Assembly Bill No. 211-Assemblymen Williams, Arberry, Herrera, Freeman, Ohrenschall, Bache, Carpenter, Amodei, Krenzer, Cegavske, Mortenson, Berman, Collins, Sandoval, Anderson, de Braga, Manendo, Tiffany, Ernaut, Goldwater, Perkins, Chowning, Buckley, Giunchigliani, Von Tobel, Hickey, Neighbors, Segerblom, Evans, Nolan, Price, Humke, Koivisto, Parks, Lambert, Lee, Dini and Braunlin
February 27, 1997
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Referred to Committee on Commerce
SUMMARY--Provides for regulation and licensure of check-cashing services. (BDR 55-1322)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to check-cashing services; providing for the regulation and licensure of check-cashing services; prohibiting certain acts relating to check-cashing services; providing a penalty; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Title 55 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 2 to 16, inclusive, of this act.
Sec. 2 As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 3 to 6, inclusive, of this act, have the meanings ascribed to them in those sections.
Sec. 3 "Cashing" means providing currency or a negotiable instrument in exchange for a check.
Sec. 4 "Check" means a check, draft or money order, but does not include a travelers check.
Sec. 5 "Check-cashing service" means any person engaged in the business of cashing checks for a fee, service charge or other consideration.
Sec. 6 "Licensee" means a person licensed to operate a check-cashing service pursuant to this chapter.
Sec. 7 1. Except as otherwise provided in subsection 2, it is unlawful to operate a check-cashing service without a license issued pursuant to this chapter.
2. The provisions of this chapter do not apply to:
(a) A bank, savings and loan association or credit union organized pursuant to the laws of the United States or any state within the United States.
(b) A person who is primarily engaged in the retail sale of goods or services who:
(1) As an incident to or independently of a retail sale or service from time to time cashes checks for a fee or other consideration of not more than $2; and
(2) Does not hold himself out as a check-cashing service.
(c) A person while performing any act authorized by a license issued pursuant to chapter 671 of NRS.
(d) A person who holds a nonrestricted gaming license issued pursuant to chapter 463 of NRS while performing any act in the course of that licensed operation.
Sec. 8 1. An application for licensure pursuant to this chapter must be made in writing, under oath and on a form prescribed by the commissioner. The application must include:
(a) If the applicant is a natural person, the name and address of the applicant.
(b) If the applicant is a business entity, the name and address of each partner, officer, director, principal and registered agent of the business entity.
(c) Such other information concerning the financial responsibility, background, experience and activities of the applicant and its partners, officers, directors and principals as the commissioner determines is necessary.
(d) The address of each location at which the applicant proposes to operate.
2. To receive a license to operate a check-cashing service, an applicant, its partners, officers, directors and principals must, in the determination of the commissioner, be:
(a) Financially responsible;
(b) Of good character and reputation;
(c) Experienced in business; and
(d) Generally fit to operate a check-cashing service efficiently, fairly, in the public interest and in accordance with law.
3. Each licensee and applicant shall have and maintain liquid assets of not less than $25,000 for each license.
4. The commissioner may make such investigations as he determines are necessary concerning the qualifications of an applicant.
5. Each application must be accompanied by a nonrefundable application fee of $250 and a nonrefundable investigation fee of $500. If a license is issued to an applicant, the payment of the application fee satisfies the required fee for the first year of licensure.
Sec. 9 1. The commissioner shall not grant a license to an applicant unless the commissioner has determined that the applicant has satisfied the requirements of section 8 of this act.
2. If an applicant is denied a license, the commissioner shall, by mail, notify the applicant in writing of the denial and the reasons therefor.
3. The applicant is entitled to a hearing before the commissioner on the denial if the applicant requests the hearing in writing within 30 days after the commissioner mails the notification required by subsection 2.
4. The commissioner shall reconsider the application at the hearing and issue a written order granting or denying the application. The decision of the commissioner is a final decision for the purpose of judicial review.
Sec. 10 Licenses expire annually and may be renewed upon the payment of a renewal fee of $250 and an additional fee of $50 for each branch location at which the licensee is authorized to operate under the license.
Sec. 11 It is unlawful for a licensee to:
1. Charge or collect a fee or other consideration for check-cashing in excess of:
(a) Three percent of the face amount of the check or $5, whichever is greater, for checks issued by the Federal Government, this state or any political subdivision of this state.
(b) Eight percent of the face amount of the check or $5, whichever is greater, for any other check.
2. Fail to post in a conspicuous place in every location at which he operates under a license issued pursuant to this chapter a notice that indicates the fees charged for cashing checks.
3. Fail to file with the commissioner a schedule of all fees charged at each such location.
4. Fail to deposit a check or present it for payment within 7 days after cashing it for a customer and endorse it in the name of the licensee.
5. Fail to provide to each customer cashing a check a receipt that includes the:
(a) Name or trade name of the licensee;
(b) Date of the transaction;
(c) Amount of the check that was cashed; and
(d) Fee charged for the transaction.
6. Engage in the business of:
(a) Making loans of money, credit, goods or other tangible items;
(b) Discounting notes, bills of exchange or other evidences of indebtedness; or
(c) Accepting deposits or bailments of money or other tangible items.
7. Use or cause to be published or disseminated any advertising that contains any false, misleading or deceptive statement of material fact.
8. Operate a check-cashing service at a location other than a location for which the service is licensed.
9. Cash a check made payable to a payee other than a natural person unless the licensee has appropriate documentation from the payee clearly indicating the authority of the natural person to cash the check on behalf of the payee.
Sec. 12 1. The commissioner shall adopt regulations that require a licensee to maintain in its offices such books, accounts and records as the commissioner requires. The books, accounts and records must be maintained separately from any other business in which the licensee is engaged and must be retained for a period prescribed by the commissioner.
2. The commissioner may examine the books, accounts and records at any time to determine whether the licensee is complying with the provisions of this chapter and any regulations adopted pursuant thereto.
Sec. 13 The commissioner may suspend or revoke a license issued pursuant to this chapter if, after a hearing, the commissioner determines that the licensee has:
1. Willfully:
(a) Violated any provision of this chapter or any regulation adopted pursuant thereto;
(b) Made a false statement of material fact on his application for a license;
(c) Refused to cooperate in an investigation conducted by the commissioner; or
(d) Failed to comply with an order of the commissioner.
2. Engaged in conduct that demonstrates a lack of the competency or trustworthiness which, in the determination of the commissioner, is necessary to operate a check-cashing service.
3. Been convicted of a felony or misdemeanor involving fraud, misrepresentation or deceit.
Sec. 14 1. If the commissioner determines that a person required to be licensed pursuant to this chapter has violated any provision of this chapter or any regulation adopted pursuant thereto, the commissioner may, after a hearing, order the person to cease and desist from the violation and comply with such provisions.
2. The commissioner may order any person required to be licensed pursuant to this chapter to refund to a customer any unlawful or excessive fee charged by the person for cashing a check for the customer.
3. The commissioner may impose an administrative fine, not to exceed $1,000 per violation, on any person required to be licensed pursuant to this chapter who violates an order issued pursuant to this section.
4. All money collected pursuant to this section must be deposited in the state general fund.
Sec. 15 The commissioner may adopt such regulations as are necessary to carry out the provisions of this chapter.
Sec. 16 A violation of section 7 or 11 of this act is a category D felony and shall be punished as provided in NRS 193.130. Each transaction or act that constitutes such a violation is a separate offense.
Sec. 17 The provisions of this act do not apply to offenses that are committed before October 1, 1997.