Credit Services Organization

9 Months Ended

Sep. 30, 2011

Credit Services Organization [Abstract]

Credit Services Organization

Note 15 — Credit Services Organization

For the Company's locations in Texas, the Company began operating as a CSO, through one of its subsidiaries, in September 2005. As a CSO, the Company acts as a credit services organization on behalf of consumers in accordance with Texas laws. The Company charges the consumer a fee for arranging for an unrelated third-party to make a loan to the consumer and for providing related services to the consumer, including a guarantee of the consumer's obligation to the third-party lender. The Company also services the loan for the lender. The CSO fee is recognized ratably over the term of the loan. The Company is not involved in the loan approval process or in determining the loan approval procedures or criteria. As a result, loans made by the lender are not included in the Company's loans receivable balance and are not reflected in the Consolidated Balance Sheets. As noted above, however, the Company absorbs all risk of loss through its guarantee of the consumer's loan from the lender. As of December 31, 2010 and September 30, 2011, the consumers had total loans outstanding with the lender of approximately $3.0 million and $2.7 million, respectively. Because of the economic exposure for potential losses related to the guarantee of these loans, the Company records a payable at fair value to reflect the anticipated losses related to uncollected loans. The balance of the liability for estimated losses reported in accrued liabilities was approximately $100,000 as of December 31, 2010 and $70,000 as of September 30, 2011.

The following tables summarize the activity in the CSO liability (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
Allowance for loan losses	2010			2011			2010			2011
Balance, beginning of period	$	110		$	90		$	100		$	100
Charge-offs		(891	)		(1,017	)		(2,027	)		(2,463	)
Recoveries		206			203			600			630
Provision for losses		655			794			1,407			1,803
Balance, end of period	$	80		$	70		$	80		$	70