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Williams & Connolly Sues Bank Regulator Over Foreclosure Review Information

But the process seemed mainly to benefit the consultants, who raked in nearly $2 billion through November 2012 without a single borrower receiving compensation. As OCC head Thomas Curry put it in a February speech, the independent foreclosure review “proved to be much more complicated than anyone anticipated.”

In January, banking regulators pulled the plug on the program, striking deals with 13 servicers to pay more than $9.3 billion in cash payments and other assistance to help borrowers.

In its FOIA suit, filed on March 27, Williams Connolly wants to know exactly what guidance OCC provided to mortgage services for hiring the independent consultants. The suit seeks “All documents and/or records relating to the OCC’s definition of independence,” including “Any documents and/or records relating to determining whether any particular independent consultant…was or was not independent.”

Companies including Promontory Financial Group, PricewaterhouseCoopers, Ernst Young and Deloitte Touche were hired by mortgage servicers to conduct the reviews.

The OCC initially refused Williams Connolly’s request in full, citing FOIA subsection (b)(8), which exempts information “contained in or related to examination, operating, or condition reports prepared by… an agency responsible for the regulation or supervision of financial institutions.”

Williams Connolly appealed the request to the OCC in September, and “specifically noted that the OCC could not withhold the documents under the stated exemption,” according to the complaint.

The OCC in December released five pages of partially redacted documents related to its definition of independence and provided documents that were publically available on its website. Also, the agency offered new grounds for withholding information, citing subsection (b)(5) which exempts “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.”

Aufhauser argued in the complaint that Williams Connolly has a “right of access to the documents requested, and Defendant has no legal basis for its actions in withholding the right of access to such documents.” The suit also seeks attorneys’ fees.

Aufhauser, who did not respond to a request for comment, previously served as general counsel of the Treasury Department.

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