NYDFS issued guidance in the form of a policy statement on obtaining what it terms a “Notice of Satisfaction of Agreements.”
· Importantly, a Satisfaction Notice does not serve as the termination of a Consent Order, Written Agreement or MOU: “Notices will not alter, rescind, or seal an Agreement, and they will not cancel any restriction imposed on a Person as a term of an Agreement.”
· Unlike federal banking regulators, NYDFS is not providing guidance on how to obtain termination of an enforcement action. Rather, its Satisfaction Notice appears to share similarities with a “Satisfaction of Judgment” obtained in the civil litigation context.
· NYDFS sets out eligibility for entities subject to the Banking and Financial Services Laws as follows:
o The Person has received at least one report of examination that has validated the Person’s compliance with the terms of the Agreement (including at least one exam with DFS participation) since the execution of the Agreement at issue.
o During the most recent examination, DFS and/or any other examining regulatory agency has not found any legal violations relating to the issues referenced in the Agreement.
o The Person has not requested and been denied a Notice with respect to the Agreement at issue since its last examination by DFS or another examining regulatory agency relating to the issues referenced in the Agreement.
o For Agreement requirements for which there is no associated time or duration, the Person has demonstrated sustainable compliance.
o For Agreement requirements that are time-limited or require a single action, such as payment of a fine, the Person has fulfilled those obligations for the full period or completed the action specified, as applicable.
· Eligibility for entities subject to the Insurance Law is as follows:
o The Person has received at least one report on examination that has validated the Person’s compliance with the terms of the Agreement since the execution of the Agreement.
o During the most recent examination, DFS has not found any legal violations relating to the issues referenced in the Agreement.
o For Agreement requirements for which there is no associated time or duration, the Person has demonstrated sustainable compliance.
o For Agreement requirements that are time-limited or require a single action, such as payment of a fine, the Person has fulfilled those obligations for the full period or completed the action specified, as applicable.
· Although NYDFS has from time to time terminated an enforcement action, unlike federal regulators like the FDIC and OCC, it has determined not to lay out its own guidance for such an event. However, the factors it identifies nonetheless may serve as useful guidance in this respect.