Cordray Hopeful Privilege Bill Becomes Law by Memorial Day

WASHINGTON — Consumer Financial Protection Bureau Director Richard Cordray said Wednesday that a bill to clarify protections for privileged information provided to the bureau could become law by the end of May.

The House voted Monday to pass a bill that would add the CFPB to the list of regulators to which banks may provide certain confidential information without waiving attorney-client privilege.

"We're hopeful that, even in this legislative environment, this will move through the Senate and be law — I'm told, with the speed of light in the Senate, maybe by Memorial Day," Cordray told the U.S. Chamber of Commerce's annual Capital Markets Summit in Washington.

The bureau released a bulletin in January arguing that financial institutions would be protected if they provided privileged information to the bureau during exams, and vowed to defend banks against third-party subpoenas. But financial industry lawyers called for a legislative fix, which Cordray has supported.

"It's a pretty simple fix," Cordray said. "I know we've had good support from the Chamber, American Bar Association [and] a number of other organizations."

Cordray was also asked to expound on what the bureau thinks are "abusive" practices under Dodd-Frank. Cordray reiterated, as he has in recent weeks that the term is defined by Congress.

"If it's an abusive practice, it presumably goes beyond something that's unfair and deceptive, because if it's already unfair or deceptive, you don't need to define a separate term," he said. "So it's going to be something that's more severe than something that is unfair or deceptive."

"I don't think there are any businesses right now that are considering practices that go beyond 'unfair' or 'deceptive,' and that they need guidance to think about" whether those practices would be prohibited, he added.