New York State’s Department of Financial Services (“DFS”) has unveiled two new divisions focused on consumer protection, enforcement, and cybersecurity. These highly–touted divisions expand the enforcement capabilities of DFS and confirm that the department will continue to serve as a regulatory leader in the consumer protection space.
The Cybersecurity Division was launched by DFS on May 22, 2019. The new division will focus on protecting consumers and industries from cyber threats. In a press release, the DFS advertised that the division is “the first of its kind to be established at a banking or insurance regulator.” In describing the purpose of the Cybersecurity Division, Acting Superintendent Linda A. Lacewell stated that “[a]s technology changes the financial services industry, regulation must evolve, and DFS is evolving to meet the challenges and opportunities of the new landscape, to protect consumers, safeguard the industry, and encourage innovation.” Justin Herring, former Chief of the first Cyber Crimes Unit in New Jersey’s Office of the U.S. Attorney, was appointed as the Executive Deputy Superintendent of the Division. The Cybersecurity Division will enforce the department’s cybersecurity regulations, issue guidance, and help the financial services industry protect itself by disseminating trends and information about cybercrime threats.
The Consumer Protection and Enforcement Division was launched by DFS on April 29, 2019. This new division combines the department’s previously separate Enforcement and Financial Frauds and Consumer Protection divisions. Katherine A. Lemire, a former prosecutor and regulatory professional, was appointed as the Executive Deputy Superintendent of the division. In a press release, Lacewell stated that the new division “will be a powerhouse, and Katie’s knowledge and skillset will greatly strengthen the Department’s mandate to guard against financial crises and to protect consumers and markets from fraud.” The new division is responsible for protecting and educating consumers and fighting consumer fraud, as well as developing investigative leads and intelligence in furtherance of DFS efforts to enforce banking, insurance, and financial services laws.
Troutman Sanders will continue to report on new developments with the New York Department of Financial Services and other institutions involved with the regulation of the financial services industry.