NYDFSNew York Department of Financial Services
New York State's financial regulator, created in 2011 by combining the former Banking and Insurance Departments. NYDFS supervises state-chartered banks, foreign bank branches, insurers, money transmitters and virtual currency businesses, and was the first US regulator to license virtual currency companies.
Why it matters
Because many global banks and payment companies hold New York licenses or operate New York branches, NYDFS has outsized influence on AML practice. It has brought major enforcement actions for BSA/AML and sanctions failures, often requiring independent monitors and remediation alongside penalties.
Its Part 504 regulation (3 NYCRR Part 504) requires regulated institutions to maintain a transaction monitoring program and a sanctions filtering program, and a senior officer or the board must certify compliance to NYDFS by April 15 each year. Part 504 expects documented scenarios, threshold tuning, data validation, and testing of the systems end to end.
NYDFS also licenses virtual currency businesses under its BitLicense framework, introduced in 2015, and expects licensees to run AML and sanctions controls comparable to those of banks, including blockchain analytics for crypto activity.
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