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Banking Interpretations

NYSBL  374

January 8, 2008 


Re: Licensed Cashers of Checks

Dear [---]:

Your inquiry to Richard H. Neiman, Superintendent of Banks of the State of New York, has been referred to me for response. In your letter, you request an opinion from the New York State Banking Department ("the Banking Department"), as to whether the Company you represent [---], ("TCG") is required to be a licensed casher of checks pursuant to Article 9-A of the Banking Law.

In your letter you explain that TCG is the New York State unit of an international company whose primary business is currency exchange. Your letter further indicates that incidental to the business of currency exchange, TCG also accepts traveler's checks in exchange for cash. After further communications, you explained that TCG charges a fee of ninety cents for each traveler's check that is cashed regardless of the amount of the check.

Pursuant to Section 374 of the New York Banking Law, licensure under Article 9-A of the Banking Law is not required when checks, drafts or money orders are cashed, other than by a licensee, without consideration or charge; nor when checks, drafts or money orders are cashed, other than by a licensee, as an incident to the conduct of any other lawful business where not more than one dollar is charged for cashing each check, draft or money order. Therefore, TCG, which engages in the business of cashing traveler's checks incidental to its business of currency exchange, does not need to be licensed under Article 9-A of the New York Banking Law since it does not charge more than one dollar for cashing each traveler's check.

I note that in your letter, you explained that you do not believe that a traveler's check should be considered a check and further explained that you believe a traveler's check is more like paper money. Nonetheless, it has been held that a traveler's check, which is customarily issued in various standard denominations of American or foreign currency, is much like a cashier's check in that the issuer is, in effect drawer and drawee. Citicorp v. Interbank Card Ass'n. (SDNY 1979) 478 F. Supp. 756 at 759. It is the opinion of the Banking Department that Article 9-A of the Banking Law applies when dealing with the business of cashing traveler's checks.

I trust that this has been responsive to your inquiry. If you have any further questions, please do not hesitate to contact me at
(212) 709-1674.

Very truly yours,

Megan Prendergast
Associate Attorney

Department of Financial Services


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