BPI Offers Recommendations to NY Financial Services Regulator on a Re-Proposed Regulation on Disclosure of Confidential Supervisory Information

On Nov. 9, BPI submitted comments to the New York Department of Financial Services (NYDFS) on its re-proposal to introduce a new regulation on the use and disclosure of NYDFS confidential supervisory information (CSI) under Section 36.10 of the New York Banking Law.  BPI’s letter generally supported the proposed revision to the NYDFS CSI framework to allow NYDFS-supervised institutions to disclose NYDFS CSI, such as examination reports, to outside legal counsel, auditors and affiliates without the need to first obtain the NYDFS’ written approval.  BPI believes that the current approach inhibits the flow of CSI between financial institutions and their trusted external advisors and affiliates.  At the same time, however, BPI offered the NYDFS several recommended revisions to the NYDFS’ re-proposed CSI framework designed to facilitate effective and efficient compliance by regulated entities (e.g., by removing unnecessary barriers to sharing CSI with third party service providers as did the Federal Reserve in a recent rulemaking), and promote safety and soundness (e.g., through greater ability to share NYDFS CSI with other bank regulators that have supervisory oversight over the institution and other party(ies) to merger and acquisition transaction). BPI had previously filed an initial comment letter in January on the original proposal.