Fintech Multistate Licensing Pilot Aims to Develop a Unified Framework

The American Banker reports that state regulators, including those representing Georgia, Illinois, Texas, Washington, Kansas, Massachusetts and Tennessee, earlier this month announced a pilot program to simplify licensing for money services businesses and better enable firms to operate in all seven states.

Many fintech firms and industry watchers are hoping that the new potential multistate licensing plan will help fix the balkanized chartering system. However, getting enough states on board to make the plan effective could be a challenge.

While just seven states is far from the national platform many companies covet, observers say the pilot program, which will tentatively launch in April, is a step in the right direction. "The seven states actually is a pretty big deal," said Brion Nazzaro, head of global compliance at WorldRemit, a global digital money transfer service. "These are not small states."

The pilot is part of a larger effort by the Conference of State Bank Supervisors to have all states involved by 2020. The Office of the Comptroller of the Currency (OCC) has been developing a limited-purpose fintech charter that could allow companies to go through one federal regulator, but there continues to be uncertainty about the OCC's plan.

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