Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
NYDFS takes enforcement action against the National Bank of Pakistan. Some takeaways: $35 million civil monetary penalty NYDFS may impose independent consultant or monitor after a year in the event progress on remediation is unsatisfactory There is a parallel settlement with the Federal Reserve Board which includes a $20 million penalty as well. The NYDFS … Read more
Important industry cooperation among some lead players in crypto in setting compliance standards, called “T.R.U.S.T.” Press release here: https://www.coinbase.com/blog/introducing-the-travel-rule-universal-solution-technology-trust
Interesting take in pymts.com on NYDFS Crypto Regulation: “NYDFS will not only remain relevant as the regulator of the largest financial center in the world, but as the obvious yardstick against which proposed national rules are measured.” Article is found here: https://www.pymnts.com/cryptocurrency/2022/in-adrienne-harris-nydfs-getting-firm-but-friendly-crypto-regulator/
Want to know what’s on the mind of NYDFS Superintendent Adrienne Harris? Interesting discussion including re: crypto, fintech, the Community Reinvestment Act, and cannabis during her confirmation hearing in the NYS Senate, link here: https://www.nysenate.gov/calendar/meetings/insurance/january-24-2022/insurance-meeting
A survey indicates compliance officers are increasingly concerned about unfair regulatory enforcement against individual compliance officers. Some findings: – 72% are concerned regulators expanded the role of compliance officers and the scope of their responsibilities in imposing personal liability. – 70% believe the overall compliance function at their firms is under resourced. – 35% reported … Read more
NYDFS has appointed Peter Marton as its new Virtual Currency Chief. He serves as Deputy Superintendent of the Research and Innovation Division. More here: https://www.coindesk.com/policy/2022/01/06/nydfs-hires-new-deputy-superintendent-of-virtual-currency/
Multi-Factor Authentication (MFA) is a core tenet of cybersecurity and recent NYDFS enforcement actions have highlighted such deficiencies. NYDFS issued guidance on compliance with Part 500 regarding MFA, an important read, which may be found here: https://www.dfs.ny.gov/industry_guidance/industry_letters/il20211207_mfa_guidance
Matthew Levine and Ilene Jaroslaw teamed up to discuss how the federal regulatory and prosecutorial enforcement focus is shifting to cryptocurrency exchanges. The article in the New York Law Journal is found here: New York Law Journal – Biden Administration Increasingly Focused on Crypto Exchanges – Nov 29 2021
NYDFS created a new Climate Risk Division, with a new Executive Deputy Superintendent overseeing the Division, which will:
– integrate climate risks into its supervision of regulated entities
– support industry growth in managing climate risks
– coordinate with international, national, and state regulators
– develop internal capacity on climate-related financial risks
– support capacity-building of peer regulators on climate-related supervision
– ensure fair access to financial services for all communities, especially those most impacted by climate change.
Press release is here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202111032
Matthew Levine and Alicyn Cooley provide some hot takes on DOJ’s new actions and approaches to corporate criminal enforcement on the NYU Program on Corporate Compliance and Enforcement Blog. Blog post here: What’s Old Is New Again: DOJ’s New Corporate Criminal Enforcement Policies Equip Prosecutors with More Tools and Information