Gordon J. Reykdal, CEO of Cash Store Financial is taking home nearly $2.3 million in pay and bonuses this year thanks to record profits in the payday loan industry. His son, Barret J. Reykdal, who serves as president of the company, earned $720,761. The information is contained in a management information circular released this week.
As of September 1st, the publicly traded company had 22 payday outlets in Nova Scotia, more than half the provincial total. It operates under the names The Cash Store and Instaloans and charges $31 per $100 on its short-term loans, the maximum allowed under Nova Scotia regulations. A recent Coast cover story reported that people who borrow $300 at that rate would have to repay $393 out of their next paycheque.
Cash Store Financial released figures last month showing the Alberta-based company took in record quarterly revenues of nearly $50 million in the three months ending September 30th — up almost 20 percent over the year before. The company’s net income in the same period was up 37.5 percent to $7.7 million from $5.6 million the year before. The figures also showed that the company opened 120 new outlets in just over a year for a Canada-wide total of 544.
Last month during public hearings on the payday loan industry, Gordon Reykdal urged the Nova Scotia Utility and Review Board not to lower the $31 per $100 maximum rate — the highest in the country. Consumer advocate David Roberts argued that Nova Scotia should adopt the Ontario rate of $21 per $100. So far, the UARB has not released its decision. Money Mart, The Cash Store’s main competitor, charges $19.50 per $100.
A rate of $31 works out to more than 800 percent in annual interest and fees compared to an annual rate of around 36 percent on credit card advances, 21 percent for bank account overdraft protection or 10 percent on a bank line of credit.
This article appears in Dec 9-15, 2010.
Not to mention the former Liberal MP who shills for the Loan Shark Industry Association.
Self respect must not be in the lexicon of Liberals.
I wish Dexter would shut the loan stores down.
I mentioned in a comment to the cited original cover story that the payday loan industry is a symptom. It’s not the problem. It’s tempting to despise worms like Reykdal and his kid, but they’re not causing the problem. If poor people are living beyond their means (and all I mean by that is that they don’t get paid enough to live) then they *will* find a way to bridge the gap. The fact that they can’t get reasonable loans from banks or credit unions isn’t really the problem either, because a loan at reasonable interest for bad reasons (to bridge an operating deficit) is still a bad loan.
The central problem is that lots of families can’t break even, let alone save a pittance, on minimum wage. I don’t have a solution for that. Raising the minimum wage is no solution at all. But until such a time as people can make ends meet off their pay packet, there’s no point in quibbling over how they stave off inevitable financial ruin.