Benjamin M. Lawsky, Superintendent of Financial Services, has announced the structure for the new Department of Financial Services for the State of New York. Superintendent Lawsky was recently joined by 19 former Banking and Insurance Superintendents, other officials and hundreds of Department staff at the ceremony at Pace University marking the official start of the Department, which merges the State Banking and Insurance Departments.
"The Department of Financial Services has three main goals-keeping New York on the cutting-edge as the financial capital of the world, protecting consumers better than ever before, and serving as a model of efficient government,” said Superintendent Lawsky. “Today, I am announcing a Jobs Initiative to partner with the financial services industry and find the best ways to attract more jobs to New York State. We have set up the Financial Frauds and Consumer Protection Division, which has new powers to help consumers on all types of financial products and services. In addition, we will be creating a new executive level position, a Director of Enforcement, who will oversee all criminal investigations. Also, I can announce that the new Department is on track to achieve more than $25 million in budget savings in just its first year.”
The Department will have five main divisions:
►The Banking Division will continue regulating state chartered banks, along with other financial services providers such as mortgage servicers and originators, check cashers, money transmitters and budget planners.
►The Real Estate Finance Division will focus on all aspects of the mortgage industry to ensure that the lessons from the recent financial crisis are learned and new reforms are instituted.
►The Insurance Division will carry on the core functions of regulating all insurance activities in New York, including life, property and health insurance.
►The Financial Frauds and Consumer Protection Division will protect and educate consumers of financial products and services and fight financial fraud. The Division will pursue civil and criminal investigations and bring enforcement proceedings as appropriate.
►The Capital Markets Division will actively monitor the latest developments and products and help the Department better police systemic risk.
"We are taking the best of the Banking and Insurance Departments and working to add new skills and responsibilities so we can keep pace with the rapid developments in the financial markets," Superintendent Lawsky said. "That's necessary to keep consumers protected and keep the institutions we regulate safe, solvent and able to meet their obligations."
"The Department's new Jobs Initiative is in line with Gov. Cuomo's priority on job creation. We will work with businesses to bring jobs and capital to New York, both upstate and downstate. When businesses are looking to consolidate their operations or start a new operation, they should be doing it in New York," Superintendent Lawsky said. This effort will be led by Deputy Superintendent for Financial Services James J. Wrynn.
The Financial Frauds and Consumer Protection Division bring together the fraud and consumer units of Banking and Insurance, but also adds important new powers. It can conduct investigations, research, studies and analyses of issues affecting consumers of most financial products and services.
"The Governor's vision in merging banking and insurance was to create a stronger agency able to not only improve its regulation of those two essential industries, but also cover many things that currently fall between regulators," Superintendent Lawsky said.
Michael P. Smith, president and chief executive officer of the New York Bankers Association (NYBA), said, "NYBA supported the legislation to establish a new Department of Financial Services and commends the leadership of Governor Cuomo and the new Superintendent, Ben Lawsky. The centralization of regulation into one agency signals the state's commitment to the most diverse banking industry in the nation, along with a commitment to strengthen New York's position as a global financial capital."
