Removing Barriers Blog

CUNA Opposes CFPB Information Sharing Proposal
Posted October 24, 2016 by CUNA Advocacy

Last week, CUNA filed a letter opposing a CFPB proposal that would greatly expand the CFPB’s discretion to release more information to more entities. While information sharing is a critical component to ensuring the safety and soundness of financial institutions, the vast expansion of information sharing contemplated by the proposal could increase the risk of unintended disclosures and a loss of confidentiality, which could ultimately harm consumers. 

The proposal would revise aspects of a rule adopted by the CFPB in 2013 that addresses disclosure of certain records and confidential information by and with the Bureau as well as by and with financial institutions. While the proposal is intended to “to clarify, correct, and amend certain provisions based on [the Bureau’s] experience over the last several years,” it appears to go well beyond the scope of clarification, and in some instances even beyond statutory authority. 

As described in our letter, we have concerns with a number of proposed revisions to the existing rule. For example, the proposal would amend a section of the current rule that allows the Bureau to share certain confidential information only with other agencies that have jurisdiction over the financial institution at issue. The proposal would eliminate the requirement that the other agency have jurisdiction. 

Another proposed change would define the term “agency” to include not only a state or federal authority—which we are fine with—but also “an entity exercising governmental authority.” Such a broad definition would permit the Bureau to share confidential information with non-governmental entities, including “registration and disciplinary organizations like state bar associations.” We oppose these and other aspects of the proposal because they are unnecessary, dangerous, and in some instances contrary to statutory language.