MSB newsletter, Issue 2 (Apr.-June 2011)

April - June 2011, Volume 7, 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:

Check Casher License /

2

Registration Renewal

(continued)

Depositing of Checks

2

Cashed by

Licensees/Registrants

REMINDER: Issuance of

3

Examination Reports

Check Casher License / Registration Renewal
The Department will be sending out check casher renewal notices VIA EMAIL in early July. Please be sure that the Department has your correct e-mail address on file to ensure that you receive the renewal requirements and login information for the secure online renewal website.
You must renew your license or registration online. For administrative reasons, the Department requires that you also 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):

Cashing

3

Corporate/Business

Checks

Ownership Issues

4

Upcoming State Holidays 4

Check Cashing Class

5

Customer Service Star for 5 the Previous Quarter
Action on Applications for 6 the Previous Quarter

Closed/Expired/Revoked/ 8 Surrendered in the Previous Quarter

Administrative Actions

8

Department Contact

9

Information

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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 via e-mail at nelson@dbf.state.ga.us or via phone at (770) 986-1652.
NOTE: You may also update your contact information online from our secure website at: https://bkgfin.dbf.state.ga.us/MSBUpdate.html
Depositing of Checks Cashed by Licensees/Registrants
It has come to the attention of the Department that some money transmitters are offering a third-party processing service to check cashers. Rather than depositing checks directly to its own bank account, the check casher scans checks through to the money transmitter, who then advances/sends funds by ACH to the check casher. This process enables check cashers to use the money transmitter as a conduit to "deposit" checks in order to receive ACHs for the funds more quickly than when depositing directly to their own bank accounts. However, it is not lawful for a check casher to do this. The check casher is required to deposit checks to its account at a depository financial institution pursuant to Georgia law and a Department rule. More specifically, O.C.G.A. 7-1-705(c) requires that "[b]efore a licensee or registrant shall deposit with any bank a check, draft, or money order cashed by such licensee or registrant, the same must be endorsed with the actual name under which such licensee or registrant is doing business." Further, Rule 80-3-1-.02(7) of the Georgia Department of Banking and Finance requires that "[a]ll checks, drafts, and money orders drawn on a financial institution domiciled in the United States and cashed pursuant to a license or registration under Article 4A of Title 7, O.C.G.A., shall be sent for deposit to the licensee's or registrant's account at a depository financial institution domiciled within the United States or sent for collection not later than close of business on the next business day after the date on which the check was cashed."
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REMINDER: Issuance of Examination Reports
If you are subject to an examination by this agency, please keep in mind that the Department transmits the Reports of Examination to licensees/registrants by using a secure e-mail system called Ironport/CISCO. After an examination is completed by the Department, the owner (primary contact) 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
Cashing Corporate/Business Checks
Rule 80-3-1-.02 (5)(f) of the Department of Banking and Finance (Department) provides that "[a]n original written authorization or other evidence of verification shall be maintained, attesting to the fact that said corporation has authorized its officers and employees or specific officers or employees to present checks, drawn by the corporation payable to cash or drawn by any party payable to the corporation, to a licensee or registrant for cashing. A check casher shall not cash a check payable to persons other than natural persons unless the payee has on file such a written authorization or verification indicating that the payee has authorized the presentation of such checks on behalf of the payee."
Before cashing checks written to businesses, a check casher must have on file documentation regarding their particular ownership and the persons authorized on their behalf to cash checks. Without adequate documentation to show that the person cashing the check is authorized to do so, the check casher subjects itself to the risk that it will be responsible for the amount of a check cashed by an unauthorized party. Proper documentation MUST be maintained that indicates such authorization. The best documentation is a written authorization signed and notarized by the owner. Ownership must be verified. Copies of business licenses can be helpful; however, business licenses don't identify all of the owners of the company and therefore do not provide proper documentation to satisfy the requirements of the above Rule. Simply making a note of an Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is not acceptable. Even documentation of the EIN might not be enough if ownership is not verified also.
After ownership of the business is verified and documentation is obtained, if its owners wish to allow specific officers or employees to cash checks on behalf of the company, they must provide the licensee or registrant with written documentation authorizing those persons to do so.
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Ownership Issues
Several recent examinations of 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 of the business, 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 each will 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 that a spouse "owns" 50 percent of a business solely due to his or her marital status.

Upcoming State Holidays
During the next quarter, the Department's offices will be closed in observance of the following State holidays:

Holiday Name
Confederate Memorial Day Memorial Day Independence Day

Date Observed
April 25th Monday May 30th Monday July 4th Monday

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Check Cashing Class
Are you keeping the proper books and records required by law and regulation? Each month the Department offers a class on the MSB rules to new check cashers. There is no cost for the class and it is a great way to learn about Georgia law and Department regulations as well as the Bank Secrecy Act (BSA) and Anti-Money Laundering requirements. In addition, the Department now provides a certificate of attendance which licensees may use as evidence of training received on BSA and Anti-Money Laundering. This class has proven very helpful to those who have attended. During subsequent examinations, those who have attended the class have stated that the knowledge and information gained helped prevent violations and subsequent fines. The one-hour class is held at the Department's main office on the third Tuesday of the month. The class is limited to a maximum of seven attendees, so you must reserve a seat by emailing msb@dbf.state.ga.us or tkoeppel@dbf.state.ga.us at least five days before the class is held. Reserve your seat NOW! We look forward to seeing you.
CUSTOMER SERVICE STAR FOR THE PREVIOUS QUARTER
Teresa Koeppel, Administrative Examiner The Department received comments from several different customers regarding Teresa stating: "Teresa Koeppel is one of the most knowledgeable, pleasant and professional people I work with on a regular basis. She is always available and willing to answer questions so that I am able to provide the Department with required information." and "We have worked with Teresa Koeppel during and after our license application process. We found her to be extremely knowledgeable and helpful." and "Teresa Koeppel has been a delight to deal with, and I appreciate the class the Department offers its MSBs."
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ACTION ON APPLICATIONS FOR THE PREVIOUS QUARTER
APPROVED/REINSTATED CHECK CASHERS (License/Registration)
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ACTION ON APPLICATIONS FOR THE PREVIOUS QUARTER
APPROVED/REINSTATED CHECK CASHERS (License/Registration) continued
R=Registrant L=Full Service License
APPROVED CHECK SELLERS AND MONEY TRANSMITTERS
M=Money Transmitter S=Sale of Checks Company
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CLOSED/EXPIRED/REVOKED/SURRENDERED IN THE PREVIOUS QUARTER
CLOSED CHECK CASHERS (License/Registration)
RD=Registrant Dead LD=Full Service License Dead
CLOSED/EXPIRED/SURRENDERED CHECK SELLERS AND MONEY TRANSMITTERS
MD=Money Transmitter Dead SD=Sale of Checks Company Dead
ADMINISTRATIVE ACTIONS
On January 19, 2011, Orders to Cease and Desist issued by the Department became final against Young Choe, the owner of Eastern Union, Inc. d/b/a United One ("Eastern Union"), check seller license number 19450, located at 221-A Cleveland Avenue, SW, Atlanta, Georgia 30315, and Eric Young, the company's chief executive officer. Also on January 19, 2011, a Notice of Intent to Revoke Annual License issued to Eastern Union became final. Read the full press release on the Department's website.
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Department Contact Information
NAME
Teresa Koeppel, Administrative Examiner (Check Sellers/Money Transmitters)
Susan Nelson, Applications Analyst (Check Cashers)

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

PHONE#
770-986-1639

nelson@dbf.state.ga.us

770-986-1652

Mailing Address: Georgia 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
When corresponding with the Department, e-mail communication is preferred. 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 with an answer. The main Division e-mail address is
msb@dbf.state.ga.us.
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, license or registration # (if applicable). Also, please indicate which publication(s) you would like to receive. See the list under Publications on our home page.

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