There may well come a day when money transmitter laws are consistent across state lines. Baby steps in that direction, however, underline the complicated work that lies ahead if such a dream is to become reality.

The Conference of State Bank Supervisors recently announced its plans to move toward a consistent framework for regulating non-bank entities, including financial technology companies – a plan it called its Vision 2020 initiative.

The organization’s board released a policy statement that read:

“CSBS, the states and territories will create consistent and data-driven solutions that support innovation by minimizing friction in the state regulatory system. By 2020, state regulators will adopt an integrated, 50-state licensing and supervisory system, leveraging technology and smart regulatory policy to transform the interaction between industry, regulators and consumers.”

The CSBS announcement included potential steps toward achieving uniformity that included working groups around best practices for supervising non-bank entities and the establishment of an advisory panel of fintech organizations that would provide feedback to help improve multi-state regulation.

The CSBS has taken other steps toward uniformity across state lines in recent months. Its new Money Services Businesses Call Report, which was deployed during the first quarter of this year, is intended to streamline regulation by enabling licensees to fulfill their periodic reporting obligations for the participating states through a single data portal.

“That’s an improvement, and it’s another step down the path towards uniformity,” said attorney Evan Minsberg. “But that’s only one piece of the puzzle and the biggest one right now is actually getting these licenses.” Minsberg is an attorney with Washington, D.C., law firm Venable LLP, where he focuses on financial services regulation.

Among the actions the CSBS says it plans to take as part of Vision 2020 is a redesign of the Nationwide Multistate Licensing System, the portal where the new call report is housed. According to Minsberg, this system originated as an online portal for applying for state mortgage licenses, but its usefulness has expanded beyond that to enable online application for other licenses.

Recently, for example, Arkansas amended its money transmitter statute to include legal language authorizing the use of such a portal for accepting money transmitter license applications.

The amendment also authorizes the acceptance of “uniform procedures and forms” as part of a multistate licensing system, which could lay the groundwork for participating in some sort of passporting-type scheme.

The concept of passporting is often mentioned in reference to the European Union, where companies licensed to sell financial services in one country are allowed to do business across the EU. Conceivably, a similar scheme in the U.S. could allow states to accept money transmitter licenses from other states.

“It looks promising,” Minsberg said, “but even if every state put something like this in their code, it’s still going to require them all getting together and agreeing on a uniform set of application requirements.”

Because the requirements vary among states and licenses are easier to obtain in some states than others, such an effort would challenge states to determine whose standards will apply. One state may have 10 requirements to get a license, for example, whereas others may have 20 to 30.

“So, would this process result in fewer requirements overall, or will the most complex applications become the national standard? Greater uniformity is generally good, but if I now have to meet the highest standard everywhere, that could be counterproductive in some ways,” Minsberg said.

In the meantime, individual state laws continue to be the focus for much of the industry. The governor of Washington recently signed legislation that carves out an exemption for payment processors within its money transmitter law. The Electronic Transactions Association worked with the state’s Department of Financial Institutions to draft the amendment and supported its passage through the legislature.

Washington had previously issued an interpretive statement that required all payment processors to register as money transmitters. While an exemption was available, companies were required to apply for it, essentially having to prove they were not money transmitters before doing business in Washington.

The legislative fix codifies the exemption and does away with the requirement to apply for a waiver, said Minsberg, whose firm worked with ETA on the issue.

Scott Talbott, senior vice president of government relations for ETA, sees the move as a positive development.

“The language will provide certainty to payment processors doing business with the citizens of Washington State. While other states are conflating payments processors and money transmitters, Washington is a leader in providing certainty to the payments industry,” Talbott said.