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After reviewing the licensing/chartering/approval structures that DFS uses for entities seeking to engage in virtual currency activities, we discuss the role of guidance in DFS’s regulation and oversight of virtual currency, particularly new DFS guidance on digital asset custody practices and DFS expectations for how entities acting as digital asset custodians can better protect customers in the event of an insolvency or similar proceeding. … Continue Reading

To further its ongoing diversity, equity, and inclusion (DEI) efforts, the New York State Department of Financial Services (DFS) announced an initiative to collect and publish diversity data on the demographic makeup of NY-regulated financial institution’s boards and senior management teams.  In its July 29th business industry letter, DFS emphasized that transparency around this data will help measure progress toward DEI goals, allow firms to assess where they stand relative to their peers, and increase transparency and accountability.… Continue Reading

The New York Department of Financial Services (DFS) announced on September 16 that it has filed a Statement of Charges against debt collector Forster & Garbus LLP (Forster) for alleged violations of the state’s Debt Collection Regulation, Part 1 of Title 23 of the New York Codes, Rules, and Regulations, promulgated in 2015. … Continue Reading

The OCC has filed its opening brief in its appeal to the Second Circuit from the district court’s final judgment in the lawsuit filed by the New York Department of Financial Services (DFS) seeking to block the OCC’s issuance of special purpose national bank (SPNB) charters to non-depository fintech companies.

In May 2019, the district court denied the OCC’s motion to dismiss and found that the term “business of banking” as used in the National Bank Act  (NBA) “unambiguously requires receiving deposits as an aspect of the business.” … Continue Reading

As expected, the OCC filed a motion to dismiss the second lawsuit filed by the New York Department of Financial Services (DFS) in a New York federal district court to block the OCC’s issuance of special purpose national bank (SPNB) charters to fintech companies.  The OCC also filed a reply brief in support of its motion to dismiss the second lawsuit filed by the Conference of State Bank Supervisors (CSBS) in a D.C.… Continue Reading

New York Governor Andrew Cuomo has nominated Linda Lacewell to become Superintendent of the state’s Department of Financial Services.  Ms. Lacewell would replace Maria Vullo who announced last month that she will leave DFS on February 1.

Ms. Lacewell most recently served as Governor Cuomo’s Chief of Staff.  She previously served as executive director of a cancer foundation initiative in California and as Governor Cuomo’s Chief Risk Officer. … Continue Reading

Maria Vullo, the current Superintendent of the New York Department of Financial Services, has announced that she will leave DFS on February 1, 2019.

Ms. Vullo, who has served as Superintendent since 2016, has been an aggressive regulator.  In September 2018, she made a public announcement stating that the DFS intended to pursue what appeared to be a disparate impact theory arising out of indirect auto finance transactions. … Continue Reading

On September 12th, the Conference of State Bank Supervisors (CSBS) announced that it would again pursue litigation in opposition to the OCC’s recent decision to accept applications from non-depository financial technology firms for a special purpose national bank (SPNB) charter.

While it announced that its Board of Directors had approved renewing litigation against the OCC at an August 28 meeting, the CSBS did not indicate when it plans to file the lawsuit. … Continue Reading

Identical bills have been introduced in the New York Assembly (A08938) and Senate (S07294) that would direct the New York Department of Financial Services (DFS) to issue a report on online lending by July 1, 2018.

The bills are intended to amend legislation signed into law by New York Governor Cuomo on December 29, 2017 (S6593A) that created a seven-person task force to study online lending and issue a report by April 15, 2018 containing specified information. … Continue Reading

The Office of the Comptroller of the Currency (OCC) has filed a motion to dismiss the lawsuit filed by the New York Department of Financial Services (DFS) challenging the OCC’s authority to grant special purpose national bank (SPNB) charters to nondepository fintech companies.

The DFS lawsuit, which was filed in May 2017 in a New York federal district court, is similar to the lawsuit filed in April 2017 by the Conference of State Bank Supervisors (CSBS) in D.C.… Continue Reading