Behind the scenes, regulators try to shape FOIA bill

By Kevin Bogardus | 06/01/2015 01:15 PM EDT

New documents shed light on a quiet campaign by federal agencies to shape legislation that would strengthen the Freedom of Information Act.

New documents shed light on a quiet campaign by federal agencies to shape legislation that would strengthen the Freedom of Information Act.

Emails between staff for the Office of the Comptroller of the Currency and congressional aides, obtained by Greenwire under FOIA, show financial regulators’ heightened interest in and attempts to change S. 337 and H.R. 653, two bills moving on Capitol Hill that would reform the public records law.

In the documents, OCC — an independent bureau of the Department of the Treasury that regulates all national banks and federal savings associations — raised concerns that the FOIA reform measure would lead to banks and other financial institutions to stop sharing confidential information with agencies since they believe the bill could risk disclosure of such secret data.


Language in the Senate version of the FOIA reform bill "is likely to lead to a substantial amount of litigation," says an OCC explanation that was included with its suggested amendment to S. 337. That amendment was shared with an aide to Sen. John Cornyn (R-Texas), one of the bill’s sponsors.

"As a result, supervised institutions will be very reluctant to share information with examiners in the open and transparent way they have done to date for fear that this confidential information will be disclosed publicly. This will impede the flow of information needed to conduct robust supervision and will undermine the effectiveness of the supervisory process," the agency explains.

The suggested amendment was included in a series of emails between Lauren Barlow, counsel to Cornyn, and Arnie Cohen, congressional liaison to OCC, that began just days before the Senate Judiciary Committee approved the FOIA bill in early February (E&ENews PM, Feb. 5).

The agency’s recommended change would clarify that the Senate bill wouldn’t limit the scope of FOIA’s Exemption 8 — which protects records related to financial institutions — for blocking the disclosure of "confidential supervisory information," according to OCC. The amendment’s language seemingly didn’t make it into the marked-up legislation.

Barlow reached out to Cohen on Jan. 30 asking about speculated opposition to FOIA reform from the financial sector.

"There are a lot of rumors about opposition from banks and bank regulators to the bill, but those concerns are not entirely clear to us," said the Cornyn aide in an email.

Barlow and Cohen would later talk on the phone, leading to OCC sharing its amendment with the Senate aide. Barlow warned OCC’s suggested tweak would not go over well with Sen. Patrick Leahy (D-Vt.), another of the bill’s sponsors and the Senate Judiciary Committee’s ranking member.

"I anticipate the language you sent would receive fairly ardent resistance from Leahy," Barlow said in an email. "I would recommend focusing your efforts on the House side, because some version of what they are drafting is likely what we will pick up and ultimately pass through the Senate."

In response to questions from Greenwire, Bryan Hubbard, an OCC spokesman, said "the OCC fully supports government transparency and citizen access to information and data" and the agency "has not taken a specific position on these bills."

Hubbard also said OCC does not lobby but provides "information, proposed language and assistance" to address concerns that may affect the agency’s mission.

"In that role, we expressed specific concerns with drafts of these bills regarding how certain language may adversely impact the effectiveness of bank supervision by weakening protections for historically confidential bank examination information," Hubbard said.

Hubbard said OCC shared its language for the FOIA legislation with the relevant committees in the House and Senate.

Agencies’ discomfort with Congress’ effort to boost FOIA has bubbled up before on Capitol Hill. Several have credited resistance to FOIA reform from various entities in the Obama administration to slowing and ultimately stopping legislation late last year (E&E Daily, March 5).

As OCC’s emails show, those concerns have lingered into 2015.

Staff for the agency would be in contact with aides to Leahy, as well. Another email chain has Carrie Moore, OCC’s director of congressional liaison, scheduling a conference call with Chanda Betourney, senior counsel to Leahy.

"I am wondering if you would have time this afternoon to have a conversation about our concerns with the FOIA bill and a suggested fix we could offer?" Moore asks in a Feb. 11 email.

Other agencies — such as the Federal Reserve, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau — were included on that call, according to the emails and Hubbard.

Those agencies seemingly following FOIA reform were reticent when asked about the legislation.

"The CFPB does not generally take a position on proposed or pending legislation, and we will not have a comment on either of those bills," said Sam Gilford, a CFPB spokesman.

A FDIC spokesman declined to comment for this story. The Federal Reserve didn’t respond to questions.

In another batch of emails, Cohen with OCC would also discuss the FOIA legislation with aides to Reps. Darrell Issa (R-Calif.) and Elijah Cummings (D-Md.), sponsors of the House version of the bill. The OCC staffer shared an agency memorandum with those aides regarding the agency’s authority to protect confidential banking information.

Hubbard said that memo has been shared with the relevant congressional committees, as well.

Cummings, ranking member on the House Oversight and Government Reform Committee, asked at a hearing in Febuary whether financial records would lose their protection from disclosure under the FOIA bill.

"Is there any reason to believe that … the information that an agency is legitimately withholding under Exemption 8 would lose its protection under the bill?" Cummings asked.

"I really don’t think this bill would change that or have the kind of damaging impact," answered Rick Blum, director of the Sunshine in Government Initiative (Greenwire, Feb. 27).

The Maryland Democrat said he opposes any move to soften the bill. In a statement to Greenwire, Cummings said the FOIA legislation "should be brought to the floor as quickly as possible without any changes that would weaken the bill."

Need to ‘clarify’ FOIA reform?

Agencies have found that concerns with FOIA reform have not fallen on deaf ears in Congress.

When the House Oversight committee marked up the lower chamber’s FOIA bill in March, Rep. Carolyn Maloney (D-N.Y.) offered and then withdrew an amendment to the legislation that was designed to address regulators’ worries (E&E Daily, March 26). She was able to secure a promise from Rep. Jason Chaffetz (R-Utah), the panel’s chairman, to work on the FOIA bill together.

"The financial regulators are concerned, and I share their concerns, that this bill would take away their ability to withhold confidential, supervisory information solely to protect the free flow of information between banks and their regulators," Maloney said at the markup before withdrawing her amendment. "If that happens, then the financial institutions will be less candid with their regulators and less likely to share important information, and this is information that the regulators need to do their job."

A spokeswoman for the chairman said staff for Chaffetz and Maloney have been discussing the legislation.

"Rep. Maloney’s staff was able to have a productive conversation with committee staff that outlined her concerns and suggestions for improvements to the bill. Chairman Chaffetz appreciates Rep. Maloney’s input and will take it into consideration moving forward," Chaffetz spokeswoman M.J. Henshaw said.

In the Senate, they have also tried to address regulators’ concerns. In a colloquy included in the May 22 Congressional Record, Sens. Cornyn, Leahy and Sherrod Brown (D-Ohio), ranking member on the Senate Banking, Housing and Urban Affairs Committee, discussed the FOIA bill.

Brown noted that the bill wouldn’t limit the scope of protections available under Exemption 8.

"I will continue to work with the banking committee and financial regulatory agencies to clarify the scope of the bill as we move forward in the legislative process and address any remaining concerns," Brown said.

A Senate Democratic aide said the Ohio senator wanted to clarify the legislative intent of S. 337 and that he wants to move forward with the bill.

Click here to read OCC’s emails obtained by Greenwire under FOIA.