After 48 state regulators agreed to new regulatory rules, money transmitters like Western Union, PayPal, and cryptocurrency firms will expand across the United States. The set of supervisory regulations aim at reducing compliance costs.
On Tuesday, the Conference of State Bank Supervisors(CSBS) will reveal the new regulatory rules for money services businesses. Instead of the usual dozens of individual state exams, it will now undergo a single exam by a collaborative group of state regulators that oversee licensing.
A New Regime of State Harmony
In the wake of the new streamlined regime, 78 large payment and cryptocurrency firms that make a combined move of over $1 trillion every year will benefit. It aims to simplify how companies operate across multiple states.
In the past years, companies have been sending out complaints to state regulators concerning the state supervisory system’s redundant state. Specifically, cryptocurrency and fintech firms have been at the forefront in voicing out the issue.
Under the new regulations, a group of examiners from involved states will supervise a business instead of each country. CSBS President John Ryan said that this approach would be just as robust but more efficient.
Different states will share information from the exams and still reserve the right to launch independent examinations if they want. He further added that their governments aren’t giving up authority but instead realizing efficiencies of sharing information.
Rosemary Gallagher, associate counsel for Western Union, said that the company previously faced dozens of individual state exams. She added that they had been hoping for a reduction of the repetition during several similar exams. Further, she stated that the new regime would reduce each state’s burden, too, allowing them to invest in their highest quality examiners.
CSBS Vision 2020 Initiative
On October 10, 2019, the Conference of State Bank Supervisors (CSBS) announced their Vision 2020 initiative. The initiative was to modernize state regulation of non-banks, including financial technology firms. By achieving this vision, they would accomplish a regulatory system that would make supervision more efficient and recognize standards across state lines.
The CSBS Board, in a statement, said that states and territories would create consistent and data-driven solutions that support innovation by reducing friction in the state regulatory system. By 2020,they worked on seeing that state regulators adopt a licensing and supervisory structure that leverages technology and smart regulatory policies to rework the interaction between industry, regulators, and consumers.
It is safe to say that their Vision 2020 initiative is starting to sail with the new regulatory rules set to get announced on Tuesday.