Source: https://www.consumerfinancemonitor.com/tag/privilege/
Timestamp: 2017-05-29 09:37:39
Document Index: 15922514

Matched Legal Cases: ['§ 1693', '§ 1693', '§ 1821', '§ 1821', '§ 1828', '§ 1821', '§ 1821', '§ 1022', '§ 1022']

privilege | Consumer Finance Monitor
By Barbara S. Mishkin on December 26, 2012 Posted in CFPB Exams, CFPB General, CFPB Monitor On December 20, 2012, President Obama signed into law (1) the bill amending the Electronic Fund Transfer Act (H.R. 4367) to eliminate the ATM fee sticker requirement, and (2) the bill amending the Federal Deposit Insurance Act (H.R. 4014) to provide protection against waiver of the
attorney-client privilege when privileged information is shared with the CFPB or by the CFPB with other federal agencies.
By Christopher J. Willis on August 7, 2012 Posted in CFPB Enforcement, CFPB Exams, CFPB Monitor, Debt Collection, Hot Issues On Friday, August 3, I had the pleasure of speaking on a panel at the ABA Annual Meeting with Meredith Fuchs, General Counsel of the CFPB, and Michael Gordon, Senior Counselor to the Director of the CFPB. Also on the panel were Mark Metz from Bank of America, Jean Noonan from Hudson Cook, and Reginald Brown from Wilmer Hale, who did a great job moderating.
— the Bureau believes, based on its experience, that the presence of enforcement lawyers in examinations does not chill communications during the exam process, and it was noted that the enforcement lawyers were there as part of the “integration” of the Bureau’s supervision and enforcement processes
— the senior leadership of the CFPB reads the submissions on the “Tell Your Story” part of the CFPB website regularly.
— the Bureau is trying to work with supervised entities to find alternatives to the turnover of privileged documents, and is being restrained in its requests for such documents.
— the “larger participant” rule relating to debt collectors will be finalized in “a couple of months.”
— the Bureau is working on adding a search function to its website. (In the meantime, just use Google and restrict the search to consumerfinance.gov, like this: “qualified mortgage site:consumerfinance.gov”).
By Keith R. Fisher on July 25, 2012 Posted in CFPB Exams, CFPB Monitor, Deposit Accounts On Tuesday July 17, Senate Banking Committee Chairman Tim Johnson (D.-SD) introduced a new bill, S. 3394, which combines two consumer-related regulatory initiatives that had already been separately introduced and passed by the House of Representatives. These are (1) eliminating one of the automated teller machine (“ATM”) fee notice provisions (so-called “ATM placard regulation”), passed by the House in H.R. 4367, and (2) providing protection for privileged information shared with, or by, the CFPB, passed by the House in H.R. 4014. Both initiatives have been on the regulatory agenda of the American Bankers Association.
ATM Placard Regulation
In the Electronic Funds Transfer Act (“EFTA”), subparagraph (A) of Section 904(d)(3) mandates that regulations thereunder require ATM operators charging fees for providing host transfer services to consumers to provide, at the time the services are provided, notice to consumers of the fact that a fee is being charged and the amount of the fee. 12 U.S.C. § 1693b(d)(3)(A). Subparagraph (B) then establishes requirements for such notice and, as currently in force, mandates both that prominent and conspicuous notice be placed on or next to the machine itself (usually done in the form of a printed placard) and that, once an ATM transaction is initiated (but while the customer can still abandon the transaction), notice also appear on the ATM screen. 12 U.S.C. § 1693b(d)(3)(B).
The ATM placard regulation is duplicative, because consumers are already alerted to the nature and amount of the fee on the ATM screen and have the option to decline the transaction without being charged. S. 3394, like H.R. 4367, would eliminate the placard requirement by amending subparagraph (B) with the following deletions:
(i) On the machine The notice required under clause (i) of subparagraph (A) with respect to any fee described in such subparagraph shall be posted in a prominent and conspicuous location on or at the automated teller machine at which the electronic fund transfer is initiated by the consumer. (ii) On the screen The notice required under clauses (i) and (ii) of subparagraph (A) with respect to any fee described in such subparagraph shall appear on the screen of the automated teller machine, or on a paper notice issued from such machine, after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction, except that during the period beginning on November 12, 1999, and ending on December 31, 2004, this clause shall not apply to any automated teller machine that lacks the technical capability to disclose the notice on the screen or to issue a paper notice after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction.
CFPB Anti-Privilege Waiver Amendments
Chris Willis and I have previously blogged on several occasions, such as here and here, about the “legislative fix” passed in the House and stalled in the Senate earlier in this session of Congress, and, more recently, we issued an E-Alert about the Bureau’s rulemaking to accomplish the same goal by administrative fiat. S. 3394, in addition to amending the EFTA, is the latest iteration of the two-fold legislative fix. First, it would amend Section 11(t)(2)(A) of the Federal Deposit Insurance Act to add the Bureau to the laundry list of federal regulatory agencies that may share privileged information with other federal agencies without the privilege being waived. Second, it would amend Section 18(x) of that Act expressly to include the Bureau with the other Federal banking agencies in terms of insulating from waiver any privileged information submitted by a regulated entity. The bill is co-sponsored by Ranking Member Richard Shelby (R.-AL) and by Senators Sherrod Brown (D.-OH), Mike Crapo (R.-ID), Kay Hagan (R.-NC), Mike Johanns (R.-NE), Diane McCaskill (D.-MD), and Jim Tester (D.-MT).
By Christopher J. Willis on May 22, 2012 Posted in CFPB Exams, CFPB Monitor, CFPB Rulemaking Last week, the American Banker reported that while the legislative “fix” to the CFPB privilege waiver problem is stalled in the Senate, an alternative version of the legislation is being circulated in Congress. This alternative version, being proposed by the American Financial Services Association, broadens the existing proposed legislation (HR 4014) principally by providing that privileged documents provided to the CFPB and then shared by the Bureau with a state banking regulatory agency remain privileged despite that sharing. The legislation that passed the House and now awaits action in the Senate was silent with regard to sharing between the CFPB and any state agency. For that reason, in our blog posts regarding HR 4014, we have referred to it as a “partial fix” to the privilege waiver problem.
ABA and Consumer Financial Services Committee file comments on CFPB proposals
By Barbara S. Mishkin on April 18, 2012 Posted in CFPB Monitor, CFPB Rulemaking The American Bar Association (ABA) and the Committee on Consumer Financial Services of the ABA’s Section of Business Law have submitted comment letters on two CFPB proposals. The Committee’s letter comments on the “larger participant” proposal and the ABA’s letter comments on the proposed rule on confidential treatment of privileged information.
The Committee’s “larger participant” letter addresses the concern that the CFPB appears to believe it could treat an attorney engaged in the practice of law who is not involved in offering or providing a consumer financial product or service either as a “service provider” over whom the CFPB has supervisory authority or as a “larger participant” subject to the CFPB’s supervisory authority. The letter points to Dodd-Frank legislative history that makes clear Congress’ intent to exclude such attorneys from Title X.
The ABA’s letter on the privileged information proposal addresses concerns that (1) the CFPB does not have legal authority to compel supervised entities to produce materials protected by the attorney-client privilege or work product doctrine, (2) the proposal would undermine the attorney-client privilege and work product doctrine, the confidential lawyer-client relationship and the fundamental right to counsel, and (3) because it is based on the incorrect premise that the CFPB has the authority to compel production of privileged materials, the proposal will not be effective in preserving the privileged status of materials supervised entities provide to the CFPB and could result in the waiver of those entities’ privileges as to the CFPB and all third parties. Asserting that federal legislation is the most effective way to preserve the privileged status of materials provided to the CFPB, the letter urges the CFPB to withdraw the proposal and to instead encourage Congress to pass such legislation. The proposal has been the subject of several posts by my colleagues Chris Willis and Keith Fisher who have expressed concerns similar to those raised in the ABA’s letter.
By Christopher J. Willis on March 7, 2012 Posted in CFPB Monitor, CFPB Rulemaking, Hot Issues, Mortgages Director Cordray attended a meeting of the National Association of Attorneys General yesterday, delivering some prepared remarks and answering questions from the state AGs in attendance. Here are the highlights – statements that give us a clue about what the CFPB and the AGs will be joining forces to do in the near future:
Focus on debt collection. Mr. Cordray’s remarks addressed debt collection at length, calling on the AGs to form a “national strategic plan” with the CFPB to combat “unconscionable” and “inexcusable” conduct by debt collectors. He specifically mentioned “robo-signing” with regard to debt collection. These comments make it clear that there is a strong impetus behind the CFPB’s desire to supervise debt collectors under the proposed Larger Participant Rule, and also make it clear that the Bureau will be looking at documentation issues with regard to debt collection, as we’ve predicted on this blog. New Mortgage-Related Rules Coming. The Director previewed several upcoming mortgage-related rulemaking efforts forthcoming “this year” – including one dealing with monthly mortgage statements, one requiring disclosures on ARMs, and another dealing with force-placed insurance. “Zoning in” on tribal payday lenders. Answering a question from Colorado’s Attorney General, Mr. Cordray stated that both the CFPB and the FTC are looking at payday lenders who assert Native American tribal immunity as a defense to state laws. The overall theme of the Director’s remarks was to underscore the cooperation between the CFPB and state AGs, which is certainly no surprise. What will result from that cooperation remains to be seen, but given the Director’s rhetoric, I won’t be surprised to see it happen sooner rather than later.
By Keith R. Fisher on February 13, 2012 Posted in CFPB General, CFPB Monitor, Federal Agencies, Federal CFS Monitor, Hot Issues In a recent blog on the Bacchus-Capito letter to CFPB Director Richard Cordray, possible “legislative fixes” to the highly publicized privilege waiver issues involving the Bureau and possible amendments to 12 U.S.C. §§ 1821(t) and 1828(x) were discussed. The major shortcoming identified with regard to such amendments was the persistent problem of the Bureau’s sharing privileged information, whether obtained from a regulated entity or from another federal regulatory agency, with State Attorneys General or other law enforcement authorities.
Two bills have recently been introduced in Congress, H.R. 3871 and S. 2009. Each is a partial solution to the privilege waiver problem, but neither avoids that identified shortcoming. S. 2009 takes the direct approach of adding the Bureau to §§ 1821(t)(2) and 1828(x), which arguably maintains privilege with respect to material shared with State bank supervisors. I say “arguably” because § 1828(x) by its terms applies to privileged material provided directly by a bank to a regulator during the supervisory process. Only by inference could that provision be interpreted to extend to the situation where the information is provided to one regulator by another. Such an inference is arguably negated, however, by the separate existence of § 1821(t), and § 1821(t)(2), even if amended to include the Bureau, does not include State bank supervisors.
H.R. 3871 takes a different approach, amending § 1022(c)(6) of the Dodd-Frank legislation by adding the following language as a new subparagraph (B):
“The submission by any person of any information to the Bureau 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 Bureau.”
To recapitulate: both approaches seek (with varying degrees of success) to eliminate inadvertent or coerced waiver of the attorney-client privilege or the work product doctrine by (1) a regulated entity’s directly turning over privileged material to the Bureau, (2) sharing with the Bureau of privileged information by a bank regulatory agency, (3) the Bureau’s sharing such information with another federal agency (such as the FTC) or with a State or foreign bank supervisor. Neither approach, however, protects such material if the Bureau should share it with a state law enforcement authority other than a State bank supervisor.
One way to resolve this problem unambiguously would be to insert a new subparagraph (E) to Dodd-Frank § 1022(c)(6) along these lines:
“Notwithstanding subparagraphs (C) and (D) of this subsection, neither access by the Bureau to reports of other regulators nor access by any other Federal or State agency or regulatory or law enforcement authority to any reports or other information issued by the Bureau or in its possession shall result in the waiver of any statutory or common law privilege held by any covered person or service provider, unless the holder of such privilege has otherwise waived it.”