| Massachusetts became just one of seven states to sign an agreement yesterday that should significantly streamline the licensing process for fintech companies.
The multistate compact standardizes key elements of the licensing process for money services businesses because now if one state reviews key elements of state licensing for a money transmitter – IT, cybersecurity, business plan, background check and compliance with the federal Bank Secrecy Act – then other participating states agree to accept the findings.
Joining Massachusetts in the agreement are Georgia, Illinois, Kansas, Tennessee, Texas and Washington. Other states are expected to join this compact.
“This MSB licensing agreement will minimize the burden of regulatory licensing, use state resources more efficiently, and allow for broad participation by other states across the country,” John Ryan, president and CEO of The Conference of State Bank Supervisors, said in a statement.
The agreement represents the first step among state regulators in moving towards an integrated, 50-state system of licensing and supervision for fintech.
In May 2017, state regulators, operating through the CSBS, issued a policy statement establishing the 50-state goal. CSBS then developed Vision 2020 as a series of implementation initiatives including:
- Forming a Fintech Industry Advisory Panel of 33 companies to identify pain points and recommend solutions
- Building a next generation technology platform to streamline both the licensing and supervision of non-banks
- Working with states to harmonize their licensing and supervisory practices, such as today’s announcement.
