States Agree to Regulatory Cooperation

Earlier today, the Conference of State Bank Supervisors (CSBS), announced that 23 states have agreed to accept other states’ reviews of companies’ licensing process for money transmitters and other money services businesses (MSBs). 

The agreement lays out two tracts for companies to obtain state licenses. First, a state regulatory department will review common licensing requirements, including the “business plan; direct and indirect owners, including background checks; financial information and compliance with the anti-money laundering provisions of the federal Bank Secrecy Act.” According to CSBS, this review takes a substantial amount of time to complete. 

A company that successfully passes this review will be certified in all the states that have joined the agreement. After the certification process is completed, each state is then able to review state-specific elements. Once finished, a company can obtain a license to operate in that particular state.

“The collaboration among these 23 states has significantly streamlined the licensing process for participating companies,” said Charlie Clark, director of the Washington State Department of Financial Institutions. “This is a new era in the state system where we are not only coordinating but actively relying on our fellow regulators.”

Only seven states supported the original agreement, but, today, nearly half of all states are participating, including California, Ohio, and Texas.