June 25, 1998
Mr. Charles W. Filson
Callahan and Associates
1001 Connecticut Avenue, NW
Suite 1001
Washington, DC 20036
Re: FOIA Appeal, your letter dated May 27, 1998
Dear Mr. Filson:
On March 24, 1998, you submitted a Freedom of Information Act
(FOIA) request to Becky Baker, Secretary of the NCUA Board, for
copies of any material presented to the NCUA Board that illustrate
Central Liquidity Facility (CLF) lending from 1979 through 1983.
You identified four federal credit unions (Mather FCU, Mare Island
FCU, Eglin FCU, and Chattanooga TVA FCU) you believed to be participants
in the CLF lending program. You also requested agency records
concerning special lending programs developed to help credit unions
that were affected by the Penn Square Bank liquidation. Dianne
Salva, NCUA Staff Attorney, responded to your request on April
27, 1998. Your request concerning three of the named credit unions
was denied pursuant to exemptions 5 and 8 of the FOIA (5 USC 552b(5)
and (8)). As noted in Ms. Salva's letter, responsive documents
consisted of four Board Action Memoranda (BAMs) and their attachments.
No information was found on Mare Island FCU. Ms. Salva's response
also indicated that more information was needed in order to search
our files concerning the Penn Square failure. Your appeal was
hand delivered on May 28, 1998. You provided no additional information
on the Penn Square failure so we assume you are not pursuing that
part of your request at this time. We have identified two additional
responsive BAMs with attachments: Mather FCU dated March 25,
1982; and Chattanooga TVA Employees FCU dated October 13, 1982.
The denial of your FOIA request is upheld pursuant to exemptions
5 and 8 of the FOIA. Both exemptions are discussed below.
Exemption 5
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). This exemption is incorporated into NCUA's Rules and Regulations at 12 CFR 792.11(a)(5). Discussion in the BAMs themselves as well as internal memoranda attached to the BAMs are withheld pursuant to exemption 5 in this case.
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). Any
one of the following three policy purposes have been held to constitute
a basis 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).
In your appeal you state you do not believe the policy purposes
outlined in the Russell case continue to be valid reasons
to exempt records, since the records requested are at least seventeen
years old. We disagree. We believe that the first and third
policy purposes continue to be met in withholding the memoranda.
In support of the first purpose noted above, policy discussions
between subordinates and superiors may be stifled if employees
are aware that records of discussions are being released under
the FOIA. The fact that the discussions took place several years
ago has little or no bearing on this basis for withholding the
information. Similarly in support of the third purpose, we do
not believe that the passage of time diminishes public confusion
that might result from disclosure of reasons that were not ultimately
the grounds for an action taken by NCUA.
The courts have established two fundamental requirements for the deliberative process privilege to be invoked. The communication must be predecisional and it must be deliberative. Mapother v. Department of Justice, 3 F.3d 1533 (D. C. 1993). The information withheld is both predecisional and deliberative. As the purposes and requirements of exemption 5 are met in this case, the memoranda continue to be withheld pursuant to exemption 5 of the FOIA. Exemption 5 does not always allow for documents to be withheld in full (factual information that is not deliberative in nature must be disclosed, see Mapother at 1538 - 40). However, exemption 8 does allow for entire documents to be withheld.
Exemption 8
Exemption 8 of the FOIA (5 U.S.C. §552(b)(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.
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 an examination report.
NCUA has incorporated these dual purposes into its regulation.
Section 792.11(a)(8) of the NCUA Rules and Regulations implements
exemption 8 and adds the following:
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.
The requested information concerns several credit unions involved
in CLF lending programs. Matters that are related to examination
reports (e.g., determinations regarding assistance) can be withheld
from disclosure pursuant to exemption 8. See Atkinson.
The BAMs and their attachments concern matters clearly within
exemption 8. Safety and soundness issues are discussed. Disclosure
of the records could clearly harm the financial security of the
credit unions as well as interfere with the relationship between
NCUA and credit unions. In addition, courts have held that 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). We do not believe the passage
of time significantly diminishes the rationale for withholding
the information pursuant to exemption 8. Although the documentation
does contain some non-financial information, courts do not require
agencies to segregate and disclose those portions of documents
that are unrelated to the financial condition of the institution.
See Atkinson. The BAMs and their attachments continue
to be withheld in their entirety pursuant to exemption 8.
In your appeal, you describe the purpose of your FOIA request. You state you will use the information requested to develop case studies which demonstrate that the types of assistance provided by the CLF over the years are not available from other lending sources. The case studies will be used to demonstrate the unique role which the CLF fills in the credit union community and the need for its continued existence.
A FOIA requester's basic rights to access are neither increased
nor decreased by virtue of having a greater interest in the records
than that of an average member of the general public. NLRB
v. Sears, Roebuck & Co., 421 U.S. 132, 143, n.10 (1975).
Under the FOIA, once a document is disclosed to one requester,
it is available to any requester. We believe that documents requested
should remain exempt from disclosure because of the potential
harm disclosure could cause, as discussed above.
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 withheld 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, 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
98-0559