SDNY COURTHOUSE, July 28 – The
Federal Reserve asked a straightforward question of the
company seeking to acquire Green Dot Bank: how do you
intend to use artificial intelligence, and what is your AI
policy? Fair Finance Watch and Inner City Press had
challenged the merger, and so were supposed to be sent a
copy.
CommerceOne Financial Corporation answered,
but withholding. Inner City Press submitted a Freedom of
Information Act request.
The Federal Reserve has now withheld
the entire answer from the public, in full, under a FOIA
exemption meant for trade secrets. The redacted
response is part of CommerceOne's Third Additional
Information filing in its pending application to become
the top-level holding company overseeing both CommerceOne
Bank and Green Dot Bank, doing business as Bonneville
Bank, a Utah-chartered institution. Inner City Press
requested the filing under the Freedom of Information Act;
the Board's July 28 response released most of the document
with redactions, but Question 1 — the AI governance
question — comes back entirely blacked out. Not a sentence
survives.
That is the wrong answer to withhold
completely, and not simply because Inner City Press asked
for it. No federal banking regulator, including the
Federal Reserve itself, has settled a definitive framework
for how insured depository institutions should govern
their use of artificial intelligence — not in consumer
lending, not in payments processing, not in the kind of
combined bank-and-payments operation this merger would
create. That is precisely the moment the public most needs
to see what one of the largest pending bank acquisitions
in the country is deciding to do on its own, because there
is no rulebook yet against which to check it. An
institution's internal AI policy is not a pricing
algorithm or a customer list; it is closer to a compliance
framework, and disclosing it does not hand a competitor
anything it doesn't already face in the same regulatory
void. The same filing shows the Board pressing
CommerceOne on how the resulting board of directors and
staff would have "sufficient knowledge and understanding
of the payments business line to properly oversee it" — to
which CommerceOne's answer, visible in the unredacted
portion, is candid: its current board "is not filled with
experts in the businesses in which CommerceOne currently
operates," and its argument for adequacy rests instead on
directors' general ability to "effectively challenge"
management, not subject-matter expertise in payments or
banking. Whatever one makes of that answer, at least it's
an answer the public can read and judge. The AI governance
question got no such chance.
Inner City Press has appealed, asking
the Board to release the substance of CommerceOne's AI
policy response, to reconsider redactions concerning
remediation of previously identified compliance issues at
Green Dot Bank — which bear on the statutory
managerial-resources factor, not on any competitive secret
— and to account for the 273 total pages withheld in their
entirety, rather than accept a blanket claim that none of
it is fit for public view. This amid Inner City Press'
FOIA lawsuit against the Fed for withholding an entire
question letter it send to high cost lender Enova. On
that, only after the filing of the FOIA lawsuit and a
conference after which the Fed was ordered to submitted
its fully redacted Enova letter to the judge for review,
the Fed belated unredacted a few lines. Too little, too
late - filing a FOIA lawsuit should not have been
necessary.
Update, September 19: CommerceOne has done
it again. Two months after the Federal Reserve withheld
CommerceOne's entire answer on AI governance in its Green
Dot Bank acquisition — 273 pages redacted in full, still
under appeal — the company has submitted a new
confidential filing whose public version contains nothing
at all. Three slides, covering Green Dot Bank's senior
management, operations, and risk and compliance
organizational charts, each survive in the public record
as a bare title and nothing else — no names, no reporting
lines, no structure of any kind. The pattern is not
confined to this one application. Since February 2026, the
Federal Reserve has fully redacted its own
additional-information letter to Enova International in a
separate pending application. Only after Fair Finance
Watch filed a FOIA lawsuit did the Board release minimal
unredactions — not nearly enough, and that case continues
in the Southern District of New York. Now this. Across two
unrelated applications, the same institutional reflex
appears: withhold first, litigate before disclosing
anything, and even then disclose as little as possible.
Fair Finance Watch and Inner City Press have filed a new
FOIA request arguing that who will run a bank's
management, operations, and risk functions is not a
competitive secret — it is exactly the
managerial-resources information the Federal Reserve's own
statutory review exists to test in public — and that it
should be released in full, immediately, without requiring
another round of litigation to accomplish what should have
been a straightforward application of Exemption 4's actual
standard. Watch this site.
