On Tuesday, the state Senate confirmed Adrienne Harris, a former public policy professor, presidential advisor, financial executive, and corporate lawyer, as superintendent of New York’s Department of Financial Services, the top financial regulator post in state government, with only nine senators out of 63 voting against her confirmation.
“I am honored to serve as the Superintendent of the Department of Financial Services,” Harris said in a statement following the vote. “As the first African American woman to lead DFS, I am personally committed to working with all stakeholders to build a robust, fair and sustainable financial system, creating a better economic future for all New Yorkers.”
The no votes were cast by Senators Alessandra Biaggi (D-Bronx), Phil Boyle (R-Suffolk), Jabari Brisport (D-Brooklyn), Michael Gianaris (D-Queens), John Liu (D-Queens), Peter Oberacker (R-Cortland), Jessica Ramos (D-Queens), Dan Stec (R-North Country), and James Tedisco (R-Glenville).
The Department of Financial Services, New York’s main financial regulator, oversees over 3,000 financial institutions controlling over $8 trillion in assets. It is responsible for chartering banks, regulating insurance companies and mortgages, and licensing cryptocurrencies, among other roles.
When Governor Kathy Hochul nominated Harris to the post in August 2021, a coalition of progressive groups began organizing in opposition to her confirmation, citing her numerous roles working with and for the financial companies she will now be charged with regulating, and her permissive attitude towards the regulation of the financial technology sector, or “fintech,” as reasons for their opposition.
Since the end of the Obama administration, in which Harris served as an economic policy advisor, she has held more than a dozen positions in various financial technology companies.
One of those companies was the scandal-plagued LendingClub, which paid $18 million in July 2021 to settle Federal Trade Commission charges that it had deceived consumers about hidden fees. The day after the settlement was publicized, LendingClub announced that Harris would be joining its board.
Between 2020 and 2021, Harris worked as an adviser to Brigit, a fintech company specializing in payday loans that in 2019 was subpoenaed by the Department of Financial Services over concerns that the interest rates on its loans violated New York’s anti-usury laws.
Harris has also expressed skepticism towards heavy regulation of fintech, urging regulators to approach it with an “affirmative mindset” at an appearance in 2020.
In her testimony to the state Senate’s finance committee on Monday, Harris said that she believes that fintech services “are some of the most important services that New Yorkers and consumers will use, and they should all be strongly regulated.”
“They should be regulated just like incumbent financial services,” she added.
In the days following Harris’ nomination in August, the push to stop the nomination appeared to be gathering steam, and several state senators, including Deputy Majority Leader Michael Gianaris, said that they would vote against her confirmation.
“What we need is someone to oversee the industry that actually has interest in overseeing the industry. I don’t believe that Adrienne Harris is that person,” Gianaris, who voted against Harris’ confirmation on Tuesday, told New York Focus in September.
But in the end, opponents were unable to persuade enough senators to seriously threaten to derail the nomination.
In addition to Hochul’s administration pushing for confirmation, Harris’ nomination was supported by influential figures such as Albany lobbyist Patrick Jenkins, and Kathryn Wylde, president and CEO of the Partnership for New York City, a business lobby.
“In any circumstances it would have taken a lot to have legislators be willing to risk making all of those parties upset,” said Charles Khan, organizing director of the progressive Strong Economy for All coalition, one of the groups that opposed the nomination.
Following her nomination, Harris undertook an intense charm offensive to ensure her confirmation, meeting with nearly every Democratic senator, and multiple Democratic assembly members and Republican senators, she said Monday, while taking questions from members of the Senate’s finance committee.
The fruits of this effort were on display during floor debate on Harris’ nomination. Senator James Sanders (D-Queens) said that his meetings with her had addressed concerns about her deep background in the fintech industry.
“Some of these things were troubling and I actually went line-by-line with her” looking at her writings and statements on fintech regulation, Sanders said. “I came away convinced that this gifted person was the right one to be in charge of the Department of Financial Services.”
When Harris testified before the Senate’s finance committee on Monday, the day before her confirmation vote, she also received effusive praise from several members of the committee.
“Quite honestly, we don’t deserve you, but I’m very grateful that you’re willing to take on this responsibility,” Senator Diane Savino (D-Staten Island/Brooklyn) told her during the committee meeting.
During the finance committee meeting, Senators John Liu and Gustavo Rivera (D-Bronx) both expressed concerns with Harris’ experience in the fintech world. In a question, Liu stated that Harris has significant “lived experiences as a corporate lawyer with white shoe law firms, defending banks and financial institutions that have engaged in predatory practices,” and questioned whether that would impair her ability to be an effective regulator.
Liu, who voted against Harris’ confirmation on the Senate floor, told New York Focus that Harris’ answers to his questions were “less than satisfying.”
“Some of her critics have pointed out that in her past she seemed to lean more towards the argument of not hindering innovation with regulation,” he said. “I gave her a chance to explain that, which she did not do.”
But ultimately, no senators voted in opposition to Harris’ confirmation in committee, and only three senators out of the twenty-three on the committee voted “no recommendation”— Liu, Rivera, and Julia Salazar (D-Brooklyn).
Rivera said in a statement that his questions were to “get clarity on concerns that have been raised due to her previous ties to certain financial institutions and her ability to regulate such institutions effectively.”
“I believe that her qualifications and perspective on the role of the NYS Department of Finance Services meet the benchmarks for her appointment,” said Rivera, who voted to confirm Harris on Tuesday.
Some legislators’ fears about Harris’ regulatory postures may also have been allayed by her actions as Acting Superintendent of the Department, a role she assumed in September, shortly after her nomination.
Under Harris’ aegis, the department has moved to incorporate risks from climate change into insurance regulation, study the availability of credit for minority- and women-owned businesses, and secured a $3.1 million restitution payment from health insurance companies who improperly denied mental health care and substance abuse treatment to New Yorkers.
Khan praised these actions, and said that securing the payment “is what we want DFS to be doing,” but said that they were not enough to overcome opponents’ concerns about Harris’ “long history of uncomfortable friendliness with industry that she’s supposed to regulate.”
At the finance committee meeting, Harris noted that she has stepped down from her positions at all fintech companies that she has worked with in recent years, and said that she will implement a strict conflict of interest policy that will recuse her from any decisions relating to those companies.
“That’s a pretty standard line for people who go back and forth,” between the public and private sectors, Liu said. “Her actions will be judged through legislative oversight and public watchdogs.”