NY Regulator Uncovers Banks’ ‘Serious Compliance Failures’


A number of financial institutions that, in the past, had settled misconduct charges levied by the New York State financial regulator have now gone off the wagon, so to speak, and have been identified as having committed “serious compliance failures,” that agency has determined.

Reuters reported on Tuesday (June 21) that the financial institutions have been identified by monitors as having acted intentionally. Evidence was found of improper lending practices tied to foreign exchange, according to Maria Vullo, superintendent of the New York State Department of Financial Services. The newswire said that Vullo declined to name the banks.

As reported, the department looks in on banks that operate in the state and does have the power to revoke their licenses where appropriate. At a New York event focused on legal and compliance issues, Vullo told Reuters that enforcement actions could be forthcoming. The agency will work with the financial institutions in order to put safeguards in place. There are a dozen cases under review. There are also multiple and overlapping authorities tied to the cases under review in New York state. Reuters noted that cases with multiple authorities can be seen with some precedent in the Barclays pact last year when the company agreed to settle FX manipulation allegations for $2.4 billion but also was fined an additional $441 million by a British oversight agency.

The New York regulator is in the midst of revising some of its anti-money laundering provisions, the newswire reported.