Seven States Form Alliance for FinTech Licensing

Home » FinTech » FinTech News » Seven States Form Alliance for FinTech Licensing

Seven States Form Alliance for FinTech Licensing

One of many challenges that FinTech companies have faced in the past is that they’ve had to apply for licensing in each individual state they hoped to operate in. A solution to this had been proposed to allow businesses to apply to be “Special Purpose National Banks,” although that plan has seemingly been delayed as regulators fear such a move could pose a problem for consumer protections. In the meantime seven states are now banding together in an effort to make the licensing process a bit easier for these firms.

Reuters reports that Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas, and Washington state will share a licensing standard when it comes to money service businesses. This move should help FinTech companies save them both time and money during the process of obtaining licenses in these states. In a statement about the change, John Ryan of the Conference of State Bank Supervisors said, “This [money services business] licensing agreement will minimize the burden of regulatory licensing, use state resources more efficiently, and allow for broad participation by other states across the country.”

While this is a positive development for FinTechs — especially startups that have not already gone through the licensing phase — it does once again highlight just how cumbersome the process has been up to this point. Furthermore there hasn’t been much in the way of relief as of late with the long overdue “special purpose national banks” announcement happening more than a year ago without further action coming to bear. As for the seven states involved in this pact, it would appear that they now have a competitive advantage over those who impose greater restrictions on incoming and upcoming companies. Perhaps if all goes well this with this arrangement it could help further the argument for a national solution and get that debate back on track.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Walmart Exec Gives Update on Retailer's FinTech Efforts

Of all the retailers you might expect to be pushing forward the adoption of digital wallets and other FinTech products, Walmart is probably not be first on your list. And yet the mega-chain has been doing just that via their Walmart Pay option, partnerships with PayPal, and more. That's why...

New Study Highlights Which Stores Have the Best Black Friday Discounts

If the blasts of cold weather and snow in parts of the country weren't a clear indication that the holiday season was well on its way, this week marks the official kickoff of the retail bonanza as so-called Black Friday arrives. Despite several retailers getting an even earlier jump on...

Small Business Optimism Hot Streak Reaches Two-Year Mark 1

It's been a little while since we last checked in on the National Federation of Independent Business's small business optimism index but things seem to still be going strong. In fact the NFIB notes that this month marks two straight years where small business optimism has remained at historically high levels. Furthermore, coming at...