State regulators consolidate regulatory burden for money transmitters

If you’re a money transmitter, like PayPal or Moneygram, following the law has just become much simpler. 

The Conference of State Bank Supervisors (CSBS) announced on Sept. 15 that nationwide transmitters will have to undergo a single comprehensive exam to satisfy all state regulatory requirements. 

This new change, called MSB Networked Supervision, will impact 78 payments and cryptocurrency companies that generate over $1 trillion in consumer funds and should allow states to have a better response to compliance concerns. 

A CSBS press release explained that this recent consolidation effort resulted from years of multi-state coordination, primarily through the CSBS Fintech Industry Advisory Panel.

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

“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,” adds Kevin Hagler, commissioner for Georgia Department of Baking and Finance and board chair for CSBS. 

Companies, like Western Union, who participated in the planning and pilot of the program have hopes that the programs will streamline the regulatory process. 

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

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