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S.B. 83

             1     

CHECK CASHING AND DEFERRED DEPOSIT

             2     
LENDING REGISTRATION ACT

             3     
2008 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Karen Mayne

             6     
House Sponsor: Gregory H. Hughes

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Check Cashing Registration Act to be the Check Cashing and
             11      Deferred Deposit Lending Registration Act.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies definition provisions;
             15          .    addresses references to a check casher or deferred deposit lender;
             16          .    requires a deferred deposit lender to file operation statements to renew registration;
             17          .    prohibits a deferred deposit lender from extending certain deferred deposit loans;
             18          .    requires the commissioner to report annually regarding deferred deposit lenders; and
             19          .    makes technical and conforming amendments.
             20      Monies Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          7-1-325, as enacted by Laws of Utah 2006, Chapter 165
             27          7-1-401, as last amended by Laws of Utah 2007, Chapter 277


             28          7-1-501, as last amended by Laws of Utah 2003, Chapter 177
             29          7-15-1, as last amended by Laws of Utah 2007, Chapter 87
             30          7-23-101, as enacted by Laws of Utah 1999, Chapter 144
             31          7-23-102, as last amended by Laws of Utah 2003, Chapter 236
             32          15-1-4, as last amended by Laws of Utah 2005, Chapter 190
             33      ENACTS:
             34          7-23-503, Utah Code Annotated 1953
             35      RENUMBERS AND AMENDS:
             36          7-23-103.1, (Renumbered from 7-23-110, as enacted by Laws of Utah 1999, Chapter
             37      144)
             38          7-23-104.1, (Renumbered from 7-23-109, as enacted by Laws of Utah 1999, Chapter
             39      144)
             40          7-23-201, (Renumbered from 7-23-103, as last amended by Laws of Utah 2007,
             41      Chapter 87)
             42          7-23-301, (Renumbered from 7-23-104, as enacted by Laws of Utah 1999, Chapter 144)
             43          7-23-401, (Renumbered from 7-23-105, as last amended by Laws of Utah 2007,
             44      Chapter 87)
             45          7-23-402, (Renumbered from 7-23-105.1, as enacted by Laws of Utah 2003, Chapter
             46      236)
             47          7-23-501, (Renumbered from 7-23-106, as last amended by Laws of Utah 2007,
             48      Chapter 87)
             49          7-23-502, (Renumbered from 7-23-107, as last amended by Laws of Utah 2007,
             50      Chapter 87)
             51          7-23-504, (Renumbered from 7-23-108, as last amended by Laws of Utah 2007,
             52      Chapter 87)
             53     
             54      Be it enacted by the Legislature of the state of Utah:
             55          Section 1. Section 7-1-325 is amended to read:
             56           7-1-325. Compliance with applicable federal law.
             57          (1) As used in this section, "federal law" means:
             58          (a) a statute passed by the Congress of the United States; or


             59          (b) a final regulation:
             60          (i) adopted by an administrative agency of the United States government; and
             61          (ii) published in the code of federal regulations or the federal register.
             62          (2) (a) An institution subject to the jurisdiction of the department violates this title if
             63      the institution violates a federal law:
             64          (i) that is applicable to the institution; and
             65          (ii) pursuant to the terms of the federal law in effect on the day the institution violates
             66      the federal law.
             67          (b) The department shall by rule, made in accordance with Title 63, Chapter 46a, Utah
             68      Administrative Rulemaking Act, and consistent with this title, designate which one or more
             69      federal laws are applicable to an institution subject to the jurisdiction of the department.
             70          (3) Except for criminal penalties, the department may enforce a violation described in
             71      Subsection (2) by taking any action:
             72          (a) permitted by:
             73          (i) this part;
             74          (ii) Chapter 2, Possession of Depository Institution by Commissioner;
             75          (iii) Chapter 19, Acquisition of Failing Depository Institutions or Holding Companies;
             76          (iv) in the case of a check casher or deferred deposit lender, Chapter 23, Check
             77      Cashing and Deferred Deposit Lending Registration Act; or
             78          (v) in the case of a title lender, Chapter 24, Title Lending Registration Act; and
             79          (b) including bringing an action permitted under this title in state court.
             80          Section 2. Section 7-1-401 is amended to read:
             81           7-1-401. Fees payable to commissioner.
             82          (1) Except for an out-of-state depository institution with a branch in Utah, a depository
             83      institution under the jurisdiction of the department shall pay an annual fee:
             84          (a) computed by averaging the total assets of the depository institution shown on each
             85      quarterly report of condition for the depository institution for the calendar year immediately
             86      proceeding the date on which the annual fee is due under Section 7-1-402 ; and
             87          (b) at the following rates:
             88          (i) on the first $5,000,000 of these assets, the greater of:
             89          (A) 65 cents per $1,000; or


             90          (B) $500;
             91          (ii) on the next $10,000,000 of these assets, 36 cents per $1,000;
             92          (iii) on the next $35,000,000 of these assets, 17 cents per $1,000;
             93          (iv) on the next $50,000,000 of these assets, 14 cents per $1,000;
             94          (v) on the next $200,000,000 of these assets, 11 cents per $1,000;
             95          (vi) on the next $300,000,000 of these assets, 7 cents per $1,000; and
             96          (vii) on all amounts over $600,000,000 of these assets, 2.625 cents per $1,000.
             97          (2) A financial institution with a trust department shall pay a fee determined in
             98      accordance with Subsection (7) for each examination of the trust department by a state
             99      examiner.
             100          (3) Notwithstanding Subsection (1), a credit union in its first year of operation shall
             101      pay a basic fee of $25 instead of the fee required under Subsection (1).
             102          (4) A trust company that is not a depository institution or a subsidiary of a depository
             103      institution holding company shall pay:
             104          (a) an annual fee of $500; and
             105          (b) an additional fee determined in accordance with Subsection (7) for each
             106      examination by a state examiner.
             107          (5) Any person or institution under the jurisdiction of the department that does not pay
             108      a fee under Subsections (1) through (4) shall pay:
             109          (a) an annual fee of $200; and
             110          (b) an additional fee determined in accordance with Subsection (7) for each
             111      examination by a state examiner.
             112          (6) A person filing an application or request under Section 7-1-503 , 7-1-702 , 7-1-703 ,
             113      7-1-704 , 7-1-713 , 7-5-3 , or 7-18a-202 shall pay:
             114          (a) (i) a filing fee of $500 if on the day on which the application or request is filed the
             115      person:
             116          (A) is a person with authority to transact business as:
             117          (I) a depository institution;
             118          (II) a trust company; or
             119          (III) any other person described in Section 7-1-501 as being subject to the jurisdiction
             120      of the department; and


             121          (B) has total assets in an amount less than $5,000,000; or
             122          (ii) a filing fee of $2,500 for any person not described in Subsection (6)(a)(i); and
             123          (b) all reasonable expenses incurred in processing the application.
             124          (7) (a) Per diem assessments for an examination shall be calculated at the rate of $55
             125      per hour:
             126          (i) for each examiner; and
             127          (ii) per hour worked.
             128          (b) For an examination of a branch or office of a financial institution located outside of
             129      this state, in addition to the per diem assessment under this Subsection (7), the institution shall
             130      pay all reasonable travel, lodging, and other expenses incurred by each examiner while
             131      conducting the examination.
             132          (8) In addition to a fee under Subsection (5), a person registering under Section
             133      [ 7-23-103 ] 7-23-201 or 7-24-201 shall pay an original registration fee of $300.
             134          Section 3. Section 7-1-501 is amended to read:
             135           7-1-501. Institutions and persons subject to jurisdiction of department.
             136          (1) As provided in this title and the rules of the department, the persons and institutions
             137      described in Subsection (2) are subject to:
             138          (a) the jurisdiction of the department; and
             139          (b) supervision and examination by the department.
             140          (2) Subsection (1) applies to:
             141          (a) all depository institutions chartered under the laws of this state, including any
             142      out-of-state branches;
             143          (b) all Utah depository institutions chartered by the federal government, but only to the
             144      extent the application of this title is authorized by:
             145          (i) federal law; or
             146          (ii) the appropriate federal regulatory agency;
             147          (c) all Utah branches of out-of-state depository institutions chartered under the laws of
             148      another state;
             149          (d) all Utah branches of out-of-state depository institutions chartered by the federal
             150      government, but only to the extent the application of this title is authorized by:
             151          (i) federal law; or


             152          (ii) the appropriate federal regulatory agency;
             153          (e) all service corporations and service organizations, including credit union service
             154      organizations as defined in Section 7-9-3 ;
             155          (f) all trust companies;
             156          (g) all escrow companies;
             157          (h) all persons or institutions engaged in this state in the business of:
             158          (i) guaranteeing or insuring deposits, savings accounts, share accounts, or other
             159      accounts in depository institutions;
             160          (ii) operating a loan production office for:
             161          (A) a Utah depository institution;
             162          (B) an out-of-state depository institution; or
             163          (C) a foreign depository institution;
             164          (iii) allowing persons to effect third party payments from loan, charge, or other
             165      accounts by checks, drafts, or other instruments or by electronic means; or
             166          (iv) a check casher or deferred deposit lender, as defined in Section 7-23-102 ;
             167          (i) all corporations or other business entities owning or controlling an institution
             168      subject to the jurisdiction of the department;
             169          (j) all subsidiaries and affiliates of an institution subject to the jurisdiction of the
             170      department; and
             171          (k) any person or institution that, with or without authority to do so, transacts business
             172      as, or holds itself out as being, a depository institution, trust company, or any other person or
             173      institution described in this section as being subject to the jurisdiction of the department.
             174          Section 4. Section 7-15-1 is amended to read:
             175           7-15-1. Definitions -- Civil liability of issuer -- Notice of action -- Collection costs
             176      -- Exemptions.
             177          (1) As used in this chapter:
             178          (a) "Check" means a payment instrument on a depository institution including a:
             179          (i) check;
             180          (ii) draft;
             181          (iii) order; or
             182          (iv) other instrument.


             183          (b) "Issuer" means a person who makes, draws, signs, or issues a check, whether as
             184      corporate agent or otherwise, for the purpose of:
             185          (i) obtaining from any person any money, merchandise, property, or other thing of
             186      value; or
             187          (ii) paying for any service, wages, salary, or rent.
             188          (c) "Mailed" means the day that a notice is properly deposited in the United States
             189      mail.
             190          (2) (a) An issuer of a check is liable to the holder of the check if:
             191          (i) the check:
             192          (A) is not honored upon presentment; and
             193          (B) is marked "refer to maker";
             194          (ii) the account upon which the check is made or drawn:
             195          (A) does not exist;
             196          (B) has been closed; or
             197          (C) does not have sufficient funds or sufficient credit for payment in full of the check;
             198      or
             199          (iii) (A) the check is issued in partial or complete fulfillment of a valid and legally
             200      binding obligation; and
             201          (B) the issuer stops payment on the check with the intent to:
             202          (I) fraudulently defeat a possessory lien; or
             203          (II) otherwise defraud the holder of the check.
             204          (b) If an issuer of a check is liable under Subsection (2)(a), the issuer is liable for:
             205          (i) the check amount; and
             206          (ii) a service charge of $20.
             207          (3) (a) The holder of a check that has been dishonored may:
             208          (i) give written or oral notice of dishonor to the issuer of the check; and
             209          (ii) waive all or part of the service charge imposed under Subsection (2)(b).
             210          (b) Notwithstanding Subsection (2)(b), a holder of a check that has been dishonored
             211      may not collect and the issuer is not liable for the service charge imposed under Subsection
             212      (2)(b) if:
             213          (i) the holder redeposits the check; and


             214          (ii) that check is honored.
             215          (4) If the issuer does not pay the amount owed under Subsection (2)(b) within 15
             216      calendar days from the day on which the notice required under Subsection (5) is mailed, the
             217      issuer is liable for:
             218          (a) the amount owed under Subsection (2)(b); and
             219          (b) collection costs not to exceed $20.
             220          (5) (a) A holder shall provide written notice to an issuer before:
             221          (i) charging collection costs under Subsection (4) in addition to the amount owed under
             222      Subsection (2)(b); or
             223          (ii) filing an action based upon this section.
             224          (b) The written notice required under Subsection (5)(a) shall notify the issuer of the
             225      dishonored check that:
             226          (i) if the amount owed under Subsection (2)(b) is not paid within 15 calendar days
             227      from the day on which the notice is mailed, the issuer is liable for:
             228          (A) the amount owed under Subsection (2)(b); and
             229          (B) collection costs under Subsection (4); and
             230          (ii) the holder may file civil action if the issuer does not pay to the holder the amount
             231      owed under Subsection (4) within 30 calendar days from the day on which the notice is mailed.
             232          (6) (a) Except as provided in Section [ 7-23-105 ] 7-23-401 , if the issuer has not paid the
             233      holder the amounts owed under Subsection (4) within 30 calendar days from the day on which
             234      the notice required by Subsection (5) is mailed, the holder may offer to not file civil action
             235      under this section if the issuer pays the holder:
             236          (i) the amount owed under Subsection (2)(b);
             237          (ii) the collection costs under Subsection (4);
             238          (iii) an amount that:
             239          (A) is equal to the greater of:
             240          (I) $50; or
             241          (II) triple the check amount; and
             242          (B) does not exceed the check amount plus $250; and
             243          (iv) if the holder retains an attorney to recover on the dishonored check, reasonable
             244      attorney's fees not to exceed $50.


             245          (b) (i) Notwithstanding Subsection (6)(a), all amounts charged or collected under
             246      Subsection (6)(a)(iii) shall be paid to and be the property of the original payee of the check.
             247          (ii) A person who is not the original payee may not retain any amounts charged or
             248      collected under Subsection (6)(a)(iii).
             249          (iii) The original payee of a check may not contract for a person to retain any amounts
             250      charged or collected under Subsection (6)(a)(iii).
             251          (7) (a) A civil action may not be filed under this section unless the issuer fails to pay
             252      the amounts owed:
             253          (i) under Subsection (4); and
             254          (ii) within 30 calendar days from the day on which the notice required by Subsection
             255      (5) is mailed.
             256          (b) Subject to Subsections (7)(c) and (d) and except as provided in Section [ 7-23-105 ]
             257      7-23-401 , in a civil action the issuer of the check is liable to the holder for:
             258          (i) the amount owed under Subsection (2)(b);
             259          (ii) the collection costs under Subsection (4);
             260          (iii) interest;
             261          (iv) court costs;
             262          (v) reasonable attorney fees; and
             263          (vi) damages:
             264          (A) equal to the greater of:
             265          (I) $100; or
             266          (II) triple the check amount; and
             267          (B) not to exceed the check amount plus $500.
             268          (c) If an issuer is held liable under Subsection (7)(b), notwithstanding Subsection
             269      (7)(b), a court may waive any amount owed under Subsections (7)(b)(iii) through (vi) upon a
             270      finding of good cause.
             271          (d) If a holder of a check violates this section by filing a civil action under this section
             272      before 31 calendar days from the day on which the notice required by Subsection (5) is mailed,
             273      an issuer may not be held liable for an amount in excess of the check amount.
             274          (e) (i) Notwithstanding Subsection (7)(b), all amounts charged or collected under
             275      Subsection (7)(b)(vi) shall be paid to and be the property of the original payee of the check.


             276          (ii) A person who is not the original payee may not retain any amounts charged or
             277      collected under Subsection (7)(b)(vi).
             278          (iii) The original payee of a check may not contract for a person to retain any amounts
             279      charged or collected under Subsection (7)(b)(vi).
             280          (8) This section may not be construed to prohibit the holder of the check from seeking
             281      relief under any other applicable statute or cause of action.
             282          (9) (a) Notwithstanding the other provisions of this section, a holder of a check is
             283      exempt from this section if the holder is:
             284          (i) a depository institution; or
             285          (ii) a person that receives a payment on behalf of a depository institution.
             286          (b) A holder exempt under Subsection (9)(a) may contract with an issuer for the
             287      collection of fees or charges for the dishonor of a check.
             288          Section 5. Section 7-23-101 is amended to read:
             289     
CHAPTER 23. CHECK CASHING AND DEFERRED DEPOSIT

             290     
LENDING REGISTRATION ACT

             291           7-23-101. Title.
             292          This chapter is known as the "Check Cashing and Deferred Deposit Lending
             293      Registration Act."
             294          Section 6. Section 7-23-102 is amended to read:
             295           7-23-102. Definitions.
             296          As used in this chapter:
             297          (1) "Business of [a check casher] cashing checks" means[: (a)] cashing a check for
             298      consideration[; or].
             299          [(b)] (2) "Business of deferred deposit lending" means extending a deferred deposit
             300      loan.
             301          [(2)] (3) "Check" is as defined in Section 70A-3-104 .
             302          [(3)] (4) "Check casher" means a person that engages in the business of [a check
             303      casher] cashing checks.
             304          (5) "Deferred deposit lender" means a person that engages in the business of deferred
             305      deposit lending.
             306          [(4)] (6) "Deferred deposit loan" means a transaction where:


             307          (a) a person:
             308          (i) presents to a [check casher] deferred deposit lender a check written on that person's
             309      account; or
             310          (ii) provides written or electronic authorization to a [check casher] deferred deposit
             311      lender to effect a debit from that person's account using an electronic payment; and
             312          (b) the [check casher] deferred deposit lender:
             313          (i) provides the [maker] person described in Subsection (6)(a) an amount of money that
             314      is equal to the face value of the check or the amount of the debit less any fee or interest charged
             315      for the transaction; and
             316          (ii) agrees not to cash the check or process the debit until a specific date.
             317          [(5)] (7) (a) "Electronic payment" means [any] an electronic method by which a [check
             318      casher] person:
             319          (i) accepts a payment from [a] another person; or
             320          (ii) makes a payment to [a] another person.
             321          (b) "Electronic payment" includes a payment made through:
             322          (i) an automated clearing house transaction;
             323          (ii) an electronic check;
             324          (iii) a stored value card; or
             325          (iv) an Internet transfer.
             326          [(6)] (8) "Rollover" means the extension or renewal of the term of a deferred deposit
             327      loan.
             328          Section 7. Section 7-23-103.1 , which is renumbered from Section 7-23-110 is
             329      renumbered and amended to read:
             330           [7-23-110].     7-23-103.1. Exemptions.
             331          The following are not subject to the requirements of this chapter:
             332          (1) a depository institution;
             333          (2) a depository institution holding company;
             334          (3) an institution directly or indirectly owned or controlled by one or more:
             335          (a) depository institutions; or
             336          (b) depository institution holding companies; or
             337          (4) a person that cashes a check in a transaction:


             338          (a) that is incidental to [the] a retail sale of goods or services; and
             339          (b) for consideration that does not exceed the greater of:
             340          (i) 1% of the amount of the check; or
             341          (ii) $1.
             342          Section 8. Section 7-23-104.1 , which is renumbered from Section 7-23-109 is
             343      renumbered and amended to read:
             344           [7-23-109].     7-23-104.1. No affect on civil liability.
             345          Nothing in this chapter is intended to limit any civil liability that may exist against a
             346      check casher or deferred deposit lender for:
             347          (1) breach of contract;
             348          (2) violation of federal law; or
             349          (3) other unlawful act.
             350          Section 9. Section 7-23-201 , which is renumbered from Section 7-23-103 is
             351      renumbered and amended to read:
             352     
Part 2. Registration Requirements

             353           [7-23-103].     7-23-201. Registration -- Rulemaking.
             354          (1) (a) It is unlawful for a person to engage in the business of [a check casher] cashing
             355      checks or the business of deferred deposit lending in Utah or with a Utah resident unless the
             356      person:
             357          (i) registers with the department in accordance with this chapter; and
             358          (ii) maintains a valid registration.
             359          (b) It is unlawful for a person to operate a mobile facility in this state to engage in the
             360      business of [a check casher.]:
             361          (i) cashing checks; or
             362          (ii) deferred deposit lending.
             363          (2) (a) A registration and a renewal of a registration expires on April 30 of each year
             364      unless on or before that date the person renews the registration.
             365          (b) To register under this section, a person shall:
             366          (i) pay an original registration fee established under Subsection 7-1-401 (8); and
             367          (ii) submit a registration statement containing the information described in Subsection
             368      (2)(d).


             369          (c) To renew a registration under this section, a person shall:
             370          (i) pay the annual fee established under Subsection 7-1-401 (5); [and]
             371          (ii) submit a renewal statement containing the information described in Subsection
             372      (2)(d)[.]; and
             373          (iii) if the person engages in the business of deferred deposit lending, submit an
             374      operations statement containing the information described in Subsection (2)(e).
             375          (d) A registration or renewal statement shall state:
             376          (i) the name of the person;
             377          (ii) the name in which the business will be transacted if different from that required in
             378      Subsection (2)(d)(i);
             379          (iii) the address of the person's principal business office, which may be outside this
             380      state;
             381          (iv) the addresses of all offices in this state at which the person conducts the business
             382      of [a check casher;]:
             383          (A) cashing checks; or
             384          (B) deferred deposit lending;
             385          (v) if the person conducts the business of [a check casher] cashing checks or the
             386      business of deferred deposit lending in this state but does not maintain an office in this state, a
             387      brief description of the manner in which the business is conducted;
             388          (vi) the name and address in this state of a designated agent upon whom service of
             389      process may be made;
             390          (vii) disclosure of any injunction, judgment, administrative order, or conviction of any
             391      crime involving moral turpitude with respect to that person or any officer, director, manager,
             392      operator, or principal of that person; and
             393          (viii) any other information required by the rules of the department.
             394          (e) An operation statement required for a deferred deposit lender to renew a registration
             395      shall state for the immediately preceding calendar year:
             396          (i) the average deferred deposit loan amount that the deferred deposit lender extended;
             397          (ii) the average number of days a deferred deposit loan is extended by the deferred
             398      deposit lender before the deferred deposit loan is paid in full;
             399          (iii) the minimum and maximum amount of interest or fees charged by the deferred


             400      deposit lender for a deferred deposit loan:
             401          (A) of $100; and
             402          (B) extended for one week; and
             403          (iv) the total number of deferred deposit loans rescinded by the deferred deposit lender
             404      at the request of the customer pursuant to Subsection 7-23-401 (3)(b).
             405          (3) Information provided by a deferred deposit lender under Subsection (2)(e) is:
             406          (a) confidential in accordance with Section 7-1-802 ; and
             407          (b) not subject to Title 63, Chapter 2, Government Records Access and Management
             408      Act.
             409          [(e) (i)] (4) (a) The commissioner may impose an administrative fine determined under
             410      Subsection [(2)(e)(ii)] (4)(b) on a person if:
             411          [(A)] (i) the person is required to be registered under this chapter;
             412          [(B)] (ii) the person fails to register or renew a registration in accordance with this
             413      chapter;
             414          [(C)] (iii) the department notifies the person that the person is in violation of this
             415      chapter for failure to be registered; and
             416          [(D)] (iv) the person fails to register within 30 days after the day on which the person
             417      receives the notice described in Subsection [(2)(e)(i)(C)] (4)(a)(iii).
             418          [(ii)] (b) Subject to Subsection [(2)(e)(iii)] (4)(c), the administrative fine imposed
             419      under this section is:
             420          [(A)] (i) $500 if the person:
             421          [(I)] (A) has no office in this state at which the person conducts the business of [a
             422      check casher; or]:
             423          (I) cashing checks; or
             424          (II) deferred deposit lending; or
             425          [(II)] (B) has one office in this state at which the person conducts the business of [a
             426      check casher; or]:
             427          (I) cashing checks; or
             428          (II) deferred deposit lending; or
             429          [(B)] (ii) if the person has two or more offices in this state at which the person
             430      conducts the business of [a check casher] cashing checks or the business of deferred deposit


             431      lending, $500 for each office at which the person conducts the business of [a check casher.]:
             432          (A) cashing checks; or
             433          (B) deferred deposit lending.
             434          [(iii)] (c) The commissioner may reduce or waive a fine imposed under this Subsection
             435      [(2)(e)] (4) if the person shows good cause.
             436          [(3)] (5) If the information in a registration [or], renewal, or operations statement
             437      required under Subsection (2) becomes inaccurate after filing, a person is not required to notify
             438      the department until:
             439          (a) that person is required to renew the registration; or
             440          (b) the department specifically requests earlier notification.
             441          [(4)] (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             442      Act, the department may make rules consistent with this section providing for:
             443          (a) the form, content, and filing of a registration and renewal statement described in
             444      Subsection (2)(d); and
             445          (b) the form and filing of an operations statement described in Subsection (2)(e).
             446          Section 10. Section 7-23-301 , which is renumbered from Section 7-23-104 is
             447      renumbered and amended to read:
             448     
Part 3. Check Cashing Operations

             449           [7-23-104].     7-23-301. Posting of fee schedules for cashing checks.
             450          (1) A check casher shall post a complete schedule of all fees for cashing a check in a
             451      conspicuous location on its premises that can be viewed by a person cashing a check.
             452          (2) The schedule of fees required to be posted under Subsection (1) shall state the fees
             453      using dollar amounts.
             454          Section 11. Section 7-23-401 , which is renumbered from Section 7-23-105 is
             455      renumbered and amended to read:
             456     
Part 4. Deferred Deposit Lending Operations

             457           [7-23-105].     7-23-401. Operational requirements for deferred deposit loans.
             458          (1) If a [check casher] deferred deposit lender extends a deferred deposit loan, the
             459      [check casher] deferred deposit lender shall:
             460          (a) post in a conspicuous location on its premises that can be viewed by a person
             461      seeking a deferred deposit loan:


             462          (i) a complete schedule of any interest or fees charged for a deferred deposit loan that
             463      states the interest and fees using dollar amounts;
             464          (ii) a number the person can call to make a complaint to the department regarding the
             465      deferred deposit loan; and
             466          (iii) a list of states where the [check casher] deferred deposit lender is registered or
             467      authorized to offer deferred deposit loans through the Internet or other electronic means;
             468          (b) enter into a written contract for the deferred deposit loan;
             469          (c) conspicuously disclose in the written contract:
             470          (i) that under Subsection (3)(a), a person receiving a deferred deposit loan may make a
             471      partial payment in increments of at least $5 on the principal owed on the deferred deposit loan
             472      without incurring additional charges above the charges provided in the written contract;
             473          (ii) that under Subsection (3)(b), a person receiving a deferred deposit loan may rescind
             474      the deferred deposit loan on or before 5 p.m. of the next business day without incurring any
             475      charges;
             476          (iii) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             477      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             478      deposit loan;
             479          (iv) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             480      rollover requires the person to pay the amount owed by the person under the deferred deposit
             481      loan in whole or in part more than 12 weeks after the day on which the deferred deposit loan is
             482      executed; and
             483          (v) (A) the name and address of a designated agent required to be provided the
             484      department under Subsection [ 7-23-103 ] 7-23-201 (2)(d)(vi); and
             485          (B) a statement that service of process may be made to the designated agent;
             486          (d) provide the person seeking the deferred deposit loan a copy of the deferred deposit
             487      contract;
             488          (e) orally review with the person seeking the deferred deposit loan the terms of the
             489      deferred deposit loan including:
             490          (i) the amount of any interest rate or fee;
             491          (ii) the date on which the full amount of the deferred deposit loan is due;
             492          (iii) that under Subsection (3)(a), a person receiving a deferred deposit loan may make


             493      a partial payment in increments of at least $5 on the principal owed on the deferred deposit
             494      loan without incurring additional charges above the charges provided in the written contract;
             495          (iv) that under Subsection (3)(b), a person receiving a deferred deposit loan may
             496      rescind the deferred deposit loan on or before 5 p.m. of the next business day without incurring
             497      any charges;
             498          (v) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             499      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             500      deposit loan; and
             501          (vi) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             502      rollover requires the person to pay the amount owed by the person under the deferred deposit
             503      loan in whole or in part more than 12 weeks after the day on which the deferred deposit loan is
             504      executed; and
             505          (f) comply with the following as in effect on the date the deferred deposit loan is
             506      extended:
             507          (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et seq., and its implementing federal
             508      regulations;
             509          (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691, and its implementing federal
             510      regulations;
             511          (iii) Bank Secrecy Act, 12 U.S.C. Sec. 1829b, 12 U.S.C. Sec. 1951 through 1959, and
             512      31 U.S.C. Sec. 5311 through 5332, and its implementing regulations; and
             513          (iv) Title 70C, Utah Consumer Credit Code.
             514          (2) If a [check casher] deferred deposit lender extends a deferred deposit loan through
             515      the Internet or other electronic means, the [check casher] deferred deposit lender shall provide
             516      the information described in Subsection (1)(a) to the person receiving the deferred deposit loan:
             517          (a) in a conspicuous manner; and
             518          (b) prior to the person entering into the deferred deposit loan.
             519          (3) A [check casher] deferred deposit lender that engages in a deferred deposit loan
             520      shall permit a person receiving a deferred deposit loan to:
             521          (a) make partial payments in increments of at least $5 on the principal owed on the
             522      deferred deposit loan at any time prior to maturity without incurring additional charges above
             523      the charges provided in the written contract; and


             524          (b) rescind the deferred deposit loan without incurring any charges by returning the
             525      deferred deposit loan amount to the [check casher] deferred deposit lender on or before 5 p.m.
             526      the next business day following the deferred deposit loan transaction.
             527          (4) A [check casher] deferred deposit lender that engages in a deferred deposit loan
             528      may not:
             529          (a) collect additional interest on a deferred deposit loan with an outstanding principal
             530      balance 12 weeks after the day on which the deferred deposit loan is executed;
             531          (b) roll over a deferred deposit loan without the person receiving the deferred deposit
             532      loan requesting the rollover of the deferred deposit loan;
             533          (c) roll over a deferred deposit loan if the rollover requires a person to pay the amount
             534      owed by the person under a deferred deposit loan in whole or in part more than 12 weeks from
             535      the day on which the deferred deposit loan is first executed; [or]
             536          (d) extend a new deferred deposit loan to a person on the same business day that the
             537      person makes a payment on another deferred deposit loan if the payment:
             538          (i) is made at least 12 weeks after the day on which that deferred deposit loan is
             539      extended; and
             540          (ii) results in the principal of that deferred deposit loan being paid in full; or
             541          [(d)] (e) threaten to use or use the criminal process in any state to collect on the
             542      deferred deposit loan.
             543          (5) Notwithstanding Subsections (4)(a) and (4)[(d)] (e), a [check casher] deferred
             544      deposit lender that is the holder of a check used to obtain a deferred deposit loan that [has
             545      been] is dishonored may use the remedies and notice procedures provided in Chapter 15,
             546      Dishonored Instruments, except that the issuer, as defined in Section 7-15-1 , of the check may
             547      not be:
             548          (a) asked by the holder to pay the amount described in Subsection 7-15-1 (6)(a)(iii) as a
             549      condition of the holder not filing a civil action; or
             550          (b) held liable for the damages described in Subsection 7-15-1 (7)(b)(vi).
             551          Section 12. Section 7-23-402 , which is renumbered from Section 7-23-105.1 is
             552      renumbered and amended to read:
             553           [7-23-105.1].     7-23-402. Electronic disbursement and collections.
             554          If a [check casher] deferred deposit lender collects payment on a deferred deposit loan


             555      through an electronic payment, the [check casher] deferred deposit lender shall, on the day the
             556      loan is executed:
             557          (1) credit the amount of the deferred deposit loan through an electronic payment to the
             558      person receiving the deferred deposit loan; or
             559          (2) make the amount of the deferred deposit loan immediately available to the person
             560      receiving the deferred deposit loan.
             561          Section 13. Section 7-23-501 , which is renumbered from Section 7-23-106 is
             562      renumbered and amended to read:
             563     
Part 5. Enforcement

             564           [7-23-106].     7-23-501. Enforcement by department -- Rulemaking.
             565          (1) Subject to the requirements of Title 63, Chapter 46b, Administrative Procedures
             566      Act, the department may:
             567          (a) receive and act on complaints;
             568          (b) take action designed to obtain voluntary compliance with this chapter;
             569          (c) commence administrative or judicial proceedings on its own initiative to enforce
             570      compliance with this chapter; or
             571          (d) take action against [any] a check casher or deferred deposit lender that fails to:
             572          (i) respond to the department, in writing within 30 business days of the day on which
             573      the check casher or deferred deposit lender receives notice from the department of a complaint
             574      filed with the department; or
             575          (ii) submit information as requested by the department.
             576          (2) The department may:
             577          (a) counsel persons and groups on their rights and duties under this chapter;
             578          (b) make rules in accordance with Title 63, Chapter 46a, Utah Administrative
             579      Rulemaking Act, to:
             580          (i) restrict or prohibit lending or servicing practices that are misleading, unfair, or
             581      abusive;
             582          (ii) promote or assure fair and full disclosure of the terms and conditions of agreements
             583      and communications between [check cashers and customers; or] a customer and:
             584          (A) a check casher; or
             585          (B) a deferred deposit lender; and


             586          (iii) promote or assure uniform application of or to resolve ambiguities in applicable
             587      state or federal laws or federal regulations; and
             588          (c) employ hearing examiners, clerks, and other employees and agents as necessary to
             589      perform the department's duties under this chapter.
             590          Section 14. Section 7-23-502 , which is renumbered from Section 7-23-107 is
             591      renumbered and amended to read:
             592           [7-23-107].     7-23-502. Examination of books, accounts, and records by the
             593      department.
             594          (1) At least annually the department shall, for each premise engaging in the business of
             595      [a check casher] cashing checks or the business of deferred deposit lending:
             596          (a) examine the books, accounts, and records; and
             597          (b) make investigations to determine compliance with this chapter.
             598          (2) In accordance with Section 7-1-401 , [the check casher] a person examined under
             599      Subsection (1) shall pay a fee for [an] the examination conducted under Subsection (1).
             600          Section 15. Section 7-23-503 is enacted to read:
             601          7-23-503. Reporting by commissioner.
             602          (1) Subject to Subsection (2), as part of the commissioner's annual report to the
             603      governor and Legislature under Section 7-1-211 , the commissioner shall report to the governor
             604      and Legislature on the operations on an aggregate basis of deferred deposit lenders operating in
             605      the state.
             606          (2) In preparing the report required by Subsection (1), the commissioner:
             607          (a) shall include in the report for the immediately preceding calendar year aggregate
             608      information from the one or more operation statements filed under Subsection 7-23-201 (2)(e)
             609      by deferred deposit lenders for that calendar year; and
             610          (b) may not include in the report information from an operation statement filed with
             611      the department that could identify a specific deferred deposit lender.
             612          Section 16. Section 7-23-504 , which is renumbered from Section 7-23-108 is
             613      renumbered and amended to read:
             614           [7-23-108].     7-23-504. Penalties.
             615          (1) A person who violates this chapter or who files materially false information with a
             616      registration or renewal under Section [ 7-23-103 ] 7-23-201 is:


             617          (a) guilty of a class B misdemeanor, except for a violation of:
             618          (i) Subsection [ 7-23-105 ] 7-23-401 (1)(f)(i), (ii), or (iii); or
             619          (ii) rules made under Subsection [ 7-23-106 ] 7-23-501 (2)(b); and
             620          (b) subject to revocation of a person's registration under this chapter.
             621          (2) Subject to Title 63, Chapter 46b, Administrative Procedures Act, if the department
             622      determines that a person is engaging in the business of cashing checks or the business of
             623      deferred deposit lending in violation of this chapter, the department may:
             624          (a) revoke that person's registration under this chapter;
             625          (b) issue a cease and desist order from committing any further violations;
             626          (c) prohibit the person from continuing to engage in the business of [a check casher;]:
             627          (i) cashing checks; or
             628          (ii) deferred deposit lending;
             629          (d) impose an administrative fine not to exceed $1,000 per violation, except that:
             630          (i) a fine imposed under Subsection [ 7-23-103 (2)(e)] 7-23-201 (4) shall comply with
             631      Subsection [ 7-23-103 (2)(e)] 7-23-201 (4); and
             632          (ii) the aggregate total of fines imposed under this chapter against a person in a
             633      calendar year may not exceed $30,000 for that calendar year; or
             634          (e) take any combination of actions listed under this Subsection (2).
             635          Section 17. Section 15-1-4 is amended to read:
             636           15-1-4. Interest on judgments.
             637          (1) As used in this section, "federal postjudgment interest rate" means the interest rate
             638      established for the federal court system under 28 U.S.C. Sec. 1961, as amended.
             639          (2) (a) Except as provided in Subsection (2)(b), a judgment rendered on a lawful
             640      contract shall conform to the contract and shall bear the interest agreed upon by the parties,
             641      which shall be specified in the judgment.
             642          (b) A judgment rendered on a deferred deposit loan subject to Title 7, Chapter 23,
             643      Check Cashing and Deferred Deposit Lending Registration Act, shall bear interest at the rate
             644      imposed under Subsection (3) on an amount not exceeding the sum of:
             645          (i) the total of the principal balance of the deferred deposit loan;
             646          (ii) interest at the rate imposed by the deferred deposit loan agreement for a period not
             647      exceeding 12 weeks as provided in Subsection [ 7-23-105 ] 7-23-401 (4);


             648          (iii) costs;
             649          (iv) attorney fees; and
             650          (v) other amounts allowed by law and ordered by the court.
             651          (3) (a) Except as otherwise provided by law, other civil and criminal judgments of the
             652      district court and justice court shall bear interest at the federal postjudgment interest rate as of
             653      January 1 of each year, plus 2%.
             654          (b) The postjudgment interest rate in effect at the time of the judgment shall remain the
             655      interest rate for the duration of the judgment.
             656          (c) The interest on criminal judgments shall be calculated on the total amount of the
             657      judgment.
             658          (d) Interest paid on state revenue shall be deposited in accordance with Section
             659      63A-8-301 .
             660          (e) Interest paid on revenue to a county or municipality shall be paid to the general
             661      fund of the county or municipality.




Legislative Review Note
    as of 1-30-08 9:52 AM


Office of Legislative Research and General Counsel


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