States Press Regulators To Simplify FinTech Licensing

Reuters reported news on Tuesday that banking regulators from seven states across the United States are working to, as the newswire reported, “streamline” the FinTech reporting process, with an eye on those tech firms having an easier road toward offering their products and services across the nation.

The Conference of State Bank Supervisors (CSBS), through which these states are working, said Tuesday that seven states — which include Georgia, Illinois, Kansas, Massachusetts, Texas, Tennessee and Washington — have agreed to standardize licensing processes that are in place in order to provide money licensing services. The goal is to make it easier for firms that offer money transfers and cryptocurrency trading services to operate nationwide. At present, those firms have to apply for licenses on a state-by-state basis.

The new agreement states that if one of those member states reviews components of the licensing processes, the other member states will accept the findings, which can span activities such as business plans and compliance efforts. The CSBS said that other states are likely to join the agreement. Additionally, a FinTech advisory panel has been formed, with further efforts to center on a new tech platform for licensing and supervision of non-banks.

Reuters noted that the initiative announced Tuesday “responds to longstanding complaints” by FinTech firms that tie into the time and costs incurred by those state-by-state processes. Separately, the Office of the Comptroller of the Currency (OCC) has offered its own proposals to ease the process for FinTech firms looking to expand their reach. Two years ago, the OCC proposed a special charter that would grant those firms the right to operate nationwide.

As reported by The Wall Street Journal, Charlie Clark, deputy director of the financial regulator in Washington State, said “there’s somewhat of a redundancy in that license applicants have to submit in many cases the same submission to each individual state to meet the same licensing standards.”