Harold Violette, President
Fraser Federal Credit Union
534 Main Street
Madawaska, Maine 04756
Re: Freedom of Information Act Appeal
(Your November 21, 1995 Letter)
Dear Mr. Violette:
On August 28, 1995, you wrote to NCUA Region I Director Layne
Bumgardner requesting a copy of a letter that NCUA examiner Homer
McLemore had written to him concerning the merger of Fraser Federal
Credit Union with Northern Maine Credit Union. Your letter was
treated as a Freedom of Information Act (FOIA) request and was
forwarded NCUA's central office. On October 30, 1995, Richard
Schulman, NCUA's FOIA Officer, denied your request pursuant to
exemptions 5 and 8 of the FOIA. We received your FOIA appeal
on November 27, 1995. Your appeal is granted in part and denied
in part. Mr. Schulman's denial is affirmed in part and reversed
in part. Portions of the documents continue to be withheld pursuant
to exemptions 5 and 8 of the FOIA. Those portions of the documents
have been redacted. Copies of the redacted documents responding
to your request are enclosed.
In your initial FOIA request and appeal, you request a copy of
"correspondence" or a "letter" written by
NCUA examiner McLemore to Region I Director Bumgardner concerning
the merger of Northern Maine Credit Union into Fraser Federal
Credit Union. There is no direct correspondence or letter from
Mr. McLemore to Mr. Bumgardner. The following three memoranda,
however, address the subject matter of your request and appeal:
1) July 7, 1995 memo from supervisory examiner Dorothy Peacock
to Region I Director Bumgardner; 2) June 15, 1995 memo from McLemore
to Peacock; and 3) June 12, 1995 memo from McLemore to file.
Redacted versions of the three memos are released. The applicable
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).
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). 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). We have determined
that most of the information in the three memoranda is not subject
to exemption under the deliberative process privilege. However,
a portion of the June 15, 1995 memo is both predecisional and
deliberative and continues to be withheld pursuant to exemption
5. The exempt portions of this memo have been redacted.
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).
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). Sections 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 other documents have been withheld from disclosure.
Exemption 8 has been used to withhold portions of documents such
as internal memoranda that contain specific information about
named financial institutions. Wachtel v. Office of Thrift
Supervision, No. 3-90-833 (M.D. Tenn. Nov. 20, 1990.) The
three internal memoranda contain exemption 8 information. We
believe that the purposes of exemption 8 are met, and the exemption
8 information contained in the memos has been redacted.
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.
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 you requested and to order production
of the complete 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
95-1145
SSIC 3212