ACE Cash Express really has a bankless job. The company owns a chain of financial services outlets that target the underbanked and bankless populations. For a fee, customers can cash checks, obtain short-term unsecured loans ("payday loans"), purchase money orders, pay bills, and set up pre-paid debit cards. There are more than 1,700 company-owned and franchised ACE Cash Express and ACE Cash Advance stores throughout the US. ACE stores are typically found in strip malls, in free-standing buildings on busy streets, and in kiosks within retail stores. ACE Cash Express is held by private equity firm JLL Partners.
JLL Partners also owns about 25% of NetSpend, which offers prepaid debit cards. ACE is one of the largest distributors of NetSpend cards, which are growing in popularity with the unbanked and underbanked consumer market. ACE and partner NetSpend are among a growing number of companies that target millions of people who do not have traditional bank accounts.
Although the market is ripe with opportunity, ACE faces fierce criticism and the threat of new regulation as well. Critics have charged that the steep interest rates and service charges levied by payday loan/cash-checking businesses constitute predatory lending practices. Further raising the ire of critics, the industry tends to serve more vulnerable populations including the elderly and the less-educated. Laws regulating or even prohibiting payday loans have been passed in some states, and others are being considered.
New proposed federal reforms also could limit payday loans. Although the new regulations have cut into ACE's (and its competitors') payday loan operations, the company has kept affected locations open by focusing on other product offerings such as title loans, auto insurance, and pre-paid debit cards. – less