State financial regulators in the US have approved an action plan to streamline the experience of fintech startups setting up shop across multiple jurisdictions.
The Conference of State Bank Supervisors (CSBS) is responding to a Fintech Industry Advisory Panel set up last year to identify and remove unnecessary pain points in the multistate experience of fintechs and other nonbanks operating regionally or nationwide.
CSBS has agreed to implement 14 specific recommendations from the panel, including the development of a 50-state model law to license money services businesses and the creation of an online database of state licensing and fintech guidance. It will aloso develop a new technology offering, a State Examination System, to simplify examinations of nonbanks operating in more than one state.
Mark Quandahl, chair of the CSBS Emerging Payments & Innovation Task Force and director of the Nebraska Department of Banking and Finance, says: “As regulators overseeing nonbanks, our goals are clear: ensure the safety and soundness of the financial system, protect consumers, and streamline the multistate experience. The Fintech Industry Advisory Panel has developed actionable items for us; we embrace these recommendations, and we are now focused on implementation.”
The changes have been spurred by a turf war between the state regulators and the Office of the Comptroller of the Currency (OCC), which wants to start granting fintech charters to make it easier for startups to operate across state lines.
The CSBS has brought a complaint in the US district court of Columbia which alleges that the OCC is over-reaching its authority in granting charter status to non-banks.