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FL Office of Financial Regulation - Check Cashers & Money Transmitters Prepare For Examination

Money transfer

If you are a licensed check casher or money transmitter in Florida, then you are subject to chapter 560, Florida Statutes ("F.S."). If you are even aware of that fact, you probably are not fully aware of all of the provision contained therein. As a very general matter, Florida Statutes require that licensed transmitters be examined every five years. To show the extent of the power the statutes provide for oversight in this chapter, the statutes also require that licensees pay for the examination. Section 560.1092, F.S., provides that the licensee shall pay expenses that include "travel expenses, reasonable living expense allowance, compensation of the examiner or other person making the examination, and necessary attendant administrative costs of the office directly related to the examination." If that is news to you, then get prepared for a statutory chapter that provides numerous requirements that can trip up the unwary licensee.

The various provisions that a licensee must comply with are numerous enough to fill several articles if you went into detail. Suffice it to say that the nature of a licensee's business can help focus the ap

plication of some of the more commonly applicable provisions. Another article will look into those provisions to point out possible violations. This article is attempting to educate a licensee on the importance of using the generally limited time noticed by the Florida Office of Financial Regulation (FOFR).

In many instances, the Notice of Examination is sent less than a week before the scheduled examination. And, also frequently, this notice is mailed close to a weekend so that two additional days are frequently lost between the date of the notice and the scheduled start date of examination. The frequency of this occurrence indicates it is not unintentional. Despite limited time, a licensee can use the short time to prepare for the examination which provides at least two significant benefits. The preparation will limit the time of the examination which carries the obligated examination costs which the licensee must pay. The second, and more beneficial benefit, is getting the information organized to avoid alleged violations.

As noted above, licensed check cashers and money transmitters are obligated by statute to pay for examin

ation expenses. This includes not only the filed examination but the report preparation time. Limiting the required time for the examination directly addresses the out of pocket expense for licensees. Frequently, the examination expenses can outweigh the generated fees from the licensed activity to a significant degree. Therefore, it is to every licensee's benefit to limit those costs to every degree possible. You as a licensee are a business owner and you are trying to make money. This is aided by not paying it to the FOFR - especially when each examination almost always includes two FOFR personnel.

But, the bigger way to avoid the examination expense is getting prepared to participate in the process. Florida Statutes require providing access to licensee records within 3 days of notice of the examination. The applicable examination is generally scheduled out to begin almost immediately after receipt of the mailed examination notice letter. An unprepared licensee is significantly more likely to be caught in a position where the FOFR will be able to allege numerous violations. Besides the penalties associated with individual alleged violations, the number of violations alleged will subsequently impact the FOFR's consideration in trying to settle a matter following the issuance of an admini

strative complaint. The process of settling a matter is itself worthy of its own article.

Suffice it say, the old adage “an ounce of prevention is worth a pound of cure” is especially true here. A licensee with organized and available records not only sets the stage for a more reasonable examination but it also provides arguments that can later be advanced to settle the matter. The compliance officer needs to be ready to respond and participate in the examination with the FOFR personnel. The officer needs to be aware of the requirements the examination will cover and be able to answer questions about the licensee's activity. With two examiners present, any misstatement will be noted and likely used to allege at least one violation. Generally, the statutes are such that most instances of one allegation can almost necessarily include another related but separate additional violation that carries its own unique, additional punishment.

In light of these facts, it is imperative that licensees be vigilant with mail from the FOFR. As the FOFR has limited mailings, any letter should be opened immediately for review. As noted above, a notice of examination will provide limited notice to get ready for the examiners arrival. The precious little time needs to be used to get documentation gathered and organized for review. The statutes provide little guidance on limitations on examination procedures so you as a licensee need to be ready to provide informa

tion and response. Otherwise, you likely will need to prepare yourself for a Report of Examination that alleges a number of violations. And, an Administrative Complaint will likely follow that report - and that might come many months or even more than a year later.

Therefore, it is vital to be ready to handle the process initially to avoid the increased difficulty of responding to a lengthy administrative complaint. Though we can help with the necessary response to an administrative complaint, it likely would be wiser to prepare for the certainty of an examination proactively to try and avoid the danger in receiving a notice of examination with limited time to prepare and an inability to get a response ready. Let us help you prepare for the notice of examination that could already be in the mail.

Florida sales tax attorney; Florida sales tax audit; Florida office of financial regulation; Florida check cashing audit

About the author: Mr. Parker is a sales and use tax attorney and an associate in the law firm the Law Offices of Moffa, Sutton, & Donnini, P.A., based in the firm's Tampa office. Mr. Parker's practice includes state tax audits and controversies involving sales and use tax and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Parker received his law degree and L.L.M. in Taxation from the University of Florida. To learn more about Mr. Parker, please call him at 813-775-2132 or visit his firm bio.