Question

Explain the different legal options to address a bank teller involved in a check cashing scheme and why or why not the case should involve law enforcement.

Answer 1

whether a state law includes a provision requiring that a list of fees and/or a copy of the license or certificate of registration be conspicuously posted in every check-cashing outlet

Posts Fees/ License/Registration:

Most states that regulate check cashing
require that certain key information be prominently posted in the check-cashing outlet—a copy of the license or certificate of registration (which-ever is appropriate) and a listing of fees charged (where set by law or regulation). Requiring that fees be conspicuously disclosed will increase customer knowledge and encourage competition among outlets. Only one
state—Virginia—requires the posting of information on how a consumer can file a complaint about a check casher.

Deferred deposits :
This refers to whether the state allows or prohibits “deferred de-posit” or “payday lending.” A shaded box in this column means that the
state prohibits deferred deposit. Otherwise, the state explicitly allows this loan practice by check cashers or has not enacted legislation addressing deferred deposit.
“Deferred deposit” or “payday lending” is the practice of holding a customer’s check for deposit at a later date, often up to two
weeks later, for a preagreed fixed fee. These relatively small-sum, short-term loans carry with them very high, effective interest rates, estimated by some consumer advocates to be as much as 2,000 percent on an annual basis. Currently, nine states allow deferred deposit by check cashers,
often through a separate approval/licensing process or with significant restrictions. Seven states prohibit this practice outright, and many more are in the process of considering deferred deposit legislation.

Limit fees :

It refers to whether states cap the amount of fees check cashers can charge customers to cash checks. Most states set fee limits
based on the type of check being cashed (i.e., payroll, government, or personal checks); this column does not, however, indicate what the exact limits are and which type of checks are subject to these limits.
Not all states that regulate check-cashing outlets limit the amount of fees that can be charged for check cashing; in fact, only 20 state statutes and the District of Columbia set fee limits or direct the appropriate regulatory authority to set these limits. Most states use a slidingscale for setting fees. For example, to cash a government or payroll check, some state laws limit fees to 2 percent of the face value of the check or $5, whichever is greater. To cash personal checks or money orders, the fee limit may be 10 percent of the check’s face value or $5, whichever is greater

Civil penalties :

It indicates which states impose civil fines on check cashers who violate the law. Civil penalties are one of a number of tools available to the
state regulatory authority to enforce its check-cashing authority; others include criminal penalties and cease and desist orders. The maximum amount of the fine varies from state to state.

Criminal penalties :
This indicates which states impose criminal fines on check cashers who violate the law.
Criminal penalties are another enforcement tool available to the state. These penalties vary depending on the severity of the offense, and can differ considerably among the states. Almost all state laws that provide for criminal penalties include imprisonment in lieu of or in addition to a monetary fine. Many states believe that criminal penalties are the best deterrent against check-cashing fraud.

Private Right of Action:

This right means that individual consumers or
groups of consumers who have been injured by check-cashing fraud can sue under the law to recover damages and enjoin illegal practices. If a
private right of action is not provided for in a state’s law, then only the state can prosecute violations of the law, and individuals must use other remedies to pursue individual damages.

These are the legal aspects.