BILL NUMBER: SB 1959	ENROLLED
	BILL TEXT

	PASSED THE SENATE   AUGUST 30, 1996
	PASSED THE ASSEMBLY   AUGUST 28, 1996
	AMENDED IN ASSEMBLY   JULY 2, 1996
	AMENDED IN ASSEMBLY   JUNE 18, 1996
	AMENDED IN SENATE   MAY 23, 1996
	AMENDED IN SENATE   APRIL 25, 1996
	AMENDED IN SENATE   APRIL 17, 1996

INTRODUCED BY  Senator Calderon

                        FEBRUARY 23, 1996

   An act to amend Sections 1789.30, 1789.31, 1789.35, and 1789.37
of, and to add Section 1789.33 to, the Civil Code, and to amend
Section 22050 of the Financial Code, relating to check cashers.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1959, Calderon.  Check cashers:  military identification card
and deferred deposits.
   Existing law regulates the provision of certain services by check
cashers, as defined.  Existing law requires check cashers to post a
complete schedule of fees for specified services provided to
customers, and a list of acceptable identification, as specified.  In
addition, under existing law it is a misdemeanor for a check casher
to charge a fee in excess of 3% of the face amount of the check or
$3, whichever is greater, for cashing a payroll check or government
check if identification is provided by the customer.  For purposes of
this provision, identification is limited to a California driver's
license or a California identification card.  Existing law also
requires the owner of a check casher's business to obtain a permit to
conduct that business, and specifies the information to be provided
on an application for that permit.
   This bill would expand the scope of these provisions to
specifically permit check cashers to defer the deposit of personal
checks written by their customers for up to 30 days, as specified.
The bill would define a deferred deposit for these purposes.
   Among other things, the bill would require every deferred deposit
transaction to be made pursuant to a written agreement that has been
signed, as specified.  The bill would also require disclosure of any
fees to be charged for a deferred deposit, as specified.  The bill
would specifically provide that a customer shall not be subject to
criminal penalties for the failure to comply with that written
agreement.
   The bill would also require applicants for a permit to conduct a
check casher's business to disclose whether they intend to enter into
deferred deposit agreements.  The bill would provide that check
cashers who hold a valid permit shall not be subject to the
California Finance Lenders Law, as specified.
   The bill would provide that the identification required for
purposes of the provision limiting the fees that may be charged for
cashing a payroll check or a government check may be a valid United
States military identification card, in addition to a California
driver's license or a California identification card.  The bill would
also impose restrictions on the fees that may be charged for cashing
any personal check, whether for immediate or deferred deposit, and
would prohibit a check casher from entering into more than one
deferred deposit agreement at a time with the same customer, as
specified.  The bill would also make a related change.  The bill
would also permit collection of a fee for the return of a deferred
deposit check that is dishonored.  A violation of these provisions
would be a misdemeanor, thus imposing a state-mandated local program.
  The bill also would provide that any person who violates these
provisions regulating check cashers, shall be liable for a civil
penalty not to exceed $2,000.  The bill would additionally permit any
person who is injured by any violation of those provisions to bring
an action, as specified.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1789.30 of the Civil Code is amended to read:
   1789.30.  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 and making any deferred
deposit thereof, (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.
  SEC. 2.  Section 1789.31 of the Civil Code is amended to read:
   1789.31.  (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 minimum flat
fee not exceeding two dollars ($2) as a service to its customers that
is incidental to its main purpose or business.
   (b) As used in this title, "deferred deposit" means a transaction
whereby the check casher refrains from depositing a personal check
written by a customer until a specific date, pursuant to a written
agreement, as provided in Section 1789.33.
  SEC. 2.5.  Section 1789.33 is added to the Civil Code, to read:
   1789.33.  (a) A check casher may defer the deposit of a personal
check written by a customer for up to 30 days, pursuant to the
provisions of this section.  The face amount of the check shall not
exceed three hundred dollars ($300).  Each deferred deposit shall be
made pursuant to a written agreement that has been signed by the
customer and by the check casher or an authorized representative of
the check casher.  The written agreement shall contain a statement of
the total amount of any fees charged for the deferred deposit,
expressed both in United States currency and as an annual percentage
rate (APR).  The written agreement shall authorize the check casher
to defer deposit of the personal check until a specific date not
later than 30 days from the date the written agreement was signed and
executed.  The written agreement shall not permit the check casher
to accept collateral.
   (b) A customer who enters into a deferred deposit agreement and
offers a personal check to a check casher pursuant to that agreement
shall not be subject to any criminal penalty for the failure to
comply with the terms of that agreement.
  SEC. 3.  Section 1789.35 of the Civil Code is amended to read:
   1789.35.  (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).
   (c) A check casher shall provide a receipt to the customer for
each transaction.
   (d) Subject to the limitations of Section 1789.33, 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, or for deferred deposit in
an amount not to exceed 15 percent of the face value of the check.
   (e) A check casher shall not enter into an agreement for a
deferred deposit with a customer during the period of time that an
earlier written agreement for a deferred deposit for the same
customer is in effect.
   (f) A check casher who enters into a deferred deposit agreement
and accepts a check passed on insufficient funds, or any assignee of
that check casher, shall not be entitled to recover damages in any
action brought pursuant to, or governed by, Section 1719.
   (g) For a transaction pursuant to Section 1789.33, a fee not to
exceed fifteen dollars ($15) may be charged for the return of a
dishonored check by a depositary institution.  The fee may be
collected by a check casher who holds a valid permit issued pursuant
to Section 1789.37, when acting under the authority of that permit.
   (h) No amount in excess of the amounts authorized by this section
shall be directly or indirectly charged by a check casher pursuant to
a deferred deposit agreement.
   (i) 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.
   (j) A willful violation of this section is a misdemeanor.
   (k) 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.
  SEC. 4.  Section 1789.37 of the Civil Code is amended to read:
   1789.37.  (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,
whether the applicant intends to enter into deferred deposit
agreements, 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, provided 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.
  SEC. 5.  Section 22050 of the Financial Code is amended to read:
   22050.  (a) This division does not apply to any person doing
business under any law of this state or of the United States relating
to banks, trust companies, savings and loan associations, industrial
loan companies, credit unions, small business investment companies,
California business and industrial development corporations, or
licensed pawnbrokers.
   (b) This division does not apply to a broker-dealer acting
pursuant to a certificate, then in effect, issued pursuant to Section
25211 of the Corporations Code.
   (c) This division does not apply to a college or university making
a loan for the purpose of permitting a person to pursue a program or
course of study leading to a degree or certificate.
   (d) This division does not apply to a check casher who holds a
valid permit issued pursuant to Section 1789.37 of the Civil Code
when acting under the authority of that permit.
  SEC. 6.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
   Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.