In one of its first actions under its new, never-before-seen authority, the Consumer Financial Protection Bureau is already getting push back from banks concerned about protection of their confidential data. When it when it opened its doors in July, the agency issued a rule on disclosure of records and information, including the sharing of some confidential information with states.
Now banks are pushing back, objecting to the ability of attorneys general to file lawsuits based on private data collected by the CFPB. Banks and other companies offering consumer financial products are subject to the Bureau’s oversight and data collection.
“The bureau is suggesting anything we provide will go straight to the state attorneys general,” L. Richard Fischer, a banking lawyer with Morrison Foerster LLC who represents the American Bankers Association and the Financial Services Roundtable told Bloomberg News in a Sept. 27 article. Providing data to states “will terrorize large banks,” Fischer told the news outlet.
In April, the bureau and the states signed a cooperation agreement that included a commitment to share information “to inform enforcement policies and priorities,” Bloomberg reports. Dodd-Frank allows, but does not require, the bureau to share that information.
While it is not yet clear exactly which information the bureau will share with states, the cooperation is aimed toward closer communication between the consumer protection agency and the states, an effort supported by the bureau’s early architect, Elizabeth Warren.
The American Bankers Association, Mortgage Bankers Associaiton and other banking industry groups submitted comments to the rule urging the CFPB to ensure supervisory information remains confidential and limits sharing of that information to agencies that have authority over CFPB supervised institutions.
Read the Bloomberg News article.
Written by Elizabeth Ecker