The Department of Banking (DOB) is appealing a ruling by the Freedom of Information Commission (FOIC) ordering it to turn over records it argues are protected by the state’s banking statutes.
At the end of July, the FOIC ruled that the DOB needed to turn over a number of records it had withheld from a request submitted by John DiIorio. DiIorio served as the principal of 1st Alliance Lending, LLC, which the DOB began investigating in 2018 over allegations it was using unlicensed staff to process mortgage applications. The DOB also revoked 1st Alliance’s license and issued a civil penalty. DiIorio maintained throughout the legal proceedings that he had done nothing wrong.
In the case, DiIorio submitted a FOIA request to the DOB seeking email communications from DOB employees that included several key phrases relating to the legal case against 1st Alliance.
While the DOB did turn over some responsive records on several dates, they withheld other records, citing a variety of exemptions.
The FOIC found the DOB improperly withheld a number of records they claimed were exempt because they contained confidential information or related to an investigation.
State statute allows agencies to withhold confidential records, but that exemption applies only to records relating to “publicly adjudicated disciplinary and enforcement actions” included in the Nationwide Multistate Licensing System and Registry (NMLS) and which are publicly accessible.
DiIorio argued this applied to the records at issue, since they were related to the agency’s actions against 1st Alliance. The FOIC agreed, finding 1st Alliance was a person included in the NMLS for public access, and ordered that those records be disclosed.
The commission also found DOB officials improperly withheld records the agency had claimed contained confidential information about internal procedures or codes and software that would compromise their IT systems if it was released. The FOIC found the DOB had provided no evidence that releasing the records would compromise their IT and ordered them to be disclosed.
Prior to the FOIC’s ruling, DOB’s attorney argued the finding against the department was unnecessary because the records at issue had been released. DiIorio disagreed with that statement.
The DOB’s complaint argues that the FOIC was wrong in finding that they denied DiIorio’s request.
According to the complaint, the FOIC did not have jurisdiction over DiIorio’s complaint because they claim he filed it later than the 30-day period state law gives requesters after a request is denied.
The complaint states Eric Beckenstein, an attorney who serves as the department’s FOI coordinator, provided DiIorio with responsive records to his April 12, 2024, request on three separate dates in June. On June 14, the last day Beckenstein provided records, DOB’s complaint says he told DiIorio the department considered the request closed.
DiIorio told the DOB on June 17 that he could not access records. A DOB paralegal gave DiIorio instructions for accessing the records on June 25. On June 29 and July 4, DiIorio requested additional copies of the records Beckenstein had already provided. Beckenstein provided those records on July 11.
DOB’s complaint alleges that DiIorio’s subsequent June 29 and July 4 requests, which the FOIC ruled to be followup communication to his June 14 request and therefore part of that request, did not involve the records Beckenstein withheld as part of the June 14 request.
DOB argues the requests should be considered separate and that they occurred later than the 30-day period requesters have to file a complaint with the FOIC once a request is denied. According to DOB, this means the FOIC did not have subject matter jurisdiction over the complaint.
The department is also arguing that the FOIC “exceeded its jurisdiction by presuming the authority to investigate the Banking Commissioner’s performance of statutory duties assigned to the Banking Commissioner” in state statute, referencing the FOIC’s finding on records publicly available in the NMLS. During the hearing in DiIorio’s complaint, the DOB also unsuccessfully argued that the FOIC could not review DOB decisions made under state banking law. The DOB again raises that argument in its appeal.
The DOB also claims they do not have the authority to provide those documents because they are copyrighted by Lexis-Nexis. Additionally, they argue that the FOIC failed to thoroughly review the records they ordered to be turned over.
The department is asking the court to vacate the FOIC’s decision and remand the case to the commission for dismissal.
On October 8, the FOIC found in DiIorio’s favor in a similar complaint against the DOB. The case also involved records relating to 1st Alliance. The DOB again put forward the argument that the FOIC did not have the authority to review DOB decisions made under state banking law, and the FOIC again rejected it.
The FOIC found that the DOB improperly withheld records officials claimed were exempt because they contained confidential supervisory or investigative information. It also claimed certain responsive records contained information that would harm “the reputation or safety and soundness of any person subject to the supervision of the [DOB] commissioner.” The FOIC found those exemptions did not apply to a number of records and ordered that they be disclosed.
The DOB also argued that records, which contained emails and attachments, could not be disclosed because they considered them to be a single electronic record that could not be separated. The FOIC rejected that argument. DiIorio withdrew his challenge to whether the attachments had been improperly withheld.
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