# Appraisal Subcommittee; Appraiser Regulation; Freedom of Information Act Implementation

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URL: https://www.frixlaw.com/law-library/documents/fr%3A94-813

## Record

- **Collection:** Federal Register
- **Document type:** Uncategorized Document
- **Published:** January 13, 1994

## Text

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

12 CFR Part 1102

[Docket No. AS94-1]

Appraisal Subcommittee; Appraiser Regulation; Freedom of
Information Act Implementation

AGENCY: Appraisal Subcommittee, Federal Financial Institutions
Examination Council.

ACTION: Final rules.

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SUMMARY: The Appraisal Subcommittee (``ASC'') of the Federal Financial
Institutions Examination Council is adopting amendments to the portion
of its regulations regarding the availability of information to enable
interested persons: To obtain copies of ASC final opinions and orders
in adjudications, statements of general policy not published in the
Federal Register, interpretive, no-action requests and responses and
certain other correspondence related to ASC field reviews; to request
confidential treatment of information subject to a Freedom of
Information Act (``FOIA'') request; and to petition for the issuance,
amendment or repeal of an ASC rule.

EFFECTIVE DATE: February 14, 1994.

FOR FURTHER INFORMATION CONTACT:
Edwin W. Baker, Executive Director, or Marc L. Weinberg, General
Counsel, at (202) 634-6520, Appraisal Subcommittee, 2100 Pennsylvania
Avenue NW., suite 200, Washington, DC 20037.

SUPPLEMENTARY INFORMATION:

I. Background and Authority

FOIA, 5 U.S.C. 552, generally requires each Federal agency to make
available to the public information regarding its organization,
operation, rules of procedure, substantive rules and interpretations of
general applicability and statements of general policy. 5 U.S.C.
552(a)(1). In addition, each agency, in accordance with published
rules, must ``make available for public inspection and copying--(A)
final opinions, * * * as well as orders, made in the adjudication of
cases; (B) those statements of policy and interpretations which have
been adopted by the agency and are not published in the Federal
Register, and (C) administrative staff manuals and instructions to
staff that affect a member of the public * * *.'' 5 U.S.C. 552(a)(2).
Certain documents and portions thereof, however, can be withheld from
disclosure under one or more statutory exemptions set out in FOIA, 5
U.S.C. 552(b), or the Privacy Act of 1974, 5 U.S.C. 552a.\1\
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\1\On December 14, 1992, the ASC adopted 12 CFR part 1102,
subpart D, implementing the ASC's basic program for complying with
FOIA. See 57 FR 60722 (December 22, 1992). And, on August 7, 1992,
the ASC adopted 12 CFR part 1102, subpart C, implementing the
Privacy Act. See 57 FR 36356 (August 13, 1992).
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Executive Order No. (``EO'') 12600, 52 FR 23781 (June 23, 1987),
generally requires each agency subject to FOIA to establish procedures
to notify submitters of records containing confidential commercial
information when those records are requested under FOIA and the agency
determines that the information may be required to disclose that
information.
Paragraph (e) of 5 U.S.C. 553 requires each agency to give an
interested person the right to petition for the issuance, amendment or
repeal of a rule.
On October 13, 1993, the ASC proposed for comment several
amendments to its related regulations in 12 CFR part 1102, subpart D
(1993), to implement these authorities. The comment period closed on
December 9, 1993, and no written comments were received. The ASC,
however, received and incorporated into the final version of the
amendments oral comments of a technical nature from the Office of
Management and Budget (``OMB'').

II. Description of the Final Amendments

The ASC is adopting technical amendments to subpart D--new
Secs. 1102.305, .306 and .307--to implement the provisions summarized
above. In that regard, new Sec. 1102.305 clarifies that certain written
communications, such as the ASC's annual report to Congress; all final
opinions and orders made in the adjudication of cases; all statements
of general policy not published in the Federal Register, and incoming
and outgoing correspondence concerning interpretive, no-action and
State review matters, shall be made publicly available on a routine
basis no sooner than ten business days after the ASC or its staff sends
or gives the item of correspondence to the affected person or persons.
Next, the ASC is adopting Sec. 1102.306, consistent with EO 12600,
to provide predisclosure notification procedures for confidential
commercial information. Under paragraph (a) of the new section, a
submitter of written information to the ASC who wants some or all of
that information to be treated as confidential information under 5
U.S.C. 552(b)(4) may file a request for confidential treatment with the
ASC at the time the information is submitted to the ASC or soon
thereafter. Confidential information means ``trade secrets and
commercial or financial information obtained from a person and
privileged or confidential,'' as stated in section 552(b)(4).
New paragraphs (b) and (c) of Sec. 1102.306 deal with the form of
the request. They require the submitter to include in reasonable detail
the facts and arguments supporting the request and its legal
justification, to designate clearly all information considered
confidential and to separate clearly such information from other non-
confidential information, whenever possible.
Paragraph (d) of the section notes that a request for confidential
treatment will be considered by the ASC only in connection with a FOIA
request for access to the claimed confidential information under FOIA.
That is, the ASC will not determine whether the request for
confidential treatment should be granted or denied, in whole or in
part, when the request is received by the ASC. The ASC, however, will
process the request upon receipt to ensure that it is complete and
would place it with the related information submission. If a FOIA
request were made respecting that information, the ASC then will be
required to send written notices to the submitter and the FOIA
requester. The submitter will have no longer than ten business days to
file written objections to the ASC's disclosure of the information. The
ASC may provide a submitter with a notice even if the submitter did not
request confidential treatment of the requested information.\2\
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\2\If the ASC required the submitter to provide the requested
information, the ASC would need to have substantial reason to
believe that disclosure of the requested information would result in
substantial competitive harm to the submitter. On the other hand, if
the submitter provided the information voluntarily to the ASC, the
ASC would need to believe that the information is of a kind that the
submitter would not customarily make available to the public. See
Critical Mass Energy Project v. Nuclear Regulatory Commission, 975
F.2d 871 (D.C. Cir. 1992), cert. denied 113 S. Ct. 1579 (1993).
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These notice requirements will not have to be followed under
certain stated circumstances, such as if the ASC determines under this
subpart that the information should not be disclosed. The ASC must
carefully consider the issues involved and, if disclosure of the
requested information is warranted, a written notice containing a brief
description of why the submitter's objections were not sustained must
be forwarded to the submitter within ten business days. The time for
response may be extended up to ten additional business days, as
provided in 5 U.S.C. 552(a)(6)(B), of for other periods by agreement
between the requester and the ASC. This notice shall be provided to the
submitter at least five business days prior to release of the requested
information. Last, the ASC will be required to notify a submitter
promptly of any filing of any suit against the ASC pursuant to 5 U.S.C.
552 to compel disclosure of documents or information covered by the
submitter's request for confidential treatment, and conversely, will be
required to notify the requester of the documents or information of any
suit filed by the submitter against the ASC to enjoin disclosure.
Finally, Sec. 1102.307 would provide an interested person with the
right to petition the ASC for the issuance, amendment or repeal of a
rule, thus implementing 5 U.S.C. 553(e).

III. Conclusion

For the reasons stated above, the ASC has determined to adopt the
amendments to subpart D of part 1102 to implement 5 U.S.C. 552 and
553(e) and EO 12600.

IV. Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.
35, forms, reporting and recordkeeping requirements included in 12 CFR
part 1102, subpart D, Secs. 1102.305, 1102.306 and 1102.307 were
submitted for review and approval to OMB. See 58 FR 54153 (October 20,
1993). OMB approved these sections, as revised by this final rule,
until December 31, 1996, and assigned them control number 3139-0006.
The public reporting burden for the collection of information
requirements contained in these sections are estimated to include the
time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed and completing and reviewing
the collection of information. The sections would enhance the ASC's
FOIA program, would conform the ASC's rules and regulations to EO
12600, and would specifically provide for the public's petition rights
under 5 U.S.C. 553(e). The estimated number of respondents each year is
100 for Sec. 1102.305, two for Sec. 1102.306 and one for Sec. 1102.307,
with an estimated average reporting burden of .5 hours per response and
an estimated annual total reporting burden of 51.5 hours.

V. Regulatory Flexibility Act Statement

Pursuant to section 605(b) of the Regulatory Flexibility Act, the
ASC certifies that Secs. 1102.305, 1102.306 and 1102.307 are not
expected to have a significant economic impact on a substantial number
of small entities. The rules will fully implement FOIA, EO 12600 and 5
U.S.C. 553(e). None of these authorities addresses business or
corporate entities. Accordingly, a regulatory flexibility analysis is
not required.

VI. EO 12866 Statement

These rules were reviewed by the Office of Information and
Regulatory Affairs of OMB.

List of Subjects in 12 CFR Part 1102

Administrative practice and procedure, Appraisers, Banks, Banking,
Freedom of information, Mortgages, Reporting and recordkeeping
requirements.

Text of the Rule

Chapter XI, title 12, part 1102, subpart D of the Code of Federal
Regulations is amended as set forth below:

PART 1102--APPRAISER REGULATION

Subpart D--Description of Office, Procedures, Public Information

1. The authority citation for subpart D is revised to read as
follows:

Authority: 5 U.S.C. 552, 553(e); and Executive Order 12600, 52
FR 23781 (3 CFR, 1987 Comp., p. 235).

2. New sections 1102.305, 1102.306 and 1102.307 are added to read
as follows:

Sec. 1102.305 Availability of interpretive, no-action and other
written communications.

(a) In general. Subject to the provisions of Sec. 1102.304 and
subpart C of this part, certain types of ASC written communications
shall be made publicly available upon request.
(b) Types of written communications. The following types of written
communications shall be subject to paragraph (a) of this section:
(1) The ASC's annual report to Congress;
(2) All final opinions and orders made in the adjudication of
cases;
(3) All statements of general policy not published in the Federal
Register.
(4) Requests for the ASC or its staff to provide interpretive
advice with respect to the meaning or application of any statute
administered by the ASC or any rule or regulation adopted thereunder
and any ASC responses thereto;
(5) Requests for a statement that, on the basis of the facts
presented in such a request, the ASC would not take any enforcement
action pertaining to the facts as represented and any ASC responses
thereto: and
(6) Correspondence between the ASC and a State appraiser regulatory
agency arising out of the ASC's field review of the State agency's
appraiser regulatory program.
(c) Embargo period. Unless the ASC determines otherwise, the
written communications in paragraph (b) of this section shall be made
publicly available no sooner than ten business days after a written
response has been sent or given to the affected person or persons.

Sec. 1102.306 Confidential treatment procedures.

(a) In general. Any submitter of written information to the ASC who
desires that some or all of his or her submission be afforded
confidential treatment under 5 U.S.C. 552(b)(4) (i.e., trade secrets
and commercial or financial information obtained from a person and
privileged or confidential) shall file a request for confidential
treatment with the Executive Director of the ASC at the time the
written information is submitted to the ASC or within ten business days
thereafter. Nothing in this section limits the authority of the ASC and
its staff to make determinations regarding access to documents under
this subpart.
(b) Form of request. A request for confidential treatment shall be
submitted in a separate letter or memorandum conspicuously entitled,
``Request for Confidential Treatment.'' Each request shall state in
reasonable detail the facts and arguments supporting the request and
its legal justification. If the submitter had been required by the ASC
to provide the particular information, conclusory statements that the
information would be useful to competitors or would impair sales or
similar statements generally will not be considered sufficient to
justify confidential treatment. When the submitter had voluntarily
provided the particular information to the ASC, the submitter must
specifically identify the documents or information which are of a kind
the submitter would not customarily make available to the public.
(c) Designation and separation of confidential material. Submitters
shall clearly designate all information considered confidential and
shall clearly separate such information from other non-confidential
information, whenever possible.
(d) ASC action on request. A request for confidential treatment of
information will be considered only in connection with a request for
access to the information under FOIA as implemented by this subpart.
Upon the receipt of a request for access, the Executive Director or his
or her designee (``ASC Officer'') as soon as possible shall provide the
submitter with a written notice describing the request and shall
provide the submitter with a reasonable opportunity, no longer than ten
business days, to submit written objections to disclosure of the
information. Notice may be given orally, and such notice shall be
promptly confirmed in writing. The ASC Officer may provide a submitter
with a notice if the submitter did not request confidential treatment
of the requested information. If the ASC required the submitter to
provide the requested information, the ASC Officer would need
substantial reason to believe that disclosure of the requested
information would result in substantial competitive harm to the
submitter. If the submitter provided the information voluntarily to the
ASC, the ASC officer would need to believe that the information is of a
kind the submitter would not customarily make available to the public.
The ASC Officer similarly shall notify the person seeking disclosure of
the information under FOIA of the existence of a request for
confidential treatment. These notice requirements need not be followed
if the ASC Officer determines under this subpart that the information
should not be disclosed; the information has been published or has been
officially made available to the public; disclosure of the information
is required by law (other than FOIA); or the submitter's request for
confidential treatment appears obviously frivolous, in such instance
the submitter shall be given written notice of the determination to
disclose the information at least five business days prior to release.
The ASC Officer shall carefully consider the issues involved, and if
disclosure of the requested information is warranted, a written notice,
containing a brief description of why the submitter's objections were
not sustained, must be forwarded to the submitter within ten business
days. The time for response may be extended up to ten additional
business days, as provided in 5 U.S.C. 552(a)(6)(B), or for other
periods by agreement between the requester and the ASC Officer. This
notice shall be provided to the submitter at least five business days
prior to release of the requested information.
(e) Notice of lawsuit. The ASC Officer shall notify a submitter of
any filing of any suit against the ASC pursuant to 5 U.S.C. 552 to
compel disclosure of documents or information covered by the
submitter's request for confidential treatment within ten business days
of service of the suit. The ASC Officer also shall notify the requester
of the documents or information of any suit filed by the submitter
against the ASC to enjoin their disclosure within ten business days of
service of the suit.

Sec. 1102.307 Right to petition for issuance, amendment and repeal of
rules of general application.

Any person desiring the issuance, amendment or repeal of a rule of
general application may file a petition for those purposes with the
Executive Director of the ASC. The petition shall include a statement
setting forth the text or substance of any proposed rule or amendment
desired or shall specify the rule for which repeal is desired. The
petitioner also shall state the nature of his or her interest and the
reasons for seeking ASC action. The Executive Director shall
acknowledge receipt of the petition within ten business days of
receipt. As soon as reasonably practicable, the ASC shall consider the
petition and related staff recommendations and shall take such action
as it deems appropriate. The Executive Director shall notify the
petitioner in writing of the ASC action within ten business days of the
action.

By the Appraisal Subcommittee of the Federal Financial
Institutions Examination Council.

Dated: January 5, 1994.
Fred D. Finke,
Chairperson.
[FR Doc. 94-813 Filed 1-12-94; 8:45 am]
BILLING CODE 6210-01-M

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-813. Public record. Not legal advice.