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CSBS Streamlines Exam Process for Payments Firms

On September 15, 2020, the Conference of State Bank Supervisors (“CSBS”) announced the launch of a new program intended to streamline the exam process required by state regulatory agencies for the nation’s payments firms and money transmitters.  Known as the MSB Networked Supervision, the state-initiated program seeks to make the examination process more predictable and consistent for the nation’s largest payments and cryptocurrency companies—whose transactions total more than $1 trillion each year.  The initiative was an outcome of the CSBS Fintech Industry Advisory Panel, which fielded suggestions from those in the industry who collectively called for multistate examination coordination of the nation’s payment firms and money transmitters.    

By making the exam protocol consistent among the more than forty member states, regulators will be able to better understand the risks associated in each company’s payments model and address compliance issues as they arise.  Increased state cooperation will decrease the likelihood of perpetual compliance pitfalls, as all regulators will be kept apprised of a payment firm’s regulatory status.  The single exam will be led by one state that will oversee a group of examiners sourced from regulatory bodies across the country. 

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ReVeal, Rinearson, Simon to Speak at Money2020 Expo

DC Partner John ReVeal, New York Partner Judith Rinearson and Santa Monica Partner Brette Simon will provide insight at the Money2020 Expo. The conference promises to bring together a global community of innovators in payments and financial services with 400-plus speakers spanning more than 100 sessions and workshops. More than 4,000 attendees are expected.

October 6, 2013 – October 10, 2013
Aria Resort and Casino
3730 Las Vegas Blvd.
Las Vegas, NV 89158

On Oct. 6, ReVeal will moderate a panel on the risks and rewards of credit-based emerging payment products. In addition to discussing what people need to know when launching or distributing credit-based products, this panel will address the current consumer group and regulatory pressure to restrict or prohibit credit as part of emerging payments and financial services solutions.

Later in the afternoon, Rinearson will moderate the panel “Money Transmitter Licensing: Kafka Revisited,” which will offer insight on how to manage the ambiguities of state money transmitter licensing laws.

Simon then will join a panel on how to prepare in advance of raising capital from institutional investors. Topics will include getting your legal and business house in order to maximize value upon a capital raise and avoid the “10% valuation haircut;” due diligence and the risks of having the wrong investors; and structuring investment to avoid “change of control” regulatory issues.

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Illinois Orders Six Unlicensed Money Transmitters to Cease & Desist

The Illinois Department of Financial & Professional Regulation recently released five cease and desist orders from January 2013 against six entities charging each with unlicensed activities under the state’s Transmitters of Money Act. These six entities offer a variety of services in Illinois, including domestic and international money transfer, bill payment services and prepaid cards.

One of these companies, Square, Inc. is described in its order as providing “mobile card reading devices for the express purpose of transmitting money,” providing iPhone and Android apps to Illinois consumers “for the express purpose of transmitting money” through those devices and selling and issuing “digital gift cards to Illinois consumers for the express purpose of purchasing items from designated vendors on Square’s Website.”

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