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USA Statutes : arizona
Title : Banks and Financial Institutions
Chapter : DEFERRED PRESENTMENT COMPANIES
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6-1251 Definitions
In this chapter, unless the context otherwise requires:
1. "Branch office" means any office operated by a licensee to provide deferred
presentment services.
2. "Check" means a draft signed by the maker and made payable to a person that is
licensed pursuant to this chapter with the name of the maker preprinted on the face of
the check.
3. "Deferred presentment services" means a transaction pursuant to a written
agreement in which the licensee accepts a check and agrees to hold the check for at least
five days before presentment for payment or deposit.
4. "Engaged in the business" means either:
(a) Advertising to or any other solicitation of a resident of this state that
offers deferred presentment services and that occurs within this state.
(b) Providing three or more deferred presentment services within a calendar year to
residents of this state.
5. "License" means a license issued pursuant to this chapter.
6. "Licensee" means a corporation, company, firm, partnership, association or
natural person that is licensed by the superintendent to engage in the business of
providing deferred presentment services pursuant to this chapter.
7. "Location" means the entire space in which a licensee provides deferred
presentment services.
8. "Partner" means a person who either:
(a) Is authorized by law or a partnership agreement to participate in the
management of the business of the partnership.
(b) Owns more than twenty-five per cent of the applicant or licensee partnership. 6-1252 Exemptions
This chapter does not apply to:
1. Banks, savings and loan associations, collection agencies or financing or
lending institutions authorized and licensed to transact business under the laws of the
United States or this state.
2. Any person that is principally engaged in the retail sale of goods or services
and that, either as an incident to or independently of a retail sale or service and not
holding itself out to be a deferred presentment service, from time to time cashes checks,
drafts or money orders for any fee or other consideration in which not more than two
dollars is charged for the service.
6-1253 Application for license; financial statement
A. A person shall make an application for a license in writing, under oath and in
the form prescribed by the superintendent. The superintendent may require additional
information on the experience, background, honesty, truthfulness, integrity and
competency of the applicant. If the applicant is a person other than a natural person,
the superintendent may require information as to the honesty, truthfulness, integrity and
competency of any executive officer, director, shareholder, member, partner, trustee,
employee or any other interested party of the firm, partnership or association.
B. Each applicant shall include with an application for a license both of the
following:
1. A statement of personal history in the form prescribed by the superintendent.
If the applicant is a person other than a natural person, the superintendent may require
a statement of personal history of any executive officer, director, shareholder, member,
partner, trustee, employee or any other interested party of the firm, partnership or
association. The statement of personal history prescribed in this section is confidential
and is not a public record under title 39, chapter 1, article 2.
2. A financial statement in the form prescribed by the superintendent that
accurately states the applicant's assets, liabilities and net worth.
C. The superintendent may acquire as part of the application a credit report and
any information the superintendent deems necessary in order to evaluate the applicant's
qualifications for licensure pursuant to this chapter.
D. This chapter applies to any person who seeks to avoid its application by any
subterfuge or pretense.
6-1254 Qualifications of applicants
A. An applicant for a license:
1. Shall be a citizen of the United States.
2. Shall be a person of honesty, truthfulness and good moral character.
3. Shall not have been convicted of a crime that involves moral turpitude.
4. Shall not have defaulted on payment of money collected or received for another
person.
5. Shall not have been a former licensee pursuant to this chapter whose license was
suspended or revoked and not subsequently reinstated.
B. If the applicant is a person other than a natural person, the qualifications
required by subsection A are also required of any executive officer, director or partner
of the firm, partnership or association.
C. To qualify for a license an applicant shall have:
1. A minimum net worth in cash or cash equivalents, determined in accordance with
generally accepted accounting principles, of at least fifty thousand dollars.
2. The financial responsibility, character and experience to warrant a belief that
the business is operated lawfully, honestly, fairly and efficiently. 6-1255 Issuance of licenses
A. On receipt of an original application that is accompanied by the fees prescribed
in section 6-126 and the financial statement prescribed in this chapter, the
superintendent shall conduct a general review of the qualifications of the applicant. If
the superintendent finds no grounds for denial of a license, within one hundred twenty
days after receiving a complete application, the superintendent shall grant the
application and issue a license to the applicant.
B. A license is not transferable or assignable and control of a license shall not
be acquired through any stock purchase or other device without the prior written consent
of the superintendent. The superintendent shall not give consent if the superintendent
finds that the acquiring person does not meet the qualifications of this chapter. For the
purposes of this subsection, "control" means the power to vote more than twenty-five per
cent of the outstanding voting shares of a licensed corporation, partnership, association
or trust.
C. A license remains the property of this state. On termination at the request of
the licensee or revocation by the superintendent, the licensee shall immediately deliver
the license to the superintendent. Termination of the license does not affect any other
liability of the licensee. 6-1256 Annual renewal of license
A. On or before June 30 of each year, an applicant for licensure renewal shall:
1. File with the superintendent a financial statement prepared according to
generally accepted accounting principles for the twelve month period ending the previous
December 31.
2. Make a renewal application to the department on forms prescribed by the
superintendent and:
(a) Pay the fees prescribed in section 6-126.
(b) Include information to assist the superintendent in determining whether the
applicant is in default of or in violation of this chapter and whether the applicant
meets the requirements of this chapter.
B. If the renewal applicant is unable to make a financial statement at the time the
applicant files the renewal application, the applicant may make a written request for an
extension of time to file the financial statement. If the superintendent grants the
extension the applicant shall file a financial statement within thirty days after the
superintendent issues the renewal license.
C. On application to the superintendent each year pursuant to subsection A of this
section, the superintendent shall issue the renewal license on August 1 of each year. 6-1257 Duties of licensees
A licensee:
1. Shall meet the financial responsibility requirements of this chapter.
2. Shall deal openly, fairly and honestly in the conduct of the deferred
presentment business.
3. Shall at all times and in every branch office conspicuously post a notice in
English and Spanish that states the fee charged for deferred presentment services.
4. Shall file with the superintendent a statement of the fees charged at every
location that is licensed for deferred presentment services. The licensee shall file the
statement annually and include the statement with the licensee's renewal application. 6-1258 Denial, revocation or suspension of license
A. The superintendent may deny a license to a person or suspend or revoke a license
if the superintendent finds that an applicant or licensee:
1. Has failed to pay the annual renewal fees.
2. Has failed to file the annual financial statement as prescribed in this chapter.
3. Is insolvent as defined in section 47-1201.
4. Is not a person of honesty, truthfulness or good character.
5. Has violated this chapter or any other applicable law, rule or order.
6. Has been convicted in any jurisdiction of any felony or other crime that
involved breach of trust or dishonesty.
7. Has had an order entered against the applicant or licensee by an administrative
agency of any jurisdiction and the order is based on conduct that involves fraud, deceit
or misrepresentation by the applicant or licensee and is entered after notice and an
opportunity to be heard.
8. Has made a material misstatement or omission on the application for a license or
on any document required to be filed with the superintendent.
9. Has had a financial judgment ordered against the applicant or licensee in a
civil action based on fraud, deceit or misrepresentation.
10. Has failed to take reasonable measures to ensure that an agreement to defer
presentment is not breached.
11. Has engaged in any act or practice that would violate section 32-1051, paragraph
4, 6, 7 or 8 if engaged in by a third party acting on behalf of the applicant or
licensee.
B. It is sufficient cause for the denial, suspension or revocation of a license if
an officer, director, partner, employee or controlling person of the licensee has acted
or failed to act in a manner that if the licensee acted or failed to act in that manner
would be cause for denial, suspension or revocation of the license. For purposes of this
subsection, "controlling person" means a person who owns more than twenty-five per cent
equity interest in the deferred presentment company or who has the ability to affect one
or more significant business decisions of the licensee or applicant.
C. The superintendent may deny renewal of a license or suspend or revoke a license
if the superintendent finds that any fact or condition exists that, if it had existed at
the time of the original application for the license, would have warranted the
superintendent to refuse to issue the license. 6-1259 Prohibited acts
A. A person shall not engage in the business of providing deferred presentment
services without first obtaining a license pursuant to this chapter. A separate license
is required for each location from which the business is conducted. The licensee shall
post its license to engage in the business of deferred presentment services at each
location that is licensed pursuant to this chapter.
B. A licensee shall not:
1. Advance monies on the security of a check without first obtaining reasonable
evidence that indicates that the account on which the presented check is drawn is an open
and active account.
2. Assess any fee that is more than the amount prescribed in this chapter.
3. At the licensed location engage in the business of:
(a) Making loans of money or extensions of credit other than those allowed under
this chapter or title 44, chapter 11, article 3.
(b) Discounting notes, bills of exchange, items or other evidences of debt.
(c) Accepting deposits or bailments of money or items, except as expressly provided
in section 6-1260.
4. Use or cause to be published or disseminated any advertisement that contains
false, misleading or deceptive statements or representations.
5. Engage in the business of deferred presentment services at locations other than
licensed locations.
6. Engage in unfair, deceptive or fraudulent practices.
7. Alter or delete the date on a check accepted by the licensee.
8. Take possession of an undated check or a check dated on a date other than the
date on which the licensee takes possession of the check or the date of presentment.
9. Require a customer to provide security for the transaction, other than the
presented check, or require the customer to provide a guaranty from another person.
10. Fail to take reasonable measures to ensure that no customer has more than one
deferred presentment loan outstanding at any time with any licensee in this state.
11. Engage in the sale of the following goods or services at any licensed location:
(a) Gaming activities, including the sale of lottery tickets.
(b) Alcoholic beverages.
12. Tie or otherwise condition the offering of deferred presentment services to the
sale of any good or service.
13. Permit others to engage in any activity prohibited in this section at a location
licensed pursuant to this chapter.
14. Offer deferred presentment services for less than five days.
15. Be required to request or accept any written representation by a customer as to
whether the customer has any outstanding checks for deferred presentment held by other
licensees. 6-1260 Deferred presentment; amount; fees
A. The licensee may accept for deferred presentment or deposit a check with a face
amount of at least fifty dollars but not more than five hundred dollars, excluding the
fees permitted in subsection F of this section.
B. For each check the licensee accepts for deferred presentment or deposit, the
licensee and the customer shall sign a written agreement that contains the name or trade
name of the licensee, the transaction date, the amount of the check, the amount to be
paid by the maker, a statement of the total amount of the fees charged, expressed both as
a dollar amount and as an effective annual percentage rate, a disclosure statement that
complies with state and federal truth in lending laws and a notice to the customer as
prescribed in subsection C of this section. The written agreement shall expressly require
the licensee to defer presentment or deposit of the check until a specified date.
C. A licensee shall provide a notice in a prominent place on each written agreement
that specifies that no customer may have outstanding more than one deferred presentment
service agreement at one time and the face amount, exclusive of any fees, cannot be more
than five hundred dollars. A licensee shall ask every customer who seeks deferred
presentment services whether that customer has any outstanding checks payable to other
licensees.
D. A licensee may rely on the customer's representation of whether the customer has
any outstanding checks for deferred presentment held by other licensees.
E. The maker of a check has the right to redeem the check from the licensee before
the agreed on date of presentment or deposit if the maker pays the licensee the amount of
the check.
F. A licensee shall not directly or indirectly charge any fee or other
consideration for accepting a check for deferred presentment or deposit that is more than
fifteen per cent of the face amount of the check for any initial transaction or any
extension.
G. A licensee may impose the fee prescribed in subsection F of this section only
once for each written agreement. The fee is earned on execution of the written agreement
and is not subject to any reimbursement even if the maker redeems the check pursuant to
subsection E of this section.
H. The fee charged by the licensee is not interest for purposes of any other law or
rule of this state.
I. A person may extend the presentment or deposit of a check not more than three
consecutive times. For each extension the customer and the licensee shall terminate the
previous agreement and sign a separate agreement. During an incomplete transaction the
customer may not receive any additional monies from the licensee. The licensee may charge
a fee as prescribed in subsection F of this section for each extension. If a customer has
completed a deferred presentment transaction with the licensee, the customer may enter
into a new agreement for deferred presentment services with the licensee. A transaction
is completed when the customer's check is presented for payment, deposited or redeemed by
the customer for cash.
J. If a check is returned to the licensee from a payer financial institution due to
insufficient funds, a closed account or a stop payment order, the licensee may use all
available civil remedies to collect on the check including the imposition of the
dishonored check fee prescribed in section 44-6852. An individual who issues a personal
check to a licensee under a deferred presentment agreement is not subject to criminal
prosecution pursuant to title 13, chapter 18. 6-1261 Books, accounts and records; examinations; costs
A. A licensee shall maintain in its branch and home offices all books, accounts and
records that the superintendent reasonably requires. The licensee shall:
1. Ensure that the books, accounts and records are sufficiently detailed to comply
with all applicable statutes and rules.
2. Maintain the books, accounts and records separately from any other business in
which the licensee is engaged and shall retain the books, accounts and records for at
least three years.
B. The superintendent may examine the books, accounts and records to determine if
the licensee has complied with this chapter and any rule adopted pursuant to this
chapter. The licensee shall pay the cost of the examination determined in accordance with
section 6-125 to the department. 6-1262 Violation; classification; individual liability
A. A person that provides deferred presentment services without a license is guilty
of a class 1 misdemeanor.
B. A licensee that violates this chapter or the rules adopted pursuant to this
chapter is subject to revocation of the licensee's license and is guilty of a class 1
misdemeanor.
C. An officer or agent of a corporation or association who participates in a
violation of this chapter is subject to the penalties prescribed in this section.
D. Except as the result of an accidental or bona fide error, if the licensee
charges, contracts for or receives any amount in excess of the fees expressly permitted
by this chapter, the deferred presentment is voidable and the licensee has no right to
collect or receive any fees in connection with the deferred presentment transaction. Any
deferred presentment transaction that is made by a person who is required to be licensed
pursuant to this chapter but who is not licensed is void, and the person has no right to
collect, receive or retain any principal or other fees in connection with that deferred
presentment transaction. 6-1263 Program termination
The deferred presentment licensing program established by this chapter ends on July
1, 2010 pursuant to section 41-3102.
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