031.00.00 Ark. Code R. § 001 - RULES AND REGULATIONS PERTAINING TO THE CHECK - CASHERS ACT

Section I. DEFINITIONS

A) "Act" means Act 1216 of 1999, An Act to License and Regulate Check Cashing and Deferred Presentment Option Services; To Provide for Definitions; To Provide for Administration by the State Board of Collection Agencies; To Provide for Exemptions, Fines, and Penalties; and for Other Purposes.

B) "Applicant" means a person who applies for a license permit or renewal.

C) "Cash" means United States currency and does not include a check, draft, traveler's check, money order or other instrument for the transmission of money.

D) "Cash or other liquid assets"[fn1] means cash, federally or state insured certificates of deposit made out in the name of the check-casher, an irrevocable letter of credit, federally or state insured savings accounts or checking accounts, insured money market accounts and any other types of assets approved by the SBCA from time to time. The term "cash or other liquid assets" does not include the following: fixtures, furniture, interests in real property, accounts receivables, general intangibles, stocks, bonds, checks from or deposited by customers, notes, loan commitments or other evidences of loan availability, or lines of credit.

E) "Check" means a check, warrant, draft, money order, or other instrument for the payment of money, whether or not negotiable, and signed by the maker.

F) "Check-casher" or "check casher" means a person that for compensation engages, in whole or in part, in the check-cashing and/or deferred presentment option services business.

G) "Check-cashing business" means the business of a check-casher selling currency to another person in exchange for a check, with or without a deferred presentment option.

H) "Customer" means the maker of the check.

I) "Deferred Presentment" is a phrase which includes such related terms such as "delayed deposit", "deferred deposit", "deferred presentment option" or similar terms evidencing comparable types of transactions.

J) "Deferred presentment option" services means a transaction made pursuant to a written agreement between the check-casher and the customer in which the check-casher in exchange for a fee:

(1) Accepts the customer's personal check which is dated on the same day that the check is written;[fn2]

(2) Pays that customer in cash the amount of money that is equal to the face amount of that check less any fees charged;

(3) Agrees to hold the check for a period of time prior to depositing or presenting it on the date set out in the written agreement;

(4) Gives the customer the option to repurchase his personal check for the full face amount of the check before the agreed deposit/presentment date set out in the written agreement.

K) "Department" means the Arkansas State Board of Collection Agencies.

L) "Licensee" or "Permittee" means a person who has received a license permit to provide check-cashing and/or deferred presentment option services.

M) "License" means a permit to engage in the check-cashing and/or deferred presentment option services business.

N) "Licensing" means any SBCA process respecting the grant, denial, renewal, revocation, suspension, annulment, withdrawal, limitation, or amendment of a license.[fn3]

O) "Permit" means a license to engage in the check-cashing and/or deferred presentment option services business.

P) "Person" means an individual, group of individuals, partnership, incorporated or unincorporated association, corporation, or any other business unit or legal entity and/or anyone who is a member, partner, director, officer, or five percent (5%) or more shareholder of the applicant or who otherwise controls the applicant;[fn4]

Q) "Personal check" means a check drawn on the checking account of a natural person and bearing the signature of the customer who signs the Deferred Presentment Agreement.

R) "Records" means books, accounts, papers, records and files, no matter in what format they are kept, which are used in conducting business.

S) "Renew" or "Extend" means to postpone the effective due date or to modify or alter or replace an instrument previously given so as to continue it beyond its originally stated due date, whether or not another fee is paid to the licensee.

T) "Regulations" or "Rules and Regulations" means any rule(s) or regulation(s) promulgated and duly enacted by the SBCA which are the SBCA's statement of general applicability and future effect that implements, interprets, or prescribes law or policy, or describes the organization, procedure or practice of the SBCA.[fn5]

U) "SBCA" means the Arkansas State Board of Collection Agencies, Board of Directors and/or Executive Director.

V) "Security" means any agreement or document given as a promise to secure the repurchase or repayment of the face amount of the check.

PERMITS & RENEWALS.

[fn1] Act 1216 of 1999, § 7(1) (hereafter only § numbers are indicated).

[fn2] § 6 j.

[fn3] § 25-15-202(8).

[fn4] § 7(2)(B).

[fn5] § 25-15-202(4).

Section II. LICENSE REQUIRED

(A) No person shall engage in the business of check cashing and/or deferred presentment option services without having first obtained a license permit. A separate license is required for each location from which such business is conducted.[fn6]

(B) If a retailer claims to be exempt from licensure because the revenue generated from its check cashing operations does not exceed three percent (3 %) of its gross revenue, [fn7] the retailer shall have the burden of proving that he is entitled to the exemption. It is the retailer's responsibility to prove to the SBCA by providing pertinent information that the statutory criteria warranting the grant of the exemption are met.

[fn6] § 3.

[fn7] § 2 D.

Section III. QUALIFICATIONS FOR LICENSURE

To qualify for a license, an applicant shall at a minimum satisfy the following requirements:

(A) The applicant shall have and maintain at least Twenty Thousand Dollars ($20,000.00) in cash or liquid assets for the operation of each location.[fn8]

(B) An examination of the applicant's qualifications shall reasonably warrant the belief that the applicant will conduct business in accordance with the Act and its Rules and Regulations. In determining whether these qualifications have been met, the financial responsibility, financial condition, and business experience of the applicant may be considered.

(1) The SBCA may review the following:

(a) The relevant business records and the capital adequacy of the applicant;

(b) The competence, experience, and financial ability of any person who is a member, partner, director, officer, or five percent (5%) or more shareholder of the applicant or who otherwise controls the applicant;

(c) Any record of a felony conviction on the part of the applicant, or any person who is a member, partner, director, officer, or five percent (5%) or more shareholder of the applicant or who otherwise controls the applicant, for any criminal activity involving dishonesty, fraud, or deceit; or any suspension, removal or administrative action by any agency or department of the United States or any state from participation in the conduct of any business.

(d) Any other reasonable criteria consistent with the requirements of the Act.

(C) An initial or renewal permit application shall be denied if the applicant, or any person who is a member, partner, director, officer, or five percent (5%) or more shareholder of the applicant or who otherwise controls the applicant, has a felony conviction involving dishonesty, fraud, or deceit, provided the crime is substantially related to the check-cashing and/or deferred presentment option business.[fn9]

(D) These requirements are continuing in nature.

[fn8] § 7(1), § 8 b2.

[fn9] § 7(4).

Section IV. APPLICATION FOR LICENSE PERMIT

Each application for a license permit shall be in writing and under oath to the SBCA, submitted in the format prescribed by the SBCA, and shall be accompanied by and include at least the following:

(A) An initial permit fee of Five Hundred Dollars ($500.00).

(1) This fee is not refundable.[fn10]

(2) If the permit is granted, the fee will be used as the license fee for the first license year or part thereof.

(B) A financial statement showing that the applicant or check casher has at least twenty thousand dollars ($20,000.00) in cash or liquid assets, available for the operations of his check cashing business, for each location for which he seeks a license permit,

(1) The statement shall, at a minimum, be a compiled balance sheet of the business prepared by a certified professional accountant or preparer in accordance with generally accepted accounting principles.

(2) The financial statement shall be accompanied by a sworn affidavit from each person identified in the application as holding a 5% or more ownership interest in the applicant confirming:

(a) The accuracy of the financial statement,

(b) The amount and type of the twenty thousand dollars ($20,000.00) of liquid or other cash assets being held for each location at which the applicant will engage in the check-cashing business, and

(c) An affirmative statement that the applicant will maintain at least twenty thousand dollars ($20,000.00) in liquid or other cash assets for as long as it operates a check-cashing business at that location.

(3) The financial statement must be for the exact business entity applying for the license permit.

(4) In addition to the financial statement, an applicant may submit an irrevocable letter of credit to satisfy all or a portion of the cash requirement provided that:

(a) The letter of credit be for a one (1) year term or appropriate portion thereof and should expire when the annual license permit expires;

(b) The letter of credit should recite that it is to be used to satisfy the Act's[fn11] cash requirements and that the money will be used for no other purpose;

(c) The letter of credit should recite that the SBCA shall receive prior written notice from the check casher of his intent to draw on the letter of credit.

(C) The obligation to maintain Twenty Thousand Dollars ($20,000.00) in cash or liquid assets for the operation of the business is continuous.[fn12] The applicant is responsible for providing to the SBCA all relevant information regarding this obligation, including but not limited to:

(1) The form of the asset(s);

(2) Where each asset is located, including at a minimum the bank or financial institution's name, address, telephone number, account number; and

(3) Any other relevant information which may be used to locate and/or verify the asset.

(D) An original surety bond in the amount of Fifty Thousand Dollars ($50,000.00) and made payable to the State of Arkansas, State Board of Collection Agencies.

(E) A separate application and license permit is required for each location from which the check cashing-business is conducted.

(F) If the applicant is conducting or plans to conduct any other business within the same location as the check cashing business, he must obtain written approval to do so.[fn13]

1) In order to obtain written approval, the applicant must submit a request to do so in writing and certify that at a minimum the check cashing business has bank accounts, books and financial records that are separate and apart from the other business.

2) The applicant or check casher must keep and maintain all records or other documents relating to the check cashing business distinct and separate from the records and other documents of the other businesses.

3) The applicant or check casher must maintain separate bank accounts for his check-cashing business and shall not commingle money, accounts, other funds or assets of his check-cashing business with the assets of any other businesses.

[fn10] § 8 b1.

[fn11] § 7(1).

[fn12] § 7(3).

[fn13] § 9 b.

Section V. ISSUANCE OF PERMITS - POSTING

(A) Once an application for licensure has been filed with the SBCA, along with the proper fees, documents, letters and any other information prescribed by the SBCA, [fn14] the SBCA will investigate to determine if the applicant has satisfied all the qualifications. If it is found that the qualifications have been satisfied and the documents, letters and other information approved, the SBCA shall issue a license permit for the applicant to engage in the check-cashing and/or deferred presentment option business in Arkansas.

(B) The license permit shall remain effective and in full force from the date it is issued until July 31st of each year unless it is surrendered, suspended or revoked prior to that date.[fn15]

(C) The license permit is neither assignable nor transferable.[fn16]

(D) Once received, the check-casher license permit must be prominently displayed in the check-casher's place of business.[fn17]

[fn14] § 9 a.

[fn15] § 9 d.

[fn16] § 9 c.

[fn17] § 9 c.

Section VI. PERMIT RENEWAL

(A) Each license permit expires on July 31st of each year. On or before July 31st of each year, the licensee may renew his license for the next twelve (12) month period by making a timely and sufficient application for renewal. This shall be accomplished by submitting properly completed renewal forms, to be provided or made available by the SBCA no later than June 30th of each year, by submitting the required fees, by submitting proof that the licensee continues to possess all qualifications required for licensure under the Act and the Regulations and by updating the appropriate information as required by the renewal forms. Absent such renewal each year, the license shall expire and become void on July 31st.[fn18]

(B) The annual renewal fee is four hundred dollars ($400.00) for each location and is non-refundable.[fn19]

(C) Any licensee who fails to remit all the fees required for the continuation of his license by September 1st will be considered delinquent. A penalty of ten percent (10%) shall be assessed for each month or part thereof that the check-casher is late in the payment of its permit fee.

(D) Failure to complete the renewal process by November 15th shall result in the licensee having its license revoked. Should a later request for licensing be made, it shall be treated in all respects as a new applicant.

(E) Failure to receive a renewal package from the SBCA shall not constitute an excuse for failure to pay the renewal fee or to renew one's license, absent a showing that the licensee timely attempted to acquire a renewal package from the SBCA to no avail. The SBCA shall make renewal packages available, for those who do not receive one through the mail, at its offices. The SBCA shall also provide a renewal package by mail to any licensee who requests one.

[fn18] § 25-15-211.

[fn19] § 9 d.

Section VII. PERMIT SURRENDER and NOTICE OF TERMINATION

(A) A check-casher may voluntarily surrender his permit to the SBCA[fn20] by providing the SBCA with written notice that he is surrendering his license and by returning the current license permit to the SBCA.

(B) Upon termination of its business, a permittee must notify the SBCA within twenty days (20) by providing the SBCA with written notice that he has terminated his business, a statement of the reasons for the termination and by returning his current license permit.

(C) Upon surrender or termination, all books, records and papers required to be created and maintained under the Act or Regulations shall immediately be made available to the SBCA for inspection.

[fn20] $ 9(f).

Section VIII. PERMIT DENIAL

(A) If the SBCA determines that an applicant is not qualified to receive or renew a permit, the applicant shall be notified in writing by the SBCA that his application has been denied. This Notice shall state the reason(s) for denial.[fn21]

(B) The applicant may demand in writing a hearing before the Board if:

(1) If the SBCA denies an application; or

(2) If the SBCA fails to act on a properly completed application within ninety (90) days after it has been filed with the SBCA.

(3) The applicant has the burden of proving[fn22] at the hearing that he is entitled to receive a permit.

(C) Should the Board deny the issuance of the license permit, its decision may be subject to review in accordance with the Arkansas Administrative Procedure Act.

[fn21] § 13.

[fn22] § 13 c.

Section IX. DUPLICATE PERMITS

The SBCA may issue a duplicate permit for one that has been lost, stolen or destroyed, or for a permit which the permittee desires to replace. The licensee must make the request in writing and provide satisfactory proof of loss, theft or destruction, or upon surrender of the certificate for replacement and the payment of a fee of twenty five dollars ($25.00).

Section X. CHANGE OF LOCATION OR NAME

No permittee shall transact the check cashing business under any name or at any location other than that stated on the permit.

(A) Whenever a permittee changes his place of business to a street address other than that designated on his permit, he shall give written notice to the SBCA at least forty five (45) days prior to the change. Upon receipt of the written notice, a bond rider reflecting the address change, and the payment of a fee of twenty five dollars ($25.00), the SBCA shall issue a new permit reflecting the changes.

(B) The check casher must provide proof to the SBCA of the steps it has taken to notify its customers of the impending move. In the event the permittee is providing deferred presentment services, this proof should include, at a minimum, written and verbal notice provided to its customers regarding how they may repurchase their checks.

(C) Whenever a licensee changes his name to one other than that designated on his permit, he shall give written notice to the SBCA at least forty five (45) days prior to the change. Upon receipt of the notice, a bond rider reflecting the name change, and payment of a fee of twenty five dollars ($25.00), the SBCA shall issue a new permit reflecting the changes.

Section XI. CHANGE OF OWNERSHIP AND/OR CONTROL

(A) Whenever a change in ownership or control of a licensee is proposed, the licensee shall give written notice to the SBCA at least forty five days (45) days prior to the change. Prior written approval of the SBCA is required for the continued operation of the check-cashing business.[fn23]

(B) A fee of up to Fifty Dollars ($50.00) shall be paid by the person requesting approval to cover costs incurred by the SBCA in investigating the change of control and/or ownership.

(C) The Licensee shall submit information to the SBCA sufficient to establish that a new application is not required. In the absence of such a showing, the Licensee shall submit a new application.

[fn23] § 10.

Section XII. NOTICE

Any application for a license permit, report, renewal application, amendment of information, or any other notice or document pertaining to the Act or these Regulations to be filed with the SBCA shall be sent to:

Arkansas State Board of Collection Agencies

Division of Check Cashing/Deferred Presentment Services

523 S. Louisiana, Suite 460

Little Rock, AR 72201

Section XIII. ACCESS TO SBCA FILES

The check casher files maintained at the offices of the SBCA are considered public records and are subject to the provisions of the Arkansas Freedom of Information Act.[fn24] Any decisions regarding the examination and copying of these records or exemptions from examination and copying will be made by the SBCA in accordance with Arkansas statutes and case law.

OPERATIONS

[fn24] § 25-19-103.

Section XIV. SIGNS/DISCLOSURE

Each check casher must continuously and conspicuously post the following:

A) A complete, detailed, and unambiguous schedule of fees it charges for its services it;

B) A list of acceptable identification;

C) Its license permit.

D) The term "conspicuously post" means placed in plain public view in such a location and in such a way and of such form and size and typeface that any person seeking the services of a licensee could clearly and easily see and read the contents of the posted notices.

Section XV. PERMISSIBLE FEES

The Check casher shall charge up to the following as fees for the service of selling currency in exchange for a check:[fn25]

(A) To initially set up a customer's account and to help defray the licensee's operational costs, a one time fee not to exceed to Five Dollars ($5.00) may be charged. If the licensee provides an identification card, he may charge a fee not to exceed Five Dollars ($5.00) for a replacement card.

(B) To purchase a government check, a service fee of up to five percent (5%) of the face amount of the check may be charged.

(C) To purchase a personal check or money order, a service fee of up to ten percent (10%) of the face amount of the check may be charged.

(D) To purchase all other types of checks, including but not limited to payroll checks, cashier's checks, travelers checks, insurance checks, etc., a service fee of up to six percent (6%) of the face amount of the check may be charged.

(E) To hold personal checks or provide deferred presentment services for personal checks, an additional fee not to exceed ten dollars ($10.00) may be charged and added to the above.

[fn25] No footnote is given on the original Rules/Regs.

Section XVI. DEFERRED PRESENTMENT OPTION SERVICES

A) A check casher may purchase a customer's check and provide that customer with the deferred presentment services by agreeing to hold the customer's check for an agreed period of time of not less than six (6) days nor more than thirty one (31) days. The agreed date on which the check will be deposited or presented to the financial institution must be set out in the Deferred Presentment Agreement in language that is clear and understandable to the customer, who will then have the right to repurchase his check before the deposit date set out in the Agreement.

B) Only personal checks may be purchased for this service.

C) The customer must receive a copy of the Deferred Presentment Agreement and a copy must be retained by the check casher.

D) The customer may repurchase his check by:

(1) Paying the check-casher in cash the full face amount of that check;

(2) Before the time agreed to and set out in the Deferred Presentment Agreement.

(3) Upon repurchase, the check casher shall maintain adequate records to show the receipt of cash funds from the customer who tendered cash for repurchase of his check and provide the customer with a receipt for the cash funds he tendered for repurchase of his check. The records and receipt shall at a minimum show:

(a) The name of the customer;

(b) The name of the licensee;

(c) The location and date of the transaction;

(d) The date the deferred presentment check is repurchased; and

(e) The amount of cash received from the customer.

E) If the customer does not exercise his option to repurchase his check, the check casher must present or deposit the customer's check to the financial institution pursuant to the agreed date of deposit set out in clear, understandable language in the Deferred Presentment Agreement.[fn26]

[fn26] § 6 d.

Section XVII. PARTIAL PAYMENTS

At the customer's option and with the written agreement of the check casher, the customer may exercise the customer's option to repurchase his check which is the subject of a Deferred Presentment Option Agreement by offering to pay the check casher a partial payment for the repurchase of the check in cash. If the check casher accepts any such partial payment from the customer, the following procedures must be followed:

A) The check must not be presented for deposit;[fn27]

B) The check casher must not charge the customer any additional fees for making partial payments;

C) The customer may write the check casher a new check for the balance owed on the transaction and this new check should be attached to the DPO Agreement. The old check should then be voided and either attached to the Agreement or returned to the customer.

D) Accurate record keeping must be maintained to show the partial payments made by the customer and the remaining balance due;

E) The check casher shall provide the customer with a receipt for each partial payment. The receipt shall show:

(a) The name of the customer;

(b) The name of the licensee;

(c) The location of the transaction;

(d) The date of the partial payment;

(e) The amount of cash received from the customer; and

(f) The balance that remains due.

F) The customer must sign and receive a copy of the receipt and the check casher must retain a copy of this receipt for his records.

G) This procedure must be followed until the check is paid in full by the customer.

H) If the customer and check casher agree to a partial payment repurchase plan, they must put their plan in a writing which adequately discloses the terms agreed upon by both parties. The check casher shall provide a copy of the repayment plan to the customer and shall retain a copy for his records. The plan shall disclose that if payment is not made in accordance with the plan, the check casher may present or deposit the current check which represents the balance that is still due or pursue other means of collection as allowed by law.

I) The check casher must submit his overall plan for handling partial payments, including a sample copy of the plan, to the SBCA for approval prior to its use.

J) This procedure shall not constitute a renewal or consolidation of a transaction.

[fn27] § 6 d.

Section XVIII. BUSINESS PRACTICES

(A) Each check-cashing business shall pay in cash[fn28] to its customer the entire amount of a check it purchased less any service fees permitted by law. All checks shall be paid on the same date the check is presented to the check casher.

(B) No check-cashing business shall directly or indirectly:

(1) Purchase and/or hold any check at any place other than the licensed business location;

(2) Purchase and/or hold any check if the check-cashing business has reason to believe that the maker or the person presenting the check has used a name on the check which is not his legal name. The use of common nicknames or names resulting from legal changes made through the courts or by marriage shall not be deemed a violation of this rule;

(3) Accept an undated check or alter or change the date of any check presented for cashing[fn29];

(4) Fail to present or deposit in a timely manner with a financial institution a check which was sold by a customer for cash and held for repurchase by the customer.

[fn28] § 6 I(L).

[fn29] § 6 j.

Section XIX. LICENSEE'S REMEDIES

A) If a customer's check is returned due to insufficient funds, closed account, or stop payment order, the licensee is entitled to the following:

1) All civil remedies allowed by law including receiving:

b) The face amount of the check purchased;

c) A returned check fee;

d) Court costs; and

e) Reasonable attorney's fees.

2) If a customer's check is returned due to insufficient funds, criminal remedies may be instituted only if:

a) The licensee would otherwise be entitled to initiate criminal prosecution; and

b) The customer's account was closed by the customer either before or during the term of the Deferred Presentment Option Agreement; and

c) Payment of the check was stopped by the customer.

Section XX. RECORD KEEPING

A) Each licensee shall keep and use in its business any books, accounts, records and other documentation required by the SBCA to carry into effect the provisions of the Act and Regulations issued. Each licensee shall preserve these books, accounts, records and other documentation for at least two (2) years after melting the last entry on any transaction.[fn30]

B) At a minimum, these books, accounts, records and documentation shall include the original or copies of all documentation signed by a customer, copies of all documents pertaining to deferred presentment transactions, evidence of all payments received from the customer, evidence of all checks presented or deposited to a financial institution, evidence of all returned checks and the assessment of NSF charges, evidence of all transactions turned over for collection including court costs and attorneys fees, a cash receipts/disbursement journal or acceptable equivalent, evidence of check deposits or presentment, partial payment plans and any other documentation that may be deemed necessary by the SBCA.

C) Each licensee may submit to the SBCA his own proposed list of books, accounts, records and other documents to be maintain at each location. If, after considering the particular facts and circumstances of a licensee's record keeping procedures and the public interest in promoting the efficiency and effectiveness of compliance exams, the SBCA may approve such list. If the SBCA fails to disapprove such procedures within sixty (60) days of its receipt, then the Licensee shall be deemed to be in compliance with Rule XX.

[fn30] § 12.

Section XXI. UNFAIR OR UNCONSCIONABLE BUSINESS PRACTICES

No licensee shall engage in unfair or deceptive acts, practices or advertising in the conduct of its check cashing business.

Section XXII. GROUNDS FOR REVOCATION or SUSPENSION OF A PERMIT

A) The SBCA may, after reasonable notice and an opportunity to be heard, suspend or revoke any permit if the Director finds that the check casher has knowingly or without due care committed one of the following:[fn31]

1) Failed to pay the requisite fees including but not limited to annual fees and investigation fees.

2) Violated a provision of the Act or Regulations;

3) Made a false statement or failing to give a true response on any application form or other document submitted to the SBCA.

4) A renewal or other consolidation of a deferred presentment option transaction with the proceeds of another deferred presentment option transaction made by the same customer;[fn32]

5) Holding more than one (1) deferred presentment check per permitted location at one time for the same customer;[fn33]

6) Accepting a check in excess of $400 for a deferred presentment transaction;[fn34]

7) Failing to make the disclosures required by the Act; 8) Operating at any time without a valid license permit;

9) Operating without the minimum capital or bond requirements of the Act;

10) Committing any fraudulent act, engaging in any dishonest activities or making any misrepresentations substantially related to the check cashing and/or deferred presentment option business; or

11) Using violence or threats of physical violence in its collection efforts.

[fn31] § 14 a.

[fn32] § 6 N.

[fn33] § 6 m.

[fn34] § 6 m.

Section XXIII. ADMINISTRATIVE HEARING

A) Any hearing on the suspension or revocation of a check cashing permit shall be held on written notice given to the licensee at least twenty (20) days prior to the hearing date.[fn35]

B) The notice shall include:[fn36]

(1) A statement of the time, place, and nature of the hearing;

(2) A statement of the legal authority and jurisdiction under which the hearing is to be held;

(3) A short and plain statement of the matters of fact and law asserted.

C) The licensee will be given an opportunity to show compliance with all the lawful requirements for the retention of its license.[fn37]

D) If the SBCA finds that public health, safety, or welfare requires emergency action and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action, which proceedings shall be promptly instituted and determined.[fn38]

[fn35] § l4c.

[fn36] §25-15-208a 2.

[fn37] §25-15-211b.

[fn38] §25-15-211C.

Section XXIV. SBCA REMEDIES FOR VIOLATIONS

If it is found, after notice and a hearing, that a person has violated the Act or any of its Regulations, the SBCA may do any or all of the following:

A) Issue a Cease and Desist Order ordering the person to cease and desist violating the Act or any administrative rules[fn39];

B) Require the refund of any fees collected by such person in violation of the Act;

C) Require the payment to the SBCA of civil penalties of up to one thousand dollars ($1,000.00) for each transaction in violation or for each day that violation occurred and continued.[fn40]

[fn39] § 15(1).

[fn40] $15.

Section XXV. PRIOR APPROVAL OF CHECK CASHING BUSINESS FORMS

A) In order to ensure that applicants and check-cashers comply with the Act and the Regulations, the SBCA shall have the right and authority to:

1) Promulgate model forms for use by applicants or check-cashers; and

2) To the extent applicants and/or check-cashers elect not to use a model form promulgated by the SBCA, applicants and/or licensed check cashers shall submit to the SBCA for review and approval any forms which applicants and/or permitted check-cashers intend to use in connection with the check cashing business in advance of their use.

B) Applicants and check-cashers shall provide the SBCA with copies of all proposed forms which they intend to use in their check-cashing businesses at least thirty (30) days prior to the use of such forms in their businesses.

C) The SBCA shall review such proposed forms for compliance with the Act and applicants and/or check-cashers shall modify the proposed forms as may be required by the Department prior to using such forms in their check-cashing business.

D) If a check casher elects to use the model forms or seeks and receives pre-approval of its forms, such use or approval shall protect the check casher from citation by the SBCA for any violation regarding the approved format.

E) If the SBCA does not approve a proposed form, its decision shall be subject to review in accordance with the Administrative Procedures Act.

F) In the event the check casher elects to include an arbitration provision in any customer agreement, the provision must at a minimum recite that:

1) Either the American Arbitration Association, J.A.M.S./Endisput or the National Arbitration Forum shall administer the arbitration;

2) The check casher will advance all of the filing or hearing fees on behalf of its customer;

3) If the arbitrator finds in favor of the check casher, the customer may be required to reimburse the check casher for those filing or hearing fees advanced by the check casher,

4) That both the customer and the licensee shall retain the right to seek adjudication in small claims court for disputes within the scope of that tribunal's jurisdiction.

5) That nothing contained in the arbitration agreement shall prevent or limit the authority of the Arkansas State Board of Collection Agencies from fully exercising its administrative remedies as set forth in Act 1216 of 1999 nor preclude the customer from any administrative remedies available to him under the Act.

Section XXVI. IMPAIRMENT OF FINANCIAL REQUIREMENTS

A licensee shall immediately notify the SBCA in writing if, at any time, it fails to meet the minimum cash or liquid asset requirements of the Act.

Section XXVII. EXAMINATIONS/INVESTIGATIONS

A) The SBCA may examine the books, records, business documents, and/or operations of any licensee at any reasonable time. Such examinations may be with or without advance notice to the licensee.

B) The SBCA, for purposes of discovering violations of the Act or its Regulations and for the purpose of determining whether persons are subject to the provisions of the Act or its Regulations, may examine persons licensed under the Act and persons reasonably suspected of conducting business which would require licensure under the Act. This investigation shall include an examination of all relevant books, records, and papers employed by such persons in the transaction of their business; If the SBCA has received a complaint, it shall have the authority to summon witnesses and examine them under oath concerning matters relating to the complaint, or such other matters as may be relevant to the discovery of violations of the Act, including without limitation the conducting of business without a license. The SBCA may compel the production of documents if it has probable cause to suspect a violation of the Act and/or these Rules and Regulation[fn41].

C) The SBCA may examine or investigate a licensee to assure compliance with the Act and/or when it has probable cause to believe that a licensee may have violated any law or regulation.

D) The SBCA may charge and collect an examination fee of up to two hundred fifty dollars ($250.00) per examination.[fn42]

[fn41] § 12(b).

[fn42] § 14(a)(1).

Section XXVIII. COMPLAINTS

Any person aggrieved by the conduct of a check casher may file a written complaint[fn43] with the SBCA. Nothing shall preclude the aggrieved individual from redressing his grievances through Arkansas administrative proceedings.

A) The SBCA may investigate the consumer complaint by doing at a minimum any and all of the following:

1) Conduct a field examination;

2) Compel the production of documents, including but not limited to books, records, papers, contracts, agreements, and/or any other documents relevant to the investigation;

3) Subpoena witnesses;

4) Administer and examine any individual under oath.

B) The SBCA may petition a court of competent jurisdiction for an order to compel compliance with a subpoena for the production of evidence or of testimony.

C) If a licensee fails to comply with a subpoena, the Director may suspend its license pending compliance with the subpoena.[fn44]

[fn43] § 17.

[fn44] § 17 c.

Section XXIX. STATUTE OF LIMITATIONS

Any civil remedial actions taken by the SBCA or by any other person against a check casher must be commenced within five (5) years of the action or inaction giving rise to the right to seek the civil remedy.[fn45]

[fn45] § 17 f.

Section XXX. COLLECTION/DISBURSEMENT OF BOND

(A) Each licensee is required to maintain a fifty thousand dollar ($50,000.00) surety bond for the use and benefit of the State of Arkansas and/or for any injured party and to ensure that the licensee shall faithfully perform its duties and obligations pertaining to the business of check cashing and/or deferred presentment services.

(B) If the Board determines, after due process, including proper notice and opportunity to be heard, that the licensee has violated any provision of Act 1216 of 1999 or these Rules and Regulations, it shall collect from the required Surety Bond any monies due and payable to satisfy any loss or damages suffered by the State including civil penalties and/or any loss or damages suffered by any persons of the State. Payment on the bond shall be upon the written demand of the State of Arkansas State Board of Collection Agencies. The above notwithstanding, no monies may be collected from the Bond and/or disbursed pending any administrative and/or judicial appeals.

(C) In the event of any loss or damage suffered by any persons of the State, the SBCA shall proceed to disburse the funds it has collected from the Surety company in accordance with these Rules.

1) The SBCA shall cause notice of the noncompliance to be given. This notice shall contain the name and address of the check cashing business (licensee) whose bond has been collected; name and address of the owner or owners if the licensee was proprietorship or partnership; address of the SBCA where claims are to be sent; who may file a claim; requirements for a proper claim, and time to file.

2) Individual notice to interested persons need be given only when the SBCA has reasonable cause to believe that such person possesses a claim against the licensee's surety bond.

3) The notice requirement of this section may be served in any or all of the following manners:

a) By certified mail, return receipt requested to all who have expressed a complaint of noncompliance. Such notice shall be mailed to the business address of the claimant.

b) By certified mail, return receipt requested to all others that the SBCA has reason to believe have a claim as to the bond; or

c) By publishing once a week for two consecutive weeks in a newspaper that has a statewide circulation and in a newspaper in the county or the licensee with a countywide circulation, if there is such a paper.

4) Once notice is given, any claim must be filed within ninety (90) days of the date of the first publication. A claim must state the name and address of the claiming party, an itemized list of the amounts claimed; and attach reasonable proof that he is due this amount. All claims must be timely filed or the claimant shall be forever barred and precluded from receiving any benefit in the surety bond.

5) All expenses incurred in giving notice under this provision shall be paid from the proceeds of the bond.

6) At the expiration of ninety (90) days, the SBCA as soon as practical thereafter, shall hold a hearing to determine the amount, if any, to be awarded on each timely filed claim. At least ten (10) days notice of this hearing shall be given by first class mail to all who filed timely claims.

a) At the hearing, the SBCA may hear evidence to determine the validity of any or all claims and shall either approve or deny all claims properly filed.

b) The approval or denial of any claim shall be subject to review pursuant to the Arkansas Administrative Procedures Act.

c) In the event that the bond is insufficient to pay all claims found to be valid by the SBCA, disbursement shall be made on a pro rata share. In the event that a bond surplus arises, the excess funds shall be returned to the bonding company.

d) Payment to those claimants which the SBCA has found to have valid claims shall be made within a reasonable time after all timely filed claims are finally determined including resolution of any administrative and/or judicial appeals.

Notes

031.00.00 Ark. Code R. § 001

3/13/2000.