ARG:wlj
2023 - 2024 LEGISLATURE
November 9, 2023 - Introduced by Senators Knodl and Wanggaard, cosponsored
by Representatives O'Connor, Murphy and Macco. Referred to Committee on
Shared Revenue, Elections and Consumer Protection.
SB668,3,9
1An Act to repeal 138.09 (7) (b), (bm) and (bn), 138.09 (7) (e) 2., 138.09 (7) (gm)
21. and 2., 138.12 (14), 218.04 (3) (c), 218.04 (8), 224.72 (7) (bm), 224.725 (5) (a)
31. and 2. and 224.725 (5) (b);
to renumber 138.09 (1a) and 218.0161;
to
4renumber and amend 138.09 (1d), 138.09 (1m) (a), 218.0114 (4), 218.0114
5(17), 218.04 (1) (b), 218.04 (13), 224.72 (7) (am), 224.725 (5) (a) (intro.), 224.728
6(title), 224.728 (1), 224.728 (2), 224.728 (3), 224.728 (4) and 224.728 (5);
to
7amend 49.857 (1) (d) 12., 73.0301 (1) (d) 6., 100.315 (1), 108.227 (1) (e) 6., 138.09
8(1m) (b) 1. (intro.), 138.09 (2), 138.09 (3) (c), 138.09 (3) (d), 138.09 (3) (e) 1. a. and
9f., 138.09 (3) (f), 138.09 (6), 138.09 (7) (c) 2. and 4., 138.09 (7) (e) 3., 138.09 (7)
10(g) (intro.), 138.09 (7) (k), 138.12 (3) (b), 138.12 (4) (am) 1., 138.12 (5) (b), 138.14
11(4) (a) 1. (intro.), 138.14 (6) (a), 138.14 (6) (b) 1. b., 138.14 (7) (d), 138.14 (8) (c),
12138.14 (9) (a) 4., 138.14 (14) (c) 1., 138.14 (14) (m), 138.14 (15) (title), 186.113
13(22) (title), 214.04 (20), 215.13 (41) (title), 218.0111 (2), 218.0114 (5) (b),
14218.0114 (13) (a), 218.0114 (20) (c), 218.0116 (1) (am), 218.0161 (title), 218.0162,
1218.02 (2) (a) 1. (intro.), 218.02 (5) (a) and (b), 218.02 (6) (a) (intro.), 218.02 (6)
2(a) 1., 218.02 (9) (title), 218.02 (9) (a) (intro.), 218.02 (9) (c), 218.04 (1) (a), 218.04
3(2) (a) and (b), 218.04 (3) (a) 1. (intro.), 218.04 (3) (b), 218.04 (4) (a), 218.04 (4)
4(am) 1., 218.04 (5) (a) (intro.), 1., 2., 3. and 4., 218.04 (5) (c), 218.04 (6) (title),
5218.04 (6) (b), 218.04 (6) (c) (intro.) and 2., 218.04 (7) (title), 218.04 (7) (a), 218.04
6(9g) (c), 218.04 (9m) (e), 218.04 (10) (b), 218.04 (13) (title), 218.05 (3) (a) 2.,
7218.05 (3) (c), 218.05 (10) (a) and (c), 218.05 (11) (intro.), 218.05 (12) (title),
8218.05 (12) (a) 1., 220.02 (2) (c), 220.02 (3), 220.06 (1m), 224.71 (7), 224.71 (13g)
9(b), 224.71 (18), 224.72 (2) (am), 224.72 (7) (title), 224.725 (1), 224.725 (1r) (a)
105., 224.725 (1r) (c) 1., 224.725 (1r) (c) 2. d., 224.725 (2) (a), 224.725 (2) (c) (intro.)
11and 2. (intro.), 224.725 (5) (title), 224.74 (1) (a), 224.74 (2) (b), 224.755 (3) (a),
12(c) and (d), 224.755 (4) (b) 1., 224.77 (1) (a), 224.77 (9), 321.60 (1) (a) 12., 422.202
13(3) (c) and 946.79 (1) (a);
to repeal and recreate 138.09 (3) (b), 138.12 (3) (c),
14138.12 (5) (a) 2., 138.14 (5) (c), chapter 217, 218.02 (5) (c), 218.04 (6) (a), 218.04
15(10) (a) and 218.05 (14) (a); and
to create 138.09 (1c) (a) 3., 4., 5. and 6., 138.09
16(1c) (b), 138.09 (1g) (a), (b), (d), (e), (f), (g), (h) and (i), 138.09 (1m) (b) 2. c., 138.09
17(1m) (d) and (e), 138.09 (3) (cm), 138.09 (3) (e) 3., 138.09 (3) (g), 138.09 (4) (a)
184., 138.09 (4) (e), 138.12 (1) (cm) and (dm), 138.12 (3) (d) 2. c., 138.12 (3) (f), (g)
19and (h), 138.12 (5r), 138.14 (1) (br), (jm) and (m), 138.14 (4) (a) 1g., 1m. and 1r.,
20138.14 (4) (a) 2. c., 138.14 (15) (c), 218.0101 (24m) and (37m), 218.0114 (4g) and
21(4m), 218.0114 (17) (b), 218.0114 (21g) (b) 3., 218.0114 (25), 218.0161 (2), 218.02
22(1) (e) and (f), 218.02 (2) (a) 2. c., 218.02 (2) (d), (e) and (f), 218.02 (6) (a) 5., 218.02
23(9) (d), 218.04 (1) (b) 2. and 3., 218.04 (1) (em) and (h), 218.04 (3) (a) 1g., 1m. and
241r., 218.04 (3) (a) 2. c., 218.04 (4) (ap) and (c), 218.04 (5) (a) 6., 218.04 (9), 218.04
25(13) (b), 218.05 (1) (e) and (f), 218.05 (3) (am) 2. c., 218.05 (3) (d), (e) and (f),
1218.05 (12) (a) 4., 218.05 (12) (f), 224.35 (1g), 224.35 (1m) (bm), 224.35 (1r), (6),
2(7) and (8), 224.72 (2) (c) 2. c. and 224.725 (2) (b) 1. c. of the statutes;
relating
3to: the licensing and regulation by the Department of Financial Institutions of
4consumer lenders, payday lenders, money transmitters, sales finance
5companies, collection agencies, mortgage bankers and mortgage brokers,
6adjustment service companies, community currency exchanges, and insurance
7premium finance companies; the Nationwide Multistate Licensing System and
8Registry; modifying and repealing rules promulgated by the Department of
9Financial Institutions; and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill makes changes related to the Department of Financial Institutions'
regulation of collection agencies, consumer lenders, and sellers of checks and
standardizes certain DFI administrative procedures related to these and other
licensed financial services providers.
Nationwide Multistate Licensing System and Registry
The bill authorizes DFI to utilize the Nationwide Multistate Licensing System
and Registry to administer its licensing functions, and standardizes certain
administrative procedures, with respect to the following: consumer lenders; payday
lenders; collection agencies; sales finance companies; money transmitters (currently
known as sellers of checks); mortgage bankers and mortgage brokers; adjustment
service companies; community currency exchanges; and insurance premium finance
companies (collectively, licensed financial services providers). The NMLSR is a
multistate system developed and operated for the licensing and registration of
persons in financial services industries.
Under current law, DFI participates in the NMLSR (formerly known as the
Nationwide Mortgage Licensing System and Registry) only with respect to the
licensing of mortgage loan originators and certain other functions related to
mortgage loan originators, mortgage bankers, and mortgage brokers. Current law
allows DFI to establish relationships or contracts with the NMLSR or other entities
designated by the NMLSR to collect and maintain records and process transaction
or other fees related to mortgage loan originators, mortgage bankers, and mortgage
brokers. With respect to licensing mortgage loan originators, DFI may require that
an applicant submit any form, fee, or other information directly to the NMLSR and
may authorize the NMLSR to perform functions related to the licensing of mortgage
loan originators. DFI may also provide to the NMLSR information relating to
mortgage loan originator licensing or responsibilities. DFI may also rely on the
NMLSR to establish application or reporting deadlines for mortgage loan originators
and other requirements related to mortgage loan originators. DFI may also use the
NMLSR as an agent for requesting and distributing information, including to other
governmental agencies. In general, information that is confidential or privileged
when it is provided to the NMLSR remains confidential or privileged.
The bill expands DFI's participation in the NMLSR and requires DFI to utilize
the NMLSR with respect to the licensing and regulation of licensed financial services
providers, including requiring applicants and licensees to provide information
directly to the NMLSR and to comply with application and reporting deadlines
established by the NMLSR. These applicants and licensees must register with, and
maintain a unique identifier issued by, the NMLSR. The bill provides DFI with
authority relating to the NMLSR that is additional to the NMLSR authority
described above. DFI may require an applicant or licensee to submit identity
information, a credit report, an investigative background report, fingerprints for
identity verification or a criminal history check, or other personal or professional
history information. DFI may report to the NMLSR enforcement actions against or
violations by licensed financial services providers, which generally must be kept
confidential.
The bill standardizes the license renewal process and renewal period for
licensed financial services providers and specifies that the renewal application and
related materials or information must be submitted through the NMLSR or as
directed by DFI. The bill specifies reasons for which DFI may deny renewal of a
license and allows an expired license to be reinstated within two months after the
license expires.
The bill requires licensed financial services providers to keep current and
accurate all material information on file with DFI and the NMLSR. If the
information changes in any material respect, the licensed financial services provider
must notify DFI and the NMLSR of the change within 10 days after the change. The
bill also requires most licensed financial services providers to submit annual reports
and financial statements through the NMLSR or as directed by DFI.
Collection agencies
The bill makes various changes relating to DFI's licensing and regulation of
collection agencies and their employees.
Under current law, a person may not operate as a collection agency unless the
person is licensed as a collection agency by DFI. A “collection agency" is defined as
a person engaging in the business of collecting or receiving for payment for others
of any account, bill, or other indebtedness, but the definition also contains specific
exceptions, including those for attorneys, banks, express companies, health care
billing companies, insurers, and real estate brokers and salespersons. A collection
agency is subject to regulation by DFI and to certain laws regulating its operations.
Also under current law, a “collector" or “solicitor" is defined as a person
employed by a collection agency to collect or receive payment, or to solicit the
receiving or collecting of payment, for others of any account, bill, or other
indebtedness outside of the collection agency office or the person's home. A collector
or solicitor must hold a separate license as a collector or solicitor, which must state
the name of the collector's or solicitor's employer. The collector or solicitor must carry
this license as a means of identification whenever the collector or solicitor is engaged
in business.
The bill makes numerous statutory changes related to the licensing and
regulation of collection agencies and their employees, including the following:
1. The bill eliminates the requirement that a collector or solicitor hold a license
separate from the license of the collection agency that employs the collector or
solicitor. The bill also changes the definition of collector or solicitor to any person
who, on behalf of a licensed collection agency, does any of the following: 1) collects,
or attempts to collect, for others any account, bill, or other indebtedness; 2) receives
payment for others of any account, bill, or other indebtedness; or 3) solicits any
account, bill, or other indebtedness for collection by the collection agency. In
addition, the bill specifies that a collection agency is responsible for, and must
supervise the acts of, its collectors and solicitors and any other person who acts on
its behalf.
2. The bill changes the definition of a collection agency by adding exceptions
for mortgage bankers licensed by DFI and credit unions and by deleting the
exception for express companies. Accordingly, under the bill, licensed mortgage
bankers and credit unions are not regulated as collection agencies.
3. The bill specifies that a separate collection agency license is required for each
place of business maintained by the collection agency from which the collection
agency or its collectors or solicitors engage in the business of collecting or receiving
payments for others of any account, bill, or other indebtedness of a person located in
this state. The bill also specifies that, if an employee of a licensed collection agency
works from the employee's residence, a collection agency license is not required for
the employee's residence, but the employee's resident address may not be presented
to the public as a location or office of the collection agency and collection agency
records may not be maintained at the employee's residence.
4. As described above, the bill requires DFI to use the NMLSR in the licensing
and regulation of collection agencies. The bill also modifies license renewal and
reporting procedures for collection agencies to conform to the standardized
procedures applicable to all licensed financial services providers that use the
NMLSR. This change includes changing the collection agency licensing year to a
calendar year.
5. The bill specifies that the annual license fee applies for each place of business
that is required to be separately licensed. The bill also specifies that if an applicant
for an initial collection agency license fails to complete the application within 60 days
after DFI provides written notice that it is incomplete, the application is considered
abandoned, although the applicant may submit a new application.
6. The bill expands the reasons that DFI may suspend or revoke a collection
agency license to include the following: the collection agency has violated DFI's rules
related to collection agencies; and the collection agency has made a material
misstatement, or knowingly omitted a material fact, in an application for a license
or in information furnished to DFI or the NMLSR.
7. The bill specifies that a collection agency must deposit and maintain in its
trust account money due to a claimant or forwarder within 48 hours after collection,
while current law requires the money to be deposited promptly.
8. The bill specifies that a collection agency may forward printed collection
notices to a debtor that are unsigned.
9. The bill creates statutory provisions relating to collectors or solicitors that
are similar to provisions that currently appear in DFI's rules. A collector or solicitor
may use an alias in oral or written communications with a debtor, but the alias must
include a first and last name and the collector or solicitor may not have more than
one alias. A collector or solicitor may only change an alias for good cause and if DFI
is first notified of the change.
10. The bill modifies current law provisions relating to a collection agency's
change of business location. The bill requires a collection agency to give written
notice to DFI at least 30 days prior to changing its business location, but deletes the
requirement that the collection agency obtain approval from DFI.
11. The bill gives DFI discretion to determine whether to report to the district
attorney for prosecution violations of law relating to a collection agency.
The bill also modifies and repeals various DFI rules related to collection
agencies, including the following:
1. The bill prohibits, with an exception, a licensed collection agency from
contracting for or assessing a fee, commission, or other charge to a creditor for
returning any account to the creditor that is not in the actual process of collection.
2. The bill requires a licensed collection agency's trust checking account to be
identified as a “trust account.” For the purpose of determining that funds are
maintained in a trust account sufficient to pay creditors or forwarders, amounts
collected by a third party, but not yet deposited into the trust account, are not
considered trust funds. Third-party payment processors may not be given authority
to withdraw funds from a collection agency's trust account.
3. The bill requires a licensed collection agency, in the records that it must keep
at its office, to maintain a list of all collectors and solicitors employed by the collection
agency that includes specified information about each collector or solicitor.
4. The bill includes the following requirements related to a licensed collection
agency's use of a trade name (commonly referred to as a “doing business as” or “d/b/a”
designation): 1) a licensed collection agency may not conduct business under a name
other than a name listed on its license; 2) before using a trade name, the collection
agency must obtain approval of the use of the trade name from DFI; and 3) the trade
name may not include a corporate identifier.
5. The bill specifies that, in attempting to collect an alleged account, bill, or
other indebtedness, a licensed collection agency may not violate any federal or state
statute, rule, or regulation that relates to practice as a collection agency.
6. The bill defines “terminated,” for purposes related to the termination of a
collection agency license, to include a license that is surrendered, revoked, or
expired.
7. The bill specifies that a collection agency must enter into a written
agreement with the creditor not only before accepting accounts for collection from the
creditor but also before earning or collecting a fee or commission.
8. The bill includes restrictions on the ability of a collection agency and its client
to modify the meaning of the defined term “actual process of collection” for purposes
of a collection agency's duty upon receiving a written request from a creditor or
forwarder for the return of an account not in the actual process of collection.
9. The bill changes the date by which a licensed collection agency must provide
a remittance statement and remit money due to creditors or forwarders, establishing
the deadline as the last day of the month following the close of the month during
which the collection was effected instead of 30 days from the close of the month
during which the collection was effected.
10. The bill repeals a rule relating to the use of an alias by a collector or solicitor,
but incorporates similar provisions into the statutes.
11. The bill makes other changes to DFI's rules to retain consistency with the
statutory changes in the bill.
Licensed lenders
The bill makes various changes relating to DFI's licensing and regulation of
certain consumer lenders.
Under current law, a lender other than a bank, savings bank, savings and loan
association, credit union, or any of its affiliates (financial institution) generally must
obtain a license from DFI to assess a finance charge for a consumer loan that is
greater than 18 percent per year. This type of lender is generally referred to as a
“licensed lender." A “consumer loan” is not defined in provisions governing licensed
lenders, but the Wisconsin Consumer Act (WCA) defines a consumer loan as a loan
made to an individual for personal, family, or household purposes that is payable in
installments or for which a finance charge may be imposed and includes most
transactions under an open-end credit plan such as most credit card debt.
The bill makes numerous changes related to the licensing and regulation of
licensed lenders, including the following:
1. The bill creates a definition of consumer loan for purposes of licensed lenders
that is similar to the WCA definition of consumer loan.
2. The bill specifies that provisions governing licensed lenders apply to any
person who takes an assignment for sale, in whole or in part, of a consumer loan with
a finance charge in excess of 18 percent per year, without regard to whether the loan
was originally made by a financial institution. The bill also specifies that provisions
governing licensed lenders do not apply to collection agencies, payment processors,
and certain persons involved in investment or financing transactions.
3. The bill specifies that the following activities are doing business that require
a person to be licensed as a licensed lender: a) making a consumer loan that has a
finance charge in excess of 18 percent per year; b) taking an assignment of a
consumer loan in which a customer is assessed a finance charge in excess of 18
percent per year; or c) directly collecting payments from or enforcing rights against
a customer relating to a consumer loan in which a customer is assessed a finance
charge in excess of 18 percent per year.
4. The bill specifies that a licensed lender may contract with a person that is
not a licensed lender to service a consumer loan on behalf of the licensed lender, but
the licensed lender generally is responsible for violations of law committed by the
contracted party with respect to the servicing of the consumer loan. “Service” is
defined to include collecting or receiving payments of principal, interest, and other
amounts on consumer loans and undertaking other tasks related to the
administration of consumer loans under the direction and control of the licensed
lender.
5. As described above, the bill requires DFI to use the NMLSR in the licensing
and regulation of licensed lenders. The bill also modifies license renewal and
reporting procedures for licensed lenders to conform to the standardized procedures
applicable to all licensed financial services providers that use the NMLSR.
6. The bill provides as an additional basis for DFI to suspend or revoke a license
that the licensed lender has made a material misstatement, or knowingly omitted
a material fact, in an application for a license or in information furnished to DFI or
the NMLSR.
7. The bill eliminates provisions related to consumer loan interest rates that
apply to certain loans entered into before specified dates, the latest being August 1,
1987.
8. The bill removes a provision of current law that, subject to exceptions, all
loans must be consummated at the licensed location, but does not change the
requirement that a licensed lender operate only from its licensed location.
9. The bill requires a licensed lender to keep its loan records separate and
distinct from the records of any other business of the licensed lender. The bill also
requires a licensed lender, upon DFI's request, to promptly deliver books and records
located outside Wisconsin to a location within Wisconsin specified by DFI.
Sellers of checks and money transmitters
The bill repeals provisions of current law governing the licensing and
regulation of sellers of checks, which are persons engaged in the business of selling
and issuing checks, transmitting money, or receiving money for transmission. The
bill replaces these provisions with provisions governing the licensing and regulation
of money transmitters, titled the Model Money Transmission Modernization Law.
The bill generally requires that a person be licensed by DFI in order to engage
in the business of money transmission or advertise, solicit, or hold itself out as
providing money transmission (money transmitter). However, certain persons and
transactions are exempt from this license requirement, including federally insured
financial institutions, government agencies, registered securities broker-dealers,
agents of a payee that collect and process payments on behalf of the payee if certain
conditions are satisfied, electronic funds transfers of governmental benefits by
government contractors, employees and authorized delegates of licensed money
transmitters if certain conditions are satisfied, and any other person exempted by
DFI, as long as the exempt person does not engage in money transmission outside
the scope of the exemption. “Money transmission” means 1) selling or issuing
payment instruments to a person located in this state; 2) selling or issuing stored
value to a person located in this state; or 3) receiving money for transmission from
a person located in this state. “Money transmission” includes payroll processing
services. A “payment instrument” is, with specified exceptions such as stored value,
a written or electronic check, 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. “Stored value” means monetary value representing a
claim against the issuer that is evidenced by an electronic or digital record and is
intended and accepted for use as a means of redemption for money or monetary value
or payment for goods or services.
Under the bill, an application for a money transmitter license must be made to
DFI through the NMLSR. The application must include specified information and
be accompanied by an application fee. DFI must promptly notify an applicant when
its application is complete and must then investigate the applicant's financial
condition and responsibility, financial and business experience, character, and
general fitness. DFI must issue a money transmitter license to the applicant, valid
for a calendar year, if the applicant satisfies certain requirements, including
requirements related to the applicant's financial security and that the applicant's
financial condition and responsibility, financial and business experience,
competence, character, and general fitness, and the competence, experience,
character, and general fitness of persons in control of the applicant, indicate that it
is in the interest of the public to permit the applicant to engage in money
transmission. DFI must approve or deny an application within 120 days after the
date the application is complete, unless DFI for good cause extends the review period.
DFI may deny a license application for the same reasons it may suspend a license
(discussed below). If DFI denies an application, DFI must provide specific reasons
for the denial in a written notice. An issued license may be renewed annually, upon
payment of the applicable renewal fee, in accordance with the standardized renewal
procedures under the bill for all licensed financial services providers.
The bill allows DFI, after complaint, notice, and hearing, to suspend, revoke,
or refuse renewal of a license for specified reasons, including that the licensee no
longer meets a requirement for initial granting of the license; the licensee made a
material misstatement, or knowingly omitted a material fact, in the application for
the license or in information furnished to DFI or the NMLSR; the licensee has
engaged in unsafe or unsound practices in connection with, or fraudulent or
deceptive conduct or gross negligence relating to, the business of money
transmission; or the licensee has violated a law or DFI order applicable to money
transmission.
Under the bill, a person or group seeking to acquire control of a licensed money
transmitter must apply to DFI, in cooperation with the licensed money transmitter,
and obtain DFI's written approval before acquiring control. “Control” means, among
other powers, the power to vote at least 25 percent of the outstanding shares of the
licensed money transmitter, to elect a majority of its officers, or to exercise controlling
influence over its management or policies. The process and criteria for DFI's
approval to acquire control of a licensed money transmitter are mostly similar to that
for issuance of a money transmitter license. The bill specifies various circumstances
under which DFI's approval is not required, although notice may be required to DFI
after the acquisition of control. A licensed money transmitter, upon adding or
replacing a key individual, must also provide notice of the change to DFI along with
certain information. A “key individual” is an individual ultimately responsible for
establishing or directing policies and procedures of the licensed money transmitter,
such as an officer. DFI may issue a notice of disapproval of a key individual if DFI
finds that the competence, experience, character, or integrity of the individual
indicates that it is not in the interest of the public or the customers of the licensed
money transmitter to permit the individual to be a key individual of the licensed
money transmitter.
The bill allows a licensed money transmitter to conduct business through an
authorized delegate. An “authorized delegate” is defined as a person designated by
a licensed money transmitter to engage in money transmission on behalf of the
licensed money transmitter. An authorized delegate of a licensed money transmitter
is not required to hold a money transmitter license if the delegate acts within the
scope of authority conferred by a written contract with the licensed money
transmitter. Before a licensed money transmitter may conduct business through an
authorized delegate or allow a person to act as an authorized delegate, the licensed
money transmitter must 1) adopt written policies and procedures reasonably
designed to ensure that its authorized delegate complies with applicable state and
federal law; 2) conduct a reasonable risk-based background investigation sufficient
for the licensed money transmitter to determine whether the authorized delegate
will likely comply with applicable state and federal law; and 3) enter into a written
agreement with the authorized delegate containing specified terms, including
appointing the authorized delegate with the authority to conduct money
transmission on behalf of the licensed money transmitter; requiring the authorized
delegate to fully comply with applicable law pertaining to money transmission; and
establishing certain requirements pertaining to the relationship between the
licensed money transmitter and the authorized delegate and the duties of the
authorized delegate. An application for a money transmitter license must include
a list of the applicant's proposed authorized delegates and a sample contract for these
authorized delegates. An authorized delegate of a licensed money transmitter holds
in trust for the benefit of the licensed money transmitter all money net of fees
received from money transmission. An authorized delegate may not use a
subdelegate to conduct money transmission on behalf of a licensed money
transmitter. DFI may suspend or revoke the designation of an authorized delegate
under specified circumstances.
The bill imposes various other requirements on licensed money transmitters,
including requiring a licensed money transmitter to 1) forward all money received
for transmission in accordance with the terms of the agreement between the licensed
money transmitter and the sender, subject to limited exceptions; 2) refund to the
sender any money received for transmission within 10 days of receipt of the sender's
written request for a refund unless the money was forwarded within 10 days of the
date on which the money was received for transmission or unless various other
circumstances apply; 3) provide the sender a receipt, for money received for
transmission, containing specified information, subject to certain exceptions; 4)
submit a quarterly report of condition; 5) submit annually audited financial
information that contains specified information and meet certain standards; 6)
submit a quarterly report of authorized delegates; 7) report certain events to DFI,
including the filing of a bankruptcy petition, a proceeding to suspend or revoke its
license in another state, or that the licensed money transmitter, a key individual, or
an authorized delegate has been charged with or convicted of a felony; 8) maintain
specified records for at least three years and make these records available to DFI
upon written request; 9) maintain a tangible net worth of more than $100,000 or an
amount determined by formula, whichever is greater, although DFI may exempt a
licensed money transmitter from this requirement; 10) maintain a surety bond or
other form of security acceptable to DFI in a minimum amount of $100,000 or an
amount determined by formula, whichever is greater; and 11) maintain a certain
minimum value of permissible investments, specified by investment category, which,
if certain events occur such as the filing of a petition for bankruptcy, are held in trust
for the benefit of those whose money is outstanding.
The bill provides DFI with various powers relating to the regulation of money
transmitters, including investigatory and enforcement powers. Among these
powers, DFI may investigate the business of a licensed money transmitter and
examine its books, accounts, or records and those of its authorized delegates, and the
cost of the examination must be paid by the licensed money transmitter. DFI may
issue subpoenas and take testimony. DFI may also accept an audit report made by
a third-party for a licensed money transmitter and incorporate the audit report in
any report of examination or investigation. DFI may also take possession of an
insolvent licensed money transmitter under specified circumstances.
Payday lenders
The bill makes changes relating to DFI's licensing and regulation of payday
lenders. As described above, the bill requires DFI to use the NMLSR in the licensing
and regulation of payday lenders. The bill also modifies license renewal and
reporting procedures for payday lenders to conform to the standardized procedures
applicable to all licensed financial services providers that use the NMLSR. The bill
also modifies as a basis for DFI to suspend or revoke a license, in addition to a
material misstatement, that the payday lender knowingly omitted a material fact in
an application or information furnished to DFI or the NMLSR.
Sales finance companies
The bill makes changes relating to DFI's licensing and regulation of sales
finance companies, which are companies that acquire motor vehicle installment
sales contracts or consumer leases originated by a motor vehicle dealer. As described
above, the bill requires DFI to use the NMLSR in the licensing and regulation of sales
finance companies. The bill also modifies license renewal procedures and creates
reporting procedures for sales finance companies to conform to the standardized
procedures applicable to all licensed financial services providers that use the
NMLSR. The bill modifies as a basis for DFI to suspend or revoke a license, in
addition to a material misstatement, that the sales finance company knowingly
omitted a material fact in an application or information furnished to DFI or the
NMLSR. The bill requires a sales finance company to give DFI notice within 10 days
of a change of location.
Adjustment service companies
The bill makes changes relating to DFI's licensing and regulation of adjustment
service companies, which are companies that, for a fee, assist debtors in prorating
the income of the debtor to the debtor's creditors or assume the debtor's obligations
by purchasing the accounts of the debtor. As described above, the bill requires DFI
to use the NMLSR in the licensing and regulation of adjustment service companies.
The bill also modifies license renewal and reporting procedures for adjustment
service companies to conform to the standardized procedures applicable to all
licensed financial services providers that use the NMLSR. The bill provides as an
additional basis for DFI to revoke a license that the adjustment service company has
made a material misstatement, or knowingly omitted a material fact, in an
application for a license or in information furnished to DFI or the NMLSR.
Community currency exchanges
The bill makes changes relating to DFI's licensing and regulation of community
currency exchanges, also called check cashers, which cash checks for individuals for
a fee. As described above, the bill requires DFI to use the NMLSR in the licensing
and regulation of community currency exchanges. The bill also modifies license
renewal and reporting procedures for community currency exchanges to conform to
the standardized procedures applicable to all licensed financial services providers
that use the NMLSR. The bill provides as an additional basis for DFI to revoke a
license that the community currency exchange has made a material misstatement,
or knowingly omitted a material fact, in an application for a license or in information
furnished to DFI or the NMLSR. The bill eliminates a requirement that a community
currency exchange's license be conspicuously posted at its place of business.
Insurance premium finance companies
The bill makes changes relating to DFI's licensing and regulation of insurance
premium finance companies, which are companies that loan money to an insured to
finance the payment of insurance premiums. As described above, the bill requires
DFI to use the NMLSR in the licensing and regulation of insurance premium finance
companies. The bill also modifies license renewal procedures and creates reporting
procedures for insurance premium finance companies to conform to the standardized
procedures applicable to all licensed financial services providers that use the
NMLSR. The bill also provides as an additional basis for DFI to suspend or revoke
a license that the insurance premium finance company has made a material
misstatement, or knowingly omitted a material fact, in an application for a license
or in information furnished to DFI or the NMLSR.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB668,1
1Section 1
. 49.857 (1) (d) 12. of the statutes is amended to read:
SB668,13,42
49.857
(1) (d) 12. A license or certificate of registration issued under ss. 138.09,
3138.12, 138.14,
217.06 217.05, 218.0101 to 218.0163, 218.02, 218.04, 218.05, 224.72,
4224.725, 224.93 or subch. IV of ch. 551.
SB668,2
5Section 2
. 73.0301 (1) (d) 6. of the statutes is amended to read:
SB668,13,96
73.0301
(1) (d) 6. A license or certificate of registration issued by the
7department of financial institutions, or a division of it, under ss. 138.09, 138.12,
8138.14, 202.12 to 202.14, 202.22,
217.06 217.05, 218.0101 to 218.0163, 218.02,
9218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551.