Happy Trails Ben Lawsky
“Bank Cop Lawsky Turns In His Badge ”
That’s the headline into today’s WSJ announcing the Departure of Ben Lawsky as the first head of the Department of New York’s department of Financial Services. As its first Superintendent he oversaw the unification of the Insurance and Banking Departments in the opening act of what has been a very impressive tenure.
In his first State Of The State address Governor Cuomo criticized the state’s performance cracking down on banker malfeasance in the years leading up to the Mortgage Meltdown. He wanted a Superintendent more analogous to an Attorney General than a traditional regulator. The WSJ headline speaks volumes about how successfully Lawsky carried out this task for the Governor, for whom he had served as an a top assistant when the Governor was Attorney General. Lawsky brought the zeal of a former federal prosecutor to the job and demonstrated that the state has enough jurisdiction to make itself a major player in investigations previously thought of as the exclusive purview of the federal government, such as BSA violations by foreign banks with New York branches.
If you think I’m exaggerating here is a trivia question for you: Who was New York’s last Banking Superintendent? Richard Neiman. No one ever thought of him as a Hell-Hound of Wall Street.
On the more traditional regulatory front, his initiative that I believe will have the most lasting impact-hopefully for the better but maybe for the worse will be in the regulation of virtual currency. New York was the first state to establish a licensing requirement for virtual currency traders. The issue he grappled with: how to increase regulatory oversight without stifling currency innovation-will be one of the key challenges faced by his successors for years to come.
Finally and most importantly, his tenure has also been marked by a refreshing receptiveness to credit union issues. The Department is increasing staff dedicated to credit unions and has expressed a willingness to work with credit unions that may be interested in converting to the state charter. Plus, its acquiescence was crucial to ultimately getting our enhanced field of membership bill approved by the governor.
In my ever so humble opinion this is a pretty good list of accomplishments, He is starting his own consulting firm but my guess is that New York hasn’t seen Lawsky’s last stint on the public stage. Pure speculation on my part but he will run for statewide office someday.