Do you need another demonstration of how dangerous regulatory power can be when it’s weaponized by politicians? Look no further than New York Gov. Andrew M. Cuomo’s recent directive to financial regulators. Cuomo wants them to pressure private companies to break ties with the National Rifle Association (NRA).
“I am directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support,” the governor wrote. The Department of Financial Services, which regulates the banking and insurance industries in New York, followed up with guidance letters to insurance companies and banks.
In such a politicized environment, getting on the wrong side of regulators can be dangerous, writes J.D. Tuccille. Don’t be surprised if banks and insurers cave.
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