Sections 2101 through 2121 of this title and Sections 13 and 14 of this act shall be known and may be cited as the "Sale of Checks Act".

2102. Definitions [Back]

Unless the context otherwise requires:

1. "Commissioner" means the State Bank Commissioner.

2. "Check" means any check, draft, money order or other written instrument for the transmission or payment of money or credit, except that it does not mean money or currency of any nation, or instruments commonly known as travelers checks which require that the same be signed by the person to whom such instruments are issued at the time of issue and at the time such instruments are cashed or exchanged for value by such person.

3. "Fiscal year" means the period from July 1 through the next succeeding June 30.

4. "Issuing" means the act of drawing any instrument of exchange by a person who engages in the business of drawing such instruments as a service or for a fee or other consideration.

5. "Licensee" means any person licensed under this act.

6. "Money order" means a bill of exchange issued at the request and for the use or benefit of a person other than the issuer and representing an unconditional order or obligation in writing of the issuer to pay a sum certain in money on demand to order or to bearer.

7. "Net worth" means excess of assets over liabilities as determined by accepted accounting practices.

8. "Person" means any individual, partnership, joint-stock association, trust, unincorporated association or corporation.

2103. Licenses-Requirements-Exceptions-Penalty [Back]

(a) No person shall engage in the business of selling or issuing checks as a service or for a fee or other consideration without first securing a license to do so from the Commissioner, except that no license under this act shall be required of any agent, subagent or representative of a licensee, or employee of such agent, subagent or representative who acts on behalf of such licensee in the sale or exchange of which the licensee is the issuer.

(b) Any person who violates this section shall be fined not less than Five Hundred Dollars ($500.00) or imprisonment in county jail for not more than one (1) year, or both. Each day such violation continues shall constitute a separate offense.

2104. Exempt transactions [Back]

(a) Nothing in this act shall apply to the receipt of money by any incorporated telegraph company at any agency or office of such company for immediate transmission by telegraph, or to the receipt of money for the purpose of transmitting or transferring it to foreign countries.

(b) Nothing in this act shall apply to the sale or issuance of checks by governmental departments. No federally insured financial institutions authorized to do business in this state, including banks, savings and loan associations, and credit unions, whether such federally insured financial institutions are organized under the laws of this state or of the United States, shall be subject to this act where such institution is selling or issuing checks drawn only on itself or on another federally insured financial institution.

2105. Application for license [Back]

(a) Application for a license shall be made to the Commissioner on forms prepared by him and shall be under oath.

(b) The application for a license shall:

1. State the name of the applicant and the street address of his principal office, as well as the mailing address if such mailing address is different from the street address.

2. Contain evidence of the good moral character of the applicant, if the applicant is an individual, or of the partners, if the applicant is a partnership; if the applicant is a joint-stock association, trust, unincorporated association or corporation, the secretary or any assistant secretary thereof shall certify the name and address of each of the officers, directors, trustees or other managing officials, together with a designation of the office or offices held by each and evidence of the good moral character of each, and shall submit such certificate to the Commissioner with the application.

3. Be accompanied by evidence of the ability of the applicant to meet the requirements of this act.

4. Be accompanied by the license fee required by Section 2107 of this title.

5. Unless the applicant shall have demonstrated a net worth in excess of Five Million Dollars ($5,000,000.00), be accompanied by a summary of the sales of checks activities being conducted by the applicant in any and all other states, and shall include the number of locations at which its checks are sold as well as information regarding bonds posted in each state and the amount thereof.

(c) All applications for a license shall be confidential and not subject to public inspection.

2106. Investigation of applicants [Back]

(a) Upon the filing of an application, the Commissioner shall investigate the applicant and if he finds that the applicant is of good moral character and financially responsible and can meet the requirements of this act, he shall give notice in writing of his approval of said application to the applicant, who shall within thirty (30) days post the bond, or securities in lieu thereof, required by this act, whereupon the Commissioner shall forthwith issue to the applicant a license to engage in the business of selling or issuing checks subject to the provisions of this act.

(b) No license shall be issued to an applicant:

1. If a natural person, unless he is over twenty-one (21) years of age;

2. If a partnership, unless each of the partners is over twenty-one (21) years of age;

3. If a joint-stock association, trust, unincorporated association or corporation, unless each of the officers, directors, trustees or other managing officials is over twenty-one (21) years of age.

(c) No application shall be denied unless the applicant has had notice of a hearing on said application and an opportunity to be heard thereon. If the application is denied, the Commissioner shall, within thirty (30) days thereafter, prepare and file in his office a written order of denial which shall contain his findings and reasons supporting the denial, and shall within ten (10) days after the filing of such order, notify the applicant and send him a copy of such order.

2107. Annual license fees-Renewals-Display of license certificate-Exception [Back]

A. Before any license is issued or renewed the applicant or licensee shall pay an annual license fee in the amount of Two Hundred Dollars ($200.00), plus Ten Dollars ($10.00) for each location within this state at which checks of the licensee are issued or sold. With respect to license renewals, every licensee on or before June 1, shall pay the annual license fee for the succeeding fiscal year commencing July 1.

B. The State Banking Commissioner shall issue a license certificate to a licensee satisfying the requirement therefor. The license certificate shall be displayed prominently and be available for inspection upon demand at each location of the licensee at which checks of the licensee are to be issued or sold. It shall be the responsibility of the licensee to provide a copy of the original license certificate to the agent at each location for display. Any location failing to display a license certificate may be prohibited by the Commissioner from selling checks if the agent at such location fails or refuses to comply with such display requirement after receipt of written notice from the Commissioner. The Commissioner shall provide the licensee with a copy of the written notice and shall also notify the licensee in writing of any additional action proposed or taken by the Commissioner.

C. A license issued hereunder shall remain in effect until surrendered by the licensee or revoked, and may be renewed from year to year upon payment of the fee required in subsection A of this section, provided the licensee continues to comply with all provisions Section 2101 et seq. of this title and of all regulations hereunder.

D. The requirements of this section shall not apply to those locations where checks of the licensee are issued or sold which are governmental departments or financial institutions fully exempt from the provisions of the Sale of Checks Act pursuant to Section 2104 of this title.

E. Fees collected pursuant to this section shall be deposited in the Oklahoma State Banking Department revolving fund pursuant to Section 211.1 of this title.

2108. Surety bond or irrevocable letter of credit [Back]

Each approved applicant shall furnish a corporate surety bond in the principal sum of One Hundred Thousand Dollars ($100,000.00) for one (1) to fifteen (15) locations within this state at which checks of the licensee are issued or sold, Two Hundred Fifty Thousand Dollars ($250,000.00) for sixteen (16) to five hundred (500) locations within this state at which checks of the licensee are issued or sold, One Million Dollars ($1,000,000.00) for five hundred one (501) to eight hundred (800) locations within this state at which checks of the licensee are issued or sold, or One Million Five Hundred Thousand Dollars ($1,500.000.00) for over eight hundred (800) locations, 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 One Million Five Hundred Thousand Dollars ($1,500,000.00). A licensee may furnish a bond in the maximum amount required by this section, or deposit securities equal to such amount as provided in subsection (b) of Section 2109 of this title, even though the locations in this state at which checks of the licensee are issued or sold do not total a number requiring a bond or a deposit of securities in such maximum amount. 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 and undertakings for exchange 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 or exchange issued or sold in this state by such licensee. The bond shall remain in force and effect until canceled by the surety, which cancellation may be had only upon thirty (30) 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.

In lieu of the corporate surety bond required herein, the Commissioner may in his discretion permit an approved applicant to furnish an irrevocable letter of credit from a bank approved in writing by the Commissioner in the same amount as would be required for a corporate surety bond. A new irrevocable letter of credit from a qualifying bank would be required within fifteen (15) days if the bank originally issuing the irrevocable letter of credit refuses to continue the letter of credit or is otherwise notified by the Commissioner that the original bank is no longer qualified to issue a letter of credit for the purposes described in this section.

2109. Additional bond-Deposit of securities in lieu of bond [Back]

(a) If the Commissioner shall find at any time that any bond required under this act is insecure 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 ready market 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 Oklahoma, or of any county, city, town, school district, or other political subdivision or municipal corporation of the State of Oklahoma. 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, such licensee shall be permitted to receive the interest or dividends on said deposit. The Commissioner may provide for custody of such securities by any qualified trust company or bank located in the State of Oklahoma 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.

2110. Minimum net worth [Back]

Each licensee under the Sale of Checks Act shall at all times maintain a minimum net worth of at least Two Hundred Seventy-five Thousand Dollars ($275,000.00) in order to issue or sell checks at one (1) to three hundred (300) locations, Five Hundred Thousand Dollars ($500,000.00) in order to issue or sell checks at three hundred one (301) to five hundred (500) locations, One Million Five Hundred Thousand Dollars ($1,500,000.00) in order to issue or sell checks at five hundred one (501) to eight hundred (800) locations, or Three Million Dollars ($3,000,000.00) in order to issue or sell checks at over eight hundred (800) locations. Net worth must be demonstrated annually by filing with the Commissioner, at the time of application for a license and at each time of license renewal, the most current annual audited financial statement of the licensee certified by a licensed public accountant holding a permit to practice in this state or by a certified public accountant. For purposes of this section, a financial statement shall be deemed to be current if it is no more than twelve (12) months old. Financial statements may be submitted to the Commissioner at any time in order to maintain a current status. The Commissioner may require, upon request, a more current statement than the last statement submitted by the licensee.

2111. Semi-annual reports [Back]

Unless a licensee shall have on file in the office of the Commissioner a bond in the maximum amount required under Section 2108 of this title, or shall have deposited securities equal to such amount as provided in subsection (b) of Section 2109 of this title, such licensee shall on or before the first day of September and the first day of March each year file a report with the Commissioner for the preceding one-half (1/2) calendar year. Such report shall, if the Commissioner requests, list the name and address of each agent, subagent or representative authorized by the licensee, as of the close of business on the last day of the one-half (1/2) calendar year preceding such report, to engage in the sale of checks of which the licensee is the issuer. The Commissioner may require that such report include the dollar amount of checks sold by the licensee in this state during the preceding one-half (1/2) calendar year or the average amount of outstanding liabilities of such licensee from business for which the licensee is licensed hereunder or both amounts. The report shall be subscribed and sworn to by the licensee or an officer of the licensee. No reports shall be required pursuant to this section unless specifically requested by the Commissioner.

2112. Books, accounts and records-Current financial statements [Back]

Each licensee shall keep such books, accounts and records as will enable the Commissioner to determine the proper amount of the bond and license fee to be required of such licensee. Each licensee who does not maintain in force a bond in the maximum amount required by Section 2108 of this title or keep on deposit securities equal to such amount as provided in subsection (b) of Section 2109 of this title shall submit to the Commissioner on a monthly basis a report which shall include a statement of the gross sales of money orders from the previous month.

2113. Examination of books and records-Audits [Back]

A. The State Banking Commissioner may examine the books and records of each licensee as often as the Commissioner deems advisable for the purpose of determining the amount of the bond to be filed and the amount of the license fee to be paid by such licensee and to determine whether the licensee is in compliance with all applicable requirements of law. For that purpose, the Commissioner shall have free access to the offices and places of business and to such records of such licensee that relate to the business for which the licensee is licensed under Section 2101 et seq. of this title.

B. There shall be paid to the Commissioner for an examination or audit review a fee of Seventy-five Dollars ($75.00) per hour for each representative of the Commissioner required to conduct the examination or audit review plus travel expenses as provided by subsection B of Section 201.1 of this title for each of the examining personnel.

C. In lieu of any examination which the Commissioner shall be authorized to make hereunder, the Commissioner may accept the audit of a licensed public accountant holding a permit to practice in this state or a certified public accountant, provided that:

1. The costs of such audit shall be borne by the licensee;

2. The scope of such audit shall be at least equal to the scope of the examination required by the Commissioner;

3. The Commissioner shall have received prior notice in writing that the licensee is having the audit prepared in lieu of examination by the Commissioner; and

4. The Commissioner shall have given prior approval of the licensed public accountant holding a permit to practice in this state or the certified public accountant making the audit.

If the Commissioner accepts an audit in lieu of the examination of the Commissioner, the Commissioner may review such audit and may charge to the licensee fees for such review at the rate prescribed in subsection B of this section.

D. The Commissioner may contract with qualified licensed auditors to conduct any examinations authorized under this section.

E. All license, examination, audit review, and investigation fees herein provided for shall be deposited in the Oklahoma State Banking Department revolving fund pursuant to Section 211.1 of this title.

2114. Investigation upon noncompliance with act [Back]

When the Commissioner shall have reasonable cause to believe that the provisions of this act are not being complied with by any licensee the Commissioner shall investigate the business, including the books and records of any such licensee, and may require the licensee to furnish such additional reports relating to his said business as the Commissioner may require to effectuate the provisions of this act.

2115. Conduct of business-Location-Agents-Conditions [Back]

Each licensee may conduct his business at such locations within this state and through or by means of such employees, agents, subagents or representatives as he may from time to time designate and appoint, so long as the Commissioner has been notified timely of each location, appropriate licensing fees have been paid, and the bonding requirement has been met.

2116. Revocation of license-Hearing-Grounds [Back]

(a) The Commissioner may, upon ten (10) days' notice to the licensee, stating the contemplated action and in general the grounds therefor, hold a hearing at which the licensee shall have a reasonable opportunity to be heard, for the purpose of determining whether a license should be revoked, for failure of the licensee to comply with the provisions of this act and the regulations hereunder. After such hearing the Commissioner may revoke any license issued hereunder if he finds that:

1. The licensee has failed to pay the annual license fee or to maintain the bond or the deposit or securities required by this act; or

2. The licensee has failed to comply with any order, decision or finding of the Commissioner made pursuant to this act; or

3. The licensee has violated any provision of this act; or

4. Any fact or condition exists which, if it had existed at the time of original application for a license, would have warranted the Commissioner in refusing its issuance.

(b) A licensee may surrender any license by delivering to the Commissioner written notice that he surrenders such license, but such surrender shall not affect such licensee's civil or criminal liability on any bond, or entitle such licensee to a return of any part of any license fee.

2117. Power of subpoena-Designation of hearing officer [Back]

(a) For the purpose of this act, the Commissioner or the hearing officer as hereinafter provided has power to require by subpoena the attendance and testimony of witnesses, and the production of all documentary evidence relating to any matter under hearing pursuant to this act, and shall issue such subpoenas at the request of an interested party. The hearing officer may sign subpoenas in the name of the Commissioner.

(b) The Commissioner may, in his discretion, direct that any hearing pursuant to this act shall be held before a competent and qualified agent of the Commissioner, whom the Commissioner shall designate as the hearing officer in such matter. The Commissioner and the hearing officer are hereby empowered to, and shall, administer oaths and affirmations to all witnesses appearing before them. The hearing officer, upon the conclusion of the hearing before him, shall certify the evidence to the Commissioner.

(c) Any district court of this state, within the jurisdiction of which such hearing is carried on, may, in case of contumacy, or refusal of a witness to obey a subpoena, issue an order requiring such witness to appear before the Commissioner, or the hearing officer, or to produce documentary evidence, or to give testimony touching the matter in question, and the willful refusal and failure of any such witness to obey such order of the court shall constitute contempt of court.

2118. Judicial review [Back]

All final administrative decisions of the Commissioner hereunder shall be subject to judicial review by the district court of Oklahoma County on questions of law and appeal therefrom to the Supreme Court of Oklahoma.

2119. Giving of notice [Back]

Except as otherwise provided in this act, whenever the Commissioner is required to give notice to any applicant or licensee, such requirement shall be complied with if, within the time fixed herein, such notice shall be enclosed in an envelope plainly addressed to such applicant or licensee, at the address set forth in the application or license, United States postage fully prepaid, and deposited registered or certified in the United States mail.

2120. Rules and regulations [Back]

The Commissioner may make and enforce such reasonable rules and regulations as are necessary for the enforcement and execution of this act.

2121. Penalties [Back]

Any person who violates any provision of this act or any provision of the rules and regulations of the Commissioner is guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than the sum of One Hundred Dollars ($100.00) for each day of violation.

2122. Repealed by Laws 1980, c. 68, º 1, eff. April 10, 1980 [Back]

2123. Proceeds of sales of checks by agents-Exemption from attachment, levy of execution, or sequestration-Assignment to commissioner [Back]

(a) All funds collected or received from the sale of checks by an agent shall be impressed with a trust in favor of such licensee in an amount equal to the amount of the proceeds due the licensee and shall not be commingled with other funds of the agent.

(b) No proceeds received by any agent or agents of a licensee from the sale of any check issued by such licensee, while held by the agent, nor any property impressed with a trust pursuant to this section shall be subject to attachment, levy of execution, or sequestration by order of any court, except for the benefit of the licensee. In the event that a licensee's license is revoked by the Commissioner, all sales proceeds then held in trust by agents of the licensee shall be deemed to have been assigned to the Commissioner.

2124. Acts required of licensees-Deadline-Exception [Back]

(a) A person licensed under, and in compliance with all applicable requirements of, the Sale of Checks Act in effect immediately prior to the effective date of this act shall have until December 1, 1988, to:

1. furnish the Commissioner with a corporate surety bond complying with the requirements of Section 2108 of Title 6 of the Oklahoma Statutes or, in lieu thereof, to deposit securities equal to the amount of such bond complying with the requirements of subsection (b) of Section 2109 of Title 6 of the Oklahoma Statutes; and

2. file with the Commissioner the most current annual financial statement of such licensee, which financial statement shall be in compliance with the requirements of Section 2110 of Title 6 of the Oklahoma Statutes.

(b) A person licensed under, and in compliance with all applicable requirements of, the Sale of Checks Act in effect immediately prior to the effective date of this act shall not be required to comply with the provisions of subsection (b) of Section 2107 of Title 6 of the Oklahoma Statutes until the Commissioner has issued license certificates for each location to said licensee for the fiscal year commencing July 1, 1989; provided, the licensee must timely satisfy all requirements for the issuance of a renewal license and such license certificates.