EMPLOYMENT AGREEMENT

AGREEMENT made as of the 17th day of December 2004, between People?s Choice Financial Corporation, a Maryland corporation (the ?Company?), and Dwayne Barfell (the ?Executive?).

The Executive is presently employed as an Executive Vice President and Co ? Chief Production Officer of the Company. The Company recognizes that the Executive?s contribution to the growth and success of the Company has been substantial. The Company desires to provide for the continued employment of the Executive and to make certain changes in the Executive?s employment arrangements with the Company which the Company has determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company?s management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive?s continued employment with the Company is contingent on his execution of this Employment Agreement. Any and all employment contracts, bonus plans and agreements, and all amendments to such employment contracts, bonus plans and agreements between Executive and People?s Choice Home Loan, Inc., a Wyoming corporation, shall be superseded in their entirety and rendered null and void upon the commencement date of this Agreement as provided in Section 2 below.

In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below (the ?Agreement?). Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.

2. Term. The employment of the Executive by the Company as provided in Section 1 will commence on the date of the completion of the Company?s private placement of shares of its common stock pursuant to Rule 144A of the Securities and Exchange Commission and end on December 31, 2007, unless further extended or sooner terminated as hereinafter provided. Commencing on January 1, 2006, and on each January 1 thereafter (each, an ?Anniversary Date?),, the term of the Executive?s employment shall automatically be extended for one (1) additional year, unless the Company or the Executive provides 90 days? written notice to the other prior to any such Anniversary Date that it or he does not wish that the Term of this Agreement to continue to be automatically extended as described above. In the event either party gives such notice, no additional automatic extensions shall take effect. For purposes of this Agreement, ?Term? shall mean the actual duration of Executive?s employment hereunder, taking into account any extensions or notices not to extend pursuant to this Section 2 or termination of employment pursuant to Section 7.

3. Position and Duties. The Executive shall serve as an Executive Vice President and Co ? Chief Production Officer for all Company Sales and Marketing and shall have responsibility and authority for all production and marketing channels co-equally with the other Co - Chief Production Officer and as may from time to time be assigned to the Executive by the Chief Executive Officer (?CEO?), to whom the Executive shall report directly, that are consistent with such responsibilities, duties and authority. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive?s performance of his duties hereunder or violate Section 9 or 10 of this Agreement.

4. Service on Committees. During the Term, the Executive agrees to continue to serve on committees specified by the CEO.

5. Place of Performance. In connection with the Executive?s employment by the Company, the Executive?s home office shall be his principal office, except for required travel on the Company?s business to the Company?s principal office and elsewhere to an extent substantially consistent with present business travel obligations.

6. Compensation and Related Matters.

(a) Base Salary. The Company shall pay the Executive a base salary annually (the ?Base Salary?), which shall be payable in periodic installments according to the Company?s normal payroll practices. The initial Base Salary shall be $225,000. During the Term, the Company?s board of directors (the ?Board?) or the Compensation Committee of the Board (the ?Compensation Committee?) shall review the Base Salary at least once a year to determine whether the Base Salary should be increased effective the following January 1; provided, however, that on January 1, 2006 and on each January 1 thereafter, the Base Salary shall be increased by at least 10 percent. The Base Salary, including any increases, shall not be decreased during the Term. For purposes of this Agreement, the term ?Base Salary? shall mean the amount established and adjusted from time to time pursuant to this Section 6(a).

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