June 30, 1992

Denise M. Glore, Esq.
812 Marquette N.W.
Albuquerque, New Mexico 87102

Re: Freedom of Information Act Appeal (Your June 9, 1992, Letter)

Dear Ms. Glore:

We received your Freedom of Information Act ("FOIA") appeal on June 12, 1992. On May 29, 1992, the National Credit Union Administration's ("NCUA") Freedom of Information Officer, Benny R. Henson, denied your request for a copy of "the let- ter report, or inter-agency memo, or intra-agency memo written by Eleanor Taylor, regarding her investigation of hiring and firing practices by the Los Alamos Credit Union, written in late 1991 or early 1992." We have determined that the document you requested was properly withheld pursuant to FOIA.

Exemption 8 of FOIA, 5 U.S.C. 522(b)(8), exempts from disclo- sure information:

Contained in or related to examination, operating, or condition reports prepared by, or on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.

Section 792.3(a)(8) of NCUA's Rules and Regulations, 12 C.F.R. ~792.3(a)(8), which implements exemption 8, spe- cifically includes reports prepared by, or for the use of NCUA, among the exempt information. Section 792.3(a)(8) also adds the following language:

This includes all information, whether in formal or informal report form, the dis- closure of which would harm the financial security of credit unions or would inter- fere with the relationship between NCUA and credit unions.

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 an institution's stability; and (2) to promote cooperation and communication between em- ployees and examiners. See, Atkinson v. FDIC, 1 GDS `80,034, at 80,102 (D.D.C. 1980). Either purpose is sufficient reason to withhold a document. Courts do not require agencies to segregate and disclose those portions of documents that are unrelated to the financial condition of the institution. An entire report may be withheld. See, Atkinson, 1 GDS at 80,103. Disclosure of the document you requested would unquestionably interfere with cooperation and communication between credit union employees and NCUA examiners. One of the purposes of exemption 8 is met, therefore, and the document responsive to your request is withheld pursuant to exemption 8.

We note your argument that exemption 8 is inapplicable be- cause the document you seek "does not contain financial in- formation; therefore, it is not within the purview of the exception for financial information." However, we do not find your argument persuasive. Exemption 8 does not state that only "financial information" may be withheld; the term "financial information" does not appear in the statute. Nei- ther does the legislative history of FOIA support your inter- pretation of exemption 8. Furthermore, the case you cited, Consumers Union of United States, Inc. v. Heimann, 589 F.2d 531 (D.C. Cir. 1978) does not state, or even suggest, that the exemption is so limited. Exemption 8 and Section 792.3(a)(8) require only that the information in question be "contained in or related to examination, operating, or condi- tion reports prepared by, or on behalf or, or for the use of" NCUA as regulator or supervisor of credit unions. The document you asked for clearly falls within that category, having been prepared by an NCUA supervisory examiner for the use of NCUA as supervisor/insurer of the Los Alamos Credit Union. We see no basis for finding that exemption 8 does not cover the document in question.

Pursuant to 5 U.S.C. 522(a)(4)(B), you may seek judicial re- view of this determination of your appeal by filing suit to enjoin NCUA from withholding the document you requested and to order production of such document. Such a suit may be filed in the United States District Court in the district where your client resides or where your client's principal place of business is located, or in the District of Columbia.

Sincerely,

Robert M. Fenner
General Counsel

GC/MRS:sg
SSIC 3212
92-0623 _