Governor Andrew Cuomo of New York recently proposed a state budget in which some money would be allocated towards a proposed agency that combines the insurance regulatory departments and existing banking departments.
His 2011-2012 budget recommends a $564 million allotment for the new DFR or Department of Financial Regulation. This reflects an approximate net increase of $6.4 M which is 1.1% over the 2010-2011 combined budgets of both insurance and banking departments.
The newly managed DFR would be located in New York and Albany, merges the operations, functions, as well as staff of insurance and banking departments together with allied sectors of the Consumer Protection Board. Its operation will be initially financed through assessments which are entrusted to organizations and insurance and banking institutions. What’s left of the operating budget is taken from other fees including licensing fees.
There is a new Financial Regulation Superintendent who will take up the responsibilities of insurance and banking department along with extended responsibilities for investor and consumer protection over transactions, services, and financial products. The superintendent will also oversee new FFCPU or Financial Frauds and Consumer Protection Unit which is the heart for complaints related to consumer finances.
According to Cuomo, the present state bureaucracy is poorly structured to regulate Wall Street and financial services industry that is ever changing. He also suggested that by combining agencies, consumer protection abilities will be improved while administrative costs are reduced. Cuomo said that his projected 2011-2012 budget eradicated a ten billion dollar deficit without borrowing or raising taxes.