NYDFS ISSUES ENFORCEMENT ACTION AGAINST RHINEBECK BANK FOR FAIR LENDING VIOLATIONS

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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

NYDFS SUPERINTENDENT SPEAKS ON REGULATORY REACH

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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

NASDAQ TO ENTER CRYPTO CUSTODY BUSINESS AND SEEK NYDFS LICENSE

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Law360 reports that NASDAQ will be jumping into the crypto custody business for institutional investors.   NYDFS will be reviewing their application, according to Law360. Coindesk reporting on this may be found here:  https://www.coindesk.com/business/2022/09/20/nasdaq-starts-crypto-custody-services-for-institutional-clients/  

DOJ ANNOUNCES REFORMS TO THE MONITORSHIP PROCESS

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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

NYDFS ISSUES GUIDANCE ON THE ETH MERGE

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As the Eth merge occurred, NYDFS issued guidance about this token:  “With Ethereum’s protocol change complete, #NYDFS continues to recognize Ether (ETH) under our Greenlisted Coins/Tokens List.” The guidance may be found here on Twitter:   https://twitter.com/NYDFS/status/1570430059000856577?s=20&t=mE8Rl2KoyZDyjnsO0Kclag  

ROBINHOOD REVISITED: A KEY TAKEAWAY FROM THE RECENT NYDFS ENFORCEMENT ACTION CONCERNING NYDFS’ VIEW OF ITS JURISDICTION

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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 TAKES $26.3 MILLION ENFORCEMENT ACTION AGAINST JOHN HANCOCK LIFE INSURANCE CO

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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

CFPB SEEKS TO MUSCLE INTO CYBERSECURITY ENFORCEMENT

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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 ISSUES “PRE-PROPOSED OUTREACH” FOR AMENDMENTS TO ITS LANDMARK CYBERSECURITY REGULATION

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NYDFS issued what it called a  “Pre-Proposed Outreach” for Proposed Amendments to Its Cybersecurity Regulation.  The changes are significant and in some sense more prescriptive. Comments are due August 8; to be followed by the actual proposed rulemaking under the state Administrative Procedure Act and a 60-day comment period. The NYDFS Pre-Proposal is available here:  … Read more