Banking and Finance Law Daily New York Governor Cuomo proposes comprehensive consumer financial protections
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Tuesday, January 10, 2017

New York Governor Cuomo proposes comprehensive consumer financial protections

By Charles A. Menke, J.D.

New York Governor Andrew C. Cuomo used his 2017 regional state of the state addresses to unveil a series of proposals targeting cybercrime, elder financial abuse, and misconduct in the financial services industries. Cuomo proposed a comprehensive package of new legislation, as well as additional regulatory programs and oversight.

Cybercrime. Cuomo’s fourth proposal of his state of the state addresses seeks to better protect New York residents and government entities from cyber-attack threats through the strengthening and modernization of cybercrime and identity theft laws. "This proposal will give police and prosecutors the authority and the tools they need to bring cyber thieves to justice and protect New Yorkers," he said.

Cuomo proposed a three-pronged approach to strengthen the state’s cybercrime penalties, including:

  • gradating cybercrimes to ensure that the penalties reflect their severity, such as creating a new Class B felony to punish those responsible for causing over $1 million in damage by computer tampering;
  • updating current identity theft laws to address mass-identity theft through gradated criminal punishments ranging from an A misdemeanor to a D felony, and expanding aggravated identity theft protections to other vulnerable groups outside of military service members, such as seniors and the mentally and physically disabled; and
  • expanding computer intrusion laws to better protect private citizens.

Cuomo also directed the state’s Division of Homeland Security and Emergency Services to establish a Cyber Incident Response Team within the office of Counter Terrorism. According to Cuomo, the team will serve as a go-to resource for non-executive agencies, local governments, and public authorities in how to better protect their information technology assets, critical operating systems and data from cyberattacks, malware, and ransomware.

Elder financial abuse. In his fifth proposal of the addresses, Cuomo submitted a comprehensive plan aimed at better protecting senior citizens in the state from financial exploitation and foreclosure. The plan includes amending New York’s banking law to empower banks to place holds on potentially fraudulent transactions.

Cuomo also requested strengthening legislation to protect senior homeowners with reverse mortgages. He further stated that he intends to direct the Department of Financial Services (DFS) to revisit and revise any rules and regulations pertaining to reverse mortgages.

In addition, Cuomo proposed the creation of an Elder Abuse Certification Program for banks located in the state. According to the Governor, the DFS will design the program, which will include training bank employees on how to recognize the signs of financial abuse.

Financial industry misconduct. The Governor’s sixth proposal of the addresses aims to further protect consumers from egregious and deceptive behavior in the financial services industry. Cuomo proposed new legislation empowering the DFS to ban individuals from the financial services industry if it is determined that they have engaged in conduct that directly bears on their fitness or ability to continue participating in the industry. The proposal builds upon guidance previously issued by the DFS after the Wells Fargo scandal where bank employees secretly opened new accounts and funded them with transfers from existing ones without the knowledge or consent of the account holder (see Banking and Finance Law Daily, Oct. 11, 2016).

Companies: Wells Fargo

MainStory: TopStory BankingOperations CrimesOffenses CyberPrivacyFeed DirectorsOfficersEmployers IdentityTheft Mortgages NewYorkNews Privacy StateBankingLaws

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