KRS 286.9-100: Procedures to be followed by licensees.

(1) (a) Any fee charged by a licensee for cashing a check or entering into a deferred

deposit transaction shall be disclosed in writing to the bearer of the check

prior to cashing the check or entering into a deferred deposit transaction, and

the fee shall be deemed a service fee and not interest.

(b) A licensee shall not charge a service fee in excess of fifteen dollars ($15) per

one hundred dollars ($100) on the face amount of a deferred deposit check. A

licensee shall prorate any fee, based upon the maximum fee of fifteen dollars

($15) per one hundred dollars ($100). This service fee shall be for a period of

at least fourteen (14) days.

(2) Before a licensee shall deposit with any bank or other depository institution a check

cashed by the licensee, the check shal l be endorsed with the actual name under

which the licensee is doing business.

(3) A licensee shall not cash a check payable to a payee other than a natural person

unless the licensee has previously obtained appropriate documentation from the

board of dire ctors or similar governing body of the payee clearly indicating the

authority of the natural person or persons cashing the check, draft, or money order

on behalf of the payee.

(4) (a) A licensee shall:

1. Not indicate through advertising, signs, billhead, or otherwise that

checks may be cashed without identification of the bearer of the check;

and

2. Require any person seeking to cash a check to submit reasonable

identification as prescribed by the commissioner.

(b) The provisions of this subsection shall not prohibit a licensee from cashing a

check simultaneously with the verification and establishment of the identity of

the presenter by means other than the presentation of identification.

(5) (a) Within two (2) business days after being advised by a financial institution that

a payment instrument has been altered, forged, stolen, obtained through

fraudulent or illegal means, negotiated without proper legal authority, or

otherwise represents the proceeds of illegal ac tivity, the licensee shall notify

the commissioner and the prosecutor or law enforcement authority in the

county in which the check was received.

(b) If a payment instrument is returned to the licensee by a financial institution

for any of the reasons stat ed in paragraph (a) of this subsection, the licensee

shall not release the payment instrument without the written consent of the

prosecutor or law enforcement authority or a court order.

(6) A licensee shall not alter or delete the date on any payment inst rument accepted by

the licensee.

(7) A licensee shall not engage in unfair or deceptive acts, practices, or advertising in

the conduct of the licensed business.

(8) A licensee shall not require a customer to provide security for a deferred deposit

transaction or require the customer to provide a guaranty from another person.

(9) (a) A licensee shall not have more than two (2) deferred deposit transactions from

any one (1) customer at any one time.

(b) 1. Except as provided in subparagraph 2. of this paragra ph, the total

proceeds received by a customer from all open deferred deposit

transactions shall not exceed six hundred dollars ($600).

2. a. Subject to subdivision b. of this subparagraph, the commissioner

shall, on or before July 1 of each year, issue an order increasing, or

decreasing if the percent change is negative, the maximum amount

of total proceeds permitted under subparagraph 1. of this

paragraph by the percent change in the nonseasonally adjusted

annual average Consumer Price Index for all Urban Consumers

(CPI-U), U.S. City Average, All Items, for the previous calendar

year as published by the United States Bureau of Labor Statistics,

except the amount shall be rounded up to the nearest ten dollar

($10) increment.

b. The commissioner shall not iss ue an order under subdivision a. of

this subparagraph that results in the amount of total proceeds

permitted under subparagraph 1. of this paragraph exceeding eight

hundred fifty dollars ($850).

(10) (a) If the database described in KRS 286.9 -140 is unavai lable due to technical

difficulties with the database, as determined by the commissioner, a licensee

shall utilize the process established in this subsection to verify deferred

deposit transactions.

(b) A licensee shall inquire of any customer seeking to e nter into a deferred

deposit transaction, whether the customer has any outstanding deferred

deposit transactions from any licensee.

(c) If the customer represents in writing that the customer has no more than one

(1) deferred deposit transaction outstandin g to any licensee and that the total

proceeds received by the customer from the outstanding deferred deposit

transaction does not equal or exceed the amount permitted under subsection

(9)(b) of this section, a licensee may accept a deferred deposit transac tion in

an amount that, when combined with the customer's other outstanding

deferred deposit transaction, does not exceed the amount permitted under

subsection (9)(b) of this section.

(d) If the customer represents in writing that the customer has more tha n one (1)

deferred deposit transaction outstanding to licensees or if the total proceeds

received by the customer from the deferred deposit transactions equal or

exceed the amount permitted under subsection (9)(b) of this section, a licensee

shall not ente r into another deferred deposit transaction with that customer

until the customer represents to the licensee in writing that the customer

qualifies to enter into a new deferred deposit transaction under the

requirements set forth in this subtitle.

(11) A l icensee shall not use any device or agreement, including agreements with an

affiliate of a licensee, with the intent to obtain greater charges than are authorized in

this subtitle.

(12) A licensee shall not agree to hold a deferred deposit transaction for more than sixty

(60) days.

(13) (a) Each deferred deposit transaction shall be made according to a written or

electronic agreement that is:

1. Dated and signed by the customer and the licensee or an authorized

agent of the licensee; and

2. Made available to the commissioner upon request.

(b) The customer shall receive a copy of the agreement referenced in paragraph

(a) of this subsection.

(c) A customer may enter into an agreement referenced in paragraph (a) of this

subsection:

1. In person at the licensed location; or

2. If the customer is a citizen of this state, by telephone or other electronic

means.

(14) A licensee or its affiliate shall not for a fee renew, roll over, or otherwise

consolidate a deferred deposit transaction for a customer.

(15) An individual who enters into a deferred deposit transaction with a licensee shall

not be convicted under the provisions of KRS 514.040.

(16) A licensee who enters into a deferred deposit transaction with an individual shall

not prosecute or threaten to prosecute the individual under the provisions of KRS

514.040.

(17) Each licensee shall conspicuously display in eac h of its deferred deposit business

locations a sign supplied by the commissioner that gives the following notice: "No

person who enters into a post -dated or deferred deposit transaction with this

business establishment will be prosecuted for or convicted of writing cold checks or

of theft by deception under the provisions of KRS 514.040."

(18) A licensee shall not enter into a deferred deposit transaction with a customer who

has two (2) open deferred deposit transactions.

(19) A licensee shall verify a cust omer's eligibility to enter into a deferred deposit

transaction by doing one (1) of the following, as applicable:

(a) If the database is not fully operational, as determined by the commissioner,

the licensee shall verify that the customer meets the eligibi lity requirements

for a deferred deposit transaction under this subtitle. The licensee shall

maintain a database of all of the licensee's transactions at all of its locations

and search that database to meet its obligation under this subtitle; or

(b) If th e database is fully operational, as determined by the commissioner, the

licensee shall promptly and accurately access the database through an internet

real-time connection, and verify that the customer meets the eligibility

requirements for a deferred deposit transaction under this subtitle.