Regular Session 2017-2018 House Bill 2453 P.N. 3590

PRINTER'S NO. 3590

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2453

Session of

2018

INTRODUCED BY ELLIS, THOMAS AND MILLARD, JUNE 4, 2018

REFERRED TO COMMITTEE ON COMMERCE, JUNE 4, 2018

AN ACT

Amending the act of February 18, 1998 (P.L.146, No.22), entitled

"An act regulating the check-cashing industry; providing for

the licensing of check cashers, for additional duties of the

Department of Banking and for certain terms and conditions of

the business of check cashing; and providing penalties for

money-laundering activities and violations of the act,"

amending the title of the act; in general provisions, further

providing for authority of the Department of Banking and

Securities; in licensing provisions, further providing for

license terms and fees; in enforcement, further providing for

suspension and revocation of license and civil penalties, for

change of status, for restrictions on business of licensee

and for civil penalty; and, in miscellaneous provisions,

further providing for applicability and repealing provisions

relating to report to General Assembly.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The title of the act of February 18, 1998

(P.L.146, No.22), known as the Check Casher Licensing Act, is

amended to read:

AN ACT

Regulating the check-cashing industry; providing for the

licensing of check cashers, for additional duties of the

Department of Banking and Securities and for certain terms

and conditions of the business of check cashing; and

providing penalties for money-laundering activities and

violations of the act.

Section 2. Sections 104, 302(b), 501, 502, 505, 507 and 1101

of the act are amended to read:

Section 104. Authority of department.

(a) General rule.--The department shall have the authority

to:

[(1) Issue rules, regulations and orders as may be

necessary for the administration and enforcement of this act.

(2) Examine any check, document, account, book, record

or file relating to a check casher's business or operation

during regular business hours at the check casher's principal

office or to make such other investigation as may be

reasonably necessary to administer and enforce this act.

(3) Conduct administrative hearings on any matter

pertaining to this act, issue subpoenas to compel the

attendance of witnesses and the production of checks,

documents, accounts, books and records at any such hearing,

which may be retained by the department until the proceedings

are completed, and administer oaths and affirmations to any

person whose testimony is required. In the event a person

fails to comply with a subpoena issued by the department or

to testify on any matter concerning which that person may be

lawfully interrogated, on application by the department the

Commonwealth Court may issue an order requiring the

attendance and testimony of such person and requiring the

production of checks, documents, accounts, books and records

or may institute contempt of court penalties.]

(1) Examine any instrument, document, account, book,

record or file of a licensee or any person having a

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connection to the licensee or make other investigation as may

be necessary to administer the provisions of this act. The

department may remove any instrument, document, account,

book, record or file of a licensee to a location outside of

the licensee's office. The costs of the examination shall be

borne by the licensee or the person subject to the

examination.

(2) Conduct administrative hearings on any matter

relating to this act, issue subpoenas to compel the

attendance of witnesses and the production of instruments,

documents, accounts, books and records at a hearing. The

instruments, documents, accounts, books and records may be

retained by the department until the completion of all

proceedings in connection with which the materials were

produced. A department official may administer oaths and

affirmations to a person whose testimony is required. In the

event a person fails to comply with a subpoena issued by the

department or to testify on a matter which the person may be

lawfully interrogated, on application by the department, the

Commonwealth Court may issue an order requiring the

attendance of the person, the production of instruments,

documents, accounts, books and records and the giving of

testimony.

(3) Request and receive information or records of any

kind, including reports of criminal history record

information from any Federal, State, local or foreign

government entity regarding an applicant for a license,

licensee or person related to the business of the applicant

or licensee, the cost of which shall be paid for by the

applicant or licensee.

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(4) Issue regulations, statements of policy or orders as

may be necessary for the proper conduct of the check casher

business by licensees, the issuance and renewal of licenses

and the enforcement of this act.

(5) Prohibit or permanently remove a person who violates

this act from working in the person's current capacity or in

any other capacity of the person related to activities

regulated by the department.

(6) Order a person to make restitution for actual

damages to consumers caused by any violation of this act.

(7) Issue cease and desist orders that are effective

immediately, subject to a hearing as provided under

subsection (b) within 14 days of the issuance of the cease

and desist order.

(8) Impose such other conditions as the department deems

appropriate.

(a.1) Hearings.--A person aggrieved by a decision of the

department may appeal the decision to the commission. The appeal

shall be conducted under 2 Pa.C.S. Ch. 5 Subch. A (relating to

practice and procedure of Commonwealth agencies).

(a.2) Injunctions.--The department may maintain an action

for an injunction or other process against a person to restrain

and prevent the person from engaging in an activity violating

this act.

(a.3) Final orders.--A decision of the commission or an

unappealed order of the department shall be a final order of the

department and shall be enforceable in a court of competent

jurisdiction. The department may publish final adjudications

issued under this section, subject to redaction or modification

to preserve confidentiality. The department shall regularly

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report violations of this act, enforcement actions and other

relevant information to the Nationwide Multistate Licensing

System and Registry.

(a.4) Appeals.--A person aggrieved by a decision of the

commission may appeal the decision under 2 Pa.C.S. Ch. 7 Subch.

A (relating to judicial review of Commonwealth agency action).

(b) Limitation.--The department may not require retail food

stores, which must register with the department, to register

with the Nationwide Multistate Licensing System and Registry.

Section 302. License terms and fees.

* * *

(b) [License renewal.--On May 1 of each year, upon payment

of an annual renewal fee of $350 for each fixed location or

mobile unit, the department shall renew the license if the

licensee is in compliance with the provisions of this act.] Term

and renewal.--A license shall be issued for a term not to exceed

14 months and may be renewed by the department each year on a

schedule set by the department upon application by the licensee

and the payment of $350 for each fixed location or mobile unit.

The licensee shall demonstrate to the department that it is

conducting the check casher business in accordance with the

requirements of this act and that the licensee or directors,

officers, partners, employees, agents and ultimate equitable

owners of 10% or more of the licensee continue to meet all of

the initial requirements for licensure required by this act,

unless otherwise determined by the department.

* * *

Section 501. Suspension and revocation of license and civil

penalties.

[(a) Acts of licensee.--The department, upon 60 days'

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written notice to the licensee and consistent with 2 Pa.C.S.

(relating to administrative law and procedure), may revoke,

suspend or decline to renew a license if it finds that the

licensee:

(1) has made any material misstatement in the

application for license;

(2) has violated any provision of this act or any order,

rule or regulation of the department issued under this act;

(3) has failed to comply with a subpoena issued under

authority of this act;

(4) has failed to maintain records as required under

this act or as prescribed by the department;

(5) has falsified a record required under this act or as

prescribed by the department;

(6) has refused to permit the department or its

designated representative to make examinations or

investigations authorized under this act;

(7) has failed to file a report with the department

within the time stipulated in this act;

(8) has been convicted of or pled guilty or nolo

contendere to, or has otherwise been adjudged in a final

judgment by a court of competent jurisdiction to have

committed, any of the following acts:

(i) a violation of 18 Pa.C.S. (relating to crimes

and offenses) regarding theft or fraud involving a

customer;

(ii) a violation of Federal or State law regarding

the reporting of currency transactions, including section

21 of the Federal Deposit Insurance Corporation Act (64

Stat. 873, 12 U.S.C. § 1829b) and sections 121 through

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124 of the act of October 26, 1970 (Public Law 91-508, 12

U.S.C. §§ 1951 through 1954);

(iii) a violation of 18 Pa.C.S. § 5111 (relating to

dealing in proceeds of unlawful activities) or any

Federal criminal statute related to money laundering or

conspiracy to launder money; or

(iv) any other felony as determined in accordance

with section 304(e); or

(9) has committed any act, the fact or condition of

which exists or is discovered to exist which, if it had

existed or had been discovered to exist at the time of filing

of the application for a license, would have been grounds for

the department to refuse to issue the license.

(b) Noncompliance notice.--The department shall provide to a

licensee notice of noncompliance with or a violation of this

act. The department shall permit the licensee a reasonable time

to comply with this act or to correct the violation. If the

licensee fails to comply or correct the violation, the

department may order that civil penalties be levied against a

licensee.

department may revoke, suspend or nonrenew only the particular

license for which grounds to do so may occur or exist, but if it

finds that such grounds are of general application to all places

of business or to more than one place of business operated by a

licensee, it may revoke, suspend or nonrenew all or some of the

licenses issued to the check casher.

(d) Issuance of another license.--Whenever a license has

been revoked, the department shall not issue another license

until the expiration of at least one year from the effective

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date of revocation of such license.

(e) Appeals.--A licensee may appeal the department's

suspension, revocation or nonrenewal of a license in accordance

with the procedures of 2 Pa.C.S. (relating to administrative law

and procedure).]

The department may suspend, revoke or refuse to renew a

license issued under this act if any fact or condition exists or

is discovered which, if it had existed or had been discovered at

the time of filing of the application for the license, would

have warranted the department to refuse issuance of the license

or if a licensee or director, officer, partner, employee,

mortgage originator or owner of a licensee has:

(1) Made a material misstatement in an application or

any report or submission required by this act or any

department regulation, statement of policy or order.

(2) Failed to comply with or violated any provision of

this act or any regulation or order promulgated or issued by

the department under this act.

(3) Engaged in dishonest, fraudulent or illegal

practices or conduct in a business or unfair or unethical

practices or conduct in connection with the check casher

business.

(4) Been convicted of or pleaded guilty or nolo

contendere to a crime of moral turpitude or felony.

(5) Permanently or temporarily been enjoined by a court

of competent jurisdiction from engaging in or continuing

conduct or a practice involving an aspect of the check casher

business.

(6) Become the subject of an order of the department

denying, suspending or revoking a license applied for or

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issued under this act.

(7) Become the subject of a United States Postal Service

fraud order.

(8) Failed to comply with the requirements of this act

to make and keep records prescribed by regulation, statement

of policy or order of the department, to produce records

required by the department or to file financial reports or

other information that the department by regulation,

statement of policy or order may require.

(9) Become the subject of an order of the department

denying, suspending or revoking a license under the

provisions of any other law administered by the department.

(10) Demonstrated negligence or incompetence in

performing an act for which the licensee is required to hold

a license under this act.

(11) Become insolvent due to the liabilities of the

applicant or licensee exceeding the assets of the applicant

or licensee, the applicant or licensee being unable to meet

the obligations of the applicant or licensee as they mature

or being in a financial condition that the applicant or

licensee cannot continue in business with safety to the

customers of the applicant or licensee.

Section 502. Change of status.

[(a) Notice to department.--]A licensee shall send written

notice to the department on any change in status including

address change, change of directors, owners or officers,

including the reason for the proposed change within 10 days of

the change of status.

[(b) Approval for sale or transfer of license.--A licensee

shall not sell, transfer or assign its check-casher license

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without the issuance by the department of a new license. In the

event a license is terminated, the former licensee shall

surrender it to the department.]

Section 505. Restrictions on business of licensee.

[(a) Advancement of moneys.--] No licensee shall at any time

cash or advance any money on a postdated personal check. A

licensee may cash a postdated government check, government

assistance check or payroll check so long as the date on the

check is no more than five days later than the date the check is

presented to the licensee and the fee charged by the licensee

for the transaction does not exceed the applicable fee provided

in section 503. No check-casher licensee shall engage in the

business of transmitting money or receiving money for

transmission, unless licensed or operating as an agent of a

licensee under the act of September 2, 1965 (P.L.490, No.249),

referred to as the Money Transmission Business Licensing Law.

[(b) Report of certain transactions.--A licensee shall

report to the department each transaction involving a check

drawn on the personal account of the maker which is also payable

to the maker in accordance with the requirements of 31 United

States Code § 5316 (relating to reports on exporting and

importing monetary instruments). The report shall be forwarded

to the department within ten days of the transaction and shall

include the name and address of the person on whose account the

check was drawn and the date of the transaction.]

Section 507. Civil penalty.

[Any person who is subject to the provisions of this act who

violates any of the provisions of this act shall be subject to a

civil penalty levied by the department of up to $2,000 for each

violation. The civil penalty shall specifically apply to

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licensed and unlicensed activity under this act. The department

may also recover the cost of investigating alleged violations.]

(a) Persons operating without licenses.--A person subject to

the provisions of this act and not licensed by the department

who violates a provision of this act or who commits any action

which would subject a license to suspension, revocation or

nonrenewal under section 501 may be fined by the department up

to $10,000 for each offense.

(b) Violation by licensee.--A person licensed under this act

or director, officer, owner, partner, employee or agent of a

licensee who violates a provision of this act or any act

enforced by the department or who commits any action which would

subject the licensee to suspension, revocation or nonrenewal

under section 501 may be fined by the department up to $10,000

for each offense.

Section 1101. Applicability.

This act shall not apply to any insured depository

institution or affiliate or service corporation of any

depository institution supervised or regulated by the

[Department of Banking] department, the National Credit Union

Administration, [the Office of Thrift Supervision,] the Federal

Deposit Insurance Corporation, the Comptroller of the Currency

or the Board of Governors of the Federal Reserve or the Federal

Reserve Banks. It also shall not apply to companies licensed by

the [Department of Banking] department under the act of April 8,

1937 (P.L.262, No.66), known as the Consumer Discount Company

Act, the act of September 2, 1965 (P.L.490, No.249), referred to

as the Money Transmission Business Licensing Law, unless

conducting activities regulated by this act[, the act of

December 12, 1980 (P.L.1179, No.219), known as the Secondary

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Mortgage Loan Act, and the act of December 22, 1989 (P.L.687,

No.90), known as the Mortgage Bankers and Brokers Act,] and 7

Pa.C.S. Ch. 61 (relating to mortgage loan industry licensing and

consumer protection), in the normal course of business with

specific relation to lending transactions and when engaged in

the activities regulated under these acts. It also shall not

apply to a retail food store licensed as a food establishment,

as defined in section 2 of the act of July 7, 1994 (P.L.421,

No.70), known as the Food Act, or a retail food store licensed

as a public eating or drinking place, as defined in section 1 of

the act of May 23, 1945 (P.L.926, No.369), referred to as the

Public Eating and Drinking Place Law, that receives less than 1%

of its annual gross revenue from cashing checks. A retail food

store location must register annually with the department, and

the provisions of sections 301(b)(4), 304(c)(3), 503, 507 and

509 shall apply to such a business entity. Each retail food

store location shall provide the department with the company

name, address and telephone number on a form prescribed by the

department and a $100 annual registration fee. Upon request, a

retail food store location shall demonstrate to the satisfaction

of the department that it receives less than 1% of its annual

gross income revenue from cashing checks.

Section 3. Section 1102 of the act is repealed:

[Section 1102. Report to General Assembly.

Three years from the effective date of this act, the

department shall provide a written report to the General

Assembly summarizing consumer complaints received by the

department relating to check-cashing activities and the methods

by which the complaints were addressed. The department shall

also make recommendations to the General Assembly regarding

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improvements to this act and the continuance of a licensing

program.]

Section 4. This act shall take effect in 60 days.

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