Appointment of notaries public, collection agencies, and community currency exchanges

Under current law, a person may not operate as a collection agency unless the person is licensed as a collection agency by the Division of Banking (division) in DFI.

A "collection agency" is defined as a person engaging in the business of collecting or receiving for payment for others of any account, bill, or other indebtedness, but the definition also contains specific exceptions, including those for attorneys, banks and certain other financial institutions, health care billing companies, insurers, and real estate brokers and salespersons. A collection agency is subject to regulation by the division and to certain laws regulating its operations. The division has certain powers and duties with respect to the collection of accounts, including: 1) to issue general and special orders to protect the public from certain practices of licensed collection agencies; 2) to investigate potential violations by licensed collection agencies, including examination of the books and records of collection agencies and the taking of testimony; and 3) to appoint advisers from the collection agency industry to consult and assist the division in the execution of the division's duties, which advisers receive no compensation but may be reimbursed for their traveling expenses.

This bill repeals the power and duty described as item 3), above.

Under current law, a person may not engage in the business of a community currency exchange unless the person has been issued a license by the division. A "community currency exchange" is defined as any person, except certain financial institutions, engaged in the business of cashing checks, money orders, and other evidences of money for a fee, service charge, or other consideration. A community currency exchange may not accept money for deposit. After an application for a community currency exchange license has been approved, the applicant must submit to the division for approval, in a principal sum determined by the division, a policy or policies of insurance that insures the licensee against loss by burglary, larceny, robbery, forgery, or embezzlement. With respect to forgery, the policy may carry a condition that the community currency exchange assumes the first $50 of each claim under the policy.

Under this bill, the policy or policies of insurance must be filed with, and approved by, the division before the division may issue the community currency exchange license or, thereafter, renew the community currency exchange license.

Also under the bill, rather than specify that the policy may carry a condition that the community currency exchange assumes the first $50 of each forgery claim, the division has the authority to determine not only the principal sum under such a policy, but deductibles as well.