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MSB Industry FAQs

General Information
Licensing and Registration of Check Cashers
Licensing of Sale of Check Companies or Money Transmitters
Agents of Check Sellers and Money Transmitters
Credit History / Criminal Background Checks
Surety Bonds
Anti-Money Laundering Policies
Complaints

 

 

GENERAL INFORMATION

Q:      What functions does your Department perform with respect to money service businesses (MSBs)?

 A:    To ensure that the citizens of Georgia have access to wide array of properly operated money service providers, the MSB section of the Non-Depository Financial Institutions Division is responsible for supervising those who are licensed or registered (or who should be licensed or registered) to do business in the Georgia as a check casher, sale of check company, or money transmitter.   In regards to MSBs covered by Georgia law, the Department is charged with the supervision and examination of their business affairs to ensure that they operate in a manner consistent with state law, and also for the protection of the interests of consumers who are served by these entities.

Certain categories of MSBs must apply to the Department and meet certain licensing or registration standards before they may legally offer their services to the public.   Monetary fines and civil sanctions can be levied if a person or company is discovered to be operating in Georgia without being properly licensed or registered.

After obtaining a license, periodic examinations of the licensee's operations are performed to monitor operating standards to assure compliance with the provisions of Title 7 of the Official Code of Georgia (O.C.G.A.) Article 4 or 4a. 

 Q:     What laws and regulations do I need to be familiar with in order to meet the licensing/ registration requirements and properly operate in Georgia as an MSB?

 A:    The following sections of the Official Code of Georgia Annotated (O.C.G.A.) and the Regulations of Department of Banking and Finance are used in the operation and regulation of MSBs in Georgia. You should be familiar with these in the operation of your business.    To access laws, regulations, and Department policies applicable to MSBs, you may view or download the Department’s “Pink Book”, which contains all of these references in one place.

Applicable Georgia Laws and Department Regulations:

• O.C.G.A., Title 7, Chapter 1, Article 4 – Sale of Checks or Money Orders
• O.C.G.A., Title 7, Chapter 1, Article 4A – Cashing Checks, Drafts, or Money Orders for Consideration
• O.C.G.A., Title 7, Chapter 1, Article 11 – Records and Reports of Currency Transactions
• Chapter 80-3-1 of the Department’s Rules and Regulations

 

LICENSING AND REGISTRATION OF CHECK CASHERS

Q:      How do I obtain a license or registration to operate a check cashing business in Georgia?

 A:    Significant changes to Georgia laws governing check cashing were made during the 2007 legislative session.   These changes were primarily in regards to licensing, registration, and exemption qualifications as follows:

License - A full service license is required if you charge a fee that exceeds the greater of $2.00 or 2% of the face amount of the check.  Advertising is permitted ONLY by Full Service Licensees.

Registration  - A registration is required if you charge a fee, the fee  DOES NOT exceed  the greater of $2.00 or 2% of the face amount of the check, and you DO NOT advertise.

Exemptions - An entity that cashes checks for which NO FEE is charged for the service is exempt from the provisions of Article 4A.

Previous requirements for registrations and exemptions which were based on incidental retail sales and levels of income from check cashing activity have been eliminated.  License requirements are now based on amount of fees charged and the advertising of check cashing services.

For example:

Check Cashing Full Service License Required

• If your fees charged for check cashing services EVER exceed the greater of $2 or 2% of the face amount of the check,   then a full service LICENSE is required, regardless of whether or not you advertise such services. 
• If your fees charged for check cashing services NEVER exceed the greater of $2 or 2% of the face amount of the check, but you DO advertise such services, then a full service LICENSE is required.

Check Cashing Registration Required

• If your fees charged for check cashing services NEVER exceed the greater of $2 or 2% of the face amount of the check, AND you DO NOT advertise such services, then an application as a REGISTERED check casher is permitted.
• If you charge any fee and advertise the service, then a full service LICENSE is required.

Exemption from Check Cashing Licensing or Registration

• If you DO NOT charge a FEE to cash a check – you DO NOT need to obtain a license or registration.

To obtain the appropriate application or registration form, go to the Forms and Applications page for MSBs.   These documents are available in either Microsoft Word or Adobe PDF format.

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LICENSING OF SALE OF CHECK COMPANIES OR MONEY TRANSMITTERS

Q:     How do I obtain a license to sell checks (or money orders) or to transmit money in Georgia?

 A:    You must submit an application to the Department of Banking and Finance to obtain either type of license.  To obtain an application, go to the Forms and Applications page for MSBs.     These documents are available in either Microsoft Word or Adobe PDF format.

Q:     Are agents of check sellers or money transmitters required to obtain a separate license?

 A:    No.  Entities that serve as authorized agents for check sellers or money transmitters are allowed to engage in money transmission without obtaining a separate license as long as they do not engage in money transmission outside of the scope of their contract with the principal transmitter or seller. Therefore, any authorized agent which starts to offer money transmission or sale of checks on its own behalf will be required to obtain its own license. 

Q:     Are any entities exempt from obtaining a check seller or money transmitter license?

 A:    Yes.  As provided for in Georgia law, the following entities are not required to obtain a license: banks, trust companies, credit unions, savings and loan associations or savings banks, the authorized agent of a licensee, and the United States Postal Service. 

Q:     How do I calculate outstandings for the semi-annual report required? (check sellers and money transmitters)

 A:    In addition to the minimum surety bond coverage required, the Department may require additional coverage to ensure adequate protection for citizens doing business with licensees or their authorized agents.  Written reports that reveal a licensee’s level of holdings (outstandings) shall be made semi-annually to the Department. 

Average daily balance of outstanding checks sold in Georgia   $____________

(Sum of balance of checks sold in Georgia that remained outstanding at the end of each day of the six month period divided by total number of days in the period OR the sum balance of checks sold in Georgia that remained outstanding at the end of each month-end during the 6 months divided by 6).

Average daily balance of undelivered money transfer orders in Georgia $__________

(Sum of balance of Georgia money transfer orders that remained undelivered at the end of each day of the six month period divided by total number of days in the period OR the sum balance of Georgia money transfer orders that remained undelivered at the end of each month-end during the 6 months divided by 6).

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CREDIT HISTORY / CRIMINAL BACKGROUND CHECKS

Q:      I have bad credit. Will my license be approved?

 A:    Bad credit will make your application VERY difficult to approve. Georgia law requires that licensees demonstrate reasonable financial responsibility and operate their businesses in an honest, fair, and efficient manner and with the confidence and trust of our citizens.   At the very least, you must settle all collection accounts, charged-off accounts, judgments and outstanding tax liens.

Q:      Where do I get background checks done?

 A:    Your least expensive option is probably your local police department.

Q:      I have a criminal background. Will my license be approved?

 A:    As stated previously, Georgia law requires that licensees demonstrate reasonable financial responsibility and operate in a manner which will protect the financial rights of the citizens of Georgia. Therefore, criminal activity increases the difficulty of making a favorable finding on an application. While minor traffic offenses will not affect your chances for a license, convicted felons who have not been PARDONED (not just paroled) or who have not sought and obtained/documented the remedies provided for in O.C.G.A. Section 7-1-682(c) for check sellers or money transmitters and O.C.G.A. Section 7-1-702(b) for check cashers, cannot be licensed. The Department verifies the criminal background of each applicant for a license. It is very important to provide honest answers in the application. Omissions regarding arrests are deemed to be a serious falsification of the application and can lead to denial regardless of the nature or outcome of the arrest.

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SURETY BONDS

Q:       What is a surety bond and why do I need to have one? (for sale of check companies and money transmitters)

 A:    A surety bond is a three-party instrument between a surety (insurance company), the licensee, and the Department. The agreement binds the licensee to comply with the terms and conditions of the laws and regulations concerning the issuance of their license. If the licensee is unable to successfully meet those requirements, the surety assumes certain monetary obligations required for performance under that surety bond for the licensee, and ensures that the obligations are met. Such obligations may be those owed to qualifying consumers, other creditors, or the Department.

Q:       Can the Department return my bond? (for sale of check companies and money transmitters)

 A:    It depends on the circumstances. The Department can only return a bond if the license was never approved; just send a letter to the Department asking for the bond to be sent back to you.  However, if the license was approved, the Department cannot return a bond to the licensee or its surety.  Further, the Department cannot execute a general release that discharges a surety from any past, present, or future liability under a bond.

ANTI-MONEY LAUNDERING POLICIES

Q:      What is an Anti-Money Laundering (AML) Policy and where do I find information regarding developing a Policy?

 A:    Each MSB is required by law to have an effective anti-money laundering (AML) compliance program.  An effective anti-money laundering program is one that is reasonably designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities.  The federal regulation requiring MSBs to develop and maintain an AML compliance program is contained in 31 CFR103.125.  Each program must be commensurate with the risks posed by the location, size, nature and volume of the financial services provided by the MSB.  

The Department has provided guidance on its website to help you develop your policy. Please note that the document referenced on our website IS NOT a sample policy but a guide only.

Office of Foreign Asset Control (OFAC) – NOTE: MSBs must have a policy to follow regarding checking the list of Specially Desigated Nationals as is required by the Patriot Act.  Refer to http://www.ustreas.gov/offices/enforcement/ofac/

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COMPLAINTS

Q:       I have a complaint against a company offering check cashing, check selling or money transmission services in Georgia. How do I file a complaint?

A:      Click here for further information regarding Complaints and Inquiries.