We believe it is in the best interests of all of our stakeholders to settle this lawsuit so as to avoid further expenses and management distractions in dealing with the suit.
Gordon Reykdal, Chairman and CEO, Cash Store Financial, formerly RentCash

Cash Store Financial, formerly Rentcash, announced today that, subject to court approval, it has settled a class action lawsuit commenced in 2004 for the restitution of brokerage fees and interest charged to customers of The Cash Store and Instaloans. The settlement is conditional on being approved by the court.

The class action lawsuit alleges that the brokerage fees, in combination with interest charged by The Cash Store and Instaloans on their customer loans, constituted interest charged in excess of the maximum rate prescribed by the Criminal Code of Canada.

Under the terms of the settlement, Cash Store Financial will pay $1.5 million in cash and $1.5 million in credit vouchers to customers of The Cash Store and Instaloans, outside of Alberta and British Columbia, who who repaid a payday loan plus the brokerage fees and interest in full. The credit vouchers may be used to pay existing outstanding brokerage fees and interest or to pay brokerage fees and interest which may arise in the future through new loans advanced to the customer. The credit vouchers are fully transferable and have no expiration date. In addition, Cash Store Financial is to pay the legal fees and costs of the Class in an amount approved by the Court.

Gordon Reykdal, Chairman and Chief Executive Officer of Cash Store Financial, stated that, "we are of the firm belief that our broker/lender business model complies with existing legislation and that our broker fees do not constitute interest. Nevertheless, we believe it is in the best interests of all of our stakeholders to settle this lawsuit so as to avoid further expenses and management distractions in dealing with the suit."

Cash Store Financial operates 370 branches in Canada and employs 1,500.