The director of the Consumer Financial Protection Bureau will have too much discretion to disclose sensitive information, according to the National Association of Federal Credit Unions.
According to Dillon Shea, NAFCU’s Regulatory Affairs Counsel, the agency’s interim final rule for disclosure of records and information exceeds the authority policies for the Federal Reserve and the National Credit Union Administration.
Once a director is nominated, he or she will have “considerably more authority to disclose any confidential information to the extent permitted by law, without any substantive or procedural protections to ensure that there is a pressing need for such disclosure,” Shea wrote in an official comment, according to NAFCU.org.
Shea recommended that the bureau revise the section of the rule to give the director similar disclosure policies that other banking regulators abide by.
Without reining in that authority, the director will have “considerable latitude” to disclose information, specifically relating to exams and supervision, Shea wrote, according to NAFCU.org.
With the existing rule, the director is able to disclose confidential information as long as the disclosure is not prohibited by law.
“The fact that the rule provides virtually no check on the director’s authority to disclose such information is troubling,” Shea wrote, according to NAFCU.org.
NAFCU is also advocating against a plan to make consumer complaints against financial institutions public as well as voicing concern that the interim final rule would allow records that were exempt from disclosure under the Freedom of Information Act to be made public after 10 years.
The NCUA, according to NACFU.org, has a policy of holding all examination-related documents confidential, privileged and exempt from disclosure.
The NCUA also does not have a sunset provision for protection of business information.