Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
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
According to Superintendent Harris, NYDFS will issue additional guidance for cryptocurrency firms. Superintendent Harris via Law360: “We’ll have more to say on capitalization,….You’ll hear more from us on consumer protection, disclosures, advertising … [and] complaints, making sure these companies have an easy way for consumers to complain. . . . Harris indicated that the forthcoming … Read more
CHIEF FEDERAL BANKING REGULATOR MICHAEL HSU, THE ACTING COMPTROLLER OF THE CURRENCY, IS “CAREFUL AND CAUTIOUS” ON CRYPTO — Michael Hsu: “Last year, the OCC adopted a “careful and cautious” approach to crypto activities by national banks. This helped mitigate the risk of contagion from crypto to the banking system. Years of reform and rebuilding … Read more
Superintendent Adrienne A. Harris, Peter Marton & Kaitlin Asrow spoke today at The Brookings Institution about FTX, indicating NY residents had limited exposure to the collapse because (a) FTX had not yet been licensed to operate in NY (it had a pending application) and (b) FTX’s own coin, FTT, had not yet been greenlisted by DFS. Video of the interviews is here: https://www.brookings.edu/events/digital-asset-regulation-the-state-perspective/?utm_campaign=events%3a%20economic%20studies&utm_medium=email&utm_content=231476264&utm_source=hs_automation
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
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
NYDFS Superintendent Adrienne A. Harris spoke to the Times Union newspaper about the regulatory reach of the agency and challenges in staffing: “[Harris] spent the first six months on the job conducting a staff analysis, prompting her to conclude that the agency is understaffed, especially considering its regulatory reach.” More on the interview in the … Read more