Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
Matthew L. Levine 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
Matthew Levine spoke on a panel at the ABA’s Business Law Section’s Hybrid Spring Meeting on enforcement risks for banks, fintechs and their vendors. As the regulatory perimeter continues to develop, the enforcement risk for regulated financial institutions, fintechs, and third-party service providers, including notably the technology companies that work with them, remains a key … Read more
In an in-depth look at NYDFS Superintendent Adrienne A. Harris, titled, “Crypto’s Most Powerful Regulator is Here,” New York Magazine (nymag.com) elicits important information concerning her vision and approach to cryptocurrency regulation is included, including her view that NYDFS may attempt to regulate DEFI “lending and asset management.” The article may be found here: https://nymag.com/intelligencer/2022/03/adrienne-harris-is-cryptos-most-powerful-regulator.html
Hot takes from Part Two of Law360’s interview with NYDFS Superintendent Adrienne A. Harris: NYDFS intends to streamline the Bitlicense application process but “without sacrificing regulatory rigor.” Diversity in the Board and management of regulated financial institutions is a “safety and soundness” issue. Superintendent Harris’ favorite musical artist is Jay-Z. Part Two of the Law360 … Read more
Hot takes from Part One of Law360’s interview with NYDFS Superintendent Adrienne A. Harris: NYDFS will focus on “kitchen table” Issues, so consumer-facing businesses will be in focus for enforcement efforts. BSA/AML/OFAC enforcement “continues to be incredibly important.” Three — “Predatory behavior” and “cybersecurity governance and protocols” also will be enforcement emphasis. Part One of … Read more
What happens when a company flubs a monitorship? It certainly can get worse for the company. According to this order issued against ZTE Corporation by the Court: “[T]he Court encourages the Government to pursue any reasonable charges and criminal or civil penalties in all cases known and currently unknown. This is especially true for the … Read more
NYDFS issued an enforcement action with an against money services business Moneygram. Some takeaways: $8.25 million civil monetary penalty. Classic typology of “many-to-one” transactions was highly suspicious. Store front agents accounted for dramatic spike in volume and dollar value of payments sent to China in short time period. No monitor imposed but remediation and reporting … Read more
The U.S. Department of Justice extended the monitorship it had imposed on Deutsche Bank. Some takeaways: DOJ found that Deutsche Bank violated a 2021 Deferred Prosecution Agreement relating to FCPA matters. The violation arose because Deutsche Bank “untimely reported” unrelated allegations concerning the purported overstating of the use of ESG criteria in another business line. … Read more
According to NYDFS: “As part of DFS’s work to become a leading, data-driven regulator of the global financial services sector, the Department has been assessing a number of technology tools and service providers to augment current supervisory capabilities. Accelerating the procurement process is a critical step to strengthen the Department’s ability to enforce anti-money laundering … Read more