NYBA President Michael Smith Testifies at Senate Hearing

Bankers Assn. Supports Streamlining Financial Regulatory System but Urges Key Refinements Before Final Action

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ALBANY, NY (03/07/2011)(readMedia)-- Michael P. Smith, President & CEO of the New York Bankers Association (NYBA) said today, "NYBA supports efforts to streamline and modernize New York State's banking charter and regulatory structure." However, he called for important modifications to be acted upon before consideration is given to passing Governor Cuomo's plan to merge the state's Banking Department, Insurance Department and Consumer Protection Board into a new Department of Financial Regulation. Smith offered specific recommendations in his testimony today before the State Senate's Committee on Banks, Committee on Insurance and Committee on Investigation and Government Operations.

"We believe that the modernization of the State's financial regulatory system is an appropriate undertaking – especially in a state like New York, which boasts an impressive history of pro-consumer initiatives that serve as models for other states and federal law," Smith said in his testimony, pledging to work with the Governor and Legislature on the merger.

Smith praised the Governor for making some significant improvements in the proposal in his 21-day budget amendments, and said NYBA's recommendations "are aimed ultimately at enhancing the new Department and preserving New York's position as a global financial capital."

The recommendations provided to the Legislature include:

  • Ensuring that "safety and soundness" of New York's banking institutions be among the fundamental goals for the Department;
  • Highlighting that among the goals of the new Department should be strengthening and promoting the state banking charter and revitalizing New York's financial industries;
  • Clarifying the division of assessment costs between financial institutions and insurance companies;
  • Changing the funding mechanism for the Department's consumer and investor protection activities to eliminate potential conflicts of interest; and
  • Reworking the hearing and review procedures to ensure fairness and due process.

"We commend the Governor for launching this bold initiative and for considering the implications on the regulated industries – who together are the largest employers in the State. NYBA pledges to work with the Legislature as it refines this proposal. We urge that this work be undertaken with the goal of preserving New York's status as a world financial center," Smith concluded his testimony.

NYBA is the primary banking trade group in New York, representing independent, community, regional, and money center commercial banks and thrift institutions operating across New York State. NYBA members have aggregate assets in excess of $9 trillion and more than 200,000 New York employees.

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