Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
Matthew L. Levine NYDFS has issued new guidance for banks on climate risk. This follows on initial guidance issued for banks on climate risk in 2020. According to DFS: “A Regulated Organization’s board of directors and management are expected to care for the organization’s operational resilience and safety and soundness on an ongoing basis and with respect to … Read more
NYDFS has issued guidance for regulated banks that seek to engage in “virtual currency-related activity.” The guidance requires prior approval based on submission of such items as a business plan, evaluation of risk management, governance structures, and financials. Unsurprisingly, and especially in this environment, consideration of consumer protection is central: “The Department has a particular … Read more
While the jury appears still to be out on what will result in imposition of a new DOJ monitorship under the Monaco Memos, if you breach a DPA — twice — you will get an extension of the Monitorship. DOJ has now extended the Ericsson monitorship arising out of an FCPA prosecution for one year. … Read more
State bank supervisors have appointed New York State Department of Financial Services Superintendent Adrienne A. Harris to serve as the state banking representative on the Financial Stability Oversight Council (FSOC), according to the Conference of State Banking Supervisors. “Superintendent Harris’ background and experience at both the federal and state level will be an asset for … Read more
“41 percent of respondents in Compliance Week’s annual ‘Inside the Mind of the CCO’ survey said they don’t believe the DOJ’s CCO certification requirement to be a positive development for the profession,” according to Compliance Week. This report comes at the same time that the OCC is that compliance risk remains “elevated” in its Semiannual … Read more
According to its second report on fair lending violations, NYDFS took action against two mortgage lenders, although it did not make any findings of violations: “After taking the testimony of Premium Mortgage and 1st Priority executives, as well as a number of licensed mortgage loan originators at Premium Mortgage, and reviewing documents provided by the … Read more
NYDFS issued a so-called “Pre-Proposal” for regulation providing for assessments of entities with a BitLicense, pursuant to the New York budget legislation passed in the Spring authorizing these assessments. Cryptocurrency entities chartered by NYDFS as a limited purpose trust charter will continue to be assessed under the regulations issued under the Banking Law. Comments on … Read more
NYDFS entered into another cybersecurity Consent Order, this time with TTEC Healthcare Solutions, Inc. an insurance broker. Cybersecurity actions have become one of the agency’s most common types of enforcement actions. This one carries a $1.9 Million penalty; some takeaways from DFS allegations include: • TTEC failed to implement adequate multi-factor authentication. • TTEC completely failed to … Read more
SELF REPORTING TO NYDFS – ITS NOT YOUR MONACO MEMO (Part One): Pleased that the New York Law Journal has published Part One of my latest article about self-reporting misconduct by financial institutions regulated by the New York State Department of Financial Services (NYDFS). Article is here: http://blogaboutnydfs.com/wp-content/uploads/2022/12/NYLJ11292022562493-DFSReporting-Part-One.pdf
OFAC issued an enforcement action against the U.S.-based crypto exchange Kraken. What is perhaps most striking is how this matter is much more like the run-of-the-mill OFAC enforcement action against a mature financial institution, and not a start up. Key language from OFAC: “This case also demonstrates the value of a company implementing robust remedial … Read more