💡 Plain English Explanation

Regulatory disclosure clauses address the unique situation where financial institutions may be legally required to share confidential information with bank examiners and regulators. Unlike general compelled disclosure provisions (which typically address subpoenas and court orders), these clauses specifically recognize the routine, ongoing supervisory relationship between financial institutions and their regulators.

Bank examiners from the OCC, Federal Reserve, FDIC, NCUA, and state banking departments have broad statutory authority to access bank records and information as part of their supervisory functions. NDAs that purport to restrict such disclosure could put financial institutions in an impossible position, potentially violating either the NDA or their regulatory obligations.

These clauses typically address:

⚠ Why This Clause Matters

Statutory Requirements: Federal banking laws (12 U.S.C. 1820, 1867, etc.) give regulators broad authority to examine financial institutions and their service providers. Contracts cannot lawfully prevent banks from complying with these requirements.

Examination Cooperation: Financial institutions are expected to cooperate fully with examinations. An NDA that creates hesitation or delay in providing information to examiners could itself become a regulatory concern, potentially leading to criticism in examination reports or supervisory action.

Confidential Supervisory Information: Information disclosed to regulators often becomes "confidential supervisory information" (CSI), which is protected from public disclosure under bank regulatory privilege. This provides some protection for sensitive information, though it does not prevent regulatory use.

Enforcement Proceedings: In enforcement matters, regulators may require production of documents subject to NDAs. Clear contractual language avoids disputes about whether such disclosure is permitted and eliminates breach-of-contract exposure for the disclosing party.

📄 Clause Versions

Balanced Version: Provides clear authority for regulatory disclosure while including reasonable notice provisions and requests for confidential treatment. Suitable for most financial services relationships. 
REGULATORY DISCLOSURE

1. Permitted Regulatory Disclosures. Notwithstanding any other provision of this Agreement, either party may disclose Confidential Information to:

(a) Any federal or state banking regulator, examiner, or supervisory authority having jurisdiction over such party, including but not limited to the Office of the Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, National Credit Union Administration, and state banking departments;

(b) Any self-regulatory organization to which such party is subject, including FINRA and securities exchanges;

(c) Any other governmental or regulatory authority in connection with any examination, investigation, inquiry, or proceeding.

2. Scope. Disclosure under this Section is permitted:

(a) In connection with routine examinations and supervisory activities;
(b) In response to formal or informal requests from regulatory authorities;
(c) In connection with enforcement proceedings, consent orders, or other regulatory actions;
(d) As otherwise required by applicable law, regulation, or regulatory guidance.

3. Notice. Where legally permissible, the disclosing party shall provide reasonable advance notice to the other party before making a disclosure under this Section, except that no notice shall be required for:

(a) Routine examination requests;
(b) Disclosures where notice is prohibited by the requesting authority;
(c) Disclosures to self-regulatory organizations in the ordinary course.

4. Confidential Treatment. Where practicable and appropriate, the disclosing party shall request that the regulatory authority treat the disclosed Confidential Information as confidential supervisory information or otherwise afford it confidential treatment under applicable regulations.

5. No Waiver. Disclosure to a regulatory authority pursuant to this Section shall not constitute a waiver of any privilege, trade secret protection, or confidentiality protection otherwise applicable to the Confidential Information.

6. Regulatory Authority Definition. For purposes of this Agreement, "regulatory authority" includes any federal, state, local, or foreign governmental authority, regulatory agency, self-regulatory organization, or other body having jurisdiction over a party's activities.
Disclosing Party Favor: Provides expansive regulatory disclosure permissions with minimal notice requirements. Appropriate for financial institutions that need maximum flexibility to comply with regulatory obligations without contractual restrictions. 
REGULATORY DISCLOSURE

1. Unrestricted Regulatory Access. The Receiving Party acknowledges that the Disclosing Party is subject to extensive regulation and examination by federal and state authorities. Notwithstanding any other provision of this Agreement:

(a) The Disclosing Party may disclose any Confidential Information to any regulatory authority, examiner, auditor, or governmental body in connection with any examination, investigation, inquiry, audit, or proceeding, without restriction and without the consent of the Receiving Party;

(b) The Disclosing Party shall have no obligation to provide notice to the Receiving Party before or after any regulatory disclosure;

(c) The Disclosing Party shall have no obligation to seek confidential treatment, protective orders, or other limitations on regulatory use or disclosure of Confidential Information;

(d) The Disclosing Party may provide Confidential Information to regulatory authorities proactively, without any request or compulsion, if the Disclosing Party determines in its sole discretion that such disclosure is appropriate.

2. Broad Regulatory Scope. For purposes of this Section, "regulatory authority" includes:

(a) All federal banking regulators (OCC, Federal Reserve, FDIC, NCUA, CFPB);
(b) All state banking regulators and departments;
(c) The Securities and Exchange Commission and state securities regulators;
(d) FINRA, securities exchanges, and other self-regulatory organizations;
(e) The Department of Justice, state attorneys general, and law enforcement agencies;
(f) The Department of the Treasury, FinCEN, and OFAC;
(g) Foreign regulatory authorities with jurisdiction over the Disclosing Party's operations;
(h) Any successor agency to any of the foregoing;
(i) Any other governmental authority with regulatory jurisdiction over the Disclosing Party.

3. No Restriction on Cooperation. Nothing in this Agreement shall be construed to:

(a) Limit the Disclosing Party's ability to cooperate with any regulatory authority;
(b) Require the Disclosing Party to assert any privilege, objection, or defense to regulatory requests;
(c) Require the Disclosing Party to notify the Receiving Party of any regulatory matter;
(d) Create any liability of the Disclosing Party for regulatory disclosures.

4. Receiving Party Obligations. The Receiving Party shall:

(a) Cooperate with any regulatory examination or inquiry relating to the Disclosing Party;
(b) Provide information and documentation to regulatory authorities upon request;
(c) Not take any action to impede or delay the Disclosing Party's regulatory disclosures;
(d) Not assert any claim against the Disclosing Party based on regulatory disclosures.

5. Survival. This Section shall survive termination of this Agreement.
Receiving Party Favor: Permits necessary regulatory disclosures while requiring notice (where possible) and efforts to protect confidentiality. Appropriate where the receiving party has legitimate concerns about the scope of disclosure and wants reasonable process protections. 
REGULATORY DISCLOSURE

1. Permitted Disclosures. Confidential Information may be disclosed to a regulatory authority only:

(a) In response to a formal written request or examination requirement from a regulatory authority having jurisdiction over the disclosing party;
(b) As specifically required by applicable law or regulation;
(c) Pursuant to a lawful subpoena, civil investigative demand, or similar compulsory process.

2. Limitations on Proactive Disclosure. The disclosing party shall not proactively volunteer Confidential Information to regulatory authorities except:

(a) Where required by law, regulation, or regulatory guidance;
(b) In response to a specific request from the regulatory authority;
(c) Where necessary to respond to examination questions or supervisory concerns.

3. Notice Requirements. Before disclosing Confidential Information to any regulatory authority, the disclosing party shall:

(a) Provide at least ten (10) business days' prior written notice to the other party, unless prohibited by the regulatory authority or applicable law;
(b) Describe the nature and scope of the requested disclosure;
(c) Provide copies of any written request or demand (to the extent permitted);
(d) Consult with the other party regarding the disclosure, unless time constraints make consultation impractical.

4. Confidential Treatment. The disclosing party shall use commercially reasonable efforts to:

(a) Limit the scope of disclosure to information specifically requested or required;
(b) Request that the regulatory authority treat disclosed information as confidential;
(c) Assert any available privileges or protections (to the extent consistent with regulatory requirements);
(d) Provide advance copies of proposed disclosures for review where practicable.

5. Opportunity to Seek Protection. If the other party wishes to seek a protective order or other limitation on disclosure:

(a) The disclosing party shall provide reasonable cooperation;
(b) The disclosing party shall delay disclosure for a reasonable period (not exceeding ten business days) to permit the other party to seek protection;
(c) The other party shall bear all costs of seeking such protection.

6. No Waiver. Any disclosure pursuant to this Section shall be made with a request that such disclosure not constitute a waiver of any applicable privilege or protection.

7. Post-Disclosure Notice. If the disclosing party makes any regulatory disclosure without prior notice (due to prohibition or timing constraints), it shall provide notice to the other party as soon as legally permissible thereafter, describing the nature and scope of the disclosure made.

💬 Key Considerations