When Confidential Supervisory Information Hinders Attorney-Client Relationships

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,