Wisconsin Department of Financial Institutions (DFI)

Overview

Official Title: Wisconsin Department of Financial Institutions

Primary Regulator Type: Official Regulator

Regulatory Focus: Money Transmission, Financial Services Licensing and Supervision

The Wisconsin Department of Financial Institutions (DFI) is the official state regulator overseeing financial services in Wisconsin, including money transmission licensing and supervision. The DFI administers licensing, examination, and enforcement programs under Wisconsin statutory authority. The agency oversees sellers of checks (now designated as money transmitters under modernized legislation), state-chartered banks, savings institutions, credit unions, and other regulated financial service providers.

As of January 1, 2025, the DFI transitioned from the traditional "Seller of Checks" licensing framework to the modernized "Money Transmitter" license under Wisconsin Act 267 (signed into law April 4, 2024), which repealed and replaced Chapter 217 of the Wisconsin Statutes with model legislation aligned with the Money Transmission Modernization Act for nationwide uniform standards.

Current Leadership:

• DFI Secretary: Wendy K. Baumann (Secretary-designee, appointed January 2025)
• Division of Corporate and Consumer Services Administrator: Kristie Pulvermacher (appointed November 4, 2024)

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Examination Authority

The DFI conducts regular on-site examinations and reviews of licensed entities to assess:

• Compliance with statutory requirements
• Safety and soundness of operations
• Adherence to financial standards
• Consumer protection measures
• Anti-fraud controls

Examination Frequency

The DFI's examination program conducts over 1,000 on-site reviews annually across all regulated entities. [UNVERIFIED: specific frequency for money transmitters not confirmed in available sources]

Supervisory Activities

Division Responsible: Division of Banking (within DFI)

Supervisory Functions:

• Approval of licenses and renewals
• Ongoing monitoring of licensee compliance
• Collection and analysis of financial data and operational reports
• Evaluation of capital adequacy and liquidity
• Assessment of consumer complaints and operational deficiencies

Safety and Soundness Standards:

• Permissible investments and asset composition
• Management competency and integrity
• Systems and controls for transaction processing
• Business continuity and disaster recovery planning
• Fraud prevention and detection measures

Consumer Safeguards

The DFI enforces consumer protection standards for money transmission services:

Complaint Handling: [UNVERIFIED: specific complaint process and response timeline not confirmed]

Transparency Requirements: [UNVERIFIED: specific fee and disclosure requirements not confirmed in available sources]

Fraud Prevention: Money transmitters required to implement systems and controls to detect and prevent fraud, including authority to halt suspicious transactions.

Consumer Rights: Consumers may file complaints with the DFI regarding:

• Unlicensed operation
• Inadequate financial handling
• Fraud or deception
• Failure to transmit funds properly
• Breach of legal requirements

Relationship to Federal Oversight

The Wisconsin DFI operates as the state regulator but coordinates with federal regulators and law enforcement agencies regarding interstate and multi-state money transmission operations and enforcement matters.

Regulatory Powers

Enforcement Authority

The DFI possesses broad enforcement powers to ensure licensee compliance and protect consumers:

Administrative Remedies:

• License denial or revocation
• Suspension of license
• Imposition of conditions or restrictions on licensed operations
• Issuance of cease-and-desist orders
• Mandatory corrective action orders
• Administrative fines and penalties

Investigative Powers:

• Subpoena authority over records and witnesses
• On-site examination and inspection rights
• Authority to compel production of books, accounts, and records

Civil Actions:

• Restitution to affected consumers
• Civil penalties and damages

Criminal Enforcement:

• Referral to law enforcement and prosecution
• Criminal penalties for violations (including fraud, unlicensed operation, record falsification)

Fraud Prevention Requirements (Money Transmission-Specific)

Under Wisconsin's Money Transmission Law, BTM (Bitcoin/Cryptocurrency ATM) operators and money transmitters must implement fraud reduction measures, including authority to restrict transmission if the operator "has a reasonable belief" that:

• The sender is a victim of fraud, OR
• The transaction relates to a crime

This requirement applies to all money transmitters, not exclusively to virtual currency operators.

Regulatory Role and Function

Legal Foundation

Statutory Framework

Primary Statute: Wisconsin Statutes Chapter 217 (repealed and replaced effective January 1, 2025)

Successor Legislation: Wisconsin Act 267 (2023), signed into law April 4, 2024, which implemented the Money Transmission Modernization Act model legislation. This legislation:

• Repealed the entirety of Chapter 217 (Seller of Checks)
• Replaced it with standardized model legislation governing money transmitter licensing
• Established uniform nationwide standards for definitions, exemptions, licensing processes, and safety/soundness requirements
• Became effective January 1, 2025

Regulatory Scope

The DFI's authority extends to any entity engaged in money transmission within Wisconsin, defined as the business of accepting currency, funds, or monetary value from one person and transmitting it by any means to another location or person. This includes:

• Money orders
• Traveler's checks
• Prepaid cards
• Virtual currency transmissions (conditional—see Virtual Currency section)
• Check selling and payment processing services

The statute applies to both entities with a physical presence in Wisconsin and out-of-state entities providing money transmission services to Wisconsin residents.

Legal Authority: Binding regulatory authority established by state statute. DFI determinations are enforceable through administrative, civil, and criminal penalties.

Licensing and Authorization Relevance

License Type

Money Transmitter License (formerly: Seller of Checks License)

Application and Licensing Process

Application Channel: National Multistate Licensing System (NMLS)

Application Start Date: October 1, 2024

Effective Date of Modernization: January 1, 2025

Key Licensing Requirements:

1. License Requirement: Yes—mandatory for all entities conducting money transmission in Wisconsin
2. NMLS Registration: Yes—all applications and licensing now conducted through the Nationwide Multistate Licensing System & Registry (NMLS)
3. Background Checks: Yes—applicants required to undergo thorough background checks including:

• Criminal history assessment
• Financial examination
• Fingerprinting
• Additional vetting procedures

1. Ownership and Control Vetting: Standardized determinations of who is in control of the licensee per model legislation
2. Consumer Access Information: Licensed entities publicly listed on NMLS Consumer Access website

Transition Requirements

Existing Licensees: Wisconsin sellers of checks licensees holding active licenses as of the transition date are NOT required to reapply for a new money transmitter license. However, they must comply with all new money transmitter license requirements by January 1, 2025, when the new licensing framework takes effect.

Compliance Deadline: January 1, 2025

Tangible Net Worth

Licensees must maintain at all times a tangible net worth calculated as follows:

Tangible Net Worth Definition: Aggregate assets excluding all intangible assets, less liabilities, as determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP).

Minimum Tangible Net Worth: The greater of either:

• Floor Amount: $100,000, OR
• Sliding Scale (based on total assets):
• 3% of the first $100,000,000 in total assets
• Plus 2% of additional assets from $100,000,000 to $1,000,000,000
• Plus 0.5% of additional assets over $1,000,000,000

Example: A licensee with $500M in total assets would maintain tangible net worth of: (3% × $100M) + (2% × $400M) = $11,000,000

Ongoing Requirement: Tangible net worth must be maintained continuously during the term of the license.

Surety Bond / Financial Guarantee

Surety Bond Requirement: Yes—mandatory

Bond Amounts:

• Primary Location: $10,000 minimum
• Additional Locations: $5,000 per additional location
• Maximum Total Bond: $300,000

Alternative to Surety Bond: A financial guarantee of equal value may be deposited with the State of Wisconsin in lieu of a surety bond.

Purpose: To protect consumers and ensure financial stability and accountability of the licensee.

Financial Reporting

Audited Financial Statements: Required annually

Filing Deadline: Within 90 days after completion of each fiscal year

Submission Method: Upload to NMLS

Requirement: Audited fiscal year-end financial statements for the licensed legal entity

Virtual Currency Regulation

Key Restriction: Wisconsin's Money Transmitter law does not grant the Wisconsin DFI authority to regulate virtual currency as a standalone activity. The Division of Banking is unable to license or supervise companies whose business activities are limited exclusively to virtual currency transmission.

Conditional Applicability: Virtual currency transmission becomes subject to licensing requirements if the transaction structure involves:

• Sovereign currency (fiat money) as part of the transmission process
• Conversion between virtual and fiat currency
• Involvement of deposit, custodial, or remittance services

The specific determination depends on how the transaction is structured under the DFI's regulatory analysis.

Virtual Currency Kiosks

Regulatory Guidance: The DFI has issued Guidance on Virtual Currency Kiosks (available on the DFI website) to clarify regulatory requirements for entities operating cryptocurrency ATMs and kiosks in Wisconsin.

Applicability: Entities operating BTMs (Bitcoin Machines/Cryptocurrency ATMs) that engage in money transmission are subject to money transmitter licensing and regulatory requirements.

Fintech and Innovation

[UNVERIFIED: specific fintech regulatory framework or innovation exceptions not confirmed in available sources]

Payments and Money Movement Relevance

The Wisconsin Department of Financial Institutions (DFI) has the following relevance to payments and money movement in United States:

Payment Systems Governed or Overseen

The Wisconsin Department of Financial Institutions (DFI) does not directly operate payment systems. Its payment-related role includes:

Money transmitters, payment processors, and fintech companies operating in this jurisdiction require licensing or registration with this entity.

Relationship to Other Regulators

Multistate Operations

Entities licensed in Wisconsin conducting money transmission in other states may be subject to:

• Additional licensing requirements in other jurisdictions
• Multistate examination coordination through the Conference of State Bank Supervisors (CSBS)
• Interstate enforcement cooperation

NMLS Platform

Wisconsin participates in the National Multistate Licensing System (NMLS), which facilitates:

• Coordinated licensing across multiple states
• Information sharing between state regulators
• Standardized application and reporting procedures
• Centralized consumer access database

Regulator-to-Regulator Coordination

The Wisconsin DFI coordinates with other state regulators and federal agencies (FinCEN, Federal Reserve, FDIC, OCC) on:

• Anti-money laundering (AML) compliance
• Know Your Customer (KYC) requirements
• Suspicious activity reporting (SAR)
• Enforcement actions
• Information sharing on unsafe or unsound practices

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Main Office Contact Information

Wisconsin Department of Financial Institutions

Mailing Address:

P.O. Box 8861

Madison, WI 53708-8861

Physical Address:

4822 Madison Yards Way, North Tower

Madison, WI 53705

General Phone: (608) 266-8915

Alternative Phone: (608) 261-9555

Money Transmitter / Licensed Financial Services

Bureau: Licensed Financial Services Bureau

Phone: (608) 261-7578

Email: [email protected]

Bureau Focus: Money transmitter licensing, renewal, compliance, and inquiries

Secretary's Office

Secretary: Wendy K. Baumann (Secretary-designee, appointed January 2025)

Former Secretary: Cheryll Olson-Collins (retired)

Secretary's Office Contact:

Phone: (608) 264-7800

Fax: (608) 261-4334

Email:** [email protected]

Online Resources

Official Website: https://dfi.wi.gov/

Legacy Website: https://www.wdfi.org/

Key Webpages:

• DFI Money Transmitter (Licensing Page)
• DFI Money Transmitter Modernization Act
• Virtual Currency Kiosks Guidance
• NMLS Resource Center (for Wisconsin applications)
• NMLS Consumer Access (search licensed entities)

Licensed Entity Database:

Wisconsin seller of checks / money transmitter licensees can be searched via:

1. NMLS Consumer Access Website (nmlsconsumeraccess.org)
2. Wisconsin DFI Corporate Records Search (https://apps.dfi.wi.gov/apps/corpsearch/search.aspx)

Notes on Naming and Language