[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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