Alert June 04, 2013

U.S. District Court for Southern District of New York Denies OCC’s Motion to Reconsider Court’s Bank Examination Privilege Ruling

On May 23, 2013 the U.S. District Court for the Southern District of New York (the “Court”) denied the OCC’s motion to reconsider the Court’s April 9, 2013 order (the “Order”) allowing disclosure of the Bank of China’s (“BOC”) correspondence with the OCC and other bank regulators concerning apparent weaknesses in BOC’s anti-money laundering and counter-terrorism (“AML/CTF”) program.  The OCC had argued in its brief, filed on May 10, 2013, seeking reconsideration of the Order that the OCC, as holder of the Bank examination privilege, must be provided an opportunity to review the OCC-BOC correspondence proposed to be disclosed and to assert the bank examination privilege and object to production of those documents prior to their production in civil litigation.  The arguments asserted in the OCC’s May 10, 2013 brief were described in the May 21, 2013 Financial Services Alert.  In the Court’s May 23, 2013 Opinion and Order, the Court stated that the standard for reconsideration is that to prevail, the moving party must point to controlling decisions or data that the Court overlooked and that might reasonably be expected to change the Court’s decision.

Even though some of the documents for which disclosure was sought included the OCC’s bank examination reports, OCC evaluations of BOC policies and practices, OCC recommendations to BOC and other communications concerning apparent deficiencies in BOC’s AML/CTF compliance program, the Court denied the OCC’s motion to reconsider and concluded that the OCC failed to establish the applicability of the bank examination privilege to disclosure of the documents in dispute.