Nondepository financial institutions




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CHAPTER 668
NONDEPOSITORY FINANCIAL INSTITUTIONS

PART IV
CHECK CASHING SERVICES


Sec. 36a-580. (Formerly Sec. 36-564). Definitions. Applicability of provisions. (a) For purposes of this chapter:
(1) “General facility” means a facility at a fixed location where a licensee may engage in the business of cashing checks, drafts or money orders and which is open to the general public for at least six hours per day four days per week.
(2) “Limited facility” means a mobile facility, where on no more than two days per week, on property occupied by an employer, a licensed operator of a general facility may, under written contract with such employer, engage in the business of cashing payroll checks for the employees of the employer.
(b) The provisions of this section and sections 36a-581 to 36a-589, inclusive, shall not apply to: (1) Checks, drafts or money orders cashed without consideration or charge; (2) checks, drafts or money orders cashed as an incident to the conduct of any other lawful business where not more than fifty cents is charged for cashing such check, draft or money order; or (3) any institution subject to and under the general supervision of any agency of the United States or any Connecticut bank or Connecticut credit union.
(P.A. 88-200, S. 1; P.A. 94-122, S. 269, 340; P.A. 95-253, S. 12, 19; P.A. 05-192, S. 1; P.A. 06-35, S. 3.)
History: Sec. 21-111 transferred to Sec. 36-564 in 1991; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-564 transferred to Sec. 36a-580 in 1995; P.A. 95-253 added the definitions of “general facility” and “limited facility” as Subsec. (a) and designated prior provisions as Subsec. (b), effective July 6, 1995; P.A. 05-192 amended Subsec. (b)(3) to substitute “bank” for “entity”; P.A. 06-35 amended Subsec. (b)(3) to exempt Connecticut credit unions from licensure as check cashing licensees and to make a technical change, effective May 8, 2006.

Sec. 36a-581. (Formerly Sec. 36-565). License required. Application. (a) Except as provided for in section 36a-580, no person shall engage in the business of cashing checks, drafts or money orders for consideration without obtaining a license to operate a general facility or a license to operate a limited facility for each location where such business is to be conducted.
(b) Each licensee of a limited facility shall continuously maintain at least one operating general facility. A licensee of a limited facility shall not pay any compensation or consideration to any employer.
(c) An application for a check cashing license or renewal of such license shall be in writing, under oath and on a form provided by the commissioner. The application shall set forth: (1) The name and address of the applicant; (2) if the applicant is a firm or partnership, the names and addresses of each member of the firm or partnership; (3) if the applicant is a corporation, the names and addresses of each officer, director, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of such corporation; (4) if the applicant is a limited liability company, the names and addresses of each member and authorized agent of such limited liability company; (5) (A) the history of criminal convictions for the ten-year period prior to the date of the application of the applicant; the members, if the applicant is a firm or partnership; the officers, directors, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of the applicant, if the applicant is a corporation, and (B) sufficient information pertaining to the history of criminal convictions in a form acceptable to the commissioner on such applicant, members, officers, directors, authorized agent and shareholders as the commissioner deems necessary to make the findings under subsection (e) of this section; (6) each location where the check cashing business is to be conducted and the type of facility that will be operated at that location; (7) the business plan, which shall include the proposed days and hours of operation; (8) the amount of liquid assets available for each location which shall not be less than the amount specified in subdivision (7) of subsection (e) of this section; (9) for each limited facility, a copy of the executed contract evidencing the proposed arrangement between the applicant and the employer; and (10) any other information the commissioner may require.
(d) A licensee shall not change the name or the location specified on its license unless, prior to such change in name or location, the licensee files an application with the commissioner accompanied by the applicable name change fee or location transfer fee specified in section 36a-582 and receives the approval of the commissioner. A licensee of a limited facility shall not change its approved days and hours of operation unless, prior to any such change, the licensee files an application with and receives the approval of the commissioner. No licensee shall use any name other than the name specified on the license issued by the commissioner.
(e) Upon the filing of the required application and the applicable license and location fees, the commissioner shall investigate the facts and may issue a license if the commissioner finds that (1) the applicant is in all respects properly qualified and of good character, (2) if the applicant is a firm or partnership, each member of the firm or partnership is in all respects properly qualified and of good character, (3) if the applicant is a corporation, each officer, director, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of such corporation is in all respects properly qualified and of good character, (4) if the applicant is a limited liability company, each member and authorized agent is in all respects properly qualified and of good character, (5) granting such license would not be against the public interest, (6) the applicant has a feasible plan for conducting business, and (7) the applicant has available and shall continuously maintain liquid assets of at least ten thousand dollars for each general facility location and at least two thousand five hundred dollars for each limited facility location specified in the application. The commissioner may deny an application if the commissioner finds that the applicant or any member, officer, director or authorized agent or shareholder owning ten per cent or more of the outstanding stock of the applicant has been convicted, during the ten-year period prior to the date of application, of any misdemeanor involving any aspect of the check cashing services business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.
(f) An applicant or licensee shall promptly notify the commissioner, in writing, of any change in the information provided in its initial or renewal application for licensure or most recent renewal of such license.
(P.A. 88-200, S. 2; P.A. 89-178, S. 2, 8; P.A. 91-11, S. 1; P.A. 94-122, S. 270, 340; P.A. 95-253, S. 13, 19; P.A. 04-14, S. 1; P.A. 05-46, S. 8; 05-288, S. 223; P.A. 06-35, S. 4; P.A. 08-119, S. 8, 9; P.A. 09-208, S. 10, 12; P.A. 09-209, S. 40.)
History: P.A. 89-178 substituted the commissioner of banking for the commissioner of consumer protection in Subsec. (a); Sec. 21-112 transferred to Sec. 36-565 in 1991; P.A. 91-11 amended Subsec. (c) to insert Subdiv. indicators, adding provisions to require the commissioner, prior to issuing a license, to find a need in the community for the services to be provided by the applicant and that the applicant has a feasible business plan; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-565 transferred to Sec. 36a-581 in 1995; P.A. 95-253 amended Subsec. (a) to provide for separate licenses for general and limited facilities, added a new Subsec. (b) to require a licensee of a limited facility to maintain at least one general facility, relettered Subsec. (b) as (c) and amended Subsec. (c) by providing for the form of application and by adding Subdivs. (4) to (7), inclusive, re the contents of the application, added a new Subsec. (d) re change in location, in type of facility or in time of operation, relettered Subsec. (c) as (e) and amended Subsec. (e) by adding new Subdivs. (2) and (3) re applications by firms, partnerships or corporations, deleting former Subdiv. (3) re need for services, renumbering Subdivs. (4) and (5) as (5) and (6), respectively, and adding a fee for each limited facility in Subdiv. (6), effective July 6, 1995; P.A. 04-14 amended Subsec. (c) to insert new Subdiv. (4) requiring application to set forth the names and addresses of each manager and authorized agent if applicant is a limited liability company and to redesignate existing Subdivs. (4) to (8) as Subdivs. (5) to (9), respectively, amended Subsec. (d) to restate provisions and require approval of the commissioner for application for change in location, to provide that licensee of limited facility shall not change approved days and hours of operation unless licensee files application with and receives approval of commissioner, and to eliminate prohibition re change in the type of facility, amended Subsec. (e) to insert new Subdiv. (4) authorizing commissioner to issue license if commissioner finds that each manager and authorized agent is in all respects properly qualified and of good character if applicant is a limited liability company and to redesignate existing Subdivs. (4) to (6) as Subdivs. (5) to (7), respectively, and added Subsec. (f) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 amended Subsec. (d) to prohibit licensee from changing the name specified on license unless licensee files application, pays applicable name change fee specified in Sec. 36a-582 and receives approval of commissioner; P.A. 05-288 made a technical change in Subsec. (c)(7), effective July 13, 2005; P.A. 06-35 amended Subsec. (d) to prohibit licensee from using any name other than the name specified on the license issued by commissioner, and amended Subsec. (e) to delete reference to application fees and to insert reference to location fees; P.A. 08 119 amended Subsec. (c)(4) and Subsec. (e)(4) by replacing “manager” with “member”.

Sec. 36a-582. (Formerly Sec. 36-566). License and location fees. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. Expenses of examination. (a) Each applicant for a check cashing license shall pay to the commissioner a nonrefundable initial license fee of two thousand dollars and a nonrefundable location fee of two hundred dollars for each location, except that if such application is filed not earlier than one year before the date such license will expire, the applicant shall pay to the commissioner a nonrefundable initial license fee of one thousand dollars and a nonrefundable location fee of one hundred dollars for each location. Each licensee shall pay to the commissioner a nonrefundable (1) name change fee of one hundred dollars for each application to change a name, and (2) location transfer fee of one hundred dollars for each application to transfer a location. Each license issued pursuant to section 36a-581 shall expire at the close of business on September thirtieth of the odd-numbered year following its issuance unless such license is renewed, provided any license that is renewed effective July 1, 2007, shall expire on September 30, 2009, unless renewed. Each licensee shall, on or before September first of the year in which the license expires, pay to the commissioner a renewal license fee of one thousand five hundred dollars and a renewal location fee for each location of one hundred dollars for the succeeding two years, commencing October first. In the case of a license that expires on June 30, 2007, each licensee shall, on or before June 1, 2007, pay to the commissioner a renewal license fee of one thousand six hundred eighty-eight dollars and a renewal location fee of one hundred thirteen dollars. Any renewal application filed with the commissioner after September first, or in the case of a license that expires on June 30, 2007, after June 1, 2007, shall be accompanied by a one-hundred-dollar late fee and any such filing shall be deemed to be timely and sufficient for purposes of subsection (b) of section 4-182. Each licensee shall file with the commissioner, not later than September first of each even numbered year, the information required by subdivision (8) of subsection (c) of section 36a-581.
(b) If the commissioner determines that a check filed with the commissioner to pay a license or location fee has been dishonored, the commissioner shall automatically suspend the license or approval or a renewal license that has been issued but is not yet effective. The commissioner shall give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew such license and an opportunity for a hearing on such actions in accordance with section 36a-51.
(c) Each applicant or licensee shall pay the expenses of any examination or other investigation under sections 36a-580 to 36a-589, inclusive.
(d) No abatement of the license or location fee shall be made if the license is surrendered, cancelled, revoked or suspended prior to the expiration of the period for which it was issued.
(P.A. 88-200, S. 3; P.A. 89-178, S. 3, 8; P.A. 92-89, S. 16, 20; P.A. 94-122, S. 271, 340; P.A. 95-253, S. 14, 19; P.A. 04-14, S. 2; 04-257, S. 106; P.A. 05-46, S. 9; P.A. 06-35, S. 5; P.A. 09-208, S. 11.)
History: P.A. 89-178 substituted the commissioner of banking for the commissioner of consumer protection in Subsec. (a); Sec. 21-113 transferred to Sec. 36-566 in 1991; P.A. 92-89 increased the license fees in Subsec. (a) from $250 to $1,000; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-566 transferred to Sec. 36a-582 in 1995; P.A. 95-253 amended Subsec. (a) to change the license fee and renewal license fee and to add application and location transfer fees, and made technical changes to Subsecs. (b) and (c), effective July 6, 1995; P.A. 04-14 inserted new Subsec. (b), requiring commissioner to automatically suspend license or approval or renewal license if commissioner determines that a check filed to pay an application or license fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51, and providing that if commissioner determines a check filed to pay a location transfer fee has been dishonored, commissioner shall automatically suspend the location transfer approval pending revocation of such approval by commissioner and an opportunity for a hearing in accordance with Sec. 36a-51, and redesignated existing Subsecs. (b) and (c) as Subsecs. (c) and (d), respectively; P.A. 04-257 made a technical change in Subsec. (a); P.A. 05-46 amended Subsec. (a) to add Subdiv. (1) re nonrefundable name change fee of $100 for each application to change a name and to designate provision re location transfer fee as Subdiv. (2), amended Subsec. (b) to delete requirement for automatic suspension of location transfer approval if commissioner determines that check filed with commissioner to pay location transfer fee has been dishonored, and amended Subsec. (d) to delete provision re no abatement of location transfer fee; P.A. 06-35 amended Subsec. (a) to revise procedures and fees for application, renewal and expiration of licenses, changing period of validity of licenses from one to two years, deleting reference to application fee and inserting references to license and location fees, and imposing a $100 late fee for late filings of renewal applications, and amended Subsecs. (b) and (d) to delete reference to application fee and insert reference to location fee.

Sec. 36a-583. (Formerly Sec. 36-567). Posting of license. License not transferable or assignable. Surrender of license. The license for each facility shall be conspicuously posted in that facility during the hours of operation. Such license shall not be transferable or assignable. Not later than fifteen days after a licensee ceases to engage in this state in the business of cashing checks, drafts or money orders for consideration at a general facility or limited facility for any reason, including, but not limited to, a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner in person or by registered or certified mail its license for each location in which such licensee has ceased to engage in such business.
(P.A. 88-200, S. 4; P.A. 95-253, S. 15, 19; P.A. 08-119, S. 10.)
History: Sec. 21-114 transferred to Sec. 36-567 in 1991; Sec. 36-567 transferred to Sec. 36a-583 in 1995; P.A. 95-253 made technical changes re the contents, location and timing of the postings, effective July 6, 1995; P.A. 08-119 added requirement for surrender of license when licensee ceases to engage in the business of cashing checks, drafts or money orders for consideration.

Sec. 36a-584. (Formerly Sec. 36-568). Maximum fees for the cashing of state checks. Regulations. Maximum amount of check that may be cashed by check cashing licensee. Exceptions. Report. (a) A check cashing licensee shall not charge or collect in fees, charges or otherwise, a sum in excess of one per cent of the check for cashing a check drawn by the state of Connecticut and payable within this state to a recipient of public assistance, as provided in section 36a-304, if the check is negotiated to the licensee by the original payee of the check, and if the payee produces reasonable identification, as provided for in regulations adopted pursuant to section 36a-305.
(b) No check cashing licensee shall cash an item if the amount exceeds six thousand dollars. This subsection shall not apply to (1) the cashing of any check, draft or money order drawn by the United States, any state or any political subdivision of a state, or by any department, bureau, agency, authority, instrumentality or officer, acting in such officer’s official capacity, of the United States, any state or any political subdivision of a state, (2) the cashing of any check which has been certified by the depository institution on which it has been drawn, (3) the cashing of any check drawn by an insurance company for the payment of a claim, (4) the cashing of any check drawn by an attorney from the attorney’s clients’ funds account, and (5) the cashing of any check, draft or money order where the payee is not an individual as long as the licensee complies with all recordkeeping and reporting requirements specified in sections 36a-580 to 36a-589, inclusive.
(c) Not later than January 15, 2006, and quarterly thereafter, each check cashing licensee shall submit a report to the commissioner that specifies the type of checks cashed by such licensee and the number of checks cashed that exceed two thousand five hundred dollars during the previous calendar quarter.
(P.A. 88-200, S. 5; P.A. 89-178, S. 4, 8; P.A. 91-11, S. 2; P.A. 94-122, S. 272, 340; P.A. 95-253, S. 16, 19; P.A. 05-74, S. 2; 05-192, S. 2.)
History: P.A. 89-178 amended Subsec. (a) by imposing a cap of 1% per check on certain state checks and requiring the commissioner of banking to establish by regulation a fee schedule for other checks; Sec. 21-115 transferred to Sec. 36-568 in 1991; P.A. 91-11 added Subsec. (b)(1) to (4), inclusive, re exceptions to the maximum amount of a check that may be cashed by a check cashing service; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-568 transferred to Sec. 36a-584 in 1995; P.A. 95-253 changed “check cashing service” to “check cashing licensee”, effective July 6, 1995; P.A. 05-74 amended Subsec. (a) to make a technical change, effective June 2, 2005; P.A. 05-192 amended Subsec. (b) to substitute $6,000 for $2,500 as the maximum amount of check that may be cashed by check cashing licensee and add Subdiv. (5) re exception for cashing of any check where payee is not an individual, and added Subsec. (c) re quarterly report to commissioner.

Sec. 36a-585. (Formerly Sec. 36-569). Maximum fees set by Banking Commissioner. The commissioner shall, by regulation adopted in accordance with the provisions of chapter 54, establish the maximum fees which may be charged by a licensee for cashing a check, draft or money order drawn on a depository institution. No check cashing licensee shall charge any sum in excess of that established by such regulation or one dollar, whichever is greater. In establishing maximum fees under this section, the commissioner shall consider: (1) The effect any change in rates will have on consumers; (2) start-up costs, operational expenses, volume of business, and any other information the commissioner deems relevant. The licensee shall conspicuously post and at all times display, at each place of business, a schedule of fees permitted under sections 36a-580 to 36a-589, inclusive. The sum of any payment made by an employee or by an employer on behalf of the employee to a licensee of a limited facility for cashing payroll checks shall not exceed the percentage limitation for maximum fees established by the commissioner in regulations adopted pursuant to this section.
(P.A. 89-178, S. 5, 8; P.A. 94-122, S. 273, 340; P.A. 95-253, S. 17, 19; P.A. 05-192, S. 3.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-569 transferred to Sec. 36a-585 in 1995; P.A. 95-253 added the ceiling on the sum of payments to a licensee of a limited facility and changed “check cashing service” to “checking cashing licensee”, effective July 6, 1995; P.A. 05-192 established maximum fee of $1 or that established by regulation, “whichever is greater”.

Sec. 36a-586. (Formerly Sec. 36-570). Records to be maintained by check cashing licensee. Reporting requirements. (a) Each check cashing licensee shall use and maintain at a general facility in this state, in the form satisfactory to the commissioner, such books, records and accounts as will enable the commissioner to determine whether the licensee is complying with the provisions of sections 36a-580 to 36a-589, inclusive. Each licensee shall retain such books, records and accounts for not less than the periods of time specified in regulations adopted by the commissioner in accordance with section 36a-588.

(b) Before a licensee deposits with any financial institution a check, draft or money order cashed by such licensee, the item shall be endorsed with the actual name under which the licensee is doing business and must have the words “licensed check cashing service” legibly written or stamped immediately after or below such name.


(c) Each check cashing licensee shall comply with the applicable provisions of the Currency and Foreign Transactions Reporting Act, 31 USC Section 5311 et seq., as from time to time amended, and any regulations adopted under such provisions, as from time to time amended.
(P.A. 88-200, S. 6; P.A. 89-178, S. 6, 8; P.A. 94-122, S. 274, 340; P.A. 95-253, S. 18, 19; P.A. 98-192, S. 2.)
History: P.A. 89-178 amended Subsec. (a) by substituting the commissioner of banking for the commissioner of consumer protection; Sec. 21-116 transferred to Sec. 36-570 in 1991; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-570 transferred to Sec. 36a-586 in 1995; P.A. 95-253 changed “check cashing service” to “check cashing licensee” and made technical changes in Subsec. (a), effective July 6, 1995; P.A. 98-192 added new Subsec. (c) re compliance with federal Currency and Foreign Transactions Reporting Act.

Sec. 36a-587. (Formerly Sec. 36-571). Suspension, revocation or refusal to renew license or taking of other action. Hearings. Enforcement powers of commissioner. (a) The commissioner may suspend, revoke or refuse to renew any license issued pursuant to section 36a-581 or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for a license under sections 36a-580 to 36a-589, inclusive, or if the commissioner finds that the licensee or any owner, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has done any of the following: (1) Made any material misstatement in the application; (2) committed any fraud, engaged in dishonest activities or made any misrepresentation; (3) violated any provision of sections 36a-580 to 36a-589, inclusive, or any regulation promulgated under said sections; or (4) demonstrated incompetency or untrustworthiness to act as a licensed check cashing service.
(b) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-580 to 36a-589, inclusive, or any regulation adopted pursuant to said sections, or any licensee or any owner, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has committed any fraud, engaged in dishonest activities or made any misrepresentation, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.
(P.A. 88-200, S. 7; 88-230, S. 1, 12; P.A. 89-178, S. 7, 8; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 94 122, S. 275, 340; P.A. 05-46, S. 10; P.A. 06-35, S. 6; P.A. 07-91, S. 21.)
History: P.A. 88-230 replaced “judicial district of Hartford-New Britain” with “judicial district of Hartford”, effective September 1, 1991; P.A. 89-178 amended Subsec. (a) by substituting the commissioner of banking for the commissioner of consumer protection; Sec. 21-117 transferred to Sec. 36-571 in 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-122 deleted Subsec. (c) re cease and desist provisions and made technical changes, effective January 1, 1995; Sec. 36-571 transferred to Sec. 36a-587 in 1995; P.A. 05-46 amended Subsec. (b) to allow commissioner to impose civil penalty or issue cease and desist order against licensee or owner, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee who has committed fraud, engaged in dishonest activities or made any misrepresentation; P.A. 06-35 amended Subsec. (b) to authorize commissioner to take enforcement action under Secs. 36a-50 and 36a-52 for violation of “any of” the provisions of Secs. 36a-580 to 36a-589, inclusive, or any regulation adopted pursuant to said Secs., effective May 8, 2006; P.A. 07-91 amended Subsec. (a) to authorize commissioner to take any other action, in accordance with Sec. 36a-51, effective June 5, 2007.

Sec. 36a-588. (Formerly Sec. 36-572). Regulations. The commissioner shall adopt, pursuant to chapter 54, such regulations as may be necessary to carry out the provisions of sections 36a-580 to 36a 589, inclusive.
(P.A. 88-200, S. 8.)
History: Sec. 21-118 transferred to Sec. 36-572 in 1991; Sec. 36-572 transferred to Sec. 36a-588 in 1995.

Sec. 36a-589. (Formerly Sec. 36-573). Violations. A violation of any of the provisions of sections 36a-580 to 36a-589, inclusive, shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.
(P.A. 88-200, S. 9.)
History: Sec. 21-119 transferred to Sec. 36-573 in 1991; Sec. 36-573 transferred to Sec. 36a-589 in 1995.
Annotation to former section 36-573:

Cited. 231 C. 707.



Secs. 36a-590 to 36a-594. Reserved for future use.



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