SUPERINTENDENT HARRIS REPORTS VIA LEGISLATIVE TESTIMONY AND REGULATORY AGENDA

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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

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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 TAKES AIM AT MEME COINS IN INDUSTRY LETTER

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•        NYDFS issued an Industry Letter and consumer bulletin that warns licensees and consumers to exercise caution regarding meme coins. According to the Industry Letter: •        “The New York State Department of Financial Services (“Department”) is closely monitoring the rapid proliferation of sentiment-based virtual currencies. The platforms that enable the creation of these coins are not licensed … Read more

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

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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 INVESTIGATES POTENTIAL REDLINING, ISSUES ANNUAL MINORITY MORTGAGE LENDING REPORT

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•   According to NYDFS, this is the second annual report, reviewing lending activity based on the New York Home Mortgage Disclosure Act (“HMDA”) data from 2023. •   As in last year’s report, NYDFS analyzed mortgage lending in 23 different geographies, including New York State as a whole, all metropolitan statistical areas (“MSAs”) within the state, and a … Read more

NYDFS SUPERINTENDENT SAYS MORE CRYPTO ENFORCEMENT COMING

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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 SUPERINTENDENT HARRIS SPEAKS ON FUTURE OF BITLICENSE AND BEST PRACTICES

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Speaking this week at DACOM 2024, Superintendent Harris stated: •   The Superintendent does not contemplate any amendments to the BitLicense, even though the regulatory regime will be in effect for 10 years coming June. •   She said the BitLicense framework will continue to evolve instead through guidance, enforcement and other supervisory activity. She pointed to the agency’s … Read more

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

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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 HIRES NEW SUPERVISORY TEAM FOR CRYPTO

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From the Wall Street Journal: –     “New York’s financial regulator has appointed a former official from Dubai’s financial regulator to help oversee its virtual currency unit that regulates cryptocurrency businesses in the state. Ken Coghill, who most recently was the director and head of innovation and technology risk supervision at Dubai Financial Services Authority, … Read more

NYDFS FINALIZES AI GUIDANCE FOR INSURANCE COMPANIES; ARE BANKS NEXT?

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•   According to the agency, “DFS has finalized the guidance with careful consideration of the valuable feedback received from regulated entities and other key stakeholders, including trade associations, advisory firms, universities, and the broader public.” •   Superintendent Adrienne Harris has said recently, in several public settings (including the IIB Conference in March), that guidance for banks is … Read more