CSBS Issue Briefings - August 2020

Vision 2020

CSBS Official Position

In May 2017, CSBS members adopted a policy statement committing state regulators to move towards an integrated, 50-state system of licensing and supervision for nonbanks, including fintech firms, while promoting strong consumer protections. Achieving this goal involves several CSBS and state initiatives. We refer to these initiatives collectively as CSBS Vision 2020.

Summary

CSBS Vision 2020 includes:

1. Industry Engagement: Through our Fintech Industry Advisory Panel (FIAP), we brought together 33 firms to i dentify state licensing and regulation “pain points.” In February 2019, we released the FIAP’s recommendations and announced the steps the states and CSBS are taking to smooth the licensing and supervision of nonbanks across the nation while strengthening consumer protections and local accountability. These next steps focus on forging common definitions and practices, increasing transparency and expanding the use of common technology. CSBS regularly issues a FIAP Accountability Report on the progress of the recommendations. 2. Next-generation technology platform: In March 2020, CSBS launched the State Examination System (SES), a new nationwide technology platform that allows state examiners collect information from supervised institutions securely and perform key aspects of formal examinations without the normal onsite visits. SES has built these procedures into an automated workflow that is easily accessible from locations near or far. 3. Harmonize multistate licensing and supervision: State regulators and CSBS have several initiatives underway to bring more efficiency and standardization to licensing and supervision. • In 2019, we conducted a One Company, One Exam pilot which has now evolved to a greater commitment to a networked approach to supervision greater reliance and sharing of exam work and information. • The states are working on a model approach to MSB licensing requirements and processes. • The states are in the early stages of developing a consumer finance call report. As the mortgage and MSB call reports have done, the consumer finance call report’s goal will be to improve the information reported to regulators while bringing greater consistency to reporting requirements. 4. Better tools for navigating the state system: CSBS is developing several tools and resources to bring greater transparency to state nonbank supervision and licensing. In 2019, we launched a repository of state guidances related to nonbank licensing and supervision as well as surveys of certain areas of state MSB laws. In February 2020, CSBS released a survey of consumer lending laws and regulations of all 50 states and Washington, D.C. 5. Assist state banking departments: To help better regulate banks and nonbanks CSBS has trained hundreds of state regulators as part of a nationwide cyber training initiative, developed a model cyber regulation and is finalizing an MSB accreditation program. 6. Improve third party supervision: Banks seeks to partner with a variety of companies, including many who consider themselves fintechs. The Bank Service Company Examination Coordination

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