MSB newsletter, Issue 2 (Apr.-June 2008)

April to June 2008, Volume 4, Issue #2

(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
DEPARTMENT OF REVENUE REGULATIONS

REGULATORY MATTERS

DOR Regulations

1

As some of you may remember, the check cashing statutes previously contained a provision for an exemption category that 1) was limited in the amount which could be charged for cashing a check ($2.00 or 2% of the face amount of the check); 2) required that the check could only be cashed if there was a simultaneous retail sale of goods or services; and 3) limited the gross check cashing fee income to an annual amount of $25,000 per retail location.

IRS Ruling-Tax Refunds

2

Surety Bonds

2

OTHER NEWS

In 2007, the check cashing statutes were simplified to clarify that exempted companies are those that do not charge a fee to cash a check, that registered entities were those that charged $2.00 or 2% of the face amount of the check and which do not advertise, and licensees are those entities which can charge the full amounts allowed by statute and can advertise. The exemption category requiring an incidental sale of goods or services and which limited the check cashing fee income was removed.
However, for those licensees or registrants who are retail liquor store owners, the Georgia Department of Revenue's regulations have a provision restricting the secondary business activities of their licensees.

Semi-Annual

Reporting: International

3

Transfers

Action on Applications During the Previous Quarter/Closed Licensees

3 to 5

Department Contact Information

6

Georgia Department of Revenue Rule 560-2-3-.36 (1) appears to prohibit distilled spirit retailers (liquor store owners) from selling other products, except those specifically allowed in the regulation, and as related to check cashing as noted below: 560-2-3-.36 Products Other than Distilled Spirits for Sale, Display, or Offer. (1) No retailer shall sell, offer for sale, display or keep in stock for sale or furnish at its licensed premises where distilled spirits are offered for sale, any other products or services except the following: (j) Check cashing services arising out of the sale of alcoholic beverages; (emphasis added).

Basically, check cashing services "arising out of", or incidental to, the sale of distilled spirits (liquor) is allowed. However, the cashing of checks independent of a concurrent sale of alcoholic beverages is not permitted, and any sale of money orders or the transmission of money as an agent for a Georgia seller of checks or money transmitter licensee is not allowed. If you have questions, you are encouraged to contact the Georgia Department of Revenue at (404) 417-4477 or toll free at 1-(877) 602-8477.

E-MAIL UPDATES!!! https://bkgfin.dbf.state.ga.us/MSBUpdate.html
A reminder renewals are fast approaching make certain we have the correct e-mail address for your license or registration so that you will receive the notices and correspondence!

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FEDERAL REGULATORY ISSUES
FinCEN Clarifies Check Cashing
In January of this year, FinCEN clarified the requirements for registration with their agency as a check casher for purposes of compliance under the Bank Secrecy Act. They determined that a company that only cashes loan checks for customers who are obtaining loans would not be considered a money services business. This was published by the Financial Crimes Enforcement Network in an interpretative letter on Jan. 8, 2008. The unidentified company in the letter offers consumer lending services and tax return preparation. FinCEN said that if the company only cashes a given loan check for the customer who is obtaining the loan, and not for a third party, then the service is in effect disbursing loan proceeds in cash and would not be considered a check cashing business under FinCEN's regulations. FinCEN also noted that the company's registration of its securities with the Securities and Exchange Commission is not a factor in determining whether it is a money services business. Read more http://www.fincen.gov/FIN-2007- R001.html
State Regulatory Considerations
What does the FinCEN ruling mean for licensees and registrants? Under ARTICLE 4A - CASHING CHECKS, DRAFTS, OR MONEY ORDERS FOR CONSIDERATION, a business that:
offers consumer lending services and tax return preparation which offers "refund anticipation" loans or similar services, and;
charges a check cashing fee for cashing the loan or refund anticipation proceeds, and;
may or may not choose to advertise this service;
is by definition a check cashing company, and a license or registration is required with the Department. The fee may or may not be a separate fee, but reflected as a reduction in the amount of the proceeds of the check. Nonetheless, it is still a fee, and as a check cashing company the fee must be properly

disclosed and reported, and the appropriate license/registration acquired.
SURETY BONDS
O. C. G. A 7-1-683 License application; fee; bonding; alternative deposit of assets for check sellers., Paragraph (b) (2), requires that licensees obtain and maintain financial standards in order to maintain their license.
The purpose of Surety Bonds is to provide a measure of performance protection on the part of the licensee to the consumer. For sellers of checks and money transmitters, the bond must be large enough to cover all outstanding transactions (outstanding checks or orders to transmit, but not yet paid) at any given time up to a given maximum within the code. These bonds are written to cover a specific time period and are generally renewed annually. If the licensee decides to stop doing business, they no longer need to provide a bond renewal. However, the existing bond up until the time of withdrawal or expiration of the license must be maintained with the Department for a period of two years (or until all outstanding transmission orders or checks have paid) to cover the outstanding transactions. For example, a money transmitter may have outstanding transactions that have been sent but not picked up by the beneficiary. The money transmitter must maintain coverage until those transactions are complete and all parties receive their funds.
The Department does not release bonds. The bond continues to exist to cover any claims that may be brought against the licensee for transactions that occurred in the timeframe that the bond covered. However, if the licensee's outstanding orders to transmit, but not yet paid for the time period covered are zero, the liability is also zero.

AGENTS
A reminder to all money transmitters and check sellers when you enter agents into the system during the semi- annual reporting periods (next due June 2008), ALL agents have to have their own UNIQUE, separate, identifying number. NO SHARING OF AGENT NUMBERS IS ALLOWED, and possible fines could be assessed for failure to assign unique numbers for recordkeeping purposes.

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INTERNATIONAL TRANSFER REPORTING In February, seller of checks/money transmission licensees
were requested to report on money transmissions, providing the information as noted below. It has been determined that this information will be collected on a semi-annual basis going forward, along with the standard reporting of agents and average outstandings for the period. Therefore, please remember that when reporting, this additional information will be required.



Number of transactions and total dollar amounts of

money transmitted from all Georgia locations

during the reporting period.



Number of transactions and total dollar amounts of

money transmitted from Georgia to international

locations during the reporting period.



A breakdown of transmissions and dollar amounts

originated in Georgia per nation transmitted to

during the reporting period.



The range of fees charged for money transmission.

HOLIDAY CLOSING
The Department will be closed on Monday, April 28, for Confederate Memorial Day.

ACTION ON APPLICATIONS DURING THE PREVIOUS QUARTER

APPROVED CHECK CASHERS (License/Registration) First Quarter 2008

Lic # 23100 23102
23105
23106 23103 23110 23111
23112 23107 23113 23122 23123 23116 23124 23136 23130 23138 23139 23141
23144 23145 23161 23153 23165 23166

Company Name Short Stop Grocery Big G Grocery Super Mercado Carrillo El Guero United Consolidated Accounting & Business Services GJD Check Cashing Evergreen Pawn S&R Package Store Modern Agency, Inc./Silos Grocery Northland Title Pawn, LLC Viva Mexico Cash Express of Georgia, Inc. McDuffie Package Store Discount Food Mart Dixie Beverage Store
San Jose Tienda Mexicana Air Digital Cellular Griffin Package Shorter BP National Title Pawn of Lafayette, Inc. Gorin's Homemade Cafe Southlake Chevron Ajax Liquors JJ's Liquor Store Cabanas Salvadorian -Rest #2

DBA Name Short Stop Grocery Big G Grocery
Super Mercado Carrillo El Guero United Consolidated Accounting & Business Services GJD Check Cashing Evergreen Pawn S&R Package Store
Silos Grocery Northland Financial Services Viva Mexico Cash Express of Georgia McDuffie Package Store Discount Food Mart Dixie Beverage Store Kendra J. Bowen San Jose Tienda Mexicana Air Digital Cellular Griffin Package Shorter BP
National Title Pawn Lafayette Gorin's Homemade Cafe Southlake Chevron Ajax Liquors JJ's Liquor Store Cabanas Salvadorian Restaurant

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City COLLEGE PARK COLLEGE PARK
GAINESVILLE
SMYRNA GAINESVILLE ADAIRSVILLE MILLEDGEVILLE
ALPHARETTA HIAWASSEE ELLIJAY ALBANY THOMSON ATLANTA CALHOUN LYONS CARTERSVILLE DORAVILLE GRIFFIN ROME
LAFAYETTE DULUTH MORROW ALBANY CARTERSVILLE MARIETTA

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

Approved 01/03/2008 01/03/2008
01/07/2008
01/07/2008 01/08/2008 01/08/2008 01/09/2008
01/09/2008 01/10/2008 01/10/2008 01/14/2008 01/15/2008 01/16/2008 01/16/2008 01/17/2008 01/18/2008 01/18/2008 01/18/2008 01/23/2008
01/25/2008 01/25/2008 02/01/2008 02/05/2008 02/05/2008 02/07/2008

Lic # 23164 23174 23181 23182 23185 23186 23187 23195 23196 23198 23199 23213 23215 23216 23219 23220 23221 23222 23151 23238 23239 23237 23241 23242 23251 23252 23254 23257 23258 23259 23260 23265 23266 23268 23269 23270
23267 23292 23280 23294 23302 23301

Company Name Morales Income Tax, Inc.
Tadmore Food Mart Village Financial Service, LLC
Newstart Trucking, Inc. Fairburn Food Mart Mani's Food Mart Piggly Wiggly Radium Springs Food Mart R&R Quick Stop Fexom, LLC Fairburn Food Store Floyd Road Shopette Anjali Ventrues, Inc. Wasifa Enterprises, Inc. Molino, Inc. Zahara Enterprises, Inc. Sunny Food Mart Shree Jala, LLC Vaidehi Corporation DJHill Enterprises, LLC Conner Ventures First Asia Saniha & Sameer, Inc. KISS, LLC Seven Seas Bottle Shop, Inc. Sakshi Inc. LAK Beverage, LLC Riley's Cellar, LLC 24/7 Enterprises LLC KP One Stop, Inc. Tienda Hidalgo Krina & Chirag, Inc. Cho's Texaco Food Mart, Inc. Sportsman's Package Store #2 Global Communications Network, Inc. OGA's Enterprises, Inc. La Estrella Sport & Gift Shop Feather Touch, Inc. Murray Hill Sand, Inc. Shlok, Inc.

DBA Name Morales Income Tax Robert Bailey Tadmore Food Mart Huh's Check Cashing William Cumbee Newstart Fairburn Food Mart Mani's Food Mart Piggly Wiggly Radium Springs Food Mart R&R Quick Stop
Fairburn Food Store Floyd Road Shopette RK Foods
Molino Check Cashing Zee Check Cashing Sunny Food Mart Crossroad #3 Quik Mart Piedmont at Lindbergh Exxon Conner Ventures First Asia Shell Food Mart Jacks Package Store Seven Seas Bottle Shop Quick Stop Crazy J's Party Shop The Check Company Marathon Food Mart One Stop Food Store Tienda Hidalgo Shivam Food Mart
Sportsman's Package Store #2
Big Bear Supermarket #1 La Estrella Sport & Gift Shop Fast Cash B&B Check Cashing Stop N Shop

R=Registrant L=Full Service
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City DALTON DUBLIN GAINESVILLE GAINESVILLE AUGUSTA STOCKBRIDGE ATLANTA LITHIA SPRINGS EAST POINT ALBANY DALTON MARIETTA AUSTELL AUSTELL MACON BUFORD OAKWOOD MARIETTA BROOKFIELD COCHRAN PELHAM ATLANTA SOPERTON FOREST PARK DOUGLASVILLE MABLETON POWDER SPRINGS WAYNESBORO PERRY RED OAK ATLANTA CUTHBERT CALHOUN MACON NORCROSS MACON
VALDOSTA ATLANTA CHATSWORTH GRIFFIN Ellabell Forsyth

Type L R L L R R L R R R R L R R L R R L R R L L R R L R R R R L R R L R R L
R R R L L R TOTAL

Approved 02/11/2008 02/11/2008 02/11/2008 02/12/2008 02/12/2008 02/12/2008 02/12/2008 02/19/2008 02/19/2008 02/19/2008 02/19/2008 02/22/2008 02/22/2008 02/22/2008 02/26/2008 02/26/2008 02/26/2008 02/26/2008 02/28/2008 02/29/2008 02/29/2008 03/04/2008 03/04/2008 03/05/2008 03/10/2008 03/10/2008 03/10/2008 03/11/2008 03/11/2008 03/13/2008 03/13/2008 03/17/2008 03/17/2008 03/17/2008 03/17/2008 03/17/2008
03/24/2008 03/24/2008 03/28/2008 03/28/2008 03/31/2008 03/31/2008
67

EXPIRED/CLOSED CHECK CASHERS (License/Registration)

Lic #

Company

23072 UMA Corporation APPdis APPR

22331 Valued Services of Georgia, LLC

21140 20485 21694 18272 22060

Junaid, Inc. Dhaban, Inc. Virginia Holdings LLC Ishan, Inc. Best Check Cashing, LLC

22605 Wan Hee, Inc. 22649 Atlanta Drinks, LLC

DBA Name Kanta Food Mart
Purpose Money Discount Check Cashing & Grocery Downtown Beverages Chevron Food Mart Squire Package Best Financial, LLC
Jumbo Package Store Skyland Point Bottle Store

City VALDOSTA

Type RD

PEACHTREE CITY LD

ATLANTA LAVONIA ATLANTA PERRY ATLANTA STONE MOUNTAIN ATLANTA

LD RD RD RD LD
LD LD Total

Date Closed 01/03/2008
01/07/2008
01/15/2008 01/25/2008 01/31/2008 02/04/2008 02/27/2008
03/03/2008 03/11/2008
9

APPROVED/EXPIRED CHECK SELLERS/ MONEY TRANSMITTERS

Lic #

Company Name

Approved Money Transmitters

NONE

Closed Money Transmitters

DBA Name

Approved Closed

City

ST

Total

0

20686 Equimoney Transfer Services, Inc. Equimoney Transfers

03/21/2008 Marietta GA

Total

1

APPROVED NAME CHANGE: CHECK SELLERS/ MONEY TRANSMITTERS

Lic #

Company Name

Approved Money Transmitters

20306 Americana de Servicios

DBA Name Girocheck Financial, Inc.

Approved 03/17/2008

City

ST

Miami

FL

Total

1

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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

770-986-1315 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 (770) 986-1029

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. Also, please indicate which publication(s) you would like to receive. See the list under PUBLICATIONS on our home page.

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