84-2

November 26, 1984

Re: Sale of Travelers Check of ________
Dear Mr. ________:
This will respond to your letter of October 25, 1984. Your letter states that your bank wishes to sell travelers check denominated in Pesetas.
Financial Code Section 1750 (a) provides “No foreign (other nation) bank shall transact business in this State except at an agency or branch office which it is licensed to maintain and at which it is permitted by this chapter to transact such business.” Financial Code Section 1853 provides that “No person shall engage in the business of issuing travelers checks without having first obtained a license hereunder.” However, Financial Code Section 1854 (a) provides the following exemptions:
“No license to issue travelers checks shall be required of any bank which is organized under the laws of this state, any national bank which maintains its head office in this state, or any foreign bank which is licensed under Article 3 (commencing with Section 1750) of Chapter 13.5 or which is authorized under federal law to maintain a federal agency or branch office in this state.”
Financial Code Section 1854.1 also provides a limited exemption from the provisions of Financial Code Section 1853. That exemption is as follows:
“There is exempted from the provisions of Section 1853 the sale by a person licensed under Chapter 14 (commencing with Section 1800) or by any agent of such person, of any foreign currency travelers check that is issued by a bank which is organized under the laws of a nation other than the United States and which is neither licensed under Article 3 (commencing with Section 1750) of Chapter 13.5 nor authorized under federal law to maintain a federal agency or federal branch in this state, provided: (a) That such person, at the time when it sells the foreign currency travelers check, either directly or indirectly through any of its agents, provides to the purchaser a written guaranty that, if such bank falls to pay the foreign currency travelers check on account of insolvency, such person will pay the foreign currency travelers check; and (b) That the aggregate face amount of foreign currency travelers checks issued by such bank which are sold in this state in any calendar year by such person, directly or indirectly through its agents, shall not exceed the equivalent of one hundred thousand dollars ($100,000).”
It appears that ________ is currently not licensed under Article 3 (commencing with Section 1750) of Chapter 13.5 nor authorized under federal law to maintain a federal agency or federal branch in this State, therefore, the exemption under Financial Code Section 1854 does not appear to be available. Therefore, it appears that only the limited exemption under Financial Code Section 1854.1 would be available.
If you have any questions or comments, please feel free to write or telephone.
Very truly yours,
LOUIS CARTER
Superintendent of Banks

By

ALIDA R. BUCHANAN
Counsel

ARB:aee

cc: John R. Paulus

November 5, 1984

Re: Sale of Money Orders of ________

Dear Mr. ________:
This will respond to your letter of October 1, 1984. Your letter states that ________ proposes to issue its money orders for sale in California. You state that it is your interpretation of the Payment Instruments Law that ________ is exempt from any licensing requirements as it is a national banking association whose deposits are insured by the Federal Deposit Insurance Corporation.
You are correct that Financial Code Section 33100(a)(1) provides an exemption from licensing requirements under the Payment Instruments Law for any insured bank, when selling any payment Instruments by it: however, Financial Code Section 1750(a)(1) provides:
“No foreign (other state) bank shall transact business in this state.”
Although Financial Code Section 33100(a)(1) would exempt ________ from the licensing requirements of the Payment Instruments Law if it were permitted to transact business in the state, Financial Code Section 1750(a)(1) prohibits ________ from transacting business in this state.
Should you have any questions, please feel free to contact us.
Very truly yours,
LOUIS CARTER
Superintendent of Banks
By
ALIDA R. BUCHANAN
Counsel
ARB:jo