NYDFS shake-up - Harris exits, Asrow steps in
Adrienne Harris, the superintendent of New York’s Department of Financial Services, is leaving the agency, Governor Kathy Hochul said in a Monday release.
Kaitlin Asrow, who leads NYDFS’s research and innovation division, will serve as acting superintendent beginning 18 October, according to the release.
Harris, a former Obama staffer, began in her role in January 2022 after being nominated the previous August.
In an interview with the Financial Times, Harris said she had always planned to step down after four years and that her departure has “nothing to do with anything else going on in the country or in politics - zero.”
Under Harris, NYDFS closed Signature Bank in 2023, the fourth-largest bank failure in US history, and pressed for clearer, earlier flags on weaknesses across institutions.
“What we saw with all the banks that failed that weekend, including Signature, is they all had persistent threes, at least, in critical areas like liquidity risk management,” she said, citing CAMELS ratings.
“If you had a kid who was getting Cs in math semester after semester, you would have some sort of intervention,” Harris said in March at the Brookings Institution.
For banks with substandard ratings, NYDFS needed escalation “to executive management,” and decisions on whether to conduct “an interim exam,” issue “a [memorandum of understanding],” or pursue “a consent order.” “If those issues aren’t bubbling up, we can’t take proper action,” she said.
Harris also kept a strong focus on crypto oversight, pushing NYDFS-regulated banks to seek prior approval before engaging in digital-asset activities and proposing to bill state-licensed crypto firms for supervision and examination costs.
The agency fined Paxos, Coinbase and Robinhood tens of millions of dollars each and prioritized guidance to prevent money-laundering and sanctions breaches, including directing banks this month to use blockchain analytics tools for crypto-related transactions.
Hochul credited Harris for “rebuilding the Department into a regulator fit for the financial capital of the world.” Harris said, “It has been a privilege and an honor to serve New Yorkers, delivering positive outcomes for consumers; cementing DFS as a global regulatory leader; and transforming the Department’s operations.”
Asrow, Harris’s acting successor, has served as executive deputy superintendent for research and innovation since February 2022, overseeing virtual-currency supervision and NYDFS policy on innovation and financial inclusion.
Previously, she was senior fintech policy adviser at the Federal Reserve Bank of San Francisco, where she led work on data and artificial intelligence and coordinated innovation policy across the Fed’s 12 districts and with the OCC and FDIC.
In a statement, Asrow said she is “humbled” by the opportunity to lead the agency.
“I am committed to ensuring that New York remains the global financial capital, a leader in consumer protection, and a hub for responsible financial innovation,” she said. Hochul called Asrow “well suited to lead the Department into the future.”
As political winds shifted nationally, Harris pursued steps to bolster state-level consumer protection, including a January proposal to bar overdraft fees when customers overdraw by 20 dollars or less.
Speaking to the Financial Times, London, she cautioned against politicising supervision.
“You really shouldn’t have ideology in financial regulation,” she said. “You can protect consumers and support business at the same time; this can be mutually reinforcing.”