Seven State Agreement to License Money Services Businesses
A multi-state licensing agreement (“Compact”), that standardizes certain elements of the licensing process for money services businesses (“MSB”), has been implemented. MSB include money transmitters, payment service providers, and currency exchangers. The agreement provides that if one state in the Compact has reviewed certain license requirements such as IT processes, cybersecurity, business plan, background check and compliance with certain federal laws such as the Bank Secrecy Act, the participating states agree to accept that state’s findings. The states in the compact are, Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington. In May, 2017, state regulators, operating through the Conference of State Bank Supervisors (“CSBS”) issues a policy statement establishing a uniform 50 state licensing goal. The CSBS is the national organization of bank regulators from all 50 states, American Samoa, District of Colombia, Guam, Puerto Rico and the US Virgin Islands. In earlier posts I advised my readers that a lawsuit had been filed attempting to challenge the Office of the Comptroller (“OCC”) proposed fintech charter. I have been working in this industry for many years and there is a need for more integrated licensing model for operating nationwide. The key to your analysis should be to look very specifically at the scope of the licensed behavior. We can then prepare a targeted licensing strategy.
