The Consumer Financial Protection Bureau (CFPB) announced a proposed rule that would codify protections for privileged information submitted to the bureau by the financial institutions it regulates.

“This is a common sense rule that is consistent with our practice of guarding the confidentiality of the information of the institutions we supervise,” said Richard Cordray, CFPB director. “This rule will allow us to further protect consumers by facilitating the flow of information between the bureau and its supervised entities.”

In January 2012, the CFPB advised the institutions that it supervises that the submission of privileged information to the CFPB does not waive any applicable privilege with respect to third parties. The proposed rule is intended to provide supervised entities further assurances that providing privileged information to the bureau will not adversely affect the confidentiality of such information. The proposed rule also clarifies that the CFPB’s transfer of privileged information to another federal or state agency does not result in a waiver of any applicable privilege.

The Dodd-Frank Wall Street Reform and Consumer Protection Act provided the CFPB with the authority to issue rules necessary or appropriate to enable the bureau to fulfill its obligations to protect consumers of financial products and services, and specifically provided the bureau with authority to issue rules regarding the confidential treatment of information obtained by the bureau.

The proposed rule amends 12 CFR part 1070, subpart D, its rules relating to the confidential treatment of information obtained from persons in connection with its exercise of authorities under federal consumer financial law. The proposed amendments will add a new section to these rules providing that the submission by any person of any information to the bureau in the course of the bureau’s supervisory or regulatory processes will not waive or otherwise affect any privilege such person may claim with respect to such information under federal or state law as to any other person or entity.

In addition, the bureau is proposing to readopt 12 CFR 1070.47(c) in modified form to provide that the bureau’s provision of privileged information to another federal or state agency does not waive any applicable privilege, whether the privilege belongs to the bureau or any other person.

The proposed rule is open for comment for 30 days after the rule is published in the Federal Register.