Banks and consumers concerned about waiving attorney-client privilege can now rest easy when submitting privileged information to the Consumer Financial Protection Bureau (CFPB). Congress recently passed legislation confirming such submissions will not waive privileged status as to third parties, consistent with existing law with respect to submissions to other federal banking agencies.
On December 20, 2012, President Obama signed H.R. 4014, protecting privileged information submitted to the CFPB, a federal supervisory entity created by the Dodd-Frank Act of 2010. The bill was passed by the House in March and by the Senate in December, and was strongly supported by the American Bar Association, numerous state bar associations, and the U.S. Chamber of Commerce.
H.R. 4014 clarifies that when financial institutions and other entities supervised by the CFPB submit privileged information, they do not waive attorney-client privilege as to third parties, and the CFPB can share such information with other federal agencies without affecting its privileged status. Although provisions protecting privileged information submitted by banks to other supervisory agencies, such as the FDIC and Federal Reserve Board, have previously existed, the Dodd-Frank Act did not clearly specify whether these provisions would apply to information submitted to the CFPB as well. The passage of H.R. 4014 creates a uniform standard for treatment of privileged information submitted to any federal banking agency.
This development should reassure and encourage banks and consumers to seek legal advice when dealing with the CFPB without the worry that attorney-client privilege will be waived.