Check Cashing Account Addendum (Addendum A )

Transcription

1 1. The Parties: This Check Cashing Account Addendum is entered into as part of the Specialized Banking Services Master Agreement concurrently or previously entered into between Merchants Bank of California, N.A.(hereinafter referred to as Merchants ), and, (hereinafter referred to as Check Casher ), and, (hereafter "Principal"). This addendum is herein referred to as the "Addendum" and the Specialized Banking Services Master Agreement, is herein separately referred to as the "Master Agreement" and the Master Agreement together with this and all addendums thereto is herein referred to as the "Agreement." 2. Incorporation of Master Agreement: This Addendum is a part of, and incorporates by reference all of the terms of the Master Agreement. 3. Business Purpose: Check Casher operates a retail business which offers financial services to the general public such as check cashing privileges and the sale of money orders, among other services, and in connection with its business, Check Casher desires to have ready access to significant amounts of currency and coin, specialized banking services, including, but not limited to, cash ordering privileges, and check processing and check clearing services. 4. Acceptance of Account: Subject to the terms and conditions of this Agreement, Merchants agrees to open an Account in the name of the Check Casher or to maintain an Account that is already open, and to provide banking services for Check Casher in the operation of its check cashing business. Merchants shall, subject to the terms, conditions and limits set forth herein: (1) process Check Casher s deposits, clearings and other transactions; (2) provide cash ordering services; (3) in Merchant s sole discretion, which Merchants may withdraw at any time, allow overdraft privileges, or permit credit against uncollected funds or uncleared items, if at all only in such amounts deemed appropriate by Merchants in its sole discretion; and (4) perform other banking services for Check Casher as considered appropriate by Merchants. 5. Use of Account, Instructions: Check Casher agrees to use the Account solely for its normal and customary lawful business purposes. Check Casher represents that its primary business is providing check cashing services in the form of cashing payroll checks, welfare checks, social security checks and other checks typically cashed by the general public. Check Casher may also offer other services to the general public, including, but not limited to, the sale of money orders, phone cards, the issuance of food stamps, the processing of funds transfers, the payment of utility bills, and cash advances under Visa and MasterCard charge cards. Check Casher shall limit its uses of the Account to only those functions that are normal, lawful and necessary part of its business. Check Casher shall not use any funds obtained through this Account to fund, either directly or indirectly, any other check cashing operation, or any other business or personal investment of Check Casher or Principal, or for any other purpose whatsoever. Merchants is authorized and entitled to rely on as authentic and genuine any instructions, directions or communications to Bank by any person purporting to act on behalf of Check Casher, if by written communication, facsimile or responding to a communication from the Bank, or which Bank in good faith without any investigation or inquiry believes to emanate from an authorized representative of Check Casher, whether or not the person is in fact authorized by Check Casher generally or with respect to that specific transaction, and regardless of the nature of the transaction, account history, previous endorsements or past authorizations or lack thereof pertaining to that or any other account. Bank may, in its sole discretion, at any time require written authorization from an authorized signer on the account or any person in authority for Check Casher. 4. Customer Compliance Obligations a) Customer shall assume total responsibility for its, and for its employees and agent's compliance with the Bank Secrecy Act ( BSA ) and all state and federal banking, money laundering, money transmission, money order, check cashing, trust fund, secrecy, privacy, and other applicable laws. b) Customer understands and warrants that it and its employees and agents (hereinafter collectively referred to as Customer ) will comply with the following BSA regulations, applicable State regulations, and MERCHANTS BANK OF CALIFORNIA, N.A. policies at all times: i. Customer will never commit or knowingly facilitate the crime of money laundering. ii. Customer will complete an IRS CTR Form 104 and obtain a copy of the customer s identification before processing a transaction totaling more than $10,000 (including fees) or when Customer recognizes that two or more currency transactions were conducted on the same day by the same person or on behalf of the same person and the sum of the transactions exceeds $10,000 (multiple transactions), if applicable. iii. Customer will monitor transactions in order to detect individuals who may be attempting to structure transactions to avoid the BSA s requirement. Structured transactions occur when customers break down amounts of currency into amounts less than the legal thresholds and conduct transactions for these lesser amounts over the course of a few days or during the same day. iv. Customer will complete and send a Suspicious Activity Report to FinCEN and obtain a copy of the customer s identification OR contact the IRS/CID at within thirty days of discovering the suspicious transaction(s). v. Customer will obtain a copy of its customer s identification and maintain records of money orders of $2,000 or more, as required, if applicable. vi. Customer will obtain a copy of its customer s identification and maintain records of money transfers of $3,000 or more, as required, if applicable. CM-0001a (Rev. 4/13) PC Page 1 of 5

2 vii. Customer will.: (a) obtain as much information as possible about each customer, especially regular customers in order to detect suspicious transactions, (b) ask customers about the source of funds used to conduct frequent and/or large currency transactions, especially when Customer considers a transaction suspicious, (c) report transactions, which Customer consider suspicious and (d) reject transactions, which Customer knows would result in the laundering of funds. viii. Customer WILL NEVER ALLOW AN EMPLOYEE WHO IS NOT TRAINED IN BANK SECRECY ACT COMPLIANCE TO ACCEPT OR PROCESS CURRENCY TRANSACTIONS. ix. Customer will follow MERCHANTS BANK OF CALIFORNIA, N.A. policies concerning BSA compliance, which MERCHANTS BANK OF CALIFORNIA, N.A. may establish from time to time. Customer shall indemnify and hold harmless MERCHANTS BANK OF CALIFORNIA, N.A., its officers, directors, and shareholders for and against any loss, liability or expense, including attorneys fees and costs, caused directly or indirectly by a failure of Customer to perform its compliance obligations. x. Customer will register as a money service business with FinCEN and the State Department of Justice and will renew the registration every two years, if applicable. 6. Discretion to Accept Checks; Warranties: Bank may for any reason, in its sole discretion decline to honor, purchase, cash or accept for deposit in the Account any check or instrument. Bank reserves the right in its sole discretion to restrict the type of checks Bank will honor, purchase, cash or accept for deposit in the account. Any item may be rejected by Bank at any time before final settlement. Without limiting its discretion provided for herein, Bank may from time to time impose additional minimum requirements than those forth herein below. By presenting any check to Bank, Check Casher warrants and represents that the check is fully authorized and properly made and issued in all respects, issued in the regular course of business for legitimate business purposes and obligations, payable to a proper and existing payee, and complies with all terms and conditions of all other warranties or requirements established in this agreement or by the Commercial Code for Bank to be a holder in due course for value and without notice of any defect or deficiency. 7. Cash Orders: During the term of this Agreement, Check Casher may on any Business Day place orders for currency and coin not exceeding an amount reasonably necessary to cover Check Casher s anticipated check cashing and other normal and customary needs through the next Business Day. Orders placed prior to the Order Cutoff Time (as specified by Merchants from time to time) will be made available the next Business Day. Orders placed after the Order Cutoff Time will be made available the second Business Day following placement. Business Day as used herein means every day national banks located in Los Angeles, California are required by law to be open for business. 8. Analysis Fees: Check Casher agrees to pay analysis fees to Merchants for services provided, with such charges to be established by Merchants at its sole discretion. These charges may change from time. Current charges are made available to Check Casher and Principal concurrently with or prior to signing of this Agreement. Merchants may effect changes to these service charges upon 30 days written notice, sent to the last known address of Check Casher. These charges will be debited from the Check Casher s account on a monthly basis on a day determined solely by Merchants. No representation is made by Merchants as to its charges to any other customers. 9. Interest Charge: In addition to the analysis fees, Check Casher agrees to pay an Interest Charge on funds made available to it by Merchants. The Interest Charge shall be calculated by multiplying the Balance to Support Services (as defined below ) of the Account, if negative, times a rate of interest (calculated on the basis of a 360-day year from the actual days lapsed) to be determined from time to time by Merchants, with current rate equal to eighteen percent (18%) per annum. No representation is made by Merchants as to the rate charged or to be charged to any other customers, which may be less or more. 10. Calculation of Average Ledger Balance, Average Collected Balance and Balance to Support Services: The Average Ledger Balance shall be determined monthly by adding the daily Ledger Balance in the Account for each day of the month, then dividing that sum by the number of days in the month. The Average Uncollected Funds for a month shall be determined by adding together the daily uncollected balance for each calendar day of the month, then dividing that sum by the number of calendar days in the month. The Average Collected Balance is then determined by deducting from the Average Ledger Balance, the Average Uncollected Funds for the month. The Balance to Support Services is then determined by deducting from the Average Collected Balance an amount equal to 15% of the Average Collected Balance, if the Average Collected Balance is positive. If the Average Collected Balance is negative, the Balance to Support Services is equal to the Average Collected Balance. 11. Earnings Credit: Merchants shall calculate an Earnings Credit for any month in which the Account has a positive Balance to Support Services. The Earnings Credit shall be determined by multiplying such positive Balance to Support Services times a rate of interest equal to the average federal funds rate for the month. The Earnings Credit shall be used to offset or reduce the analysis fees, as calculated in accordance with Paragraph 8, incurred during the month in which the Earnings Credit was earned. If the Earnings Credit for a month equals or exceeds the analysis fees for that month, there will be no charge to the Account for that month s activities. However, excess Earnings Credits (Earnings Credits greater than analysis fees) will not be credited to the account, nor will they be carried into later months to offset excess charges of those months. 12. Net Charge to Account: An amount equal to the sum of any analysis fees and/or Interest Charge, less any Earnings Credit, shall be automatically deducted from the Account each month. Merchants shall provide Check Casher with an Account Analysis each CM-0001a (Rev. 4/13) PC Page 2 of 5

3 month which shows the calculation of the net charge to the Account. Merchants is authorized to charge Check Casher s account for currency ordered, repayment of advances from Check Casher s credit line, if any, charge backs, and for any other charges ordinarily and customarily charged by Merchants to check casher accounts or on loans, for advances, for products or for services. 13. Changes in Formula: Merchants shall determine the length of time after which an item deposited is considered collected for purposes of determining the Average Collected Balance. Merchants shall have the right to adjust the formula, or any part of the formula, upon which the Interest Charge or Earnings Credit is calculated, provided that Merchants shall provide Check Casher with 30-days advance written notice of any such change in formula. 14. Overdrafts; Uncollected Funds: The Bank, in its sole discretion, shall determine whether it shall allow the Account to go or remain overdrawn (hereafter referred to as an "Overdraft"), return any item or items, or both. The Bank shall have the option of demanding, immediate payment of any Overdraft, in which case Check Casher shall immediately pay the amount of the Overdraft in full, or of continuing to carry the Overdraft until sufficient funds are deposited to cover the Overdraft. Overdrafts or credit against uncollected or uncleared funds permitted in one or more instances or by practice shall not imply an obligation to continue doing so, or to do so in any other instance. Payments of any amounts due under the Agreement may be effected by the Bank by debiting the Account. The Bank will review on a daily basis whether it shall continue to carry any Overdraft, permit withdrawals against uncollected funds or against uncleared items, or to process any transaction, which could cause the account to become overdrawn. Without limitation, Bank shall have all of the rights provided for under California Commercial Code Section Indemnification: Check Casher and Principal hereby acknowledge that because of a variety of reasons (i.e. insufficient funds, forged endorsements, stolen items, etc.) some portion of the checks that Check Casher cashes will not be honored upon presentation. They further acknowledges that certain such check could be returned against the Account unpaid, for as long as seven years after they were negotiated, and that Merchants may have a legal obligation to honor such returned items regardless of whether the Account remains open. To induce Merchants to accept the Account, and assume such unknown potential liability associated with such possible future returned items, Check Casher and Principal hereby agree to indemnify Merchants and hold it harmless as set forth in the Master Services Agreement. 16. Retention: Check Casher and Principal agree that, in addition to the indemnification described in Paragraph 15, they further hereby agree to maintain a time certificate of deposit in an amount to be determined by Merchants as Retention for any potential further charge-backs against the Account or for any other future liabilities arising hereunder. Any such Retention shall be held in an interest-bearing account in the name of Check Casher earning interest at the prevailing adjustable rate paid by Merchants on Check Casher time certificates of deposit. Merchants shall have the right to retain those funds for up to three years from the date the account was closed by either party. The Retention does not limit the liability of Check Casher or Principal, under the Agreement in any way. The amount of Retention shall be reviewed annually, or more frequently, by Merchants, which may, in its sole and absolute discretion, increase the requirement of same as circumstances appear to warrant. 17. Transportation of Cash; Indemnity; Armored Car Agent and Others: Check Casher may desire from time to time to have authorized individuals, other than licensed armored car carrier agents, acting on behalf of Check Casher, pick up cash from the Bank to be delivered by such individuals, to Check Casher for check-cashing needs. Check Casher understands that the Bank discourages having individuals other than licensed armored car carrier agents, transports cash. Check Casher hereby acknowledge that the transportation of cash is dangerous, and that transportation can result in loss of cash as well as physical and/or mental harm, and even death, to any party transporting such cash. Whether or not an armored car carrier is used, Check Casher hereby releases and indemnifies the Bank and agrees to hold it harmless from and against any and all claims, liabilities, losses, damages, costs and expenses of any nature, either monetary or otherwise, whether arising from active or passive negligence, or otherwise, suffered by Check Casher, or its agents, employees or representatives, Bank or its agents, employees or representatives, armored car service providers or their agents or employees, landlords of either Bank or Check Casher, customers of either Bank or Check Casher, bystanders or any other person, as a result of such transportation of cash or instruments to or from Bank. 18. Liability of Cash in Transit. Risk of Loss as To Cash in Transit: Cash shipments that are picked up by armored carrier (or any other representative of Check Casher) shall become the property and responsibility of Check Casher at the time the carrier or representative accepts or takes possession or control of the shipment. Any losses, discrepancies, shortages or other differences which may result or occur after the shipment is turned over to the carrier or representative are the responsibility of Check Casher. Furthermore, cash and other items in transit to the Bank remain the liability of Check Casher until such cash and other items are delivered to the Bank and the Bank issues a signed receipt therefore. Check Casher shall scan, image, micro-film or photocopy the front and back of all checks presented to the Bank for deposit prior to their presentation to Bank. Any armored car carrier, messenger, or other person picking up cash or withdrawals or delivering cash or items for deposit shall be deemed the agent of Check Casher, regardless of whether Check Casher or Bank orders or requests the service, or which is billed for the service. 19. Account Closing: The Account shall be deemed closed at such time as Check Casher and Principal have advised Merchants in writing of its intention to cease using the Account as of a specified date; or if closing is initiated by Merchants, upon written notice by Merchants that it shall no longer accept transactions in the Account as of a specified date. Upon closing, Check Casher and Principal shall immediately pay all Overdrafts and any other amounts outstanding hereunder and retain sufficient funds in the Account (in an amount to be determined by Merchants) to cover any outstanding checks, money orders, or any known liability existing at the time of Closing. This amount shall be in addition to the Retention as described in Paragraph 16. CM-0001a (Rev. 4/13) PC Page 3 of 5

4 20. Acceptance of Checks from Unapproved Locations: The Check Casher shall not accept checks from any locations other than those set forth in Paragraph 3 of the Master Services Agreement as amended from time to time, or from any other Customers of Merchants, without prior written approval of Merchants. 21. Segregation of Deposits: Check Casher agrees to submit on separate deposit tickets all Federal Tax Refund checks, checks payable to legal entities (if allowed pursuant to Paragraph 21), and checks over $1, Prohibited Deposits: In addition to such checks as are described on Schedule "B," ("Prohibited Deposits"), Merchants reserves the right to restrict the type of checks Merchants will accept for deposit from time to time upon written notice. 23. Miscellaneous: a) Check Casher must maintain a satisfactory relationship with Check Casher s money order supplier (which relationship will be verified by Merchants). Failure to do so may cause Merchants to sever the account relationship. b) Check Casher agrees to allow Merchants to compile bad check data to include in its database with the understanding that such data will be distributed to other customers of Merchants. This will be done to reduce the risk of bad checks to Merchants and other check cashers. c) Check Casher agrees to allow Merchants or its third party contractors access to inspect each check cashing facility upon request. CUSTOMER MERCHANTS For Business Name CM-0001a (Rev. 4/13) PC Page 4 of 5

5 Schedule "A" Check Casher Charges Schedule Subject to Change Per Terms of Addendum Maintenance Fee $20.00 per account Currency out $1.10 per $1, Currency Deposited $1.00 per $1, Coin Deposited or Paid out $0.10 per roll Checks Deposited Checks Paid Deposits Posted Deposit Corrections Returned Items BSA Monitoring $0.15 per check $0.15 per check $1.35 per deposit $5.00 each $6.00 each $ monthly Schedule "B" Schedule of Generally Non-Qualifying Items While the Items below generally do not qualify for deposit or acceptance by Merchants, it may (or may not) make exceptions in its sole and absolute discretion upon verbal or written prior request if all available information upon which to base a decision is presented by Customer. Generally Unacceptable Items a. Checks made payable to a business b. Credit Card Checks c. Travelers Checks d. Third party Cashier s Checks issued more than six months prior e. Demand Drafts f. A check which does not: Have on it a proper endorsement by the payee and any other necessary endorsement Have recorded on it the endorser s California driver s license number or California identification card number, or other similar identification, as well as the endorser s date of birth With respect to any check in an amount greater than $1, and Federal Tax refund checks, have recorded upon it a thumb print of each endorser, or a notation that the Check Casher has taken and retained a photograph of the endorser's face (said photographs to be retained for a period of at least seven years) Tax refund checks payable to individuals residing out of Check Casher's zip code area, and tax refund checks deposited 45 days or more after the date of origination will usually be rejected by Bank g. An instrument payable to a legal entity (any payee who is not an individual) without Bank s prior written approval. If such prior written approval has been granted, any such check presented must be in fact fully authorized and properly issued and: Be properly endorsed on behalf of the payee entity Have recorded on it the as to the individual signing on behalf of the entity, the individual's California driver s license number or California identification card number, or other similar identification, as well as the endorser s date of birth For corporations, have a record of the sufficient evidence of authority of the individual endorsing on behalf of the entity which was presented to Check Casher to establish the endorser's authority which shall include a Corporate Resolution, Statement of Information, Articles of Incorporation, and a certification of principal owners with number of shares owned by each principal Have recorded upon it a thumb print of the individual endorsing the instrument on behalf of the payee, or a notation that the Check Casher has taken and retained a photograph of the face of the individual endorsing the instrument on behalf of the payee (said photographs to be retained for a period of at least seven years) The following items will generally be acceptable for remote capture deposit/check cashing if the issuer/drawer is local to the point of remote deposit capture/check cashing and the item is handled by Customer in compliance with Bank's standards and policies for such items, and subject to the rights of the Bank under this agreement: Checks from licensed pay day advance lenders Payroll Check Government Relief Check Tax Refund Check Money Orders CM-0001a (Rev. 4/13) PC Page 5 of 5