Counsel for companies building the next layer of financial infrastructure, covering licensing, bank partnerships, and product structure, from a firm that reads where the regulator will look before the product ships.
A money services business registers with FinCEN within 180 days of opening, and the state licenses then come one at a time from every state but one, each with its own bond, its own net-worth floor and its own examiner. Or the product never holds the funds, because they sit in a sponsor bank's account for the benefit of customers, and the question becomes whose ledger proves which customer owns what. Pass-through deposit insurance depends on that ledger. So does the company, if the bank or the middleware between them fails.
We advise payments and fintech companies on the decision that precedes every other, which is how a dollar moves and in whose name it rests at each hop. From that map we choose the perimeter: state licensing, a bank partnership or an exemption that holds on the facts. Then we paper the rails, from the sponsor-bank and processor agreements to the compliance program the bank's examiner will read, and we structure the fundraise so investor diligence finds a licensing file in order.
Mapping which state money-transmitter, lending, or related licenses a business model triggers, then structuring the flow of funds, as agent of payee, through a bank partnership, or in a licensed entity, to fit that map before a product touches customer money.
Negotiating banking-as-a-service and sponsor-bank agreements, meaning the program, compliance-allocation, and oversight terms that let a fintech run on a chartered bank's rails, charter, and card-issuing capability without becoming a bank itself.
Structuring the card-network, processor, and payment-rail relationships behind a product, and drafting the merchant, network, and settlement agreements that govern how value moves from one party to another.
Building the anti-money-laundering, consumer-protection, and program-compliance posture regulators expect, and advising clients in matters before state banking, money-transmission, and federal consumer-protection authorities.
The corporate and securities work behind fintech capital, from priced rounds and convertible instruments to acquisitions, structured so the licensing and compliance story lines up with the capital story.
Structuring international expansion centrally, as licensing, sanctions, and data questions shift with every market, while coordinating with locally admitted counsel where a jurisdiction or charter requires it.
Many states exempt a processor appointed as the merchant's agent to receive payment: once the agent is paid, the customer's debt is discharged and nobody is transmitting money on the customer's behalf. The exemption rests on a written appointment and on funds never being held for the payer.
FinCEN registration confers nothing and is renewed every two years. What it starts is the Bank Secrecy Act program the business must run, with a named compliance officer, written controls and independent testing. A suspicious-activity report falls due within 30 days of detection, whether or not a dollar moved.
Customer funds at a sponsor bank sit pooled in one account. Deposit insurance passes through to each customer only if records identify each one's share, and the fintech or its middleware vendor, not the bank, usually keeps them. When that ledger fails, an insurance question becomes a bankruptcy question.
Under the 2023 interagency guidance on third-party relationships, the bank answers to its regulator for every fintech program it sponsors, so the program agreement passes those duties down: audit rights, reserve accounts and a wind-down plan. Recent consent orders against sponsor banks read like audits of those clauses.
In most licensing states, acquiring control of a licensed money transmitter, often set at a quarter of the voting equity, needs the regulator's prior approval. A financing or acquisition that crosses the line carries its own filings and timetable, and investors who learn this in diligence tend to reprice.
Sending money abroad for consumers brings the remittance transfer rule: the exchange rate, fees and amount received disclosed before payment, and a right to cancel for 30 minutes after. Sanctions screening is strict liability: a payment reaching a blocked party is a violation whether or not anyone knew.
Before a term sheet or a license application, we diagram every hop a dollar takes: who holds it, when, in whose name, and under whose FBO account. That map decides your status as a money transmitter, an agent of a payee, or neither, and it becomes the exhibit every regulator and bank partner will read first.
With the flow of funds fixed, we pick the regulatory posture: state-by-state money transmitter licensing, a sponsor-bank or BaaS arrangement that keeps funds on a chartered balance sheet, or a payroll/agent exemption where one applies on the facts. Each path is priced in months, capital, and control before you commit.
Sponsor-bank agreements, processor and network contracts, program terms, and the BSA/AML and consumer-compliance program are negotiated as one system, with reserve requirements, audit rights, wind-down triggers, and error-resolution duties allocated so no obligation lands unowned when volume is real.
Post-launch the matter never closes. Multistate exam cycles, quarterly call reports, bank-partner oversight reviews, and new-corridor or new-product change approvals keep coming. When acquirers or Series B diligence arrive, the licensing file and flow-of-funds map answer in hours rather than weeks.
A payments company is a regulatory structure with software attached, so we build the structure first.
A fintech and payments lawyer helps a financial-technology company build and sell a product without running afoul of the rules that govern money. That means mapping which licenses a business model triggers, structuring the bank and processor relationships that move funds, drafting the customer and partner agreements, and advising on the consumer-protection and anti-money-laundering obligations that come with handling other people's money. At Hart David Carson LLP, one partner coordinates that work across corporate, regulatory, and transactional teams.
If the company receives money from one person for transmission to another, or issues stored value, it is a money transmitter in nearly every state unless an exemption applies, and every state but Montana licenses the activity. The common exits are three: the funds never pass through the company because a sponsor bank holds them; the company is the merchant's appointed agent for payment, so receipt by the company discharges the customer's debt; or the company is itself the bank's agent under a written agreement. Each exit depends on facts that can drift as the product evolves, so we document the flow of funds hop by hop, test it against the definitions in each launch state and set the licensing plan before the term sheet. Applying afterward means disclosing that you operated without a license, which the applications ask about.
Many fintechs operate on top of a chartered bank rather than becoming one. The bank holds the funds, issues the cards, or provides the rails, and the fintech provides the product and the customer relationship. These banking-as-a-service arrangements are governed by detailed agreements covering compliance responsibility, program oversight, and the regulator's expectations of the bank for its partners. We negotiate those agreements and build the compliance allocation so both sides know who owns what.
Four, in practice. State money-transmission regulators license the company and examine it, increasingly through coordinated multistate exams run on the NMLS. The Consumer Financial Protection Bureau enforces Regulation E on electronic transfers, Regulation Z where credit is extended and the prohibition on unfair, deceptive or abusive practices over everything else, and state attorneys general enforce their own versions. FinCEN administers the Bank Secrecy Act program and receives the suspicious-activity reports, and OFAC enforces sanctions on a strict-liability basis. Behind all of them stands the sponsor bank's prudential regulator, which never writes to the fintech and still shapes what it may do. We advise on matters before these agencies and coordinate with bank-regulatory counsel where a charter question requires it.
Yes. The round itself is standard corporate and securities work: priced preferred stock or a convertible instrument, documented under the usual exemption. What is different is the diligence list and the approvals. An investor in a licensed money transmitter will ask for the licensing matrix, the last examination reports and the independent BSA audit, and a round that takes an investor over the control threshold in a licensing state needs that state's prior approval before closing. We build the data room around those requests from the start, calendar the change-of-control filings into the closing timeline and draft the representations so the company is warranting its actual compliance posture, not an aspirational one.
Yes. The firm works from Chicago, with offices in London and Dubai through partner firms and a partner network of locally admitted counsel in about 51 jurisdictions. Each market licenses payments differently: in the United Kingdom a payment or e-money institution is authorized by the Financial Conduct Authority and must safeguard customer funds in segregated accounts, in the European Union a licence granted in one member state can be passported to the others, and in the United Arab Emirates retail payment services are licensed by the central bank, with separate regimes in the financial free zones. Consumer remittances from the United States add the remittance transfer rule's disclosures and cancellation right. We structure the expansion centrally, settle the licensing path for each corridor before it opens and instruct local counsel for the applications, with one partner accountable for the whole map.
Fund formation, governance, and M&A for managers, sponsors, and the family offices behind them, including international banking and structuring work.
Explore →Token, exchange, fund, and regulatory strategy for digital-asset ventures and the institutions financing them, where we have been early counsel to the category since 2014.
Explore →Transactions, IP, and growth capital for software and platform businesses, from papering the round and licensing the technology to structuring the exit.
Explore →Buyouts, fund formation, and direct deals for sponsors and the family offices behind them, with the governance work that keeps a portfolio defensible.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
One partner is accountable for the whole matter, and you have that partner's direct line. Chicago, London, and Dubai work to the same standard.