Benjamin Lawsky will step down next month as New York’s top bank regulator after four years, during which he threatened to take away the U.S. charters of some of the world’s biggest banks and collected billions of dollars in penalties by being the squeaky wheel in global bank settlements.
The 45-year-old regulator plans to set up his own consulting firm in New York, advising financial institutions on matters related to technology, cybersecurity and virtual currency. He will also become a visiting scholar at Stanford University’s Cyber Initiative starting in the fall.
New York Governor Andrew Cuomo hasn’t yet named Lawsky’s replacement. Among those under consideration to replace Lawsky are Linda Lacewell, a former federal prosecutor who is now counsel to Cuomo, Jonathan Schwartz, general counsel for Univision Communications Inc. and a former JPMorgan executive, and Michele Hirshman, a former federal prosecutor who is a partner in New York at a Paul, Weiss, Rifkind, Wharton & Garrison LLP, said a person familiar with the matter. Rich Azzopardi, a Cuomo spokesman, declined to comment on whether Lacewell is a candidate. Neither Schwartz nor Hirshman immediately returned telephone calls for comment.
“We have assembled a great team at NYDFS and I have full confidence that the critical work of this agency will continue seamlessly moving forward,” Lawsky said in a statement.
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Foreign banks licensed in New York will surely be hoping for someone with a softer touch. News of Lawsky’s upcoming departure comes on a day when he announced a $485 million settlement with Barclays for misconduct in its currency trading operations, bringing the total amount of fines and penalties secured by DFS since 2011 above the $6 billion mark, according to his office.
Lawsky was the first to lead DFS, which was formed in 2011 when Cuomo merged two smaller banking and insurance regulatory agencies and asked him to run the new entity.
As multi-billion-dollar settlements started to lose their punch, Lawsky found ways to tailor punishments to the crimes, including forcing banks to terminate executives and agree to operational bans for units responsible for misconduct. He also insisted on inserting monitors at banks to curb repeat offenders and punished consulting firms for relationships with banks that he deemed too cozy.
On the consumer front, Lawsky has investigated the online payday lending industry, the mortgage servicing industry and reformed force-placed home insurance practices.