The Money Transmission Modernization Act is a single set of nationwide standards and requirements that was created by industry and state experts and approved by the Conference of State Bank Supervisors Board of Directors. The new law standardizes definitions, exemptions from licensing, the licensing process, and safety and soundness requirements.
2023 WI Act 267, which is Wisconsin’s version of the Money Transmission Modernization Act, did not include the optional virtual currency component of the model law. The Division of Banking does not license or supervise companies whose business activities are limited to those involving virtual currency. However, should the transmission of virtual currency include the involvement of sovereign currency, it may be subject to licensure depending on how the transaction is structured.
Here are some of the key changes under the new law.
Prudential Standards
- Net Worth (s. 217.10(1)): A licensee shall maintain at all times a tangible net worth in excess of the greater of $100,000 or the sum of the following: 3 percent of the licensee's first $100,000,000 in total assets, plus 2 percent of any additional assets up to $1,000,000,000, plus 0.5 percent of any additional assets over $1,000,000,000.
- Surety Bond (s. 217.10(2)): A licensee shall at all times maintain a surety bond or other form of security acceptable to the division. The minimum required amount of the security shall be the greater of $100,000 or an amount equal to 100 percent of the licensee's average daily money transmission liability in this state calculated for the most recently completed 3-month period, up to $500,000. A licensee that maintains security of at least $500,000 is not required to calculate its average daily money transmission liability in this state.
- Permissible Investments (NEW for WI) (217.10(3)): A licensee shall maintain at all times permissible investments that have a market value computed in accordance with U.S. generally accepted accounting principles of not less than the aggregate amount of all of the licensee's outstanding money transmission obligations.
Renewal of License
- The license expires December 31st annually. (224.35(7)(e))
- No more than 60 days before license expiration, a licensee shall pay an annual renewal fee on the basis of its volume of money transmission in this state, as follows (217.05(6)):
- For a volume of $10,000,000 or less of money transmitted in the prior calendar year, $500.
- For a volume of $10,000,001 to $100,000,000 of money transmitted in the prior calendar year, $1,000.
- For a volume of $100,000,001 to $1,000,000,000 of money transmitted in the prior calendar year, $2,000.
- For a volume greater than $1,000,000,000 of money transmitted in the prior calendar year, $4,000.
Reporting and Records
- Money Services Businesses Call Report (217.07(1)): Each licensee shall submit a report of condition no later than 45 days after the end of each calendar quarter.
- Audited Financials (217.07(2)): Each licensee shall submit audited financial information prepared in accordance with U.S. generally accepted accounting principles no later than 90 days after the end of each fiscal year.
- Report of Authorized Delegates (formerly known as authorized agents) (217.07(3)): A licensee shall submit a report of authorized delegates no later than 45 days after the end of each calendar quarter.
- Reports of Certain Events (217.07(4)): Certain events are required to be filed with the division within 1-3 business days depending upon the event.
Change in Control
- Acquisition of Control (217.06(1)): Any person, or group of persons acting in concert seeking to acquire control of a licensee shall obtain the written approval of the division prior to acquiring control.
- Change of Key Individuals (217.06(2)): Upon adding or replacing any key individual, a licensee shall notify the division within 15 days after the effective date of the appointment and provide the required supporting documentation no later than 45 days after the effective date of the appointment.