CFPB Issues Proposed Rule on Privileged Information Obtained from Supervised Entities and House Passes Bill that Would Authorize It, But Concern Remains About Erosion of Attorney-Client Privilege

Pepper Hamilton LLP Client Alert  – April 2, 2012

The Consumer Financial Protection Bureau (the Bureau) announced a proposed rule (the Proposed Rule) to codify protections for privileged information obtained by the Bureau from financial institutions and other entities it supervises. The Proposed Rule provides that any supervised entity that submits privileged material to the Bureau (such as communications with counsel) in the course of the supervisory process does not waive the privilege.

On March 26, 2012, the House of Representatives passed H.R. 4014, a bill that if enacted into law would provide clear statutory authority for the Proposed Rule. Serious concern remains, however, that even if authorized by statute the Bureau’s policy of requiring supervised entities to provide privileged material to the Bureau, even without waiver of privilege, will ultimately result in erosion of the attorney-client privilege.

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For additional information, please visit Pepper’s Financial Services Reform Resource Center.