Cabela's 2005 Annual Report Download - page 26

The Fair Credit Reporting Act establishes procedures for correcting mistakes in a person’s credit record and
generally requires that the records be kept confidential. The USA Patriot Act, among other things, regulates
money laundering and prohibits structuring financial transactions to evade reporting requirements. The
Community Reinvestment Act requires federal agencies to encourage depository financial institutions to help
meet the credit needs of their communities. The Service members’ Civil Relief Act provides for temporary
suspension of legal proceedings and financial transactions that may adversely affect the civil rights of service
members during military service. We spend significant amounts of time ensuring we are in compliance with
these laws and work with our service providers to ensure that actions they take in connection with services they
perform for us are in compliance with these laws. Depending on the underlying issue and applicable law,
regulators are often authorized to impose penalties for violations of these statutes and, in some cases, to order our
bank subsidiary to compensate injured borrowers. Borrowers may also have a private right of action to bring
actions for some violations. Federal bankruptcy and state debtor relief and collection laws also affect the ability
of our bank subsidiary to collect outstanding balances owed by borrowers. The GLB Act requires our bank
subsidiary to disclose its privacy policy to customers and consumers, and requires that such customers and
consumers be given a choice (through an opt-out notice) to forbid the sharing of non-public personal information
about them with non-affiliated third persons. We have a written Privacy Notice posted on our website which is
delivered to each of our customers when the customer relationships begin, and annually thereafter, in compliance
with the GLB Act.
Certain acquisitions of our capital stock or our bank subsidiary’s capital stock may be subject to regulatory
approval or notice under federal or Nebraska law. Investors are responsible for ensuring that they do not, directly
or indirectly, acquire shares of our capital stock in excess of the amount which can be acquired without
regulatory approval.
Taxation Applicable to Us. We pay applicable corporate income, franchise and other taxes, to states in
which our destination retail stores are physically located. Upon entering a new state, we apply for a private letter
ruling from the state’s revenue department stating which types of taxes our direct and retail businesses will be
required to collect and pay in such state, and we accrue and remit the applicable taxes based upon the private
letter ruling. As we open more destination retail stores, we will be subject to tax in an increasing number of state
and local taxing jurisdictions. Although we believe we have properly accrued for these taxes based on our current
interpretation of the tax code and prior private letter rulings, state taxing authorities may challenge our
interpretation, attempt to revoke their private letter rulings or amend their tax laws. If state taxing authorities are
successful, additional taxes, interest and related penalties may be assessed. See “Risk Factors—Our use tax
collection policy for our direct business may subject us to liabilities for unpaid use taxes on past sales” and
“—Our destination retail store expansion strategy may result in our direct business establishing nexus with
additional states which may cause our direct business to pay additional income and use taxes and have an adverse
effect on the profitability and cash flows of our direct business.”
Other Regulations Applicable to Us. We must comply with federal, state and local regulations, including the
federal Brady Handgun Violence Prevention Act, which require us, as a federal firearms licensee, to perform a
pre-sale background check of purchasers of hunting rifles and other firearms.
We also are subject to a variety of state laws and regulations relating to, among other things, advertising,
pricing, and product safety/restrictions. Some of these laws prohibit or limit the sale, in certain states and
locations, of certain items we offer such as black powder firearms, ammunition, bows, knives and similar
products. State and local government regulation of hunting can also affect our business.
We are subject to certain federal, state and local laws and regulations relating to the protection of the
environment and human health and safety. We believe that we are in substantial compliance with the terms of
environmental laws and that we have no liabilities under such laws that we expect to have a material adverse
effect on our business, results of operations or financial condition.
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