July 3, 2020

Volume X, Number 185

July 02, 2020

Subscribe to Latest Legal News and Analysis

July 01, 2020

Subscribe to Latest Legal News and Analysis

June 30, 2020

Subscribe to Latest Legal News and Analysis

New York Moves Money Transmitters to NMLS (Nationwide Multistate Licensing System and Registry)

As of July 1, 2017, the New York Department of Financial Services (“DFS”) is using the Nationwide Multistate Licensing System and Registry (“NMLS”) to manage license applications and conduct ongoing regulation of nondepository financial institutions, including money transmitters, doing business in New York. The NMLS website is available here.

The decision by DFS should bring some additional ease to an otherwise cumbersome state-by-state money transmitter licensing regime.  Applicants applying for a license in the NMLS system need only fill out a single set of applications for all states that participate (although, of course, individual state licensing requirements still differ). Money transmitters already licensed in New York will be able to transition their licenses to the NMLS system.  In a June 29, 2017 press release, available here, DFS stated it had sent letters to each licensee providing detailed instructions on how to accomplish the transition.

DFS has lauded the move to NMLS as bringing efficiency to its regulatory oversight responsibilities, including enhanced consumer protection.  According to a May 11, 2017 DFS press release, the move to NMLS will “allow DFS to provide better supervision of the money transmitter industry by linking with other states to protect consumers.”

Copyright 2020 K & L GatesNational Law Review, Volume VII, Number 194


About this Author


Jeremy McLaughlin is an associate in the firm’s San Francisco office and a member of the Consumer Financial Service group. His practice focuses principally on regulatory compliance and government enforcement for Fintech and consumer financial products and services, with particular attention on emerging payments and compliance with state and federal consumer protection laws, state money transmitter licensing laws, and international remittances, as well as advising on privacy, data security, and PCI compliance. He represents and advises financial technology companies,...

Judith E. Rinearson, KL Gates, federal consumer protection lawyer, anti money laundering attorney

Judith Rinearson is a partner in the firm’s New York and London offices. Ms. Rinearson concentrates her practice in prepaid and emerging payment systems, electronic payments, crypto/virtual currencies, reward programs, ACH and check processing. She has more than 25 years of experience in the financial services industry, including 18 years at American Express’s General Counsel’s Office. Her expertise focuses particularly in the areas of emerging payments and compliance with state and federal consumer protection laws, anti-money laundering laws, state money transmitter licensing laws and abandoned property laws. 

Fully experienced in both the “issuing” and “acquiring” side of the payments business, Ms. Rinearson has drafted and negotiated complex agreements with strategic co-branded partners, processors and Independent Sales Organizations (ISOs), ATM networks, major retailers and service providers, prepaid card issuers and program managers, international remittance companies, virtual and mobile payment providers, as well as the Terms and Conditions and disclosures that usually accompany such products. She has hands-on experience in all legal aspects of launching and managing a range of payment products, from prepaid cards of all kinds, to Bitcoin exchanges and miners, wire transfer services, ACH, electronic banking, money orders and credit cards. Her practice includes advising on fraud avoidance and compliance with federal banking and anti-money laundering laws, as well as state money transmitter licensing laws, consumer protection laws and abandoned property laws. On the international level, Ms. Rinearson has supervised the launch of a range of payment and foreign currency products in Europe, Asia and Latin America; met with international regulators; and spoken on the issue of payment regulation.