Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
FROM NYDFS SUPERINTENDENT HARRIS’ PREPARED TESTIMONY BEFORE US SENATE BANKING COMMITTEE ON DFS REFORMS FOLLOWING BANKING CRISIS: “DFS has been monitoring the liquidity of [high risk] institutions on a daily basis, which entails frequent engagements with these institutions, as well as close coordination with our federal counterparts. . . . I directed DFS’s Office of … Read more
NYDFS settled with several insurers that offer student health plans, alleging a number of violations. According to the DFS allegations across the four consent orders: • DFS found that four insurers – 4 Ever Life Insurance Co., Aetna Life Insurance Co., United Healthcare Insurance Co., and Wellfleet NY Insurance Co. — charged unapproved premium rates to … Read more
More from Fortune on the proposed legislation from the NYAG and an apparent rift with NYDFS. But what does this mean for passage/enactment? From the Forbes article: “Another point of contention has turned on the extent to which DFS was consulted in the drafting of the bill. Among the endorsements for the legislation in the … Read more
Advancing a key agenda item from the the last several administrations, DFS has published aggregate gender and racial/ethnic data of board members and senior management for regulated banks, non-depository institutions, and insurance companies. According to DFS, it collected the data from insurance companies with more than $100 million in 2019 New York premiums, regulated banks … Read more
according to the proposed guidance: · “Covered Institutions are expected to update and modernize their policies and procedures to require vetting of Designated Persons—including senior officers and members of any governing board—both at onboarding and on a regular ongoing basis, to ensure a robust initial vetting and to confirm that no new circumstances or conflicts … Read more
Here are some quick impressions: • Provides expansive new authority to the NYAG to regulate and enforce in the crypto market • Appears to codify the DFS BitLicense, which is now set by regulation • Sets up competing enforcement regimes and specifically contemplates conflict by requiring the “attorney general and the [DFS] superintendent shall cooperate, coordinate and assist … Read more
NYDFS issued an enforcement action against bitFlyer USA, Inc., a cryptocurrency exchange, obtaining a $1.2 million penalty. Takeaways from DFS allegations: • No specific cyber event was involved – enforcement was based on violations identified over two examination cycles • This suggests cybersecurity is now well integrated into the DFS examination process • Core violations included the lack … Read more
DFS Virtual Currency Peter Marton testified on April 25 before the New York Senate Banking Committee. Some takeaways from his testimony: • Virtual currency division has hired 40 new staff since Jan. 2022, with total reports of 57 • The application backlogs remains; DFS has granted four BitLicenses in last 15 months • The application queue remains high, but … Read more
Rep. Ritchie Torres said today that he would not support legislation that preempts NYDFS’ powers to regulate cryptocurrency or otherwise encroaches on New York’s sovereignty in regulating financial services. [Video here]. He made these comments today at the House Financial Services Committee hearing today on stablecoins, at which Superintendent Harris testified. Other takeaways from today’s … Read more
Superintendent Harris announced today final adoption of the assessment regulation. Quick takeaways: • The adopted regulation effectuates legislation in the NYS FY23 Budget giving DFS authority to collect supervisory costs from licensed virtual currency businesses, similar to other licensees regulated by DFS. • Says DFS: “As stewards of others’ assets, virtual currency entities play an important role in the … Read more