This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

15286 

Vol. 77, No. 51 

Thursday, March 15, 2012 

1See Public Law 111–203, section 1011(a) (2010). 

2See Dodd-Frank Act § 1025(b)(1), (d), 12 U.S.C. 

5515(b)(1), (d); see also Dodd-Frank Act § 1029A, 12 

U.S.C. 5511 note (stating that this provision 

becomes effective on the designated transfer date, 

established by the Secretary of the Treasury as July 

21, 2011). The Bureau also has certain supervisory 

authorities with respect to other depository 

institutions and credit unions, as well as the service 

providers to a substantial number of such 

institutions. See Dodd-Frank Act § 1026(b), (c), (e), 

12 U.S.C. 5516(b), (c), (e). 

3See Dodd-Frank Act § 1061, 12 U.S.C. 5581. The 

prudential regulators are the Office of the 

Comptroller of the Currency (OCC), the Board of 

Governors of the Federal Reserve System (Board), 

the Federal Deposit Insurance Corporation (FDIC), 

the National Credit Union Administration (NCUA), 

and the former Office of Thrift Supervision (OTS). 

See Dodd-Frank Act § 1002(24), 12 U.S.C. 5481(24). 

4See Dodd-Frank Act § 1024(b), 12 U.S.C. 

5514(b). The Bureau also has supervisory authority 

over service providers to such institutions. See 

Dodd-Frank Act § 1024(e), 12 U.S.C. 5514(e). 

5See Financial Services Regulatory Relief Act of 

2006 (FSRRA), Public Law 109–351, § 607 (2006), 

codified at 12 U.S.C. 1785(j), 1828(x). 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1070 

[Docket No. CFPB–2012–0010] 

RIN 3170–AA20 

Confidential Treatment of Privileged 

Information 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Proposed rule; request for 

public comment. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau or CFPB) is 

publishing for notice and comment 

proposed amendments to 12 CFR part 

1070, subpart D, its rules relating to the 

confidential treatment of information 

obtained from persons in connection 

with its exercise of authorities under 

Federal consumer financial law. The 

proposed amendments will add a new 

section to these rules providing that the 

submission by any person of any 

information to the Bureau in the course 

of the Bureau’s supervisory or 

regulatory processes will not waive or 

otherwise affect any privilege such 

person may claim with respect to such 

information under Federal or State law 

as to any other person or entity. In 

addition, the Bureau is proposing to 

readopt 12 CFR 1070.47(c) in modified 

form to provide that the Bureau’s 

provision of privileged information to 

another Federal or State agency does not 

waive any applicable privilege, whether 

the privilege belongs to the Bureau or 

any other person. 

DATES: Written comments must be 

received on or before April 16, 2012. 

ADDRESSES: Interested parties are 

invited to submit written comments 

electronically or in paper form. Because 

paper mail in the Washington, DC area 

and at the Bureau is subject to delay, 

commenters are encouraged to submit 

comments electronically. You may 

submit comments by any of the 

following methods: 

• Electronic: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Monica Jackson, Office of the 

Executive Secretary, Consumer 

Financial Protection Bureau, 1700 G 

Street NW., Washington, DC 20552. 

• Hand Delivery/Courier: Monica 

Jackson, Office of the Executive 

Secretary, Consumer Financial 

Protection Bureau, 1700 G Street NW., 

Washington, DC 20552. 

Instructions: All submissions must 

include the agency name and docket 

number or Regulatory Information 

Number (RIN) for this rulemaking. In 

general, all comments received will be 

posted without change to http:// 

www.regulations.gov. In addition, 

comments will be available for public 

inspection and copying at 1700 G Street 

NW., Washington, DC 20552 on official 

business days between the hours of 10 

a.m. and 5 p.m. Eastern Time. You can 

make an appointment to inspect the 

documents by telephoning (202) 435– 

7275. 

All comments, including attachments 

and other supporting materials, will 

become part of the public record and 

subject to public disclosure. Submit 

only information that you wish to make 

available publicly. Do not include 

sensitive personal information, such as 

account numbers or Social Security 

numbers. Comments will not be edited 

to remove any identifying or contact 

information, such as name and address 

information, email addresses, or 

telephone numbers. 

FOR FURTHER INFORMATION CONTACT: John 

R. Coleman, Senior Litigation Counsel at 

(202) 435–7254, Office of General 

Counsel, Consumer Financial Protection 

Bureau. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Title X of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(Dodd-Frank Act) established the 

Bureau as an independent agency 

within the Federal Reserve System 

responsible for regulating the offering 

and provision of consumer financial 

products and services under the Federal 

consumer financial laws.1 On July 21, 

2011, the Bureau assumed the authority 

to supervise insured depository 

institutions and credit unions with total 

assets of more than $10,000,000,000, as 

well as their affiliates and service 

providers, for compliance with Federal 

consumer financial law and other 

related purposes.2 This supervisory 

authority transferred to the Bureau from 

the prudential regulators, and all 

‘‘powers and duties’’ of the prudential 

regulators ‘‘relating’’ to this transferred 

authority were granted to the Bureau.3

Congress also provided the Bureau with 

nearly identical authority to supervise 

certain nondepository institutions.4 The 

entities subject to the Bureau’s 

supervisory authority are referred to 

herein as ‘‘supervised entities.’’ 

In exercising its supervisory 

authority, the Bureau will at times 

request from its supervised entities 

information that may be subject to one 

or more statutory or common law 

privileges, including, for example, the 

attorney-client privilege and attorney 

work product protection. The prudential 

regulators have taken the position that 

a supervised institution’s submission of 

privileged information to its regulator 

does not waive any applicable privilege 

with respect to any third person, a 

position Congress codified in 2006 

through amendments to the National 

Credit Union Act and the Federal 

Deposit Insurance Act.5

The Dodd-Frank Act does not 

explicitly address whether the 

submission of privileged information to 

the Bureau in the course of the Bureau’s 

supervisory or regulatory processes will 

affect any privilege a supervised entity 

may claim with respect to such 


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6See Dodd-Frank Act § 1022(c)(6)(A), 12 U.S.C. 

5512(c)(6)(A). ‘‘Federal consumer financial law’’ 

includes Title X of the Dodd-Frank Act and all rules 

promulgated thereunder. See Dodd-Frank Act 

§ 1002(14), 12 U.S.C. 5481(14). 

7See Dodd-Frank Act § 1022(b)(1), 12 U.S.C. 

5512(b)(1). 

8See 12 U.S.C. 1785(j), 1828(x). 

9See Dodd-Frank Act § 1025(b)(1); 12 U.S.C. 

5515(b)(1). The Bureau will supervise 

nondepository supervised entities for the same 

purposes. See Dodd-Frank Act § 1024(b), 12 U.S.C. 

5514(b). 

10See OCC Interpretive Letter, 1991 WL 338409 

(Dec. 3, 1991); Statement of Julie L. Williams, First 

Senior Deputy Comptroller and Chief Counsel, 

Office of the Comptroller of the Currency, before the 

U.S. House Subcommittees on General Oversight 

and Investigations and on Financial Institutions and 

Consumer Credit, Committee on Financial Services, 

on Coordination and Information Sharing among 

Financial Institution Regulators, 20 No. 2 OCC Q.J. 

45, 2001 WL 1002162 (Mar. 6, 2001). 

11See Statement of Julie L. Williams, First Senior 

Deputy Comptroller and Chief Counsel, Office of 

the Comptroller of the Currency, before the Senate 

Committee on Banking, Housing and Urban Affairs, 

Hearing: Consideration of Regulatory Relief 

Proposals, 2006 WLNR 3558037 (Mar. 1, 2006). 

12 Id.; see also Testimony of Donald L. Kohn, 

Member of the Board of Governors of the Federal 

Reserve System, before the Senate Committee on 

Banking, Housing and Urban Affairs, Regulatory 

Relief—Part 1, 2006 WLNR 3557970 (Mar. 2, 2006) 

(supporting passage of the selective waiver 

provision because it would ‘‘[f]acilitate the flow of 

information during the supervisory process by 

clarifying that depository institutions and others do 

not waive any privilege they may have with respect 

to information when they provide the information 

to a federal, state, or foreign banking authority as 

part of the supervisory process.’’). 

information. Congress, however, did 

provide that all the powers and duties 

of the prudential regulators relating to 

their transferred consumer financial 

protection functions would be granted 

to the Bureau, and this grant of 

authority encompasses the ability to 

receive privileged information from 

supervised entities without effecting a 

waiver. Moreover, Congress delegated 

authority to the Bureau to ‘‘prescribe 

rules regarding the confidential 

treatment of information obtained from 

persons in connection with the exercise 

of its authorities under Federal 

consumer financial law.’’ 6 Pursuant to 

this and other rulemaking authority, 

including the authority to prescribe 

rules it determines are ‘‘necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of the Federal consumer 

financial laws, and to prevent evasions 

thereof,’’ 7 the Bureau proposes to 

promulgate a rule providing that a 

person’s submission of information to 

the Bureau in the course of its 

supervisory or regulatory processes does 

not thereby waive any privilege the 

person may claim with respect to such 

information as to any person other than 

the Bureau. 

On July 28, 2011, the Bureau issued 

a rule providing that ‘‘[t]he provision by 

the CFPB of any confidential 

information pursuant to [12 CFR part 

1070, subpart D] does not constitute a 

waiver, or otherwise affect, any 

privilege any agency or person may 

claim with respect to such information 

under federal law.’’ 12 CFR 1070.47(c). 

The Bureau proposes to readopt this 

rule in modified form to clarify that it 

is intended to be a rule with the force 

and effect of law and to provide the 

public with an additional opportunity to 

comment upon the rule and the 

Bureau’s rationale for issuing the rule. 

The Bureau is in the process of 

reviewing comments received on the 

interim final rule that is codified at 12 

CFR part 1070, and intends to issue a 

final rule in response to those 

comments. 

II. Summary of Proposed Rule 

A. Addition of 12 CFR 1070.48 

The Bureau proposes to add the 

following new section to its rules 

governing the confidential treatment of 

information: 

§ 1070.48 Privileges not affected by 

disclosure to the CFPB. 

(a) In General. The submission by any 

person of any information to the CFPB 

for any purpose in the course of any 

supervisory or regulatory process of the 

CFPB shall not be construed as waiving, 

destroying, or otherwise affecting any 

privilege such person may claim with 

respect to such information under 

Federal or State law as to any person or 

entity other than the CFPB. 

(b) Rule of Construction. Paragraph (a) 

shall not be construed as implying or 

establishing that— 

(1) Any person waives any privilege 

applicable to information that is 

submitted or transferred under 

circumstances to which paragraph (a) 

does not apply; or 

(2) Any person would waive any 

privilege applicable to any information 

by submitting the information to the 

Bureau but for this section. 

This rule is substantively identical to 

the statutory provisions that apply to 

the submission of privileged 

information to the prudential regulators, 

State bank and credit union supervisors, 

and foreign banking authorities in the 

course of their supervisory or regulatory 

processes.8 Once effective, the proposed 

rule is intended to govern all claims, in 

Federal and State court, that an entity 

has waived any applicable privilege by 

providing information requested by the 

Bureau pursuant to its supervisory or 

regulatory authority. 

As noted, the Bureau has exclusive 

authority to supervise depository 

institutions and credit unions with more 

than $10,000,000,000 in assets, as well 

as their affiliates and service providers, 

for purposes of assessing such 

institutions’ compliance with the 

requirements of Federal consumer 

financial law; obtaining information 

about the activities subject to such laws 

and the associated compliance systems 

or procedures of such entities; and 

detecting and assessing associated risks 

to consumers and markets for consumer 

financial products and services.9 The 

Bureau believes, based on the historical 

experience of the prudential regulators 

and state banking supervisors, and its 

experience to date, that effective 

supervision may often require review of 

supervised entities’ privileged 

information. For example, part of a 

strong compliance program is selfmonitoring for consumer protection 

issues. Supervised entities often employ 

inside or outside counsel to conduct 

analyses regarding whether the entity is 

in compliance with Federal consumer 

financial law. The Bureau may require 

access to these analyses, which may be 

subject to the attorney-client privilege, 

to assess effectively the adequacy of 

supervised entities’ compliance with 

Federal consumer financial law as well 

as these entities’ systems and 

procedures for compliance with Federal 

consumer financial law. 

The experience of the prudential 

regulators prior to the enactment of the 

Financial Services Regulatory Relief Act 

(FSRRA) also demonstrates the need for 

the proposed rule. For example, the 

Office of the Comptroller of the 

Currency (OCC) has consistently taken 

the position that the submission of 

privileged information to its examiners 

is not ‘‘voluntary’’ and therefore does 

not result in the waiver of any 

applicable privilege with respect to 

third parties.10 Nonetheless, the OCC 

supported enactment of the statutory 

‘‘selective waiver’’ provision (codified at 

12 U.S.C. 1828(x)) in order to provide 

greater assurance to its supervised 

entities that their submission of 

privileged information to the OCC 

would not thereby waive any applicable 

privilege with respect to third parties.11

According to the OCC, the provision 

would ‘‘improve [its] ability to obtain 

information from regulated entities’’ and 

‘‘significantly enhance the free flow of 

information between the OCC and the 

institutions [it] supervise[s].’’ 12

Similarly, although the Bureau 

believes that supervised entities do not 

waive any applicable privilege with 

respect to third parties by providing 

privileged information to the Bureau, 


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13See, e.g., In re Qwest Commc’ns Int’l, Inc., 450 

F.3d 1179 (10th Cir. 2006) (holding that providing 

information to DOJ and the SEC in the course of 

their investigation waived the protections of the 

attorney-client privilege and work product doctrine 

applicable to that information); In re Columbia 

Healthcare Corp. Billing Practices Litig., 293 F.3d 

289 (6th Cir. 2002) (holding that providing 

information to the DOJ pursuant to its investigation 

of Columbia’s billing practices waived any claim 

that the information was subject to the attorneyclient privilege or work product doctrine); 

Westinghouse Elec. Corp. v. Phillipines, 951 F.2d 

1414 (3d Cir. 1991) (holding that the disclosure of 

documents to the SEC and the DOJ in order to 

cooperate with their investigations waived the 

attorney-client privilege and the work product 

doctrine with respect to those documents); but see 

Diversified Indus., Inc. v. Meredith, 572 F.2d 596 

(8th Cir. 1978) (en banc) (holding that providing 

information to the SEC in the course of its 

investigation did not result in a waiver of attorneyclient privilege with respect to third parties). 

14See 12 U.S.C. 1785(j), 1828(x); see also 12 

U.S.C. 1813(z) (defining Federal banking agency as 

the OCC, the Board, and the FDIC). 

15This letter is available on the Bureau’s Web site 

at http://files.consumerfinance.gov/f/2012/01/ 

GC_bulletin_12-01.pdf. 

16See. e.g., Boston Auction Co. v. W. Farm Credit 

Bank, 925 F. Supp. 1478, 1481–82 (D. Hawaii 1996) 

(no waiver where documents provided to examiners 

from the Farm Credit Administration because 

disclosure not voluntary); Vanguard Sav. & Loan 

Assn v. Banks, No. 93–cv–4267, 1995 WL 555871, 

at *5 (E.D.Pa. Sept. 18, 1995) (holding that the 

disclosure of work product privileged information 

to state bank regulator is ‘‘involuntary’’ and, 

therefore, does not waive the privilege); United 

States v. Buco, Crim. No. 90–10252–H, 1991 WL 

82459, at *2 (D. Mass. May 13, 1991) (holding that 

‘‘the public interest served by encouraging the free 

flow of information between the banks and their 

Federal regulators is substantial; a rule which 

provided that a bank generally waived its attorneyclient privilege as to materials submitted to federal 

regulators would substantially impair that 

interest.’’). Moreover, in recognition of the need for 

a frank, informal, and relatively continuous flow of 

communication between supervisory agencies and 

the financial institutions they supervise, courts 

have long held that supervisory agencies do not 

waive the protections of the bank examination 

privilege (an offshoot of the deliberative process 

privilege) by sharing privileged information with 

their supervised entities. See Overby v. United 

States Fid. & Guar. Co., 224 F.2d 158, 163 (5th Cir. 

1955) (‘‘We do not think that any privilege [of the 

OCC] has been waived by putting copies of the 

documents in the hands of directors of the bank.’’); 

In re Subpoena Served Upon the Comptroller of the 

Currency, and Sec’y of Bd. of Governors of Fed. 

Reserve Sys., 967 F.2d 630, 635 (D.C. Cir. 1992) 

(‘‘We do not think that sharing a bank examination 

report or other supervisory information with the 

subject depository institution can reasonably be 

thought to bear upon the continuing need for the 

privilege.’’). The sound reasons underlying the 

preservation of the supervisory agency’s privilege 

when it provides information to a supervised entity 

apply equally to the communication of privileged 

information in the opposite direction, and support 

preservation of the supervised entity’s privilege 

when it provides privileged information to its 

supervisor. 

17See Dodd-Frank Act § 1061(b), 12 U.S.C. 

5581(b). 

18See Dodd-Frank Act § 1025(b), (e), 12 U.S.C. 

5515(b), (e). 

19See 12 U.S.C. 1828(x), 1785(j). 

20See 12 U.S.C. 1821(t). 

21See Dodd-Frank Act § 1061(c)(1)(B), 12 U.S.C. 

5581(c)(1)(B). 

22See Dodd-Frank Act § 1021(a), 12 U.S.C. 

5511(a). 

the Bureau proposes issuing 12 CFR 

1070.48 to provide greater assurances to 

supervised entities and thereby facilitate 

the Bureau’s supervisory and regulatory 

processes. Certain supervised entities 

have expressed concern that providing 

privileged information to Bureau 

supervisory personnel could waive the 

entities’ privilege with respect to third 

parties. This concern is based on 

judicial decisions holding that entities 

have waived the attorney-client 

privilege or the work product privilege 

with respect to third parties by 

providing information outside of the 

supervisory context to other Federal 

agencies, primarily the Department of 

Justice (DOJ) and the Securities and 

Exchange Commission (SEC).13 In 

addition, the statutory selective waiver 

provisions contained in the National 

Credit Union Act and the Federal 

Deposit Insurance Act do not explicitly 

apply to information submitted to the 

Bureau.14

In response to these concerns, on 

January 4, 2012, the Bureau’s General 

Counsel issued a letter, CFPB Bulletin 

12–01, expressing the Bureau’s 

considered view that the submission of 

privileged information to the Bureau in 

response to requests made pursuant to 

the Bureau’s supervisory authority does 

not result in the waiver of any 

applicable privilege a supervised entity 

may claim in response to a request or 

demand for the same information by a 

third party.15 In its letter, the Bureau 

explained that, like the prudential 

regulators, its supervisory authority 

encompasses the authority to compel 

supervised entities to provide privileged 

information and, therefore, a supervised 

entity’s submission of privileged 

information to the Bureau in response to 

a request is not a voluntary disclosure 

that would result in the waiver of any 

applicable privilege. Although CFPB 

Bulletin 12–01 was addressed to the 

Bureau’s supervision of large depository 

institutions and credit unions and their 

affiliates, the same reasoning applies to 

the Bureau’s supervisory authority over 

other entities. Courts have affirmed this 

view, rejecting claims that supervised 

entities have waived applicable 

privileges by providing information to 

their supervisors.16

Further, when Congress transferred to 

the Bureau the prudential regulators’ 

authority to conduct examinations to 

assess compliance with Federal 

consumer financial law by large 

depository institutions and credit 

unions and their affiliates, it also 

granted to the Bureau ‘‘all powers and 

duties * * * relating’’ to those 

transferred authorities.17 This broad 

grant of authority provides the Bureau 

with supervisory authority equivalent to 

that of the prudential regulators, which 

includes the authority to request and 

receive information without effecting a 

waiver of any privilege a supervised 

entity may claim with respect to that 

information in response to a request or 

demand by a third party. 

This conclusion is consistent with the 

coordinated scheme of supervision 

established by Title X of the Dodd-Frank 

Act. The prudential regulators and the 

Bureau share responsibility for 

supervising large depository institutions 

and credit unions and are required to 

coordinate their examinations and 

consult regarding draft reports of 

examination.18 As noted, a supervised 

entity’s submission of privileged 

information to a prudential regulator 

does not waive the privilege with 

respect to third parties.19 In addition, a 

prudential regulator’s provision of a 

supervised entity’s privileged 

information to the Bureau does not 

waive ‘‘any privilege applicable to [the] 

information.’’ 20 It would be 

incongruous for Congress to provide a 

mechanism whereby a person could 

pass privileged information through a 

prudential regulator to the Bureau 

without waiving any applicable 

privilege, but could not provide the 

information directly to the Bureau 

without waiving the privilege. 

Furthermore, the prudential 

regulators retain primary responsibility 

for supervising smaller depository 

institutions and credit unions for 

compliance with Federal consumer 

financial law.21 A central purpose of 

Title X of the Dodd-Frank Act was to 

enhance the supervision of all entities 

for compliance with Federal consumer 

financial law and to ensure that Federal 

consumer financial law is enforced 

consistently.22 These goals would be 

undermined if a supervised entity’s 

ability to provide privileged information 

to supervisory personnel without 

risking a waiver were to depend upon 

the entity’s size. 

Statutes should be construed as a 

coherent whole and in a manner 

consistent with their purpose. 

Accordingly, the Bureau construes its 

examination authority to be equivalent 

to that of the prudential regulators in 

this respect, and continues to adhere to 

the position that the submission of 

privileged information in response to 

requests made pursuant to the Bureau’s 

examination authority does not result in 

a waiver of any privilege with respect to 

third parties. Nonetheless, in order to 


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23See Dodd-Frank Act § 1021(b)(4), 12 U.S.C. 

5511(b)(4). 

24See Dodd-Frank Act § 1021(a), 12 U.S.C. 

5511(a) (emphasis added); see also S. Rep. No. 111– 

176, at 168 (describing as one of the purposes of 

section 1025 of the Dodd-Frank Act as eliminating 

opportunities for ‘‘regulatory arbitrage’’). 

25See 12 CFR 1070.43. 

26See 12 CFR 1070.47(c). 

27See Interim Final Rule, 76 FR 45372, 45375– 

76 (July 28, 2011) (emphasis added). 

28The Bureau believes that the prudential 

regulators’ ability to transfer information to other 

Federal agencies without effecting a waiver is also 

a ‘‘power[] * * * relating’’ to the transferred 

supervision authority that was granted to the 

Bureau by section 1061 of the Dodd-Frank Act. 

29See Dodd-Frank Act § 1015, 12 U.S.C. 5495. 

30See Dodd-Frank Act §§ 1022(c)(6)(C), 1025(e), 

1052(a); 12 U.S.C. 5512(c)(6)(C); 5515(e); 5562(a). 

provide maximum assurance to its 

supervised entities, the Bureau is 

proposing to exercise its delegated 

rulemaking authority to prescribe a rule 

intended to govern any third party’s 

claim in Federal or State court that a 

supervised entity has waived any 

applicable privilege by providing 

information to the Bureau in the course 

of its supervisory or regulatory 

processes. 

In addition to applying to claims 

regarding large depository institutions 

and credit unions and their affiliates, 

the proposed rule will apply to third 

parties’ claims that nondepository 

institutions or other persons have 

waived any applicable privilege by 

providing information to the Bureau in 

the course of its supervisory or 

regulatory processes. In enacting Title X 

of the Dodd-Frank Act, Congress 

authorized the Bureau to exercise its 

authority to ensure that ‘‘Federal 

consumer financial law is enforced 

consistently, without regard to the 

status of a person as a depository 

institution, in order to promote fair 

competition.’’ 23 Indeed, Congress 

directed the Bureau to ‘‘seek to 

implement and, where applicable, 

enforce Federal consumer financial law 

consistently for the purpose of ensuring 

that all consumers have access to 

markets for consumer financial products 

and services and that markets for 

consumer financial products and 

services are fair, transparent, and 

competitive.’’ 24 The Bureau’s exercise 

of supervisory and regulatory authority 

over nondepository institutions and 

other persons must, therefore, be 

consistent with its exercise of 

supervisory and regulatory authority 

over large depository institutions and 

credit unions and their affiliates. 

Accordingly, consistent with the broad 

language of 12 U.S.C. 1828(x) adopted 

by the proposed rule, the Bureau 

intends for the proposed rule to apply 

to the submission of privileged 

information by any person subject to the 

Bureau’s supervisory or regulatory 

authority. 

Once effective, the rule is intended to 

govern all claims by third parties in 

Federal or State court that any person 

has waived any applicable privilege by 

providing information to the Bureau, 

even if the submission of such 

information to the Bureau occurred 

prior to the date the rule became 

effective. Furthermore, as the Bureau 

stated in CFPB Bulletin 12–01, the 

Bureau is prepared to take all reasonable 

and appropriate steps to assist 

supervised entities in rebutting any 

claims made in Federal or State court, 

both before and after the rule’s effective 

date, that supervised entities have 

waived any privilege by providing 

privileged information to the Bureau. 

B. Amendment of 12 CFR 1070.47 

The Bureau also proposes to readopt 

in modified form its rule regarding the 

effect upon any applicable privilege 

when the Bureau discloses information 

pursuant to its authority under subpart 

D of its Rules Relating to the Disclosure 

of Records and Information. The 

proposed rule would provide as follows: 

(c) Non-waiver. 

(1) In General. The CFPB shall not be 

deemed to have waived any privilege 

applicable to any information by 

transferring that information to, or 

permitting that information to be used 

by, any Federal or State agency. 

(2) Rule of Construction. Paragraph (1) 

shall not be construed as implying that 

any person waives any privilege 

applicable to any information because 

paragraph (1) does not apply to the 

transfer or use of that information. 

Under subpart D, appropriate Bureau 

personnel are authorized to disclose 

confidential information to certain 

individuals and entities in certain 

circumstances. For example, the Bureau 

is authorized to disclose, in appropriate 

circumstances, confidential information 

to another Federal or State agency.25 On 

July 28, 2011, the Bureau issued an 

interim final rule, which provides that 

‘‘[t]he provision by the CFPB of any 

confidential information pursuant to 

this subpart does not constitute a 

waiver, or otherwise affect, any 

privilege any agency or person may 

claim with respect to such information 

under federal law.’’ 26 In the preamble, 

the Bureau stated that this paragraph 

was intended to clarify ‘‘that disclosures 

of confidential information pursuant to 

subpart D are not intended and should 

not be construed to constitute a waiver 

of any privileges that are otherwise 

available to the CFPB or to any agency 

or person with respect to this 

confidential information.’’ 27 The 

Bureau requested comments on its 

interim final rule, but did not receive 

any comments on this particular 

provision. 

The Bureau proposes to readopt this 

rule in slightly modified form to clarify 

that it is intended not merely to express 

the Bureau’s intent not to waive any 

applicable privilege, but to provide the 

applicable rule of decision for any 

claim, in Federal or State court, that the 

Bureau has waived any applicable 

privilege—whether the privilege belongs 

to the Bureau, another Federal or State 

agency, or a regulated entity—by 

sharing information with a Federal or 

State agency pursuant to subpart D.28

The Bureau also proposes to limit the 

rule to disclosures to Federal and State 

agencies. Congress generally directed 

the Bureau to coordinate its regulatory 

activities with other Federal and State 

agencies ‘‘to promote consistent 

regulatory treatment of consumer 

financial and investment products and 

services.’’ 29 In addition, Congress 

specifically directed the Bureau to share 

draft and final reports of examination 

with other Federal and State agencies, 

and authorized the Bureau to engage in 

joint investigations with other Federal 

and State agencies.30 The coordinated 

intergovernmental action envisioned by 

Title X of the Dodd-Frank Act would be 

significantly hampered if the Bureau 

were not able to exchange privileged 

information with these agencies freely. 

The Bureau believes that courts would 

be unlikely to find a waiver of privilege 

in these circumstances. Nonetheless, in 

order to provide assurances comparable 

to those provided by 12 U.S.C. 1821(t), 

the Bureau proposes to adopt a rule 

providing that ‘‘[t]he Bureau shall not be 

deemed to have waived any privilege 

applicable to any information by 

transferring that information or 

permitting that information to be used 

by any Federal or State agency.’’ In 

other contexts in which the Bureau 

discloses information pursuant to 

subpart D, the Bureau expects 

determinations regarding privilege 

waiver to be made by the courts 

pursuant to otherwise applicable law. 

III. Legal Authority 

A. Rulemaking Authority 

The Bureau’s proposed rule is based 

on its authority to ‘‘prescribe rules 

regarding the confidential treatment of 

information obtained from persons in 

connection with the exercise of its 

authorities under Federal consumer 


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31See Dodd-Frank Act § 1022(c)(6)(A); 12 U.S.C. 

5512(c)(6)(A). 

32See Dodd-Frank Act § 1022(b)(1), 12 U.S.C. 

5512(b)(1). 

33See Dodd-Frank Act § 1021(b)(4), 12 U.S.C. 

5511(b)(4); see also Dodd-Frank Act § 1021(a), 12 

U.S.C. 5511(a). 

34See Dodd-Frank Act § 1024(b)(7)(A), 12 U.S.C. 

5514(b)(7)(A). This rulemaking does not concern 

supervisory requirements or coordinated 

registration systems for nondepository institutions. 

Accordingly, the Bureau has determined that 

consultation with state agencies is not appropriate. 

See Dodd-Frank Act § 1024(b)(7)(D); 12 U.S.C. 

5514(b)(7)(D). 

35Specifically, section 1022(b)(2)(A) calls for the 

Bureau to consider the potential benefits and costs 

of a regulation to consumers and covered persons, 

including the potential reduction of access by 

consumers to consumer financial products or 

services; the impact on depository institutions and 

credit unions with $10 billion or less in total assets 

as described in section 1026 of the Act; and the 

impact on consumers in rural areas. The manner 

and extent to which the provisions of section 

1022(b)(2) apply to a rule of this kind that does not 

establish standards of conduct is unclear. 

Nevertheless, to inform this rulemaking more fully, 

the Bureau performed the described analyses and 

consultations. 

financial laws.’’ 31 As explained above, 

the proposed 12 CFR 1070.48 will 

ensure that the confidential and 

privileged nature of information 

obtained by the Bureau in the course of 

any supervisory or regulatory process is 

not waived, destroyed, or modified by 

compliance with the Bureau’s requests 

for information. The proposed 

amendment to 12 CFR 1070.47(c) 

ensures that the sharing of information 

with Federal and State agencies 

mandated or authorized by Title X of 

the Dodd-Frank Act does not affect the 

confidential and privileged nature of the 

information. 

In addition, the Bureau relies on its 

general rulemaking authority to 

‘‘prescribe rules * * * as may be 

necessary or appropriate to enable the 

Bureau to administer and carry out the 

purposes and objectives of the Federal 

consumer financial laws, and to prevent 

evasions thereof.’’ 32 The supervision 

and other authorities provided by Title 

X of the Dodd-Frank Act are 

components of ‘‘Federal consumer 

financial law.’’ As explained above, the 

proposed rules are necessary and 

appropriate measures to ensure that the 

Bureau is able to implement these 

authorities, and to do so consistently 

‘‘without regard to the status of a person 

as a depository institution, in order to 

promote fair competition.’’ 33 By 

providing greater certainty to supervised 

entities, this rule will also prevent 

evasions of the Bureau’s supervisory 

and other authorities based on concerns 

about the risk of waiving privilege. 

Finally, the Bureau also relies on its 

authority to ‘‘prescribe rules to facilitate 

the supervision of [nondepository 

institutions] and assessment and 

detection of risks to consumers.’’ 34 For 

the reasons discussed above, the 

proposed rule will facilitate the 

Bureau’s supervision of nondepository 

institutions and thereby enhance the 

Bureau’s ability to assess and detect 

risks to consumers. 

B. Section 1022(b)(2) of the Dodd-Frank 

Act 

In developing the proposed rule, the 

Bureau has conducted an analysis of 

potential benefits, costs, and impacts, 

and has consulted or offered to consult 

with the prudential regulators and the 

Federal Trade Commission, including 

regarding consistency with any 

prudential, market, or systemic 

objectives administered by such 

agencies.35

The proposed rule provides that the 

submission by any person of 

information to the Bureau in the course 

of the Bureau’s supervisory or 

regulatory processes does not waive or 

otherwise affect any privilege such 

person may claim with respect to such 

information under Federal or State law 

as to any other person or entity. The 

proposed rule also provides that the 

Bureau’s provision of privileged 

information to another Federal or State 

agency does not waive any applicable 

privilege. 

As explained above, the Bureau 

believes that the submission by any 

person of any information to the Bureau 

in the course of the Bureau’s 

supervisory or regulatory processes, or 

the Bureau’s transfer of privileged 

information to other Federal and State 

agencies, generally does not waive or 

otherwise affect any privilege a person 

may claim with respect to such 

information under Federal or State law 

as to any other person or entity. The 

proposed rule would codify this 

understanding in order to provide 

entities subject to the Bureau’s 

supervisory or regulatory authority 

further assurances that the submission 

of privileged information to the Bureau, 

or the Bureau’s subsequent transmission 

of the information to other government 

agencies, will not affect the privileged 

and confidential nature of the 

information. Because the proposed rule 

generally will not result in a 

determination regarding the privileged 

nature of information different than that 

which would have been reached in the 

absence of the rule, the proposed rule is 

not expected to impose any costs on 

consumers or covered persons or to 

impact consumers’ access to consumer 

financial products or services. Notably, 

the rule does not impose obligations on 

covered persons to provide information; 

rather, any requirement to provide 

information stems from the Bureau’s 

authority under existing law. 

Assuming, however, that the 

proposed rule would result in a 

determination regarding the privileged 

nature of information different than that 

which would be reached under existing 

law, the proposed rule would benefit 

covered persons by protecting any 

applicable privilege a covered person 

that provides information to the Bureau 

may claim in response to a third party’s 

claim of waiver. Furthermore, in that 

scenario, the proposed rule could 

impose a potential cost on consumers or 

covered persons involved in subsequent 

third-party litigation regarding a 

supervised entity to the extent the rule, 

as opposed to existing law, prevents 

them from compelling privileged 

information subject to the rule pursuant 

to a theory of waiver. 

Finally, the proposed rule has no 

unique impact on insured depository 

institutions or insured credit unions 

with less than $10,000,000,000 in assets 

as described in section 1026 of the 

Dodd-Frank Act. Nor does the proposed 

rule have a unique impact on rural 

consumers. 

The Bureau requests comments on the 

potential benefits, costs, and impacts of 

the proposal. 

IV. Request for Comment 

The Bureau invites comments on all 

aspects of this notice and the proposed 

rule, including the proposed rule’s 

scope. 

V. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996, requires each agency to consider 

the potential impact of its regulations on 

small entities, including small 

businesses, small governmental units, 

and small not-for-profit organizations. 

The RFA generally requires an agency 

to conduct an initial regulatory 

flexibility analysis (IRFA) and a final 

regulatory flexibility analysis (FRFA) of 

any rule subject to notice-and-comment 

rulemaking requirements, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. 

The Bureau also is subject to certain 

additional procedures under the RFA 

involving the convening of a panel to 

consult with small business 


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Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Proposed Rules 15291 

representatives prior to proposing a rule 

for which an IRFA is required. 

When an agency issues a rulemaking 

proposal, the RFA requires the agency 

to, ‘‘prepare and make available for 

public comment an initial regulatory 

flexibility analysis,’’ which will 

‘‘describe the impact of the proposed 

rule on small entities.’’ The RFA allows 

an agency to certify a rule, in lieu of 

preparing an analysis, if the proposed 

rulemaking is not expected to have a 

significant economic impact on a 

substantial number of small entities. 

An IRFA is not required for this 

proposal because, if adopted, it would 

not have a significant economic impact 

on a substantial number of small 

entities. The proposed rule does not 

impose obligations or standards of 

conduct on any entities. In any event, as 

noted, the submission by any person of 

any information to the Bureau in the 

course of the Bureau’s supervisory or 

regulatory processes or the Bureau’s 

later disclosure of such submitted 

material generally does not waive or 

otherwise affect any privilege such 

person may claim with respect to such 

information under Federal or State law 

as to any other person or entity. The 

proposed rule is intended to codify this 

result in order to give further assurance 

to entities subject to the Bureau’s 

authority. Any requirement to provide 

information stems from the Bureau’s 

authority under existing law, not the 

proposed rule. To the extent that the 

proposed rule alters existing law, it 

protects any applicable privilege under 

Federal or State law that a covered 

person that provides information to the 

Bureau may claim. 

Accordingly, the undersigned hereby 

certifies that, if promulgated, the 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities. 

List of Subjects in 12 CFR Part 1070, 

Subpart D 

Confidential business information, 

Consumer protection, Privacy. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau proposes to 

amend 12 CFR part 1070, subpart D, as 

set forth below: 

PART 1070—DISCLOSURES OF 

RECORDS AND INFORMATION 

Subpart D—Confidential Information 

1. The authority citation for part 1070 

continues to read as follows: 

Authority: 12 U.S.C. 3401; 12 U.S.C. 5481 

et seq.; 5 U.S.C. 552; 5 U.S.C. 552a; 18 U.S.C. 

1905; 18 U.S.C. 641; 44 U.S.C. ch. 30; 5 

U.S.C. 301. 

2. Amend § 1070.47 by revising 

paragraph (c) to read as follows: 

§ 1070.47 Other Rules Regarding 

Disclosure of Confidential Information. 

* * * * * 

(c) Non-waiver. (1) In General. The 

CFPB shall not be deemed to have 

waived any privilege applicable to any 

information by transferring that 

information to, or permitting that 

information to be used by, any Federal 

or State agency. 

(2) Rule of Construction. Paragraph (1) 

shall not be construed as implying that 

any person waives any privilege 

applicable to any information because 

paragraph (1) does not apply to the 

transfer or use of that information. 

3. Add § 1070.48 to subpart D to read 

as follows: 

§ 1070.48 Privileges not affected by 

disclosure to the CFPB. 

(a) In General. The submission by any 

person of any information to the CFPB 

for any purpose in the course of any 

supervisory or regulatory process of the 

Bureau shall not be construed as 

waiving, destroying, or otherwise 

affecting any privilege such person may 

claim with respect to such information 

under Federal or State law as to any 

person or entity other than the CFPB. 

(b) Rule of Construction. Paragraph (a) 

shall not be construed as implying or 

establishing that— 

(1) Any person waives any privilege 

applicable to information that is 

submitted or transferred under 

circumstances to which paragraph (a) 

does not apply; or 

(2) Any person would waive any 

privilege applicable to any information 

by submitting the information to the 

CFPB but for this section. 

Dated: March 12, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–6254 Filed 3–14–12; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2012–0264; Directorate 

Identifier 2011–NM–179–AD] 

RIN 2120–AA64 

Airworthiness Directives; Airbus 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to adopt a new 

airworthiness directive (AD) for all 

Airbus Model A300 B4–603, B4–605R, 

and B4–622R airplanes; Model A300 

C4–605R Variant F airplanes; and Model 

A300 F4–600R series airplanes. This 

proposed AD was prompted by a report 

that chafing was detected between the 

autopilot electrical wiring conduit and 

the wing bottom skin. This proposed AD 

would require modifying the wiring 

installation on the right-hand wing. We 

are proposing this AD to prevent 

sparking due to electrical chafing when 

flammable vapors are present in the 

area, which could cause an uncontrolled 

fire. 

DATES: We must receive comments on 

this proposed AD by April 30, 2012. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE., Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE., Washington, DC, between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. 

For service information identified in 

this proposed AD, contact Airbus SAS— 

EAW (Airworthiness Office), 1 Rond 

Point Maurice Bellonte, 31707 Blagnac 

Cedex, France; telephone +33 5 61 93 36 

96; fax +33 5 61 93 44 51; email 

account.airworth-eas@airbus.com; 

Internet http://www.airbus.com. You 

may review copies of the referenced 

service information at the FAA, 

Transport Airplane Directorate, 1601 

Lind Avenue SW., Renton, Washington. 

For information on the availability of 

this material at the FAA, call 425–227– 

1221. 


tkelley on DSK3SPTVN1PROD with PROPOSALS-1