(1) DEFINITIONS. In this section: (a) “Client funds” means all downpayments, earnest money deposits, or other money related to a conveyance of real estate that is received by a licensee on behalf of a firm or any other person. “Client funds” does not include promissory notes. (b) “Depository institution” means a bank, savings bank, savings and loan association or credit union that is authorized by federal or state law to do business in this state and that is insured by the federal deposit insurance corporation or by the national credit union share insurance fund. (2) INTEREST-BEARING COMMON TRUST ACCOUNT. (a) A firm that holds client funds shall establish an interest-bearing common trust account in a depository institution. The interestbearing common trust account shall earn interest at a rate not less than that applicable to individual accounts of the same type, size, and duration and for which withdrawals or transfers can be made without delay, subject to any notice period that the depository institution is required to observe by law or regulation. (b) Any firm that maintains an interest-bearing common trust account shall do all of the following: 1. Register with the department the name and address of the depository institution and the number of the interest-bearing common trust account. 2. Notify the department when any of the information required under subd. 1. is changed. 3. Furnish the department with a letter authorizing the department and the department of administration to examine and audit the interest-bearing common trust account whenever either department considers it necessary. (bm) The department shall forward to the department of administration the information and documents furnished under par. (b). (c) A firm shall deposit all client funds in the interest-bearing common trust account. (d) The department of administration is the beneficial owner of the interest accruing to the interest-bearing common trust account, minus any service charges or fees. (e) For each interest-bearing common trust account, the firm shall direct the depository institution to do all of the following: 1. Annually, before February 1, remit to the department of administration the total interest or dividends, minus service charges or fees, earned on the average daily balance in the interest-bearing common trust account during the 12 months ending on the previous December 31. A depository institution is not required to remit any amount if the total interest or dividends for that period is less than $10 before any deduction for service charges or fees. 2. When the interest remittance is sent, furnish to the department of administration and to the firm maintaining the interestbearing common trust account a statement that includes the name of the firm for whose account the remittance is made, the rate of interest applied, the amount of service charges or fees deducted, if any, and the account balance for the period that the statement covers. (f) A depository institution: 1. May not assess a service charge or fee that is due on an interest-bearing common trust account against any firm or, except as provided in subd. 3., against any other account, regardless of whether the same firm maintains the other account. 2. May not assess a service charge or fee for an interest-bearing common trust account against the department of administration. 3. May deduct a service charge or fee from the interest earned by an interest-bearing common trust account, and if a balance remains, may deduct the remaining charge or fee from the interest earned on any other interest-bearing common trust account maintained in that depository institution, before remitting interest to the department of administration. 4. May not deduct a service charge or fee from the principal of an interest-bearing common trust account. (3) DEPOSIT PROVISIONS. A firm that deposits client funds in an interest-bearing common trust account in compliance with this section may not be held liable to the owner or beneficial owner of the client funds for damages due to compliance with this section. A licensee that deposits client funds in an interest-bearing common trust account in compliance with this section on behalf of a firm is not required to disclose alternative depository arrangements that could be made by the parties or to disclose that a deposit will be made under this section. (4) TRUST ACCOUNT OPTIONAL. This section does not require a firm to hold client funds or require a person to transfer client funds to a firm. (5) RULES. In consultation with the department, the department of administration shall promulgate rules necessary to administer this section.
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