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Every owner of a check cashing business in California must obtain a permit from the Attorney General's Department of Justice under Civil Code section 1789.37 and the Check Casher Permit Program regulations at Title 11, Division 1, Chapter 13.5 of the California Code of Regulations. This permit program is administered by the Department of Justice, not the Department of Financial Protection and Innovation (DFPI), and is legally distinct from the DFPI-administered licenses that apply to related financial services. However, DFPI has regulatory authority under the CCFPL. Law Offices of Alan Abergel, P.C. ("LOAA") represents California check cashing businesses in DOJ permit applications, ongoing compliance, and permit defense as well as with DFPI's enforcement action defense.
Businesses that handle checks, funds, or payment instruments in California may be subject to several distinct regulatory regimes, and confusing one for another is a common and costly error:
Check cashers, who cash checks, warrants, drafts, money orders, or similar commercial paper for a fee, obtain a permit through the DOJ's Check Casher Permit Program.
Check sellers, bill payers, and proraters, who sell payment instruments or handle funds on behalf of an obligor for bill payment or debt proration, are licensed separately by the DFPI under the Check Sellers, Bill Payers, and Proraters Law.
Money transmitters, who transmit money domestically or internationally, are licensed by the DFPI under the Money Transmission Act.
Deferred deposit transaction (payday) lenders, who make small consumer loans secured by a postdated check, are licensed by the DFPI under the California Deferred Deposit Transaction Law.
A single business may need more than one of these authorizations if its operations span multiple activities, such as a location that both cashes checks and sells money orders. As a California check cashing license attorney resource, LOAA advises businesses on which of these frameworks, or combination of frameworks, applies to their specific operations through written business model legal opinions.
The permit requirement applies to any person or entity that, for compensation, engages in the business of cashing checks, warrants, drafts, money orders, or other commercial paper serving the same purpose.
LOAA advises retail operators on whether an incidental check-cashing service offered alongside a primary retail business falls within an exemption or exclusion or requires a permit.
DOJ check casher permit applications are submitted on form BCIA 4130, Application for Check Casher Permit. As DOJ Check Casher Permit Program counsel, LOAA assists applicants with permit application requirements.
Once issued, a check casher permit must be maintained through timely renewal, and the current regulations specify that a surrendered or revoked permit cannot be renewed. LOAA assists permit holders with check casher permit renewal filings, amendments reflecting changes to the licensed business, and the filing of a new application for each additional business location, since additional locations are not covered under a single existing permit but instead require separate applications.
Material changes in the ownership of a permitted check cashing business require corresponding updates to the Department, since the individuals and entities identified as owners, partners, or qualifying officers and shareholders on the original application form the basis of the Department's background review. LOAA advises permit holders on the filings required when ownership of a permitted business changes.
The Department of Justice has authority to investigate permitted check cashers and to suspend or revoke a permit for violations of the Check Cashing Act or its implementing regulations. As check casher permit defense counsel, LOAA represents permit holders in DOJ investigations and permit enforcement proceedings, including responses to Department inquiries, negotiation with the Department to resolve identified deficiencies, and defense in formal permit suspension or revocation proceedings, where the loss of a permit threatens the business's ability to operate.
Separate from DOJ permit enforcement, the DFPI retains authority to investigate and discipline check cashers whose conduct violates the California Consumer Financial Protection Law, ("CCFPL") including engaging in unlawful, unfair, deceptive, or abusive practices. LOAA represents check cashers in DFPI investigations and enforcement matters arising under this authority, in addition to DOJ permit defense.
Some check cashing businesses separately qualify as money services businesses (MSBs) under federal law, triggering registration with the Financial Crimes Enforcement Network (FinCEN) and compliance with the Bank Secrecy Act's anti-money laundering requirements, independent of the state DOJ permit. As check casher MSB registration counsel, LOAA advises check cashers on whether their operations trigger federal MSB status and coordinates state permit compliance with federal registration obligations.
Law Offices of Alan Abergel, P.C. represents California check cashing businesses in DOJ Check Casher Permit Program applications, renewals, amendments, and permit defense, and advises on the interplay between DOJ permitting and DFPI or federal MSB obligations. Contact LOAA to discuss your check casher business's legal services needs.
Disclaimer: The information on this page is provided for general informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this content. Every legal matter is unique, and you should consult directly with a qualified attorney regarding your specific circumstances.
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