State Regulators Roll Out One Company, One Exam for Nationwide Payments Firms

WASHINGTON, Sept. 15, 2020 /PRNewswire/ -- Money transmitters operating in 40 or more states will benefit from streamlined state supervision in 2021.

The Conference of State Bank Supervisors (CSBS) announced today the launch of a state-initiated program whereby nationwide payments firms will undergo a single comprehensive exam to satisfy all state regulatory requirements. Known as MSB Networked Supervision, the initiative will apply to 78 of the nation’s largest payments and cryptocurrency companies that combined move more than $1 trillion a year in customer funds.

Building on years of multistate coordination, this exam protocol will enable states to fine tune a risk-based approach to each company’s operations. When compliance issues arise, the states will be better positioned to follow up throughout the year.

The single exam will be led by one state overseeing a group of examiners sourced from across the country. By relying on experts across the state system — including in cyber security and anti-money laundering — regulators will gain more insight while also freeing up state resources.

Rosemary Gallagher, Western Union associate general counsel, shared, “Western Union was a proud participant in the CSBS’s successful one company, one exam pilot. We firmly believe that the impact of this new approach to multistate exams will be significant in terms of driving harmonization and streamlining of state supervision across the board.”

Kevin Hagler, Georgia Department of Banking and Finance commissioner and CSBS Board chair, said, “One company, one exam is a significant and important shift in how state regulators will ensure compliance with consumer protection and safety and soundness standards for the largest payments companies. By working together and relying on the excellent work of fellow state regulators, we will be able to do even more.”

Rick St Onge, Money Transmitter Regulators Association Board president and Washington State Department of Financial Institutions examinations chief, said, “This announcement represents years of work by state agencies to move networked supervision forward. The next stage will be equally important as we raise the bar for multistate exam coordination. For over a century, state regulators have responded to evolutions within the money transmission industry, and networked supervision is the logical next step to more effectively and more efficiently supervise the growing number of nationally operating companies.”

This initiative was an outcome of the CSBS Fintech Industry Advisory Panel, which emphasized the need to increase multistate exam coordination. See more recommendations and the states’ response here.

Soliciting and implementing industry recommendations is part of CSBS Vision 2020, a collection of initiatives driving toward a networked system of nonbank licensing and supervision.

Twitter: @CSBSnews

The Conference of State Bank Supervisors (CSBS) is the national organization of bank regulators from all 50 states, American Samoa, District of Columbia, Guam, Puerto Rico and U.S. Virgin Islands. State regulators supervise 79% of all U.S. banks and are the primary supervisor of non-depository financial services. CSBS, on behalf of state regulators, also operates the Nationwide Multistate Licensing System to license and register non-depository financial service providers in the mortgage, money services businesses, consumer finance and debt industries.

SOURCE Conference of State Bank Supervisors

Related Links

https://www.csbs.org/