Following through on a pledge made more than a year ago, the New York Department of Financial Services is launching its own version of the Consumer Financial Protection Bureau, seeking to fill the consumer protection gaps that are beginning to appear as the Trump administration puts more of its stamp on the CFPB.
Back in January 2018, Mick Mulvaney, then the acting director of the CFPB, told the bureau’s employees that the agency would be much gentler towards the companies it regulates under his watch.
At the time, New York’s top financial regulator said that the state would be prepared to step in to address the CFPB’s “troublesome policy shift away from consumer protection,” and will “continue to lead and take action to fill the increasing number of regulatory voids created by the federal government.”
And now, with now-permanent CFPB Director Kathy Kraninger signaling that the bureau will continue being friendlier to those it oversees, the state of New York is now officially taking matters into its own hands.
The NYDFS announced Monday that it is creating a new division that will focus on consumer protection and financial enforcement. The new division combines the previously separate Enforcement and Financial Frauds and Consumer Protection divisions into one entity.
According to the NYDFS, the new Consumer Protection and Financial Enforcement Division will focus on “protecting and educating consumers and fighting consumer fraud, as well as ensuring that regulated entities comply with New York and federal law in relation to their activities serving the public.”
The division will also work to develop “investigative leads and intelligence” that aid in the NYDFS’ efforts to enforce the state’s banking, insurance, and financial services laws; will focus on cybersecurity events; and will also aid in the development of new supervisory, regulatory, and enforcement policies.
The Consumer Protection and Financial Enforcement Division will be led by Katherine Lemire, who will serve as Executive Deputy Superintendent at the NYDFS.
Lemire comes to the NYDFS from StoneTurn, an international consulting firm providing compliance and investigative services, where she was a partner.
Earlier in her career, Lemire served as an Assistant U.S. Attorney in the Southern District of New York, where Lemire investigated federal crimes, including allegations of public corruption, racketeering, fraud, and other white-collar crimes.
Lemire also served as a prosecutor in the Manhattan District Attorney’s Office.
“As a highly respected and experienced prosecutor, compliance and regulatory professional, Katie is well-positioned to successfully marshal the extensive resources of the Department’s Enforcement and Financial Frauds and Consumer Protection divisions to deliver real results for New Yorkers,” said NYDFS Acting Superintendent Linda Lacewell.
Lacewell also laid out what the expectations are for the new NYDFS’ new consumer protection division.
“DFS’s new Consumer Protection and Financial Enforcement Division will be a powerhouse, and Katie’s knowledge and skillset will greatly strengthen the Department’s mandate to guard against financial crises and to protect consumers and markets from fraud,” Lacewell said.
Lemire said she’s looking forward to leading the state’s efforts.
“Given the paramount importance of consumer protection and regulatory oversight in the financial marketplace, I look forward to once again re-entering public service and serving the best interests of New Yorkers, while utilizing the expertise and dedication of DFS staff and resources of the Department,” Lemire said.
In her position, Lemire will oversee the NYFDS’ Enforcement Division; Investigations and Intelligence Division; Civil Investigations Unit; the Producers Unit; the Consumer Examinations Unit; the Student Protection Unit; and the Holocaust Claims Processing Office.