On August 21, 2019 the Conference of State Bank Supervisors (“CSBS”) launched three new online tools designed to help non-bank financial services companies navigate state regulations and protect against cyber security risks: a State Regulatory Guidance Portal, a State Survey Map of Money Transmission Laws, and Cybersecurity 101: A Resource Guide for Financial Sector Executives. Each of these initiatives provides valuable new resources for both banks and non-banks to stay apprised of changing state regulatory systems and technological advances that impact the financial services industry.
State Regulatory Guidance Portal
The first of these tools, the State Regulatory Guidance Portal, provides a vault of state regulatory guidance documents, including opinion letters, orders, advisory notices and FAQs that have been issued by various state regulatory entities. These documents are categorized by state, license, and topic, including: virtual currency; correspondence to mortgage broker; lender and originator licensees; money transmission; mortgage underwriting and processing; third-party payment processing; mobile home lending; and mortgage servicing. The creation of this portal allows financial service industry regulators across the country to compile regulatory guidance in one centralized location, making it easier for both regulators and the industry to identify and maintain best practices in their businesses. State regulators are encouraged to provide copies of pertinent guidance documents they issue for inclusion in this repository. A link to the State Regulatory Guidance Portal is available here.
State Survey Map of Money Transmission Laws
The second tool is a virtual map of the United States that identifies which states do not require a money transmitter license for receiving a payment on behalf of a third party. Color-coding identifies which states’ money transmission laws include an agent of the payee exemption, and whether the exemption is available always, or case-by-case. A “yes” state is colored green, “case-by-case” states are colored blue, and the remaining states are colored gray. The map allows users to click on each state that provides for the exemption, which opens a new window that lists the source of the exemption, a link to the legislative reference for the exemption, a description of the standard to qualify for the exemption, and whether predetermination is required for the exemption. States continue to modify their money transmission licensing requirements as technology continues to expand the possibilities for money transfer. This map provides a catalogue to help the financial services industry navigate these changing laws. A link to the State Survey Map of Money Transmission Laws is available here.
Cybersecurity 101: A Resource Guide for Financial Sector Executives
The third tool is a printable guide created to help executives and board members of financial institutions understand and prepare for cyber risks faced by their companies. The document is non-technical and provides a broad overview of the tools and resources available to help financial institutions identify the threats and vulnerabilities they face, and employ best practices to reduce cyber risk. A link to Cybersecurity 101: A Resource Guide for Financial Sector Executives is available here.
We applaud CSBS for making these valuable resources available to the public. They should be particularly helpful to non-bank FinTech start-up companies that are seeking an overview of potential licensing issues. However, they are not a substitute for doing thorough research and seeking advice from a consumer financial services lawyer.
