The new Consumer Financial Protection Bureau could "potentially" share the results of its examinations of large banks with state attorneys general, according to K&L Gates attorneys.
Federal banking regulators are very protective of examination information and consider it confidential.
However, the bureau has issued interim final rules that spell out its powers to investigate and prosecute violations of federal consumer protection laws.
These interim rules allow the CFPB to share examination information, according to an Aug. 16 K&L Gates report. If shared with state AGs, it would give them access to bank information that would only be available through the exercise of "visitorial powers" and the approval of the courts.
K&L Gates attorneys suggest their banking clients may want to comment on the confidentiality provisions in the interim rules. The comment period ends September 26.
The CFPB and state AGs have already entered into an agreement to share information about consumer complaints and other information they receive from the public.
The Dodd-Frank Act granted state AGs the authority to file lawsuits to enforce CFPB regulations.
The Washington attorneys at K&L Gates also noticed that the CFPB has a lot of flexibility in conducting investigative hearings. "In CFPB hearings, witnesses or their counsel may not object on the grounds that the question is outside the scope of the investigation."
