Fed loses FOIA challenge, must release emergency loan details

Posted by nithi.vivatrat on August 25, 2009

Bloomberg reports that the Federal Reserve, losing a federal lawsuit yesterday, must identify the financial firms that received special emergency loans. You may remember that the Fed refused to disclose any details of these loan programs, arguing that the knowledge that a specific firm received emergency loan would undermine its competitiveness or even spark a run on that bank — so of course, it would be safer to keep that knowledge solely in the Fed’s wise hands. The details withheld by the Fed included the names of the firms, the loan amounts, and the assets put up for collateral.

Fortunately, Manhattan Chief U.S. District Judge Loretta Preska rejected this speculation: “Conjecture, without evidence of imminent harm, simply fails to meet the Board’s burden” of proof.

I agree. As taxpayers, we became — like it or not — lenders to and investors in these firms. We should have the right to see what’s in our portfolio. I for one look forward to seeing these details come out — Judge Preska gave the Fed five days to comply.