Gov. Andrew Cuomo and state Attorney General Eric Schneiderman appear to be locked in battle over who will act as the sheriff of Wall Street during the Trump administration.
The latest fight between New York’s two most powerful elected officials centers on the governor’s bid to expand the authority of the state Department of Financial Services. Created by Cuomo six years ago, the department has emerged as one of the nation’s most powerful banking regulators. Cuomo wants to broaden its power to bring civil enforcement actions and give it the ability to bar “bad actors” from working in banking and insurance, among other changes.
The governor’s effort to give a powerful regulator even more power comes as President Donald Trump begins to weaken federal oversight of Wall Street. (The governor has already engaged in a fight with Trump on the regulatory front, arguing that state authorities instead of the feds should be in charge of overseeing financial startups here.)
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In a Feb. 14 letter, Schneiderman denounced Cuomo’s DFS expansion plan as a “wholly unnecessary overreach.” He said the attorney general’s office, one of Wall Street’s most potent regulators for a lot longer than DFS has been around, already has the power to bar bad actors and can ably represent the agency in any legal disputes. A day later DFS Superintendent Maria Vullo fired back with a letter of her own, asserting that Schneiderman’s argument was “premised on unnecessary rhetoric” as well as “a series of factual and legal errors.”
The power struggle could be decided in the coming weeks during budget negotiations between the Cuomo administration and the state Legislature. But with the feds looking to drastically dial down regulation, New York authorities clearly intend to take the lead in watching Wall Street. The only question is, who’s watch will it be?
Gov. Andrew Cuomo and state Attorney General Eric Schneiderman appear to be locked in battle over who will act as the sheriff of Wall Street during the Trump administration.
The latest fight between New York’s two most powerful elected officials centers on the governor’s bid to expand the authority of the state Department of Financial Services. Created by Cuomo six years ago, the department has emerged as one of the nation’s most powerful banking regulators. Cuomo wants to broaden its power to bring civil enforcement actions and give it the ability to bar “bad actors” from working in banking and insurance, among other changes.
The governor’s effort to give a powerful regulator even more power comes as President Donald Trump begins to weaken federal oversight of Wall Street. (The governor has already engaged in a fight with Trump on the regulatory front, arguing that state authorities instead of the feds should be in charge of overseeing financial startups here.)
In a Feb. 14 letter, Schneiderman denounced Cuomo’s DFS expansion plan as a “wholly unnecessary overreach.” He said the attorney general’s office, one of Wall Street’s most potent regulators for a lot longer than DFS has been around, already has the power to bar bad actors and can ably represent the agency in any legal disputes. A day later DFS Superintendent Maria Vullo fired back with a letter of her own, asserting that Schneiderman’s argument was “premised on unnecessary rhetoric” as well as “a series of factual and legal errors.”
The power struggle could be decided in the coming weeks during budget negotiations between the Cuomo administration and the state Legislature. But with the feds looking to drastically dial down regulation, New York authorities clearly intend to take the lead in watching Wall Street. The only question is, who’s watch will it be?
A version of this article appears in the February 27, 2017, print issue of Crain’s New York Business.
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