Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
Matthew L. Levine Are Twitter Users Really the Best Regulator for Crypto? Regarding Crypto.com‘s erroneous transfer of $400 million, the Wall Street Journal Reports: “The transfer of a large chunk of ether, a popular cryptocurrency, took place on Oct. 21, but came to light after Twitter users flagged the transfer as unusual, based on publicly available blockchain transaction … Read more
NYDFS Proposed amendments to its Cybersecurity Regulation, “Part 500.” According to DFS, the amendments include: – Creation of three tiers of companies, further tailoring the regulation to a diverse set of businesses with different defensive needs. – Enhanced governance requirements, thereby increasing accountability for cybersecurity at the Board and C-Suite levels. – Additional controls to … Read more
As part of a global settlement with numerous attorneys general, including the New York AG, NYDFS also resolved its administrative charges of insurance fraud against pharmaceutical manufacturer Teva over misrepresentations in charges for opioid products. Notably, Teva had unsuccessfully challenged in New York State court the authority of NYDFS to investigate this conduct as insurance … Read more
NYDFS has announced a proposed regulation allowing banks to collect data concerning banking services offered to Minority and Women-Owned Businesses (MWBE) under the Community Reinvestment Act. From Superintendent Harris: “Banks must meet the needs of all consumers, including minority and women business owners, who historically have been denied fair access to credit,” said Superintendent of … Read more
The Wall Street Journal has reported that amendments to Part 500, the NYDFS Cybersecurity Regulation, could by issued by the agency in the near future. From the WSJ article: “”Last week’s consent order, one of three multimillion-dollar cybersecurity settlements NYDFS has reached in recent months, comes as the agency prepares to propose regulatory updates that … Read more
NYDFS has taken another cybersecurity enforcement action, this time against vision insurance company EyeMed. NYDFS leveled a $4.5 million penalty against the company. From its findings: “The Department’s investigation revealed that as a result of a July 1, 2020 phishing attack, a bad actor gained access to a shared EyeMed email mailbox which contained over … Read more
According to an interview given by NYDFS Superintendent Adrienne A. Harris to the Wall Street Journal, NYDFS will release guidance for regulated banks that interact with customers handling crypto or want to engage in the business themselves. Superintendent Harris to WSJ: “Where some regulators have said, “No, banks, don’t engage in this at all,” we’ve … Read more
FinCEN and OFAC teamed up to issue parallel enforcement actions against crypto exchange Bittrex, Inc. for alleged violations of BSA/AML and OFAC regulations, with penalties of $29 million and $24 million being issues, respectively. Previously in 2019, NYDFS had rejected Bittrex’s application for a license to operate in New York, finding amount other things that … Read more
Matthew Levine spoke about Monitorships and the latest USDOJ Monaco Memo at the American Bar Association Criminal Justice Section Tenth Annual #ABA London #WhiteCollar Institute. Also on the panel were experts Vincent DiCianni Christine Braamskamp Audrey Harris and the Honorable Robert Buckland. A video of the panel is here: https://www.youtube.com/watch?v=uG14Z7s7xzY
NYDFS issued an enforcement action against Rhinebeck Bank for alleged fair lending violations. Rhinebeck paid a $950,000 penalty. From the NYDFS findings: “The Department’s investigation found that Rhinebeck’s practices resulted in minority borrowers paying higher interest rates than non-Hispanic white borrowers for their automobile loans, without regard to their creditworthiness….Although the Department did not find … Read more