The Tennessee Department of Financial Institutions (TDFI) announced on Tuesday that the department has entered into a multi-state Agreement for money service businesses (MSB) licensing with Washington, Georgia, Illinois, Kansas, Massachusetts, and Texas.
Money service businesses include money transmitters, payment service providers, and currency exchangers. Generally, MSBs have to apply for a license in each state in which they want to offer their services. As technology in the financial services area has advanced, state regulators have heard concerns from innovative startups providing money services about the difficulties of varying licensing requirements in multiple states and challenges of having their full application reviewed separately by each individual state before they can offer their services nationwide.
Recognizing this issue, last year the Conference of State Bank Supervisors, of which TDFI is a member, began a campaign called “Vision 2020” to transform the licensing process, harmonize supervision, and engage fintech companies.
This multi-state agreement is closely aligned with the Vision 2020 initiative because it will create efficiencies in the MSB licensing process. Under this multi-state agreement, one participating state reviews major elements of state licensing for an applicant and then forwards the results of that review to other participating states with which the applicant is also seeking licensing. Through this process, MSB applicants will be able to secure licenses in a more streamlined and timely manner.
Commissioner Greg Gonzales said, “With this initiative, state governments will be able to be responsive to business innovation while ensuring regulatory compliance. This Department has advocated for a more coordinated approach for the licensing and regulation of MSBs for nearly 30 years and it is satisfying to be among the first states to take this step toward an integrated nationwide system. This is a global industry and its supervision must be addressed in a way that allows consumers to take advantage of a broad array of products while ensuring appropriate regulation.”
This multi-state licensing process is voluntary for states and for applicants. Participating states will likely undertake a pilot licensing project later this spring. Applicants interested in taking advantage of this approach should contact Nicole Chamblee, Assistant Commissioner, Compliance Division, Tennessee Department of Financial Institutions at 615-532-1020 or Charles Clark, Agency Deputy Director & Director of Consumer Services, Washington State Department of Financial Institutions at 360-902-0511.