April 29, 1996
Martin J. Hughes
Treasurer/Manager
United Telephone Credit Union, Inc.
20525 Center Ridge Road, Room 410
Cleveland, OH 44116
Re: Freedom of Information Act Appeal
(Your April 1, 1996 Letter)
Dear Mr. Hughes:
On February 24, 1996, you filed a Freedom of Information Act
(FOIA) request with Nicholas Veghts, NCUA's Region IV Director.
You requested copies of all NCUA records involving the United
Telephone Credit Union (hereinafter credit union) and yourself.
The credit union was previously insured by the National Credit
Union Share Insurance Fund (NCUSIF). NCUSIF insurance was canceled
effective October 31, 1985. Region IV responded to your request
on March 13, 1996. Copies of most of the documents that were
in the canceled charter file were forwarded per your request.
Certain documents were withheld pursuant to exemptions 5, 6 and
8 of the FOIA, 5 U.S.C. 552(b)(5), (6) and (8). We received your
April 1, 1996 appeal on April 4. Your appeal is granted in part
and denied in part.
In your appeal letter you state your belief that there are a substantial
number of documents that were not produced. You seem to be questioning
the accuracy of the FOIA search rather than the use of FOIA exemptions
to withhold documents. We will first address the FOIA search.
United Telephone Credit Union is a state chartered credit union
that was insured by the NCUSIF until October 31, 1985. NCUA has
not had any supervisory authority over the credit union since
that time. According to normal operating procedures, Region IV
sent its credit union files to a remote storage site several years
ago. Upon receipt of your FOIA request, Region IV contacted the
storage site. Due to the age of the records, they had been destroyed.
The Region did locate one credit union file that was maintained
in their office. Most of the contents of that file were sent
to you with the Region's March 13 response. The only documents
that you did not receive were those withheld pursuant to FOIA
exemptions. All existing documents responsive to your FOIA request
were reviewed. Although you do not specifically question the
withholding of documents pursuant to the FOIA exemptions, we will
address the documents withheld and the applicable exemptions.
Exemption 5
Several documents were withheld pursuant to exemption 5 of the
FOIA. Some of the documents were draft versions of correspondence
that were never finalized or sent. Other documents were internal
memoranda withheld pursuant to both exemptions 5 and 8 of the
FOIA. Exemption 5 of the FOIA protects "inter-agency or
intra-agency memorandums or letters which would not be available
by law to a party ... in litigation with the agency." 5
U.S.C. 552(b)(5). Included within exemption 5 is information
subject to the deliberative process privilege. The purpose of
this privilege is "to prevent injury to the quality of agency
decisions." NLRB v. Sears, Roebuck & Co., 421
U.S. 132, 151 (1975). Three policy purposes have been held to
constitute the bases for the deliberative process privilege:
(1) to encourage open, frank discussions on matters of policy
between subordinates and superiors; (2) to protect against premature
disclosure of proposed policies before they are finally adopted;
and (3) to protect against public confusion that might result
from disclosure of reasons and rationales that were not in fact
ultimately the grounds for an agency's action. Russell v.
Department of the Air Force, 682 F.2d 1045 (D.C. Cir. 1982).
The courts have established two fundamental requirements for the
deliberative process privilege to be invoked. The information
must be predecisional and it must be deliberative. Mapother
v. Department of Justice, 3 F.3d 1533 (D. C. 1993). Information
in the draft correspondence is clearly predecisional as it was
never finalized and sent. The drafts also contain deliberative
information. The internal memoranda withheld contain predecisional
and deliberative information. Exemption 5 does not always allow
for entire documents to be withheld (factual information that
is not deliberative in nature must be disclosed, see Mapother
at 1538 - 40). Portions of one document withheld pursuant to
exemption 5 have been redacted and the redacted document is released.
Other exemption 5 documents are released in full due to the fact
that they are so old the information no longer needs to be protected
from disclosure. The documents are enclosed.
Exemption 8
Examination and examination related documents were withheld pursuant
to exemption 8 of the FOIA. Exemption 8 exempts information:
Contained in or related to examination, operating, or condition
reports prepared by, on behalf of, or for the use of an agency
responsible for the regulation or supervision of financial institutions.
5 U.S.C. 552(b)(8).
The courts have discerned two major purposes for exemption 8 from
its legislative history: 1) to protect the security of financial
institutions by withholding from the public reports that contain
frank evaluations of a bank's stability; and 2) to promote cooperation
and communication between employees and examiners. See
Atkinson v. FDIC, 1 GDS 80,034, at 80,102 (D.D.C. 1980).
Either purpose is sufficient reason to withhold examination information.
The NCUA regulation implementing exemption 8 of the FOIA is found
at 12 C.F.R. 792.3(a)(8). Section 792.3(a)(8) repeats exemption
8 and states:
This includes all information, whether in formal or informal report
form, the disclosure of which would harm the financial security of
credit unions or would interfere with the relationship between
NCUA and credit unions.
Courts have interpreted exemption 8 broadly and have declined
to restrict its all- inclusive scope. Consumers Union of United
States, Inc. v. Heimann, 589 F.2d 531 (D.C. Cir. 1978). In
keeping with the expansive construction of exemption 8, the Atkinson
case held that agencies are not required to segregate and disclose
portions of documents unrelated to the financial state of the
institution. Examination reports and related information as well
as one letter have been withheld from disclosure. Exemption 8
has been used to withhold portions of other documents that contain
specific information about named financial institutions. Wachtel
v. Office of Thrift Supervision, No. 3-90-833 (M.D. Tenn.
Nov. 20, 1990.) We believe that the purposes of exemption 8 are
met. Except for a balance sheet and income statement that are
enclosed, documents withheld by Region IV pursuant to exemption
8 continue to be withheld in their entirety.
We note that exemptions 5 and 8 apply regardless of the fact that
you are seeking documents that concern your own credit union.
Under the FOIA, once documents are made available to one requester,
they are generally available to any other requester. We cannot
make a disclosure to limited parties pursuant to the FOIA. We
also note that exemption 6 was used in the Region's response to
your FOIA request. Upon further review, we have determined that
exemption 6 is not applicable to the documents withheld pursuant
to your FOIA request.
Pursuant to 5 U.S.C. 552(a)(4)(B), you may seek judicial review of this determination by filing suit to enjoin NCUA from withholding the documents you requested and to order
production of the documents. Such a suit may be filed in the
United States District Court in the district where you reside,
where your principal place of business is located,
the District of Columbia, or where the documents are located (the
Eastern District of Virginia).
Sincerely,
Robert M. Fenner
General Counsel
Enclosures
GC/HMU:bhs
96-0407
SSIC 3312