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Supreme Court allows Federal Reserve data release order to stand

By Ashley Hileman

[JURIST] The US Supreme Court [official website; JURIST news archive] on Monday denied certiorari [order list, PDF] in Clearing House Association LLC v. Bloomberg LP [docket], leaving in place a ruling [JURIST report] requiring the Federal Reserve [official website] to release information regarding loans it made to various banks during April and May 2008, a key time in the financial crisis. While the Federal Reserve did not choose to appeal the decision of the US Court of Appeals for the Second Circuit to the Supreme Court, it was appealed by the Clearing House Association [association website], which consists of a group of banks. Following the court's decision, the Federal Reserve Board reported that it will release the emergency-lending data [Bloomberg report, video]. According to the court's order, it has five days to do so. The data will include information about the specific banks that were in financial trouble and as a result, asked for assistance from the Federal Reserve. The Supreme Court also denied certiorari in a companion case brought by Fox News, requiring the Federal Reserve to disclose loan information from the period between August 2007 and November 2008.

Bloomberg originally sued the Federal Reserve under the Freedom of Information Act (FOIA) [text, PDF], and both the court of appeals and the trial court rejected the latter's argument that the records sought fell within FOIA exceptions. Now the Federal Reserve has an even greater duty to release the information under the Dodd-Frank Wall Street Reform and Consumer Protection Act [text, PDF]. The Act was signed into law [JURIST report] by President Barack Obama in July 2010 and created a new regulatory council, the US Financial Stability Oversight Council (FSOC) [official website], to monitor financial institutions in order to prevent companies from becoming "too big to fail." The FSOC convened for the first time [JURIST report] in October 2010. In addition to creating the FSOC, this legislation also gives the Federal Reserve new oversight over the largest financial institutions, creates a bureau of consumer protection, introduces multitudes of new regulations on derivatives and other financial instruments and limits the amount of capital banks can invest in hedge funds.

Full post as published by JURIST - The Paper Chase on March 21, 2011 (boomark / email).