No. 90-5290.United States Court of Appeals, District of Columbia Circuit.
July 12, 1991.
Page 291
Jay B. Stephens, U.S. Atty., John D. Bates, R. Craig Lawrence and Nathan Dodell, Asst. U.S. Attys., were on the motion, Washington, D.C., for summary affirmance, for appellee. Marina Utgoff Braswell, Asst. U.S. Atty., also entered an appearance, Washington, D.C., for appellee.
Alan B. Morrison and Eleanor H. Smith, were on the cross-motion, Washington, D.C., for summary reversal, for appellant.
Appeal from the United States District Court for the District of Columbia (Civil Action Number 89-02094).
Before WALD, EDWARDS and WILLIAMS, Circuit Judges.
Opinion for the Court filed PER CURIAM.
[1] ON MOTION FOR SUMMARY AFFIRMANCE AND CROSS-MOTION FOR SUMMARY REVERSAL
PER CURIAM:
I.
[3] Congress created and chartered the NCCB in 1978. It provides specialized credit and technical assistance to nonprofit cooperatives. 12 U.S.C. § 3011. It is capitalized in part by the United States and in part by private investors. Id. §§ 3014, 3017. It does not receive deposits that may be withdrawn on demand by the public.
[6] 5 U.S.C. § 552(b)(8). Public Citizen argues that the examination reports are not protected, first because the NCCB is not a “financial institution” for purposes of exemption 8,[1] second because the FCA does not supervise or regulate the NCCB. We address these contentions in turn.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.
II.
[7] Public Citizen notes that the legislative history of exemption 8 indicates that federal regulators were concerned that disclosure of examination reports containing candid evaluations of financial institutions could “undermine public confidence and cause unwarranted runs on banks.” Hearings on S. 1663 Before the Subcomm. on Administrative Practice and Procedure of the Senate Comm. on the Judiciary, 88th Cong., 2d Sess. 186 (1964). Because runs can be made only on institutions that receive deposits withdrawable on demand, Public Citizen concludes that “financial institutions” are limited to depository institutions for purposes of exemption 8.
Page 292
Avco Corp. v. United States Dep’t of Justice, 884 F.2d 621, 623 (D.C. Cir. 1989) (quoting Public Citizen v. United States Dep’t of Justice, 491 U.S. 440, 470, 109 S.Ct. 2558, 2574, 105 L.Ed.2d 377 (1989) (Kennedy, J., concurring)). The term “financial institution” is commonly defined to include
[9] Black’s Law Dictionary 568 (5th ed. 1979) (emphasis added) (citing Uniform Probate Code § 6-101(3)). The NCCB is authorized to do business under Title 12, the portion of the United States Code relating to “Banks and Banking” and other matters concerning financial institutions. Moreover, institutions providing credit services, as does the NCCB, are included within the term “financial institutions.” See, e.g., Black’s Law Dictionary 568 (5th ed. 1979) (defining “financial institutions” to include credit unions); 12 U.S.C. § 3302(3) (same). Because “`we assume “that the legislative purpose is expressed by the ordinary meaning of the words used,”‘” Kosak v. United States, 465 U.S. 848, 853, 104 S.Ct. 1519, 1523, 79 L.Ed.2d 860 (1984) (quotin American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982); Richards v. United States, 369 U.S. 1, 9, 82 S.Ct. 585, 591, 7 L.Ed.2d 492 (1962)), we conclude that the term “financial institutions” is not limited to depository institutions for purposes of exemption 8. [10] Although “the plain-meaning rule is `rather an axiom of experience than a rule of law, and does not preclude consideration of persuasive evidence if it exists,'” Public Citizen, 491 U.S. at 455, 109 S.Ct. at 2566 (quoting Boston Sand Gravel Co. v. United States, 278 U.S. 41, 48, 49 S.Ct. 52, 54, 73 L.Ed. 170 (1928)), Public Citizen offers no persuasive evidence that financial institutions must be depository institutions for purposes of exemption 8. Public Citizen relies on a statement by the Chairman of the National Rural Electric Cooperative Association that exemption 8 would not apply to nondepository institutions, and on the absence of any other reference to nondepository institutions in the legislative history. However, the testimony of witnesses before congressional committees prior to passage of legislation is generally weak evidence of legislative intent, Turner v. Prod, 707 F.2d 1109, 1119 (9th Cir. 1983), and “silence in legislative history is almost invariably ambiguous. If a statute is plain in its words, the silence may simply mean that no one in Congress saw any reason to restate the obvious.” Avco, 884 F.2d at 625. [11] Moreover, although the legislative history of exemption 8 does not define “financial institutions,” the National Consumer Cooperative Bank Act and its legislative history refer to the NCCB as a financial institution. See 12 U.S.C. § 3012(11) (providing that NCCB “may borrow money and issue notes, bonds and debentures or other obligations individually or in concert wit other financial institutions, agencies or instrumentalities”) (emphasis added); S.Rep. No. 795, 95th Cong., 2d Sess. 11 reprinted in 1978 U.S. Code Cong. Admin. News 1302, 1313 (“As an independent financial institution, the Bank eventually will be wholly owned and controlled by cooperatives which borrow or are eligible to borrow from it.”) (emphasis added). [12] Finally, we have twice refused to limit exemption 8 to cases in which disclosure of an examination report could threaten the solvency of the type of institution examined. In Consumers Union v. Heimann, 589 F.2d 531 (D.C. Cir. 1978), appellants argued that the Comptroller of the Currency’s reports on compliance with the Truth in Lending Act were not exempt because “Congress intended to protect only examination reports that reflected upon the security and solvency of financial institutions.” Id. at 533. We held, however, that “if Congress has intentionally and unambiguously crafted a particularly broad, all-inclusive definition, it is not our function, even in the FOIA context, to subvert that effect.” Id.; see also id. at 538 (Wright, J., concurring) (“I concur with the court that appellant must fail in its effort to[a]ny organization authorized to do business under state or federal laws relating to financial institutions, including, without limitation, banks and trust companies, savings banks, building and loan associations, savings and loan companies or associations, and credit unions.
Page 293
recast Exemption 8 from a provision that looks to the nature and source of material into one that focuses on the likely consequences of disclosure.”). Likewise, in Gregory v. FDIC, 631 F.2d 896 (D.C. Cir. 1980) (per curiam), we rejected appellant’s argument that examination reports were subject to disclosure merely because the examined banks had closed: “[T]his is not a case in which the plain meaning of the statute yields an unreasonable result. It is clear from the legislative history that the exemption was drawn to protect not simply each individual bank but the integrity of financial institutions as an industry.” Id. at 898. Although Consumers Union and Gregory
concerned the phrase “contained in or related to examination, operating, or condition reports” rather than the term “financial institutions,” Public Citizen offers no justification for its contention that the latter should be defined with reference to the consequences of disclosure while the former is not.
III.
[14] Public Citizen next argues that “[a] straightforward reading of this exemption would require that the reference to an agency that regulates or supervises financial institutions limits the exemption to the examination reports concerning the financial institutions that the agency regulates or supervises.” Opposition to Motion for Summary Affirmance at 12. Because the FCA does not supervise or regulate the NCCB, Public Citizen asserts that the FCA’s reports on the NCCB are not exempt.
[17] Consumers Union, 589 F.2d at 534. These concerns may be implicated regardless of whether the agency regulates or supervises the financial institution. The FCA represents that its examination reports on the NCCB discuss the quality of the NCCB’s loans, internal controls, and management practice and structure. These frank evaluations of the NCCB may undermine public confidence and investment in the NCCB despite the absence of a regulatory or supervisory relationship between the FCA and the NCCB. These potential consequences of disclosure may also strain the cooperation between the NCCB and the FCA that is essential to the examination process. We therefore conclude that, although the FCA does not regulate or supervise the NCCB, the FCA’s examination reports on the NCCB are protected from disclosure pursuant to exemption 8.concern that disclosure of examination, operation, and condition reports containing frank evaluations of the investigated banks might undermine public confidence and cause unwarranted runs on banks. . . . [A] secondary purpose in enacting exemption 8 appears to have been to safeguard the relationship between the banks and their supervising agencies. If details of the bank examinations were made freely available to the public and to banking competitors, there was concern that banks would cooperate less than fully with federal authorities.
IV.
[18] In sum, we hold that for purposes of exemption 8, a “financial institution” need
Page 294
not be a depository institution and examination reports need not pertain to an institution that is regulated or supervised by the withholding agency. Accordingly, the district court’s order is
[19] Affirmed.