WASHINGTON: Money transmitters like Western Union, PayPal, and cryptocurrency firms will be able to more easily expand across the United States, after 48 state regulators agreed to a single set of supervisory rules that should reduce their compliance costs.
The Conference of State Bank Supervisors (CSBS) will on Tuesday unveil the new regulatory regime for money services businesses, which will undergo a single exam by a joint group of state regulators that oversee licensing, instead of dozens of individual state exams.
The new streamlined regime applies to 78 large payment and cryptocurrency firms, which combined move over $1 trillion annually. It aims to make it easier for companies to operate across multiple states, the CSBS told Reuters.
State regulators have been working together in recent years to address company complaints that the state-by-state supervisory system is redundant and overly burdensome. Crypto-currency and fintech firms, which typically have to be licensed state by state have been particularly vocal about the problem.
Under the new arrangement, a group of examiners from a handful of states will jointly supervise a business, instead of each individual state.
John Ryan, CSBS’s president and CEO, said the new approach will be just as robust, but more efficient. States will be able to share information from the exams, and each state will reserve the right to launch independent examinations if they want.
“The states aren’t giving up authority. They’re realizing efficiencies by sharing information,” he said in an interview.
Rosemary Gallagher, associate counsel for Western Union, which participated in a pilot program last year, said the company previously faced dozens of individual state exams and that they expected that repetition to be reduced.
She added that the new regime would reduce the burden for each individual state too, allowing them to field their “highest quality examiners.”