April 24, 2024
SENT BY E-MAIL
XXXX
Re: 2024-APP-00002; Appeal of Response 24-FOI-00048
Dear XXXX:
By correspondence of November 27, 2023, you submitted a Freedom of Information Act (FOIA) request (24-FOI-00048) for a copy of the NCUA’s Examination Report for XXXX Federal Credit Union dated June 30, 2022.
In a letter dated January 10, 2024, your request was denied in full. You were advised that the requested records are exempt from release pursuant to FOIA exemptions at 5 U.S.C. §552(b)(4), (5), (6), and (8). Exemption 4 protects trade secrets and commercial or financial information obtained from a person, which is considered privileged and confidential. Exemption 5 protects privileged inter-agency or intra-agency information, including information protected by the deliberative process, attorney-work product, and/or attorney-client privileges. Exemption 6 protects information about individuals when disclosure would constitute a clearly unwarranted invasion of personal privacy. Exemption 8 protects 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. You were also advised that in determining whether to withhold information, the NCUA determined that the harm from disclosing confidential commercial or financial information, which was submitted to the NCUA for consideration and deliberation as part of the examination process, is reasonably foreseeable. Finally, as a courtesy, you were directed to XXXX Federal Credit Union’s Profile, Call Report, and Financial Performance Report, which are publicly available online on the agency’s website.
In an April 1, 2024, email correspondence you served notice of your appeal of this determination, without further discussion. Your appeal did not challenge the applicability of the FOIA exemptions cited in the response. Upon review, your appeal is denied, as discussed more fully below.
The NCUA has long held that while confidential examination reports are made available to credit unions for their use, they remain the property of the NCUA and cannot be disclosed.1 The NCUA’s regulations prohibit the release of NCUA examination reports,2 and the agency has long maintained that its examination reports are exempt from release under the FOIA.
Exemption 8 was intended by Congress, and has been interpreted by courts, to be “very broadly construed.”3 Courts have noted that “Congress has intentionally and unambiguously crafted a particularly broad, all-inclusive definition,” and “it is not [the courts’] function, even in the FOIA context, to subvert that effort.”4 The primary purpose for Exemption 8 is “to ensure the security of financial institutions by elimination of the risk that disclosure of examination, operation, and condition reports containing frank evaluations of the investigated [institutions] might undermine public confidence and cause unwarranted run on banks.”5 The secondary purpose is to safeguard the relationship between financial institutions and their supervising agencies.6 Generally, “all records, regardless of the source, of [a financial institution’s] financial condition and operations [that are] in the possession of a federal agency ‘responsible for the regulation or supervision of financial institutions,’ are exempt.”7 Documents “related to” examination reports that “represent the foundation of the examination process, the findings of such an examination, or its follow-up” also fall within the exemption.8 While ordinarily the FOIA calls for agencies to segregate and release portions of responsive documents to which a specified exemption may not apply, the broad sweep of Exemption 8 can cover the content of “an entire examination report, not just [the content] related to the ‘condition of the [institution].’”9 An agency is not required to disclose information “inextricably intertwined with exempt portions,”10 and “need not disclose a redacted version of [a record] if the unredacted markings would have minimal or no information content.”11
The credit union examination report you requested falls squarely within the scope of Exemption 8.12 The plain language of the exemption extends to information contained in or related to “examination reports” prepared on behalf of or for the use of an agency responsible for the regulation or supervision of financial institutions, such as the NCUA, which is charged with the oversight and supervision of federally insured credit unions.13 On its face, your request for a copy of the NCUA’s examination report for XXXX Federal Credit Union is precisely the type of record covered by Exemption 8. The entire examination report is inarguably covered by Exemption 8, but to the extent that any information “contained in” the report may not fit so neatly within the plain language of the exemption, that information would still fall under the exemption’s “related to” catchall.
Further, the applicability and breadth of Exemption 8 supports withholding the requested examination report in full. The entirety of the report is fully exempt or inextricably intertwined with exempt portions. There is no reasonably segregable information within the record that could be disclosed without causing reasonably foreseeable harm to the subject credit union, the security of the credit union industry, and the relationship between the NCUA and the credit unions that it supervises. Thus, the requested record was properly withheld in full pursuant to Exemption 8.
Because Exemption 8 is wholly dispositive and suffices to allow the agency to withhold the requested examination report in full, discussion of the remaining FOIA exemptions is unnecessary. However, Exemptions 4, 5, and 6 remain applicable as well.
For these reasons, your FOIA appeal is denied. Pursuant to 5 U.S.C. §552(a)(4)(B) of the FOIA, you may seek judicial review of this determination by filing suit against the NCUA. Such a suit may be filed in the United States District Court 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).
The 2007 FOIA amendments created the Office of Government Information Services (OGIS) to offer mediation services to resolve disputes between FOIA requesters and Federal agencies as a non-exclusive alternative to litigation. Using OGIS services does not affect your right to pursue litigation. You may contact OGIS in any of the following ways:
Office of Government Information Services
National Archives and Records Administration
8601 Adelphi Road - OGIS
College Park, MD 20740-6001 E-mail: ogis@nara.gov
Web: https://ogis.archives.gov
Telephone: 202.741.5770; Toll-free: 877.684.6448
Fax: 202.741.5769
Sincerely,
/s/
Frank Kressman
General Counsel
GC/PY
2024-APP-00002; 24-FOI-00048
Footnotes
1 See NCUA Legal Opinion Letter 97-0951 (December 1997); NCUA Legal Opinion Letter 97-1044 (December 1997).
2 See 12 C.F.R. §792.4(a).
3 Pentagon Fed. Credit Union v. Nat’l Credit Union Admin., No. 95-1475, 1996 U.S. Dist. LEXIS 22841, at *11 (E.D. Va. June 7, 1996).
4 Consumers Union of the U.S., Inc. v. Heimann, 589 F.2d 531, 533 (D.C. Cir. 1978).
5 James Madison Project v. Dep’t of the Treasury, 478 F. Supp. 3d 8, 14 (D.D.C. 2020) (internal citation omitted); see also McKinley v. FDIC, 744 F. Supp. 2d 128, 144 (D.D.C. 2010) (noting that the FDIC’s “ability to gather . . . information in furtherance of its mission to regulate our nation’s banking system would inarguably be compromised” if contemporaneous information about a bank’s failure was released).
6 See Consumers Union, 589 F.2d at 534; see also Fagot v. FDIC, 584 F. Supp. 1168, 1173 (D.P.R. 1984) (recognizing Exemption 8’s secondary purpose “to provide banks and financial institutions supervised by the federal government sufficient assurance of confidentiality to promote full cooperation with the regulatory agencies”).
7 McCullough v. FDIC, No. 79-1132, 1980 U.S. Dist. LEXIS 17685, at **7-8 (D.D.C. July 28, 1980) (quoting legislative history).
8 Atkinson v. FDIC, No. 79-1113, 1980 WL 355660, at *2 (D.D.C. Feb. 13, 1980).
9 Id.
10 Mead Data Cent., Inc. v. United States Dep't of the Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977).
11 Perioperative Servs. & Logistics, LLC v. U.S. Dep’t of Veterans Affairs, 57 F.4th 1061, 1069 (D.C. Cir. 2023) (citing Mead Data Center, Inc. v. Dep’t of the Air Force, 566 F.2d 242, 261 n.55 (D.C. Cir. 1977)).
12 See 5 U.S.C. §552(b)(8); 12 C.F.R. §792.(a)(8).
13 See 12 U.S.C. §§1752a and 1756.