February 16, 2012

CFPB info protection bill on 2 tracks

A NAFCU-backed bill to ensure privileged information provided by a financial institution to the Consumer Financial Protection Bureau is kept confidential was approved unchanged Thursday by the House Financial Services Committee.

Reported out of committee on voice vote, H.R. 4014, introduced by Rep. Bill Huizenga, R-Mich., makes a brief revision to the Federal Deposit Insurance Act to clarify that information provided to the CFPB receives the same level of protection as information provided to financial institutions' prudential regulators, such as NCUA.

"It is critical that this type of privacy protection from third parties . . . is clearly spelled out in the law," Dan Berger, NAFCU's executive vice president of government affairs, urged the panel late Wednesday.

Writing committee Chairman Spencer Bachus, R-Ala., and Ranking Member Barney Frank, D-Mass., Berger said failure to ensure the law is clear on the treatment of privileged information could lead to disclosures that may expose institutions to frivolous lawsuits. "NAFCU believes having clarity in the statute and accompanying Committee report could also help ensure that credit unions will have a greater comfort level in providing requested information," he wrote.

Berger said the legislation "should ensure that this privilege is maintained for any information already shared with the CFPB."

Berger reiterated that in a letter Thursday to Senate Banking Chairman Tim Johnson, D-S.D., and Ranking Member Richard Shelby, R-Ala., the sponsor and chief Republican cosponsor of S. 2099, which is identical to the House bill. Bachus is an H.R. 4014cosponsor.