Consumer bill would bar unsolicited 'live' checks that can create automatic obligations; advocates cite senior-targeting and identity-theft risks
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Summary
SB 582 would prohibit mailed negotiable 'live' checks that automatically create purchase or loan obligations when deposited; sponsors and consumer advocates said the mailings confuse seniors and can enable identity theft, while lenders asked for targeted exemptions for regulated convenience checks.
Rachel Allman, legislative director for Senator J.B. Jennings, presented SB 582 as a consumer-protection measure to stop mailed negotiable instruments that can create binding obligations when deposited. She described constituent examples and said the bill "prevents the mailing of live checks or negotiable instruments that automatically create a purchase or loan obligation when deposited," preserving non-binding solicitations and establishing enforcement tools.
Allman read a constituent example: a Parkville homeowner received a mailed check for $234,368.25; the constituent was "confused, upset, and frustrated" and worried about someone stealing the mailed check, committing identity theft and potentially buying her home. Advocates from Economic Action Maryland Fund supported the bill, citing harm to seniors and identity-theft risks. "These are very dangerous tools," said Jennifer Bevin Dangle, noting she serves senior clients and that such mailings can be used in predatory schemes.
Mariner Finance (represented by Lisa Harris Jones) asked for an amendment to clarify that legitimately regulated, unsecured convenience checks issued under Maryland law are not swept into the prohibition. "Mariners' checks are unsecured. They follow the rules of Maryland law," Jones said, and requested a carve-out so regulated financial institutions are not inadvertently excluded.
Committee members reviewed the bill's scope and the attorney general's opinion referenced by the sponsor. Members also discussed existing state and federal rules that regulate aspects of these products; witnesses said many offending mailings may originate from out of state and reiterated concern for seniors and low‑income households. The hearing concluded with questions outstanding and no recorded committee vote.
What happens next: sponsor and stakeholders may refine language to exempt regulated convenience checks while preserving a ban on deceptive mailed negotiable instruments that can create automatic obligations when deposited.
