DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000. - 12404.]

Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1.

§§ 12000–12404 · 97 sections

1. CHAPTER 1. Definitions §§ 12000–12005 · 8 sections

   • § 12000 This division is known and may be cited as the Check Sellers, Bill Payers and Proraters Law.
   • § 12001 Unless the context otherwise requires, the definitions set forth in this chapter govern the construction of this division.
   • § 12002 A check seller is a person: (a) who, for compensation, engages, in whole or in part, in the business of selling checks, drafts, money orders, or other…
   • § 12002.1 A prorater is a person who, for compensation, engages in whole or in part in the business of receiving money or evidences thereof for the purpose of…
   • § 12002.2 A business agent, for the purpose of this division is a person who engages in business as a prorater as defined in Section 12002.1 as an incident to the…
   • § 12003 “Commissioner” means the Commissioner of Financial Protection and Innovation, or any deputy, investigator, auditor, or any other person employed by the…
   • § 12004 “Licensee” means any individual or corporation licensed by the commissioner to engage in the business of a business agent, and any corporation licensed by the…
   • § 12005 “Mobile unit” means a vehicle or other movable means from which the business of selling checks, drafts, or money orders is conducted.
2. CHAPTER 2. Application of Division §§ 12100–12108 · 10 sections

   • § 12100 This division does not apply to any of the following: (a) Any person, or his or her authorized agent, doing business under license and authority of the…
   • § 12101.5 In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
   • § 12102 Any person who willfully violates any provision of this division, or who willfully violates any rule or order under this division, shall, upon conviction, be…
   • § 12102.1 A licensee under this division or any person engaged in the same type of business as licensed under this division whether said person is licensed or not shall…
   • § 12103 Whenever in the opinion of the commissioner any person is engaged in business as a check seller as defined in this division without a license from the…
   • § 12104 A nonprofit community service organization that meets all of the following criteria shall be exempt from any requirements imposed on proraters pursuant to this…
   • § 12105 (a) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision…
   • § 12106 (a) The commissioner may do the following, at his or her discretion: (1) Make public or private investigations within or outside of this state necessary to…
   • § 12107 (a) If, upon inspection or investigation, based upon a complaint or otherwise, the department has cause to believe that a person is engaged in business without…
   • § 12108 (a) The remedies available to the commissioner pursuant to this division are not exclusive and may be sought and employed in any combination deemed advisable…
3. CHAPTER 3. Licensing §§ 12200–12225 · 23 sections

   • § 12200 No person shall engage in the business, for compensation, of selling checks, drafts, money orders, or other commercial paper serving the same purpose, or of…
   • § 12200.2 A license as a business agent or special prorater may be issued to an individual.
   • § 12200.5 The commissioner shall classify and license applicants for a proraters license in accordance with the nature of their existing or proposed business and the…
   • § 12201 (a) An application for a license shall be in writing, under oath, and in a form prescribed by the commissioner and shall contain the name, and the address both…
   • § 12202 If the business is to be conducted at a specific address or addresses, the address or addresses at which the business is to be conducted shall be included in…
   • § 12203 If the business is to be conducted from a mobile unit, the California state registration number or other identification of such mobile unit and the area in…
   • § 12204 The application shall specify the type of business for which a license is requested and shall also contain such other information as the commissioner may…
   • § 12205 (a) A licensed bill payer, general prorater, or special prorater who does not qualify to make use of agencies in the conduct of its business at all times shall…
   • § 12206 (a) If the applicant is to engage in the business of receiving money for the purpose of paying bills, invoices or accounts of an obligor, the applicant shall…
   • § 12207 The bond shall be approved by the commissioner. The bond shall run to the state for the use of the state and of any person who has a cause of action against…
   • § 12208 The bond shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this division and of all rules and regulations made by…
   • § 12209 The bond shall remain in force and effect until the surety is released from liability by the commissioner, or until the bond is canceled by the surety.
   • § 12212 No action may be brought on the bond by any person after the expiration of two years from the time when the act or default complained of occurred.
   • § 12213 When an action is commenced on the bond of a licensee the commissioner may require the filing of a new bond, and immediately upon the recovery of any action on…
   • § 12214 (a) An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee…
   • § 12216 (a) Upon the filing of the application and the payment of the fees and the approval of the bond, the commissioner shall investigate and examine the following:…
   • § 12217 Each license shall state the following: (a) The name of the licensee, and if the licensee is a partnership or association the names of the members, or if the…
   • § 12218 The license shall be kept conspicuously posted in the principal place of business of the licensee.
   • § 12219 The license is not transferable or assignable.
   • § 12220 The commissioner may by regulation require licensees to file at such times as he may specify such information as the commissioner may reasonably require…
   • § 12221 Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for the license for any of the following reasons: (a) A false…
   • § 12223 The commissioner may require a licensee, in addition to the bond provided in Section 12206, to obtain an adequate fidelity bond for each officer, employee,…
   • § 12225 The commissioner may issue a duplicate of a license that has been lost, stolen, or destroyed, or for a certificate which the licensee desires to replace, upon…
4. CHAPTER 4. Licensee Regulations §§ 12300–12332 · 50 sections

   • § 12300 The commissioner may make general rules and regulations and specific rulings, demands, and findings for the enforcement of this division.
   • § 12300.1 Licensees shall observe reasonable precautions against theft or alteration of checks, drafts or money orders, and against burglary or holdup.
   • § 12300.2 Every person engaging in the business of a check seller shall conduct the business under his or her true name unless he or she has complied with Chapter 5…
   • § 12300.3 All funds received by a licensee or its agents from the sale of checks, drafts, money orders, or other commercial paper serving the same purpose and for the…
   • § 12300.4 Prior to such separation and transmittal to the licensee or deposit by its agent such funds received by said agent may be used by said agent for the sole…
   • § 12300.5 An amount equal to all such funds received by a licensee shall be separated from the funds of the licensee and deposited in its trust account not later than…
   • § 12300.6 Prior to separation and deposit by the licensee such funds may only be used by the licensee for the making of change or the cashing of checks in the normal…
   • § 12301 A licensee may establish branch offices or agencies if it is qualified under the provisions of Section 12205 and if it expressly assumes responsibility for the…
   • § 12301.1 A licensee within 10 days after establishing a mobile unit, a branch office or agency location shall notify the commissioner in writing and shall furnish the…
   • § 12301.2 A check, draft, or money order sold by a licensee shall be drawn on an account of a licensee maintained at a bank authorized to do business in the State of…
   • § 12301.3 A licensee shall not permit any officer, employee, or agent to sell any check, draft, or money order unless the signature of the person signing the same is on…
   • § 12301.4 A licensee shall terminate and cancel any agency immediately upon instruction from the commissioner and when it has been established (a) that the agent has…
   • § 12301.5 No agent of a licensee shall issue or cause to be issued any check, draft, or money order, or other commercial paper serving the same purpose which is drawn…
   • § 12302 Whenever a licensee desires to change his place of business to a street address other than that designated in his license or desires to change the place or…
   • § 12303 Every licensee shall keep and use in his business books, accounts and records in accordance with good accounting practice and which will enable the…
   • § 12304 (a) Each licensee, except a special prorater, shall submit to the commissioner, at such licensee’s own expense, an audit report containing audited financial…
   • § 12305 For the purpose of discovering violations of this division the commissioner may at any time investigate the business and examine the books, accounts, records,…
   • § 12306 The cost of every examination of a licensee or other person subject to this division shall be paid to the commissioner by the licensee or person examined, and…
   • § 12307 The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony he requires relative to any examination or…
   • § 12307.1 The commissioner may commence and prosecute actions and proceedings to enjoin violations of this division or violations of orders or decisions of the…
   • § 12307.2 If the commissioner finds as a result of an examination or report that a licensee is insolvent or has been insolvent or is conducting or has conducted business…
   • § 12307.3 Whenever as a result of an examination or report it appears to the commissioner that: (a) The capital of any licensee is impaired; (b) Any licensee is…
   • § 12307.4 Whenever the commissioner has taken possession of the property and business of a licensee the commissioner may petition the superior court for the appointment…
   • § 12307.5 (a) For any licensee, a disciplinary action taken by the State of California, another state, an agency of the federal government, or another country for an…
   • § 12309 (a) A schedule of the fees charged by a licensee shall be posted in a conspicuous place in the place of business of the licensee and its agents. A licensee and…
   • § 12310 A licensee under this division shall not sell checks payable to bearer, to cash, or to the purchaser, but a licensee may sell a check in which the name of the…
   • § 12311 No licensee shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published,…
   • § 12312 An agreement between one licensed to engage in the business of selling checks, drafts, money orders, or other commercial paper serving the same purpose, and…
   • § 12313.5 Nothing in this chapter shall be construed as authorizing the examination, inspection or auditing of the books and records of any client of a business agent…
   • § 12314 The total charges received by a prorater, or any other person for the prorater’s services, may not exceed in the aggregate twelve percent (12%) for the first…
   • § 12314.1 A cancellation fee or termination penalty may not be charged to a debtor.
   • § 12315 A prorater shall not receive any fee unless he has the consent of at least 51 percent of the total amount of indebtedness and of the number of creditors listed…
   • § 12315.1 A prorater shall notify, in writing, all creditors listed in the prorate contract of the debtors desire to engage the services of the prorater within five days…
   • § 12316 If a prorater contracts for, receives or makes any charge in excess of the maximum permitted by this division, except as the result of an accidental and bona…
   • § 12317 A prorater shall not purchase from a creditor any obligation of a debtor.
   • § 12318 A prorater shall not take: (a) Any contract, promise to pay, or other instrument which has any blank spaces when signed by a debtor; (b) Any negotiable…
   • § 12319 Every contract between a prorater and a debtor shall: (a) List every debt to be prorated with the creditor’s name and disclose the total of all such debts; (b)…
   • § 12320 A prorater shall deliver a copy of any contract or agreement between the prorater and a debtor to the debtor immediately after the debtor executes it, and the…
   • § 12321 Unless paid by check or money order a prorater shall deliver a receipt to a debtor for each payment within five (5) days after receipt of a payment.
   • § 12322 At least once in each six (6) months, the prorater shall render an accounting to the debtor which shall itemize the total amount received from the debtor, the…
   • § 12323 A prorater shall not lend money or credit.
   • § 12324 A prorater shall not: (a) Offer, pay, or give any cash, fee, gift, bonus, premium, reward, or other compensation to any person for referring any prospective…
   • § 12325 A prorater shall not solicit or require a debtor to purchase or agree to purchase any policy of insurance.
   • § 12326 A special prorater shall not advertise in any manner or otherwise hold himself out to the public as a general prorater or as qualified to do business as a…
   • § 12327 Nothing in this division shall be deemed to authorize the performance, directly or indirectly, of an act or acts constituting the practice of law by a…
   • § 12328 (a) No collection agency may be maintained in the same premises as a prorating organization unless such prorating organization is exempt under the provisions…
   • § 12329 It shall be unlawful for any prorater to disclose the list of creditors of a debtor to any individual or firm for the purpose of soliciting the accounts and…
   • § 12330 The commissioner shall have power and authority to promulgate rules and regulations governing the form and wording of advertising to be used by proraters. The…
   • § 12331 Within the organization of each prorater corporation, either as an owner, officer, or employee, there shall be one or more persons possessing a minimum of five…
   • § 12332 (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible…
5. CHAPTER 5. Revocation of Licenses §§ 12400–12404 · 6 sections

   • § 12400 The commissioner may, upon reasonable opportunity to be heard, suspend or revoke any license issued pursuant to this division, if he finds that: (a) The…
   • § 12401 The commissioner may upon three days’ notice and a hearing, suspend any license for a period not exceeding 30 days, pending investigation.
   • § 12401.1 The commissioner may by order summarily suspend or revoke the license of a licensee who fails to pay the license fee prescribed by Section 12214 within 10 days…
   • § 12402 Except where a shorter time for setting the hearing is prescribed in this division, all hearings under this division shall be conducted in accordance with…
   • § 12403 Every order, decision, license, or other official act of the commissioner is subject to review in accordance with law.
   • § 12404 (a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from…