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Division of Banking

Banks and Trust Companies - Check Printers Frequently Asked Questions

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Q. What is a Seller or Distributor of Checks?
A.

Have you ever received in the mail an advertisement to buy checks from a company or person? This is a Seller or Distributor of Checks or a Check Printer. A Check Printer is a company or person (not a bank) who sells or distributes checks to consumers. Consumers may use these checks - just like the checks banks sell - to draw against funds held by a financial institution in a consumer-deposit account, such as a checking or savings account.

Q. What are the rights and responsibilities of a Check Printer?
A.

Check Printers have the commercial ability or right to advertise and sell checks to consumers and businesses in Illinois as long as they comply with the Act 690 -- Check Printer and Check Number Act.

One of the Check Printersí most significant responsibilities is to verify that a new customer to the Check Printer is who he says he is. Before a Check Printer delivers any order of checks to a new customer, the Check Printer must verify the accuracy of that personís

1. Name
2. Street Address
3. City
4. State
5. Account Number
Acceptable forms or ways for a Check Printer to verify that a consumer is who he says he is would be to obtain

1. A copy of the consumerís account agreement with his or her financial institution
2. A recent account statement issued by the financial institution to the consumer
3. A letter or verbal response from the financial institution verifying the account information
4. A copy of the Magnetic Ink Character Recognition specification sheet from the financial institution
A Check Printer who does not follow the verification procedures is liable for a fine of $1,000 dollars per offense.

Check Printers are also required to sell checks to consumers that are in compliance with the requirements of Section 3-104 of the Uniform Commercial Code (810 ILCS 5/3-104).

Q. How does one become a Seller or Distributor of Checks?
A.

New Check Printers

If a person or company desires to establish a Check Printer business and sell checks to Illinois consumers, then before any checks are sold the Check Printer must do the following according to the Act 690 -- Check Printer and Check Number Act

1. Register with the Illinois Department of Financial and Professional Regulation using the Registration of Sellers or Distributors of Checks and the Sellers or Distributor of Check Bond
2. Register with the Illinois Department of Financial and Professional Regulation annually thereafter
3. Procure a surety bond in the principal sum of no less than $10,000 from a bonding company authorized to do business in this State.
Previously Existing Check Printers

Existing Check Printers who sell checks to consumers in other states and would like to sell checks to consumers in Illinois must register with the Illinois Department of Financial and Professional Regulation according to the Act 690 -- Check Printer and Check Number Act and annual register thereafter. A Check Printer must also procure a surety bond in the principal sum of no less than $10,000 from a bonding company authorized to do business in this State.

Q. How do I find an insurance company that is authorized by the State of Illinois to issue surety bonds?
A.

The Department of Insurance regulates insurance companies in Illinois and maintains a list of property and casualty companies registered to do business in Illinois and are authorized to issue surety bonds in Illinois under 215 ILCS 5/4 Class 2, Clause G. You may request a list of these companies from the Department of Insurance, Corporate Regulation Section:

Phone: 217-782-1757
Fax: 217-524-2271

Q. I am a Check Printer and my surety bond is being cancelled. What do I need to do?
A.

In summary, you must do two things as soon as possible if your surety bond is being cancelled:

1. Procure or receive a new surety bond before the effective date of the cancellation of your old surety bond.
2. Fax or mail proof of your new surety bond to the Division of Banking, Compliance Reporting Section

From time to time, an insurance company will cancel a Check Printer's surety bond that is payable to any party injured due to a business decision of the surety bond company or because the surety bond company is closing or is no longer authorized by the State of Illinois to issue surety bonds.

If a surety bond is being cancelled, a Check Printer is required by law to procure or receive a new surety bond before the effective date of the cancellation of your old surety bond. You must have a surety bond at all times. You may want to read How do I find an insurance company that is authorized by the State of Illinois to issue surety bonds?

The Check Printer and Check Number Actstates the following in Section 25:

A registrant shall maintain at all times a surety bond procured by the registrant and issued by a bonding company authorized to do business in this State in a principal sum of no less than $10,000. The bond shall be for any liability incurred by the registrant resulting from a judgment entered for any violation of this Act, including damages awarded in actions brought pursuant to Section 35. At the time of each registration, the registrant shall file with the Commissioner proof of such surety bond.

Please use the Sellers and Distributor of Check Bond registration form to prove that you have procured another surety bond. You may fax it to 217-557-0330 or mail it to

Division of Banking
ATTN: Compliance Reporting Section
320 West Washington Street
Springfield, IL 62786

Q. If I sell or dissolve my Check Printer business, how do I let IDFPR know?
A.

If you sell or dissolve your check printer business, all you have to do is notify this office via a correspondence. Please send a correspondence to the following address:

Division of Banking
ATTN: Compliance Reporting Section
320 West Washington Street
Springfield, IL 62786

and in the correspondence include at least the following items:

1) the effective date of the transaction between seller and buyer

or

the effective date you ceased check printing/selling activity

2) if you sold your business, the parties involved in the transaction and their addresses.

3) if you sold your business, the contact person of the buyer and what is his/her telephone number, fax number (if you have it), and email address (if you have it).