“We are committed to safeguarding the confidential information of the institutions we supervise to ensure the Bureau is best equipped to do its job and protect consumers,” CFPB Director Richard Cordray said, according to The Hill. “This new rule supports the free flow of information that is essential to an effective supervision program.”
U.S. financial institutions have voiced concern regarding the treatment of information it provides to the consumer watchdog throughout the regulatory process. The CFPB promised initially that the information would remain confidential, but many institutions worried that the information would be shared with a third party, presenting an opportunity for costly lawsuits. The rules presented by the CFPB are intended to provide assurance to those institutions.
Under the new CFPB rules, the agency assured institutions that in providing confidential information to the CFPB, the institution would not waive its right to confidentiality. Additionally, the rules mandate that the CFPB may share information with other regulators without violating confidentiality, The Hill reports.
The rule is similar to past measures, including the privilege-preservation provisions that would apply to information submitted by banks to their designated regulators. The American Bankers Association has pressured the CFPB to provide institutions with maximum legal assurance through the continued support of legislation that would grant express statutory protection to those institutions subject to CFPB oversight.
The rule is set to take effect 30 days after its publication in the Federal Register.