As a Senior Financial Examiner for the New York State Department of Financial Services, Institute member Joseph Cheung ensures that lenders comply with regulations and treat customers fairly, especially low-income families. A Plus interviews the former Hong Kong government accountant in Manhattan’s famous Chinatown
Photography by Juliet Shayne Lui
Joseph Cheung has seen both sides of government regulation – and both extremes. The former accounting officer – who spent six years working for the laissez-faire administration in Hong Kong – now answers to the New York state government as part of its activist financial services supervision apparatus.
“The main difference between Hong Kong’s and New York’s regulatory systems is that the system in the United States is much more robust,” Cheung says. “Hong Kong is focused on ensuring the stability of banks, while the U.S. – especially New York – puts more emphasis on consumers. In Hong Kong, they don’t do enough to help or promote credit access for low- and moderate-income consumers.”
After a career spent mostly in U.S. banking, Cheung is now a Senior Financial Examiner for the New York State Department of Financial Services, located in Lower Manhattan about 20 miles from his home in Long Island. “It was very easy for me to change to this job and be quickly promoted,” he says.
“Government promotion mostly depends on your performance and your examination results,” he adds. Cheung sits examinations every two years and his next promotion to a more managerial position could come in 2020. “I’m confident,” he says.
A financial examiner has many functions, Cheung says. “They enforce the state’s banking regulations and ensure the safety and soundness of the banks to ensure that liquidity requirements are met, and that they are in compliance with the various laws and regulations.”
“The department has different divisions focused on different objectives and parts of the banks that they want to look at,” he says. “I look at their consumer compliance. New York state laws encourage banks to meet the credit needs of low-income people.”
The Hong Kong Institute of CPAs member joined New York’s state government amid the turmoil of the global financial crisis. “The Dodd-Frank Act, signed by then-President Barack Obama in 2010, placed very stringent regulations on the banks after the crisis in terms of liquidity and reserve capital requirements and stress tests,” Cheung notes.
While the election of Donald Trump and changes in the federal government since 2017 has seen some rollback of Dodd-Frank, New York has maintained its pro-consumer attitude, according to Cheung, who cites former superintendent of the New York State Department of financial services Maria Vullo, who left her post in February, as a driving force for bank customers. “She was very interested in consumer protection and in changing laws,” Cheung says. “The department also regulates insurance and she required medical insurers to accept some pre-existing conditions and help pregnant women.”
“The Institute membership is recognized by the AICPA, and in New York, they know Hong Kong very well. It has helped me greatly in my U.S. career.”
Abacus and beyond
When Cheung arrived in New York in the 1980s, he – like many other Hong Kong professionals who emigrated – gravitated to the historic Chinatown district of Manhattan. The area around Canal Street became an ethnic enclave in the 1870s with the first major wave of Chinese migration. Today, more than 50,000 people of Chinese descent live in the densely populated neighbourhood and thousands more work daily in its shops and offices. Across the district, day-to-day encounters and business are conducted in Cantonese, Mandarin and a host of other languages and dialects.
“When I arrived the U.S., I worked in a local CPA firm in Chinatown and thought about adding the qualification from the American Institute of CPAs (AICPA) because I thought it would be easier to get a job as an accountant or start my own accounting practice,” Cheung recalls. “But then I found, firstly, that it’s not so easy to start a business in the Chinatown community because of the small market, and firms which had been run by Chinese accountants for around 10 years before I arrived. So after two years I switched to commerce and joined Abacus Federal Savings Bank, which serves the Chinese community.”
Secondly, Cheung found that his Institute membership was well-respected in New York. “The Institute membership is recognized by the AICPA, and in New York, they know Hong Kong very well,” he adds. “It has helped me greatly in my U.S. career.”
Cheung worked for Abacus for almost 20 years. “I joined at the very bottom as a management trainee and I learned about the operations and, because it’s a small family-owned business, the chief executive is the day-to-day manager. He trained me hands-on and I stayed there a long time.”
The role was not without its challenges. “One time in the early 1990s the bank was in a kind of crisis because it had just begun its main business of selling loans to the Federal National Mortgage Association, known as Fannie Mae,” says Cheung. “The bank was not at that time up to standard with Fannie Mae reporting requirements, and Fannie Mae was going to take away its eligibility to service loans for them if the bank didn’t change its servicing procedures.”
He worked with management to design a reporting system that was compliant. “That was an accomplishment I found interesting, and the bank went on to service US$1 billion worth of Fannie Mae loans. After reaching that milestone, I embarked on new adventures in my career – I started and operated a small tax and mortgage loan consulting business myself,” he says. “I was an ‘enrolled agent’ – a tax advisor who is authorized by the U.S. Department of the Treasury to represent taxpayers before the Internal Revenue Service (IRS) for tax issues, including audits, collections and appeals.”
Cheung found the IRS work demanding and applied for a state government financial examiner’s job advertised in the newspapers. “In my mind, I thought I had gone in a big circle – I’ve come back to working for the government, albeit in a different territory, but that was OK at my career stage,” he recalls. “It was a more stable and reliable career, and also one that would utilize my past working experience in banking, accounting and even in tax.”
After arriving New York in the 1980s, Joseph Cheung worked for a local CPA firm in Chinatown and then spent almost 20 years working at Abacus Federal Savings Bank, a bank founded by a group of business leaders from the Chinese American community.
“I chose accounting as it had a good social standing – it’s a profession that people seek advice from, and accountants are highly valued in society. I have followed this career ever since.”
Cheung, like many Hong Kong secondary school students of his day, assumed he would study engineering or medicine. “I thought I planned my career when I was in secondary school,” he says. “At that time I was following a science stream. I did well in the Hong Kong Certificate of Education Examinations, but because of poor health, I did not do well in the A-level examinations.”
That meant no university for a disappointed Cheung. “I went to Hong Kong Polytechnic [before it became a university in 1994] and studied accounting,” he says. “I chose accounting as it had a good social standing – it’s a profession that people seek advice from, and accountants are highly valued in society. I have followed this career ever since.”
Cheung soon found that accounting is not about just mathematics. “It’s numbers, management and business language in the broadest sense,” he says. “After graduation, I took the professional examinations, but I did not go through the traditional path – I did not join one of the professional firms.”
His first job wasn’t even in accounting. “I worked in a bank as a management trainee for a few months, but knowing that the experience may not count towards getting the Hong Kong Society of Accountants membership, I switched to the Hong Kong government as an accounting officer, which was more relevant.”
Cheung acknowledges that he didn’t progress very far with the government because his mind was on immigration to the U.S. “I was brought up in the 1960s, and even though I was a kid, I heard about some terrible events. The riots and the bombs in Hong Kong,” he recalls, referring to the 1967 civil disturbances. “Relatives told me horrible stories of hunger in China during the Cultural Revolution” – the violent 1966-76 socio-political upheaval in the Mainland. “I developed a phobia towards communism, so I had already planned to emigrate to another country. I wanted to improve myself and take on more challenges.”
The Cheung family had already begun to drift from Hong Kong. “My father, operated a restaurant in the U.S., and he sponsored my visa,” he says. “The whole family came over – my brothers and sisters – but they didn’t stay. They went back to Hong Kong but I liked the life here and, most importantly, I met my wife and I got married here.”
Staying business friendly
In the future, Cheung expects new technology to become more critical to his job. “We will be paying closer attention to virtual currencies and cybersecurity,” he says, adding that the U.S. is likely to go through a period of more business-friendly regulation under the administration of President Donald Trump.
While New York state is expected to continue to emphasize consumer protection – New York state requires banks to have a “basic banking” product with no minimum deposit requirement and no or low administration costs aimed at low- income residents – state financial regulation laws tend to mirror federal laws closely, and when there is a clash, U.S. law usually takes precedence in the case of federally chartered banks.
Under current trends in Washington, D.C., Cheung expects oversight over the financial sector to loosen. “Our role has been changed to more to an advisory one, rather than as a watchdog,” says Cheung. “We have taken more of the partnership role, with lighter regulation.”
Cheung stresses he’s not wholly opposed to putting some financial institutions on a longer leash. “Big banks really need stringent regulations but I think it’s reasonable to separate the level of regulations because some rules are not relevant to smaller banks,” he says. “But on the other hand,” Cheung adds, “less regulation might not be good for my career.”
Visits to Hong Kong have been less frequent over the decades, even though some of his family and friends continue to live there. “I went there last year, but I went more often when my parents were still around,” he says, adding that the city has become less of a draw as its population has grown. “I feel that it is too crowded compared with 30 years ago or even 20 years ago.”
Instead, Cheung follows Hong Kong events through social media. “I keep in touch through Facebook.” He would rather be at his suburban home in Long Island, near Queens, a borough in New York city. “In the U.S., life is easier and less hectic,” he says. “I like growing plants in my backyard and I have a pond filled with koi.”
He enjoys living in New York for a few specific reasons. “It is the financial centre of the U.S. and there are plenty of employment opportunities here. I like the variety of cultures and the liberal attitude of New Yorkers. There is also good Cantonese and Hong Kong cuisine.”
He also likes to travel locally. “I like driving around New York state, listening to country music, and there are a variety of scenic areas and hiking trails,” he says. “Upstate,” he adds, using a term New Yorkers use to describe anywhere more than about 50 kilometres north of Manhattan. One of his favourite destinations is the picturesque Niagara Falls area close to the Canadian border, about 700 kilometres northwest of New York City.
New York City and the surrounding area, including Long Island and parts of New Jersey, is home to 12 Chinatowns. The city contains the highest ethnic Chinese population of any individual city outside Asia – with upwards of 600,000 – as of 2017, according to the United States Census Bureau.