Conference of State Bank Supervisors Finalize Recommendations from Fintech Advisory Panel
The Conference of State Bank Supervisors (CSBS) recently agreed to implement 14 recommendations from the Fintech Industry Advisory Panel (the Panel). Recommendations include the development of a state model law to license fintech businesses and the creation of a State Examination System for fintech companies operating in more than one state.
CSBS formed the Fintech Advisory Panel in 2017 to “identify and remove unnecessary pain points in the multistate experience of fintechs and other nonbanks operating regionally or nationwide while improving financial supervision.” It is made up of 33 fintech firms.
The Panel released 19 recommendations on February 14, which include harmonizing and coordinating state examinations for fintech firms and developing a 50-state model law for multi-state money service business.
CSBS adopted 14 of the recommendations while tabeling the rest. These include the development of a “menu of state licensing requirements for modernization or multi-state consistency” and the examination of the “interpretive differences among states with similar consumer finance statutes.
Mark Quandahl, director of the Nebraska Department of Banking and Finance and CSBS member, has stated that state regulators are ready to embrace and implement the recommendations. “As regulators overseeing nonbanks, our goals are clear: ensure the safety and soundness of the financial system, protect consumers, and streamline the multistate experience,” said Quandahl. “The Fintech Industry Advisory Panel has developed actionable items for us; we embrace these recommendations, and we are now focused on implementation.”
Many experts feel CSBS is pushing Vision 2020 in response to potentially dwindling authority over non-bank financial institutions, spurred by the Office of the Comptroller of the Currency’s announcement in late 2016 that it would grant special purpose bank charters to fintech firms. The CSBS, along with the state of New York, are currently involved in a lawsuit against the OCC over the federal agency’s fintech charter proposal.