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On January 23, 2023, the New York Department of Financial Services released guidance with the stated goal of helping to protect customers of virtual currency businesses in the event of an insolvency or similar proceeding by imposing new custody and disclosure requirements on virtual currency entities that act as custodians.  Specifically, the guidance focuses on four areas for virtual currency entities acting as custodians (or “VCE Custodians”):

  • Segregation of and Separate Accounting for Customer Virtual Currency: A VCE Custodian is expected to (1) separately account for and segregate customer virtual currency from the corporate assets of the VCE Custodian and its affiliated entities, both on-chain and on the VCE Custodian’s internal ledger accounts; (2) avoid comingling customer virtual currency with any of the VCE Custodian’s own virtual currency or with any other non-customer virtual currency; and (3) clearly and prominently disclose the manner in which the VCE Custodian segregates and accounts for customer virtual currency. 
… Continue Reading

The New York Department of Financial Services (DFS) recently issued proposed guidance (Guidance) related to climate change that applies to New York State-regulated banking organizations, New York State-licensed branches and agencies of foreign banking organizations, and New York State-regulated mortgage bankers and servicers.  The Guidance is intended to address “material financial risks related to climate change” faced by covered entities in the context of “risk assessment, risk management, and risk appetite setting.”  … Continue Reading

On December 15, 2022, the New York Department of Financial Services (“NYDFS”) published an Industry Letter detailing the Department’s guidance regarding banking organizations that wish to engage in virtual currency-related activities.  In addition to reminding banks, trust companies, private bankers, savings banks, safe deposit companies, savings and loan associations, credit unions, investment companies, branches, and agencies of foreign banking organizations licensed by the NYDFS (together, “Banking Organizations”) of their preexisting obligation to seek approval from the NYDFS before engaging in new or significantly different virtual currency-related activity in New York or with a New York resident, the guidance describes the process and types of information that the NYDFS considers in connection with its approval process.… Continue Reading

On December 22, 2021, New York State Senate Bill 2767A was signed into law. The Bill establishes the Private Student Loan Refinancing Task Force (the “Task Force”), which was charged with “study[ing] and analyz[ing] ways lending institutions that offer non-federal student loans to students of New York institutions of higher education can be incentivized and encouraged to create student loan refinance programs.”… Continue Reading

On November 9, 2022, New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris announced that the NYDFS formally proposed an updated cybersecurity regulation.  Although the updates had previously been released in draft form, the formal announcement commences the 60-day comment period. 

The proposed regulations would create three different tiers of companies based on their size, operations, and nature of their businesses. … Continue Reading

Overdraft and NSF fees remain very much on the radar of the CFPB, the federal banking agencies, and certain state banking agencies.  The very fact that the CFPB continues to closely monitor bank call reports with respect to overdraft and NSF fee revenues demonstrates the Bureau’s ongoing focus on this issue. … Continue Reading

The New York State Department of Financial Services (DFS) has issued an Industry Letter providing guidance on overdraft and non-sufficient funds (NSF) fees to depository institutions that it supervises.

The DFS indicates that, through the supervisory process, it has identified several unfair or deceptive acts or practices regarding the imposition of overdraft and NSF fees. … Continue Reading

On April 28, 2022 the New York Department of Financial Services (“NYDFS”) issued its Guidance on Use of Blockchain Analytics, a document directed to all virtual currency business entities that either have a NYDFS Bitlicense or are chartered as a limited purpose trust company under the New York Banking Law. … Continue Reading

The New York Senate has confirmed Governor Hochul’s nomination of Adrienne Harris to serve as Superintendent of the state’s Department of Financial Services.  Ms. Harris has been serving as Acting Superintendent since the departure of her predecessor, Linda Lacewell, in August 2021.

Ms. Harris previously served as a Senior Advisor in the Treasury Department during the Obama Administration. … Continue Reading

The New York Department of Financial Services has issued a letter announcing that it has concluded that the obligation of providers of commercial financing under the Commercial Finance Disclosure Law (CFDL) to provide consumer-like disclosures does not arise “until the Department issues final implementing regulations and those regulations take effect.”

The CFDL was enacted by S 5740-B and requires consumer-like disclosures for “commercial financing” transactions of $2.5 million or less. … Continue Reading