Appeals Court Tells Fed to Turn Over Records

Well, the Federal Reserve just lost the next step of the court case, with the U.S. Court of Appeals in Manhattan siding with the circuit court, and with plaintiff, Bloomberg News, that its records are subject to the freedom of information act:

The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.

May? May?

Of course they are going to ask for an en banc hearing, and of course they will appeal to the Supreme court.

My guess is that they will also lobby for a legislative exemption while their lawyers move as slowly as possible.

FWIW, I think that the claim that the borrowers would be "stigmatized" is pure bull sh%$.

Who got the money, and how much they got, is common knowledge on Wall Street: Everyone knows who the borrowers are, except for the general public.

What is really going on here is that there is likely evidence of some sort of wrongdoing, at least a lack of due diligence and sloppiness, that the Federal reserve does not want revealed.