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New NMLS Tool Shows Money Services Businesses are Trillion Dollar Industry

By Matt Lambert, CSBS Senior Director and Non-Depository Counsel

To help states protect consumers and to coordinate regulatory requirements for Money Services Businesses (MSBs) , the Nationwide Multistate Licensing System (NMLS.org) has begun a reporting system called the MSB Call Report. This call report information gives regulators better insight into MSB activities.

When aggregated, the NMLS data also gives policy makers a macro view into the MSB industry. We’ve known that the MSB industry is big, but for the first time, we can finally say just how big.

Over the first half of 2017, filings with the NMLS MSB Call Report show that more than half a trillion dollars of funds have been transferred by MSBs. This puts the industry on pace for over $1 trillion in 2017, the first year of data collection.

When we place some parameters on the data, we can further show that more than one-third of these funds are moved over the internet by financial technology firms.

The data findings are the first of their kind, providing insight into the MSB industry that has never been available before.

The MSB Call Report is a new function within NMLS that is the only comprehensive database of nationwide MSB transaction activity. Through it, CSBS collected national and state specific MSB activity through quarterly information reported by the six major MSB sectors: money transmission, stored value, payment instruments, virtual currency, currency exchange and check cashers.

The data show that in the first two quarters of 2017, MSBs transmitted slightly more than $529 billion dollars. MSB firms that don’t have a brick and mortar presence, often referred to as fintech firms, moved more than $189 billion, or more than one-third of the total amount. Money transmissions and stored value transactions comprised the majority of the amount that fintechs transmitted.

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