The Long Arm of New York's Benjamin Lawsky
August 19, 2013 12:07 PM
Since bursting onto the financial regulatory scene two years ago, Benjamin Lawsky has fined banks hundreds of millions of dollars over money-laundering allegations, temporarily banned big consultants from operating in his state, shaken up the force-placed insurance market and clamped down on payday lenders. In the process, New York State's Superintendent of Financial Services has sometimes stepped on the toes of fellow regulators. Following are quotes from a wide-ranging interview that National Editor Maria Aspan conducted recently with the 43-year-old former prosecutor and longtime aide to New York Governor Andrew Cuomo. (Image: Bloomberg News)
On the risk of under-regulation:
"If you don't have guardrails and active oversight by regulators, you can run a real risk of having new, unexpected and sometimes quite serious problems and issues." (Image: Shutterstock )
On the risk of excessive and overlapping regulation:
"The one thing you want to avoid whenever you can is just multiple layers of regulation that do the exact same thing.
It gets very confusing, it's a waste of time and it's much better to try to coordinate and hone your regulation." (Image: Shutterstock )
On whether he is trying to pressure other regulators into acting more aggressively:
"It's not what drives us. We're a little smaller than the other regulators [with 1,400 employees], a little more nimble, and we have this ability, because we're new, to really not be wedded to the way things have been done in the past, when we don't think that makes sense." (Image: Shutterstock )
On how technology is changing finance:
"We all need to be thinking about how do we incentivize all the positives these technologies bring, but at the same time ensure we're not creating other unexpected problems that could become very serious very fast."
On his near-term plans for the Department of Financial Services:
"I don't think you'll see us jumping into five more new areas in the next four months. I think we're going to work on the four or five or six big projects we have."
On why he's clamping down on payday loans:
"Those loans, the way they're structured, are usually not helping anyone. They're pushing them into a cycle of debt that has the real chance of ruining peoples' lives for decades." (Image: Shutterstock )
On the concerns that a payday loan crackdown will push borrowers into worse alternatives:
"That is a very, very fair concern and we share it. The more aggressive we are in trying to enforce New York laws -- which make payday lending illegal -- the more aggressive we also need to be in coming up with and incentivizing financial products that those with lesser credit can still have access to." (Image: Shutterstock )
On why the financial crisis resulted in so few criminal prosecutions of top executives:
"It's a very high bar to reach, to decide that you've got probable cause [to indict someone], that an intentional crime was committed. And you're talking about incredibly complex products that were being produced at the time in enormously diffuse organizations, and to be able to point the finger at the tops of those organizations and be able to prove a criminal case for the leaders of those organizations, based on incredibly complex financial dealings that were going on deep in the bowels of those organizations, is very, very difficult." (Image: Shutterstock )
On whether he is trying to pick up the 'Sheriff of Wall Street' mantle from former New York Attorney General Eliot Spitzer:
"I don't spend a ton of time living up to a model other than the model that [New York Governor] Andrew Cuomo set." (Image: Bloomberg News)
