Yesterday, New York Governor Andrew Cuomo unveiled a proposed 2011-2012 executive budget (the “Executive Budget”). Among other things, the Executive Budget calls for the merger and consolidation of certain state entities, including merger of the Insurance and Banking departments and the Consumer Protection Board into a new Department of Financial Regulation (the “DFR”), thereby creating a unified financial regulatory and consumer protection structure.
Under the new structure, the existing supervisory, regulatory and enforcement powers of Insurance and Banking laws will remain in force, as will the chapters of the laws themselves. A new office of the Superintendent of Financial Regulation (the “DFR Superintendent”) will be created. The new DFR Superintendent will assume the responsibilities of the Insurance and Banking superintendents, as well as new and heightened oversight responsibilities with respect to financial products, services and transactions. The Executive Budget also creates a new Financial Frauds and Consumer Protection Unit (the “FFCPU”), to be overseen by the DFR Superintendent. The FFCPU will be authorized to investigate financial fraud, and to impose penalties as needed.
Obviously, this merger requires approval of both the State Assembly and Senate. Such approval requires navigation of certain political issues that could result in changes to the final form.