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States take first step towards standardized MSB licensing

Joe Mont | February 8, 2018

Seven states have agreed to a multi-state compact that standardizes key elements of the licensing process for money services businesses. The states announcing the agreement, on Feb. 6, are Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington. Other states are also expected to join.

The agreement, as described by the Conference of State Bank Supervisors: 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.

The plan is intended to significantly streamline the MSB licensing process.

This multi-state compact represents the first step among state regulators in moving towards an integrated, 50-state system of licensing and supervision for FinTechs. In May 2017, state regulators, operating through the Conference of State Bank Supervisors, issued a policy...

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