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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
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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.
(c) Multiple license suspension or revocation.--The
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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