United States: When Confidential Supervisory Information Hinders Attorney-Client Relationships

Last Updated: June 14 2017
Article by Jeffrey Alberts and Dustin N. Nofziger

In a recent article for the New York Law Journal, Partner Jeffrey Alberts, Co-Chair of Pryor Cashman's Financial Institutions Group, and Associate Dustin Nofziger examined how federal regulations concerning confidential supervisory information (CSI) can interfere with the attorney-client relationship.

"Attorneys who do not work in the banking space are often shocked to learn that federal banking regulators use regulations governing CSI to prevent banks and their officers and directors from consulting with outside counsel and to monitor that communication when it occurs," Alberts and Nofziger wrote. "When a bank, or one of its officers or directors, wants to seek legal advice concerning documents or information that a regulator deems to be 'CSI,' banking regulators take the position that this can only be done with prior agency approval." And because approval is often delayed, or even withheld completely, clients are unable to discuss critical CSI with counsel, placing them at a great disadvantage.

Further, even where consent is granted by the regulator, it is frequently contingent upon counsel informing the regulator what CSI is being shared, which, the authors note, "effectively results in the regulator monitoring the documents and topics about which banking clients seek legal advice."

Because these requirements can drive a wedge between attorneys and clients, it is vital for any lawyer representing financial institutions to understand how the regulations work and what options are available to minimize interference with attorney-client communications.

What Constitutes CSI?

Each federal banking regulator has its own definition of CSI and set of rules governing how it may be received. However, all regulations state that CSI is the property of the regulator - not the bank - and that it may only be disclosed to specific persons upon prior approval of the regulator.

"Federal banking regulators take a broad view of what constitutes CSI," Alberts and Nofziger explained. In addition to reports of examination and related supervisory correspondence, certain regulators, including the Federal Deposit Insurance Corporation (FDIC), maintain that even records "related" to reports of examination qualify as CSI.

Similarly, Office of the Comptroller of the Currency (OCC) regulations state that "[c]onfidential information relating to operating and no longer operating national banks" constitutes CSI, "which, if taken literally," the authors wrote, "would encompass a wide variety of confidential bank 'information' (not just documents) that has little or nothing to do with the OCC."

The Federal Reserve Board (FRB) includes "information derived from, related to, or contained in" reports of examination within the scope of CSI, a characterization which unfairly captures a vast swath of bank information and documents.

How Regulations Concerning CSI Impede Attorney-Client Relationships

The regulatory standards are even more unfavorable for attorneys representing bank directors or officers, who are prohibited from disclosing any CSI to counsel without the regulator's prior approval. "This framework puts client and counsel at the whim of federal banking regulators, who may delay in ruling on requests for CSI authorization for strategic advantage and, when they do rule on such requests, may choose to authorize the disclosure of only limited types of CSI," Alberts and Nofziger said.

In the event a bank receives an unfavorable report of examination, it has only a short timeframe in which to decide whether to appeal the report. The advice of experienced outside counsel can be hugely beneficial in these situations, but delays on the part of regulators in granting authorization to disclose CSI can prevent the bank from obtaining legal counsel in time to file an appeal.

Similarly, in the case of bank officers and directors, by prohibiting the automatic disclosure of a report of examination to counsel, "regulators effectively take the position that after learning of these allegations, the client cannot seek advice concerning how to prepare for a potential enforcement action based on the alleged misconduct until after the regulator consents to this disclosure. Meanwhile, the regulator is free to build its case against the client by issuing subpoenas to the bank, its employees and even the client for documents and information."

"In such circumstances," the authors wrote, "counsel for the director or officer desperately needs the report of examination to advise the client regarding a potential enforcement or even criminal action and how to respond to any subpoenas or other requests received from the regulator."

Guidance for Dealing with Regulatory Intransigence When Seeking CSI Authorization

Alberts and Nofziger recommended five key strategies for outside counsel seeking CSI authorization in connection with their representation of bank clients:

  • Ensure that a timely request is made for authorization to share CSI with counsel, seeking expedited consideration where necessary;
  • Promptly request an extension from the regulator of any deadlines until after authorization to receive the CSI is obtained;
  • Create a written record documenting if and how a regulator's delay is interfering with the representation or the attorney-client relationship;
  • If a request for CSI is denied, consider whether to submit oral or written appeals;
  • Carefully consider whether documents necessary for the representation are not CSI under the relevant regulatory provisions.

"These strategies will not level the playing field that has become improperly tilted against clients seeking legal advice, but they will limit the ability of banking regulators to use this unfairness to their tactical advantage."

To read the full New York Law Journal article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Jeffrey Alberts
Events from this Firm
30 Nov 2017, Webinar, New York, United States

On November 30, 2017, Art Law Partner William Charron will present a CLE lecture entitled, "Art Law Issues of Authenticity and Chain of Title Disputes."

8 Feb 2018, Seminar, New York, United States

On February 8, 2018, Partner Avram Morell will be a featured speaker at the Basic Immigration Law program presented by the Practising Law Institute (PLI).

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.