By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
CHECK CASHER LICENSING
AND ELECTRONIC FUND
TRANSFER APPROVALS

CEASE DIRECTIVE


In the Matter of
JACKSON HEWITT, INC., Parsippany, New Jersey
and BVIG FINANCIAL, LLC, Houston, Texas

The Commissioner of Banks ("Commissioner") is charged with the administration of Massachusetts General Laws chapter 169A, and applicable regulations found at 209 CMR 45.00 et seq., relating to the licensing of check cashers; and Massachusetts General Laws chapter 167B and applicable regulations found at 209 CMR 31.00 et seq., relating to the operation of electronic funds transfer systems through electronic branches by both banks and non-banks.

Pursuant to the authority granted by Massachusetts General Laws chapter 169A and Massachusetts General Laws chapter 167B, the Commissioner has investigated the activities of JACKSON HEWITT, INC., ("Jackson Hewitt") located at 3 Sylvan Way, Suite 301, Parsippany, New Jersey and BVIG FINANCIAL, LLC, ("BVIG Financial") located at 2425 West Loop South, Suite 865, Houston, Texas, to determine if Jackson Hewitt and BVIG Financial have engaged in the business of, or are about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 169A, and Massachusetts General laws chapter 167B. Based upon such investigations, the Division determined that while Jackson Hewitt and BVIG Financial appeared to be separate unrelated entities, both operated in what the Division considers to be a joint enterprise and hereby issues the following CEASE DIRECTIVE ("Cease Directive") as a result of the findings alleged herein.

A. FINDINGS OF FACT

I. Unlicensed Check Cashing Activity

  1. Massachusetts General Laws chapter 169A, section 2 relative to the licensing requirements for entities engaged in the business of check cashing states:

    No person or entity shall engage in cashing checks, drafts or money orders for a consideration in excess of one dollar per item without first obtaining a license from the commissioner...The commissioner shall establish rules and regulations, which may include an adequate capitalization requirement, for each place of business or mobile unit of a licensee to aid in the administration and enforcement of this chapter.

  2. The Division of Banks ("Division"), through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a check casher in Massachusetts pursuant to Massachusetts General Laws 169A, section 2 and its implementing regulation 209 CMR 45.00 et seq.
  3. Jackson Hewitt is, and at all relevant times, has been a foreign corporation doing business in the Commonwealth of Massachusetts with a principal office located at 3 Sylvan Way, Suite 301, Parsippany, New Jersey.
  4. Jackson Hewitt maintains and operates several office locations in the Commonwealth from which it offers tax preparation services to consumers in the Commonwealth.
  5. BVIG Financial is, and at all relevant times, has been a foreign corporation doing business in the Commonwealth of Massachusetts with a principal office located at 2425 West Loop South, Suite 865, Houston, Texas.
  6. On February 27, 2009, the Division was forwarded a copy of a receipt processed by a check-cashing machine maintained by BVIG Financial and operated on the premises of a Jackson Hewitt office at 574 Washington Street, Dorchester, Massachusetts ("Dorchester location").
  7. The receipt received by the Division and dated February 24, 2009 reflected a transaction for a check of $654.27 that was cashed at the check-cashing machine operated by BVIG Financial and located at the Dorchester location for fee of $20.27.
  8. As a result of the events referenced in Paragraphs 6 and 7 of this Directive, on March 4, 2009, the Division's examiners conducted a visitation of the Dorchester location ("Visitation").
  9. The Division's examiners determined that a machine that operated as a check cashing machine and an Automated Teller Machine, ("ATM" as defined herein) were located and operated on the premises of the Dorchester location and according to disclosures on the machines, were operated by BVIG Financial.
  10. The disclosures on the check-cashing machine maintained by BVIG Financial and operated on the premises of the Dorchester location, indicated that the check-cashing fee was 2.99% with a minimum fee of $5.00 per transaction. The receipt received by the Division and referenced in Paragraphs 6 and 7 of this Directive revealed, however, that the transaction fee was in excess of the 2.99% rate stated and was 3.10% or $20.27.
  11. Massachusetts General Laws chapter 169A, section 13 states:

    Whoever violates any provision of section two or any rule or regulation made thereunder by the commissioner shall be punished by a fine of not more than five hundred dollars or by imprisonment for not more than six months, or both. Each day a violation continues shall be deemed a separate offense.

  12. According to the Division's records, as of the date of this Directive, Jackson Hewitt has not filed an application with the Division to obtain a check casher license.
  13. According to the Division's records, as of the date of this Directive, BVIG Financial has not filed an application with the Division to obtain a check casher license.

    II. Operating Unauthorized Electronic Funds Transfer Services

  14. Massachusetts General Laws chapter 167B and its implementing regulation 209 CMR 31.00 et seq., requires entities seeking to purchase, establish, install, operate, lease, use, or share a non-bank electronic branch, hereinafter referred to as ATM, to file an application, with the Commissioner for a decision, prior to providing electronic funds transfer services.
  15. Massachusetts General Laws chapter 167B, section 1, in part defines an electronic branch as:

    An electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. Such term includes, but is not limited to automated teller machines and cash dispensing machines.

  16. Massachusetts General Laws chapter 167B, section 4 states in part:

    An application filed with the commissioner to purchase, establish, install, operate, lease, use or share an electronic branch shall contain the following information:

    (a) the type of electronic branch applied for;

    (b) the site location of such electronic branch with a general description of the surrounding area;

    (c) the services which may be performed at such electronic branch;

    (d) whether the electronic branch will credit or debit a customer's account immediately or on a delayed basis;

    (e) a description of the bonding or the contractual responsibilities for any losses or unauthorized transactions if such electronic branch is manned by a third party employee;

    (f) if the electronic branch is to be shared, a list of other participants and a copy of the leasing agreement;

    (g) the name and address of the owner of the electronic branch, and if such owner is a subsidiary of another corporation, the name and address of the parent corporation;'.

    (h) details regarding the applicant's insurance program and, in particular, considerations made relative to the proposed electronic branch;

    (i) an outline of the security provisions for the protection of the electronic branch and the customers using it;

    (j) the manner in which the electronic branch will be activated;

    (k) copies of all agreements or proposed agreements relating to the operation or use relative to such electronic branch;

    (l) a copy of any contract between a financial institution and its customers;

    (m) if the electronic branch is owned by the applicant, a description of the fixed assets costs and estimated operating expenses; and

    (n) any such other information which the commissioner shall require by rules and regulations.

    A schedule of all existing service charges or fees on any account and a schedule of charges assessed to financial institutions to use the electronic branch shall accompany each application.

  17. Massachusetts General Laws chapter 167B, section 5 states in part:

    No financial institution shall invest in or contract for the services of any organization unless such organization has been approved in writing by the commissioner and the financial institution has obtained a copy of such approval'.

    An organization seeking to purchase, establish, install, operate, lease, use or share an electronic branch for the purpose of providing electronic fund transfers for financial institutions shall comply with the provisions of section four. An application by an organization under said section four may list one or more financial institutions to which the organization plans to provide services, or with which or on behalf of which it plans to purchase, establish, install, operate, lease, use or share an electronic branch and may be supplemented from time to time by the addition of other such financial institutions.

  18. The visitation to the Dorchester location referenced in Paragraphs 8 through 10 of this Directive, revealed that an ATM was operated by BVIG Financial and operated on the premises of the Dorchester location.
  19. The disclosures on the ATM maintained by BVIG Financial and operated on the premises of the Dorchester location indicated that the ATM services were conducted on behalf of BVIG Financial and included a contact number for BVIG Financial.
  20. Massachusetts General Laws chapter 167B, section 22(a) states in part:

    Whenever the commissioner has reason to believe that any person is in violation of any provision of this chapter, and that proceedings would be in the public interest, the commissioner may request the attorney general to bring an action in the name of the commonwealth against such person to restrain the violation by temporary restraining order or preliminary or permanent injunction. The action may be brought in the superior court of the county in which such person resides or has his principal place of business, or the action may be brought in the superior court of Suffolk county with the consent of the parties or if the person has no place of business within the commonwealth. Said court may issue temporary restraining orders or preliminary or permanent injunctions.

  21. According to the Division's records, as of the date of this Directive, Jackson Hewitt has not filed an application to operate an ATM with the Division.
  22. According to the Division's records, as of the date of this Directive, BVIG Financial has not filed an application to operate an ATM with the Division.

    B. CEASE DIRECTIVE

  23. Jackson Hewitt and BVIG Financial are hereby directed to cease engaging in the check cashing business until such time that Jackson Hewitt and BVIG Financial have individually demonstrated that they are exempt from the licensing provisions of Massachusetts General Laws chapter 169A and its implementing regulation 209 CMR 45.00 et seq., or have obtained a license issued by the Commissioner of Banks for the check cashing business in Massachusetts.
  24. Jackson Hewitt and BVIG Financial are hereby directed to cease providing electronic funds transfer services until such time that Jackson Hewitt and BVIG Financial have individually demonstrated that they are exempt from the provisions of Massachusetts General Laws chapter 167B and its implementing regulation 209 CMR 31.00 et seq., or have filed an application and received approval to offer such services by the Commissioner of Banks.
  25. Jackson Hewitt and BVIG Financial must individually submit a response within ten days of receipt of this Directive. The response must provide satisfactory evidence that Jackson Hewitt and/or BVIG Financial are exempt from the provisions of Massachusetts General Laws chapter 169A, and Massachusetts General Laws, chapter 167B , or indicate whether Jackson Hewitt and/or BVIG Financial will seek to be licensed as a check casher and/or file an application requesting approval to provide electronic funds transfer services and, if so, indicate approximately when a completed application will be submitted to the Division. The response submitted by Jackson Hewitt and/or BVIG Financial must also include a signed copy of the enclosed affidavits, completed by an authorized officer, attesting that Jackson Hewitt and/or BVIG Financial will immediately cease from engaging in the check cashing business and/or providing electronic funds transfer services as a until such time as a license and/or approval to engage in such activities is issued by the Commissioner.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 22nd day of June, 2009

By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts