The Consumer Financial Protection Bureau announced a rule on Monday that would codify certain protections for confidential information obtained by the agency through examinations of regulated financial institutions.
Before Dodd-Frank, confidential information obtained through bank examinations was assuredly privileged information. Now that the CFPB has taken over the examinations, there has been uncertainty regarding whether or not that information will still remain privileged.
The CFPB said in January that privileged information received from financial institutions would remain confidential with respect to third parties. The privilege rule is meant to provide added assurance to regulated firms that providing confidential information will not affect the level of privacy and will remain privileged information.
The rule will also specify that information forwarded to state and other federal agencies does not affect the confidentiality of the information. The CFPB will open a 30 day comment period on the rule once it is published in the Federal Register.
In February, the American Bar Association petitioned Congress to enact legislation that would ultimately create a consistent method of handling privileged information from banks. Some lawmakers have already tried passing legislation, including H.R. 4104, passed by the House Committee on Financial Services in February, and S. 2099, that ensure that the information received by the CFPB from financial institutions remains confidential.