Linda Lacewell, Department of Financial Services. (Courtesy photo)

The New York State Department of Financial Services is seeking to make it easier for banks regulated by the state to share confidential supervisory information with their attorneys or an independent auditor, Superintendent Linda Lacewell said Thursday.

The agency is proposing a new regulation that would allow banks to share that information with their attorneys without first consulting the state.

"With this action, DFS is delivering on a promise I made to ensure the department engages in an open dialogue with the financial services industry to streamline processes," Lacewell said. "This is one of the many steps DFS is taking to ensure an efficient regulatory structure to assist the industry."

Banks currently have to get written approval from DFS every time they want to share confidential supervisory information with their attorneys or an independent auditor.

The new regulation would allow a state-regulated bank to skip getting approval from DFS if its attorneys or independent auditor agree to a handful of requirements beforehand.

Under the regulation, those entities would have to agree to keep that information confidential, only use it for providing legal counsel or auditing services, and only disclose it to employees, directors, or officers on a "need to know" basis.

Banks would also have to keep a written record of all confidential supervisory information disclosed, and a copy of each written agreement they have with their attorneys or auditors.

Those requirements are among others also included in the regulation, which will be open for a 60-day comment period starting November 27, DFS said.

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