CONGRESSWOMAN ELISE STEFANIK
On Monday, March 26, 2012, the House is scheduled to consider H.R. 4014, a bill to amend the Federal Deposit Insurance Act with respect to information provided to the Bureau of Consumer Financial Protection, under a suspension of the rules, requiring a two-thirds majority vote for passage. The bill was introduced by Rep. Bill Huizenga (R-MI) on February 13, 2012, and referred to the Committee on Financial Services. The committee held a mark-up session and ordered the legislation to be reported by a voice vote.
H.R. 4014 would amend the Federal Deposit Insurance Act by adding the Consumer Financial Protection Bureau (CFPB) to the list of covered agencies that may share information with other covered or Federal agencies without waiving any privilege applicable to the information.
The other covered agencies currently include any Federal banking agency, the Farm Credit Administration, the Farm Credit System Insurance Corporation, the National Credit Union Administration, the Government Accountability Office, and the Federal Housing Finance Agency.
The bill also amends Section 18(x) of the Federal Deposit Insurance Act to reemphasize that the submission by any person of any information to the CFPB in the course of any supervisory or regulatory process does not waive, destroy, or otherwise affect any privilege the person may claim with respect to third parties.
Under current law, sharing privileged information with a covered agency during the course of a supervisory or regulatory process does not waive attorney-client, work-product, or other privileges recognized under federal or state law.
The purpose of H.R. 4014 is to clarify that institutions regulated by the Consumer Financial Protection Bureau (CFPB) have not risked and will not waive applicable legal privileges as to third parties when they have shared or will provide information to the CFPB. The bill also makes clear that the CFPB can share such information with other Federal agencies without impacting a regulated institution's attorney-client privilege or work-product immunity as it applies to third parties. This statutory change will ensure that privileged information remains privileged.
According to H. Rept. 112-417, many supervised institutions have expressed concern that providing the CFPB privileged information could waive the institutions' privilege with respect to third parties. In response to these concerns, the CFPB stated in a bulletin that it would take reasonable and appropriate actions to assist supervised institutions in rebutting any claim that they have waived privileges by providing information to the CFPB. The CFPB has also issued a proposed rule stating that any person who submits information to the CFPB has not waived any applicable privileges. The proposed rule even provides that no waiver occurs when the CFPB shares privileged information with any state or federal agency. Richard Cordray, the Director of the CFPB, has also expressed support for a legislative clarification.
It is the Committee's intent that “any person” shall be construed to include any individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, firm, society, joint stock company, or other entity.
According to the Congressional Budget Office (CBO), “this legislation would have no impact on the federal budget; therefore, pay-as-you-go procedures do not apply.”