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Financial Services Law Insights and Observations

CSBS seeks feedback on proposed MSB national licensing requirements

Licensing State Issues CSBS Money Service / Money Transmitters

On May 24, the Conference of State Bank Supervisors (CSBS) announced a request for feedback on proposed national licensing requirements for money service businesses (MSBs). According to CSBS President and CEO John W. Ryan, the purpose of the proposal is to set “a national standard that allows the state system to operate as a single network while retaining local accountability and local control.” The proposal is based on a set of nationwide requirements reviewed by a lead state agency. According to the CSBS, the remaining state-specific requirements would be limited to items not covered by the national standards. Key aspects of the proposal include an overview of MSB-specific requirements and how they apply to companies, key individuals (the new name for what was previously referred to as “control persons”), and business location, in addition to proposed changes to the license application process for the MSB industry. The national standards for MSBs include core requirements for all applicants in all industries and MSB industry-specific requirements. The new requirements are expected to notably streamline the licensing process as part of efforts by state regulators to expand uniformity in state regulation through a strategy called Networked Supervision, which incorporates technology, data, and uniform practices to strengthen regulation.

Comments on the proposal must be submitted by July 23.

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