U.S. Consumer Bureau Issues Rule on Attorney-Client Privilege

The U.S. Consumer Financial Protection Bureau issued a final rule under which it pledges to honor attorney-client privilege when it shares information from banks with other federal and state agencies.

“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,” Richard Cordray, the bureau’s director, said in an e-mail statement. “This new rule supports the free flow of information that is essential to an effective supervision program.”

In January, the bureau advised banks that it supervises -- those with more than $10 billion in assets -- that giving CFPB information doesn’t waive any associated privilege. The rule states that privilege also remains intact if the bureau shares information with other federal or state agencies, it said in the statement.

Bank lawyers have argued that the CFPB could obtain information covered by attorney-client privilege and share it with other officials, notably state attorneys general. The bureau is not covered by a 2006 law that requires other regulators like the Federal Deposit Insurance Corp. to respect this privilege.

Cordray said on Jan. 12 that he wouldn’t oppose a legislative push by lenders to have the bureau added to the roster of agencies bound by the law. The House passed such a bill on March 26. Senator Tim Johnson, the South Dakota Democrat who leads the Banking Committee, introduced similar legislation in the Senate on Feb. 9.