Current through Register Vol. 51, No. 3, September 1, 2024
RELATES TO:
KRS
286.9-010(6),
286.9-075,
286.9-100(1),
(7), (9), (10), (18), (19),
286.9-140
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
286.9-100(9) prohibits
licensees from having more than two (2) deferred deposit transactions from any
one (1) customer at any one (1) time and limits the total proceeds received by
a customer from all deferred deposit transactions to $500.
KRS
286.9-140(1) requires the
commissioner to implement a common database with real-time access through an
internet connection accessible to the department and licensees to verify
whether any deferred deposit transactions are outstanding for a particular
person and authorizes the commissioner to adopt rules to administer and enforce
KRS
286.9-140. This administrative regulation
establishes requirements for licensee use of the database established pursuant
to
KRS
286.9-140.
Section
1. Definitions. The following shall be additional definitions of
"closed" or "close" under
KRS
286.9-010(6)(e):
(1) The customer's payment instrument was
unpaid and the licensee has sold the underlying debt to a non-affiliated third
party without recourse;
(2) The
underlying debt represented by the customer's payment instrument has been
discharged in bankruptcy;
(3) The
database provider has designated the deferred deposit transaction concerning
the customer's payment instrument as closed pursuant to
KRS
286.9-140(7); or
(4) The licensee has reported to the database
provider that the deferred deposit transaction concerning the customer's
payment instrument is closed following being held open pursuant to
KRS
286.9-140(7).
Section 2. Deferred Deposit
Database Requirements.
(1) A licensee shall
institute procedures and maintain an accounting system designed to:
(a) Prevent the licensee from entering into
transactions with a customer in violation of
KRS
286.9-100(9), including
procedures for:
1. Maintaining a record of all
current transactions with the licensee; and
2. Checking the record of current
transactions with the database prior to issuance of a new transaction;
and
(b) Generate reports
that will readily permit examination and verification of compliance with
KRS
286.9-100(9),
KRS
286.9-140, and this section by department
examiners.
(2) For each
deferred deposit transaction, a licensee shall submit:
(a) The customer's date of birth;
(b) The check number of the payment
instrument;
(c) The database
verification fee charged to the customer, if any;
(d) The service fee charged to the customer;
and
(e) The date the payment
instrument was deposited or otherwise presented for payment.
(3) A licensee shall not cause a
closed deferred deposit transaction to be reopened in the database unless:
(a) The deferred deposit transaction was
closed by reason of clerical error by the licensee;
(b) The licensee causes the deferred deposit
transaction to be reopened on or before the close of business on the business
day after the transaction was closed; and
(c) Reopening the transaction would not cause
the consumer to exceed the transaction limits set forth in
KRS
286.9-100(9).
(4) A licensee shall not accept,
collect, or seek payment on a deferred deposit transaction that is designated
as closed in the database.
(5) A
licensee that has reported to the database provider that a deferred deposit
transaction is open beyond the maturity date pursuant to
KRS
286.9-140(7) shall
immediately notify the database provider when the transaction becomes
closed.
(6) A new licensee or an
existing licensee applying for an additional location shall establish an
account with the database provider for each location prior to the time of
application.
STATUTORY AUTHORITY:
KRS
286.9-090(1),
286.9-100,
286.9-140(1)
