New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter III - SUPERINTENDENT'S REGULATIONS › Subchapter B - NON-BANKING ORGANIZATIONS › Part 400 - Licensed Cashers Of Checks › Section 400.1 - Original issuance of license or change of control of a licensee

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Application. No
				  person shall engage in the business of cashing checks, drafts or money orders,
				  as principal, broker, agent or otherwise, for a consideration, without first
				  obtaining a license from the superintendent. This licensing requirement applies
				  whether such activities are conducted for customers who are natural persons or
				  for any business, corporation, partnership, limited liability company or
				  partnership, association, or sole proprietorship, or any other entity.
				  Application for a new license or for a change of control of a licensee shall be
				  made upon forms issued by the superintendent. These forms may be obtained at
				  Banking Department offices at the locations specified in Supervisory Policy G 1
				  of this Title. For purposes of this Part, the term person shall include a
				  natural person or a partnership, corporation, association or any other entity.
				  The term control shall mean having the power directly or indirectly to direct
				  or cause the direction of the management and policies of a licensee, whether
				  through the ownership of voting stock of a licensee, the ownership of voting
				  stock of any corporation which possesses such power or otherwise and shall be
				  presumed to exist if any person, directly or indirectly, owns, controls, or
				  holds with power to vote 10 percent or more of the voting stock of any licensee
				  or any person owning, controlling or holding with power to vote 10 percent or
				  more of the voting stock of any licensee.
(b) Application procedure. Completed
				  applications should be delivered to the Licensed Financial Services Division of
				  the Banking Department at the New York City office location specified in
				  Supervisory Policy G 1 of this Title. An application for a new license for a
				  fixed location or for a mobile unit must be accompanied by payment of the fees
				  specified in section
				  1.2  of
				  Supervisory Policy G 1 of this Title. An application by a licensee to operate a
				  limited station must be accompanied by payment of the fee specified in section
				  1.2  of
				  Supervisory Policy G 1 of this Title. An application for change of control of a
				  licensee must be accompanied by payment of the fee specified in section
				  1.2  of
				  Supervisory Policy G 1 of this Title. Applicants for a new license seeking to
				  conduct business under a trade name must file a certificate in the office of
				  the county clerk as required by General Business Law, section
				  130. A
				  certificate of the county clerk stating that such a document has been filed
				  must be submitted with an application for a new license.
(c) Information and documents required. Any
				  person seeking to obtain a license to cash checks or to acquire control of a
				  licensed check casher shall submit the following information and documents:
(1) The name and address of the applicant(s).
				  If the applicant is a partnership or corporation, the names and addresses of
				  all partners, officers, directors and substantial stockholders of the
				  applicant, as applicable. For purposes of this Part, substantial stockholder
				  means any stockholder that owns, controls or holds with power to vote 10
				  percent or more of the voting stock of the applicant.
(2) A background report prepared by an
				  independent investigatory agency acceptable to the superintendent for every
				  partner, officer, director, substantial stockholder and owner of the applicant,
				  as may be applicable.
(3) For each
				  partner, officer, director, substantial stockholder and owner of the applicant,
				  as may be applicable, detailed biographical information in such form as the
				  superintendent shall prescribe.
(4)
				  For each partner, officer, director, substantial stockholder and owner of the
				  applicant, as may be applicable, and for all individuals to be employed by the
				  licensee (or, for a change of control application, for all individuals not
				  currently employed by a licensee):
(i) a set
				  of completed fingerprint cards;
(ii) a receipt from a law enforcement agency
				  indicating the place at which the fingerprints were taken;
(iii) a check in the appropriate amount
				  payable to the "Superintendent of Banks - Fingerprints"; and
(iv) two portrait-style photographs of the
				  individual measuring not more than 2" x 2".
(5) Documentation demonstrating:
(i) that one or more of the partners,
				  officers, directors, substantial stockholders or owners of the applicant, as
				  may be applicable, has management or supervisory experience of at least one
				  year in the check cashing business with a licensee in this State or in the case
				  of changes of control;
(ii) that at
				  least one individual with such experience, or such other equivalent experience
				  deemed adequate by the superintendent, has been engaged by the applicant for a
				  period of at least one year following the date of commencement of business or
				  the effective date of the change of control, whichever is the case. The
				  superintendent may increase such one-year experience requirement if it is
				  determined that such increase is in accordance with the purposes of article 9-A
				  of the Banking Law. If at any time during the one-year period (or any longer
				  period required by the superintendent) the licensee ceases to be in compliance
				  with the requirements of this subdivision, it shall notify the superintendent
				  within 10 calendar days of such noncompliance. The name and qualifications of
				  any other individual engaged by the licensee to satisfy the requirements of
				  this subdivision shall be submitted to the superintendent for
				  approval.
(6) Financial
				  documentation including:
(i) a current
				  financial statement for each applicant;
(ii) a current personal financial statement
				  for each partner, officer, director, stockholder or owner, as may be
				  applicable;
(iii) in the case of an
				  application for a new license, a projected (pro forma) balance sheet and income
				  and expense statement for the first year of operation;
(iv) in the case of an application for a new
				  license, an affirmation that net liquid assets of at least $10,000 shall be
				  available each business day for each licensed location (including mobile
				  units). Net liquid assets, as used in this subparagraph, shall mean funds on
				  hand, funds in banking institutions and marketable securities owned, less any
				  loans and accounts payable in one year or less; and
(v) in the case of an application for a new
				  license, a credit facility letter provided by a banking institution or similar
				  credit facility approved by the superintendent demonstrating an existing right
				  of access to a line of credit in an amount of $100,000 or more for each
				  licensed location. This line of credit must be available continuously and a
				  licensee must immediately give written notice to the superintendent if it is
				  not at any time in compliance with this requirement.
(7) A business plan containing such
				  information as shall permit the superintendent to make a finding that the
				  granting of the license will promote the convenience and advantage of the area
				  in which the business is to be conducted including a determination that there
				  is a community need for a new licensee in the proposed area to be served. Such
				  a plan shall contain at least the following information.
(i) description of primary market area (e.g.,
				  identification of blocks and other landmarks including the locations of banking
				  institutions and other licensed check cashers operating in the service area
				  surrounding the proposed location;
(ii) description of projected customer
				  base;
(iii) proposed days and hours
				  or operation;
(iv) types of
				  services proposed to be offered including special services such as fluency in
				  languages which are predominant in the area of licensed location(s);
(v) detailed description of demographics of
				  the area including population density which information should be derived from
				  official government records and other published sources;
(vi) description of any proposed economic
				  development of area; and
(vii)
				  specific marketing targets, if any.
In evaluating an application to permit a change of control
					 of a licensee, where the operations conducted at the licensed location are not
					 to be moved to a new location, the superintendent shall not be required to make
					 a determination that there is a community need for the licensee in the area to
					 be continued to be served.
(8) In the case of an application for a new
				  license, a copy of the deed to the property on which the check cashing business
				  will be conducted or a copy of the contract to purchase such property or, if
				  the proposed licensed location is leased or to be leased, a copy of the lease
				  or proposed lease or letter from the owner or its agent that the applicant has
				  obtained or will obtain possession of the proposed licensed location. All
				  leases shall be for a term of at least three years. For a change of control
				  application wherein succession to the licensee's business premises does not
				  occur by operation of law, the applicant shall provide evidence to the
				  satisfaction of the superintendent that the lease(s) for the licensed locations
				  will be assigned or sublet to the applicant or that a new lease(s) will be
				  given the applicant if the applicant is not purchasing the property. All
				  licensed locations except for limited stations and mobile units must include
				  the dimensions of the location and a diagram of the proposed layout with the
				  application.
(9) An affidavit
				  signed by the applicant stating that the information given in the application
				  is accurate and complete.
(10) The
				  superintendent may request such additional information from an applicant deemed
				  necessary to determine whether the applicant satisfies the standard set forth
				  in section 369  of the Banking Law.