Adrienne Harris, recently confirmed as head of the New York State Department of Financial Services, said she is focusing the agency’s law enforcement work much more on “kitchen table issues.” than was the case before.
The agency will still penalize big banks when they break regulations, Harris said at an event on Monday, but it also focuses on issues that make less headlines but still have a big impact on portfolios. people.
Last month, for example, the New York regulator hit $10 million regulation with a life insurance company. And on Monday, he announced an emergency measure that will prevent a sharp hike in fees for consumers who use check cashing services.
Check-cashing companies in New York are allowed to raise their fees each year to keep up with inflation, but the state agency said Monday it’s reviewing that methodology for the first time in its history. and maintained maximum fees for check cashers at last year’s levels. waiting for.
This decision will prevent a significant increase in fees for customers, given that US inflation reached 7.5% last month.
“We’re going to ask the tough questions and make sure the financial system works for the people it’s meant to serve,” Harris said at a Brookings Institution event, one of his first appearances since taking office as the Senate. of the state confirmed it last month. .
Harris, who is the first black woman to lead the New York agency, said she wanted to bring a fresh perspective and help address longstanding racial and economic disparities that have been exacerbated during the pandemic.
She said her mission as Superintendent of DFS is to ensure the financial system is “fairer for all and more sustainable.”
Harris, who was the agency’s acting head before his confirmation, was appointed for the post in August by New York Governor Kathy Hochul, a Democrat. The agency’s former director, Linda Lacewell, resigned in August, part of the fallout from former Democratic Governor Andrew Cuomo’s sexual harassment scandal.
Harris, a former economic adviser to President Barack Obama, continued her predecessor’s work on reducing the risks that climate change poses to the financial system. In November, the DFS established a new division that focuses solely on climate risks. The agency has already issued climate risk guidance for the insurers it regulates, and it plans to issue similar guidance for banks later this year.
While the DFS aims to take a leadership role on climate risk, the agency has also coordinated with other regulators to ensure it is not “completely disjointed from what is happening”. in other states, federally or internationally, Harris said.
During Lacewell’s tenure, the DFS joined the International Network for Greening the Financial System, which consists of central banks and regulators from various countries. The Federal Reserve and the Office of the Comptroller of the Currency are also now members, and the acting chairman of the Federal Deposit Insurance Corp. Martin Gruenberg noted last week, the agency will seek to join the group.
Last February, the New York State DFS pushed banks and credit unions to fund renewable energy projects in low-income communities, telling them they can get credit under the state’s Community Reinvestment Act for such actions.
Also last year, New York lawmakers extended the scope of the state’s ARC to include non-bank mortgage lenders, whose share of the home loan market has grown significantly since the 2008 financial crisis.
“Now we can force these non-bank lenders to the same fair lending standards that we hold banks to, which I think is a huge step forward,” Harris said Monday.
The New York agency is also focused on improving diversity in financial institutions, both within the corporate ranks and at senior management levels. The focus is “more than just the workforce,” Harris said, stressing the importance of diversity in positions that manage lines of business or work on emerging technologies such as the use of algorithms in loans.
In July, the New York State DFS interrogates the companies it regulates on the diversity of their boards and senior management, and it expects to report overall results this year.
“This is just our first step,” Harris said. “And there will be a lot more to come after we collect and publish this data.”