In December, we looked at ways fintech companies are making inroads into banking: partnering with banks to offer their services, obtaining bank charters, or seeking alternative structures such as the industrial loan company (ILC) charter. This month we are examining some of the regulatory issues that have surfaced with these new entrants. Fintech Regulation 101 Just as with banks, there is no single licensing or regulatory agency that oversees fintech companies. Depending on their activities, they can be licensed or supervised by local, state or federal regulators on a functional, or activity-based, basis. Prudential (safety and soundness) regulation and licensing are generally handled at the state level for services such as lending, money transmission and insurance. For example, PayPal, one of the oldest fintech firms, has money transmission licenses in all 50 states and has a regulator for each state or territory in which it operates.