Proposal Released to Standardize, Modernize Licensing Process

The Conference of State Bank Supervisors has issued a set of proposed requirements aimed at developing a standardized approach to the state licensing process for nonbank financial regulatory entities.

It is seeking comments on the proposal through May 31.

The overarching objective of the CSBS’s plan is to modernize the Nationwide Multistate Licensing System to make it more automated, data-drive, and user friendly.

“State agencies are evolving nonbank financial regulation by creating a system that preserves local accountability while also moving towards a more coordinated, standardized approach to regulation,” said CSBS President and Chief Executive John W. Ryan, in a statement. “This shift will streamline the licensing process for both state agencies and licensees. We welcome the input of industry as vital stakeholders of NMLS.”      

Under the proposed requirements, all companies would be required to provide a meet a set of standardized requirements, called Core Requirements. This information would include demographic and other basic information that are currently provided through the NMLA Company Form, Branch Form, and Individual Form. Companies would also be required to submit Business-Specific Requirements, which pertain to information related to licensing a business, such as the names of key individuals, bank accounts, and background checks. The third requirement would be License-Specific Requirements, such as bonds and the names of qualifying individuals.

The CSBS said that money services businesses would be the first to transition to this new model, likely sometime next year.

The proposal would also create an identity verification process to provide each unique user with a single login that will be associated with the appropriate company and have permissions for the different applications and records that the user will manage. New users will be required to complete a verification process to prevent duplicate accounts.

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