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BISA Check Cashing Corp. Stipulation Agreement

  State of New York
Banking Department

STIPULATION

STIPULATION (the “Stipulation”) made this sixth day of December, 2005, by and between BISA Check Cashing Corp. (“BISA”, the “Respondent or the “Licensee”) and the Superintendent of Banks (the “Superintendent”) of the New York State Banking Department (the “Banking Department”).

Whereas, BISA Check Cashing Corp. (“BISA” or the “Respondent”) originally was granted a license on October 8, 1990 to engage in business as a licensed casher of checks pursuant to Article IX-A of the New York Banking Law (the “Banking Law”) and currently maintains licensed locations at 61-20 Springfield Boulevard, Bayside, New York 11364, 188-06b Jamaica Avenue, Hollis, New York 11423, 44-27 Kissena Boulevard, Flushing, New York 11355, 91-20 59 th Avenue, Elmhurst, New York 11373 and 3804 Boston Post Road, Bronx, New York 10475; and

Whereas, as a result of an examination of BISA, conducted as of September 18, 2004 (the “September 18, 2004 Examination”), the following violations of the Banking Law and related regulations (the “Violations”) were cited to BISA:

  1. Violation of Banking Law Section 373.1(1) (b), which prohibits the cashing of checks in excess of $6,000 except as those allowed by this section;
  2. Violation of Part 400.3(a) of the Superintendent’s Regulations (“Part 400”), which requires a “daily record of checks cashed” in which all cash transactions shall be recorded;
  3. Violation of Part 400.3(a) (6) of the Superintendent’s Regulations, which requires complete details to be recorded individually for each check (other than a payroll check) exceeding $1,500;
  4. Violation of Part 400.3(b), which requires that all checks, drafts and money orders cashed be maintained as a microfilm record;
  5. Violation of Parts 400.3(b)(7) & (9), which requires that a log of microfilm inventory be maintained and each roll of microfilm properly labeled;
  6. Violation of Part 400.3(b)(10), which requires that an operative microfilm viewer be maintained on each licensed premises at all times;
  7. Violation of Part 400.3(d), which requires a “returned items record ”, including certain enumerated information;
  8. Violation of Part 400.6(a)(4), which requires the licensee maintain continuously liquid assets of at least $10,000 per location;
  9. Violation of Part 400.6(b)(3), which prohibits the licensee from cashing any check or draft of any drawer if the licensee has any reason to believe that such a check is likely to be dishonored; and
  10. Violation of Part 400.1(c)(6)(v), which requires the licensee to continuously have available a line of credit in an amount of $100,000 or more for each licensed location and the licensee must immediately give written notice to the superintendent if it is not at any time in compliance with this requirement.

Whereas, the Violations, as well as other violations cited in prior examinations, represent a serious ongoing lack of management oversight and controls; and

Whereas, the Violations, as well as other violations cited in prior examinations evidence that BISA is operating in an unauthorized and unsafe manner; and

Whereas, on or about July 30, 2004, a major money transmitting entity suspended the rights of Respondent to act as an agent on its behalf due to deficiencies in the anti-money laundering and Bank Secrecy Act compliance programs of BISA; and

Whereas, on or about September 2, 2004, under an existing contractual arrangement with a second major money transmitting entity, an attempted debit by said second major money transmitting entity to BISA’s bank account for the amount of $881,823.17 failed due to insufficient funds in BISA’s account; and

Whereas, on or about September 9, 2004, an attempted debit to BISA’s bank account in the amount of $175,841.04 by the entity on whose behalf BISA sold money orders failed due to insufficient funds in the account; and

Whereas, because of the Violations cited above and the failure of BISA to properly pass on to third parties various funds which it had collected on behalf of these third parties, as cited above, on September 10, 2004, the Banking Department served BISA with an Order of Suspension; and

Whereas, BISA has attempted to sell a portion of its licensed check cashing business to a related party on less than arms-length terms without full disclosure being made by BISA to the Banking Department of its relationship to the third party; and

Whereas, there has existed for a period of months a failure by BISA to maintain proper books and records to allow the Superintendent to ascertain the true financial condition of BISA; and

Whereas, pursuant to Part 400.1(c)(6)(e) of the Superintendent’s Regulations, BISA is required to obtain a credit facility approved by the Superintendent demonstrating an existing right of access to a line of credit in an amount of $100,000 or more for each licensed location, with said line of credit to be available continuously and a licensee must immediately give written notice to the Superintendent if it is not at any time in compliance with this requirement; BISA’s credit facility was cancelled in October 2004 and has not been replaced to date, BISA failed to give to the Superintendent the required written notice of this cancellation and BISA has failed to maintain a credit facility to be able to conduct its business in an authorized and safe manner; and

Whereas, on January 5, 2005, a major money transmitter reported to the Banking Department that it had stopped payment on money orders, in the total amount of $16,100.00, sold at BISA’s principal office location as said money orders had not been accurately completed and were considered “suspicious”, and based upon a review by the money transmitter, the loan account numbers noted on certain money orders belonged to BISA’s owner and the loan account information contained on the remaining money orders appeared to be that of relatives of the BISA’s owner; thus, it appeared that the money orders were used to pay personal obligations of BISA’s owner; and

Whereas, Part 400.15 of the Superintendent’s Regulations requires licensees to apply to the Superintendent for leave to change its place of business to any other location and, on or about December 2004, BISA moved one of its licensed locations from 3804 Boston Post Road, Bronx, New York 10475 to 3441A Baychester Avenue, Bronx, New York 10475 without the prior requisite approval from the Superintendent; and

Whereas, Part 400.2 of the Superintendent’s Regulations requires licensees, on or before December 15 th in each year, to file with the Superintendent an application in the form provided by the Superintendent for the renewal of its license for the forthcoming year, with said application to be accompanied by a check for the license fees required by the New York Banking Law Sections 367 and 370; as of this date, BISA has not paid its annual license fee in the amount of $2,278.35; in addition, as of this date, BISA has failed to pay the following assessment amounts: (1) Special Assessment, due October 20, 2004, in the amount of $7,599.73; (2) General Assessment, due March 10, 2005, in the amount of $9,036.58; (3) General Assessment, due June 10, 2005, in the amount of $8,391.84; and (4) General Assessment, due September 10, 2005, in the amount of $10,708.14, so that a total of $49,713.41 is due and owing to the Banking Department; and

WHEREAS, a Statement of Charges against the Respondent was issued on November 22, 2005 (the “Statement of Charges”); and

Whereas, the foregoing constitutes grounds for revocation of the Respondent’s licenses as a licensed casher of checks pursuant to Banking Law Section 373; and

Whereas, had the above described facts existed at the time of the original license application by the Respondent to the Banking Department, such facts would have warranted the refusal by the Superintendent to issue a license to the Respondent based upon a lack of good character and general fitness as well as a belief by the Superintendent that the Respondent could not conduct its business honestly, fairly and carefully as required by the Banking Law Section 369.

Whereas, the Superintendent and the Licensee mutually agree to resolve this matter on the terms set forth hereinafter in lieu of commencing a hearing seeking revocation of BISA’s licenses.

NOW, THEREFORE, IT IS STIPULATED AND AGREED by and between the Banking Department and BISA that:

  1. The Licensee, without admitting or denying any violation whatsoever, waives its right to a hearing with respect to the violations enumerated in the Statement of Charges and any and all rights of appeal relating to this matter. The Licensee and its principal have entered into this Stipulation freely and voluntarily and fully understand its terms and conditions.
  1. Upon execution of this Stipulation, BISA agrees to pay in full all outstanding annual license fees, special assessments and general assessments, including late payment charges, collection fees and returned check fees, if any. Payment shall be made by electronic transfer, in immediately available funds, pursuant to transfer instructions received from the Banking Department. Upon surrender of all of BISA’s licenses and payment in full by 10:00 A.M. on December 20, 2005 of the total amount of $49,713.41 due and owing to the Banking Department and confirmation by the Banking Department of the receipt of said immediately available funds, the Banking Department shall accept such surrender of all of BISA’s licenses with prejudice.
  1. Failure to make timely payment and surrender by 10:00 A.M. on December 20, 20005 shall result in immediate revocation of BISA’s licenses without a hearing.
  1. All communications regarding this Stipulation shall be sent to:

Regina A. Stone
Deputy Superintendent of Banks
Licensed Financial Services Division
New York State Banking Department
One State Street
New York, New York 10004

Lourdes Munoz
BISA Check Cashing Corp.
188-06B Jamaica Avenue
Hollis, New York 11423

  1. The provisions of this Stipulation shall not bar, estop or otherwise prevent the Superintendent, or any state or federal agency or department, from taking any other action affecting the Licensee, any of its current or former officers, directors, employers or other insiders, or their successors or assigns, with respect to the matters relating to this Stipulation; provided, however, that the Superintendent shall not take any further action with respect to the matters relating to this Stipulation against the Licensee, any of its current or former officers, directors, employees or insiders, or their successors or assigns, based upon any information currently known by the Superintendent.
  1. The Superintendent may, at the sole discretion of the Superintendent, grant written extensions of time to the Licensee to comply with any provision of this Stipulation.
  1. Each provision of this Stipulation shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Superintendent.
  1. The effective date of this Stipulation is the date on which it is signed by the Superintendent or her deputy.
  1. The provisions of this Stipulation are confidential until the earlier of payment and surrender of the licenses or 10:00 A.M. on December 20, 2005.

IS SO STIPULATED:

Dated: _______________ By: _______________________
Diana L. Taylor
Superintendent of Banks
New York State Banking Department

Dated: _______________ By: ________________________
Felix Munoz
Title: General Manager
Licensee’s Name: BISA Check Cashing Corp.

Dated:_____________ By:____________________________
Joseph Sanchez, Esq.
As Counsel to BISA Check
Cashing Corp.

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