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As of October 3rd of this year (2022), the state database provider for the state of Kentucky is requiring lenders it licenses for deferred check cashing to report some additional information when closing the loan transaction: payment method used to close, deposit date and proof of clearing method. I have checked the Kentucky Department of Financial Institutions (DFI) website and the Kentucky codes and regulations, including registers of both going back a year, and cannot find anything that seems to call for this explicitly. Can the database provider (Veritec Systems in this case) unilaterally decide to require information not explicitly required by statute or regulation? Or did I miss something? The relevant statute subsection is 268.9 and the regulation chapter is 808 unless I am much mistaken.

My main interest in this is to find when it was known, or should have been known, licensees would need to make changes to their reporting processes.

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  • FWIW I am not completely sure whether these are check cashing transactions per se or if they are payday/cash advance type loans, Kentucky may regulate both with these same statutes/regulations.
    – Patrick87
    Aug 26, 2022 at 10:30
  • Might Veritec, a 3rd party company, have a contract with the loan providers that stipulates such? Or might Veritec's contract with Kentucky be worded in such a way that they are required to gather these data? As someone not a party to the contract, that would be hard to verify.
    – Trish
    Aug 26, 2022 at 11:07
  • It certainly might @Trish, just seems strange to me that licensees could be required by statute /regulation to report whatever the 3rd party or commissioner say, without at least writing it down somewhere the public can see it... let alone making it a statute or regulation.
    – Patrick87
    Aug 26, 2022 at 11:11
  • Let me give you a silly example from german arms procurement for the Bundeswehr: there is no law that requires the H&K G36 to be of certain specifications. There isn't even an adopted specification sheet in any regulation. What there is, is a contract that the Bundeswehr had with H&K, which contained order specifications. There was litigation on those specifications and the claim of the Bundeswehr, that the guns were unsuitable, but the order specifications were quite precise in what was demanded. Courts found, that following the contract for the order was exactly what is enough to comply.
    – Trish
    Aug 26, 2022 at 11:15
  • If the contract with Veritc was changed to reflect "In the future, we need you to also write down the license number of the loan offering service provider", then that is a requirement of the contract, not one of the law or regulation. They just buy a different product now.
    – Trish
    Aug 26, 2022 at 11:16

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