I
104TH CONGRESS
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 per-
sons engaged in a business which regularly and primarily
charges fees for cashing checks, and to provide for in-
sured financial depository institutions to cash checks is-
sued by States or the United States.
Be it enacted by the Senate and House of Representa-
tives 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 li-
censing 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 ap-
plicable; and
(3) the person engages in that business in ac-
cordance 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 Com-
mission in accordance with this section for approval of a
State check cashing business licensing or registration sys-
tem.
(b) REQUIREMENTS FOR APPROVAL.—The Commis-
sion may approve a State check cashing business licensing
or registration system under this section if the Commis-
sion finds that the system consists of State laws that—
(1) prohibit any person from engaging in busi-
ness in the State as a check cashing business, unless
the person—
(A) holds a license issued under the sys-
tem, 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 doc-
uments, 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 sub-
section; 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 PROVID-
ING RECIPROCITY.—The Commission may not approve a
State check cashing business licensing or registration sys-
tem 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 li-
censed 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 sub-
section (f), in the case of a State which on the
date of the enactment of this Act does not pro-
hibit, and has in effect laws that establish re-
quirements for, the operation of a check cash-
ing 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 re-
quirements for, the operation of a check cash-
ing 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, rec-
ommend to the State such changes in the sys-
tem 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 SYS-
TEMS.—
(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 wheth-
er the change is in accordance with the require-
ments for approval of the system under sub-
section (b);
(B) approve the change as being in accord-
ance 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 AP-
PROVAL.—After notifying a State under paragraph
(1)(B) that the Commission disapproves a change in
the approved State system of the State, the Commis-
sion shall—
(A) review any further modifications in the
laws of the State that have been enacted; and
(B)(i) approve the change and modifica-
tions if they are in accordance with the require-
ments 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 Commis-
sion 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 require-
ments for approval of such systems in addition to
the requirements under this section as the Commis-
sion considers necessary to protect persons who pro-
vide 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 DEPOSI-
TORY INSTITUTION TO CASH GOVERNMENT
CHECKS.
(a) PROHIBITION.—An insured depository institution
shall not refuse to cash a government check, and an in-
sured credit union shall not refuse to cash a government
check presented by a member of the insured credit union,
if—