May 3, 2006

Ms. Catherine Mabrey

(b)(6)

Re: Your FOIA Appeal received April 10, 2006

Dear Ms. Mabrey:

On January 23, 2006, you e-mailed staff at NCUA's Asset Management and
Assistance Center requesting certain records. On January 30, 2006,
following up on your e-mail, you filed a Freedom of Information Act
(FOIA)/Privacy request for copies of your file from Diakonia Credit
Union. Dianne Salva responded to your request on March 1, 2006,
enclosing approximately 168 pages of responsive documents. Two documents
were withheld pursuant exemptions 5 and 8 of the FOIA, 5 U.S.C.
§552(b)(5) and (8). We received your undated appeal April 6, 2006. You
appeal the withholding of the two documents. Your appeal is granted in
part and denied in part. Enclosed is one of the pages previously
withheld. The second document continues to be withheld pursuant to
exemptions 5 and 8 of the FOIA. An explanation of exemptions 5 and 8
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. 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; the deliberative information withheld continues 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). Courts
have generally not required agencies to segregate and disclose portions
of documents unrelated to the financial condition of the institution.
*See* [Atkinson]{.underline} No. 79-1113, 1980 U.S. Dist. LEXIS 17793,
at \*4-5 (D.D.C. Feb. 13, 1980). 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} at \*4. Some of the information on
the withheld document concerns a credit union's financial condition. The
purposes of exemption 8 are met; therefore, the document (one page)
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,

Robert M. Fenner

General Counsel

Enclosure

GC/HMU:bhs

06-0415

06-FOI-00050