As discussed in our February 15, 2012, DechertOnPoint “Building Consumer Financial Protection Bureau Relationships,” a significant controversy has arisen as to whether supervised institutions providing privileged information to the Consumer Financial Protection Bureau (CFPB) waive any privilege relating to such information. Underlying that question is the more fundamental issue that has not been affected by recent rules and bulletins issued by the CFPB: does the agency have the right, even if the privilege is maintained, to compel a supervised institution to hand over privileged materials?

On January 4, 2012, the CFPB issued Bulletin 12-01, in which it took the position that such a submission would not waive any privilege. The agency based its conclusion on two factors: (i) a supervised institution must comply with a CFPB request for information, and thus compliance is not voluntary; and (ii) section 18(x) of the Federal Deposit Insurance Act (FDI Act), which preserves the privilege for information submitted to the federal banking agencies and certain other agencies, should be interpreted to apply to the CFPB as a successor agency.