Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
According to Compliance Week: • “The New York Department of Financial Services (NYDFS), led by Superintendent Adrienne Harris, doesn’t intend to let up on cryptocurrency enforcement, even in the face of pullback from the federal government.” • “Speaking during a fireside chat at Compliance Week’s 20th National Conference in Washington, D.C., Harris described how her office intends to remain … Read more
Enforcement takeaways (according to the Consent Order allegations): • NYDFS appears more inclined recently to act with other regulators under the auspices of the Conference of State Banking Supervisors and Money Transmitter Regulators Association. The action grew out of a multi-state investigation and subsequent Interim Cease and Desist Order filed by the agencies in March 2024. • NYDFS … Read more
NYDFS Superintendent Adrienne A. Harris participated in a fireside chat with the Institute of International Bankers and gave the following updates (summarized): • Impact of Change in Federal Administration: Superintendent Harris said that the change in administration at the CFPB and elsewhere would not alter DFS’ course; that there were gaps in consumer protection even before the … Read more
Superintendent Harris testified before NYS legislature and DFS issued its Regulatory Agenda. Per testimony: Looking Back: • “Since August 2021, DFS has adopted or amended 54 regulations, issued 98 pieces of regulatory guidance, and closed 117 enforcement actions resulting in more than $418 million in penalties.” •“We have addressed more than 157,000 consumer complaints and returned $$645 million to New York State consumers and health care providers, including over … Read more
Enforcement takeaways (according to DFS allegations in the Consent Order with PayPal): • NYDFS found customer data was exposed after PayPal implemented changes to make 1099-K forms available to more of its customers, after teams tasked with implementing these changes failed to follow proper procedures before the changes went live. • Malicious actors leveraged compromised credentials to … Read more
Two new cybersecurity enforcement actions from NYDFS, against GEICO and Travelers Indemnity Co. Enforcement takeaways are (according to DFS allegations): • GEICO experienced three cybersecurity events in a short period of time primarily involving customer interfaces for obtaining quotes and submitting claims and the web portal for GEICO agents, allowing threat actors to obtain driver license … Read more
Speaking to Bloomberg at DC Fintech Week, Superintendent Adrienne Harris stated about crypto enforcement: • Superintendent Adrienne Harris said “absolutely” when asked if there are “big cases coming down the pike for crypto firms, stable coin firms or even market makers in the space.” • Superintendent Harris elaborated, saying “I think for us we really make sure … Read more
Many takeaways from this 43-page Consent Order from NYDFS against Nordea Bank, including the view of DFS that: • “[t]he combination of deficient AML controls, an unsophisticated transaction monitoring apparatus, and a decentralized global compliance program created a set of circumstances that exposed Nordea’s financial channels to a high risk of criminal abuse. Nordea’s relationships with … Read more
NYDFS took action against another insurance firm. According to the DFS allegations: • The benefits of blanket accident and health insurance policies issued to groups including institutions of higher education, day camps and childcare providers were found not bear a reasonable relationship to the premiums paid by these insureds. • The minimum loss ratios maintained by National … Read more
According to the DFS allegations (and other public information): • State-owned Industrial and Commercial Bank of China has $22 Billion in assets in the New York branch alone, and over $5 Trillion globally, and is the world’s largest bank by assets according to the WSJ and third largest by capitalization according to Forbes. • ICBC entered into … Read more