RegFi Episode 64: Navigating Multistate Licensing and Supervision in a Digital Era
35 min listen
RegFi co-hosts Jerry Buckley and Sherry Safchuk are joined by Orrick partner Jedd Bellman, former Maryland Assistant Commissioner of Financial Regulation, for a deep dive into the evolving role of state regulators in supervising fintechs and other nonbank financial services providers. The conversation explores how the NMLS and CSBS are shaping multistate licensing and oversight, the growing emphasis on corporate governance and personal liability for management, and how political dynamics are influencing state regulatory coordination.
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Jerry Buckley:
Hello, this is Jerry Buckley, along with RegFi co-host Sherry Safchuk. We are joined today by our Orrick partner, Jedd Bellman.
Jedd brings a unique perspective on state regulation of financial market participants, having served as Assistant Commissioner in the Maryland Office of the Commissioner of Financial Regulation, where he coordinated the licensing and supervision of approximately 23,000 individuals and business entities. Jedd’s job at the Maryland department provided him with a close-up look at the day-to-day operations of a large number of financial services providers, from mortgage lenders to money transfer agents to student lenders to credit bureaus and much more. And while he may be too modest to say it, during his 10 years at the Maryland Commissioner’s Office, he played an important thought leadership role in coordinating with other state regulators on policy and multistate enforcement actions.
Jedd, people often think of the federal bank regulators and the CFPB when it comes to financial protection for consumers. But, in fact, the largest number and variety of consumer financial providers have their first contact with the government when getting licensed to do business by their state financial services regulator. By the way, welcome, and we’re glad to have you with us.
Maybe we could start by describing that process and the type of questions an applicant for a license should be prepared to answer.Jedd Bellman: Thank you, Jerry. Well, let’s take a step back first quickly, because I think that people need to recognize that historically, nonbank supervision rested with the states. And if you think about it, a long time ago, before we had the ability to do everything on our phone, very localized businesses offering consumer financial services that were not banks would do so in their local communities and be regulated either by the banking department or, at times, there were consumer credit regulators. Some have merged; for example, Maryland, the consumer credit side was merged with the banking side. So, there’s a long history and fabric at the state regulatory level in which local communities regulated their nonbank financial services being offered to them.
And so, we step forward today into the world of technology. And you are correct. Most nonbanks, their first interaction, to the extent that they are regulated, will be with state financial regulators. And since the last financial crisis, where there was a real effort to harmonize state licensing through something called the NMLS, originally mortgage-focused, but has expanded to many of the nonbank financial products and services.Jerry: And NMLS stands for? Jedd: Well, in the law, I think it’s nationwide multistate mortgage licensing system and registry. It’s been shortened to nationwide multistate licensing system, dropping the “registry” and dropping “mortgage” because there’s a whole host of other products and services. And the enabling statute that Congress passed, the SAFE Act, has been expanded at the federal level to cover everything in the system at the time when Senate Bill, I think, 2155 back in 2018 — and if I’m wrong, I blame Sherry — it covers everything from debt collection, credit reporting bureaus, money transmitters. All of that is the fabric of the NMLS. And many states over the years have pushed a lot of their licensing to this centralized system that’s designed to coordinate multistate information sharing, creates more efficiency in the process, more standardized questions and applications.
And so, when you ask, “What are the things you need to think about?” there’s core components: business plan, there’s control people information, there’s vetting information. You know, the system allows for fingerprinting and background checks. Well, not the fingerprints themselves, but doing the fingerprints and backgrounds of credit polls for control people, financial condition documents. If there’s, if you need to disclose your bank accounts, there’s a whole host of information that gets placed into the NMLS and is required, depending on state-to-state policies and procedures, business continuity plan. There’s just a lot of information.
But Sherry, save me from myself. What else am I missing?Sherry Safchuk: I think you got it. I think, though, it varies based on what you’re applying for. So, if you’re applying for commercial licenses, you’re probably not going to be required to provide financial information. But the more you get into the consumer side, the more requirements apply. Jedd: And I think that states have been using this as a shield, the NMLS system. During the last Trump administration, there were Treasury reports demanding that the state system, or at least highly, that the state should really focus on harmonizing the fabric of the state regulatory community to reduce regulatory burden.
And so, from that perspective, the NMLS has been one of the key tools that CSBS, the Conference of State Bank Supervisors, who run the NMLS system for the state system, has been pushing to try to meet those objectives that were laid out during the previous Trump administration.Jerry: And by the way, when you look back at CSBS pre-crisis and you look at what it is today, it has become an enormously important factor in the regulation of financial services in the United States, as much of the activity, particularly in the fintech space and in the innovation, is occurring at entities that are regulated primarily at the state level. It’s quite remarkable, really. Jedd: Yeah. And, you know, CSBS has been for a long time, especially on the state charter banking side, the voice of regulators in Washington. It’s now expanded to cover a lot more. And even next month, there’s a mortgage summit being hosted by CSBS where leaders at the state and federal level are convening to talk about high-level mortgage issues, especially given the expansion of coverage by non-banked in this space.
I think pre-crisis, the vast majority of mortgage activity was at banks. And with some of the things that happened with Basel III and everything, a lot of the mortgage activity, whether servicing and origination, now rests with nonbank mortgage entities. And so CSBS has been that voice, and NMLS has allowed them to, I hate to say it but get more resources to be able to expand their role.Jerry: Yeah. Sherry: Yeah, I hate to admit it, but the NMLS has streamlined a lot of the commercial applications. Although I get a lot of statements that it’s not user-friendly, but I think that’s just the nature of NMLS.
But Jedd, thanks so much for joining us. It’s really a great topic to be discussing right now. There’s so much going on at the state level. And with so many thousands of financial service providers licensed at the state level, their supervision of their activities really must be challenging.
So how do these state financial services regulators decide how to allocate resources and how do they prioritize the use of their resources? And do they work together?Jedd: Sure. So, I think it’s an interesting question because, as you know, many of these agencies are specially funded. So, industry pays for their supervision in each jurisdiction. But if I think about Maryland, where I was a longtime regulator, we also were subject to the budget whims of the legislature, who didn’t always recognize special-funded versus general-funded.
And so I think the staff continues to shrink, whereas the amount of coverage expected and the sophistication of entities being supervised has dramatically increased. And so, there is a resource strain at the state level. Certain states that have seen an opportunity, especially with the perceived retrenchment at the federal level, are expanding those resources. But it’s always a challenge. You have new authorities being granted on a regular basis, limited resources to allocate. And so, I think a lot of effort has been focused on how can you ... they talk about risk-based supervision from an efficiency perspective. It’s also from a resource allocation perspective. What’s the best bang for your buck with limited resources?
And so, there are statutory mandates. You need to do examinations, for example. In Maryland, we had to do exams every five years in mortgage companies. However, I think my team was 18 examiners, which is one of the larger mortgage examination teams. And we struggled to meet that mandate. And so, when you think about allocation, in most states, examination is not defined. And so how do you... When you talk in that way, what are ways to create greater efficiencies with not imposing greater risk in your community?
So, we talk about adoption, right? The CSBS has created the SES. And the idea is, can you adopt other states’ exams and treat that as your own by doing minimal work? Can you move to a more risk-based model such that one exam is a broader scope and one exam is a less broad scope? Unfortunately, regulators talk in this really myopic way. There’s full-scope exams and limited-scope exams. And I’m hoping, and I think there’s this push to be a more scalable concept where, “Hey, this company is less risky, or they’ve had two good exam cycles. Maybe we can do less and still leverage some other work product.”
You know, there’s greater tools to identify that, whether it’s the CFPB complaint portal, whether it’s FTC Sentinel, or state-only complaints. As complaints move into the SES, you can look at other states’ complaints about the same entity you’re regulating. So, yes, it’s a challenge, but it’s always... The core is meeting statutory mandate. And then, I think, looking at limited resources, commissioners are being more sensitive today. Instead of just trotting along, if we get 10 years backed up, that’s not okay. And so thinking about ways where you can create greater efficiencies in the process.
And then, as you pointed out, Jerry, there’s now more multistate functions like “one company, one exam,” where you can leverage joint examination teams. I still think they’re figuring it out because a lot of examiners just come in and want to do their own exam.
But how can you allocate resources jointly in a way where you create greater efficiency? So maybe I don’t need three examiners to be on the exam. I can use one and let another state do the financial condition analysis. Or I can let another state do the IT analysis. And that frees up two other resources to deal with backlogs or being more efficient in deployment of resources.Jerry: You know, we had Raj Date as a guest probably over a year ago. And of course, as you know, Raj set up the CFPB in the first instance, and he’s had quite a career in the area of both venture funding for financial services providers as well as consulting.
One thing he said was, and I think it was really interesting, is he said he’d like to see an A-B experiment in which you send out a bunch of examiners — now, this is for banks, of course — in middle seats and planes out to do a traditional examination, relying on call reports and looking back at what they’ve done. And then you take three or four of your best examiners and empower them with the digital tools and AI technology. And this isn’t going to happen. Things have to be developed. But he thinks that would be an interesting experiment. And he thinks that you might be able to achieve a lot more.
One of the other suggestions from another podcast guest, Nick Cook, is that he had developed a dashboard at the Financial Conduct Authority in which real-time information was coming into the regulator. And they shared that with the Bank of England. That also gave them the ability to be at their headquarters looking at that data as it came in, being much more aware, flashing amber or red if there was a problem.
So, I imagine that technology will allow less resources to achieve more over time at the state level. What are your thoughts, by the way?Jedd: I think there is definitely an opportunity there, and I have some really good examples. I think the problem is actually implementing it.
You know, CSBS has been pushing this agenda. They want real-time supervision, more automated supervision, right? Compliance ease and the process of doing data tracking of all loans was always intended to be the solution, as one of the solutions from automation and to streamline some of the manual loan final reviews by examiners.
The problem is getting the data from many different providers and systemizing that data. And I know that MBA and other people have been working really hard to try to clean that up. But yes, I do think that systemization, automation, and AI will create a more consistent supervisory landscape and probably get you better results and more consistent results.
The example when I was in Maryland was, when I first got there, we had a very manual process and a very state-specific process. At that time, as part of the SAFE Act, if you were CSS-accredited — I think it was CSBS- and ARMA-accredited — you had a safe harbor from federal preemption and takeover. The presumption switched to the government, and you were assumed to have a sufficient regulatory system under the SAFE Act and under their implementing regulations.
So, we moved to try to do the risk-based model, leveraging the exam protocol that the MMC had. And so, we fundamentally changed Maryland’s exam program. I’m going somewhere. Don’t get bored. I just actually, I have good examples. When we did that, at some point, CSBS wanted to come up with some risk ratings. So, they hired some quant geniuses, you know, the real geeks.Jerry: Yeah. Jedd: We’re kind of like the semi-geeks, but the real geeks. And I don’t know if that’s appropriate to say, but they were really smart. And they were trying to figure out, looking at exam data, whether there was any kind of correlation for purposes of risk rating, like certain findings and stuff. Would that correlate to who’s more risky? So, we should deploy researchers back to your resource question.
So, Maryland gave all this data, and the data from prior to this change and after, and at some point the quantitative mathematicians, or whatever they are, came back and said, “Hey, did something change? We saw a statistically relevant deviation in the kind of consistency and certainty in your product.” We became much more consistent and had less deviations after we adopted the MMC protocol.
And so, it’s clear that if you start leveraging centralized systems, if you’re more consistent and mitigate the human error, you get better products and more consistent products. And it was super interesting because they actually could see in the data that, when we changed and tried to conform to this national standard.
So, I would probably agree with Raj that if you did a test, you would probably see more consistent outcomes, especially if you’re just doing it state-specific, where you leverage an AI function that’s more centralized. It’s probably going to give you more consistent results, which are better for consumers.Jerry: Exactly. Jedd: Fundamentally, because you’re actually going to have it. The counter to it is, you want some diversity of thought because it’s more haphazard, but you might get better outcomes because if you get too focused on one issue, then you might have gaps in your site through your own biases. Jerry: Very, very interesting observation, Jedd. You know, as you and I have discussed, it seems that as more novel products and services are being offered by state-licensed entities, state regulators are looking carefully at how these products are being vetted by management and by boards. When a regulator finds significant harm for a consumer or if a financial services provider fails, what is the exposure for management and the board, including personal liability? I have the impression that state regulators are looking at licensed entities and imposing more bank-like corporate governance expectations. What protocols should the board be putting in place to assure good corporate hygiene and shield controlled persons and the board itself from personal liability? Jedd: So, it’s an interesting question. I think we can start from thinking about the last administration and thinking about what Director Chopra was focused on. He definitely was pushing this narrative that we should impose individual liability. And we know that they brought claims against individuals.
We’ve seen haphazardly across the state system where states have tried to hold a control person accountable for even minimal compliance violations. And we’re seeing greater use of that tool, which, again, doesn’t seem to... Like, they’ll just throw in a control person! The question is, how do you protect boards and management? And this all goes to corporate governance and corporate governance frameworks, which has also been a key component of state regulators. Some of our colleagues hate this, but if you look at the licensing and business licensing regimes, they have these broad statements like you need to operate fairly, efficiently, and honestly to warrant the belief that the public can trust you.
And state regulators have leveraged those concepts to build out more of a bank-like corporate governance expectation. And you can see that in the exam protocols. If you pull out the MMC exam manual, you’ll see that the five component ratings, or maybe it’s now four, has a whole management section, which goes to this level of, what’s the management role? What is the management’s responsibilities in giving direction and owning core functions?
This played out in 2021; CSBS, working with industry, put out model language for prudential standards for the largest mortgage servicers. And in there is a whole corporate governance framework, right? They expect to have a board; they expect the board to promulgate a corporate governance framework, which controls both for the financial condition components, which are very specific for mortgage servicers, and if you think about it, when you think about Freddie and Fannie, and then there’s this whole kind of corporate governance risk management section around giving direction, regular risk management activity, given the size, scope, and complexity of business. If you think about it, what are you doing to monitor that? And then, obviously, it flows to the compliance management system, which is a core component of operational risk.
And so, we’ve seen this being articulated in the CSBS document. But, for example, in Maryland, which I apologize, we implemented a regulation that expanded those standards, at least for corporate governance, to all mortgage companies and similarly expanded that corporate governance concept for all money transmitters. And so, as you see this replicated — and this is not a surprise because it plays out in the exam manuals, whether it’s the MTRA exam manual, which they won’t share with anyone, or the MMC — these concepts are being expected. We’re seeing them in exams. They’re asking what the boards are doing. They’re looking at board minutes. They’re expecting the board to own the decision.
And so when you talk about good corporate hygiene, that doesn’t mean that the board has to step into the shoes of management. It just requires some level of hygiene around a corporate governance framework. And then a whole stacking of policies and procedures, reporting mechanisms to ensure that, similar to what we see on the bank side — which, as you know, can be, I don’t know, Jerry, what, like a hundred-page corporate governance framework? It doesn’t need to be that robust, but it does create mechanisms to give coverage. And then so what does that mean when someone tries to hold individuals accountable? Well, we were just following our corporate governance framework. It’s not me being irresponsible. It was a risk-based decision, and the company might be, should be held accountable if we have a dispute, but the individual should not be.
So it’s a really interesting area. And with real focus on real core areas like IT, AI, vendor management, BSA/AML, for example, all of these components are key risks and hot-button topics that hopefully a corporate governance framework can both deal with the issues in a thoughtful and risk-based informed decision way but also can give mitigation to individuals from a liability perspective.Jerry: Being the director of a failed FDIC-insured bank is a very uncomfortable place to be. And if the state regulators are moving in that direction, it reflects a judgment that decisions are made by people, and they start to hold people individually responsible. That can be carried way too far, as we know, but that’s the reality driving this, I think. Jedd: And this holds especially true for our clients that are fintechs and really innovating, in which the laws that they’re trying to operate under are antiquated. And so, especially if you’re challenging the classic ways of how financial services are offered or technology just allows that, it’s really important to ensure that you have thoughtful corporate governance. So, if someone comes in and says, “Well, you’re harming consumers,” you say, “We’re not harming consumers. We made an informed risk decision. We were willing to take on this risk, and unfortunately, something happened.”
Hopefully, that can be enough of a shield to push regulators off. I’m worried that the politics are not going to always win the day. Sorry, not the politics. Sorry, the politics…Jerry: Politics may win the day. Jedd: The politics may win the day! The rational, legal thinking might not win the day, but it does give you a defense mechanism, especially if you need us to come in and fight on your behalf. Jerry: Right, right. Sherry? Sherry: And Jedd, with the advent of ubiquitous digital commerce and given the borderless nature of the internet, there is an understandable desire for a borderless set of rules because, as we know, commerce does not stop at state borders. On the other hand, one of the perceived strengths of our federal system is that states can serve as laboratories for new products without the heavy hand of a single federal regulator, perhaps, maybe inadvertently, limiting innovation. One mechanism to reconcile this tension is the Conference of State Bank Supervisors, or CSBS, as we’ve been talking about.
How effective do you think that CSBS can be with respect to coordinating state regulation and promoting standardization in rules and examination procedures?Jedd: So, it’s an interesting question. There has been some real visionary leadership. You think about John Ryan, who passed away a few years ago; him along with some of the other people on his team, were really inspirational in thinking through and challenging these notions about how we can centralize, how we can be a viable institution, especially with that notion where companies don’t want to deal with 50 state regulators and all these regulations are pushing for preemption.
And we’re very successful in walking back at the federal level, right? Those Treasury reports I discussed? You know, CSBS had its hand in developing that, right? CSBS is the one who coordinates and supports the commissioner that sits as a non-voting member on FSOC. And so they can be very effective. However some of the tension we’re seeing now, and they have a really great leader, Brandon, who has a lot of ties in Washington.Jerry: By the way, he's the podcast guest as well. Sherry: Brandon is lovely. Jerry: Yes, he’s a great guy and a very thoughtful guy. But I’m sorry, Jedd. Go ahead. Jedd: Oh, so what I was going to say is Brandon is going to be as effective as he can. The problem is one of the things I’m starting to see, which was not as evident at the state financial regulatory level, is tribalism and politics. And we’re starting to see some tension between the Republican states and the classic Democrat states. And the question is, how do those frictions play out at CSBS that will hamstring some of their efficiency and effectiveness?
Again, CSBS is beholden to the state regulators. You know, their board is made up of commissioners. Their members are commissioners. And so I think they are the most viable body to really effectively drive a narrative to counter preemption and centralization and stripping states of their rights. On the other hand, there are market conditions. There are plenty of state-licensed entities that like being state-licensed and don’t want to get into the morass of a centralized federal system where you have some kind of very centralized thinking. But that being said, it’s a good question. I do think that CSBS is the best outcome. The question is, as Brandon navigates these new power dynamics and politics, how successful he will be able to get consensus to drive certain standards?
The other thing we’ve seen is a lot of turnover at the state level. And unfortunately, it’s creating inconsistency. There’s been a loss of a lot of knowledge. And so the tension between trying to say, “My right state and my sovereignty,” versus understanding that giving up a little to preserve your turf is okay. And so those tensions are also relevant.Jerry: You know, Sherry mentioned digitization of financial services, and with it comes a whole set of new risks and opportunities. cyber risk, the advent of generative AI, the advance of cryptocurrencies, and the always evolving BSA/AML threat. There’s a lot, even for the biggest financial institutions to deal with, and that says nothing about those that are smaller. And of course, the same could be said of state regulators scrambling to keep up. With the CFPB shrinking its staffing, more responsibility will fall to the states, I believe.
How do you see the state regulators responding to this challenge?Jedd: They’re trying to. The problem is, if you think about it, I was thinking about when we moved into this robust financial condition, right? Like the complexity of the nonbank space, how they’re financed, how kind of the structure, some are fund models, right? Like being like, hey, I’m going to have one of my licensing reviewers that makes $40,000 a year, or I’m going to try to bring an examiner who I could pay $65,000 to be able to understand capital markets and evaluate a complex financial institution worth billions of dollars is a problem, right? And so some of it is they’re trying their best to create systems and do it. I don’t know how effective they’re going to be at it.
Similarly, if you think about it from an IT perspective, the same risks are out there. They want to be at the forefront of controlling for these things. The problem is, they’re hiring up IT specialists. I think the biggest risk out there is how equipped are they really to deal with really complicated issues, right? Cyber threats are complicated. Cyber infrastructure and cybersecurity practices are really complicated. The host of different tooling used by companies to do it are really complicated.
And so they’re... It’s an interesting time because state regulators want to do it. The resources there are a problem. And what do you need to pay to do it right is another problem. But look, these risks are out there. State regulators want to do it. And we’re seeing them becoming more and more aggressive in this space, whether it’s BSA/AML. You know, it’s no longer just New York kind of pressing the issue. We’re seeing state regulators wanting to do it. At the NMLS conference a couple of months ago, there was a whole panel on BSA/AML and how state regulators across the board want to be the ones doing it.
The question is, what level of sophistication do they have in understanding the history of BSA/AML, how it’s developed, and how equipped are they to actually analyze it at the low-level frontline examiner space, especially if these are not lawyers and some of them are new and are low-paid? And I don’t mean that in a negative way. It’s just... You know, there’s a level of sophistication that’s needed, especially as you get into more complicated structures, when you get into standards of a reasonable base, where it’s not just a bright-line rule, where you can check a box if a disclosure went out; whether a system reasonably complies with the safeguards rule is a completely different concept. And similar across a lot of these areas that we’re talking about, what’s a reasonable risk, for example, with an algorithm decision-making? We know the value of it. The question is, are they equipped to be sensitive, and are they equipped to be able to provide enough certainty for industry so that there’s not arbitrary risks and inefficiency in the product? Sorry, in the marketplace.Sherry: I see this often in the state licensing space, where you have these examiners asking questions of compliance with requirements that do not apply to the companies. And so, what happens is you get a lot of confusion on the financial services side of, “Wait, does this law apply to me?” But no, it doesn’t. The statutes and regulations say otherwise. So, I see a bit of that tension, especially in the application stage with states. Jedd: Yeah, and I also see an insecurity. I don’t know if you’re seeing this, Sherry, but where they’re not willing to talk, right? You think about, Jerry, you were talking about like the classic bank examiner. They were willing to take a board of directors to town, right? They could go to a bank board and say, or the holding company board and say, “What are you guys doing?” These are frontline examiners. Jerry: I’ve been there for those discussions when they allowed the lawyer to be there, yeah. Jedd: That’s why I said it. But like, I guess my concern is, to Sherry’s point, we’re getting these real demands, and then no one’s willing to talk about it up the chain. So that classic thinking where we could have a dynamic relationship where we could talk through laws, understand them, and have a robust conversation — I’m concerned that we’re losing that. And similarly, if CSBS’ voice is sort of squelched, who’s going to be that thought leader and be able to coordinate the states, especially if we’re seeing really kind of abstract outcomes, especially in these really hot-button issues that are super complicated and they’re not necessarily replicated from across each state law or they don’t easily fit into the laws?
And if you have some frontline examiner saying, “Hey, you need to do X,” and you’re like, “The law doesn’t say that.” “Hey, you need to do X, or you need to pay me a fine.” And your outcome is, “I pay a $20,000 fine, or I spend hundreds of thousands of dollars litigating it.” We’re getting to a place where this — I don’t know where the tipping point is — but there’s more inefficiency creeping into the market, which again is an area where hopefully CSBS is moving to try to create consistency. It’s just some of maybe the natural kind of developments that are, you know, more to come.Jerry: Well, things are moving fast. And I think that one thing that is a conclusion that anybody would draw from hearing this conversation is CSBS, if they can carry it out, has an extraordinarily important role and responsibility moving forward. And it is the place, as the administrator of NMLS, as well as the repository of an awful lot of technical expertise, to provide the guidance, if their members will let them, and centralized resources that states can use. Jedd: And also remember, CSBS and the nonbank side also has limited resources. So there are also critical sister organizations that kind of collaborate with CSBS at different levels of collaboration. But, like, there’s MTRA on the money transmission side. There’s AARMR. Jerry: On the mortgage side, yeah. Jedd: Yeah, the American Association of Residential Mortgage Regulators. There’s NACA, which is the consumer credit side that does the non-mortgage side, student debt. And then there’s NACARA that does the debt collection. They’re kind of like the different sister organizations that all flow up to the coordination with the CFPB. And really, these are the avenues where you need to push them as a centralized organization to counter some of the inconsistencies that might crop up.
To your point, Jerry, I think everyone’s trying to do the right thing. It’s just, technology is moving quickly. The laws are moving much slower. And how do we ensure that there’s consistency and efficiency while protecting consumers but creating a diverse marketplace where people can make money and offer really good services to communities across the country that have diverse populations, different populations, and different needs?Jerry: Jedd, we’ve covered a lot of ground in this episode, but we have by no means plumbed the depth of all you have to offer. We’ll have to have you back but as we sign off, do you have any last observations that you would like to make about the state of state financial regulation? Jedd: Yeah, I think it’s a really interesting time. There’s a lot of federal experts who are going to the state system, which will beef up the quality of the talent. And that’s not to demean, the talent already at the state level. But there’s certain states that are going to have really aggressive people. Politics are at play, so there’s a lot of uncertainty. I think it’ll be really interesting if you think about the Cantero Supreme Court decision. What is preemption, and what’s not preemption? Is there going to be any appetite to move preemption at the federal level, so like a single payments regulator at the federal level? We know that there’s discussion about preempting on stablecoin.
I just think there’s a lot of moving pieces and a lot of uncertainty that’s not great for industry. Doesn’t mean you can’t be successful, but it’s a really interesting time, especially coming off of a really aggressive CFPB that didn’t seem to care about law as much but more of using the bully pulpit to demand outcomes. And so that narrative still permeates through the states. And I think both at the Republican and Democratic states, we see kind of interesting outcomes.
And so, it’s a really exciting time for us to think through how the face of supervision at the federal and state level is going forward, what role state regulators will do, and what continued progress state regulators can have, especially through the leadership of organizations like CSBS, to harmonize, create efficiencies, and demonstrate that the state system is still a valuable component to our dual-banking, dual-regulatory environment, which is unique to the U.S.Jerry: Well, thank you so much for bringing the insight that you bring, both from your days at the Maryland Department and from your current practice helping many players in the field. It’s been great having you with us. I know there’s a lot more we could cover, but we really appreciate it, Jedd. Thank you for joining us. Jedd: You're welcome. Thank you for having me and listening to me. Sherry: Thank you, Jedd.