NORTH CAROLINA GENERAL ASSEMBLY

1963 SESSION

 

 

CHAPTER 1251

HOUSE BILL 1369

 

 

AN ACT RELATING TO SALE OF CHECKS, MONEY ORDERS OR OTHER INSTRUMENTS FOR TRANSMISSION OR PAYMENT OF MONEY.

 

The General Assembly of North Carolina do enact:

 

Section 1.  This Act shall be known and may be cited as the "Sale of Checks Act".

Sec. 2.  For the purpose of this Act:

(1)        "Person" means any individual, partnership, association, joint stock association, trust or corporation;

(2)        "Licensee" means any person duly licensed by the Commissioner pursuant to this Act;

(3)        "Check" means any check, draft, money order or other instrument for the transmission or payment of money;

(4)        "Commissioner" means the Commissioner of Banks of the State of North Carolina.

Sec. 3.  No person shall sell or issue checks in this State as a service or for a fee or other consideration without first obtaining a license from the Commissioner pursuant to the provisions of this Act, provided, however, that this Act shall not apply to the receipt of money by an incorporated telegraph company at any office or agency of such company for immediate transmission by telegraph.

Sec. 4.  Nothing in this Act shall apply to the sale or issuance of checks by:

(1)        Corporations organized under the general banking laws of this State or of the United States.

(2)        The Government of the United States or any department or agency thereof.

(3)        Savings and loan associations organized under the laws of this State or of the United States.

Sec. 5.  Each application for a license to sell or issue checks in this State shall be made in writing and under oath to the Commissioner in such form as he may prescribe. The application shall state the full name and business address of

(a)        The proprietor, if the applicant is an individual;

(b)        Every member, if the applicant is a partnership or association, except that if the applicant is a joint stock association having fifty or more members the name and business address need be given only of the association and each officer and director thereof;

(c)        The corporation and each officer and director thereof, if the applicant is a corporation.

Sec. 6.  Each application for a license shall be accompanied by an investigation fee of five hundred dollars ($500.00). If the license is granted, the investigation fee shall be applied to the license fee for the first year. No investigation fee shall be refunded.

Sec. 7.  Each approved applicant shall furnish a corporate surety bond in the principal sum of one hundred and fifty thousand dollars ($150,000.00) and an additional principal sum of five thousand dollars ($5,000.00) for each location within this State at which checks of the licensee are issued or sold, but in no event shall the bond be required to be in excess of two hundred and fifty thousand dollars ($250,000.00). Each application for a license or for the renewal of a license shall be accompanied by a list of the locations, including agencies, at which the applicant engages in the business of selling checks in this State. The bond shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this Act and will honestly and faithfully apply all funds received and perform all obligations issued and sold under this Act and will pay to the State and to any person entitled thereto all money that becomes due and owing to the State or to such person under the provisions of this Act because of any checks issued or sold in this State by such licensee or his agent or employee. The bond shall remain in force and effect until canceled by the surety, which cancellation may be had only upon thirty days' written notice to the Commissioner. Such cancellation shall not affect any liability incurred or accrued prior to the termination of such thirty-day period.

Sec. 8.  (a) If the Commissioner shall find at any time that any bond required under this Act is insecure, insufficient or exhausted, an additional bond to be approved by the Commissioner shall be filed by the licensee within ten (10) days after written demand therefor by the Commissioner.

(b)        In lieu of any bond required under this Act, the licensee may deposit with the Commissioner securities with a par value equal to the amount of any such bond. Such securities shall consist of

(1)        General obligations of or fully guaranteed by the United States or of any agency or instrumentality of or corporation wholly owned by the United States directly or indirectly; or

(2)        Direct general obligations of the State of North Carolina, or of any county, city, town, or other political subdivision or municipal corporation of the State of North Carolina. Such securities shall be held by the Commissioner to secure the same obligation as would any bond required by this Act. The securities so deposited may be exchanged from time to time for other securities receivable as aforesaid. All said securities shall be subject to sale and transfer and to the disposal of the proceeds by said Commissioner only on the order of a court of competent jurisdiction. So long as the licensee so depositing shall continue solvent, and is not in violation of any of the provisions of this Act, such licensee shall be permitted to receive the interest or dividends on said deposit. The Commissioner shall provide for custody of such securities by any qualified trust company or bank located in the State of North Carolina or by any Federal Reserve Bank. The compensation, if any, of the custodian for acting as such under this Section shall be paid by the depositing licensee.

Sec. 9.  Upon the filing of the application, the payment of the investigation fee and the approval by the Commissioner of the bond or securities delivered pursuant to Section 7 or 8, the Commissioner shall investigate the financial responsibility, financial and business experience, character and general fitness of the applicant and, if he deems it advisable, of its officers and directors, and, if he finds these factors and qualities meet the requirements of this Act and are such as to warrant the belief that the applicant's business will be conducted honestly, fairly, equitably, carefully and efficiently and in a manner commanding the confidence and trust of the community, he shall issue to the applicant a license to sell and issue checks subject to the provisions of this Act.

Sec. 10.  Each licensee under this Act shall at all times maintain a minimum net worth of at least one hundred thousand dollars ($100,000.00).

Sec. 11.  Each licensee shall pay to the Commissioner within five (5) days after the issuance of the license, and annually thereafter on or before June 30th of each year, a license fee of five hundred dollars ($500.00).

Sec. 12.  Each licensee may conduct business at one or more locations within this State and through or by means of such employees, agents, subagents or representatives as such licensee may from time to time designate and appoint. No license under this Act shall be required of any such employee, agent, subagent or representative who is acting for or in behalf of a licensee hereunder in the sale of checks of which the licensee is the issuer. Each such agent, subagent or representative shall upon demand transfer and deliver to the licensee the proceeds of the sale of licensee's checks less the fees, if any, due such agent, subagent or representative.

Sec. 13.  Each licensee shall file with the Commissioner annually on or before June 30th of each year a statement listing the locations of the offices of the licensee and the names and locations of the agents or subagents authorized by the licensee to engage in the sale of checks of which the licensee is the issuer and shall also file a statement correctly reflecting its net worth as of the close of its most recent fiscal year, such statement to be certified to by a Certified Public Accountant satisfactory to the Commissioner. The Commissioner may conduct or cause to be conducted an examination or audit of the books and records of any licensee at any time or times he shall deem proper, the cost of such examination or audit to be borne by the licensee. The refusal of access to such books and records shall be cause for the revocation of license.

Sec. 14.  Nothing in this Act shall be deemed to require a licensee to list agents which are exempted by the provisions of Section 4 of this Act.

Sec. 15.  No license shall be denied or revoked except on ten days' notice to the applicant or licensee. Upon receipt of such notice the applicant or licensee may, within five (5) days of such receipt, make written demand for a hearing. The Commissioner shall thereafter, with reasonable promptness, hear and determine the matter as provided by law and his decision shall be subject to judicial review in the Superior Court of Wake County as provided by law.

Sec. 16.  The Commissioner may at any time revoke a license on any ground on which he might refuse to grant a license or for failure to pay an annual fee or for a violation of any provision of this Act.

Sec. 17.  If any person to whom or to which this Act applies or any agent, subagent or representative of such person violates any of the provisions of this Act or attempts to sell or issue checks without having first obtained a license from the Commissioner pursuant to the provisions of this Act, or issues any check at a time when the bond or security required by this Act is not in full force and effect, such person or such agent, subagent or representative shall be deemed guilty of a misdemeanor, and upon conviction shall be fined or imprisoned within the discretion of the court and each violation shall constitute a separate offense.

Sec. 18.  All laws and clauses of laws in conflict with this Act are hereby repealed.

Sec. 19. This Act shall be in full force and effect from and after July 31, 1963.

In the General Assembly read three times and ratified, this the 26th day of June, 1963.