Lawyers Win An Attorney-Client Privilege Victory In Congress

A bill sought by the organized bar and sponsored by Rep. Bill Huizenga of Michigan was passed on Tuesday by unanimous consent of the Senate and is expected to be signed by President Obama soon. The bill amends the Federal Deposit Insurance Act to clarify that when banks and other supervised entities submit privileged information to the Consumer Financial Protection Bureau (CFPB), the privilege will not be waived as to any third parties and the CFPB can share the information with other federal agencies without affecting its privileged status.   Before this amendment the act only expressly protected against third party waiver with respect to privileged materials that banks provide to the traditional banking regulators such as the FDIC and the Federal Reserve.  Without the change, banking and other corporate clients and their lawyers could inadvertently have waived their privileges as to all third parties when they submit privileged information to the CFPB.