{"data":{"id":"us-ky/krs-286.9-140","jurisdiction":"us-ky","citation":"KRS 286.9-140","heading":"Database of outstanding deferred deposit transactions -- Submitting and","body":"accessing data.\n(1) (a) A common database with real -time access through an internet connection for\ndeferred deposit service business licensees implemented in accord ance with\nthis subtitle shall be accessible to the department and a deferred deposit\nservice business licensee to verify whether any deferred deposit transactions\nare outstanding for a particular person.\n(b) A deferred deposit service business licensee sha ll accurately and promptly\nsubmit such data into the database as may be required by the commissioner\nbefore entering into each deferred deposit transaction in such format as the\ncommissioner may require by administrative regulation or order, including the\ncustomer's name, Social Security number or employment authorization alien\nnumber, address, driver's license number, amount of the transaction, date of\ntransaction, date that the completed transaction is closed, and any additional\ninformation required by the commissioner.\n(c) The commissioner may promulgate administrative regulations in accordance\nwith KRS Chapter 13A to administer and enforce the provisions of this\nsubtitle and to assure that the database is used by deferred deposit service\nbusiness licensees in accordance with this subtitle.\n(2) The commissioner shall impose a fee of three dollars ($3) per transaction for data\nrequired to be submitted by a deferred deposit service business licensee, which fee\nmay be charged to the customer.\n(3) (a) The commissioner may operate the database or may select and contract with a\nthird-party provider to operate the database.\n(b) If the commissioner contracts with a third -party provider for the operation of\nthe database, all of the following apply:\n1. The commissioner shall ensure that the third -party provider selected as\nthe database provider operates the database pursuant to the provisions of\nthis subtitle;\n2. The commissioner shall consider cost of service and ability to meet all\nthe requirements of this subtitle in selecting a third -party provider as the\ndatabase provider;\n3. In selecting a third -party provider to act as the database provider, the\ncommissioner shall give strong consideration to the third -party\nprovider's ability to prevent fraud, abuse, and other unlawful activities\nassociated with deferred deposit transactions and provide additional\ntools for the administration and enforcement of this subtitle;\n4. The third-party provider shall use the data collected under this subtitle\nonly as prescribed in this subtitle and the contract with the department\nand for no other purpose;\n5. If the third -party provider violates this subtitle, the commissioner may\nterminate the contract and the third -party provider may be barred from\nbecoming a party to any other state contracts;\n6. A person injured by the third -party provider's violation of this subtitle\nmay maintain a civil cause of action against the third -party provider and\nmay recover actual damages plus reasonable attorney's fees and court\ncosts; and\n7. The commissioner may require that the third -party provider collect the\nfee assessed in subsection (2) of this section from the licensee. The\nthird-party provider shall remit the fee collected from the licensee to the\ncommissioner no later than the first day of each month. The third -party\nprovider shall deposit any fee collected in a separate escrow account in a\nfederally insured financial institution and shall hold  the fee deposited in\ntrust for the Commonwealth of Kentucky.\n(4) The database shall allow a deferred deposit service business licensee accessing the\ndatabase to do all of the following:\n(a) Verify whether a customer has any open deferred deposit transacti ons with\nany deferred deposit business service licensee that have not been closed;\n(b) Provide information necessary to ensure deferred deposit service business\nlicensee compliance with any requirements imposed by the United States\nTreasury Office of Forei gn Assets Control and United States Treasury Office\nof Financial Crimes Enforcement Network; and\n(c) Track and monitor the number of customers who notify a deferred deposit\nservice business licensee of violations of this subtitle, the number of times a\ndeferred deposit service business licensee agreed that a violation occurred, the\nnumber of times that a deferred deposit service business licensee did not agree\nthat a violation occurred, the amount of restitution paid, and any other\ninformation the commissioner requires by administrative regulation or order.\n(5) While operating the database, the database provider shall do all of the following:\n(a) Establish and maintain a process for responding to transaction verification\nrequests due to technical difficultie s occurring with the database that prevent\nthe licensee from accessing the database through the internet;\n(b) Comply with any applicable federal and state provisions to prevent identity\ntheft;\n(c) Provide accurate and secure receipt, transmission, and stor age of customer\ndata; and\n(d) Meet the requirements of this subtitle.\n(6) When the database provider receives notification that a deferred deposit transaction\nhas been closed, the database provider shall designate the transaction as closed in\nthe database immediately, but in no event after 11:59 p.m. on the day the\ncommissioner or database provider receives notification.\n(7) (a) The database provider shall automatically designate a deferred deposit\ntransaction as closed in the database five (5) days after t he transaction\nmaturity date unless a deferred deposit service business licensee reports to the\ndatabase provider before that time that the transaction remains open because:\n1. Of the customer's failure to make payment;\n2. The customer's payment instrument  or an electronic redeposit is in the\nprocess of clearing the banking system;\n3. The customer's payment instrument is being returned to the deferred\ndeposit service business licensee for insufficient funds, a closed account,\nor a stop payment order; or\n4. Of any other factors determined by the commissioner.\n(b) If a deferred deposit service business licensee reports the status of a\ntransaction as open in a timely manner, the transaction remains an open\ntransaction until it is closed and the database provide r is notified that the\ntransaction is closed.\n(c) 1. Notwithstanding any other law, a licensee may accept, collect, or seek\npayment on a deferred deposit transaction that is designated as closed in\nthe database if the transaction remains unpaid due to a re turned or\ndishonored payment instrument.\n2. A licensee may exercise all rights and remedies otherwise available\nunder law to enforce payment of a deferred deposit transaction\nreferenced in subparagraph 1. of this paragraph if the licensee complies\nwith applicable state and federal collection laws.\n3. This paragraph shall apply whether the returned or dishonored payment\ninstrument is within or after the time periods prescribed under:\na. The Uniform Commercial Code, KRS Chapter 355; or\nb. Federal clearinghouse rules.\n4. Any collection activity permitted under this paragraph shall not:\na. Constitute a renewal, rollover, or consolidation of a deferred\ndeposit transaction; or\nb. Trigger any additional reporting obligations within the database.\n(8) (a) If a deferred deposit service business licensee stops providing deferred deposit\ntransactions, the database provider shall designate all open transactions with\nthat licensee as closed in the database sixty (60) days after the date the\ndeferred deposit service business licensee stops offering deferred deposit\ntransactions, unless the deferred deposit service business licensee reports to\nthe database provider before the expiration of the sixty (60) day period which\nof its transactions remain open and the specific reason each transaction\nremains open.\n(b) The deferr ed deposit service business licensee shall also provide to the\ncommissioner a reasonably acceptable plan that outlines how the deferred\ndeposit service business licensee will continue to update the database after it\nstops offering deferred deposit transactions.\n(c) The commissioner shall promptly approve or disapprove the plan and\nimmediately notify the deferred deposit service business licensee of the\ncommissioner's decision.\n(d) If the plan is disapproved, the deferred deposit service business licensee ma y\nsubmit a new plan or may submit a modified plan for the deferred deposit\nservice business licensee to follow.\n(e) If at any time the commissioner reasonably determines that a deferred deposit\nservice business licensee that has stopped offering deferred d eposit\ntransactions is not updating the database in accordance with its approved plan,\nthe commissioner shall immediately close or instruct the database provider to\nimmediately close all remaining open transactions of that deferred deposit\nservice business licensee.\n(9) (a) The response to an inquiry to the database provider by a deferred deposit\nservice business licensee shall state only that a person is eligible or ineligible\nfor a new deferred deposit transaction and describe the reason for that\ndetermination.\n(b) Only the person seeking the transaction may make a direct inquiry to the\ndatabase provider to request a more detailed explanation of a particular\ntransaction that was the basis for the ineligibility determination.\n(c) Any information regarding a ny person's transaction history is confidential; is\nnot subject to public inspection; is not a public record subject to the disclosure\nrequirements of the Kentucky Open Records Act, KRS 61.870 to 61.884; is\nnot subject to discovery, subpoena, or other comp ulsory process, except in an\nadministrative or legal action arising under this subtitle; and shall not be\ndisclosed to any person other than the commissioner.\n(10) The commissioner may access the database only for purposes of an investigation of,\nexamination of, or enforcement action concerning an individual database provider,\nlicensee, customer, or other person.\n(11) (a) The commissioner shall investigate violations of and enforce this subtitle.\n(b) The commissioner shall not delegate his or her responsibi lities under this\nsubsection to any third-party provider.\n(12) The commissioner may, by administrative regulation or order, do all of the\nfollowing:\n(a) Require that data be retained in the database only as required to ensure\ndeferred deposit service business licensee compliance with this subtitle;\n(b) Require that customer transaction data in the database are archived within\nthree hundred sixty -five (365) days after the customer transaction is closed\nunless needed for a pending enforcement or legal action;\n(c) Require that any identifying customer information is deleted from the\ndatabase when data are archived; and\n(d) Require that data in the database concerning a customer transaction are\ndeleted from the database three (3) years after the customer transac tion is\nclosed or, if any administrative, legal, or law enforcement action is pending,\nthree (3) years after the administrative, legal, or law enforcement action is\ncompleted, whichever is later.\n(13) The commissioner may maintain access to data archived u nder subsection (12) of\nthis section for examination, investigation, or legislative or policy review.\n(14) A deferred deposit service business licensee may rely on the information contained\nin the database as accurate and is not subject to any administrati ve penalty or civil\nliability as a result of relying on inaccurate information contained in the database,\nprovided the deferred deposit licensee accurately and promptly submits such data as\nrequired before entering into a deferred deposit transaction with a customer.\n(15) The commissioner may use the database to administer and enforce this subtitle.\n(16) The commissioner may require a database provider to file a report by March 1 of\neach year containing the following information:\n(a) The total number and dollar amount of deferred deposit transactions entered\ninto in the calendar year ending December 31 of the previous year;\n(b) The total number and dollar amount of deferred deposit transactions\noutstanding as of December 31 of the previous year;\n(c) The total dollar amount of fees collected for deferred deposit transactions as\nof December 31 of the previous year;\n(d) The minimum, maximum, and average dollar amount of deferred deposit\ntransactions entered into, the total dollar amount of the net charge -offs and\nwrite-offs, and the net recoveries of licensees as of December 31 of the\nprevious year;\n(e) The ave rage deferred deposit transaction amount, the average number of\ntransactions, and the average aggregate deferred deposit transaction amount\nentered into per customer as of December 31 of the previous year;\n(f) The average number of days a customer was enga ged in a deferred deposit\ntransaction for the previous year; and\n(g) An estimate of the average total fees paid per customer for deferred deposit\ntransactions for the previous year.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57587","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:15Z","sha256":"c3e7cace6fada59b9ecc04f25b0e5556656bf2082e255efb58857148f285d63f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-286.9-130","next":"us-ky/krs-286.9-990"},"notice":"GroundRules: Original legal text. Not legal advice."}