FDIA Amendments Allow Supervised Institutions to Submit Privileged Materials to the CFPB Without Waiving Privilege

February 1, 2013 at 4:35 pm Leave a comment

On December 20, 2012, President Obama signed into law an amendment to 12 U.S.C. § 1828(x) of the Federal Deposit Insurance Act, which expressly provides that any person subject to examination by the Bureau of Consumer Financial Protection (the “CFPB”) will not waive any privilege attached to materials or communications disclosed to the CFPB as long as the disclosure is made “for any purpose in the course of any supervisory or regulatory process.”  Prior to this amendment, institutions subject to examination by the CFPB faced a difficult decision when asked by the CFPB to produce privileged materials: (1) produce the requested information and risk that a court in a future proceeding would hold that the disclosure waived the privilege and, as a result, compel the institution to produce the privileged material in the proceeding, or (2) refuse to produce the privileged material and face an enforcement action by the CFPB.  Now, CFPB-supervised institutions may disclose materials requested by the CFPB without the fear that such disclosure will result in a waiver of privilege in a future proceeding.  This amendment is beneficial for both supervised institutions and the CFPB as it will also enhance communication between the CFPB and the institutions it supervises, which should result in more effective oversight by the CFPB.

Click here to view the full text of the amendment. 

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