Seven US states standardise fintech payments
Seven states in the US have agreed to a multi-state compact that standardises key elements of the licensing process for money services businesses (MSB).
According to the Conference of State Bank Supervisors (CSBS), if one state reviews key elements of state licensing for a money transmitter – IT, cybersecurity, business plan, background check, and compliance with the federal Bank Secrecy Act – then other participating states agree to accept the findings.
John Ryan, CSBS president and chief executive officer, says it “will minimise the burden of regulatory licensing, use state resources more efficiently, and allow for broad participation by other states across the country”.
The states involved are Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington.
This development represents the first step among state regulators in moving towards an integrated, 50-state system of licensing and supervision for fintechs.
As a reminder, in May 2017, state regulators, operating through the CSBS issued a policy statement establishing the 50-state goal. CSBS then developed “Vision 2020” as a series of implementation initiatives.
That plan includes forming a fintech industry advisory panel of 33 companies to identify pain points and recommend solutions; and building a technology platform to improve licensing and supervision of non-banks.
CSBS is the national organisation of bank regulators from all 50 states, American Samoa, District of Columbia, Guam, Puerto Rico and US Virgin Islands.
CSBS, on behalf of state regulators, also operates the Nationwide Multistate Licensing System to licence and register non-depository financial service providers in the mortgage, money services businesses, consumer finance and debt industries.
