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SOUTH BRONX, SDNY, Dec 11 – How pro-bank has the FDIC become? There's been evasion of FOIA - and now a wider ILC loophole.

On the former, when Inner City Press submitted a FOIA request for the absurd redactions by Multi-Bank to its application for a denovo bank in Florida, the response was that there will be no review of the redactions to the application - until the application is approved.   

Also, the FDIC uses FOIA exemption 8 to say that every single one of its communications about the application are exempt. This is a new low.

As is this, the finalization of an industrial loan company loophole rule which could, unless closed, allow Amazon, Facebook, Walmart and even Google through. Even Bank Policy Institute said of an ILC application Inner City Press opposed, "it will set a precedent for every other Big Tech company (Amazon, Facebook, Google, etc.) to enter banking through an [industrial loan company] charter without consolidated supervision." This must be opposed.

Inner City Press (and Fair Finance Watch) requested:

This is a FOIA request for (all of) the overly redacted "public" application of Multi-Bank Application For DeNovo State Bank in Florida. Inner City Press has seen the redacted version, which withholdings from the public and press information about those involved and their plans. The entire application should be provide, along with all of the FDIC's communications with these applicants for the past year (including for preparation of public comment - it should be expedited and provided on a rolling basis).

Here is the FDIC's response of December 11:

This is in response to your November 29, 2020 Freedom of Information Act (FOIA) request... In general, the non-confidential portions of an application for deposit insurance for a de novo bank, an application to establish a branch, and other applications are publicly available in the appropriate FDIC Regional Office until 180 days following final disposition of the filing... for access to the public file, please contact: FDIC Atlanta Regional Office ATTN: RMS Regional Director 10 10th Street, NE, Suite 800 Atlanta, GA 30309 Since a FOIA request for these records is premature under our regulations, we are administratively closing this portion of your request.   

So there is no review of redactions. Outrageous

. Communications Between the FDIC and Applicants By its very nature, the information that you requested, if it exists and could be located, would be information contained in, or related to, the examination, operating, or condition reports prepared by, on behalf of, or for the use of the FDIC in its regulation or supervision of financial institutions. All of that information, if it exists and could be located, would be exempt from disclosure in full under FOIA Exemption 8, 5 U.S.C. § 552 (b)(8). Therefore, this portion of your request is denied under Exemption 8

Inner City Press has appealed:

This is a FOIA appeal to the outrageous total denial by the FDIC to Inner City Press' FOIA request for the erroneously redacted portions of a pending bank application, and to communication about it.   Contrary to FOIA and the practice of other regulators, the December 11 decision ("Denial") by Alisa Colgrove Government Information Specialist FOIA/Privacy Act Group makes review of an applicant's redactions impossible until the FDIC approves an application.   

Exemptions are not supposed to be invoked across the board - it is impossible to believe that every since FDIC communication is covered by the exemption, and that is not the practice of the FRB. This is a laughable FOIA response and must immediately be reviewed and reversed, and the pending application stayed until it is.

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