NCUA Refuses to Release Telesis LUA

by. Keith Leggett

In a June 19th letter, the National Credit Union Administration (NCUA) denied a Freedom of Information Act Appeal regarding the disclosure of a Letter of Understanding and Agreement (LUA) between NCUA and failed Telesis Credit Union entered into in June 2010 and amended in May 2011.

In denying the appeal, NCUA wrote that “[t]he LUA at issue in this case is not an order issued in connection with a formal enforcement proceeding, nor is it a written agreement that is specifically enforceable by the NCUA Board. Instead, the LUA is a supervisory tool that memorializes a commitment undertaken by the management of Telesis to take affirmative steps to address concerns identified by the examiner.”

The agency rejected the FOIA appeal because it determined that LUA was an outgrowth of Telesis’s last examination and was exempt from release based upon exemption 8. NCUA wrote that “all records, regardless of the source, of a financial institution’s financial condition and operations that are in possession of a federal agency responsible for its regulation or supervision are exempt.”

Also, the agency said that much of the material comprising the LUA is confidential in nature and thus qualify for protection under exemption 4.

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