Breaking Legal News - POSTED: 2010/10/26 15:34
The Federal Reserve won’t join a banking industry trade group in asking the U.S. Supreme Court to let the government continue to withhold details of emergency loans made to financial firms in 2008.
The Clearing House Association LLC, a group of the biggest commercial banks filed the appeal today. The Federal Reserve won’t file its own appeal, according to Kit Wheatley, an attorney for the central bank.
The banks are appealing a lower court order requiring the Federal Reserve to disclose lending records to Bloomberg LP, parent company of Bloomberg News. A federal judge ruled in August 2009 that the Fed had to disclose the names of banks that borrowed from its emergency lending programs.
“Greater transparency results in more accountability, and the banks’ fight continues to engender suspicion among taxpayers about the bailouts,” said Matthew Winkler, Bloomberg News editor-in-chief. “The banks’ move to appeal will deepen the public’s skepticism and defend a position that every other court has disagreed with. The public has the right to know.”
The Fed is facing unprecedented oversight by Congress. The Wall Street Reform and Consumer Protection Act, known as Dodd- Frank, mandates a one-time audit of the Fed as well as the release of details on borrowers from Fed emergency programs. The Discount Window, which provides short-term funding to financial institutions, would have to disclose loans made after July 21, 2010, following a two-year lag. The Bloomberg lawsuit asks for information on that facility.