Bloomberg L.P. v. Board of Governors of the Federal Reserve System
Bloomberg L.P. v. Board of Governors of the Federal Reserve System, case number 1:08-cv-09595, involved Bloomberg L.P. initiating legal action against the Board of Governors of the Federal Reserve System to obtain information regarding financial institutions and banks that accessed the Federal Reserve's discount window during the 2008 financial crisis.
In response to the crisis, U.S. authorities enacted the Emergency Economic Stabilization Act of 2008, which aimed to support financial entities through purchasing mortgage-backed securities and providing direct loans to banks and bank holding companies. To avoid triggering bank runs and investor losses, many troubled banks refrained from publicly acknowledging their loans. As a result, the Federal Reserve established a confidential discount window facility for these borrowers.
Reporters Mark Pittman and Bob Ivry from Bloomberg L.P. submitted requests under the FOIA seeking details on borrowers and collateral but were refused access. Subsequently, Bloomberg filed a lawsuit in the United States District Court for the Southern District of New York on November 7, 2008, demanding disclosure.
On August 24, 2009, Chief U.S. District Judge Loretta Preska mandated that the Federal Reserve release the requested information by September 14. The Federal Reserve secured an extension pending appeal, postponing the deadline to September 30, 2009. The matter then advanced to the United States Court of Appeals for the Second Circuit.
A three-judge panel issued a unanimous decision on March 19, 2010, affirming that the Federal Reserve must disclose the documents. Both the Fed and The Clearing House Association L.L.C. petitioned for rehearing; however, these motions were denied on August 20, 2010. The court granted a stay until October 19 to allow for a possible appeal to the Supreme Court.
The Supreme Court opted not to review the case on March 21, 2011, compelling the Federal Reserve to provide Bloomberg L.P. with the loan information within five days. This outcome represented a major win for transparency regarding emergency lending during periods of financial instability.