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Initiatives of the Department

Payday Lending in New York

Following an investigation into the payday lending industry, that revealed companies offering illegal payday loans to New Yorkers with APRs as high as 1,095%, DFS sent letters to 117 banks and NACHA, requesting they cut off access to New York customer accounts for these lenders, as well as a letter to all debt collection companies operating in New York specifically directing them not to collect on illegal payday loans from the 35 companies the DFS investigation has identified to date. In February 2013, DFS warned debt collectors they were prohibited from collecting on illegal payday loans in New York and in April opposed a bill that would legalize unsafe payday loans in new york.

Supporting Community Banks

The Department recognizing the importance of community and regional banks to New York State. DFS issued a Community Banking Report to highlight this, and argues for fairness of capital requirements for these banks.

Student Lending

The Student Protection Unit at DFS helps protect and empower New York students by focusing on areas such as student lending and financial literacy as well as health care coverage issues and credit issues known to affect New York students.

Criminal Investigations & Enforcement

The Criminal Investigations Unit includes a team of attorneys who, utilizing the investigative and enforcement powers granted by the Financial Services Law, investigate civil financial fraud, consumer law, banking law and insurance law violations.

Foreclosure Relief

The Foreclosure Relief Unit (FRU), offers help for homeowners at risk of foreclosure including help, learning about federal programs, finding not-for-profit housing counselors, obtaining loan modifications and more.

 Promoting the New York State Charter

Interest in charter conversion continues to remain strong among community banks with a federal thrift or national bank charter. Since the formation of DFS in 2011, eight former federal thrifts now operate as state-chartered banks.

Investigating Out-of-Network Medical Bills

The Department, seeking to better understand contributing factors to unexpected medical bills, investigated and reported on How New Yorkers are Getting Stuck with Unexpected Medical Bills from out-of -network providers.

Slumlord Prevention Guidelines

The DFS has proposed Slumlord Prevention Guidelines (SPG) for bank lending to help protect tenants, strengthen communities, and promote sustainable, long-term investments in rental housing. The guidelines include new CRA regulations from the that incentivize banks to lend to landlords who are committed to the long-term health of a community – instead of quick-buck artist slumlords who let buildings fall into disrepair.

Virtual Currencies

DFS has launched an inquiry into appropriate regulatory guidelines for virtual currencies due to concern that virtual currency exchangers may, at minimum, be engaging in money transmission as defined in New York law.

Force-Placed Insurance Reform

DFS is leading nationwide reform efforts to shut down the network of troubling relationships between banks and insurance companies that helped drive force-placed premiums sky high. DFS has also urged other state to implement these reforms.

Unpaid Death Benefits

DFS requires life insurers search the SSA Death Master File to identify policyholder deaths and check that data against policies for which no claims have been made. The DFS also offers a service to assist families in locating unclaimed benefits.

No-Fault Insurance Reform

DFS has implemented an initiative to stop deceptive doctors and shut down medical mills by issuing a new regulation that will enable the Department to ban doctors who engage in fraudulent and deceptive practices as part of the no-fault system.

Captive Reinsurance

There is considerable disagreement among states over captives and their legitimate uses. DFS coordinates with other states that have concerns similar to ours with the ultimate goal of eliminating situations involving regulatory arbitrage.

New York State of Health Marketplace

DFS staff is assisting Exchange, DOH and Governor’s office staff in establishing the New York State of Health Marketplace. DFS is engaging in most aspects of the Exchange development, including the Regional Advisory Committee.

Health Insurance Premiums and Prior Approval

The Prior Approval law requires insurers get approval from DFS before increasing rates. DFS seeks balance between keeping health insurance affordable and making sure insurers have the resources to pay claims and incentive to serve the market.

Broker and Insurer Compensation Practices

DFS has long been at the forefront of the fight to investigate inappropriate broker and insurer compensation arrangements and to punish bid rigging, steering, tying and violations of anti-trust laws in the insurance marketplace.