Alert July 10, 2012

CFPB Adopts Final Rule on Privileged Information

The CFPB adopted a final rule on the confidential treatment of privileged information, which strengthens the January 2012 guidance bulletin on the issue (see February 21, 2012 Alert).  According to the CFPB’s press release, the rule offers additional assurances to supervised entities that submitting privileged information to the CFPB will not waive the privilege.  The rule also clarifies that the CFPB’s transfer of privileged information to federal regulators or state agencies does not waive the privilege.  The rule applies to attorney work product and other privileged information. 

The rule also addresses industry concerns with the CFPB’s interpretation of Section 1061(b) of the Dodd-Frank Act – that Dodd-Frank grants the CFPB a prudential regulator’s authority to obtain privileged information from banks without effecting a waiver.  In response, the CFPB noted that the validity of the rule is based on its general rulemaking authority under Section 1022(b)(1) of the Dodd-Frank Act, as opposed to its authority to compel the submission of privileged information.  On the strength of this argument, the CFPB further stated that while it supports a legislative fix, it does not think it is necessary.