What to know about New York’s updated check-cashing regulation

The New York State Department of Financial Services has adopted an updated check-cashing regulation following the proposed regulation announced in June 2022. The regulation, which becomes effective on Feb. 4, implements a new, data-driven methodology for calculating fees which accounts for needs of licensees and consumers who use check-cashing services, according to DFS.

The final regulation eliminates annual, automatic increases based on CPI, and similar to the approach of other states, the regulation creates two tiers of fees for check cashers. The maximum fee that any check casher can charge for a public assistance check issued by a federal or state agency is 1.5%. This includes checks for social security, unemployment, emergency relief, veterans’ benefits, and the like. For all other checks, the maximum fee that any check casher can charge is 2.2% or $1, whichever is greater, according to DFS. 

Does the regulation apply to credit unions?
Based upon the definition, the regulation could be interpreted as applying to only an entity in which the primary business is check cashing or to any entity licensed under the state’s Banking Law, including banks and credit unions. However, in view of the vagueness in the definition, out of an abundance of caution, New York state chartered credit unions should follow the change in the regulation.

Federally chartered credit unions, however, are not subject to the change in the regulation because the Federal Credit Union Act and the NCUA’s regulations preempt New York law. 

Credit unions with questions about the updated check-cashing regulation can contact Genevieve Caputo, New York Credit Union Association director of compliance, at genevieve.caputo@nycua.org or (800) 342-9835, ext. 8154.

Map of New York filled with US dollars

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