NY Gets Ready To Ramp Up Enforcement Of It’s Marquee Regulations

September 26, 2017 at 9:36 am Leave a comment

New York’s Department of Financial Services is signaling that it is getting ready to ramp up enforcement of two high-profile regulations.

Last Wednesday, it announced that it was launching a series of information sessions to tell local governments about New York’s law requiring banks and credit unions above certain thresholds to maintain vacant and abandoned property. This announcement was coupled with a new guidance reminding impacted mortgagees of their basic obligations, such as that they are responsible for securing boarded windows or doors that are loose or forced open. In addition, mortgagees are required to register vacant or abandoned property to the department. They were also reminded of the obligation lenders have to report abandoned property to the state. §1308 (c) of the Zombie Property Law gives municipalities the right to enforce this law. Don’t be surprised if you begin to have more discussions with your local officials.

Remember that the obligation to maintain property under §1308 only applies to mortgagees which reach thresholds further described in this blog. This is distinct from the obligation to report vacant or abandoned property.

New York’s second major regulation imposes cyber security requirements. As readers of this blog will know, this regulation imposes baseline data security protocols on covered institutions. It applies to “any Person operating under or required to operate under a license, registration, charter, certificate, permit, accreditation or similar authorization under the Banking Law, the Insurance Law or the Financial Services Law.” Institutions covered by the regulation, such as a credit union mortgage CUSO or a state chartered credit union have to register with the state by using this link, the portal is on the upper right hand side and the Q and A’s provide some guidance: http://www.dfs.ny.gov/about/cybersecurity.htm.

I know originators have started to receive notices that they must comply with Part 500’s registration requirements by September 27th. The good news is that individuals who work for businesses subject to Part 500 are exempt from these requirements provided that the institution for which they work is properly registered with the state and has received permission to register on behalf of its employees. The bad news is that unless they work for an institution that has 50 or more employees, each individual still must indicate to the state that he or she is exempt from the regulation’s requirements by filing a notice of exemption.

 

 

Entry filed under: New York State, Regulatory. Tags: , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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