On February 6, the Conference of State Bank Supervisors (“CSBS”) announced that seven states have entered into a compact that should streamline the process of applying for state money transmitter licenses.
Moving forward, the participating states– Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas, and Washington – will accept each other’s findings regarding certain “key elements of state licensing.” The “key elements” include IT, cybersecurity, business plan, background check, and compliance with the federal Bank Secrecy Act.
If the compact works as planned, a company that has obtained a money transmitter license from one of the compact states will be able to obtain a license from any other compact state without the delay and expense of duplicative review and approval requirements, at least as to the “key elements” outlined above.
“This MSB licensing agreement will minimize the burden of regulatory licensing, use state resources more efficiently, and allow for broader participation by other states across the country,” said John Ryan, CSBS president and chief executive officer.
The CSBS’s announcement also noted that more states are expected to join the compact, which is only the “first step among state regulators in moving towards an integrated, 50-state system of licensing and supervision for fintechs.”
A copy of the CSBS’s announcement is available here.