{"id":4490,"date":"2019-02-20T20:42:14","date_gmt":"2019-02-20T20:42:14","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=4490"},"modified":"2022-11-11T09:10:05","modified_gmt":"2022-11-11T16:10:05","slug":"csbs-moves-the-ball-forward-in-effort-to-streamline-state-fintech-regulations","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/archive\/csbs-moves-the-ball-forward-in-effort-to-streamline-state-fintech-regulations\/","title":{"rendered":"CSBS Moves the Ball Forward in Effort to Streamline State Fintech Regulations"},"content":{"rendered":"\n

The effort to drive\nsome uniformity within the patchwork of state regulations faced by fintech\ncompanies \u2013 including many payment facilitators \u2013 has taken another small step\nforward.<\/strong><\/p>\n\n\n\n

Last week, the\nConference of State Bank Supervisors (CSBS) <\/strong>released<\/strong> steps it plans to take as it implements feedback from its Fintech\nIndustry Advisory Panel.<\/strong><\/p>\n\n\n\n

The panel was formed in 2017 as part of the board\u2019s Vision\n2020 initiative, a plan to develop a consistent framework for regulating\nnonbank entities across states. According to the press release, the 33-member\npanel includes companies such as Alipay, First Data and PayPal.<\/p>\n\n\n\n

Among the steps the CSBS plans to take is to expand the use\nof the Nationwide Multistate Licensing System to all nonbank industries\nsupervised at the state level.<\/p>\n\n\n\n

As PaymentFacilitator has previously\nreported, the NMLS was originally used as a portal to submit applications\nfor state mortgage licenses, but its usage has grown to allow other types of\nonline submissions \u2013 including, in some states, money transmitter license\napplications.<\/p>\n\n\n\n

Also among the advisory panel\u2019s recommendations<\/a>\nwas the need to develop uniform practices across the states, standardizing\ndefinitions and procedures for money services business (MSB) licensure. In\nresponse, the CSBS said it plans to develop what it called a \u201c50-state model\nMSB law.\u201d<\/p>\n\n\n\n

The group also recommended forming a working group to\n\u201cevaluate differences in state MSB prudential requirements and explore\nharmonization opportunities through regulatory and state legislative action.\u201d <\/p>\n\n\n\n

According to Evan Minsberg, an attorney with the Banking and\nFinancial Services Regulatory practice at law firm Venable LLP, the steps the\norganization has outlined in this announcement would all benefit payment\nfacilitators who are considering applying for money transmitter licenses by\nclarifying definitions of money transmission and expanding use of the NMLS\nlicensing portal.<\/p>\n\n\n\n

However, even with a more standardized set of application\nrequirements, the core issue of each state individually reviewing license\napplications in what for many businesses could end up being anywhere from 25 to\n50 states remains cumbersome.<\/p>\n\n\n\n

 \u201cAt the end of the\nday, the application review process would continue to be a real hurdle,\u201d he\nsaid.<\/p>\n\n\n\n

Each state has different application requirements and\nreviews the applications individually, often with state-specific follow-up\nrequests. In states with the most requirements, the process can end up taking\nas much as two years.<\/p>\n\n\n\n

For the best hope of relief there, Minsberg pointed to a\nrelated CSBS initiative announced last year, in which seven states had agreed\nto accept the others\u2019 findings on certain elements of the licensing\napplication.<\/p>\n\n\n\n

\u201cThat was a significant step forward which, if adopted\nnationwide, would absolutely streamline the licensing process, particularly if\nthat level of reciprocity expanded to the majority of the application,\u201d\nMinsberg said.<\/p>\n\n\n\n

According to a CSBS spokesperson, that initiative has\nexpanded to include 21 states.<\/p>\n\n\n\n

In its report<\/a>\nto the CSBS, the advisory panel\u2019s payments industry subgroup outlined the\nimportance of money services businesses and the challenges they face in\nobtaining licensing. <\/p>\n\n\n\n

\u201cThe variations in definitions and related exemptions, as\nwell as varied licensing and supervision regimes among states lead to\noperational challenges that hinder innovation, drive up the cost to customers,\nand limit access to financial services,\u201d the report said. <\/p>\n","protected":false},"excerpt":{"rendered":"

The effort to drive some uniformity within the patchwork of state regulations faced by fintech companies \u2013 including many payment facilitators \u2013 has taken another small step forward.<\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1015],"tags":[35,206,307,308,590,658],"class_list":["post-4490","post","type-post","status-publish","format-standard","hentry","category-archive","tag-alipay","tag-csbs","tag-fintech-industry-advisory-panel","tag-first-data","tag-nmls","tag-paypal"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4490","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4490"}],"version-history":[{"count":3,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4490\/revisions"}],"predecessor-version":[{"id":8978,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4490\/revisions\/8978"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4490"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}