400.11 Fees.

(a) Except with respect to the cashing of checks, drafts or money orders for payees of such checks, drafts or money orders that are other than natural persons, a licensee shall be permitted to charge or collect a fee for cashing a check, draft or money order not to exceed:

(1) [1.5] 2.19 per centum of the amount of the check, draft or money order [; provided, however, effective January 1, 2006, such per centum of the amount of the check, draft or money order shall be increased by an additional 0.03 per centum] in addition to any increase that shall [have been heretofore or] hereafter be made pursuant to subdivision (b) of this section [and such additional 0.03 per centum shall not itself be subject to any increase pursuant to subdivision (b) of this section]; or

(2) $1, whichever is greater.

(b) Effective January 1, 2005, and annually thereafter, the maximum per centum fee specified in subdivision (a) of this section, shall be increased by a per centum amount, based upon an increase in the consumer price index for the New York – [Northern N.J.] Newark – [Long Island] Jersey City, NY - NJ [- CT] - PA area for all urban consumers (annual CPI-U), as reported by the Bureau of Labor Statistics of the U.S. Department of Labor for the calendar year preceding the year in which such increase is made compared to such annual CPI-U for the year prior to such preceding year. The maximum per centum fee that may be charged or collected for cashing a check, draft or money order pursuant to this section in effect at such time shall be multiplied by such computed per centum amount and the result added to such maximum per centum fee. The resulting sum shall be the revised maximum per centum fee, which shall be posted upon the internet site of the Department of Financial Services (www.dfs.ny.gov) by the superintendent not later than 45 days following the public release of such annual index by the U.S. Department of Labor. Such revised maximum per centum fee shall be calculated and posted to the nearest one-hundredth of a per centum. Such revised maximum per centum fee shall be effective not later than 45 days after the superintendent shall have notified the Majority Leader of the Senate, the Speaker of the Assembly, and the chairperson of the Senate and Assembly Committees on Banks of his/her intention to change the maximum per centum fee pursuant to the provisions of section 372.3 of the Banking Law and shall continue in effect until revised and increased in the next succeeding year based upon an increase in such annual index. If such CPI-U does not increase in any one year, the maximum per centum fee in effect during the year in which the index does not increase shall remain unchanged in the next succeeding year. Nothing herein shall be deemed to prohibit the superintendent from setting, by regulation, a different maximum per centum fee at any time where the superintendent shall find that such a fee is necessary and appropriate to protect the public interest and to promote the stability of the check cashing industry for the purpose of meeting the needs of the communities that are served by check cashers. No maximum fee shall apply to the charging of fees by licensees for the cashing of checks, drafts or money orders for payees of such checks, drafts or money orders that are other than natural persons.

A revised Regulatory Impact Statement (“RIS”), Regulatory Flexibility Analysis (“RFA”), Rural Area Flexibility Analysis (“RAFA”) and Job Impact Statement (“JIS”) are not required for the adoption of the amendment to 3 NYCRR 400.11 because the non-substantive revision to the regulation does not require a change to the previously published Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement.

As a rule that requires a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2022, which is no later than the 3rd year after the year in which this rule is being adopted.

The New York State Department of Financial Services (the “Department”) received two comments on the proposed amendment to 3 NYCRR 400.11. These comments, and the Department’s responses, are summarized below.

The setting of a maximum fee is conducted in accordance with the requirements of Section 372 of the New York Banking Law, which is intended to provide a maximum fee charged for cashing checks, thus promoting the stability of the check cashing industry while protecting consumers by preventing unreasonable or excessive fees.

The two comments the Department received take diametrically opposed positions on the proposed increase in the current maximum fee of 2.11% (established by the Department in February 2019) to 2.19%. One individual comment submitted states that the increase is unfair to those who need the service while a check cashing industry group commented that the increase was inadequate.

The Department has carefully considered the industry’s concern that the current maximum fee provided for under section 400.11 is insufficient, even as adjusted annually pursuant to subdivision (b) thereof. The Department engaged extensively with the industry over many months to ensure it had the information needed based on solid methodology and comprehensive and accurate data with appropriate level of representation of the industry. The Department must strike a balance between the fee increase requested by check cashers and the interests of their customers in setting a maximum fee. Based on the information submitted by the industry for the fee increase and consistent with the Department’s obligation to maintain a stable market for check cashers while also protecting consumers from excessive and unnecessary fees, the Department has determined that the increase to 2.19% is sufficient and necessary.