Chapter 217

CHAPTER 217

MONEY TRANSMITTERS

217.01   Short title.

217.02   Definitions.

217.03   Exemptions.

217.04   Participation in the nationwide multistate licensing system and registry; networked supervision; confidentiality.

217.05   License requirements.

217.06   Acquisition of control; change of key individual.

217.07   Reporting and records.

217.08   Authorized delegates.

217.09   Timely transmission; refunds; receipts and other disclosures.

217.10   Prudential standards.

217.11   Powers of the division.

217.01 217.01 Short title. This chapter may be cited as the “Model Money Transmission Modernization Law.”

217.01 History History: 2023 a. 267.

217.02 217.02 Definitions. In this chapter:

217.02(1) (1) “Acting in concert” means persons knowingly acting together with a common goal of jointly acquiring control of a licensee, whether or not pursuant to an express agreement.

217.02(2) (2) “Authorized delegate” means a person a licensee designates to engage in money transmission on behalf of the licensee.

217.02(3) (3) “Average daily money transmission liability” means the amount of a licensee’s outstanding money transmission obligations at the end of each day in a given period of time, added together, and divided by the total number of days in the given period of time. For purposes of calculating average daily money transmission liability under this chapter for any licensee required to do so, the given period of time shall be the quarters ending March 31, June 30, September 30, and December 31.

217.02(4) (4) “Bank Secrecy Act” means the Bank Secrecy Act, 31 USC 5311 et seq., and its implementing regulations.

217.02(5) (5) “Closed loop stored value” means stored value that is redeemable by the issuer only for goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value.

217.02(6) (6) 

217.02(6)(a) (a) “Control” means any of the following:

217.02(6)(a)1. 1. The power to vote, directly or indirectly, at least 25 percent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee.

217.02(6)(a)2. 2. The power to elect or appoint a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a licensee or person in control of a licensee.

217.02(6)(a)3. 3. The power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee.

217.02(6)(b) (b) A person is presumed to exercise a controlling influence within the meaning of par. (a) 3. if the person holds the power to vote, directly or indirectly, at least 10 percent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee. A person presumed to exercise a controlling influence under this paragraph may rebut the presumption of control by showing that the person is a passive investor.

217.02(6)(c) (c) For purposes of determining the percentage of a person controlled by any other person, the person’s interest shall be aggregated with the interest of any other immediate family member, including the person’s spouse, parents, children, siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law, sisters-in-law, and any other person who shares the person’s home.

217.02(7) (7) “Division” means the division of banking.

217.02(8) (8) “Eligible rating” means a credit rating of any of the 3 highest rating categories provided by an eligible rating service, whereby each category may include rating category modifiers such as “plus” or “minus” for S&P, or the equivalent for any other eligible rating service. Long-term credit ratings are deemed eligible if the rating is equal to A- or higher by S&P, or the equivalent from any other eligible rating service. Short-term credit ratings are deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P, or the equivalent from any other eligible rating service. If ratings differ among eligible rating services, the highest rating applies when determining whether a security bears an eligible rating.

217.02(9) (9) “Eligible rating service” means any nationally recognized statistical rating organization as defined by the U.S. Securities and Exchange Commission, and any other organization designated by the division.

217.02(10) (10) “Federally insured depository financial institution” means a bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company organized under the laws of the United States or any state of the United States, when such bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company has federally insured deposits.

217.02(11) (11) “In this state” includes, with respect to a money transmission transaction, all of the following:

217.02(11)(a) (a) A transaction requested in person at a physical location within the geographic boundaries of this state.

217.02(11)(b) (b) A transaction requested by telephone or electronic means by a resident of this state, if information provided by the person requesting the transaction, or other records of the provider of money transmission, indicate that the person’s physical address or principal place of business is located within the geographic boundaries of this state.

217.02(12) (12) “Key individual” means any individual ultimately responsible for establishing or directing policies and procedures of a licensee, such as an executive officer, manager, director, or trustee.

217.02(13) (13) “Licensee” means a person licensed under this chapter.

217.02(14) (14) “Material litigation” means litigation that, according to U.S. generally accepted accounting principles, is significant to a person’s financial health and would be required to be disclosed in the person’s annual audited financial statements, report to shareholders, or similar records.

217.02(15) (15) “Monetary value” means a medium of exchange, whether or not redeemable in money.

217.02(16) (16) “Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government. “Money” includes a monetary unit of account established by an intergovernmental organization or by agreement between 2 or more governments.

217.02(17) (17) “Money transmission” means any of the following:

217.02(17)(a) (a) Selling or issuing payment instruments to a person located in this state.

217.02(17)(b) (b) Selling or issuing stored value to a person located in this state.

217.02(17)(c) (c) Receiving money for transmission from a person located in this state.

217.02(18) (18) “MSB-accredited state” means a state that has an agency that is accredited by the Conference of State Bank Supervisors and Money Transmitter Regulators Association for money transmission licensing and supervision.

217.02(19) (19) “Multistate licensing process” means any agreement among state regulators relating to coordinated processing of applications for money transmission licenses, applications for the acquisition of control of a licensee, control determinations, or notice and information requirements for a change of key individuals.

217.02(20) (20) “Nationwide multistate licensing system and registry” has the meaning given in s. 224.35 (1g) (b).

217.02(21) (21) 

217.02(21)(a) (a) “Outstanding money transmission obligations” includes all of the following:

217.02(21)(a)1. 1. Any payment instrument or stored value issued or sold by a licensee to a person located in the United States or reported as sold by an authorized delegate of the licensee to a person that is located in the United States that has not yet been paid or refunded by or for the licensee, or reported and delivered to the secretary of revenue as provided under ch. 177.

217.02(21)(a)2. 2. Any money received for transmission by a licensee or an authorized delegate in the United States from a person located in the United States that has not been received by the payee or refunded to the sender, or escheated in accordance with applicable abandoned property laws.

217.02(21)(b) (b) For purposes of this subsection, “in the United States” includes any state, territory, or possession of the United States, any U.S. military installation that is located in a foreign country, the District of Columbia, and the Commonwealth of Puerto Rico.

217.02(22) (22) 

217.02(22)(a) (a) “Passive investor” means a person who meets all of the following criteria:

217.02(22)(a)1. 1. The person does not have the power to elect a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a licensee.

217.02(22)(a)2. 2. The person is not employed by, and does not have any managerial duties of, a licensee or a person in control of a licensee.

217.02(22)(a)3. 3. The person does not have the power to exercise, either directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee.

217.02(22)(b) (b) A passive investor may demonstrate satisfaction of the criteria of par. (a) by completing an attestation or other document, in a form and manner prescribed by the division, confirming that each of those criteria is met.

217.02(23) (23) “Payment instrument” means a written or electronic check, draft, money order, traveler’s check, or other written or electronic instrument for the transmission or payment of money or monetary value, whether or not negotiable. “Payment instrument” does not include stored value or any instrument that is redeemable by the issuer only for goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value. “Payment instrument” also does not include any instrument that is not sold to the public and is issued and distributed as part of a loyalty, rewards, or promotional program.

217.02(25) (25) “Person” includes individuals, general partnerships, limited partnerships, limited liability companies, corporations, trusts, associations, joint stock corporations, and other bodies politic or corporate.

217.02(26) (26) “Receiving money for transmission” or “money received for transmission” means receiving money or monetary value in the United States for transmission within or outside the United States by electronic or other means.

217.02(27) (27) “Stored value” means monetary value representing a claim against the issuer evidenced by an electronic or digital record, and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. “Stored value” includes prepaid access, as defined in 31 CFR 1010.100. Notwithstanding the foregoing, “stored value” does not include a payment instrument or closed loop stored value, or stored value not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.

217.02(28) (28) “Tangible net worth” means the aggregate assets of a licensee excluding all intangible assets, less liabilities, as determined in accordance with U.S. generally accepted accounting principles.

217.02(29) (29) “Unique identifier” has the meaning given in s. 224.35 (1g) (e).

217.02 History History: 2023 a. 267.

217.03 217.03 Exemptions.

217.03(1) (1) This chapter does not apply to any of the following:

217.03(1)(a) (a) An operator of a payment system to the extent that it provides processing, clearing, or settlement services, between or among persons exempted by this section or licensees, in connection with wire transfers, credit card transactions, debit card transactions, stored-value transactions, automated clearing house transfers, or similar funds transfers.

217.03(1)(b) (b) A person appointed as an agent of a payee to collect and process a payment from a payor to the payee for goods or services, other than money transmission itself, provided to the payor by the payee, if all the following are true:

217.03(1)(b)1. 1. There exists a written agreement between the payee and the agent directing the agent to collect and process payments from payors on the payee’s behalf.

217.03(1)(b)2. 2. The payee holds the agent out to the public as accepting payments for goods or services on the payee’s behalf.

217.03(1)(b)3. 3. Payment for the goods and services is treated as received by the payee upon receipt by the agent, so that the payor’s obligation is extinguished and there is no risk of loss to the payor if the agent fails to remit the funds to the payee.