Dollar Financial (DLLR) Expects to Settle Class Action Lawsuit in Ontario

Dollar Financial Corp (NASDAQ: DLLR) commented today on the expected settlement of its Ontario class action litigation, in which the plaintiffs claimed that the business model used by the Company's Canadian subsidiary, National Money Mart Company, resulted in the collection of fees in excess of the statutory limit for the payday loans made since 1997 to a group of NMMC's customers.

In connection with this settlement, Jeff Weiss, the Company's Chairman and Chief Executive Officer stated, "The Government of Ontario is expected to implement balanced regulation in 2009, with National Money Mart already being one of the first companies in Ontario to be licensed under the Payday Loans Act of 2008. Now is a prudent time to put the past behind us and focus management attention on the new business model we expect to implement under the new Act, and the potential future opportunities this Act should provide."

Mr. Weiss continued, "While we admit no wrong doing and are comfortable that our Canadian payday loan business model operates within the guidelines of all legal jurisdictions, this settlement will allow us to avoid the continuing substantial litigation expense that would be expected, as well as the significant drain on management resources being devoted in defense of this claim. We also expect that the defaulted debt forgiveness and transaction credits will be welcomed by customers, allowing them access to NMMC's full suite of needed financial products. This would include many customers who may not have been using NMMC services recently, as a result of outstanding historical indebtedness to the company that will now be forgiven."

The Summary Settlement Agreement includes:

1. Periodic payments over the next two years aggregating C$27.5 million in cash, consisting of:
   
   • C$7.5 million paid to Plaintiff's counsel in trust upon signing the Summary Settlement Agreement,
     
   • C$2.5 million upon final approval of the settlement by the Court,
     
   • C$10.0 million to be paid on July 15, 2010, and
     
   • C$7.5 million to be remitted on July 15, 2011.
2. NMMC will release approximately C$43.0 million of defaulted indebtedness of class members that has built up since 1997, and which is still outstanding as of the date the settlement is approved by the Court. NMMC will take steps to notify all such class members that, as a result of this defaulted debt amnesty program, they will be returned to a status in good standing at any Money Mart location throughout Canada.
   
3. NMMC will provide C$30.0 million in transaction credits for this broad group of customers, which can be applied in C$5.00 increments to future product transactions on most of NMMC's products.

The settlement agreement still requires final Court approval and there can be no assurance that this agreement and the proposed settlement terms will receive such approval. The Company expects to record a charge of C$27.5 million associated with the scheduled cash payments, and an additional amount that will be based on the expected value of the transaction credits utilized under the settlement provisions. For financial statement purposes, the Company's loss provisioning policy requires that defaulted debt over six months of age is fully provisioned against in the Company's financial statements.

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