Title 808 | Chapter 009 | Regulation 010


808 KAR 9:010.Deferred deposit database compliance.

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.

HISTORY: (27 Ky.R. 1707; Am. 2788; eff. 4-9-2001; TAm eff. 5-2-2007; 41 Ky.R. 2634; 42 Ky.R. 686; eff. 9-22-2015; 45 Ky.R. 2220; eff. 5-3-2019.)

7-Year Expiration: 5/3/2026

Last Updated: 12/15/2021


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