UPDATE 1-Cash America to buy Mexico pawnshops for $90 mln

(Recasts; adds details)

Sept 29 (Reuters) - Payday lender Cash America International Inc (CSH.N) plans to buy an 80 percent ownership interest in 100 pawnshops in Mexico for an initial amount of about $90 million, to expand its presence to the region.

The initial payment will be in cash, with a supplemental payment based on future performance after two and a half years.

The deal is expected to close late in fourth quarter of 2008 and add to its results in 2009, Cash America said.

Cash America said the changes announced by Pennsylvania's banking regulators related to the company's online offering of cash advance products could lead to the discontinuation of the product in the state early in 2009.

The Fort Worth, Texas-based company also sees some material changes to the product in the state of Minnesota by late 2008, following similar changes by the state's regulators.

Payday lenders, who lend a few hundred dollars for a term of two weeks and at an interest as high as 800 percent, get hurt by changes in state laws that restrict charging of high rates.

Recently, Ohio state legislature passed a bill effectively capping the interest rate on payday loans at 28 percent, leading to the closure of many payday lending centres in the state.

Shares of Cash America closed at $37.99 Friday on the New York Stock Exchange. (Reporting by Anurag Kotoky in Bangalore; Editing by Himani Sarkar)