Washington State’s Disappearing New Money Transmitter Rules

On Monday (Dec. 14), the Washington state Department of Financial Institutions said that it was about to change the ways payment processors can get waivers from money transmission licensing requirements. The changes were to kick in Jan. 1. But by Wednesday (Dec. 16), the page with the announcement had vanished, instead displaying a “page not found” error. A search on the state DFI site still returns the page during a search. (Guys, if you’re going to hide a page, don’t forget to clear cache and remove it from site search results. Geez, do we have to tell you everything about hiding stuff from the public?) Fortunately, we copied the text of the page before it disappeared.

Giving processors a mechanism to not being considered a money transmitter is ostensibly a good thing. But like everything else that touches state and federal regulatory efforts, few good things ship without booby-traps. Deana Rich, president of Rich Consulting and also Partner/Director of Strategy for PaymentFacilitator.com, said the risk is not mostly with the state issuing the rules—Washington state in this case—but with other states and how they may choose to interpret that waiver request. “If you say to one state ‘I want to be exempt from your rules,’ other states might say, ‘Hmmmm. Why did you say this to Washington? I’m going to look at you much more carefully now,'” Rich said.

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