The state of New York has long been considered a leading advocate of consumer protection, particularly when it comes to regulating the financial services industry. In 2014, New York’s Department of Financial Services adopted regulatory rules for debt collectors. In 2017, NYDFS issued its cybersecurity rules for financial services.
Last month, New York’s primary banking and insurance regulator – the DFS – announced the creation of a new Consumer Protection and Financial Enforcement (CPFE) division. Many are already describing it as the state-counterpart of the Consumer Financial Protection Bureau.
The new CPFE division will maintain responsibility for consumer financial enforcement and possess oversight over consumer financial services institutions within New York. The division will be particularly focused on cybersecurity happenings and financial crimes enforcement policy development.
Many Federal Trade Commission compliance and defense law firms have long predicted that state regulatory agencies would soon step up efforts to fill the enforcement void left with the recent policy shift of the CFPB. Ironically, a unanimous Ninth Circuit panel recently ruled that the CFPB’s single-director-removable-only-for-cause structure is constitutional. Presently, the Ninth and D.C. Circuits are the only circuits to have ruled on the CFPB’s constitutionality, although there are two matters currently pending that involve challenges to the CFPB’s constitutionality.
While FTC CID investigation attorneys also continues to pick up the slack when it comes to federal investigation and enforcement of consumer financial protection legal regulations, the new Consumer Protection and Financial Enforcement Division signals greater enforcement activities against regulated entities in all areas of financial consumer protection at the state level.
Former Assistant U.S. Attorney Katherine Lemire will lead the agency’s new unit, which will combine the previously separate Enforcement and Financial Frauds and Consumer Protection divisions into one group.
New York Attorney General Letitia James also has New York’s eye on financial consume protection. In fact, early this year, the NY OAG appointed former CFPB Associate Director of Supervision, Enforcement and Fair Lending, Christopher D’Angelo, to serve as her Deputy Attorney General for Economic Justice.
Numerous states have now actively begun bolstering consumer financial protections due to federal level policy. New York’s new Consumer Protection and Financial Enforcement Division is responsible for ensuring that regulated entities are in compliance with New York and federal laws, and enforcing banking, insurance and financial services laws.
Richard B. Newman is a digital marketing attorney at Hinch Newman LLP.
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