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Counsel Dustin Nofziger, a member of the Financial Institutions Practice, and Partner Pinchus D. Raice, Co-Chair of the Financial Institutions Practice, co-authored the article "Federal Deposit Insurance Corporation Should Modernize Its Regulations on Confidential Supervisory Information," published in the January–February 2026 edition of The Journal of Federal Agency Action.
The article explains that the federal banking agencies and the New York State Department of Financial Services (DFS) permit supervised financial institutions to disclose confidential supervisory information (CSI) to their outside regulatory counsel for the purpose of obtaining legal advice, without prior regulatory approval. The Federal Deposit Insurance Corporation (FDIC), however, remains the sole outlier, requiring supervised institutions to obtain authorization before sharing CSI with counsel.
Dustin and Pinchus discuss how the FDIC's position materially interferes with the attorney-client relationship, delays the provision of informed legal advice, and prejudices institutions seeking to pursue time-sensitive intra-agency appeals of FDIC supervisory determinations. They also explain that other federal and state regulators, including the OCC, Federal Reserve Board, CFPB, NCUA, and DFS, have adopted sensible, modern approaches that protect confidentiality without obstructing access to counsel.
The authors urge the FDIC to modernize its CSI regulations by aligning them with the OCC standard, which permits a supervised institution to disclose CSI to counsel when "necessary or appropriate for business purposes." Adopting this time-tested approach would promote regulatory consistency and would ensure that supervised institutions can obtain timely and effective legal advice.
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