WASHINGTON (4/18/12)--The Credit Union National Association (CUNA) has urged the Consumer Financial Protection Bureau (CFPB), which sought comments on a proposal that is intended to protect privileged information provided to the agency, to postpone its rulemaking pending action in the Senate on legislation to accomplish similar goals.
A recent CFPB proposal seeks to clarify that protections such as the attorney-client privilege would not be waived when information is provided to the CFPB and when such information is transferred from the CFPB to other federal or state agencies.
However, there is a concern, CUNA said, because the CFPB does not have statutory authority to ensure that will be the case.
Legislation that would provide these types of protections passed the House earlier this year, and similar legislation could soon be considered in the Senate.
CUNA Deputy General Counsel Mary Mitchell Dunn in a comment letter said it is concerned that the CFPB's intent to address privacy issues on its own could encourage the Senate not to act, "thus foregoing an important opportunity to provide a stronger statutory basis for the protection of privilege than the CFPB's rule would afford, given the current uncertain legal foundation."
The letter also noted that the CFPB may not have the statutory authority to alter rules that generally govern when privileged information is and is not protected. "This doubt will persist even in the face of regulatory amendments that purport to have the force of law, even though that is the agency's objective by seeking public comments," the letter added.
If new privacy protections are, eventually, implemented, CUNA encouraged the CFPB to set parameters on the kinds of materials that the agency will request from financial institutions that it supervises and to first seek information that is not privileged.
For the full comment letter, use the resource link.