The acting head of New York’s Department of Financial Services will step down before the end of the year, giving New York Governor Andrew Cuomo a run at reshaping a regulator that has levied billions of dollars of penalties against international banks and at times raised hackles in foreign capitals.
Acting Superintendent Anthony Albanese will leave his position, the agency said in a statement. Albanese stepped into the job in June upon the departure of Benjamin Lawsky, the first director of the DFS—an agency formed in 2011 by combining the state’s banking and insurance departments to oversee the market that includes the country’s biggest concentration of global banks.
Albanese’s departure comes amid rising tensions between the DFS and Cuomo’s office over the independence of the agency, said a person briefed on the matter, who asked not to be identified because the discussions between DFS and Cuomo’s office were confidential. Albanese will leave in December, the person said.
For more than a year, New York’s financial community has lobbied Cuomo about DFS, urging him to rein in what they have said are excessive financial penalties.
One source of tension between Albanese and the governor’s office, this person said, was the ability of DFS to issue subpoenas without informing members of Cuomo’s team, including Brendan Fitzgerald, assistant secretary for financial services.
The Cuomo administration hasn’t been involved in subpoenas issued by the DFS, Dani Lever, a Cuomo spokeswoman, said in a phone interview.
In an emailed statement, Lever added that it isn’t unusual, during a transition, that a temporary agency head would work more closely with its overseer in the administration.
“As was widely reported, when the prior superintendent left, his deputy, Mr. Albanese, agreed to stay for a short time to assist with the transition, with the understanding that a permanent replacement would then be appointed,” Lever said.
In his short tenure at the head of the DFS, the 44-year-old attorney and Queens native built on Lawsky’s reputation as an aggressive regulator over international banks chartered in New York.
Lawsky in 2012 threatened to revoke the banking license of Standard Chartered Plc over allegations the London bank broke U.S. sanctions laws. The bank settled with Lawsky’s agency, a state prosecutor and federal regulators.
The agency’s aggressive stance against international banks irritated bank regulators in Europe, according to several people familiar with the situation.
Under Albanese, the DFS penalized Promontory Financial Group LLC for its work reviewing Standard Chartered’s dealings with Iran and other countries under U.S. sanctions. Last week, it joined the U.S. Justice Department and other agencies in announcing a $787 million settlement with Credit Agricole SA over the French bank’s violations of U.S. sanctions laws.
Albanese confirmed the departure, which was first reported by The Wall Street Journal.
“After four years at DFS, I decided it was time to return to the private sector, and I have accepted another opportunity outside of government,” he said in a statement. “This was always intended to be a temporary position to help smooth the transition process.”