In this episode of Payments Pros, Keith Barnett is joined by James Stevens to discuss the Merchant Acquirer Limited Purpose Bank Charter (MALPB) in Georgia, a unique charter that allows companies to offer merchant payment processing services without a sponsoring partner bank. Despite being enacted 12 years ago, companies have been unable to utilize it due to card networks not allowing direct participation. This could change soon, especially with Fiserv’s recent application.
Keith and James note that MALPB is limited to merchant activities and has specific rules regarding merchant funds. The application process is rigorous, involving a detailed review of owners, officers, and directors. The charter also requires the company to employ at least 50 Georgia residents and to engage in merchant acquiring activities within a year of receiving the charter.
The Georgia Department of Banking and Finance, which regulates traditional banks in Georgia and will regulate these MALPBs, has posted some guidance and an application form. The guidance is particularly helpful, providing robust capital requirements for these charters.
The conversation wraps up with Keith and James emphasizing that the charter’s value hinges on the card networks’ access allowance. Troutman Pepper, having played a key role in drafting the MALPB law and having a wealth of experience in securing bank charters, is ideally positioned to guide applicants. Our team has been involved in the establishment of all banks formed in the state of Georgia since 2010. James underscores the importance for applicants to seek advice from attorneys and consultants with a proven track record of successfully filing and obtaining bank charters in Georgia.