FOIA Appeal of Response 21-FOI-00042

April 20, 2021

SENT BY E-MAIL

XXXX
XXXX

Re: 2021-APP-00002; Appeal of Response 21-FOI-00042

Dear XXXX:

On January 26, 2021, you submitted a request to the National Credit Union Administration (NCUA) Office of External Affairs and Communications (OEAC) for any April 2007 NCUA Office of General Counsel (OGC) legal opinion on an effort by Wings Financial Credit Union to merge with Continental Federal Credit Union. On January 28, 2021, you submitted a modified version of this request (21-FOIA-00042) to the NCUA’s Office of Freedom of Information Act (FOIA), asking for all documents, letters, rulings or other communication by the NCUA relating to the topic of Wings Financial Credit Union’s effort to merge with Continental Federal Credit Union in 2007.

By letter of March 11, 2021, a Senior Attorney and FOIA Officer (FOIA Officer) in OGC responded to your request and advised that your request was denied. The FOIA Officer’s response explained that withheld information, if any, is exempt from FOIA release under one or more of the exemptions at 5 U.S.C. § 552(b)(4), (5), (8). Exemption 4 protects trade secrets and commercial or financial information obtained from a person that is privileged or confidential. Exemption 5 protects interagency or intra-agency memoranda or letters which would not be available by law to a party other than an agency in litigation with the agency. Exemption 8 protects matters that are 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 have appealed this determination in a correspondence dated March 23, 2021. Your appeal is denied, as discussed more fully below.

Your appeal primarily asserts general opinions and policy arguments relative to the NCUA’s merger policies and regulations. You contend, without further detail, that our denial of your FOIA request “citing ‘protecting trade secrets,’ or ‘internal memorandum,’ or ‘condition reports’ is one more regulatory default.” Upon review, we affirm the denial.

Exemption 4 protects not only trade secrets, but also “commercial or financial information” obtained from a person1 that is “privileged or confidential.”2 The word “confidential” is not defined in the FOIA but the Supreme Court in its opinion in Food Marketing Institute v. Argus Leader Media3 held that the term must be given its “ordinary” meaning of “private” or “secret.”4 The Court found that “where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is ‘confidential’ within the meaning of Exemption 4.”5 Credit unions customarily and actually treat sensitive information relative to potential merger transactions as private or as closely-held financial information, and any information imparted to the agency in contemplation of a potential merger effort was provided with an implied assurance of confidentiality. As such, the information you requested was properly withheld as exempt from FOIA release under Exemption 4.

Additionally, Exemptions 5 and 8 remain available. Exemption 56 incorporates the privileges available to a governmental agency in civil litigation, notably the deliberative process privilege (sometimes called the executive privilege), the attorney-client privilege, and the attorney work product privilege.7 To qualify for the deliberative process privilege, the documents must be both “pre-decisional” and “deliberative.” Documents are pre-decisional when they precede an agency decision and are prepared in order to assist an agency in arriving at its decision, and documents are deliberative when they comprise part of the process by which government decisions are made.8 Communications and internal memoranda among agency staff deliberating legal questions relative to a potential merger qualify for withholding under Exemption 5.

Exemption 8 provides for protection against release of 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.9 Courts have interpreted Exemption 8 broadly and have declined to restrict its all-inclusive scope.10 The merger information requested also meets this broad standard. Accordingly, we affirm the March 11 response.

For these reasons, your FOIA appeal is denied. Pursuant to 5 U.S.C. §552(a)(4)(B) of 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

21-FOI-00042; 2021-APP-00002


Footnotes


1 The FOIA defines “person” as an “individual, partnership, corporation, association, or public or private organization other than an agency.” 5 U.S.C. § 551(2).  A credit union is a “person” under the FOIA.

2 5 U.S.C. § 552(b)(4).

3 Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019).

4 Id. at 2363.

5 Id. at 2366.

6 See 5 U.S.C. §552(b)(5).

7 Id.

8 Phillips v. Immigration and Customs Enforcement, 385 F. Supp. 2d 296 (S.D. N.Y. 2005).

9 5 U.S.C. §552(b)(8).

10 See Consumers Union of United States, Inc. v. Heimann, 589 F. 2d 531 (D.C. Cir. 1978).

Last modified on
05/25/21