What's happening
This bill limits Department of Financial Services compliance audits or examinations to twelve months, with strict reporting deadlines and automatic compliance if not completed on time.
Why it matters
Significantly shortens the window for Department of Financial Services (DFS) investigations. , meaning regulated entities (like banks and insurers) will face less time under regulatory scrutiny, potentially reducing legal and administrative costs.
Imposes strict deadlines for DFS to provide preliminary (at 6 months) and final (at 12 months) findings. , which could lead to more predictable compliance processes but might also rush complex investigations.
Automatically deems a business in compliance if the audit is not finished within twelve months. , potentially allowing some regulatory violations to go unaddressed if DFS cannot complete its reviews in time—shifting the balance toward faster closure over thoroughness.
Prevents DFS from using information from incomplete audits in future investigations. , which could limit the department’s ability to address patterns of misconduct or follow up on unresolved issues, raising concerns about long-term regulatory effectiveness.
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Who cares
Headline styles
Limit Financial Audits to Year
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.651
- Referred to banks
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7819
IN SENATE
February 28, 2018
Introduced by Sen. HAMILTON -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the financial services law, in relation to instituting a twelve month limitation on compliance audits and examinations by the department of financial services
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The financial services law is amended by adding a new section 307 to read as follows:
§ 307. Limitations on audits and examinations. (a) Any compliance audit or examination by the department of a financial product or service, or any regulated person shall be completed no later than twelve months after commencement of such compliance audit or examination.
(b) The department shall provide to the subject of a compliance audit or examination:
(1) a preliminary analysis of the findings of the department six months after commencement of such compliance audit or examination; and
(2) a final report of the findings of the department twelve months after commencement of such compliance audit or examination.
(c) Any compliance audit or examination not completed by the department within twelve months of commencement shall be resolved by finding the financial product or service, or regulated person in compliance. No information discovered by the department during such compliance audit or examination shall be used by the department in any subsequent compliance audit or examination.
§ 2. This act shall take effect on the thirtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14215-01-8
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the financial services law, in relation to instituting a twelve month limitation on compliance audits and examinations by the department of financial services
Summary of specific provisions
Section 1. The financial services law is amended by adding a new section 307
*The legislation would require any compliance audit or examination of a financial product or service be completed no later than twelve months after it is commenced.
*The department shall provide a copy to subject of a preliminary compli- ance audit within six months of the commencement of the audit or exam- ination.
*The department shall provide a copy to subject of a final compliance audit within twelve months of commencement of the audit or examination.
*Any audit not completed within twelve months shall be deemed in compli- ance and no information that was part of that audit or examination shall be used by the department in a subsequent compliance audit or examina- tion.
Section 2. This act shall take effect on the thirtieth day after it shall have become a law.
Justification
A supervising agency has a responsibility to examine and comment on the compliance and procedures of the institutions it oversees in a timely fashion. The audits will sometimes penalize a licensee for continuing to act in a manner that is inconsistent with regulations of the Department of Financial Services. In the overwhelming majority of cases, there is no reasonable argument that a compliance audit and report on such audit cannot be completed and given to the recipient within twelve months. Compliance audits have in excess of thirty-six months to be completed resulting in the recipient being penalized for continued behavior when they were never informed of irregularities during the course of the compliance audit.
Prior legislative history
New Legislation.
Fiscal implications
None.
Effective date
This act shall take effect on the thirtieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.