Harrisburg, PA - Today in a letter, Secretary of Banking and Securities Robin L. Wiessmann stated that companies and individuals offering regulated financial services using innovative technology or alternative means of offering such services – so-called “fintech” companies – are required to be licensed by the Department of Banking and Securities if they wish to conduct business with Pennsylvania residents.
“Technology blended with finance can provide enormous benefits for consumers, businesses, and the economy,” said Wiessmann. “However, technology firms seeking to provide financial services to consumers may not understand or realize the legal requirements of the states in which their customers reside.”
Wiessmann noted that the excitement surrounding the introduction of new technologies in the financial world has clouded the regulatory and consumer protection environment.
“The notion that a company labels itself as ‘fintech’ because of the means by which it offers or delivers a financial service does not alter the underlying nature of the transaction or service it is offering, whether it is lending or transmitting money, or some other regulated product or service,” said Wiessmann.
The department reminds all persons and companies offering financial services requiring licensure that they must possess the appropriate license and abide by all consumer protections if such services are offered to residents of Pennsylvania. Any companies or persons offering these regulated financial services that fails to obtain an appropriate license may be subject to any penalties provided for under the governing statute for that service. The department, Wiessmann reiterated, regulates financial transactions based upon the transaction offered or delivered, not the method of delivery.
“Thousands of individuals and companies engaged in providing financial services already understand and abide by Pennsylvania law, and we want to help ensure a level playing field for all financial services providers doing business with our residents,” said Wiessmann. “Through this letter, we hope to provide guidance to these technology firms to help ensure they are aware of and can comply with Pennsylvania’s consumer protection laws.”
The letter can be found online: http://www.dobs.pa.gov/Documents/Secretary%20Letters/All%20Business/10.6.17%20Fintech%20Licensure%20Letter.pdf
Consumers with complaints or questions regarding whether a financial services provider is properly licensed can contact the department at 1-800-PA-BANKS. Members of the public are invited to connect to the department through Facebook and Twitter, or subscribing to the department’s newsletter.
MEDIA CONTACT: Ed Novak - 717.783.4721
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