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Maria Vullo Confirms She's Leaving DFS in February

Maria Vullo, superintendent of the New York State Department of Financial Services (Courtesy photo)

Maria Vullo will leave her position as superintendent of the state Department of Financial Services at the end of January, she confirmed in an interview with the New York Law Journal Wednesday.

Vullo said she doesn’t know where she’ll land after leaving what is arguably among the country’s most powerful financial regulatory bodies but added the move was her choice.

“I’ve been thinking about this for some time, but it’s the natural time for me to leave,” Vullo said. “We’ve done so many great things. This is the right time, even though it will be difficult because the team here is so great, and it’s been a great pleasure to serve the governor in this role.”

The move will set the stage for Gov. Andrew Cuomo to nominate a third person to head the agency since its creation in 2011. The department, which sets and enforces regulations for the state’s financial institutions, was a consolidation of the now-defunct banking and insurance agencies.

The rumored replacement is Linda Lacewell, Cuomo’s current chief of staff who has served in several different capacities within his administration since he was first elected as the state’s attorney general in 2006. She was previously an assistant U.S. attorney in the Eastern District of New York. Spokespeople for Cuomo have not confirmed the move.

Vullo was Cuomo’s replacement for the agency’s inaugural superintendent, Benjamin Lawsky, who left to start his own consulting firm. She’s had a long career in the legal industry, including a stint leading the Economic Justice Division of the New York Attorney General’s Office, where she supervised a staff of approximately 200 individuals.

Vullo originally wasn’t seeking the position when it was offered to her nearly three years ago, she said. Vullo, at the time, had been a partner at Paul, Weiss, Rifkind, Wharton & Garrison in Manhattan for two decades, and an associate at the same firm for an additional seven years.

“The governor called me in early January 2016 to take on this tremendous opportunity,” Vullo said. “It was certainly something I wasn’t looking for, but I was very grateful for the ask and it was something I couldn’t turn down.”

The three years that followed have been marked by a long list of accomplishments, including several regulations promulgated to protect consumers and insurance policyholders in New York, and investigations into some of the country’s largest banks.

Consider the landmark cybersecurity regulations implemented by DFS last year, which have since set a national standard for digital security in the U.S. The regulation required financial institutions in New York to adopt a robust program that establishes a high level of protection for their digital networks from potential threats. That includes the implementation of both a program to prevent those threats and policies to address them. That wasn’t previously required in New York.

“When I arrived at DFS, no one was doing anything specific and impactful with respect to cybersecurity. A lot of people were talking about it, but no one was doing something,” Vullo said. “New York is the financial capital of the world, it was imperative that New York acted. We did it, we did it well, we did the right thing and it’s become a national standard.”

The agency has also had a hand in protecting consumers from potential threats handed down by the federal government, including a rollback of protections under the Affordable Care Act. When it was unclear whether some of the law’s protections would continue, Vullo directed DFS to act.

The agency required health insurance companies that are regulated by the state to provide coverage for contraceptives and abortions without cost-sharing measures, like co-pays or deductibles. It also required coverage for women suffering from maternal depression and enacted a special healthcare enrollment period for victims of domestic violence.

“With the change in the federal administration at the end of 2016, with the efforts to repeal the ACA, it was imperative for state regulators, and certainly me as DFS superintendent, to do everything in our power to protect New Yorkers,” Vullo said. “That includes women whose health care has been under assault for the past two years.”

The agency, in a well-timed move, announced the additional protections for contraceptive and abortion coverage the same day as the first Women’s March in Washington, D.C., the day after President Trump was inaugurated in 2017.

It’s not the first time in Vullo’s career that she was involved in women’s rights. When she was a partner at Paul Weiss, she represented women raped by soldiers during the Bosnian War from 1992 to 1995, which resulted in a $745 million jury verdict for the plaintiffs. She also represented abortion providers threatened in an online “hit list.” The case ended with a $100 million jury verdict for those providers.

She’s continued with the same theme of advocating for individuals in her current role leading DFS, with the agency recovering $120 million in restitution for consumers from companies accused of violating the state’s laws and regulations.

The agency has also, notably, collected nearly $3 billion during that time from financial institutions that violated the state’s banking, insurance, and mortgage laws and regulations. That money is collected by the agency and sent to the state’s general fund.

Other states don’t have the same oversight as New York, where many of the country’s financial institutions are headquartered. That gives DFS extraordinary power to regulate banks and insurance companies whose reach extends beyond the state’s borders.

“New York is the financial capital of the world. So, New York and this agency regulates some of the largest banks and insurance companies in the world. Over $7 trillion in assets are regulated by this agency, and I’m responsible for their supervision,” Vullo said.

Her tenure has also had its challenges, notably in litigation against the agency. The National Rifle Association, for example, sued Vullo earlier this year over actions the organization claimed threatened their long-term financial well-being and ability to advocate for gun owners in New York.

The litigation was born from two actions by Vullo and DFS. The first was an investigation by the agency into an insurance product marketed by the NRA that the state deemed to be unlawful. Then, earlier this year, Vullo wrote a letter to the state’s financial institutions warning them that doing business with the gun lobby group could hurt their bottom line. The litigation is ongoing, but Vullo said she stands by the agency’s actions.

“As a litigator, it doesn’t scare me. It doesn’t change what I do. If you don’t make a decision because you’re afraid someone’s going to sue, then you’re not making the right decision,” Vullo said. “The decision always has to be legally justified, but you can’t make a decision for fear of a lawsuit. I continue to believe everything we’ve done is legally justified.”

Vullo will stay on as superintendent through the end of January to see the agency’s initiatives through while Cuomo crafts his executive budget.

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