csbs – FinTech and Blockchain Law Watch

CSBS Rolls Out Joint Examination Initiative for Nationwide Payments Firms

Sep 21 2020

On September 17, the Conference of State Bank Supervisors (CSBS) announced that at least 40 states will establish a joint examination process for “nationwide payments firms” for the 2021 examination cycle. Known as “MSB Networked Supervision,” the initiative will allow 78 licensed payments companies, including some cryptocurrency exchanges, to undergo one joint examination rather than separate examinations for each state in which they are licensed. The examinations will be conducted by a group of examiners from multiple states but led by one designated state’s regulator. To be eligible, companies must be licensed in at least 40 states. This initiative follows the “One Company, One Exam Pilot” that was completed earlier this year and is part of CSBS Vision 2020, an initiative to create “a networked system of nonbank licensing and supervision.”

“Responsible Innovation” or a “Regulatory Train Wreck”? The OCC Announces it will Accept FinTech Applications for Special Purpose National Bank Charters

Aug 06 2018

By Rebecca H. Laird, Eric A. Love and Daniel S. Cohen

On July 31, 2018, the Office of the Comptroller of the Currency (“OCC”) announced that it will begin accepting applications from non-depository FinTech companies for special purpose national bank charters. It’s a long-awaited announcement that represents the culmination of a two year process during which the OCC sought stakeholder feedback and public comment on the issue.

Among the notable points that the OCC makes in the policy statement are the following:

The OCC has the authority to issue special purpose charters to FinTech companies, an issue that was the subject of previously dismissed legal challenges brought by the Conference of State Bank Supervisors (“CSBS”) and the New York Department of Financial Services (“NYDFS”). In the policy statement, the OCC reiterates its position that the National Banking Act and OCC regulations (12 C.F.R. § 5.20) authorize the agency to grant charters to non-depository FinTech companies that engage in at least one of the “core banking activities” — lending, paying checks or deposit-taking — in addition to the special purpose charters for trust/fiduciary activities;
The OCC’s decision will benefit consumers by encouraging “responsible innovation” in the banking industry. The OCC states that its decision will expand consumer choice, foster innovation in the banking sector, and “level the playing field” between regulated and non-regulated banking services institutions while ensuring FinTech companies operate safely and soundly;
FinTech companies will be held to the same standards and supervision as their similar non-FinTech counterparts, including requirements concerning capital, liquidity, and risk management. OCC-chartered FinTech companies will also be required to maintain a contingency plan for significant financial stress scenarios. The special purpose national bank will not be required to be FDIC-insured, since they will be non-depository institutions; and
FinTech companies may engage in any activity deemed to be permissible for a national bank.

U.S. District Court for DC Dismisses CSBS’ Challenge regarding Federal FinTech Charter, All Eyes on the OCC

May 08 2018

By Dan Cohen and Eric Love

The U.S. District Court for the District of Columbia recently granted the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss a lawsuit brought by the Conference of State Bank Supervisors (“CSBS”) challenging the OCC’s authority to issue special purpose charters to FinTech companies. According to the court, the CSBS currently lacks standing to bring the action because the OCC has not to-date issued such a charter.

Hope for Regulatory Relief on the Horizon? State Regulators to Standardize Licensing Process for Money Transmitters

Mar 27 2018

By Eric A. Love and Judith Rinearson

The Conference of State Bank Supervisors (CSBS) recently announced that seven states, Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington, have agreed to a multi-state compact (the Compact) that will standardize certain aspects of the licensing process for money services businesses (MSBs).

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