Albany, New York — For Maria Vullo, being both pro-business and pro-consumer is part of the job as the state’s superintendent of banks and insurance companies.
“They don’t have to conflict,” she said of the dual roles. “I think it is part of my job to ensure the safety and soundness of the financial services industry and for it to prosper. I also think my job is to make sure that the contracts and promises that they make to people, that they are going to meet those promises.”
Vullo was confirmed in June to take over the Department of Financial Services, which was created in 2011 by consolidating two of New York’s most venerable regulatory agencies—the state banking department, formed in 1851, and state insurance department, formed in 1859.
The work of her predecessor, Benjamin Lawsky, still looms large. Lawsky, a former federal prosecutor and top aide to Andrew Cuomo when he served as state attorney general, was DFS’s first superintendent. Lawsky launched cases against PricewaterhouseCoopers, Deutsche Bank and other financial industry giants that returned hundreds of millions of dollars to the state in settlements and fines and delighted consumer advocates. Lawsky as a result became a target of criticism on Wall Street for his allegedly too-zealous enforcement of state law.
Vullo said her DFS will inevitably be different than Lawsky’s.
“I am me,” she said in a recent interview from DFS’s headquarters on the 19th floor of an office tower in lower Manhattan. “My background in the private sector, as a lawyer, is what it is, and I think I have a good appreciation and knowledge base of industry.”
She continued: “I can talk to leaders of banks and insurance companies. I understand the issues. I also believe firmly in the regulator role.”
To the extent that Vullo, 52, wants to define herself, she said she wants to be someone accessible to all the stakeholders in the regulatory process.
She said her background in the law—she was a litigation partner at Paul, Weiss, Rifkind, Wharton & Garrison in Manhattan for more than 20 years after graduating from New York University School of Law, with a detour from 2007 to 2010 to serve in Cuomo’s attorney general’s office—gives her the confidence and self-possession to handle complex regulatory matters at DFS.
“I tend to ask questions and engage in discussions,” she said. “I am not the type of person, you know, ‘I am the power person in the room and that’s who I am.’ I have been across the table a lot from government [representatives]. To me, I know I still have the power [as superintendent], whether I act like a jerk or not.”
DFS’s highest-profile action so far under Vullo has been a proposal to impose new mandates on banks and insurers, starting in November, to protect against cybersecurity attacks—protection that was among Lawsky’s leading concerns as superintendent.
Representatives of banks and insurers have been guarded in their reaction to Vullo’s proposal, promising substantive responses in the upcoming public comment period. Their counsel, who specialize in cybersecurity issues, said her proposal seems overbroad and potentially onerous.
Vullo also has set new rates for health insurers for 2017. The rates call for 8.3 percent average increases for small group providers and 16.6 percent for those writing policies for individuals. DFS additionally has reminded health insurers in New York that they must provide pregnant or postpartum women with maternal depression screenings, with no co-pay requirement.
She also plays a role in efforts to oversee life and annuity issuers.
On the banking side, Vullo said she will focus on areas where New York residents are “unbanked and underbanked,” as well as where people are at risk of predatory lenders.
Vullo said she has become more active than Lawsky was in both the National Association of Insurance Commissioners and in the national Conference of State Bank Supervisors, as a way of enhancing New York’s voice in debates over national insurance and banking policies.
Ellen Melchionni, president of the New York Insurance Association, said she agrees with Vullo’s belief that it is not “mutually exclusive” for her to be both pro-business and pro-consumer as superintendent. She said insurers are looking to collaborate more with DFS, beginning by discussing the agency’s new cybersecurity proposal.
“I do think she is looking for input,” Melchionni said in an interview. “I do think she will listen.”
Similarly, Kirstan Keefe, a staff attorney for the Empire Justice Center, said Vullo seems committed to consumer protection. The justice center is part of New Yorkers for Responsible Lending, an umbrella consumer group that has championed Lawsky’s work on behalf of consumers.
“Our first impression from the new superintendent has been very positive, and she has expressed similar intention and desire to hear from consumer groups about what’s going on on the ground,” Keefe said.
Vullo was nominated by Cuomo in January, but the state Senate took five months to confirm her to the $127,000-a-year state job. In the interim, as acting commissioner, she made several top-level hires, including Scott Fischer as executive deputy superintendent for insurance. His counterpart at the department on the banking side is Shirin Emami, a holdover from the Lawsky administration.
Vullo also hired Celeste Koeleveld, a former executive assistant corporation counsel in the New York City Law Department, as DFS general counsel.
Since leaving the Cuomo administration in 2015, Lawsky has been chief executive officer of the Manhattan-based Lawsky Group, a consultant and counsel to financial services companies on regulation, cybersecurity and other issues. He did not return calls seeking comment.
With a longtime partnership at a prominent Manhattan firm and, now, a high-level state commissionership on her resume, Vullo’s future may point to the judiciary.
She has twice been a finalist for seats on the state’s top court, the Court of Appeals. Cuomo bypassed Vullo in 2013 in favor of appellate Judge Leslie Stein, and again in 2014, when he chose another appellate judge, Eugene Fahey.
Vullo, who said she has been approached about a federal judgeship, said she did not apply for the current opening on the Court of Appeals to replace the retiring Judge Eugene Pigott Jr. in 2017.
“He [Cuomo] nominated me for this,” she said. “I went through a Senate confirmation process. I was confirmed in June. I am going to turn around and put my name in for the Court of Appeals? … I wouldn’t do that. It wouldn’t be the right thing for me to do.”
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