The New York State Department of Financial Services (NYSDFS) is a department of the US state government. It is responsible for regulating the state’s financial services and products, including those subject to the New York insurance, banking and financial services laws. It is headquartered in New York City and has offices across the state.
The department was created in October 2011, merging the New York State Insurance Department and the New York State Banking Department. The NYSDFS regulates a wide range of financial institutions. According to the NYSDFS, it regulates “nearly 1,800 insurance companies with assets of $5.5 trillion and more than 1,400 banking and other financial institutions with assets totaling more than $2.9 trillion”, as of December 31, 2020.
NYSDFS is responsible for regulating all state-licensed and state-chartered banks, credit unions, and mortgage bankers and brokers. All mortgage loan servicers operating in the state must be registered or licensed by the regulator.
Furthermore, the department oversees all insurance companies operating in New York, licenses all of the budget planners, finance agencies, check cashers, money transmitters, and virtual currency businesses operating in the state. It also investigates and prosecutes insurance and financial crimes such as fraud and money laundering, collaborating with law enforcement and regulatory agencies at the federal, state, county, and local levels.
The following are the five divisions of the New York State Department Of Financial Services:
The NYSDFS states its mission is “to reform the regulation of financial services in New York to keep pace with the rapid and dynamic evolution of these industries, to guard against financial crises and to protect consumers and markets from fraud.”
The department looks after the state’s Insurance Law and Banking Law and acts on any violations. It is mandated to take any actions necessary for:
Financial institutions under the New York Banking Law are mandated to have AML transaction monitoring and screening programmes in compliance with the state’s regulations. These institutions are also required to establish risk-based AML compliance programmes to ensure that the state’s financial institutions are not abused for criminal activities.
In 2016, the NYDFS adopted Part 504, a risk-based anti-terrorism and anti-money laundering regulation. It requires regulated banks, check cashers and money transmitters to maintain effective AML compliance programmes enabling monitoring of transactions and preventing sanctions violations.
In connection with AML compliance, financial institutions in New York have the following obligations:
The following are some of the examples of regulatory actions on its subject institutions related to AML compliance:
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