NYDFS JOINS IN MULTI-STATE ENFORCEMENT ACTION AGAINST BANKRUPT MONEY TRANSMITTER

Enforcement takeaways (according to the Consent Order allegations): •        NYDFS appears more inclined recently to act with other regulators under the auspices of the Conference of State Banking Supervisors and Money Transmitter Regulators Association.  The action grew out of a multi-state investigation and subsequent Interim Cease and Desist Order filed by the agencies in March 2024. •        NYDFS … Read more

NYDFS SUPERINTENDENT HARRIS UPDATES FOREIGN BANKS AT IIB CONFERENCE

NYDFS Superintendent Adrienne A. Harris participated in a fireside chat with the Institute of International Bankers and gave the following updates (summarized): •      Impact of Change in Federal Administration: Superintendent Harris said that the change in administration at the CFPB and elsewhere would not alter DFS’ course; that there were gaps in consumer protection even before the … Read more

SUPERINTENDENT HARRIS REPORTS VIA LEGISLATIVE TESTIMONY AND REGULATORY AGENDA

Superintendent Harris testified before NYS legislature and DFS issued its Regulatory Agenda. Per testimony: Looking Back: • “Since August 2021, DFS has adopted or amended 54 regulations, issued 98 pieces of regulatory guidance, and closed 117 enforcement actions resulting in more than $418 million in penalties.” •“We have addressed more than 157,000 consumer complaints and returned $$645 million to New York State consumers and health care providers, including over … Read more

NYDFS PENALIZES PAYPAL $2 MILLION FOR CYBERSECURITY VIOLATIONS

Enforcement takeaways (according to DFS allegations in the Consent Order with PayPal): •        NYDFS found customer data was exposed after PayPal implemented changes to make 1099-K forms available to more of its customers, after teams tasked with implementing these changes failed to follow proper procedures before the changes went live. •        Malicious actors leveraged compromised credentials to … Read more

NYDFS ORDERS NEW CYBER-ENFORCEMENT ACTIONS AGAINST GEICO ($5MM) AND TRAVELERS ($1.2MM)

Two new cybersecurity enforcement actions from NYDFS, against GEICO and Travelers Indemnity Co.   Enforcement takeaways are (according to DFS allegations): •        GEICO experienced three cybersecurity events in a short period of time primarily involving customer interfaces for obtaining quotes and submitting claims and the web portal for GEICO agents, allowing threat actors to obtain driver license … Read more

NYDFS SUPERINTENDENT SAYS MORE CRYPTO ENFORCEMENT COMING

Speaking to Bloomberg at DC Fintech Week, Superintendent Adrienne Harris stated about crypto enforcement: •        Superintendent Adrienne Harris said “absolutely” when asked if there are “big cases coming down the pike for crypto firms, stable coin firms or even market makers in the space.” •        Superintendent Harris elaborated, saying “I think for us we really make sure … Read more

NYDFS FINES NORDEA BANK $35 MILLION FOR BSA/AML DEFICIENCIES

Many takeaways from this 43-page Consent Order from NYDFS against Nordea Bank, including the view of DFS that: •   “[t]he combination of deficient AML controls, an unsophisticated transaction monitoring apparatus, and a decentralized global compliance program created a set of circumstances that exposed Nordea’s financial channels to a high risk of criminal abuse. Nordea’s relationships with … Read more

NYDFS FINES NATIONAL UNION INSURANCE $5.6 MILLION FOR FAILURE TO PROVIDE SUFFICIENT BENEFITS TO CERTAIN INSUREDS

NYDFS took action against another insurance firm.  According to the DFS allegations: •   The benefits of blanket accident and health insurance policies issued to groups including institutions of higher education, day camps and childcare providers were found not bear a reasonable relationship to the premiums paid by these insureds. •   The minimum loss ratios maintained by National … Read more

NYDFS PENALIZES WORLD’S LARGEST BANK BY ASSETS – ICBC– $30 MILLION FOR VIOLATING BSA/AML/OFAC AND CONFIDENTIAL SUPERVISORY INFORMATION REGULATIONS

According to the DFS allegations (and other public information): •   State-owned Industrial and Commercial Bank of China has $22 Billion in assets in the New York branch alone, and over $5 Trillion globally, and is the world’s largest bank by assets according to the WSJ and third largest by capitalization according to Forbes. •   ICBC entered into … Read more

NYDFS ENFORCEMENT ACTION AGAINST GENESIS GLOBAL TRADING — $8 MM PENALTY AND LICENSE SURRENDER

NYDFS penalized Genesis Global Trading, a licensee that served primarily as an OTC trading shop, $8MM for cybersecurity, BSA/AML, and Consumer Protection violations.  Genesis Global has now surrendered its license, apparently after having ceased trading activity some time ago.  According to DFS allegations: •   Genesis Global did not conduct an enterprise-wide risk assessment until 2022, despite … Read more