NEW YORK (Reuters) - Regulation should not be considered a “curse word” and is needed more than ever to head off financial threats, despite President Donald Trump’s attacks on government red tape, New York’s financial services regulator said on Thursday.
Maria Vullo, superintendent of New York’s Department of Financial Services, made the argument in a speech to white collar crime lawyers, saying states like New York had to step in to protect markets and consumers.
“At a time when regulation seems to be a curse word, I say, quite to the contrary,” Vullo said. “The rule of law and regulations are not only appropriate, they are absolutely necessary to address the risks that we face.”
Trump has moved against regulation of all kinds, saying it is killing jobs and driving companies out of the country. In January, he signed an executive order requiring two regulations be discarded for every new one. Last month, he said his administration was working on changes to the 2010 Dodd-Frank Wall Street reform law.
Vullo, speaking at the New York City Bar’s 6th Annual White Collar Crime Institute, said it was wrong for the government to step aside and let the market handle things. “We’ve been there before and know what happens when government fails to act,” she said.
She said Trump’s executive order on regulation did not address threats.
“Deregulation in a climate of change cannot mean that regulators must hang up their hats...for the sake of a signing ceremony,” she said.
Vullo touted a cybersecurity regulation her agency put into effect in March, and one that took effect in January that required banks ensure their monitoring programs were designed to help prevent money laundering and terrorism financing.
Vullo’s department regulates state-licensed financial institutions and insurers, including foreign bank branches in New York.
It has reached settlements with numerous institutions over misconduct in recent years. In January, for instance, Deutsche Bank AG agreed to pay $425 million over a “mirror-trading” scheme that moved $10 billion out of Russia between 2011 and 2015.
Reporting by Karen Freifeld; Editing by Andrew Hay