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Check Casher Licensing

Check Casher Licensing
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Overview

As stated in Section 367(1) of the New York Banking Law, “No person, partnership, association or corporation shall engage in the business of cashing checks, drafts or money orders for a consideration without first obtaining a license from the superintendent.” For licensing requirements see, e.g., BL Article 9-A and Superintendent’s Regulations Parts 400, 416, 417 and 300.

Annual Maximum Fee

Effective February 26, 2021, the maximum fee that licensed check cashers may charge will increase to 2.27 percent of the face amount of a check, draft, or money order, except with respect to the cashing of checks, drafts, or money orders for payees of such checks, drafts, or money orders that are other than natural persons.

Annual Report

The Annual Report should be prepared by a qualified person(s) and submitted no later than March 15, 2024. Instructions for the submission of the report are detailed in the cover letter.

Application and License Management

The Department of Financial Services (DFS) uses the Nationwide Multistate Licensing System and Registry (NMLS) to manage the Check Casher License.

Through NMLS, companies maintain a single record to apply for, amend, surrender and change license authorities in one or more states, and make reports conveniently and safely online.

Access to NMLS

To access NMLS for the first time, you must complete a Company Account Request Form and identify a Primary Account Administrator and a Secondary Account Administrator. This form can be submitted electronically through the NMLS website in the “Getting Started” section. This form needs to be submitted only once per company, regardless of the number of NMLS participating states in which you are licensed.

Within three days of completing and submitting the Company Account Request Form, the Primary Account Administrator will receive NMLS login information. The Primary Account Administrator will have full rights to access the system, submit information to this agency and other participating state regulators, and set up other company users in the system. Instructions and tutorials on how to access and use the system are also available in the NMLS Resource Center.

Note: If your company already has a record in NMLS, you can omit this step.

Managing Your License on NMLS

Each company holding a DFS Check Casher License who wishes to manage their license on NMLS must create a company record in the system. To gain access to NMLS, the applicant must submit a form requesting an NMLS account.

Current New York State Check Cashers may transition their licenses to NMLS. See the DFS Check Casher Company Transition Checklist, Check Casher Branch Transition Checklist and Check Casher Limited Station Transition Checklist for more information.

Submitting a Complete Application

To submit an application and ensure your application is received, acknowledged as complete, and processed, please follow the instructions on the DFS Check Casher Checklists. No application shall be deemed to be complete until the Department has received all required information, documents, and fees.

In the process of reviewing and considering the application, DFS may request additional information and supporting documents.

In the application process, an NMLS Identification Number will be assigned to your application. Please maintain a record of this NMLS Identification Number, as it will be used as your application reference number throughout the remainder of the application process. The applicant’s NMLS Identification Number must be included on every hard-copy document submitted to the Department.

Note: If the applicant has already submitted Forms MU1 and MU2 through NMLS for another state, the applicant does not need to re-enter the company record into NMLS. However, the applicant is required to provide jurisdiction-specific information to support its New York State application.

For evidence of future possession of location of business, please consult this April 14, 2021 Industry Letter regarding Applying for Approval to Operate at a New Check Cashing Location.

Requirements for Check Casher Employees

Each licensed check casher is responsible to ensure that all employees are registered with the Department. The Department must be notified of new employees before hiring.  Section 400.1(c)(4) of the Superintendent’s Regulations requires the fingerprinting of all employees and every person connected with a licensed check casher.  Please refer to the Fingerprinting Instructions

The following must be submitted to the Department for each employee and every person connected with a licensed check casher:

  • A completed Employee Introduction Letter.
  • Two passport-style photographs measuring not more than 2” x 2”. Print the person’s name and social security number on the reverse side of each photograph.
  • A receipt issued by an IdentoGO Center located in New York State, indicating the fingerprinted individual's name, fingerprinting site location, date and time, fee paid, and reason for fingerprinting.

Please mail these items (all originals – NO photocopies) to the Department at:

New York State Department of Financial Services
Licensed Financial Services
One State Street
New York, NY 10004-1511

Additionally, you must notify the Department immediately in writing, when an employee’s employment at the check casher has ceased.

Forms and Affidavits

Examination of Check Cashers

The examination focuses on compliance with applicable state and federal laws and regulations and areas deemed likely to affect the safety and soundness of the licensee.

The Department of Financial Services assigns licensed check cashers a FILM rating based on an assessment of financial condition, internal controls and auditing, legal and regulatory compliance, and management.  The ratings range from “1” (Strong) to “5” (Unsatisfactory). 

Licensees with a FILM rating of "4" (Marginal) or “5” (Unsatisfactory) or severe violations/deficiencies may be subject to regulatory actions such as monetary fines, and license suspension and revocation.

Details on the evaluation of the FILM components are as follows:

Financial Condition:  This evaluation considers balance sheet composition including the adequacy of capital to absorb losses or to support growth; adequacy of liquidity; and the level and quality of earnings.

Internal Controls and Auditing:  Internal controls and auditing are evaluated based upon the effectiveness of accounting, financial, operation, and systems controls, and the audit program.  The assessment considers the extent of adherence to established policies and procedures; the independence, frequency, scope, and adequacy of the internal and external audit functions (including risk assessment) relative to the size and business activities of the licensee; the severity of internal control and audit exceptions; the extent to which internal control and audit exceptions are tracked and resolved in a timely manner; the adequacy of management information reports; and whether the system of controls is reviewed to keep pace with changes in the licensee’s business plan.

Legal and Regulatory Compliance:  This evaluation is based upon the level of adherence to applicable state and federal laws and regulations including any supervisory follow-up actions; the effectiveness of the written compliance program including policies and procedures; the ability to submit legal and regulatory reports in a timely and accurate manner; and management’s ability to identify and correct compliance issues in a timely manner.

Management:  The rating is based upon, but not limited to the following:  the overall performance of the licensee; the capability of the governing board and management in carrying out its business plan; management depth and succession; and responsiveness to recommendations from auditors and supervisory authorities.

Changes in Certain Individuals

Pursuant to the following sections of the New York Banking Law (BL) and Superintendent’s Regulations (SR), licensees of the Department of Financial Services (DFS) are required to notify the Superintendent of changes in certain individuals, within stipulated time frames:

Check Cashers: BL 367, 369 and 370-a; and SR 400.7

These requirements are for changes in certain individuals of licensees whose licenses are not managed on NMLS. For those managed on NMLS, visit https://mortgage.nationwidelicensingsystem.org/slr/Pages/DynamicLicenses.aspx?StateID=ny, navigate to Company Licenses and Amendment under the pertinent industry type, and look under Change in Control on the Amendment Checklist.

Included Individuals

Members of the governing board such as directors, trustees, and LLC members

Officers (at a minimum Chief Executive Officer, President, Chief Financial Officer, Chief Compliance Officer, and Chief Operations Officer, and any other officers deemed necessary by DFS)

Documentary requirements for Each Included Individual Being Added

Notification on the licensee's letterhead signed by an authorized officer containing the following:

Documentary requirements for Each Included Individual Being Removed

Notification on the licensee's letterhead signed by an authorized officer containing the following:

  • Name and title of the individual being removed
  • Reason of the removal
  • Effective date of the removal
  • New title/position, if any

Where To Submit?

For matters related to Check Cashers, please submit the documents as directed by the DFS Portfolio Manager assigned to your institution.

For matters related to Virtual Currency, please submit the documents via email to [email protected].

**Background Investigation Reports are usually required only for individuals of licensed check cashers and money transmitters. However, Background Investigation Reports may also be required for other officers, directors, stockholders, owners, and control persons of any licensee as determined by the Superintendent in her sole discretion.

Questions?

More information about NMLS can be found in the NMLS Resource Center.

For application questions, call DFS at (212) 709-5507