CSBS (Conference of State Bank Supervisors)

The Conference of State Bank Supervisors (CSBS) is the nationwide organization of state financial regulators in the United States. Its members are the agencies that charter and supervise state banks and that license and examine non-bank financial companies such as money transmitters, mortgage lenders and consumer finance firms in the 50 states, the District of Columbia and the US territories. CSBS is not itself a regulator: it has no power to grant licenses or take enforcement action. Its influence comes from coordinating its members, running shared infrastructure and drafting model laws that states can adopt.

For payments and fintech companies, CSBS matters mainly for two things. It operates the Nationwide Multistate Licensing System (NMLS), through which most state money transmitter license applications and renewals are filed, and it developed the model Money Transmission Modernization Act (MTMA).

CSBS was founded in 1902, when state banking commissioners began meeting to coordinate their work in the dual banking system, under which a bank can choose a state charter or a national charter. Over the following century its focus widened from bank supervision to the growing range of non-bank financial firms that states license. It is headquartered in Washington, D.C., and is governed by a board drawn from state commissioners.

CSBS launched NMLS in 2008 as a common platform for state licensing. The federal SAFE Act of 2008 made it the registry for mortgage loan originators, and states progressively moved other license types onto it, including money transmission, check cashing, consumer lending and debt collection. Applicants file company, branch and individual records, and changes are reported through NMLS MU filings. The system lets each state see a consistent record of an applicant's control persons, financial statements and disciplinary history, although each state still makes its own licensing decision.

NMLS is also how most states process a change of control of a licensed company, which is why buyers of licensed money transmitters spend considerable time in the system.

State money transmission laws developed separately and differ on definitions, exemptions, net worth, bonding and permissible investment rules. To reduce that patchwork, CSBS adopted the Money Transmission Modernization Act as a model law in 2021, after work with state regulators and industry. The MTMA sets common standards for tangible net worth, surety bonds, permissible investments and change of control, and it treats concepts such as agent of the payee consistently. Each state must enact the model through its own legislature, and states have done so at different speeds and sometimes with amendments, so the patchwork has narrowed rather than disappeared.

CSBS supports networked supervision, under which several states examine a multistate money services business together rather than each sending its own team. Through multistate agreements, a lead group of states can conduct a single examination of a licensee's AML program, financial condition and consumer compliance, and share the results with the other licensing states. The organization also produces common examination procedures and training for state examiners.

State regulators work alongside federal bodies rather than under them. The Financial Crimes Enforcement Network (FinCEN) sets federal anti-money laundering rules for money services businesses, while the states license them and examine for compliance with both state law and the Bank Secrecy Act. Large state agencies such as the New York State Department of Financial Services are CSBS members but also act independently, including through their own licensing regimes. CSBS represents state positions in debates over federal charters for fintech companies and in proposals that would preempt state law, generally defending the role of state supervision.

• Conference of State Bank Supervisors