BILL NUMBER: AB 425	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   APRIL 15, 1999
	AMENDED IN ASSEMBLY   MARCH 24, 1999

INTRODUCED BY   Assembly  Member Corbett  
Members Corbett, Aroner, Jackson, Washington, and Wildman 

                        FEBRUARY 12, 1999

   An act to amend Sections 1789.33 and 1789.35 of the Civil Code,
relating to consumers.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 425, as amended, Corbett.  Consumers:  check cashing.
   Existing law regulates the practices of, and fees charged by,
check cashing services in certain transactions where a check casher
agrees to defer the deposit of a personal check written by a
customer.  In those transactions, the check casher is required, among
other things, to disclose the total amount of fees charged for the
deferred deposit in dollars and as an annual percentage rate and is
prohibited from entering into a deferred deposit agreement with a
customer while an earlier agreement remains in effect.  Existing law
provides that willful violation of certain of these requirements is a
misdemeanor.
   This bill would  provide that the total amount of fees
charged in a deferred deposit transaction, when expressed as an
annual percentage rate, shall not exceed 24%; would  
authorize a check casher to receive an administrative fee of no more
than $6.50 for each deferred agreement entered into with a customer;
would  prohibit a check casher from entering into more than 6
deferred deposit transactions in a 12-month period with the same
customer; and would prohibit repayment, refinancing, or consolidation
of one deferred deposit transaction with another by the same, or a
related, check casher, as specified.  Willful violation of these
requirements would be a misdemeanor and, by expanding an existing
crime, the bill would impose a state-mandated local program.  The
bill would also direct the Department of Justice to conduct a
feasibility study, and to report to the Governor and Legislature by a
specified date, relating to computer tracking of deferred deposit
transactions.
  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.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  yes.


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


  SECTION 1.  Section 1789.33 of the Civil Code is amended 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.   A check casher may receive an administrative
fee of no more than six dollars and fifty cents ($6.50) for each
deferred deposit agreement entered into with a customer.   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)  ,
which annual percentage rate shall not exceed 24 percent  .
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.
   (c) A check casher shall not enter into more than six agreements
for a deferred deposit of a personal check pursuant to this section
with the same customer during any consecutive 12-month period.
   (d) The Department of Justice shall conduct a study to determine
the feasibility of a computerized tracking system for individuals who
enter into deferred deposit transactions pursuant to this section
and shall report to the Governor and the Legislature regarding the
results of that study on or before January 1, 2001.
  SEC. 2.  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, shall be 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.  A deferred deposit transaction shall not be
repaid, refinanced, or consolidated by or with the proceeds of
another deferred deposit transaction or similar arrangement made by
the same check casher or any person related to the check casher by
common ownership or control, or in whom the check casher has a
financial interest.
   (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
or Section 1789.33 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 or
Section 1789.33 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 or
Section 1789.33 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. 3.  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.