The Consumer Financial Protection Bureau has warned banks and other financial institutions that they could face serious penalties if they publicly divulge any information related to a bureau investigation.
In a “compliance bulletin” issued Tuesday, the CFPB said that all “confidential supervisory information” cannot be disclosed to third parties. This includes “any communications between the CFPB and a supervised financial institution.” This includes any documents or communications related to an investigation and any information derived from them.
The bulletin states, “any disclosure of CSI outside of the applicable exceptions would require prior written approval.”
The financial institutions cannot even publicly divulge any information they provided to the CFPB, even though that would not necessarily involve information generated by the probe.
CFPB Director Richard Cordray said the government was enhancing transparency by prohibiting the release of information.
“The CFPB’s supervision program holds companies accountable for how they treat consumers. The Bureau’s oversight of banks and nonbanks alike helps to level the playing field for all companies, and to ensure a fair and transparent marketplace for consumers,” Cordray said in a statement.
A spokesman for the bureau did not respond to a request for comment at press time.
The U.S. Consumer Coalition, a business-backed nonprofit group, charged that the bulletin was in response to its divulging information related to a federal probe called Operation Chokepoint.
“Following the release by USCC of audio recordings of a credit union executive talking about intimidation by federal regulators, the CFPB has apparently decided to take that intimidation public by issuing a guidance reminding banks not to discuss details of federal bank examinations,” said Brian Wise, senior adviser to the coalition.
Operation Chokepoint is a controversial federal probe into alleged financial fraud involving payday lenders, escort services and gun dealers. The probe itself has been the subject of at least two probes by internal government watchdogs into whether the Chokepoint investigators abused their authority.
