50-State Financial Services Licensing Compliance Guide
Firms and individuals in the finance industry need licenses to provide services. Licensing is regulated at the state level. Some lines of authority are subject to federal regulation. Finance licensing requirements vary by state and by the types of financial services offered.
Most financial service providers need to be licensed before conducting business. This includes independent service providers as well as larger firms. Finance licenses are separated into individual and firm categories, and cover businesses and brokerage firms that offer services.
Both individuals and firms looking to provide financial services in multiple states must hold licenses in each state in which they operate. Those licenses must be renewed periodically, as determined by the licensing state. Some states have reciprocal agreements with other states that help streamline multiple applications.
Licensed individuals and firms in the finance industry that comply with state and federal regulations should be able to operate without interruption. Not only will licensing compliance ensure service consistency, but it will also build trust with current and potential clients.
What Types of Finance Licenses Exist?
Financial services are highly regulated, so service providers need to obtain the proper licenses to operate in their chosen jurisdictions. Leadership at financial institutions or servicers is responsible for preparing, updating, and renewing licenses. To operate without interruption, licensed, licensed individuals and firms must comply with federal and state regulations, which vary by state.
Firm Licenses
Businesses that provide finance-related services are also required to be licensed. Examples of these firms include:
While states oversee licensing and regulations for finance companies, many states encourage firms to apply for licenses through third parties. Multiple licenses may be required if a company provides more than one service.
Application requirements vary based on service offerings and lines of authority covered. Most applications require name approval, proof of incorporation, and a list of officers. Businesses are also required to designate an agent in charge of the application. That agent must be a licensed individual responsible for the business’s legal compliance. Agents have to be licensed in the same lines of authority that the firm is looking to provide.
Individual Licenses
Individuals who sell or solicit financial services must obtain and maintain an individual provider license for the lines of authority in which they deal. This includes but is not limited to:
Investment Advisors
Money Transmitters
Mortgage Brokers
Warranty Service Providers
Debt Collectors
Before applying for any type of finance license, applicants must complete education courses and pass an exam. The license type, its requirements, and the renewal process vary by state. Some states use third parties to guide and administer license exams and applications to promote efficiency. If an individual is looking to obtain licensure in multiple states, it’s possible they may not need to take additional examinations in the states they expand to if agreements exist between those states.
In addition to taking courses and passing exams, individuals are often required to submit fingerprints and a background check during the application process. Some states require additional documentation.
Licenses must be renewed annually in most cases. Some licenses have biennial or other renewal terms.
Explore Licensing by State
Click on the links below to view licensing information in your state.
Harbor Compliance License Manager helps finance professionals maintain their licenses by automating repetitive tasks such as tracking renewals. Through License Manager, you can also access License IQ™ - our extensive proprietary database of licensing information - to research the specific requirements for the states in which you work. Contact our licensing experts today to learn more.
