After weeks of speculation, Gov. Andrew Cuomo formally nominated Linda Lacewell, his current chief of staff, to become the next superintendent of the state Department of Financial Services, the state’s financial regulatory agency.
Lacewell will replace outgoing Superintendent Maria Vullo, who announced in December that she would be leaving the agency at the end of January. Vullo has not decided what she’s planning to do after leaving the Cuomo administration, which she’s served in for the last three years.
She was the second person to hold the position after the inaugural superintendent of DFS, Benjamin Lawsky, left to start his own consulting firm. Vullo said during an interview with the New York Law Journal last month that she had been considering the move for some time.
“I’ve been thinking about this for some time, but it’s the natural time for me to leave,” Vullo said. “We’ve done so many great things. This is the right time, even though it will be difficult because the team here is so great, and it’s been a great pleasure to serve the governor in this role.”
Lacewell will now carry the torch for the agency, which was created in 2011 as a consolidation of the state’s Banking and Insurance Departments. It’s arguably among the most powerful financial regulatory government bodies in the country — if not the world—since many of the nation’s largest financial institutions have set up shop in New York.
The position comes with several responsibilities involving oversight of those companies, as well as promulgating regulations to improve their best practices and protect consumers in New York. DFS, for example, imposed stricter cybersecurity requirements for banks and insurance companies regulated by the state in recent years. That regulation became a national standard.
The agency has also been seen as a money-maker for the state on some occasions. Going into the 2015 legislative session, DFS had collected more than $4 billion in financial settlements from multinational financial institutions that had violated the state’s laws and regulations. For comparison, the state budget that year was nearly $150 billion.
The position also has tremendous power over health insurance companies regulated by the state. Aside from approving annual rate hikes requested by insurers, DFS can also create new regulations for health coverage in New York.
During Vullo’s time leading the agency, for example, DFS mandated that the state’s health insurance companies provide coverage for contraceptives and abortions without cost-sharing measures like copays or deductibles. The change was implemented as a response to the possible repeal of the Affordable Care Act.
Lacewell, an attorney and former federal prosecutor, has served in a number of capacities in Cuomo’s administration for more than a decade since he first took office as the state attorney general in 2007. She was previously with the U.S. Attorney’s Office in Brooklyn for nearly a decade.
She was most recently elevated to the position of chief of staff in the Cuomo administration, which is essentially in charge of overseeing the day-to-day operations of the executive chamber, as well as ethics and law enforcement matters.
Lacewell first served as special counsel to Cuomo when he was the state’s attorney general from 2007 to 2010. She held the same role during Cuomo’s first term as governor before he appointed her as the state’s first chief risk officer in 2015. In that position, she helped create and implement the state’s first system for ethics, risk and compliance in state agencies and authorities.
She left the position to become executive director of the Cancer Breakthroughs 2020 Foundation, a nonprofit cancer research organization that’s part of the Chan Soon-Shiong NantHealth Foundation in California. She spent two years at the organization before returning as Cuomo’s chief of staff.
Insiders within the Cuomo administration have labeled Lacewell as a brilliant legal mind in her own right, often pointing to her work both within and outside the Cuomo administration.
She’s not unfamiliar with the kinds of cases DFS typically handles. During her time in the U.S. Attorney’s Office, Lacewell was also a member of the Enron Task Force, a panel of federal prosecutors and investigators responsible for reviewing what caused Enron Corp., an American energy company, to file for bankruptcy in 2001.
The task force brought fraud, money laundering, and other charges against more than two dozen officials at the company. Lacewell led a settlement as part of the task force with the Canadian Imperial Bank of Commerce, which was allegedly used by Enron to raise its stock price without actually earning more profits by obtaining assets and loans from the bank.
Her nomination will now head to the State Senate, which has to approve several appointments announced by Cuomo Friday afternoon. In the case of Lacewell’s nomination, it will most likely require the review of three committees in the Senate. The Finance, Insurance, and Banking Committees all held hearings on Vullo’s nomination in 2016.
Cuomo did not comment on Lacewell, specifically, but said those appointed were chosen to advance his agenda going into his third term as governor.
“This administration is laser focused on the advancement and enforcement of policies that improve the lives of residents in every corner of this state, from strengthening gun safety reforms and protecting our natural resources, to fostering economic opportunities that create new, 21st century jobs for New Yorkers,” Cuomo said. “I am proud to work with these talented and dedicated individuals as we build on our progress and continue to move New York forward.”
Lacewell was not immediately available for an interview on Friday.