[Federal Register Volume 59, Number 9 (Thursday, January 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-813]


[[Page Unknown]]

[Federal Register: January 13, 1994]


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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

12 CFR Part 1102

[Docket No. AS94-1]

 

Appraisal Subcommittee; Appraiser Regulation; Freedom of 
Information Act Implementation

AGENCY: Appraisal Subcommittee, Federal Financial Institutions 
Examination Council.

ACTION: Final rules.

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SUMMARY: The Appraisal Subcommittee (``ASC'') of the Federal Financial 
Institutions Examination Council is adopting amendments to the portion 
of its regulations regarding the availability of information to enable 
interested persons: To obtain copies of ASC final opinions and orders 
in adjudications, statements of general policy not published in the 
Federal Register, interpretive, no-action requests and responses and 
certain other correspondence related to ASC field reviews; to request 
confidential treatment of information subject to a Freedom of 
Information Act (``FOIA'') request; and to petition for the issuance, 
amendment or repeal of an ASC rule.

EFFECTIVE DATE: February 14, 1994.

FOR FURTHER INFORMATION CONTACT:
Edwin W. Baker, Executive Director, or Marc L. Weinberg, General 
Counsel, at (202) 634-6520, Appraisal Subcommittee, 2100 Pennsylvania 
Avenue NW., suite 200, Washington, DC 20037.

SUPPLEMENTARY INFORMATION:

I. Background and Authority

    FOIA, 5 U.S.C. 552, generally requires each Federal agency to make 
available to the public information regarding its organization, 
operation, rules of procedure, substantive rules and interpretations of 
general applicability and statements of general policy. 5 U.S.C. 
552(a)(1). In addition, each agency, in accordance with published 
rules, must ``make available for public inspection and copying--(A) 
final opinions, * * * as well as orders, made in the adjudication of 
cases; (B) those statements of policy and interpretations which have 
been adopted by the agency and are not published in the Federal 
Register, and (C) administrative staff manuals and instructions to 
staff that affect a member of the public * * *.'' 5 U.S.C. 552(a)(2). 
Certain documents and portions thereof, however, can be withheld from 
disclosure under one or more statutory exemptions set out in FOIA, 5 
U.S.C. 552(b), or the Privacy Act of 1974, 5 U.S.C. 552a.\1\
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    \1\On December 14, 1992, the ASC adopted 12 CFR part 1102, 
subpart D, implementing the ASC's basic program for complying with 
FOIA. See 57 FR 60722 (December 22, 1992). And, on August 7, 1992, 
the ASC adopted 12 CFR part 1102, subpart C, implementing the 
Privacy Act. See 57 FR 36356 (August 13, 1992).
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    Executive Order No. (``EO'') 12600, 52 FR 23781 (June 23, 1987), 
generally requires each agency subject to FOIA to establish procedures 
to notify submitters of records containing confidential commercial 
information when those records are requested under FOIA and the agency 
determines that the information may be required to disclose that 
information.
    Paragraph (e) of 5 U.S.C. 553 requires each agency to give an 
interested person the right to petition for the issuance, amendment or 
repeal of a rule.
    On October 13, 1993, the ASC proposed for comment several 
amendments to its related regulations in 12 CFR part 1102, subpart D 
(1993), to implement these authorities. The comment period closed on 
December 9, 1993, and no written comments were received. The ASC, 
however, received and incorporated into the final version of the 
amendments oral comments of a technical nature from the Office of 
Management and Budget (``OMB'').

II. Description of the Final Amendments

    The ASC is adopting technical amendments to subpart D--new 
Secs. 1102.305, .306 and .307--to implement the provisions summarized 
above. In that regard, new Sec. 1102.305 clarifies that certain written 
communications, such as the ASC's annual report to Congress; all final 
opinions and orders made in the adjudication of cases; all statements 
of general policy not published in the Federal Register, and incoming 
and outgoing correspondence concerning interpretive, no-action and 
State review matters, shall be made publicly available on a routine 
basis no sooner than ten business days after the ASC or its staff sends 
or gives the item of correspondence to the affected person or persons.
    Next, the ASC is adopting Sec. 1102.306, consistent with EO 12600, 
to provide predisclosure notification procedures for confidential 
commercial information. Under paragraph (a) of the new section, a 
submitter of written information to the ASC who wants some or all of 
that information to be treated as confidential information under 5 
U.S.C. 552(b)(4) may file a request for confidential treatment with the 
ASC at the time the information is submitted to the ASC or soon 
thereafter. Confidential information means ``trade secrets and 
commercial or financial information obtained from a person and 
privileged or confidential,'' as stated in section 552(b)(4).
    New paragraphs (b) and (c) of Sec. 1102.306 deal with the form of 
the request. They require the submitter to include in reasonable detail 
the facts and arguments supporting the request and its legal 
justification, to designate clearly all information considered 
confidential and to separate clearly such information from other non-
confidential information, whenever possible.
    Paragraph (d) of the section notes that a request for confidential 
treatment will be considered by the ASC only in connection with a FOIA 
request for access to the claimed confidential information under FOIA. 
That is, the ASC will not determine whether the request for 
confidential treatment should be granted or denied, in whole or in 
part, when the request is received by the ASC. The ASC, however, will 
process the request upon receipt to ensure that it is complete and 
would place it with the related information submission. If a FOIA 
request were made respecting that information, the ASC then will be 
required to send written notices to the submitter and the FOIA 
requester. The submitter will have no longer than ten business days to 
file written objections to the ASC's disclosure of the information. The 
ASC may provide a submitter with a notice even if the submitter did not 
request confidential treatment of the requested information.\2\
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    \2\If the ASC required the submitter to provide the requested 
information, the ASC would need to have substantial reason to 
believe that disclosure of the requested information would result in 
substantial competitive harm to the submitter. On the other hand, if 
the submitter provided the information voluntarily to the ASC, the 
ASC would need to believe that the information is of a kind that the 
submitter would not customarily make available to the public. See 
Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 
F.2d 871 (D.C. Cir. 1992), cert. denied 113 S. Ct. 1579 (1993).
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    These notice requirements will not have to be followed under 
certain stated circumstances, such as if the ASC determines under this 
subpart that the information should not be disclosed. The ASC must 
carefully consider the issues involved and, if disclosure of the 
requested information is warranted, a written notice containing a brief 
description of why the submitter's objections were not sustained must 
be forwarded to the submitter within ten business days. The time for 
response may be extended up to ten additional business days, as 
provided in 5 U.S.C. 552(a)(6)(B), of for other periods by agreement 
between the requester and the ASC. This notice shall be provided to the 
submitter at least five business days prior to release of the requested 
information. Last, the ASC will be required to notify a submitter 
promptly of any filing of any suit against the ASC pursuant to 5 U.S.C. 
552 to compel disclosure of documents or information covered by the 
submitter's request for confidential treatment, and conversely, will be 
required to notify the requester of the documents or information of any 
suit filed by the submitter against the ASC to enjoin disclosure.
    Finally, Sec. 1102.307 would provide an interested person with the 
right to petition the ASC for the issuance, amendment or repeal of a 
rule, thus implementing 5 U.S.C. 553(e).

III. Conclusion

    For the reasons stated above, the ASC has determined to adopt the 
amendments to subpart D of part 1102 to implement 5 U.S.C. 552 and 
553(e) and EO 12600.

IV. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C. 
35, forms, reporting and recordkeeping requirements included in 12 CFR 
part 1102, subpart D, Secs. 1102.305, 1102.306 and 1102.307 were 
submitted for review and approval to OMB. See 58 FR 54153 (October 20, 
1993). OMB approved these sections, as revised by this final rule, 
until December 31, 1996, and assigned them control number 3139-0006. 
The public reporting burden for the collection of information 
requirements contained in these sections are estimated to include the 
time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed and completing and reviewing 
the collection of information. The sections would enhance the ASC's 
FOIA program, would conform the ASC's rules and regulations to EO 
12600, and would specifically provide for the public's petition rights 
under 5 U.S.C. 553(e). The estimated number of respondents each year is 
100 for Sec. 1102.305, two for Sec. 1102.306 and one for Sec. 1102.307, 
with an estimated average reporting burden of .5 hours per response and 
an estimated annual total reporting burden of 51.5 hours.

V. Regulatory Flexibility Act Statement

    Pursuant to section 605(b) of the Regulatory Flexibility Act, the 
ASC certifies that Secs. 1102.305, 1102.306 and 1102.307 are not 
expected to have a significant economic impact on a substantial number 
of small entities. The rules will fully implement FOIA, EO 12600 and 5 
U.S.C. 553(e). None of these authorities addresses business or 
corporate entities. Accordingly, a regulatory flexibility analysis is 
not required.

VI. EO 12866 Statement

    These rules were reviewed by the Office of Information and 
Regulatory Affairs of OMB.

List of Subjects in 12 CFR Part 1102

    Administrative practice and procedure, Appraisers, Banks, Banking, 
Freedom of information, Mortgages, Reporting and recordkeeping 
requirements.

Text of the Rule

    Chapter XI, title 12, part 1102, subpart D of the Code of Federal 
Regulations is amended as set forth below:

PART 1102--APPRAISER REGULATION

Subpart D--Description of Office, Procedures, Public Information

    1. The authority citation for subpart D is revised to read as 
follows:


    Authority: 5 U.S.C. 552, 553(e); and Executive Order 12600, 52 
FR 23781 (3 CFR, 1987 Comp., p. 235).


    2. New sections 1102.305, 1102.306 and 1102.307 are added to read 
as follows:


Sec. 1102.305  Availability of interpretive, no-action and other 
written communications.

    (a) In general. Subject to the provisions of Sec. 1102.304 and 
subpart C of this part, certain types of ASC written communications 
shall be made publicly available upon request.
    (b) Types of written communications. The following types of written 
communications shall be subject to paragraph (a) of this section:
    (1) The ASC's annual report to Congress;
    (2) All final opinions and orders made in the adjudication of 
cases;
    (3) All statements of general policy not published in the Federal 
Register.
    (4) Requests for the ASC or its staff to provide interpretive 
advice with respect to the meaning or application of any statute 
administered by the ASC or any rule or regulation adopted thereunder 
and any ASC responses thereto;
    (5) Requests for a statement that, on the basis of the facts 
presented in such a request, the ASC would not take any enforcement 
action pertaining to the facts as represented and any ASC responses 
thereto: and
    (6) Correspondence between the ASC and a State appraiser regulatory 
agency arising out of the ASC's field review of the State agency's 
appraiser regulatory program.
    (c) Embargo period. Unless the ASC determines otherwise, the 
written communications in paragraph (b) of this section shall be made 
publicly available no sooner than ten business days after a written 
response has been sent or given to the affected person or persons.


Sec. 1102.306  Confidential treatment procedures.

    (a) In general. Any submitter of written information to the ASC who 
desires that some or all of his or her submission be afforded 
confidential treatment under 5 U.S.C. 552(b)(4) (i.e., trade secrets 
and commercial or financial information obtained from a person and 
privileged or confidential) shall file a request for confidential 
treatment with the Executive Director of the ASC at the time the 
written information is submitted to the ASC or within ten business days 
thereafter. Nothing in this section limits the authority of the ASC and 
its staff to make determinations regarding access to documents under 
this subpart.
    (b) Form of request. A request for confidential treatment shall be 
submitted in a separate letter or memorandum conspicuously entitled, 
``Request for Confidential Treatment.'' Each request shall state in 
reasonable detail the facts and arguments supporting the request and 
its legal justification. If the submitter had been required by the ASC 
to provide the particular information, conclusory statements that the 
information would be useful to competitors or would impair sales or 
similar statements generally will not be considered sufficient to 
justify confidential treatment. When the submitter had voluntarily 
provided the particular information to the ASC, the submitter must 
specifically identify the documents or information which are of a kind 
the submitter would not customarily make available to the public.
    (c) Designation and separation of confidential material. Submitters 
shall clearly designate all information considered confidential and 
shall clearly separate such information from other non-confidential 
information, whenever possible.
    (d) ASC action on request. A request for confidential treatment of 
information will be considered only in connection with a request for 
access to the information under FOIA as implemented by this subpart. 
Upon the receipt of a request for access, the Executive Director or his 
or her designee (``ASC Officer'') as soon as possible shall provide the 
submitter with a written notice describing the request and shall 
provide the submitter with a reasonable opportunity, no longer than ten 
business days, to submit written objections to disclosure of the 
information. Notice may be given orally, and such notice shall be 
promptly confirmed in writing. The ASC Officer may provide a submitter 
with a notice if the submitter did not request confidential treatment 
of the requested information. If the ASC required the submitter to 
provide the requested information, the ASC Officer would need 
substantial reason to believe that disclosure of the requested 
information would result in substantial competitive harm to the 
submitter. If the submitter provided the information voluntarily to the 
ASC, the ASC officer would need to believe that the information is of a 
kind the submitter would not customarily make available to the public. 
The ASC Officer similarly shall notify the person seeking disclosure of 
the information under FOIA of the existence of a request for 
confidential treatment. These notice requirements need not be followed 
if the ASC Officer determines under this subpart that the information 
should not be disclosed; the information has been published or has been 
officially made available to the public; disclosure of the information 
is required by law (other than FOIA); or the submitter's request for 
confidential treatment appears obviously frivolous, in such instance 
the submitter shall be given written notice of the determination to 
disclose the information at least five business days prior to release. 
The ASC Officer shall carefully consider the issues involved, and if 
disclosure of the requested information is warranted, a written notice, 
containing a brief description of why the submitter's objections were 
not sustained, must be forwarded to the submitter within ten business 
days. The time for response may be extended up to ten additional 
business days, as provided in 5 U.S.C. 552(a)(6)(B), or for other 
periods by agreement between the requester and the ASC Officer. This 
notice shall be provided to the submitter at least five business days 
prior to release of the requested information.
    (e) Notice of lawsuit. The ASC Officer shall notify a submitter of 
any filing of any suit against the ASC pursuant to 5 U.S.C. 552 to 
compel disclosure of documents or information covered by the 
submitter's request for confidential treatment within ten business days 
of service of the suit. The ASC Officer also shall notify the requester 
of the documents or information of any suit filed by the submitter 
against the ASC to enjoin their disclosure within ten business days of 
service of the suit.


Sec. 1102.307  Right to petition for issuance, amendment and repeal of 
rules of general application.

    Any person desiring the issuance, amendment or repeal of a rule of 
general application may file a petition for those purposes with the 
Executive Director of the ASC. The petition shall include a statement 
setting forth the text or substance of any proposed rule or amendment 
desired or shall specify the rule for which repeal is desired. The 
petitioner also shall state the nature of his or her interest and the 
reasons for seeking ASC action. The Executive Director shall 
acknowledge receipt of the petition within ten business days of 
receipt. As soon as reasonably practicable, the ASC shall consider the 
petition and related staff recommendations and shall take such action 
as it deems appropriate. The Executive Director shall notify the 
petitioner in writing of the ASC action within ten business days of the 
action.

    By the Appraisal Subcommittee of the Federal Financial 
Institutions Examination Council.

    Dated: January 5, 1994.
Fred D. Finke,
Chairperson.
[FR Doc. 94-813 Filed 1-12-94; 8:45 am]
BILLING CODE 6210-01-M