January 12, 2005, Introduced by Senator CLARK-COLEMAN and referred to the Committee on Banking and Financial Institutions.
A bill to regulate check cashing businesses; to provide for
licensing and fees; to prescribe the powers and duties of certain
state agencies and officials; and to provide for penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "check
cashing licensing act".
Sec. 2. As used in this act:
(a) "Applicant" means a person seeking a license under this
act.
(b) "Check" means a check, draft, money order, food stamp,
government warrant, or other instrument for the transmission or
payment of money.
(c) "Commissioner" means the commissioner of the department.
(d) "Department" means the office of financial and insurance
services.
(e) "Licensee" means a person licensed by the commissioner
under this act.
(f) "Person" means an individual, partnership, association,
corporation, limited liability company, or other legal entity
except a governmental agency.
Sec. 3. Except as provided in section 4, a person shall not
engage in the business of cashing checks for a fee or other
consideration without first obtaining a license under this act.
Sec. 4. (1) This act does not apply to the cashing of checks
by any of the following:
(a) A state or national bank or a state or federal credit
union, savings and loan association, or savings bank.
(b) A department or agency of a state or the United States.
(c) A foreign bank agency, as defined by section 1202 of the
banking code of 1999, 1999 PA 276, MCL 487.11202.
(d) A corporation or limited liability company with offices or
franchises in at least 20 states engaged in the business of cashing
checks.
(2) This act does not apply to the receipt of money by an
incorporated telegraph company at an office of the company for
immediate transmission by telegraph.
Sec. 5. (1) A person seeking a license to engage in the
business of cashing checks in this state shall file an application
with the commissioner in writing and under oath that includes all
of the following:
(a) The name and exact address of the applicant and the name
and address of 1 of the following:
(i) If the applicant is a corporation, its officers and
directors.
(ii) If the applicant is an association, its officers and
directors.
(iii) If the applicant is a partnership, its partners.
(iv) If the applicant is a limited liability company, either
its manager or managers if managed by a manager or managers, or its
members.
(v) If the applicant is any other legal entity, its manager or
other person designated to control the operation of that legal
entity.
(b) A copy of a certificate of an assumed name, if applicable.
(c) One of the following, as applicable:
(i) If the applicant is a corporation, a copy of the articles
of incorporation and bylaws.
(ii) If the applicant is a partnership, a copy of any
partnership agreement and partnership certificate.
(iii) If the applicant is a limited liability company, a copy of
the articles of organization and operating agreement.
(iv) If the applicant is an association, a copy of any
organizational documents of the association.
(2) At the time of filing the application, the applicant shall
do all of the following:
(a) Pay to the department a nonrefundable license fee of
$300.00 for 1 business location, and $150.00 for each additional
business location.
(b) Furnish financial statements to the department, in a form
satisfactory to the commissioner, showing the applicant has working
capital in excess of $5,000.00 for each of the applicant's business
locations and cash in excess of $25,000.00.
(c) Furnish a $5,000.00 surety bond for each of the
applicant's business locations issued by a bonding company or
insurance company authorized to do business in this state and in a
form satisfactory to the commissioner, to secure the performance of
the obligations of the applicant with respect to the receipt of
money in connection with the cashing of checks.
(d) File an appointment of the commissioner as the agent for
service of process in this state.
Sec. 6. After the applicant files the application and complies
with section 5(2), the department shall investigate the financial
responsibility, financial and business experience, and character
and general fitness of the applicant. If the department finds these
factors and qualities meet the requirements of this act and
reasonably warrant the belief that the applicant's business will be
conducted honestly, fairly, equitably, carefully, efficiently, and
in a manner commanding the confidence and trust of the community,
the commissioner shall issue to the person a license to engage in
the business of cashing checks.
Sec. 7. On or before January 1 of each year, a licensee shall
pay a license renewal fee of $300.00 for its principal business
location, and $150.00 for each additional business location, and
submit a renewal application in the form prescribed by the
commissioner. The commissioner shall renew the license if, after
considering all relevant factors and any comments or complaints
about the licensee, the commissioner determines the licensee is in
compliance with this act.
Sec. 8. (1) A licensee shall conduct the business of cashing
checks only at locations approved by the commissioner.
(2) A license issued under this act is not transferable, but
with the prior written approval of the commissioner, the licensee
may change its name or principal address.
Sec. 9. A licensee shall not contract for, receive, impose,
assess, or collect a charge or fee for the cashing of a check that
exceeds 1 of the following percentages of the face amount of the
check, as applicable:
(a) Five percent for a payroll, pension, or government check.
(b) Seven percent for a check from an insurance company,
including, but not limited to, a private health or disability
insurance plan payment.
(c) Ten percent for a personal check, money order, or other
check.
Sec. 10. (1) The commissioner shall not deny, suspend, or
revoke a license issued under this act before notice is sent to the
applicant or licensee setting forth in writing the reasons for the
denial, suspension, or revocation. Within 5 days after receipt of
the notice, the applicant or licensee may make written demand for a
hearing. The commissioner with reasonable promptness shall hear and
determine the matter as provided by the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328. If the applicant or
licensee considers itself aggrieved by the order of the
commissioner, the applicant or licensee may appeal within 30 days
from the date of the order to the circuit court in the manner
provided by the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328. If an appeal is taken from an order revoking
a license, the effect of the order may be stayed by the court
pending the final determination of the appeal.
(2) The commissioner may conduct investigations and hearings
as the commissioner considers necessary to determine whether a
licensee or other person has violated this act, or whether a
licensee has conducted business in a manner that justifies
suspension or revocation of its license.
(3) The commissioner may subpoena witnesses, documents,
papers, books, records, and other evidence in a matter over which
the commissioner has jurisdiction, control, or supervision. The
commissioner may administer oaths and affirmations to a person
whose testimony is required.
Sec. 11. The commissioner shall promulgate rules that are
necessary for the administration of this act under the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328.
Sec. 12. A licensee shall maintain accurate and complete
books, accounts, and records of its check cashing business in a
form satisfactory to the commissioner, and shall preserve the
books, accounts, and records for not less than 3 years.
Sec. 13. (1) A person who violates this act is guilty of a
misdemeanor, punishable by a fine of not more than $500.00, or
imprisonment for not more than 90 days, or both.
(2) Each transaction in violation of this act constitutes a
separate offense.