TITLE 5

Banking

Other Businesses Under Jurisdiction of State Banking Department

CHAPTER 23. SALE OF CHECKS AND TRANSMISSION OF MONEY


This chapter may be cited as "The Sale of Checks Act."

5 Del. C. 1953, § 2301; 58 Del. Laws, c. 421.;

For the purposes of this chapter:

(1) "Person" means any individual, partnership, association, joint stock association or corporation, but does not include the United States government or the government of this State.

(2) "Licensee" means a person duly licensed by the State Bank Commissioner pursuant to this chapter.

(3) "Check" means any check, draft, money order, personal money order or other instrument for the transmission or payment of money.

(4) "Personal money order" means any instrument for the transmission or payment of money in relation to which the purchaser or remitter appoints or purports to appoint the seller thereof as his agent for the receipt, transmission or handling of money, whether such instrument be signed by the seller or by the purchaser or remitter or some other person.

(5) "Sell" means to sell, to issue, or to deliver a check.

(6) "Deliver" means to deliver a check to the first person who in payment for same makes or purports to make a remittance of or against the face amount thereof, whether or not the deliverer also charges a fee in addition to the face amount, and whether or not the deliverer signs the check.

(7) "Commissioner" means the State Bank Commissioner.

(8) "Accelerated mortgage payment provider" means any person who, in accordance with a written contract, receives funds from a mortgagor to transmit, on behalf of such mortgagor, to a lender or servicer in order to exceed regularly scheduled minimum payment obligations under the terms of the indebtedness.

5 Del. C. 1953, § 2302; 58 Del. Laws, c. 421; 71 Del. Laws, c. 19, § 71.;

No person, except those specified in § 2304 or agents of a licensee as provided in § 2311 shall engage in the business of selling checks, or issuing checks or engage in the business of receiving money for transmission or transmitting the same without having first obtained a license hereunder.

5 Del. C. 1953, § 2303; 58 Del. Laws, c. 421.;

(a) No license shall be required hereunder of banks, trust companies, credit unions, building and loan associations and savings and loan associations, organized under the laws of any state in the United States of America or the United States of America, which either are authorized to do business in this State, or which act through a contractor or agent authorized to do business in this State.

(b) Nothing contained in this section or any other section of this chapter shall be construed to enlarge or limit the rights which any of the above-named organizations have under any existing law.

(c) The Commissioner shall be authorized to exempt from any or all of the provisions of this chapter such persons or classes of persons, or checks or transmissions or classes of checks or transmissions, as the Commissioner shall find inappropriate to include within the coverage of this chapter in order to effectuate the purposes of this chapter. The Commissioner may by regulation establish procedures for application, fees and other requirements for an exemption pursuant to this subsection.

5 Del. C. 1953, § 2304; 58 Del. Laws, c. 421; 69 Del. Laws, c. 58, § 1; 70 Del. Laws, c. 327, § 47; 71 Del. Laws, c. 19, § 72; 76 Del. Laws, c. 86, § 1.;

To qualify for a license hereunder an applicant shall meet the following requirements:

(1) The applicant shall have a net worth of at least $100,000 computed according to generally accepted accounting principles;

(2) The financial responsibility, financial condition, financial and business experience, character and general fitness of the applicant shall be such as reasonably to warrant the belief that applicant's business will be conducted honestly, carefully and efficiently. To the extent deemed advisable by the Commissioner, the Commissioner may investigate and consider the qualifications of the applicant including principals, officers and directors of an applicant in determining whether this qualification has been met.

5 Del. C. 1953, § 2305; 58 Del. Laws, c. 421.;

Each application for a license shall be made in writing and under oath to the Commissioner in such form and containing such information as he may prescribe including the name and business and residence address:

(1) Of the proprietor, if the applicant is an individual;

(2) Of every member, if the applicant is a partnership or unincorporated association;

(3) Of the corporation and each officer and director thereof, if the applicant is a corporation, stating the date and the state of incorporation.

5 Del. C. 1953, § 2306; 58 Del. Laws, c. 421.;

Each application for a license shall be accompanied by:

(1) An investigation fee of $172.50 which shall not be subject to refund.

(2) The annual license fee as specified in § 2310.

(3) Financial statements reasonably satisfactory to the Commissioner.

5 Del. C. 1953, § 2307; 58 Del. Laws, c. 421; 67 Del. Laws, c. 260, § 1.;

(a) Upon the filing of the application and the payment of the investigation fee and the annual license fee, the Commissioner shall, to the extent the Commissioner deems advisable, investigate the financial responsibility, financial condition, financial and business experience, character and general fitness of the applicant, and if the Commissioner finds these qualities are such as to warrant the belief that the applicant's business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes of the intent of this chapter and in the manner commanding the confidence and trust of the community, the Commissioner shall advise the applicant in writing of the Commissioner's conditional approval of the application, and thereafter, upon compliance by the applicant with § 2309 of this title, shall issue to the applicant a license to engage in the business of selling and issuing checks, subject to this chapter. If the Commissioner determines on the basis of the Commissioner's investigation that the applicant does not comply with the purposes of this chapter as set forth in the preceding sentence of this section he shall notify the applicant of the denial of the conditional approval of the license stating the reasons therefor in writing.

(b) Each license issued under this chapter shall state the address at which the business is to be conducted and shall state fully the name of the licensee. A copy of such license shall be prominently posted in each place of business of the licensee. In case such location be changed, the Commissioner shall issue without charge an amended license showing the new location. In case there is a change of name but no change in corporate structure, the Commissioner shall issue without charge an amended license showing the new name. Such license shall not be otherwise transferable or assignable. No licensee shall maintain an office at any other location than that designated in the license. The Commissioner may issue more than 1 license to the same applicant upon payment of the required fees and compliance with all applicable provisions of law.

(c) Upon written request, the Commissioner may in the Commissioner's discretion grant conditional approval for an acquired licensee to conduct its business under its existing license for a period not to exceed 60 days when control of the licensee changes and a new application for licensure has been filed in accordance with this chapter.

5 Del. C. 1953, § 2308; 58 Del. Laws, c. 421; 70 Del. Laws, c. 186, § 1; 72 Del. Laws, c. 15, § 37.;

(a) Surety bonds.

(1) Every licensee shall file with the Commissioner, in a form satisfactory to the Commissioner, an original corporate surety bond, with surety provided by a corporation authorized to transact business in this State, in the principal sum of $25,000 and in an additional principal sum of $5,000 for each location in excess of 1 at which the applicant proposes to conduct a business licensed by this chapter, but in no event shall the bond be required to be in excess of $250,000.

(2) No bond shall be accepted unless the following requirements are satisfied:

a. The term of the bond shall be commensurate with the license period or continuous;

b. The expiration date of the bond shall not be earlier than midnight of the date on which the license expires; and

c. The bond shall run to the State, for the benefit of the office of the State Bank Commissioner and for the benefit of all consumers injured by any wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the bond shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. Surety claims shall be paid to the office of the State Bank Commissioner by the insurer not later than 90 days after receipt of a claim. Claims paid after 90 days shall be subject to daily interest at the legal rate. The aggregate liability of the surety on the bond, exclusive of any interest which accrues for payments made after 90 days, shall in no event exceed the amount of such bond.

(3) If the licensee changes its surety company or the bond is otherwise amended, the licensee shall immediately provide the Commissioner with the amended original copy of the surety bond. No cancellation of an existing bond by a surety shall be effective unless written notice of its intention to cancel is filed with the Commissioner at least 30 days before the date upon which cancellation shall take effect.

(4) The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner shall determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a licensee, the Commissioner shall cause a notice to be published for the purpose of identifying all relevant claims.

(5) When a surety company receives a claim against the bond of a licensee, it shall immediately notify the Commissioner and shall not pay any claim unless and until it receives notice to do so from the Commissioner.

(6) The Commissioner shall have a period of 2 calendar years after the effective date of cancellation or termination of the surety bond by the insurer to submit claims to the insurer.

(b) Irrevocable letters of credit. — In lieu of requiring the filing of a surety bond, the Commissioner may, at the Commissioner's discretion, accept from a licensee an irrevocable letter of credit.

(1) Such irrevocable letter of credit shall be provided by an insured depository institution (as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c)) acceptable to the Commissioner, in a form satisfactory to the Commissioner in the principal sum of $25,000 and in an additional principal sum of $5,000 for each location in excess of 1 at which the applicant proposes to conduct a business licensed by this chapter, but in no event shall such irrevocable letter of credit be required to be in excess of $250,000.

(2) No irrevocable letter of credit shall be accepted unless the following requirements are satisfied:

a. The irrevocable letter of credit shall run to the State, for the benefit of the office of the State Bank Commissioner and for the benefit of all consumers injured by the wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the irrevocable letter of credit shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. The aggregate liability of the insured depository institution issuing the irrevocable letter of credit shall in no event exceed the amount of such irrevocable letter of credit; and

b. Draws upon such irrevocable letter of credit shall be available by sight drafts thereunder, in amounts determined by the Commissioner, up to the aggregate amount of the irrevocable letter of credit. Such drafts shall be paid in accordance with § 5-112(1) of Title 6.

(3) The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner shall determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a licensee, the Commissioner shall cause a notice to be published for the purpose of identifying all relevant claims.

(4) The Commissioner may refuse release of an irrevocable letter of credit, following the surrender of a license, up to 2 years after the effective date of such termination of licensure.

5 Del. C. 1953, § 2309; 58 Del. Laws, c. 421; 71 Del. Laws, c. 19, § 73.;

After applicant receives notice of conditional approval by the Commissioner of the application for an original license and annually thereafter at least 30 days prior to the expiration of such license, applicant shall file with the Commissioner a renewal application together with a statement listing the locations in the State of the offices of the applicant and the names and locations of the applicant's agents. The licensee shall pay to the Commissioner with such list a license fee of $4.60 for each such location in excess of 1. The fee shall cover the remainder of the calendar year in which license is granted. Thereafter each licensee shall submit a current list together with a renewal application not less than 30 days prior to the expiration of such license and pay a license fee of $230 plus $4.60 for each location on the list submitted. The requirements of this section shall not apply to any agent of a licensee who is exempt from this chapter pursuant to § 2304(a) of this title. The Commissioner may mandate that applications for renewal shall be treated as new applications if said renewal applications are not on file with the office of the State Bank Commissioner at least 30 days prior to the expiration of such license or renewal thereof. Licensees which have not complied with supervisory letters may be refused license renewal.

5 Del. C. 1953, § 2310; 58 Del. Laws, c. 421; 67 Del. Laws, c. 260, § 1; 68 Del. Laws, c. 9, § 6; 70 Del. Laws, c. 6, §§ 10-12; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 327, § 42.;

A licensee may conduct the licensee's business at 1 or more locations within the State and through or by means of such agents as the licensee may from time to time designate or appoint. No license under this chapter shall be required of any agent of a licensee. In order for an agent to be authorized to act for the licensee in this State, the licensee shall have on file with the Commissioner the name and address of the agent, and the licensee shall notify the Commissioner within 30 days of the change of name or address of an agent or of the termination of any such agent. If the bond deposited by the licensee under § 2309 of this title is less than the maximum provided thereunder, the licensee shall submit and deposit a supplementary bond in the amount required by § 2309 of this title for the additional location or locations that are added. In the event that the licensee shall have filed an irrevocable letter of credit in lieu of a surety bond under § 2309(b) of this title the amount of such letter of credit shall be increased accordingly. The requirements of this section shall not apply to any agent of a person who is exempt from this chapter pursuant to § 2304 of this title.

5 Del. C. 1953, § 2311; 58 Del. Laws, c. 421; 70 Del. Laws, c. 186, § 1; 76 Del. Laws, c. 86, § 2.;

(a) Each licensee shall be liable for the payment of all checks which the licensee sells in this State, in whatever form and whether directly or through an agent, as the maker or drawer thereof according to the negotiable instruments law of this State; and a licensee who sells a check, whether directly or through an agent, upon which the licensee is not designated as maker or drawer shall nevertheless have the same liabilities with respect thereto as if the licensee had signed the same as the maker or drawer thereof.

(b) Each licensee engaged in the business of receiving money for transmission shall be liable for payment of all amounts received for transmission.

5 Del. C. 1953, § 2312; 58 Del. Laws, c. 421; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 19, § 74.;

(a) Every check sold by a licensee, directly or through an agent, shall bear the name of the licensee clearly imprinted thereon.

(b) Every licensee shall furnish a customer with a receipt or other acknowledgment upon receiving funds from such customer. Such receipt or other acknowledgment shall be numbered serially and shall bear the name and address of the licensee. Each licensee who receives money for transmission abroad shall forward such money to the person or bank designated to receive the same within 5 days after receipt thereof, and shall immediately give the person delivering the money for transmission a receipt and his name with the name and address of the licensee printed thereon. The receipt shall state the date when such money was received, the amount thereof, its equivalent in the currency of the country to which it is to be forwarded, and the name and address of the payee.

(c) In lieu of the provisions of subsection (b) of this section, every accelerated mortgage payment provider may furnish an annual statement to a mortgagor of the transmittals. Each such statement shall identify the dates money was received for transmission and the amounts thereof, the dates transmittals were made to the lender on behalf of the mortgagor and the amounts thereof and the name and address of the lender or recipient of such transmittals.

5 Del. C. 1953, § 2313; 58 Del. Laws, c. 421; 71 Del. Laws, c. 19, § 75.;

The Commissioner may examine the business, books and records of the licensee at any time, the reasonable cost of such examination to be paid by licensee.

5 Del. C. 1953, § 2314; 58 Del. Laws, c. 421; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 19, § 76; 73 Del. Laws, c. 24, § 10.;

(a) The Commissioner may revoke any license issued hereunder upon finding that:

(1) The licensee has violated any provision of this chapter or any rule or regulation made by the Commissioner under and within the authority of this chapter or of any other law, rule or regulation of this State or the United States;

(2) Any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the Commissioner in refusing originally to issue such license; or

(3) The licensee has engaged in business activities or practices, in connection with any business for which a license is required under this chapter, which could be deemed unfair or deceptive by nature of intent. Such activities and practices include, but are not limited to, the use of tactics which mislead the consumer, misrepresent the consumer transaction or any part thereof, or otherwise create false expectations on the part of the consumer.

(b) The Commissioner may temporarily suspend any license pending the issuance of a final order as provided in Chapter 101 of Title 29.

(c) Except as provided in subsection (b) of this section, no license shall be revoked or suspended except after notice and an opportunity for the licensee to request a hearing in accordance with Chapter 101 of Title 29.

(d) Any licensee may surrender any license by delivering to the Commissioner such license together with written notice that it thereby surrenders such license, but such surrender shall not affect such licensee's civil or criminal liability for acts committed prior to such surrender.

(e) No revocation, suspension or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any person.

(f) Every license issued hereunder shall remain in force and effect until the same shall have expired or shall have been surrendered, revoked or suspended in accordance with this chapter, but the Commissioner shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license shall have been revoked if no fact or condition then exists which would have warranted the Commissioner in refusing originally to issue such license under this chapter.

(g) Whenever the Commissioner shall revoke or suspend a license issued pursuant to this chapter, the Commissioner shall forthwith execute a written order to that effect. The Commissioner shall forthwith serve the written order upon the licensee. Any such order may be reviewed in the manner provided by Chapter 101 of Title 29.

5 Del. C. 1953, § 2315; 58 Del. Laws, c. 421; 73 Del. Laws, c. 24, § 11; 77 Del. Laws, c. 126, § 5.;

epealed by 73 Del. Laws, c. 24, § 12, eff. April 17, 2001. For present law see § 2315 of this title;

Any person who violates any provision of this chapter shall be fined not less than $100 nor more than $500 or imprisoned for not more than 90 days, or both for each such offense.

5 Del. C. 1953, § 2317; 58 Del. Laws, c. 421.;

The Commissioner may adopt rules and regulations necessary for the administration of this chapter.

5 Del. C. 1953, § 2318; 58 Del. Laws, c. 421.;