On February 6, 2018, the Washington State Department of Financial Institutions (DFI) announced that it has entered into a multi-state Agreement with Georgia, Illinois, Kansas, Massachusetts, Tennessee and Texas to create a shared licensing process for money service businesses. This Agreement was part of the states’ efforts to address complaints from FinTech companies that the current need to obtain individual licenses from each state is difficult and burdensome.
In the face of significant uncertainty over the OCC’s attempt to streamline oversight of FinTech companies through national charters, state regulators appear to be stepping up to the plate. The Conference of State Bank Supervisors (CSBS), whose members include state financial supervisors, have created a Vision 2020 initiative to encourage all 50 states to adopt an integrated licensing and supervisory system for FinTech companies by the year 2020. Now seven states have announced they will seek to do so. According to the CSBS, “[o]ther states are expected to join this compact.”
Where the federal government has failed to implement a regulatory solution, the individual states, through coordination, may achieve a satisfactory result for FinTech companies, but whether the CSBS’ vision becomes a reality remains to be seen.
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