Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
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
Deputy Attorney General Lisa Monaco announced needed reforms and important updates to corporate criminal enforcement policies including for monitorships. New guidance will seek transparency and consistency in how to identify, select and oversee monitors. Documented selection process and program will be oriented to tailor work plans to identified deficiencies. Aim is to keep Monitorship on … Read more
The scope of NYDFS jurisdiction is an oft-debated issue for regulated and non-regulated entities alike. To better understand how NYDFS views its jurisdiction and mission, its worth re-reading these findings from its Consent Order against Robinhood Crypto. “[I]t is worth beginning with the Department’s observation that RHC’s overall approach to its compliance obligations substantially contributed … Read more
NYDFS took an enforcement action against another insurance company, this time John Hancock Life Insurance Company. According to NYDFS findings, John Hancock prematurely terminated 156 NYS Partnership long term care policies prior to insureds exhausting benefits to which they were entitled, and miscalculated lifetime maximum benefits in cases when insureds used less than the maximum … Read more
According to a CFPB Circular, the CFPB seeks to further muscle into the cybersecurity enforcement space, and it encourages State AG’s to do so as well, saying: “Specifically, financial companies are at risk of violating the Consumer Financial Protection Act if they fail to have adequate measures to protect against data security incidents.” State AG’s … Read more
NYDFS has issued its first enforcement action against one of its regulated cryptocurrency entities. Enforcement takeaways: $30 million penalty is significant. Alleged violations include BSA/AML; Cybersecurity; Reporting; and Consumer Protection. The Department alleged adequate resources were not devoted to RHC’s compliance programs, particularly as it grew, which exacerbated compliance issues. Robinhood improperly certified compliance with … Read more
NYDFS continues its actions against insurance companies for allegations of unlicensed activity occurring in New York. NYDFS leveled a $3.5 million penalty against Banner Life Insurance Company for unlicensed conduct relating to the pension risk transfer (PRT) business, where companies that carry pension obligations sell them to insurance companies to meet into the future. According … Read more
THE FDIC has joined the party, commencing investigations and issuing cease and desist letters for what it deems are misrepresentations concerning the applicability of FDIC insurance to the accounts of crypto customers. Other regulatory investigations of recent crypto firm failures include some state banking regulators/AGs. More on this from Coindesk: https://www.coindesk.com/policy/2022/07/07/fdic-probing-voyager-claims-it-was-insured-by-regulator-report/ https://www.coindesk.com/policy/2022/07/28/crypto-lender-voyager-ordered-by-us-regulators-to-stop-misleading-customers/
According to reporting from Coindesk, OFAC appears to be ramping up enforcement in the crypto space — mentions of Kraken and Binance. See article here: https://www.coindesk.com/policy/2022/07/26/kraken-under-investigation-for-alleged-sanctions-violations-report/?utm_source=Sailthru&utm_medium=email&utm_campaign=FIRST%20MOVER%20JULY%2027%202022&utm_term=First%20Mover