NY Hopes to Offset Trump’s ‘Aggressive Regulatory Reduction’

New York is reportedly tightening its financial scrutiny as Donald Trump returns to office.

With the incoming President Trump planning to roll back financial regulations, the Department of Financial Services will place more scrutiny on banks, insurers and cryptocurrency companies doing business in New York, the Financial Times (FT) reported Tuesday (Dec. 24).

Adrienne Harris, the department’s head, told the FT that scaling back federal regulations would “certainly increase the volume of consumer protection cases that we may bring on the enforcement side.”

“We’re going to keep focusing on getting money back for consumers,” said Harris, whose office has added hundreds of new staffers in recent years. While stressing that her office was “not ideological,” she added: “If there are new gaps that emerge because we don’t have a partner then we’ll work to fill those gaps as appropriate.”

Harris also said she would — if needed — ask the governor of New York for additional power to push back against the relaxation of federal regulation. The NYDFS is already a powerful regulator, licensing the banking giants headquartered in New York City.

As the FT notes, Trump campaigned on the idea of ushering in the “most aggressive regulatory reduction” in America’s history, while his supporters have argued for eliminating entire agencies, such as the Consumer Financial Protection Bureau, a longtime target of Republicans.

In November, Trump tapped crypto supporter Paul Atkins to serve as the new chair of the Securities and Exchange Commission (SEC) and pursue “common sense” regulation.

And the Trump team has also apparently floated the idea of scaling back the powers of — or simply eliminating — the Federal Deposit Insurance Corporation (FDIC), created to protect consumers from banking failures.

As PYMNTS wrote earlier this week, such moves would mark a radical shift, especially after a year marked by “a steady drumbeat of regulations and rules” dealing with everything from credit card late fees to data sharing.

“In the meantime, however, the underlying issues are still there, and key among them will be examinations of the risks and rewards inherent in bank-FinTech partnerships, cybersecurity, capital requirements and innovation,” that report said.

For example, Synapse bankruptcy will continue to have ripple effects into the new year.  One trend that will stretch into the coming months will be how the partnerships are created and how record-keeping could be redefined.

“A trio of federal bank regulatory agencies said in July that they are considering ‘additional steps’ to ensure banks effectively manage risks associated with bank-FinTech arrangements,” PYMNTS wrote.