Abstract
Adrienne Harris, head of the New York’s Department of Financial Services, which licenses many of the globe’s largest financial institutions including Goldman Sachs, ICBC, and Deutsche Bank, told the Financial Times that a rollback of federal regulations would “certainly increase the volume of consumer protection cases that we may bring on the enforcement side”.
Regulatory Environment
The incoming Trump administration is planning a deregulation spree, which may lead to a rollback of federal regulations.
New York’s Department of Financial Services (DFS) is prepared to “fill the gaps” left by the deregulation and increase its scrutiny on banks, insurance companies, and cryptocurrency groups.
The DFS has “quite broad powers” over licensees and can bring non-licensees to heel via a provision in the federal Consumer Financial Protection Act.
DFS Response
Adrienne Harris, head of the DFS, plans to focus on getting money back for consumers and will work to fill any gaps in regulation that emerge.
The DFS has hired hundreds of new staffers in the past couple of years and is prepared to increase its enforcement efforts.
Harris believes that the DFS can step into the void left by any rollback of federal regulations and use its powers to police “unfair, deceptive, or abusive” practices.
Industry Impact
Harris does not believe that increased scrutiny of financial services groups in New York will prompt businesses to relocate to more lax jurisdictions.
New York’s position as the US’s financial capital is expected to remain resilient, with companies valuing the “Good Housekeeping seal of approval” that comes with being regulated by the DFS.
Harris takes a pragmatic approach to regulating cryptocurrencies, recognizing their existence and growth, and believes that regulators should not pass judgment on their value or usefulness.