The North Carolina Office of the Commissioner of Banks charters, licenses and regulates a variety of financial institutions within the State. Answers to many of your check cashing questions and concerns may be found in this section. Please use any of the links to the left for additional information. If you still need assistance, please contact Lisa Johnson at email@example.com.
Do I need a license to cash checks in North Carolina?
Yes. A business that holds itself out to be a check-cashing service (i.e., advertises) or charges a fee greater than $2.00 per check is required to be licensed by NCCOB.
How do I apply for a license to cash checks?
Complete the online application available on our website under New Application and submit with the application/investigation fee of $750.00.
Is the license to cash checks perpetual?
No. The license to cash checks must be renewed annually between July 1st and September 1st. If not renewed, the license will expire on September 30. The renewal option is available once you log into your NCCOB Online Account. The renewal fee is $250 for the first office and $50 for each additional office or branch location. The licensee is required to provide an updated fee schedule and liquidity verification during the renewal period.
Are check-cashing licensees required to submit annual reports?
Yes. Licensees are required to submit annual information each year between July 1st and September 1st through the NCCOB Online Application. Licensees are asked to provide information relating to the number and dollar amount of checks cashed, fees collected, returned checks, and charge offs., as well as uploading the most recent Financial Crimes Enforcement Network (FinCEN) Money Services Business (MSB) registration, if applicable.
Are check-cashing licensees required to register as a money services business (MSB) with FinCEN and comply with the Bank Secrecy Act (BSA)?
Maybe. The Code of Federal Regulations defines a check casher as a person that accepts checks or monetary instruments in return for currency or a combination of currency and other monetary instruments or other instruments, in an amount greater than $1,000 for any person on any day in one or more transactions. If you cash checks over $1,000 for any person in one or more transactions, you must register as an MSB with FinCEN.
What is an effective anti-money laundering program?
If you are registered as an MSB with FinCEN, you are required to maintain an effective anti-money laundering program. An effective anti-money laundering program is one that is reasonably designed to prevent the money services business from being used to facilitate money laundering and the financing of terrorist activities. The program shall be commensurate with the risks posed by the location and size of, and the nature and volume of the financial services provided by, the money services business. The program shall be in writing, and a money services business shall make copies of the anti-money laundering program available for inspection to the Department of the Treasury upon request. At a minimum the program should include written policies and procedures, designate a compliance officer, provide education and/or training to appropriate personnel, and provide for an independent review.
The full requirements for BSA can be found on the Code of Federal Regulations website.
Can an independent review be performed by the designated compliance officer?
No. Although the review may be conducted by an officer or employee of the MSB, it cannot be conducted by the compliance officer or other individual with direct responsibility for BSA compliance.
Are check casher licensees required to maintain separate records for check cashing activity?
Yes. Check-cashing business regulations require that all books, accounts, and records shall be maintained separate from any other business; however, effective December 1, 2011, any licensee that derives less than 20% of annual gross revenue from its check cashing business is exempt from the requirement to maintain separate books, accounts, and records. “Licensee” means a person or entity licensed to engage in a check cashing business under Chapter 53, Article 22 of the North Carolina General Statutes. Also, the name on the bank account must match the name of the business licensed by the NCCOB.
What information should be maintained in check cashing transaction journals?
Licensees should maintain a record of each transaction, preferably in an electronic log, that includes the transaction date, customer name, check type, check amount, and fee charged.
Do I have to give receipts to customers for each transaction?
Yes. The North Carolina Check Cashing Act requires that each customer cashing a check be provided a receipt showing the name or trade name of the licensee, the transaction date, amount of the check, and the fee charged.
How often are examinations performed?
The NCCOB strives to examine every licensee after being licensed for six months and every three years thereafter. While the NCCOB does recognize a need to maintain a physical presence within the check-cashing industry, the majority of check-cashing examinations are conducted offsite.
What documents are requested for an examination?
The purpose of the examination is to review compliance with the North Carolina Check Cashing Act and the BSA. The documents requested to be provided for a designated scope period include transactions log, cashed check samples, any currency transaction reports filed, check cashing authorization forms for business entities, check cashing policy and procedures, BSA/AML policy and procedures, training records, latest independent review, fee schedule, sample receipt, bank statements, and financial statement.
What activities can be performed by the licensee in NCCOB Online?
Users can log in to NCCOB Online to perform various activities including to file an annual report, renew licenses, make payments, update telephone and facsimile numbers for main offices, make changes to branch offices, and upload examination documents. For other changes or updates, please contact Lisa Johnson via electronic mail at firstname.lastname@example.org.
What are the requirements to cash a check made payable to a business entity?
The North Carolina Check Cashing Act requires licensees that cash checks made payable to a payee other than a natural person, such as a business, to obtain appropriate documentation from the owner of the payee clearly indicating the authority of the natural person cashing the check, draft, or money order of behalf of the payee. The NCCOB expects licensees to have appropriate policies and procedures in place prior to cashing checks made payable to a business entity.