Noted With Interest: Newly-Issued DFS Guidance On Banks

In recently-issued guidance, the New York State Department of Financial Services (DFS) advises banks to vet the "character and fitness" of their top personnel.

The directive, issued in January, applies to New York state-regulated banking organizations, as well as branches, agencies, and representative offices of foreign banking organizations licensed by DFS. The guidance also applies to non-depository financial institutions, licensed or chartered, under the New York Banking Law. Each institution's board of directors and C-suite executives are covered by the guidance.

The guidance includes actual questions to pose to executives at the time of hiring that hit a range of issues—indebtedness, lobbying activities, lawsuits, and past regulatory queries. This list also includes questions on payment of taxes, judgments and liens, and prior employment terminations. The agency suggests additional questions that address past or ongoing litigation, criminal convictions, and