Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately establish the procedures for the licensing and regulation of persons engaged in the business of cashing checks, drafts or money orders for a consideration, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. The General Laws are hereby amended by inserting after chapter 169 the following chapter:- `tuc CHAPTER 169A. LICENSING OF CHECK CASHERS.
Section 1. For the purposes of this chapter, the following words shall have the following meanings unless the context clearly requires otherwise:-
"Casher of checks", a person or entity engaged in cashing checks, drafts or money orders for a consideration in excess of one dollar per item.
"Commissioner", the commissioner of banks.
"Licensee", a casher of checks, licensed under the provisions of this chapter.
"Mobile unit", a motor vehicle or other movable means from which the business of a licensee is to be conducted.
"Primary business", the principal business of the licensee as determined by the commissioner, exclusive of any business conducted as an agent of the state lottery commission.
Section 2. No person or entity shall engage in cashing checks, drafts or money orders for a consideration in excess of one dollar per item without first obtaining a license from the commissioner. Nothing in this chapter shall be construed to apply to a bank, as defined in section one of chapter one hundred and sixty-seven, a national banking association, a federally chartered credit union, a federal savings and loan association or a federal savings bank. The commissioner shall establish rules and regulations, which may include an adequate capitalization requirement, for each place of business or mobile unit of a licensee to aid in the administration and enforcement of this chapter.
Section 3. The application for such license shall be in writing, shall be in a form prescribed by the commissioner and shall contain the name, residential address and the address where the business of the applicant is to be conducted, and if the applicant is a partnership, association, corporation or other form of business organization, the names and addresses of each member, director and principal officer thereof, together with such further information as the commissioner may require including, but not limited to, a description of the nature of the business to be conducted, the proposed hours of operation on a daily basis and the area intended to be served; provided, however, that if such business is to be conducted from a mobile unit, the said application shall contain the Massachusetts motor vehicle registration number or other satisfactory identification of such mobile unit and a description of the area in which the applicant seeks to utilize such mobile unit. Each application for a license shall be accompanied by an investigation fee. Investigation and license fees shall be determined annually by the commissioner of administration under the provisions of section three B of chapter seven. Upon the receipt of such application, the commissioner shall furnish the applicant a form of notice, specifying the name of the applicant, the name under which the business will be conducted and the location thereof, the name, complete address and occupation of the principals as set forth in the application and assigning a closing date for receipt by the commissioner of comments by interested parties on such application. The applicant shall publish said notice at least three weeks before such closing date or such other period as may be determined by the commissioner, in a newspaper designated by the commissioner and published in the city or town wherein such business is to be conducted; provided, however, that if there is no newspaper published in such city or town, publication shall be in the city or town wherein a newspaper is published which is nearest to the proposed location of the business.
The commissioner may, after such hearing and notice thereof as he may deem necessary, reject an application for a license if he is not satisfied that the financial responsibility, character, reputation, integrity and general fitness of the applicant, and of the members thereof if the applicant is a partnership or association, and of the directors and principal officers if the applicant is a corporation, are such as to command the confidence of the public and to warrant the belief that the business will be operated honestly, fairly, soundly and efficiently in the public interest consistent with the purposes of this chapter, or that the proposed business and the hours of operation, as specified in the application, would not be detrimental to the economy or the public safety of the area to be served, or if he finds that any of the following exist:
(a) the applicant made a false statement of a material fact in the application for a license;
(b) an officer, director or member of the applicant business has, within ten years prior to the filing of the application, been (i) convicted of or pleaded nolo contendere to a felony, or (ii) committed an act involving fraud or deceit, which act is substantially related to the qualifications, functions or duties of a person engaged in the business of a casher of checks;
(c) the applicant violated any of the provisions of this chapter or regulations promulgated hereunder, any similar regulatory scheme of another jurisdiction, or any other law applicable to the conduct of the business sought to be licensed;
(d) a check cashing store located at the address at which the applicant intends to operate his business has lost its license to operate within six months of the date of the new application;
(e) the applicant fails to demonstrate a public need for the establishment of a check cashing business in the area specified in such application; provided, however, that in determining whether demonstration of public need has been satisfied, the commissioner shall consider, but shall not be limited to consideration of, the number of financial institutions in such area providing check cashing services, similar services provided in such area by nondepository institutions and such other factors which would indicate that the approval of the application for license would not provide a convenience to the people who would be served by the applicant or that it would be detrimental to the economy or the public safety in such area.
The commissioner shall make decision to approve or deny an application for a license within ninety days after the filing thereof; provided, however, that failure of the commissioner to act within such period shall not be deemed to be an approval of such application.
Section 4. If the commissioner refuses to issue a license, he shall notify the applicant of the denial, and within twenty days thereafter, he shall enter upon his records a written decision and findings containing the reasons supporting the denial and shall forthwith give written notice thereof by registered mail to the applicant. Within thirty days after the date of such notice, the applicant may appeal such denial to the superior court sitting in the county in which the business of the applicant is located. The court shall hear all pertinent evidence, determine the facts and, upon the facts as so determined, review such denial and affirm the same or order the commissioner to issue such license, as justice and equity may require.
Section 5. Each license shall state the address at which the business is to be conducted and, if a mobile unit, the appropriate identification thereof, and shall state fully the name of the licensee. If a licensee intends to carry on business in more than one location or, in the case of a mobile unit, in an area greater than that specified on the license, he shall procure a license for each place or area where such business is to be conducted. A copy of such license shall be prominently displayed in the place of business or the mobile unit of the licensee. Such license shall not be transferable or assignable and shall expire annually on April first. A change of location or closing of the place of business of the licensee at the address stated on the license, including any change in the area of operation of a mobile unit, shall require prior approval of the commissioner. A request for such relocation or change in the area of operation shall be in writing setting forth the reasons therefor and shall be accompanied by a relocation investigation fee to be determined annually by the commissioner of administration under the provisions of section three B of chapter seven.
If there shall be any change among the officers, partners or directors of any licensee, the licensee shall forthwith notify the commissioner of the name, address and occupation of each new officer, partner or director and provide such other information as the commissioner may require.
Section 6. A schedule of fees and charges to be assessed for the cashing of checks, drafts or money orders shall be filed by each licensee with the commissioner annually on or before a date to be set by the commissioner and, together with any revisions thereto, shall be conspicuously posted in each place of business and mobile unit of a licensee. An amendment to such schedule occurring between filing dates or a change in the hours of operation, as specified in the application for license filed pursuant to section three, shall be filed, in writing, with the commissioner forthwith.
Section 7. The licensee shall provide each patron cashing a check, draft or money order with a receipt of such transaction stating thereon the amount of the check, draft or money order cashed, the fee charged and the total amount received by such patron.
Section 8. The commissioner may suspend or revoke a license issued pursuant to this chapter if he finds that:
(a) the licensee has violated a provision of this chapter or any rule or regulation adopted hereunder or any other law applicable to the conduct of its business; or
(b) a fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted said commissioner in refusing to issue such license.
Except as provided in subsection (a) of section nine, no license shall be revoked or suspended except after notice and hearing pursuant to chapter thirty A.
A licensee may surrender a license by delivering to the commissioner written notice that it hereby surrenders such license, but such surrender shall not affect the civil or criminal liability of such licensee for acts committed before such surrender.
No revocation, suspension or surrender of a license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any person.
In lieu of suspension or revocation of a license issued hereunder, the commissioner may fine a licensee up to a maximum of five hundred dollars per day for each violation.
The commissioner may suspend or revoke, or impose a fine on, only the particular license or licenses for particular places of business or locations with respect to which grounds for revocation occur or exist; provided, however, that if said commissioner shall find that such grounds for revocation are of general application to all places of business or locations of the licensee or that such grounds for fine, suspension or revocation have occurred or exist with respect to a substantial number of places of business or locations of such licensee, said commissioner may suspend, revoke or impose fines with respect to all of the licenses issued to such licensee.
Section 9. (a) If the commissioner determines, after giving notice of and opportunity for a hearing, that a licensee has engaged in or is about to engage in an act or practice constituting a violation of a provision of this chapter or a rule, regulation or order adopted hereunder, said commissioner may order such licensee to cease and desist from such unlawful act or practice and take such affirmative action as in his judgment will effect the purposes of this chapter.
(b) If the commissioner makes written findings of fact that the public interest will be irreparably harmed by a delay in issuing an order under subsection (a) he may issue a temporary cease and desist order. Upon the entry of a temporary cease and desist order, the commissioner shall promptly notify, in writing, the licensee affected thereby that such order has been so entered, the reasons therefor, and that within twenty days after the receipt of a written request for a hearing from such licensee, the matter will be scheduled for such hearing to determine whether or not such temporary order shall become permanent and final. If no such hearing is requested and none is ordered by the commissioner, the order shall remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after giving notice of and opportunity for a hearing to the licensee subject to such order, shall, by written finding of facts and conclusions of law, vacate, modify or issue a permanent cease and desist order.
(c) No order under this section, except an order issued pursuant to subsection (b), may be entered without prior notice and opportunity for a hearing. The commissioner may vacate or modify an order under this section upon a finding that the conditions which required such order have changed and that it is in the public interest to vacate or modify such order.
An order issued pursuant to this section shall be subject to review as provided in chapter thirty A.
Section 10. For the purpose of discovering violations of this chapter or a rule or regulation promulgated hereunder, or for securing information lawfully required by him, the commissioner may, at any time, and as often as he may determine, either personally or by a person designated by him, investigate the business and examine the books, accounts, records and files used therein of a licensee. The total charge for such examination, which shall be paid by the licensee within thirty days after receipt of an invoice therefor, shall be determined annually by the commissioner of administration under the provisions of section three B of chapter seven for each person participating in such examination. For such purpose, the commissioner and his duly designated representative shall have access to the offices and places of business, books, accounts, papers, records, files, safes and vaults of all such licensees. The commissioner and any person designated by him may require the attendance of and examine under oath all persons whose testimony he may require relative to such business. Copies of reports of such examinations of a licensee shall be furnished to such licensee and shall not be exhibited to any other person, organization or agency; provided, however, that the commissioner may, upon the request of a law enforcement agency made in the course of its official duties, provide copies of such reports to any such law enforcement agency.
Section 11. The licensee shall keep and use within the commonwealth such books, accounts and records as will enable the commissioner to determine whether such licensee is complying with the provisions of this chapter and with the rules and regulations promulgated hereunder by the commissioner. Licensees shall preserve such books, accounts and records for at least three years. Preservation by photographic reproduction thereof or records in photographic form shall constitute compliance with the requirements of this section.
Each licensee shall, annually, on or before a date to be determined by the commissioner, file a report with said commissioner providing such information as said commissioner may require concerning its business and operations during the preceding calendar year. Such reports shall not be exhibited to any other person, organization or agency; provided, however, that the commissioner may, upon the request of a law enforcement agency made in the course of its official duties, provide copies of such reports to any such law enforcement agency. The commissioner shall evaluate such reports and make such recommendations, if any, as he deems necessary to the general court.
Section 12. The commissioner or an aggrieved party may enforce the provisions of this chapter, or restrain any violations thereof, by filing a civil action in a court of competent jurisdiction. A violation of this chapter or a rule or regulation adopted hereunder, shall constitute a violation of chapter ninety-three A.
Section 13. A licensee who commits a willful violation of the provisions of this chapter or a rule or regulation adopted hereunder, shall be punished by a fine of not more than five hundred dollars or by imprisonment for not more than one year, or both.
SECTION 2. On or before July first, nineteen hundred and ninety-four, a person engaged in the business of cashing checks, drafts or money orders for a consideration in excess of one dollar per item shall apply to the commissioner of banks for a license pursuant to section three of chapter one hundred and sixty-nine A of the General Laws; provided, however, that the provisions of clause (e) of the second paragraph of said section three shall not apply to a person so applying for a license to operate at a location at which such applicant has been engaged in the conduct of the business of cashing checks, drafts or money orders prior to the effective date of this act.