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Banking deputy flags money‑transmission growth, virtual currency kiosk report and cybersecurity concerns
Summary
Deputy Commissioner Aaron Ferentz told the committee Vermont directly regulates state‑chartered banks, credit unions and a growing set of money‑transmission and virtual currency licensees; he delivered a legislative report on virtual currency kiosks and emphasized cybersecurity and consumer protections.
Deputy Commissioner Aaron Ferentz briefed the House Commerce & Economic Development Committee on Jan. 15, 2025, on the Banking Division’s scope, licensing counts, and emerging trends including money transmission, cryptocurrency kiosks and cybersecurity.
"The area that's really growing for us is in this area called money transmission," Ferentz told the committee, describing how nonbank companies offering payment services or virtual currency products—think Venmo, Cash App and crypto exchanges—must be licensed when serving Vermonters.
Ferentz summarized the scope of DFR’s bank oversight: the state directly oversees seven state‑chartered banks, 11 credit unions and three trust companies. He said the division oversees roughly 547 companies that hold about 1,840 licenses in Vermont and about 2,463 licensed mortgage loan originators (noting that number may decline with higher interest rates).
Ferentz described the virtual currency kiosk (Bitcoin ATM) review mandated by the Legislature and said the Banking Division has delivered the kiosk report to the committee. He said DFR updated money transmission laws and implemented limits on kiosk cash flows during a moratorium on new kiosks, citing fraud and consumer protection concerns.
On consumer protection and markets, Ferentz discussed payday lending rules: Vermont does not ban payday lending but caps interest to levels that generally make such products uneconomic in the state; nonbank lenders must be licensed and subject to scrutiny. He also noted emerging fintech products—earn‑wage access, buy‑now‑pay‑later and small‑business receivables financing—may blur licensing lines and require case‑by‑case analysis.
Ferentz flagged cybersecurity as an ongoing exam priority because financial services are heavily technology dependent and institutions must safeguard data and resilience. He said the division is fully staffed and partners with federal regulators (FDIC, NCUA) for examinations and technical resources.
The committee asked for the virtual currency kiosk report to be distributed; Ferentz confirmed it was complete and said DFR will schedule a follow‑up briefing to walk the committee through the findings.
