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<SEC-DOCUMENT>0000950134-05-005463.txt : 20060328
<SEC-HEADER>0000950134-05-005463.hdr.sgml : 20060328
<ACCEPTANCE-DATETIME>20050318163404
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950134-05-005463
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20050318

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ACE CASH EXPRESS INC/TX
		CENTRAL INDEX KEY:			0000849116
		STANDARD INDUSTRIAL CLASSIFICATION:	FUNCTIONS RELATED TO DEPOSITORY BANKING, NEC [6099]
		IRS NUMBER:				752142963
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1231 GREENWAY DR STE 800
		CITY:			IRVING
		STATE:			TX
		ZIP:			75038
		BUSINESS PHONE:		2145505000

	MAIL ADDRESS:	
		STREET 1:		1231 GREENWAY DR #800
		CITY:			IRVING
		STATE:			TX
		ZIP:			75038

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ACE CASH EXPRESS INC
		DATE OF NAME CHANGE:	19921016
</SEC-HEADER>
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt"><IMG src="d23578cd2357800.gif" alt="(ACE CASH EXPRESS GRAPHIC)">



<P align="left" style="font-size: 10pt">William S. McCalmont<BR>
Executive Vice President and Chief Financial Officer<BR>
1231 Greenway Drive, Suite&nbsp;600<BR>
Irving, TX 75038<BR>
(972)&nbsp;550-5000<BR>
<HR size="1" noshade width="100%" align="center" color="#000000">


<P align="right" style="font-size: 10pt">March&nbsp;18, 2005



<P align="left" style="font-size: 10pt"><U><B>Via EDGAR and Overnight Delivery</B></U>



<P align="left" style="font-size: 10pt">Mr.&nbsp;Paul Cline, Senior Accountant<BR>
Mr.&nbsp;Michael Volley<BR>
United States Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
450 Fifth Street, N.W.<BR>
Washington, D.C. 20549


<P>
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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><B>Re:</B>&nbsp;</TD>
    <TD><B>Ace Cash Express, Inc.<BR>
Form&nbsp;10-K for the fiscal year ended June&nbsp;30, 2004</B><BR>
<B>File Number: 000-20774</B></TD>
</TR>
</TABLE>


<P align="left" style="font-size: 10pt">Dear Messrs.&nbsp;Cline and Volley:



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enclosed please find the responses of Ace Cash Express, Inc. (the &#147;Company&#148;) to the comments
received by facsimile on February&nbsp;16, 2005 from the staff of the Securities and Exchange Commission
(the &#147;Staff&#148;). For ease of review, the Company has set forth below each of the numbered comments
of your letter and its responses thereto. In addition, the Company has, where appropriate,
included proposed revisions to the Company&#146;s disclosure which the Company will include in future
periodic reports filed with the Securities and Exchange Commission. For ease of review, these
proposed disclosure changes have been set forth below as bolded underlined additions to the boxed
disclosure that was included in the Company&#146;s Annual Report Form 10-K for the fiscal year ended
June&nbsp;30, 2004.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><U><B>Item&nbsp;1. Business &#150; page 3</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>1.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please disclose the year in which you were organized and your form of organization.
Refer to Item&nbsp;101(A)(1) of Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, in future filings the Company will provide
the following additional disclosure in the overview section of its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We began operations in 1968, and were incorporated as a Texas corporation in March
1982.</B></U>

</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>2.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please include a reference to your segment disclosures presented in your financial
statements. Refer to Item&nbsp;101(B) of Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, in future filings the Company will provide
the following additional disclosure in the overview section of its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Our reportable segments are strategic business units that differentiate between
company-owned and franchised stores. Company-owned store revenue is generated from
customer-transaction processing in stores owned by the Company, and franchised store
revenue is generated from the franchise fees charged for opening the franchised store and
on-going royalty fees received from franchisees. For more information on our segment
financial information, please see Note 2 to the Company&#146;s Consolidated Financial
Statements.</B></U>

</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>3.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please disclose your Internet address. Refer to Item&nbsp;101(E)(3) of Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, in future filings the Company will provide
the following additional disclosure in the overview section of its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Website Access to Reports. </I></B><B>Through our website at www.acecashexpress.com, we provide
free access to our Annual Report on </B><B>Form 10-K</B><B>, Quarterly Reports on </B><B>Form 10-Q</B><B>, Current
Reports on </B><B>Form 8-K</B><B>, Forms 3, 4 and 5 filed by reporting persons, and all amendments
thereto, as soon as reasonably practicable after such reports are electronically filed with
the Securities and Exchange Commission. </B></U>

</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>4.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please disclose whether you make available free of charge on or through your Internet
website your filed financial reports as soon as reasonably practicable after you
electronically file such material with the SEC. Refer to Item&nbsp;101(F)(4) of Regulation
S-K.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: Please see the Company&#146;s response to Comment # 3.


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><U><B>Growth Strategy &#150; page 5</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>5.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please expand your discussion and/or add a discussion related to your strategies and
key decision making factors related to the following activities:</B></TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>a. Acquiring new owned stores;</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>b. Opening new owned stores;</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>c. Selling existing owned stores;</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>d. Closing existing owned stores;</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>e. Opening new franchised stores;</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>f. Acquiring new franchised stores;</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>g. Closing existing franchised stores.</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left:5%; font-size: 10pt"><B>In your summary of significant accounting policies, please discuss your accounting policies
relating to each of the above activities specifically disclosing how you account for the
purchase or sale price and how you calculate and record gains or losses.</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, in future filings the Company will provide
additional disclosures substantially similar to the following in the referenced section of
its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>Growth Strategy</B>



<P align="left" style="margin-left:5%; font-size: 10pt">A key objective of our <U><B>network</B></U> growth strategy is to have the most locations in
each market and to offer the broadest selection of financial services in our
industry. We believe that by offering the convenience of high-density store
locations, exceptional customer service and a broad suite of retail financial
services, we will achieve a high level of customer satisfaction. The key
elements of our growth strategy are as follows:



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Open Company-Owned Stores.</I>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We have identified several key geographic areas or markets for the development
of both ACE Cash Express stores as well as ACE Cash Advance stores. These
markets were identified following a review of the top 270 Standard Metropolitan
Statistical Areas in the United States and an internal evaluation of each
market&#146;s ability to support our store development program.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Specific trade areas are identified within each geographic market based upon
our assessment of the area&#146;s demographics and traffic patterns. Our real
estate department then seeks to identify specific site locations within each
trade area. The specific site is then presented for approval to our Capital
Approval Committee consisting of our President &#038; CEO, our EVP of Operations and
our EVP &#038; Chief Financial Officer.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>The Capital Approval Committee bases its decision to approve a specific site
and to pursue the development of a store on such factors as the terms of the
lease, the visibility of the store, the capital cost of the proposed store and
the trade area&#146;s demographics</B>.</U>



<P align="left" style="margin-left:5%; font-size: 10pt">We opened 53 company-owned stores in fiscal 2004 (including 11 ACE Cash
Advance stores), compared to 14 stores in fiscal 2003 and 39 stores in fiscal
2002. Our company-

</DIV>



<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt">owned store growth in fiscal 2003 was less than our
historical new store growth primarily due to limitations on capital
expenditures imposed by our bank credit agreement through March&nbsp;31, 2003. Our
current bank credit agreement enables us to pursue our company-owned store
growth strategy more aggressively. We expect to open approximately 60 new
company-owned stores, with a net gain of approximately 40 to 45 company-owned
stores after store closures, in fiscal 2005. We are still targeting an
aggregate net gain of approximately 300 company-owned stores for the five-year
period ending June&nbsp;30, 2008.



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>A decision to close a store is typically based upon store performance or our
inability to obtain favorable lease renewal terms. Company-owned stores are
evaluated for closure during our quarterly business reviews and at the end of
the store&#146;s lease term or any renewals of the lease term. A landlord may also
choose not to renew the lease at the end of its term. We closed 24 stores in
fiscal 2004 compared to 28 stores in fiscal 2003 and 32 stores in fiscal 2002.
This represents 2%, 3%, and 3% of total company-owned stores as of June&nbsp;30,
2004, 2003 and 2002, respectively.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Company-owned stores are sold infrequently. Company-owned stores that are sold
are typically located in isolated geographic areas that do not fit into our
overall strategic geographic development plans. We sold 5 stores in fiscal
2004, compared to 23 stores in fiscal 2003, and sold no stores in fiscal 2002.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Accelerate Franchise Store Development.</I>



<P align="left" style="margin-left:5%; font-size: 10pt">Our goal is to be the industry leader in offering quality franchising
opportunities and exceptional support systems and services to existing and
potential franchisees. We believe that by offering attractive investment
opportunities and exceptional franchisee support systems and services, we will
attract potential franchisees to partner with us rather than other franchisors.



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Our franchise department seeks to locate franchised stores in geographic
markets that are not designated for company-owned development. The franchise
department targets specific trade areas within each geographic market and
identifies potential franchisees within these trade areas. These potential
franchisees are then contacted to determine their level of interest in
developing an ACE Cash Express store. Potential franchisees interested in
developing stores also contact the franchise department directly.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt">We opened 32 franchised stores in fiscal 2004, compared to 26 stores in fiscal
2003 and 22 stores in fiscal 2002. As of June&nbsp;30, 2004, we had 204 franchised
stores and we believe our targeted markets could potentially support an
additional 1,800 ACE franchise stores across the United States. We expect to
open approximately 50 new franchised stores, with a net gain of approximately
40 franchised stores after store closures, in fiscal 2005. Currently, we have
franchise agreements for the development of over 100 new franchise stores and
we are still targeting an aggregate net gain of approximately 200 franchise
stores for the five year period ending June&nbsp;30, 2008.



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>A franchise agreement may be terminated if the franchisee does not comply with
the franchise agreement. Subject to the terms of the franchise agreement, a
franchisee may also elect to voluntarily close a store or leave the ACE system
based upon a variety of factors specific to the individual franchisee. In
either case, we consider</B></U>

</DIV>


<P align="center" style="font-size: 10pt">4
</DIV>

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<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>these closed stores, whether or not the store actually
closes or is re-branded. In fiscal 2004, 15 franchised stores were closed,
compared to 8 franchised stores in fiscal 2003 and 5 franchised stores in
fiscal 2002.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><I>Pursue Opportunistic Acquisitions.</I></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>A key element of our network growth strategy is to acquire existing
check-cashing stores and to re-brand them as ACE Cash Express stores. Since
1991, we have acquired over 500 check-cashing stores. We have not acquired any
monoline payday loan stores but may do so in the future.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Our evaluation of an acquisition candidate is based upon that store&#146;s existing
revenue and cash flow, our ability to introduce additional services enhancing
revenue growth, our assessment of the stores geographic market and its
consistency with our strategic development plans and our expectation that we
can introduce our proprietary information systems and Operational Goals to the
store generating operating efficiencies.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>A decision to acquire a store is reached following an assessment of the factors
noted above and a financial review of our anticipated return on investment.
Acquisitions requiring an investment of greater than $1&nbsp;million are approved by
our Board of Directors.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We believe that our extensive experience with acquisitions allows us to
efficiently integrate acquired stores into our network. In fiscal 2004, we
acquired 34 stores compared to 2 stores in fiscal 2003 and 8 stores in fiscal
2002.</B></U>

</DIV>



<P align="left" style="margin-left:5%; font-size: 10pt">The Company advises the Staff that in future filings it will provide additional disclosures
substantially similar to the following in Note 1 to the Company&#146;s Consolidated Financial
Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>New Store Accounting</I></B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Start-up costs for new stores such as training, supplies and travel are expensed as
incurred. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Store Acquisition Accounting</I></B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We account for all store acquisitions using the purchase method of accounting. This
method requires the allocation of the purchase price to individual tangible assets
acquired, intangible assets acquired arising from contractual or legal rights, and
liabilities assumed based on their estimated fair values at the date of acquisition. The
excess of the cost of acquired assets over the net amounts assigned to assets acquired and
liabilities assumed is recognized as goodwill. Any costs, including &#147;out-of-pocket&#148; or
incremental costs directly related to the acquisition, such as fees </B></U>

</DIV>



<P align="center" style="font-size: 10pt">5
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<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>paid to outside consultants for accounting, legal, or engineering investigations or for
appraisals, are included in the cost of the acquired assets.</B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Gain or Loss on Store Closure</I></B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We close stores in the normal course of business based on store performance, lease
termination or unfavorable lease extension terms. For closed stores, we record a loss in
other expense for the write-off of any remaining book value of fixed assets not transferred
to other locations and any related closing costs. For stores sold to third parties, a gain
or loss is recorded based on the amount received less the write-off of any remaining book
value of fixed assets not sold or transferred to other locations and any related closing
costs. </B></U>

</DIV>



<P align="left" style="font-size: 10pt"><U><B>Introduce New Services &#150; Page 6</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>6.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to provide an expanded discussion of the nature of your relationship
with NetSpend, including whether you have a written agreement and, if so, its material
terms.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In future filings the Company will provide additional disclosures substantially
similar to the following regarding the NetSpend relationship in the referenced section of
its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Introduce New Services. </I>In addition to our current broad service offering, we
continuously evaluate new services for possible introduction into our stores. For example,
in fiscal 2002, <U><B>we entered into a written agreement with</B></U> NetSpend Corporation, a
prepaid payments company<U><B>, whereby we offer prepaid debit cards in our stores.</B></U> The
MasterCard&#174; prepaid debit card <U><B>offered through NetSpend</B></U> allows our customers to
&#147;load&#148; cash onto <U><B>these cards </B></U>and use <U><B>them wherever MasterCard debit cards are
accepted.</B></U> <U> <B>Pursuant to our agreement, we receive from the customer a portion of
the purchase price of the cards and a convenience fee for loads on the cards. In
addition, we receive from NetSpend an additional portion of the purchase price of the card
and commissions based on the aggregate amount loaded or direct deposited on the cards, the
number of purchases or ATM withdrawal transactions made with the cards and account
maintenance and subscription fees paid by the customer. Our agreement with NetSpend
expires on March&nbsp;31, 2007, and will automatically renew for one year periods thereafter
absent 365&nbsp;days&#146; prior notice by either of the parties. Either party may terminate the
agreement at an earlier date if the non-terminating party (i)&nbsp;fails to pay to the
terminating party amounts when due, (ii)&nbsp;fails to timely cure a default under the agreement
or (iii)&nbsp;is bankrupt or insolvent. </B></U>During fiscal 2004, we and our franchisees sold
approximately 149,000 cards and loaded a total face value of more than $268&nbsp;million.
<U><B>Revenues generated under this NetSpend agreement during fiscal 2004, 2003, and 2002
were $4.6&nbsp;million, $2.7&nbsp;million, and $0.5&nbsp;million, respectively, which represents 1.9%,
1.2% and 0.0% of our net revenues for such periods, and are included in Bill Pay
revenue.</B></U> We believe that our distribution network, with 1,230 network stores in 36
states and the District of Columbia, makes us an ideal partner for financial service
companies seeking to gain immediate access to our customer base. Our distribution network
allows us to offer our customers new services through third parties, without incurring the
costs associated with a proprietary research and development process.

</DIV>



<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><U><B>Check Cashing &#150; page 7</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>7.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and in the footnotes to the financial statements to disclose and
discuss your policy for recognizing fee revenue on cashed checks. Clarify whether or not
you record them net of an allowance for anticipated returned checks or how you otherwise
account for fee revenues on returned checks. Quantify in MD&#038;A the amount of fee revenue
associated with returned checks.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Check cashing. </I>Our primary business is cashing checks for a fee. We primarily
cash payroll checks, but we also cash government assistance, tax refund and
insurance checks or drafts. Subject to market conditions at different
locations, our check cashing fees for payroll checks are approximately 2.3% of
the face amount of the check, <U><B>and this fee is deducted from the cash returned
to the customer.</B></U> We may charge higher rates for cashing out-of-state checks,
handwritten checks, money orders and insurance checks or drafts, depending on
risk and market factors. Unlike many of our competitors, we display our check
cashing fees in full view of our customers on a menu board in each store and
provide a detailed receipt for each transaction. Although we have established
guidelines for approving check cashing transactions, we have no preset limit on
the size of the checks we will cash.



<P align="left" style="margin-left:5%; font-size: 10pt">During fiscal 2004, we cashed approximately 13.2&nbsp;million checks with an
aggregate face amount of approximately $5.1&nbsp;billion. The face amount of the
average check was $388 and our average fee per check was $9.91, or 2.6%, of the
average check.



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>The full amount of the check fee is recognized as revenue at the time of the
transaction with no allowance for anticipated returned checks.</B></U> If a check
cashed by us is returned for any reason, we <U><B>record the face amount of the check
(which includes the check fee)</B></U> as a loss in the period in which it is returned
<U><B>in other store expenses. </B></U> We then transfer the check to our collection
department, which contacts the maker and payee of each returned check to
initiate the collection process. Our collection department utilizes a
proprietary automated tracking system to monitor the status of all returned
items. <U> <B>The percent of check fee revenue attributable to returned checks was
0.15%, 0.14% and 0.16% for the fiscal years ended June&nbsp;30, 2004, 2003 and 2002,
respectively.</B></U>

</DIV>




<P align="left" style="margin-left:5%; font-size: 10pt">Regarding the request to quantify in MD&#038;A the amount of fee revenue associated with
returned checks, the Company does not specifically track this metric. However, we know
based on other available metrics, that the amount of check fee revenue from returned checks
for fiscal 2004, 2003 and 2002 was approximately $0.2&nbsp;million for each year.



<P align="left" style="margin-left:5%; font-size: 10pt">The Company will provide additional disclosures substantially similar to the following in
the Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations:


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Store Expenses</I></B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>The percent of check fee revenue attributable to returned checks was 0.15%, 0.14% and
0.16% for the fiscal years ended June&nbsp;30, 2004, 2003 and 2002. </B></U>

</DIV>




<P align="left" style="margin-left:5%; font-size: 10pt">The Company will provide additional disclosures substantially similar to the following in
Note 1 to the Company&#146;s Consolidated Financial Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Revenue Recognition. </I>Approximately 97% of our revenue results from transactions at
the point-of-sale with our customers, and approximately 66% of our revenue is effectively
recognized when the transaction is completed at the point-of-sale. These transactions
include check cashing, bill payment, money transfer, money order sales and other
miscellaneous services grouped in &#147;other fees.&#148; <U><B>The full amount of the check fee is
recognized as revenue at the time of the transaction with no allowance for anticipated
returned checks. </B></U>We act in an agency capacity regarding some of the services offered
and sold at our stores and therefore record as revenue the amounts received from customers
less amounts remitted to the provider.

</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>8.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and in the footnotes to the financial statements to disclose where
you record returned checks that are written-off in the statements of operations. Quantify
the amounts of these write-offs in MD&#038;A in each period presented.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: As set forth in the Company&#146;s response to Comment #7, the Company will provide
additional disclosures substantially similar to the following in its business section and
MD&#038;A to provide the requested information. The Company will provide the following
additional disclosure in Note 1 to the Company&#146;s Consolidated Financial Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Returned Checks</I>



<P align="left" style="margin-left:5%; font-size: 10pt">We charge <U><B>other store expenses</B></U> for losses on returned checks <U><B>(which include the
check fee amount)</B></U> in the period such checks are returned. We credit recoveries
on returned checks in the period the recovery is received.

</DIV>



<P align="left" style="margin-left:5%; font-size: 10pt">The Company will provide disclosures substantially similar to the following in the Store
Expense section of MD&#038;A:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Year Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B><u>(dollars in thousands)</u></B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Face amount of returned checks</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>21,705</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>24,087</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>23,637</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Collections</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,947</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,935</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,090</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Net write-offs</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,758</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,152</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,547</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>


<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Year Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Net write-offs as a percentage of the
face amount of checks cashed</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="border-bottom: 1px solid #000000"><B>0.15</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="border-bottom: 1px solid #000000"><B>0.14</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="border-bottom: 1px solid #000000"><B>0.16</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>


<P align="left" style="font-size: 10pt"><U><B>Short-term Consumer Loans &#150; page 7</B></U>




<P align="left" style="margin-left:5%; font-size: 10pt"><B>9. Please revise here and throughout your document to clarify what you mean by the term
&#147;matured loans&#148; and to clarify why you think the related provision for loan loss measure
is appropriate.</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following to
clarify the term &#147;matured loans&#148; and explain the loan loss provision rationale here and
throughout the document.

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Short-term consumer loans.</I>



<P align="left" style="margin-left:5%; font-size: 10pt">For the short-term consumer loans we offer, the customer&#146;s application data is
electronically transmitted to our centralized computer system, which scores the
loan with a proprietary loan-scoring system. An approval or denial is
communicated back to the store, where the required loan documentation or
adverse action form is printed for the customer. Loans made by Republic Bank
are scored in a similar process, but Republic Bank is responsible for reviewing
each loan application and determining whether such application is approved for
a loan. We are not involved in the loan approval process or the determination
of the Republic Bank loan approval procedures or criteria. For our fiscal year
ended June&nbsp;30, 2004, our provision for loan losses<B>, </B><U><B>including our accrual for
anticipated payments to Republic Bank for losses on their loans</B>,</U> as a
percentage of matured loan volume <U><B>(which represents all loans which became due
and payable during the reporting period) </B></U>for our loans and for Republic Bank
loans combined was 4.7%. <U><B>At the end of each fiscal quarter, we analyze the
loan loss provision, our loan loss allowance and the accrued liability to
Republic Bank, that has been computed to determine if our estimates of the
allowance and liability are adequate based on our understanding of past loan
loss experience, current economic conditions, volume and growth of the loan
portfolios, timing of maturity, as well as collections experience.</B></U>

</DIV>



<P align="left" style="font-size: 10pt"><U><B>Franchising &#150; page 9</B></U>




<P align="left" style="margin-left:5%; font-size: 10pt"><B>10. Please revise to provide an expanded discussion of how you qualify franchisees,
including how they finance the acquisition of the franchise. For instance, we note the
costs associated with the franchise itself and the additional costs of opening a store.
Also, clarify whether or not you finance any of start-up or operating costs for your
franchisees.</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its business description:


<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>In order to qualify potential franchisees, we primarily evaluate their financing
viability, familiarity with the industry and prior business experience. The franchisee is
responsible for the capital cost of opening the store, including leasehold improvements,
signage, computer equipment and security systems, operating costs and working capital. We
have no obligation to finance any costs related to start-up or operations for the
franchisees. Franchises are financed by the franchisee with their own financing
sources.</B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Other Services &#150; Page 9</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>11.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to disclose how you utilize your self-service machines throughout the
year. Revise the footnotes to the financial statements to clarify the amount invested in
these machines, how you account for them, how you identify and measure impairment, to
clarify the basis of any related depreciation policy and the depreciable life assigned to
these assets. These appear to be seasonal use assets whose use and associated fee revenue
is not guaranteed.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company supplementally advises that it
does not own the self-service machines, but leases them from a third party. Since this is
an operating lease, they are not recorded as an asset on the financial statements, and
accordingly are not depreciated. The Company notes to the Staff that in the MD&#038;A section
of its current Form 10-K (Store Expenses on page 27), the Company disclosed that other
store and SSM (self-service machine) expenses increased due to incremental lease expense of
$1.4&nbsp;million for the early lease termination of 105 self-service machines. In future
filings, the Company will provide additional disclosures substantially similar to the
following to clarify the accounting for the annual SSM lease expense:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Other services. </I>In many company-owned stores, we offer a variety of other retail
financial services to our customers, such as public transportation passes, photocopying,
fax transmission services, postage stamps and various prepaid services, including
long-distance telephone cards.



<P align="left" style="margin-left:5%; font-size: 10pt">We <U><B>lease </B></U>self-service machines, which <U><B>utilize our internally developed
point-of-sale system and</B></U> are able to cash checks, sell prepaid long-distance telephone
cards, sell money orders and process third-party bill payments. As of June&nbsp;30, 2004, we had
eight machines in company-owned locations, and we placed 219 self-service machines in H&#038;R
Block retail locations for use during the 2004 tax season (i.e., January through March).
The machines in H&#038;R Block locations only cash refund anticipation loan checks issued to
customers of H&#038;R Block. As of June&nbsp;30, 2004, we had 61 bill payment self-service machines
located at a third-party service provider&#146;s locations.



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Our tax business self-service machines are leased over various terms, typically 3
to 5&nbsp;years, but our corresponding annual lease expense is recognized during the tax season.
After tax season, the machines remain in H&#038;R Block offices, but are unused until the next
tax season. Lease expense for self-service machines used during tax season for the fiscal
years ended June&nbsp;30, 2004, 2003 and 2002 was $1.3&nbsp;million, $1.6&nbsp;million, and $0.5&nbsp;million,
respectively</B>.</U>

</DIV>



<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><U><B>New Store Economics &#150; page 9</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>12.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise the tabular information of store revenues to clarify why you do not
present this information for acquired stores. Also, consider the usefulness to an
investor of presenting separate information for franchised stores, particularly in light
of your stated policy of increasing the number of these stores in the future.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide a footnote to the referenced table to explain why the inclusion of
acquired stores in the new store economics table is not useful information to investors.
The Company supplementally advises the Staff that the new store economics table is provided
to show the historical revenue and earnings performance of only newly constructed stores
and represents a measurement of the quality of our site selection process in each year and
performance trends for newly constructed stores. The number of acquisition stores had been
included solely to reconcile the newly constructed store count to total store count,
thereby showing the mix between newly constructed stores and acquired stores in our
company-owned store network. We believe an acquisition store table with comparable data
would not provide a useful performance trend because acquired store performance varies
significantly depending on the number of years that the store has been open prior to
acquisition.



<P align="left" style="margin-left:5%; font-size: 10pt">Similarly, since the Company&#146;s franchise revenue is generated from franchise fees and
royalty fees, and not store revenue, it believes this table format would not provide any
meaningful insight into the performance of the Company&#146;s franchise store operations. Also,
franchise expenses that the Company recognizes represent its corporate Franchise operations
department expenses and do not relate to the individual store operations.



<P align="left" style="margin-left:5%; font-size: 10pt">In future filings, the Company will provide the following footnote:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>(1)&nbsp;Acquired store count is provided on this newly constructed store economics table to
delineate mix between newly constructed and acquired stores in our company-owned store
network. A similar table for acquired stores would not provide a useful performance trend
because acquired store performance varies significantly depending on the number of years
that the store has been open prior to acquisition. </B></U>

</DIV>



<P align="left" style="font-size: 10pt"><U><B>Advertising and Marketing &#150; page 13</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>13.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to provide an expanded discussion of your ACE Plus program. Is
enrollment free? Revise here and in the footnotes to the financial statements to clarify
how you account for this program and how your accounting considers the requirements of
EITF 01-9.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: The Company notes the Staff&#146;s comment related to EITF 01-9. Under the Company&#146;s
ACE Plus program, we provide free or discounted products or services after a customer has
completed a specified cumulative level of revenue transactions or has remained a customer
for a specified extended period of time, which EITF 01-9 specifically does not address. As
such, the Company accounts for this program in accordance with the provisions of EITF
00-22. The Company advises the Staff that in


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="margin-left:5%; font-size: 10pt">future filings it will provide additional disclosures substantially similar to the
following in the referenced section of its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt">In fiscal 1996, we introduced a <U><B>free</B></U> loyalty and retention program called ACE Plus
which rewards customers with <U><B>free phone cards, discounted transaction fees and cash
rebates based on points accumulated for each customer&#146;s check cashing transactions. We
record a refund obligation as a reduction of revenue based on the cost of expected point
redemption. </B></U> Since inception, approximately 6.6&nbsp;million customers have joined the ACE
Plus program. Approximately 2&nbsp;million customers have used their ACE Plus card in the last
12&nbsp;months. By the end of calendar 2004, we plan on introducing a significantly enhanced
loyalty program encompassing all customer transactions.

</DIV>




<P align="left" style="margin-left:5%; font-size: 10pt">The Company advises the Staff that in future filings it will provide additional disclosures
substantially similar to the following in Note 1 to the Company&#146;s Consolidated Financial
Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><B><I>Incentive Program Accounting. </I></B><B>We offer a free loyalty and retention program
called ACE Plus which rewards customers with free phone cards, discounted transaction fees
and cash rebates based on points accumulated for each customer&#146;s check cashing
transactions. We record a refund obligation as a reduction of revenue based on the cost of
the expected point redemption. The accrued liability for ACE Plus incremental costs was
$156,000, $184,000, and $182,000 as of June&nbsp;30, 2004, 2003 and 2002, respectively. </B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Security &#150; page 15</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>14.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and in the footnotes to the financial statements to discuss
whether you receive any indemnification in the form of insurance for these losses and, if
so, how you account for it.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its business description:

<P>
<DIV style="width: 100%; border-top: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">





<P align="left" style="margin-left:5%; font-size: 10pt"><B>Security</B>



<P align="left" style="margin-left:5%; font-size: 10pt">Employee safety is critical to us. Almost all company-owned store employees work behind
bullet-resistant Plexiglas&#174; and steel-reinforced partitions. Each company-owned store&#146;s
security measures include safes, alarm systems monitored by third parties, teller area
entry control, perimeter opening entry detection and tracking of all employee movement in
and out of secured areas. All stores are currently using a centralized security system
through a third-party provider. The centralized security system includes identical alarm
systems in all stores, remote control activated alarms, arming/disarming and changing user
codes and mechanically and electronically controlled time-delay safes. <U><B>Although we do
not have a contractual indemnification agreement with our security provider for the full
amount of store losses, any amounts received from the security </B></U>

</DIV>



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<DIV style="width: 100%; border-bottom: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>provider as compensation for losses (which have historically been minimal) are recorded
in store expenses as a reduction of the loss. Under our crime insurance policy for store
theft, no claims were made in fiscal 2004, 2003 or 2002. Under our crime insurance policy
for self-service machines, no claims were made in fiscal 2004 and claims recovered in
fiscal 2003 and 2002 were recorded as a reduction of the loss. </B></U>

</DIV>



<P align="left" style="margin-left:5%; font-size: 10pt">The Company advises the Staff that in future filings it will provide additional disclosures
substantially similar to the following in Note 1 to the Company&#146;s Consolidated Financial
Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Store Expenses</I>



<P align="left" style="margin-left:5%; font-size: 10pt">The direct costs incurred in operating the stores and our self-service machines (&#147;SSMs&#148;)
have been classified as store expenses and are deducted from total revenue to determine
contribution attributable to the stores. Store expenses include salary and benefit expense
of store employees, rent and other occupancy costs, depreciation of store property, bank
charges, armored and security costs, loan losses, net returned checks, cash shortages, and
other costs incurred by the stores and for the SSMs (whether or not located in a store).
<U><B>Although we do not have a contractual indemnification agreement with our security
provider for the full amount of store losses, any amounts received from the security
provider as compensation for losses (which have historically been minimal) are recorded in
store expenses as a reduction of the loss. Any claims recovered under our crime insurance
policies also are recorded in store expenses as a reduction of the loss.</B></U>

</DIV>



<P align="left" style="font-size: 10pt"><U><B>Relationship with Republic Bank &#150; page 16</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>15.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to provide a detailed discussion of the various services you provide to
Republic Bank and how each of those services generates revenue. We note the significance
of this relationship to your operations. Also, revise to discuss termination rights of
this agreement by each party.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its business description:

<P>
<DIV style="width: 100%; border-top: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">


<P align="left" style="margin-left:5%; font-size: 10pt"><B>Relationship with Republic Bank</B>



<P align="left" style="margin-left:5%; font-size: 10pt">We are party to a marketing and servicing agreement with Republic Bank. Under this
agreement, we provide various services to Republic Bank in connection with our marketing
and servicing of Republic Bank&#146;s short-term consumer loans in exchange <U><B>for a portion of
the interest charged by Republic Bank based on loan volume. These services include
advertising, application processing and collecting payments from Republic Bank&#146;s
customers</B></U><B>. </B>As of June&nbsp;30, 2004, Republic Bank was offering its loans in 359 of our
company-owned stores in Arkansas, Pennsylvania and Texas. Approximately 9.7% and 3.9% of
our total revenues in fiscal 2004 and 2003, respectively, were derived from fees paid to us
by Republic Bank. <U><B>The term of our </B></U>

</DIV>



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<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>agreement with Republic Bank expires January&nbsp;1, 2006, but either party may terminate
this agreement at an earlier date if (i)&nbsp;the non-terminating party fails to timely cure a
material default under, or an inaccurate representation or warranty in, the agreement, (ii)
aggregate net charge offs exceed a contractual percentage of the aggregate fees we
originate during any quarter, (iii)&nbsp;either party&#146;s performance under the agreement is
rendered illegal or materially adversely affected as a result of changes in law, (iv)&nbsp;the
terminating party is notified by any governing regulatory agency that such party&#146;s
performance of its obligations under the agreement may be unlawful, unsafe or unsound or
may jeopardize such party&#146;s standing or rating with such agency, or (v)&nbsp;the non-terminating
party is bankrupt or is in receivership. Although net charge-offs have typically exceeded
the contractual percentage, thereby giving rise to an ability by either party to terminate
the agreement, neither party has exercised its ability to terminate. In addition, provided
we are not in default under the agreement, we may terminate this agreement at an earlier
date if Republic Bank ceases to fund the short-term consumer loans we market or Kentucky or
other applicable law is amended or changed in a manner that has an adverse effect on us.
The parties have recently commenced negotiation of an extension of the January&nbsp;1, 2006
expiration date. No assurance can be given that we will reach agreement or that the terms
will be acceptable. </B></U>

</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>16.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and elsewhere, as appropriate, to clarify the basis for recording
a liability for loan losses payable to Republic in other liabilities instead of in the
allowance for loan losses. Disclose the authoritative basis for your accounting.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following here
and in the appropriate sections throughout the document:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Republic Bank approves and owns the loans made by Republic. We provide various
services to Republic Bank in connection with our marketing and servicing agreement in
exchange for a fee. Since the Republic loans are not owned by ACE, we do not record the
Republic loans as loans receivable on our books. However, under our agreement with
Republic Bank, we are obligated to reimburse Republic Bank an amount equal to the net
amount charged off by Republic Bank. Therefore, we record a liability for our anticipated
payments to Republic Bank for losses on their loans, partially offset by amounts due to us
from Republic Bank.</B></U>

</DIV>




<P align="left" style="margin-left:5%; font-size: 10pt">The Company supplementally advises the Staff that it bases its accounting on FAS 5, Accrual
of Loss Contingencies, which requires liabilities to be recognized when they are both
probable and the loss can reasonably be estimated. As the Company is contractually<BR>
obligated to reimburse Republic Bank for loan losses and the loan loss amounts can be
reasonably estimated based on the Company&#146;s prior experience with similar loans, it records
a payable to Republic Bank in current liabilities. The Company believes this presentation
is appropriate.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>17.</B>&nbsp;&nbsp;</TD>
    <TD><B>On page 43, we noted that your agreement with Republic Bank can be terminated by
either party if the quarterly loan loss rate of Republic Bank loans exceeds a</B></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">14
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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD><B>specified level. Please disclose the contractual specified level and the actual level for
each period reported.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company notes to the Staff that the
specific quarterly loan loss level is confidential information that was granted
confidential treatment by the Securities and Exchange Commission in response to the
Company&#146;s confidential treatment request submitted when it filed the original agreement as
Exhibit&nbsp;10.1 to the Company&#146;s Form 10-Q for the quarter ended March&nbsp;31, 2003. In addition,
the Company supplementally advises the Staff that since the specific quarterly loan loss
level consistently exceeds the specified level and neither party has exercised its ability
to terminate, the Company continues to believe that the disclosure of such confidential
information would cause substantial competitive harm to the Company, but provides no
meaningful information to investors. Therefore, the Company respectfully submits that
disclosure of the specified quarterly loan loss rate is inappropriate.


<P align="left" style="font-size: 10pt"><U><B>Relationships with the Money Order and Moneygram Suppliers &#150; page 18</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>18.</B>&nbsp;&nbsp;</TD>
    <TD><B>You disclose here that in Note 3 to the financial statements you describe the
security agreement with Moneygram. We have reviewed Note 3 and are unable to locate the
associated discussion. Please advise or revise, including the amount of and nature of the
assets underlying the subordinated lien.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
Note 3 to the Company&#146;s Consolidated Financial Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><B>NOTE 3. FINANCING ARRANGEMENTS AND MONEYGRAM AGREEMENT</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><I>Fiscal 2004 Credit Facilities </I></U>



<P align="left" style="margin-left:5%; font-size: 10pt">&#091;to be inserted at end of current disclosure under this heading&#093;



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Our payment and performance of obligations under the credit agreement are secured by
first priority liens on all or substantially all of our company and subsidiaries&#146; (other
than Ace Funding&#146;s) assets. All of our subsidiaries (other than Ace Funding) guarantee the
obligations under the credit agreement. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Our payments and obligations to Travelers Express Company, Inc. under the Money Order
Agreement and the Money Transfer Agreement (regarding MoneyGram services) are secured by a
lien in favor of Travelers that is subordinated to the liens made pursuant to the credit
agreement. We entered into an Intercreditor Agreement dated as of July&nbsp;31, 2004 that
includes agreements regarding the priority of distributions to the credit agreement lenders
and Travelers Express upon foreclosure and liquidation of the collateral subject to these
security agreements</B></U><B>.</B>

</DIV>



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<P align="left" style="font-size: 10pt"><U><B>Legal Proceedings &#150; page 19</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>19.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and in the footnotes to the financial statements to disclose
managements&#146; assessment of threatened and pending litigation on your financial positions,
results of operations </B><U><B>and</B></U><B> cash flows.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response: </I>In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt">Management believes that no current <U><B>pending or threatened</B></U> legal proceedings will
result in any material impact on the Company&#146;s financial condition, results of operations
<U><B>and cash flows</B></U>.

</DIV>



<P align="left" style="margin-left:5%; font-size: 10pt">The Company advises the Staff that in future filings it will provide additional disclosures
substantially similar to the following in Note 17 to the Company&#146;s Consolidated Financial
Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>17. PENDING LAWSUITS AND SETTLEMENTS</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Management believes that no current pending or threatened legal proceedings will result
in any material impact on the Company&#146;s financial condition, results of operations and cash
flows</B></U>.

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations
&#150; page 25</B></U>



<P align="left" style="font-size: 10pt"><U><B>Critical Accounting Policies and Estimates &#150; page 25</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>20.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to include your policies for income taxes, goodwill, other intangibles
and self-insurance liabilities or supplementally advise as to why you do not consider them
critical. We note your disclosures on page 38.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: Please see the Company&#146;s response to Comment #21.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>21.</B>&nbsp;&nbsp;</TD>
    <TD><B>Your current disclosures seem to reiterate your accounting policies as set forth in
Note 1 to the financial statements. Please refer to Section&nbsp;V of Release Nos.
33-8350/34-48960 and revise this section to address the following for each critical
accounting policy:</B></TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Specifically identify why each policy is considered critical by management.</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Discuss why you could have selected estimates in the current period that would have
had a materially different impact on your financial presentation.</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Discuss why your accounting estimates bear the risk of change and describe the
potential impact on your financial statements.</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Discuss how accurate your estimates and assumptions have been in the past and how
much they have changed in the past.</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Include quantitative disclosure of your sensitivity to change based on other
outcomes that are reasonably likely to occur and that would have a material effect on
the company.</B></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">16
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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following
describing its critical accounting policies and estimates in the referenced section of its
MD&#038;A:

<P>

<DIV style="width: 100%; border-top: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Critical Accounting Policies and Estimates </I></B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates and
assumptions to determine the reported amounts of our assets, liabilities, revenues and
expenses. We base these estimates and assumptions upon the best information available to
us at the time the estimates or assumptions are made. The most significant estimates made
by our management, which we consider critical, include our allowance for loan losses and
accrued liability for loan losses payable to Republic Bank, valuation of goodwill, income
taxes, and valuation of self-insured liabilities, because these estimates and assumptions
could change materially as conditions both within and beyond our control change.
Accordingly, our actual results could differ materially from our estimates. The following
is a discussion of our critical accounting policies and the related management estimates
and assumptions necessary in determining the value of related assets or liabilities. A
full description of all of our significant accounting policies is included in Note
1&#151;Summary of Significant Accounting Policies to our consolidated financial statements
included in this Annual Report on </B><B>Form 10-K</B><B>. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Allowance for Loan Losses and Accrued Liability for Loan Losses Payable to Republic
Bank</I></B></U><B><I>.</I></B><U> <B>We establish an allowance for loan losses based on our estimates of the
amount of uncollectible loans in our loan portfolio. We also establish a liability for
loan losses payable to Republic Bank based on our estimates of the amount of uncollectible
loans in Republic Bank&#146;s loan portfolio. The loan loss allowance and liability to Republic
Bank are considered critical because they are material, subjective, and involve estimates.
We determine the required allowance and liability using information such as recent loan
loss experience and economic trends and conditions. While the estimates can be affected by
operations experience and regulatory changes, historically, our allowance and liability
levels have remained consistent as a percentage of their respective loan portfolios. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We regularly review our loss exposure to determine appropriate loss reserve amounts, as
well as to determine strategies that could minimize our future exposure. While we believe
our current allowance and liability are adequate, we could be negatively affected if we
experience a higher than historical level of losses in the short-term, which would require
us to increase our provision for loan losses and accrual for loan losses payable to
Republic Bank. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Goodwill. </I></B><B>From time to time, we acquire individual stores or a group of stores. When
we enter into these acquisitions, we value the underlying tangible and intangible assets
and record the excess of the purchase price over the net assets </B></U>

</DIV>


<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border-bottom: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>acquired as goodwill. We review the carrying value of goodwill annually or when events
and circumstances warrant such a review. We review the carrying value of goodwill using a
discounted cash flow model of the expected net cash flows of the business. The most
significant variables used in the model include expected revenues, incremental costs and
working capital requirements. We regularly compare actual results to expected performance,
but in the event we experience significant declines in revenue levels or significant
increases in operating costs, the value of goodwill could be impaired, and we might be
required to write-down the recorded value of goodwill. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Income Taxes. </I></B><B>We establish our deferred tax assets and liabilities based on our profits
or losses in each jurisdiction in which we operate. We periodically assess the likelihood
of realizing our deferred tax assets and adjust the related valuation allowance based on
the amount of deferred tax assets that we believe is more likely than not to be realized.
We base our judgment of the recoverability of our deferred tax asset primarily on
historical earnings, our estimate of current and expected future earnings, prudent and
feasible tax planning strategies, and current and future ownership changes. A significant
adverse change in any one or several of these factors would materially affect our
assessment of the likelihood of recoverability of our deferred tax assets and would impact
the amount of tax expense we record. Historically, we have fully recovered our deferred
tax assets as estimated. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B><I>Self-insurance liabilities. </I></B><B>We are self-insured for workers&#146; compensation, general
liability and medical liability claims not otherwise covered by third-party insurance
policies. The established self-insured reserves are determined by a review of actuarial
assessments and historical loss experience, and may be adjusted based on higher or lower
actual loss experience. In the event that we experience higher than expected losses, we
may be required to increase the levels of our self-insured liabilities and/or record a
charge to cover uninsured losses. Historically, our calculated reserves for self-insured
liabilities have been adequate. </B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Revenue Analysis &#150; page 26</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>22.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and in the footnotes to the financial statements to clarify where
you present revenues from incentives and bonuses paid under your various vendor
agreements. Provide a discussion of the effects of these revenues on your operations,
quantifying the amounts recorded as revenues in each period.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its MD&#038;A:

<P>
<DIV style="width: 100%; border-top: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>Revenue from guarantees, incentives and bonuses paid under vendor agreements (which
presently pertains only to money transfers and money orders) are recorded in their
respective revenue product line. The Travelers Express Agreement provides incentive
bonuses for opening new store locations at which MoneyGram services are offered as well as
certain other performance incentives. Incentive </B></U>

</DIV>



<P align="center" style="font-size: 10pt">18
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border-bottom: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>bonuses are recognized as revenue over the remaining term of the agreement. The
amounts recorded as guarantees, incentive and bonus revenue for the years ended June&nbsp;30,
2004, 2003 and 2002 are as follows: </B></U>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Year Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>(in thousands)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><U><B>Money transfers:</B></u></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><u><B>Incentive and store opening bonuses</B></u></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>2,559</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>2,528</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>2,491</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><u><B>Guarantee</B></u></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,326</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,470</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,678</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,885</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,998</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,169</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><u><B>Money order incentive bonus</B></u></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>854</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>950</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,000</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><u><B>Total guarantee and bonus revenue</B></u></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,739</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,948</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>5,169</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>



<P align="left" style="margin-left:5%; font-size: 10pt">The Company advises the Staff that in future filings it will provide additional disclosures
substantially similar to the following in Note 1 to the Company&#146;s Consolidated Financial
Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Revenue Recognition Policy</I>



<P align="left" style="margin-left:5%; font-size: 10pt">All of our store transactions are processed through our point-of-sale system.
Approximately 97% of our revenue results from transactions at the point-of-sale with our
customers, and approximately 66% of our revenue is effectively recognized when the
transaction is completed at the point-of-sale. These transactions include check cashing,
bill payment, money transfer, money order sales, and other miscellaneous products and
services grouped in &#147;other fees.&#148; The full amount of the check fee is recognized as
revenue at the time of the transaction with no allowance for anticipated returned checks.
We act in an agency capacity regarding bill payment services, money transfers, and money
orders offered and sold at our stores. We record the net amount retained as revenue
because the supplier is the primary obligor in the arrangement, the amount we earn per
transaction is fixed, and the supplier has the ultimate credit risk.<U> </U>



<P align="left" style="margin-left:5%; font-size: 10pt">We recognize contractual revenue guarantees from product or service providers in accordance
with the terms of the contracts under which they are paid. We amortize any bonus or
incentive payments from product or service providers over the term or duration of the
contracts under which they are made. The full amount of the check fee is recognized as
revenue at the time of the transaction with no allowance for anticipated returned checks.
<U><B>Revenue from guarantees, bonuses and incentives are</B></U> <U><B>recorded in their
respective revenue product line. </B></U>

</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>23.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise the Business section to provide an expanded discussion of your
agreements with payees under your bill payment business. Discuss the terms of these
relationships, including associated agreements and any fee arrangements with payees.</B></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its MD&#038;A:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Bill payments. </I>Our stores serve as payment locations for customers to pay many of their
utility, telephone and other bills to third parties and also serve as a distribution point
for bank-issued prepaid debit cards. Upon acceptance of the customer&#146;s bill payment, we
remit the amount owed to the third party on <U><B>the next business day</B></U> under an
agreement with that payee and either receive a service fee from the payee or collect a fee
from the consumer. <U><B>The agreements generally have a three-to-five year term, but
oftentimes renew automatically unless written notice is provided by either party.</B></U> We
offer these services primarily through agreements directly with various product and service
providers, such as Verizon, Sprint, TXU (a Texas utility company), and Baltimore Gas &#038;
Electric. <U><B>These agreements vary in term and fee structure based on estimated quantity
and volume of future customer payments</B></U><B>. </B>In fiscal 2004, we processed approximately
8.6&nbsp;million bill payment transactions <U><B>through agreements with 102 service providers for
revenue of $12.4&nbsp;million. </B></U>In fiscal 2003, we processed approximately 6.8&nbsp;million bill
payment transactions <U><B>through agreements with 66 service providers for revenue of $10.8
million. </B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Loan Portfolio &#150; page 32</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>24.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and throughout the document to include loan portfolio and
allowance for loan loss information for each period for which you present a statement of
earnings. We note the significant effect of these activities on earnings.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide the requested disclosure for each period for which the Company
presents a statement of earnings.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>25.</B>&nbsp;&nbsp;</TD>
    <TD><B>We note your allowance for loan loss roll-forward includes components related to your
loan portfolio and loans serviced for Republic. Since the risk characteristics are
different for each set of loans, in addition to your aggregated disclosure, please revise
to provide disaggregated roll-forwards for each set of loans. Furthermore, provide
quantified information of the reserves established by Republic in each period and the
activity in those reserves, clarifying how you determine your liability for amounts in
excess of Republic&#146;s established reserves. Revise your discussions of the activities in
the allowance for loan losses, in addition to your aggregated discussion, to discuss
separately the activity in each set of loans.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that the
discussion and table on page 32 includes only ACE Loans and no Republic Bank Loans, as
referenced in the lead-in to the table on page 32. Our relationship with Republic Bank and
the related liability for loans serviced for Republic Bank is discussed separately in the
&#147;Off-Balance Sheet Relationship with Republic Bank&#148; disclosure. Please refer to the
response to question 30 for the above referenced Republic Bank loan roll-forward schedule,
along with discussion regarding the determination of the loan loss liability to Republic
Bank.


<P align="center" style="font-size: 10pt">20
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>26.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to provide a roll-forward of your loans receivable for each period
presented in your financial statements, including originations, principle payments and
charge-offs.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its MD&#038;A:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Year Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B><u>(dollars in thousands)</u></B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>ACE Loans:</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Gross loans receivable,
beginning of period</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>21,734</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>29,569</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>27,768</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Originations</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>368,031</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>420,129</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>502,013</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Repayments</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(347,094</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(405,124</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(477,119</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Charge-offs</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(15,295</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(23,729</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(24,519</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Recoveries</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>287</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>889</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,426</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Gross loans receivable,
end of period</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>27,663</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>21,734</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>29,569</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>27.</B>&nbsp;&nbsp;</TD>
    <TD><B>We note that at the end of each fiscal quarter, you analyze the loan loss provision
and the allowance to determine if the allowance is adequate based on your understanding of
numerous factors, and if necessary, you make adjustments. As of each reported period end,
please disclose the amount of this adjustment and discuss the main qualitative items that
factored in your decision.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will disclose the requested information, including not only any changes in the
provision rate, but also when no change has occurred. For the years ended June&nbsp;30, 2004,
2003 and 2002, the loan loss provision rate was not adjusted.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>28.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please refer to paragraph </B><B>13(c)</B><B> of SOP 01-6 and revise to disclose your policy for
the following</B></TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Placing loans on non-accrual status (or discontinuing accrual of interest),</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Recording payments received on non-accrual loans,</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Resuming accrual of interest on non-accrual loans,</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><B>Determining past due or delinquency status (that is, whether past due status is
based on how recently payments have been received or contractual terms.)</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company supplementally advises the Staff
that the types of loans offered by ACE typically have a term of only two to four weeks, and
when the loan matures, the loan no longer accrues interest. All loans not paid on the due
date are considered delinquent. Even when payments are subsequently received for
delinquent loans, no additional interest is accrued on those loans. The Company&#146;s policy
is to charge off all of its ACE Loans that are 180&nbsp;days or more past due. In response to
the Staff&#146;s comment, the Company advises the Staff that in future filings it will disclose
the requested information.


<P align="center" style="font-size: 10pt">21
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>29.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to provide tabular disclosure of non-accrual loans and loans past due
ninety days or more at each balance-sheet date. Refer to paragraph </B><B>13(g)</B><B> of SOP 01-6.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the following table will be provided
regarding loans past due (non-accrual) and loans ninety days or more past due at each
balance sheet date:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Year Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B><u>(dollars in thousands)</u></B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>ACE Loans:</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Gross loans receivable,
end of period</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>27,663</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>21,734</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>29,569</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Loans past due (unpaid at due
date)</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>9,914</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,841</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>13,458</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>% of gross loans receivable</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>35.8</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>36.1</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>45.5</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Loans past due 90&#043; days</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>3,653</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>3,249</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,707</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>% of gross loans receivable</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>13.2</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>15.0</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>15.9</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>


<P align="left" style="font-size: 10pt"><U><B>Off-Balance Sheet Arrangement with Republic Bank</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>30.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise this section to provide a roll-forward of loans you service to Republic
for each period presented, enhancing your discussions of both the allowance for loan
losses and your contingent liabilities. Include originations, principle repayments and
charge-offs. Clearly identify the loans as not being included in your balance sheet.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response: </I>In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its MD&#038;A:


<P align="center" style="font-size: 10pt">22
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Year Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Republic Bank Loans:</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Gross loans receivable, beginning of period</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>10,356</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>Originations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>159,692</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>63,897</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B><u>Repayments</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(154,084</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(53,462</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B><u>Charge-offs</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(6,545</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B><u>Recoveries</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>15</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(79</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Gross loans receivable, end of period *</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9,434</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,356</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B><u>Liability for loan losses payable to
Republic Bank,
beginning of period</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,854</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B><u>Provision for loan losses payable to
Republic Bank</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(7,390</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,933</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B><u>Charge-offs</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,545</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B><u>Recoveries</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(15</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>79</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><u><B>Liability for loan losses payable to
Republic Bank,
end of period</B></u></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,714</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,854</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Net loans receivable</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>5,720</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,502</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Net loan charge-offs as a percent of volume</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>4.1</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><u>Liability as a percent of gross receivable</u></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>39.4</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>27.6</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left"><B><I><u>*</u></I></B></TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%"><B><I><u>Note: These loans are not carried on our balance sheet</u></I></B></TD>
</TR>

</TABLE>

</DIV>

<P>
<DIV style="width: 100%; border-top: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><B>Off-Balance Sheet Arrangement with Republic Bank</B>



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we market and service these Republic Bank loans, Republic Bank is responsible
for reviewing each loan application and determining whether such application is approved
for a loan. We are not involved in the loan approval process, including with respect to
determining the loan approval procedures or criteria, nor do we acquire or own any
participation interest in these loans. Consequently, Republic Bank loans are not included
in our loan portfolio or in our loans receivable and are not reflected on our balance
sheet. Under our agreement, however, we are obligated to reimburse Republic Bank by paying
it an amount equal to the net amount charged off by Republic Bank, regarding its loans in
our stores. Therefore, we could be obligated to pay Republic Bank for loan losses in an
amount up to the total outstanding amount of Republic Bank loans recorded on Republic
Bank&#146;s financial statements, which was $9.4&nbsp;million as of June&nbsp;30, 2004.



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of our economic exposure for losses related to the Republic Bank loans, we
have established a payable to reflect our anticipated losses related to uncollected
Republic Bank loans that are 180&nbsp;days or more past due. Though we have not had any
long-term experience with Republic Bank loans, we believe that the loss experience with
Republic Bank loans will be similar to the loss experience with our other loans <U><B>because
the loan products are similar in term, amount and credit quality</B></U>. Accordingly, the
payable for amounts due to Republic Bank for losses regarding Republic Bank loans has

</DIV>



<P align="center" style="font-size: 10pt">23
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border-bottom: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt">been established <U><B>using the same methodology discussed in the Loan Portfolio
disclosure</B></U>. We cannot assure you, however, that our estimates will be accurate, and if
the Republic Bank loan losses are materially greater than our recorded amount payable to
Republic Bank, our financial condition could be materially adversely affected.



<P align="left" style="margin-left:5%; font-size: 10pt">For the year ended June&nbsp;30, 2004, we provided approximately $7.4&nbsp;million for losses on
Republic Bank loans and charged-off $6.5&nbsp;million related to these loans. The balance of the
liability for Republic Loan losses reported in accrued liabilities as of June&nbsp;30, 2004 was
$0.7&nbsp;million.

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Self-Service Machine Funding Arrangement </B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>31.</B>&nbsp;&nbsp;</TD>
    <TD><B>We note your disclosure regarding the financing you obtained for the 2004 tax season.
Please discuss and analyze your strategies regarding the types of financing that are
reasonably likely to be available for future tax seasons. Discuss the impact on your cash
position and liquidity should these types of financing be unavailable.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
the referenced section of its MD&#038;A that is substantially similar to the following:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Self-Service Machine Funding Arrangements</I>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>We reduced the number of self-service machines in H&#038;R Block offices to 130 during the
fiscal 2005 tax season from 219 in fiscal 2004, thereby reducing our cash required to fund
the machines. In fiscal 2005, we are only utilizing the DZ Bank funding of $190&nbsp;million,
which extends through the 2007 tax season. We expect to have this or a similar type of
funding in place in the future. If this type of financing were not available, we would
need to evaluate the continuation of this service offering. </B></U>



<P align="left" style="margin-left:5%; font-size: 10pt"><U><B>The revenue and contribution to profit from this specific operation does not have a
material impact on the operations of the Company. The tax revenue generated from
self-service machines for the fiscal years ended June&nbsp;30, 2004, 2003 and 2002 was $4.3
million, $4.7&nbsp;million and $2.8&nbsp;million, respectively. </B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Financial Statements</B></U>



<P align="left" style="font-size: 10pt"><U><B>Consolidated Statements of Cash Flows &#150; page 57</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>32.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to classify cash flows from money orders as an operating activity as
these amounts represent the cash effects of transactions that enter into the determination
of net income. Refer to paragraph 21 of SFAS 95.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings, the Company&#146;s statement of cash flows will be revised as directed above.


<P align="center" style="font-size: 10pt">24
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>33.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to report the total store acquisition purchase price, net of cash
received, in the investing section of the statement of cash flows for all periods
presented.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings, the Company&#146;s statement of cash flows will be revised as directed above.


<P align="left" style="font-size: 10pt"><U><B>Note 1. Summary of Significant Accounting Policies &#150; page 58 </B></U>



<P align="left" style="font-size: 10pt"><U><B>Revenue Recognition Policy &#150; page 58</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>34.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise here and in the business section to specifically disclose the nature of
the products and services in which you act in an agency capacity. Clarify how you
considered EITF 99-19 in determining the appropriateness of your accounting.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
Note 1 to the Company&#146;s Consolidated Financial Statements and in the referenced section of
its business description:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Revenue Recognition Policy</I>



<P align="left" style="margin-left:5%; font-size: 10pt">All of our store transactions are processed through our point-of-sale system.
Approximately 97% of our revenue results from transactions at the point-of-sale with our
customers, and approximately 66% of our revenue is effectively recognized when the
transaction is completed at the point-of-sale. These transactions include check cashing,
bill payment, money transfer, money order sales, and other miscellaneous products and
services grouped in &#147;other fees.&#148; The full amount of the check fee is recognized as
revenue at the time of the transaction with no allowance for anticipated returned checks.
We act in an agency capacity regarding <U><B>bill payment services, money transfers, and
money orders</B></U> offered and sold at our stores. <U><B>We record the net amount retained as
revenue because the supplier is the primary obligor in the arrangement, the amount we earn
per transaction is fixed, and the supplier has the ultimate credit risk. </B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Accounts Receivable, Net &#150; page 59</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>35.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to disclose why you record an allowance on amounts due from business
partners, such as Republic and Moneygram, including the specific nature of the
uncertainties related to the collection of these receivables.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
Note 1 to the Company&#146;s Consolidated Financial Statements:


<P align="center" style="font-size: 10pt">25
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><B>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Accounts Receivable, Net</I>



<P align="left" style="margin-left:5%; font-size: 10pt">Accounts receivable, net, on the consolidated balance sheets as of June&nbsp;30, 2004 and 2003
were $5.6&nbsp;million and $9.4&nbsp;million, respectively, and include the receivable for fees
payable by Republic Bank, the receivable for incentive payments under the agreement with
MoneyGram Payment Systems, Inc., and other miscellaneous receivables net of an allowance
for doubtful accounts. <U><B>The allowance for doubtful accounts of $0.8&nbsp;million and $0.7
million as of June&nbsp;30, 2004 and 2003, respectively, relates to the collection of
miscellaneous receivables only, none of which included Republic or MoneyGram receivables
because historically we have not incurred any losses on these receivables. </B></U> Accounts
receivable, net, as of June&nbsp;30, 2003 also included the receivable for the insurance
settlement related to the Goleta Loan-related lawsuits of $4.7&nbsp;million.

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Derivative Instruments and Hedging Activities &#150; page 62</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>36.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please disclose the specific line items in your balance sheet, statement of earnings,
and statement of cash flows in which you report your derivative financial instruments and
their related gains and losses. Refer to Rule&nbsp;</B><B>408(n)(7)</B><B> of Regulation&nbsp;S-X.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response: </I>In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
Note 1 to the Company&#146;s Consolidated Financial Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Derivative Instruments and Hedging Activities</I>



<P align="left" style="margin-left:5%; font-size: 10pt">The interest-rate swaps resulted in an increase of interest expense of $0.4&nbsp;million, $1.9
million and $3.2&nbsp;million for the years ended June&nbsp;30, 2004, 2003 and 2002, respectively.



<P align="left" style="margin-left:5%; font-size: 10pt">The fair value of the interest-rate swaps increased by $847,000 and $61,000, net of tax,
during the years ended June&nbsp;30, 2004 and 2003, respectively, which have been recorded in
accumulated other comprehensive loss <U><B>and other current and non-current liabilities</B></U>.
The estimated net amount of existing losses expected to be reclassified into earnings
during the next fiscal year is $105,000.

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Note 2. Operating Segments &#150; page 66</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>37.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to provide the disclosures required by paragraph </B><B>32(c)</B><B> of SFAS 131 for
all period presented.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings, it will present the reconciliation of the segment&#146;s assets to the total
consolidated assets for all periods presented.


<P align="center" style="font-size: 10pt">26
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><U><B>Note 3. Financing Arrangements and Moneygram Agreement &#150; page 66</B></U>



<P align="left" style="font-size: 10pt"><U><B>Self-Service Machine Funding Arrangements &#150; page 69</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>38.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise to disclose the terms of the multi-year license agreement with H&#038;R
Block, including the number of years covered by the agreement, the nature and amount of
fees payable and all other material terms.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
Note 3 to the Company&#146;s Consolidated Financial Statements:

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 2px;">




<P align="left" style="margin-left:5%; font-size: 10pt"><I>Self-Service Machine Funding Arrangements</I>



<P align="left" style="margin-left:5%; font-size: 10pt">We placed 219 of our self-service check cashing machines in certain retail offices of H&#038;R
Block Tax Services, Inc. (&#147;H&#038;R Block&#148;) during the 2004 tax season. In accordance with a
license agreement between us and H&#038;R Block, the self-service machines are made available to
cash only tax refund anticipation loan checks of H&#038;R Block customers. <U><B>H&#038;R Block is
entitled to a portion of the tax fees collected varying by level of fees collected. Our
agreement with H&#038;R Block has a term through July&nbsp;1, 2006, and will automatically renew for
one-year periods thereafter absent 60&nbsp;days&#146; prior notice to terminate by either of the
parties. Either party may terminate the agreement at an earlier date if the
non-terminating party (i)&nbsp;fails to timely cure a default under the agreement or (ii)&nbsp;is
bankrupt or insolvent. </B></U>

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Note 11. Shareholders&#146; Equity &#150; page 75</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>39.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please revise your discussion of stock incentive plans to disclose the restrictions
placed on restricted stock awards and how those restrictions are cured.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide additional disclosures substantially similar to the following in
Note 11 to the Company&#146;s Consolidated Financial Statements:

<P>
<DIV style="width: 100%; border-top: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Employee Stock Incentive Plan. </I>We sponsor the 1997 Stock Incentive Plan, <I>wh</I>ich permits the
grant of stock options and restricted stock to eligible employees. <U><B>Restricted stock are
shares of our Common Stock that cannot be transferred by the holder until its restrictions
are lifted, usually in accordance with a vesting schedule of three to five years from the
date of grant.</B></U> The 1987 Stock Option Plan expired during fiscal 1998, though options
granted thereunder continued to be effective, in accordance with their terms, through
November&nbsp;2002. A total of 2,115,000 shares of our common stock may be issued upon exercise
of options or as restricted stock under the 1997 Stock Incentive Plan. As of June&nbsp;30,
2004, there were 1,605,887 shares of Common Stock reserved for grants of options or
restricted stock under the 1997 Stock Incentive Plan. Options and restricted stock are
granted at the sole discretion of the Board of Directors or its Compensation Committee to
selected ACE employees. Outstanding options are generally exercisable annually in
installments over a three- to four-year period from the date of grant at an exercise price
of not less than the fair market value at the grant date.

</DIV>


<P align="center" style="font-size: 10pt">27
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border-bottom: 1px solid black; border-left: 1px solid black; border-right: 1px solid black; padding: 2px;">



<P align="left" style="margin-left:5%; font-size: 10pt">The options expire at ten years after date of grant. Exercise prices for employee options
outstanding as of June&nbsp;30, 2004, ranged from $8.06 to $27.90 (fair market value on dates of
grant). The following table provides certain information with respect to stock options
outstanding and exercisable at June&nbsp;30, 2004, under the 1997 Stock Incentive Plan:

</DIV>


<P align="left" style="font-size: 10pt"><U><B>Note 20. Summarized Quarterly Financial Data (unaudited) &#150; page 80</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>40.</B>&nbsp;&nbsp;</TD>
    <TD><B>Please disclose the store gross margin in your quarterly financial data. Refer to
Item&nbsp;302(A)(1) of Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:5%; font-size: 10pt"><I>Response</I>: In response to the Staff&#146;s comment, the Company advises the Staff that in future
filings it will provide the requested store gross margin information in its quarterly
financial data table.


<P align="center" style="font-size: 10pt">* * *




<P align="left" style="margin-left:5%; font-size: 10pt">The Company acknowledges that:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>the Company is responsible for the adequacy and accuracy of the disclosure in the
filing;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing: and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>the Company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I hope the foregoing answers are responsive to your comments. Please do not hesitate to
contact me by telephone at (972)&nbsp;753-2314 or by fax at (972)&nbsp;582-1464 with any questions or
comments regarding this correspondence.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Sincerely,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ WILLIAM S. MCCALMONT
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">William S. McCalmont<BR>
Executive Vice President and<BR>
Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">28
</DIV>


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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
