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.