Twenty-three states have committed to a multistate agreement that standardizes key elements of the licensing process for money transmitters and other money services businesses.
Midwest states participating in the agreement include Iowa, Illinois, Indiana, Kansas, North Dakota, Nebraska and Ohio. The original agreement, backed by the Conference of State Bank Supervisors, included seven states in February 2018.
One state regulatory department reviews common licensing requirements – 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. These represent a large part of an application review workload.
The state communicates the review, called a certification, with all other participating states who have agreed to accept the findings. Each state then reviews remaining, state-specific elements. Licenses follow this second phase review.
Currently, 15 companies are involved in the second pilot of this initiative, and as of June 20, they have received 72 licenses.
“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 and chair of the CSBS non-depository supervisory committee. . “We look forward to more states joining. This is a new era in the state system where we are not only coordinating but actively relying on our fellow regulators to safely bring new financial service products to our citizens.”
Other participating states are:
- North Carolina
- Rhode Island