House Introduced Bill 4408

HOUSE BILL No. 4408

March 6, 2001, Introduced by Reps. Clark, Dennis, Hale, McConico, Bogardus, Garza, Thomas, Neumann, Frank, Jacobs, Reeves, Kolb, Switalski,
Callahan, Lipsey, Hardman, Williams, Woodward, Adamini, Rich Brown, Phillips, Anderson, Kilpatrick, Rison, Minore, Plakas, Waters, Murphy,
Lockwood, Hansen, Basham and Lemmons and referred to the Committee on Commerce.

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:

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Sec. 1. This act shall be known and may be cited as the

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"check cashing licensing act".

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Sec. 2. As used in this act:

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(a) "Applicant" means a person seeking a license under this

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act.

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(b) "Check" means a check, draft, money order, food stamp,

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government warrant, or other instrument for the transmission or

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payment of money.

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(c) "Commissioner" means the commissioner of the

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department.

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(d) "Department" means the office of financial and insurance

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services.

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(e) "Licensee" means a person licensed by the commissioner

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under this act.

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(f) "Person" means an individual, partnership, association,

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corporation, limited liability company, or other legal entity

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except a governmental agency.

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Sec. 3. Except as provided in section 4, a person shall not

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engage in the business of cashing checks for a fee or other con-

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sideration without first obtaining a license under this act.

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Sec. 4. (1) This act does not apply to the cashing of

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checks by any of the following:

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(a) A state or national bank or a state or federal credit

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union, savings and loan association, or savings bank.

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(b) A department or agency of a state or the United States.

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(c) A foreign bank agency, as defined by section 1202 of the

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banking code of 1999, 1999 PA 276, MCL 487.11202.

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(d) A corporation or limited liability company with offices

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or franchises in at least 20 states engaged in the business of

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cashing checks.

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(2) This act does not apply to the receipt of money by an

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incorporated telegraph company at an office of the company for

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immediate transmission by telegraph.

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Sec. 5. (1) A person seeking a license to engage in the

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business of cashing checks in this state shall file an applica-

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tion with the commissioner in writing and under oath that

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includes all of the following:

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(a) The name and exact address of the applicant and the name

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and address of 1 of the following:

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(i) If the applicant is a corporation, its officers and

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directors.

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(ii) If the applicant is an association, its officers and

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directors.

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(iii) If the applicant is a partnership, its partners.

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(iv) If the applicant is a limited liability company, either

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its manager or managers if managed by a manager or managers, or

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its members.

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(v) If the applicant is any other legal entity, its manager

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or other person designated to control the operation of that legal

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entity.

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(b) A copy of a certificate of an assumed name, if

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applicable.

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(c) One of the following, as applicable:

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(i) If the applicant is a corporation, a copy of the arti-

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cles of incorporation and bylaws.

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(ii) If the applicant is a partnership, a copy of any part-

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nership agreement and partnership certificate.

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(iii) If the applicant is a limited liability company, a

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copy of the articles of organization and operating agreement.

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(iv) If the applicant is an association, a copy of any orga-

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nizational documents of the association.

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(2) At the time of filing the application, the applicant

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shall do all of the following:

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(a) Pay to the department a nonrefundable license fee of

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$300.00 for 1 business location, and $150.00 for each additional

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business location.

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(b) Furnish financial statements to the department, in a

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form satisfactory to the commissioner, showing the applicant has

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working capital in excess of $5,000.00 for each of the

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applicant's business locations and cash in excess of $25,000.00.

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(c) Furnish a $5,000.00 surety bond for each of the

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applicant's business locations issued by a bonding company or

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insurance company authorized to do business in this state and in

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a form satisfactory to the commissioner, to secure the per-

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formance of the obligations of the applicant with respect to the

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receipt of money in connection with the cashing of checks.

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(d) File an appointment of the commissioner as the agent for

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service of process in this state.

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Sec. 6. After the applicant files the application and com-

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plies with section 5(2), the department shall investigate the

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financial responsibility, financial and business experience, and

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character and general fitness of the applicant. If the depart-

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ment finds these factors and qualities meet the requirements of

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this act and reasonably warrant the belief that the applicant's

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business will be conducted honestly, fairly, equitably, careful-

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ly, efficiently, and in a manner commanding the confidence and

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trust of the community, the commissioner shall issue to the

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person a license to engage in the business of cashing checks.

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Sec. 7. On or before January 1 of each year, a licensee

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shall pay a license renewal fee of $300.00 for its principal

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business location, and $150.00 for each additional business

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location, and submit a renewal application in the form prescribed

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by the commissioner. The commissioner shall renew the license

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if, after considering all relevant factors and any comments or

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complaints about the licensee, the commissioner determines the

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licensee is in compliance with this act.

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Sec. 8. (1) A licensee shall conduct the business of cash-

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ing checks only at locations approved by the commissioner.

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(2) A license issued under this act is not transferable, but

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with the prior written approval of the commissioner, the licensee

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may change its name or principal address.

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Sec. 9. A licensee shall not contract for, receive, impose,

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assess, or collect a charge or fee for the cashing of a check

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that exceeds 1 of the following percentages of the face amount of

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the check, as applicable:

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(a) Five percent for a payroll, pension, or government

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check.

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(b) Seven percent for a check from an insurance company,

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including, but not limited to, a private health or disability

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insurance plan payment.

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(c) Ten percent for a personal check, money order, or other

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check.

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Sec. 10. (1) The commissioner shall not deny, suspend, or

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revoke a license issued under this act before notice is sent to

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the applicant or licensee setting forth in writing the reasons

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for the denial, suspension, or revocation. Within 5 days after

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receipt of the notice, the applicant or licensee may make written

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demand for a hearing. The commissioner with reasonable

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promptness shall hear and determine the matter as provided by the

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administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

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24.328. If the applicant or licensee considers itself aggrieved

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by the order of the commissioner, the applicant or licensee may

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appeal within 30 days from the date of the order to the circuit

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court in the manner provided by the administrative procedures act

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of 1969, 1969 PA 306, MCL 24.201 to 24.328. If an appeal is

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taken from an order revoking a license, the effect of the order

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may be stayed by the court pending the final determination of the

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appeal.

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(2) The commissioner may conduct investigations and hearings

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as the commissioner considers necessary to determine whether a

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licensee or other person has violated this act, or whether a

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licensee has conducted business in a manner that justifies sus-

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pension or revocation of its license.

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(3) The commissioner may subpoena witnesses, documents,

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papers, books, records, and other evidence in a matter over which

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the commissioner has jurisdiction, control, or supervision. The

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commissioner may administer oaths and affirmations to a person

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whose testimony is required.

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Sec. 11. The commissioner shall promulgate rules that are

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necessary for the administration of this act under the adminis-

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trative procedures act of 1969, 1969 PA 306, MCL 24.201 to

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24.328.

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Sec. 12. A licensee shall maintain accurate and complete

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books, accounts, and records of its check cashing business in a

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form satisfactory to the commissioner, and shall preserve the

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books, accounts, and records for not less than 3 years.

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Sec. 13. (1) A person who violates this act is guilty of a

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misdemeanor, punishable by a fine of not more than $500.00, or

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imprisonment for not more than 90 days, or both.

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(2) Each transaction in violation of this act constitutes a

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separate offense.

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