WASHINGTON — The Supreme Court shot down Monday an attempt by large banks to stop news organizations from accessing details about their Federal Reserve Board borrowings.
By refusing to hear an appear, the high court's decision essentially upheld an appeals court ruling last year that forces the central bank to fulfill a Freedom of Information Act request from Bloomberg News asking for the information. The news outlet sought borrower information and the amount of loans the Fed made available through its credit facilities at the height of the financial crisis.
But the impact of the Supreme Court's decision was in question Monday, since the Fed had already been required to publish information under last year's financial reform law. The legislation required the Fed to release information on borrowings during the crisis from its emergency lending facilities — operated under the Fed's so-called "13(3)" authority — by Dec. 1 of last year.
The law also established standards for releasing such data on post-crisis borrowings. The Fed must publish the information regarding emergency lending facilities one year after a facility's authorization has ended. Discount-window borrowings are required to be published two years after the transaction.
A Fed spokesperson said the agency was in the process of fulfilling the FOIA requests. "The Board will fully comply with the courts' decisions and is preparing to make the information available," the spokesperson said. "Some of the information relating to emergency credit facilities was already released on December 1 by the Board under the Dodd-Frank Act."
Following Bloomberg's May 2008 FOIA request, the Fed released only partial data regarding its lending programs, claiming exemptions protected sensitive aspects of the information. Those included exemptions for "trade secrets and commercial or financial information."
A district court decision sided with Bloomberg, as did the U.S. Court of Appeals for the Second Circuit. (The Fed relented following the appeals court decision, but the Clearing House Association — which represents big banks — had asked the high court to get involved.)
Gil Schwartz, a former Fed attorney and now a partner at Schwartz & Ballen, said while the immediate issue of Bloomberg's request had largely already been addressed in Dodd-Frank, the question of what information banks provide to the government is protected is still open.
"The question that still remains outstanding, which the court will not address because they turned down this case, is the scope of the exemption in the Freedom of Information Act for trade secrets and commercial or financial information," Schwartz said.
