NYDFS Superintendent Wants to Take Leading Role on Setting Nationwide Regulatory Agenda, Starting with Crypto
Adrienne Harris, who was confirmed in January to be superintendent of the New York State Department of Financial Services (NYDFS), recently said in an interview with the Wall Street Journal that she planned to use her agency to set the regulatory agenda nationwide, specifically to organize the cryptocurrency industry. She also wants to give clearer guidance to banks and other financial institutions by strengthening the NYDFS’ resources.
Regarding cryptocurrency, Harris said the agency “can make rules, we can issue guidance, we supervise and examine, and we can bring enforcement and so that attracts the good actors and it attracts the industry that wants to be here, in the financial capital.”
Because Harris is focused on regulating emerging financial services products, the NYDFS currently supervises 31 crypto companies. In August, the agency took its first enforcement action against Robinhood Markets Inc., imposing a $30 million fine for alleged violations of cybersecurity regulations and anti-money-laundering.
Harris helped the agency secure full funding for the first time since it was created in 2011. The New York State government sets the NYDFS’ funding, and has recommended a budget of $480.8 million for fiscal year 2023, which increased by 2.4 percent from fiscal year 2022.
“One of my goals has been to make sure this place is resourced the way it should be—it’s the financial capital of the world and its regulators should have the resources to reflect that,” Harris said.
Harris is the first person of color to hold the superintendent position at the NYDFS, and previously served as a senior advisor at the Treasury Department. She was also the head of a financial task force under the Obama administration. Prior to taking the position leading NYDFS, Harris had taught at the University of Michigan’s Gerald Ford School of Public Policy.
“One of the benefits of being a state regulator is that you can move fast and be nimble; you can respond to changes in the marketplace,” she said in the interview. “And I think you’ve seen that from us. With crypto, we got stablecoins guidance that has reserve requirements. We were able to do that quickly while others are still battling it out about who has jurisdiction. And because we’re the financial capital of the world, it’s meaningful.”
The NYDFS oversees state-chartered banks and insurance companies, and it plays an outsize role in financial services. Harris wants to bring the leadership role of the agency not only to crypto, but to climate change as well. Harris said that the state would soon be issuing banking climate guidance, which would represent a very data-driven approach to risk mitigation and operational resiliency for regulated banks.