Joint Trades Letter to CFPB re Information Sharing Proposal



October 24, 2016

Via Electronic Mail



Ms. Monica Jackson

Office of the Executive Secretary Consumer Financial Protection Bureau 1275 First Street NE

Washington, DC 20002



Docket No. CFPB–2016–0039, RIN 3170–AA63



Re: Comments in Response to the Notice of Proposed Rulemaking

Amendments Relating to Disclosure of Records and Information.


Ladies and Gentlemen:


The Clearing House Association L.L.C., the American Bankers Association, the Consumer Bankers Association, the Financial Services Roundtable, the Housing Policy Council, and the U.S. Chamber of Commerce (collectively, the “Associations”)1 appreciate the opportunity to comment on the amendments proposed by the Consumer Financial Protection Bureau (the “Bureau”) to (i) the procedures used by the public to obtain information from the Bureau under the Freedom of Information Act, the Privacy Act of 1974, and in legal proceedings, and (ii) its rule regarding the confidential treatment of information obtained from persons in connection with the exercise of its authorities under federal consumer financial law (the “Proposal” or the “NPR”).2


The Bureau proposes to amend its rules related to information and records disclosure in order to “clarify, correct, and amend certain provisions based on its experience over the last several years” in exercising its authority to regulate consumer financial products and services and protecting and disclosing information related thereto.3   The Bureau states that, since its creation, it “has sought to provide maximum protection for confidential information, while ensuring its ability to share or disclose information to the extent necessary to achieve its mission.”4


We appreciate the Bureau’s recognition of the importance of providing maximum protection to sensitive information and its efforts to provide additional clarity and transparency regarding its information protection and disclosure practices.  However, we believe that certain of the Bureau’s proposed amendments would inappropriately and unnecessarily expand the universe of entities that could receive protected information.  Any such expansion would exceed the applicable statutory limits on the Bureau’s authority to share confidential information and, if adopted, could lead to inappropriately broad disclosure of confidential information that may significantly damage institutions supervised by the Bureau—including a potential breach of a supervised institution’s legal privileges should the materials be shared beyond the scope contemplated by Section 1828(x) of the Federal Deposit Insurance Act (the “FDI Act”). Because these aspects of the Proposal would do significant harm while providing few, if any, corresponding benefits to the Bureau in carrying out its statutory mandate, we urge the Bureau to remove them from any final rule or procedures.


More generally, we also believe that several of the Bureau’s rules on confidentiality create unwarranted compliance risks for supervised institutions without furthering the policies that promote the confidentiality regime.  In order to ensure compliance, institutions seek greater clarity as to how they should handle supervisory and other confidential information in the possession of the institutions.


Part I of this letter provides an executive summary of our comments, while Parts II through VI identify our core concerns with the Proposal, recommend specific changes to address those concerns and identify several aspects of the Proposal and the Bureau’s practices regarding confidential information disclosure more broadly that merit further clarification...(Continue Reading)