[Federal Register Volume 61, Number 4 (Friday, January 5, 1996)]
[Rules and Regulations]
[Pages 386-390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-73]
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
31 CFR Part 1
[No. 95-148]
Privacy Act of 1974; Implementation
AGENCY: Office of Thrift Supervision, Treasury.
ACTION: Final Rule.
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SUMMARY: The Office of Thrift Supervision (OTS) hereby exempts the
Criminal Referral Database from certain provisions of the Privacy Act
of 1974, 5 U.S.C. 552a (Privacy Act), to the extent the system contains
investigatory material pertaining to the enforcement
[[Page 387]]
of laws or compiled for law enforcement purposes. The OTS is also
adding a Privacy Act exemption to the Confidential Individual
Information System.
EFFECTIVE DATE: January 5, 1996.
ADDRESSES: Please submit inquiries to: Director, Records Management and
Information Policy Division, Office of Thrift Supervision, 1700 G
Street, NW, Washington, DC 20552.
FOR FURTHER INFORMATION CONTACT: Catherine C. M. Teti, Director,
Records Management and Information Policy Division, (202) 906-7571,
1700 G Street, N.W., Washington, D.C. 20552.
SUPPLEMENTARY INFORMATION: The Office of Thrift Supervision (OTS)
published a notice of proposed rule exempting two systems of records in
the Federal Register at 60 FR 15730, dated March 27, 1995. OTS'
inventory of Privacy Act systems of records was published in the
Federal Register at 60 FR 13770, dated March 14, 1995.
Under 5 U.S.C. 552a(j)(2), the head of an agency may promulgate
rules to exempt any system of records within the agency from certain
provisions of the Privacy Act of 1974 if the agency or component
thereof that maintains the system performs as its principal function
any activities pertaining to the enforcement of laws. The Office of
Thrift Supervision has as one of its principal functions activities
pertaining to the enforcement of laws.
To the extent the exemption under 5 U.S.C. 552a(j)(2) does not
apply to the Criminal Referral System, then exemption under 5 U.S.C.
552a(k)(2), relating to investigatory material compiled for law
enforcement purposes, is hereby claimed for this system.
The proposed rule requested that public comments be sent to the
Office of Thrift Supervision, no later than April 26, 1995. No comments
pertaining to the proposed rule were received by April 26, 1995.
Accordingly, the Department of the Treasury is hereby giving notice
that the system of records entitled--Treasury/OTS .001--Confidential
Individual Information System--and--Treasury/OTS .004 Criminal Referral
Database--are exempt from provisions of the Privacy Act pursuant to 5
U.S.C. 552(j)(2), (k)(2), and the authority of 31 CFR 1.23(c). The
reason for exempting these systems of records from certain provisions
of the Privacy Act, 5 U.S.C. 552a, is set forth in the rule itself.
The OTS investigative files will contain information of the type
described in the (j)(2) and (k)(2) exemptions of the Privacy Act.
Authority for these systems is provided by 12 U.S.C. 1464, and 44
U.S.C. 3101. OTS will maintain information in these systems of records,
pursuant to its law enforcement and investigative functions, in order
to carry out these functions and its mission.
This rule is not a ``significant regulatory action'' under
Executive Order 12866 and will not require the approval of the Office
of Management and Budget; therefore, this rule does not require a
Regulatory Impact Analysis.
Pursuant to the requirements of the Regulatory Flexibility Act, 5
U.S.C. 601-612, it is hereby certified that this rule will not have
significant economic impact on a substantial number of small entities.
In accordance with the Paperwork Reduction Act of 1980, the
Department of the Treasury has determined that this proposed rule would
not impose new recordkeeping, application, reporting, or other types of
information collection requirements.
Lists of Subjects in 31 CFR Part 1
Privacy
Part 1 of Title 31 of the Code of Federal Regulations is amended
as follows:
PART 1--[AMENDED]
1. The authority citation for part 1 continues to read as follows:
Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also
issued under 5 U.S.C. 552 as amended. Subpart C also issued under 5
U.S.C. 552a.
Sec. 1.36 [Amended]
2. Section 1.36 of subpart C is amended by adding the following
text at the end of the section as follows:
* * * * *
OFFICE OF THRIFT SUPERVISION
NOTICE OF EXEMPT SYSTEMS
In accordance with 5 U.S.C. 552a (j) and (k), general notice is
hereby given of rulemaking pursuant to the Privacy Act of 1974 by the
Director, Office of Thrift Supervision, under authority delegated to
him by the Secretary of the Treasury. The Director, Office of Thrift
Supervision, exempts the systems of records identified in the
paragraphs below from certain provisions of the Privacy Act of 1974 as
set forth in such paragraphs.
a. General exemptions under 5 U.S.C. 552a(j)(2). Pursuant to
the provisions of 5 U.S.C. 552a(j)(2), the Director, Office of
Thrift Supervision, hereby exempts certain systems of records,
maintained by the Office of Thrift Supervision, from the provisions
of 5 U.S.C. 552a(c) (3) and (4), (d) (1), (2), (3) and (4), (e) (1),
(2), (3), (4)(G), (H) and (I), (5) and (8), (f) and (g).
1. Exempt Systems. The following systems of records, which
contain information of the type described in 5 U.S.C. 552a(j)(2),
shall be exempt from the provisions of 5 U.S.C. 552a listed in
paragraph a. above except as otherwise indicated below and in the
general notice of the existence and character of systems of records
which appears elsewhere in the Federal Register
: .001 -- Confidential Individual Information System
.004 -- Criminal Referral Database
2. Reasons for exemptions. (a) 5 U.S.C. 552a (e)(4)(G) and
(f)(1) enable individuals to be notified whether a system of records
contains records pertaining to them. The OTS believes that
application of these provisions to the above-listed systems of
records would give individuals an opportunity to learn whether they
are the subject of an administrative investigation; this would
compromise the ability of the OTS to complete investigations and to
detect and apprehend violators of applicable laws in that
individuals would thus be able (1) to take steps to avoid detection,
(2) to inform co-conspirators of the fact that an investigation is
being conducted, (3) to learn the nature of the investigation to
which they are being subjected, (4) to learn the type of
surveillance being utilized, (5) to learn whether they are the
subject of investigation or identified law violators, (6) to
continue or resume their illegal conduct without fear of detection
upon learning that they are not in a particular system of records,
and (7) to destroy evidence needed to prove a violation.
(b) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f)(2), (3) and (5)
enable individuals to gain access to records pertaining to them. The
OTS believes that application of these provisions to the above-
listed systems of records would compromise its ability to complete
or continue administrative investigations and to detect and
apprehend violators of applicable laws. Permitting access to records
contained in the above-listed systems of records would provide
individuals with significant information concerning the nature of
the investigation, and this could enable them to avoid detection or
apprehension in the following ways: (1) by discovering the
collection of facts which would form the basis of an enforcement
action, and (2) by enabling them to destroy evidence of wrongful
conduct which would form the basis of an enforcement action.
Granting access to on-going or closed investigative files would also
reveal investigative techniques and procedures, the knowledge of
which could enable individuals planning illegal activity to
structure their future operations in such a way as to avoid
detection or apprehension, thereby neutralizing established
investigative techniques and procedures. Further, granting access to
investigative files and records could disclose the identities of
confidential sources and other informers and the nature of the
information which they supplied, thereby exposing them to possible
reprisals for having provided information related to the activities
of those individuals who are subjects of the investigative files and
records; confidential sources and other informers might refuse to
provide investigators with
[[Page 388]]
valuable information if they could not be secure in the knowledge that
their identities would not be revealed through disclosure of either
their names or the nature of the information they supplied, and this
would seriously impair the ability of the OTS to carry out its
mandate to enforce the applicable laws. Additionally, providing
access to records contained in the above-listed systems of records
could reveal the identities of individuals who compiled information
regarding illegal activities, thereby exposing them to possible
reprisals.
(c) 5 U.S.C. 552a(d) (2), (3) and (4), (e)(4)(H) and (f)(4),
which are dependent upon access having been granted to records
pursuant to the provisions cited in paragraph (b) above, enable
individuals to contest (seek amendment to) the content of records
contained in a system of records and require an agency to note an
amended record and to provide a copy of an individual's statement
(of disagreement with the agency's refusal to amend a record) to
persons or other agencies to whom the record has been disclosed. The
OTS believes that the reasons set forth in paragraph (b) above are
equally applicable to this subparagraph and, accordingly, those
reasons are hereby incorporated herein by reference.
(d) 5 U.S.C. 552a(c)(3) requires that an agency make
accountings of disclosures of records available to individuals named
in the records at their request; such accountings must state the
date, nature and purpose of each disclosure of a record and the name
and address of the recipient. The OTS believes that application of
this provision to the above-listed systems of records would impair
the ability of other law enforcement agencies to make effective use
of information provided by the OTS in connection with the
investigation, detection and apprehension of violators of the laws
enforced by those other law enforcement agencies. Making accountings
of disclosure available to subjects would alert those individuals to
the fact that another agency is conducting an investigation into
their activities, and this could reveal the nature and purpose of
that investigation, and the dates on which that investigation was
active. Subjects possessing such knowledge would thereby be able to
take appropriate measures to avoid detection or other apprehension
by altering their operations, or by destroying or concealing
evidence which would form the basis of an enforcement action. In
addition, providing subjects with accountings of disclosure would
inform those individuals of general information, and alert them that
the OTS has information regarding their activities; this, in turn,
would afford those individuals a better opportunity to take
appropriate steps to avoid detection or apprehension.
(e) 5 U.S.C. 552a(c)(4) requires that an agency inform any
person or other agency about any correction or notation of dispute
made by the agency in accordance with 5 U.S.C. 552(d) of any record
that has been disclosed to the person or agency if an accounting of
the record was made. Since this provision is dependent on an
individual's having been provided an opportunity to contest (seek
amendment to) records pertaining to him, and since the above-listed
systems of records are proposed to be exempted from those provisions
of 5 U.S.C. 552a relating to amendments of records as indicated in
paragraph (c) above, the OTS believes that this provision should not
be applicable to the above-listed systems of records.
(f) 5 U.S.C. 552a(e)(4)(I) requires that an agency publish a
public notice listing the categories of sources for information
contained in a system of records. The OTS believes that application
of this provision to the above-listed systems of records could
compromise its ability to conduct investigations and to identify,
detect and apprehend violators of the applicable laws for the
reasons that revealing sources for information could 1) disclose
investigative techniques and procedures, 2) result in possible
reprisal directed to informers by the subject under investigation,
and 3) result in the refusal of informers to give information or to
be candid with investigators because of the knowledge that their
identities as sources might be disclosed.
(g) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its
records only such information about an individual as is relevant and
necessary to accomplish a purpose of the agency required to be
accomplished by statute or executive order. The term ``maintain'' as
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and
``disseminate.'' At the time that information is collected by the
OTS, there is often insufficient time to determine whether the
information is relevant and necessary to accomplish a purpose of the
OTS; in many cases information collected may not be immediately
susceptible to a determination whether the information is relevant
and necessary, particularly in the early stages of an investigation,
and in many cases information which initially appears to be
irrelevant and unnecessary may, upon further evaluation or upon
continuation of the investigation, prove to have particular
relevance to an enforcement program of OTS. Further, not all
violations of law discovered during an OTS administrative
investigation fall within the investigative jurisdiction of OTS; in
order to promote effective law enforcement, OTS is often required to
disseminate information pertaining to such violations to other law
enforcement agencies which have jurisdiction over the offense to
which the information relates. The OTS therefore believes that it is
appropriate to exempt the above-listed systems of records from the
provisions of 5 U.S.C. 552a(e)(1).
(h) 5 U.S.C. 552a(e)(2) requires that an agency collect
information to the greatest extent practicable directly from the
subject individual when the information may result in adverse
determinations about an individual's rights, benefits, and
privileges under Federal programs. The OTS believes that application
of this provision to the above-listed systems of records would
impair the ability of OTS to conduct investigations and to identify,
detect and apprehend violators of applicable laws for the following
reasons: (1) most information collected about an individual under
investigation is obtained from third parties such as witnesses and
informers, and it is usually not feasible to rely upon the subject
of the investigation as a source for information regarding his
activities, (2) an attempt to obtain information from the subject
regarding an investigation will often alert the subject to the
existence of such an investigation, thereby affording him an
opportunity to conceal his activities so as to avoid apprehension,
(3) in certain instances individuals are not required to supply
information to investigators as a matter of legal duty, and (4)
during investigations it is often a matter of sound investigative
procedures to obtain information from a variety of sources in order
to verify information already obtained.
(i) 5 U.S.C. 552a(e)(3) requires that an agency inform each
individual whom it asks to supply information, on the form which it
uses to collect the information or on a separate form that can be
retained by the individual, of the authority which authorizes the
solicitation of the information and whether disclosure of such
information is mandatory or voluntary; the principal purposes for
which the information is intended to be used; the routine uses which
may be made of the information; and the effects on the individual of
not providing all or part of the requested information. The OTS
believes that the above-listed systems of records should be exempted
from this provision in order to avoid adverse effects on its ability
to identify, detect and apprehend violators of applicable laws. In
many cases, information is obtained from confidential sources and
other individuals under circumstances where it is necessary that the
true purpose of their actions be kept secret so as not to alert the
subject of the investigation or his associates that an investigation
is in progress. In many cases, individuals for personal reasons
would feel inhibited in talking to a person representing a law
enforcement agency but would be willing to talk to a confidential
source or a person who they believed was not involved in enforcement
activity. In addition, providing information in this system with
written evidence of who was the source, as required by this
provision, could increase the likelihood that the source of
information would be the subject of retaliatory action by the
subject of the investigation. Further, application of this provision
could result in an unwarranted invasion of the personal privacy of
the subject of the investigation, particularly where further
investigation would result in a finding that he was not involved in
unlawful activity.
(j) 5 U.S.C. 552a(e)(5) requires that an agency maintain all
records used by the agency in making any determination about any
individual with such accuracy, relevance, timeliness, and
completeness as is reasonably necessary to assure fairness to the
individual in the determination. Since 5 U.S.C. 552a(a)(3) defines
``maintain'' to include ``collect'' and ``disseminate,'' application
of this provision to the above-listed systems of records would
hinder the initial collection of any information which could not, at
the moment of collection, be determined to be accurate, relevant,
timely and complete. Similarly, application of this provision would
seriously restrict the
[[Page 389]]
necessary flow of information from the OTS to other law enforcement
agencies where an OTS investigation revealed information pertaining
to a violation of law which was under the investigative jurisdiction
of another agency. In collecting information during the course of an
administrative investigation, it is not possible or feasible to
determine accuracy, relevance, timeliness or completeness prior to
collection of the information; in disseminating information to other
law enforcement agencies it is often not possible to determine
accuracy, relevance, timeliness or completeness prior to
dissemination because the disseminating agency may not have the
expertise with which to make such determinations. Further,
information which may initially appear inaccurate, irrelevant,
untimely or incomplete may, when gathered, grouped, and evaluated
with other available information, become more pertinent as an
investigation progresses. The OTS therefore believes that it is
appropriate to exempt the above-listed systems of records from the
provisions of 5 U.S.C. 552a(e)(5).
(k) 5 U.S.C. 552a(e)(8) requires that an agency make reasonable
efforts to serve notice on an individual when any record on the
individual is made available to any person under compulsory legal
process when such process becomes a matter of public record. The OTS
believes that the above-listed systems of records should be exempt
from this provision in order to avoid revealing investigative
techniques and procedures outlined in those records and in order to
prevent revelation of the existence of an on-going investigation
where there is a need to keep the existence of the investigation
secret.
(l) 5 U.S.C. 552a(g) provides civil remedies to an individual
for an agency refusal to amend a record or to make a review of a
request for amendment, for an agency refusal to grant access to a
record, for an agency failure to maintain accurate, relevant, timely
and complete records which are used to make a determination which is
adverse to the individual, and for an agency failure to comply with
any other provision of 5 U.S.C. 552a in such a way as to have an
adverse effect on an individual. The OTS believes that the above-
listed systems of records should be exempted from this provision to
the extent that the civil remedies provided therein may be related
to provisions of 5 U.S.C. 552a from which the above-listed systems
of records are proposed to be exempt. Since the provisions of 5
U.S.C. 552a enumerated in paragraphs (a) through (k) above are
proposed to be inapplicable to the above-listed systems of records
for the reasons stated therein, there should be no corresponding
civil remedies for failure to comply with the requirements of those
provisions to which the exemption is proposed to apply. Further, the
OTS believes that the application of this provision to the above-
listed systems of records would adversely affect its ability to
conduct investigations by exposing to civil court actions every
stage of the investigative process in which information is compiled
or used in order to identify, detect, apprehend and otherwise
investigate persons suspected or known to be engaged in conduct in
violation of applicable laws.
b. Specific exemptions under 5 U.S.C. 552a(k)(2). Pursuant to
the provisions of 5 U.S.C. 552a(k)(2), the OTS hereby exempts
certain systems of records, maintained by the OTS from the
provisions of 5 U.S.C. 552a(c)(3), (d)(1), (2), (3) and (4), (e)(1)
and (4)(G), (H) and (I) and (f).
1. Exempt Systems. The following systems of records, which
contain information of the type described in 5 U.S.C. 552a(k)(2),
shall be exempt from the provisions of 5 U.S.C. 552a listed in
paragraph b. above except as otherwise indicated below and in the
general notice of the existence and character of systems of records
which appears elsewhere in the Federal Register:
.001 -- Confidential Individual Information System
.004 -- Criminal Referral Database
2. Reasons for exemptions. (a) 5 U.S.C. 552a (e)(4)(G) and
(f)(1) enable individuals to be notified whether a system of records
contains records pertaining to them. The OTS believes that
application of these provisions to the above-listed systems of
records would impair the ability of the OTS to successfully complete
investigations and inquiries of suspected violators of laws and
regulations under its jurisdiction. In many cases investigations and
inquiries into violations of laws and regulations involve complex
and continuing patterns of behavior. Individuals, if informed that
they have been identified as the subject of an investigation, would
have an opportunity to take measures to prevent detection of illegal
action so as to avoid prosecution or the imposition of civil
sanctions. They would also be able to learn the nature and location
of the investigation and the type of inquiry being made, and they
would be able to transmit this knowledge to co-conspirators.
Finally, subjects might be given the opportunity to destroy evidence
needed to prove the violation under investigation or inquiry.
(b) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f)(2), (3) and (5)
enable individuals to gain access to records pertaining to them. The
OTS believes that application of these provisions to the above-
listed systems of records would impair its ability to complete or
continue investigations and inquiries and to detect and apprehend
violators of the applicable laws. Permitting access to records
contained in the above-listed systems of records would provide
subjects with significant information concerning the nature of the
investigation or inquiry. Knowledge of the facts developed during an
investigation or inquiry would enable violators of laws and
regulations to learn the extent to which the investigation or
inquiry has progressed, and this could provide them with an
opportunity to destroy evidence that would form the basis for the
imposition of civil sanctions. In addition, knowledge gained through
access to investigatory material could alert a subject to the need
to temporarily postpone commission of the violation or to change the
intended point where the violation is to be committed so as to avoid
detection or apprehension. Further, access to investigatory material
would disclose investigative techniques and procedures which, if
known, could enable individuals to structure their future operations
in such a way as to avoid detection or apprehension, thereby
neutralizing investigators' established and effective investigative
tools and procedures. In addition, investigatory material may
contain the identity of confidential sources who would not want
their identity to be disclosed for reasons of personal privacy or
for fear of reprisal at the hands of the individual about whom they
supplied information. In some cases mere disclosure of the
information provided by a source would reveal the identity of the
source either through the process of elimination or by virtue of the
nature of the information supplied. If sources could not be assured
that their identities (as sources for information) would remain
confidential, they would be very reluctant in the future to provide
information pertaining to violations of laws and regulations, and
this would seriously compromise the ability of the OTS to carry out
its mission. Further, application of 5 U.S.C. 552a (d)(1), (e)(4)(H)
and (f)(2), (3) and (5) to the above-listed systems of records would
make available attorney's work product and other documents which
contain evaluations, recommendations, and discussions of ongoing
legal proceedings; the availability of such documents could have a
chilling effect on the free flow of information and ideas within the
OTS which is vital to the agency's predecisional deliberative
process, could seriously prejudice the agency's or the Government's
position in litigation, and could result in the disclosure of
investigatory material which should not be disclosed for the reasons
stated above. It is the belief of the OTS that due process will
assure that individuals have a reasonable opportunity to learn of
the existence of, and to challenge, investigatory records and
related materials which are to be used in legal proceedings.
(c) 5 U.S.C. 552a(d) (2), (3) and (4), (e)(4)(H) and (f)(4),
which are dependent upon access having been granted to records
pursuant to the provisions cited in subparagraph (b) above, enable
individuals to contest (seek amendment to) the content of records
contained in a system of records and require an agency to note an
amended record and to provide a copy of an individual's statement
(of disagreement with the agency's refusal to amend a record) to
persons or other agencies to whom the record has been disclosed. The
OTS believes that the reasons set forth in subparagraph (b) above
are equally applicable to this subparagraph, and, accordingly, those
reasons are hereby incorporated herein by reference.
(d) 5 U.S.C. 552a(c)(3) requires that an agency make
accountings of disclosures of records available to individuals named
in the records at their request; such accountings must state the
date, nature and purpose of each disclosure of a record and the name
and address of the recipient. The OTS believes that application of
this provision to the above-listed systems of records would impair
the ability of the OTS and other law enforcement agencies to conduct
investigations and inquiries into potential violations under their
respective jurisdictions. Making accountings available
[[Page 390]]
to subjects would alert those individuals to the fact that the OTS or
another law enforcement authority is conducting an investigation or
inquiry into their activities, and such accountings could reveal the
geographic location of the investigation or inquiry, the nature and
purpose of the investigation or inquiry and the nature of the
information disclosed, and dates on which that investigation or
inquiry was active. Subjects possessing such knowledge would thereby
be able to take appropriate measures to avoid detection or
apprehension by altering their operations, transferring their
activities to other locations or destroying or concealing evidence
which would form the basis for prosecution or the imposition of
civil sanctions.
(e) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its
records only such information about an individual as is relevant and
necessary to accomplish a purpose of the agency required to be
accomplished by statute or executive order. The term ``maintain'' as
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and
``disseminate.'' At the time that information is collected by the
OTS there is often insufficient time to determine whether the
information is relevant and necessary to accomplish a purpose of the
OTS; in many cases information collected may not be immediately
susceptible to a determination of whether the information is
relevant and necessary, particularly in the early stages of
investigation or inquiry; and in many cases information which
initially appears to be irrelevant and unnecessary may, upon further
evaluation or upon continuation of the investigation or inquiry,
prove to have particular relevance to an enforcement program of the
OTS. Further, not all violations of law uncovered during an OTS
investigation or inquiry fall within the jurisdiction of the OTS; in
order to promote effective law enforcement it often becomes
necessary and desirable to disseminate information pertaining to
such violations to other law enforcement agencies which have
jurisdiction over the offense to which the information relates. The
OTS therefore believes that it is appropriate to exempt the above-
listed systems of records from provisions of 5 U.S.C. 552a(e)(1).
Dated: September 20, 1995.
Jonathan L. Fiechter,
Acting Director.
Dated: December 5, 1995.
Alex Rodriquez,
Deputy Assistant Secretary (Administration).
[FR Doc. 96-73 Filed 1-4-96; 8:45 am]
BILLING CODE: 6720-01-F
