# Title 6 — Banks and Banking

## Chapter 6-13 — Self-Critical Analysis Privilege of Financial Institutions

### § 6-13-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:
1. "Commissioner" means the commissioner of financial institutions.
2. "Compliance audit" means a voluntary, internal evaluation, review, assessment, audit,
or investigation for the purpose of identifying or preventing noncompliance with, or
promoting compliance with, laws, regulations, orders, or industry or professional
standards, which is conducted by or on behalf of a financial institution.
3. "Compliance self-critical analysis audit document" means a document prepared as a
result of or in connection with a financial institution's compliance audit. A compliance
self-critical analysis audit document may include a written response to the findings of a
compliance audit. A compliance self-critical analysis audit document may include, as
applicable, field notes and records of observations, workpapers, findings, opinions,
suggestions, conclusions, drafts, memoranda, drawings, photographs, exhibits,
computer-generated or electronically recorded information, telephone records, maps,
charts, graphs, and surveys, provided this supporting information is collected or
developed for the primary purpose and in the course of a compliance audit. A
compliance self-critical analysis audit document also includes:
a. A compliance audit report prepared by an auditor, who may be an employee of
the financial institution or an independent contractor, which may include the
scope of the audit, the information gained in the audit, and conclusions and
recommendations, with exhibits and appendices;
b. Memoranda and documents analyzing portions or all of the compliance audit
report and discussing potential implementation issues;
c. An implementation plan that addresses correcting past noncompliance, improving
current compliance, and preventing future noncompliance; or
d. Analytic data generated in the course of conducting the compliance audit.
4. "Financial institution" means any organization authorized to do business under state
and federal laws relating to financial institutions, including a bank, the Bank of North
Dakota, a savings bank, a trust company, a savings and loan association, or a credit
union.
### § 6-13-02. Self-critical analysis privilege created - Scope.

A compliance self-critical analysis privilege is created to protect the confidentiality of
compliance self-critical analysis documents or communications in regard to their content relating
to voluntary internal compliance audits conducted by financial institutions and persons in regard
to activities regulated under title 6 or federal law, both to conduct voluntary internal audits of its
compliance programs and management systems and to assess and improve compliance with
state and federal statutes, rules, and orders. The compliance self-critical analysis privilege
applies to all litigation or administrative proceedings pending on August 1, 2001.
### § 6-13-03. Compliance self-critical analysis document not discoverable or admissible.

Except as provided in this chapter, a compliance self-critical analysis audit document is
privileged information and is not discoverable or admissible evidence in any legal action in any
civil, criminal, or administrative proceeding. The privilege is a matter of substantive law of this
state and is not merely a procedural matter governing administrative, civil, or criminal
procedures in the courts of this state.
### § 6-13-04. Application of privilege.

If a financial institution, person, or entity performs or directs the performance of a
compliance audit, an officer, employee, or agent involved with the compliance audit, or any
consultant who is hired for the purpose of performing the compliance audit, may not be
examined in any civil, criminal, or administrative proceeding as to the compliance audit or any

compliance self-critical analysis audit document. This section does not apply if it is determined
under section 6-13-06 or 6-13-07 that the privilege does not apply.
### § 6-13-05. Submission to commissioner.

1. Upon request of the commissioner, a financial institution must submit a compliance
self-critical analysis audit document to the commissioner, or the commissioner's
designee, as a confidential document under the provisions of section 6-01-07, without
waiving the privilege set forth in this chapter to which the financial institution would
otherwise be entitled. However, the provisions of section 6-01-07 permitting the
commissioner to release confidential documents and make them accessible to federal
financial institution regulatory agencies does not apply to the compliance self-critical
analysis audit documents voluntarily submitted. To the extent the commissioner has
the authority to compel the disclosure of a compliance self-critical analysis audit
document under other provisions of applicable law, any report furnished to the
commissioner may not be provided to any other person or entity and must be
accorded the same confidentiality and other protections as provided above for
voluntarily submitted documents. Any use of a compliance self-critical analysis audit
document furnished as a result of a request of the commissioner, whether under a
claim of authority to compel disclosure or not, is limited to determining whether any
disclosed defects in a financial institution's policies or procedures or inappropriate
treatment of customers has been remedied or that an appropriate plan for their remedy
is in place. The commissioner may not impose any type of administrative fine or
penalty as to any area addressed or matter covered in a compliance self-critical
analysis audit document furnished at the commissioner's request, except when there is
clear and convincing evidence that the financial institution failed to undertake
reasonable corrective action, eliminate inappropriate treatment of customers, or failed
to implement an appropriate plan to rectify any noncompliance with state and federal
statutes, rules, and orders.
2. A financial institution's compliance self-critical analysis audit document submitted to
the commissioner remains subject to all applicable statutory or common-law privileges,
including the work product doctrine, attorney-client privilege, or the subsequent
remedial measures exclusion. A compliance self-critical analysis audit document
submitted to and in the possession of the commissioner remains the property of the
financial institution and is not subject to any disclosure or production under section
44-04-18.
3. Disclosure of a compliance self-critical analysis audit document to a governmental
agency, whether voluntary or pursuant to compulsion of law, does not constitute a
waiver of the privilege with respect to any other person or any other governmental
agency.
### § 6-13-06. Waiver of privilege by financial institution - Grounds for determination of

privilege - Civil, administrative, or criminal proceedings.
1. The self-critical analysis privilege does not apply to the extent that it is expressly
waived by the financial institution that prepared or caused to be prepared the
compliance self-critical analysis audit document.
2. In a civil or administrative proceeding, a court of record, after an in camera review,
may require disclosure of material for which the privilege is asserted, if the court
determines one of the following:
a. The privilege is asserted for a fraudulent purpose; or
b. The material is not subject to the privilege.
3. In a criminal proceeding, a court of record, after an in camera review, may require
disclosure of material for which the privilege is asserted, if the court determines one of
the following:
a. The privilege is asserted for a fraudulent purpose;
b. The material is not subject to the privilege; or

c. The material contains evidence relevant to commission of a criminal offense, and
all three of the following factors are present:
(1) The commissioner, state's attorney, or attorney general has a compelling
need for the information;
(2) The information is not otherwise available; and
(3) The commissioner, state's attorney, or attorney general is unable to obtain
the substantial equivalent of the information by any other means without
incurring prohibitive cost and delay.
### § 6-13-07. Determination of privilege - Procedure.

1. If a person seeks from a financial institution communications involving a compliance
audit or any compliance self-critical analysis audit document during the course of a
pending civil or criminal proceeding, the financial institution may assert the self-critical
analysis privilege and provide the information set forth in subsection 6 during the
course of those proceedings just as any other privilege is asserted in the courts of this
state. If the court is required to make a determination as to the privilege, the court shall
follow the procedure and conditions set forth in subsection 5.
2. If there is a pending administrative proceeding, or there is no pending civil or criminal
proceeding, the commissioner, state's attorney, or attorney general may serve on a
financial institution a written request by certified mail for disclosure of a compliance
self-critical analysis audit document. Within thirty days after the commissioner, state's
attorney, or attorney general serves on a financial institution a written request by
certified mail for disclosure of a compliance self-critical analysis audit document, the
financial institution that prepared or caused the document to be prepared may file with
the appropriate court a petition requesting an in camera hearing on whether the
compliance self-critical analysis audit document or portions of the document are
privileged under this chapter or subject to disclosure. The court has jurisdiction over a
petition filed by a financial institution under this subsection requesting an in camera
hearing on whether the compliance self-critical analysis document or portions of the
document are privileged or subject to disclosure. Failure by the financial institution to
file a petition waives the privilege for only the specific request made.
3. A financial institution asserting the compliance self-critical analysis privilege in
response to a request for disclosure under this section shall include in its request for
an in camera hearing all of the information set forth in subsection 6.
4. Upon the filing of a petition under this section, the court shall issue an order
scheduling, within forty-five days after the filing of the petition, an in camera hearing to
determine whether the compliance self-critical analysis audit document or portions of
the document are privileged under this chapter or subject to disclosure.
5. The court, after an in camera review, may require disclosure of material for which the
privilege is asserted if the court determines, based upon its in camera review, that any
one of the conditions set forth in subsection 2 of section 6-13-06 is applicable as to a
civil or administrative proceeding or that any one of the conditions set forth in
subsection 3 of section 6-13-06 is applicable as to a criminal proceeding. Upon making
such determination, the court may only compel the disclosure of those portions of a
compliance self-critical analysis document relevant to issues in dispute in the
underlying proceeding. A compelled disclosure may not be considered to be a public
document or be deemed to be a waiver of the privilege for any other civil, criminal, or
administrative proceeding. A financial institution unsuccessfully opposing disclosure
may apply to the court for an appropriate order protecting the document from further
disclosure.
6. A financial institution asserting the compliance self-critical analysis privilege in
response to a request for disclosure under this section shall provide at the time of
making and filing any objection to the disclosure all of the following information:
a. The date of the compliance self-critical analysis audit document;
b. The identity of the entity conducting the audit;
c. The general nature of the activities covered by the compliance audit; and

d. An identification of the portions of the compliance self-critical analysis audit
document for which the privilege is being asserted.
### § 6-13-08. Privilege - Burden of proof - Stipulation.

A financial institution asserting the compliance self-critical analysis privilege set forth in this
chapter has the burden of demonstrating the applicability of the privilege. Once a financial
institution has established the applicability of the privilege, a party seeking disclosure has the
burden of proving that the privilege is asserted for a fraudulent purpose. The commissioner,
state's attorney, or attorney general seeking disclosure of the privilege has the burden of proving
the elements set forth in subdivisions a and c of subsection 3 of section 6-13-06.
The parties may at any time stipulate in proceedings under section 6-13-06 or 6-13-07 to
entry of an order directing whether the specific information contained in a compliance
self-critical analysis audit document is or is not subject to the privilege provided under this
chapter. Any such stipulation may be limited to the instant proceeding and, absent specific
language to the contrary, is not applicable to any other proceeding.
### § 6-13-09. Nonapplication of privilege.

The self-critical analysis privilege set forth in this chapter does not extend to:
1. Documents, communications, data, reports, or other information expressly required to
be collected, developed, maintained, or reported to a regulatory agency pursuant to
this title, or other federal or state law;
2. Information obtained by observation or monitoring by any regulatory agency; or
3. Information obtained from a source independent of the compliance audit.
