In early April, when The New York Times reported that the Justice Department would grant Credit Suisse a deferred prosecution agreement for actively aiding tax evasion, it seemed yet another bank would pay a paltry penalty for major misconduct. Credit Suisse would owe only a fine for helping rich Americans hide their wealth from taxes in Switzerland. And those wealthy clients would get off scot-free, with their Swiss bank accounts still secret.

But a funny thing happened on Credit Suisse’s way to legal impunity: a new inquiry from the relatively obscure New York Department of Financial Services (DFS). Under the direction of former federal prosecutor Benjamin Lawsky, DFS has reportedly requested documents from Credit Suisse and a Senate subcommittee investigation, seeking to learn whether Credit Suisse executives based in New York lied to state regulators about their role in creating offshore tax havens. In the current climate of financial regulation, where investigations rarely impact the individual employees who design and perpetrate misdeeds, this was a bold step—one that could force the Justice Department to toughen up. Imposing a less stringent penalty than a state regulator would humiliate the feds.

A few years ago, Lawsky’s agency didn’t even exist. Now it’s a player in virtually every major bank scandal, investigating money laundering, market manipulation, accounting fraud, and faulty mortgage servicing, to name just a few. While DFS cannot indict individuals or convene a grand jury, its unorthodox and uncompromising methods can inform other regulators, or even embarrass them into stronger action. Given the persistent and deserved criticism over the lack of consequences for the architects of the financial crisis and its aftermath, such competition fills a glaring gap. By actually enforcing the rules, Ben Lawsky could save the financial regulatory apparatus from itself.

“When a corporation does wrong, it has to be that individuals who work at the corporation have done wrong,” Lawsky said in an interview. “The corporation itself doesn't sit around and say, ‘should we as a corporation engage in this conduct?’ It's just people. We've come to believe, if you're finding serious wrongdoing, but can't find individuals who committed that wrongdoing, you’ve just stopped looking.”

Lawsky’s efficacy has been surprising, given that his office originated not as a high-minded alternative to Wall Street’s failed regulators, but rather as a power play by New York Governor Andrew Cuomo. Cuomo, the former state attorney general, famously doesn’t get along with his successor, Eric Schneiderman. One of Cuomo’s first acts as governor was to combine the state Banking and Insurance Departments, both dating back to the 19th century, into a new agency with expanded powers, many of which overlapped with Schneiderman’s. While DFS and Schneiderman’s office have worked together on occasion, many believed Cuomo was creating a parallel cop on the beat to undermine his rival.