March 21, 2006

Mr. Michael Ravnitzky

(b)(6)

Re: Your FOIA Appeal dated February 17, 2006 (06-FOI-00019)

Dear Mr. Ravnitzky:

Late last year, you submitted a Freedom of Information Act (FOIA)
request for several NCUA monthly management reports for the years 2001
and 2005. Dianne Salva, NCUA's FOIA Officer/Staff Attorney, responded to
your request. You received several hundred pages of responsive
documents. Some pages were released in full, some pages were redacted
and some pages were withheld in full. We received your February 17, 2006
appeal on February 21^st^. You only appeal NCUA's withholding of
portions of page 47 and the entirety of page 48 of the Management Report
dated October 10, 2001. Redactions from these pages were made pursuant
to exemptions (b)(5) and (b)(8) of the FOIA,

5 U.S.C. §552(b)(5) & (8). Your appeal is granted in part and denied in
part. Portions of page 48 that were previously withheld pursuant to
exemption 8 are now released. The information withheld on page 47
continues to be withheld. Exemptions (b)(5) and (b)(8) remain applicable
to the redacted portions on enclosed pages 47 and 48. An explanation of
the applicable exemptions follows.

# Exemption 5

Exemption 5 of the FOIA protects "inter-agency or intra-agency
memorandums or letters which would not be available by law to a party
... in litigation with the agency." 5 U.S.C. §552(b)(5). Included within
exemption 5 is information subject to the deliberative process
privilege. In order for information to qualify for the deliberative
process privilege it must be both predecisional and deliberative.
[Petroleum Information Corporation v. United States Department of the
Interior]{.underline}, 976 F.2d 1429, 1434 (D.C.Cir. 1992). The
information withheld qualifies as such. The purpose of the deliberative
process privilege is "to prevent injury to the quality of agency
decisions." [NLRB v. Sears, Roebuck & Co.]{.underline}, 421 U.S. 132,
151 (1975). Any one of the following three policy purposes have been
held to constitute a basis for the deliberative process privilege: (1)
to encourage open, frank discussions on matters of policy between
subordinates and superiors; (2) to protect against premature disclosure
of proposed policies before they are finally adopted; and (3) to protect
against public confusion that might result from disclosure of reasons
and rationales that were not in fact ultimately the grounds for an
agency's action. [Russell v. Department of the Air Force]{.underline},
682 F.2d 1045 (D.C. Cir. 1982). The first and third policies enumerated
in [Russell]{.underline} apply in this case. Portions of the management
report continue to be withheld pursuant to exemption 5.

# Exemption 8

Exemption 8 applies to information "contained in or related to
examination, operating or condition reports prepared by, on behalf of,
or for the use of an agency responsible for the regulation or
supervision of financial institutions."

5 U.S.C. §552(b)(8). Courts have interpreted exemption 8 broadly and
have declined to restrict its all-inclusive scope. [Consumers Union of
United States, Inc. v. Heimann]{.underline}, 589 F.2d 531 (D.C. Cir.
1978). In general, all records, regardless of the source, of a financial
institution's financial condition and operations that are in the
possession of a federal agency responsible for their regulation or
supervision are exempt. [McCullough v. FDIC]{.underline}, No. 79-1132,
1980 U.S. Dist. LEXIS 17685, at \*\*7-8 (D.D.C. July 28, 1980). Some of
the information withheld was gleaned from examination of
federally-insured credit unions; therefore it qualifies for withholding
pursuant to exemption 8.

The courts have discerned two major purposes for exemption 8 from its
legislative history: 1) to protect the security of financial
institutions by withholding from the public reports that contain frank
evaluations of a bank's stability; and 2) to promote cooperation and
communication between employees and examiners. *See* [Atkinson v.
FDIC]{.underline}, No. 79-1113, 1980 U.S. Dist. LEXIS 17793, at \*4
(D.D.C. Feb. 13, 1980). The purposes of exemption 8 are met; therefore,
the information redacted from pages 47 and 48 gleaned from examination
information continues to be withheld pursuant to exemption 8.

Pursuant to 5 U.S.C. §552(a)(4)(B) of the FOIA, you may seek judicial
review of this determination by filing suit against the NCUA. Such a
suit may be filed in the United States District Court where you reside,
where your principal place of business is located, the District of
Columbia, or where the documents are located (the Eastern District of
Virginia).

Sincerely,

/S/

Robert M. Fenner

General Counsel

Enclosures

GC/HMU:bhs

06-0230