ABA strongly supported CFPB inclusion
The Senate gave final approval Dec. 11 to H.R. 4014, legislation strongly supported by the ABA to protect privileged information submitted to the Consumer Financial Protection Bureau (CFPB).
After clearing the Senate and House, the legislation was presented to President Obama, who is expected to sign it.
The bill, H.R. 4014, clarifies that when banks and other supervised entities submit privileged information to the CFPB, which was established by the Dodd-Frank Act of 2010, the privilege will not be waived as to any third parties and the CFPB can share the information with other federal agencies without affecting its privileged status. Because existing law accorded similar protections to the other major federal bank regulators such as the FDIC and the Federal Reserve Board but not explicitly to the newly created CFPB, H.R. 4014 will provide much needed certainty to business lawyers and their clients by creating a single, consistent standard for the treatment of privileged information submitted to all federal banking agencies.
“It is very encouraging to see the Senate and the House come together to protect cardinal values like the attorney-client privilege,” ABA President Laurel G. Bellows said. She had urged Senate leaders this fall to promptly take up the legislation during the lame duck session after the House overwhelmingly passed the bill in March. Bellows said the legislation would safeguard the privilege while also helping to “ensure a more integrated, consistent and coordinated approach to the regulation of financial service providers.”
“This is a clear win for lawyers, their clients and the public,” Bellows said, “The attorney-client privilege is a bedrock legal principle that is essential to providing effective counsel. This legislation removes the barriers that may have discouraged clients – be they banks or average consumers – from seeking legal advice. In fact, this new legislation encourages clients to obtain their lawyers’ guidance to comply with the law.”
By creating a uniform standard for the treatment of privileged information submitted to any of the federal banking agencies, including CFPB, the legislation will advance key financial regulatory reform principles adopted by the ABA in 2009 that were developed by the association's Task Force on Financial Markets Regulatory Reform. The ABA worked closely with the U.S. Chamber of Commerce and 13 state and local bars across the country to advocate for prompt Senate passage of the legislation. Those bars were the Alabama State Bar, the Illinois State Bar Association, The Mississippi Bar, The Missouri Bar, the State Bar of Nevada, the New York State Bar Association, the Association of the Bar of the City of New York, the North Carolina Bar Association, the Ohio State Bar Association, the Oregon State Bar, the Pennsylvania Bar Association, the South Carolina Bar, and the Tennessee Bar Association.