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The Consumer Financial Protection Bureau has vowed to protect privileged information collected during the supervision process, but banks are nervous that might not be enough.
February 3
WASHINGTON — The House Financial Services Committee on Thursday passed two bills — one controversial and the other not — that would make changes to the Dodd-Frank Act.
The uncontroversial measure, sponsored by Republican Rep. Bill Huizenga, passed the committee by a unanimous vote. It would specify that any bank providing data to the Consumer Financial Protection Bureau is not waiving attorney-client privilege, something that would allow the information to be subpoenaed by third parties.
The bill is seen as necessary by many in the banking industry because the Dodd-Frank Act did not explicitly bar the CFPB from turning over privileged information. Such a prohibition exists already in the law for the other federal banking agencies.
CFPB Director Richard Cordray has said that he supports a legislative fix, and as Thursday's vote suggests, there appears to be broad bipartisan support for the measure in Congress.
Still, passing the bill through both the House and Senate could be tricky, given that amendments can sometimes derail even uncontroversial legislation.
Huizenga's bill could be attached to a larger piece of legislation that is seen as likely to pass in order to smooth its path toward becoming law.
The second bill, sponsored by Republican Rep. Nan Hayworth, would repeal a provision of Dodd-Frank known as the swaps push-out rule.
The provision, which was sponsored by former Democratic Sen. Blanche Lincoln, prohibits FDIC-insured institutions from acting as swap dealers in most circumstances, forcing the institutions to push their swap dealing activities into affiliates that are not FDIC insured.
If Hayworth's bill passes the House, its prospects appear dim in the Senate, where Democrats who control the majority oppose major changes to Dodd-Frank.
