Despite the CFPB's intent to clarify, correct and amend certain provisions, industry reviewers feel the proposal goes well beyond this scope, and in some instances, beyond statutory authority.
“Information sharing is a critical component to ensuring the safety and soundness of financial institutions and their provision of financial services to consumers,” CUNA’s letter reads. “However, the vast expansion of information sharing contemplated by the proposal could increase the risk of unintended disclosures and a loss of confidentiality, which could ultimately harm consumers.”
The area of greatest concern is changes to the subpart that deals with confidential information.
Highlights of the letter include:
- CUNA asked the CFPB to refrain from expanding the scope of a section that allows the bureau to disclose CSI that pertains to a supervised institution to that institution to also include CII;
- CUNA opposes a proposed change that would allow the bureau to disclose CSI and CII to an institution’s service providers, due to numerous potential unforeseen consequences, including possible compromise of attorney-client privilege held by the institution as well as disclosure of proprietary information;
- CUNA strongly opposes a proposed removal of a provision that limits CFPB sharing of CSI to only those agencies with jurisdiction over the institution. This removal is unnecessary for supervision and enforcement purposes and exposes the CSI to potential unauthorized release; and
- A proposed new definition of “agency” could exacerbate the above concerns, CUNA believes, due to the new definition encompassing non-governmental agencies. The CFPB has not provided rationale for this expansion, and it also contains potential for unauthorized release.
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