and problem solving to identify opportunities to better serve our customers and position us to be the leader in customer service and satisfaction.

Our risk management structure consists of asset protection, compliance and internal audit departments, which monitor the inventory system, lending practices, regulatory compliance and compliance with our policies and procedures.

We perform full physical audits of inventory at each store at least annually, and more often in higher risk stores or those experiencing higher shrinkage.

Inventory counts are completed daily for jewelry and firearms, and other inventory categories more susceptible to theft are cycle counted multiple times annually.

We record shrink adjustments for known losses at the conclusion of each inventory count.

as estimates during interim periods and as discovered during cycle counts.

Our success is dependent upon our team members’ ability to provide prompt and courteous customer service and to execute our operating procedures and standards.

To achieve our long-range people goals, we offer management and technical skills training

utilizing computer-based training modules that can be accessed at the store and district levels.

It is mandatory that all field and corporate team members complete specific compliance training annually.

We offer formalized management development training to specific executives to enhance their management capabilities and effectiveness and to enhance their career progression.

We maintain field trainers who travel to stores to provide hands-on training in high skill areas, such as jewelry evaluation, firearms handling and information technology.

Generally, we expect that store team members, including managers, will meet certain competency criteria prior to hire or promotion and participate in on-going training classes and formal instructional programs.

Our store level and management training programs are designed to develop and advance our team members and provides training for the efficient integration of experienced managers and team members from outside the company.

These adjustments are recorded as estimates during interim periods and as discovered during cycle counts.

Human Capital Management

We employ 5,900 Team Members in the U.S., Mexico, Guatemala, El Salvador, Honduras, Peru and Canada, all of whom are expected to be guided by our vision and values and by an underlying set of ethical principles.

Incorporated into our Code of Conduct, our vision, values and principles define our culture and strengthen the workforce.

We strive to demonstrate to our customers, shareholders, business partners, communities and Team Members that we are worthy of their trust and continually strive to enhance and differentiate our brand reputation as the best in our industry.

Globally, we invest in Team Members at all levels who are expected to integrate our vision and values in all that we do.

While the People and Compensation Committee of the Board of Directors has the primary responsibility of overseeing our human capital management activities (including assessing the effectiveness of employee programs and advising management with regard to the quality of the workforce to carry out our strategic goals and overall human resource strategies), other Board committees also have responsibilities that impact our human capital management as outlined in their respective Charters.

Within management, our Human Resources function has global management responsibility for advising and assisting the business on human resource matters and executing our overall human capital management strategies.

We are committed to fostering work environments that value diversity and inclusion.

This commitment includes providing equal access to, and participation in, equal employment opportunities, programs and services without regard to race, creed, religion, color, national origin, disability, sex (including pregnancy), sexual orientation, gender identity, veteran status, age or stereotypes or assumptions based thereon.

We welcome and celebrate our Team Members’ differences, experiences and beliefs, and we are investing in a more productive, engaged, diverse and inclusive workforce.

During fiscal 2020, we appointed a Senior Manager of Diversity and Inclusion, who is responsible for strategic management and planning for diversity and inclusion within the Company, as well as enhancing our understanding, providing training and development, and partnering with and assisting all of us to be accountable.

During the year, our new Diversity and Inclusion function drove a number of initiatives to enhance our focus on diversity and inclusion and raise our awareness, including mandatory compliance training on unconscious bias, introduction of the Diversity Word of the Month (a recurring program to raise awareness and promote constructive conversations about various diversity and inclusion issues), and conducting a series of surveys and group feedback sessions, the results of which are shared with senior management and help guide our ongoing Diversity and Inclusion activities.

We strive to engage and retain our Team Members throughout the employment life-cycle with effective recruiting and onboarding;

competitive pay, benefits and other total rewards;

mandatory and optional programs for professional development and career advancement;

compliance training;

succession planning;

and a safe, healthy and respectful workplace.

Our EZCORP University includes mandatory global compliance training at hire and periodically thereafter, career advancement training requirements and thousands of self-directed developmental courses.

In response to the COVID-19 pandemic, we quickly implemented safety and health standards and protocols for our Team Members while continuing to offer a safe environment as an essential service to our customers.

Team Members in our Corporate Support Centers have been working from home since March.

Our pawn locations are provided with PPE, other equipment and enhanced cleaning supplies, and are required to adhere to appropriate protocols for social distancing, limiting density, taking temperatures, reporting and documenting exposures and wearing masks at all times, all as recommended by the Centers for Disease Control or mandated by local regulations.

We maintain an Ethics Hotline that is available to all of our Team Members to report (anonymously if desired) any matter of concern.

Communications to the hotline (which is facilitated by an independent third party) are routed to appropriate functions (whether Human Resources, Legal or Compliance) for investigation and resolution.

In addition, any shareholder or other interested party may send communications to the Board of Directors, either individually or as a group, through a process that is outlined in the Investor Relations section of our website.

Growth and Expansion

We plan to expand the number of locations we operate through opening new (“de novo”) locations and through acquisitions in both Latin America and the United States and potential new markets.

Part of our strategy is to grow the number of locations we operate through opening new (“de novo”) locations and through acquisitions in both Latin America and the U.S.

and potential new markets.

Our ability to add new stores is dependent on several variables, such as projected achievement of internal investment hurdles, the availability of acceptable sites or acquisition candidates, the alignment of acquirer/seller price expectations, the regulatory environment, local zoning ordinances, access to capital and availability of qualified personnel.

During fiscal 2019, we grew our store count and began development of new products as follows:

We opened 22 de novo stores in Latin America (12 in Mexico, 6 in Guatemala, 3 in Honduras and 1 in Peru).

In December 2018, we acquired five pawn stores in Mexico.

In June 2019, we acquired seven pawn stores operating under the name "Metro Pawn" in Nevada, entering the Reno market and expanding our presence in the Las Vegas metropolitan area.

We began development of a mobile application providing banking and pawn related services on a differentiated digital customer-centric engagement platform (“Lana”).

This platform will allow us to leverage our existing store and pawn customer base footprint to expand customer acquisition and retention and enable rapid deployment of new products.

In October 2019, we completed rollout of our POS2 system (upgraded point of sale system which will allow us to make better pricing decisions and drive higher returns on earning assets) across all stores in the U.S.

During fiscal 2020, we continued our expansion in Latin America with the opening of 23 de novo stores (14 in Mexico, 7 in Guatemala, 1 in Honduras and 1 in Peru).

We now own a total of 500 stores in Latin America, representing 50% of our total pawn stores.

In fiscal 2019, these stores represented 21% of our consolidated net revenues as the average scale of Latin America pawn stores is smaller than in the United States.

In fiscal 2020, these stores represente d 19% of our consolidated net revenues as the average scale of Latin

America pawn stores is smaller than in the U.S.

We see opportunity for further expansion in Latin America through both acquisitions and de novo openings.

For further information about our acquisitions, see Note 2 of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.”

For further information about our acquisitions, se e Note 3 of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.”

Seasonality and Quarterly Results

Historically, pawn service charges are highest in our fourth fiscal quarter (July through September) due to a higher average loan balance during the summer lending season in the United States and lowest in our third fiscal quarter (April through June) following the tax refund season in the United States.

Merchandise sales are highest in our first and second fiscal quarters (October through March) due to the holiday season, jewelry sales in the United States surrounding Valentine’s Day and the availability of tax refunds in the United States.

Most of our Latin America customers receive additional compensation from their employers in December, and many also receive additional compensation in June or July, applying downward pressure on loan balances and fueling some merchandise sales in those periods.

In the United States, pawn service charges are historically highest in our fourth fiscal quarter (July through September) due to a higher average loan balance during the summer lending season and lowest in our third fiscal quarter (April through June) following the tax refund season, and merchandise sales are highest in our first and second fiscal quarters (October through March) due to the holiday season, jewelry sales surrounding Valentine’s Day and the availability of tax refunds.

In Latin America, most of our customers receive additional compensation from their employers in December, and many receive additional compensation in June or July, applying downward pressure on loan balances and fueling some merchandise sales in those periods.

As a net effect of these and other factors and excluding discrete charges, our consolidated profit before tax is generally highest in our first fiscal quarter (October through December) and lowest in our third fiscal quarter (April through June).

These historical trends have been impacted by COVID-19, but we expect them to return in the future.

We encounter significant competition in connection with all of our activities.

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We compete with other pawn stores, credit service organizations, banks, credit unions and other financial institutions, such as consumer finance companies.

We believe that the primary elements of competition are the quality of customer service and relationship management, including understanding our customers’ needs better than anyone else, convenience, store location and a customer friendly environment.

We believe the primary elements of competition are the quality of customer service and relationship management, including understanding our customers’ needs better than anyone else, convenience, store location and a customer-friendly environment.

In addition, we believe the ability to compete effectively will be based increasingly on strong general management, regional focus, automated management information systems, access to capital and superior customer service.

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Competitive factors in our retail operations include the ability to provide the customer with a variety of merchandise at an exceptional value coupled with exceptional customer service and convenient locations.

The pawn industry in the United States is large and highly fragmented.

The industry consists of pawn stores owned primarily by independent operators who own one to three locations, and the industry is relatively mature.

We are the second largest operator of pawn stores in the United States.

The pawn industry in the United States is large, relatively mature and highly fragmented.

The industry consists of a few large operators (of which we are the second largest) and then independent operators who primarily own one to three locations .

The pawn industry in Latin America is also fragmented, but less so than in the United States.

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We operate our U.S.

pawn stores principally under the names “EZPAWN” or “Value Pawn & Jewelry,” our Mexico pawn stores principally under the name “EMPEÑO FÁCIL,” our Guatemala pawn stores under the name “GuatePrenda,” and our El Salvador, Honduras and Peru pawn stores under the name “MaxiEfectivo.” Our financial services stores in Canada operate under the name “CASHMAX.” We have registered with the United States Patent and Trademark Office the names EZPAWN and EZCORP, among others.

In Mexico, we have registered with the Instituto Mexicano de la Propiedad Industrial the names “EMPEÑO FÁCIL,” “Bazareño,” “Presta Dinero” and “Montepio San Patricio.” We have registered the name “GuatePrenda” in Guatemala and the name “MaxiEfectivo” in Guatemala, El Salvador, Honduras and Peru.

pawn stores principally under the names “EZPAWN” or “Value Pawn & Jewelry,” our Mexico pawn stores principally under the name “EMPEÑO FÁCIL,” our Guatemala pawn stores under the name “GuatePrenda,” and our El Salvador, Honduras and Peru pawn stores under the name “MaxiEfectivo.” We have registered the names EZPAWN and EZCORP, among others, with the United States Patent and Trademark Office.

In Mexico, we have registered the names “EMPEÑO FÁCIL,” “Bazareño,” “Presta Dinero” and “Montepio San Patricio” with the Instituto Mexicano de la Propiedad Industrial.

We have registered the name “GuatePrenda” in Guatemala and the name “MaxiEfectivo” in Guatemala, El Salvador, Honduras and Peru.

Compliance with federal, state and local laws and regulations is an integral part of how we manage our business, and we conduct our business in material compliance with all of these rules.

The following is a general description of significant regulations affecting our business.

For a geographic breakdown of our operating locations, see “Part I, Item 2 — Properties.”

Pawn Regulations — Our pawn stores are regulated by the states in which they are located and, in some cases, by individual municipalities or other local authorities.

The applicable statutes, ordinances and regulations vary from location to location and typically impose licensing requirements for pawn stores or individual pawn store team members.

Licensing requirements typically relate to financial responsibility and character and may establish restrictions on where pawn stores can operate.

Licensing requirements

typically relate to financial responsibility and character and may establish restrictions on where pawn stores can operate.

Additional rules regulate various aspects of the day-to-day pawn operations, including the pawn service charges that a pawn store may charge, the maximum amount of a pawn loan, the minimum or maximum term of a pawn loan, the content and format of the pawn ticket, and the length of time after a loan default that a pawn store must hold a pawned item before it can be offered for sale.

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These reports provide local law enforcement with information about the items received from customers (whether through pawn or purchase), including a detailed description of the goods involved and the name and address of the customer.

If we accept as collateral or purchase merchandise from a customer and it is determined that our customer was not the rightful owner, the merchandise is subject to recovery by the rightful owner and those losses are included in our shrinkage.

Historically, we have not experienced a material number of claims of this nature.

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We are subject to the Fair Credit Reporting Act, which was enacted, in part, to address privacy concerns associated with the sharing of consumers’ financial information and credit history contained in consumer credit reports and limits our ability to share certain consumer report information.

We are subject to the Federal Fair and Accurate Credit Transactions Act, which amended the Fair Credit Reporting Act, and requires us to adopt written guidance and procedures for detecting, preventing and mitigating identity theft, and to adopt various policies and procedures (including team member training) that address and aid in detecting and responding to suspicious activity or identify theft “red flags.”

We are subject to the Federal Fair and Accurate Credit Transactions Act, which amended the Fair Credit Reporting Act and requires us to adopt written guidance and procedures for detecting, preventing and mitigating identity theft, and to adopt various policies and procedures (including Team Member training) that address and aid in detecting and responding to suspicious activity or identity theft “red flags.”

• As a provider of consumer financial products, we are prohibited from engaging in any unfair, deceptive or abusive act or practice (UDAAP) under the Dodd-Frank Act, as they can cause significant financial injury to consumers, erode consumer confidence and undermine the financial marketplace.

• The Equal Credit Opportunity Act prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance or good faith exercise of any rights under the Consumer Credit Protection Act.

• Under the USA PATRIOT Act, we must maintain an anti-money laundering compliance program that includes the development of internal policies, procedures and controls;

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• We are subject to the Bank Secrecy Act and its underlying regulations, which require us to report and maintain records of certain high-dollar transactions.

In addition, federal laws and regulations prohibit us from doing business with terrorists and require us to report certain suspicious transactions to the Financial Crimes Enforcement Network of the Treasury Department (“FinCen”).

In addition, federal laws and regulations require us to report certain suspicious transactions to the Financial Crimes Enforcement Network of the Treasury Department (“FinCen”).

Generally, a transaction is considered to be suspicious if we know, suspect or have reason to suspect that the transaction (a) involves funds derived from illegal activity or is intended to hide or disguise such funds, (b) is designed to evade the requirements of the Bank Secrecy Act or (c) appears to serve no legitimate business or lawful purpose.

The Foreign Corrupt Practices Act ("FCPA") was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.

• The Office of Foreign Assets Control (“OFAC”) of the Department of the Treasury administers and enforces economic and trade sanctions based on U.S.

foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons

of mass destruction and other threats to the national security, foreign policy or economy of the United States.

We are prohibited from doing business with named individuals, businesses and countries subject to sanctions and restrictions, and we are required to report any transactions involving those named by the US.

Department of the Treasury.

• The Foreign Corrupt Practices Act ("FCPA") makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.

Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of mail or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.

Effective October 2016, Department of Defense regulations promulgated under the Military Lending Act (the “MLA”), formerly applicable to payday loans and auto title loans, were expanded to include various additional forms of consumer credit, including pawn loans.

The MLA regulations limit the annual percentage rate charged on consumer loans made to active military personnel or their dependents to 36%.

• The Department of Defense regulations promulgated under the Military Lending Act (the “MLA”) limit the annual percentage rate charged on certain consumer loans (including pawn loans) made to active military personnel or their dependents to 36%.

Under certain circumstances, the federal Consumer Financial Protection Bureau (“CFPB”) may be able to exercise regulatory authority over the U.S.

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Relevant aspects of the law specifically affecting the pawn industry include monthly reporting on “vulnerable activities,” which includes certain high-value pawn and precious metal transactions.

The Federal Personal Information Protection Law requires us to protect our customers’ personal information.

Specifically, the law requires us to inform customers if we share customer personal information with third parties and to post (both online and in-store) our privacy policy.

The Federal Law on the Protection of Personal Data Held by Private Parties requires us to protect our customers’ personal information.

This law requires us to inform customers if we share customer personal information with third parties and to post (both online and in-store) our Data Privacy Policy.

Our pawn business in Mexico is also subject to regulation at the state and local level through state laws and local zoning and permitting ordinances.

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This law affects all industries in Mexico and is intended to detect commercial activities arising from illicit or ill-gotten means through bilateral cooperation between Mexico’s Ministry of Finance and Public Credit and Mexico’s Attorney General’s Office.

The law also restricts the use of cash in certain transactions associated with high-value assets and limits, and to the extent possible, money laundering activities protected by the anonymity that such cash transactions provide.

Relevant aspects of the law specifically affecting the pawn industry include monthly reporting on “vulnerable activities,” which include pawn transactions exceeding 139,442 Mexican pesos and retail transactions of precious metals exceeding 139,442 Mexican pesos.

Retail transactions of precious metals exceeding 271,213 Mexican pesos are prohibited.

Retail transactions of precious metals in cash exceeding 271,213 Mexican pesos are prohibited.

There are significant fines and sanctions for failure to comply with these rules.

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Available Information

We maintain an Internet website at www.ezcorp.com.

All of our reports filed with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and Section 16 filings are accessible, free of charge, through the Investor Relations section of our website as soon as reasonably practicable after electronic filing.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Information on our website is not incorporated by reference into this report.

We file annual, quarterly and current reports and other documents with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The SEC maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC.

The public can obtain any documents that we file with the SEC at www.sec.gov.

We maintain a website at www.ezcorp.com.

Our filings with the SEC, including our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and Section 16 filings, are available free of charge through links maintained on our website under the heading “Investor Relations — SEC Filings.” Information contained on our website is not incorporated by reference into this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business