New York Proposes Rule to Ban Bad Actors Over Banking Fraudby
Cuomo cites ‘systemic abuse’ of customers at Wells Fargo
Law would let regulator ban people for ‘egregious conduct’
New York would ban “bad actors” from the banking and insurance industries in the state under legislation proposed by Governor Andrew Cuomo.
The law, which would need to be approved by state legislators in Albany, would allow the superintendent of the state’s Department of Financial Services to ban individuals for “egregious conduct,” the governor’s office said on Monday.
The proposal is a response to the scandal last year at Wells Fargo & Co., in which employees created unauthorized accounts for customers in an attempt to earn bonuses based on volume sales, the governor’s office said.
“The excesses and systematic abuse at the center of the Wells Fargo scandal is unacceptable, and New York, in its role as a regulator, is seeking to take bold steps to crack down on this unacceptable behavior and ensure these bad actors are barred from working in this industry once and for all,” Cuomo said in a written statement.
The proposal is a sign of Cuomo’s continued interest in reform of Wall Street. As the state’s attorney general during the financial crisis, he conducted an investigation into bonuses paid at Merrill Lynch and other banks. Then, after being elected governor, he combined the state’s banking and insurance regulators into a new, more powerful entity, the Department of Financial Services.
Following the election of President-elect Donald J. Trump in November, and threats by Republican lawmakers to curtail the powers of the Consumer Financial Protection Board, Cuomo’s proposal is a sign that some states might become more active in the oversight of the financial services industry. The Department of Financial Services oversees banks and insurers chartered in New York.