808 KAR 9:010. Administration and enforcement of KRS 286.9-140[Books and records] to ensure that check cashers do not violate the law against multiple transactions in excessive amounts by a customer

Link to law: http://www.lrc.ky.gov/kar/808/009/010.htm
Published: 2015

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      808 KAR 9:010. Administration and enforcement of KRS

286.9-140 to ensure that check cashers do not violate the law against multiple

transactions in excessive amounts by a customer.


      RELATES TO: KRS 286.9-010(6), 286.9-075,

286.9-100(1), (7), (9), (10), (18), (19), 286.9-140

      STATUTORY AUTHORITY: KRS 286.9-090(1), 286.9-100,



286.9-100(9) prohibits licensees from having more than two (2) deferred deposit

transactions from a customer at a time. The total proceeds received by a customer from all deferred deposit transactions from all

licensees shall not exceed $500 at any one (1) time. KRS 286.9-140(1) directs

the commissioner to implement a common database with real-time access through

an internet connection accessible to the department and a licensee to verify

whether any deferred deposit transactions are outstanding for a particular

person and, which in addition to the general grant of authority in KRS

286.9-090(1), authorizes the commissioner to promulgate an administrative regulation

to enforce KRS 286.9-140. This administrative regulation establishes

requirements for a licensee to ensure that the database established pursuant to

KRS 286.9-140 is used by licensees in accordance with KRS Chapter 286.9.


      Section 1. Definitions. The following

shall be additional definitions of "closed" or "close"

under KRS 286.9-010(6)(e):

      (1) The customer’s payment instrument was

unpaid and the licensee has sold the underlying debt to a non-affiliated third

party without recourse;

      (2) The underlying debt represented by

the customer’s payment instrument has been discharged in bankruptcy;

      (3) The database provider has designated

the deferred deposit transaction concerning the customer’s payment instrument

as closed pursuant to KRS 286.9-140(7); or

      (4) The licensee has reported to the

database provider that the deferred deposit transaction concerning the

customer’s payment instrument is closed following being held open pursuant to KRS



      Section 2. Deferred Deposit Database Requirements.

(1) A licensee shall institute procedures and maintain an accounting system

that is designed to:

      (a) Prevent the licensee from entering

into transactions with a customer in violation of KRS 286.9-100(9), including

procedures for:

      1. Maintaining a record of all current

transactions with the licensee; and

      2. Checking the record of current

transactions with the database prior to issuance of a new transaction; and

      (b) Generate reports that will readily

permit examination and verification of compliance with KRS 286.9-100(9), KRS

286.9-140, and this section by department examiners.

      (2) In addition to the data listed in KRS

286.9-140(1), licensees shall submit the following data to the database for

each deferred deposit transaction:

      (a) The customer’s date of birth;

      (b) The check number of the payment


      (c) The database verification fee charged

to the customer, if any;

      (d) The service fee charged to the

customer; and

      (e) The date the payment instrument was

deposited or otherwise presented for payment.

      (3) A licensee shall not cause a closed

deferred deposit transaction to be reopened in the database unless all of the

following conditions are satisfied:

      (a) The deferred deposit transaction was

closed by reason of clerical error by the licensee;

      (b) The licensee causes the deferred

deposit transaction to be reopened on or before the close of business on the business

day after the transaction was closed; and

      (c) Reopening the transaction would not

cause the consumer to exceed the transaction limits set forth in KRS


      (4) A licensee shall not accept, collect,

or seek payment on a deferred deposit transaction that is designated as closed

in the database.

      (5) A licensee that has reported to the

database provider that a deferred deposit transaction is open beyond the

maturity date pursuant to KRS 286.9-140(7) shall immediately notify the

database provider when the transaction becomes closed.

      (6)(a) Except as provided in paragraph

(b) of this subsection, each licensee shall achieve compliance with this

administrative regulation within sixty (60) days of the effective date of this

administrative regulation.

      (b) After the sixty (60) day period established

in paragraph (a) of this subsection, a new licensee or an existing licensee

applying for an additional location, shall demonstrate the ability to

immediately comply with this administrative regulation at the time of application.

(27 Ky.R. 1707; Am. 2788; eff. 4-9-2001; TAm eff. 5-2-2007; 41 Ky.R. 2634; 42

Ky.R. 686; eff. 9-22-2015.)