Enrolled SB 272: Relating to certain monetary advances in which the deposit or other negotiation of checks to pay the advances is delayed until a later date; and providing for an effective date.

00 Enrolled SB 272                                                                                                         
01 Relating to certain monetary advances in which the deposit or other negotiation of checks to                            
02 pay the advances is delayed until a later date; and providing for an effective date.                                    
03                           _______________                                                                               
04    * Section 1.  AS 06.01.020(a) is amended to read:                                                                  
05            (a)  Notwithstanding other provisions of this title, the department may by order                             
06       authorize state financial institutions, except licensees subject to AS 06.20, [OR]                            
07       AS 06.40, or AS 06.50, to exercise any of the powers conferred upon, or to be subject                         
08       to any of the limitations imposed upon, a federally chartered financial institution doing                         
09       business in this state with deposits insured by an agency of the federal government if                            
10       the department finds that the exercise of the power or imposition of the limitation both                          
11                 (1)  serves the public convenience and advantage; and                                                   
12                 (2)  equalizes and maintains the quality of competition between state                                   
13       financial institutions and federally chartered financial institutions.                                            
01    * Sec. 2.  AS 06.01.050(3) is amended to read:                                                                     
02                 (3)  "financial institution" means an institution subject to the regulation                             
03       of the department under this title; in this paragraph, "institution" includes a                                   
04       commercial bank, savings bank, credit union, premium finance company, small loan                                  
05       company, bank holding company, financial holding company, trust company, [AND]                                
06       savings and loan association, and deferred deposit advance licensee under                                     
07       AS 06.50;                                                                                                     
08    * Sec. 3.  AS 06 is amended by adding a new chapter to read:                                                       
09                   Chapter 50.  Deferred Deposit Advances.                                                             
10                          Article 1.  Licensing.                                                                       
11            Sec. 06.50.010.  License required.  A person, including a person doing                                     
12       business from outside this state, may not engage in the business of making or offering                            
13       to make deferred deposit advances in this state without having a license under this                               
14       chapter.  A separate license is required for each physical location or Internet website                           
15       from which the person conducts the business.                                                                      
16            Sec. 06.50.020.  Qualifications for license.  (a)  To qualify for a license, an                            
17       applicant shall                                                                                                   
18                 (1)  have cash assets of at least $25,000, as determined under generally                                
19       accepted accounting principles, except that an applicant who wants to engage in the                               
20       business of making advances at more than one location in the state shall have cash                                
21       assets of at least $25,000 for each location;                                                                     
22                 (2)  demonstrate the financial responsibility, financial condition,                                     
23       business experience, character, and general fitness that reasonably warrant the                                   
24       department's belief that the applicant's business will be conducted lawfully and fairly;                          
25       when determining whether this qualification has been met, and for the purpose of                                  
26       investigating compliance with this chapter, the department may review                                             
27                      (A)  the relevant business records of the applicant and the                                        
28            adequacy of the capital of the applicant;                                                                    
29                      (B)  the competence, experience, integrity, and financial ability                                  
30            of the applicant, and, if the applicant is an entity, of any person who is a                                 
31            member, partner, director, senior officer, or owner of 10 percent or more of the                             
01            equity of the applicant; and                                                                                 
02                      (C)  a record of conviction, on the part of the applicant or a                                     
03            person described in (B) of this paragraph, of                                                                
04                           (i)  criminal activity, fraud, or other act of personal                                       
05                 dishonesty;                                                                                             
06                           (ii)  an act, an omission, or a practice that constitutes a                                   
07                 breach of a fiduciary duty; or                                                                          
08                           (iii)  a suspension, a revocation, a removal, or an                                           
09                 administrative act by an agency or a department of the United States or                                 
10                 a state from participation in the conduct of a business;                                                
11                 (3)  if the person has a physical business location in the state, have a                                
12       physical business location that is accessible by and convenient to the public;                                    
13                 (4)  have a current business license issued under AS 43.70; and                                         
14                 (5)  if applicable, have a certificate of incorporation under                                           
15       AS 10.06.218, have a certificate of authority under AS 10.06.705, have a copy of                                  
16       articles of organization that satisfies AS 10.50.090, be registered under AS 10.50.605,                           
17       have a statement of foreign qualification filed under AS 32.06.922, have a certificate                            
18       of limited partnership filed under AS 32.11.060, or be registered under AS 32.11.420.                             
19            (b)  The requirements in (a) of this section are continuing in nature and may be                             
20       reviewed periodically by the department.                                                                          
21            Sec. 06.50.030.  Application.  (a)  An application for a license must be in                                
22       writing and under oath, in a form prescribed by the department by regulation, and                                 
23       include at least                                                                                                  
24                 (1)  the legal name, residence, and business address of the applicant                                   
25       and, if the applicant is not a natural person, of each member, partner, director, senior                          
26       officer, or owner of 10 percent or more of the equity of the applicant;                                           
27                 (2)  the address and physical location of the principal place of business                               
28       named in the application; and                                                                                     
29                 (3)  other information the department may require with respect to the                                   
30       applicant and, if the applicant is not a natural person, about the applicant's members,                           
31       partners, directors, senior officers, or owners of 10 percent or more of the equity of the                        
01       applicant.                                                                                                        
02            (b)  The applicant shall submit with the application the bond required by                                    
03       AS 06.50.040 and a nonrefundable application fee in an amount that is established by                              
04       the department by regulation and that does not exceed $3,000.  The application fee for                            
05       the initial license may not be prorated.                                                                          
06            Sec. 06.50.040.  Bond.  (a)  An applicant for a license shall file with the                                
07       application a bond                                                                                                
08                 (1)  in a form to be approved by the department;                                                        
09                 (2)  in which the applicant is the obligor; and                                                         
10                 (3)  in the sum of $25,000 for a business with one location and $50,000                                 
11       for a business with more than one location.                                                                       
12            (b)  Only one bond is required for an application for a business with more than                              
13       one location.                                                                                                     
14            (c)  The bond required by (a) of this section is for the use of the state and a                              
15       person who may have a cause of action against the obligor under this chapter.                                     
16            (d)  The bond must state that the obligor will                                                               
17                 (1)  faithfully conform to and abide by the provisions of this chapter                                  
18       and regulations adopted by the department under this chapter; and                                                 
19                 (2)  pay to the state and to a person all money that may become due or                                  
20       owing to the state or to the person from the applicant under this chapter.                                        
21            (e)  The bond must remain in effect for three years following the denial of a                                
22       renewal of a license or the expiration of a license.                                                              
23            (f)  If, at any time, the department finds that a bond filed under (a) of this                               
24       section is unsatisfactory for any reason, the department may require the licensee to                              
25       file, within 10 days after the receipt of a written demand, an additional bond to comply                          
26       with this section.                                                                                                
27            (g)  The licensee shall file a new bond that complies with this section each time                            
28       a license is renewed.                                                                                           
29            Sec. 06.50.050.  Investigation by department.  Within 60 days after an                                     
30       applicant files a completed application, the bond, and an application fee, the                                    
31       department shall investigate whether the applicant satisfies the qualifications of                                
01       AS 06.50.020(a).  If the department finds that the applicant satisfies the qualifications,                        
02       it shall approve the application and issue the applicant a license to engage in the                               
03       business of making deferred deposit advances.                                                                     
04            Sec. 06.50.060.  Conditions precedent to license.  The requirements of                                     
05       AS 06.50.030 - 06.50.050 are conditions precedent to the issuance of a license under                              
06       this chapter.  The license permits the applicant to make advances under this chapter at                           
07       the location specified in the application.                                                                      
08            Sec. 06.50.070.  Duration of license.  A license issued under this chapter is                              
09       valid for two calendar years.  Each license remains in force through the calendar year                            
10       after the calendar year in which the license was issued unless surrendered, suspended,                            
11       or revoked under this chapter.                                                                                    
12            Sec. 06.50.080.  Renewal of license.  A license issued under this chapter shall                            
13       be renewed on or before the date set by the department by submitting to the                                       
14       department a completed renewal application on a form established by the department                                
15       and paying a nonrefundable renewal fee established by the department, which may not                               
16       exceed $3,000.                                                                                                    
17            Sec. 06.50.090.  Denial of license or renewal.  (a)  If the department                                     
18       determines that an applicant is not qualified to receive a license or a license renewal,                          
19       the department shall notify the applicant in writing within 20 days that the application                          
20       has been denied and state the basis for the denial.                                                               
21            (b)  The decision of the department to deny an application or a renewal may be                               
22       reviewed in the manner provided in AS 44.62.330 - 44.62.630 (Administrative                                       
23       Procedure Act).                                                                                                   
24            (c)  If the denial of a renewal is upheld, the former licensee shall return the                              
25       license to the department within 10 days after the former licensee receives notice of                             
26       the denial.                                                                                                       
27            (d)  A license application shall be considered withdrawn within the meaning of                               
28       this section if the applicant fails to respond to a written notification of a deficiency in                       
29       the application within 60 days after the date of the notification.                                                
30            (e)  If a license renewal is denied or if a license is surrendered, suspended, or                            
31       revoked, all accounts of the licensee remain subject to this chapter until paid in full.                          
01           Article 2.  Licensee Transfer, Assignment, Control, and Change.                                             
02            Sec. 06.50.200.  Transfer or assignment.  Except for the transfer of a license                             
03       to a new location under AS 06.50.220, a licensee may not transfer or assign the                                   
04       licensee's license.                                                                                               
05            Sec. 06.50.210.  Change in control.  The prior written approval of the                                     
06       department is required for the continued operation of a licensee's deferred deposit                               
07       advance business when a change in control of the licensee is proposed.  The                                       
08       department may require the information it considers necessary to determine whether a                              
09       new application is required.  The licensee requesting approval of the change in control                           
10       shall pay all reasonable expenses incurred by the department to investigate and                                   
11       approve or deny the change in control.                                                                            
12            Sec. 06.50.220.  Change in location or name.  A licensee shall notify the                                  
13       department in writing at least 15 days before any proposed change in the licensee's                               
14       business location or name, and shall provide the department with the information                                  
15       described in AS 06.50.030(a).                                                                                   
16            Sec. 06.50.230.  Conduct of other business.  A licensee may conduct other                                  
17       business at a location where it engages in making advances unless it conducts the                                 
18       other business for the purpose of evading or violating the provisions of this chapter.                            
19                     Article 3.  Department Supervision.                                                               
20            Sec. 06.50.300.  Suspension or revocation of license.  (a)  The department                                 
21       may suspend or revoke a license under AS 44.62 (Administrative Procedure Act) if the                              
22       department finds that                                                                                             
23                 (1)  the licensee has failed to pay the license fee, failed to maintain the                             
24       required bond in effect, or failed to comply with a demand, ruling, or requirement of                             
25       the department made under this chapter;                                                                           
26                 (2)  the licensee has violated a provision of this chapter or a regulation                              
27       adopted by the department under this chapter; or                                                                  
28                 (3)  a fact or condition exists that, if it had existed at the time of the                              
29       original application for the license, clearly would have constituted ground for denial of                         
30       the issuance of the license.                                                                                      
31            (b)  If the reason for suspension or revocation of a licensee's license at one                               
01       location applies generally to all locations operated by the licensee, the department may                          
02       suspend or revoke all licenses issued to the licensee.                                                            
03            Sec. 06.50.310.  Reports to department.  (a)  On or before March 15 of each                                
04       year, a licensee shall file with the department a composite annual report for the                                 
05       preceding calendar year in the form prescribed by the department relating to all                                  
06       advances made by the licensee.  The department may require that the report be                                     
07       submitted under oath or affirmation, or with notice that false statements made are                                
08       punishable as unsworn falsification under AS 11.56.210.                                                           
09            (b)  The report must include                                                                                 
10                 (1)  the total number and dollar amount of advances made by the                                         
11       licensee;                                                                                                         
12                 (2)  the total number of individual customers who received advances;                                    
13                 (3)  the minimum, maximum, and average amount of advances;                                              
14                 (4)  the average annual percentage rate of the fee charged for advances;                                
15                 (5)  the average number of days of the advances;                                                        
16                 (6)  the total number and dollar amount of returned checks;                                             
17                 (7)  the total number and dollar amount of checks paid by advance                                       
18       recipients;                                                                                                       
19                 (8)  the total number and dollar amount of checks charged off as a loss;                                
20                 (9)  the total dollar amount of outstanding advances as of the last day of                              
21       the calendar year;                                                                                                
22                 (10)  the total number of outstanding advances as of the last day of the                                
23       calendar year; and                                                                                                
24                 (11)  any other information the department determines is required to                                    
25       conduct its review.                                                                                               
26            (c)  Within 15 days after the occurrence of any of the following events, a                                   
27       licensee shall file a written report with the department describing the event and its                             
28       expected effect on the activities of the licensee in the state:                                                   
29                 (1)  filing for bankruptcy or reorganization by the licensee;                                           
30                 (2)  institution of suspension or revocation proceedings against the                                    
31       licensee by a state or other governmental authority;                                                              
01                 (3)  a felony indictment or felony conviction of the licensee and, if the                               
02       licensee is not a natural person, of a member, partner, director, senior officer, or holder                       
03       of 10 percent or more of the licensee's equity; and                                                               
04                 (4)  other events that the department determines and identifies by                                      
05       regulation that may impair the ability of the licensee to operate its business under this                         
06       chapter.                                                                                                          
07            (d)  In the discretion of the department, the occurrence of an event in (c) of this                          
08       section may constitute grounds for suspension or revocation of a license.                                         
09            Sec. 06.50.320.  Records.  (a)  A licensee shall maintain all records relating to                          
10       this chapter at the location for which the licensee has a license.  The records must                              
11       conform to generally accepted accounting principles and practices in a manner that                                
12       will enable the department to determine whether the licensee is complying with the                                
13       provisions of this chapter.  The department shall have unrestricted access to the                                 
14       records of the licensee.                                                                                          
15            (b)  A licensee shall retain records relating to an advance for at least two years                           
16       after the last entry on the advance, unless otherwise required by the department.                                 
17            (c)  A licensee shall retain records of an advance that is the subject of a court                            
18       action for at least two years after a judgment or settlement of the court action.                                 
19            Sec. 06.50.330.  Examinations and investigations.  (a)  The department shall                               
20       examine the business records of a licensee at intervals the department considers                                  
21       appropriate.  In addition, for the purpose of discovering violations of this chapter or                           
22       securing information lawfully required, the department may, at any time, investigate                              
23       the advances, business transactions, and records of a licensee.  For these purposes, the                          
24       licensee shall provide the department with unrestricted access to the offices, places of                          
25       business, and records of the licensee.  Within 30 days after the department requests                              
26       payment, the licensee shall pay the department the cost of examination at a rate of $75                           
27       an hour for each examiner.                                                                                        
28            (b)  For the purposes of this section, the department may administer oaths or                                
29       affirmations and, upon its own motion or upon request of a party, may subpoena                                    
30       witnesses, compel the attendance of witnesses, take evidence, and require the                                     
31       production of material that is relevant to the investigation, including the existence,                            
01       description, nature, custody, condition, and location of books, documents, and other                              
02       tangible items, and the identity and location of persons having knowledge of relevant                             
03       facts, or other material reasonably calculated to lead to the discovery of admissible                             
04       evidence.                                                                                                         
05            (c)  Upon failure without lawful excuse to obey a subpoena or to give                                        
06       testimony, and upon reasonable notice to all persons affected by the failure, the                                 
07       department may apply to the superior court for an order compelling compliance.                                    
08         Article 4.  Licensee Practices and Recipient Rescission and Payment.                                          
09            Sec. 06.50.400.  Advance agreement.  (a)  An advance shall be documented in                                
10       a written agreement that is signed by the advance recipient and on a form approved by                             
11       the department.                                                                                                   
12            (b)  The agreement must clearly and conspicuously disclose                                                   
13                 (1)  the name of the licensee;                                                                          
14                 (2)  the date of the advance;                                                                           
15                 (3)  the principal amount of the advance;                                                               
16                 (4)  a statement of the total amount of fees that may be charged under                                  
17       AS 06.50.460(a) as a condition of making the advance, expressed both as a dollar                                  
18       amount and as an annual percentage rate;                                                                          
19                 (5)  the repayment terms;                                                                               
20                 (6)  the due date;                                                                                      
21                 (7)  an itemization of all disbursements, including disbursements to                                    
22       third parties;                                                                                                    
23                 (8)  the name and title of the employee who signs the agreement on                                      
24       behalf of the licensee; and                                                                                       
25                 (9)  any other item required to be disclosed under state or federal law.                                
26            (c)  The written agreement required by (a) of this section may not require an                                
27       advance recipient to waive any rights under 15 U.S.C. 1692 - 1692o (Fair Debt                                     
28       Collection Practices Act) or other state or federal laws that regulate debt collection                            
29       practices.                                                                                                        
30            Sec. 06.50.410.  Maximum amount of advances.  A licensee, including a                                      
31       licensee with more than one location, may not make advances to an advance recipient                               
01       that exceed $500 outstanding in advances to the recipient at one time.                                            
02            Sec. 06.50.420.  Prohibition on dividing advance amount or increasing                                      
03       number of advances.  A licensee may not induce or permit an advance recipient to                                
04       divide the amount of an advance, or to become obligated, directly, contingently, or                               
05       both, for more than one advance at the same time, if the purpose or result is to obtain                           
06       additional origination fees under AS 06.50.460(a)(1).                                                             
07            Sec. 06.50.430.  Prohibition on collateral and services.  The licensee may                                 
08       not accept collateral or services as security for or payment of an advance.                                       
09            Sec. 06.50.440.  Duration of advances.  The minimum duration of an advance                                 
10       is 14 days.                                                                                                       
11            Sec. 06.50.450.  Prohibition on advances on behalf of another.  A licensee                                 
12       may not make an advance to a person who purports to be acting on behalf of another                                
13       person.                                                                                                           
14            Sec. 06.50.460.  Fees.  (a)  Notwithstanding any other provision of law, except                            
15       for the fee allowed under AS 06.50.510(b)(3) and where federal law provides                                       
16       otherwise, a licensee may only charge                                                                             
17                 (1)  a nonrefundable origination fee in an amount not to exceed $5; and                                 
18                 (2)  a fee that does not exceed $15 for each $100 of an advance, or 15                                  
19       percent of the total amount of the advance, whichever is less.                                                    
20            (b)  A licensee may not charge a fee other than the fees allowed under (a) of                                
21       this section.                                                                                                     
22            (c)  The fees allowed by (a) of this section are considered earned at the time of                            
23       the transaction and may not be prorated.                                                                          
24            (d)  A licensee may not charge the advance recipient an additional fee to access                             
25       the proceeds of an advance.                                                                                       
26            Sec. 06.50.470.  Renewal of advance.  (a)  The minimum term of a renewal of                                
27       an advance is 14 days.                                                                                            
28            (b)  A licensee may not renew an advance more than two consecutive times,                                    
29       after which the licensee shall require the advance recipient to repay the advance in                              
30       full.                                                                                                             
31            (c)  A licensee may not renew an advance for fees greater than the fees under                                
01       AS 06.50.460(a).                                                                                                  
02            Sec. 06.50.480.  Rescission.  A person who receives an advance may rescind                                 
03       an advance without cause and without cost, except for the nonrefundable origination                               
04       fee, at any time before the close of business on the business day following the day on                            
05       which the advance was made by paying the principal amount of the advance to the                                   
06       licensee in cash or other immediately available funds.                                                            
07            Sec. 06.50.490.  Prohibited arbitration requirement.  A licensee may not                                   
08       require a recipient to agree to mandatory arbitration.                                                            
09            Sec. 06.50.500.  Posted fee notice.  A licensee shall post a notice in each                                
10       business location that discloses the fees that the licensee charges for advances.  The                            
11       fees in the notice must be expressed as a dollar amount, as an annual percentage rate                             
12       for 14 days for each $100, and as an annual percentage rate for 30 days for each $100.                            
13       The notice must also contain any other reasonably necessary information required by                               
14       the department by regulation.  The notice shall be posted so that it is conspicuous to an                         
15       advance recipient or a potential advance recipient.  The lettering in the notice must be                          
16       legible and at least one inch in height.                                                                          
17            Sec. 06.50.510.  Required disclosures before disbursement.  (a)  Before                                    
18       disbursing funds under an advance, a licensee shall provide a clearly written statement                           
19       that is separate from the written advance agreement required by AS 06.50.400(a).                                  
20       This disclosure statement must be reviewed and signed by the advance recipient.  The                              
21       licensee shall keep the signed original in the advance file for the recipient and give a                          
22       copy to the recipient.                                                                                            
23            (b)  The disclosure statement required by (a) of this section must                                           
24                 (1)  indicate the advance is intended to address short-term, not long-                                  
25       term, financial needs;                                                                                            
26                 (2)  include an explanation of all fees for advances and renewals of                                    
27       advances;                                                                                                         
28                 (3)  state that the licensee may charge an advance recipient a bad check                                
29       fee for costs as allowed under AS 09.68.115(a)(2) if a payment is returned unpaid;                                
30                 (4)  state that, in the event of the advance recipient's default, the                                   
31       licensee may sue the recipient and recover up to $700 over the amount of the payment                              
01       and, if the payment is a check, recover as permitted under AS 06.50.550(b);                                       
02                 (5)  give the department's address and telephone number for receiving                                   
03       calls regarding customer complaints and concerns;                                                                 
04                 (6)  state that the licensee may not accept collateral or services for an                               
05       advance;                                                                                                          
06                 (7)  state that the check given as security for the advance may be                                      
07       negotiated as part of the advance;                                                                                
08                 (8)  state that                                                                                         
09                      (A)  the advance recipient may rescind the advance without                                         
10            cause at any time before the close of business on the business day following                                 
11            the day on which the licensee makes the advance by paying the principal                                      
12            amount of the advance to the licensee in cash or other immediately available                                 
13            funds;                                                                                                       
14                      (B)  if the advance recipient rescinds under this paragraph, the                                   
15            origination fee is not refundable, but the licensee may not charge the recipient                             
16            another fee, except for a bad check fee for costs as allowed under                                           
17            AS 09.68.115(a)(2) if the payment is returned unpaid;                                                        
18                 (9)  state that a criminal action may not be brought against the advance                                
19       recipient for failure to pay the advance; and                                                                     
20                 (10)  include other information reasonably required by the department                                   
21       to inform and protect advance recipients.                                                                         
22            Sec. 06.50.520.  Payment by licensee.  (a)  A licensee may give an advance                                 
23       recipient the amount of the advance in cash, by the licensee's business check, by a                               
24       money order, or by a reasonable electronic payment mechanism, including an                                        
25       electronic funds transfer to the advance recipient's account.                                                     
26            (b)  A licensee may not use another form of payment than the form of payment                                 
27       authorized in (a) of this section to make an advance to an advance recipient.  In this                            
28       subsection, "another form of payment" includes coupons, merchandise, services, or                                 
29       chattel of any kind.                                                                                              
30            Sec. 06.50.530.  Payment by advance recipient.  (a)  An advance recipient                                  
31       may repay an advance                                                                                              
01                 (1)  in cash;                                                                                           
02                 (2)  by negotiation of the recipient's check that secures the advance; or                               
03                 (3)  with the agreement of the licensee, a debit card, a cashier's check,                               
04       an electronic funds transfer from the recipient's bank account, or a reasonable                                   
05       electronic payment mechanism to which the parties agree.                                                          
06            (b)  An advance is paid in full when the advance recipient repays the advance                                
07       under (a) of this section, or when the advance recipient rescinds the advance under                               
08       AS 06.50.480.                                                                                                     
09            (c)  A licensee may not accept payment of an advance from the proceeds of                                    
10       another advance provided by the same licensee.                                                                    
11            Sec. 06.50.540.  Default fees.  If a payment received from an advance                                      
12       recipient is returned unpaid to a licensee, the licensee may not collect the fees allowed                         
13       by this chapter unless the fees are disclosed in the agreement for the advance under                              
14       AS 06.50.400.                                                                                                     
15            Sec. 06.50.550.  Collection or court action after default.  (a)  If an advance                             
16       recipient defaults, before assigning the payment obligation to a third party for                                  
17       collection and before initiating a court action against the recipient, a licensee                                 
18                 (1)  shall attempt in good faith to contact the advance recipient at                                    
19       reasonable times by telephone or mail to discuss the delinquency and to offer the                                 
20       recipient a payment plan under (2) of this subsection;                                                            
21                 (2)  shall offer the recipient a payment plan under which                                               
22                      (A)  the recipient may repay the delinquent advance over an                                        
23            extended period of time, which may not exceed six months;                                                    
24                      (B)  at least five percent of the outstanding balance is due when                                  
25            the payment plan is signed;                                                                                  
26                      (C)  an additional fee by the licensee is not allowed, except for a                                
27            bad check fee for costs as allowed under AS 09.68.115(a)(2);                                                 
28                 (3)  in addition to the contact required by (1) of this subsection, shall                               
29       send a certified letter to the recipient's last known address at least 15 days before the                         
30       action that makes the offer described in (2) of this subsection and that informs the                              
31       recipient of the licensee's intent to proceed with a court action.                                                
01            (b)  The licensee may initiate a court action against a defaulting recipient to                              
02       recover damages and costs allowed under AS 09.68.115 if the licensee has complied                                 
03       with (a) of this section.  Notwithstanding AS 09.68.115, the total of all damages and                             
04       costs, including damages recovered under AS 09.68.115(a), may not exceed the                                      
05       amount of the payment by $700.                                                                                    
06            Sec. 06.50.560.  Threat of criminal action prohibited.  A licensee may not                                 
07       threaten an advance recipient with criminal action as a result of the recipient's default.                        
08                     Article 5.  Miscellaneous Provisions.                                                             
09            Sec. 06.50.600.  Regulations.  The department may adopt regulations under                                  
10       AS 44.62 (Administrative Procedure Act) to implement this chapter.                                                
11            Sec. 06.50.610.  Relationship to federal and other state law.  (a)  If a                                   
12       provision of this chapter is preempted by or conflicts with federal law in a particular                           
13       situation, the provision does not apply to the extent of the preemption or conflict.                              
14            (b)  If a provision of this chapter conflicts with another state law in a particular                         
15       situation, the provision in this chapter governs to the extent of the conflict.                                   
16                       Article 6.  General Provisions.                                                                 
17            Sec. 06.50.900.  Definitions.  In this chapter, unless the context requires                                
18       otherwise,                                                                                                        
19                 (1)  "advance" means a deferred deposit advance;                                                        
20                 (2)  "advance recipient" means a borrower to whom an advance is                                         
21       made;                                                                                                             
22                 (3)  "control," in the case of a person who is not a natural person,                                    
23       means direct or indirect ownership, the right to vote or otherwise control 10 percent or                          
24       more of the governance interests of the entity, or the ability of a person to elect a                             
25       majority of the directors;                                                                                        
26                 (4)  "deferred deposit advance" means a transaction in which a person                                   
27                      (A)  accepts a dated check from a person seeking an advance;                                       
28                      (B)  agrees to hold the check for a specified period of time                                       
29            before depositing or otherwise negotiating the check; and                                                    
30                      (C)  pays to the advance recipient, credits to the account of the                                  
31            advance recipient, or pays to another person on behalf of the advance recipient                              
01            the amount of the check less the charges allowed under this chapter;                                         
02                 (5)  "department" means the Department of Community and Economic                                        
03       Development;                                                                                                      
04                 (6)  "license" means a license issued under this chapter;                                               
05                 (7)  "licensee" means a person to whom a license has been issued under                                  
06       this chapter.                                                                                                     
07    * Sec. 4.  AS 44.62.330(a) is amended by adding a new paragraph to read:                                           
08                 (61)  Department of Community and Economic Development relating                                         
09       to the licensing and regulation of persons making deferred deposit advances under                                 
10       AS 06.50.                                                                                                         
11    * Sec. 5.  The uncodified law of the State of Alaska is amended by adding a new section to                         
12 read:                                                                                                                   
13       TRANSITION:  EXISTING ACTIVITIES.  (a)  Notwithstanding the licensing                                             
14 requirements of AS 06.50.010 - 06.50.090, enacted by sec. 3 of this Act, a person who, on the                           
15 day before the effective date of secs. 1 - 5 of this Act, is engaged in the business of making                          
16 deferred deposit advances may continue to make deferred deposit advances for 60 days after                              
17 the effective date of secs. 1 - 5 of this Act without being licensed under AS 06.50, enacted by                         
18 sec. 3 of this Act.  Beginning on the 61st day after the effective date of secs. 1 - 5 of this Act,                     
19 a person described in this subsection shall be licensed under AS 06.50.010 in order to                                  
20 continue making deferred deposit advances.                                                                              
21       (b)  In this section, "deferred deposit advance" has the meaning given in                                         
22 AS 06.50.900, enacted by sec. 3 of this Act.                                                                            
23    * Sec. 6.  The uncodified law of the State of Alaska is amended by adding a new section to                         
24 read:                                                                                                                   
25       TRANSITIONAL PROVISIONS:  REGULATIONS.  The Department of Community                                               
26 and Economic Development may proceed to adopt regulations necessary to implement this                                   
27 Act.  The regulations take effect under AS 44.62 (Administrative Procedure Act), but not                                
28 before the effective date of secs. 1 - 5 of this Act.                                                                   
29    * Sec. 7.  Section 6 of this Act takes effect immediately under AS 01.10.070(c).                                   
30    * Sec. 8.  Sections 1 - 5 of this Act take effect January 1, 2005.