On March 26, 2012, the House of Representatives passed H.R. 4014, which would amend Sections 11(t) and 18(x) of the Federal Deposit Insurance Act, 12 U.S.C. §§ 1821(t), 1828(x), to add the Bureau to the laundry list of Federal agencies that may share attorney-client privileged information with other Federal agencies without the privilege being waived.

The purpose of the bill is twofold. First, it clarifies (at least to the extent that Congress has power under the commerce clause to regulate the attorney-client privilege, which is not a matter entirely free from doubt) that any regulated entity subject to CFPB jurisdiction will not be deemed to have waived the attorney-client privilege as to any third party with or to which the Bureau may share or provide pursuant to §§ 1821(t) and 1828(x). Second, the bill explicates the Bureau’s authority to share and provide information under those provisions in pari materia with the other enumerated Federal agencies.
As previously chronicled in a blog by Chris Willis and an E-Alert of mine, the Bureau itself has initiated a rulemaking proceeding with substantially similar goals. The proposed rule is somewhat broader than H.R. 4014 in two respects: it also covers the attorney work product doctrine and it extends anti-waiver protection to State agencies (e.g., State Attorneys General) as well as Federal entities with which the Bureau may share confidential supervisory information.

Of the existing statutes, only § 1828(x) covers some State actors, namely State bank supervisors, but not any other State entities (including State Attorneys General or other law enforcement agencies). As far as work product protected information is concerned, H.R. 4014 provides no protection from waiver except to the extent that the information in question constitutes both work product and attorney-client privilege. By the same token, neither H.R. 4014 nor the Bureau’s proposed rule provides any protection for proprietary data, trade secrets, or other confidential information provided to the Bureau during the examination process and passed on to other federal and state authorities. (Note in that regard that the Trade Secrets Act, 18 U.S.C. § 1905, mentions the bank regulatory agencies by name but not the Bureau, which means that the Bureau is not covered by that statute; H.R. 4014 does nothing to fix that).
One interesting — and potentially controversial — aspect of congressional action on this issue is that it calls into question the authority of the Bureau to engage in rulemaking on this subject. A companion bill to H.R. 4014 (S.2099) was introduced in the Senate last month and was referred to the Senate Banking Committee.