[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1095 Introduced in House (IH)]
1st Session
H. R. 1095
To establish a State system of licensing or registering persons engaged
in a business which regularly and primarily charges fees for cashing
checks, and to provide for insured financial depository institutions to
cash checks issued by States or the United States.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 1, 1995
Mr. Fields of Louisiana introduced the following bill; which was
referred to the Committee on Banking and Financial Services
_______________________________________________________________________
A BILL
To establish a State system of licensing or registering persons engaged
in a business which regularly and primarily charges fees for cashing
checks, and to provide for insured financial depository institutions to
cash checks issued by States or the United States.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Check Cashing Act of 1995''.
SEC. 2. STATE LICENSE OR REGISTRATION REQUIRED FOR CHECK CASHING
BUSINESSES.
(a) In General.--A person, other than a depository institution,
shall not engage in business in a State as a check cashing business
unless--
(1) the State has established a system for licensing or
registering check cashing businesses that is approved by the
Commission in accordance with section 3;
(2) the person is licensed by or registered with the State
under that approved State system, as applicable; and
(3) the person engages in that business in accordance with
the requirements under that system for licensing or
registration, as applicable.
(b) Penalty.--Any person that violates subsection (a) shall be
subject to a civil penalty of not more than $5,000, which may be
assessed by Commission.
(c) Effective Date.--Subsections (a) and (b) shall take effect on
the date that is 2 years after the date of the enactment of this Act.
(d) Limitation on Application to Existing Businesses.--Subsections
(a) and (b) shall not apply to engagement by a person in business in a
State as a check cashing business in the 1-year period beginning on the
date of approval of a check cashing business licensing or registration
system of the State under section 3, if the person engaged in that
business in the State on the date of the enactment of this Act.
SEC. 3. APPROVAL OF STATE CHECK CASHING BUSINESS LICENSING OR
REGISTRATION SYSTEM.
(a) In General.--Any State may apply to the Commission in
accordance with this section for approval of a State check cashing
business licensing or registration system.
(b) Requirements for Approval.--The Commission may approve a State
check cashing business licensing or registration system under this
section if the Commission finds that the system consists of State laws
that--
(1) prohibit any person from engaging in business in the
State as a check cashing business, unless the person--
(A) holds a license issued under the system, or
(B) in the case of a registration system, is
registered with the State under the system;
(2) prohibit the issuance of a check cashing business
license to a person or the registration of a person as such a
business, as applicable, unless the person--
(A) identifies to the State--
(i) all persons that are officers of the
business; and
(ii) all persons that own or control more
than 5 percent of the total ownership interest
in the business;
(B) complies with bonding or minimum capital
requirements established by the State;
(3) require that any person that engages in business in the
State as a check cashing business shall--
(A) post a schedule of all fees charged for
providing check cashing services, in a manner that is
conspicuous to the public;
(B) issue a receipt for each check cashing service
provided, that shows the amount of the check or other
instrument with respect to which the service is
provided, the fee charged for the service, and the date
the service is provided; and
(C) post the name and address of the State agency
responsible under State law for administering the
system, in a manner that is conspicuous to the public;
(4) prohibit any person from charging any fee for providing
a check cashing service, that is greater than the amount of fee
authorized for that service by the State;
(5) establish a centralized system for filing of check
cashing business licensing or registration documents, as
applicable;
(6) establish criteria for refusal, suspension, and
revocation of check cashing business licenses or registrations,
as applicable;
(7) establish criminal or civil penalties (or both) for
violations of the State laws;
(8) ensure the submission to the Commission of any changes
in the State laws described in this subsection; and
(9) comply with such additional requirements as may be
established by the Commission in regulations issued under
subsection (f).
(c) Limitation on Approval of Systems Providing Reciprocity.--The
Commission may not approve a State check cashing business licensing or
registration system under this section if the laws of the State
authorize the licensing or registration of a person under the system,
as applicable, on the basis of the person having been licensed or
registered under the laws of another State and without having to comply
with all requirements applicable under the laws of the State that
comprise the system.
(d) Submission, Review, and Approval of State Applications.--
(1) Submission of application.--A State may submit an
application to the Commission for approval of a State check
cashing business licensing or registration system under this
section--
(A) in the 1-year period beginning on the date of
the issuance of regulations under subsection (f), in
the case of a State which on the date of the enactment
of this Act does not prohibit, and has in effect laws
that establish requirements for, the operation of a
check cashing business;
(B) in the 2-year period beginning on that date of
issuance in the case of a State which on that date of
enactment does not prohibit, and does not have in
effect laws that establish requirements for, the
operation of a check cashing business; or
(C) in the 60-day period beginning on the date of
the enactment by the State of any law that repeals a
prohibition on the operation of check cashing
businesses, in the case of a State which on the date of
the enactment of this Act has in effect laws that
prohibit the operation of all check cashing businesses.
(2) Review and approval by commission.--The Commission
shall, by not later than 1 year after the date of submittal of
an application by a State under this subsection--
(A) approve the State system if the system complies
with the requirements for approval under subsection
(b); or
(B) disapprove the State system, recommend to the
State such changes in the system as are necessary for
approval, and provide the State one additional year to
make changes in State law to effect those changes.
(e) Review of Changes in Approved State Systems.--
(1) General.--Not later than 1 year after the date of
submission to the Commission of any change in the laws
described in subsection (b) of a State that has an approved
State system, the Commission shall--
(A) review the change to determine whether the
change is in accordance with the requirements for
approval of the system under subsection (b);
(B) approve the change as being in accordance with
those requirements, or disapprove the change as not
being in accordance with those requirements; and
(C) notify the State of that approval or
disapproval, including with any notification of
disapproval a description of such modifications to
State law as are necessary for the system to continue
to be an approved State system.
(2) Subsequent review; revocation of approval.--After
notifying a State under paragraph (1)(B) that the Commission
disapproves a change in the approved State system of the State,
the Commission shall--
(A) review any further modifications in the laws of
the State that have been enacted; and
(B)(i) approve the change and modifications if they
are in accordance with the requirements for approval
under subsection (b); or
(ii) revoke the Commission's approval of the State
system if they are not in accordance with those
requirements.
(f) Regulations and Guidelines.--
(1) In general.--Not later than 60 days after the date of
the enactment of this Act, the Commission shall issue
regulations and guidelines for the submission of applications
and approval of State check cashing business licensing and
registration systems under this section.
(2) Additional requirements.--Regulations issued under this
subsection may include requirements for approval of such
systems in addition to the requirements under this section as
the Commission considers necessary to protect persons who
provide check cashing services, ensure the free flow of
commerce, or protect the monetary system of the United States.
(g) Rule of Construction.--This Act shall not be construed to
prohibit a State from establishing, assessing, collecting, and using
fees in the administration of a check cashing business licensing or
registration system under this Act.
SEC. 4. PROHIBITION ON REFUSAL BY INSURED DEPOSITORY INSTITUTION TO
CASH GOVERNMENT CHECKS.
(a) Prohibition.--An insured depository institution shall not
refuse to cash a government check, and an insured credit union shall
not refuse to cash a government check presented by a member of the
insured credit union, if--
(1) the check is presented for cashing by an individual who
is the payee of the check, and is properly endorsed by each
individual who is a payee of the check;
(2) the individual who presents the check for cashing
provides sufficient identification;
(3) the check and the identification documents required
under paragraph (2) do not bear evidence of forgery, fraud,
counterfeiting, alteration, or other tampering; and
(4) the face value of the check is less than $2500.
(b) Penalty.--An insured depository institution or insured credit
union that violates subsection (a) shall be liable for a civil penalty
of not more than $500 for each violation, which may be assessed by--
(1) the State agency having primary responsibility under
State law for administering an approved State system;
(2) the State agency having primary responsibility under
State law for administering laws regulating banking, in the
case of a violation in a State that does not have an approved
State system; or
(3) the person having responsibility under subsection (c)
for enforcing this section with respect to the depository
institution.
(c) Enforcement.--The requirements of this section shall be
enforced--
(1) under section 8 of the Federal Deposit Insurance Act
(12 U.S.C. 1818) by the Office of the Comptroller of the
Currency, with respect to national banks, and Federal branches
and Federal agencies of foreign banks;
(2) under section 8 of that Act by the Board of Governors
of the Federal Reserve, with respect to member banks of the
Federal Reserve System (other than national banks), branches
and agencies of foreign banks (other than Federal branches,
Federal agencies, and insured State branches of foreign banks),
commercial lending companies owned or controlled by foreign
banks, and organizations operating under section 25 or 25(a) of
the Federal Reserve Act;
(3) under section 8 of that Act by the Board of Directors
of the Federal Deposit Insurance Corporation, with respect to
banks insured by the Federal Deposit Insurance Corporation
(other than members of the Federal Reserve System) and insured
State branches of foreign banks;
(4) under section 8 of that Act by the Director of the
Office of Thrift Supervision, with respect to any savings
association the deposits of which are insured by the Federal
Deposit Insurance Corporation;
(5) under the Federal Credit Union Act (12 U.S.C. 1752 et
seq.) by the Administrator of the National Credit Union
Administration, with respect to any insured credit union; and
(6) under the Farm Credit Act of 1971 (12 U.S.C. 2001 et
seq.) by the Farm Credit Administration, with respect to any
Federal land bank, Federal land bank association, Federal
intermediate credit bank, or production credit association.
(d) Rules of Construction.--This section shall not be construed
to--
(1) prohibit an insured depository institution from
charging fees to cash Government checks; or
(2) prohibit or preempt a State from establishing
requirements or limitations with respect to the charging of
fees by insured depository institutions for check cashing
services, that are different than State requirements or
limitations that apply to persons that are not insured
depository institutions.
SEC. 5. DISPENSING OF FEDERAL AND STATE GOVERNMENT BENEFITS BY
COMMUNITY DEVELOPMENT CREDIT UNIONS.
(a) Limitation on Authority of National Credit Union
Administration.--The National Credit Union Administration Board may not
prohibit any Federally chartered credit union from dispensing benefits
under any Federal or State assistance program (including benefits under
the Aid to Families with Dependent Children program under title IV of
the Social Security Act (42 U.S.C. 601 et seq.)) that are authorized to
be dispensed by a check cashing service.
(b) Study.--After the date that is 2 years after the date of the
enactment of this Act, and not later than 3 years after that date of
enactment, the Comptroller General of the United States shall conduct a
study and submit a report to the Congress on the effectiveness and
efficiency of the dispensation of benefits under Federal and State
assistance programs (including benefits under the aid to families with
dependent children program under title IV of the Social Security Act
(42 U.S.C. 601 et seq.) through federally chartered credit unions.
SEC. 6. STUDY OF DEBIT CARD SYSTEMS OF BENEFIT PAYMENTS AND BENEFIT
CHECK DELIVERY.
Not later than 9 months after the date of the enactment of this
Act, the Comptroller General of the United States shall conduct a study
and submit a report to the Congress on--
(1) the effects of requiring the use of a debit card system
for making all benefit payments by the Federal Government; and
(2) other innovative ways to enhance and upgrade the
current methods by which the Federal Government delivers
benefit payment checks.
SEC. 7. DEFINITIONS.
(a) In General.--As used in this Act--
(1) the term ``approved State system'' means a State check
cashing business license or registration system that is
approved by the Commission under section 3;
(2) the term ``check cashing business'' means a person that
regularly and primarily engages in the business of providing
any check cashing service for a fee and not in exchange for
goods or services;
(3) the term ``check cashing service'' means--
(A) the issuance, redemption, or cashing of a 2-
party or multi-party check or similar negotiable
instrument;
(B) the sale, redemption, or cashing of a travelers
check, money order, or similar negotiable instrument by
an agent of the issuer of the instrument that is
authorized to do so; or
(C) the transmittal of money by wire, in any form
or by any method or manner;
(4) the term ``Commission'' means the Federal Trade
Commission;
(5) the term ``depository institution'' has the meaning
given that term in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813(c));
(6) the term ``Federally chartered credit union'' means a
credit union having an organization certificate approved by the
National Credit Union Board under section 102 of the Federal
Credit Union Act (123 U.S.C. 1752a);
(7) the term ``government check'' means any check issued by
the United States or any agency of the United States;
(8) the term ``insured depository institution'' has the
meaning given that term in section 3(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(c));
(9) the term ``insured credit union'' has the meaning given
that term in section 101(7) of the Federal Credit Union Act (12
U.S.C. 1752(7));
(10) the term ``State'' means the 50 States, the District
of Columbia, and the territories and possessions of the United
States; and
(11) the term ``sufficient identification'' means--
(A) a valid driver's license that bears the name
and address of the person providing the license as
identification;
(B) a valid photo-identification card issued by a
State or Federal agency; or
(C) a valid United States passport.
(b) Terms Relating to Enforcement of Section 4.--A term used in
section 4 that is not defined in this Act shall have the meaning given
that term by--
(1) section 3(s) of the Federal Deposit Insurance Act (12
U.S.C. 1813(s)); or
(2) in the case of a term not defined in the Act referred
to in paragraph (1), section 1(b) of the International Banking
Act of 1978 (12 U.S.C. 3101).
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