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Journal of the Professional Lawyers



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Federal Banking Regulation; Privacy Policies; Attorney-Client Privilege


This essay examines three ways in which bank regulation has spawned significant exceptions to the ordinary judicial and administrative understanding of the attorney-client privilege. First, federal banking agencies assert that they have the legal authority selectively to compel banks and other financial institutions they supervise to disclose attorney-client privileged information. Second, when banks disclose privileged material to bank regulators, even if voluntarily, banks retain the privilege with respect to third parties pursuant to specific federal statutory authority. Third, under agency policy, once bank regulators obtain privileged information from a bank, whether through compulsion or voluntarily, the regulators reserve the right to share the information with any other government agency, notwithstanding the selective waiver statute. This state of affairs raises questions about the wisdom of the federal banking laws and regulatory policies, but also it raises questions about the conventional privilege doctrine: Is the public interest best served if bank regulators can compel banks to disclose confidential attorney-client communications, even with express statutory protections against third party access? If so, is bank regulation unique in this respect, or would the public be best served if other regulatory and law enforcement agencies, such as the SEC or the DOJ, had a similar power, and if entities could generally disclose privileged material to these other public agencies without waiving the privilege generally? This essay addresses these questions.