Explanatory All Institutions Letter
September 7, 2004
TO THE INDIVIDUAL OR INSTITUTION ADDRESSED:
RE: Emergency Adoption of Amendments to Part 400.6 of the Superintendent's Regulations (Licensed Cashers of Checks)
The Superintendent has adopted the attached amendments to Part 400.6 of the Superintendent’s Regulations on an emergency basis. These regulations became effective on September 6, 2004.
Amendments to Part 400.12 concerning increases in the fee that licensed check cashers may charge for cashing checks in New York State recently became effective. These amendments allow licensed check cashers to charge a fee of 1.5% of the face amount of the check with a minimum fee of $1.00. In addition, future increases in the permissible fee will be governed by increases in the Consumer Price Index.
Amendment of the signage requirements set forth in Part 400.6 that pertain to the disclosure of the check cashing fee was necessary in connection with the fee increases becoming effective.
In addition to amending the disclosure of the amount of the check-cashing fee, the structure of the disclosure has been amended to provide more useful information. Prior to the amendment of Part 400.6, the signage was required to disclose the fee charged in five-cent increments. As a result, the corresponding check amounts were often atypical amounts. This was not helpful to consumers. Rather, the disclosure should be governed by the amount of the check. Accordingly, the amendment mandates that the amount of the check and the corresponding check cashing fee be set forth on the signage according to the amount of the check in increments of $25.00 ranging from $25.00 to $2,000. The schedule will also indicate the percentage charge imposed on all checks and the $1.00 minimum.
Moreover, since the fee may change in the future due to changes in the Consumer Price Index, the amendment allows signs to be made of durable material instead of specifying that the signs must be made of plastic or metal.
Very truly yours,
Sam L. Abram
Secretary of the Banking Board