MSB newsletter, Issue 4 (Oct.-Dec. 2007)

October to December 2007, Volume 3, Issue #4

(This Newsletter is a quarterly publication containing topics of interest to the categories of MSBs regulated by the Georgia Department of Banking and Finance. We hope that you will find this publication to be informative and valuable for providing information about the issues affecting your industry. If there are any issues you would like for the Department to highlight or address in future editions, please e-mail your questions or suggestions to dbfmort@dbf.state.ga.us.)

In This Issue:

REGULATORY MATTERS
Changes in the Regulations Effective September 5, 2007
Changes were made in this year's legislative session which resulted in several changes to the Department's regulations. The highlights of those changes are noted below.
80-3-1-.01 Check Sellers and Money Transmitters: Exemptions and Requirements
A change was made to exempt entities from the Georgia Sale of Checks Act excluding only those federally insured financial institutions. This change in the definition was based upon similar language added to O.C.G.A. 7-1-681 became effective July 1, 2007.
Reporting requirements for licensees' agent(s) information were changed from quarterly to semi-annually, providing for applicable due dates. Similarly, quarterly financial statement requirements were changed to submission on a semi-annual basis. Reports are due on or before the first business day of March for the reporting period July 1 to December 31 of each year, and due on or before the first business day in September for the reporting period of January 1 to June 30.
This new reporting will begin with the July 1 to December 31, 2007 reporting period. Note the NEW screen you will see on the web for online reporting. Direct links are available from the Department's MSB website: http://dbf.georgia.gov/msbforms

Regulation Changes

1

Background Checks &

Agents DBF Policy

3

Statement

Record Disposal Requirements

4

Check CasherCompliance with BSA

4

New SAR Form

5

Action on Applications During the Previous Quarter/Closed Licensees

6 to 8

Check Seller/Money

Transmitter

8

Renewal Information

2008 State Holidays

9

Department Contact Information

10

Or you may use the links noted for each type. The websites are: https://bkgfin.dbf.state.ga.us/MTSemiAnnualReport.html for Money Transmitters, and: https://bkgfin.dbf.state.ga.us/CSSemiAnnualReport.html for Check Sellers.
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Other Significant Regulatory Changes
80-3-1-.02 Check Cashers Many of these changes were made to set simplified qualifications for licensees and registrants, as follows:
80-3-1-.02(2)(a) Removed "Agent" as a defined term; Check Cashers are not permitted to use Agents;
80-3-1-.02(2)(b)- Deleted the "incidental to the retail sale of goods or services" definition, as definitions of "registration" and "exemption" have changed;
80-3-1-.02(4)(a)- Changed the "exemptee" definition which included income caps involving a 2% fee and a maximum per annum income of $25,000, and instead provides a new definition for exemptees as those who do not charge a fee for cashing a check;
80-3-1-.02(4)(b) - Clarifies the registrant classification, placing caps on the rate/fee amount which can be charged and specifying that no advertising may be conducted.
80-3-1-.02(6)(b)- Added the requirement for check cashers' employees to have criminal history background checks run prior to hiring;
80-3-1-.02(9)(b) Requires prior written application to and approval by the Department for a change in ownership of the license.

As a matter of reminder regarding the new classifications for Check Cashing licensing, registration, or exemption, please remember the following revised classifications:

Check Casher Licensing, Registration, or

Exemption

Generally, the changes in licensing, registration,

and exemption qualifications passed by the

General Assembly in the 2007 Legislative session

are as follows:



License - A full service license is required

if you charge a fee that exceeds the greater of

$2.00 or 2% of the face amount of the check.

Advertising is permitted ONLY by Full Service

Licensees.



Registration - A registration is required if

you charge a fee, the fee DOES NOT exceed the

greater of $2.00 or 2% of the face amount of the

check, and you DO NOT advertise.



Exemptions - An entity that cashes checks

for which NO FEE is charged for the service is

exempt from the provisions of Article 4A.

All registrations and exemptions which were based on incidental retail sales and levels of income from check cashing activity have been eliminated. License requirements are now based on amount of fees charged and the advertising of check cashing services. Please note the following examples.

Check Cashing Full Service License Required



If your fees charged for check cashing

services EVER exceed the greater of $2 or 2% of

the face amount of the check, then a full service

LICENSE is required, regardless of whether or not

you advertise such services.



If your fees charged for check cashing

services NEVER exceed the greater of $2 or 2% of

the face amount of the check, but you DO

advertise such services, then a full service LICENSE

is required.

Check Cashing Registration Required



If your fees charged for check cashing

services NEVER exceed the greater of $2 or 2% of

the face amount of the check, AND you DO NOT

advertise such services, then an application to

become a REGISTERED check casher is permitted.



If you charge any fee and advertise the

service, then a full service LICENSE is required.

Exemption from Check Cashing Licensing or

Registration



If you DO NOT charge a FEE to cash a

check you DO NOT need to

obtain a license or registration.

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Background Checks Check Sellers, Money Transmitters, and Check Cashers are affected by changes to both O.C.G.A. Title 13 Articles 4 and 4A relating to the requirement that applicants, licensees, and additionally in the case of check cashers, registrants, are required to perform background checks on all persons working in the licensed or registered activity of the applicant, licensee or registrant PRIOR TO HIRING the individual. The law has always prohibited the hiring of felons to work in these regulated businesses. The requirement to perform the required background check prior to hiring to help ensure that felons are not working in the industry has been added. In addition, regulatory changes have further defined the persons to be checked, and added a fine provision for failure to have performed those required checks.
Employees included in the requirement, and additionally agents for check sellers and money transmitters, are only those which are involved with the check cashing or check selling/money transmission function(s). In addition, the Department has issued a policy statement, as follows herein, which further defines "agent" for those holding a Seller of Checks/Money Transmission license.
80-3-1-.07) Administrative Fines and Penalties These changes for licensees and registrants are as follow:
80-3-1-.07(1)(f) - Added the requirement that check cashers' employees have criminal history background checks run prior to hiring, along with a record retention requirement for maintaining those records. Failure to meet the requirements will result in a $1,000 fine;
80-3-1-.07(2)(e) - Added the requirement that check seller's employees or agents have criminal history background checks run prior to hiring, along with a record retention requirement for maintaining those records. Failure to meet the requirements will result in a $1,000 fine. Includes Money Transmitters.

MONEY SERVICES BUSINESSES: POLICY STATEMENT REGARDING SCOPE OF PERSONS COVERED BY "AGENTS" AT RULE 80-3-01-.07(2)(e)
Purpose:
Based upon questions recently received in response to the Department of Banking and Finance (Department) Final Regulations adopted August 14, 2007, this Policy Statement provides a Department definition for the term "agents" for purposes of Rule 80-3-1-.07(2)(e)
Background:
O.C.G.A. Section 7-1-682(e) recently enacted by the Georgia General Assembly in pertinent part provides as follows:
"(e) Every applicant and licensee shall be authorized and required to obtain and maintain the results of background checks on employees and agents working in or for the applicant or licensee..."
The Department of Banking and Finance Final Regulations adopted on August 14, 2007, attempted to clarify the scope of persons covered by the requirement and the resulting fine for failure to obtain such background checks. Based upon numerous requests for further clarity, the Department has adopted the following definition of "agents" for purposes of Rule 80- 3-1-.07(2)(e). The Department has provided such definition to its Money Services Businesses Examiners and has posted this Policy Statement to the Department's website information.
Definition:
For purposes of Rule 80-3-1-.07(2)(e) only, the Department shall define "agents" as those individuals with a ten percent (10%) or more ownership interest in the outlet through which the checks or money orders are sold under an agreement with the Licensee and those sales outlets that provide money transmission on behalf of a money transmitter on a contractual basis.

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OTHER NEWS
RECORD DISPOSAL REQUIREMENTS UNDER THE BUSINESS ADMINISTRATION ACT (O.C.G.A. 10-15-1 et seq.)
The Governor's Office of Consumer Affairs has requested that the Department remind our regulated entities about Georgia's Business Administration Act (BAA), which regulates the proper disposal of business records that contain the following: sensitive information about a customer's medical condition; certain financial data relating to a customer's account or transaction with a business; data provided by a customer to a business upon opening an account or applying for a loan or credit; and data about a customer's federal, state, or local tax return. According to the BAA, once such records are no longer needed, a business must do one of the following before discarding them:
Shred the record; Erase the personal information contained in the record; Modify the record so that the personal information is unreadable; or Take actions that will ensure that no unauthorized person will have access to the personal information contained in the records. Improper disposal of records containing personal information may result in a fine of $500 per record, up to $10,000.
For more information regarding document disposal, contact Bill Cloud, Governor's Office of Consumer Affairs, at 404-656-3790.

BSA ISSUES FOR CHECK CASHERS A Reminder
Common issues noted during examinations of check cashers involve several different statutes and regulations. Some of the federal regulations that apply to check cashers are for the larger purpose of protecting the whole country against terrorists, money launderers and other risks. The following is a VERY BRIEF description of actions you need to take to be in compliance with some federal regulations. For information that you need to read, PLEASE refer to our website: http://dbf.georgia.gov/00/channel_title/0,2094,4341 4745_46385621,00.html. This is the Money Services Business, Forms and Applications page. To review our MSB information look down the page to the section in the chart titled Bank Secrecy Act Information & News Items. You can read about the requirements for completing Currency Transaction Reports, Suspicious Activity Reports, conducting independent review and other topics. Remember that your risk level may not be the same as your neighbors risk level and your

program must be written based on the risks posed by the location, size, nature and volume of the financial services provided by you.
You should also visit www.msb.gov for more information, including a Fact Sheet found at http://www.msb.gov/pdf/FinCENfactsheet.pdf. Spend some time on the www.fincen.gov website also. If you read and understand this information you should be able to put together a program to protect your company that meets the requirements of the regulation.
Minimum BSA compliance requires the following: Registration with the U.S. Department of the Treasury Financial Crimes Enforcement Network. This registration must be renewed every two years (for those who handle transactions of $1,000 or more, for one person, in one day). Cash Transaction Reports must be filed for all transactions greater than $10,000. A Monetary Instrument Log must be maintained for all sales of money orders

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between $3,000 and $10,000 to the same customer in a day. The licensee has to have incorporated the following four items into an Anti-Money Laundering (AML) Compliance Program: 1. The licensee must incorporate
policies, procedures, and internal controls reasonably designed to assure compliance with the BSA. These must be written. 2. The licensee must designate a compliance officer to be responsible for day-to-day compliance with the BSA and the AML compliance program. This designation must be in writing. 3. The licensee must provide education and/or training of appropriate personnel. The proof of the education or required reading must be in writing. 4. The licensee must provide for an independent review to monitor and maintain an adequate program.
In addition, check cashers must have a policy that explains procedures used to comply with the Office of Foreign Asset Control. Go to their website to understand more about their purpose: http://www.treas.gov/offices/enforcement/ofac/.
There is a list called "Specially Designated Nationals List" and if you complete a transaction with a person that is on this list, the federal government may pursue additional actions against your business. When you check the list and identify a customer on the list, you will need to call the OFAC hotline. Read the information at http://www.fincen.gov/hotlineterrorist.pdf. Also go to and read "Protecting Our National Security: The Critical Nature of OFAC Compliance for Money Service Business" here: http://www.treas.gov/offices/enforcement/ofac/regu lations/msb_reg.pdf If you don't have access to the internet, please visit a library to review all of the information referenced here. Other important issues related to the state law and regulations include:

Section 7-1-705(g) and Rule 80-3-1-.06(2): report fraudulent or forged checks
Rule 80-3-1-.02(5)(b): maintain logs of checks cashed (specific information required)
Rule 80-3-1-.02(5)(c) maintain a daily reconcilement of cash (specific information required)
Rule 80-3-1-.02(5)(g) provide all customers with a receipt (specific information required)
Section 7-1-705(a) post fees charged for cashing checks
Rule 80-3-1-.02(3) post the license in plain view
Rule 80-3-1-.02(l) have sufficient financial resources, you must provide current financial statements
Rule 80-3-1-.02(5)(e) maintain a general ledger in order to produce quarterly financial statements
Rule 80-3-1-.02(6) maintain personnel files (specific information required)
These are not the only state rules and regulations that require compliance. You MUST refer to our law and rules to read the details of the above and all other law and rules that have not been mentioned. These are all found on our website and are changed annually so remember to update your copy and review it often.
Suspicious Activity Reports Reminder The Financial Crimes Enforcement Network (FinCEN) has revised Form TD F 90-22.56, Suspicious Activity Report by Money Services Business, The new report is FinCEN Form 109, Suspicious Activity Report by Money Services Business. Form TD F 90-22.56 is no longer being accepted by the Enterprise Computing Center- Detroit. It expired September 30, 2007.
Revisions to the form include the deletion of the continuation sheet requirement, modifications to the contact information to protect the individual, and the relocation of law enforcement contact reporting information to the narrative. The revised SAR-MSB may be found at www.msb.gov under "What's New". Be sure to include the form's instructions in the download, as these contain critical "How to" information for completing the form. Any questions regarding the revised format may be directed to the BSA Forms Manager via the FinCEN Helpline at 1-800-949-2732.

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ACTION ON APPLICATIONS DURING THE PREVIOUS QUARTER

APPROVED CHECK CASHERS (License/Registration) Third Quarter 2007

Lic# 22448 22678 22679 22698 22699 22700 22701 22706 22716 22722 22723 22724 22725 22749 22750 22751 22782 22783 22785 22786 22788 22823 22824
22825 22826 22827 22828 22829
22830 22831 22834 22836 22838 22866 22868 22871 22874 22892 22894 22895

Company Name Sonac, Inc. CW Financial of GA, LLC The Beverage Outlet Roy's Little Garden Point Financial Corporation Package City Mr. Mac's Quick Mart Rapid Service International Liberty Check Cashing LLC DeKalb Convenience Money World #3 The Winery Elks Club Chevron Empire Food Mart Five Star Super Market Hop N Shop Dos Amigos Grocery Sunoco Food Mart Carniceria y Tienda la Mexicana A&M Food Store Cash Now Olde Towne Convenience Tibbs Road Convenience Store Tifton Business & Tax Services, Inc. Citgo Food Mart Texaco Food Mart Flint River Grocery National Title Pawn of Trion, Inc. National Title Pawn of Chatsworth, Inc. Bob's Grocery Mi Tierra La Chiquita S P Food Mart #3 S P Food Mart #1 H&S Accounting Services Fast Food Mart Fast Times Convenience Store Citgo Food Mart Yogi Sales Corporation JNE Smith Food Store LLC LIMS Check Cashing

DBA Name Sonac Prompt Financial The Beverage Outlet Roy's Little Garden Point Financial Package City Mr. Mac's Quick Mart Rapid Service Travel Liberty Check Cashing DeKalb Convenience Money World #3 The Winery Elks Club Chevron Empire Food Mart Five Star Super Market Hop N Shop Dos Amigos Grocery Sunoco Food Mart Carniceria Tienda la Mexicana A&M Food Store Cash Now Olde Towne Convenience Tibbs Road Convenience Store
Tifton Business & Tax Services Citgo Food Mart Texaco Food Mart Flint River Grocery National Title Pawn of Trion National Title Pawn of Chatsworth Bob's Grocery Mi Tierra La Chiquita S P Food Mart #3 S P Food Mart #1 E. U. Financial Group Fast Food Mart Fast Times Convenience Store Citgo Food Mart Madison Discount Shop Smith Foods LIMS Check Cashing

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City JESUP WASHINGTON CALHOUN ROME NORTHBROOK BAXLEY LOGANVILLE ATLANTA MONTGOMERY ATLANTA ATLANTA CHAMBLEE COVINGTON ATLANTA ATLANTA DECATUR SUGAR HILL HAMPTON ELLIJAY VALDOSTA MILLEN NEWNAN DALTON
TIFTON JONESBORO TUCKER WARWICK TRION
CHATSWORTH CAMILLA WOODSTOCK KINGSLAND ST. MARYS DULUTH GRIFFIN LINCOLNTON MARIETTA VALDOSTA CARROLLTON DORAVILLE

Type L L R R L R R L L R L R R L L R L L R R L R R
R R R L L
L R L R R L L R R R R L

Approved 07/16/2007 07/02/2007 07/02/2007 07/11/2007 07/11/2007 07/13/2007 07/13/2007 07/16/2007 07/24/2007 07/23/2007 07/31/2007 07/31/2007 07/25/2007 08/06/2007 08/09/2007 08/09/2007 08/21/2007 08/21/2007 08/15/2007 08/20/2007 08/21/2007 08/23/2007 08/23/2007
08/23/2007 08/23/2007 08/23/2007 08/27/2007 08/27/2007
08/30/2007 08/31/2007 09/04/2007 09/04/2007 09/04/2007 09/13/2007 09/14/2007 09/25/2007 09/25/2007 09/25/2007 09/26/2007 09/26/2007

Lic# 22896 22897 22898

Company Name St. Thomas Quick Corner Ace Total Solutions, Inc. Minit Mart

R=Registrant L=Full Service

DBA Name St. Thomas Quick Corner Express Tax & Ace Insurers Minit Mart

City LAWRENCEVILLE ROME DECATUR
Total

Type R L R

Approved 09/26/2007 09/26/2007 09/27/2007
43

EXPIRED/CLOSED CHECK CASHERS (License/Registration)

Lic # 18687 18111
21302 20715 20906 21482
18219 22661 20665
9373 16835 19787 21995 14624 19935 21716 21604 19801 21499 22315 22356 22106 19607 21621 20569 19710

Company Name
Conwell William, LLC Mail Suite, Inc.
Sam's East, Inc. Standard Motor Enterprises, Inc. Kampala Enterprises, Inc. Dipken, LLC Consolidated Loan Company of Albany, Inc. Arora, Suraj B. Dos Amigos Check Cashing & Grocery, Inc. William Robert Parrish Chi Family, Inc. Parks Brothers Investment Co, Inc. Zish Enterprises, LLC Young's Family Corporation Kong, Sung N. Knight, Sun H. JMC Food, Inc. Poul Enterprise, Inc. SAR 2, Inc. Thaker, Inc. Boulevard Convenience, Inc. Lopez, Alberto Weathers, Nick W., Jr. EZ Check Cashing LLC Pronto Cash of Georgia, Inc. Chez Fox, LLC

City Clarkston Marietta Bentonville, AR Macon Jonesboro Atlanta
Albany Martinez Sugar Hill Macon Atlanta Atlanta Atlanta Atlanta Atlanta Augusta Conyers Norcross Atlanta Tucker Atlanta Palmetto East Point Snellville Norcross Lawrenceville

Date Closed 07/02/2007 07/19/2007
07/19/2007 07/26/2007 08/03/2007 08/03/2007
08/10/2007 08/10/2007 08/14/2007 08/17/2007 08/17/2007 08/17/2007 08/21/2007 08/28/2007 08/31/2007 09/10/2007 09/11/2007 09/13/2007 09/13/2007 09/13/2007 09/13/2007 09/17/2007 09/21/2007 09/21/2007 09/27/2007 09/28/2007
Total

Type LD LD
LD RD LD RD
LD RD LD LD RD RD LD RD LD RD LD LD LD LD LD LD RD LD LD LD 26

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APPROVED/EXPIRED CHECK SELLERS/ MONEY TRANSMITTERS

LicNUM

Applicant Name

22614 Koumi Services, Inc.

22685 Jay International, LLC

22772 Kwik Dollar, LLC

22768 Aaran Financial Services, Inc.

22893 Qaran Express US Inc.

21209 PSO, Inc.

Name Change

21188

MNESVC

DBA
DINEX
Giant Express Amazon Payments, Inc.

City New York Tucker Houston Minneapolis Minneapolis Miami
Seattle

ST NY GA TX MN MN FL
WA

Approved 7/11/2007 7/11/2007 8/17/2007 9/17/2007 9/28/2007

Closed 08/29/2007

8/24/2007

Total

7

2008 CHECK SELLER/MONEY TRANSMITTER RENEWALS
The Calendar year 2008 CHECK SELLER/MONEY TRANSMITTER on-line license renewal is in process. Late renewal fines will be assessed after midnight November 15. ALL licensees MUST complete their application ON-LINE. The websites, available below or from http://dbf.georgia.gov/msbforms are as follows please make certain you select the correct link for your license type:
Seller of Checks Licensees: https://bkgfin.dbf.state.ga.us/FY08SOCRenewal.html
Money Transmitter Licensees: https://bkgfin.dbf.state.ga.us/FY08MTRenewal.html.
Licensees should use their USER ID and PASSWORD which was mailed with the renewal notice. Please note the following: PAYMENT: ACH or credit card ONLY. Most major cards accepted. PASSWORDS: Provided in your renewal notice. Contact the Department if you misplace this information. INCOMPLETE or "INFORMATION REQUIRED" APPLICATIONS: Supplemental information should be mailed in. Should any additional information then be required based on review of your renewal, the licensee will be contacted by e-mail or fax ONLY. Renewals requiring additional information cannot be approved until such information is received and approved. Should the license expire during that period, no business may be conducted until the license is reinstated. All fines and fees must be paid prior to approval of the renewal. LATE FILINGS: If you have attempted access but been unable to utilize the on-line system, please contact the Department for instructions to complete your application. HARD COPY FORMS ARE NOT AVAILABLE ON THE INTERNET. Failure to request assistance in a timely manner will NOT prevent the assessment of the late fee if the deadline has passed.
RENEWAL QUESTIONS SHOULD BE DIRECTED TO: renewalmsb@dbf.state.ga.us

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2008 Calendar of State Holidays

2008 State Holidays ~ The following is a list of State Holidays when the Capitol and all State agencies will be closed in 2008, as designated by
~ Governor Sonny Perdue, June 15, 2007

Holiday New Year's Day 2008
Robert E. Lee's Birthday Martin Luther King Jr.'s Birthday
Washington's Birthday Confederate Memorial Day Memorial Day Independence Day Labor Day Columbus Day Veterans' Day
Thanksgiving Day
Christmas Day

Date or Observed Date January 1st - Tuesday January 19th - Saturday Observed on Friday, November 28th
January 21st - Monday February 18th - Monday Observed on Friday, December 26th
April 28th - Monday
May 26th - Monday
July 4th - Friday
September 1st - Monday
October 13th - Monday
November 11th - Tuesday November 27th - Thursday Lee's Birthday will be observed on Friday, November 28thth December 25th - Thursday Washington's Birthday will be observed on Friday, Dec. 26th

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Department Contact Information

NAME Melinda Kinard, Director of Money Service Businesses and Mortgage Licensing Joel Byers, Supervisory Manager - Money Service Businesses (MSBs) Peter Lisowski, Financial Examiner
Teresa Koeppel, Administrative Examiner
Susan Nelson, Applications Analyst

E-MAIL ADDRESS mkinard@dbf.state.ga.us

PHONE# 770-986-1649

byers@dbf.state.ga.us

770-986-1656

lisowski@dbf.state.ga.us tkoeppel@dbf.state.ga.us nelson@dbf.state.ga.us

770-986-1639 770-986-1639 770-986-1652

Mailing Address: Department of Banking and Finance 2990 Brandywine Road, Suite 200 Atlanta, GA 30341-5565
Website: http://dbf.georgia.gov
Phone & Fax Numbers: Phone: (770) 986-1633 or Toll Free: (888) 986-1633 Fax: (770) 986-1655 or 1029

E-MAILING THE DEPARTMENT
The Department would like to encourage you to correspond with us using e-mail. Providing written details in the e-mail regarding any questions or concerns you may have allows the Department to forward the request to the appropriate person who handles that area, and if sufficient details are included in the request, that person can then more efficiently provide you an answer. The main Division e-mail address is dbfmort@dbf.state.ga.us
In the event you still need additional information or you do not receive a timely response to your e-mail, please contact us by phone.
NOTE: This publication is delivered to interested parties via e-mail and is also available from the Department's website at: http:// dbf.georgia.gov under Publications, Bulletins. If you would like to be added to our distribution list, please send an e-mail to dbfcorp@dbf.state.ga.us and indicate your name, the company you are with, license or registration # (if applicable), and phone number.

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