[Federal Register Volume 60, Number 68 (Monday, April 10, 1995)]
[Proposed Rules]
[Pages 18036-18038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8337]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 792
Addition of Specific Exemptions Under the Privacy Act
AGENCY: National Credit Union Administration.
ACTION: Proposed rule.
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SUMMARY: The National Credit Union Administration (NCUA) is proposing
to amend its regulations pertaining to exemptions of the NCUA's Privacy
Act Systems of Records. These amendments are necessary to reflect the
addition of the (j)(2) and (k)(2) exemptions of the Privacy Act to the
NCUA regulations that describe exempt systems of records, and to
clearly link the ``Office of Inspector General (OIG) Investigative
Records--NCUA,'' system NCUA- 20, to these Privacy Act exemptions.
DATES: Comments must be postmarked or posted to the NCUA Electronic
Bulletin Board by May 10, 1995. Comments postmarked or posted by
Electronic Bulletin Board after this date will be considered if it is
practical to do so, but the NCUA is able to assure consideration only
for comments that are received on or before this date.
ADDRESSES: Send comments to Becky Baker, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria, VA
22314, or post comments to the NCUA Electronic Bulletin Board at 800
876-1684 or 703 518-6480. Comments received may be examined at the
Office of Inspector General, 5th floor, NCUA Building, 1775 Duke
Street, Alexandria, VA.
FOR FURTHER INFORMATION CONTACT: Alexandra B. Keith, Counsel to the
Inspector General, Office of Inspector General, National Credit Union
Administration, 5th floor, 1775 Duke Street, Alexandria, VA, 22314,
Telephone: 703-518-6352.
SUPPLEMENTARY INFORMATION: In 1989, in response to the Inspector
General Act Amendments, P.L. 100-504, the National Credit Union
Administration Board established a statutorily designated Inspector
General (IG), to whom the functions of the former NCUA Office of
Internal Auditor, were transferred. The functions of NCUA's Office of
Inspector General (OIG) include: (1) The detection and prevention of
waste, fraud, and abuse and (2) the promotion of economy and efficiency
in NCUA programs and operations. As one of its principal functions, the
OIG performs investigations into alleged violations of criminal law in
connection with NCUA's programs and operations, pursuant to the IG Act
of 1978, as amended. In conjunction with these functions, OIG reports
suspected violations of criminal and civil law to the U.S. Attorney
General.
Section (j)(2) of the Privacy Act (5 U.S.C. 552a (j)(2)) permits
the head of an agency to promulgate rules to exempt a system of records
from certain requirements if the system is maintained by an agency
component or sub component whose principal function pertains to the
enforcement of criminal laws and if the system of records is compiled
for a criminal law enforcement purpose. Accordingly, to the extent it
includes this kind of records, the OIG Investigative Records system of
records is exempt from the following sections of 552a of Title 5
U.S.C.: (c)(3), (c)(4), (d), (e)(1),(e)(2),(e)(3), (e)(4)(G),
(e)(4)(H), (e)(4)(I), (e)(5), (e)(8), (f), and (g), as well as from the
corresponding regulatory subsections.
Section (k)(2) (Title 5 USC 552a(k)(2)) permits exemption from
certain requirements if the system consists of investigatory material
compiled for law enforcement purposes, other than material within the
scope of subsection (j)(2); Provided however, that if any individual is
denied any right, privilege, or benefit that he or she would otherwise
be entitled to by Federal law, or for which he or she would otherwise
be eligible, as a result of the maintenance of such material, such
material shall be provided to such individual except to the extent that
the disclosure of such material would reveal the identity of a source
who furnished information to the Government under an express promise
that the identity of the source would be held in confidence, or prior
to January 1, 1975, under an implied promise that the identity of the
source should be held in confidence. Accordingly, to the extent that it
includes this kind of records, this system of records is also exempt
under Section (k)(2) from the following sections of 552a of Title 5
U.S.C.: (c)(3);(d); (e)(1); (e)(4)(G), (H), and (I); and (f), as well
as from the corresponding regulatory subsections. This proposed rule,
amending 12 CFR 792.34, would make NCUA's regulations consistent with
those of the majority of agencies with statutory IG's.
Elsewhere in today's Federal Register there is a Notice describing
this system of records.
Exemptions from the particular subsections are justified for the
following reasons:
Section 552a(c)(3) of title 5 U.S.C. requires an agency to make the
accounting of each disclosure of records available to the individual
named in the record at his/her request. This accounting must state the
date, nature and purpose of each disclosure of a record and the name
and address of the recipient. Accounting for each disclosure could
alert the subject of an investigation to the existence and nature of
the investigation and reveal investigative or prosecutive interest by
other agencies, especially in a joint investigation situation. This
could seriously impede or compromise an investigation and case
preparation by prematurely revealing its existence and nature;
compromise or interfere with witnesses reluctant to cooperate with the
investigators; lead to suppression, alteration, fabrication or
destruction or evidence; and endanger the physical safety of
confidential sources, witnesses, law enforcement personnel and their
families.
Section 552a(c)(4) of title 5 U.S.C. requires an agency to inform
outside parties of amendments to and notation of disputes about
information in a system in accordance with subsection (d) of the
Privacy Act. Because this system of records is exempted from the
amendment provisions of subsection (d) of the Privacy Act by this rule,
this section is not properly applicable.
Sections 552a(d) and (f) of title 5 U.S.C. require an agency to
provide access to records, make corrections, and amendments to records,
and notify individuals of the existence of records upon their request.
Providing individuals with the access to records of an investigation
and the right to contest the contents of those records and force
[[Page 18037]] changes to be made to the information contained therein
would seriously interfere with and thwart the orderly and unbiased
conduct of the investigation and impede case preparation. Providing the
access normally afforded under the Privacy Act would provide the
subject with valuable information that would allow interference with or
compromise of witnesses or render witnesses reluctant to cooperate with
investigators; lead to suppression, alteration, fabrication, or
destruction of evidence; endanger the physical safety of confidential
sources, witnesses, law enforcement personnel and their families, and
result in the secreting of or other disposition of assets that would
make them difficult or impossible to reach to satisfy any Government
claims growing out of the investigation.
Section 552a(e)(1) of title 5 U.S.C. requires an agency to maintain
in agency records only ``relevant and necessary'' information about an
individual. This provision is inappropriate for investigations, because
it is not always possible to detect the relevance or necessity of each
piece of information in the early stages of an investigation. In some
cases, it is only after the information is evaluated in light of other
evidence that its relevance and necessity will be clear. In other
cases, what may appear to be a relevant and necessary piece of
information may become irrelevant in light of further investigation.
In addition, during the course of an investigation, the
investigator may obtain information that relates primarily to matters
under the investigative jurisdiction of another agency (e.g., the
fraudulent use of Social Security numbers) and that information may not
be reasonably segregated. In the interests of effective law
enforcement, OIG investigators should retain this information, because
it can aid in establishing patterns of criminal activity and can
provide valuable leads for Federal and other law enforcement agencies.
Section 552a(e)(2) of title 5 U.S.C. requires an agency to 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 general rule that information be collected ``to the greatest
extent practicable'' from the target individual is not appropriate in
investigations. OIG investigators should be authorized to use their
professional judgment as to the appropriate sources and timing of an
investigation. Often it is necessary to conduct an investigation so
that the target does not suspect that he or she is being investigated.
The requirement to obtain the information from the targeted individual
may put the suspect on notice of the investigation and thereby thwart
the investigation by enabling the suspect to destroy evidence and take
other action that would impede the investigation. This requirement may
also in some cases preclude an OIG investigator from gathering
information and evidence before interviewing an investigative target in
order to maximize the value of the interview by confronting the target
with evidence or information. Moreover, in certain circumstances, the
subject of an investigation cannot be required to provide information
to investigators and information must be collected from other sources.
Furthermore, it is often necessary to collect information from sources
other than the subject of the investigation to verify the accuracy of
the evidence collected.
In addition, the statutory term, ``to the greatest extent
practicable,'' is a subjective standard, and it is impossible
adequately to define the term so that individual OIG investigators can
consistently apply it to the many fact patterns encountered in OIG
investigations.
Section 552a(e)(3) of title 5 U.S.C. requires an agency to inform
each person whom it asks to supply information, on a form that can be
retained by the person, of the authority under which the information is
sought and whether disclosure is mandatory or voluntary; of the
principal purpose for which the information is intended to be used; of
the routine uses which may be made of the information; and of the
effects on any person, if any, of not providing all or any part of the
required information. The application of this provision could provide
the subject of an investigation with substantial information about the
nature of that investigation. Moreover, providing such a notice to the
subject of an investigation could seriously impede or compromise an
investigation by revealing its existence and could endanger the
physical safety of confidential sources, witnesses, and investigators
by revealing their identities.
Sections 552a(e)(4)(G) and (H) of title 5 U.S.C. require an agency
to publish in the Federal Register notice concerning its procedures for
notifying an individual at his/her request, if the system of records
contains a record pertaining to him/her, how to gain access to such a
record and how to contest its content. Since this system of records is
being exempted from subsection (f) of the Privacy Act, concerning
agency rules, and subsection (d) of the Act, concerning access to
records, these requirements are inapplicable to the extent that the
system of records would be exempt from those subsections.
Section 552a(e)(4)(I) of title 5 U.S.C. requires an agency to
publish notice of categories of sources of records in the system of
records. To the extent that this provision is constructed to require
more detailed disclosure than the broad generic information currently
published in the system notice an exemption from this provision is
necessary to protect the confidentiality of sources of information, to
protect privacy and information, and to avoid the disclosure of
investigative techniques and procedures.
Section 552a(e)(5) of title 5 U.S.C. requires an agency to maintain
its records with such accuracy, relevance, timeliness, and completeness
as is reasonably necessary to assure fairness to the individual in
making any determination about the individual. Much the same rationale
is applicable to this proposed exemption as that set forth previously
in item (d) (duty to maintain in agency records only ``relevant and
necessary information'' about an individual.) While the OIG makes every
effort to maintain records that are accurate, relevant, timely and
complete, it is not always possible in an investigation to determine
with certainty that all the information collected is accurate,
relevant, timely, and complete. During a thorough investigation, a
trained investigator would be expected to collect allegations,
conflicting information, and information that may not be based upon the
personal knowledge of the provider. At the point of determination by
OIG to refer a matter to a prosecutive agency, for example, that
information would be in the system of records, and it may not be
possible until further investigation is conducted, or indeed in many
cases until a trial (if at all) to determine the accuracy, relevance,
and completeness of some information. This requirement would inhibit
the ability of trained investigators to exercise professional judgment
in conducting a thorough investigation. Moreover, fairness to affected
individuals is assured by the due process they are accorded in any
trial or other proceeding resulting from the OIG investigation.
Section 552a(e)(8) of title 5 U.S.C. requires an agency to make
reasonable efforts to serve notice on an individual when any record on
such individual is [[Page 18038]] made available under compulsory legal
process when such process becomes a matter of public record. Compliance
with this provision could prematurely reveal and compromise an ongoing
criminal investigation to the target of the investigation and reveal
confidential investigative techniques, procedures, or evidence.
Section 552a(g) of title 5 U.S.C. provides for civil remedies if an
agency fails to comply with the requirements concerning access to
records under subsections (d)(1) and (3) of the Act; maintenance of
records under subsection (e)(5) of the Act; and any other provision of
the Act or any rule promulgated thereunder in such a way as to have an
adverse effect on an individual. The system would be exempt from many
of the Act's requirements; it is unnecessary and contradictory to
provide for civil remedies from violations of those provisions in
particular.
Regulatory Flexibility Certification
As required by the Regulatory Flexibility Act (5 U.S.C. 605(b)),
the NCUA certifies that this rule does not have a significant economic
impact on a substantial number of small entities. The amendments to 12
CFR are procedural in nature and will aid an NCUA office to perform its
criminal law enforcement function.
Paperwork Reduction Act Statement
This proposed rule contains no information collection requirements
and therefore is not subject to the requirements of the Paperwork
Reduction Act of 1980 (44 U.S.C. 3501 et seq.)
Executive Order 12612
This amendment to NCUA's systems of record notice does not affect
state regulation of credit unions.
List of Subjects in 12 CFR Part 792
Criminal penalties, Freedom of Information, Privacy, Reporting and
record keeping requirements, Sunshine Act.
By the National Credit Union Administration Board on March 30,
1995.
Becky Baker,
Secretary of the Board.
For the reasons set out in the preamble and under the authority of
the Federal Credit Union Act of 1934, as amended; and 5 U.S.C. 552,
552a, and 553, the NCUA is proposing to adopt the following amendments
to 12 CFR part 792.
PART 792--[AMENDED]
Subpart B-The Privacy Act
1. The authority citation for Part 792 is revised to read as
follows:
-Authority: 12 U.S.C. 1766(a) and 1789(a)(7); 5 U.S.C. App. 3.
Subpart B is also issued under 5 U.S.C. 552a.
2. In Sec. 792.34, a new paragraph (b)(3) is added to read as
follows:
Sec. 792.34 Exemptions.
* * * * *
(b) * * *
(3) System NCUA-20, entitled, ``Office of Inspector General (OIG)
Investigative Records,'' consists of OIG records of closed and pending
investigations of individuals alleged to have been involved in criminal
violations. The records in this system are exempted pursuant to
Sections (k)(2) of the Privacy Act, 5 U.S.C. 552a(k)(2), from sections
(c)(3); (d); (e)(1); (e)(4)(G); (e)(4)(H); (e)(4)(I); and (f). The
records in this system are also exempted pursuant to section (j)(2) of
the Privacy Act, 5 U.S.C. 552a(j)(2), from sections (c)(3); (c)(4);
(d); (e)(1); (e)(2); (e)(3); and (g).
[FR Doc. 95-8337 Filed 4-7-95; 8:45 am]
BILLING CODE 7535-01-U -
