Chapter 217

217.10(3)(b)6. 6. An obligation that is guaranteed fully as to principal and interest by the United States.

217.10(3)(b)7. 7. The amount of the security provided under sub. (2) that exceeds the average daily money transmission liability in this state.

217.10(3)(b)8. 8. The full drawable amount of a standby letter of credit that meets all the following requirements:

217.10(3)(b)8.a. a. It is irrevocable, unconditional, and unqualified.

217.10(3)(b)8.b. b. It is issued by a federally insured depository financial institution; a foreign bank authorized under federal law to maintain a federal agency or federal branch office in a state; or a foreign bank that is authorized under the law of a state to maintain a branch that is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks, credit unions, and trust companies if the foreign bank or its parent company bears an eligible rating.

217.10(3)(b)8.c. c. It identifies the division or its agent as the stated beneficiary.

217.10(3)(b)8.d. d. It states an issue date and expiration date.

217.10(3)(b)8.e. e. It automatically extends for one year, without a written amendment, upon each expiration date unless the issuer of the letter of credit notifies the division at least 60 days prior to any expiration date that the irrevocable letter of credit will not be extended. Notice shall be provided by certified or registered mail or courier mail or other receipted means.

217.10(3)(b)8.f. f. It provides that the issuer of the letter of credit will honor, at sight, a presentation made by the beneficiary to the issuer of the original letter of credit and any amendments thereto.

217.10(3)(b)8.g. g. It provides that the issuer of the letter of credit will honor, at sight, a written statement by the beneficiary that a petition for bankruptcy, reorganization, receivership, or dissolution has been filed by or against the licensee; the licensee’s assets have been seized pursuant to an emergency order issued on the ground that the licensee is, or is at risk of becoming, insolvent; or the beneficiary has received notice of expiration or nonextension of a letter of credit and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain the minimum permissible investments required in par. (a) upon the expiration or nonextension of the letter of credit.

217.10(3)(b)8.h. h. It stipulates that the beneficiary may obtain funds up to the amount of the letter of credit no later than 7 days after presenting a written statement by the beneficiary that any of the events specified in subd. 8. g. has occurred.

217.10(3)(b)8.i. i. It does not reference other agreements or provide for any security interest in the licensee.

217.10(3)(b)9. 9. Receivables payable to a licensee from its authorized delegates in the ordinary course of business that are less than 7 days old, subject to the following limitations:

217.10(3)(b)9.a. a. Receivables payable to a licensee from its authorized delegates may not exceed 50 percent of the aggregate value of the licensee’s total permissible investments.

217.10(3)(b)9.b. b. Receivables payable to a licensee from a single authorized delegate may not exceed 10 percent of the aggregate value of the licensee’s total permissible investments.

217.10(3)(b)10. 10.

217.10(3)(b)10.a. a. Subject to the limitations in subd. 10. b., a short-term investment of 6 months or less that bears an eligible rating; commercial paper that bears an eligible rating; a bill, note, bond, or debenture that bears an eligible rating; a U.S. tri-party repurchase agreement collateralized at 100 percent or more with federal government or agency securities, municipal bonds, or other securities that bear an eligible rating; a money market mutual fund rated less than “AAA” and equal to or higher than “A-” by S&P, or the equivalent from any other eligible rating service; or a mutual fund or other investment fund composed exclusively of the investments listed in subds. 1. to 6.

217.10(3)(b)10.b. b. The investments specified in subd. 10. a. may not in the aggregate exceed 50 percent of the aggregate value of the licensee’s total permissible investments. No single category of investment under subd. 10. a. may exceed 20 percent of the aggregate value of the licensee’s total permissible investments. The division may limit the extent to which a specific investment maintained by a licensee within a class of permissible investments may be considered a permissible investment.

217.10(3)(b)11. 11. Cash, including demand deposits, savings deposits, and funds in such accounts held for the benefit of the licensee’s customers, maintained at a foreign depository institution, subject to the following limitations:

217.10(3)(b)11.a. a. The licensee must have obtained at least a satisfactory rating in its most recent examination under this chapter.

217.10(3)(b)11.b. b. The foreign depository institution must bear an eligible rating, be registered under the Foreign Account Tax Compliance Act, and not be located in a country that is subject to sanctions from the office of foreign assets control in the U.S. treasury department or designated a high-risk or noncooperative jurisdiction by the Financial Action Task Force established at the G7 summit in Paris on July 14, 1989.

217.10(3)(b)11.c. c. Cash maintained at a foreign depository institution may not exceed 10 percent of the aggregate value of the licensee’s total permissible investments.

217.10(3)(b)12. 12. Any other investment authorized as a permissible investment by rule or written determination of the division.

217.10(3)(c) (c) Permissible investments, even if commingled with other assets of the licensee, are held in trust for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations on an equitable basis in the event of insolvency, the filing of a petition by or against the licensee for bankruptcy or reorganization, the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for the licensee’s dissolution or reorganization, or an action by a creditor against the licensee who is not a beneficiary of the trust. Permissible investments held in trust pursuant to this section are not subject to attachment, levy of execution, or sequestration, except for a beneficiary of the trust. Any statutory trust established hereunder shall be terminated upon extinguishment of all the licensee’s outstanding money transmission obligations.

217.10(3)(d) (d) Following the issuance of a notice of expiration or nonextension of a letter of credit under par. (b) 8. e., and no later than 15 days prior to the expiration date of the letter of credit, the licensee shall demonstrate to the satisfaction of the division that the licensee will continue to comply with sub. (1) after the letter of credit expires. If the licensee fails to do so, the division may draw on the letter of credit up to an amount necessary to meet the licensee’s requirements under sub. (1), which shall be offset against the licensee’s outstanding money transmission obligations. The drawn funds shall be held in trust by the division or its agent for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations.

217.10 History History: 2023 a. 267.

217.11 217.11 Powers of the division. In addition to the powers granted in other sections of this chapter or other applicable law, the division may do any of the following:

217.11(1) (1) Investigate, at any time, the business and examine the books, accounts, records, and files used in the business of every licensee or authorized delegate of a licensee. The cost of each examination shall be paid by each licensee so examined within 30 days after demand by the division.

217.11(2) (2) Issue subpoenas and take testimony of any person in relation to any matter within the division’s powers and require the person to produce records regarding any matter related to the condition or business of a person engaged in activity regulated under this chapter.

217.11(3) (3) Require any person to provide written reports or answers to questions, in a form and manner acceptable to the division, concerning any matter related to the condition or business of a person engaged in activity regulated under this chapter.

217.11(4) (4) Use, contract for, or employ analytical systems, methods, or software to examine or investigate any person subject to this chapter.

217.11(5) (5) Accept an audit report made by an independent certified public accountant or other qualified 3rd-party auditor for an applicant or licensee and incorporate the audit report in any report of examination or investigation.

217.11(6) (6) Promulgate rules or issue orders to administer, enforce, or carry out the purposes of this chapter, including such rules or orders as may be necessary to protect the public from oppressive or deceptive practices of licensees and to prevent evasions of this chapter.

217.11(7) (7) Take possession of any insolvent licensee under the circumstances and utilizing the procedures prescribed in s. 218.04 (9m), so far as applicable.

217.11(8) (8) Enter into a consent order at any time with a person to resolve a matter arising under this chapter or any rule promulgated under this chapter.

217.11 History History: 2023 a. 267.