The October 24 deadline for commenting on the CFPB’s Proposed Amendments Relating to the Disclosure of Records and Information, CFPB-2016-0039, is fast approaching. The current rule is 12 C.F.R. Part 1070. The proposed amendments contain several troubling changes, the most notable of which are outlined below. Those regulated by the CFPB should not let these proposed amendments fly under the radar.
- The proposed amendment would eliminate the requirement that the CFPB notify a company of a request by Congress for confidential information. This means that the company would have no opportunity to object to the disclosure, and could make it difficult for a company to prepare for a congressional inquiry or respond to public or media attention accompanying any congressional inquiry.
- The proposed amendment would subject confidential investigative information to the same standards as confidential supervisory information. This makes it unclear what a company could disclose to a third party, including whether the company could disclose the existence of a civil investigative demand (“CID”), such as pursuant to contract, in a joint defense group setting, or in compliance with securities requirements.
- The proposed amendment would no longer require CFPB contractors or consultants to sign a non-disclosure agreement. Although the proposed amendment would subject CFPB contractors and consultants to the CFPB’s confidentiality rules, it could be more difficult to enforce this obligation absent a written agreement.
- The proposed amendment would permit the CFPB to disclose confidential supervisory and investigative information to a company’s service providers. This could lead to attempts by the CFPB to influence a company’s vendors by disclosure of mere allegations, reminiscent of the FDIC’s conduct in “Operation Choke Point”.