Board members but if any Board member wishes to express a substantive view on the merits of a proposal it is moved to the Discussion Agenda.

The discussion agenda

Items on the Discussion (or Regular) Agenda are presented orally by staff members from the division originating a proposal or by Board members with oversight responsibility for a particular matter. Following presentation and discussion of each agenda item the members of the Board vote in order of seniority, with the Chairman or the presiding officer generally casting the last vote.

CLOSED MEETINGS-NOTICE REQUIREMENTS

Items considered in closed session include primarily bank and bank holding company supervisory matters, discussions of which generally disclose information from bank examination reports or commercial and financial information obtained in confidence by the Board; monetary policy and other matters whose premature release could be used in financial speculation; and personnel matters. The two types of closed meetings, discussed more fully below, are:

1. "Recorded" meetings-or those meetings which require advance public notice of one week. The Sunshine Act requires a full transcript or electronic recording of these meetings. For them, the Board uses a multi-track recording system that enables identification of each speaker.

2. "Expedited" meetings-or those meetings which do not require advance public notice. Customarily, the Board prepares minutes of these meetings. Recorded meetings

Notices of meetings closed to the public under exemptions 1, 2, 3, 5, 6, 7, and 9B of the Sunshine_Act are published in the Federal Register and copies are available from the Board's Freedom of Information and Public Affairs Offices, and in the Treasury Department's Press Room-generally a week before the meeting. Federal Register notices indicate the time, place, subject matter, and closed status of the meeting; and the name and phone number of the official designated to respond to requests for information about the meeting. As required by law, the following additional information is available in advance of a meeting in the Board's Freedom of Information Office:

A notice citing the applicable exemptions and reasons for closing an item; the anticipated attendance during discussion of that item; and the vote by Board members for closing the item.

As necessary, a notice indicating any change in time of meeting, any deletion or addition of an item, and any change in the open/closed status of an item. After a meeting has been held, the following information is made available in the Board's Freedom of Information Office:

The certificate of the General Counsel, stating that the meeting may be closed to the public and citing applicable exemptions.

If applicable, a statement of the vote by Board members to withhold information from the copy of the recording or transcript released to the public, and the exemptions cited.

A full cassette recording of the meeting, unless the Board has determined that the recording or a portion of the recording is exempted from release. Recordings or portions of recordings initially withheld are often released at a later date when their exempted status no longer applies.

The Presiding Officer's Statement, giving the time and place the meeting was held and the persons present.

Special facilities are provided in the Freedom of Information Office for listening to recordings. Or, cassettes may be purchased at $5 per copy.

Expedited meetings

Because a majority of its meetings can properly be closed pursuant to exemptions 4, 8, 9(A), or 10, the Board is qualified under the law to use expedited procedures for closing certain meetings. Expedited items include supervisory, regulatory, and enforcement matters relating to a specific financial institution, and monetary policy matters. Minutes of these meetings, rather than recordings, are usually maintained by the Board.

Copies of notices of meetings closed under expedited procedures are available from the Board's Freedom of Information and Public Affairs Offices and in the Treasury Department Press Room. Such notices indicate the time, place, and subject matter of the meeting; exemptions applicable to the closing of an item;

and the phone number of the official designated to respond to requests for information about the meeting. Additional information about expedited meetings available for inspection in the Freedom of Information Office includes:

The certificate of the General Counsel stating that the meeting may be closed to the public and citing applicable exemptions.

Minutes of the meeting, unless the Board has determined that the mintues or portions of the minutes are exempted from release. These minutes fully and clearly describe all matters discussed, and provide an accurate summary of any actions taken and the reasons for any action. The minutes also include a description of each of the views expressed on any item and a record of any roll call vote. Minutes or portions of minutes initially withheld may be released when their exempted status no longer applies.

The Presiding Officer's Statement giving the time and place a meeting was held and the persons present.

Minutes may be examined in the Freedom of Information Office. Or, copies of minutes may be purchased at 10 cents per page.

OTHER PROCEDURES FOR HANDLING OFFICIAL BUSINESS

Not all matters coming before the Board are considered at Board meetings. The Board uses two other procedures to handle official business: notation voting and delegation of authority. Under the first procedure, routine business is conducted by circulating material to each Board member for written vote and comment. Upon request by a Board member, however, any such item may be referred to the Board's regular agenda for discussion and is then subject to the provisions of the Sunshine Act.

Under the second procedure, authority is granted to individual members of the Board or its staff, or to Reserve Bank staff, to act on behalf of the Board. A copy of the Board's "Rules Regarding Delegation of Authority."1 may be obtained from the Freedom of Information Office.

SUNSHINE EXEMPTIONS

Under the Sunshine Act meetings may be closed to the public when presentations to the Board are likely to

1. Disclose matters authorized under Executive Order to be kept secret in the interests of national defense or foreign policy.

2. Relate solely to internal personnel rules and practices of an agency.

3. Disclose matters specifically exempted from disclosure by statute.

4. Disclose trade secrets, commercial or financial information obtained from a person and privileged or confidential.

5. Involve accusing any person of a crime or censuring any person.

6. Disclose information of a personal nature where disclosure would constitute invasion of personal privacy.

7. Disclose investigatory records compiled for law enforcement purposes. 8. Disclose information contained in or related to examination, operating or condition reports prepared for or used by an agency responsible for regulation or supervision of financial institutions.

9. Disclose information the premature disclosure of which would(A) (i) lead to significant financial speculation in currencies, securities or commodities; or

(ii) significantly endanger the stability of any financial institution; or (B) be likely to significantly frustrate implementation of a proposed agency action.

10. Specifically concern the agency's issuance of a subpoena or participation in a civil action or proceeding.

CONSUMERS UNION

Senator CHILES. Our next witness this morning is Mr. Mark Cymrot, senior litigator, and Ms. Ellen Broadman, attorney, of the Consumers Union, Washington, D.C., which is a nonprofit memberhsip organization chartered in 1936 under the laws of New York, for consumer goods

112 C.F.R. Part 265.

and services and the management of family income. The Consumers Union is probably best known for its publication, Consumer Reports. We are happy to have you with us this morning. I would like you to please, if you can, summarize your written testimony and your written statement will be inserted in the record.

TESTIMONY OF MARK CYMROT, SENIOR LITIGATOR, CONSUMERS UNION, WASHINGTON OFFICE, ACCOMPANIED BY MS. ELLEN BROADMAN, ATTORNEY

Mr. CYMROT. Thank you, Mr. Chairman. We do intend to briefly summarize our written testimony. Ms. Broadman will discuss her actual experience attending board meetings, and I will discuss Sunshine Act litigation from earlier this year arising from Ms. Broadman's experience.

Ms. BROADMAN. Before describing my experiences at the Federal Reserve Board, I would like to stress the importance of the Sunshine Act to groups like Consumers Union. Because the secrecy with which some agencies act, open meetings are often one of the few sources of information we have on how agencies act and make their decisions. With this information, we are better able to participate in agency procedures in a meaningful way and to comment on proposed regulations.

While public participation and scrutiny may oftentimes add complexity to agency proceedings, it often results in more fully considered and better informed decisions. For this reason we are a strong supporter of the Sunshine Act.

My most extensive experience with the Sunshine Act has involved the Federal Reserve Board. In the summer of 1977, I began attending Board meetings because I was particularly interested in the enforcement actions that they intended to take involving the Truth in Lending Act. A recent survey of the Comptroller of Currency and some hearings before a House committee had revealed that the agencies had not enforced the Truth in Lending Act adequately since 1969 when the act was first enacted. Because of this inadequate enforcement, there were widespread violations of the act which had resulted in enormous overcharges to consumers.

I was also interested in learning of the Board's position on Truth in Lending Act amendments that were then pending before Congress. The meetings were often incomprehensive. Most of the meetings that I attended focused on staff memorandum and proposals that were not made available to public observers.

At one meeting, the Governors discussed a proposed statement to be issued by the Federal Reserve Board on Truth in Lending Act reform. Each Governor took a turn stating revisions that he thought were necessary in this proposed document. The conversation consisted of such uninformative statements as, "I think this specific word should be deleted from line 5, on page 4." "I think this sentence should be inserted at page 9, line 3." and so on.

At points during this discussion people in the audience just looked at one another and laughed because it was clear that nobody knew what was going on.

Even at meetings where staff proposals were discussed generally, the Governors would often refer to pages and lines in these documents. Also, at one meeting, one of the Governors actually read from the document. Not knowing what the entire document said or the context within which the sentence was written, it was very difficult to follow the conversations and understand the decisionmaking process. On one occasion a Governor was having a debate with another Governor and referred to him a section in the staff document without saying what that section said. Needless to say, without the staff documents it was impossible to fully understand the decisionmaking process that we were entitled to view under the Sunshine Act.

One of the industry lobbyists fairly routinely concerned one of the Federal Reserve employees after staff meetings in order to get a translation of what we had actually observed.

Having attended those meetings I am convinced that all the documents which served as a basis for a decisionmaking process at a sunshine meeting must be disclosed to the public if the purposes of the Sunshine Act are to be fulfilled.

I also attended several meetings after our lawsuit was settled with the documents in hand and that experience further convinced me of the importance of their disclosure to meaningful implementation of the Sunshine Act.

At this point Mark is going to discuss the act and some of the positive changes that have occurred at the Federal Reserve Board since that time.

Mr. CYMROT. Well, based on Ellen's experience in the summer of 1977 when she was attending meetings where truth in lending was being discussed and she did not understand what was happening, we made a formal request for staff documents for two of the meetings and that request was denied. We appealed that denial but prior to the decision on the appeal we were forced to file suit because of the 60-day statute of limitations in the Sunshine Act. Our right to action would have expired if we waited any longer, so we filed suit to obtain these documents in the U.S. district court here in Washington, D.C.

After the suit was filed the Board did give us the two documents we requested. However, the suit proceeded because there was a question about what the future policy of the Board would be.

We started discovery in that suit. We served subpenas on several members of the Board and on Commissioner Gardner. At that point entered into settlement discussions and the suit was settled.

The basis of the settlement was that the Board would establish a procedure for making public the staff documents being discussed at the open meeting and this procedure was published in the Federal Register in January 1978.

Under the new procedure, if a written request is made at least 48 hours in advance of the open meeting, it will be given priority treatment. Priority treatment means that a decision on the request for the document will be made prior to the meetings except if there is some extraordinary circumstance that prevents that from occurring. The second thing that the Board agreed to do was generally make available the staff documents. Again, the staff documents would be made public, but the Board reserved the right in extraordinary circumstances to withhold certain documents.

Now, in our view, the suit accomplished the release of staff documents and established a new procedure to obtain these documents. It also made the Board much more sensitive to the needs for open meetings and the problems of a group like ours and how we have to get information through these open meetings because the information is generally not available otherwise.

The suit did not accomplish certain things, though, that we would have liked to see occur.

First of all, it did not decide the question of whether documents can be obtained under the Sunshine Act or whether observers are limited to the Freedom of Information Act procedure.

It was our view that where the Sunshine Act says that every portion of every meeting of the agency shall be open to public observation, the staff document is a portion of the meeting when it is discussed at a meeting. The legal significance of this issue whether the Sunshine Act or the Freedom of Information Act applies, gets back to the point that you were making to Chairman Miller. That's the question of whether exemption 5 of the Freedom of Information Act, which is the exemption of disclosure of intra-agency memorandums is applicable to open meeting documents.

This exemption was not included in the Sunshine Act and we believe the reason for that was that the purpose of the exemption is to protect the deliberative processes of the staff. Yet, the Sunshine Act mandates that when it comes to the Board table, this deliberative process should be in the sunshine and the public should be permitted to see what process the Board goes through in making a final decision. Therefore, we don't believe that this exemption should be applicable in a situation where you have discussion of documents at open meetings.

Now, in our experience, there has been significant improvement at the Federal Reserve Board. We receive staff documents. We have received all staff documents relating to the meetings that we have requested. As Ms. Broadman said, that makes the meetings much more understandable and we are able to do our job better as a result of being able to understand the process that the Board is going through. While all of our requests have been granted we learned that in the period of January to May of 1978, 26 requests from other people have been denied. We find that disturbing. I think that the issue of whether intra-agency memoranda exemptions to the Freedom of Information Act, whether that should apply to sunshine documents is still a very significant question because of the Board's continued resistance to disclosure.

Senator CHILES. Do you think there could be some difference, that your request has been complied with because you brought suit and the other people have not shown that they would litigate so their requests might have been denied?

Mr. CYMROT. Well, we certainly noticed that we caught the Board's and staff's attention with a lawsuit and we have been treated very well since that time. It is very possible that others who have not taken the trouble to file suit are not being treated as well. Yes, there is a possibility. I have no definite information on that.

The one other matter that we are concerned with, the Board has put out a pamphlet on the Sunshine Act. We think it is an excellent