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Bandco Check Cashing Services, Inc., a licensed casher of checks, has entered into a Settlement Agreement with the Superintendent of Banks which includes the payment of a $50,000 fine


April 8, 2004

State of New York Banking Department
New York, New York


In the Matter of  

BANDCO CHECK CASHING SERVICES, INC.

A Casher of Checks Licensed Pursuant To Article IX-A of the New York Banking Law 

               (Respondent)


SETTLEMENT AGREEMENT

WHEREAS, Bandco Check Cashing Services, Inc. (“Bandco” or the “Licensee”), with corporate headquarters at 1826 Nostrand Avenue, Brooklyn, New York 11226, was granted licenses for two separate locations on August 1, 1988 and May 12, 1995 to engage in business as a licensed casher of checks pursuant to Article IX-A of the New York Banking Law (the “Banking Law”) by the Superintendent of Banks (the “Superintendent”) of the New York State Banking Department (the “Banking Department”); and  

WHEREAS, in recognition of their common goals to ensure compliance with applicable federal and state laws, rules and regulations by the Licensee, and to manage the financial, operational, legal, reputational and compliance risks of licensees, including Bandco, the Banking Department and the Licensee have mutually agreed to enter into this Settlement Agreement (“Agreement”); 

WHEREAS, an examination of Bandco as of August 19, 2003 revealed the following violations of the Banking Law and related regulations, and the Currency and Foreign Transaction Reporting Act (31 United States Code, Section 5311 et seq.) and accompanying regulations issued by the United Stated Department of the Treasury (31 Code of Federal Regulations, Part 103.11 et seq.): (1) inaccurately prepared and filed currency transaction reports, as well as instances in which such reports should have been filed but were not; (2) violations of the Bank Secrecy Act (“BSA”), in particular, 31 C.F.R. Part 103.125, relating to the rules and regulations requiring the adoption and implementation of an effective anti-money laundering compliance program; (3) violations of Banking Law § 373.1(b), relating to restrictions on the cashing of certain checks in excess of $6,000; (4) violations of Part 400.3(b)(2) of the Superintendent’s Regulations (“Part 400”), requiring the use of date cards to be inserted into the machine before the items are microfilmed; (5) violations of Part 400.3(b)(4), requiring that items shall be microfilmed in such a manner as to include deposit tickets and to avoid the overlapping of checks, drafts or money orders or otherwise obscuring such items; (6) violations of Part 400.3(b)(8), requiring that if the Licensee’s review of microfilm determines that processed film is not accurate and legible, or if any equipment becomes inoperable, the Licensee shall immediately begin to maintain written records as required by Part 400.3(a) until such time as the microfilm equipment has been repaired or replaced; (7) violations of Part 400.3(d)(7), requiring that the Licensee’s “returned items record” include the name of the bank on which the check, draft or money order is drawn; (8) a violation of Part 400.6(d), requiring the Licensee’s 1826 Nostrand Avenue location to have the proper Banking Department signage regarding licensing and complaints;  (9) a violation of Part 400.13(h)(4), requiring that Licensee, at its 1826 Nostrand Avenue location, display proper signage indicating that utility payments are not considered paid until received by the utility company.  

WHEREAS, the Superintendent and the Licensee mutually agree to resolve the issues and violations noted during the examination on the basis of the terms and conditions set forth herein, which include the payment by Licensee of a fine in the amount of $50,000.00, in lieu of litigating such issues in a hearing seeking revocation of Bandco’s licenses.

 

NOW, THEREFORE IT IS STIPULATED AND AGREED BY THE PARTIES HERETO AS FOLLOWS:

 

1.     Without admitting or denying the aforementioned violations, and fully understanding the terms and conditions of this Agreement, Bandco knowingly and voluntarily waives (a) its right to a hearing on the violations noted above, and (b) any and all rights of appeal relating to this matter. 

2.     Bandco will take all necessary steps to ensure that it is in compliance with all applicable laws, rules and regulations and submit to the Department quarterly reports indicating compliance with the BSA and Banking Law Section 373.1 (b), relating to the cashing of checks in excess of certain enumerated amounts. Specifically, the report must include a record of all checks cashed over $6,000 in the reporting quarter (the first reporting quarter shall consist of the three (3) months prior to the date of this Agreement), a description of the procedures put into place to prevent cashing checks in excess of the legal limit ($6,000) in the initial report only, and copies of all CTRs filed during that quarter. The first such quarterly report is due no later than thirty (30) days from the date of execution of this Agreement and then every 90 days thereafter. 

3.     No later than sixty (60) days from the date of execution of this Agreement, Bandco shall hire an independent third party firm acceptable to the Banking Department to conduct a  review of its anti-money laundering compliance program and submit the results of such review to the Banking Department.  

4.     Bandco agrees to pay a fine in the aggregate amount of $50,000.00 in the following manner: $20,000 on the date of the Agreement; $15,000 forty-five (45) days after the date of the first payment made under the terms of this Agreement; and $15,000 ninety (90) days after the date of the first payment made under the terms of this Agreement. Each payment shall be made by electronic transfer, in immediately available funds, pursuant to transfer instructions received from the Banking Department. Failure to make timely payment shall result in the Banking Department’s commencement of a hearing to revoke the licensee’s licenses.

5.   All communications regarding this Agreement shall be sent to: 

Paul J. Fazio
Deputy Superintendent of Banks
Licensed Financial Services Division
New York State Banking Department
One State Street
New York, New York 10004

 

Peter Cohen, President
Bandco Check Cashing Services, Inc.
1826 Nostrand Avenue
Brooklyn, New York 11226

 

Laurence D. Pittinsky, Esq.
Rosenberg & Pittinsky, LLP
708 Third Avenue, 24th floor
New York, New York 10017         

6.   The provisions of this Agreement shall not bar, estop or otherwise prevent any state or federal agency or department from taking any other action affecting the Licensee, any of its current or former officers, directors, employees, or insiders, or their successors or assigns, with respect to matters relating to this Agreement.

7.   No extension or waiver of the terms of this Agreement shall be binding on the banking Department except if in writing, signed by the Superintendent. 

8.   Each provision of this Agreement shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Superintendent

9.     The effective date of this Agreement is the date on which it is executed by the Superintendent or her Deputy.

10. The provisions of this Agreement are not confidential.

 

Agreed to and Accepted: 

 

Dated: April 8, 2004.

By: /S/ Paul J. Fazio
Deputy Superintendent of Banks 
New York State Banking Department   

 Dated: April 5, 2004.

By: /S/ Peter Cohen
President
Bandco Check Cashing Services, Inc.

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