SUBCHAPTER 03L - CHECK-CASHING BUSINESSES

 

SECTION .0100 – ADMINISTRATIVE

 

04 NCAC 03L .0101          DEFINITIONS

(a)  As used in this Subchapter unless the context or the language of G.S. 53, Article 22 indicates a contrary intention, the following definitions shall apply:

(1)           "Any one maker" shall mean any single signatory on a personal checking account.

(2)           "Branch location" shall mean any location, including a mobile unit, but not the principal place of business, where the licensee holds itself out to the public as engaging in a check-cashing business.

(3)           "Business day" shall mean a calendar day, other than Saturday, Sunday or holiday.

(4)           "Check" shall mean a draft (other than a draft payable upon presentation of documentation such as securities) payable on demand and drawn on a bank.  The term "check" may also include any cashier's check or teller's check or other check, draft, or money order, but shall not include travelers checks or foreign denomination payment instruments.

(5)           "Conspicuously posted" shall mean placed in plain public view in such a location and in such a way and of such form and size and typeface that any person seeking the services of a licensee could easily see and read the contents of the posted notice.

(6)           "Controlling person" shall mean any person who owns or holds with the power to vote 10% or more of the equity securities of an applicant or licensee, or who has the power to direct the management and policy of the licensee.

(7)           "Draft" shall mean a written order to pay money signed by one person, the drawer who signs the document, to another person, the drawee.

(8)           "Liquid assets" shall mean cash, bank deposit accounts, and money market accounts or similar property owned by the applicant or licensee, plus undeposited checks cashed by a licensee, less any returned checks doubtful of collection and cash remittances due others.

(9)           "Location" shall mean any place of business where check-cashing activity is conducted.

(10)         "Mobile unit" shall mean a vehicle or other movable means from which the business of check cashing is conducted.

(11)         "Principal" shall mean any person who controls directly, or indirectly through one or more intermediaries, alone or in concert with others, a 10% or greater interest in a partnership, company, association or corporation; the owner of a sole proprietorship; any natural person acting with apparent authority for or on behalf of an owner, officer, member, or director of a licensee; or any natural person who directs the performance of other employees as manager of a branch of any licensee.

(12)         "Principal place of business" shall mean the location where the licensee holds itself out to the public as engaging in a check cashing business and which the licensee has declared to the Commissioner to be its main site of business operations.

(13)         "Receipt" shall mean a written record of the check-cashing transaction.

(b)  Unless a term is defined herein or in G.S. 53, Article 22, that term shall have the meaning given it, if any, by Article 3 "Negotiable Instruments" of Chapter 25, North Carolina Uniform Commercial Code.

 

History Note:        Authority G.S. 53C-2-1; 53C-2-2; 53-288;

Eff. July 1, 2000;

Amended Eff. November 1, 2013.

04 NCAC 03L .0102          FILINGS

Any application for a license, or any report, application for annual renewal, amendment to application, renewal notice or other document which is required by law or rule to be filed with the Commissioner shall be addressed as follows:

Office of the Commissioner of Banks

4309 Mail Service Center

Raleigh, North Carolina 27699-4309

or, if not mailed, then delivered to:

Office of the Commissioner of Banks

316 West Edenton Street

Raleigh, North Carolina  27603.

 

History Note:        Authority G.S. 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000;

Amended Eff. September 1, 2006.

 

SECTION .0200 - APPLICATION

 

04 NCAC 03L .0201          APPLICATION FOR LICENSE

(a)  Any person intending to engage in a check-cashing business pursuant to G.S. 53, Article 22 shall first be licensed by the Commissioner. An application shall be made on a form obtained from the Commissioner, and the completed application shall be filed pursuant to Rule .0102 of this Subchapter.

(b)  The application for license as a check-cashing business shall include a financial statement that is sufficient to show liquid assets of fifty thousand dollars ($50,000) as required by G.S. 53-279(a). 

(c)  The application for license as a check-cashing business shall further include:

(1)           the business address in North Carolina, mailing address, business telephone number, facsimile number, and  name of the supervisor or manager for the principal place of business and for each branch location;

(2)           the address where books and records for the business will be kept;

(3)           name, title, and business telephone number and facsimile number for the application contact person;

(4)           the applicant's federal employer identification number;

(5)           a declaration as to whether the applicant's business will be conducted as a sole proprietorship, a partnership, a limited liability company, or a corporation.

(d)  Each applicant shall provide a signed statement authorizing the Commissioner to run a credit report on the applicant and on each owner, partner, director, principal, controlling person thereof.

(e)  Each applicant shall provide a signed statement making full disclosure to the Commissioner concerning the following:

(1)           Any criminal proceedings pending against or criminal convictions entered against the applicant, its partners, directors, principal officers or controlling persons;

(2)           Any civil proceedings pending against or civil judgments entered against the applicant, its partners, directors, principal officers or controlling persons which involve fraud or dishonesty;

(3)           Any civil judgments entered against the applicant, its partners, directors, principal officers or controlling persons during the past 10 years which have remained partially or wholly unpaid;

(4)           Any of the following proceedings involving the applicant, its partners, directors, principal officers or controlling persons: bankruptcy, assignment for the benefit of creditors, receivership, consevatorship or similar proceeding;

(5)           Any proceedings brought by a state or federal administrative agency against the applicant, its partners, directors, principal officers or controlling persons;

(6)           Any judgments entered by state or federal administrative agency against the applicant, its partners, directors, principal officers, or controlling persons which involve fraud, dishonesty, or that reflect on the applicants' character and fitness to command the confidence of the public;

(7)           A description of the business experience, current business activities and education of the applicant, its partners, directors, principal officers and controlling persons.

(f)  The application shall be in writing and shall be verified by the oath of the applicant.

(g)  In addition to the documents and information described in this Rule, the Commissioner may require such additional information as he may deem necessary or helpful in order to perform the investigation required by required by G.S. 53-278 and to make the findings required by G.S. 53-279.

(h)  Incomplete application files may be closed and may be deemed denied without prejudice when the applicant has not submitted information requested by the Commissioner within 30 days of request.

 

History Note:        Authority G.S. 53-276; 53-278; 53-279; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0202          FEES

(a)  The initial fees required by G.S. 53-278(c) shall be submitted with the application for license and shall be made payable to the Commissioner.

(b)  The annual renewal fees required by G.S. 53-278(d) shall be submitted with the request for renewal of the license and shall be made payable to the Commissioner.

 

History Note:        Authority G.S. 53-278; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

SECTION .0300 - LICENSING

 

04 NCAC 03L .0301          ISSUANCE

Upon receipt of a completed application and payment of the investigation fee required by G.S. 53-278 the Commissioner shall investigate the applicant pursuant to G.S. 53-278 and G.S. 53-279. If the Commissioner finds that the applicant has met the provisions of G.S. 53-279, the Commissioner shall issue the applicant a license for use at the declared location.

 

History Note:        Authority G.S. 53-278; 53-279; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0302          NONTRANSFERABILITY OF LICENSE

(a)  A license granted hereunder shall be neither transferable nor assignable.

(b)  The circumstances under which the Commissioner shall deem a change in the licensee's organizational structure to constitute a transfer or assignment of the license shall include, but not be limited to, the following:

(1)           If the licensee is a corporation or limited liability company:

(A)          A change in ownership of 50% or more of the licensee's stock;

(B)          The conversion of the corporation or company into a general or limited partnership or sole proprietorship;

(2)           If the licensee is a general or limited partnership:

(A)          A change in one of the licensee's general partners;

(B)          The conversion of the general partnership into a limited partnership, corporation or sole proprietorship;

C)            The conversion of the limited partnership into a general partnership, corporation or sole proprietorship;

(3)           If the licensee is a sole proprietor:

(A)          The conversion of the sole proprietorship into a general or limited partnership or corporation;

(B)          The sale or assignment of all of the assets of the licensee's business to another person.

(c)  Upon a change in organization as set forth in Paragraph (b) of this Rule, the licensee's license shall become void and the licensee shall surrender its licensee to the Commissioner within 10 days of such change.  If the entity which results from the change in the licensee's organizational structure desires and intends to engage in a check-cashing business in this State, it shall apply for a license pursuant to Section .0200 of this Subchapter, and this application may be made prior to the effective date of said change.

 

History Note:        Authority G.S. 53-276; 53-278; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0303          ANNUAL RENEWAL OF LICENSE

On or before September 1 of each year, a licensee may renew its license by filing with the Commissioner an application for license renewal on a form available from the Commissioner, along with payment of renewal fees required under G.S. 53-278(d).  Absent such renewal each year, the license shall expire and become void on September 30 without further action by the Commissioner.

 

History Note:        Authority G.S. 53-276; 53-278; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

SECTION .0400 - OPERATIONS

 

04 NCAC 03L .0401          POSTING OF LICENSE OR BRANCH CERTIFICATE

A licensee shall obtain a branch location certificate for each location other than its principal place of business at which its business of cashing checks is conducted. The license or certificate must be conspicuously posted.

 

History Note:        Authority G.S. 53-276; 53-278; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0402          SURRENDER OF LICENSE

A licensee shall notify the Commissioner in writing of its decision to cease operations as a check-cashing business in this State within seven days of such decision.  A licensee shall surrender its license and branch certificates, if any, to the Commissioner no later than 30 days after it has voluntarily ceased operations in this State and within such shorter time as the Commissioner may order if operations end involuntarily.

 

History Note:        Authority G.S. 53-276; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0403          POSTING OF FEES

(a)  The notice of fees required by G.S. 53-280(c) shall be clear, legible, and in bold and blocked letters and numbers not less than one inch in height.  The information shall be posted in a conspicuous location in the unobstructed view of the public within the check casher's premises. 

(b)  A licensee shall file with the Commissioner on paper 8 1/2 x 11 inches a scaled duplicate of the notice required by G.S. 53-280(c) and Paragraph (a) of this Rule.

 

History Note:        Authority G.S. 53C-2-1; 53C-2-2; 53-280; 53-288;

Eff. July 1, 2000;

Amended Eff. November 1, 2013.

 

04 NCAC 03L .0404          CASH-OUT TRANSACTIONS

04 NCAC 03L .0405          LIMITATION ON DELAYED DEPOSIT CHECK CASHING

 

History Note:        Authority G.S. 53-92; 53-93; 53-281; 53-282; 53-288;

Eff. July 1, 2000;

Repealed Eff. January 1, 2013.

 

SECTION .0500 - BOOKS AND RECORDS: EXAMINATIONS

 

04 NCAC 03L .0501          BOOKS AND RECORDS

(a)  Each check-cashing business licensed by the Commissioner of Banks shall record all transactions of receipts and disbursements pertaining to checks cashed.  All entries shall be made as of the exact date the transactions occur.  A licensee shall maintain books and accounting records which shall include, at a minimum:

(1)           a daily transaction journal, or equivalent record, which shall show the customer's name for each transaction;

(2)           the written receipt required by G.S. 53-282(b); and

(3)           the bank statements of the licensee. If the statements are not maintained on the premises of the licensee, they must be made available upon request by the Office of the Commissioner of Banks.

(b)  These records shall be maintained at each business location and shall be made available by the close of business on the next business day upon request to the Commissioner of Banks or his designee for inspection or examination for a period of not less than three years from the date of final entry.

(c)  No books or records of the licensee required hereunder shall show any account or reflect any transaction other than those related to the check-cashing business within the provisions of the Check-Cashing Businesses Act.

(d)  Books and records retained by a licensee which arise from or relate to a prior accounting period may be maintained in the form of magnetic tape, magnetic disk, or other form of computer, electronic or microfilm media available for examination on the basis of computer printed reproduction, video display, or other medium so long as any books and records kept in such manner are convertible into legible, tangible documents within 72 hours of request of the Commissioner.  The time for such conversion may be extended if the Commissioner determines that the burden to the licensee of such conversion exceeds the benefit to the Commissioner and the public. 

 

History Note:        Authority G.S. 53C-2-1; 53C-2-2; 53-282; 53-288;

Eff. July 1, 2000;

Amended Eff. November 1, 2013.

 

04 NCAC 03L .0502          EXAMINATIONS; INVESTIGATIONS

(a)  The Commissioner of Banks may make such examination of the books, records, business locations, and operations of any licensee and at such times as may seem necessary or desirable to the Commissioner or his designee. Such examinations may be with or without advance notice to the licensee.

(b)  In addition to examinations authorized by G.S. 53-278(b) or G.S. 53-282(c), the Commissioner may request from licensees hereunder such reports and at such times as to him shall be necessary or advisable for the purpose of determining the general results of operations under G.S. 53, Article 22.  The Commissioner or his designee may also examine or investigate a licensee when the Commissioner has reasonable grounds to believe that a registrant has violated any law or regulation of this State, the Federal government or any agency thereof.

(c)  If a licensee fails to pay the costs of examination or investigation to the Commissioner within a reasonable time as required by G.S. 53-282(c), then the Commissioner may proceed to remedies contemplated by G.S. 53-284 et seq.

 

History Note:        Authority G.S. 53-278; 53-282; 53-284; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

SECTION .0600 - REPORTING AND NOTIFICATION REQUIREMENTS

 

04 NCAC 03L .0601          AMENDMENTS TO INFORMATION ON FILE WITH THE COMMISSIONER

(a)  A licensee shall notify the Commissioner within 30 days of any material change to information which it submitted to the Commissioner, whether provided in its initial application, in its request for annual renewal, or in any other report or information otherwise provided to the Commissioner.

(b)  Notification shall be accomplished by letter or by revision or modification of the appropriate portions of the application (whether initial or renewal).  If the licensee elects to revise or modify its initial application or annual renewal statement, it shall do so on pages obtained from the Commissioner.

(c)  For the purposes of this Rule, the term "material" shall mean any information which would be likely to influence the granting, revocation, or expiration of a license hereunder.  The term "material" shall include, but not be limited to:

(1)           changes in the licensee's corporate officers, partners, or business structure;

(2)           changes in the address of the licensee's main or branch offices and any names under which the licensee operates; or

(3)           changes which would render untrue, inaccurate, or misleading any of the disclosures made by the licensee in its application pursuant to Rule .0201 of this Subchapter.

 

History Note:        Authority G.S. 53-278; 53-283; 53-284; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0602          EXPANSION OR RELOCATION

A licensee shall notify the Commissioner of the opening of any new branch office or the relocation of its principal place of business or of any branch office at least 20 days prior to the effective date of such change.  The notification shall be on a form obtained from the Commissioner.  The notification shall provide an explanation of the reasons for such change and shall be accompanied by a certificate fee for the new branch certificate in the amount of fifty dollars ($50.00).  The Commissioner shall issue a revised branch certificate upon his receipt of the required notification, the satisfactory explanation, and the filing fee, and upon surrender of the licensee's inaccurate certificate.

 

History Note:        Authority G.S. 53-276; 53-278; 53-279; 53-283; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0603          IMPAIRMENT OF FINANCIAL REQUIREMENTS

A licensee shall immediately notify the Commissioner in writing if, at any time, it fails to meet the minimum liquid asset requirement of G.S. 53-279(a).

 

History Note:        Authority G.S. 53-279; 53-288; 53C-2-1; 53C-2-2;

Eff. July 1, 2000.

 

04 NCAC 03L .0604          REPORT OF INFORMATION TO COMMISSIONER FOR THE GENERAL ASSEMBLY

 

History Note:        Authority G.S. 53-92; 53-93;

Eff. July 1, 2000;

Repealed Eff. November 1, 2013.