Federal Reserve Board: Regional banks have limited FOIA obligations

By Mike Kaszuba

The Board of Governors of the Federal Reserve System says that its regional banks – like the Federal Reserve Bank of Minneapolis – have a limited obligation to comply with federal public information laws when they carry out their duties.

In a new letter to Public Record Media (PRM), a non-profit based in Saint Paul, a spokesperson for the Federal Reserve System’s Board of Governors said the system’s twelve regional federal reserve banks are required to follow the Freedom of Information Act (FOIA) when conducting business on behalf of the board. But, the spokesperson added, “it is our understanding that the position of the individual Reserve Banks is that they are not ‘agencies’ that are subject to the FOIA when carrying out their own authorities.”

The letter comes as the Federal Reserve Bank of Minneapolis has said that is not subject to FOIA as the bank helps to research and gather support in Minnesota for the so-called Page Amendment, a proposed change to the state constitution that would rewrite the language outlining Minnesota’s responsibilities toward educating children.

Support for the Page Amendment has been led by Alan Page, a retired Minnesota Supreme Court justice, and Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis. In addition, the Federal Reserve Bank of Minneapolis has served as a “research arm” for the group lobbying for the amendment.

“When Reserve Banks carry out functions on behalf of the board (i.e., when they act under authority delegated to them from the Board), Reserve Banks must comply with the FOIA solely with respect to actions they take under the Board’s authorities,” Michele Taylor Fennell, a deputy associate secretary of the Federal Reserve System’s Board of Governors, wrote in a letter to PRM on August 2nd.

But she added that “communications between staff at the FRB Minneapolis and outside entities in relation to the Page Amendment, (would) have been conducted by FRB Minneapolis pursuant to their own authority independent from the Board.”

Federal Reserve: No records on regional banks, FOIA

In the letter from the Federal Reserve System’s Board of Governors, Taylor Fennell also stated that the Board of Governors possessed little documentation regarding the regional banks’ responsibility to follow public records laws.

She wrote, in fact, that the board had no records showing that it had discussed with the federal regional banks whether the banks are subject to FOIA.

“Staff searched Board records and consulted with knowledgeable subject matter experts to determine whether there were any communications between Board and Reserve Bank staff about whether the Reserve Banks are subject to the FOIA but did not locate any such communications,” she wrote.

In a May letter to PRM, a Board of Governors official for the Federal Reserve System similarly stated that a search for data and discussions with experts likewise did not produce any information on whether regional federal reserve banks were covered by FOIA.

The Federal Reserve System, which is itself overseen by Congress, is an independent arm of the federal government whose board of governors supervises the regional banks and the U.S. central banking system. Its statement on its purpose and function notes that the system, among other duties, conducts monetary policy, regulates financial institutions, promotes financial system stability and promotes consumer protection and community development.

The debate over the Page Amendment has meanwhile shown how far Kashkari, as the leader of one of the dozen regional banks, has waded into state education policy in Minnesota. The Minneapolis-based regional bank, which has more than a thousand employees, covers Montana, South Dakota, North Dakota, Minnesota and parts of both Wisconsin and Michigan.

Supporters of the constitutional amendment in Minnesota have portrayed the proposal as having widespread support in the state as a way to eliminate educational achievement gaps between white and minority students.

Critics of the Page Amendment meanwhile have said the proposed change to the state constitution would have only a minimal impact on Minnesota’s public education problems. Education Minnesota, the state teacher’s union, has taken its criticism a step further, saying the amendment could mean more taxpayer-funded vouchers for private schools.

In exploring the bank’s role in the Page amendment, PRM had also examined a side issue – whether Kashkari’s bank is covered by the federal government’s main transparency law.

In a March 9th letter to PRM, John Yanish, the deputy general counsel of the Federal Reserve Bank of Minneapolis, wrote that the bank was not subject to state and federal laws governing the release of public data.

“FRB Mpls is not an ‘agency’ as that term is defined in FOIA, and consequently is not subject to its provisions,” he wrote. “Similarly, FRB Mpls is not subject to state laws such as the Minnesota Data Practices Act. Notwithstanding, FRB Mpls considers requests for information, and responds within the parameters of its established policies and other relevant authorities.”

In the letter, Yanish released Kashkari’s daily calendar dating back to 2016 and said the calendars helped to show the “very wide range of individuals that were consulted as part of the development of the proposed amendment.” In July 2020, for example, Kashkari held an hour-long video conference with Page and more than a dozen Minnesota Association of Charter Schools officials and other charter school advocates.