The Conference of State Bank Supervisors (CSBS) has requested public input on preliminary language for a model payments law that could be used in all 50 states, helping to standardize state-by-state money transmission and payments regulation.
The model payments law is part of the organization’s Vision 2020 initiative to establish a more streamlined process for nonbank multistate licensing. This most recent development is yet another step forward in what may prove to be a beneficial initiative for the payment facilitator landscape.
“This model law is a key component of the states’ work under Vision 2020 to create a modern nonbank licensing and supervision framework. A 50-state law for money transmission offers nationwide consistency for companies, access to innovative financial products for citizens and more effective supervision by state regulators,” John Ryan, CSBS president and CEO said in the press release.
As it stands now, money transmission application can be a very tedious process. Laws and procedures that govern money transmission licensing differ from state to state, which can prove extremely inefficient and challenging. A more streamlined approach can significantly benefit fintechs looking to broaden their suite of offerings. And while it’s been a slow burn for sure, it looks as though the embers may be heating up a bit.
Earlier this year, CSBS released a series of steps it planned to take to help create a more uniform system for regulating nonbank entities, based on input from an advisory panel. Those steps include expanding the use of an online portal that is being used by some states to submit money transmitter licensing applications and building an online database of state licensing guidance.
The organization is requesting feedback on several outstanding questions regarding the draft language. All suggestions must be submitted no later than November 1, 2019.