In April 2024, Wisconsin and Maine enacted the Model Money Transmission Modernization Law (“MTML”) to implement the Conference of State Bank Supervisors’ Model Money Transmission Modernization Act.  As of April 22, 2024, twenty-one states have fully or partially enacted the model act, and eight additional states having legislation pending.

On April 4, 2024, Wisconsin enacted the MTML, which becomes effective January 1, 2025.  As we previously blogged, the Wisconsin law replaces the state’s current seller of checks law.  On April 22, 2024, Maine enacted the MTML to replace the state’s Money Transmitters Act, which becomes effective July 16, 2024.  Under the MTML, a license is required for any person engaged in the business of money transmission.  Both states’ laws include the following definitions:

• Money transmission means any of the following: (a) selling or issuing payment instruments to a person located in this state; (b) selling or issuing stored value to a person located in this state; or (c) receiving money for transmission from a person located in this state.
• Payment instrument means 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.  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 or any instrument that is not sold to the public and is issued and distributed as part of a loyalty, rewards, or promotional program.

These laws also include common license exemptions, such as for federally-insured financial institutions, government agencies, registered securities broker-dealers, agents of a payee, electronic funds transfers of governmental benefits by government contractors, operators of a payment systems, payroll processors, third-party service providers, employees and authorized delegates of licensed money transmitters if certain conditions are satisfied, and any other persons exempted by regulation.

Our attorneys regularly assist clients with determining the applicability of state licensing laws to their businesses and filing license applications and renewals.