4.	Consumer Loans, Credit Quality Information and Allowances and Liabilities for Estimated Losses on Consumer Loans

Each consumer loan provides customers with cash, typically in exchange for a fee and an agreement to repay the amount advanced. These transactions result in a receivable or a loan, owed to the Company or a third-party lender that the Company guarantees. The Company's consumer loan portfolio consists of consumer loans the Company originates, guarantees or purchases and includes: short-term loans, which include single payment loans and line of credit products, and longer-term multi-payment installment loans. Through the credit services organization programs (the "CSO programs"), the Company provides services related to a third-party lender's consumer loan product in some markets by acting as a credit services organization or credit access business on behalf of consumers in accordance with applicable state laws. Services offered under the CSO programs include credit related services such as arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents. Under the CSO programs, the Company also guarantees consumer loan payment obligations to the third-party lender in the event that the consumer defaults on the loan. A customer who obtains a loan through the CSO programs pays the Company a fee for these credit services ("CSO fees"). Consumer loan fee revenue generated from the Company's consumer loans, CSO programs and related activities for the three months ended March 31, 2012 and 2011 was as follows (dollars in thousands):


	Three Months Ended March 31,
	2012		2011

Interest and fees on short-term loans	$	148,293	$	114,994
Interest and fees on installment loans		24,547		8,133

Total consumer loan fees	$	172,840	$	123,127

The Company monitors the performance of its portfolio of consumer loans and maintains either an allowance or liability for estimated losses on consumer loans (including fees and interest) at a level estimated to be adequate to absorb credit losses inherent in the portfolio. The allowance for losses on the Company's owned consumer loans reduces the outstanding loan balance in the consolidated balance sheets. In addition, the Company maintains a liability for estimated losses related to loans guaranteed under the CSO programs which approximates the fair value of the liability and is included in "Accounts payable and accrued expenses" on the consolidated balance sheets.

In determining the allowance or liability for estimated losses on consumer loans, the Company applies a documented systematic methodology. Outstanding loans are divided into discrete groups of short-term loans and installment loans and are analyzed as performing or nonperforming. Short-term consumer loans are considered nonperforming as of the payment due date when payment of an amount due has not been made as of that date (after allowing for normal payment processing time). An installment loan is considered nonperforming if the customer does not make two consecutive payments.

Where permitted by law, a customer may choose to renew a performing short-term consumer loan before it is considered nonperforming by agreeing to pay the current finance charge for the right to make payment of the outstanding principal balance at a later date plus an additional finance charge. If a performing loan is renewed, the renewal is considered a new loan. In some instances in the United Kingdom, customers agree to repay a new short-term loan in two payments (which the Company also considers short-term loans), and in these cases the Company considers the obligation to make the first payment as a new single-payment loan and the obligation to make the second payment as a renewal of that loan because the customer pays a finance charge when each payment is made, similar to a renewed loan. If a performing loan is renewed but the customer fails to pay that loan's current finance charge as of its due date (after allowing for normal payment processing time), the loan that was renewed is reclassified as nonperforming to the extent of that loan's unpaid finance charge.

The Company does not provide for any grace period when determining the performance status of a consumer loan (other than allowing for normal payment processing time). Nonperforming loans may not be renewed, and if during its attempt to collect on a nonperforming loan the Company extends the time for payment through a payment plan or a promise to pay, it is still considered nonperforming. Nonperforming loans are analyzed by stage of collection. Actual loss experience based on historical loss rates for each discrete group is calculated and adjusted for recent default trends. The required allowance is calculated by applying the resulting adjusted loss rates to each discrete loan group and aggregating the results. Increases in either the allowance or the liability, net of charge-offs and recoveries, are recorded as a "Consumer loan loss provision" in the consolidated statements of income. The Company fully reserves and generally charges off all consumer loans once they have been classified as nonperforming for 60 consecutive days. If a loan is deemed uncollectible before it is fully reserved, it is charged off at that point. All loans included in nonperforming loans have an age of one to 59 days from the date they became nonperforming loans, as defined above. Recoveries on loans previously charged to the allowance are credited to the allowance when collected.

The allowance deducted from the carrying value of consumer loans was $58.7 million, $35.0 million and $63.1 million at March 31, 2012 and 2011 and December 31, 2011, respectively. In connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders and is required to purchase the loan should a consumer not make payments as required by the contract. The guarantee represents an obligation to purchase specific loans that go into default, which generally have terms of less than 90 days. At March 31, 2012 and 2011 and December 31, 2011, the amount of consumer loans guaranteed by the Company was $44.5 million, $38.8 million and $59.4 million, respectively, representing amounts due under consumer loans originated by third-party lenders under the CSO programs. The estimated fair value of the liability related to these guarantees of $2.0 million, $1.7 million and $3.1 million at March 31, 2012 and 2011 and December 31, 2011, respectively, is included in "Accounts payable and accrued expenses" in the accompanying consolidated balance sheets.

The components of Company-owned consumer loan portfolio receivables at March 31, 2012 and 2011 and December 31, 2011 were as follows (dollars in thousands):


	As of March 31, 2012
	Short-term Loans			Installment Loans			Total
Performing loans	$	136,158		$	65,127		$	201,285
Nonperforming loans		47,775			10,018			57,793
Total consumer loans, gross		183,933			75,145			259,078
Less: Allowance for losses		(43,425	)		(15,288	)		(58,713	)
Consumer loans, net	$	140,508		$	59,857		$	200,365

	As of March 31, 2011
	Short-term Loans			Installment Loans			Total
Performing loans	$	101,283		$	20,122		$	121,405
Nonperforming loans		36,447			3,293			39,740
Total consumer loans, gross		137,730			23,415			161,145
Less: Allowance for losses		(30,512	)		(4,498	)		(35,010	)
Consumer loans, net	$	107,218		$	18,917		$	126,135

	As of December 31, 2011
	Short-term Loans			Installment Loans			Total
Performing loans	$	157,156		$	59,165		$	216,321
Nonperforming loans		59,049			10,480			69,529
Total consumer loans, gross		216,205			69,645			285,850
Less: Allowance for losses		(50,129	)		(12,943	)		(63,072	)
Consumer loans, net	$	166,076		$	56,702		$	222,778

Changes in the allowance for losses for the Company-owned loans and the liability for estimated losses on the Company's guarantees of third-party lender-owned loans during the three months ended March 31, 2012 and 2011 were as follows (dollars in thousands):

Three Months Ended March 31, 2012

Short-term
Loans

Installment
Loans

MLOC^(a)

Total

Allowance for losses for Company-owned consumer loans:

Balance at beginning of period

50,129

12,943

63,072

Consumer loan loss provision

48,954

14,498

63,452

Charge-offs

(65,276

)

(13,337

)

(78,613

)

Recoveries

9,618

1,184

10,802

Balance at end of period

43,425

15,288

58,713

Liability for third-party lender-owned consumer loans:

Balance at beginning of period

2,617

445

3,062

Decrease in liability

(987

)

(82

)

(1,069

)

Balance at end of period

1,630

363

1,993



	Three Months Ended March 31, 2011
	Short-term Loans			Installment Loans			MLOC^(a)			Total
Allowance for losses for Company-owned consumer loans:

Balance at beginning of period	$	34,455		$	2,988		$	1,510		$	38,953
Consumer loan loss provision		36,169			4,888			(430	)		40,627
Charge-offs		(47,601	)		(3,561	)		(1,514	)		(52,676	)
Recoveries		7,489			183			434			8,106

Balance at end of period	$	30,512		$	4,498		$	-		$	35,010
Liability for third-party lender-owned consumer loans:

Balance at beginning of period	$	2,610		$	228		$	-		$	2,838
Decrease in liability		(1,109	)		(18	)		-			(1,127	)

Balance at end of period	$	1,501		$	210		$	-		$	1,711

^(a) Represents micro line of credit ("MLOC") receivables, which are participation interests in receivables acquired from a third-party lender. The Company stopped providing MLOC services on behalf of a third-party lender in October 2010 when the lender discontinued offering MLOC advances.