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Wisconsin Statutes Banking and Finance (Ch. 214 to 225) § 217.08. Authorized delegates

Current as of January 01, 2025 | Updated by Findlaw Staff

<Text of section effective Jan. 1, 2025>

(1) Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee's authorized delegate, the licensee shall do all of the following:

(a) Adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law.

(b) Conduct a reasonable risk-based background investigation sufficient for the licensee to determine whether the authorized delegate has complied and will likely comply with applicable state and federal law.

(c) Enter into a signed written agreement that does all of the following:

1. Appoints the authorized delegate for the licensee with the authority to conduct money transmission on behalf of the licensee.

2. Sets forth the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of the parties.

3. Requires the authorized delegate to fully comply with all applicable state and federal laws, rules, and regulations pertaining to money transmission, including relevant provisions of the Bank Secrecy Act and federal and state laws pertaining to money laundering.

4. Requires the authorized delegate to remit and handle money and monetary value in accordance with the terms of the agreement.

5. Imposes a trust for the benefit of the licensee on money and monetary value net of fees received for money transmission.

6. Requires the authorized delegate to prepare and maintain records as required by this chapter and applicable rules.

7. States the authorized delegate's consent to examination or investigation by the division.

8. States that the licensee is subject to regulation by the division, and that, as part of that regulation, the division may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation.

9. Acknowledges the authorized delegate's receipt of the written policies and procedures required under par. (a).

(2) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission. If any authorized delegate commingles any funds received from money transmission with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property shall be considered held in trust in favor of the licensee in an amount equal to the amount of money net of fees received from money transmission.

(3) An authorized delegate may not use a subdelegate to conduct money transmission on behalf of a licensee.

(4) A person shall not engage in the business of money transmission on behalf of a person not licensed under this chapter or not exempt pursuant to s. 217.03. A person violating this subsection shall be jointly and severally liable with the unlicensed and nonexempt person for engaging in the business of money transmission without a license.

(5) If a licensee's license is suspended, revoked, surrendered, or expired, the licensee shall, within 5 business days, provide documentation to the division that the licensee has notified all applicable authorized delegates of the licensee of the suspension, revocation, surrender, or expiration of the license. Upon receiving notice of the suspension, revocation, surrender, or expiration of a license, an authorized delegate shall immediately cease to provide money transmission as an authorized delegate of the applicable licensee.

(6) The division may, by written order, suspend or revoke the designation of an authorized delegate if the division finds any of the following:

(a) The authorized delegate failed to comply with an order of the division, any provision of this chapter, any rule promulgated under this chapter, or any other state or federal law applicable to money transmission.

(b) The authorized delegate failed to cooperate with an investigation, examination, or other request for information by the division.

(c) The authorized delegate engaged in unsafe or unsound practices in connection with the business of money transmission.

(d) The authorized delegate made a material misstatement, or knowingly omitted a material fact, in an application for a license or in information furnished to the division or the nationwide multistate licensing system and registry.

(e) The authorized delegate engaged in any fraudulent or deceptive conduct or gross negligence relating to the business of money transmission.

(f) A federal or state administrative order has been entered against the authorized delegate for violation of any rule or regulation applicable to the conduct of the person's money transmission business.

(g) The financial responsibility, character, reputation, experience, and general fitness of the authorized delegate indicate that it is not in the public interest to permit the applicant or licensee to provide money transmission in this state.

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Cite this article: FindLaw.com - Wisconsin Statutes Banking and Finance (Ch. 214 to 225) § 217.08. Authorized delegates - last updated January 01, 2025 | https://codes.findlaw.com/wi/banking-and-finance-ch-214-to-225/wi-st-217-08/

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