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by dsl 4864 days ago
Just because another state has not yet taken enforcement action doesn't mean Square isn't in violation. The TechCrunch article mentions they have been in talks with the state for a while, which means they could be talking to 40 other states that have the same concerns... we don't know.

If you are big enough to be noticed by the states as a major money mover, you're probably big enough to get the proper licenses to conduct business. The last thing we need is deregulation in the financial space.
1 comments
tptacek 4864 days ago
Of the various regulatory hurdles you have to jump over to be a business that handles money for other people, money transmitter licenses seem like one of the most reasonable requirements, so I guess I agree. It must suck a lot to have to deal with every state on these, but I'm not sure we'd like federal requirements any more.
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aristus 4864 days ago
If the bond requirement becomes daily volume times 50 states, they are boned.
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dsl 4864 days ago
The bond requirements are per state for daily volume, so if they needed one in every state it would be equal to one days volume.
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AnIrishDuck 4864 days ago
I wonder if they can post one bond that meets the requirements of all 50 states somehow... that seems reasonable, the issue is which party they would post the bond with.
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thinkcomp 4864 days ago
No. The bonds must be separate as it currently stands, and they are very expensive, not to mention a horrible way to handle insurance.
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tptacek 4864 days ago
Two questions. First, insurance underwriters sell surety bonds, so what makes them a "horrible" way to handle insurance? If the states mandated actual insurance, you'd be held hostage to the arbitrary requirements of insurance companies; the bond requirement allows you to substitute your own capital for the judgement of insurance underwriters if that's what you want to do, but also allows you to avail yourself of the insurance industry.

Second, even though separate bonds are required by each state, what prevents insurance companies from simply selling you a surety bond product that meets the requirements of multiple states simultaneously?

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