A group of states including Massachusetts has approved a number of recommendations from the fintech industry to streamline the licensing of fintech companies.
The Conference of State Bank Supervisors announced yesterday that the group had approved 14 action items from the 33 companies, including Paypal and Sofi, on the CSBS Fintech Industry Advisory Panel.
The panel was formed in 2017 to identify and remove unnecessary pain points in the multistate experience of fintechs and other nonbanks operating regionally or nationwide, while improving financial supervision.
“As regulators overseeing nonbanks, our goals are clear: Ensure the safety and soundness of the financial system, protect consumers, and streamline the multistate experience,” Mark Quandahl, chairman of the CSBS Emerging Payments & Innovation Task Force and director of the Nebraska Department of Banking and Finance, said in a statement. “The Fintech Industry Advisory Panel has developed actionable items for us; we embrace these recommendations, and we are now focused on implementation.”
Specifically, CSBS agreed to recommendations that would create uniform definitions and practices, increase transparency and expand the use of common technology among all state regulators.
Among the actions, CSBS will develop a 50-state model law to license money services businesses, create a standardized call report for consumer finance businesses and build an online database of state licensing and fintech guidance.
The recommendations also include developing a new technology offering, a state examination system, simplifying examinations of nonbanks operating in more than one state and expanding the use of the nationwide multistate licensing system among all state regulators and to all nonbank industries supervised at the state level.
The panel is one of several initiatives within CSBS Vision 2020, through which state regulators are hoping to create more uniform licensing and supervision standards by next year.