WASHINGTON — Top House Republicans are calling on the Consumer Financial Protection Bureau to suspend the collection of privileged information from banks until Congress can clarify whether and how that information is protected.
The House Financial Services subcommittee on financial institutions and consumer credit plans to hold a hearing on Feb. 8 to examine the issue, according to a letter that Reps. Spencer Bachus and Shelley Moore Capito sent to the bureau Tuesday.
"Our committee will work quickly so that there is not any extended uncertainty, but, it is our view that the CFPB should not request privileged material from depository institutions, credit unions and their affiliates until our committee can discuss this at a hearing and Congress can enact a legislative fix," wrote Bachus, who chairs the House Financial Services Committee, and Capito, who chairs the financial institutions subcommittee.
Among the concerns is that providing information to the bureau could be considered a waiver of attorney-client privilege, and open up the banks to third-party subpoenas.
The bureau has promised to rebut those third-party claims and protect privileged information, and Director Richard Cordray has said he would support a change to legislation. A law was enacted in 2006 implementing similar protections for information provided to the other banking regulators, but Dodd-Frank failed to amend that statute to include the CFPB.
During a hearing in the Senate Banking Committee on Tuesday, Cordray reiterated that he would support legislation to fix the issue.
"We would support an amendment to correct what we believe was an oversight," Cordray said. "I have told the banking trade associations that, and we're happy to work with them and you to get that fixed."
