The Conference of State Bank Supervisors (CSBS) announced yesterday that seven states have agreed to a multi-state compact that, according to the CSBS, “standardizes key elements of the licensing process for money services businesses (MSB).”

The seven states consist of Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington.  The CSBS expects other states to join the compact.  Under the compact, if one participating state has reviewed key elements of a company’s operations in connection with the company’s application for money transmitter license (IT, cybersecurity, business plan, background check, and compliance with the federal Bank Secrecy Act), the other participating states will accept that state’s findings.

The CSBS describes the compact as “the first step among state regulators in moving towards an integrated, 50-state system of licensing and supervision for fintechs.”  It is expected to significantly streamline the MSB licensing process.

 

The CFPB has issued its December 2015 complaint report which highlights money transfer complaints and complaints from consumers in Georgia and the Atlanta metro area.

General findings include the following:

  • As of December 1, 2015, the CFPB handled approximately 770,100 complaints nationally, including approximately 21,000 complaints in November 2015.  For November 2015, debt collection continued to be the most complained-about financial product or service, representing about 30 percent of complaints submitted.  (The CFPB stated that this was the 27th consecutive month in which it handled more complaints about debt collection than about any other type of complaint.)  Debt collection complaints, together with complaints about credit reporting and mortgages, collectively represented about 68 percent of the complaints submitted in November 2015.
  • Complaints about prepaid cards showed the greatest percentage increase based on a three-month average, increasing about 215 percent from the same time last year (September to November 2014 compared with September to November 2015).
  • Payday loan complaints showed the greatest percentage decrease based on a three-month average, decreasing about 14 percent from the same time last year (September to November 2014 compared with September to November 2015).  Complaints during those periods decreased from 532 complaints in 2014 to 459 complaints in 2015.  (Payday loan complaints also showed the greatest percentage decrease in the October and November 2015 complaint reports.)
  • Idaho, Alabama and Vermont experienced the greatest complaint volume increases from the same time last year (September to November 2014 compared with September to November 2015).  The volume of complaints from Idaho, Alabama and Vermont increased by, respectively, 49, 38 and 36 percent.  The states with the greatest complaint volume decreases from the same time last year (September to November 2014 compared with September to November 2015) were Montana, Oklahoma and South Dakota with decreases of, respectively, 10, 10 and 7 percent.

Findings regarding money transfer complaints include the following:

  • Since April 4, 2013, the CFPB has handled approximately 5,100 money transfer complaints, representing about 1 percent of total complaints.
  • The most common complaints (42 percent) involved consumers complaining about being victims of fraud.  A common fraud involved the fraud perpetrator asking for a money transfer in order to provide relief to a family member in need.  In its press release about the report, the CFPB notes that while fraud is the most common type of money transfer complaint, it is not targeted at the actual money transfer service being provided.
  • Consumers often submitted complaints because the money transfer was not received by the intended recipient, the amount received was smaller than expected, or the transfer was delayed.
  • Other issues raised in complaints included problems with customer service, such as confusing information and long hold times, and error resolution problems such as long delays in obtaining refunds.

Findings regarding complaints from consumers in Georgia and the Atlanta metro area include the following:

  • As of December 1, 2015, approximately 31,300 complaints were submitted by Georgia consumers, of which about 23,600 (75 percent) were from Atlanta consumers.
  • Mortgages were the most-complained-about product, with mortgage-related complaints representing 33 percent of the complaints submitted by Georgia consumers.  (Nationally, mortgage complaints averaged 27 percent of all complaints received by the CFPB.)
  • Debt collection and credit reporting were, respectively, the second and third most-complained-about financial products by Georgia consumers.