PRIVILEGED INFORMATION: Several state bar associations have joined the ABA in urging their senators to pass S. 3394, legislation to protect the attorney-client privilege during the bank examination process. The legislation, already passed by the House as H.R. 4014, would create a single, consistent standard for the treatment of privileged information submitted to all federal agencies that supervise banks, including the new Consumer Financial Protection Bureau (CFPB). Although the Federal Deposit Insurance Act protects the privileged status of information that banks and other supervised entities provide to any “federal banking agency,” including the Federal Deposit Insurance Corporation and the Federal Reserve Board, the CFPB currently is not explicitly included in the act’s definition of that term. “By explicitly applying the same privilege standards to information submitted to the CFPB that currently apply to any submissions to a ‘federal banking agency,’ S. 3394 would help ensure a more integrated, consistent and coordinated approach to the regulation of financial services providers,” ABA President Laurel G. Bellows wrote to the Senate Banking, Housing and Urban Affairs Committee Sept. 20. So far, five state bars – the Illinois State Bar Association, The Missouri Bar, the Ohio State Bar Association, the Oregon State Bar and the North Carolina Bar Association – have written to their senators in support of the legislation, and more bar associations are expected to convey their support in the next several weeks. The association is urging the Senate to act on the bill during the lame duck session that began Nov. 13.
GATEKEEPER REGULATIONS: The ABA continues to oppose legislation that the association maintains would impose burdensome federal mandates on state incorporation practices and subject many lawyers to the anti-money laundering and suspicious activity reporting requirements of the Bank Secrecy Act when they help clients establish companies, trusts or certain other entities. The legislation, S. 1483, is intended to combat terrorism, money laundering, tax evasion and other wrongdoing by U.S. companies with hidden owners. The bill would require states to obtain a list of the beneficial owners of each corporation or LLC formed under their laws, maintain the information for a period of years after a company is terminated, and provide the information to law enforcement upon receipt of a subpoena or summons. The ABA is concerned that S. 1483 and its House companion, H.R. 3416, could compel lawyers to disclose privileged or confidential client information to government officials. The ABA and a number of specialty bar associations have developed and are promoting the “Voluntary Good Practices Guidance for Lawyers to Detect and Combat Money Laundering and Terrorist Financing,” an effort to fight money laundering and terrorist financing in ways that minimize the impact on the confidential lawyer-client relationship. The Senate Homeland Security and Governmental Affairs Committee postponed markup of S. 1483 twice this fall, but there remains a possibility that the committee may take up the bill during the lame duck session.
EDUCATING FOSTER CHILDREN: The ABA expressed strong support Nov. 15 for H.R. 5871 and S. 3472, legislation to promote educational success for children in foster care. In letters to bill sponsors Rep. Karen Bass (D-Calif.) and Sens. Mary Landrieu (D-La.) and Charles Grassley (R-Iowa), ABA Governmental Affairs Director Thomas M. Susman thanked them and the other cosponsors of the bills for introducing the legislation. In the letter, Susman explained that child welfare agencies often face difficulty and delays in obtaining education records for children in their care under restrictions in the Family Educational Rights and Privacy Act of 1974 (FERPA). Without records, these agencies have trouble ensuring that children are in school, in the right schools, and attending classes that will help them become healthy and productive adults. The bill, known as the Uninterrupted Scholars Act, would clarify FERPA as it pertains to sharing education records with child welfare agencies. Susman emphasized that the ABA has long supported the educational needs and outcomes of children in out-of-home care who are some of the most educationally at-risk children in the nation. The legislation, he said, “respects student privacy and the important role parents have in the education of their children, but eliminates confusion and obstacles that currently exist for children in foster care.”