Federal Reserve Proposes Amendments to CSI and FOIA Regulations: Proposal Provides Greater Clarity, but Does not Address a Number of Key Issues

Sullivan & Cromwell LLP - June 17, 2019
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On June 14, 2019, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) published proposed amendments (the “Proposal”) that would revise the rules governing confidential supervisory information (“CSI”) and other nonpublic information of the Federal Reserve, as well as provide “technical updates” to its regulations implementing the Freedom of Information Act (“FOIA”). The Proposal’s CSI-related changes include: revisions to the definitions of “CSI” itself and “supervised financial institution;” authorizing the disclosure of CSI to affiliates when the recipients have a need for the CSI in the performance of their official duties; elimination of the “premises” requirement in the exception for CSI disclosures to auditors and outside legal counsel; and a revised process through which supervised financial institutions may seek authorization to disclose CSI to other service providers. The Proposal’s changes to the Federal Reserve’s FOIA regulations include: revisions to the definition of “records of the Board” to incorporate the two-part test for agency records set forth in the U.S. Department of Justice v. Tax Analysts decision; various changes to conform the Federal Reserve’s FOIA regulations with Department of Justice guidance; and revisions to the process for requesting confidential treatment for records submitted to the Federal Reserve.