Check Cashers - Obligations Arising From Particular Transactions - Civil Law - CA

Section § 1789.30

If you run a check cashing business in California, you need to clearly display all your fees for cashing checks, selling money orders, and issuing ID cards. This information must be easy to understand and be posted where customers can easily see it. You also have to list which IDs you'll accept. Also, depending on your situation, you might need to file a specific tax return. Most of these rules started at the end of 2004, but some parts kicked in later, like specific rules about cashed checks in 2006 and further changes in 2008.

(a)

(1) Every check casher, as applicable to the services provided, shall post a complete, detailed, and unambiguous schedule of all fees for (A) cashing checks, drafts, money orders, or other commercial paper serving the same purpose, (B) the sale or issuance of money orders, and (C) the initial issuance of any identification card. Each check casher shall also post a list of valid identification which is acceptable in lieu of identification provided by the check casher. The information required by this section shall be clear, legible, and in letters not less than one-half inch in height. The information shall be posted in a conspicuous location in the unobstructed view of the public within the check casher’s premises.

(2) A check casher may be required to file a return required by Section 18631.7 of the Revenue and Taxation Code.

(b)

(1) Except as provided in paragraph (2), this section shall become operative December 31, 2004.

(2)

(A) Except as provided in subparagraph (B), paragraph (2) of subdivision (a) shall apply to checks cashed on or after January 1, 2006.

(B) The amendments to this section made by the act adding this subparagraph shall become operative on January 1, 2008.

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Section § 1789.31

This law defines what a 'check casher' is. A check casher is someone who gets paid to cash checks and similar financial documents. However, it doesn't include banks, credit unions, or retail stores that primarily sell products but also cash checks for a small fee. It officially took effect on December 31, 2004.

(a) As used in this title, a “check casher” means a person or entity that for compensation engages, in whole or in part, in the business of cashing checks, warrants, drafts, money orders, or other commercial paper serving the same purpose. “Check casher” does not include a state or federally chartered bank, savings association, credit union, or industrial loan company. “Check casher” also does not include a retail seller engaged primarily in the business of selling consumer goods, including consumables, to retail buyers that cashes checks or issues money orders for a fee not exceeding two dollars ($2) as a service to its customers that is incidental to its main purpose or business.

(b) This section shall become operative December 31, 2004.

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Section § 1789.32

If a business doesn't share information they're supposed to or charges fees or requires ID in a way that's different from what they've posted, it's breaking a law about unfair business practices.

Failure to post information as required by this title, or the imposition of fees or identification requirements contrary to the information posted, shall constitute an unfair business practice within the meaning of Section 17200 of the Business and Professions Code.

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Section § 1789.35

This law sets rules for check-cashing businesses in California. They can't charge more than 3% of a payroll or government check's face value if the customer shows ID (or 3.5% without ID), with a $3 minimum fee. For personal checks, the fee can't exceed 12% of the check's value. Setting up an account and issuing an ID card can cost up to $10, and replacing a card can cost $5. Businesses must give receipts, and breaking the law can result in fines and legal action. Violations can also lead to misdemeanor charges, and injured customers can sue for damages and potentially receive up to three times their losses and attorney fees. This regulation took effect on December 31, 2004.

(a) A check casher shall not charge a fee for cashing a payroll check or government check in excess of 3 percent if identification is provided by the customer, or 3.5 percent without the provision of identification, of the face amount of the check, or three dollars ($3), whichever is greater. Identification, for purposes of this section, is limited to a California driver’s license, a California identification card, or a valid United States military identification card.

(b) A check casher may charge a fee of no more than ten dollars ($10) to set up an initial account and issue an optional identification card for providing check cashing services. A replacement optional identification card may be issued at a cost not to exceed five dollars ($5).

(d) A check casher may charge a fee for cashing a personal check, as posted pursuant to Section 1789.30, for immediate deposit in an amount not to exceed 12 percent of the face value of the check.

(e) Any person who violates any provision of this section shall be liable for a civil penalty not to exceed two thousand dollars ($2,000) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General in any court of competent jurisdiction. Any action brought pursuant to this subdivision shall be commenced within four years of the date on which the act or transaction upon which the action is based occurred.

(f) A willful violation of this section is a misdemeanor.

(g) Any person who is injured by any violation of this section may bring an action for the recovery of damages, an equity proceeding to restrain and enjoin those violations, or both. The amount awarded may be up to three times the damages actually incurred, but in no event less than the amount paid by the aggrieved consumer to a person subject to this section. If the plaintiff prevails, the plaintiff shall be awarded reasonable attorney’s fees and costs. If a court determines by clear and convincing evidence that a breach or violation was willful, the court, in its discretion, may award punitive damages in addition to the amounts set forth above.

(h) This section shall become operative December 31, 2004.

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Section § 1789.37

If you want to run a check cashing business in California, you need a permit from the Department of Justice. To get this permit, you have to apply in writing, pay a fee, and get fingerprinted. Renewals are needed every year with similar requirements. If you've been convicted of certain crimes, you might not qualify. If you operate without a permit, you can face fines or even jail time for repeat offenses. Any fines collected go half to the state and half to the local city or county.

(a) Every owner of a check casher’s business shall obtain a permit from the Department of Justice to conduct a check casher’s business.

(b) All applications for a permit to conduct a check casher’s business shall be filed with the department in writing, signed by the applicant, if an individual, or by a member or officer authorized to sign, if the applicant is a corporation or other entity, and shall state the name of the business, the type of business engaged in, and the business address. Each applicant shall be fingerprinted.

(c) Each applicant for a permit to conduct a check casher’s business shall pay a fee not to exceed the cost of processing the application, fingerprinting the applicant, and checking or obtaining the criminal record of the applicant, at the time of filing the application.

(d) Each applicant shall annually, beginning one year from the date of issuance of a check casher’s permit, file an application for renewal of the permit with the department, along with payment of a renewal fee not to exceed the cost of processing the application for renewal and checking or obtaining the criminal record of the applicant.

(e) The department shall deny an application for a permit to conduct a check casher’s business, or for renewal of a permit, if the applicant has a felony conviction involving dishonesty, fraud, or deceit, if the crime is substantially related to the qualifications, functions, or duties of a person engaged in the business of check cashing.

(f) The department shall adopt regulations to implement this section and shall determine the amount of the application fees required by this section. The department shall prescribe forms for the applications and permit required by this section, which shall be uniform throughout the state.

(g) In any action brought by a city attorney or district attorney to enforce a violation of this section, an owner of a check casher’s business who engages in the business of check cashing without holding a current and valid permit issued by the department pursuant to this section is subject to a civil penalty, as follows:

(1) For the first offense, not more than one thousand dollars ($1,000).

(2) For the second offense, not more than five thousand dollars ($5,000).

(h) Any person who has twice been found in violation of subdivision (g) and who, within 10 years of the date of the first offense, engages in the business of check cashing without holding a current and valid permit issued by the department pursuant to this section is guilty of a misdemeanor punishable by imprisonment in a county jail not exceeding six months, or by a fine not exceeding five thousand dollars ($5,000), or by both that fine and imprisonment.

(i) All civil penalties, forfeited bail, or fines received by any court pursuant to this section shall, as soon as practicable after the receipt thereof, be deposited with the county treasurer of the county in which the court is situated. Fines and forfeitures deposited shall be disbursed pursuant to the Penal Code. Civil penalties deposited shall be paid at least once a month as follows:

(1) Fifty percent to the Treasurer by warrant of the county auditor drawn upon the requisition of the clerk or judge of the court, to be deposited in the State Treasury on order of the Controller.

(2) Fifty percent to the city treasurer of the city, if the offense occurred in a city, otherwise to the treasurer of the county in which the prosecution is conducted. Any money deposited in the State Treasury under this section that is determined by the Controller to have been erroneously deposited shall be refunded out of any money in the State Treasury that is available by law for that purpose.

(j) This section shall become operative December 31, 2004.

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Section § 1789.38

In California, you can't give up your rights under this specific law because doing so goes against public policy, and any agreement that tries to make you waive these rights won't hold up in court.

Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.

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