Financial News

I have always had trouble delegating. Even as a manager in corporate America, I had a tendency to do all my work myself — everything from scheduling meetings, to reserving conference rooms, to ordering lunch for guests and sending faxes. I was convinced I was the best person to complete these tasks.

That tendency continued when I started my own marketing agency and hired a couple of interns. Rarely could they get the work done as quickly or as thoroughly as I could, so, too often, I kept it for myself.

As you might expect with only one person working at capacity — me — my firm quickly hit a revenue ceiling. Everything I was able to do myself, I did. It was only when I encountered a need for a website, which I had no idea how to design and create, that I was forced hand over a key task.

And after witnessing how much could be done by someone else, I did a complete about-face. I began looking for opportunities to delegate and outsource.

Buoyed by Tim Ferriss’ recommendation of low-cost help in his bestselling The 4-Hour Workweek, I turned to Brickwork India, in Bangalore, for some market research. I wanted to know how large a particular industry was to help me determine if it was worth targeting. But since this was a not yet a revenue-generating concern, I also wanted to keep my costs as low as possible. Hiring Bain or the Boston Consulting Group was not an option.

I have a virtual assistant in Texas (I’m in New York) who handles much of my Web work, at $50 an hour, but this project required a different skill-set. I had already spent a few hours of my time conducting my own top-line investigation and came up short. So when Ferriss indicated that Brickwork charges as little as $15 an hour, I decided to test them out.

I went to the company’s website and completed an initial Request for Information form identifying myself and the specific tasks I needed a Brickwork analyst to perform. Based on that input, I received a quote for a block of 10 hours of work in the next 30 days. The cost was $140. Total. I was more than willing to risk $14 an hour on this experiment.

The next step was setting up my Brickwork account, which took a matter of minutes, and paying the $140 via credit card. I received an introductory e-mail from my senior executive assistant the next afternoon, the start of their work day. I would have liked to have been able to request a particular worker, since a colleague had recommended a talented researcher there, but there was no opportunity to request anyone specific during the sign-up quick guaranteed personal loans.

Unsure of whether I should immediately hand off this important research project, I started with a softball task — compile a list of associations and organizations for writers in the U.S. Within a matter of hours, I had a spreadsheet listing 15 such organizations, their corresponding locations and number of members. Given that I could rattle off close to a dozen writers’ associations off the top of my head, I was a bit disappointed it took my executive assistant two hours to come up with 15. I was fairly certain there were more, but the information I received was well-organized.

So I forged ahead and with eight hours remaining on my credit I asked for help in finding the size of the ghostwriting industry. Mindful that more than eight hours could be spent with little to show for it, I set a cap of two hours. Those two hours were quickly gone and, in exchange, I received a list of four small companies that compete in that market. Not exactly what I was after. And then there were six hours left.

We spent some time going back and forth, as I tried to clarify exactly what I needed while also trying to assess whether there was any chance I would actually get it. Looking back, I should have picked up the phone and spent five minute making sure my assistant truly understood what I wanted, but e-mail was so much more convenient; I had her phone number but didn’t use it.

From the tasks I assigned and the deliverables I received, it slowly became clear that Brickwork was awesome at tracking down information with a single known value. For example, if you wanted to know how many babies were born last year worldwide, I’m sure my executive assistant could have found that fact. But ask for information that requires some primary research or deductive reasoning and you’ll burn through several hours just explaining what you’re after, information-wise. Alas, my industry research task falls into the latter category.

At such a low hourly rate and with the flexibility to hire a Brickworker on a whim, I may turn to them for administrative help in the future. But only when the data I need is well-defined and finite. 

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Exactly what happened behind the scenes at Hewlett-Packard Co. as the board of directors reached a deal for CEO Mark Hurd to resign after an ethics probe over sexual harassment allegations is still not known.

But the back-room dealing that led to one of America's top CEOs to resign with what could be up to a $40 million severance deal from HP (NYSE: HPQ) continues to be one of the most-talked about topics in the business world more than a week after his departure.

In a report this weekend, The Wall Street Journal cited a person it says was familiar with the HP board's thinking who said that the former CEO short-circuited an internal investigation by agreeing to a settlement with former actress Jodie Fisher on August 4, two days before his departure was announced.

The Journal reported that the settlement with the former marketing contractor came without the board's knowledge or input, a day before Fisher and her lawyer were supposed to meet with HP's outside counsel and Hurd's personal lawyer.

That story runs counter to another that the Journal attributes to an unnamed source it said is familiar with Hurd's thinking that HP had repeatedly instructed its CEO for three weeks before the settlement to come to an agreement with his accuser.

That source told the Journal that Hurd gave the board everything it asked for up to that point but the directors didn't let him address them or respond directly to questions.

The paper further said, however, that another unnamed source familiar with the board's thinking encouraged Hurd to speak with the board but he declined. It said, however, that the source on Hurd's side didn't agree with that version of the story.

Hurd led NCR Corp. (NYSE: NCR) in Dayton before going to HP, and had helped grow it's data warehouse division into what spun off as Teradata Corp. (NYSE: TDC) while at NCR.

The latest revelations about Hurd's departure come amid continuing scrutiny of the reasons for his sudden exit.

New York Times columnist Joe Nocera called it "one of the great head-scratchers in recent times" in a Saturday piece.

"The consensus in Silicon Valley is that Mr. Hurd was despised at HP, not just by the rank and file, but even by HP’s top executives," Nocera wrote.

The Times columnist suggests that the sexual harassment claim merely gave the board the pretext for doing what it wanted to do, get rid of Hurd without provoking an outcry on Wall Street where he was extremely popular for turning around the company's finances.

"In fact, the directors should be called out for acting like the cowards they are," the columnist wrote in a scathing piece. "Mr. Hurd’s supposed peccadilloes were a smoke screen for the real reason they got rid of an executive they didn’t trust and employees didn’t like."

Fisher, 50, was working as a contractor for HP when the alleged incidents that led to Hurd's resignation on August 6 occurred. She was reportedly paid to appear as a greeter at HP customer events where Hurd also appeared.

HP said an internal investigation didn't find evidence of sexual harassment but did find instances when Hurd's behavior didn't live up to the company's codes of conduct. This reportedly included alleged instances of expenses Fisher was paid that weren't properly reported.

For more on this story, including Hurd's full connections to Dayton through the years, click the following DBJ stories in our continuing coverage:

Mark Hurd - Rise and fall of a CEO

Poll: HP right to force Mark Hurd to resign

Report: Mark Hurd agrees to pay settlement

Hewlett-Packard stock plummets on CEO scandal

HP CEO Hurd to get $12M severance payout

Full text of Mark Hurd's separation agreement with HP

HP CEO Mark Hurd resigns amid sexual harassment scandal

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Bank of America’s stock fell 9 percent Friday after the bank posted a 3 percent drop in earnings and said that new financial regulations could cost California’s largest bank as much as much as $4.3 billion a year.

The Charlotte, N.C., bank also told investors that it will take a third-quarter charge of $7 billion to $10 billion due to a drop in the value of its credit card business once financial reform becomes law.

BofA is also getting slammed as the nation’s largest issuer of debit cards, which has been one of the most lucrative areas of retail banking. New restrictions on what the bank can collect every time a merchant swipes a customer’s debit card will hit the bank’s bottom line by $1.8 billion to $2 no fax pay day loan.3 billion annually. The bank also said its decision to not allow overdrafts on debit cards, doing away with the infamous $40 cup of coffee, will cost BofA another billion dollars.

The bank’s second-quarter performance failed to lift investors’ spirits. BofA saw profit decline among several units, including Merrill Lynch and its residential mortgage business.

The bank’s second-quarter provision for loan losses fell to $8.11 billion from $9.81 billion in this year’s first quarter. BofA’s pace of charge-offs fell to 3.98 percent from 4.44 percent in this year’s first quarter.

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A sharp drop in demand for temporary nurses sent Medical Staffing Network Holdings to bankruptcy court late Friday, when the Boca Raton-based company filed for Chapter 11 reorganization.

The company is the largest provider of per diem health care staffing in the U.S. and among the largest providers of traveling nurses, but many hospitals have scaled back on temporary staff to cut costs. It has 101 branch locations, 915 corporate employees and about 19,000 field employees nationwide.

Medical Staffing (Pink Sheets: MSNW) immediately signed a deal to sell its assets to MSN AcquisitionCo, a company formed by its first lien lenders. The $84.1 million proposed purchase price is the equivalent of the money Medical Staffing owes those creditors. The deal would essentially wipe out the company’s existing shareholders.

However, third parties can submit competing bids by contacting Leon Szlezinger at Jefferies & Co. in New York City. The company hopes to complete its sale by Aug. 31.

As that deal seeks court approval, the company will continue operating and its employees are expected to continue receiving full pay and benefits. The first lien lenders, led by General Electric Capital Corp., provided the company with $15 million of debtor-in-possessing financing to support cash flow needs during the transition.

The bankruptcy filing listed assets of $10 million to $50 million, and liabilities of $100 million to $500 million payday loan. The filing has a list of creditors 493 pages long.

“We believe that the filing of our Chapter 11 petition and the signing of the asset purchase agreement move us one step closer to emerging from the restructuring process with a capital structure that will allow us to successfully operate our business in the future,” Medical Staffing Chairman and CEO Robert Adamson said in a news release.

Although Adamson and other company executives have large stakes in Medical Staffing’s stock, the bankruptcy filing lists Warburg Pincus Private Equity VIII as the largest stockholder, with a 45.4 percent equity stake.

In addition to GECC, the first lien holders set to acquire Medical Staffing include SunTrust Bank, Bank of America, Hewlett-Packard Financial Services Co. and a host of investment funds organized by Dallas-based Highland Capital Management.

Miami law firm Berger Singerman has been retained to represent Medical Staffing in bankruptcy court.

Medical Staffing shares closed Friday at 0.4 cents. The 52-week high was 72 cents on Nov. 16.

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Luby’s Inc. has agreed to buy substantially all the assets of bankrupt Fuddruckers Inc. for $61 million in cash.

Houston-based Luby’s (NYSE: LUB) will also assume Fuddruckers’ obligations, real estate leases and contract and will pay an additional $2.45 million in cash if it does not assume certain specified contracts. Luby’s will also buy Fuddruckers’ Magic Brands LLC.

Austin-based Fuddruckers filed for Chapter 11 bankruptcy protection on April 21. Luby’s participated in an auction and won the right to buy substantially all of Fuddruckers’ assets on June 17. The sale to Luby’s remains subject to the U.S. Bankruptcy Court for the District of Delaware. The Bankruptcy Court has scheduled a final hearing on the sale of assets on June 22. If approved by the court, the transaction should close on or about July 9.

Luby’s has 96 restaurants that serve home-style food. Luby’s has 10 restaurants in San Antonio.

Fuddruckers currently operates 60 Fuddruckers restaurants and three Koo-Koo-Roo locations. Franchisees currently operate another 138 Fuddruckers locations, which are not included in the purchase. Fuddruckers has four corporate owned restaurants in San Antonio.

Both restaurant concepts were founded in San Antonio but their corporate headquarters have long since moved elsewhere in Texas. Luby's was founded in San Antonio in 1947. Fuddruckers was founded in San Antonio in 1980.

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Two weeks after the stock market’s record dive, regulators have a plan to keep it from happening again by essentially calling "time out" when trading gets too chaotic. The question is whether that will work.

The big exchanges say new curbs on trading known as "circuit breakers" will help prevent runaway market drops. But not everyone is convinced. To some market watchers, the rules are too limited. To others, the rules go too far.

The reality is that we may not know who’s right until there is another wild trading day like the one that stunned Wall Street May 6. Intense selling sent the Dow industrials down to a loss of almost 1,000 points in less than 30 minutes.

Under the plan announced Tuesday by the Securities and Exchange Commission, trading of any Standard & Poor’s 500 stock that rises or falls 10 percent or more within a five-minute period would be halted for five minutes. The idea is that by giving investors a break, they’ll be less likely to set off a chain reaction of human and computerized selling.

That’s one of several possible causes of the May 6 plunge. The drop, which some are calling a "flash crash," briefly wiped out $1 trillion in market value as some stocks traded as low as 1 cent. What if the new circuit breakers were in place that day?

"I believe that day would’ve played out significantly different," said Joe Ratterman, CEO of the third-largest U.S. stock exchange, BATS Exchange, which helped devise the new rules.

"There would’ve been chaos," he said, "but that pausing would’ve created enough breathing room for people to realize that the falling prices weren’t based on fundamentals," or economic news.

Still, given that regulators have yet to determine the cause of the market’s dive, some market watchers question how they can be so sure they can prevent another drop.

"I’m absolutely skeptical," said J.W. Verret, a former SEC defense lawyer who teaches law at George Mason University.

He called circuit breakers a "blunt instrument" that could interfere with the markets’ role in determining what a price should be. "Sometimes a stock needs to drop."

Others say the new SEC rules don’t go far enough.

The circuit breakers will apply to all 50 or so U.S. exchanges. But they would only kick in for 500 of the some 8,000 publicly traded U.S. stocks. After a six-month trial, the SEC and the exchanges could expand the rules to include more. In the meantime, some traders aren’t happy with the unequal treatment.

"If you’re going to put in circuit breakers, then put them across the board," said Ted Weisberg of Seaport Securities.

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St. Louis Mayor Francis Slay presented the Mayor’s Spirit of St. Louis Award Thursday to AgraForm, a chemical processing plant and packaging company.

The Mayor’s Spirit of St. Louis Award recognizes businesses that make major expansions or improvements to their existing locations, open or relocate to the city.

When Bayer CropScience decided to close its south St. Louis insecticide processing plant last year, a former Bayer employee and his business partners bought out the operations and started a new company, AgraForm.

AgraForm now counts Bayer as its largest customer and retained 12 jobs, along with seven contract positions at the plant, located at 133 E. Krauss St. in the Carondelet neighborhood. The company hopes to add employees as the business grows with new clients and additional products, the mayor’s office said.

The company’s owners are Doug Baskett, a former mechanical and process controls engineer with Bayer’s Kansas City plant; Ron Cunningham, who spent 18 years with Procter & Gamble in process controls and automation; and Bill McVeagh, an engineer and principal with Flourtown, Pa low interest rate personal loans.-based Engineering Support Systems.

The owners obtained at least $2.35 million in financing.

The company’s public/private financing package included assistance from the St. Louis Development Corp., the city’s economic development agency, in the forms of revolving loan funds and a Small Business Association 504 loan for start-up costs, inventory, equipment, working capital and other needs.

Southern Commercial, a local community bank, secured $1.1 million in private financing. Additional working capital assistance came from the St. Louis Minority Business Council.

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Now that Citigroup and AIG are rolling in the bucks, GMAC is looking like the most egregious zombie bank of them all.

A report released Thursday questions the wisdom of the government’s decision to spend $17 billion propping up the money-losing maker of car and home loans.

The report, released by the Congressional Oversight Panel, noted that the White House thinks taxpayers will lose at least $6 billion on the GMAC bailout. Two members of the panel projected that losses could reach $10 billion, based on the expected cost of the bailouts of GM and Chrysler.

But that’s not the worst of it. Thanks to Treasury’s decision to avoid a comprehensive restructuring of the company, pre-bailout shareholders in GMAC — including private equity firm Cerberus — could still profit on their investments, the report said.

And while the costs are mounting, the panel, chaired by Harvard law professor Elizabeth Warren, said it remains unclear what Treasury accomplished by shielding GMAC from bankruptcy.

The panel also questioned the government’s decision to bail out the entire company rather than simply supporting its auto-lending unit, and how GMAC might return to sufficient profitability to begin repaying its obligations.

In its report, the panel said it "is deeply concerned that Treasury has not required GMAC to lay out a clear path to viability or a strategy for fully repaying taxpayers." It called on Treasury to "clearly articulate its exit strategy from GMAC."

GMAC chief Michael Carpenter told the panel last month that the company hopes to conduct an initial public offering within two years to repay taxpayers. But to say observers are skeptical about the prospects for an IPO would be an understatement.

"In my view, GMAC badly needs to be restructured before it will have a real possibility of revival," bank watcher Chris Whalen of Institutional Risk Analytics told the panel last month. He said the company’s misguided expansion beyond car lending "threatens the viability of GMAC."

Thursday’s report comes at a time when the prospects for some of the most notorious bailout beneficiaries have started to turn up a bit.

AIG (AIG, Fortune 500) is on track to repay $51 billion of federal aid, thanks to two recent asset-sale agreements. Fortune’s report that value investor Bruce Berkowitz is buying Citi (C, Fortune 500) shares helped spark a rally this week in that beaten-down stock.

The outlook for what is shaping up as the costliest bailout, the 2008 takeover of Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), isn’t brightening — but at least it’s clear how the companies fit into the government’s effort to support an economic rebound.

That’s not at all the case for GMAC, which is best known as a car lender but has been hemorrhaging billions of dollars thanks to its subprime home lending spree.

GMAC’s mortgage operations lost $15 billion over the past three years and the company has spent recent months attempting to limit its exposure to further losses at its main mortgage business, ResCap.

The report suggests a bankruptcy for all or part of GMAC, particularly ResCap, should have been given strong consideration when the bailout decision was initially made in 2008 and again when additional support was injected in May and December 2009.

But the government instead chose to support the entire company, first by permitting GMAC to convert to a Federal Reserve-regulated bank holding company and then by administering repeated infusions of taxpayer support. Last year’s bailout decisions, the report says, appear to have been clouded by Treasury’s desire to avoid taking a loss on its initial $5 billion investment.

Allowing GMAC to proceed as is looks especially questionable in light of the $6 billion that the company has channeled to ResCap, which it is trying to sell.

"Given ResCap’s limited available capital and liquidity, its ongoing existence and viability have remained highly doubtful without continued contributions from its parent," the report said. "GMAC’s contributions to ResCap would not have been possible, however, had GMAC not received TARP assistance."

Treasury isn’t the only arm of the government exposed to GMAC’s problems. The Federal Deposit Insurance Corp., the guarantor of the increasingly stressed-out deposit insurance fund, is backing $7.4 billion of GMAC bonds issued under a crisis-era program that helped to restart the credit markets.

That program has so far been a success, drawing $10 billion in fees for the FDIC and allowing banks to issue more than $300 billion of low-cost debt.

GMAC sold bonds this month without federal backing for the first time since the crisis. But the company is paying a steep 8% yield on those bonds, which the panel noted will weigh on its finances.

What’s more, GMAC will have to repeat the feat many times to have any hope of standing on its own two feet. The company has $59 billion of debt maturing over the next three years, the Congressional Oversight Panel said. 

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President Obama was stumping once again Tuesday for his plan to reimburse homeowners who invest in energy efficiency and create jobs.

But the president’s plan offered less money than had been previously hoped.

‘It’s going to be politically difficult to get this done," Obama said at a speech at Savannah Technical College in Georgia. "But it’s the right thing to do."

The plan, officially known as Home Star, would give rebates of 50% up to $3,000 for energy saving purchases like new appliances, furnaces, or insulation.

Consumers would get the rebate from a store, contractor, or utility.

It would also offer a larger rebate for homeowners who performed a more comprehensive energy audit of their home. Under that plan, homeowners could be reimbursed for up to half the cost of hiring contractors to do things like add insulation, swap out old appliances, and caulk leaky windows and doors.

Rebates depend on a home’s energy savings. Cut energy use by 20% and homeowners could get back half the money they shell out, up to $3,000. Homeowners who cut more than that might get up to $8,000, depending on how much they cut, according to people familiar with the plan.

A typical home energy audit and retrofit costs $5,000 to $8,000, and generally shaves 20%-40% off the monthly energy bills.

Unlike the Energy Department’s Weatherization program, which is targeted to low-income people and has been criticized for taking too long to get going, this plan would be available to everyone.

The $8,000 rebate is less than the $12,000 proponents originally wanted, and the $6 billion proposed for the program is less than the $10 billion originally hoped for creditreport.

Nonetheless, environmentalists praised the idea.

"Even the most basic upgrade puts money in our pockets, puts Americans back to work and puts energy waste on the run," Lane Burt, manager of Building Energy Policy at the Natural Resources Defense Council, said in a statement. "It’s a triple play on a more efficient future."

The program, dubbed "cash for caulkers" by some, has been touted by the president for months. It even won a mention in his State of the Union Address.

But whether it becomes reality is far from certain.

Congressional Democrats are also behind the idea and have said it is a part of their larger job creation strategy. But it was not included in a recent jobs bill, which focused more on extending current tax breaks rather than enacting new programs.

And it faces likely opposition from lawmakers concerned about rising government spending.

"Democratic leaders in Congress will still need to test the level of support for ‘cash for caulker’ programs relative to other jobs priorities," Whitney Stanco, an energy policy analyst at the brokerage firm Concept Capital, said in an e-mail.

The plan could appear in another jobs bill, or in separate energy legislation expected later this year.  

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Federal Reserve Chairman Ben S. Bernanke sought to defuse congressional efforts to audit monetary policy by backing the release of more information on emergency aid to investment banks and corporations.

The Fed will support legislation to let government auditors probe six temporary programs created to combat the financial crisis such as the Primary Dealer Credit Facility, Bernanke said yesterday in House testimony. While he would support the delayed release of names of firms getting aid from those programs, he said banks borrowing through the longstanding discount window must be allowed to remain anonymous.

Bernanke’s move toward greater openness may not dissuade lawmakers who want the Fed to disclose more information about the Fed’s lending and policy decisions. Lawmakers are responding to public anger over the Fed’s role in the $182.3 billion bailout of American International Group Inc.

“You’ve certainly seen changes for more transparency in the past 18 months,” said Representative Scott Garrett, a New Jersey Republican. “But I still support the legislation and I think the majority of the House still does as well.”

Representative Ron Paul won House passage in December of broader audits than Bernanke advocates. House members “signed on to the bill because there has been a public outcry, and this has given them a chance to express themselves and identify with that position,” Paul said in an interview yesterday.

Bernanke yesterday offered “full transparency” on the emergency programs, including revealing the names of borrowers.

Lehman Collapse

Most of the programs were created in response to the Bear Stearns Cos. near-collapse and the bankruptcy of Lehman Brothers Holdings Inc. and were closed by the Fed as of Feb. 1 because of improvements in financial markets. They include facilities backing investment banks, companies issuing commercial paper and money-market mutual funds. Loans outstanding under the programs peaked at a combined $930.1 billion and stood at $50.1 billion as of last week.

The Term Asset-Backed Securities Loan Facility, designed to spur consumer and business lending, closes June 30.

“He is definitely trying to defuse the Ron Paul issue,” said Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc., which oversees $37.4 billion in assets. “The best he can do at the moment is to play more offense than defense.”

The openness can’t apply to the Fed’s discount window, used by banks facing temporary shortages of cash, Bernanke said.

Role in Panics

Borrowers would be reluctant to use the window if they knew their names would become known, and that would “intensify the crisis or panic, and therefore the whole purpose of the discount window to try to eliminate financial panics would be severely damaged,” Bernanke said during the hearing under questioning from Representative Michele Bachmann, a Minnesota Republican.

The proposed law to allow audits of interest-rate decisions could have “bad effects on markets” because it could create the perception that the central bank is subject to political pressure, Bernanke said make quick cash.

Telling the public more about the operations of the central bank was one of the goals Bernanke listed for his second term when he was sworn in on Feb. 3. He pledged to “ensure maximum transparency” without compromising the “ability to conduct policy in the public interest.”

The Senate confirmed Bernanke for a second four-year term by a 70-30 vote last month, the most opposition in history for a Fed chief. Today Bernanke, 56, appears before the Senate Banking Committee to deliver his monetary policy report.

Senate Opposition

Opposition in the Senate to Paul’s audit measure was likely to doom the populist cause after it passed in the House Dec. 11, Gregory R. Valliere, a chief strategist at Potomac Research Group in Washington, said earlier this month.

“I still think the large majority will stick with me,” Paul said yesterday.

Vermont Independent Bernard Sanders, the measure’s main backer in the Senate, has 32 co-sponsors for a version of Paul’s audit provision, short of the 60 votes it will probably need to overcome procedural hurdles.

Bernanke “indicated the need for more transparency than before and a willingness to work with Congress,” Alabama Representative Spencer Bachus, the senior Republican on the House panel, said in an interview. “I really want to sit down with him.”

Bernanke’s comments were part of testimony in which the Fed chief said the U.S. economy is in a “nascent” recovery that still requires low interest rates to encourage demand by consumers and businesses once federal stimulus expires.

Low Inflation

Bernanke said slack labor markets and low inflation will allow the Federal Open Market Committee to keep the benchmark lending rate, which has been in a range of zero to 0.25 percent for more than a year, low “for an extended period.” He said the Fed will need to start tightening policy “at some point.”

The central bank hasn’t dropped its opposition to revealing data on borrowers through the Freedom of Information Act, which requires federal agencies to respond to public requests for government documents within 20 days. Fed spokeswoman Barbara Hagenbaugh declined to comment.

The Fed is appealing a U.S. district judge’s August 2009 order compelling it to release names of banks that took emergency loans during the 2007-2008 financial crisis. The suit was brought under the FOIA by New York-based Bloomberg LP, the parent company of Bloomberg News.

“Chairman Bernanke’s testimony is consistent with our position in the litigation,” said Paul Saltzman, general counsel for The Clearing House Association LLP, a trade group for the largest U.S. banks that joined the Fed in fighting Bloomberg’s lawsuit.

Banks have counted on confidentiality when borrowing from the Fed — and if those rules are to change, “we believe that Congress, working with the Fed, is best situated to address disclosure issues,” Saltzman said.

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