CFPB and the Attorney Client Privilege

         One of the “hot topics” since the Consumer Financial Protection Bureau (“CFPB”) was established and, particularly since it has begun its supervisions, is the issue of the attorney/client privilege and waiver of confidential attorney/client communications.  Whether through oversight or design, the federal statute addressing confidentiality of submissions to a federal banking agency was not amended to include the CFPB as a federal banking agency as part of the Dodd-Frank Act.[1]    With the CFPB requesting information as part of its enforcement and examination  processes, this omission has become more important and has resulted in CFPB Guidance, a CFPB Rule, and now proposed federal legislation.

         On January 4, 2012, the CFPB issued its Guidance 12-01 in which the CFPB took the position that confidentiality would not be waived by providing documents to the CFPB.  Many attorneys and legal scholars disagreed with this position.  Accordingly, institutions refused to provide confidential documents to the CFPB. 

         The CFPB then promulgated a rule which was effective August 6, 2012, which declared that providing documents to the CFPB would not waive confidentiality and further declared that this provision would also be applicable to joint examinations and investigations.[2]

         Senate Bill 3394 proposes to amend the relevant statutes so as to include the CFPB within the definition of a federal banking agency under 12 USC § 1828(x) and to add the CFPB to the list of agencies that may share privileged information with other agencies  without causing a waiver of confidentiality pursuant to 12 USC § 1821(t).  The proposed bill has wide support from the agencies, the American Bar Association, and private counsel.  There is optimism that the bill will pass following the election. 

         In the meantime, the CFPB has stated that it will continue to adhere to its policy to request submission of privileged information only when it determines that such information is material to supervisory objectives and that it cannot practicably obtain the same information from non-privileged sources and to its policy of giving due consideration to supervised institutions’ requests to limit the form and scope of any request for privileged information.  The CFPB has stated that it will not routinely share confidential supervisory information with agencies that are not engaged in supervision.  It has also stated that, except where required by law, the Bureau’s policy is to share confidential supervisory information with law enforcement agencies, including state attorneys general, only in very limited circumstances and upon a review of all relevant facts and considerations.[3] 

         Should your institution receive a notice of examination or request for information from the CFPB, it is very important that you immediately contact your counsel for guidance in responding appropriately.  This is not an area in which you should attempt to respond without advice from experienced counsel.

 These materials are presented for informational purposes only and are not intended to constitute legal advice.



[1] 12 USC § 1828(x).

[2] 12 CFR 1070.48 and Amended 12 CFR 1070.47(c).

[3] See CFPD Bulletin 12-01 and CFPD Rule Summary.

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