The Pennsylvania Department of Banking suspended the license of Cashpoint Network Services, Inc., of 143 W. 72nd St., New York, N.Y., effective immediately.
Cashpoint, a money transmitter, operates about 250 outlets across the state in grocery stores and convenience outlets where its agents accept utility-bill payments from consumers and then send these payments to the utilities.
The license is suspended pending a hearing by the Department on the continued suspension, reinstatement or revocation of Cashpoint Network Services, Inc.’s license.
The Department is authorized to suspend or revoke a license issued under the Money Transmitter Act if certain facts or conditions are discovered. The Department began an investigation of Cashpoint’s financial situation when it learned that the New York State Department of Banking issued an order on April 21, 2004, temporarily suspending Cashpoint’s license for failure to pay $13 million owed to a New York Bank and that several Pennsylvania utility companies have not received payments due.
“It is unfortunate that we occasionally have to suspend a license in Pennsylvania, but we have an effective process in place which works quickly in protecting consumers,” said Banking Secretary William Schenck. The Department of Banking is responsible for regulating financial institutions authorized by state law to receive deposits, lend money or provide other financial services and is active in protecting Pennsylvania consumers from financial abuse. The Department also works with state and local partners to foster economic development in the Commonwealth. To contact the Department, call 1-800-PA Banks or visit the Web site at .
A copy of the order is attached.
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF BANKING
Commonwealth of Pennsylvania :
Department of Banking :
Bureau of Supervision and Enforcement :
: Docket No. ENF-2004-02
Cashpoint Network Services, Inc. :
ORDER TO INCREASE BOND
WHEREAS, the Commonwealth of Pennsylvania, Department of Banking
(“Department”) is authorized to administer and enforce the Act of September 2,
1965, P.L. 490, No. 249, an Act providing for the licensing and regulation of
the business of transmitting money or credit for a fee or other consideration
by the issuance of money orders by the sale of checks or by other methods;
conferring powers and duties upon the Department of Banking; and imposing
penalties, codified at 7 P.S. Section 6101 et seq. (“Money Transmitter Act”);
WHEREAS, Cashpoint Network Services, Inc. is headquartered at 143 West
72nd Street, New York, NY 10023;
WHEREAS, the Department’s Bureau of Supervision and Enforcement (“Bureau”)
is primarily responsible for administering and enforcing the Money Transmitter
WHEREAS, Cashpoint Network Services, Inc. (“Cashpoint”) is licensed by the
Department as a money transmitter under the Money Transmitter Act and holds
license number 0034 under the Money Transmitter Act; and
WHEREAS, by order dated April 21, 2004, the New York State Department of
Banking issued an order temporarily suspending Cashpoint’s New York money
transmitter license because Cashpoint failed to pay approximately $13 million
due and owing to a New York State chartered bank, Cashpoint owes approximately
$20 – $25 million to other creditors including monies due and owed to
beneficiaries of money transmission transactions conducted by Cashpoint and
Cashpoint has failed to maintain its books and records in a condition that
would allow the New York State Superintendent of Banks to determine whether
Cashpoint or any of its agents or subagents are in compliance with relevant
New York state law; and
WHEREAS, several Pennsylvania utility companies are owed substantial
amounts of money in excess of Cashpoint’s security deposits and bonds; and
WHEREAS, Cashpoint held a meeting on April 22, 2004, in New York, New York
to address concerns raised by entities to which Cashpoint was to remit money
and the Bureau understands that this meeting did not resolve those outstanding
WHEREAS, the Department has information that creditors of Cashpoint intend
to force Cashpoint into bankruptcy; and
WHEREAS, the Department has been informed that the financial records of
Cashpoint are unreliable and in disarray; and
WHEREAS, the Department has been informed that Cashpoint is not opening
its records to regulators; and
WHEREAS, the Department is authorized to suspend or revoke a license
issued under the Money Transmitter Act, “if any fact or condition is
discovered which, if it had been known at the time of the filing of the
application for the license, would have warranted the Department of Banking in
denying the application;” 7 P.S. Section 6110(b); and
WHEREAS, based on the foregoing facts, the Department would not issue a
license to Cashpoint under the Money Transmitter Act pursuant to section 4 of
the Money Transmitter Act, 7 P.S. Section 6104.
AND NOW, THEREFORE, pursuant to sections 10 and 13 of the Money
Transmitter Act, 7 P.S. Sections 6110 and 6113, Cashpoint’s license under the
Money Transmitter Act, number 0034, is hereby SUSPENDED.
FURTHER, Cashpoint is to cease and desist from engaging in the
transmission of money in Pennsylvania and is not to accept directly, or
through any agent, any monies of funds on behalf of any person;
FURTHERMORE, pursuant to section 6(b.1) of the Money Transmitter Act, 7
P.S. Section 6106(b.1) Cashpoint is hereby ORDERED to provide an additional
bond in the amount of $1 million to the Department of Banking no later than
5:00 on April 30, 2004.
It is so ordered this 23rd day of April, 2004 at 10:00.
FOR THE COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF BANKING
BUREAU OF SUPERVISION AND ENFORCEMENT
Timothy J. Blase, Director