By Maxey H.B. No. 2722
75R2893 BEM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the cashing of certain checks and to the registration
1-3 of certain persons engaged in a check-cashing business; providing
1-4 penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Title 16, Revised Statutes, is amended by adding
1-7 Articles 352 and 353 to read as follows:
1-8 Art. 352. Registration of Check-Cashing Business
1-9 Sec. 1. SHORT TITLE. This article may be cited as the
1-10 "Consumer Check-Cashing Act."
1-11 Sec. 2. DEFINITIONS. In this article:
1-12 (1) "Check-cashing business" means a person in the
1-13 business of cashing checks for a fee, other than:
1-14 (A) a bank, savings and loan association,
1-15 savings bank, or credit union;
1-16 (B) a grocery or convenience store; or
1-17 (C) a person that cashes checks as an incident
1-18 to another business for a consideration of not more than 50 cents a
1-19 check.
1-20 (2) "Check-cashing service" means:
1-21 (A) the issuance, redemption, or cashing of a
1-22 two-party or multi-party check or similar negotiable instrument;
1-23 (B) the sale, redemption, or cashing of a
1-24 travelers check, money order, or similar negotiable instrument by
2-1 an agent of the issuer of the instrument that is authorized to do
2-2 so; or
2-3 (C) the transmittal of money in any form by wire
2-4 or similar method.
2-5 (3) "Convenience store" means a retail establishment
2-6 that is primarily engaged in the retail sale of groceries and other
2-7 products and services, including:
2-8 (A) prepared foods;
2-9 (B) household items and toiletries; and
2-10 (C) gasoline and services.
2-11 (4) "Finance commission" means the Finance Commission
2-12 of Texas.
2-13 (5) "Person" means an individual, corporation,
2-14 association, or other business entity.
2-15 Sec. 3. REGISTRATION REQUIRED. A check-cashing business may
2-16 not operate in this state unless the business:
2-17 (1) is registered with the finance commission under
2-18 this article; and
2-19 (2) operates in accordance with this article and the
2-20 rules adopted under this article.
2-21 Sec. 4. REGISTRATION. (a) To register, a person must file
2-22 a sworn, written application with the finance commission. The
2-23 finance commission by rule shall adopt the form of the application.
2-24 (b) An application for registration must identify:
2-25 (1) each officer of the business;
2-26 (2) each person that owns or controls more than five
2-27 percent of the business;
3-1 (3) the street address at which the business will be
3-2 operated; and
3-3 (4) any other information required by the finance
3-4 commission.
3-5 (c) An applicant must comply with bonding or minimum capital
3-6 requirements established by the finance commission.
3-7 Sec. 5. OPERATING REQUIREMENTS. A check-cashing business
3-8 shall:
3-9 (1) post a schedule of all fees charged for
3-10 check-cashing services in a manner that is conspicuous to customers
3-11 of the check-cashing business;
3-12 (2) issue a receipt for each check-cashing service
3-13 provided that shows:
3-14 (A) the amount of the check or other instrument
3-15 with respect to which the service is provided;
3-16 (B) the fee charged for the service; and
3-17 (C) the date the service is provided; and
3-18 (3) post a notice that is conspicuous to the public
3-19 that:
3-20 (A) contains the name and address of the finance
3-21 commission; and
3-22 (B) advises the public that a person may make a
3-23 complaint to the finance commission about the check-cashing
3-24 business.
3-25 Sec. 6. MAXIMUM FEE. A check-cashing business may charge a
3-26 fee for providing a check-cashing service in an amount that is not
3-27 more than the greater of 25 cents or .5 percent of the face value
4-1 of the instrument being cashed or the amount being wired.
4-2 Sec. 7. FINANCE COMMISSION RULES. (a) The finance
4-3 commission shall adopt rules that establish:
4-4 (1) a centralized system for filing of check-cashing
4-5 business registration documents;
4-6 (2) criteria for refusal, suspension, and revocation
4-7 of a check-cashing business registration; and
4-8 (3) administrative penalties for violations of this
4-9 article and rules adopted by the finance commission under this
4-10 article.
4-11 (b) The finance commission by rule may adopt other
4-12 requirements for the registration and regulation of the
4-13 check-cashing business and may adopt rules necessary to implement
4-14 this article.
4-15 Sec. 8. ADMINISTRATIVE PENALTY. (a) The finance commission
4-16 may impose an administrative penalty against a person registered
4-17 under this article who violates this article or a rule or order
4-18 adopted under this article.
4-19 (b) The penalty for a violation may be in an amount not to
4-20 exceed $5,000. Each day that a violation continues or occurs is a
4-21 separate violation for the purposes of imposing a penalty.
4-22 (c) The amount of the penalty shall be based on:
4-23 (1) the seriousness of the violation, including the
4-24 nature, circumstances, extent, and gravity of any prohibited acts,
4-25 and the hazard or potential hazard created to the health, safety,
4-26 or welfare of the public;
4-27 (2) the history of any previous violations;
5-1 (3) the amount necessary to deter future violations;
5-2 (4) efforts to correct the violation; and
5-3 (5) any other matter that justice may require.
5-4 (d) If the finance commission determines that a violation
5-5 has occurred, the finance commission may issue a report that states
5-6 the facts on which the determination is based. The finance
5-7 commission shall make a recommendation on the imposition of a
5-8 penalty, including a recommendation on the amount of the penalty.
5-9 (e) Within 14 days after the date on which the report is
5-10 issued, the finance commission shall give written notice of the
5-11 report to the person who committed the alleged violation. The
5-12 notice may be given by certified mail. The notice must include a
5-13 brief summary of the alleged violation and a statement of the
5-14 amount of the recommended penalty and must inform the person that
5-15 the person has a right to a hearing on the occurrence of the
5-16 violation, the amount of the penalty, or both the occurrence of the
5-17 violation and the amount of the penalty.
5-18 (f) Within 20 days after the date the person receives the
5-19 notice, the person in writing may accept the determination and
5-20 recommended penalty of the finance commission or may make a written
5-21 request for a hearing on the occurrence of the violation, the
5-22 amount of the penalty, or both the occurrence of the violation and
5-23 the amount of the penalty.
5-24 (g) If the person accepts the determination and recommended
5-25 penalty of the finance commission, the finance commission shall
5-26 issue an order and impose the recommended penalty.
5-27 (h) If the person requests a hearing or fails to respond
6-1 timely to the notice, the finance commission shall set a hearing
6-2 and give notice of the hearing to the person. The hearing shall be
6-3 held by an administrative law judge of the State Office of
6-4 Administrative Hearings. The administrative law judge shall make
6-5 findings of fact and conclusions of law and promptly issue to the
6-6 finance commission a proposal for a decision about the occurrence
6-7 of the violation and the amount of the penalty. Based on the
6-8 findings of fact, conclusions of law, and proposal for a decision,
6-9 the finance commission by order may find that a violation has
6-10 occurred and impose a penalty or may find that no violation
6-11 occurred.
6-12 (i) The notice of the finance commission's order given to
6-13 the person under Chapter 2001, Government Code, must include a
6-14 statement of the right of the person to judicial review of the
6-15 order.
6-16 (j) Within 30 days after the date the finance commission's
6-17 order is final as provided by Section 2001.144, Government Code,
6-18 the person shall:
6-19 (1) pay the amount of the penalty;
6-20 (2) pay the amount of the penalty and file a petition
6-21 for judicial review contesting the occurrence of the violation, the
6-22 amount of the penalty, or both the occurrence of the violation and
6-23 the amount of the penalty; or
6-24 (3) without paying the amount of the penalty, file a
6-25 petition for judicial review contesting the occurrence of the
6-26 violation, the amount of the penalty, or both the occurrence of the
6-27 violation and the amount of the penalty.
7-1 (k) Within the 30-day period, a person who acts under
7-2 Subsection (j)(3) of this section may:
7-3 (1) stay enforcement of the penalty by:
7-4 (A) paying the amount of the penalty to the
7-5 court for placement in an escrow account; or
7-6 (B) giving to the court a supersedeas bond
7-7 approved by the court for the amount of the penalty and that is
7-8 effective until all judicial review of the finance commission's
7-9 order is final; or
7-10 (2) request the court to stay enforcement of the
7-11 penalty by:
7-12 (A) filing with the court a sworn affidavit of
7-13 the person stating that the person is financially unable to pay the
7-14 amount of the penalty and is financially unable to give the
7-15 supersedeas bond; and
7-16 (B) giving a copy of the affidavit to the
7-17 finance commission by certified mail.
7-18 (l) If the finance commission receives a copy of an
7-19 affidavit under Subsection (k)(2) of this section, the finance
7-20 commission may file with the court within five days after the date
7-21 the copy is received a contest to the affidavit. The court shall
7-22 hold a hearing on the facts alleged in the affidavit as soon as
7-23 practicable and shall stay the enforcement of the penalty on
7-24 finding that the alleged facts are true. The person who files an
7-25 affidavit has the burden of proving that the person is financially
7-26 unable to pay the amount of the penalty and to give a supersedeas
7-27 bond.
8-1 (m) If the person does not pay the amount of the penalty and
8-2 the enforcement of the penalty is not stayed, the finance
8-3 commission may refer the matter to the attorney general for
8-4 collection of the penalty.
8-5 (n) Judicial review of the order of the finance commission:
8-6 (1) is instituted by filing a petition as provided by
8-7 Section 2001.176, Government Code; and
8-8 (2) is under the substantial evidence rule.
8-9 (o) If the court sustains the occurrence of the violation,
8-10 the court may uphold or reduce the amount of the penalty and order
8-11 the person to pay the full or reduced amount of the penalty. If
8-12 the court does not sustain the occurrence of the violation, the
8-13 court shall order that no penalty is owed.
8-14 (p) When the judgment of the court becomes final, the court
8-15 shall proceed under this subsection. If the person paid the amount
8-16 of the penalty and if that amount is reduced or is not upheld by
8-17 the court, the court shall order that the appropriate amount plus
8-18 accrued interest be remitted to the person. The rate of interest
8-19 is the rate charged on loans to depository institutions by the New
8-20 York Federal Reserve Bank, and the interest shall be paid for the
8-21 period beginning on the date the penalty was paid and ending on the
8-22 date the penalty is remitted. If the person gave a supersedeas
8-23 bond and if the amount of the penalty is not upheld by the court,
8-24 the court shall order the release of the bond. If the person gave
8-25 a supersedeas bond and if the amount of the penalty is reduced, the
8-26 court shall order the release of the bond after the person pays the
8-27 amount.
9-1 (q) A penalty collected under this section shall be remitted
9-2 to the comptroller for deposit in the general revenue fund.
9-3 (r) All proceedings under this section are subject to
9-4 Chapter 2001, Government Code.
9-5 Art. 353. Requirement To Cash Government Check
9-6 Sec. 1. DEFINITIONS. In this article:
9-7 (1) "Financial institution" means a state or national
9-8 bank, state or federal savings and loan association, or state or
9-9 federal savings bank.
9-10 (2) "Government check" means a check issued by this
9-11 state or the United States.
9-12 Sec. 2. REQUIREMENT TO CASH. A financial institution shall
9-13 cash a government check and a state or federal credit union shall
9-14 cash a government check presented by a member of the credit union
9-15 if:
9-16 (1) the check is presented for cashing by a payee of
9-17 the check;
9-18 (2) the check is properly endorsed by each payee of
9-19 the check;
9-20 (3) the person who presents the check for cashing
9-21 provides:
9-22 (A) a valid driver's license that bears the name
9-23 and address of the person providing the license as identification;
9-24 (B) a valid photographic identification card
9-25 issued by a state or federal agency; or
9-26 (C) a valid United States passport;
9-27 (4) the check and the identification documents
10-1 required under Subdivision (3) of this section do not bear evidence
10-2 of forgery, fraud, counterfeiting, alteration, or other tampering;
10-3 and
10-4 (5) the check is for an amount that is less than
10-5 $2,500.
10-6 Sec. 3. ENFORCEMENT. This article shall be enforced by the
10-7 official who is responsible for regulating the entity under
10-8 Subtitle 2, Title 79, Revised Statutes (Article 5069-2.01 et seq.,
10-9 Vernon's Texas Civil Statutes), as provided by Subsection (l),
10-10 Article 2.01, Title 79, Revised Statutes (Article 5069-2.01,
10-11 Vernon's Texas Civil Statutes).
10-12 Sec. 4. CIVIL PENALTY. A financial institution or credit
10-13 union that violates this article or a rule adopted under this
10-14 article is subject to a civil penalty of not more than $500 for
10-15 each violation. The attorney general shall bring suit to collect
10-16 the penalty.
10-17 Sec. 5. RULES OF CONSTRUCTION. This article does not
10-18 prohibit a financial institution or credit union from charging a
10-19 fee for cashing a government check.
10-20 SECTION 2. This Act takes effect January 1, 1998, except
10-21 that a check-cashing business is not required to be registered
10-22 under Article 352, Revised Statutes, as added by this Act, before
10-23 September 1, 1999.
10-24 SECTION 3. The importance of this legislation and the
10-25 crowded condition of the calendars in both houses create an
10-26 emergency and an imperative public necessity that the
10-27 constitutional rule requiring bills to be read on three several
11-1 days in each house be suspended, and this rule is hereby suspended.