The American Bar Association (ABA) and the Committee on Consumer Financial Services of the ABA’s Section of Business Law have submitted comment letters on two CFPB proposals. The Committee’s letter comments on the “larger participant” proposal and the ABA’s letter comments on the proposed rule on confidential treatment of privileged information.
The Committee’s “larger participant” letter addresses the concern that the CFPB appears to believe it could treat an attorney engaged in the practice of law who is not involved in offering or providing a consumer financial product or service either as a “service provider” over whom the CFPB has supervisory authority or as a “larger participant” subject to the CFPB’s supervisory authority. The letter points to Dodd-Frank legislative history that makes clear Congress’ intent to exclude such attorneys from Title X.
The ABA’s letter on the privileged information proposal addresses concerns that (1) the CFPB does not have legal authority to compel supervised entities to produce materials protected by the attorney-client privilege or work product doctrine, (2) the proposal would undermine the attorney-client privilege and work product doctrine, the confidential lawyer-client relationship and the fundamental right to counsel, and (3) because it is based on the incorrect premise that the CFPB has the authority to compel production of privileged materials, the proposal will not be effective in preserving the privileged status of materials supervised entities provide to the CFPB and could result in the waiver of those entities’ privileges as to the CFPB and all third parties. Asserting that federal legislation is the most effective way to preserve the privileged status of materials provided to the CFPB, the letter urges the CFPB to withdraw the proposal and to instead encourage Congress to pass such legislation.