March 27, 1997
Cheryl K. Zemelman
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Re: FOIA Appeal
(Your March 10, 1997 Letter)
Dear Ms. Zemelman:
This is in response to your March 10, 1997 appeal pursuant to
the Freedom of Information Act (FOIA). On December 12, 1996,
Jerome Snider of your law firm appealed a denial of certain records
pursuant to the FOIA. In processing the appeal, we identified
examination records of Providence Teachers State Credit Union
that had been sent to our archives and appeared to be responsive
to the original request. These records had not been previously
identified. Once the records were retrieved from archives, the
newly identified records, with some redactions, were sent to Mr.
Snider on February 18, 1997. Redactions were made pursuant to
exemptions 6 and 8 of the FOIA (12 U.S.C. 552b(6) and (8)). You
have now appealed our decision to withhold information pursuant
to exemptions 6 and 8 of the FOIA. Your appeal is denied as discussed
below.
As you can see from the records sent to you with our February
18 letter, very little material was redacted and withheld. No
documents were withheld in full. The redacted information consists
of names identifying borrowers (exemption 6) and CAMEL code information
on the credit union (exemption 8).
Exemption 6
Exemption 6 of the FOIA protects information about an individual
in "personnel and medical files and similar files" where
the disclosure of such information "would constitute a clearly
unwarranted invasion of personal privacy." 5 U.S.C. 552(b)(6).
The courts have held that all information which applies to a
particular individual meets the threshold requirement for exemption
6 protection. United States Department of State v. Washington
Post Co., 456 U.S. 595 (1982). As noted above, the information
withheld pursuant to exemption 6 consists of names of borrowers.
The redacted information clearly meets the threshold requirement
for exemption 6 personal information. Once a privacy interest
is established, application of exemption 6 requires a balancing
of the public's right to disclosure against the individual's right
to privacy. Department of the Air Force v. Rose, 425 U.S.
352, 372 (1976). The public interest in the information is to
"shed light on an agency's performance of its statutory duties."
United States Department of Justice v. Reporters Committee,
489 U.S. 749 (1989). The burden of establishing that disclosure
would serve the public interest is on the requester. Carter
v. United States Department of Commerce, 830 F.2d 388, 391
(D.C. Cir. 1987). The court in Reporters Committee held
that the interest of the individual FOIA requester is not to be
considered in the balancing. The privacy interest of the individual
is to be balanced against the public interest generally in disclosure.
489 U.S. at 771-772. We believe there is minimal, if any, public
interest in disclosing the names of individual borrowers. The
individual borrowers' privacy interest clearly outweighs any public
interest in disclosure. Therefore, this information continues
to be withheld pursuant to exemption 6 of the FOIA.
Exemption 8
Exemption 8 of the FOIA 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). Information withheld pursuant to exemption
8 consists of the CAMEL code ratings assigned to the credit union.
The ratings were assigned by NCUA examiners when Providence Teachers
State Credit Union (a RISDIC insured credit union) applied for
federal share insurance. We reassert the applicability of exemption
8 to the redacted CAMEL codes.
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). Examination
reports as well as matters that are related to such reports (the
findings of an examination and its follow-up) have been withheld
from disclosure. See Atkinson, at 80,102. Records
pertaining to a financial institution no longer in operation can
be withheld pursuant to exemption 8. Gregory v. FDIC,
631 F.2d 896 (D.C. Cir. 1980). In addition, courts have generally
not required agencies to segregate and disclose portions of documents
unrelated to the financial condition of the institution. See
Atkinson, at 80,103. It is appropriate to withhold
entire documents pursuant to this exemption.
Discretionary Disclosure
The examination reports and related documents released on February
18 were released solely pursuant to NCUA's discretionary authority.
NCUA has not waived its right to invoke exemption 8, or any other
exemption, that might be applicable to similar or related information
in the future. Courts have held that in no case has the release
of certain documents waived the exemption as to other similar
documents. On the contrary, courts have generally found that
the release of certain documents waives the FOIA exemptions only
for those specific documents released. Mobil Oil Corp. v.
EPA, 879 F.2d 698 (9th Cir. 1989).
Judicial Review
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 portions of documents withheld and to order production of
the complete documents. Such a suit may be filed in the United
States District Court in the district where the requester resides,
where the requester's 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
GC/HMU:bhs
SSIC 3212
97-0310