[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Proposed Rules]
[Pages 27976-27990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12524]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 84, No. 116 / Monday, June 17, 2019 / 
Proposed Rules  

[[Page 27976]]



FEDERAL RESERVE SYSTEM

12 CFR Part 261

[Docket No. R-1665]
RIN 7100-AF 51


Rules Regarding Availability of Information

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Notice of proposed rulemaking and request for comment.

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SUMMARY: The Board is inviting comment on a notice of proposed 
rulemaking (proposal) that would amend the Board's Rules Regarding 
Availability of Information (Board's Rules). The amendments clarify and 
update the Board's regulations implementing the Freedom of Information 
Act and the rules governing the disclosure of confidential supervisory 
information and other nonpublic information of the Board.

DATES: Comments must be received by August 16, 2019.
    You may submit comments, identified by Docket No. R-1665 and RIN 
No. 7100 AF 51, by any of the following methods:
     Agency Website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include the 
docket number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments are available from the Board's website at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any identifying or 
contact information. Public comments may also be viewed electronically 
or in paper in Room 146, 1709 New York Avenue NW, Washington, DC 20006, 
between 9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Alye S. Foster, Assistant General 
Counsel, (202) 452-5289; Mary Bigloo, Counsel, (202) 475-6361, or Misty 
M. Kheterpal, Counsel, (202) 452-2597; Board of Governors of the 
Federal Reserve System, 20th and C Streets NW, Washington, DC 20551.

SUPPLEMENTARY INFORMATION: 

I. Background

    The purpose of this proposed revision of the Board's Rules is to 
set forth more clearly the procedures for requesting access to 
documents that are records of the Board under the Freedom of 
Information Act (FOIA), as well as to update the rules governing the 
Board's disclosure of confidential supervisory and other nonpublic 
information. The revision also revises certain definitions to be 
consistent with language from the FOIA and to conform to recent case 
law and the Board's current FOIA practices. These provisions and 
changes are described in more detail below.

II. Description of the Proposal

A. Subpart A--General

    Subpart A describes the authority, purpose, and scope of the 
regulation, and includes new or revised definitions for the terms used 
in the regulation.
Sec.  261.1 Authority, Purpose, and Scope
    While Sec.  261.1 largely tracks the current Sec.  261.1, the Board 
has made some minor changes to improve the language and organization of 
the section.
Sec.  261.2 Definitions
    Section 261.2 contains the definitions of key terms used throughout 
part 261. The Board's proposal to Sec.  261.2 adds new terms, clarifies 
certain existing terms, and deletes other outdated terms. In addition, 
the Board proposes moving all terms related to the fees for processing 
a FOIA request, such as ``commercial use requester,'' ``direct costs,'' 
``duplication,'' ``educational institution,'' ``non-commercial 
scientific institution,'' ``representative of the news media,'' and 
``review'' to the general fees section at Sec.  261.16. The Board's 
proposed changes to these fees-related definitions are discussed in 
more depth in the Fees section below.
    The Board proposes adding new definitions for three new terms 
(``affiliate,'' ``nonpublic information,'' and ``working day''). The 
Board also proposes modifying the definitions of ``confidential 
supervisory information,'' ``records of the Board,'' ``search,'' and 
``supervised financial institution'' to clarify the full scope of those 
terms or to conform the terms with current Board practices to 
facilitate the orderly processing of requests.
    Sec.  261.2(a) Affiliate. The Board is incorporating the definition 
of ``affiliate'' from its Regulation Y, 12 CFR 225.2(a), as a new 
defined term in light of the Board's proposed revisions to subpart C 
providing for certain permitted disclosures of confidential supervisory 
information to the directors, officers, or employees of the affiliates 
of a supervised financial institution.
    Sec.  261.2(b)(1) Confidential supervisory information. The Board 
proposes revising its definition of the term ``confidential supervisory 
information'' to clarify that confidential supervisory information 
constitutes any nonpublic information that is exempt from disclosure 
under Exemption 8 of the FOIA, 5 U.S.C. 552(b)(8), including any 
information created or obtained in furtherance of the Board's 
supervisory, investigatory, or enforcement activities, including 
activities conducted by a Federal Reserve Bank (Reserve Bank) under 
delegated authority, relating to any supervised financial institution. 
The revised definition further makes clear that confidential 
supervisory information includes any portions of internal documents of 
a supervised financial institution that contain, refer to, or would 
reveal confidential supervisory information.
    Sec.  261.2(c) Nonpublic information. The Board proposes replacing 
the term ``exempt information'' with the term ``nonpublic information'' 
to emphasize that the term applies to information the Board has not 
made public, rather than simply to information subject to an exemption 
under the FOIA. This clarifies that information that could be subject 
to a FOIA exemption but that the Board has made public is not 
encompassed within the definition. At

[[Page 27977]]

the same time, information that has been disclosed on a discretionary 
basis and subject to confidentiality restrictions, such as disclosures 
under subpart C of the regulation, would not be considered as having 
been publicly disclosed, and therefore remains ``nonpublic'' 
information. The term ``nonpublic information'' has replaced ``exempt 
information'' throughout part 261.
    Sec.  261.2(d) Records of the Board. The Board's revised definition 
of this term updates the description of records in order to encompass 
all forms of records and eliminate outdated terminology. The proposed 
definition also incorporates the two-part test for determining whether 
a document qualifies as an agency document as set forth in U.S. 
Department of Justice v. Tax Analysts, 492 U.S. 136 (1989), by covering 
documents that are ``created or obtained'' by the Board and are under 
the Board's ``control.'' The definition encompasses all information 
that is created or obtained by the Board or by any Reserve Bank in the 
performance of functions for or on behalf of the Board in order to 
conform to Board practice and eliminate any ambiguity regarding the 
scope of the Board's records as they pertain to Reserve Banks. The 
Board has determined that the records referred to in existing Sec.  
261.2(i)(1)(ii) as being maintained for administrative reasons at a 
Reserve Bank are all encompassed within the category of records 
described in new paragraph (d)(1)(i). The revision also eliminates the 
definition of ``Board's official files'' as unnecessary and confusing. 
The proposal further clarifies that Board records do not include 
records located at Reserve Banks other than those identified in Sec.  
261.2(d)(1) and records that may be in the Board's possession but are 
under the control of another entity or agency.
    Sec.  261.2(e) Search. The proposed changes simplify the definition 
of ``search'' by moving the part of the definition relating to 
computing fees to Sec.  261.16, which discusses the fee schedule.
    Sec.  261.2(f) Supervised financial institution. The Board is 
proposing to modify the definition of ``supervised financial 
institution'' to clarify that, for the purposes of this part, the term 
includes not only institutions supervised by the Board but also any 
entity or service subject to examination by the Board.
    Sec.  261.2(g) Working day. The Board proposes adding a definition 
of ``working day'' to clarify time limits in accordance with the FOIA. 
5 U.S.C. 552(a)(6)(A)(i).
    The Board proposes deleting the definitions of ``report of 
examination'' and ``report of inspection'' as no longer necessary in 
light of the other revisions made in this section.
Sec.  261.3 Custodian of Records; Certification; Service; Alternative 
Authority
    The Board proposes minor changes to this section. Section 261.3(a) 
deletes reference to records held at Reserve Banks, since these are 
covered by the definition of ``records of the Board.'' Section 261.3(c) 
will add language clarifying that the Secretary will not accept service 
of process on behalf of employees in connection with private legal 
disputes. Section 261.3(d) will add language clarifying that Board 
officers authorized under the rule to take actions may delegate that 
authority to others.
Sec.  261.4 Prohibition Against Disclosure
    A new Sec.  261.4 will be added to subpart A to emphasize the 
general prohibition on disclosure of the Board's nonpublic information 
by Board or Reserve Bank staff. This provision is currently included in 
Sec.  261.14. A companion prohibition relating to third parties in 
possession of nonpublic Board information is found at Sec.  261.20(a).

B. Subpart B--Published Information and Records Available to Public; 
Procedures for Requests

Sec.  261.10 Published Information
    Section 261.10 lists and explains the various types of information 
that are readily available to the public in the Federal Register, Board 
Printing & Fulfillment, or in the Board's electronic reading room. The 
proposed regulations revise the regulations in three ways. First, the 
Board proposes shortening the list of items published in the Federal 
Register by replacing the items listed in original paragraphs (a)(6) 
through (10) with Other notices as required by law in order to add 
flexibility in the event of new required reports. Second, the Board 
proposes removing the paragraphs regarding the Board's reports to 
Congress, the Federal Reserve Bulletin, and ``Other published 
information'' because of the ready availability and frequently changing 
nature of information made available on the Board's website. As 
proposed, Sec.  261.10(b) will address the current procedures for 
obtaining Board publications. Finally, the Board will consolidate 
duplicative material in current Sec.  261.11 into Sec.  261.10(c). In 
particular, Sec.  261.10(c)(1) will explain what information is 
available in the Board's electronic reading room, Sec.  261.10(c)(2) 
will explain which publicly available filings may be made available at 
Reserve Banks, and Sec.  261.10(c)(3) will retain the existing 
provision authorizing the Board to delete personal privacy details 
prior to disclosure.
Sec.  261.11 Records Available to the Public Upon Request
    This revised section (currently Sec.  261.12) is modified to 
separate the mechanics of making a request (new Sec.  261.11(a)) from 
the contents of the request (new Sec.  261.11(b)). In addition, the 
Board proposes clarifying that its time period for responding to a 
request begins when it receives a request that includes all required 
information. Finally, the Board proposes removing the paragraph 
regarding oral requests given that the FOIA does not reference oral 
requests. As a practical matter, the Board may decide to honor oral 
requests on a case-by-case basis.
Sec.  261.12 Processing Requests
    The substance of current Sec.  261.13 relating to processing 
requests is substantially unchanged, although some clarifying language 
has been added. This section contains information on tracking, time 
limits, and responses to requests. Matters related to appeals, 
currently included in Sec.  261.13, will be moved to a later section. 
Further changes to the section include incorporating language from the 
Department of Justice's guidance (DOJ guidance) \1\ into Sec.  
261.12(c) (``Expedited Processing'') and Sec.  261.12(e) (``Time 
Limits'').
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    \1\ https://www.justice.gov/oip/template-agency-foia-regulations.
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Sec.  261.13 Responses to Requests
    While the majority of the language in the proposal reflects the 
current regulation, Sec.  261.13 is reorganized and includes a few 
substantive edits. Section 261.13(a) will clarify that the search for 
responsive records, and therefore the start of the response time clock, 
will begin once the Board has received a perfected request. The 
language will also be revised to explain that the search for responsive 
records will be of records of the Board as of the date of the search. 
The foreseeable harm standard language currently in Sec.  261.14(a) 
will be moved to Sec.  261.13(c) and the discussion of segregability, 
now in Sec.  261.14(b), will be moved to Sec.  261.13(d) to reflect the 
sequential process that the Board takes when it receives a FOIA 
request. The Board proposes editing Sec.  261.13(e)(3) to conform to 
the DOJ guidance, mainly to

[[Page 27978]]

specify that the Board will provide the requester with an estimate of 
the amount of information withheld unless the amount of information 
withheld is indicated by deletions marked on the documents that are 
produced in part or if providing an estimate would harm an interest 
protected by an exemption. Section 261.13(f) will set out with 
additional specificity what determinations are considered ``adverse 
determinations'' that can be appealed. Finally, the Board proposes 
editing Sec.  261.13(g) to indicate that the Board will typically send 
responsive records via email unless otherwise agreed upon by the Board 
and the requester.
Sec.  261.14 Appeals
    The Board proposes adding a new section, Sec.  261.14, for Appeals, 
which was previously included in the section about ``Processing 
Requests.'' Section 261.14(a)(1) will now specifically include 
information about how to appeal the denial of expedited treatment. The 
time period for filing an appeal is amended to conform to the statute 
and DOJ guidance. Finally, the Board proposes adding clarifying 
language to Sec.  261.14(c) which describes the circumstances for when 
the Board may reconsider an adverse determination.
Sec.  261.15 Exemptions From Disclosure
    Section 261.15 lists the exemptions available under the FOIA, 
currently located in Sec.  261.14. The Board proposes simplifying the 
language related to exemptions (b)(3) and (b)(7) of the FOIA, 5 U.S.C. 
552(b)(3) and (7), to incorporate rather than repeat the statutory 
language. The Board also proposes adding clarifying information to 
Sec.  261.15(b) which discusses the circumstances under which the Board 
may make a discretionary release of nonpublic information. For example, 
the Board proposes adding paragraph (b)(2) that explains that the 
Board's prior release of particular nonpublic information does not 
waive the Board's ability to withhold similar nonpublic information in 
response to the same or a different request. The Board also proposes 
moving language currently in Sec.  261.14(c)(1), which permits the 
Board, designated Board members, the General Counsel, and the Secretary 
to make discretionary disclosures of any material that is exempt under 
FOIA, into Sec.  261.15(b)(3). Section 261.15(c) is unchanged from the 
current provision (Sec.  261.14(c)).
Sec.  261.16 Fee Schedules; Waiver of Fees
    Proposed Sec.  261.16 sets forth various provisions relating to the 
fees applicable to requests for records and also provides in Table 1 to 
Sec.  261.16 the proposed fee schedule. The Board proposes several 
changes to the current fee provisions at Sec.  261.17. First, the Board 
proposes adding language to Sec.  261.16(a) to emphasize that the fee 
schedules will be applied in a manner consistent with the limitations 
set forth in 5 U.S.C. 552(a)(4)(A)(viii), which reference the Board's 
compliance with the response time limit and also address unusual 
circumstances. Second, the Board proposes adding Sec.  261.16(b) to 
address the definitions for search time, direct costs, duplication 
costs, and review time which have been modified to provide greater 
clarity. Section 261.16(c) addresses the payment procedures for 
requesters. Third, the Board proposes removing from Sec.  261.16(c) any 
reference to a dollar threshold for when the Board will give advance 
notification of fees. In practice, a requester is only notified if 
staff have determined that the processing charges will exceed the 
amount the requester agreed to in his original perfected request; the 
language will now reflect that. Fourth, proposed Sec.  261.16(d) will 
define the different categories of requesters, which are currently 
found in Sec.  261.2 (``Definitions''). The Board believes that these 
definitions are better grouped in the fees section so that users only 
have to reference a single section in order to determine the fee 
category for which they qualify. The proposal updates the definitions 
for ``representative of the news media,'' ``educational institution,'' 
and ``noncommercial scientific institution'' to be consistent with the 
FOIA and DOJ guidance. The Board will also set out a fee schedule in 
chart form in place of the current regulatory language so that users 
can more easily determine which fees apply. Finally, the Board proposes 
adding Sec.  261.16(g) to detail the conditions for a waiver or 
reduction of fees.
Sec.  261.17 Request for Confidential Treatment
    Section 261.17 addresses the procedures to be used by any submitter 
of information to the Board who seeks confidential treatment of the 
information. The language of Sec.  261.17(a) is revised to permit 
confidential treatment requests to be made for personal privacy 
information as well as proprietary commercial information. The Board 
also proposes replacing ``a reasonable time after submission'' with 
``within 10 working days thereafter'' in order to provide the 
submitters with a specific time frame for Board review of confidential 
treatment requests. The Board proposes language to Sec.  261.17(b) that 
requires submitters to include detailed information to support 
confidential treatment requests. In addition, the Board proposes 
including language from the DOJ guidance stating that confidential 
treatment requests expire after 10 years. In the provision regarding 
confidential information contained in forms approved pursuant to the 
Paperwork Reduction Act in Sec.  261.17(d), the Board proposes 
replacing ``data'' with ``data items'' to emphasize that even if the 
entire form is not deemed confidential, certain portions of the form 
may be confidential.
Sec.  261.18 Process for Addressing a Submitter's Request for 
Confidential Treatment
    Section 261.18 addresses how the Board processes confidential 
treatment requests and incorporates the provisions of current Sec.  
261.16. In Sec.  261.18(a), the Board proposes removing language that 
specifically references that Board or Reserve Bank staff may also act 
on confidential treatment requests as unnecessary in light of revisions 
to the ``Alternative authority'' section in Sec.  261.3. While the 
substance of current Sec.  261.16(b), regarding notice to the 
submitter, will not be altered, the proposal incorporates DOJ guidance 
language into this section to help clarify the process. Proposed 
revisions to Sec.  261.18(c), (d), (e), and (g) also incorporate DOJ 
guidance language without changing the substance of the Board's current 
language.

C. Nonpublic Information Made Available to Supervised Financial 
Institutions, Governmental Agencies, and Others in Certain 
Circumstances

Sec.  261.20 General
    The Board is proposing to add a new ``General'' section at the 
beginning of subpart C to set forth certain generally applicable 
provisions. Section 261.20(a) is largely based on current Sec. Sec.  
261.20(g), 261.21(g) and 261.22(e) and provides that all confidential 
supervisory information and other nonpublic information of the Board 
made available under subpart C remains the property of the Board and 
can neither be used for an unauthorized purpose nor further disclosed 
without the written permission of the General Counsel. Section 
261.20(b) adds new language stating that any disclosure of confidential 
supervisory information or

[[Page 27979]]

nonpublic information under subpart C does not constitute a waiver by 
the Board of any applicable privileges. This new language would make 
explicit the Board's authority to make disclosures of confidential 
supervisory information and other nonpublic information on a 
confidential and limited basis without forfeiting any applicable 
privileges such as the bank examination privilege. Section 261.20(c) 
provides that subpart C does not limit or restrict the Board's 
authority to impose additional conditions or limitations on the use and 
disclosure of confidential supervisory information or other nonpublic 
information or to make discretionary disclosures of confidential 
supervisory information or other nonpublic information in addition to 
the specific disclosures provided for in subpart C.
Sec.  261.21 Confidential Supervisory Information Made Available to 
Supervised Financial Institutions
    Current Sec.  261.20 addresses confidential supervisory information 
that is made available to both supervised financial institutions and 
financial institution supervisory agencies in one section. Under the 
Board's proposal, these provisions will be covered by separate 
regulatory sections. Section 261.21 will address disclosures to and by 
supervised financial institutions and Sec.  261.22 will address 
disclosures by the Board to governmental agencies, including financial 
institution supervisory agencies.
    The Board is proposing a number of changes in Sec.  261.21. Under 
current Sec.  261.20(b), a supervised financial institution may 
disclose confidential supervisory information only to its parent 
holding company. The Board recognizes that supervised financial 
institutions may have legitimate business needs to disclose information 
to a variety of affiliates, including subsidiary banks, nonbank 
subsidiaries, and other entities within a holding company structure 
that provide centralized services to the company. Accordingly, under 
Sec.  261.21(b), supervised financial institutions would be authorized 
to disclose confidential supervisory information to the directors, 
officers, or employees of their affiliates, as defined in the Board's 
Regulation Y, 12 CFR 225.2(a), to the extent such individuals have a 
need for the information in the performance of their official duties.
    Additionally, under Sec.  261.21(b)(2) the Board is proposing to 
permit supervised financial institutions to disclose confidential 
supervisory information directly to the Federal Deposit Insurance 
Corporation (FDIC), the Office of the Comptroller of the Currency 
(OCC), the Consumer Financial Protection Bureau (CFPB), and the state 
financial supervisory agency that supervises the institution, so long 
as the institution's central point of contact at the Reserve Bank or 
equivalent supervisory team leader (CPC) concurs that the receiving 
agency has a legitimate supervisory or regulatory interest in the 
information.
    Sections 261.21(b)(3) and (b)(4) further modify the requirements 
governing supervised financial institutions' disclosures of 
confidential supervisory information to their auditors, outside legal 
counsel, and other service providers. Section 261.21(b)(3) eliminates 
the requirement that auditors and legal counsel view confidential 
supervisory information only on the premises of the supervised 
financial institution. Accordingly, the Board's amendment would allow 
supervised financial institutions to provide their auditors and outside 
legal counsel off-premises access to confidential supervisory 
information, subject to the written agreements set forth in Sec.  
261.21(b)(3)(i) through (iv), which include the requirement to render 
electronic files effectively inaccessible through access control 
measures or other means at the conclusion of the engagement.
    Sections 261.21(b)(4) and (5) would modify the current process 
under which firms seek approval to disclose confidential supervisory 
information to their other service providers, including consultants and 
independent contractors. Instead of institutions submitting their 
disclosure requests to the General Counsel as required under the 
current regulation, the proposal would have institutions direct 
requests to their CPCs, who will, if required by internal procedures, 
consult with other Federal Reserve staff before rendering a decision on 
the request. This change will efficiently locate the Federal Reserve 
decision-making on such requests within the area most knowledgeable 
about a particular institution's supervisory information and need to 
share that information. The Board particularly invites public comment 
on this provision, given the change in existing procedure and the 
amendments proposed in Sec.  261.21(b)(3).
Sec.  261.22 Nonpublic Information Made Available by the Board to 
Governmental Agencies and Entities Exercising Governmental Authority
    Section 261.22(a) revises the Board's current rules governing 
disclosures by the Board and Reserve Banks to financial institution 
supervisory agencies. It updates the agencies with which information 
may be shared to eliminate agencies that no longer exist and include 
new ones, such as the CFPB. It also permits sharing with state 
financial supervisory agencies on the same basis as the federal 
agencies--that is, ``for legitimate supervisory or regulatory purposes 
and with or without a request.'' The revisions also slightly alter the 
authorities of various Board staff to make disclosures in particular 
circumstances. Section 261.22(b) permits disclosure of information to 
particular governmental units in furtherance of specific statutory 
responsibilities, such as the Fair Housing Act, the Equal Credit 
Opportunity Act, and the Employee Retirement Income Security Act of 
1974.
    Section 261.22(c), which largely tracks current Sec.  261.21(a) 
through (c), addresses non-subpoena requests for confidential 
supervisory information or other nonpublic information from other 
governmental agencies or entities exercising governmental authority, 
such as self-regulatory organizations. Section 261.22(c) additionally 
clarifies that properly accredited foreign law enforcement agencies and 
other foreign government agencies may submit requests for confidential 
supervisory information and other nonpublic information, with the 
exception that the provision of confidential supervisory information to 
foreign bank regulatory or supervisory authorities is governed by 12 
CFR 211.27.
    Section 261.22(d) addresses federal and state grand jury, criminal 
trial, and government administrative subpoenas, and largely tracks 
existing Sec.  261.21(e). Section 261.22(e) permits the Board's General 
Counsel to impose conditions on disclosure and recognizes that the 
Board also enters into formal information-sharing agreements with other 
agencies and entities.
Sec.  261.23 Other Disclosure of Confidential Supervisory Information
    Section 261.23 addresses requests that do not fall under Sec.  
261.21 or 261.22, including requests to access, use, or disclose 
confidential supervisory information in litigation. Section 261.23 
largely adopts current Sec.  261.22 with some clarifying revisions. For 
example, amended Sec.  261.23(a)(2) will clarify that the Board will 
not authorize access to or disclosure of suspicious activity reports 
except as necessary to fulfill official duties under the Bank Secrecy 
Act and therefore will not authorize disclosure of such reports for use 
in private legal proceedings. This provision implements the Bank 
Secrecy Act regulations

[[Page 27980]]

promulgated by the Financial Crimes Enforcement Network (FinCEN) within 
the Department of the Treasury. See 31 U.S.C. 5318(g)(2)(ii); 31 CFR 
1020.320(e)(2). Amended Sec.  261.23(a) will also specify that the 
section covers not only requests for disclosure from the Board but also 
requests to access confidential supervisory information in the 
possession of third parties.
    Section 261.23(b)(1)(i) clarifies which requests may be made in 
connection with litigation, recognizing that the Board receives various 
types of such requests. Accordingly, the revised section identifies the 
following categories of requests for the proposed use of confidential 
supervisory information in litigation: (1) Requests to obtain 
confidential supervisory information from the Board or Reserve Banks; 
(2) requests to disclose confidential supervisory information already 
in the possession of the requester; and (3) requests to access 
confidential supervisory information in the possession of a third 
party. Section 261.23(b)(2) sets forth the requirements for any request 
made under Sec.  261.23(b)(1), which are largely based on the Board's 
requirements at current Sec.  261.22(b)(1) with some proposed 
modifications to ensure requests contain the information required by 
the General Counsel. First, the Board is proposing that in addition to 
the requester identifying the ``judicial or administrative action'' to 
which the request relates, the requester also provide a copy of the 
complaint or other pleading setting forth the assertions in the case. 
Importantly, the proposed rule would have requesters directly speak to 
``the relevance of the confidential supervisory information to the 
issues or matters raised by the litigation,'' which allows the General 
Counsel to make an informed judgment as to the party's need for the 
information. The proposed rule further requires requesters to provide a 
``narrow and specific description of the confidential supervisory 
information,'' emphasizing the importance of precisely identifying the 
confidential supervisory information that is deemed relevant to the 
litigation.
    The Board is also clarifying current Sec.  261.22(b)(1)(iv) to 
require the requester to state ``[t]he reason why the information 
sought, or equivalent information adequate to the needs of the case, 
cannot be obtained from any other source'' (emphasis added). This 
recognizes that frequently, business information obtainable directly 
from litigants may provide material sufficient for a party's purposes 
without invading the bank examination privilege. Lastly, the Board's 
amended rule would clarify that in cases in which a requester seeks to 
disclose confidential supervisory information to a litigant, the Board, 
prior to acting on the request, may require the litigant to whom 
disclosure would be made to substantiate its needs for the information.
    While Sec.  261.23(c), governing all other requests seeking to 
access or to disclose confidential supervisory information, is largely 
unchanged from the current Sec.  261.22(b)(2), the Board has added some 
minor clarifications, including requiring the requester to provide 
``other information as requested by the General Counsel.''
Sec.  261.24 Subpoenas, Orders Compelling Production, and Other Process
    The Board is proposing minor clarifying revisions to current Sec.  
261.23(a) and (b) addressing the actions required of any individual who 
is served with a subpoena, order, or other judicial or administrative 
process requiring the person's production of confidential supervisory 
information or other nonpublic information of the Board in the form of 
documents or testimony. Specifically, the revisions make clear that the 
Board does not expect parties to defy court orders where the Board has 
had an opportunity to appear and oppose disclosure of its information. 
The Board is also proposing to add a new provision at Sec.  261.24(c) 
to clarify that Sec.  261.24 governs the procedure with respect to 
subpoenas and other legally-enforceable demands only, while any civil 
request for production of documents containing confidential supervisory 
information must proceed under Sec.  261.23.

III. Administrative Law Matters

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA), 5 U.S.C. 
601 et seq., the Board is publishing an initial regulatory flexibility 
analysis of the proposal. The RFA requires each federal agency to 
prepare an initial regulatory flexibility analysis in connection with 
the promulgation of a proposed rule or certify that the proposed rule 
will not have a significant economic impact on a substantial number of 
small entities. Under regulations issued by the Small Business 
Administration, a small entity includes a depository institution, bank 
holding company, or savings and loan holding company with average total 
assets of $550 million or less and trust companies with average total 
assets of $38.5 million or less. As of December 2018, there were 
approximately 3,191 small bank holding companies, 204 small savings and 
loan holding companies, 549 small state member banks, and one small 
trust company directly supervised by the Federal Reserve. Based on the 
Board's analysis, and for the reasons stated below, the Board believes 
that this proposed rule will not have a significant economic impact on 
a substantial of number of small entities. The Board will, if 
necessary, conduct a final regulatory flexibility analysis after 
consideration of comments received during the public comment period.
    1. Statement of the need for, and objectives of, the proposed rule. 
The proposed rule updates the procedures for requesting access to 
documents that are records of the Board under the FOIA and the rules 
governing the disclosure of confidential supervisory and other 
nonpublic information.
    2. Small entities affected by the proposed rule. Like the Board's 
current part 261 regulation, the requirements set forth in the proposed 
rule with respect to requests for Board records under the FOIA and 
requests to access and disclose confidential supervisory information 
apply equally to all persons and to all entities regardless of their 
size. The proposal, which in part introduces organizational changes to 
clarify the Board's FOIA regulation, does not impose economic effects 
on FOIA requesters, including any FOIA requesters that would be small 
entities. Notably, under the FOIA, fees for processing FOIA requests 
must be limited to reasonable standard charges. Similarly, far from 
imposing any economic costs on supervised financial institutions, the 
Board's clarifications to the rules governing access to and disclosure 
of confidential supervisory information would ease certain outdated 
restrictions that hamper supervised financial institutions in their 
ability to further disclose confidential supervisory information within 
their organizations as well as with their auditors and legal counsel.
    3. Recordkeeping, reporting, and compliance requirements. Beyond 
the restrictions on the unauthorized use and disclosure of confidential 
supervisory information and other nonpublic information of the Board, 
the proposal does not impose any reporting, recordkeeping, or other 
compliance requirements on persons or entities, including small 
entities.
    4. Other Federal rules. The Board does not believe that the 
proposal duplicates, overlaps, or conflicts with any other federal 
rules.
    5. Significant alternatives to the proposed revisions. The Board 
does not believe that there are other significant

[[Page 27981]]

alternatives to the proposed rule which accomplish its stated 
objectives.

Paperwork Reduction Act

    There is no collection of information required by this proposal 
that would be subject to the Paperwork Reduction Act of 1995, 44 U.S.C. 
3501 et seq.

Plain Language

    Section 722 of the Gramm-Leach-Bliley Act requires each federal 
banking agency to use plain language in all rules published after 
January 1, 2000. In light of this requirement, the Board believes this 
proposal is presented in a simple and straightforward manner and is 
consistent with this ``plain language'' directive.

List of Subjects in 12 CFR Part 261

    Administrative practice and procedure, Confidential business 
information, Freedom of information.

Authority and Issuance

    For the reasons set forth in the preamble, the Board of Governors 
of the Federal Reserve System proposes to amend 12 CFR part 261 as 
follows:

0
1. Revise part 261 to read as follows:

PART 261--RULES REGARDING AVAILABILITY OF INFORMATION

Subpart A--General
Sec.
261.1 Authority, purpose, and scope.
261.2 Definitions.
261.3 Custodian of records; certification; service; alternative 
authority.
261.4 Prohibition against disclosure.
Subpart B--Published Information and Records Available to Public; 
Procedures for Requests
261.10 Published information.
261.11 Records available to the public upon request.
261.12 Processing requests.
261.13 Responses to requests.
261.14 Appeals.
261.15 Exemptions from disclosure.
261.16 Fee schedules, waiver of fees.
261.17 Request for confidential treatment.
261.18 Process for addressing a submitter's request for confidential 
treatment.
Subpart C--Nonpublic Information Made Available to Supervised Financial 
Institutions, Governmental Agencies, and Others in Certain 
Circumstances
261.20 General.
261.21 Confidential supervisory information made available to 
supervised financial institutions.
261.22 Nonpublic information made available by the Board to 
governmental agencies and entities exercising governmental 
authority.
261.23 Other disclosure of confidential supervisory information.
261.24 Subpoenas, orders compelling production, and other process.

    Authority:  5 U.S.C. 552; 12 U.S.C. 248(i) and (k), 321 et seq., 
611 et seq., 1442, 1467a, 1817(a)(2)(A), 1817(a)(8), 1818(u) and 
(v), 1821(o), 1821(t), 1830, 1844, 1951 et seq., 2601, 2801 et seq., 
2901 et seq., 3101 et seq., 3401 et seq.; 15 U.S.C. 77uuu(b), 
78q(c)(3); 29 U.S.C. 1204; 31 U.S.C. 5301 et seq.; 42 U.S.C. 3601; 
44 U.S.C. 3510.

Subpart A--General


Sec.  261.1   Authority, purpose, and scope.

    (a) Authority and purpose. This part establishes mechanisms for 
carrying out the Board's statutory responsibilities relating to the 
disclosure, production, or withholding of information. In this regard, 
the Board has determined that the Board, or its delegees, may disclose 
nonpublic information of the Board, in accordance with the procedures 
set forth in this part, whenever it is necessary or appropriate to do 
so in the exercise of any of the Board's authorities, including but not 
limited to authority granted to the Board in the Federal Reserve Act, 
12 U.S.C. 221 et seq., the Bank Holding Company Act, 12 U.S.C. 1841 et 
seq., the Home Owners' Loan Act, 12 U.S.C. 1461 et seq., and the 
International Banking Act, 12 U.S.C. 3101 et seq. The Board has 
determined that all such disclosures made in accordance with the rules 
and procedures specified in this part are authorized by law, and are, 
as applicable, disclosures to proper persons pursuant to 12 U.S.C. 326. 
This part also sets forth the categories of information made available 
to the public, the procedures for obtaining information and records, 
the procedures for limited release of nonpublic information, and the 
procedures for protecting confidential business information.
    (b) Scope. (1) This subpart A contains general provisions and 
definitions of terms used in this part.
    (2) Subpart B of this part implements the Freedom of Information 
Act (FOIA) (5 U.S.C. 552).
    (3) Subpart C of this part sets forth:
    (i) The kinds of nonpublic information made available to supervised 
financial institutions, governmental agencies, and others in certain 
circumstances;
    (ii) The procedures for disclosure; and
    (iii) The procedures with respect to subpoenas, orders compelling 
production, and other process.


Sec.  261.2  Definitions.

    For purposes of this part:
    (a) Affiliate has the meaning given it in 12 CFR 225.2(a).
    (b)(1) Confidential supervisory information means nonpublic 
information that is exempt from disclosure pursuant to 5 U.S.C. 
552(b)(8) and includes information that is or was created or obtained 
in furtherance of the Board's supervisory, investigatory, or 
enforcement activities, including activities conducted by a Federal 
Reserve Bank (Reserve Bank) under delegated authority, relating to any 
supervised financial institution, including, without limitation, 
reports of examination, inspection, and visitation; confidential 
operating and condition reports, supervisory assessments, investigative 
requests for documents or other information, supervisory correspondence 
or other supervisory communications; any portions of internal documents 
of a supervised financial institution that contain, refer to, or would 
reveal confidential supervisory information; and any information 
derived from, related to, or contained in such documents.
    (2) Confidential supervisory information does not include:
    (i) Documents prepared by or for a supervised financial institution 
for its own business purposes and that are in its possession except to 
the extent included in paragraph (b)(1) of this section; or
    (ii) Final orders, amendments, or modifications of final orders, or 
other actions or documents that are specifically required to be 
published or made available to the public pursuant to 12 U.S.C. 
1818(u), the Community Reinvestment Act, or other applicable law.
    (c) Nonpublic information means information that has not been 
publicly disclosed by the Board and that is:
    (1) Confidential supervisory information, or
    (2) Exempt from disclosure under Sec.  261.15(a).
    (d)(1) Records of the Board or Board records means all recorded 
information, regardless of form or characteristics, that is created or 
obtained by the Board and is under the Board's control. A record is 
created or obtained by the Board if it is created or obtained by:
    (i) Any Board member or any officer, employee, or contractor of the 
Board in the conduct of the Board's official duties, or
    (ii) Any officer, director, employee, or contractor of any Reserve 
Bank in the performance of functions for or on behalf of the Board.
    (2) Records of the Board do not include:
    (i) Personal files or notes of Board members, employees, or 
contractors; extra copies of documents and library and museum materials 
kept solely for reference or exhibition purposes; or unaltered 
publications otherwise

[[Page 27982]]

available to the public in Board publications, libraries, or 
established distribution systems;
    (ii) Records located at Reserve Banks other than those records 
identified in paragraph (d)(1) of this section; or
    (iii) Records that belong to or are otherwise under the control of 
another entity or agency despite the Board's possession.
    (e)(1) Search means a reasonable search of such records of the 
Board as seem likely in the particular circumstances to contain 
information of the kind requested.
    (2) As part of the Board's search for responsive records, the Board 
is not obligated to conduct any research, create any document, or 
modify an electronic program or automated information system.
    (f) Supervised financial institution includes any institution that 
is supervised by the Board, including a bank; a bank holding company, 
intermediate holding company, or savings and loan holding company 
(including their non-depository subsidiaries); a U.S. branch or agency 
of a foreign bank; any company designated for Board supervision by the 
Financial Stability Oversight Council; or any other entity or service 
subject to examination by the Board.
    (g) Working day means any day except Saturday, Sunday, or a legal 
Federal holiday.


Sec.  261.3  Custodian of records; certification; service; alternative 
authority.

    (a) Custodian of records. The Secretary of the Board (Secretary) is 
the official custodian of all records of the Board.
    (b) Certification of record. The Secretary may certify the 
authenticity of any Board record, or any copy of such record, for any 
purpose, and for or before any duly constituted federal or state court, 
tribunal, or agency.
    (c) Service of subpoenas or other process. Subpoenas or other 
judicial or administrative process demanding access to any Board 
records or making any claim against the Board or against Board members 
or staff in their official capacity shall be addressed to and served 
upon the Secretary of the Board at the Board's office at 20th Street 
and Constitution Avenue NW, Washington, DC 20551. The Board does not 
accept service of process on behalf of any employee in respect of 
purely private legal disputes.
    (d) Alternative authority. Any action or determination required or 
permitted by this part to be done by the Board, the Secretary, the 
General Counsel, the Director of any Division, or any Reserve Bank, may 
be done by any employee who has been duly authorized or designated for 
this purpose by the Board, the Secretary, the General Counsel, the 
appropriate Director, or the appropriate Reserve Bank, respectively.


Sec.  261.4  Prohibition against disclosure.

    Except as provided in this part or as otherwise authorized, no 
officer, employee, or agent of the Board or any Reserve Bank shall 
disclose or permit the disclosure of any nonpublic information of the 
Board to any person other than Board or Reserve Bank officers, 
employees, or agents properly entitled to such information for the 
performance of official duties.

Subpart B--Published Information and Records Available to Public; 
Procedures for Requests


Sec.  261.10  Published information.

    (a) Federal Register. The Board publishes in the Federal Register 
for the guidance of the public:
    (1) Descriptions of the Board's central and field organization;
    (2) Statements of the general course and method by which the 
Board's functions are channeled and determined, including the nature 
and requirements of procedures;
    (3) Rules of procedure, descriptions of forms available and the 
place where they may be obtained, and instructions on the scope and 
contents of all papers, reports, and examinations;
    (4) Substantive rules, interpretations of general applicability, 
and statements of general policy;
    (5) Every amendment, revision, or repeal of the foregoing in 
paragraphs (a)(1) through (4) of this section; and
    (6) Other notices as required by law.
    (b) Publications. The Board maintains a list of publications on its 
website (at www.federalreserve.gov/publications). Most publications 
issued by the Board, including available back issues, may be downloaded 
from the website; some may be obtained through an order form located on 
the website (at www.federalreserve.gov/files/orderform.pdf) or by 
contacting Board Printing & Fulfillment, Federal Reserve Board, 
Washington, DC 20551. Subscription or other charges may apply for some 
publications.
    (c) Publicly available information--(1) Electronic reading room. 
The Board makes the following records available in its electronic 
reading room, http://www.federalreserve.gov/foia/readingrooms.htm#rr1.
    (i) Final opinions, including concurring and dissenting opinions, 
as well as final orders and written agreements, made in the 
adjudication of cases;
    (ii) Statements of policy and interpretations adopted by the Board 
that are not published in the Federal Register;
    (iii) Administrative staff manuals and instructions to staff that 
affect the public;
    (iv) Copies of all records, regardless of form or format--
    (A) That have been released to any person under Sec.  261.11; and
    (B)(1) That because of the nature of their subject matter, the 
Board has determined have become or are likely to become the subject of 
subsequent requests for substantially the same records; or
    (2) That have been requested 3 or more times.
    (v) A general index of the records referred to in paragraph 
(c)(1)(iv) of this section; and
    (vi) The public section of Community Reinvestment Act examination 
reports.
    (2) Inspection and copying at Reserve Banks. The Board may 
determine that certain classes of publicly available filings shall be 
made available for inspection and copying only at the Reserve Bank 
where those records are filed.
    (3) Privacy protection. The Board may delete identifying details 
from any public record to prevent a clearly unwarranted invasion of 
personal privacy.


Sec.  261.11  Records available to the public upon request.

    (a) Procedures for requesting records. (1) Requesters are 
encouraged to submit requests electronically by filling out the 
required information at https://www.federalreserve.gov/secure/forms/efoiaform.aspx. Alternatively, requests may be submitted in writing to 
the Office of the Secretary, Board of Governors of the Federal Reserve 
System, Attn: FOIA Requests, 20th Street and Constitution Avenue NW, 
Washington, DC 20551; or sent by facsimile to the Office of the 
Secretary, (202) 872-7565. Clearly mark the request FREEDOM OF 
INFORMATION ACT REQUEST.
    (2) A request may not be combined with any other request or with 
any matter presented to the Board such as a protest on a pending 
application or a comment on a public rulemaking. It may, however, be 
combined with a request for records under the Privacy Act pursuant to 
12 CFR 261a.5(a) or a request for discretionary release of confidential 
supervisory information pursuant to Sec.  261.23.
    (b) Contents of request. A request must include:

[[Page 27983]]

    (1) The requester's name, address, daytime telephone number, and an 
email address if available.
    (2) A description of the records that enables the Board's staff to 
identify and produce the records with reasonable effort and without 
unduly burdening or significantly interfering with any of the Board's 
operations. Whenever possible, the request should include specific 
information about each record sought, such as the date, title or name, 
author, recipient, and subject matter of the record.
    (3) A statement agreeing to pay the applicable fees. If the 
information requested is not intended for a commercial use (as defined 
in Sec.  261.16(d)(1)) and the requester seeks a reduction or waiver of 
the fees because he or she is either a representative of the news 
media, an educational institution, or a noncommercial scientific 
institution, the requester should include the information called for in 
Sec.  261.16(g)(2).
    (c) Perfected and defective requests. (1) The Board will consider 
the request to be perfected on the date the Office of the Secretary 
receives a request that contains all of the information required by 
paragraphs (b)(1) through (3) of this section.
    (2) The Board need not accept or process a request that does not 
reasonably describe the records requested or that does not otherwise 
comply with the requirements of this section.
    (3) The Board may return a defective request, specifying the 
deficiency. The requester may submit a corrected request, which will be 
treated as a new request.


Sec.  261.12  Processing requests.

    (a) Receipt of requests. Upon receipt of any request that satisfies 
the requirements set forth in Sec.  261.11, the Office of the Secretary 
shall assign the request to the appropriate processing schedule, 
pursuant to paragraph (b) of this section. The date of receipt for any 
request, including one that is addressed incorrectly or that is 
referred to the Board by another agency or by a Reserve Bank, is the 
date the Office of the Secretary actually receives the request.
    (b) Multitrack processing. (1) The Board provides different levels 
of processing for categories of requests under this section.
    (i) Requests for records that are readily identifiable by the 
Office of the Secretary and that have already been cleared for public 
release or can easily be cleared for public release may qualify for 
simple processing.
    (ii) All other requests shall be handled under normal processing 
procedures, unless expedited processing has been granted pursuant to 
paragraph (c) of this section.
    (2) The Office of the Secretary will make the determination whether 
a request qualifies for simple processing. A requester may contact the 
Office of the Secretary to learn whether a particular request has been 
assigned to simple processing. If the request has not qualified for 
simple processing, the requester may limit the scope of the request in 
order to qualify for simple processing by contacting the Office of the 
Secretary in writing, by letter or email, or by telephone.
    (c) Expedited processing. (1) A request for expedited processing 
may be made at any time. A request for expedited processing must be 
clearly labeled ``Expedited Processing Requested.'' The Board will 
process requests and appeals on an expedited basis whenever it is 
determined that they involve:
    (i) Circumstances in which the lack of expedited processing could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual; or
    (ii) An urgency to inform the public about an actual or alleged 
federal government activity, if made by a person who is primarily 
engaged in disseminating information.
    (2) A requester who seeks expedited processing must submit a 
statement, certified to be true and correct, explaining in detail the 
basis for making the request for expedited processing. For example, 
under paragraph (c)(1)(ii) of this section, a requester who is not a 
full-time member of the news media must establish that the requester is 
a person whose primary professional activity or occupation is 
information dissemination, though it need not be the requester's sole 
occupation. Such a requester also must establish a particular urgency 
to inform the public about the government activity involved in the 
request--one that extends beyond the public's right to know about 
federal government activity generally. The existence of numerous 
articles published on a given subject can be helpful in establishing 
the requirement that there be an ``urgency to inform'' the public on 
the topic. As a matter of administrative discretion, the Board may 
waive the formal certification requirement.
    (3) Within 10 calendar days of receipt of a request for expedited 
processing, the Board will notify the requester of its decision on the 
request. A denial of expedited processing may be appealed to the Board 
in accordance with Sec.  261.14. The Board will respond to the appeal 
within 10 working days of receipt of the appeal.
    (d) Priority of responses. The Office of the Secretary will 
normally process requests in the order they are received in the 
separate processing tracks, except when expedited processing is granted 
in which case the request will be processed as soon as practicable.
    (e) Time limits. The time for response to requests shall be 20 
working days from when a request is perfected. Exceptions to the 20-day 
time limit are only as follows:
    (1) In the case of expedited treatment under paragraph (c) of this 
section, the Board shall give the expedited request priority over non-
expedited requests and shall process the expedited request as soon as 
practicable.
    (2) Where the running of such time is suspended for a requester to 
address fee requirements pursuant to Sec.  261.16(c)(1) or (2).
    (3) In unusual circumstances, as defined in 5 U.S.C. 552(a)(6)(B), 
the Board may--
    (i) Extend the 20-day time limit for a period of time not to exceed 
10 working days, where the Board has provided written notice to the 
requester setting forth the reasons for the extension and the date on 
which a determination is expected to be dispatched; and
    (ii) Extend the 20-day time limit for a period of more than 10 
working days where the Board has provided the requester with an 
opportunity to modify the scope of the FOIA request so that it can be 
processed within that time frame or with an opportunity to arrange an 
alternative time frame for processing the original request or a 
modified request, and has notified the requester that the Board's FOIA 
Public Liaison is available to assist the requester for this purpose 
and in the resolution of any disputes between the requester and the 
Board and of the requester's right to seek dispute resolution services 
from the Office of Government Information Services.


Sec.  261.13   Responses to requests.

    (a) When the Board receives a perfected request, it will conduct a 
reasonable search of Board records on the date the Board's search 
begins and will review any responsive information it locates.
    (b) If a request covers documents that were created by, obtained 
from, or classified by another agency, the Board may refer the request 
for such documents to that agency for a response and inform the 
requester promptly of the referral.

[[Page 27984]]

    (c) In responding to a request, the Board will withhold information 
under this section only if--
    (1) The Board reasonably foresees that disclosure would harm an 
interest protected by an exemption described in Sec.  261.15(a); or
    (2) Disclosure is prohibited by law.
    (d) The Board will take reasonable steps necessary to segregate and 
release nonexempt information.
    (e) The Board will notify the requester of:
    (1) The Board's determination of the request;
    (2) The reasons for the determination;
    (3) An estimate of the amount of information withheld, if any. An 
estimate is not required if the amount of information is otherwise 
indicated by deletions marked on records that are disclosed in part or 
if providing an estimate would harm an interest protected by an 
applicable exemption;
    (4) The right of the requester to seek assistance from the Board's 
FOIA Public Liaison; and
    (5) When an adverse determination is made, the Board will advise 
the requester in writing of that determination and will further advise 
the requester of:
    (i) The right of the requester to appeal any adverse determination 
within 90 calendar days after the date of the determination as 
specified in Sec.  261.14;
    (ii) The right of the requester to seek dispute resolution services 
from the Board's FOIA Public Liaison or the Office of Government 
Information Services; and
    (iii) The name and title or position of the person responsible for 
the adverse determination.
    (f) Adverse determinations, or denials of requests, include 
decisions that the requested record is exempt, in whole or in part; the 
request does not reasonably describe the records sought; the 
information requested is not a record subject to the FOIA; the 
requested record does not exist, cannot be located, or has been 
destroyed; or the requested record is not readily reproducible in the 
form or format sought by the requester. Adverse determinations also 
include denials involving fees or fee waiver matters or denials of 
requests for expedited treatment.
    (g) The Board will normally send responsive, nonexempt documents to 
the requester by email but may use other means as arranged between the 
Board and the requester or as determined by the Board. The Board will 
attempt to provide records in the format requested by the requester.


Sec.  261.14   Appeals.

    (a) If the Board makes an adverse determination as defined in Sec.  
261.13(f), the requester may file a written appeal with the Board, as 
follows:
    (1) The appeal should prominently display the phrase FREEDOM OF 
INFORMATION ACT APPEAL on the first page, and should be sent directly 
to [email protected] or, if sent by mail, addressed to the Office of 
the Secretary, Board of Governors of the Federal Reserve System, Attn: 
FOIA Appeals, 20th Street & Constitution Avenue NW, Washington, DC 
20551; or sent by facsimile to the Office of the Secretary, (202) 872-
7565. If the requester is appealing the denial of expedited treatment, 
the appeal should clearly be labeled ``Appeal for Expedited 
Processing.''
    (2) An initial request for records may not be combined in the same 
letter with an appeal.
    (3) To be considered timely, an appeal must be postmarked, or in 
the case of electronic submissions, transmitted, within 90 calendar 
days after the date of the adverse determination.
    (b) Except as provided in Sec.  261.12(c)(3), the Board shall make 
a determination regarding any appeal within 20 working days of actual 
receipt of the appeal by the Office of the Secretary. If an adverse 
determination is upheld on appeal, in whole or in part, the 
determination letter shall notify the appealing party of the right to 
seek judicial review and of the availability of dispute resolution 
services from the Office of Government Information Services as a 
nonexclusive alternative to litigation.
    (c) The Board may reconsider an adverse determination, including 
one on appeal, if intervening circumstances or additional facts not 
known at the time of the adverse determination come to the attention of 
the Board.


Sec.  261.15   Exemptions from disclosure.

    (a) Types of records exempt from disclosure. Pursuant to 5 U.S.C. 
552(b), the following records of the Board are exempt from disclosure 
under this part:
    (1) Any information that is specifically authorized under criteria 
established by an Executive Order to be kept secret in the interest of 
national defense or foreign policy and is in fact properly classified 
pursuant to the Executive Order.
    (2) Any information related solely to the internal personnel rules 
and practices of the Board.
    (3) Any information specifically exempted from disclosure by 
statute to the extent required by 5 U.S.C. 552(b)(3).
    (4) Any matter that is a trade secret or that constitutes 
commercial or financial information obtained from a person and that is 
privileged or confidential.
    (5) Inter- or intra-agency memorandums or letters that would not be 
available by law to a party other than an agency in litigation with the 
Board, provided that the deliberative process privilege shall not apply 
to records that were created 25 years or more before the date on which 
the records were requested.
    (6) Any information contained in personnel and medical files and 
similar files the disclosure of which would constitute a clearly 
unwarranted invasion of personal privacy.
    (7) Any records or information compiled for law enforcement 
purposes, to the extent permitted under 5 U.S.C. 552(b)(7).
    (8) Any matter that is 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, including a state financial institution 
supervisory agency.
    (b) Release of nonpublic information. (1) The Board may make any 
nonpublic information furnished in connection with an application for 
Board approval of a transaction available to the public in response to 
a request in accordance with Sec.  261.11, and may, without prior 
notice and to the extent it deems necessary, comment on such 
information in any opinion or statement issued to the public in 
connection with a Board action to which such information pertains.
    (2) The fact that the Board has determined to release particular 
nonpublic information does not waive the Board's ability to withhold 
similar nonpublic information in response to the same or a different 
request.
    (3) Except where disclosure is expressly prohibited by statute, 
regulation, or order, the Board may release records that are exempt 
from mandatory disclosure whenever the Board or designated Board 
members, the Secretary, or the General Counsel determines that such 
disclosure would be in the public interest.
    (c) Delayed release. Except as required by law, publication in the 
Federal Register or availability to the public of certain information 
may be delayed if immediate disclosure would likely:
    (1) Interfere with accomplishing the objectives of the Board in the 
discharge of its statutory functions;

[[Page 27985]]

    (2) Interfere with the orderly conduct of the foreign affairs of 
the United States;
    (3) Permit speculators or others to gain unfair profits or other 
unfair advantages by speculative trading in securities or otherwise;
    (4) Result in unnecessary or unwarranted disturbances in the 
securities markets;
    (5) Interfere with the orderly execution of the objectives or 
policies of other government agencies; or
    (6) Impair the ability to negotiate any contract or otherwise harm 
the commercial or financial interest of the United States, the Board, 
any Reserve Bank, or any department or agency of the United States.


Sec.  261.16   Fee schedules; waiver of fees.

    (a) Fee schedules. Consistent with the limitations set forth in 5 
U.S.C. 552(a)(4)(A)(viii), the fees applicable to a request for records 
pursuant to Sec.  261.11 are set forth in Table 1 to Sec.  261.16 Fees 
of this section. These fees cover only the full allowable direct costs 
of search, duplication, and review. No fees will be charged where the 
average cost of collecting the fee (calculated at $5.00) exceeds the 
amount of the fee.
    (b) Computing Fees. For purposes of computing fees:
    (1) Search time includes all time spent looking for material that 
is responsive to a request, including line-by-line identification of 
material within documents. Such activity is distinct from ``review'' of 
material to determine whether the material is exempt from disclosure.
    (2) Direct costs mean those expenditures that the Board actually 
incurs in searching for, reviewing, and duplicating records in response 
to a request made under Sec.  261.11, as shown in Table 1 to Sec.  
261.16 Fees of this section.
    (3) Duplication refers to the process of making a copy, in any 
format, of a document.
    (4) Review refers to the process of examining documents that have 
been located as being potentially responsive to a request for records 
to determine whether any portion of a document is exempt from 
disclosure. It includes doing all that is necessary to prepare the 
documents for release, including the redaction of exempt information. 
It does not include time spent resolving general legal or policy issues 
regarding the application of exemptions.
    (c) Payment procedures. The Board may assume that a person 
requesting records pursuant to Sec.  261.11 will pay the applicable 
fees, unless the request includes a limitation on fees to be paid or 
seeks a waiver or reduction of fees pursuant to paragraph (g) of this 
section.
    (1) Advance notification of fees. If the estimated charges are 
likely to exceed the amount authorized by the requester, the Office of 
the Secretary shall notify the requester of the estimated amount. Upon 
receipt of such notice, the requester may confer with the Office of the 
Secretary to reformulate the request to lower the costs or may 
authorize a higher amount. The time period for responding to requests 
under Sec.  261.12(e) and the processing of the request will be 
suspended until the requester agrees in writing to pay the applicable 
fees.
    (2) Advance payment. The Board may require advance payment of any 
fee estimated to exceed $250. The Board may also require full payment 
in advance where a requester has previously failed to pay a fee in a 
timely fashion. The time period for responding to a request under Sec.  
261.12(e) and the processing of the request will be suspended until the 
Office of the Secretary receives the required payment.
    (3) Late charges. The Board may assess interest charges when fee 
payment is not made within 30 days of the date on which the billing was 
sent. Interest is at the rate prescribed in 31 U.S.C. 3717 and accrues 
from the date of the billing.
    (d) Categories of uses. The fees assessed depend upon the intended 
use for the records requested. In determining which category is 
appropriate, the Board will look to the intended use set forth in the 
request for records. Where a requester's description of the use is 
insufficient to make a determination, the Board may seek additional 
clarification before categorizing the request.
    (1) A commercial use requester is one who requests records for a 
use or purpose that furthers the commercial, trade, or profit interests 
of the requester or the person on whose behalf the request is made, 
which can include furthering those interests through litigation.
    (2) Representative of the news media is any person or entity that 
gathers information of potential interest to a segment of the public, 
uses its editorial skills to turn the raw materials into a distinct 
work, and distributes that work to an audience, including organizations 
that disseminate solely on the internet. The term ``news'' means 
information that is about current events or that would be of current 
interest to the public. A non-affiliated journalist who demonstrates a 
solid basis for expecting publication through a news media entity, such 
as a publishing contract or past publication record, will be considered 
as a representative of the news media.
    (3) Educational institution is any school that operates a program 
of scholarly research. A requester in this fee category must show that 
the request is made in connection with his or her role at the 
educational institution. The Board may seek verification from the 
requester that the request is in furtherance of scholarly research.
    (4) Noncommercial scientific institution is an institution that is 
not operated on a ``commercial'' basis, as defined in paragraph (d)(1) 
of this section, and that is operated solely for the purpose of 
conducting scientific research the results of which are not intended to 
promote any particular product or industry. A requester in this 
category must show that the request is authorized by and is made under 
the auspices of a qualifying institution and that the records are 
sought to further scientific research and are not for a commercial use. 
Please refer to Table 1 to Sec.  261.16 Fees to determine what fees 
apply for different categories of users.
    (e) Nonproductive search. Fees for search and review may be charged 
even if no responsive documents are located or if the request is 
denied.
    (f) Aggregated requests. A requester may not file multiple requests 
at the same time, solely in order to avoid payment of fees. If the 
Board reasonably believes that a requester is separating a single 
request into a series of requests for the purpose of evading the 
assessment of fees, the Board may aggregate any such requests and 
charge accordingly. It is considered reasonable for the Board to 
presume that multiple requests of this type made within a 30-day period 
have been made to avoid fees.
    (g) Waiver or reduction of fees. A request for a waiver or 
reduction of the fees, and the justification for the waiver, shall be 
included with the request for records to which it pertains. If a waiver 
is requested and the requester has not indicated in writing an 
agreement to pay the applicable fees if the waiver request is denied, 
the time for response to the request for documents, as set forth in 
Sec.  261.12(e), shall not begin until either a waiver has been granted 
or, if the waiver is denied, until the requester has agreed to pay the 
applicable fees.
    (1) The Board will grant a waiver or reduction of fees where it is 
determined both that disclosure of the information is in the public 
interest because it is likely to contribute significantly to public 
understanding of the operation or activities of the federal government, 
and that the disclosure of information is not

[[Page 27986]]

primarily in the commercial interest of the requester. In making this 
determination, the Board will consider the following factors:
    (i) Whether the subject of the records would shed light on 
identifiable operations or activities of the government with a 
connection that is direct and clear, not remote or attenuated; and
    (ii) Whether disclosure of the information is likely to contribute 
significantly to public understanding of those operations or 
activities. This factor is satisfied when the following criteria are 
met:
    (A) Disclosure of the requested records must be meaningfully 
informative about government operations or activities. The disclosure 
of information that already is in the public domain, in either the same 
or a substantially identical form, would not be meaningfully 
informative if nothing new would be added to the public's 
understanding.
    (B) The disclosure must contribute to the understanding of a 
reasonably broad audience of persons interested in the subject, as 
opposed to the individual understanding of the requester. A requester's 
expertise in the subject area as well as the requester's ability and 
intention to effectively convey information to the public must be 
considered. The Board will presume that a representative of the news 
media will satisfy this consideration.
    (iii) The disclosure must not be primarily in the commercial 
interest of the requester. A commercial interest includes any 
commercial, trade, profit, or litigation interest.
    (2) A request for a waiver or reduction of fees must include:
    (i) A clear statement of the requester's interest in the documents;
    (ii) The use proposed for the documents and whether the requester 
will derive income or other benefit for such use;
    (iii) A statement of how the public will benefit from such use and 
from the Board's release of the documents;
    (iv) A description of the method by which the information will be 
disseminated to the public; and
    (v) If specialized use of the information is contemplated, a 
statement of the requester's qualifications that are relevant to that 
use.
    (3) The requester has the burden to present evidence or information 
in support of a request for a waiver or reduction of fees.
    (4) The Board will notify the requester of its determination on the 
request for a waiver or reduction of fees. The requester may appeal a 
denial in accordance with Sec.  261.14(a).
    (5) Where only some of the records to be released satisfy the 
requirements for a waiver of fees, a waiver must be granted for those 
records.
    (6) A request for a waiver or reduction of fees should be made when 
the request for records is first submitted to the Board and should 
address the criteria referenced in this section. A requester may submit 
a fee waiver request at a later time so long as the underlying record 
request is pending or on administrative appeal. When a requester who 
has committed to pay fees subsequently asks for a waiver of those fees 
and that waiver is denied, the requester must pay any costs incurred up 
to the date the fee waiver request was received.
    (h) Restrictions on charging fees. (1) If the Board fails to comply 
with the FOIA's time limits in which to respond to a request, the Board 
may not charge search fees, or, in the instances of requests from 
requesters described in paragraph (d)(2) through (4) of this section, 
may not charge duplication fees, except as permitted under paragraphs 
(h)(2) through (4) of this section.
    (2) If the Board determines that unusual circumstances exist, as 
described in 5 U.S.C. 552(a)(6)(B), and has provided timely written 
notice to the requester and subsequently responds within the additional 
10 working days as provided in Sec.  261.12(e)(3), the Board may charge 
search fees, or, in the case of requests from requesters described in 
paragraphs (d)(2) through (4) of this section, may charge duplication 
fees.
    (3) If the Board determines that unusual circumstances exist, as 
described in 5 U.S.C. 552(a)(6)(B), and more than 5,000 pages are 
necessary to respond to the request, then the Board may charge search 
fees, or, in the case of requesters described in paragraphs (d)(2) 
through (4) of this section, may charge duplication fees, if the Board 
has:
    (i) Provided timely written notice to the requester in accordance 
with the FOIA; and
    (ii) Discussed with the requester via written mail, email, or 
telephone (or made not less than three good-faith attempts to do so) 
how the requester could effectively limit the scope of the request in 
accordance with 5 U.S.C. 552(a)(6)(B)(ii).
    (4) If a court has determined that exceptional circumstances exist, 
as defined by the FOIA, a failure to comply with the time limits shall 
be excused for the length of time provided by the court order.
    (i) Employee requests. In connection with any request by an 
employee, former employee, or applicant for employment, for records for 
use in prosecuting a grievance or complaint of discrimination against 
the Board, fees shall be waived where the total charges (including 
charges for information provided under the Privacy Act of 1974 (5 
U.S.C. 552a)) are $50 or less; but the Board may waive fees in excess 
of that amount.
    (j) Special services. The Board may agree to provide, and set fees 
to recover the costs of, special services not covered by the FOIA, such 
as certifying records or information and sending records by special 
methods such as express mail or overnight delivery.

                                          Table 1 to Sec.   261.16 Fees
----------------------------------------------------------------------------------------------------------------
          Type of requester             Search costs per hour    Review costs per hour      Duplication costs
----------------------------------------------------------------------------------------------------------------
Commercial...........................  Clerical/technical       Clerical/technical       Photocopy, per standard
                                        staff--$20.              staff--$20.              page--.10.
                                       Professional/            Professional/            Other types of
                                        Supervisory staff--$40.  Supervisory staff--$40.  duplication--Actual
                                                                                          Cost.
                                       Manager/Senior           Manager/Senior
                                        professional staff--     professional staff--
                                        $65.                     $65.
                                       Computer search,
                                        including computer
                                        search time, output,
                                        operator's salary--
                                        Direct Costs.

[[Page 27987]]

 
Educational; or Non-commercial         Costs waived...........  Costs waived...........  First 100 pages free,
 scientific; or News Media.                                                               then:
                                                                                         Photocopy per standard
                                                                                          page--.10.
                                                                                         Other types of
                                                                                          duplication--Actual
                                                                                          Cost.
All other requesters.................  First 2 hours free,      Costs waived...........  First 100 pages free,
                                        then:.                                            then:
                                       Clerical/Technical                                Photocopy, per standard
                                        staff--$20..                                      page--.10.
                                       Professional/                                     Other types of
                                        Supervisory staff--                               duplication--Actual
                                        $40..                                             Cost.
                                       Manager/Senior
                                        professional staf--
                                        $65..
----------------------------------------------------------------------------------------------------------------

Sec.  261.17   Request for confidential treatment.

    (a) Submission of request. Any submitter of information to the 
Board who desires that such information be withheld pursuant to Sec.  
261.15(a)(4) or (6) shall file a request for confidential treatment 
with the Board (or in the case of documents filed with a Reserve Bank, 
with that Reserve Bank) at the time the information is submitted or 
within 10 working days thereafter.
    (b) Form of request. Each request for confidential treatment shall 
state in reasonable detail the facts supporting the request, provide 
the legal justification, identify the specific information for which 
confidential treatment is requested, and include an affirmative 
statement that such information is not available publicly. Conclusory 
statements that release of the information would cause competitive harm 
generally will not be considered sufficient to justify confidential 
treatment for purposes of Sec.  261.15(a)(4). A submitter's request for 
confidentiality in reliance upon Sec.  261.15(a)(4) generally expires 
10 years after the date of submission unless a renewal request is 
submitted in writing to the Board before the confidentiality 
designation expires. The renewal request will likewise expire 10 years 
after the date of submission, unless the Board receives another timely 
renewal request.
    (c) Designation and separation of confidential material. All 
information considered confidential by a submitter shall be clearly 
designated CONFIDENTIAL in the submission and separated from 
information for which confidential treatment is not requested. Failure 
to segregate confidential information from other material may result in 
release of the unsegregated material to the public without notice to 
the submitter.
    (d) Exceptions. This section does not apply to:
    (1) Data items collected on forms that are approved pursuant to the 
Paperwork Reduction Act (44 U.S.C. 3501 et seq.) and deemed 
confidential by the Board. Any such data items deemed confidential by 
the Board shall so indicate on the face of the form or in its 
instructions. The data may, however, be disclosed in aggregate form in 
such a manner that individual company data is not disclosed or 
derivable.
    (2) Any comments submitted by a member of the public on 
applications and regulatory proposals being considered by the Board, 
unless the Board determines that confidential treatment is warranted.
    (3) A determination by the Board to comment upon information 
submitted to the Board in any opinion or statement issued to the public 
as described in Sec.  261.15(b)(1).
    (e) Special procedures. The Board may establish special procedures 
for particular documents, filings, or types of information by express 
provisions in this part or by instructions on particular forms that are 
approved by the Board. These special procedures shall take precedence 
over this section.


Sec.  261.18   Process for addressing a submitter's request for 
confidential treatment.

    (a) Resolving requests for confidential treatment. In general, a 
request by a submitter for confidential treatment of any information 
shall be considered in connection with a request for access to that 
information. At its discretion, the Board may act on a request for 
confidentiality prior to any request for access to the documents.
    (b) Notice to the submitter. (1) When the Board receives a FOIA 
request for information for which a submitter has requested 
confidential treatment, the Board shall promptly provide written notice 
of the request to the submitter if the Board determines that it may be 
required to disclose the records, provided:
    (i) The requested information has been designated in good faith by 
the submitter as information considered protected from disclosure under 
5 U.S.C. 552(b)(4) or (6); and
    (ii) The Board has reason to believe that the requested information 
may be protected from disclosure, but has not yet determined whether 
the information may be protected from disclosure.
    (2) Where a submitter has not requested confidential treatment but 
the Board reasonably believes that disclosure of information may cause 
substantial competitive harm to the submitter or would result in an 
unwarranted invasion of personal privacy, the Board may notify a 
submitter of the receipt of a request for access to that information 
and provide the submitter an opportunity to respond.
    (3) The notice given to the submitter shall:
    (i) Describe the information that has been requested or include a 
copy of the requested records or portions of records containing the 
information. In cases involving a voluminous number of submitters, the 
Board may post or publish a notice in a place or manner reasonably 
likely to inform the submitters of the proposed disclosure, instead of 
sending individual notifications; and
    (ii) Give the submitter a reasonable opportunity, not to exceed 10 
working days from the date of notice, to submit written objections to 
disclosure of the information.
    (c) Exceptions to notice to submitter. Notice to the submitter need 
not be given if:
    (1) The Board determines that the information is exempt under the 
FOIA and, therefore, will not be disclosed;
    (2) The requested information has been lawfully published or has 
been officially made available to the public;
    (3) Disclosure of the information is required by a statute (other 
than 5 U.S.C. 552) or by a regulation issued in accordance with the 
requirements of Executive Order 12,600 of June 23, 1987; or

[[Page 27988]]

    (4) The submitter's claim of confidentiality appears obviously 
frivolous or has already been denied by the Board. In such case, the 
Board shall give the submitter written notice of the determination to 
disclose the information at least five working days prior to 
disclosure.
    (d) Notice to requester. The requester shall be notified whenever:
    (1) The submitter is provided with notice and an opportunity to 
object to disclosure under paragraph (b) of this section;
    (2) The submitter is notified of the Board's intention to disclose 
the requested information; or
    (3) The submitter files a lawsuit to prevent the disclosure of 
information.
    (e) Written objections by submitter. (1) Upon receipt of the notice 
referenced in paragraph (b) of this section, a submitter that has any 
objections to disclosure should provide a detailed written statement 
that specifies all grounds for withholding the particular information 
under any exemption identified in Sec.  261.15(a). A submitter relying 
on Sec.  261.15(a)(4) as the basis for nondisclosure must explain why 
the information constitutes a trade secret or commercial or financial 
information that is confidential and must explain the consequences of 
disclosure of the information.
    (2) A submitter who fails to respond within the time period 
specified in the notice will be considered to have no objection to 
disclosure of the information. The Board is not required to consider 
any information received after the date of any disclosure decision. Any 
information provided by a submitter under this subpart, including a 
written request for confidential treatment, may itself be subject to 
disclosure under the FOIA.
    (f) Analysis of objections. The Board's determination to disclose 
any information for which confidential treatment has been requested 
shall be communicated to the submitter immediately. If the Board 
determines to disclose the information and the submitter has objected 
to such disclosure pursuant to paragraph (e) of this section, the Board 
shall provide the submitter with the reasons for disclosure and shall 
delay disclosure for 10 working days from the date of the 
determination.
    (g) Notice of lawsuit. The Board shall promptly notify any 
submitter of information covered by this section of the filing of any 
legal action against the Board to compel disclosure of such 
information.

Subpart C--Nonpublic Information Made Available to Supervised 
Financial Institutions, Governmental Agencies, and Others in 
Certain Circumstances


Sec.  261.20   General.

    (a) All confidential supervisory information and other nonpublic 
information, including but not limited to information made available 
under this subpart, remains the property of the Board, and except as 
otherwise provided in this regulation, no person, entity, agency, or 
authority to whom the information is made available or who otherwise 
possesses the information, including any officer, director, employee, 
or agent thereof, may use any such information for an unauthorized 
purpose or disclose any such information without the prior written 
permission of the General Counsel.
    (b) The disclosure of confidential supervisory information or other 
nonpublic information in accordance with this subpart shall not 
constitute a waiver by the Board of any applicable privileges.
    (c) Nothing in this subpart shall be construed to limit or restrict 
the authority of the Board to impose any additional conditions or 
limitations on the use and disclosure of confidential supervisory 
information or other nonpublic information. Further, nothing in this 
subpart shall be construed to limit or restrict the authority of the 
Board to make discretionary disclosures of confidential supervisory 
information or other nonpublic information in addition to the 
disclosures expressly provided for in this subpart.


Sec.  261.21   Confidential supervisory information made available to 
supervised financial institutions.

    (a) Disclosure of confidential supervisory information to 
supervised financial institutions. The Board or the appropriate Reserve 
Bank may disclose confidential supervisory information concerning a 
supervised financial institution to that supervised financial 
institution.
    (b) Disclosure of confidential supervisory information by 
supervised financial institutions--(1) General. Any supervised 
financial institution lawfully in possession of confidential 
supervisory information pursuant to this section may disclose such 
information to its directors, officers, or employees, and to the 
directors, officers, or employees of its affiliates, but only to the 
extent those individuals have a need for the information in the 
performance of their official duties.
    (2) Federal Deposit Insurance Corporation, Office of the 
Comptroller of the Currency, Bureau of Consumer Financial Protection, 
and state financial supervisory agencies. Any supervised financial 
institution lawfully in possession of confidential supervisory 
information about that institution pursuant to this section may, with 
the concurrence of the institution's central point of contact at the 
Reserve Bank or equivalent supervisory team leader (CPC), disclose such 
information to the Federal Deposit Insurance Corporation, the Office of 
the Comptroller of the Currency, the Bureau of Consumer Financial 
Protection, and the state financial supervisory agency that supervises 
that institution when the CPC determines that the receiving agency has 
a legitimate supervisory or regulatory interest in the information.
    (3) Legal counsel and auditors. In connection with the provision of 
legal or auditing services to the supervised financial institution, the 
supervised financial institution may disclose confidential supervisory 
information to its legal counsel or auditors so long as the disclosure 
is necessary to the legal counsel's or auditor's engagement and the 
legal counsel or auditor is engaged by the supervised financial 
institution pursuant to a written agreement under which the legal 
counsel or auditor agrees that:
    (i) It will treat the confidential supervisory information in 
accordance with this subpart;
    (ii) It will not use the confidential supervisory information for 
any purpose other than in connection with the particular engagement 
with the supervised financial institution;
    (iii) It will strictly limit disclosure of the confidential 
supervisory information to those of its staff who have a need to know 
the information for the purposes of the engagement and who are bound by 
written agreement to keep the information confidential in accordance 
with this subpart;
    (iv) It will not disclose the confidential supervisory information 
to any third party for any purpose without the prior written approval 
of the General Counsel; and
    (v) It will return or certify the destruction of the confidential 
supervisory information or, in the case of electronic files, render the 
files effectively inaccessible through access control measures or other 
means, at the conclusion of the engagement.
    (4) Other service providers. (i) A supervised financial institution 
that seeks to disclose confidential supervisory information to other 
service providers (such as consultants,

[[Page 27989]]

contingent workers, and technology providers) (hereinafter, ``service 
provider'') engaged by the supervised financial institution must submit 
a written request to the financial institution's CPC that identifies:
    (A) The purpose and scope of the service provider's engagement;
    (B) The specific business need to disclose confidential supervisory 
information to the service provider; and
    (C) The specific documents or materials the supervised financial 
institution seeks permission to disclose to the service provider.
    (ii) The CPC may authorize, in whole or in part, or deny the 
request. If the CPC authorizes a supervised financial institution to 
disclose confidential supervisory information to a service provider 
under this section, the supervised financial institution may not 
disclose confidential supervisory information to the service provider 
unless the service provider has agreed to the terms set out in 
paragraphs (b)(3)(i) through (v) of this section.
    (5) Other applicable internal procedures. A CPC's action under this 
section may require concurrence of other Federal Reserve staff in 
accordance with internal supervisory procedures.


Sec.  261.22   Nonpublic information made available by the Board to 
governmental agencies and entities exercising governmental authority.

    (a) Disclosure to Federal and State financial institution 
supervisory agencies. The Director of the Division of Supervision and 
Regulation, the Director of the Division of Consumer and Community 
Affairs, the General Counsel, or the appropriate Reserve Bank may, for 
legitimate supervisory or regulatory purposes and with or without a 
request, disclose confidential supervisory information and other 
nonpublic information to the Office of the Comptroller of the Currency, 
the Federal Deposit Insurance Corporation, the Bureau of Consumer 
Financial Protection, and a state financial institution supervisory 
agency.
    (b) Disclosures pursuant to the Equal Credit Opportunity Act, the 
Fair Housing Act, and the Employee Retirement Income Security Act. The 
Director of the Division of Supervision and Regulation, the Director of 
the Division of Consumer and Community Affairs, or the General Counsel 
may disclose confidential supervisory information and other nonpublic 
information concerning a supervised financial institution to:
    (1) The Attorney General or to the Secretary of the Department of 
Housing and Urban Development related to the enforcement of the Equal 
Credit Opportunity Act (15 U.S.C. 1691 et seq.) or the Fair Housing Act 
(42 U.S.C. 3601 et seq.); and
    (2) The Secretary of the Department of Labor and the Secretary of 
the Department the Treasury in accordance with section 3004(b) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1204(b)).
    (c) Disclosure to other governmental agencies and entities 
exercising governmental authority. Except as provided in paragraph (d) 
or (e) of this section, other federal, state, and local agencies, 
including law enforcement agencies, and other entities exercising 
governmental authority, may file written requests with the Board for 
access to confidential supervisory information and other nonpublic 
information under this section, including information in the form of 
testimony and interviews from current or former Federal Reserve System 
staff. Properly accredited foreign law enforcement agencies and other 
foreign government agencies may also file written requests with the 
Board in accordance with this paragraph, except that provision of 
confidential supervisory information to foreign bank regulatory or 
supervisory authorities is governed by 12 CFR 211.27.
    (1) Contents of request. To obtain access to confidential 
supervisory information or other nonpublic information under this 
section, including information in the possession of a person other than 
the Board, the requester shall address a letter request to the Board's 
General Counsel, specifying:
    (i) The particular information, kinds of information, and where 
possible, the particular documents to which access is sought;
    (ii) The reasons why such information cannot be obtained from the 
supervised financial institution in question or another source rather 
than from the Board;
    (iii) A statement of the law enforcement purpose or other statutory 
purpose for which the information shall be used;
    (iv) A commitment that the information requested shall not be 
disclosed to any person outside the requesting agency or entity without 
the written permission of the General Counsel; and
    (v) If the document or information requested includes customer 
account information subject to the Right to Financial Privacy Act, as 
amended (12 U.S.C. 3401 et seq.), any Federal agency request must 
include a statement that such customer account information need not be 
provided, or a statement as to why the Act does not apply to the 
request, or a certification that the requesting federal agency has 
complied with the requirements of the Act.
    (2) Action on request. The General Counsel may approve the request 
upon determining that:
    (i) The request complies with this section;
    (ii) The information is needed in connection with a formal 
investigation or other official duties of the requesting agency or 
entity;
    (iii) Satisfactory assurances of confidentiality have been given; 
and
    (iv) Disclosure is consistent with the supervisory and regulatory 
responsibilities and policies of the Board.
    (d) Federal and state grand jury, criminal trial, and government 
administrative subpoenas. The General Counsel shall review and may 
approve the disclosure of nonpublic information pursuant to federal and 
state grand jury, criminal trial, and government administrative 
subpoenas.
    (e) Conditions or limitations; written agreements. The General 
Counsel may impose any conditions or limitations on disclosure that the 
General Counsel determines to be necessary to effect the purposes of 
this regulation, including the protection of the confidentiality of the 
Board's information, or to ensure compliance with applicable laws or 
regulations. In addition, Board or Reserve Bank staff may make 
disclosures pursuant to any written agreement entered into by the Board 
when authorized by the express terms of such agreement or by the 
General Counsel.


Sec.  261.23   Other disclosure of confidential supervisory 
information.

    (a) Board policy. (1) It is the Board's policy regarding 
confidential supervisory information that such information is 
confidential and privileged. Accordingly, the Board does not normally 
disclose confidential supervisory information to the public or 
authorize third parties in possession of confidential supervisory 
information to further use or disclose the information. When 
considering a request to access, use, or to disclose confidential 
supervisory information under this section, the Board will not 
authorize access, use, or disclosure unless the requesting person is 
able to show a substantial need to access, use, or disclose such 
information that outweighs the need to maintain confidentiality.
    (2) Notwithstanding any other provision of this part, the Board 
will not

[[Page 27990]]

authorize access to or disclosure of any suspicious activity report 
(SAR), or any information that would reveal the existence of a SAR, 
except as necessary to fulfill official duties consistent with Title II 
of the Bank Secrecy Act. For purposes of this part, ``official duties'' 
shall not include the disclosure of a SAR, or any information that 
would reveal the existence of a SAR, in response to a request for 
disclosure of nonpublic information or a request for use in a private 
legal proceeding, including a request pursuant to this section.
    (b) Requests in connection with litigation. Except as provided in 
Sec. Sec.  261.21 and 261.22,
    (1) In connection with any proposed use of confidential supervisory 
information in litigation before a court, board, commission, agency, or 
arbitration, any person who:
    (i) Seeks access to confidential supervisory information from the 
Board or a Reserve Bank (including the testimony of present or former 
Board or Reserve Bank employees on matters involving confidential 
supervisory information, whether by deposition or otherwise);
    (ii) Seeks to use confidential supervisory information in its 
possession or to disclose such information to another party; or
    (iii) Seeks to require a person to disclose confidential 
supervisory information to a party, shall file a written request with 
the General Counsel.
    (2) The request shall include:
    (i) The judicial or administrative action, including the case 
number and court or adjudicative body and a copy of the complaint or 
other pleading setting forth the assertions in the case;
    (ii) A description of any prior judicial or other decisions or 
pending motions in the case that may bear on the asserted relevance of 
the requested information;
    (iii) A narrow and specific description of the confidential 
supervisory information the requester seeks to access or to disclose 
for use in the litigation including, whenever possible, the specific 
documents the requester seeks to access or disclose;
    (iv) The relevance of the confidential supervisory information to 
the issues or matters raised by the litigation;
    (v) The reason why the information sought, or equivalent 
information adequate to the needs of the case, cannot be obtained from 
any other source; and
    (vi) A commitment to obtain a protective order acceptable to the 
Board from the judicial or administrative tribunal hearing the action 
preserving the confidentiality of any information that is provided.
    (3) In the case of requests covered by paragraph (b)(1)(ii) of this 
section, the Board may require the party to whom disclosure would 
ultimately be made to substantiate its need for the information prior 
to acting on any request.
    (c) All other requests. Any other person seeking to access, use, or 
disclose confidential supervisory information for any other purpose 
shall file a written request with the General Counsel. A request under 
this paragraph (c) shall describe the purpose for which access, use, or 
disclosure is sought and the requester shall provide other information 
as requested by the General Counsel.
    (d) Action on request--(1) Determination of approval. The General 
Counsel may approve a request made under this section provided that he 
or she determines that:
    (i) The person seeking access, or the person to whom access would 
be provided, has shown a substantial need to access confidential 
supervisory information that outweighs the need to maintain 
confidentiality; and
    (ii) Approval is consistent with the supervisory and regulatory 
responsibilities and policies of the Board.
    (2) Conditions or limitations. The General Counsel may, in 
approving a request, impose such conditions or limitations on use of 
any information disclosed as is deemed necessary to protect the 
confidentiality of the Board's information.
    (e) Exhaustion of administrative remedies for discovery purposes in 
civil, criminal, or administrative action. Action on a request under 
this section by the General Counsel is necessary in order to exhaust 
administrative remedies for discovery purposes in any civil, criminal, 
or administrative proceeding. A request made pursuant to Sec.  261.11 
of this regulation does not exhaust administrative remedies for 
discovery purposes. Therefore, it is not necessary to file a request 
pursuant to Sec.  261.11 to exhaust administrative remedies under this 
section.


Sec.  261.24   Subpoenas, orders compelling production, and other 
process.

    (a) Any person (including any officer, employee, or agent of the 
Board or any Reserve Bank) who is served with a subpoena, order, or 
other judicial or administrative process requiring the production of 
confidential supervisory information or other nonpublic information of 
the Board or requiring the person's testimony regarding such Board 
information in any proceeding, shall:
    (1) Promptly inform the Board's General Counsel of the service and 
all relevant facts, including the documents, information or testimony 
demanded, and any facts relevant to the Board in determining whether 
the material requested should be made available;
    (2) Inform the entity issuing the process of the substance of these 
rules and, in particular, of the obligation to follow the request 
procedures in Sec.  261.23(b); and
    (3) At the appropriate time inform the court or tribunal that 
issued the process of the substance of these rules.
    (b) Unless authorized by the Board or as ordered by a federal court 
in a judicial proceeding in which the Board has had the opportunity to 
appear and oppose discovery, any person who is required to respond to a 
subpoena or other legal process concerning Board confidential 
supervisory information or other non-public Board information shall 
attend at the time and place required and respectfully decline to 
disclose or to give any testimony with respect to the information, 
basing such refusal upon the provisions of this regulation. If the 
court or other body orders the disclosure of the information or the 
giving of testimony, the person having the information shall continue 
to decline to disclose the information and shall promptly report the 
facts to the Board for such action as the Board may deem appropriate.
    (c) A litigant or non-party who is served with a civil request for 
production of documents calling for production of confidential 
supervisory information should proceed under Sec.  261.23 rather than 
this section.

    By order of the Board of Governors of the Federal Reserve 
System, June 10, 2019.
Ann Misback,
Secretary of the Board.
[FR Doc. 2019-12524 Filed 6-14-19; 8:45 am]
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