text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Check Cashing Act of 1995''.
  
  SEC. 2. STATE LICENSE OR REGISTRATION REQUIRED FOR CHECK CASHING 
                BUSINESSES.
  
      (a) In General.--A person, other than a depository institution, 
  shall not engage in business in a State as a check cashing business 
  unless--
              (1) the State has established a system for licensing or 
          registering check cashing businesses that is approved by the 
          Commission in accordance with section 3;
              (2) the person is licensed by or registered with the State 
          under that approved State system, as applicable; and
              (3) the person engages in that business in accordance with 
          the requirements under that system for licensing or 
          registration, as applicable.
      (b) Penalty.--Any person that violates subsection (a) shall be 
  subject to a civil penalty of not more than $5,000, which may be 
  assessed by Commission.
      (c) Effective Date.--Subsections (a) and (b) shall take effect on 
  the date that is 2 years after the date of the enactment of this Act.
      (d) Limitation on Application to Existing Businesses.--Subsections 
  (a) and (b) shall not apply to engagement by a person in business in a 
  State as a check cashing business in the 1-year period beginning on the 
  date of approval of a check cashing business licensing or registration 
  system of the State under section 3, if the person engaged in that 
  business in the State on the date of the enactment of this Act.
  
  SEC. 3. APPROVAL OF STATE CHECK CASHING BUSINESS LICENSING OR 
                REGISTRATION SYSTEM.
  
      (a) In General.--Any State may apply to the Commission in 
  accordance with this section for approval of a State check cashing 
  business licensing or registration system.
      (b) Requirements for Approval.--The Commission may approve a State 
  check cashing business licensing or registration system under this 
  section if the Commission finds that the system consists of State laws 
  that--
              (1) prohibit any person from engaging in business in the 
          State as a check cashing business, unless the person--
                      (A) holds a license issued under the system, or
                      (B) in the case of a registration system, is 
                  registered with the State under the system;
              (2) prohibit the issuance of a check cashing business 
          license to a person or the registration of a person as such a 
          business, as applicable, unless the person--
                      (A) identifies to the State--
                              (i) all persons that are officers of the 
                          business; and
                              (ii) all persons that own or control more 
                          than 5 percent of the total ownership interest 
                          in the business;
                      (B) complies with bonding or minimum capital 
                  requirements established by the State;
              (3) require that any person that engages in business in the 
          State as a check cashing business shall--
                      (A) post a schedule of all fees charged for 
                  providing check cashing services, in a manner that is 
                  conspicuous to the public;
                      (B) issue a receipt for each check cashing service 
                  provided, that shows the amount of the check or other 
                  instrument with respect to which the service is 
                  provided, the fee charged for the service, and the date 
                  the service is provided; and
                      (C) post the name and address of the State agency 
                  responsible under State law for administering the 
  system, in a manner that is conspicuous to the public;
              (4) prohibit any person from charging any fee for providing 
          a check cashing service, that is greater than the amount of fee 
          authorized for that service by the State;
              (5) establish a centralized system for filing of check 
          cashing business licensing or registration documents, as 
          applicable;
              (6) establish criteria for refusal, suspension, and 
          revocation of check cashing business licenses or registrations, 
          as applicable;
              (7) establish criminal or civil penalties (or both) for 
          violations of the State laws;
              (8) ensure the submission to the Commission of any changes 
          in the State laws described in this subsection; and
              (9) comply with such additional requirements as may be 
          established by the Commission in regulations issued under 
          subsection (f).
      (c) Limitation on Approval of Systems Providing Reciprocity.--The 
  Commission may not approve a State check cashing business licensing or 
  registration system under this section if the laws of the State 
  authorize the licensing or registration of a person under the system, 
  as applicable, on the basis of the person having been licensed or 
  registered under the laws of another State and without having to comply 
  with all requirements applicable under the laws of the State that 
  comprise the system.
      (d) Submission, Review, and Approval of State Applications.--
              (1) Submission of application.--A State may submit an 
          application to the Commission for approval of a State check 
          cashing business licensing or registration system under this 
          section--
                      (A) in the 1-year period beginning on the date of 
                  the issuance of regulations under subsection (f), in 
                  the case of a State which on the date of the enactment 
                  of this Act does not prohibit, and has in effect laws 
                  that establish requirements for, the operation of a 
                  check cashing business;
                      (B) in the 2-year period beginning on that date of 
                  issuance in the case of a State which on that date of 
                  enactment does not prohibit, and does not have in 
                  effect laws that establish requirements for, the 
                  operation of a check cashing business; or
                      (C) in the 60-day period beginning on the date of 
                  the enactment by the State of any law that repeals a 
                  prohibition on the operation of check cashing 
                  businesses, in the case of a State which on the date of 
                  the enactment of this Act has in effect laws that 
                  prohibit the operation of all check cashing businesses.
              (2) Review and approval by commission.--The Commission 
          shall, by not later than 1 year after the date of submittal of 
          an application by a State under this subsection--
                      (A) approve the State system if the system complies 
                  with the requirements for approval under subsection 
                  (b); or
                      (B) disapprove the State system, recommend to the 
                  State such changes in the system as are necessary for 
                  approval, and provide the State one additional year to 
                  make changes in State law to effect those changes.
      (e) Review of Changes in Approved State Systems.--
              (1) General.--Not later than 1 year after the date of 
          submission to the Commission of any change in the laws 
          described in subsection (b) of a State that has an approved 
          State system, the Commission shall--
                      (A) review the change to determine whether the 
                  change is in accordance with the requirements for 
                  approval of the system under subsection (b);
                      (B) approve the change as being in accordance with 
                  those requirements, or disapprove the change as not 
                  being in accordance with those requirements; and
                      (C) notify the State of that approval or 
                  disapproval, including with any notification of 
                  disapproval a description of such modifications to 
                  State law as are necessary for the system to continue 
                  to be an approved State system.
              (2) Subsequent review; revocation of approval.--After 
          notifying a State under paragraph (1)(B) that the Commission 
          disapproves a change in the approved State system of the State, 
          the Commission shall--
                      (A) review any further modifications in the laws of 
                  the State that have been enacted; and
                      (B)(i) approve the change and modifications if they 
                  are in accordance with the requirements for approval 
                  under subsection (b); or
                      (ii) revoke the Commission's approval of the State 
                  system if they are not in accordance with those 
                  requirements.
      (f) Regulations and Guidelines.--
              (1) In general.--Not later than 60 days after the date of 
          the enactment of this Act, the Commission shall issue 
          regulations and guidelines for the submission of applications 
          and approval of State check cashing business licensing and 
          registration systems under this section.
              (2) Additional requirements.--Regulations issued under this 
          subsection may include requirements for approval of such 
          systems in addition to the requirements under this section as 
          the Commission considers necessary to protect persons who 
          provide check cashing services, ensure the free flow of 
          commerce, or protect the monetary system of the United States.
      (g) Rule of Construction.--This Act shall not be construed to 
  prohibit a State from establishing, assessing, collecting, and using 
  fees in the administration of a check cashing business licensing or 
  registration system under this Act.
  
  SEC. 4. PROHIBITION ON REFUSAL BY INSURED DEPOSITORY INSTITUTION TO 
                CASH GOVERNMENT CHECKS.
  
      (a) Prohibition.--An insured depository institution shall not 
  refuse to cash a government check, and an insured credit union shall 
  not refuse to cash a government check presented by a member of the 
  insured credit union, if--
              (1) the check is presented for cashing by an individual who 
          is the payee of the check, and is properly endorsed by each 
          individual who is a payee of the check;
              (2) the individual who presents the check for cashing 
          provides sufficient identification;
              (3) the check and the identification documents required 
          under paragraph (2) do not bear evidence of forgery, fraud, 
          counterfeiting, alteration, or other tampering; and
              (4) the face value of the check is less than $2500.
      (b) Penalty.--An insured depository institution or insured credit 
  union that violates subsection (a) shall be liable for a civil penalty 
  of not more than $500 for each violation, which may be assessed by--
              (1) the State agency having primary responsibility under 
          State law for administering an approved State system;
              (2) the State agency having primary responsibility under 
          State law for administering laws regulating banking, in the 
          case of a violation in a State that does not have an approved 
          State system; or
              (3) the person having responsibility under subsection (c) 
          for enforcing this section with respect to the depository 
          institution.
      (c) Enforcement.--The requirements of this section shall be 
  enforced--
              (1) under section 8 of the Federal Deposit Insurance Act 
          (12 U.S.C. 1818) by the Office of the Comptroller of the 
          Currency, with respect to national banks, and Federal branches 
          and Federal agencies of foreign banks;
              (2) under section 8 of that Act by the Board of Governors 
          of the Federal Reserve, with respect to member banks of the 
          Federal Reserve System (other than national banks), branches 
          and agencies of foreign banks (other than Federal branches, 
          Federal agencies, and insured State branches of foreign banks), 
          commercial lending companies owned or controlled by foreign 
          banks, and organizations operating under section 25 or 25(a) of 
          the Federal Reserve Act;
              (3) under section 8 of that Act by the Board of Directors 
          of the Federal Deposit Insurance Corporation, with respect to 
          banks insured by the Federal Deposit Insurance Corporation 
          (other than members of the Federal Reserve System) and insured 
          State branches of foreign banks;
              (4) under section 8 of that Act by the Director of the 
          Office of Thrift Supervision, with respect to any savings 
          association the deposits of which are insured by the Federal 
          Deposit Insurance Corporation;
              (5) under the Federal Credit Union Act (12 U.S.C. 1752 et 
          seq.) by the Administrator of the National Credit Union 
          Administration, with respect to any insured credit union; and
              (6) under the Farm Credit Act of 1971 (12 U.S.C. 2001 et 
          seq.) by the Farm Credit Administration, with respect to any 
          Federal land bank, Federal land bank association, Federal 
          intermediate credit bank, or production credit association.
      (d) Rules of Construction.--This section shall not be construed 
  to--
              (1) prohibit an insured depository institution from 
          charging fees to cash Government checks; or
              (2) prohibit or preempt a State from establishing 
          requirements or limitations with respect to the charging of 
          fees by insured depository institutions for check cashing 
          services, that are different than State requirements or 
          limitations that apply to persons that are not insured 
          depository institutions.
  
  SEC. 5. DISPENSING OF FEDERAL AND STATE GOVERNMENT BENEFITS BY 
                COMMUNITY DEVELOPMENT CREDIT UNIONS.
  
      (a) Limitation on Authority of National Credit Union 
  Administration.--The National Credit Union Administration Board may not 
  prohibit any Federally chartered credit union from dispensing benefits 
  under any Federal or State assistance program (including benefits under 
  the Aid to Families with Dependent Children program under title IV of 
  the Social Security Act (42 U.S.C. 601 et seq.)) that are authorized to 
  be dispensed by a check cashing service.
      (b) Study.--After the date that is 2 years after the date of the 
  enactment of this Act, and not later than 3 years after that date of 
  enactment, the Comptroller General of the United States shall conduct a 
  study and submit a report to the Congress on the effectiveness and 
  efficiency of the dispensation of benefits under Federal and State 
  assistance programs (including benefits under the aid to families with 
  dependent children program under title IV of the Social Security Act 
  (42 U.S.C. 601 et seq.) through federally chartered credit unions.
  
  SEC. 6. STUDY OF DEBIT CARD SYSTEMS OF BENEFIT PAYMENTS AND BENEFIT 
                CHECK DELIVERY.
  
      Not later than 9 months after the date of the enactment of this 
  Act, the Comptroller General of the United States shall conduct a study 
  and submit a report to the Congress on--
              (1) the effects of requiring the use of a debit card system 
          for making all benefit payments by the Federal Government; and
              (2) other innovative ways to enhance and upgrade the 
          current methods by which the Federal Government delivers 
          benefit payment checks.
  
  SEC. 7. DEFINITIONS.
  
      (a) In General.--As used in this Act--
              (1) the term ``approved State system'' means a State check 
          cashing business license or registration system that is 
          approved by the Commission under section 3;
              (2) the term ``check cashing business'' means a person that 
          regularly and primarily engages in the business of providing 
          any check cashing service for a fee and not in exchange for 
          goods or services;
              (3) the term ``check cashing service'' means--
                      (A) the issuance, redemption, or cashing of a 2-
                  party or multi-party check or similar negotiable 
                  instrument;
                      (B) the sale, redemption, or cashing of a travelers 
                  check, money order, or similar negotiable instrument by 
                  an agent of the issuer of the instrument that is 
                  authorized to do so; or
                      (C) the transmittal of money by wire, in any form 
                  or by any method or manner;
              (4) the term ``Commission'' means the Federal Trade 
          Commission;
              (5) the term ``depository institution'' has the meaning 
          given that term in section 3 of the Federal Deposit Insurance 
          Act (12 U.S.C. 1813(c));
              (6) the term ``Federally chartered credit union'' means a 
          credit union having an organization certificate approved by the 
          National Credit Union Board under section 102 of the Federal 
          Credit Union Act (123 U.S.C. 1752a);
              (7) the term ``government check'' means any check issued by 
          the United States or any agency of the United States;
              (8) the term ``insured depository institution'' has the 
          meaning given that term in section 3(c) of the Federal Deposit 
          Insurance Act (12 U.S.C. 1813(c));
              (9) the term ``insured credit union'' has the meaning given 
          that term in section 101(7) of the Federal Credit Union Act (12 
          U.S.C. 1752(7));
              (10) the term ``State'' means the 50 States, the District 
          of Columbia, and the territories and possessions of the United 
          States; and
              (11) the term ``sufficient identification'' means--
                      (A) a valid driver's license that bears the name 
                  and address of the person providing the license as 
                  identification;
                      (B) a valid photo-identification card issued by a 
                  State or Federal agency; or
                      (C) a valid United States passport.
      (b) Terms Relating to Enforcement of Section 4.--A term used in 
  section 4 that is not defined in this Act shall have the meaning given 
  that term by--
              (1) section 3(s) of the Federal Deposit Insurance Act (12 
          U.S.C. 1813(s)); or
              (2) in the case of a term not defined in the Act referred 
          to in paragraph (1), section 1(b) of the International Banking 
          Act of 1978 (12 U.S.C. 3101).
target: Check Cashing Act of 1995 - Requires any person other than a depository institution to obtain a State license or registration as a prerequisite to conducting a check cashing business. 
  Prescribes guidelines under which the Federal Trade Commission may approve a State check cashing business licensing or registration system. 
  Cites circumstances under which an insured depository institution or (with respect to its members) credit union may not refuse to cash a government check presented by a payee. 
  Declares that the National Credit Union Administration Board may not prohibit any federally chartered (community development) credit union from dispensing benefits under a Federal or State assistance program that are authorized to be dispensed by a check cashing service. 
  Directs the Comptroller General to study and report to the Congress on:  (1) the effectiveness of the dispensation of benefits under Federal and State assistance programs through federally chartered credit unions; and (2) the effects of requiring the use of a debit card system for making all federal benefit payments, as well as other innovative ways to upgrade current methods by which the Federal Government delivers benefit payment checks.
feat_title: Check Cashing Act of 1995