Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
Matthew L. Levine At an ACAMS conference NYDFS Superintendent Adrienne A. Harris stated that guidance on non-fungible tokens — NFTs — will be forthcoming. “You will continue to see leadership from DFS in virtual currency,” Harris said, adding that the regulator intended to advise the financial sector on non-fungible tokens,” A Financial News article covering the discussion is … Read more
More cybersecurity enforcement from NYDFS, this time against Carnival Cruise Lines. Enforcement takeaways: Carnival Cruise Lines paid $5 million and surrendered its license to be an insurance broker in New York. It had sold life, accident and health insurance to cruise customers. NYDFS alleged “significant” violations, including: Failure to implement multi-factor authentication; Failure to timely … Read more
Strong compliance personnel remain one of the best investments for a financial institution, and an ongoing challenge, per the OCC: “Compliance risk remains heightened…. [T]he OCC has observed an increase in the competition for compliance subject matter experts, at both the bank management and staff levels.” The OCC Report may be found here: https://www.occ.treas.gov/publications-and-resources/publications/semiannual-risk-perspective/files/semiannual-risk-perspective-spring-2022.html
Its finally here: first-in-the-nation stablecoin guidance for regulated cryptocurrency entities. Some highlights: Backing and Redeemability: The stablecoin must be fully backed by a Reserve of assets, meaning that the market value of the Reserve is at least equal to the nominal value of all outstanding units of the stablecoin as of the end of each … Read more
NYDFS entered into a consent order with Nationwide Life Insurance Company for $5.6 million in penalties and restitution arising from violations alleged to have occurred in connection with the annuity replacement business. According to NYDFS, “DFS’s investigation found that Nationwide failed to properly disclose to consumers income comparisons and suitability information, causing consumers to exchange … Read more
At the Links 2022 Conference, NYDFS Superintendent Adrienne A. Harris stated that “the regulatory agency will triple the size of its virtual currency unit by the end of the year.” Its ambitious — but much needed. Superintendent Harris “said her agency is working to hire additional staff and update its guidance to better deal with … Read more
NYDFS issued guidance concerning the use of blockchain analytics by regulated cryptocurrency firms. NYDFS stated: “The purpose of this guidance … is to emphasize to all virtual currency business entities that are either licensed under 23 NYCRR Part 200 or chartered as a limited purpose trust company … the importance of blockchain analytics to effective policies, … Read more
Matthew Levine published his most recent article on NYDFS titled “NYDFS Roundup: Crypto, Cybersecurity, and Insurance Companies.” The article begins: “Change has been a constant at the New York State Department of Financial Services. Since its first Superintendent departed the agency in June 2015, there have been six confirmed and acting Superintendents for DFS. With … Read more
The New York State legislature and Governor Hochul enacted a new law that allows NYDFS to assess licensed crypto businesses in the same manner it assesses other regulated entities. Each regulated entity must pay a yearly assessment to NYDFS that, in aggregate, funds NYDFS operations. NYDFS does not rely on taxpayer funds and does not … Read more
NYDFS held the first of three webinars marking the 5th anniversary of adoption of its Cybersecurity Regulation, known as “Part 500.” The webinar featured from NYDFS Justin Herring, Executive Deputy Superintendent for Cybersecurity, William Petersen, Assistant Deputy Superintendent for Cybersecurity Supervision, and Robert Francis, its CIO. Some takeaways: The Cybersecurity Division has now grown to … Read more