Asserting and Defending the Bank Examination Privilege in Litigation

Gain an understanding on bank examination privilege and how to protect privileged information in litigation.

Banking institutions benefit from a unique privilege held by prudential regulators with respect to the confidential information they exchange in furtherance of the regulators' examination and supervision responsibilities. This privilege - the bank examination privilege - serves to protect confidential supervisory information (CSI) from disclosure to third parties, including litigants, as part of discovery proceedings. Confusion regarding the qualified nature of the bank examination privilege, along with the varied and sometimes conflicting regulator and court interpretations of its scope and application, can lead to the improper and unnecessary disclosure of protected materials. And, the interaction between the bank examination privilege and other privileges and protections available to banks can have far-reaching implications. This information aims to help banks navigate the bank examination privilege in responding to discovery requests seeking CSI. By walking through the scope of the privilege and applicable regulations, the program equips compliance and legal personnel with critical information regarding how to approach regulators to obtain assertion of the privilege and possible steps to take in response to efforts by litigants to override the privilege. The topic will feature illustrative case examples and hypotheticals and will explore the relationship between the attorney-client privilege and the bank examination privilege. Understanding how to identify CSI and respond to investigatory and discovery demands can help to minimize the risks and avoid the consequences of the inadvertent disclosure.