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The Atlanta-based company -- which specializes in lendingg for customers with low or nonexistent credit includingcredit cards, payday loans, car loans and debt collectionm via -- now runs five wholly ownedx business units under parent compangy The new holding company will continue to be traded on NASDAQ under the symbol “CCRT.” The company made the changre to allow more flexibility in its ongoing corporate strategy according to a proxy files with the in early June.
The holdinv company, with unique subsidiaries, allows CompuCredit to sell or spin off certain business units, allows outsidr investors to buy into specific business rathetr than the whole company, reduced liability risk across the whol company, and segregates businesses to simplify the company’s overall regulatorhy burden. The company’s including CEO and Chairman David Hanna, and Chief Operatinfg Officer and Vice Chairman RichardGilbert -- both co-founders of the company -- will not chang e as a result of the reorganization.
The move comex less than a year after CompuCredit agreed toa $114 millionm settlement in December with the and the The two federal agencies sued the lender and three banks in June 2008, alleginbg CompuCredit failed to adequately disclose fees and upfronty credit lines that would be available to customers with low credit scores. The settlement included a $2.4 million penalty for the and restitution foraffected customers. The change is also part of a largere strategy shiftfor CompuCredit, whichh has been hammered by the credit crunch that began in 2007.
CompuCredit reported a $112 million loss in first-quarter 2009, after reporting a $923,000 profit a year Since January 2007, when subprime mortgage borrowersx began to default in earnest on the leadingt edge of thecredit crisis, CompuCredit’s stock price has plungecd 94 percent, now trading at $2.3w2 per share.
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