New York Attorney General Letitia James announced Monday that her office has reached settlements with Deutsche Bank National Trust Company and U.S. Bank National Association, securing $90,000 in penalties and restoring 12 Brooklyn apartments to rent-stabilized status after investigations found the banks failed to comply with New York’s rent stabilization laws.
The settlements are the first obtained through the attorney general’s de facto rent stabilization compliance program, which was launched in May 2025 to enforce rent stabilization requirements in New York City buildings that courts or state housing officials have determined are subject to those protections.
Under the agreements, Deutsche Bank will pay $42,000 and register four apartments as rent stabilized, while U.S. Bank will pay $48,000, register eight apartments as rent stabilized, and face additional civil penalties related to registration violations with the city’s Department of Housing Preservation and Development.
“No matter how big or powerful they are, banks are not above the law, and they cannot get away with failing to protect their tenants,” James said in a statement. “My office created this compliance program to ensure all New York City tenants are treated fairly. We will not hesitate to take action against any bank that attempts to circumvent our rent stabilization laws.”
According to the attorney general’s office, the compliance program has prevented 26 evictions and returned 103 apartments to rent stabilization protections since its launch.
The program focuses on enforcing de facto rent stabilization, a legal doctrine that applies to certain buildings constructed before 1974 that originally contained five or fewer apartments but were later altered to include six or more units. Courts and New York State Homes and Community Renewal, the state’s housing agency, have ruled that some of those properties remain subject to rent stabilization laws, even if the number of apartments later falls below six.
The attorney general’s office said it contacted more than 50 New York City landlords whose buildings had been determined to be de facto rent stabilized but were not registered as such with the state.
Landlords receiving compliance notices were given an opportunity to demonstrate that their properties were exempt from rent stabilization requirements. Those unable to do so were instructed to register legal regulated rents with the state, issue rent-stabilized leases, notify tenants of their rights, and certify compliance to the attorney general’s office.
The investigation involving Deutsche Bank centered on 392 Rockaway Parkway in Brooklyn. The attorney general’s office said Deutsche Bank acquired the property through a foreclosure sale in October 2024 and later attempted to evict tenants from four apartments while asserting the units were not rent stabilized.
After being informed by state officials that the apartments were covered by rent stabilization laws, Deutsche Bank withdrew the eviction proceedings, according to the settlement. The attorney general’s office said the bank later failed to respond to a compliance deadline issued in August 2025.
The investigation involving U.S. Bank focused on 8624 Glenwood Road in Brooklyn, which the bank acquired through foreclosure in September 2023. State officials determined in 2025 that the building was subject to rent stabilization laws. The attorney general’s office said U.S. Bank failed to comply with those requirements and did not respond to a compliance deadline issued in August 2025.
The settlements require both banks to bring the properties into compliance with state rent stabilization regulations and ensure tenants receive the protections afforded under those laws.
