The New York State Banking Department Issued an Order of Suspension to BISA Check Cashing Corp., a Licensed Casher of Checks Pursuant to Article IX-A of the New York Banking Law
State of New York
In the Matter of
BISA Check Cashing Corp.
A Check Casher licensed
Pursuant to Article IX-A of the
New York State Banking Law
License Numbers 1361, 1417,1651, 1663 & 1674
ORDER OF SUSPENSION
PURSUANT TO SECTION 373(2) OF THE BANKING LAW
Whereas, BISA Check Cashing Corp. (“Licensee”) was granted a license to engage in the business of check cashing on October 8, 1990 at 188-06b Jamaica Avenue, Hollis New York, under Article IX-A of the Banking Law (“BL”). Subsequently, Licensee was granted licenses by the Banking Department (“Department”) to operate at the following additional locations:
44-27 Kissena Boulevard (License # 1651)
Flushing, New York 11355
3804 Boston Post Road (License # 1417)
Bronx, New York 10475
91-20 59th Avenue (#1674)
Elmhurst, New York 11373
61-20 Springfield Boulevard (#1663)
Bayside, New York 11364
Whereas, in addition to cashing checks, Licensee also acts as an agent for various money transmitters. As an agent for money transmitters, Licensee accepts cash and other payments from the general public for the payment of utility bills and the purchase of money orders. Amounts received for money orders and utility bill payments from the general public must be kept in a separate account in accordance with Superintendent’s Regulation 400.5 (d), and sent on to the intended recipients; and
Whereas, Part 400.6 (a)(4) of the Superintendent’s Regulations requires licensees to continuously maintain net liquid assets of at least $10,000 for each licensed premises; and
Whereas, in an examination completed on or about June 22, 2004, Licensees were cited for having failed to maintain the requisite liquidity level for five monthly periods, and for having failed to reconcile their book cash balances to the cash balances reflected on Licensees’ bank statements for the period January 1, 2004 through April 30, 2004, as required under Superintendent’s Regulation 400.6 (a) (6); and
Whereas, on or about August 27, 2004, the Banking Department, after citing Licensees in connection with liquidity violations, sent a letter to Licensees requesting that they explain in detail the actions they had taken to improve liquidity. As of the date of this order, the Department has not received a response to this letter.
Whereas, on or about July 30, 2004, a substantial money transmitting entity suspended Licensees’ rights to act as an agent on its behalf due to deficiencies in Licensees’ anti-money laundering and Bank Secrecy Act compliance programs.
Whereas, Licensee sold money orders on behalf of a second money transmitting entity. In this role, Licensees accepted payments for money orders for which such money transmitting entity would ultimately be responsible. Under its arrangement with this money transmitter, payments received by Licensees for money orders were to be deposited in a particular account. The account would then and was periodically debited by the money transmitting entity via the Automated Clearinghouse system. Through the use of terminals at Licensees’ locations, the money transmitting entity was able to track the amount in money orders that had been sold on its behalf by Licensees. This money transmitter would then debit Licensees’ account for the appropriate amount; and
Whereas, on or about September 2, 2004, the entity on whose behalf Licensees sell money orders attempted to debit Licensee’s bank account for $881,823.17, the amount it was due for money order sales, however, the attempted debit was denied due to insufficient funds in the account; and
Whereas, on or about September 2, 2004, counsel for the Licensees advised the Banking Department that the bank on whom Licensees had depended for credit line extensions had advised licensees that it would extend no further credit; and
Whereas, on or about September 9, 2004, an attempted debit of Licensee’s account in the amount of $175, 841.04 by the entity on whose behalf Licensees’ sold money orders was denied due to insufficient funds; and
Whereas, based on its failure to reconcile its book and bank statement cash balances, together with Licensee’s failure to pass on the funds that it had collected on behalf of various third parties, and to apply consumer funds in the manner directed, the Superintendent has determined that, pursuant to Banking Law 373(2), pending an investigation or hearing to determine whether Licensee’s license should be suspended or revoked, it is in the public’s interest that Licensee’s licensees be suspended for a period not to exceed ninety days of the date of this order.
NOW, THEREFORE, it is hereby ORDERED that the check cashing licenses of BISA Check Cashing Corp.—Licenses 1361, 1417, 1651, 1663 and 1674—are hereby suspended for a period of ninety days from the date of this Order.
Witness, my hand and official seal of the Banking Department at the City of New York, this 10th day of September two thousand four.
Deputy Superintendent of Banks