City & State New York
March 6, 2017
GUILLAUME FEDERIGHI
L
AST JUNE, MARIA VULLO was in Albany to be confirmed as superintendent of the state Department of Financial Services. She had taken over on an interim basis earlier in the year, and now she was being grilled by state senators about how aggressively she would regulate New York’s financial and insurance industries. Kicking off the questions, state Sen. Diane Savino asked Vullo if she would take the same hard-charging approach as Ben Lawsky, the first DFS superintendent whose vacancy she would fill. “Your predecessor is legendary. He started the agency. He’s someone with a reputation as a crusader,” Savino said. “You either loved him or hated him depending on where you were in the financial services sector. So I’m curious, how do you see your role as the head of DFS? Will you continue the crusader role that Ben Lawsky had – the new sheriff of Wall Street – or do you see a more pragmatic approach?” That “sheriff of Wall Street” meme – a maverick New York lawman taking on the big banks as the feds sit on the sidelines – originated with Eliot Spitzer, the state attorney general from 1999 to 2006. At a time when market self-regulation was in vogue, Spitzer wielded New York’s powerful state securities law to tackle white-collar crime and broke with tradition by taking on cases traditionally left to federal regulators. Spitzer’s successors, Andrew Cuomo and Eric Schneiderman, each won acclaim for taking on national targets as “the next sheriff of Wall Street.” Schneiderman’s tenure coincided with the rise of Lawsky, who was appointed to run the newly formed DFS in 2011 after Cuomo became governor. Lawsky raked in more than $6 billion in bank settlements and outflanked President Barack Obama’s administration by targeting individual bankers and executives. In a stunning move that enraged the industry, Lawsky threatened to revoke the New York bank license of the British bank Standard Chartered for dealings in Iran and won a $340 million settlement. The “sheriff” moniker has proven so durable that it has been applied in other locales: U.S. Attorney Preet Bharara is the sheriff of Albany, while Schneiderman’s legal challenges against President Donald Trump have some playing him up as the sheriff of Pennsylvania Avenue. But Vullo was having none of this sheriff talk. “I don’t wear boots,” she told Savino. “So on the sheriff side, I am me. I’ve been asked this question a number of times: Who are you going to be? I’m going to be Maria Vullo.”
Vullo told lawmakers that while she wouldn’t pin herself down with a label, she would strike a balance between New York’s vital role as the financial capital of the world and ensuring the industry serves “the needs of all New Yorkers across the state.” But now, as Vullo enters her second year leading DFS, that balancing act could get a whole lot harder. Trump, who stocked his Cabinet with Goldman Sachs alums and Wall Street power brokers, has called the landmark Dodd-Frank legislation “a disaster.” Last month, he signed an executive order to dramatically scale back the 2010 financial regulation law, which was aimed at preventing another financial crisis. Assuming Trump’s administration moves forward with its plans to usher in a new era of banking deregulation, will Vullo be ready to fill the regulatory void? “Look, this is not about any particular individual, or it’s not about any particular administration,” Vullo told City & State, taking pains not to even mention Trump by name. “The regulation of the federal government impacts what we do in several respects in New York, but whoever is in Washington, my job is to protect our markets in New York, to protect our consumers in New York, to make sure that the banks and the insurance companies that I regulate are making good on the promises that they are making to New Yorkers, making sure that there aren’t predatory actors taking advantage of New Yorkers.” Vullo’s diplomatic take on the potential threat posed by Trump reflects a nononsense attitude that has helped her rise to become a top regulator on Wall Street. She grew up in Brooklyn, the youngest of five children in a working-
“WHOEVER IS IN
WASHINGTON,
MY JOB IS TO PROTECT
OUR MARKETS IN NEW YORK, TO PROTECT OUR
CONSUMERS
IN NEW YORK.”
13