April - June 2010, Volume 6, Issue 2 (This Newsletter is a quarterly publication containing topics of interest to MSBs regulated by the Georgia Department of Banking and Finance (Department). 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 msb@dbf.state.ga.us). REGULATORY MATTERS Georgia News In This Issue: Issuance of Examination 2 Reports Check Sellers and Money 2 Transmitters Change in Control Surety Bond Concerns 3 Ownership Issues 4 Check Casher License / Registration Renewal The Department will be sending out check casher renewal notices VIA EMAIL in late June. Please be sure that the Department has your correct email address on file to ensure that you receive the renewal requirements and login information for the online renewal website. Check Cashing Class 4 Upcoming Holidays and 5 Employee Furlough Days **REMINDER** 5 Contact Information E-mail Addresses Beginning this year, you must renew online -- no exceptions. For administrative reasons, the Department is now requiring that you pay online, either by credit card or ACH. If you have a checking account, you can choose the ACH payment option. You will need the bank routing number and your checking account number to pay by ACH (see sample below): Action on Applications 6 for the Previous Quarter Closed/Expired/Revoked 8 in the Previous Quarter Administrative Actions 8 Department Contact 9 Information Page - 1 - Check Casher License / Registration Renewal (continued) If you have questions regarding the license / registration renewal process or need to update your e-mail address, please contact Applications Analyst Susan Nelson at (770) 986-1652 or via e-mail at nelson@dbf.state.ga.us. Issuance of Examination Reports Reports of Examination are no longer being mailed to licensees/registrants. Instead, the Department transmits them to recipients by using a secure e-mail system called Ironport/CISCO. After an examination is done by the Department, the owner of the subject licensee/registrant will receive an e-mail directing him or her to register with the system in order to receive the Report of Examination. A password must be created as part of this process. After a Report of Examination is received by any licensee/registrant, it is recommended by the Department that a copy be printed out and/or saved to a secure location for future reference. To read more about the secure e-mail system used by the Department and how it can be utilized to receive, retrieve and send secure e-mail, please go to: http://dbf.georgia.gov/vgn/images/portal/cit_1210/53/12/65153161Ironport_CiscoDBFSecureEmailInstructions.pdf Check Sellers and Money Transmitters - CHANGE IN CONTROL In any instance in which there will be a merger or sale of a business that holds a check seller or money transmitter license, a change in control application must be submitted and approved by the Department before the transaction is completed. This requires the existing licensee to submit for each new owner, director and officer his or her current credit report, fingerprints, and a completed biographical form called a MSB-3. As it relates to the credit history of a prospective owner, director or officer, please note that an individual will not be approved if his or her credit report shows any collections, charge-offs or liens that have not been satisfied, are not the subject of an existing documented payment plan, or cannot be shown to the Department's satisfaction as being the subject of a legitimate dispute. The fingerprint requirement can be met through use of the Georgia Applicant Processing Services ("GAPS") for individuals located in this state. Page - 2 - Check Sellers and Money Transmitters - CHANGE IN CONTROL (continued) GAPS relies on electronic fingerprint submission technology to perform background checks required by the Department. Individuals residing outside of the state of Georgia can request blue line FBI cards from the Department via e-mail or online at https://bkgfin.dbf.state.ga.us/MSBFPCards.html. MSB-3 forms, which can be found on the MSB forms and applications section of the Department's webpage, must be complete when they are submitted to this agency. Once a change in control application is submitted, further information may be requested by the Department. Please be prompt when providing any additional information that is requested so that the application can be processed in a timely manner. By doing so, an applicant may be able to avoid the Department denying or administratively withdrawing an application that is not complete. Surety Bond Concerns In lieu of providing the Department with surety bonds as part of their licensure requirements, sale of check and money transmitter licensees have the option of pledging securities or certificates of deposit to meet this obligation. It is in the best interest of all licensees that rely on certificates of deposits to periodically review the FDIC coverage on these financial instruments to make sure that it is adequate. Certificates of deposits, securities, and surety bonds are required to provide protection for the consumers of the state of Georgia, and any departmental decision involving those securities, certificates of deposits, and bonds will be made with the best interests of the consumers, first and foremost. Anytime a licensee elects to change bonding companies, switch from a bond to securities or certificates of deposits, or vice versa, the licensee must contact the Department. Each licensee's situation is different and will need to be reviewed before the change being sought can be effected. The Department will not release a surety bond as it provides protection mandated by law for the outstanding items generated during the time period it has been in effect. In an instance in which a licensee was required by the surety company to provide collateral as a condition to obtaining a surety bond, the Department cannot release the surety bond in order for the collateral to be returned. In the event a licensee wishes to obtain the collateral it provided, it must work directly with its surety company to do so. This may entail discussing with the surety company how long it will require the collateral to be maintained or asking what requirements must be met to exchange or reduce the collateral. Page - 3 - Ownership Issues Several recent examinations of licensed check cashers have exposed discrepancies between the ownership as established by the company tax returns and the ownership as filed with the Department. Georgia licensed and registered money service businesses must seek approval for all changes in control, and all new owners of 10 percent or more must be investigated prior to the change. Failure to notify and obtain approval by this agency can result in a $5,000 fine and additional administrative action by the Department. When a corporation is formed and there is one shareholder of the corporation, there will be shares of stock issued and authorized through a corporate resolution. If there are two or more owners, they will each be shown to own shares of stock. When applying for a license/registration from the Department, all owners of 10 percent or more must be listed along with the control interest in the company. When shareholders, directors or other key personnel change, this information must be approved by the Department and noted in the corporation's records. Tax returns should also properly reflect the ownership as established by corporate records. It is incorrect to assume a spouse "owns" 50 percent of a business solely due to his or her marital status. Check Cashing Class Each month, the Department offers a class on the MSB Rules and Regulations for check cashers. There is no cost for the class, which is not mandatory. This class is a great way to learn about state law and regulations as well as the Bank Secrecy Act and Anti-Money Laundering requirements. Please read the law and the rules and bring your questions to ask the examiners at the class! Gain knowledge so that you can avoid violations and fines. The class is held at the Department Main Office on the second Tuesday of the month. The class size is limited in space, but if the demand is great enough, more classes will be scheduled. This is a one-hour class. You must reserve a seat by emailing msb@dbf.state.ga.us at least five days before the class is held. Reserve your seat NOW! We look forward to seeing you. Page - 4 - Upcoming Holidays and Employee Furlough Days As directed by the Governor's Office of Planning and Budget, all state employees are required to take three furlough days before June 30, 2010. The Department has developed a plan to furlough all employees and will be closed for business on Friday, April 2nd; Monday, May 10th; and Tuesday, June 1st. These dates were selected in an effort to minimize the impact in any one pay period, minimize the effect on exam schedules, and maximize cost savings. Even in these difficult fiscal times, the Department remains committed to fulfilling its mission in the same manner as always - with excellence and professionalism. Holiday / Furlough Day Confederate Memorial Day Furlough Day (DBF offices closed) Memorial Day Furlough Day (DBF offices closed) Independence Day Date Observed April 26th Monday May 10th Monday May 31st Monday June 1st Tuesday July 4th Sunday Will be observed on Friday, July 2nd **REMINDER** Contact Information E-mail Addresses Since the Department's main method of communicating with licensees/registrants is via e-mail, it is very important that you supply this agency with a valid e-mail address and that you keep us informed if your email address changes. To ensure receipt of these e-mails, please make certain that: The Department has your current e-mail address on file, and that notification of changes in that address are made via our online form at: https://bkgfin.dbf.state.ga.us/MSBUpdate.html Your e-mail account does not divert Department e-mail to your spam or junk folder. You are knowledgeable of website information, renewal or other filing due-dates, and check the DBF website for information. Information is posted on the website, in the event you did not get your personalized e-mail. In addition, please be sure to include your license/registration number on any communication with the Department. This will allow us to assist you more quickly and efficiently. Page - 5 - ACTION ON APPLICATIONS FOR THE PREVIOUS QUARTER APPROVED / REINSTATED CHECK CASHERS (License/Registration) Page - 6 - ACTION ON APPLICATIONS FOR THE PREVIOUS QUARTER APPROVED / REINSTATED CHECK CASHERS (License/Registration) R=Registrant L=Full Service APPROVED CHECK SELLERS AND MONEY TRANSMITTERS M=Money Transmitter S=Sale of Checks Company Page - 7 - CLOSED/EXPIRED/REVOKED IN THE PREVIOUS QUARTER CLOSED/REVOKED CHECK CASHERS (License/Registration) CLOSED/EXPIRED/REVOKED IN THE PREVIOUS QUARTER CLOSED/EXPIRED/SURRENDERED CHECK SELLERS AND MONEY TRANSMITTERS ADMINISTRATIVE ACTIONS FINAL ORDERS Heer, Inc. dba S&P Quick Stop, Cochran, GA (license# 24268) Consent Order issued 02/08/2010 became final 02/08/2010. Page - 8 - Department Contact Information NAME Joel Byers, Supervisory Manager - Money Service Businesses Teresa Koeppel, Administrative Examiner Susan Nelson, Applications Analyst (Check Cashers) E-MAIL ADDRESS byers@dbf.state.ga.us tkoeppel@dbf.state.ga.us nelson@dbf.state.ga.us PHONE# 770-986-1656 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 msb@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 News/Press Releases. If you would like to be added to our distribution list, please send an e-mail to dbfpress@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. Page - 9 -