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MTLs and Money Transmission Primer with Evan Minsberg

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Evan Minsberg speaks with FinTech Layer Cake host Reggie Young about the nuanced world of money transmission licenses (MTLs)....

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Evan Minsberg speaks with FinTech Layer Cake host Reggie Young about the nuanced world of money transmission licenses (MTLs). Evan explains what MTLs are, why fintechs need them, and the trade-offs between pursuing a license, partnering with a bank, or using alternative models. He also unpacks the hidden costs, both in dollars and time, behind getting licensed, and how fintechs can think strategically about when it makes sense to pursue one.Listen to the <a href="https://www.lithic.com/blog/flc-evan-minsberg" target="_blank">podcast</a>.

MTLs and Money Transmission Primer with Evan Minsberg

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Evan Minsberg advises fintech companies, banks, and other financial services providers on developing new products, services, and strategic partnerships. Evan provides practical regulatory counsel and transactional support for a wide variety of payments, credit, and other financial technology business models. Evan’s focus includes payment processors, money transmitters, bank-fintech partnership arrangements, marketplaces, and other online and app-based financial services providers.With over a decade of experience in the financial services space, Evan is readily familiar with numerous fintech models and provides strategic, practical, and digestible advice. Evan’s clients are looking for help navigating the complex federal and state financial regulatory requirements applicable to the products they bring to market and finding the most efficient compliance solutions for achieving their goals – whether on their own or in partnership with other regulated entities and service providers. His transactional clients want support negotiating the best arrangements possible for their budget, timeline, and priorities, while maintaining productive relationships with their contractual counterparties. Evan’s clients range from start-ups, to fintech market leaders, to multinational public companies.Prior to joining MoFo, Evan worked in the financial services teams of two other leading law firms.<h4>Representative Experience</h4>Payment Processing and Money Movement<ul><li>Advise clients, from unlicensed start-ups to leading fintech payments companies, on compliance with federal and state money transmission and money services business laws, including licensing requirements and exemptions, bank partner and authorized delegate arrangements, funds flows, and use of “FBO accounts” and other structures.</li><li>Negotiate merchant processing and sponsorship agreements for multiple merchant, payment facilitator, and marketplace clients and advice on compliance with Card Network rules.</li><li>Structure, draft, and negotiate ACH origination, third-party sender, and third-party service provider agreements for multiple bank and fintech clients and advise on compliance with NACHA rules.</li><li>Counsel digital assets platforms on application of federal and state money transmission laws to cryptocurrency transactions.</li></ul>Banking as a Services (BaaS)<ul><li>Structure, draft, and negotiate program management agreements for multiple sponsor bank clients for deposit account programs with fintech companies, including use of “FBO Account” structures.</li><li>Advise sponsor bank clients on compliance requirements and appropriate division of rights and responsibilities with fintech partners, including end-user relationships, AML issues, customer data sharing, and program agreements.</li><li>Counsel sponsor bank clients on wind-down procedures, including timing, customer notice, return of customer funds, and other relevant issues.</li></ul>Bank Secrecy Act (BSA) and Anti-Money Laundering (AML)<ul><li>Counsel multiple bank, money services business, and other financial services clients on compliance with statutory and contractual BSA/AML requirements for BaaS, payment processing, “FBO Account” arrangements, and other models and structures.</li><li>Assist clients in preparing BSA/AML policies and procedures, including for money services business, digital assets and cryptocurrency, and cannabis-banking models. </li></ul>Credit Products and Services<ul><li>Develop consumer and commercial financing programs, including Buy Now, Pay Later, retail installment sales, and revenue-based financing arrangements.</li><li>Advise on state licensing requirements and exemptions and usury laws for consumer and commercial lenders, brokers, lead generators and others.</li><li>Structure, draft, and negotiate agreements for various credit arrangements, including card issuing agreements, bank partner / platform models, and lead generation arrangements.</li></ul>