House concurs with amendments that ban new crypto kiosks and creates licensing for merchant cash advances

The Vermont House on May 14 concurred in committee amendments to House Bill 648, a package of changes to banking, insurance and securities law that includes a multi-part approach to cryptocurrency kiosks and a new licensing program for merchant cash advance providers. The House approved concurrence by voice vote after committee reporters summarized the findings and proposed amendments.

Committee reporters told members that testimony from the attorney general's consumer assistance program, the Department of Financial Regulation and organizations such as AARP described crypto kiosks as tools frequently exploited in scams that can leave victims—particularly seniors—without recourse. "The essential problem with the crypto kiosk model of cryptocurrency purchase is just too easy to perpetrate the fraud," the committee report said, citing FBI and AG office complaint data presented during hearings.

Why it matters: Committees concluded that the risk to Vermont consumers from vending machines that convert cash to cryptocurrency outweighs the limited public benefit, particularly given the potential for money laundering and international transfers. The Senate had proposed extending the moratorium on new kiosks to 2027; the House committee recommended further amendments that would effectively prohibit operation of new crypto devices and retain regulatory obligations for prior transactions so consumers could seek refunds.

The bill also includes a separate, detailed program to license merchant cash advance and other small-scale commercial financing providers. The committee report explained the licensing scheme would require registration with the Department of Financial Regulation, set disclosure requirements (amount financed, finance charge, APR and key terms), prohibit certain automatic debits unless the lender has a perfected UCC security interest, and bar confessions of judgment. The licensing provisions are slated to take effect July 1, 2027, with the commissioner authorized to adopt rules prior to the effective date.

Fiscal and practical considerations: The Ways and Means committee reported the changes would have a minimal fiscal impact. Rescinding or preventing additional kiosk operations was estimated to reduce state revenue by roughly $1,000 given only two kiosks currently operate; licensing merchant cash advance providers was estimated to bring about $1,000 per provider, but the total number of such providers in Vermont is not specified.

Points of contention: A member questioned why loans above $1 million are exempt from the merchant cash advance licensing requirement; the presenter said the threshold mirrors the cap used in an existing personal lending program and reflects a policy judgment that larger borrowers are more sophisticated and less in need of the added consumer protections.

What happens next: The House concurred in the committee amendments and will carry the amended text back to the Senate as required by the legislative process. Implementation details (rulemaking and effective dates) were left to the implementing agency and the bill sets a 2027 effective date for the licensing program.