On April 29, 2019, just months into her new job at the New York State Department of Financial Services (“DFS”), acting DFS Superintendent Linda Lacewell announced a significant reorganization within the financial and insurance regulator. The new Consumer Protection and Financial Enforcement Division (the “CPFED”) combines seven previously separate divisions and units – Enforcement, Investigations and Intelligence, the Civil Investigations Unit, the Producers Unit, the Consumer Examinations Unit, the Student Protection Unit, and the Holocaust Claims Processing Office – under a single executive deputy superintendent. Lacewell appointed Katherine Lemire, a former state and federal prosecutor, to head the newly-minted division.

According to an April 29, 2019 press release, Lacewell refers to the CPFED as a “powerhouse” whose mission is to protect and educate consumers, fight consumer fraud, and ensure that regulated entities comply with New York and federal law. CPFED is also tasked with developing “investigative leads and intelligence in furtherance of the Department’s efforts to enforce the Banking, Insurance and Financial Services laws, with particular focus on the review and response to cybersecurity events and the development of supervisory, regulatory and enforcement policy and direction in the area of financial crimes.”

Lacewell appears intent on ensuring DFS remains focused on consumer cybersecurity. In 2017, DFS was at the forefront of cybersecurity regulation when it adopted Regulation 500, which set forth minimum standards for regulated entities’ cybersecurity programs. In keeping with the Department’s historic emphasis on cybersecurity, Lacewell reminded the audience at a recent New York City Bar Association event that cybersecurity was the “number one” global threat facing industries and governments. Lacewell’s comments, coupled with this significant realignment, may suggest more rigorous enforcement of New York’s landmark cybersecurity regulation in 2019 and beyond.

Lemire’s own background may also provide some clues as to how the new CPFED will be run. Lemire served a combined twelve years as an Assistant Manhattan District Attorney and Assistant U.S. Attorney for the Southern District of New York, prosecuting a broad array of criminal cases, including public corruption, racketeering, fraud, and other white-collar crimes. Lemire then spent four years as counsel and principal advisor to former New York Police Commissioner Raymond W. Kelly. Following her career in public service, Lemire founded Lemire LLC, a consulting firm focused on regulatory compliance, corporate fraud investigations, construction labor compliance, and investigative due diligence. Lemire LLC merged into StoneTurn in 2018. Lemire’s substantial prosecutorial experience and her robust compliance background may signal a renewed focus on enforcement at DFS.

However, for all the attention Lacewell, Lemire, and the powerhouse CPFED have garnered, it is unclear whether the new consolidated division will operate any differently than its predecessor divisions. In fact, DFS’s description of CPFED’s mandate is substantively identical to the combined descriptions of the former Financial Frauds and Consumer Protection Division, Enforcement Division, and Investigations and Intelligence Division as set out in DFS’s 2017 Annual Report. Time will tell whether the reorganization will translate into a materially different experience for regulated entities.