New York Governor Andrew Cuomo’s pick to become the state’s top financial regulator on Wednesday signaled she would take a more business-friendly approach than her predecessor, who was known for his pursuit of big banks.
“I believe in compromise to get things done for the benefit of everyone,” Maria Vullo, acting superintendent of the New York State Department of Financial Services (NYDFS), said during a confirmation hearing before the New York State Senate Banks Committee.
Vullo, a lawyer who represented banks and donated to Cuomo’s campaigns, described herself as “pro-business and pro-consumer.” The two terms are not mutually exclusive, she said. Vullo wants the New York financial industry to grow, but also serve lower-income residents whose financial needs are not being met, she said.
“I think you might see creative, innovate initiatives to try to address those concerns,” said Vullo, who must still testify before a finance committee before the state legislature can approve her nomination.
Cuomo, a Democrat, nominated Vullo in January, eight months after former Superintendent Benjamin Lawsky left the agency. Under Lawsky, NYDFS earned a reputation as an aggressive regulatory body that extracted hefty fines from global banks and other financial institutions.
Lawsky became known as “the sheriff of Wall Street.” Asked by a lawmaker whether she would favor a similar approach, Vullo said: “I don’t wear boots. I am me.”
Still, financial institutions must follow the law, including not making overly-risky decisions and applying internal controls, she said.
Created in 2011 by consolidating the state’s banking and insurance agencies, the regulator had been in flux since before Vullo’s arrival in March.
Vullo’s concerns include payday lending, which is illegal in New York, and predatory auto loan practices, such as devices that disable a car when the borrower misses a payment.
The NYDFS also recently launched an inquiry into online lenders who are not licensed in New York.
“People are popping up in this business and from home, create these websites, that make it look like the American dream,” Vullo told lawmakers. “But it’s not.”
Online lenders and other companies are also packaging debt as securities that can spur risky investments by larger financial institutions.
NYDFS lacks authority to stop the securitizing, but can look into whether financial institutions are too heavily invested in those instruments, Vullo said.
Reporting by Suzanne Barlyn; Editing by Lisa Von Ahn and Andrew Hay
- Viewpoint: Tremendous Opportunity for N.Y.’s Department of Financial Services
- Vullo Nomination Signals Shift at N.Y. Dept. of Financial Services
- N.Y. Gov. Cuomo Nominates Vullo to Head Department of Financial Services
- New York DFS Superintendent Lawsky Leaving After $3B in Fines Makes Mark