COMMITMENTS AND CONTINGENCIES
Litigation
The Company, in the ordinary course of business, is a party to various legal and regulatory proceedings and other general claims. Although no assurances can be given, in management’s opinion, such outstanding proceedings are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
The Company believes it has meritorious defenses to all of the claims and intends to vigorously defend itself against such claims. However, legal and regulatory proceedings involve an inherent level of uncertainty and no assurances can be given regarding the ultimate outcome of any such matters or whether an adverse outcome would not have a material adverse impact on the Company’s financial position, results of operations, or cash flows. Other than as described below, the Company is unable to determine whether a future loss will be incurred for any of its material outstanding legal and regulatory proceedings or to estimate a range of loss with respect to such proceeding, if any, and accordingly, no material amounts have been accrued in the Company’s financial statements for legal and regulatory proceedings.
On November 12, 2021, the CFPB initiated a civil action in the United States District Court for the Northern District of Texas (the “District Court”) against FirstCash, Inc. and Cash America West, Inc., and later amended the complaint to include numerous Company subsidiaries as defendants. The CFPB’s lawsuit alleged violations of the MLA in connection with pawn transactions. The CFPB sought an injunction, redress for affected borrowers and a civil monetary penalty. On July 11, 2025, with the District Court’s approval and without admitting or denying the allegations, the Company and the CFPB agreed to settle and resolve all matters in dispute. As part of the settlement, the Company agreed to offer a new pawn lending product for covered members of the U.S. military and their covered dependents. Additionally, the Company will pay consumer redress in fees or principal returned to affected customers, which is estimated by the Company to be no more than $7.0 million. The Company paid a $4.0 million fine to the CFPB victims' relief fund in July 2025.
OBS Loans
The Company is obligated to reimburse the bank for the outstanding principal amount plus accrued interest for all OBS Loans that are 90 days contractually past due. This obligation constitutes an off-balance sheet credit exposure for which the Company is required to recognize, upon inception of the obligation, a liability for the expected lifetime losses, which is included in accrued liabilities in the accompanying consolidated balance sheets. As of December 31, 2025, the outstanding amount of OBS Loans originated and held by the bank, which would represent the maximum exposure to the Company, was $28.1 million.
Gold Forward Sales Contracts
As of December 31, 2025, the Company had contractual commitments to deliver a total of 60,000 gold ounces between January 2026 and September 2027 at a weighted-average price of $3,340 per ounce. The ounces required to be delivered over this time period are less than the historical volume of scrap gold normally produced, and the Company expects to have the required gold ounces to meet the commitments as they come due.