[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2004 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
12
Parts 300 to 499
Revised as of January 1, 2004
Banks and Banking
Containing a codification of documents of general
applicability and future effect
As of January 1, 2004
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2004
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter III--Federal Deposit Insurance Corporation 3
Chapter IV--Export-Import Bank of the United States 483
Finding Aids:
Table of CFR Titles and Chapters........................ 559
Alphabetical List of Agencies Appearing in the CFR...... 577
List of CFR Sections Affected........................... 587
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----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 12 CFR 303.0 refers
to title 12, part 303,
section 0.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
regulation. Each title is divided into chapters which usually bear the
name of the issuing agency. Each chapter is further subdivided into
parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
volume.
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EFFECTIVE AND EXPIRATION DATES
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
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1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate
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Sections Affected'' is published at the end of each CFR volume.
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A subject index to the Code of Federal Regulations is contained in a
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the revision dates of the 50 CFR titles.
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[[Page vii]]
The Office of the Federal Register also offers a free service on the
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Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 2004.
[[Page ix]]
THIS TITLE
Title 12--Banks and Banking is composed of seven volumes. The parts
in these volumes are arranged in the following order: parts 1-199, 200-
219, 220-299, 300-499, 500-599, part 600-899, and 900-end. The first
volume containing parts 1-199 is comprised of chapter I--Comptroller of
the Currency, Department of the Treasury. The second and third volumes
containing parts 200-299 are comprised of chapter II--Federal Reserve
System. The fourth volume containing parts 300-499 is comprised of
chapter III--Federal Deposit Insurance Corporation and chapter IV--
Export-Import Bank of the United States. The fifth volume containing
parts 500-599 is comprised of chapter V--Office of Thrift Supervision,
Department of the Treasury. The sixth volume containing parts 600-899 is
comprised of chapter VI--Farm Credit Administration, chapter VII--
National Credit Union Administration, chapter VIII--Federal Financing
Bank. The seventh volume containing part 900-end is comprised of chapter
IX--Federal Housing Finance Board, chapter XI--Federal Financial
Institutions Examination Council, chapter XIV--Farm Credit System
Insurance Corporation, chapter XV--Department of the Treasury, chapter
XVII--Office of Federal Housing Enterprise Oversight, Department of
Housing and Urban Development and chapter XVIII--Community Development
Financial Institutions Fund, Department of the Treasury. The contents of
these volumes represent all of the current regulations codified under
this title of the CFR as of January 1, 2004.
[[Page x]]
[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains parts 300 to 499)
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Part
chapter iii--Federal Deposit Insurance Corporation.......... 303
chapter iv--Export-Import Bank of the United States......... 400
[[Page 3]]
CHAPTER III--FEDERAL DEPOSIT INSURANCE CORPORATION
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SUBCHAPTER A--PROCEDURE AND RULES OF PRACTICE
Part Page
300-302 [Reserved]
303 Filing procedures........................... 5
304 Forms, instructions and reports............. 48
305-306 [Reserved]
307 Notification of changes of insured status... 49
308 Rules of practice and procedure............. 50
309 Disclosure of information................... 132
310 Privacy Act regulations..................... 145
311 Rules governing public observation of
meetings of the Corporation's Board of
Directors............................... 150
312 Assessment of fees upon entrance to or exit
from the Bank Insurance Fund or the
Savings Association Insurance Fund...... 155
313 Procedures for corporate debt collection.... 160
SUBCHAPTER B--REGULATIONS AND STATEMENTS OF GENERAL POLICY
323 Appraisals.................................. 179
324 [Reserved]
325 Capital maintenance......................... 183
326 Minimum security devices and procedures and
Bank Secrecy Act compliance............. 238
327 Assessments................................. 240
328 Advertisement of membership................. 258
329 Interest on deposits........................ 262
330 Deposit insurance coverage.................. 265
331 [Reserved]
332 Privacy of consumer financial information... 279
333 Extension of corporate powers............... 296
334 [Reserved]
335 Securities of nonmember insured banks....... 298
336 FDIC employees.............................. 304
337 Unsafe and unsound banking practices........ 308
338 Fair housing................................ 314
[[Page 4]]
339 Loans in areas having special flood hazards. 317
340 Restrictions on sale of assets by the
Federal Deposit Insurance Corporation... 322
341 Registration of securities transfer agents.. 324
342 [Reserved]
343 Consumer protection in sales of insurance... 326
344 Recordkeeping and confirmation requirements
for securities transactions............. 330
345 Community reinvestment...................... 338
346 Disclosure and reporting of CRA-related
agreements.............................. 356
347 International banking....................... 369
348 Management official interlocks.............. 391
349 Reports and public disclosure of
indebtedness of executive officers and
principal shareholders to a State
nonmember bank and its correspondent
banks................................... 396
350 Disclosure of financial and other
information by FDIC-insured State
nonmember banks......................... 398
351 [Reserved]
352 Nondiscrimination on the basis of handicap.. 401
353 Suspicious activity reports................. 405
357 Determination of economically depressed
regions................................. 408
359 Golden parachute and indemnification
payments................................ 408
360 Resolution and receivership rules........... 415
361 Minority and Women Outreach Program
Contracting............................. 421
362 Activities of insured State banks and
insured savings associations............ 422
363 Annual independent audits and reporting
requirements............................ 444
364 Standards for Safety and Soundness.......... 453
365 Real Estate Lending Standards............... 458
366 Minimum standards of integrity and fitness
for an FDIC contractor.................. 463
367 Suspension and exclusion of contractor and
termination of contracts................ 467
368 Government securities sales practices....... 476
369 Prohibition against use of interstate
branches primarily for deposit
production.............................. 479
[[Page 5]]
SUBCHAPTER A_PROCEDURE AND RULES OF PRACTICE
PARTS 300-302 [RESERVED]
PART 303_FILING PROCEDURES--Table of Contents
Sec.
303.0 Scope.
Subpart A_Rules of General Applicability
303.1 Scope.
303.2 Definitions.
303.3 General filing procedures.
303.4 Computation of time.
303.5 Effect of Community Reinvestment Act performance on filings.
303.6 Investigations and examinations.
303.7 Public notice requirements.
303.8 Public access to filing.
303.9 Comments.
303.10 Hearings and other meetings.
303.11 Decisions.
303.12 Waivers.
303.13 [Reserved]
303.14 Being ``engaged in the business of receiving deposits other than
trust funds.''
303.15 Certain limited liability companies deemed incorporated under
State law.
303.16-303.19 [Reserved]
Subpart B_Deposit Insurance
303.20 Scope.
303.21 Filing procedures.
303.22 Processing.
303.23 Public notice requirements.
303.24 Application for deposit insurance for an interim institution.
303.25 Continuation of deposit insurance upon withdrawing from
membership in the Federal Reserve System.
303.26-303.39 [Reserved]
Subpart C_Establishment and Relocation of Domestic Branches and Offices
303.40 Scope.
303.41 Definitions.
303.42 Filing procedures.
303.43 Processing.
303.44 Public notice requirements.
303.45 Special provisions.
303.46-303.59 [Reserved]
Subpart D_Merger Transactions
303.60 Scope.
303.61 Definitions.
303.62 Transactions requiring prior approval.
303.63 Filing procedures.
303.64 Processing.
303.65 Public notice requirements.
303.66-303.79 [Reserved]
Subpart E_Change in Bank Control
303.80 Scope.
303.81 Definitions.
303.82 Transactions requiring prior notice.
303.83 Transactions not requiring prior notice.
303.84 Filing procedures.
303.85 Processing.
303.86 Public notice requirements.
303.87-303.99 [Reserved]
Subpart F_ Change of Director or Senior Executive Officer
303.100 Scope.
303.101 Definitions.
303.102 Filing procedures and waiver of prior notice.
303.103 Processing.
303.104-303.119 [Reserved]
Subpart G_Activities of Insured State Banks
303.120 Scope.
303.121 Filing procedures.
303.122 Processing.
303.123-303.139 [Reserved]
Subpart H-Activities of Insured Savings Associations
303.140 Scope.
303.141 Filing procedures.
303.142 Processing.
303.143-303.159 [Reserved]
Subpart I_Mutual-to-Stock Conversions
303.160 Scope.
303.161 Filing procedures.
303.162 Waiver from compliance.
303.163 Processing.
303.164-303.179 [Reserved]
Subpart J_International Banking
303.180 Scope.
303.181 Definitions.
303.182 Establishing, moving or closing a foreign branch of a state
nonmember bank; Sec. 347.103.
303.183 Investmentby insured state nonmember banks in foreign
organizations; Sec. 347.108.
303.184 Moving an insured branch of a foreign bank.
303.185 Merger transactions involving foreign banks or foreign
organizations.
303.186 Exemptions from insurance requirement for a state branch of a
foreign bank; Sec. 347.206.
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303.187 Approval for an insured state branch of a foreign bank to
conduct activities not permissible for federal branches; Sec.
347.213
303.188-303.199 [Reserved]
Subpart K_Prompt Corrective Action
303.200 Scope.
303.201 Filing procedures.
303.202 Processing.
303.203 Applications for capital distribution.
303.204 Applicationsfor acquisitions, branching, and new lines of
business.
303.205 Applications for bonuses and increased compensation for senior
executive officers.
303.206 Application for payment of principal or interest on subordinated
debt.
303.207 Restricted activities for critically undercapitalized
institutions.
303.208-303.219 [Reserved]
Subpart L_Section 19 of the FDI Act (Consent to Service of Persons
Convicted of Certain Criminal Offenses)
303.220 Scope.
303.221 Filing procedures.
303.222 Service at another insured depository institution.
303.223 Applicant's right to hearing following denial.
303.224-303.239 [Reserved]
Subpart M_Other Filings
303.240 General.
303.241 Reduce or retire capital stock or capital debt instruments.
303.242 Exercise of trust powers.
303.243 Brokered deposit waivers.
303.244 Golden parachute and severance plan payments.
303.245 Waiver of liability for commonly controlled depository
institutions.
303.246 Insurance fund conversions.
303.247 Conversion with diminution of capital.
303.248 Continue or resume status as an insured institution following
termination under section 8 of the FDI Act.
303.249 Truth in Lending Act--Relief from reimbursement.
303.250 Management official interlocks.
303.251 Modification of conditions.
303.252 Extension of time.
303.253-303.259 [Reserved]
Subpart N [Reserved]
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818, 1819,
(Seventh and Tenth), 1820, 1823, 1828, 1831e, 1831p-l, 1835a, 3104,
3105, 3108; 3207; 15 U.S.C. 1601-1607.
Source: 67 FR 79247, Dec. 27, 2002, unless otherwise noted.
Sec. 303.0 Scope.
(a) This part describes the procedures to be followed by both the
FDIC and applicants with respect to applications, requests, or notices
(filings) required to be filed by statute or regulation. Additional
details concerning processing are explained in related FDIC statements
of policy.
(b) Additional application procedures may be found in the following
FDIC regulations:
(1) 12 CFR part 327--Assessments (Request for review of assessment
risk classification);
(2) 12 CFR part 328--Advertisement of Membership (Application for
temporary waiver of advertising requirements);
(3) 12 CFR part 345--Community Reinvestment (CRA strategic plans and
requests for designation as a wholesale or limited purpose institution);
Subpart A_Rules of General Applicability
Sec. 303.1 Scope.
Subpart A prescribes the general procedures for submitting filings
to the FDIC which are required by statute or regulation. This subpart
also prescribes the procedures to be followed by the FDIC, applicants
and interested parties during the process of considering a filing,
including public notice and comment. This subpart explains the
availability of expedited processing for eligible depository
institutions (defined in Sec. 303.2(r)). Certain terms used throughout
this part are also defined in this subpart.
Sec. 303.2 Definitions.
Except as modified or otherwise defined in this part, terms used in
this part that are defined in the Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) have the meanings provided in the Federal Deposit
Insurance Act. Additional definitions of terms used in this part are as
follows:
(a) Act or FDI Act means the Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.).
(b) Adjusted part 325 total assets means adjusted 12 CFR part 325
total assets as
[[Page 7]]
calculated and reflected in the FDIC's Report of Examination.
(c) Adverse comment means any objection, protest, or other adverse
written statement submitted by an interested party relative to a filing.
The term adverse comment shall not include any comment concerning the
Community Reinvestment Act (CRA), fair lending, consumer protection, or
civil rights that the appropriate regional director or designee
determines to be frivolous (for example, raising issues between the
commenter and the applicant that have been resolved). The term adverse
comment also shall not include any other comment that the appropriate
regional director or designee determines to be frivolous (for example, a
non-substantive comment submitted primarily as a means of delaying
action on the filing).
(d) Amended order to pay means an order to forfeit and pay civil
money penalties, the amount of which has been changed from that assessed
in the original notice of assessment of civil money penalties.
(e) Applicant means a person or entity that submits a filing to the
FDIC.
(f) Application means a submission requesting FDIC approval to
engage in various corporate activities and transactions.
(g) Appropriate FDIC region and appropriate regional director mean,
respectively, the FDIC region and the FDIC regional director which the
FDIC designates as follows:
(1) When an institution or proposed institution that is the subject
of a filing or administrative action is not and will not be part of a
group of related institutions, the appropriate FDIC region for the
institution and any individual associated with the institution is the
FDIC region in which the institution or proposed institution is or will
be located, and the appropriate regional director is the regional
director for that region; or
(2) When an institution or proposed institution that is the subject
of a filing or administrative action is or will be part of a group of
related institutions, the appropriate FDIC region for the institution
and any individual associated with the institution is the FDIC region in
which the group's major policy and decision makers are located, or any
other region the FDIC designates on a case-by-case basis, and the
appropriate regional director is the regional director for that region.
(h) Associate director means any associate director of the Division
of Supervision and Consumer Protection (DSC) or, in the event such title
become obsolete, any official of equivalent authority within the
division.
(i) Book capital means total equity capital which is comprised of
perpetual preferred stock, common stock, surplus, undivided profits and
capital reserves, as those items are defined in the instructions of the
Federal Financial Institutions Examination Council (FFIEC) for the
preparation of Consolidated Reports of Condition and Income for insured
banks.
(j) Comment means any written statement of fact or opinion submitted
by an interested party relative to a filing.
(k) Corporation or FDIC means the Federal Deposit Insurance
Corporation.
(l) CRA protest means any adverse comment from the public related to
a pending filing which raises a negative issue relative to the Community
Reinvestment Act (CRA) (12 U.S.C. 2901 et seq.), whether or not it is
labeled a protest and whether or not a hearing is requested.
(m) Deputy director means the deputy director of the Division of
Supervision and Consumer Protection (DSC) or, in the event such title
become obsolete, any official of equivalent or higher authority within
the division.
(n) Deputy regional director means any deputy regional director of
the Division of Supervision and Consumer Protection (DSC) or, in the
event such title become obsolete, any official of equivalent authority
within the same FDIC region of DSC.
(o) Appropriate FDIC office means the office designated by the
appropriate regional director or designee.
(p) DSC means the Division of Supervision and Consumer Protection
or, in the event the Division of Supervision and Consumer Protection is
reorganized, such successor division.
(q) Director means the Director of the Division of Supervision and
Consumer Protection (DSC) or, in the event such title become obsolete,
any official of
[[Page 8]]
equivalent or higher authority within the division.
(r) Eligible depository institution means a depository institution
that meets the following criteria:
(1) Received an FDIC-assigned composite rating of 1 or 2 under the
Uniform Financial Institutions Rating System (UFIRS) as a result of its
most recent federal or state examination;
(2) Received a satisfactory or better Community Reinvestment Act
(CRA) rating from its primary federal regulator at its most recent
examination, if the depository institution is subject to examination
under part 345 of this chapter;
(3) Received a compliance rating of 1 or 2 from its primary federal
regulator at its most recent examination;
(4) Is well-capitalized as defined in the appropriate capital
regulation and guidance of the institution's primary federal regulator;
and
(5) Is not subject to a cease and desist order, consent order,
prompt corrective action directive, written agreement, memorandum of
understanding, or other administrative agreement with its primary
federal regulator or chartering authority.
(s) Filing means an application, notice or request submitted to the
FDIC under this part.
(t) General Counsel means the head of the Legal Division of the FDIC
or any official within the Legal Division exercising equivalent
authority for purposes of this part.
(u) Insider means a person who is or is proposed to be a director,
officer, organizer, or incorporator of an applicant; a shareholder who
directly or indirectly controls 10 percent or more of any class of the
applicant's outstanding voting stock; or the associates or interests of
any such person.
(v) Institution-affiliated party shall have the same meaning as
provided in section 3(u) of the Act (12 U.S.C. 1813(u)).
(w) NEPA means the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.).
(x) NHPA means the National Historic Preservation Act of 1966 (16
U.S.C. 470 et seq.).
(y) Notice means a submission notifying the FDIC that a depository
institution intends to engage in or has commenced certain corporate
activities or transactions.
(z) Notice to primary regulator means the notice described in
section 8(a)(2)(A) of the Act concerning termination of deposit
insurance (12 U.S.C. 1818(a)(2)(A)).
(aa) Regional counsel means a regional counsel of the Legal Division
or, in the event the title becomes obsolete, any official of equivalent
authority within the Legal Division.
(bb) Regional director means any regional director in the Division
of Supervision and Consumer Protection (DSC), or in the event such title
become obsolete, any official of equivalent authority within the
division.
(cc) [Reserved]
(dd) Standard conditions means the conditions that the FDIC may
impose as a routine matter when approving a filing, whether or not the
applicant has agreed to their inclusion. The following conditions, or
variations thereof, are standard conditions:
(1) That the applicant has obtained all necessary and final
approvals from the appropriate federal or state authority or other
appropriate authority;
(2) That if the transaction does not take effect within a specified
time period, or unless, in the meantime, a request for an extension of
time has been approved, the consent granted shall expire at the end of
the specified time period;
(3) That until the conditional commitment of the FDIC becomes
effective, the FDIC retains the right to alter, suspend or withdraw its
commitment should any interim development be deemed to warrant such
action; and
(4) In the case of a merger transaction (as defined in [para]
303.61(a) of this part), including a corporate reorganization, that the
proposed transaction not be consummated before the 30th calendar day (or
shorter time period as may be prescribed by the FDIC with the
concurrence of the Attorney General) after the date of the order
approving the merger transaction.
(ee) Tier 1 capital shall have the same meaning as provided in
[para] 325.2(v) of this chapter (12 CFR 325.2(v)).
[[Page 9]]
(ff) Total assets shall have the same meaning as provided in [para]
325.2(x) of this chapter (12 CFR 325.2(x)).
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50459, Aug. 21, 2003]
Sec. 303.3 General filing procedures.
Unless stated otherwise, filings should be submitted to the
appropriate FDIC office. Forms and instructions for submitting filings
may be obtained from any FDIC regional director. If no form is
prescribed, the filing should be in writing; be signed by the applicant
or a duly authorized agent; and contain a concise statement of the
action requested. For specific filing and content requirements, consult
the appropriate subparts of this part. The FDIC may require the
applicant to submit additional information.
Sec. 303.4 Computation of time.
For purposes of this part, and except as otherwise specifically
provided, the FDIC begins computing the relevant period on the day after
an event occurs (e.g., the day after a substantially complete filing is
received by the FDIC or the day after publication begins) through the
last day of the relevant period. When the last day is a Saturday, Sunday
or federal holiday, the period runs until the end of the next business
day.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50459, Aug. 21, 2003]
Sec. 303.5 Effect of Community Reinvestment Act performance on filings.
Among other factors, the FDIC takes into account the record of
performance under the Community Reinvestment Act (CRA) of each applicant
in considering a filing for approval of:
(a) The establishment of a domestic branch;
(b) The relocation of the bank's main office or a domestic branch;
(c) The relocation of an insured branch of a foreign bank;
(d) A transaction subject to the Bank Merger Act; and
(e) Deposit insurance.
Sec. 303.6 Investigations and examinations.
The FDIC may examine or investigate and evaluate facts related to
any filing under this chapter to the extent necessary to reach an
informed decision and take any action necessary or appropriate under the
circumstances.
Sec. 303.7 Public notice requirements.
(a) General. The public must be provided with prior notice of a
filing to establish a domestic branch, relocate a domestic branch or the
main office, relocate an insured branch of a foreign bank, engage in a
merger transaction, initiate a change of control transaction, or request
deposit insurance. The public has the right to comment on, or to
protest, these types of proposed transactions during the relevant
comment period. In order to fully apprise the public of this right, an
applicant shall publish a public notice of its filing in a newspaper of
general circulation. For specific publication requirements, consult
subparts B (Deposit Insurance), C (Branches and Relocations), D (Merger
Transactions), E (Change in Bank Control), and J (International Banking)
of this part.
(b) Confirmation of publication. The applicant shall mail or
otherwise deliver a copy of the newspaper notice to the appropriate FDIC
office as part of its filing, or, if a copy is not available at the time
of filing, promptly after publication.
(c) Content of notice. (1) The public notice referred to in
paragraph (a) of this section shall consist of the following:
(i) Name and address of the applicant(s). In the case of an
application for deposit insurance for a de novo bank, include the names
of all organizers or incorporators. In the case of an application to
establish a branch, include the location of the proposed branch or, in
the case of an application to relocate a branch or main office, include
the current and proposed address of the office. In the case of a merger
application, include the names of all parties to the transaction. In the
case of a notice of acquisition of control, include the name(s) of the
acquiring parties. In the
[[Page 10]]
case of an application to relocate an insured branch of a foreign bank,
include the current and proposed address of the branch.
(ii) Type of filing being made;
(iii) Name of the depository institution(s) that is the subject
matter of the filing;
(iv) That the public may submit comments to the appropriate FDIC
regional director;
(v) The address of the appropriate FDIC office where comments may be
sent (the same location where the filing will be made);
(vi) The closing date of the public comment period as specified in
the appropriate subpart; and
(vii) That the nonconfidential portions of the application are on
file in the appropriate FDIC office and are available for public
inspection during regular business hours; photocopies of the
nonconfidential portion of the application file will be made available
upon request.
(2) The requirements of paragraphs (c)(1)(iv) through (vii) of this
section may be satisfied through use of the following notice:
Any person wishing to comment on this application may file his or her
comments in writing with the regional director of the Federal Deposit
Insurance Corporation at the appropriate FDIC office [insert address of
office] not later than [insert closing date of the public comment period
specified in the appropriate subpart of part 303]. The non-confidential
portions of the application are on file at the appropriate FDIC office
and are available for public inspection during regular business hours.
Photocopies of the nonconfidential portion of the application file will
be made available upon request.
(d) Multiple transactions. The FDIC may consider more than one
transaction, or a series of transactions, to be a single filing for
purposes of the publication requirements of this section. When
publishing a single public notice for multiple transactions, the
applicant shall explain in the public notice how the transactions are
related. The closing date of the comment period shall be the closing
date of the longest public comment period that applies to any of the
related transactions.
(e) Joint public notices. For a transaction subject to public notice
requirements by the FDIC and another federal or state banking authority,
the FDIC will accept publication of a single joint notice containing all
the information required by both the FDIC and the other federal agency
or state banking authority, provided that the notice states that
comments must be submitted to the appropriate FDIC office and, if
applicable, the other federal or state banking authority.
(f) Where public notice is required, the FDIC may determine on a
case-by-case basis that unusual circumstances surrounding a particular
filing warrant modification of the publication requirements.
Sec. 303.8 Public access to filing.
(a) General. For filings subject to a public notice requirement, any
person may inspect or request a copy of the non-confidential portions of
a filing (the public file) until 180 days following final disposition of
a filing. Following the 180-day period, non-confidential portions of an
application file will be made available in accordance with ' 303.8(c).
The public file generally consists of portions of the filing, supporting
data, supplementary information, and comments submitted by interested
persons (if any) to the extent that the documents have not been afforded
confidential treatment. To view or request photocopies of the public
file, an oral or written request should be submitted to the appropriate
FDIC office. The public file will be produced for review not more than
one business day after receipt by the appropriate FDIC office of the
request (either written or oral) to see the file. The FDIC may impose a
fee for photocopying in accordance with Sec. 309.5(f) of this chapter
at the rates the FDIC publishes annually in the Federal Register.
(b) Confidential treatment. (1) The applicant may request that
specific information be treated as confidential. The following
information generally is considered confidential:
(i) Personal information, the release of which would constitute a
clearly unwarranted invasion of privacy;
(ii) Commercial or financial information, the disclosure of which
could result in substantial competitive harm to the submitter; and
[[Page 11]]
(iii) Information, the disclosure of which could seriously affect
the financial condition of any depository institution.
(2) If an applicant requests confidential treatment for information
that the FDIC does not consider to be confidential, the FDIC may include
that information in the public file after notifying the applicant. On
its own initiative, the FDIC may determine that certain information
should be treated as confidential and withhold that information from the
public file.
(c) FOIA requests. A written request for information withheld from
the public file, or copies of the public file following closure of the
file 180 days after final disposition, should be submitted pursuant to
the Freedom of Information Act (5 U.S.C. 552) and part 309 of this
chapter to the FDIC, Attn: FOIA/Privacy Group, Legal Division, 550 17th
Street, NW., Washington, DC 20429.
Sec. 303.9 Comments.
(a) Submission of comments. For filings subject to a public notice
requirement, any person may submit comments to the appropriate FDIC
regional director during the comment period.
(b) Comment period--(1) General. Consult appropriate subparts of
this part for the comment period applicable to a particular filing.
(2) Extension. The FDIC may extend or reopen the comment period if:
(i) The applicant fails to file all required information on a timely
basis to permit review by the public or makes a request for confidential
treatment not granted by the FDIC that delays the public availability of
that information;
(ii) Any person requesting an extension of time satisfactorily
demonstrates to the FDIC that additional time is necessary to develop
factual information that the FDIC determines may materially affect the
application; or
(iii) The FDIC determines that other good cause exists.
(3) Solicitation of comments. Whenever appropriate, the appropriate
regional director may solicit comments from any person or institution
which might have an interest in or be affected by the pending filing.
(4) Applicant response. The FDIC will provide copies of all comments
received to the applicant and may give the applicant an opportunity to
respond.
Sec. 303.10 Hearings and other meetings.
(a) Matters covered. This section covers hearings and other
proceedings in connection with filings and determinations for or by:
(1) Deposit insurance by a proposed new depository institution or
operating non-insured institution;
(2) An insured state nonmember bank to establish a domestic branch
or to relocate a main office or domestic branch;
(3) Relocation of an insured branch of a foreign bank;
(4)(i) Merger transaction which requires the FDIC's prior approval
under the Bank Merger Act (12 U.S.C. 1828(c));
(ii) Except as otherwise expressly provided, the provisions of this
Sec. 303.10 shall not be applicable to any proposed merger transaction
which the FDIC Board of Directors determines must be acted upon
immediately to prevent the probable failure of one of the institutions
involved, or must be handled with expeditious action due to an existing
emergency condition, as permitted by the Bank Merger Act (12 U.S.C.
1828(c)(6));
(5) Nullification of a decision on a filing; and
(6) Any other purpose or matter which the FDIC Board of Directors in
its sole discretion deems appropriate.
(b) Hearing requests. (1) Any person may submit a written request
for a hearing on a filing:
(i) To the appropriate regional director before the end of the
comment period; or
(ii) To the appropriate regional director, pursuant to a notice to
nullify a decision on a filing issued pursuant to Sec. 303.11(g)(2)(i)
or (ii).
(2) The request must describe the nature of the issues or facts to be
presented and the reasons why written submissions would be insufficient
to make an adequate presentation of those issues or facts to the FDIC. A
person requesting a hearing shall simultaneously submit a copy of the
request to the applicant.
[[Page 12]]
(c) Action on a hearing request. The appropriate regional director,
after consultation with the Legal Division, may grant or deny a request
for a hearing and may limit the issues that he or she deems relevant or
material. The FDIC generally grants a hearing request only if it
determines that written submissions would be insufficient or that a
hearing otherwise would be in the public interest.
(d) Denial of a hearing request. If the appropriate regional
director, after consultation with the Legal Division, denies a hearing
request, he or she shall notify the person requesting the hearing of the
reason for the denial. A decision to deny a hearing request shall be a
final agency determination and is not appealable.
(e) FDIC procedures prior to the hearing--(1) Notice of hearing. The
FDIC shall issue a notice of hearing if it grants a request for a
hearing or orders a hearing because it is in the public interest. The
notice of hearing shall state the subject and date of the filing, the
time and place of the hearing, and the issues to be addressed. The FDIC
shall send a copy of the notice of hearing to the applicant, to the
person requesting the hearing, and to anyone else requesting a copy.
(2) The presiding officer shall be the regional director or designee
or such other person as may be named by the Board or the Director. The
presiding officer is responsible for conducting the hearing and
determining all procedural questions not governed by this section.
(f) Participation in the hearing. Any person who wishes to appear
(participant) shall notify the appropriate regional director of his or
her intent to participate in the hearing no later than 10 days from the
date that the FDIC issues the Notice of Hearing. At least 5 days before
the hearing, each participant shall submit to the appropriate regional
director, as well as to the applicant and any other person as required
by the FDIC, the names of witnesses, a statement describing the proposed
testimony of each witness, and one copy of each exhibit the participant
intends to present.
(g) Transcripts. The FDIC shall arrange for a hearing transcript.
The person requesting the hearing and the applicant each shall bear the
cost of one copy of the transcript for his or her use unless such cost
is waived by the presiding officer and incurred by the FDIC.
(h) Conduct of the hearing--(1) Presentations. Subject to the
rulings of the presiding officer, the applicant and participants may
make opening and closing statements and present and examine witnesses,
material, and data.
(2) Information submitted. Any person presenting material shall
furnish one copy to the FDIC, one copy to the applicant, and one copy to
each participant.
(3) Laws not applicable to hearings. The Administrative Procedure
Act (5 U.S.C. 551 et seq.), the Federal Rules of Evidence (28 U.S.C.
Appendix), the Federal Rules of Civil Procedure (28 U.S.C. Rule 1 et
seq.), and the FDIC's Rules of Practice and Procedure (12 CFR part 308)
do not govern hearings under this Sec. 303.10.
(i) Closing the hearing record. At the applicant's or any
participant's request, or at the FDIC's discretion, the FDIC may keep
the hearing record open for up to 10 days following the FDIC's receipt
of the transcript. The FDIC shall resume processing the filing after the
record closes.
(j) Disposition and notice thereof. The presiding officer shall make
a recommendation to the FDIC within 20 days following the date the
hearing and record on the proceeding are closed. The FDIC shall notify
the applicant and all participants of the final disposition of a filing
and shall provide a statement of the reasons for the final disposition.
(k) Computation of time. In computing periods of time under this
section, the provisions of Sec. 308.12 of the FDIC's Rules of Practice
and Procedure (12 CFR 308.12) shall apply.
(l) Informal proceedings. The FDIC may arrange for an informal
proceeding with an applicant and other interested parties in connection
with a filing, either upon receipt of a written request for such a
meeting made during the comment period, or upon the FDIC's own
initiative. No later than 10 days prior to an informal proceeding, the
appropriate regional director shall
[[Page 13]]
notify the applicant and each person who requested a hearing or oral
presentation of the date, time, and place of the proceeding. The
proceeding may assume any form, including a meeting with FDIC
representatives at which participants will be asked to present their
views orally. The regional director may hold separate meetings with each
of the participants.
(m) Authority retained by FDIC Board of Directors to modify
procedures. The FDIC Board of Directors may delegate authority by
resolution on a case-by-case basis to the presiding officer to adopt
different procedures in individual matters and on such terms and
conditions as the Board of Directors determines in its discretion. The
resolution shall be made available for public inspection and copying in
the Office of the General Counsel, Executive Secretary Section under the
Freedom of Information Act (5 U.S.C. 552(a)(2)).
Sec. 303.11 Decisions.
(a) General procedures. The FDIC may approve, conditionally approve,
deny, or not object to a filing after appropriate review and
consideration of the record. The FDIC will promptly notify the applicant
and any person who makes a written request of the final disposition of a
filing. If the FDIC denies a filing, the FDIC will immediately notify
the applicant in writing of the reasons for the denial.
(b) Authority retained by FDIC Board of Directors to modify
procedures. In acting on any filing under this part, the FDIC Board of
Directors may by resolution adopt procedures which differ from those
contained in this part when it deems it necessary or in the public
interest to do so. The resolution shall be made available for public
inspection and copying in the Office of the General Counsel, Executive
Secretary Section under the Freedom of Information Act (5 U.S.C.
552(a)(2)).
(c) Expedited processing. (1) A filing submitted by an eligible
depository institution as defined in Sec. 303.2(r) will receive
expedited processing as specified in the appropriate subparts of this
part unless the FDIC determines to remove the filing from expedited
processing for any of the reasons set forth in paragraph (c)(2) of this
section. Except for filings made pursuant to subpart J (International
Banking), expedited processing will not be available for any filing that
the appropriate regional director does not have delegated authority to
approve.
(2) Removal of filing from expedited processing. The FDIC may remove
a filing from expedited processing at any time prior to final
disposition if:
(i) For filings subject to public notice under Sec. 303.7, an
adverse comment is received that warrants additional investigation or
review;
(ii) For filings subject to evaluation of CRA performance under
Sec. 303.5, a CRA protest is received that warrants additional
investigation or review, or the appropriate regional director determines
that the filing presents a significant CRA or compliance concern;
(iii) For any filing, the appropriate regional director determines
that the filing presents a significant supervisory concern, or raises a
significant legal or policy issue; or
(iv) For any filing, the appropriate regional director determines
that other good cause exists for removal.
(3) For purposes of this section, a significant CRA concern
includes, but is not limited to, a determination by the appropriate
regional director that, although a depository institution may have an
institution-wide rating of satisfactory or better, a depository
institution's CRA rating is less than satisfactory in a state or multi-
state metropolitan statistical area, or a depository institution's CRA
performance is less than satisfactory in a metropolitan statistical area
as defined in 12 CFR 345.12 (MSA) or in the non-MSA portion of a state
in which it seeks to expand through approval of an application for a
deposit facility as defined in 12 U.S.C. 2902(3).
(4) If the FDIC determines that it is necessary to remove a filing
from expedited processing pursuant to paragraph (c)(2) of this section,
the FDIC promptly will provide the applicant with a written explanation
(d) Multiple transactions. If the FDIC is considering related
transactions, some or all of which have been granted expedited
processing, then the longest processing time for any of the related
[[Page 14]]
transactions shall govern for purposes of approval.
(e) Abandonment of filing. A filing must contain all information set
forth in the applicable subpart of this part. To the extent necessary to
evaluate a filing, the FDIC may require an applicant to provide
additional information. If information requested by the FDIC is not
provided within the time period specified by the agency, the FDIC may
deem the filing abandoned and shall provide written notification to the
applicant and any interested parties that submitted comments to the FDIC
that the file has been closed.
(f) Appeals and requests for reconsideration--(1) General. Appeal
procedures for a denial of a change in bank control (subpart E), change
in senior executive officer or board of directors (subpart F) or denial
of an application pursuant to section 19 of the FDI Act (subpart L) are
contained in 12 CFR part 308, subparts D, L, and M, respectively. For
all other filings covered by this chapter for which appeal procedures
are not provided by regulation or other written guidance, the procedures
specified in paragraphs (f) (2) and (3) of this section shall apply. A
decision to deny a request for a hearing is a final agency determination
and is not appealable.
(2) Filing procedures. Within 15 days of receipt of notice from the
FDIC that its filing has been denied, any applicant may file a request
for reconsideration with the appropriate regional director.
(3) Content of filing. A request for reconsideration must contain
the following information:
(i) A resolution of the board of directors of the applicant
authorizing filing of the request if the applicant is a corporation, or
a letter signed by the individual(s) filing the request if the applicant
is not a corporation;
(ii) Relevant, substantive information that for good cause was not
previously set forth in the filing; and
(iii) Specific reasons why the FDIC should reconsider its prior
decision.
(4)-(5) [Reserved]
(6) Processing. The FDIC will notify the applicant whether
reconsideration will be granted or denied within 15 days of receipt of a
request for reconsideration. If a request for reconsideration is granted
pursuant to Sec. 303.11(f), the FDIC will notify the applicant of the
final agency decision on such filing within 60 days of its receipt of
the request for reconsideration.
(g) Nullification, withdrawal, revocation, amendment, and suspension
of decisions on filings--(1) Grounds for action. Except as otherwise
provided by law or regulation, the FDIC may nullify, withdraw, revoke,
amend or suspend a decision on a filing if it becomes aware at anytime:
(i) Of any material misrepresentation or omission related to the
filing or of any material change in circumstance that occurred prior to
the consummation of the transaction or commencement of the activity
authorized by the decision on the filing; or
(ii) That the decision on the filing is contrary to law or
regulation or was granted due to clerical or administrative error.
(iii) Any person responsible for a material misrepresentation or
omission in a filing or supporting materials may be subject to an
enforcement action and other penalties, including criminal penalties
provided in Title 18 of the United States Code.
(2) Notice of intent and temporary order. (i) Except as provided in
Sec. 303.11(g)(2)(ii), before taking action under this Sec. 303.11(g),
the FDIC shall issue and serve on an applicant written notice of its
intent to take such action. A notice of intent to act on a filing shall
include:
(A) The reasons for the proposed action; and
(B) The date by which the applicant may file a written response with
the FDIC.
(ii) The FDIC may issue a temporary order on a decision on a filing
without providing an applicant a prior notice of intent if the FDIC
determines that:
(A) It is necessary to reevaluate the impact of a change in
circumstance prior to the consummation of the transaction or
commencement of the activity authorized by the decision on the filing;
or
(B) The activity authorized by the filing may pose a threat to the
interests of the depository institution's depositors or may threaten to
impair
[[Page 15]]
public confidence in the depository institution.
(iii) A temporary order shall provide the applicant with an
opportunity to make a written response in accordance with Sec.
303.11(g)(3) of this section.
(3) Response to notice of intent or temporary order. An applicant
may file a written response to a notice of intent or a temporary order
within 15 days from the date of service of the notice or temporary
order. The written response should include:
(i) An explanation of why the proposed action or temporary order is
not warranted; and
(ii)(A) Any other relevant information, mitigation circumstance,
documentation, or other evidence in support of the applicant's position.
An applicant may also request a hearing under Sec. 303.10.
(B) Failure by an applicant to file a written response with the FDIC
to a notice of intent or a temporary order within the specified time
period, shall constitute a waiver of the opportunity to respond and
shall constitute consent to a final order under this paragraph (g). The
FDIC shall consider any such response, if filed in a timely manner,
within 30 days of receiving the response.
(4) Effective date. All orders issued pursuant to this section shall
become effective immediately upon issuance unless otherwise stated
therein.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50459, Aug. 21, 2003]
Sec. 303.12 Waivers.
(a) The Board of Directors, of the FDIC (Board) may, for good cause
and to the extent permitted by statute, waiver the applicability of any
provision of this chapter.
(b) The provisions of this chapter may be suspended, revoked,
amended or waived for good cause shown, in whole or in part, at any time
by the Board, subject to the provisions of the Administrative Procedure
Act and the provisions of this chapter. Any provision of the rules may
be waived by the Board on its own motion or on petition if good cause
thereof is shown.
[68 FR 50459, Aug. 21, 2003]
Sec. Sec. 303.13 [Reserved]
Sec. 303.14 Being ``engaged in the business of receiving deposits
other than trust funds.''
(a) Except as provided in paragraphs (b), (c), and (d) of this
section, a depository institution shall be ``engaged in the business of
receiving deposits other than trust funds'' only if it maintains one or
more non-trust deposit accounts in the minimum aggregate amount of
$500,000.
(b) An applicant for federal deposit insurance under section 5 of
the FDI Act, 12 U.S.C. 1815(a), shall be deemed to be ``engaged in the
business of receiving deposits other than trust funds'' from the date
that the FDIC approves deposit insurance for the institution until one
year after it opens for business.
(c) Any depository institution that fails to satisfy the minimum
deposit standard specified in paragraph (a) of this section as of two
consecutive call report dates (i.e., March 31st, June 30th, September
30th, and December 31st) shall be subject to a determination by the FDIC
that the institution is not ``engaged in the business of receiving
deposits other than trust funds'' and to termination of its insured
status under section 8(p) of the FDI Act, 12 U.S.C. 1818(p). For
purposes of this paragraph, the first three call report dates after the
institution opens for business are excluded.
(d) Notwithstanding any failure by an insured depository institution
to satisfy the minimum deposit standard in paragraph (a) of this
section, the institution shall continue to be ``engaged in the business
of receiving deposits other than trust funds'' for purposes of section 3
of the FDI Act until the institution's insured status is terminated by
the FDIC pursuant to a proceeding under section 8(a) or section 8(p) of
the FDI Act. 12 U.S.C. 1818(a) or 1818(p).
Sec. 303.15 Certain limited liability companies deemed incorporated
under State law.
(a) For purposes of the definition of ``State bank'' in 12 U.S.C.
1813(a)(2) and this Chapter, a banking institution that is chartered as
a limited liability company (LLC) under the law of any
[[Page 16]]
State is deemed to be ``incorporated'' under the law of the State, if
(1) The institution is not subject to automatic termination,
dissolution, or suspension upon the happening of some event (including,
e.g., the death, disability, bankruptcy, expulsion, or withdrawal of an
owner of the institution), other than the passage of time;
(2) The exclusive authority to manage the institution is vested in a
board of managers or directors that is elected or appointed by the
owners, and that operates in substantially the same manner as, and has
substantially the same rights, powers, privileges, duties,
responsibilities, as a board of directors of a bank chartered as a
corporation in the State;
(3) Neither State law, nor the institution's operating agreement,
bylaws, or other organizational documents provide that an owner of the
institution is liable for the debts, liabilities, and obligations of the
institution in excess of the amount of the owner's investment; and
(4) Neither State law, nor the institution's operating agreement,
bylaws, or other organizational documents require the consent of any
other owner of the institution in order for an owner to transfer an
ownership interest in the institution, including voting rights.
(b) For purposes of the Federal Deposit Insurance Act and this
Chapter,
(1) Each of the terms ``stockholder'' and ``shareholder'' includes
an owner of any interest in a bank chartered as an LLC, including a
member or participant;
(2) The term ``director'' includes a manager or director of a bank
chartered as an LLC, or other person who has, with respect to such a
bank, authority substantially similar to that of a director of a
corporation;
(3) The term ``officer'' includes an officer of a bank chartered as
an LLC, or other person who has, with respect to such a bank, authority
substantially similar to that of an officer of a corporation; and
(4) Each of the terms ``voting stock,'' ``voting shares,'' and
``voting securities'' includes ownership interests in a bank chartered
as an LLC, as well as any certificates or other evidence of such
ownership interests.
[68 FR 7308, Feb. 13, 2003]
Sec. Sec. 303.16-303.19 [Reserved]
Subpart B_Deposit Insurance
Sec. 303.20 Scope.
This subpart sets forth the procedures for applying for deposit
insurance for a proposed depository institution or an operating
noninsured depository institution under section 5 of the FDI Act (12
U.S.C. 1815). It also sets forth the procedures for requesting
continuation of deposit insurance for a state-chartered bank withdrawing
from membership in the Federal Reserve System and for interim
institutions chartered to facilitate a merger transaction.
Sec. 303.21 Filing procedures.
(a) Applications for deposit insurance shall be filed with the
appropriate FDIC office. The relevant application forms and instructions
for applying for deposit insurance for an existing or proposed
depository institution may be obtained from any FDIC regional director.
(b) An application for deposit insurance for an interim depository
institution shall be filed and processed in accordance with the
procedures set forth in Sec. 303.24, subject to the provisions of Sec.
303.62(b)(2) regarding deposit insurance for interim institutions. An
interim institution is defined as a state- or federally-chartered
depository institution that does not operate independently but exists
solely as a vehicle to accomplish a merger transaction.
(c) A request for continuation of deposit insurance upon withdrawing
from membership in the Federal Reserve System shall be in letter form
and shall provide the information prescribed in Sec. 303.25.
Sec. 303.22 Processing.
(a) Expedited processing for proposed institutions. (1) An
application for deposit insurance for a proposed institution which will
be a subsidiary of an eligible depository institution as defined
[[Page 17]]
in Sec. 303.2(r) or an eligible holding company will be acknowledged in
writing by the FDIC and will receive expedited processing unless the
applicant is notified in writing to the contrary and provided with the
basis for that decision. An eligible holding company is defined as a
bank or thrift holding company that has consolidated assets of at least
$150 million or more; a BOPEC rating of at least ``2'' for bank holding
companies or an above average or ``A'' rating for thrift holding
companies; and at least 75 percent of its consolidated depository
institution assets comprised of eligible depository institutions. The
FDIC may remove an application from expedited processing for any of the
reasons set forth in Sec. 303.11(c)(2).
(2) Under expedited processing, the FDIC will take action on an
application within 60 days of receipt of a substantially complete
application or 5 days after the expiration of the comment period
described in Sec. 303.23, whichever is later. Final action may be
withheld until the FDIC has assurance that permission to organize the
proposed institution will be granted by the chartering authority.
Notwithstanding paragraph (a)(1) of this section, if the FDIC does not
act within the expedited processing period, it does not constitute an
automatic or default approval.
(b) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50459, Aug. 21, 2003]
Sec. 303.23 Public notice requirements.
(a) De novo institutions and operating noninsured institutions. The
applicant shall publish a notice as prescribed in Sec. 303.7 in a
newspaper of general circulation in the community in which the main
office of the depository institution is or will be located. Notice shall
be published as close as practicable to, but no sooner than five days
before, the date the application is mailed or delivered to the
appropriate FDIC office. Comments by interested parties must be received
by the appropriate regional director within 30 days following the date
of publication, unless the comment period has been extended or reopened
in accordance with Sec. 303.9(b)(2).
(b) Exceptions to public notice requirements. No publication shall
be required in connection with the granting of insurance to a new
depository institution established pursuant to the resolution of a
depository institution in default, or to an interim depository
institution formed solely to facilitate a merger transaction, or for a
request for continuation of federal deposit insurance by a state-
chartered bank withdrawing from membership in the Federal Reserve
System.
Sec. 303.24 Application for deposit insurance for an interim institution.
(a) Application required. Subject to Sec. 303.62(b)(2), a deposit
insurance application is required for a state-chartered interim
institution if the related merger transaction is subject to approval by
a federal banking agency other than the FDIC. A separate application for
deposit insurance for an interim institution is not required in
connection with any merger requiring FDIC approval pursuant to subpart D
of this part.
(b) Content of separate application. A letter application for
deposit insurance for an interim institution, accompanied by a copy of
the related merger application, shall be filed with the appropriate FDIC
office. The letter application shall briefly describe the transaction
and contain a statement that deposit insurance is being requested for an
interim institution that does not operate independently but exists
solely as a vehicle to accomplish a merger transaction which will be
reviewed by a federal banking agency other than the FDIC.
(c) Processing. An application for deposit insurance for an interim
depository institution will be acknowledged in writing by the FDIC.
Final action will be taken within 21 days after receipt of a
substantially complete application, unless the applicant is notified in
writing that additional review is warranted. If the FDIC does not act
within the expedited processing period, it does not constitute an
automatic or default approval.
[[Page 18]]
Sec. 303.25 Continuation of deposit insurance upon withdrawing from
membership in the Federal Reserve System.
(a) Content of application. To continue its insured status upon
withdrawal from membership in the Federal Reserve System, a state-
chartered bank shall submit a letter application to the appropriate FDIC
office. A complete application shall consist of the following
information:
(1) A copy of the letter, and any attachments thereto, sent to the
appropriate Federal Reserve Bank setting forth the bank's intention to
terminate its membership;
(2) A copy of the letter from the Federal Reserve Bank acknowledging
the bank's notice to terminate membership;
(3) A statement regarding any anticipated changes in the bank's
general business plan during the next 12-month period; and
(4)(i) A statement by the bank's management that there are no
outstanding or proposed corrective programs or supervisory agreements
with the Federal Reserve System.
(ii) If such programs or agreements exist, a statement by the
applicant that its Board of Directors is willing to enter into similar
programs or agreements with the FDIC which would become effective upon
withdrawal from the Federal Reserve System.
(b) Processing. An application for deposit insurance under this
section will be acknowledged in writing by the FDIC. The FDIC shall
notify the applicant, within 15 days of receipt of a substantially
complete application, either that federal deposit insurance will
continue upon termination of membership in the Federal Reserve System or
that additional review is warranted and the applicant will be notified,
in writing, of the FDIC's final decision regarding continuation of
deposit insurance. If the FDIC does not act within the expedited
processing period, it does not constitute an automatic or default
approval.
Sec. Sec. 303.26-303.39 [Reserved]
Subpart C_Establishment and Relocation of Domestic Branches and Offices
Sec. 303.40 Scope.
(a) General. This subpart sets forth the application requirements
and procedures for insured state nonmember banks to establish a branch,
relocate a branch or main office, and retain existing branches after the
interstate relocation of the main office subject to the approval by the
FDIC pursuant to sections 13(f), 13(k), 18(d) and 44 of the FDI Act.
(b) Merger transaction. Applications for approval of the acquisition
and establishment of branches in connection with a merger transaction
under section 18(c) of the FDI Act (12 U.S.C. 1828(c)), are processed in
accordance with subpart D (Merger Transactions) of this part.
(c) Insured branches of foreign banks and foreign branches of
domestic banks. Applications regarding insured branches of foreign banks
and foreign branches of domestic banks are processed in accordance with
subpart J (International Banking) of this part.
(d) Interstate acquisition of individual branch. Applications
requesting approval of the interstate acquisition of an individual
branch or branches located in a state other than the applicant's home
state without the acquisition of the whole bank are treated as
interstate bank merger transactions under section 44 of the FDI Act (12
U.S.C. 1831a(u)), and are processed in accordance with subpart D (Merger
Transactions) of this part.
Sec. 303.41 Definitions.
For purposes of this subpart:
(a) Branch includes any branch bank, branch office, additional
office, or any branch place of business located in any State of the
United States or in any territory of the United States, Puerto Rico,
Guam, American Samoa, the Trust Territory of the Pacific Islands, the
Virgin Islands, and the Northern Mariana Islands at which deposits are
[[Page 19]]
received or checks paid or money lent. A branch does not include an
automated teller machine, an automated loan machine, or a remote service
unit. The term branch also includes the following:
(1) A messenger service that is operated by a bank or its affiliate
that picks up and delivers items relating to transactions in which
deposits are received or checks paid or money lent. A messenger service
established and operated by a non-affiliated third party generally does
not constitute a branch for purposes of this subpart. Banks contracting
with third parties to provide messenger services should consult with the
FDIC to determine if the messenger service constitutes a branch.
(2) A mobile branch, other than a messenger service, that does not
have a single, permanent site and uses a vehicle that travels to various
locations to enable the public to conduct banking business. A mobile
branch may serve defined locations on a regular schedule or may serve a
defined area at varying times and locations.
(3) A temporary branch that operates for a limited period of time
not to exceed one year as a public service, such as during an emergency
or disaster situation.
(4) A seasonal branch that operates at various periodically
recurring intervals, such as during state and local fairs, college
registration periods, and other similar occasions.
(b) Branch relocation means a move within the same immediate
neighborhood of the existing branch that does not substantially affect
the nature of the business of the branch or the customers of the branch.
Moving a branch to a location outside its immediate neighborhood is
considered the closing of an existing branch and the establishment of a
new branch. Closing of a branch is covered in the FDIC Statement of
Policy Concerning Branch Closing Notices and Policies. 1 FDIC Law,
Regulations, Related Acts 5391; see Sec. 309.4 (a) and (b) of this
chapter for availability.
(c) De novo branch means a branch of a bank which is established by
the bank as a branch and does not become a branch of such bank as a
result of:
(1) The acquisition by the bank of an insured depository institution
or a branch of an insured depository institution; or
(2) The conversion, merger, or consolidation of any such institution
or branch.
(d) Home state means the state by which the bank is chartered.
(e) Host state means a state, other than the home state of the bank,
in which the bank maintains, or seeks to establish and maintain, a
branch.
Sec. 303.42 Filing procedures.
(a) General. An applicant shall submit an application to the
appropriate FDIC office on the date the notice required by Sec. 303.44
is published, or within 5 days after the date of the last required
publication.
(b) Content of filing. A complete letter application shall include
the following information:
(1) A statement of intent to establish a branch, or to relocate the
main office or a branch;
(2) The exact location of the proposed site including the street
address. With regard to messenger services, specify the geographic area
in which the services will be available. With regard to a mobile branch
specify the community or communities in which the vehicle will operate
and the manner in which it will be used;
(3) Details concerning any involvement in the proposal by an insider
of the bank as defined in Sec. 303.2(u), including any financial
arrangements relating to fees, the acquisition of property, leasing of
property, and construction contracts;
(4) A statement on the impact of the proposal on the human
environment, including, information on compliance with local zoning laws
and regulations and the effect on traffic patterns for purposes of
complying with the applicable provisions of the NEPA and the FDIC
Statement of Policy on NEPA (1 FDIC Law, Regulations, Related Acts 5185;
see Sec. 309.4 (a) and (b) of this chapter for availability);
(5) A statement as to whether or not the site is eligible for
inclusion in the National Register of Historic Places for purposes of
complying with applicable provisions of the NHPA and the FDIC
[[Page 20]]
Statement of Policy on NHPA (1 FDIC Law, Regulations, Related Acts 5175;
see Sec. 309.4 (a) and (b) of this chapter for availability) including
documentation of consultation with the State Historic Preservation
Officer, as appropriate;
(6) Comments on any changes in services to be offered, the community
to be served, or any other effect the proposal may have on the
applicant's compliance with the CRA;
(7) A copy of each newspaper publication required by Sec. 303.44 of
this subpart, the name and address of the newspaper, and date of the
publication;
(8) When an application is submitted to relocate the main office of
the applicant from one state to another, a statement of the applicant's
intent regarding retention of branches in the state where the main
office exists prior to relocation.
(c) Undercapitalized institutions. Applications to establish a
branch by applicants subject to section 38 of the FDI Act (12 U.S.C.
1831o) also should provide the information required by Sec. 303.204.
Applications pursuant to sections 38 and 18(d) of the FDI Act (12 U.S.C.
1831o and 1828(d)) may be filed concurrently or as a single application.
(d) Additional information. The FDIC may request additional
information to complete processing.
Sec. 303.43 Processing.
(a) Expedited processing for eligible depository institutions. An
application filed under this subpart by an eligible depository
institution as defined in Sec. 303.2(r) will be acknowledged in writing
by the FDIC and will receive expedited processing, unless the applicant
is notified in writing to the contrary and provided with the basis for
that decision. The FDIC may remove an application from expedited
processing for any of the reasons set forth in Sec. 303.11(c)(2).
Absent such removal, an application processed under expedited processing
will be deemed approved on the latest of the following:
(1) The 21st day after receipt by the FDIC of a substantially
complete filing;
(2) The 5th day after expiration of the comment period described
inSec. 303.44; or
(3) In the case of an application to establish and operate a de novo
branch in a state that is not the applicant's home state and in which
the applicant does not maintain a branch, the 5th day after the FDIC
receives confirmation from the host state that the applicant has both
complied with the filing requirements of the host state and submitted a
copy of the application with the FDIC to the host state bank supervisor.
(b) Standard processing. For those applications which are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
Sec. 303.44 Public notice requirements.
(a) Newspaper publications. For applications to establish or
relocate a branch, a notice as described in Sec. 303.7(c) shall be
published once in a newspaper of general circulation. For applications
to relocate a main office, notice shall be published at least once each
week on the same day for two consecutive weeks. The required publication
shall be made in the following communities:
(1) To establish a branch. In the community in which the main office
is located and in the communities to be served by the branch (including
messenger services and mobile branches).
(2) To relocate a main office. In the community in which the main
office is currently located and in the community to which it is proposed
the main office will relocate.
(3) To relocate a branch. In the community in which the branch is
located.
(b) Public comments. Comments by interested parties must be received
by the appropriate regional director within 15 days after the date of
the last newspaper publication required by paragraph (a) of this
section, unless the comment period has been extended or reopened in
accordance with Sec. 303.9(b)(2).
(c) Lobby notices. In the case of applications to relocate a main
office or a branch, a copy of the required newspaper publication shall
be posted in the public lobby of the office to be relocated for at least
15 days beginning on the date of the last published notice required by
paragraph (a) of this section.
[[Page 21]]
Sec. 303.45 Special provisions.
(a) Emergency or disaster events. (1) In the case of an emergency or
disaster at a main office or a branch which requires that an office be
immediately relocated to a temporary location, applicants shall notify
the appropriate FDIC office within 3 days of such temporary relocation.
(2) Within 10 days of the temporary relocation resulting from an
emergency or disaster, the bank shall submit a written application to
the appropriate FDIC office, that identifies the nature of the emergency
or disaster, specifies the location of the temporary branch, and
provides an estimate of the duration the bank plans to operate the
temporary branch.
(3) As part of the review process, the FDIC will determine on a case
by case basis whether additional information is necessary and may waive
public notice requirements.
(b) Redesignation of main office and existing branch. In cases where
an applicant desires to redesignate its main office as a branch and
redesignate an existing branch as the main office, a single application
shall be submitted. The FDIC may waive the public notice requirements in
instances where an application presents no significant or novel policy,
supervisory, CRA, compliance or legal concerns. A waiver will be granted
only to a redesignation within the applicant's home state.
(c) Expiration of approval. Approval of an application expires if
within 18 months after the approval date a branch has not commenced
business or a relocation has not been completed.
Sec. Sec. 303.46-303.59 [Reserved]
Subpart D_Merger Transactions
Sec. 303.60 Scope.
This subpart sets forth the application requirements and procedures
for transactions subject to FDIC approval under the Bank Merger Act,
section 18(c) of the FDI Act (12 U.S.C. 1828(c)). Additional guidance is
contained in the FDIC ``Statement of Policy on Bank Merger
Transactions'' (1 FDIC Law, Regulations, Related Acts 5145; see Sec.
309.4(a) and (b) of this chapter for availability).
Sec. 303.61 Definitions.
For purposes of this subpart:
(a) Merger transaction includes any transaction:
(1) In which an insured depository institution merges or
consolidates with any other insured depository institution or, either
directly or indirectly, acquires the assets of, or assumes liability to
pay any deposits made in, any other insured depository institution; or
(2) In which an insured depository institution merges or
consolidates with any noninsured bank or institution or assumes
liability to pay any deposits made in, or similar liabilities of, any
noninsured bank or institution, or in which an insured depository
institution transfers assets to any noninsured bank or institution in
consideration of the assumption of any portion of the deposits made in
the insured depository institution.
(b) Corporate reorganization means a merger transaction between
commonly-owned institutions, between an insured depository institution
and its subsidiary, or between an insured depository institution and its
holding company, provided that the merger transaction would have no
effect on competition or otherwise have significance under the statutory
standards set forth in section 18(c) of the FDI Act (12 U.S.C. 1828(c)).
For purposes of this paragraph, institutions are commonly-owned if more
than 50 percent of the voting stock of each of the institutions is owned
by the same company, individual, or group of closely-related individuals
acting in concert.
(c) Interim merger transaction means a merger transaction (other
than a purchase and assumption transaction) between an operating
depository institution and a newly-formed depository institution or
corporation that will not operate independently and that exists solely
for the purpose of facilitating a corporate reorganization.
(d) Optional conversion (Oakar transaction) means a merger
transaction in which an insured depository institution assumes deposit
liabilities insured by the deposit insurance fund (either the Bank
Insurance Fund (BIF) or the Savings Association Insurance Fund
[[Page 22]]
(SAIF)) of which that assuming institution is not a member, and elects
not to convert the insurance covering the assumed deposits. Such
transactions are covered by section 5(d)(3) of the FDI Act (12 U.S.C.
1815(d)(3)).
(e) Resulting institution refers to the acquiring, assuming or
resulting institution in a merger transaction.
Sec. 303.62 Transactions requiring prior approval.
(a) Merger transactions. The following merger transactions require
the prior written approval of the FDIC under this subpart:
(1) Any merger transaction, including any corporate reorganization,
interim merger transaction, or optional conversion, in which the
resulting institution is to be an insured state nonmember bank; and
(2) Any merger transaction, including any corporate reorganization
or interim merger transaction, that involves an uninsured bank or
institution.
(b) Related provisions. Transactions covered by this subpart also
may be subject to other provisions or application requirements,
including the following:
(1) Interstate merger transactions. Merger transactions between
insured banks that are chartered in different states are subject to the
provisions of section 44 of the FDI Act (12 U.S.C. 1831u). In the case
of a merger transaction that consists of the acquisition by an out of
state bank of a branch without acquisition of the bank, the branch is
treated for section 44 purposes as a bank whose home state is the state
in which the branch is located.
(2) Deposit insurance. An application for deposit insurance will be
required in connection with a merger transaction between a state-
chartered interim institution and an insured depository institution if
the related merger application is being acted upon by a federal banking
agency other than the FDIC. If the FDIC is the federal banking agency
responsible for acting on the related merger application, a separate
application for deposit insurance is not necessary. Procedures for
applying for deposit insurance are set forth in subpart B of this part.
An application for deposit insurance will not be required in connection
with a merger transaction (other than a purchase and assumption
transaction) of a federally-chartered interim institution and an insured
institution, even if the resulting institution is to operate under the
charter of the federal interim institution.
(3) Deposit insurance fund conversions. Procedures for conversion
transactions involving the transfer of deposits from BIF to SAIF or from
SAIF to BIF are set forth in subpart M of this part at Sec. 303.246.
(4) Branch closings. Branch closings in connection with a merger
transaction are subject to the notice requirements of section 42 of the
FDI Act (12 U.S.C. 1831r-1), including requirements for notice to
customers. These requirements are addressed in the ``Interagency Policy
Statement Concerning Branch Closings Notices and Policies'' (1 FDIC Law,
Regulations, Related Acts (FDIC) 5391; see Sec. 309.4(a) and (b) of
this chapter for availability.)
(5) Undercapitalized institutions. Applications for a merger
transaction by applicants subject to section 38 of the FDI Act (12
U.S.C. 1831o) should also provide the information required by Sec.
303.204. Applications pursuant to sections 38 and 18(c) of the FDI Act
(12 U.S.C, 1831o and 1828(c)) may be filed concurrently or as a single
application.
(6) Certification of assumption of deposit liability. An insured
depository institution assuming deposit liabilities of another insured
institution must provide certification of assumption of deposit
liability to the FDIC in accordance with 12 CFR part 307.
Sec. 303.63 Filing procedures.
(a) General. Applications required under this subpart shall be filed
with the appropriate FDIC office. The appropriate forms and instructions
may be obtained upon request from any FDIC regional director.
(b) Merger transactions. Applications for approval of merger
transactions shall be accompanied by copies of all agreements or
proposed agreements relating to the merger transaction and any other
information requested by the FDIC.
[[Page 23]]
(c) Interim merger transactions. Applications for approval of
interim merger transactions and any related deposit insurance
applications shall be made by filing the forms and other documents
required by paragraphs (a) and (b) of this section and such other
information as may be required by the FDIC for consideration of the
request for deposit insurance.
(d) Optional conversions. If the proposed merger transaction is an
optional conversion, the merger application shall include a statement
that the proposed merger transaction is a transaction covered by section
5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).
Sec. 303.64 Processing.
(a) Expedited processing for eligible depository institutions--(1)
General. An application filed under this subpart by an eligible
depository institution as defined in Sec. 303.2(r) and which meets the
additional criteria in paragraph (a)(4) of this section will be
acknowledged by the FDIC in writing and will receive expedited
processing, unless the applicant is notified in writing to the contrary
and provided with the basis for that decision. The FDIC may remove an
application from expedited processing for any of the reasons set forth
in Sec. 303.11(c)(2).
(2) Under expedited processing, the FDIC will take action on an
application by the date that is the latest of:
(i) 45 days after the date of the FDIC's receipt of a substantially
complete merger application; or
(ii) 10 days after the date of the last notice publication required
under Sec. 303.65 of this subpart; or
(iii) 5 days after receipt of the Attorney General's report on the
competitive factors involved in the proposed transaction; or
(iv) For an interstate merger transaction subject to the provisions
of section 44 of the FDI Act (12 U.S.C. 1831u), 5 days after the FDIC
receives confirmation from the host state (as defined in Sec.
303.41(e)) that the applicant has both complied with the filing
requirements of the host state and submitted a copy of the FDIC merger
application to the host state's bank supervisor.
(3) Notwithstanding paragraph (a)(1) of this section, if the FDIC
does not act within the expedited processing period, it does not
constitute an automatic or default approval.
(4) Criteria. The FDIC will process an application using expedited
procedures if:
(i) Immediately following the merger transaction, the resulting
institution will be ``well-capitalized'' pursuant to subpart B of part
325 of this chapter (12 CFR part 325); and
(ii)(A) All parties to the merger transaction are eligible
depository institutions as defined in Sec. 303.2(r); or
(B) The acquiring party is an eligible depository institution as
defined in Sec. 303.2(r) and the amount of the total assets to be
transferred does not exceed an amount equal to 10 percent of the
acquiring institution's total assets as reported in its report of
condition for the quarter immediately preceding the filing of the merger
application.
(b) Standard processing. For those applications not processed
pursuant to the expedited procedures, the FDIC will provide the
applicant with written notification of the final action taken by the
FDIC on the application when the decision is rendered.
Sec. 303.65 Public notice requirements.
(a) General. Except as provided in paragraph (b) of this section, an
applicant for approval of a merger transaction must publish notice of
the proposed transaction on at least three occasions at approximately
equal intervals in a newspaper of general circulation in the community
or communities where the main offices of the merging institutions are
located or, if there is no such newspaper in the community, then in the
newspaper of general circulation published nearest thereto.
(1) First publication. The first publication of the notice should be
as close as practicable to the date on which the application is filed
with the FDIC, but no more than 5 days prior to the filing date.
(2) Last publication. The last publication of the notice shall be on
the 25th day after the first publication or, if the newspaper does not
publish on the 25th day, on the newspaper's publication date that is
closest to the 25th day.
[[Page 24]]
(b) Exceptions--(1) Emergency requiring expeditious action. If the
FDIC determines that an emergency exists requiring expeditious action,
notice shall be published twice. The first notice shall be published as
soon as possible after the FDIC notifies the applicant of such
determination. The second notice shall be published on the 7th day after
the first publication or, if the newspaper does not publish on the 7th
day, on the newspaper's publication date that is closest to the 7th day.
(2) Probable failure. If the FDIC determines that it must act
immediately to prevent the probable failure of one of the institutions
involved in a proposed merger transaction, publication is not required.
(c) Content of notice--(1) General. The notice shall conform to the
public notice requirements set forth in Sec. 303.7.
(2) Branches. If it is contemplated that the resulting institution
will operate offices of the other institution(s) as branches, the
following statement shall be included in the notice required in Sec.
303.7(b):
It is contemplated that all offices of the above-named institutions will
continue to be operated (with the exception of [insert identity and
location of each office that will not be operated]).
(3) Emergency requiring expeditious action. If the FDIC determines
that an emergency exists requiring expeditious action, the notice shall
specify as the closing date of the public comment period the date that
is the 10th day after the date of the first publication.
(d) Public comments. Comments must be received by the appropriate
FDIC office within 30 days after the first publication of the notice,
unless the comment period has been extended or reopened in accordance
with Sec. 303.9(b)(2). If the FDIC has determined that an emergency
exists requiring expeditious action, comments must be received by the
appropriate FDIC office within 10 days after the first publication.
Sec. Sec. 303.66-303.79 [Reserved]
Subpart E_Change in Bank Control
Sec. 303.80 Scope.
This subpart sets forth the procedures for submitting a notice to
acquire control of an insured state nonmember bank or a parent company
of an insured state nonmember bank pursuant to the Change in Bank
Control Act of 1978, section 7(j) of the FDI Act (12 U.S.C. 1817(j)).
[68 FR 50459, Aug. 21, 2003]
Sec. 303.81 Definitions.
For purposes of this subpart:
(a) Acquisition includes a purchase, assignment, transfer, pledge or
other disposition of voting shares, or an increase in percentage
ownership resulting from a redemption of voting shares of an insured
state nonmember bank or a parent company.
(b) Acting in concert means knowing participation in a joint
activity or parallel action towards a common goal of acquiring control
of an insured state nonmember bank or a parent company, whether or not
pursuant to an express agreement.
(c) Control means the power, directly or indirectly, to direct the
management or policies of an insured bank or a parent company or to vote
25 percent or more of any class of voting shares of an insured bank or a
parent company.
(d) Parent Company means any company that controls, directly or
indirectly, an insured state nonmember bank.
(e) Person means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, and any other form of entity; and a voting
trust, voting agreement, and any group of persons acting in concert.
[68 FR 50459, Aug. 21, 2003]
[[Page 25]]
Sec. 303.82 Transactions requiring prior notice.
(a) Prior notice requirement. Any person acting directly or
indirectly, or through or in concert with one or more persons, shall
give the FDIC 60 days prior written notice, as specified in Sec.
303.84, before acquiring control of an insured state nonmember bank or
any parent company, unless the acquisition is exempt under Sec. 303.83.
(b) Acquisition requiring prior notice--(1) Acquisition of control.
The acquisition of control, unless exempted, requires prior notice to
the FDIC.
(2) Rebuttable presumption of control. The FDIC presumes that an
acquisition of voting shares of an insured state nonmember bank or a
parent company constitutes the acquisition of the power to direct the
management or policies of an insured bank or a parent company requiring
prior notice to the FDIC, if, immediately after the transaction, the
acquiring person (or persons acting in concert) will own, control, or
hold with power to vote 10 percent or more of any class of voting shares
of the institution, and if:
(i) The institution has registered shares under section 12 of the
Securities Exchange Act of 1934 (15 U.S.C. 78l); or
(ii) No other person will own, control or hold the power to vote a
greater percentage of that class of voting shares immediately after the
transaction. If two or more persons, not acting in concert, each propose
to acquire simultaneously equal percentages of 10 percent or more of a
class of voting shares of an insured state nonmember bank or a parent
company, each such person shall file prior notice with the FDIC.
(c) Acquisition of loans in default. The FDIC presumes an
acquisition of a loan in default that is secured by voting shares of an
insured state nonmember bank or a parent company to be an acquisition of
the underlying shares for purposes of this section.
(d) Other transactions. Acquisitions other than those set forth in
paragraph (b)(2) of this section resulting in a person's control of less
than 25 percent of a class of voting shares of an insured state
nonmember bank or a parent company are not deemed by the FDIC to
constitute control for purposes of the Change in Bank Control Act.
(e) Rebuttal of presumptions. Prior notice to the FDIC is not
required for any acquisition of voting shares under the presumption of
control set forth in this section, if the FDIC finds that the
acquisition will not result in control. The FDIC will afford any person
seeking to rebut a presumption in this section an opportunity to present
views in writing or, if appropriate, orally before its designated
representatives at an informal meeting.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50460, Aug. 21, 2003]
Sec. 303.83 Transactions not requiring prior notice.
(a) Exempt transactions. The following transactions do not require
notice to the FDIC under this subpart:
(1) The acquisiiton of additional voting shares of an insured state
nonmember bank or a parent company by a person who:
(i) Held the power to vote 25 percent or more of any class of voting
shares of the institution continuously since the later of March 9, 1979,
or the date that the institution commenced business as an insured state
nonmember bank or a parent company; or
(ii) Is presumed, under Sec. 303.82(b)(2), to have controlled the
institution continuously since March 9, 1979, if the aggregate amount of
voting shares held does not exceed 25 percent or more of any class of
voting shares of the institution or, in other cases, where the FDIC
determines that the person has controlled the institution continuously
since March 9, 1979;
(2) The acquisition of additional shares of a class of voting shares
of an insured state nonmember bank or a parent company by any person (or
persons acting in concert) who has lawfully acquired and maintained
control of the institution (for purposes of Sec. 303.82) after
complying with the procedures of the Change in Bank Control Act to
acquire voting shares of the institution under this subpart;
(3) Acquisitions of voting shares subject to approval under section
3 of the Bank Holding Company Act (12 U.S.C. 1842(a)), section 18(c) of
the FDI Act (12 U.S.C. 1828(c)), or section 10 of the
[[Page 26]]
Home Owners' Loan Act (12 U.S.C. 1467a);
(4) Transactions exempt under the Bank Holding Company Act:
foreclosures by institutional lenders, fiduciary acquisitions by banks,
and increases of majority holdings by bank holding companies described
in sections 2(a)(5), 3(a)(A), or 3(a)(B) respectively of the Bank
Holding Company Act (12 U.S.C. 1841(a)(5), 1842(a)(A), and 1842(a)(B));
(5) A customary one-time proxy solicitation;
(6) The receipt of voting shares of an insured state nonmember bank
or a parent company through a pro rata stock dividend;
(7) The acquisition of voting shares in a foreign bank, which has a
insured branch or branches in the United States. (This exemption does
not extend to the reports and information required under paragraphs 9,
10, and 12 of the Change in Bank Control Act of 1978 (12 U.S.C.
1817(j)(9), (10), and (12)) and;
(8) The acquisition of voting shares of a depository institution
holding company that either the Board of Governors of the Federal
Reserve System or the Office of Thrift Supervision reviews pursuant to
the Change in Bank Control Act (12 U.S.C. 1817(j)).
(b) Prior notice exemption. (1) The following acquisitions of voting
shares of an insured state nonmember bank or a parent company, which
otherwise would require prior notice under this subpart, are not subject
to the prior notice requirements if the acquiring person notifies the
appropriate FDIC office within 90 calendar days after the acquisition
and provides any relevant information requested by the FDIC:
(i) The acquisition of voting shares through inheritance;
(ii) The acquisition of voting shares as a bona fide gift; or
(iii) The acquisition of voting shares in satisfaction of a debt
previously contracted in good faith, except that the acquirer of a
defaulted loan secured by a controlling amount of a state nonmember
bank's voting securities or a parent company's voting securities shall
file a notice before the loan is acquired.
(2) The following acquisitions of voting shares of an insured state
nonmember bank or a parent company, which otherwise would require prior
notice under this subpart, are not subject to the prior notice
requirements if the acquiring person notifies the appropriate FDIC
office within 90 calendar days after receiving notice of the acquisition
and provides any relevant information requested by the FDIC.
(i) A percentage increase in ownership of voting shares resulting
from a redemption of voting shares by the issuing bank or a parent
company; or
(ii) The sale of shares by any shareholder that is not within the
control of a person resulting in that person becoming the largest
shareholder.
(3) Nothing in paragraph (b)(1) of this section limits the authority
of the FDIC to disapprove a notice pursuant to Sec. 303.85(c).
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50460, Aug. 21, 2003]
Sec. 303.84 Filing procedures.
(a) Filing notice. (1) A notice required under this subpart shall be
filed with the appropriate FDIC office and shall contain all the
information required by paragraph 6 of the Change in Bank Control Act,
section 7 (j) of the FDI Act, (12 U.S.C. 1817(j)(6)), or prescribed in
the designated interagency form which may be obtained from any FDIC
regional director.
(2) The FDIC may waive any of the informational requirements of the
notice if the FDIC determines that it is in the public interest.
(3) A notificant shall notify the appropriate FDIC office
immediately of any material changes in a notice submitted to the FDIC,
including changes in financial or other conditions.
(4) When the acquiring person is an individual, or group of
individuals acting in concert, the requirement to provide personal
financial data may be satisfied by a current statement of assets and
liabilities and an income summary, as required in the designated
interagency form, together with a statement of any material changes
since the date of the statement or summary. The FDIC may require
additional information if appropriate.
(b) Other laws. Nothing in this subpart shall affect any obligation
which the acquiring person(s) may have to
[[Page 27]]
comply with the federal securities laws or other laws.
Sec. 303.85 Processing.
(a) Acceptance of notice, additional information. The FDIC shall
notify the person or persons submitting a notice under this subpart in
writing of the date the notice is accepted as substantially complete.
The FDIC may request additional information at any time.
(b) Commencement of the 60-day notice period: consummation of
acquisition. (1) The 60-day notice period specified in Sec. 303.82
shall commerce on the day after the date of acceptance of a
substantially complete notice by the appropriate regional director. The
notificant(s) may consummate the proposed acquisition after the
expiration of the 60-day notice period, unless the FDIC disapproves the
proposed acquisition or extends the notice period.
(c) Disapproval of acquisition of control. Subpart D of 12 CFR part
308 sets forth the rules of practice and procedure for a notice of
disapproval.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50460, Aug. 21, 2003]
Sec. 303.86 Public notice requirements.
(a) Publication--(1) Newspaper announcement. Any person(s) filing a
notice under this subpart shall publish an announcement soliciting
public comment on the proposed acquisition. The announcement shall be
published in a newspaper of general circulation in the community in
which the home office of the state nonmember bank to be acquired is
located. The announcement shall be published as close as is practicable
to the date the notice is filed with the appropriate FDIC office, but in
no event more than 10 calendar days before or after the filing date.
(2) Contents of newspaper announcement. The newspaper announcement
shall conform to the public notice requirements set forth in Sec.
303.7.
(b) Delay of publication. The FDIC may permit delay in the
publication required by this section if the FDIC determines, for good
cause, that it is in the public interest to grant such a delay. Requests
for delay of publication may be submitted to the appropriate FDIC
office.
(c) Shortening or waiving public comment period, waiving
publications; acting before close of public comment period. The FDIC may
shorten the public comment period to a period of not less than 10 days,
or waive the public comment or newspaper publication requirements of
paragraph (a) of this section, or act on a notice before the expiration
of a public comment period, if it determines in writing either that an
emergency exists or that disclosure of the notice, solicitation of
public comment, or delay until expiration of the public comment period
would seriously threaten the safety and soundness of the bank to be
acquired.
(d) Consideration of public comments. In acting upon a notice filed
under this subpart, the FDIC shall consider all public comments received
in writing within 20 days following the required newspaper publication
or, if the FDIC has shortened the public comment period pursuant to
paragraph (c) of this section, within such shorter period.
(e) Publication if filing is subsequent to acquisition of control.
(1) Whenever a notice of a proposed acquisition of control is not filed
in accordance with the Change in Bank Control Act and these regulations,
the acquiring person(s) shall, within 10 days of being so directed by
the FDIC, publish an announcement of the acquisition of control in a
newspaper of general circulation in the community in which the home
office of the state nonmember bank to be acquired is located.
(2) The newspaper announcement shall contain the name(s) of the
acquiror(s), the name of the depository institution involved, and the
date of the acquisition of the stock. The announcement shall also
contain a statement indicating that the FDIC is currently reviewing the
acquisition of control. The announcement also shall state that any
person wishing to comment on the change in control may do so by
submitting written comments to the appropriate regional director of the
FDIC (give address of appropriate FDIC office) within 20 days following
the required newspaper publication.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50461, Aug. 21, 2003]
[[Page 28]]
Sec. Sec. 303.87-303.99 [Reserved]
Subpart F_Change of Director or Senior Executive Officer
Sec. 303.100 Scope.
This subpart sets forth the circumstances under which an insured
state nonmember bank must notify the FDIC of a change in any member of
its board of directors or any senior executive officer and the
procedures for filing such notice. This subpart implements section 32 of
the FDI Act (12 U.S.C. 1831i).
Sec. 303.101 Definitions.
For purposes of this subpart:
(a) Director means a person who serves on the board of directors or
board of trustees of an insured state nonmember bank, except that this
term does not include an advisory director who:
(1) Is not elected by the shareholders;
(2) Is not authorized to vote on any matters before the board of
directors or board of trustees or any committee thereof;
(3) Solely provides general policy advice to the board of directors
or board of trustees and any committee thereof; and
(4) Has not been identified by the FDIC as a person who performs the
functions of a director for purposes of this subpart.
(b) Senior executive officer means a person who holds the title of
president, chief executive officer, chief operating officer, chief
managing official (in an insured state branch of a foreign bank), chief
financial officer, chief lending officer, or chief investment officer,
or, without regard to title, salary, or compensation, performs the
function of one or more of these positions. Senior executive officer
also includes any other person identified by the FDIC, whether or not
hired as an employee, with significant influence over, or who
participates in, major policymaking decisions of the insured state
nonmember bank.
(c) Troubled condition means any insured state nonmember bank that:
(1) Has a composite rating, as determined in its most recent report
of examination, of 4 or 5 under the Uniform Financial Institutions
Rating System (UFIRS), or in the case of an insured state branch of a
foreign bank, an equivalent rating; or
(2) Is subject to a proceeding initiated by the FDIC for termination
or suspension of deposit insurance; or
(3) Is subject to a cease-and-desist order or written agreement
issued by either the FDIC or the appropriate state banking authority
that requires action to improve the financial condition of the bank or
is subject to a proceeding initiated by the FDIC or state authority
which contemplates the issuance of an order that requires action to
improve the financial condition of the bank, unless otherwise informed
in writing by the FDIC; or
(4) Is informed in writing by the FDIC that it is in troubled
condition for purposes of the requirements of this subpart on the basis
of the bank's most recent report of condition or report of examination,
or other information available to the FDIC.
Sec. 303.102 Filing procedures and waiver of prior notice.
(a) Insured state nonmember banks. An insured state nonmember bank
shall give the FDIC written notice, as specified in paragraph (c)(1) of
this section, at least 30 days prior to adding or replacing any member
of its board of directors, employing any person as a senior executive
officer of the bank, or changing the responsibilities of any senior
executive officer so that the person would assume a different senior
executive officer position, if:
(1) The bank is not in compliance with all minimum capital
requirements applicable to the bank as determined on the basis of the
bank's most recent report of condition or report of examination;
(2) The bank is in troubled condition; or
(3) The FDIC determines, in connection with its review of a capital
restoration plan required under section 38(e)(2) of the FDI Act (12
U.S.C. 1831o(e)(2)) or otherwise, that such notice is appropriate.
(b) Insured branches of foreign banks. In the case of the addition
of a member of the board of directors or a change in senior executive
officer in a foreign bank having an insured state branch,
[[Page 29]]
the notice requirement shall not apply to such additions and changes in
the foreign bank parent, but only to changes in senior executive
officers in the state branch.
(c) Waiver of prior notice--(1) Waiver requests. The FDIC may permit
an individual, upon petition by the bank to the appropriate FDIC office,
to serve as a senior executive officer or director before filing the
notice required under this subpart if the FDIC finds that:
(i) Delay would threaten the safety or soundness of the bank;
(ii) Delay would not be in the public interest; or
(iii) Other extraordinary circumstances exist that justify waiver of
prior notice.
(2) Automatic waiver. In the case of the election of a new director
not proposed by management at a meeting of the shareholders of an
insured state nonmember bank, the prior 30-day notice is automatically
waived and the individual immediately may begin serving, provided that a
complete notice is filed with the appropriate FDIC office within two
business days after the individual's election.
(3) Effect on disapproval authority. A waiver shall not affect the
authority of the FDIC to disapprove a notice within 30 days after a
waiver is granted under paragraph (c)(1) of this section or the election
of an individual who has filed a notice and is serving pursuant to an
automatic waiver under paragraph (c)(2) of this section.
(d)(1) Content of filing. The notice required by paragraph (a) of
this section shall be filed with the appropriate FDIC office and shall
contain information pertaining to the competence, experience, character,
or integrity of the individual with respect to whom the notice is
submitted, as prescribed in the designated interagency form which is
available from any FDIC regional director. The FDIC may require
additional information.
(2) Modification. The FDIC may modify or accept other information in
place of the requirements of paragraph (d)(1) of this section for a
notice filed under this subpart.
Sec. 303.103 Processing.
(a) Processing. The 30-day notice period specified in Sec.
303.102(a) shall begin on the date substantially all information
required to be submitted by the notificant pursuant to Sec.
303.102(c)(1) is received by the appropriate FDIC office. The FDIC shall
notify the bank submitting the notice of the date on which the notice is
accepted for processing and of the date on which the 30-day notice
period will expire. If processing cannot be completed within 30 days,
the notificant will be advised in writing, prior to expiration of the
30-day period, of the reason for the delay in processing and of the
additional time period, not to exceed 60 days, in which processing will
be completed.
(b) Commencement of service--(1) At expiration of period. A proposed
director or senior executive officer may begin service after the end of
the 30-day period or any other additional period as provided under
paragraph (a) of this section, unless the FDIC disapproves the notice
before the end of the period.
(2) Prior to expiration of period. A proposed director or senior
executive officer may begin service before the end of the 30-day period
or any additional time period as provided under paragraph (a) of this
section, if the FDIC notifies the bank and the individual in writing of
the FDIC's intention not to disapprove the notice.
(c) Notice of disapproval. The FDIC may disapprove a notice filed
under Sec. 303.102 if the FDIC finds that the competence, experience,
character, or integrity of the individual with respect to whom the
notice is submitted indicates that it would not be in the best interests
of the depositors of the bank or in the best interests of the public to
permit the individual to be employed by, or associated with, the bank.
Subpart L of 12 CFR part 308 sets forth the rules of practice and
procedure for a notice of disapproval.
Sec. Sec. 303.104-303.119 [Reserved]
Subpart G_Activities of Insured State Banks
Sec. 303.120 Scope.
This subpart sets forth procedures for complying with notice and
application
[[Page 30]]
requirements contained in subpart A of part 362 of this chapter,
governing insured state banks and their subsidiaries engaging in
activities which are not permissible for national banks and their
subsidiaries. This subpart sets forth procedures for complying with
notice and application requirements contained in subpart B of part 362
of this chapter, governing certain activities of insured state nonmember
banks, their subsidiaries, and certain affiliates. This subpart also
sets forth procedures for complying with the notice requirements
contained in subpart E of part 362 of this chapter, governing
subsidiaries of insured state nonmember banks engaging in financial
activities.
Sec. 303.121 Filing procedures.
(a) Where to file. A notice or application required by subpart A,
subpart B, or subpart E of part 362 of this chapter shall be submitted
in writing to the appropriate FDIC office.
(b) Contents of filing. A complete letter notice or letter
application shall include the following information:
(1) Filings generally. (i) A brief description of the activity and
the manner in which it will be conducted;
(ii) The amount of the bank's existing or proposed direct or
indirect investment in the activity as well as calculations sufficient
to indicate compliance with any specific capital ratio or investment
percentage limitation detailed in subpart A, B, or E of part 362 of this
chapter;
(iii) A copy of the bank's business plan regarding the conduct of
the activity;
(iv) A citation to the state statutory or regulatory authority for
the conduct of the activity;
(v) A copy of the order or other document from the appropriate
regulatory authority granting approval for the bank to conduct the
activity if such approval is necessary and has already been granted;
(vi) A brief description of the bank's policy and practice with
regard to any anticipated involvement in the activity by a director,
executive office or principal shareholder of the bank or any related
interest of such a person; and
(vii) A description of the bank's expertise in the activity.
(2) [Reserved]
(3) Copy of application or notice filed with another agency. If an
insured state bank has filed an application or notice with another
federal or state regulatory authority which contains all of the
information required by paragraph (b) (1) of this section, the insured
state bank may submit a copy to the FDIC in lieu of a separate filing.
(4) Additional information. The FDIC may request additional
information to complete processing.
Sec. 303.122 Processing.
(a) Expedited processing. A notice filed by an insured state bank
seeking to commence or continue an activity under Sec.
362.3(a)(2)(iii)(A)(2), Sec. 362.4(b)(3)(i), or Sec. 362.4(b)(5) of
this chapter will be acknowledged in writing by the FDIC and will
receive expedited processing, unless the applicant is notified in
writing to the contrary and provided a basis for that decision. The FDIC
may remove the notice from expedited processing for any of the reasons
set forth in Sec. 303.11(c)(2). Absent such removal, a notice processed
under expedited processing is deemed approved 30 days after receipt of a
complete notice by the FDIC (subject to extension for an additional 15
days upon written notice to the bank) or on such earlier date authorized
by the FDIC in writing.
(b) Standard processing for applications and notices that have been
removed from expedited processing. For an application filed by an
insured state bank seeking to commence or continue an activity under
Sec. 362.3(a)(2)(iii)(A)(2), Sec. 362.3(b)(2)(i), Sec.
362.3(b)(2)(ii)(A), Sec. 362.3(b)(2)(ii)(C), Sec. 362.4(b)(1), Sec.
362.4(b)(4), Sec. 362.5(b)(2), or Sec. 362.8(b) or seeking a waiver or
modification under Sec. 362.18(e) or Sec. 362.18(g)(3) of this chapter
or for notices which are not processed pursuant to the expedited
processing procedures, the FDIC will provide the insured State bank with
written notification of the final action as soon as the decision is
rendered. The FDIC will normally review and act in such cases within 60
days after receipt of a completed application or notice (subject to
extension for an additional 30 days
[[Page 31]]
upon written notice to the bank), but failure of the FDIC to act prior
to the expiration of these periods does not constitute approval.
Sec. Sec. 303.123-303.139 [Reserved]
Subpart H_Activities of Insured Savings Associations
Sec. 303.140 Scope.
This subpart sets forth procedures for complying with the notice and
application requirements contained in subpart C of part 362 of this
chapter, governing insured state savings associations and their service
corporations engaging in activities which are not permissible for
federal savings associations and their service corporations. This
subpart also sets forth procedures for complying with the notice
requirements contained in subpart D of part 362 of this chapter,
governing insured savings associations which establish or engage in new
activities through a subsidiary.
Sec. 303.141 Filing procedures.
(a) Where to file. All applications and notices required by subpart
C or subpart D of part 362 of this chapter are to be in writing and
filed with the appropriate FDIC office.
(b) Contents of filing--(1) Filings generally. A complete letter
notice or letter application shall include the following information:
(i) A brief description of the activity and the manner in which it
will be conducted;
(ii) The amount of the association's existing or proposed direct or
indirect investment in the activity as well as calculations sufficient
to indicate compliance with any specific capital ratio or investment
percentage limitation detailed in subpart C or D of part 362 of this
chapter;
(iii) A copy of the association's business plan regarding the
conduct of the activity;
(iv) A citation to the state statutory or regulatory authority for
the conduct of the activity;
(v) A copy of the order or other document from the appropriate
regulatory authority granting approval for the association to conduct
the activity if such approval is necessary and has already been granted;
(vi) A brief description of the association's policy and practice
with regard to any anticipated involvement in the activity by a
director, executive officer or principal shareholder of the association
or any related interest of such a person; and
(vii) A description of the association's expertise in the activity.
(2) [Reserved]
(3) Copy of application or notice filed with another agency. If an
insured savings association has filed an application or notice with
another federal or state regulatory authority which contains all of the
information required by paragraph (b)(1) of this section, the insured
state bank may submit a copy to the FDIC in lieu of a separate filing.
(4) Additional information. The FDIC may request additional
information to complete processing.
Sec. 303.142 Processing.
(a) Expedited processing. A notice filed by an insured state savings
association seeking to commence or continue an activity under Sec.
362.11(b)(2)(ii) of this chapter will be acknowledged in writing by the
FDIC and will receive expedited processing, unless the applicant is
notified in writing to the contrary and provided a basis for that
decision. The FDIC may remove the notice from expedited processing for
any of the reasons set forth in Sec. 303.11(c)(2). Absent such removal,
a notice processed under expedited processing is deemed approved 30 days
after receipt of a complete notice by the FDIC (subject to extension for
an additional 15 days upon written notice to the bank) or on such
earlier date authorized by the FDIC in writing.
(b) Standard processing for applications and notices that have been
removed from expedited processing. For an application filed by an
insured state savings association seeking to commence or continue an
activity under Sec. 362.11(a)(2)(ii), Sec. 362.11(b)(2)(i), Sec.
362.12(b)(1) of this chapter or for notices which are not processed
pursuant to the expedited processing procedures, the FDIC will provide
the insured state savings association with written notification of the
final action as soon as the decision is
[[Page 32]]
rendered. The FDIC will normally review and act in such cases within 60
days after receipt of a completed application or notice (subject to
extension for an additional 30 days upon written notice to the bank),
but failure of the FDIC to act prior to the expiration of these periods
does not constitute approval.
(c) Notices of activities in excess of an amount permissible for a
federal savings association; subsidiary notices. Receipt of a notice
filed by an insured state savings association as required by Sec.
362.11(b)(3) or Sec. 362.15 of this chapter will be acknowledged in
writing by the FDIC. The notice will be reviewed at the appropriate FDIC
office, which will take such action as it deems necessary and
appropriate.
Sec. Sec. 303.143-303.159 [Reserved]
Subpart I_Mutual-To-Stock Conversions
Sec. 303.160 Scope.
This subpart sets forth the notice requirements and procedures for
the conversion of an insured mutual state-chartered savings bank to the
stock form of ownership. The substantive requirements governing such
conversions are contained in Sec. 333.4 of this chapter.
Sec. 303.161 Filing procedures.
(a) Prior notice required. In addition to complying with the
substantive requirements in Sec. 333.4 of this chapter, an insured
state-chartered mutually owned savings bank that proposes to convert
from mutual to stock form shall file with the FDIC a notice of intent to
convert to stock form.
(b) General. (1) A notice required under this subpart shall be filed
in letter form with the appropriate FDIC office at the same time as
required conversion application materials are filed with the
institution's state regulator.
(2) An insured mutual savings bank chartered by a state that does
not require the filing of a conversion application shall file a notice
in letter form with the appropriate FDIC office as soon as practicable
after adoption of its plan of conversion.
(c) Content of notice. The notice shall provide a description of the
proposed conversion and include all materials that have been filed with
any state or federal banking regulator and any state or federal
securities regulator. At a minimum, the notice shall include, as
applicable, copies of:
(1) The plan of conversion, with specific information concerning the
record date used for determining eligible depositors and the
subscription offering priority established in connection with any
proposed stock offering;
(2) Certified board resolutions relating to the conversion;
(3) A business plan, including a detailed discussion of how the
capital acquired in the conversion will be used, expected earnings for
at least a three-year period following the conversion, and a
justification for any proposed stock repurchases;
(4) The charter and bylaws of the converted institution;
(5) The bylaws and operating plans of any other entities formed in
connection with the conversion transaction, such as a holding company or
charitable foundation;
(6) A full appraisal report, prepared by an independent appraiser,
of the value of the converting institution and the pricing of the stock
to be sold in the conversion transaction;
(7) Detailed descriptions of any proposed management or employee
stock benefit plans or employment agreements and a discussion of the
rationale for the level of benefits proposed, individually and by
participant group;
(8) Indemnification agreements;
(9) A preliminary proxy statement and sample proxy;
(10) Offering circular(s) and order form;
(11) All contracts or agreements relating to solicitation,
underwriting, market-making, or listing of conversion stock and any
agreements among members of a group regarding the purchase of
unsubscribed shares;
(12) A tax opinion concerning the federal income tax consequences of
the proposed conversion;
(13) Consents from experts to use their opinions as part of the
notice; and
(14) An estimate of conversion-related expenses.
[[Page 33]]
(d) Additional information. The FDIC, in its discretion, may request
any additional information it deems necessary to evaluate the proposed
conversion. The institution proposing to convert from mutual to stock
form shall promptly provide such information to the FDIC.
(e) Acceptance of notice. The 60-day notice period specified inSec.
303.163 shall commence on the date of receipt of a substantially
complete notice. The FDIC shall notify the institution proposing to
convert in writing of the date the notice is accepted.
(f) Related applications. Related applications that require FDIC
action may include:
(1) Applications for deposit insurance, as required by subpart B of
this part; and
(2) Applications for consent to merge, as required by subpart D of
this part.
Sec. 303.162 Waiver from compliance.
(a) General. An institution proposing to convert from mutual to
stock form may file with the appropriate FDIC office a letter requesting
waiver of compliance with this subpart or Sec. 333.4 of this chapter:
(1) When compliance with any provision of this section or Sec.
333.4 of this chapter would be inconsistent or in conflict with
applicable state law, or
(2) For any other good cause shown.
(b) Content of filing. In making a request for waiver under
paragraph (a) of this section, the institution shall demonstrate that
the requested waiver, if granted, would not result in any effects that
would be detrimental to the safety and soundness of the institution,
entail a breach of fiduciary duty on part of the institution's
management or otherwise be detrimental or inequitable to the
institution, its depositors, any other insured depository
institution(s), the federal deposit insurance funds, or to the public
interest.
Sec. 303.163 Processing.
(a) General considerations. The FDIC shall review the notice and
other materials submitted by the institution proposing to convert from
mutual to stock form, specifically considering the following factors:
(1) The proposed use of the proceeds from the sale of stock, as set
forth in the business plan;
(2) The adequacy of the disclosure materials;
(3) The participation of depositors in approving the transaction;
(4) The form of the proxy statement required for the vote of the
depositors/members on the conversion;
(5) Any proposed increased compensation and other remuneration
(including stock grants, stock option rights and other similar benefits)
to be granted to officers and directors/trustees of the bank in
connection with the conversion;
(6) The adequacy and independence of the appraisal of the value of
the mutual savings bank for purposes of determining the price of the
shares of stock to be sold;
(7) The process by which the bank's trustees approved the appraisal,
the pricing of the stock, and the proposed compensation arrangements for
insiders;
(8) The nature and apportionment of stock subscription rights; and
(9) The bank's plans to fulfill its commitment to serving the
convenience and needs of its community.
(b) Additional considerations. (1) In reviewing the notice and other
materials submitted under this subpart, the FDIC will take into account
the extent to which the proposed conversion transaction conforms with
the various provisions of the mutual-to-stock conversion regulations of
the Office of Thrift Supervision (OTS) (12 CFR part 563b), as currently
in effect at the time the notice is submitted. Any non-conformity with
those provisions will be closely reviewed.
(2) Conformity with the OTS requirements will not be sufficient for
FDIC regulatory purposes if the FDIC determines that the proposed
conversion transaction would pose a risk to the bank's safety or
soundness, violate any law or regulation, or present a breach of
fiduciary duty.
(c) Notice period. (1) The period in which the FDIC may object to
the proposed conversion transaction shall be the later of:
[[Page 34]]
(i) 60 days after receipt of a substantially complete notice of
proposed conversion; or
(ii) 20 days after the last applicable state or other federal
regulator has approved the proposed conversion.
(2) The FDIC may, in its discretion, extend the initial 60-day
period for up to an additional 60 days by providing written notice to
the institution.
(d) Letter of non-objection. If the FDIC determines, in its
discretion, that the proposed conversion transaction would not pose a
risk to the institution's safety or soundness, violate any law or
regulation, or present a breach of fiduciary duty, then the FDIC shall
issue to the institution proposing to convert a letter of non-objection
to the proposed conversion.
(e) Letter of objection. If the FDIC determines, in its discretion,
that the proposed conversion transaction poses a risk to the
institution's safety or soundness, violates any law or regulation, or
presents a breach of fiduciary duty, then the FDIC shall issue a letter
to the institution stating its objection(s) to the proposed conversion
and advising the institution not to consummate the proposed conversion
until such letter is rescinded. A copy of the letter of objection shall
be furnished to the institution's primary state regulator and any other
state or federal banking regulator and state or federal securities
regulator involved in the conversion.
(f) Consummation of the conversion. (1) An institution may
consummate the proposed conversion upon either:
(i) The receipt of a letter of non-objection; or
(ii) The expiration of the notice period.
(2) If a letter of objection is issued, then the institution shall
not consummate the proposed conversion until the FDIC rescinds such
letter.
Sec. Sec. 303.164-303.179 [Reserved]
Subpart J_International Banking
Sec. 303.180 Scope.
This subpart sets forth procedures for complying with application
requirements relating to the foreign activities of insured state
nonmember banks, U.S. activities of insured branches of foreign banks,
and certain foreign mergers of insured depository institutions.
Sec. 303.181 Definitions.
For the purposes of this subpart, the following additional
definitions apply:
(a) Board of Governors means the Board of Governors of the Federal
Reserve System.
(b) Comptroller means the Office of the Comptroller of the Currency.
(c) Eligible insured branch. An insured branch will be treated as an
eligible depository institution within the meaning of Sec. 303.2(r) if
the insured branch:
(1) Received an FDIC-assigned composite ROCA supervisory rating
(which rates risk management, operational controls, compliance, and
asset quality) of 1 or 2 as a result of its most recent federal or state
examination, and the FDIC, Comptroller, or Board of Governors have not
expressed concern about the condition or operations of the foreign
banking organization or the support it offers the branch;
(2) Received a satisfactory or better Community Reinvestment Act
(CRA) rating from its primary federal regulator at its most recent
examination, if the depository institution is subject to examination
under part 345 of this chapter;
(3) Received a compliance rating of 1 or 2 from its primary federal
regulator at its most recent examination;
(4) Is well-capitalized as defined in subpart B of part 325 of this
chapter; and
(5) Is not subject to a cease and desist order, consent order,
prompt corrective action directive, written agreement, memorandum of
understanding, or other administrative agreement with any U.S. bank
regulatory authority.
(d) Federal branch means a federal branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
(e) Foreign bank means a foreign bank as defined by Sec. 347.202 of
this chapter.
(f) Foreign branch means a foreign branch of an insured state
nonmember bank as defined by Sec. 347.102 of this chapter.
(g) Foreign organization means a foreign organization as defined by
Sec. 347.102 of this chapter.
[[Page 35]]
(h) Insured branch means an insured branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
(i) Noninsured branch means a noninsured branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
(j) State branch means a state branch of a foreign bank as defined
by Sec. 347.202 of this chapter.
Sec. 303.182 Establishing, moving or closing a foreign branch of a
state nonmember bank; Sec. 347.103.
(a) Notice procedures for general consent. Notice in the form of a
letter from an eligible depository institution establishing or
relocating a foreign branch pursuant to Sec. 347.103(b) of this chapter
shall be provided to the appropriate FDIC office no later than 30 days
after taking such action, and include the location of the foreign
branch, including a street address, and a statement that the foreign
branch has not been located on a site on the World Heritage List or on
the foreign country's equivalent of the National Register of Historic
Places (National Register), in accordance with section 402 of the
National Historic Preservation Act Amendments of 1980 (NHPA Amendments
Act) (16 U.S.C. 470a-2). The FDIC will provide written acknowledgment of
receipt of the notice.
(b) Filing procedures for other branch establishments--(1)Where to
file. An applicant seeking to establish a foreign branch other than
under Sec. 347.103(b) of this chapter shall submit an application to
the appropriate FDIC office.
(2) Content of filing. A complete letter application shall include
the following information:
(i) The exact location of the proposed foreign branch, including the
street address, and a statement whether the foreign branch will be
located on a site on the World Heritage List or on the foreign country's
equivalent of the National Register, in accordance with section 402 of
the NHPA Amendments Act;
(ii) Details concerning any involvement in the proposal by an
insider of the applicant, as defined in Sec. 303.2(u), including any
financial arrangements relating to fees, the acquisition of property,
leasing of property, and construction contracts;
(iii) A brief description of the applicant's business plan with
respect to the foreign branch; and
(iv) A brief description of the activities of the branch, and to the
extent any activities are not authorized by Sec. 347.103(a) of this
chapter, the applicant's reasons why they should be approved.
(3) Additional information. The FDIC may request additional
information to complete processing.
(c) Processing--(1) Expedited processing for eligible depository
institutions. An application filed under Sec. 347.103(c) of this
chapter by an eligible depository institution as defined in Sec.
303.2(r) of this part seeking to establish a foreign branch by expedited
processing will be acknowledged in writing by the FDIC and will receive
expedited processing, unless the applicant is notified in writing to the
contrary and provided with the basis for that decision. The FDIC may
remove the application from expedited processing for any of the reasons
set forth in Sec. 303.11(c)(2). Absent such removal, an application
processed under expedited processing is deemed approved 45 days after
receipt of a substantially complete application by the FDIC, or on such
earlier date authorized by the FDIC in writing.
(2) Standard processing. For those applications which are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
(d) Closing. Notices of branch closing under Sec. 347.103(f) of
this chapter, in the form of a letter including the name, location, and
date of closing of the closed branch, shall be filed with the
appropriate FDIC office no later than 30 days after the branch is
closed.
Sec. 303.183 Investment by insured state nonmember banks in foreign
organizations; Sec. 347.108.
(a) Notice procedures for general consent. Notice in the form of a
letter from an eligible depository institution making direct or indirect
investments in a foreign organization pursuant to Sec. 347.108(a) of
this chapter shall be provided to the appropriate FDIC office no
[[Page 36]]
later than 30 days after taking such action. The FDIC will provide
written acknowledgment of receipt of the notice.
(b) Filing procedures for other investments--(1) Where to file. An
applicant seeking to make a foreign investment other than under Sec.
347.108(a) of this chapter shall submit an application to the
appropriate FDIC office.
(2) Content of filing. A complete application shall include the
following information:
(i) Basic information about the terms of the proposed transaction,
the amount of the investment in the foreign organization and the
proportion of its ownership to be acquired;
(ii) Basic information about the foreign organization, its financial
position and income, including any available balance sheet and income
statement for the prior year, or financial projections for a new foreign
organization;
(iii) A listing of all shareholders known to hold ten percent or
more of any class of the foreign organization's stock or other evidence
of ownership, and the amount held by each;
(iv) A brief description of the applicant's business plan with
respect to the foreign organization;
(v) A brief description of any business or activities which the
foreign organization will conduct directly or indirectly in the United
States, and to the extent such activities are not authorized by subpart
A of part 347, the applicant's reasons why they should be approved;
(vi) A brief description of the foreign organization's activities,
and to the extent such activities are not authorized by subpart A of
part 347, the applicant's reasons why they should be approved; and
(vii) If the applicant seeks approval to engage in underwriting or
dealing activities, a description of the applicant's plans and
procedures to address all relevant risks.
(3) Additional information. The FDIC may request additional
information to complete processing.
(c) Processing--(1) Expedited processing for eligible depository
institutions. An application filed under Sec. 347.108(b) of this
chapter by an eligible depository institution as defined in Sec.
303.2(r) seeking to make direct or indirect investments in a foreign
organization will be acknowledged in writing by the FDIC and will
receive expedited processing, unless the applicant is notified in
writing to the contrary and provided with the basis for that decision.
The FDIC may remove the application from expedited processing for any of
the reasons set forth in Sec. 303.11(c)(2). Absent such removal, an
application processed under expedited processing is deemed approved 45
days after receipt of a complete application by the FDIC, or on such
earlier date authorized by the FDIC in writing.
(2) Standard processing. For those applications which are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
(d) Divestiture. If an insured state nonmember bank holding 50
percent or more of the voting equity interests of a foreign organization
or otherwise controlling the foreign organization divests itself of such
ownership or control, the insured state nonmember bank shall file a
notice in the form of a letter, including the name, location, and date
of divestiture of the foreign organization, with the appropriate FDIC
office no later than 30 days after the divestiture.
Sec. 303.184 Moving an insured branch of a foreign bank.
(a) Filing procedures--(1) Where and when to file. An application by
an insured branch of a foreign bank seeking the FDIC's consent to move
from one location to another, as required by section 18(d)(1) of the FDI
Act (12 U.S.C. 1828(d)(1)), shall be submitted in writing to the
appropriate FDIC office on the date the notice required by paragraph (c)
of this section is published, or within 5 days after the date of the
last required publication.
(2) Content of filing. A complete letter application shall include
the following information:
(i) The exact location of the proposed site, including the street
address;
(ii) Details concerning any involvement in the proposal by an
insider of the applicant, as defined in Sec. 303.2(u), including any
financial arrangements relating to fees, the acquisition of
[[Page 37]]
property, leasing of property, and construction contracts;
(iii) A statement of the impact of the proposal on the human
environment, including information on compliance with local zoning laws
and regulations and the effect on traffic patterns, for purposes of
complying with the applicable provisions of the NEPA, and the FDIC
``Statement of Policy on NEPA'' (1 FDIC Law, Regulations, Related Acts
5185; see Sec. 309.4(a) and (b) of this chapter for availability).
(iv) A statement as to whether or not the site is eligible for
inclusion in the National Register of Historic Places for purposes of
complying with the applicable provisions of the NHPA, and the FDIC
AStatement of Policy on NHPA'' (1 FDIC Law, Regulations, Related Acts
5175; see Sec. 309.4(a) and (b) of this chapter for availability),
including documentation of consultation with the State Historic
Preservation Officer, as appropriate.
(v) Comments on any changes in services to be offered, the community
to be served, or any other effect the proposal may have on the
applicant's compliance with the CRA; and
(vi) A copy of the newspaper publication required by paragraph (c)
of this section, as well as the name and address of the newspaper and
the date of the publication.
(3) Comptroller's application. If the applicant is filing an
application with the Comptroller which contains the information required
by paragraph (a)(2) of this section, the applicant may submit a copy to
the FDIC in lieu of a separate application.
(4) Additional information. The FDIC may request additional
information to complete processing.
(b) Processing--(1) Expedited processing for eligible insured
branches. An application filed by an eligible insured branch as defined
in Sec. 303.181(c) will be acknowledged in writing by the FDIC and will
receive expedited processing, unless the applicant is notified to the
contrary and provided with the basis for that decision. The FDIC may
remove an application from expedited processing for any of the reasons
set forth in Sec. 303.11(c)(2). Absent such removal, an application
processed under expedited processing will be deemed approved on the
latest of the following:
(i) The 21st day after the FDIC's receipt of a substantially
complete application; or
(ii) The 5th day after expiration of the comment period described in
paragraph (c) of this section.
(2) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action as soon as
the decision is rendered.
(c) Publication requirement and comment period--(1) Newspaper
publications. The applicant shall publish a notice of its proposal to
move from one location to another, as described in Sec. 303.7(b), in a
newspaper of general circulation in the community in which the insured
branch is located prior to its being moved and in the community to which
it is to be moved. The notice shall include the insured branch's current
and proposed addresses.
(2) Public comments. All public comments must be received by the
appropriate regional director within 15 days after the date of the last
newspaper publication required by paragraph (c)(1) of this section,
unless the comment period has been extended or reopened in accordance
with Sec. 303.9(b)(2).
(3) Lobby notices. If the insured branch has a public lobby, a copy
of the newspaper publication shall be posted in the public lobby for at
least 15 days beginning on the date of the publication required by
paragraph (c)(1) of this section.
(d) Other approval criteria. (1) The FDIC may approve an application
under this section if the criteria in paragraphs (d)(1)(i) through
(d)(1)(vi) of this section is satisfied.
(i) The factors set forth in section 6 of the FDI Act (12 U.S.C.
1816) have been considered and favorably resolved;
(ii) The applicant is at least adequately capitalized as defined in
subpart B of part 325 of this chapter;
(iii) Any financial arrangements which have been made in connection
with the proposed relocation and which involve the applicant's
directors, officers, major shareholders, or their interests are fair and
reasonable in comparison to similar arrangements that
[[Page 38]]
could have been made with independent third parties;
(iv) Compliance with the CRA, the NEPA, the NHPA and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved;
(v) No CRA protest as defined in Sec. 303.2(l) has been filed which
remains unresolved or, where such a protest has been filed and remains
unresolved, the Director or designee concurs that approval is consistent
with the purposes of the CRA and the applicant agrees in writing to any
conditions imposed regarding the CRA; and
(vi) The applicant agrees in writing to comply with any conditions
imposed by the FDIC, other than the standard conditions defined in Sec.
303.2(dd) which may be imposed without the applicant's written consent.
Sec. 303.185 Merger transactions involving foreign banks or foreign
organizations.
(a) Merger transactions involving an insured branch of a foreign
bank. Merger transactions requiring the FDIC's prior approval as set
forth in Sec. 303.62 include any merger transaction in which the
resulting institution is an insured branch of a foreign bank which is
not a federal branch, or any merger transaction which involves any
insured branch and any uninsured institution. In such cases:
(1) References to an eligible depository institution in subpart D of
this part include an eligible insured branch as defined in Sec.
303.181;
(2) The definition of a corporate reorganization in Sec. 303.61(b)
includes a merger transaction between an insured branch and other
branches, agencies, or subsidiaries in the United States of the same
foreign bank; and
(3) For the purposes of Sec. 303.62(b)(1) on interstate mergers, a
merger transaction involving an insured branch is one involving the
acquisition of a branch of an insured bank without the acquisition of
the bank for purposes of section 44 of the FDI Act (12 U.S.C. 1831u)
only when the merger transaction involves fewer than all the insured
branches of the same foreign bank in the same state.
(b) Certain merger transactions with foreign organizations outside
any State. Merger transactions requiring the FDIC's prior approval as
set forth in Sec. 303.62 include any merger transaction in which an
insured depository institution becomes directly liable for obligations
which will, after the merger transaction, be treated as deposits under
section 3(l)(5)(A)(i)-(ii) of the FDI Act (12 U.S.C. 1813(l)(5)(A)(i)-
(ii)), as a result of a merger or consolidation with a foreign
organization or an assumption of liabilities of a foreign organization.
Sec. 303.186 Exemptions from insurance requirement for a state branch
of a foreign bank; Sec. 347.206.
(a) Filing procedures--(1) Where to file. An application by a state
branch for consent to operate as a noninsured state branch, as permitted
by Sec. 347.206(b) of this chapter, shall be submitted in writing to
the appropriate FDIC office.
(2) Content of filing. A complete letter application shall include
the following information:
(i) The kinds of deposit activities in which the state branch
proposes to engage;
(ii) The expected source of deposits;
(iii) The manner in which deposits will be solicited;
(iv) How the activity will maintain or improve the availability of
credit to all sectors of the United States economy, including the
international trade finance sector;
(v) That the activity will not give the foreign bank an unfair
competitive advantage over United States banking organizations; and
(vi) A resolution by the applicant's board of directors, or evidence
of approval by senior management if a resolution is not required
pursuant to the applicant's organizational documents, authorizing the
filing of the application.
(3) Additional information. The FDIC may request additional
information to complete processing.
(4) Processing. The FDIC will provide the applicant with written
notification of the final action taken.
[[Page 39]]
Sec. 303.187 Approval for an insured state branch of a foreign bank
to conduct activities not permissible for federal branches; Sec. 347.213.
(a) Filing procedures--(1) Where to file. An application by an
insured state branch seeking approval to conduct activities not
permissible for a federal branch, as required by Sec. 347.213(a) of
this chapter, shall be submitted in writing to the appropriate FDIC
office.
(2) Content of filing. A complete letter application shall include
the following information:
(i) A brief description of the activity, including the manner in
which it will be conducted and an estimate of the expected dollar volume
associated with the activity;
(ii) An analysis of the impact of the proposed activity on the
condition of the United States operations of the foreign bank in general
and of the branch in particular, including a copy of the feasibility
study, management plan, financial projections, business plan, or similar
document concerning the conduct of the activity;
(iii) A resolution by the applicant's board of directors, or
evidence of approval by senior management if a resolution is not
required pursuant to the applicant's organizational documents,
authorizing the filing of the application;
(iv) A statement by the applicant of whether it is in compliance
with Sec. Sec. 347.210 and 347.211 of this chapter, Pledge of assets
and Asset maintenance, respectively;
(v) A statement by the applicant that it has complied with all
requirements of the Board of Governors concerning applications to
conduct the activity in question and the status of each such
application, including a copy of the Board of Governors' disposition of
such application, if applicable; and
(vi) A statement of why the activity will pose no significant risk
to the Bank Insurance Fund.
(3) Board of Governors application. If the application to the Board
of Governors contains the information required by paragraph (a) of this
section, the applicant may submit a copy to the FDIC in lieu of a
separate letter application.
(4) Additional information. The FDIC may request additional
information to complete processing.
(b) Divestiture or cessation--(1) Where to file. Divestiture plans
necessitated by a change in law or other authority, as required by Sec.
347.213(e) of this chapter, shall be submitted in writing to the
appropriate FDIC office.
(2) Content of filing. A complete letter application shall include
the following information:
(i) A detailed description of the manner in which the applicant
proposes to divest itself of or cease the activity in question; and
(ii) A projected timetable describing how long the divestiture or
cessation is expected to take.
(3) Additional information. The FDIC may request additional
information to complete processing.
Sec. Sec. 303.188-303.199 [Reserved]
Subpart K_Prompt Corrective Action
Sec. 303.200 Scope.
(a) General. (1) This subpart covers applications filed pursuant to
section 38 of the FDI Act (12 U.S.C. 1831o), which requires insured
depository institutions that are not adequately capitalized to receive
approval prior to engaging in certain activities. Section 38 restricts
or prohibits certain activities and requires an insured depository
institution to submit a capital restoration plan when it becomes
undercapitalized. The restrictions and prohibitions become more severe
as an institution's capital level declines.
(2) Definitions of the capital categories referenced in this Prompt
Corrective Action subpart may be found in subpart B of part 325 of this
chapter, Sec. 325.103(b) for state nonmember banks and Sec. 325.103(c)
for insured branches of foreign banks.
(b) Institutions covered. Restrictions and prohibitions contained in
subpart B of part 325 of this chapter apply primarily to insured state
nonmember banks and insured branches of foreign banks, as well as to
directors and senior executive officers of those institutions. Portions
of subpart B of part 325 of this chapter also apply to all insured
[[Page 40]]
depository institutions that are deemed to be critically
undercapitalized.
Sec. 303.201 Filing procedures.
Applications shall be filed with the appropriate FDIC office. The
application shall contain the information specified in each respective
section of this subpart, and shall be in letter form as prescribed in
Sec. 303.3. Additional information may be requested by the FDIC. Such
letter shall be signed by the president, senior officer or a duly
authorized agent of the insured depository institution and be
accompanied by a certified copy of a resolution adopted by the
institution's board of directors or trustees authorizing the
application.
Sec. 303.202 Processing.
The FDIC will provide the applicant with a subsequent written
notification of the final action taken as soon as the decision is
rendered.
Sec. 303.203 Applications for capital distributions.
(a) Scope. An insured state nonmember bank and any insured branch of
a foreign bank shall submit an application for capital distribution if,
after having made a capital distribution, the institution would be
undercapitalized, significantly undercapitalized, or critically
undercapitalized.
(b) Content of filing. An application to repurchase, redeem, retire
or otherwise acquire shares or ownership interests of the insured
depository institution shall describe the proposal, the shares or
obligations which are the subject thereof, and the additional shares or
obligations of the institution which will be issued in at least an
amount equivalent to the distribution. The application also shall
explain how the proposal will reduce the institution's financial
obligations or otherwise improve its financial condition. If the
proposed action also requires an application under section 18(i) of the
FDI Act (12 U.S.C. 1828(i)) as implemented by Sec. 303.241 of this part
regarding prior consent to retire capital, such application should be
filed concurrently with, or made a part of, the application filed
pursuant to section 38 of the FDI Act (12 U.S.C. 1831o).
Sec. 303.204 Applications for acquisitions, branching, and new
lines of business.
(a) Scope. (1) Any insured state nonmember bank and any insured
branch of a foreign bank which is undercapitalized or significantly
undercapitalized, and any insured depository institution which is
critically undercapitalized, shall submit an application to engage in
acquisitions, branching or new lines of business.
(2) A new line of business will include any new activity exercised
which, although it may be permissible, has not been exercised by the
institution.
(b) Content of filing. Applications shall describe the proposal,
state the date the institution's capital restoration plan was accepted
by its primary federal regulator, describe the institution's status in
implementing the plan, and explain how the proposed action is consistent
with and will further the achievement of the plan or otherwise further
the purposes of section 38 of the FDI Act. If the FDIC is not the
applicant's primary federal regulator, the application also should state
whether approval has been requested from the applicant's primary federal
regulator, the date of such request and the disposition of the request,
if any. If the proposed action also requires applications pursuant to
section 18 (c) or (d) of the FDI Act (mergers and branches) (12 U.S.C.
1828 (c) or (d)), such applications should be filed concurrently with,
or made a part of, the application filed pursuant to section 38 of the
FDI Act (12 U.S.C. 1831o).
Sec. 303.205 Applications for bonuses and increased compensation
for senior executive officers.
(a) Scope. Any insured state nonmember bank or insured branch of a
foreign bank that is significantly or critically undercapitalized, or
any insured state nonmember bank or any insured branch of a foreign bank
that is undercapitalized and which has failed to submit or implement in
any material respect an acceptable capital restoration plan, shall
submit an application to pay a bonus or increase compensation for any
senior executive officer.
[[Page 41]]
(b) Content of filing. Applications shall list each proposed bonus
or increase in compensation, and for the latter shall identify
compensation for each of the twelve calendar months preceding the
calendar month in which the institution became undercapitalized.
Applications also shall state the date the institution's capital
restoration plan was accepted by the FDIC, and describe any progress
made in implementing the plan.
Sec. 303.206 Application for payment of principal or interest on
subordinated debt.
(a) Scope. Any critically undercapitalized insured depository
institution shall submit an application to pay principal or interest on
subordinated debt.
(b) Content of filing. Applications shall describe the proposed
payment and provide an explanation of action taken under section
38(h)(3)(A)(ii) of the FDI Act (action other than receivership or
conservatorship). The application also shall explain how such payments
would further the purposes of section 38 of the FDI Act (12 U.S.C.
1831o). Existing approvals pursuant to requests filed under section
18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)) (capital stock reductions
or retirements) shall not be deemed to be the permission needed pursuant
to section 38.
Sec. 303.207 Restricted activities for critically undercapitalized
institutions.
(a) Scope. Any critically undercapitalized insured depository
institution shall submit an application to engage in certain restricted
activities.
(b) Content of filing. Applications to engage in any of the
following activities, as set forth in sections 38(i)(2) (A) through (G)
of the FDI Act, shall describe the proposed activity and explain how the
activity would further the purposes of section 38 of the FDI Act (12
U.S.C. 1831o):
(1) Enter into any material transaction other than in the usual
course of business including any action with respect to which the
institution is required to provide notice to the appropriate federal
banking agency. Materiality will be determined on a case-by-case basis;
(2) Extend credit for any highly leveraged transaction (as defined
in part 325 of this chapter);
(3) Amend the institution's charter or bylaws, except to the extent
necessary to carry out any other requirement of any law, regulation, or
order;
(4) Make any material change in accounting methods;
(5) Engage in any covered transaction (as defined in section 23A(b)
of the Federal Reserve Act (12 U.S.C. 371c(b));
(6) Pay excessive compensation or bonuses. Part 364 of this chapter
provides guidance for determining excessive compensation; or
(7) Pay interest on new or renewed liabilities at a rate that would
increase the institution's weighted average cost of funds to a level
significantly exceeding the prevailing rates of interest on insured
deposits in the institution's normal market area. Section 337.6 of this
chapter (Brokered deposits) provides guidance for defining the relevant
terms of this provision; however this provision does not supersede the
general prohibitions contained in Sec. 337.6.
Sec. Sec. 303.208-303.219 [Reserved]
Subpart L_Section 19 of the FDI Act (Consent to Service of Persons
Convicted of Certain Criminal Offenses)
Sec. 303.220 Scope.
This subpart covers applications under section 19 of the FDI Act (12
U.S.C. 1829). Pursuant to section 19, any person who has been convicted
of any criminal offense involving dishonesty, breach of trust, or money
laundering, or has agreed to enter into a pretrial diversion or similar
program in connection with a prosecution for such offense, may not
become, or continue as, an institution-affiliated party of an insured
depository institution; own or control, directly or indirectly, any
insured depository institution; or otherwise participate, directly or
indirectly, in the conduct of the affairs of any insured depository
institution without the prior written consent of the FDIC.
[[Page 42]]
Sec. 303.221 Filing procedures.
(a) Where to file. An application under section 19 of the FDI Act
shall be filed with the appropriate FDIC office.
(b) Contents of filing. Application forms may be obtained from any
FDIC regional director. The FDIC may require additional information
beyond that sought in the form, as warranted, in individual cases.
Sec. 303.222 Service at another insured depository institution.
In the case of a person who has already been approved by the FDIC
under this subpart or section 19 of the FDI Act in connection with a
particular insured depository institution, such person may not become an
institution affiliated party, or own or control directly or indirectly
another insured depository institution, or participate in the conduct of
the affairs of another insured depository institution, without the prior
written consent of the FDIC.
Sec. 303.223 Applicant's right to hearing following denial.
An applicant may request a hearing following a denial of an
application in accordance with the provisions of part 308 of this
chapter.
Sec. Sec. 303.224-303.239 [Reserved]
Subpart M_Other Filings
Sec. 303.240 General.
This subpart sets forth the filing procedures to be followed when
seeking the FDIC's consent to engage in certain activities or accomplish
other matters as specified in the individual sections contained herein.
For those matters covered by this subpart that also have substantive
FDIC regulations or related statements of policy, references to the
relevant regulations or statements of policy are contained in the
specific sections.
Sec. 303.241 Reduce or retire capital stock or capital debt instruments.
(a) Scope. This section contains the procedures to be followed by an
insured state nonmember bank to seek the prior approval of the FDIC to
reduce the amount or retire any part of its common or preferred stock,
or to retire any part of its capital notes or debentures pursuant to
section 18(i)(1) of the Act (12 U.S.C. 1828(i)(1)).
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(c) Content of filing. The application shall contain the following:
(1) The type and amount of the proposed change to the capital
structure and the reason for the change;
(2) A schedule detailing the present and proposed capital structure;
(3) The time period that the proposal will encompass;
(4) If the proposal involves a series of transactions affecting Tier
1 capital components which will be consummated over a period of time
which shall not exceed twelve months, the application shall certify that
the insured depository institution will maintain itself as a well-
capitalized institution as defined in part 325 of this chapter, both
before and after each of the proposed transactions;
(5) If the proposal involves the repurchase of capital instruments,
the amount of the repurchase price and the basis for establishing the
fair market value of the repurchase price;
(6) A statement that the proposal will be available to all holders
of a particular class of outstanding capital instruments on an equal
basis, and if not, the details of any restrictions; and
(7) The date that the applicant's board of directors approved the
proposal.
(d) Additional information. The FDIC may request additional
information at any time during processing of the application.
(e) Undercapitalized institutions. Procedures regarding applications
by an undercapitalized insured depository institution to retire capital
stock or capital debt instruments pursuant to section 38 of the FDI Act
(12 U.S.C. 1831o) are set forth in subpart K (Prompt Corrective Action),
Sec. 303.203. Applications pursuant to sections 38 and 18(i) may be
filed concurrently, or as a single application.
(f) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined inSec. 303.2(r) will be acknowledged in
[[Page 43]]
writing by the FDIC and will receive expedited processing, unless the
applicant is notified in writing to the contrary and provided with the
basis for that decision. The FDIC may remove an application from
expedited processing for any of the reasons set forth in Sec.
303.11(c)(2). Absent such removal, an application processed under
expedited processing will be deemed approved 20 days after the FDIC's
receipt of a substantially complete application.
(g) Standard processing. For those applications that are not
processed pursuant to expedited procedures, the FDIC will provide the
applicant with written notification of the final action as soon as the
decision is rendered.
Sec. 303.242 Exercise of trust powers.
(a) Scope. This section contains the procedures to be followed by a
state nonmember bank to seek the FDIC's prior consent to exercise trust
powers. The FDIC's prior consent to exercise trust powers is not
required in the following circumstances:
(1) Where a state nonmember bank received authority to exercise
trust powers from its chartering authority prior to December 1, 1950; or
(2) Where an insured depository institution continues to conduct
trust activities pursuant to authority granted by its chartering
authority subsequent to a charter conversion or withdrawal from
membership in the Federal Reserve System.
(b) Where to file. Applicants shall submit to the appropriate FDIC
office a completed form, ``Application for Consent To Exercise Trust
Powers''. This form may be obtained from any FDIC regional director.
(c) Content of filing. The filing shall consist of the completed
trust application form.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined in Sec. 303.2(r) will be acknowledged in writing
by the FDIC and will receive expedited processing, unless the applicant
is notified in writing to the contrary and provided with the basis for
that decision. The FDIC may remove an application from expedited
processing for any of the reasons set forth in Sec. 303.11(c)(2).
Absent such removal, an application processed under expedited procedures
will be deemed approved 30 days after the FDIC's receipt of a
substantially complete application.
(f) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
Sec. 303.243 Brokered deposit waivers.
(a) Scope. Pursuant to section 29 of the FDI Act (12 U.S.C. 1831f)
and part 337 of this chapter, an adequately capitalized insured
depository institution may not accept, renew or roll over any brokered
deposits unless it has obtained a waiver from the FDIC. A well-
capitalized insured depository institution may accept brokered deposits
without a waiver, and an undercapitalized insured depository institution
may not accept, renew or roll over any brokered deposits under any
circumstances. This section contains the procedures to be followed to
file with the FDIC for a brokered deposit waiver. The FDIC will provide
notice to the depository institution's appropriate federal banking
agency and any state regulatory agency, as appropriate, that a request
for a waiver has been filed and will consult with such agency or
agencies, prior to taking action on the institution's request for a
waiver. Prior notice and/or consultation shall not be required in any
particular case if the FDIC determines that the circumstances require it
to take action without giving such notice and opportunity for
consultation.
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(c) Content of filing. The application shall contain the following:
(1) The time period for which the waiver is requested;
(2) A statement of the policy governing the use of brokered deposits
in the institution's overall funding and liquidity management program;
[[Page 44]]
(3) The volume, rates and maturities of the brokered deposits held
currently and anticipated during the waiver period sought, including any
internal limits placed on the terms, solicitation and use of brokered
deposits;
(4) How brokered deposits are costed and compared to other funding
alternatives and how they are used in the institution's lending and
investment activities, including a detailed discussion of asset growth
plans;
(5) Procedures and practices used to solicit brokered deposits,
including an identification of the principal sources of such deposits;
(6) Management systems overseeing the solicitation, acceptance and
use of brokered deposits;
(7) A recent consolidated financial statement with balance sheet and
income statements; and
(8) The reasons the institution believes its acceptance, renewal or
rollover of brokered deposits would pose no undue risk.
(d) Additional information. The FDIC may request additional
information at any time during processing of the application.
(e) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined in this paragraph will be acknowledged in writing
by the FDIC and will receive expedited processing, unless the applicant
is notified in writing to the contrary and provided with the basis for
that decision. For the purpose of this section, an applicant will be
deemed an eligible depository institution if it satisfies all of the
criteria contained in Sec. 303.2(r) except that the applicant may be
adequately capitalized rather than well-capitalized. The FDIC may remove
an application from expedited processing for any of the reasons set
forth in Sec. 303.11(c)(2). Absent such removal, an application
processed under expedited procedures will be deemed approved 21 days
after the FDIC's receipt of a substantially complete application.
(f) Standard processing. For those filings which are not processed
pursuant to the expedited procedures, the FDIC will provide the
applicant with written notification of the final action as soon as the
decision is rendered.
(g) Conditions for approval. A waiver issued pursuant to this
section shall:
(1) Be for a fixed period, generally no longer than two years, but
may be extended upon refiling; and
(2) May be revoked by the FDIC at any time by written notice to the
institution.
Sec. 303.244 Golden parachute and severance plan payments.
(a) Scope. Pursuant to section 18(k) of the FDI Act (12 U.S.C.
1828(k)) and part 359 of this chapter, an insured depository institution
or depository institution holding company may not make golden parachute
payments or excess nondiscriminatory severance plan payments unless the
depository institution or holding company obtains permission to make
such payments in accordance with the rules contained in part 359 of this
chapter. This section contains the procedures to file for the FDIC's
consent when such consent is necessary under part 359 of this chapter.
(1) Golden parachute payments. A troubled insured depository
institution or a troubled depository institution holding company is
prohibited from making golden parachute payments (as defined in Sec.
359.1(f)(1) of this chapter) unless it obtains the consent of the
appropriate federal banking agency and the written concurrence of the
FDIC. Therefore, in the case of golden parachute payments, the
procedures in this section apply to all troubled insured depository
institutions and troubled depository institution holding companies.
(2) Excess nondiscriminatory severance plan payments. In the case of
excess nondiscriminatory severance plan payments as provided by Sec.
359.1(f)(2)(v) of this chapter, the FDIC's consent is necessary for
state nonmember banks that meet the criteria set forth in Sec.
359.1(f)(1)(ii) of this chapter. In addition, the FDIC's consent is
required for all insured depository institutions or depository
institution holding companies that meet the same criteria and seek to
make payments in excess of the 12-month amount specified in Sec.
359.1(f)(2)(v).
[[Page 45]]
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC regional director.
(c) Content of filing. The application shall contain the following:
(1) The reasons why the applicant seeks to make the payment;
(2) An identification of the institution-affiliated party who will
receive the payment;
(3) A copy of any contract or agreement regarding the subject matter
of the filing;
(4) The cost of the proposed payment and its impact on the
institution's capital and earnings;
(5) The reasons why the consent to the payment should be granted;
and
(6) Certification and documentation as to each of the points cited
in Sec. 359.4(a)(4).
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with a
subsequent written notification of the final action taken as soon as the
decision is rendered.
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50461, Aug. 21, 2003]
Sec. 303.245 Waiver of liability for commonly controlled depository
institutions.
(a) Scope. Section 5(e) of the FDI Act (12 U.S.C. 1815(e)) creates
liability for commonly controlled insured depository institutions for
losses incurred or anticipated to be incurred by the FDIC in connection
with the default of a commonly controlled insured depository institution
or any assistance provided by the FDIC to any commonly controlled
insured depository institution in danger of default. In addition to
certain statutory exceptions and exclusions contained in sections
5(e)(6), (7) and (8), the FDI Act also permits the FDIC, in its
discretion, to exempt any insured depository institution from this
liability if it determines that such exemption is in the best interests
of the Bank Insurance Fund (BIF) or the Savings Association Insurance
Fund (SAIF). This section describes procedures to request a conditional
waiver of liability pursuant to section 5 of the FDI Act (12 U.S.C.
1815(e)(5)(A)).
(b) Definition. Conditional waiver of liability means an exemption
from liability pursuant to section 5(e) of the FDI Act (12 U.S.C.
1815(e)) subject to terms and conditions.
(c) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(d) Content of filing. The application shall contain the following
information:
(1) The basis for requesting a waiver;
(2) The existence of any significant events (e.g., change in
control, capital injection, etc.) that may have an impact upon the
applicant and/or any potentially liable institution;
(3) Current, and if applicable, pro forma financial information
regarding the applicant and potentially liable institution(s); and
(4) The benefits to the appropriate FDIC insurance fund resulting
from the waiver and any related events.
(e) Additional information. The FDIC may request additional
information at any time during the processing of the filing.
(f) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
(g) Failure to comply with terms of conditional waiver. In the event
a conditional waiver of liability is issued, failure to comply with the
terms specified therein may result in the termination of the conditional
waiver of liability. The FDIC reserves the right to revoke the
conditional waiver of liability after giving the applicant written
notice of such revocation and a reasonable opportunity to be heard on
the matter pursuant to Sec. 303.10.
Sec. 303.246 Insurance fund conversions.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the FDIC's prior approval to
engage in an insurance fund conversion that involves the transfer of
deposits between the SAIF and the BIF. Optional conversion transactions,
commonly referred to as Oakar transactions, pursuant to section 5(d)(3)
of the FDI Act (12 U.S.C. 1815(d)(3)), which do not involve the
[[Page 46]]
transfer of deposits between the SAIF and the BIF, are governed by the
procedures set forth in subpart D (Merger Transactions) of this part.
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC regional director. The filing shall be signed by
representatives of each institution participating in the transaction.
Insurance fund conversions which are proposed in conjunction with a
merger application filed by a state nonmember bank pursuant to section
18(c) of the FDI Act (12 U.S.C. 1828(c)) should be included with that
filing.
(c) Content of filing. The application shall include the following
information:
(1) A description of the transaction;
(2) The amount of deposits involved in the conversion transaction;
(3) A pro forma balance sheet and income statement for each
institution upon consummation of the transaction; and
(4) Certification by each party to the transaction that applicable
entrance and exit fees will be paid pursuant to part 312 of this
chapter.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
Sec. 303.247 Conversion with diminution of capital.
(a) Scope. This section contains the procedures to be followed by an
insured federal depository institution seeking the prior written consent
of the FDIC pursuant to section 18(i)(2) of the FDI Act (12 U.S.C.
1828(i)(2)) to convert from an insured federal depository institution to
an insured state nonmember bank (except a District bank) where the
capital stock or surplus of the resulting bank will be less than the
capital stock or surplus, respectively, of the converting institution at
the time of the shareholders' meeting approving such conversion.
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(c) Content of filing. The application shall contain the following
information:
(1) A description of the proposed transaction;
(2) A schedule detailing the present and proposed capital structure;
and
(3) A copy of any documents submitted to the state chartering
authority with respect to the charter conversion.
(d) Additional information. The FDIC may request additional
information at any time during the processing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action when the decision is rendered.
Sec. 303.248 Continue or resume status as an insured institution
following termination under section 8 of the FDI Act.
(a) Scope. This section relates to an application by a depository
institution whose insured status has been terminated under section 8 of
the FDI Act (12 U.S.C. 1818) for permission to continue or resume its
status as an insured depository institution. This section covers
institutions whose deposit insurance continues in effect for any purpose
or for any length of time under the terms of an FDIC order terminating
deposit insurance, but does not cover operating non-insured depository
institutions which were previously insured by the FDIC, or any non-
insured, non-operating depository institution whose charter has not been
surrendered or revoked.
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(c) Content of filing. The filing shall contain the following
information:
(1) A complete statement of the action requested, all relevant
facts, and the reason for such requested action; and
(2) A certified copy of the resolution of the depository
institution's board of directors authorizing submission of the filing.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification
[[Page 47]]
of the final action as soon as the decision is rendered.
Sec. 303.249 Truth in Lending Act--Relief from reimbursement.
(a) Scope. This section applies to requests for relief from
reimbursement pursuant to the Truth in Lending Act (15 U.S.C. 1601 et
seq.) and Regulation Z (12 CFR part 226). Related delegations of
authority are also set forth.
(b) Procedures to be followed in filing initial requests for relief.
Requests for relief from reimbursement shall be filed with the
appropriate FDIC office or within 60 days after receipt of the
compliance report of examination containing the request to conduct a
file search and make restitution to affected customers. The filing shall
contain a complete and concise statement of the action requested, all
relevant facts, the reasons and analysis relied upon as the basis for
such requested action, and all supporting documentation.
(c) Additional information. The FDIC may request additional
information at any time during processing of any such requests.
(d) Processing. The FDIC will acknowledge receipt of the request for
reconsideration and provide the applicant with written notification of
its determination within 60 days of its receipt of the request for
reconsideration.
(e) Procedures to be followed in filing requests for
reconsideration. Within 15 days of receipt of written notice that its
request for relief has been denied, the requestor may petition the
appropriate FDIC office for reconsideration of such request in
accordance with the procedures set forth inSec. 303.11(f).
Sec. 303.250 Management official interlocks.
(a) Scope. This section contains the procedures to be followed by an
insured state nonmember bank to seek the approval of FDIC to establish
an interlock pursuant to the Depository Institutions Management
Interlocks Act (12 U.S.C. 3207), section 13 of the FDI Act (12 U.S.C.
1823(k)) and part 348 of this chapter (12 CFR part 348).
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(c) Content of filing. The application shall contain the following:
(1) A description of the proposed interlock;
(2) A statement of reason as to why the interlock will not result in
a monopoly or a substantial lessening of competition; and
(3) If the applicant is seeking an exemption set forth in Sec.
348.5 or 348.6 of this chapter, a description of the particular
exemption which is being requested and a statement of reasons as to why
the exemption is applicable.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action when the decision is rendered.
Sec. 303.251 Modification of conditions.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the prior consent of the FDIC to
modify the requirement of a prior approval of a filing issued by the
FDIC.
(b) Where to file. Applicants should submit a letter application to
the appropriate FDIC regional director.
(c) Content of filing. The application should contain the following
information:
(1) A description of the original approved application;
(2) A description of the modification requested; and
(3) The reason for the request.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with a written
notification of the final action as soon as the decision is rendered.
Sec. 303.252 Extension of time.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the prior consent of the FDIC for
additional time to fulfill a condition required in an approval of a
filing issued by the FDIC or to consummate a transaction which
[[Page 48]]
was the subject of an approval by the FDIC.
(b) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(c) Content of filing. The application shall contain the following
information:
(1) A description of the original approved application;
(2) Identification of the original time limitation;
(3) The additional time period requested; and
(4) The reason for the request.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
Sec. Sec. 303.253-303.259 [Reserved]
PART 304_FORMS, INSTRUCTIONS, AND REPORTS--Table of Contents
Sec.
304.1 Purpose.
304.2 Where to obtain forms and instructions.
304.3 Reports.
Authority: 5 U.S.C. 552; 12 U.S.C. 1817, 1831, 1867.
Source: 67 FR 18793, Apr. 17, 2002, unless otherwise noted.
Sec. 304.1 Purpose.
Part 304 informs the public where it may obtain forms and
instructions for reports, applications, and other submittals used by the
FDIC, and also describes certain forms that are not described elsewhere
in FDIC regulations.
Sec. 304.2 Where to obtain forms and instructions.
Forms and instructions used in connection with applications,
reports, and other submittals used by the FDIC can be obtained by
contacting the FDIC Public Information Center (801 17th Street, NW.,
Washington, DC 20434; telephone: 800-276-6003 or 202-416-6940), except
as noted below in Sec. 304.3. In addition, many forms and instructions
can be obtained from FDIC regional offices. A list of FDIC regional
offices can be obtained from the FDIC Public Information Center or found
at the FDIC's web site at http://www.fdic.gov, or in the directory of
FDIC Law, Regulations and Related Acts published by the FDIC.
Sec. 304.3 Reports.
(a) Consolidated Reports of Condition and Income, Forms FFIEC 031
and 041. Pursuant to section 7(a) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(a)), every national bank, state member bank, and insured
state nonmember bank is required to file Consolidated Reports of
Condition and Income (also known as the Call Report) in accordance with
the instructions for these reports. All assets and liabilities,
including contingent assets and liabilities, must be reported in, or
otherwise taken into account in the preparation of, the Call Report. The
FDIC uses Call Report data to calculate deposit insurance assessments
and monitor the condition, performance, and risk profile of individual
banks and the banking industry. Reporting banks must also submit
annually such information on small business and small farm lending as
the FDIC may need to assess the availability of credit to these sectors
of the economy. The report forms and instructions can be obtained from
the Division of Supervision and Consumer Protection (DSC), FDIC,
Washington, DC 20429.
(Approved by the Office of Management and Budget under control number
3064-0052)
(b) Report of Assets and Liabilities of U.S. Branches and Agencies
of Foreign Banks, Form FFIEC 002. Pursuant to section 7(a) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(a)), every insured U.S.
branch of a foreign bank is required to file a Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign Banks in accordance
with the instructions for the report. All assets and liabilities,
including contingent assets and liabilities, must be reported in, or
otherwise taken into account in the preparation of the report. The FDIC
uses the reported data
[[Page 49]]
to calculate deposit insurance assessments and monitor the condition,
performance, and risk profile of individual insured branches and the
banking industry. Insured branches must also submit annually such
information on small business and small farm lending as the FDIC may
need to assess the availability of credit to these sectors of the
economy. Because the Board of Governors of the Federal Reserve System
collects and processes this report on behalf of the FDIC, the report
forms and instructions can be obtained from Federal Reserve District
Banks or through the web site of the Federal Financial Institutions
Examination Council,
http://www.ffiec.gov/.
(Approved by the Office of Management and Budget under control number
7100-0032)
(c) Summary of Deposits, Form FDIC 8020/05. Form 8020/05 is a report
on the amount of deposits for each authorized office of an insured bank
with branches; unit banks do not report. Reports as of June 30 of each
year must be submitted no later than the immediately succeeding July 31.
The report forms and the instructions for completing the reports will be
furnished to all such banks by, or may be obtained upon request from,
the Division of Supervision and Consumer Protection (DSC), FDIC, 550
17th Street, NW., Washington, DC 20429.
(Approved by the Office of Management and Budget under control number
3064-0061)
(d) Notification of Performance of Bank Services, Form FDIC 6120/06.
Pursuant to Section 7 of the Bank Service Company Act (12 U.S.C. 1867),
as amended, FDIC supervised banks must notify the agency about the
existence of a service relationship within thirty days after the making
of the contract or the performance of the service, whichever occurs
first. Form FDIC 6120/06 may be used to satisfy the notice requirement.
The form contains identification, location and contact information for
the bank, the servicer, and a description of the services provided. In
lieu of the form, notification may be provided by letter. Either the
form or the letter containing the notice information must be submitted
to the regional director-- Division of Supervision and Consumer
Protection (DSC) of the region in which the bank's main office is
located.
(Approved by the Office of Management and Budget under control number
3064-0029)
PARTS 305-306 [RESERVED]
PART 307_NOTIFICATION OF CHANGES OF INSURED STATUS--Table of Contents
Sec.
307.1 Certification of assumption of deposit liabilities.
307.2 Notice to be given when deposit liabilities are not assumed.
Authority: Sec. 2, Pub. L. 797, 64 Stat. 879, 880 as amended by
secs. 202, 204, Pub. L. 89-694, 80 Stat. 1046, 1054, and sec. 6(c)(14),
Pub. L. 95-369, 92 Stat. 618 (12 U.S.C. 1818(a), 1818(o)); sec. 304,
Pub. L. 95-630, 92 Stat. 3676 (12 U.S.C. 1818(q); sec. 9, Pub. L. 797,
64 Stat. 881 (12 U.S.C. 1819).
Sec. 307.1 Certification of assumption of deposit liabilities.
Whenever the deposit liabilities of an insured bank or insured
branch of a foreign bank are assumed by another insured bank (whether by
merger, consolidation, or other statutory assumption, or by contract),
the assuming or resulting bank shall certify to the FDIC that it has
agreed to assume the deposit liabilities of the bank whose deposits were
assumed. The certification shall be made within 30 days after the
assumption takes effect and shall state the date the assumption took
effect. This certification shall be considered satisfactory evidence of
the assumption.
[48 FR 24031, May 31, 1983]
Sec. 307.2 Notice to be given when deposit liabilities are not assumed.
Any insured bank or insured branch of a foreign bank whose insured
status is voluntarily terminated, but whose deposit liabilities are not
assumed shall give notice to each of its depositors of the date of the
termination of its insured status under the Federal Deposit Insurance
Act. The notice to depositors shall be given in a form, in a manner and
at a time approved by
[[Page 50]]
the appropriate FDIC Regional Director. The FDIC may require the bank to
take other steps that it considers necessary for the protection of
depositors.
[48 FR 24031, May 31, 1983]
PART 308_RULES OF PRACTICE AND PROCEDURE--Table of Contents
Subpart A_Uniform Rules of Practice and Procedure
Sec.
308.1 Scope.
308.2 Rules of construction.
308.3 Definitions.
308.4 Authority of Board of Directors.
308.5 Authority of the administrative law judge.
308.6 Appearance and practice in adjudicatory proceedings.
308.7 Good faith certification.
308.8 Conflicts of interest.
308.9 Ex parte communications.
308.10 Filing of papers.
308.11 Service of papers.
308.12 Construction of time limits.
308.13 Change of time limits.
308.14 Witness fees and expenses.
308.15 Opportunity for informal settlement.
308.16 FDIC's right to conduct examination.
308.17 Collateral attacks on adjudicatory proceeding.
308.18 Commencement of proceeding and contents of notice.
308.19 Answer.
308.20 Amended pleadings.
308.21 Failure to appear.
308.22 Consolidation and severance of actions.
308.23 Motions.
308.24 Scope of document discovery.
308.25 Request for document discovery from parties.
308.26 Document subpoenas to nonparties.
308.27 Deposition of witness unavailable for hearing.
308.28 Interlocutory review.
308.29 Summary disposition.
308.30 Partial summary disposition.
308.31 Scheduling and prehearing conferences.
308.32 Prehearing submissions.
308.33 Public hearings.
308.34 Hearing subpoenas.
308.35 Conduct of hearings.
308.36 Evidence.
308.37 Post-hearing filings.
308.38 Recommended decision and filing of record.
308.39 Exceptions to recommended decision.
308.40 Review by Board of Directors.
308.41 Stays pending judicial review.
Subpart B_General Rules of Procedure
308.101 Scope of Local Rules.
308.102 Authority of Board of Directors and Executive Secretary.
308.103 Appointment of administrative law judge.
308.104 Filings with the Board of Directors.
308.105 Custodian of the record.
308.106 Written testimony in lieu of oral hearing.
308.107 Document discovery.
Subpart C_Rules of Practice Before the FDIC and Standards of Conduct
308.108 Sanctions.
308.109 Suspension and disbarment.
Subpart D_Rules and Procedures Applicable to Proceedings Relating to
Disapproval of Acquisition of Control
308.110 Scope.
308.111 Grounds for disapproval.
308.112 Notice of disapproval.
308.113 Answer to notice of disapproval.
308.114 Burden of proof.
Subpart E_Rules and Procedures Applicable to Proceedings Relating to
Assessment of Civil Penalties for Willful Violations of the Change in
Bank Control Act
308.115 Scope.
308.116 Assessment of penalties.
308.117 Effective date of, and payment under, an order to pay.
308.118 Collection of penalties.
Subpart F_Rules and Procedures Applicable to Proceedings for Involuntary
Termination of Insured Status
308.119 Scope.
308.120 Grounds for termination of insurance.
308.121 Notification to primary regulator.
308.122 Notice of intent to terminate.
308.123 Notice to depositors.
308.124 Involuntary termination of insured status for failure to receive
deposits.
308.125 Temporary suspension of deposit insurance.
308.126 Special supervisory associations.
Subpart G_Rules and Procedures Applicable to Proceedings Relating to
Cease-and-Desist Orders
308.127 Scope.
308.128 Grounds for cease-and-desist orders.
308.129 Notice to state supervisory authority.
308.130 Effective date of order and service on bank.
[[Page 51]]
308.131 Temporary cease-and-desist order.
Subpart H_Rules and Procedures Applicable to Proceedings Relating to
Assessment and Collection of Civil Money Penalties for Violation of
Cease-and-Desist Orders and of Certain Federal Statutes, Including Call
Report Penalties
308.132 Assessment of penalties.
308.133 Effective date of, and payment under, an order to pay.
Subpart I_Rules and Procedures for Imposition of Sanctions Upon
Municipal Securities Dealers or Persons Associated With Them and
Clearing Agencies or Transfer Agents
308.134 Scope.
308.135 Grounds for imposition of sanctions.
308.136 Notice to and consultation with the Securities and Exchange
Commission.
308.137 Effective date of order imposing sanctions.
Subpart J_Rules and Procedures Relating to Exemption Proceedings Under
Section 12(h) of the Securities Exchange Act of 1934
308.138 Scope.
308.139 Application for exemption.
308.140 Newspaper notice.
308.141 Notice of hearing.
308.142 Hearing.
308.143 Decision of Board of Directors.
Subpart K_Procedures Applicable to Investigations Pursuant to Section
10(c) of the FDIA
308.144 Scope.
308.145 Conduct of investigation.
308.146 Powers of person conducting investigation.
308.147 Investigations confidential.
308.148 Rights of witnesses.
308.149 Service of subpoena.
308.150 Transcripts.
Subpart L_Procedures and Standards Applicable to a Notice of Change in
Senior Executive Officer or Director Pursuant to Section 32 of the FDIA
308.151 Scope.
308.152 Grounds for disapproval of notice.
308.153 Procedures where notice of disapproval issues pursuant to Sec.
303.103(c) of this chapter.
308.154 Decision on review.
308.155 Hearing.
Subpart M_Procedures and Standards Applicable to an Application Pursuant
to Section 19 of the FDIA
308.156 Scope.
308.157 Relevant considerations.
308.158 Filing papers and effective date.
308.159 Denial of applications.
308.160 Hearings.
Subpart N_Rules and Procedures Applicable to Proceedings Relating to
Suspension, Removal, and Prohibition Where a Felony Is Charged
308.161 Scope.
308.162 Relevant considerations.
308.163 Notice of suspension, and orders of removal or prohibition.
308.164 Hearings.
Subpart O_Liability of Commonly Controlled Depository Institutions
308.165 Scope.
308.166 Grounds for assessment of liability.
308.167 Notice of assessment of liability.
308.168 Effective date of and payment under an order to pay.
Subpart P_Rules and Procedures Relating to the Recovery of Attorney Fees
and Other Expenses
308.169 Scope.
308.170 Filing, content, and service of documents.
308.171 Responses to application.
308.172 Eligibility of applicants.
308.173 Prevailing party.
308.174 Standards for awards.
308.175 Measure of awards.
308.176 Application for awards.
308.177 Statement of net worth.
308.178 Statement of fees and expenses.
308.179 Settlement negotiations.
308.180 Further proceedings.
308.181 Recommended decision.
308.182 Board of Directors action.
308.183 Payment of awards.
Subpart Q_Issuance and Review of Orders Pursuant to the Prompt
Corrective Action Provisions of the Federal Deposit Insurance Act
308.200 Scope.
308.201 Directives to take prompt corrective action.
308.202 Procedures for reclassifying a bank based on criteria other than
capital.
308.203 Order to dismiss a director or senior executive officer.
[[Page 52]]
308.204 Enforcement of directives.
Subpart R_Submission and Review of Safety and Soundness Compliance Plans
and Issuance of Orders To Correct Safety and Soundness Deficiencies
308.300 Scope.
308.301 Purpose.
308.302 Determination and notification of failure to meet a safety and
soundness standard and request for compliance plan.
308.303 Filing of safety and soundness compliance plan.
308.304 Issuance of orders to correct deficiencies and to take or
refrain from taking other actions.
308.305 Enforcement of orders.
Subpart S_Applications for a Stay or Review of Actions of Bank Clearing
Agencies
308.400 Scope.
308.401 Applications for stays of disciplinary sanctions or summary
suspensions by a bank clearing agency.
308.402 Applications for review of final disciplinary sanctions, denials
of participation, or prohibitions or limitations of access to
services imposed by bank clearing agencies.
Subpart T_Program Fraud Civil Remedies and Procedures
308.500 Basis, purpose, and scope.
308.501 Definitions.
308.502 Basis for civil penalties and assessments.
308.503 Investigations.
308.504 Review by the reviewing official.
308.505 Prerequisites for issuing a complaint.
308.506 Complaint.
308.507 Service of complaint.
308.508 Answer.
308.509 Default upon failure to file an answer.
308.510 Referral of complaint and answer to the ALJ.
308.511 Notice of hearing.
308.512 Parties to the hearing.
308.513 Separation of functions.
308.514 Ex parte contacts.
308.515 Disqualification of reviewing official or ALJ.
308.516 Rights of parties.
308.517 Authority of the ALJ.
308.518 Prehearing conferences.
308.519 Disclosure of documents.
308.520 Discovery.
308.521 Exchange of witness lists, statements, and exhibits.
308.522 Subpoenas for attendance at hearing.
308.523 Protective order.
308.524 Witness fees.
308.525 Form, filing, and service of papers.
308.526 Computation of time.
308.527 Motions.
308.528 Sanctions.
308.529 The hearing and burden of proof.
308.530 Determining the amount of penalties and assessments.
308.531 Location of hearing.
308.532 Witnesses.
308.533 Evidence.
308.534 The record.
308.535 Post-hearing briefs.
308.536 Initial decision.
308.537 Reconsideration of initial decision.
308.538 Appeal to the Board of Directors.
308.539 Stays ordered by the Department of Justice.
308.540 Stay pending appeal.
308.541 Judicial review.
308.542 Collection of civil penalties and assessments.
308.543 Right to administrative offset.
308.544 Deposit in Treasury of United States.
308.545 Compromise or settlement.
308.546 Limitations.
Subpart U_Removal, Suspension, and Debarment of Accountants From
Performing Audit Services
308.600 Scope.
308.601 Definitions.
308.602 Removal, suspension, or debarment.
308.603 Automatic removal, suspension, and debarment.
308.604 Notice of removal, suspension, or debarment.
308.605 Application for reinstatement.
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505,
1815(e), 1817, 1818, 1820, 1828, 1829, 1829b, 1831i, 1831m(g)(4), 1831o,
1831p-1, 1832(c), 1884(b), 1972, 3102, 3108(a), 3349, 3909, 4717; 15
U.S.C. 78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3 and
78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 U.S.C. 330, 5321; 42
U.S.C. 4012a; Sec. 3100(s), Pub. L. 104-134, 110 Stat. 1321-358.
Source: 56 FR 37975, Aug. 9, 1991, unless otherwise noted.
Subpart A_Uniform Rules of Practice and Procedure
Sec. 308.1 Scope.
This subpart prescribes rules of practice and procedure applicable
to adjudicatory proceedings as to which hearings on the record are
provided for by the following statutory provisions:
[[Page 53]]
(a) Cease-and-desist proceedings under section 8(b) of the Federal
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the
FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit
Insurance Corporation (``FDIC''), should issue an order to approve or
disapprove a person's proposed acquisition of an institution and/or
institution holding company;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions
upon any government securities broker or dealer or upon any person
associated or seeking to become associated with a government securities
broker or dealer for which the FDIC is the appropriate regulatory
agency;
(e) Assessment of civil money penalties by the FDIC against
institutions, institution-affiliated parties, and certain other persons
for which it is the appropriate regulatory agency for any violation of:
(1) Sections 22(h) and 23 of the Federal Reserve Act (``FRA''), or
any regulation issued thereunder, and certain unsafe or unsound
practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1828(j);
(2) Section 106(b) of the Bank Holding Company Act Amendments of
1970 (``BHCA Amendments of 1970''), and certain unsafe or unsound
practices or breaches of fiduciary duty, pursuant to 12 U.S.C.
1972(2)(F);
(3) Any provision of the Change in Bank Control Act of 1978, as
amended (the ``CBCA''), or any regulation or order issued thereunder,
and certain unsafe or unsound practices, or breaches of fiduciary duty,
pursuant to 12 U.S.C. 1817(j)(16);
(4) Section 7(a)(1) of the FDIA, pursuant to 12 U.S.C. 1817(a)(1);
(5) Any provision of the International Lending Supervision Act of
1983 (``ILSA''), or any rule, regulation or order issued thereunder,
pursuant to 12 U.S.C. 3909;
(6) Any provision of the International Banking Act of 1978
(``IBA''), or any rule, regulation or order issued thereunder, pursuant
to 12 U.S.C. 3108;
(7) Certain provisions of the Exchange Act, pursuant to section 21B
of the Exchange Act (15 U.S.C. 78u-2);
(8) Section 1120 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order or
regulation issued thereunder;
(9) The terms of any final or temporary order issued under section 8
of the FDIA or of any written agreement executed by the FDIC, the terms
of any condition imposed in writing by the FDIC in connection with the
grant of an application or request, certain unsafe or unsound practices
or breaches of fiduciary duty, or any law or regulation not otherwise
provided herein pursuant to 12 U.S.C. 1818(i)(2);
(10) Any provision of law referenced in section 102(f) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder; and
(11) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(f) Remedial action under section 102(g) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g)); and
(g) This subpart also applies to all other adjudications required by
statute to be determined on the record after opportunity for an agency
hearing, unless otherwise specifically provided for in the Local Rules.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.2 Rules of construction.
For purposes of this subpart:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neuter gender encompasses
all three, if such use would be appropriate;
(c) The term counsel includes a non-attorney representative; and
(d) Unless the context requires otherwise, a party's counsel of
record, if any, may, on behalf of that party, take any action required
to be taken by the party.
[[Page 54]]
Sec. 308.3 Definitions.
For purposes of this subpart, unless explicitly stated to the
contrary:
(a) Administrative law judge means one who presides at an
administrative hearing under authority set forth at 5 U.S.C. 556.
(b) Adjudicatory proceeding means a proceeding conducted pursuant to
these rules and leading to the formulation of a final order other than a
regulation.
(c) Board of Directors or Board means the Board of Directors of the
Federal Deposit Insurance Corporation or its designee.
(d) Decisional employee means any member of the Federal Deposit
Insurance Corporation's or administrative law judge's staff who has not
engaged in an investigative or prosecutorial role in a proceeding and
who may assist the Board of Directors or the administrative law judge,
respectively, in preparing orders, recommended decisions, decisions, and
other documents under the Uniform Rules.
(e) Designee of the Board of Directors means officers or officials
of the Federal Deposit Insurance Corporation acting pursuant to
authority delegated by the Board of Directors as provided in 12 CFR part
303 of this chapter or by specific resolution of the Board of Directors.
(f) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the FDIC in an adjudicatory
proceeding.
(g) Executive Secretary means the Executive Secretary of the Federal
Deposit Insurance Corporation or his or her designee.
(h) FDIC means the Federal Deposit Insurance Corporation.
(i) Final order means an order issued by the FDIC with or without
the consent of the affected institution or the institution-affiliated
party, that has become final, without regard to the pendency of any
petition for reconsideration or review.
(j) Institution includes:
(1) Any bank as that term is defined in section 3(a) of the FDIA (12
U.S.C. 1813(a));
(2) Any bank holding company or any subsidiary (other than a bank)
of a bank holding company as those terms are defined in the BHCA (12
U.S.C. 1841 et seq.);
(3) Any savings association as that term is defined in section 3(b)
of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company or
any subsidiary thereof (other than a bank) as those terms are defined in
section 10(a) of the HOLA (12 U.S.C. 1467(a));
(4) Any organization operating under section 25 of the FRA (12
U.S.C. 601 et seq.);
(5) Any foreign bank or company to which section 8 of the IBA (12
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; and
(6) Any federal agency as that term is defined in section 1(b) of
the IBA (12 U.S.C. 3101(5)).
(k) Institution-affiliated party means any institution-affiliated
party as that term is defined in section 3(u) of the FDIA (12 U.S.C.
1813(u)).
(l) Local Rules means those rules promulgated by the FDIC in those
subparts of this part other than subpart A.
(m) Office of Financial Institution Adjudication (``OFIA'') means
the executive body charged with overseeing the administration of
administrative enforcement proceedings of the Office of the Comptroller
of the Currency (``OCC''), the Board of Governors of the Federal Reserve
Board (``FRB''), the FDIC, the Office of Thrift Supervision (``OTS'')
and the National Credit Union Administration (``NCUA'').
(n) Party means the FDIC and any person named as a party in any
notice.
(o) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency or other entity or organization, including an
institution as defined in paragraph (j) of this section.
(p) Respondent means any party other than the FDIC.
(q) Uniform Rules means those rules in subpart A of this part that
pertain to the types of formal administrative enforcement actions set
forth at Sec. 308.01 and as specified in subparts B through P of this
part.
(r) Violation includes any action (alone or with another or others)
for or toward causing, bringing about, participating in, counseling, or
aiding or abetting a violation.
[[Page 55]]
Sec. 308.4 Authority of Board of Directors.
The Board of Directors may, at any time during the pendency of a
proceeding, perform, direct the performance of, or waive performance of,
any act which could be done or ordered by the administrative law judge.
Sec. 308.5 Authority of the administrative law judge.
(a) General rule. All proceedings governed by this part shall be
conducted in accordance with the provisions of chapter 5 of title 5 of
the United States Code. The administrative law judge shall have all
powers necessary to conduct a proceeding in a fair and impartial manner
and to avoid unnecessary delay.
(b) Powers. The administrative law judge shall have all powers
necessary to conduct the proceeding in accordance with paragraph (a) of
this section, including the following powers:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, and protective
orders, as authorized by this part, and to quash or modify any such
subpoenas and orders;
(3) To receive relevant evidence and to rule upon the admission of
evidence and offers of proof;
(4) To take or cause depositions to be taken as authorized by this
subpart;
(5) To regulate the course of the hearing and the conduct of the
parties and their counsel;
(6) To hold scheduling and/or pre-hearing conferences as set forth
in Sec. 308.31;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the Board
of Directors shall have the power to grant any motion to dismiss the
proceeding or to decide any other motion that results in a final
determination of the merits of the proceeding;
(8) To prepare and present to the Board of Directors a recommended
decision as provided herein;
(9) To recuse himself or herself by motion made by a party or on his
or her own motion;
(10) To establish time, place and manner limitations on the
attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 308.6 Appearance and practice in adjudicatory proceedings.
(a) Appearance before the FDIC or an administrative law judge--(1)
By attorneys. Any member in good standing of the bar of the highest
court of any state, commonwealth, possession, territory of the United
States, or the District of Columbia may represent others before the FDIC
if such attorney is not currently suspended or debarred from practice
before the FDIC.
(2) By non-attorneys. An individual may appear on his or her own
behalf; a member of a partnership may represent the partnership; a duly
authorized officer, director, or employee of any government unit,
agency, institution, corporation or authority may represent that unit,
agency, institution, corporation or authority if such officer; director,
or employee is not currently suspended or debarred from practice before
the FDIC.
(3) Notice of appearance. Any individual acting as counsel on behalf
of a party, including the FDIC, shall file a notice of appearance with
OFIA at or before the time that individual submits papers or otherwise
appears on behalf of a party in the adjudicatory proceeding. The notice
of appearance must include a written declaration that the individual is
currently qualified as provided in paragraph (a)(1) or (a)(2) of this
section and is authorized to represent the particular party. By filing a
notice of appearance on behalf of a party in an adjudicatory proceeding,
the counsel agrees and represents that he or she is authorized to accept
service on behalf of the represented party and that, in the event of
withdrawal from representation, he or she will, if required by the
administrative law judge, continue to accept service until new counsel
has filed a notice of appearance or until the represented party
indicates that he or she will proceed on a pro se basis.
[[Page 56]]
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or
contumacious conduct at any phase of any adjudicatory proceeding may be
grounds for exclusion or suspension of counsel from the proceeding.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.7 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice shall be signed by at least one
counsel of record in his or her individual name and shall state that
counsel's address and telephone number. A party who acts as his or her
own counsel shall sign his or her individual name and state his or her
address and telephone number on every filing or submission of record.
(b) Effect of signature. (1) The signature of counsel or a party
shall constitute a certification that: The counsel or party has read the
filing or submission of record; to the best of his or her knowledge,
information, and belief formed after reasonable inquiry, the filing or
submission of record is well-grounded in fact and is warranted by
existing law or a good faith argument for the extension, modification,
or reversal of existing law; and the filing or submission of record is
not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
(2) If a filing or submission of record is not signed, the
administrative law judge shall strike the filing or submission of
record, unless it is signed promptly after the omission is called to the
attention of the pleader or movant.
(c) Effect of making oral motion or argument. The act of making any
oral motion or oral argument by any counsel or party constitutes a
certification that to the best of his or her knowledge, information, and
belief formed after reasonable inquiry, his or her statements are well-
grounded in fact and are warranted by existing law or a good faith
argument for the extension, modification, or reversal of existing law,
and are not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
Sec. 308.8 Conflicts of interest.
(a) Conflict of interest in representation. No person shall appear
as counsel for another person in an adjudicatory proceeding if it
reasonably appears that such representation may be materially limited by
that counsel's responsibilities to a third person or by the counsel's
own interests. The administrative law judge may take corrective measures
at any stage of a proceeding to cure a conflict of interest in
representation, including the issuance of an order limiting the scope of
representation or disqualifying an individual from appearing in a
representative capacity for the duration of the proceeding.
(b) Certification and waiver. If any person appearing as counsel
represents two or more parties to an adjudicatory proceeding or also
represents a non-party on a matter relevant to an issue in the
proceeding, counsel must certify in writing at the time of filing the
notice of appearance required by Sec. 308.6(a):
(1) That the counsel has personally and fully discussed the
possibility of conflicts of interest with each such party and non-party;
and
(2) That each such party and non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any non-material conflicts of interest during the course of the
proceeding.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.9 Ex parte communications.
(a) Definition--(1) Ex parte communication means any material oral
or written communication relevant to the merits of an adjudicatory
proceeding that was neither on the record nor on reasonable prior notice
to all parties that takes place between:
(i) An interested person outside the FDIC (including such person's
counsel); and
(ii) The administrative law judge handling that proceeding, the
Board of Directors, or a decisional employee.
(2) Exception. A request for status of the proceeding does not
constitute an ex parte communication.
[[Page 57]]
(b) Prohibition of ex parte communications. From the time the notice
is issued by the FDIC until the date that the Board of Directors issues
its final decision pursuant to Sec. 308.40(c):
(1) No interested person outside the FDIC shall make or knowingly
cause to be made an ex parte communication to any member of the Board of
Directors, the administrative law judge, or a decisional employee; and
(2) No member of the Board of Directors, no administrative law
judge, or decisional employee shall make or knowingly cause to be made
to any interested person outside the FDIC any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the administrative law judge, any
member of the Board of Directors or other person identified in paragraph
(a) of this section, that person shall cause all such written
communications (or, if the communication is oral, a memorandum stating
the substance of the communication) to be placed on the record of the
proceeding and served on all parties. All other parties to the
proceeding shall have an opportunity, within ten days of receipt of
service of the ex parte communication, to file responses thereto and to
recommend any sanctions that they believe to be appropriate under the
circumstances. The administrative law judge or the Board of Directors
shall then determine whether any action should be taken concerning the
ex parte communication in accordance with paragraph (d) of this section.
(d) Sanctions. Any party or his or her counsel who makes a
prohibited ex parte communication, or who encourages or solicits another
to make any such communication, may be subject to any appropriate
sanction or sanctions imposed by the Board of Directors or the
administrative law judge including, but not limited to, exclusion from
the proceedings and an adverse ruling on the issue which is the subject
of the prohibited communication.
(e) Separation of functions. Except to the extent required for the
disposition of ex parte matters as authorized by law, the administrative
law judge may not consult a person or party on any matter relevant to
the merits of the adjudication, unless on notice and opportunity for all
parties to participate. An employee or agent engaged in the performance
of investigative or prosecuting functions for the FDIC in a case may
not, in that or a factually related case, participate or advise in the
decision, recommended decision, or agency review of the recommended
decision under Sec. 308.40 except as witness or counsel in public
proceedings.
[56 FR 37975, Aug. 9, 1991, as amended at 60 FR 24762, May 10, 1995]
Sec. 308.10 Filing of papers.
(a) Filing. Any papers required to be filed, excluding documents
produced in response to a discovery request pursuant to Sec. Sec.
308.25 and 308.26, shall be filed with the OFIA, except as otherwise
provided.
(b) Manner of filing. Unless otherwise specified by the Board of
Directors or the administrative law judge, filing may be accomplished
by:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if expressly authorized,
and upon any conditions specified, by the Board of Directors or the
administrative law judge. All papers filed by electronic media shall
also concurrently be filed in accordance with paragraph (c) of this
section.
(c) Formal requirements as to papers filed--(1) Form. All papers
filed must set forth the name, address, and telephone number of the
counsel or party making the filing and must be accompanied by a
certification setting forth when and how service has been made on all
other parties. All papers filed must be double-spaced and printed or
typewritten on 8\1/2\x11 inch paper, and must be clear and legible.
(2) Signature. All papers must be dated and signed as provided in
Sec. 308.7.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name of the FDIC and of the
[[Page 58]]
filing party, the title and docket number of the proceeding, and the
subject of the particular paper.
(4) Number of copies. Unless otherwise specified by the Board of
Directors, or the administrative law judge, an original and one copy of
all documents and papers shall be filed, except that only one copy of
transcripts of testimony and exhibits shall be filed.
Sec. 308.11 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers shall serve a copy upon the counsel of record for all other
parties to the proceeding so represented, and upon any party not so
represented.
(b) Method of service. Except as provided in paragraphs (c)(2) and
(d) of this section, a serving party shall use one or more of the
following methods of service:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if the parties mutually
agree. Any papers served by electronic media shall also concurrently be
served in accordance with the requirements of Sec. 308.10(c).
(c) By the Board of Directors. (1) All papers required to be served
by the Board of Directors or the administrative law judge upon a party
who has appeared in the proceeding in accordance with Sec. 308.6, shall
be served by any means specified in paragraph (b) of this section.
(2) If a party has not appeared in the proceeding in accordance with
Sec. 308.6, the Board of Directors or the administrative law judge
shall make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
(iv) By registered or certified mail addressed to the party's last
known address; or
(v) By any other method reasonably calculated to give actual notice.
(d) Subpoenas. Service of a subpoena may be made:
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(3) By delivery to an agent which, in the case of a corporation or
other association, is delivery to an officer, managing or general agent,
or to any other agent authorized by appointment or by law to receive
service and, if the agent is one authorized by statute to receive
service and the statute so requires, by also mailing a copy to the
party;
(4) By registered or certified mail addressed to the person's last
known address; or
(5) In such other manner as is reasonably calculated to give actual
notice.
(e) Area of service. Service in any state, territory, possession of
the United States, or the District of Columbia, on any person or company
doing business in any state, territory, possession of the United States,
or the District of Columbia, or on any person as otherwise provided by
law, is effective without regard to the place where the hearing is held,
provided that if service is made on a foreign bank in connection with an
action or proceeding involving one or more of its branches or agencies
located in any state, territory, possession of the United States, or the
District of Columbia, service shall be made on at least one branch or
agency so involved.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.12 Construction of time limits.
(a) General rule. In computing any period of time prescribed by this
subpart, the date of the act or event that commences the designated
period of time is not included. The last day so computed
[[Page 59]]
is included unless it is a Saturday, Sunday, or Federal holiday. When
the last day is a Saturday, Sunday, or Federal holiday, the period runs
until the end of the next day that is not a Saturday, Sunday, or Federal
holiday. Intermediate Saturdays, Sundays, and Federal holidays are
included in the computation of time. However, when the time period
within which an act is to be performed is ten days or less, not
including any additional time allowed for in paragraph (c) of this
section, intermediate Saturdays, Sundays, and Federal holidays are not
included.
(b) When papers are deemed to be filed or served. (1) Filing and
service are deemed to be effective:
(i) In the case of personal service or same day commercial courier
delivery, upon actual service;
(ii) In the case of overnight commercial delivery service, U.S.
Express Mail delivery, or first class, registered, or certified mail,
upon deposit in or delivery to an appropriate point of collection;
(iii) In the case of transmission by electronic media, as specified
by the authority receiving the filing, in the case of filing, and as
agreed among the parties, in the case of service.
(2) The effective filing and service dates specified in paragraph
(b) (1) of this section may be modified by the Board of Directors or
administrative law judge in the case of filing or by agreement of the
parties in the case of service.
(c) Calculation of time for service and filing of responsive papers.
Whenever a time limit is measured by a prescribed period from the
service of any notice or paper, the applicable time limits are
calculated as follows:
(1) If service is made by first class, registered, or certified
mail, add three calendar days to the prescribed period;
(2) If service is made by express mail or overnight delivery
service, add one calendar day to the prescribed period; or
(3) If service is made by electronic media transmission, add one
calendar day to the prescribed period, unless otherwise determined by
the Board of Directors or the administrative law judge in the case of
filing, or by agreement among the parties in the case of service.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.13 Change of time limits.
Except as otherwise provided by law, the administrative law judge
may, for good cause shown, extend the time limits prescribed by the
Uniform Rules or by any notice or order issued in the proceedings. After
the referral of the case to the Board of Directors pursuant to Sec.
308.38, the Board of Directors may grant extensions of the time limits
for good cause shown. Extensions may be granted at the motion of a party
or of the Board of Directors after notice and opportunity to respond is
afforded all non-moving parties, or on the administrative law judge's
own motion.
Sec. 308.14 Witness fees and expenses.
Witnesses subpoenaed for testimony or depositions shall be paid the
same fees for attendance and mileage as are paid in the United States
district courts in proceedings in which the United States is a party,
provided that, in the case of a discovery subpoena addressed to a party,
no witness fees or mileage need be paid. Fees for witnesses shall be
tendered in advance by the party requesting the subpoena, except that
fees and mileage need not be tendered in advance where the FDIC is the
party requesting the subpoena. The FDIC shall not be required to pay any
fees to, or expenses of, any witness not subpoenaed by the FDIC.
Sec. 308.15 Opportunity for informal settlement.
Any respondent may, at any time in the proceeding, unilaterally
submit to Enforcement Counsel written offers or proposals for settlement
of a proceeding, without prejudice to the rights of any of the parties.
No such offer or proposal shall be made to any FDIC representative other
than Enforcement Counsel. Submission of a written settlement offer does
not provide a basis for adjourning or otherwise delaying all or any
portion of a proceeding under this part. No settlement offer or
proposal, or any subsequent negotiation or resolution, is admissible as
evidence in any proceeding.
[[Page 60]]
Sec. 308.16 FDIC's right to conduct examination.
Nothing contained in this subpart limits in any manner the right of
the FDIC to conduct any examination, inspection, or visitation of any
institution or institution-affiliated party, or the right of the FDIC to
conduct or continue any form of investigation authorized by law.
Sec. 308.17 Collateral attacks on adjudicatory proceeding.
If an interlocutory appeal or collateral attack is brought in any
court concerning all or any part of an adjudicatory proceeding, the
challenged adjudicatory proceeding shall continue without regard to the
pendency of that court proceeding. No default or other failure to act as
directed in the adjudicatory proceeding within the times prescribed in
this subpart shall be excused based on the pendency before any court of
any interlocutory appeal or collateral attack.
Sec. 308.18 Commencement of proceeding and contents of notice.
(a) Commencement of proceeding. (1)(i) Except for change-in-control
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a
proceeding governed by this subpart is commenced by issuance of a notice
by the FDIC.
(ii) The notice must be served by the Executive Secretary upon the
respondent and given to any other appropriate financial institution
supervisory authority where required by law.
(iii) The notice must be filed with the OFIA.
(2) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the
FDIC.
(b) Contents of notice. The notice must set forth:
(1) The legal authority for the proceeding and for the FDIC's
jurisdiction over the proceeding;
(2) A statement of the matters of fact or law showing that the FDIC
is entitled to relief;
(3) A proposed order or prayer for an order granting the requested
relief;
(4) The time, place, and nature of the hearing as required by law or
regulation;
(5) The time within which to file an answer as required by law or
regulation;
(6) The time within which to request a hearing as required by law or
regulation; and
(7) That the answer and/or request for a hearing shall be filed with
OFIA.
Sec. 308.19 Answer.
(a) When. Within 20 days of service of the notice, respondent shall
file an answer as designated in the notice. In a civil money penalty
proceeding, respondent shall also file a request for a hearing within 20
days of service of the notice.
(b) Content of answer. An answer must specifically respond to each
paragraph or allegation of fact contained in the notice and must admit,
deny, or state that the party lacks sufficient information to admit or
deny each allegation of fact. A statement of lack of information has the
effect of a denial. Denials must fairly meet the substance of each
allegation of fact denied; general denials are not permitted. When a
respondent denies part of an allegation, that part must be denied and
the remainder specifically admitted. Any allegation of fact in the
notice which is not denied in the answer must be deemed admitted for
purposes of the proceeding. A respondent is not required to respond to
the portion of a notice that constitutes the prayer for relief or
proposed order. The answer must set forth affirmative defenses, if any,
asserted by the respondent.
(c) Default--(1) Effect of failure to answer. Failure of a
respondent to file an answer required by this section within the time
provided constitutes a waiver of his or her right to appear and contest
the allegations in the notice. If no timely answer is filed, Enforcement
Counsel may file a motion for entry of an order of default. Upon a
finding that no good cause has been shown for the failure to file a
timely answer, the administrative law judge shall file with the Board of
Directors a recommended decision containing the findings and the relief
sought in the notice. Any final order issued by the Board of Directors
based upon a respondent's failure to answer is deemed to be an order
issued upon consent.
[[Page 61]]
(2) Effect of failure to request a hearing in civil money penalty
proceedings. If respondent fails to request a hearing as required by law
within the time provided, the notice of assessment constitutes a final
and unappealable order.
Sec. 308.20 Amended pleadings.
(a) Amendments. The notice or answer may be amended or supplemented
at any stage of the proceeding. The respondent must answer an amended
notice within the time remaining for the respondent's answer to the
original notice, or within ten days after service of the amended notice,
whichever period is longer, unless the Board of Directors or
administrative law judge orders otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised in
the notice or answer are tried at the hearing by express or implied
consent of the parties, they will be treated in all respects as if they
had been raised in the notice or answer, and no formal amendments are
required. If evidence is objected to at the hearing on the ground that
it is not within the issues raised by the notice or answer, the
administrative law judge may admit the evidence when admission is likely
to assist in adjudicating the merits of the action and the objecting
party fails to satisfy the administrative law judge that the admission
of such evidence would unfairly prejudice that party's action or defense
upon the merits. The administrative law judge may grant a continuance to
enable the objecting party to meet such evidence.
[61 FR 20348, May 6, 1996]
Sec. 308.21 Failure to appear.
Failure of a respondent to appear in person at the hearing or by a
duly authorized counsel constitutes a waiver of respondent's right to a
hearing and is deemed an admission of the facts as alleged and consent
to the relief sought in the notice. Without further proceedings or
notice to the respondent, the administrative law judge shall file with
the Board of Directors a recommended decision containing the findings
and the relief sought in the notice.
Sec. 308.22 Consolidation and severance of actions.
(a) Consolidation. (1) On the motion of any party, or on the
administrative law judge's own motion, the administrative law judge may
consolidate, for some or all purposes, any two or more proceedings, if
each such proceeding involves or arises out of the same transaction,
occurrence or series of transactions or occurrences, or involves at
least one common respondent or a material common question of law or
fact, unless such consolidation would cause unreasonable delay or
injustice.
(2) In the event of consolidation under paragraph (a)(1) of this
section, appropriate adjustment to the prehearing schedule must be made
to avoid unnecessary expense, inconvenience, or delay.
(b) Severance. The administrative law judge may, upon the motion of
any party, sever the proceeding for separate resolution of the matter as
to any respondent only if the administrative law judge finds that:
(1) Undue prejudice or injustice to the moving party would result
from not severing the proceeding; and
(2) Such undue prejudice or injustice would outweigh the interests
of judicial economy and expedition in the complete and final resolution
of the proceeding.
Sec. 308.23 Motions.
(a) In writing. (1) Except as otherwise provided herein, an
application or request for an order or ruling must be made by written
motion.
(2) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as
otherwise directed by the administrative law judge. Written memoranda,
briefs, affidavits or other relevant material or documents may be filed
in support of or in opposition to a motion.
(b) Oral motions. A motion may be made orally on the record unless
the administrative law judge directs that such motion be reduced to
writing.
(c) Filing of motions. Motions must be filed with the administrative
law judge, except that following the filing
[[Page 62]]
of the recommended decision, motions must be filed with the Executive
Secretary for disposition by the Board of Directors.
(d) Responses. (1) Except as otherwise provided herein, within ten
days after service of any written motion, or within such other period of
time as may be established by the administrative law judge or the
Executive Secretary, any party may file a written response to a motion.
The administrative law judge shall not rule on any oral or written
motion before each party has had an opportunity to file a response.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed a consent by that party to the entry
of an order substantially in the form of the order accompanying the
motion.
(e) Dilatory motions. Frivolous, dilatory or repetitive motions are
prohibited. The filing of such motions may form the basis for sanctions.
(f) Dispositive motions. Dispositive motions are governed by
Sec. Sec. 308.29 and 308.30.
Sec. 308.24 Scope of document discovery.
(a) Limits on discovery. (1) Subject to the limitations set out in
paragraphs (b), (c), and (d) of this section, a party to a proceeding
under this subpart may obtain document discovery by serving a written
request to produce documents. For purposes of a request to produce
documents, the term ``documents'' may be defined to include drawings,
graphs, charts, photographs, recordings, data stored in electronic form,
and other data compilations from which information can be obtained, or
translated, if necessary, by the parties through detection devices into
reasonably usable form, as well as written material of all kinds.
(2) Discovery by use of deposition is governed by subpart I of this
part.
(3) Discovery by use of interrogatories is not permitted.
(b) Relevance. A party may obtain document discovery regarding any
matter, not privileged, that has material relevance to the merits of the
pending action. Any request to produce documents that calls for
irrelevant material, that is unreasonable, oppressive, excessive in
scope, unduly burdensome, or repetitive of previous requests, or that
seeks to obtain privileged documents will be denied or modified. A
request is unreasonable, oppressive, excessive in scope or unduly
burdensome if, among other things, it fails to include justifiable
limitations on the time period covered and the geographic locations to
be searched, the time provided to respond in the request is inadequate,
or the request calls for copies of documents to be delivered to the
requesting party and fails to include the requestor's written agreement
to pay in advance for the copying, in accordance with Sec. 308.25.
(c) Privileged matter. Privileged documents are not discoverable.
Privileges include the attorney-client privilege, work-product
privilege, any government's or government agency's deliberative-process
privilege, and any other privileges the Constitution, any applicable act
of Congress, or the principles of common law provide.
(d) Time limits. All discovery, including all responses to discovery
requests, shall be completed at least 20 days prior to the date
scheduled for the commencement of the hearing. No exceptions to this
time limit shall be permitted, unless the administrative law judge finds
on the record that good cause exists for waiving the requirements of
this paragraph.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.25 Request for document discovery from parties.
(a) General rule. Any party may serve on any other party a request
to produce for inspection any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. The request must identify the documents to be produced either by
individual item or by category, and must describe each item and category
with reasonable particularity. Documents must be produced as they are
kept in the usual course of business or must be organized to correspond
with the categories in the request.
(b) Production or copying. The request must specify a reasonable
time, place,
[[Page 63]]
and manner for production and performing any related acts. In lieu of
inspecting the documents, the requesting party may specify that all or
some of the responsive documents be copied and the copies delivered to
the requesting party. If copying of fewer than 250 pages is requested,
the party to whom the request is addressed shall bear the cost of
copying and shipping charges. If a party requests 250 pages or more of
copying, the requesting party shall pay for the copying and shipping
charges. Copying charges are the current per-page copying rate imposed
by 12 CFR part 310 implementing the Freedom of Information Act (5 U.S.C.
552). The party to whom the request is addressed may require payment in
advance before producing the documents.
(c) Obligation to update responses. A party who has responded to a
discovery request with a response that was complete when made is not
required to supplement the response to include documents thereafter
acquired, unless the responding party learns that:
(1) The response was materially incorrect when made; or
(2) The response, though correct when made, is no longer true and a
failure to amend the response is, in substance, a knowing concealment.
(d) Motions to limit discovery. (1) Any party that objects to a
discovery request may, within ten days of being served with such
request, file a motion in accordance with the provisions of Sec. 308.23
to strike or otherwise limit the request. If an objection is made to
only a portion of an item or category in a request, the portion objected
to shall be specified. Any objections not made in accordance with this
paragraph and Sec. 308.23 are waived.
(2) The party who served the request that is the subject of a motion
to strike or limit may file a written response within five days of
service of the motion. No other party may file a response.
(e) Privilege. At the time other documents are produced, the
producing party must reasonably identify all documents withheld on the
grounds of privilege and must produce a statement of the basis for the
assertion of privilege. When similar documents that are protected by
deliberative process, attorney-work-product, or attorney-client
privilege are voluminous, these documents may be identified by category
instead of by individual document. The administrative law judge retains
discretion to determine when the identification by category is
insufficient.
(f) Motions to compel production. (1) If a party withholds any
documents as privileged or fails to comply fully with a discovery
request, the requesting party may, within ten days of the assertion of
privilege or of the time the failure to comply becomes known to the
requesting party, file a motion in accordance with the provisions of
Sec. 308.23 for the issuance of a subpoena compelling production.
(2) The party who asserted the privilege or failed to comply with
the request may file a written response to a motion to compel within
five days of service of the motion. No other party may file a response.
(g) Ruling on motions. After the time for filing responses pursuant
to this section has expired, the administrative law judge shall rule
promptly on all motions filed pursuant to this section. If the
administrative law judge determines that a discovery request, or any of
its terms, calls for irrelevant material, is unreasonable, oppressive,
excessive in scope, unduly burdensome, or repetitive of previous
requests, or seeks to obtain privileged documents, he or she may deny or
modify the request, and may issue appropriate protective orders, upon
such conditions as justice may require. The pendency of a motion to
strike or limit discovery or to compel production is not a basis for
staying or continuing the proceeding, unless otherwise ordered by the
administrative law judge. Notwithstanding any other provision in this
part, the administrative law judge may not release, or order a party to
produce, documents withheld on grounds of privilege if the party has
stated to the administrative law judge its intention to file a timely
motion for interlocutory review of the administrative law judge's order
to produce the documents, and until the motion for interlocutory review
has been decided.
(h) Enforcing discovery subpoenas. If the administrative law judge
issues a
[[Page 64]]
subpoena compelling production of documents by a party, the subpoenaing
party may, in the event of noncompliance and to the extent authorized by
applicable law, apply to any appropriate United States district court
for an order requiring compliance with the subpoena. A party's right to
seek court enforcement of a subpoena shall not in any manner limit the
sanctions that may be imposed by the administrative law judge against a
party who fails to produce subpoenaed documents.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.26 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the administrative law
judge for the issuance of a document discovery subpoena addressed to any
person who is not a party to the proceeding. The application must
contain a proposed document subpoena and a brief statement showing the
general relevance and reasonableness of the scope of documents sought.
The subpoenaing party shall specify a reasonable time, place, and manner
for making production in response to the document subpoena.
(2) A party shall only apply for a document subpoena under this
section within the time period during which such party could serve a
discovery request under Sec. 308.24(d). The party obtaining the
document subpoena is responsible for serving it on the subpoenaed person
and for serving copies on all parties. Document subpoenas may be served
in any state, territory, or possession of the United States, the
District of Columbia, or as otherwise provided by law.
(3) The administrative law judge shall promptly issue any document
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon such conditions as may be consistent with the Uniform Rules.
(b) Motion to quash or modify. (1) Any person to whom a document
subpoena is directed may file a motion to quash or modify such subpoena,
accompanied by a statement of the basis for quashing or modifying the
subpoena. The movant shall serve the motion on all parties, and any
party may respond to such motion within ten days of service of the
motion.
(2) Any motion to quash or modify a document subpoena must be filed
on the same basis, including the assertion of privilege, upon which a
party could object to a discovery request under Sec. 308.25(d), and
during the same time limits during which such an objection could be
filed.
(c) Enforcing document subpoenas. If a subpoenaed person fails to
comply with any subpoena issued pursuant to this section or any order of
the administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may, to the extent authorized by applicable law, apply
to an appropriate United States district court for an order requiring
compliance with so much of the document subpoena as the administrative
law judge has not quashed or modified. A party's right to seek court
enforcement of a document subpoena shall in no way limit the sanctions
that may be imposed by the administrative law judge on a party who
induces a failure to comply with subpoenas issued under this section.
Sec. 308.27 Deposition of witness unavailable for hearing.
(a) General rules. (1) If a witness will not be available for the
hearing, a party desiring to preserve that witness' testimony for the
record may apply in accordance with the procedures set forth in
paragraph (a)(2) of this section, to the administrative law judge for
the issuance of a subpoena, including a subpoena duces tecum, requiring
the attendance of the witness at a deposition. The administrative law
judge may issue a deposition subpoena under this section upon showing
that:
[[Page 65]]
(i) The witness will be unable to attend or may be prevented from
attending the hearing because of age, sickness or infirmity, or will
otherwise be unavailable;
(ii) The witness' unavailability was not procured or caused by the
subpoenaing party;
(iii) The testimony is reasonably expected to be material; and
(iv) Taking the deposition will not result in any undue burden to
any other party and will not cause undue delay of the proceeding.
(2) The application must contain a proposed deposition subpoena and
a brief statement of the reasons for the issuance of the subpoena. The
subpoena must name the witness whose deposition is to be taken and
specify the time and place for taking the deposition. A deposition
subpoena may require the witness to be deposed at any place within the
country in which that witness resides or has a regular place of
employment or such other convenient place as the administrative law
judge shall fix.
(3) Any requested subpoena that sets forth a valid basis for its
issuance must be promptly issued, unless the administrative law judge on
his or her own motion, requires a written response or requires
attendance at a conference concerning whether the requested subpoena
should be issued.
(4) The party obtaining a deposition subpoena is responsible for
serving it on the witness and for serving copies on all parties. Unless
the administrative law judge orders otherwise, no deposition under this
section shall be taken on fewer than ten days' notice to the witness and
all parties. Deposition subpoenas may be served in any state, territory,
possession of the United States, or the District of Columbia, on any
person or company doing business in any state, territory, possession of
the United States, or the District of Columbia, or as otherwise
permitted by law.
(b) Objections to deposition subpoenas. (1) The witness and any
party who has not had an opportunity to oppose a deposition subpoena
issued under this section may file a motion with the administrative law
judge to quash or modify the subpoena prior to the time for compliance
specified in the subpoena, but not more than ten days after service of
the subpoena.
(2) A statement of the basis for the motion to quash or modify a
subpoena issued under this section must accompany the motion. The motion
must be served on all parties.
(c) Procedure upon deposition. (1) Each witness testifying pursuant
to a deposition subpoena must be duly sworn, and each party shall have
the right to examine the witness. Objections to questions or documents
must be in short form, stating the grounds for the objection. Failure to
object to questions or documents is not deemed a waiver except where the
ground for the objection might have been avoided if the objection had
been timely presented. All questions, answers, and objections must be
recorded.
(2) Any party may move before the administrative law judge for an
order compelling the witness to answer any questions the witness has
refused to answer or submit any evidence the witness has refused to
submit during the deposition.
(3) The deposition must be subscribed by the witness, unless the
parties and the witness, by stipulation, have waived the signing, or the
witness is ill, cannot be found, or has refused to sign. If the
deposition is not subscribed by the witness, the court reporter taking
the deposition shall certify that the transcript is a true and complete
transcript of the deposition.
(d) Enforcing subpoenas. If a subpoenaed person fails to comply with
any order of the administrative law judge which directs compliance with
all or any portion of a deposition subpoena under paragraph (b) or
(c)(3) of this section, the subpoenaing party or other aggrieved party
may, to the extent authorized by applicable law, apply to an appropriate
United States district court for an order requiring compliance with the
portions of the subpoena that the administrative law judge has ordered
enforced. A party's right to seek court enforcement of a deposition
subpoena in no way limits the sanctions that may be imposed by the
administrative law judge on a party who fails to comply with, or
procures a failure to
[[Page 66]]
comply with, a subpoena issued under this section.
Sec. 308.28 Interlocutory review.
(a) General rule. The Board of Directors may review a ruling of the
administrative law judge prior to the certification of the record to the
Board of Directors only in accordance with the procedures set forth in
this section and Sec. 308.23.
(b) Scope of review. The Board of Directors may exercise
interlocutory review of a ruling of, the administrative law judge if the
Board of Directors finds that:
(1) The ruling involves a controlling question of law or policy as
to which substantial grounds exist for a difference of opinion;
(2) Immediate review of the ruling may materially advance the
ultimate termination of the proceeding;
(3) Subsequent modification of the ruling at the conclusion of the
proceeding would be an inadequate remedy; or
(4) Subsequent modification of the ruling would cause unusual delay
or expense.
(c) Procedure. Any request for interlocutory review shall be filed
by a party with the administrative law judge within ten days of his or
her ruling and shall otherwise comply with Sec. 308.23. Any party may
file a response to a request for interlocutory review in accordance with
Sec. 308.23(d). Upon the expiration of the time for filing all
responses, the administrative law judge shall refer the matter to the
Board of Directors for final disposition.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Board of Directors
under this section suspends or stays the proceeding unless otherwise
ordered by the administrative law judge or the Board of Directors.
Sec. 308.29 Summary disposition.
(a) In general. The administrative law judge shall recommend that
the Board of Directors issue a final order granting a motion for summary
disposition if the undisputed pleaded facts, admissions, affidavits,
stipulations, documentary evidence, matters as to which official notice
may be taken, and any other evidentiary materials properly submitted in
connection with a motion for summary disposition show that:
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a
matter of law.
(b) Filing of motions and responses. (1) Any party who believes that
there is no genuine issue of material fact to be determined and that he
or she is entitled to a decision as a matter of law may move at any time
for summary disposition in its favor of all or any part of the
proceeding. Any party, within 20 days after service of such a motion, or
within such time period as allowed by the administrative law judge, may
file a response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, investigatory depositions, transcripts,
affidavits and any other evidentiary materials that the moving party
contends support his or her position. The motion must also be
accompanied by a brief containing the points and authorities in support
of the contention of the moving party. Any party opposing a motion for
summary disposition must file a statement setting forth those material
facts as to which he or she contends a genuine dispute exists. Such
opposition must be supported by evidence of the same type as that
submitted with the motion for summary disposition and a brief containing
the points and authorities in support of the contention that summary
disposition would be inappropriate.
(c) Hearing on motion. At the request of any party or on his or her
own motion, the administrative law judge may hear oral argument on the
motion for summary disposition.
(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the administrative law judge
shall determine whether the moving party is entitled to summary
disposition. If the administrative law judge determines that
[[Page 67]]
summary disposition is warranted, the administrative law judge shall
submit a recommended decision to that effect to the Board of Directors.
If the administrative law judge finds that no party is entitled to
summary disposition, he or she shall make a ruling denying the motion.
Sec. 308.30 Partial summary disposition.
If the administrative law judge determines that a party is entitled
to summary disposition as to certain claims only, he or she shall defer
submitting a recommended decision as to those claims. A hearing on the
remaining issues must be ordered. Those claims for which the
administrative law judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 308.31 Scheduling and prehearing conferences.
(a) Scheduling conference. Within 30 days of service of the notice
or order commencing a proceeding or such other time as parties may
agree, the administrative law judge shall direct counsel for all parties
to meet with him or her in person at a specified time and place prior to
the hearing or to confer by telephone for the purpose of scheduling the
course and conduct of the proceeding. This meeting or telephone
conference is called a ``scheduling conference.'' The identification of
potential witnesses, the time for and manner of discovery, and the
exchange of any prehearing materials including witness lists, statements
of issues, stipulations, exhibits and any other materials may also be
determined at the scheduling conference.
(b) Prehearing conferences. The administrative law judge may, in
addition to the scheduling conference, on his or her own motion or at
the request of any party, direct counsel for the parties to meet with
him or her (in person or by telephone) at a prehearing conference to
address any or all of the following:
(1) Simplification and clarification of the issues;
(2) Stipulations, admissions of fact, and the contents, authenticity
and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes;
(7) Amendments to pleadings; and
(8) Such other matters as may aid in the orderly disposition of the
proceeding.
(c) Transcript. The administrative law judge, in his or her
discretion, may require that a scheduling or prehearing conference be
recorded by a court reporter. A transcript of the conference and any
materials filed, including orders, becomes part of the record of the
proceeding. A party may obtain a copy of the transcript at his or her
expense.
(d) Scheduling or prehearing orders. At or within a reasonable time
following the conclusion of the scheduling conference or any prehearing
conference, the administrative law judge shall serve on each party an
order setting forth any agreements reached and any procedural
determinations made.
Sec. 308.32 Prehearing submissions.
(a) Within the time set by the administrative law judge, but in no
case later than 14 days before the start of the hearing, each party
shall serve on every other party, his or her:
(1) Prehearing statement;
(2) Final list of witnesses to be called to testify at the hearing,
including name and address of each witness and a short summary of the
expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with
a copy of each exhibit; and
(4) Stipulations of fact, if any.
(b) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the prehearing submissions pursuant to paragraph (a) of
this section, except for good cause shown.
Sec. 308.33 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the FDIC, in its discretion, determines that holding an open hearing
would be contrary to
[[Page 68]]
the public interest. Within 20 days of service of the notice or, in the
case of change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)), within 20 days from service of the hearing
order, any respondent may file with the Executive Secretary a request
for a private hearing, and any party may file a reply to such a request.
A party must serve on the administrative law judge a copy of any request
or reply the party files with the Executive Secretary. The form of, and
procedure for, these requests and replies are governed by Sec. 308.23.
A party's failure to file a request or a reply constitutes a waiver of
any objections regarding whether the hearing will be public or private.
(b) Filing document under seal. Enforcement Counsel, in his or her
discretion, may file any document or part of a document under seal if
disclosure of the document would be contrary to the public interest. The
administrative law judge shall take all appropriate steps to preserve
the confidentiality of such documents or parts thereof, including
closing portions of the hearing to the public.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.34 Hearing subpoenas.
(a) Issuance. (1) Upon application of a party showing general
relevance and reasonableness of scope of the testimony or other evidence
sought, the administrative law judge may issue a subpoena or a subpoena
duces tecum requiring the attendance of a witness at the hearing or the
production of documentary or physical evidence at the hearing. The
application for a hearing subpoena must also contain a proposed subpoena
specifying the attendance of a witness or the production of evidence
from any state, territory, or possession of the United States, the
District of Columbia, or as otherwise provided by law at any designated
place where the hearing is being conducted. The party making the
application shall serve a copy of the application and the proposed
subpoena on every other party.
(2) A party may apply for a hearing subpoena at any time before the
commencement of a hearing. During a hearing, a party may make an
application for a subpoena orally on the record before the
administrative law judge.
(3) The administrative law judge shall promptly issue any hearing
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon any conditions consistent with this subpart. Upon issuance by
the administrative law judge, the party making the application shall
serve the subpoena on the person named in the subpoena and on each
party.
(b) Motion to quash or modify. (1) Any person to whom a hearing
subpoena is directed or any party may file a motion to quash or modify
the subpoena, accompanied by a statement of the basis for quashing or
modifying the subpoena. The movant must serve the motion on each party
and on the person named in the subpoena. Any party may respond to the
motion within ten days of service of the motion.
(2) Any motion to quash or modify a hearing subpoena must be filed
prior to the time specified in the subpoena for compliance, but not more
than ten days after the date of service of the subpoena upon the movant.
(c) Enforcing subpoenas. If a subpoenaed person fails to comply with
any subpoena issued pursuant to this section or any order of the
administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may seek enforcement of the subpoena pursuant to Sec.
308.26(c).
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.35 Conduct of hearings.
(a) General rules. (1) Hearings shall be conducted so as to provide
a fair and expeditious presentation of the relevant disputed issues.
Each party has the right to present its case or defense by oral and
documentary evidence and to conduct such cross examination as
[[Page 69]]
may be required for full disclosure of the facts.
(2) Order of hearing. Enforcement Counsel shall present its case-in-
chief first, unless otherwise ordered by the administrative law judge,
or unless otherwise expressly specified by law or regulation.
Enforcement Counsel shall be the first party to present an opening
statement and a closing statement, and may make a rebuttal statement
after the respondent's closing statement. If there are multiple
respondents, respondents may agree among themselves as to their order of
presentation of their cases, but if they do not agree the administrative
law judge shall fix the order.
(3) Examination of witnesses. Only one counsel for each party may
conduct an examination of a witness, except that in the case of
extensive direct examination, the administrative law judge may permit
more than one counsel for the party presenting the witness to conduct
the examination. A party may have one counsel conduct the direct
examination and another counsel conduct re-direct examination of a
witness, or may have one counsel conduct the cross examination of a
witness and another counsel conduct the re-cross examination of a
witness.
(4) Stipulations. Unless the administrative law judge directs
otherwise, all stipulations of fact and law previously agreed upon by
the parties, and all documents, the admissibility of which have been
previously stipulated, will be admitted into evidence upon commencement
of the hearing.
(b) Transcript. The hearing must be recorded and transcribed. The
reporter will make the transcript available to any party upon payment by
that party to the reporter of the cost of the transcript. The
administrative law judge may order the record corrected, either upon
motion to correct, upon stipulation of the parties, or following notice
to the parties upon the administrative law judge's own motion.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.36 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material, and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the
Administrative Procedure Act and other applicable law.
(2) Evidence that would be admissible under the Federal Rules of
Evidence is admissible in a proceeding conducted pursuant to this
subpart.
(3) Evidence that would be inadmissible under the Federal Rules of
Evidence may not be deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant,
material, reliable and not unduly repetitive.
(b) Official notice. (1) Official notice may be taken of any
material fact which may be judicially noticed by a United States
district court and any material information in the official public
records of any Federal or state government agency.
(2) All matters officially noticed by the administrative law judge
or Board of Directors shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Documents. (1) A duplicate copy of a document is admissible to
the same extent as the original, unless a genuine issue is raised as to
whether the copy is in some material respect not a true and legible copy
of the original.
(2) Subject to the requirements of paragraph (a) of this section,
any document, including a report of examination, supervisory activity,
inspection or visitation, prepared by an appropriate Federal financial
institution regulatory agency or state regulatory agency, is admissible
either with or without a sponsoring witness.
(3) Witnesses may use existing or newly created charts, exhibits,
calendars, calculations, outlines or other graphic material to
summarize, illustrate, or simplify the presentation of testimony. Such
materials may, subject to the administrative law judge's discretion, be
used with or without being admitted into evidence.
(d) Objections. (1) Objections to the admissibility of evidence must
be timely made and rulings on all objections must appear on the record.
(2) When an objection to a question or line of questioning
propounded to a
[[Page 70]]
witness is sustained, the examining counsel may make a specific proffer
on the record of what he or she expected to prove by the expected
testimony of the witness, either by representation of counsel or by
direct interrogation of the witness.
(3) The administrative law judge shall retain rejected exhibits,
adequately marked for identification, for the record, and transmit such
exhibits to the Board of Directors.
(4) Failure to object to admission of evidence or to any ruling
constitutes a waiver of the objection.
(e) Stipulations. The parties may stipulate as to any relevant
matters of fact or the authentication of any relevant documents. Such
stipulations must be received in evidence at a hearing, and are binding
on the parties with respect to the matters therein stipulated.
(f) Depositions of unavailable witnesses. (1) If a witness is
unavailable to testify at a hearing, and that witness has testified in a
deposition to which all parties in a proceeding had notice and an
opportunity to participate, a party may offer as evidence all or any
part of the transcript of the deposition, including deposition exhibits,
if any.
(2) Such deposition transcript is admissible to the same extent that
testimony would have been admissible had that person testified at the
hearing, provided that if a witness refused to answer proper questions
during the depositions, the administrative law judge may, on that basis,
limit the admissibility of the deposition in any manner that justice
requires.
(3) Only those portions of a deposition received in evidence at the
hearing constitute a part of the record.
Sec. 308.37 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the administrative law
judge shall serve notice upon each party, that the certified transcript,
together with all hearing exhibits and exhibits introduced but not
admitted into evidence at the hearing, has been filed. Any party may
file with the administrative law judge proposed findings of fact,
proposed conclusions of law, and a proposed order within 30 days
following service of this notice by the administrative law judge or
within such longer period as may be ordered by the administrative law
judge.
(2) Proposed findings and conclusions must be supported by citation
to any relevant authorities and by page references to any relevant
portions of the record. A post-hearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document. Any party who fails to file timely with the
administrative law judge any proposed finding or conclusion is deemed to
have waived the right to raise in any subsequent filing or submission
any issue not addressed in such party's proposed finding or conclusion.
(b) Reply briefs. Reply briefs may be filed within 15 days after the
date on which the parties' proposed findings, conclusions, and order are
due. Reply briefs must be strictly limited to responding to new matters,
issues, or arguments raised in another party's papers. A party who has
not filed proposed findings of fact and conclusions of law or a post-
hearing brief may not file a reply brief.
(c) Simultaneous filing required. The administrative law judge shall
not order the filing by any party of any brief or reply brief in advance
of the other party's filing of its brief.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.38 Recommended decision and filing of record.
(a) Filing of recommended decision and record. Within 45 days after
expiration of the time allowed for filing reply briefs under Sec.
308.37(b), the administrative law judge shall file with and certify to
the Executive Secretary, for decision, the record of the proceeding. The
record must include the administrative law judge's recommended decision,
recommended findings of fact, recommended conclusions of law, and
proposed order; all prehearing and hearing transcripts, exhibits, and
rulings; and the motions, briefs, memoranda, and other supporting papers
filed in connection with the hearing. The administrative law judge shall
[[Page 71]]
serve upon each party the recommended decision, findings, conclusions,
and proposed order.
(b) Filing of index. At the same time the administrative law judge
files with and certifies to the Executive Secretary for final
determination the record of the proceeding, the administrative law judge
shall furnish to the Executive Secretary a certified index of the entire
record of the proceeding. The certified index shall include, at a
minimum, an entry for each paper, document or motion filed with the
administrative law judge in the proceeding, the date of the filing, and
the identity of the filer. The certified index shall also include an
exhibit index containing, at a minimum, an entry consisting of exhibit
number and title or description for: Each exhibit introduced and
admitted into evidence at the hearing; each exhibit introduced but not
admitted into evidence at the hearing; each exhibit introduced and
admitted into evidence after the completion of the hearing; and each
exhibit introduced but not admitted into evidence after the completion
of the hearing.
[61 FR 20350, May 6, 1996]
Sec. 308.39 Exceptions to recommended decision.
(a) Filing exceptions. Within 30 days after service of the
recommended decision, findings, conclusions, and proposed order under
Sec. 308.38, a party may file with the Executive Secretary written
exceptions to the administrative law judge's recommended decision,
findings, conclusions or proposed order, to the admission or exclusion
of evidence, or to the failure of the administrative law judge to make a
ruling proposed by a party. A supporting brief may be filed at the time
the exceptions are filed, either as part of the same document or in a
separate document.
(b) Effect of failure to file or raise exceptions. (1) Failure of a
party to file exceptions to those matters specified in paragraph (a) of
this section within the time prescribed is deemed a waiver of objection
thereto.
(2) No exception need be considered by the Board of Directors if the
party taking exception had an opportunity to raise the same objection,
issue, or argument before the administrative law judge and failed to do
so.
(c) Contents. (1) All exceptions and briefs in support of such
exceptions must be confined to the particular matters in, or omissions
from, the administrative law judge's recommendations to which that party
takes exception.
(2) All exceptions and briefs in support of exceptions must set
forth page or paragraph references to the specific parts of the
administrative law judge's recommendations to which exception is taken,
the page or paragraph references to those portions of the record relied
upon to support each exception, and the legal authority relied upon to
support each exception.
Sec. 308.40 Review by Board of Directors.
(a) Notice of submission to Board of Directors. When the Executive
Secretary determines that the record in the proceeding is complete, the
Executive Secretary shall serve notice upon the parties that the
proceeding has been submitted to the Board of Directors for final
decision.
(b) Oral argument before the Board of Directors. Upon the initiative
of the Board of Directors or on the written request of any party filed
with the Executive Secretary within the time for filing exceptions, the
Board of Directors may order and hear oral argument on the recommended
findings, conclusions, decision, and order of the administrative law
judge. A written request by a party must show good cause for oral
argument and state reasons why arguments cannot be presented adequately
in writing. A denial of a request for oral argument may be set forth in
the Board of Directors' final decision. Oral argument before the Board
of Directors must be on the record.
(c) Final decision. (1) Decisional employees may advise and assist
the Board of Directors in the consideration and disposition of the case.
The final decision of the Board of Directors will be based upon review
of the entire record of the proceeding, except that the Board of
Directors may limit the issues to be reviewed to those findings
[[Page 72]]
and conclusions to which opposing arguments or exceptions have been
filed by the parties.
(2) The Board of Directors shall render a final decision within 90
days after notification of the parties that the case has been submitted
for final decision, or 90 days after oral argument, whichever is later,
unless the Board of Directors orders that the action or any aspect
thereof be remanded to the administrative law judge for further
proceedings. Copies of the final decision and order of the Board of
Directors shall be served upon each party to the proceeding, upon other
persons required by statute, and, if directed by the Board of Directors
or required by statute, upon any appropriate state or Federal
supervisory authority.
Sec. 308.41 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision and order of the FDIC may not, unless specifically ordered by
the Board of Directors or a reviewing court, operate as a stay of any
order issued by the FDIC. The Board of Directors may, in its discretion,
and on such terms as it finds just, stay the effectiveness of all or any
part of its order pending a final decision on a petition for review of
that order.
Subpart B_General Rules of Procedure
Sec. 308.101 Scope of Local Rules.
(a) Subparts B and C of the Local Rules prescribe rules of practice
and procedure to be followed in the administrative enforcement
proceedings initiated by the FDIC as set forth in Sec. 308.01 of the
Uniform Rules.
(b) Except as otherwise specifically provided, the Uniform Rules and
subpart B of the Local Rules shall not apply to subparts D through T of
the Local Rules.
(c) Subpart C of the Local Rules shall apply to any administrative
proceeding initiated by the FDIC.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999; 66
FR 9189, Feb. 7, 2001]
Sec. 308.102 Authority of Board of Directors and Executive Secretary.
(a) The Board of Directors. (1) The Board of Directors may, at any
time during the pendency of a proceeding, perform, direct the
performance of, or waive performance of, any act which could be done or
ordered by the Executive Secretary.
(2) Nothing contained in this part 308 shall be construed to limit
the power of the Board of Directors granted by applicable statutes or
regulations.
(b) The Executive Secretary. (1) When no administrative law judge
has jurisdiction over a proceeding, the Executive Secretary may act in
place of, and with the same authority as, an administrative law judge,
except that the Executive Secretary may not hear a case on the merits or
make a recommended decision on the merits to the Board of Directors.
(2) Pursuant to authority delegated by the Board of Directors, the
Executive Secretary and Assistant Executive Secretary, upon the advice
and recommendation of the Deputy General Counsel for Litigation or, in
his absence, the Assistant General Counsel, Trial Litigation Section,
may issue rulings in proceedings under sections 7(j), 8, 18(j), 19, 32
and 38 of the FDIA (12 USC 1817(j), 1818, 1828(j), 1829, 1831i and 1831o
concerning:
(i) Denials of requests for private hearing;
(ii) Interlocutory appeals;
(iii) Stays pending judicial review;
(iv) Reopenings of the record and/or remands of the record to the
ALJ;
(v) Supplementation of the evidence in the record;
(vi) All remands from the courts of appeals not involving
substantive issues;
(vii) Extensions of stays of orders terminating deposit insurance;
and
(viii) All matters, including final decisions, in proceedings under
section 8(g) of the FDIA (12 U.S.C. 1818(g)).
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999; 67
FR 71071, Nov. 29, 2002]
Sec. 308.103 Appointment of administrative law judge.
(a) Appointment. Unless otherwise directed by the Board of Directors
or as
[[Page 73]]
otherwise provided in the Local Rules, a hearing within the scope of
this part 308 shall be held before an administrative law judge of the
Office of Financial Institution Adjudication (``OFIA'').
(b) Procedures. (1) The Executive Secretary shall promptly after
issuance of the notice refer the matter to the OFIA which shall secure
the appointment of an administrative law judge to hear the proceeding.
(2) OFIA shall advise the parties, in writing, that an
administrative law judge has been appointed.
Sec. 308.104 Filings with the Board of Directors.
(a) General rule. All materials required to be filed with or
referred to the Board of Directors in any proceedings under this part
308 shall be filed with the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
(b) Scope. Filings to be made with the Executive Secretary include
pleadings and motions filed during the proceeding; the record filed by
the administrative law judge after the issuance of a recommended
decision; the recommended decision filed by the administrative law judge
following a motion for summary disposition; referrals by the
administrative law judge of motions for interlocutory review; motions
and responses to motions filed by the parties after the record has been
certified to the Board of Directors; exceptions and requests for oral
argument; and any other papers required to be filed with the Board of
Directors under this part 308.
Sec. 308.105 Custodian of the record.
The Executive Secretary is the official custodian of the record when
no administrative law judge has jurisdiction over the proceeding. As the
official custodian, the Executive Secretary shall maintain the official
record of all papers filed in each proceeding.
Sec. 308.106 Written testimony in lieu of oral hearing.
(a) General rule. (1) At any time more than fifteen days before the
hearing is to commence, on the motion of any party or on his or her own
motion, the administrative law judge may order that the parties present
part or all of their case-in-chief and, if ordered, their rebuttal, in
the form of exhibits and written statements sworn to by the witness
offering such statements as evidence, provided that if any party
objects, the administrative law judge shall not require such a format if
that format would violate the objecting party's right under the
Administrative Procedure Act, or other applicable law, or would
otherwise unfairly prejudice that party.
(2) Any such order shall provide that each party shall, upon
request, have the same right of oral cross-examination (or redirect
examination) as would exist had the witness testified orally rather than
through a written statement. Such order shall also provide that any
party has a right to call any hostile witness or adverse party to
testify orally.
(b) Scheduling of submission of written testimony. (1) If written
direct testimony and exhibits are ordered under paragraph (a) of this
section, the administrative law judge shall require that it be filed
within the time period for commencement of the hearing, and the hearing
shall be deemed to have commenced on the day such testimony is due.
(2) Absent good cause shown, written rebuttal, if any, shall be
submitted and the oral portion of the hearing begun within 30 days of
the date set for filing written direct testimony.
(3) The administrative law judge shall direct, unless good cause
requires otherwise, that--
(i) All parties shall simultaneously file any exhibits and written
direct testimony required under paragraph (b)(1) of this section; and
(ii) All parties shall simultaneously file any exhibits and written
rebuttal required under paragraph (b)(2) of this section.
(c) Failure to comply with order to file written testimony. (1) The
failure of any party to comply with an order to file written testimony
or exhibits at the time and in the manner required under this section
shall be deemed a waiver of that party's right to present any evidence,
except testimony of a previously
[[Page 74]]
identified adverse party or hostile witness. Failure to file written
testimony or exhibits is, however, not a waiver of that party's right of
cross-examination or a waiver of the right to present rebuttal evidence
that was not required to be submitted in written form.
(2) Late filings of papers under this section may be allowed and
accepted only upon good cause shown.
Sec. 308.107 Document discovery.
(a) Parties to proceedings set forth at Sec. 308.01 of the Uniform
Rules and as provided in the Local Rules may obtain discovery only
through the production of documents. No other form of discovery shall be
allowed.
(b) Any questioning at a deposition of a person producing documents
pursuant to a document subpoena shall be strictly limited to the
identification of documents produced by that person and a reasonable
examination to determine whether the subpoenaed person made an adequate
search for, and has produced, all subpoenaed documents.
Subpart C_Rules of Practice Before the FDIC and Standards of Conduct
Sec. 308.108 Sanctions.
(a) General rule. Appropriate sanctions may be imposed when any
counsel or party has acted, or failed to act, in a manner required by
applicable statute, regulations, or order, and that act or failure to
act:
(1) Constitutes contemptuous conduct;
(2) Has in a material way injured or prejudiced some other party in
terms of substantive injury, incurring additional expenses including
attorney's fees, prejudicial delay, or otherwise;
(3) Is a clear and unexcused violation of an applicable statute,
regulation, or order; or
(4) Has unduly delayed the proceeding.
(b) Sanctions. Sanctions which may be imposed include any one or
more of the following:
(1) Issuing an order against the party;
(2) Rejecting or striking any testimony or documentary evidence
offered, or other papers filed, by the party;
(3) Precluding the party from contesting specific issues or
findings;
(4) Precluding the party from offering certain evidence or from
challenging or contesting certain evidence offered by another party;
(5) Precluding the party from making a late filing or conditioning a
late filing on any terms that are just; and
(6) Assessing reasonable expenses, including attorney's fees,
incurred by any other party as a result of the improper action or
failure to act.
(c) Limits on dismissal as a sanction. No recommendation of
dismissal shall be made by the administrative law judge or granted by
the Board of Directors based on the failure to hold a hearing within the
time period called for in this part 308, or on the failure of an
administrative law judge to render a recommended decision within the
time period called for in this part 308, absent a finding:
(1) That the delay resulted solely or principally from the conduct
of the FDIC enforcement counsel;
(2) That the conduct of the FDIC enforcement counsel is unexcused;
(3) That the moving respondent took all reasonable steps to oppose
and prevent the subject delay;
(4) That the moving respondent has been materially prejudiced or
injured; and
(5) That no lesser or different sanction is adequate.
(d) Procedure for imposition of sanctions. (1) The administrative
law judge, upon the request of any party, or on his or her own motion,
may impose sanctions in accordance with this section, provided that the
administrative law judge may only recommend to the Board of Directors
the sanction of entering a final order determining the case on the
merits.
(2) No sanction, other than refusing to accept late papers,
authorized by this section shall be imposed without prior notice to all
parties and an opportunity for any counsel or party against whom
sanctions would be imposed to be heard. Such opportunity to be heard may
be on such notice, and the response may be in such form, as the
administrative law judge directs. The opportunity to be heard may be
limited
[[Page 75]]
to an opportunity to respond orally immediately after the act or
inaction covered by this section is noted by the administrative law
judge.
(3) Requests for the imposition of sanctions by any party, and the
imposition of sanctions, shall be treated for interlocutory review
purposes in the same manner as any other ruling by the administrative
law judge.
(4) Section not exclusive. Nothing in this section shall be read as
precluding the administrative law judge or the Board of Directors from
taking any other action, or imposing any restriction or sanction,
authorized by applicable statute or regulation.
Sec. 308.109 Suspension and disbarment.
(a) Discretionary suspension and disbarment. (1) The Board of
Directors may suspend or revoke the privilege of any counsel to appear
or practice before the FDIC if, after notice of and opportunity for
hearing in the matter, that counsel is found by the Board of Directors:
(i) Not to possess the requisite qualifications to represent others;
(ii) To be seriously lacking in character or integrity or to have
engaged in material unethical or improper professional conduct;
(iii) To have engaged in, or aided and abetted, a material and
knowing violation of the FDIA; or
(iv) To have engaged in contemptuous conduct before the FDIC.
Suspension or revocation on the grounds set forth in paragraphs (a)(1)
(ii), (iii), and (iv) of this section shall only be ordered upon a
further finding that the counsel's conduct or character was sufficiently
egregious as to justify suspension or revocation.
(2) Unless otherwise ordered by the Board of Directors, an
application for reinstatement by a person suspended or disbarred under
paragraph (a)(1) of this section may be made in writing at any time more
than three years after the effective date of the suspension or
disbarment and, thereafter, at any time more than one year after the
person's most recent application for reinstatement. The suspension or
disbarment shall continue until the applicant has been reinstated by the
Board of Directors for good cause shown or until, in the case of a
suspension, the suspension period has expired. An applicant for
reinstatement under this provision may, in the Board of Directors' sole
discretion, be afforded a hearing.
(b) Mandatory suspension and disbarment. (1) Any counsel who has
been and remains suspended or disbarred by a court of the United States
or of any state, territory, district, commonwealth, or possession; or
any person who has been and remains suspended or barred from practice
before the OCC, Board of Governors, the OTS, the NCUA, the Securities
and Exchange Commission, or the Commodity Futures Trading Commission; or
any person who has been convicted of a felony, or of a misdemeanor
involving moral turpitude, within the last ten years, shall be suspended
automatically from appearing or practicing before the FDIC. A
disbarment, suspension, or conviction within the meaning of this
paragraph (b) shall be deemed to have occurred when the disbarring,
suspending, or convicting agency or tribunal enters its judgment or
order, regardless of whether an appeal is pending or could be taken, and
includes a judgment or an order on a plea of nolo contendere or on
consent, regardless of whether a violation is admitted in the consent.
(2) Any person appearing or practicing before the FDIC who is the
subject of an order, judgment, decree, or finding of the types set forth
in paragraph (b)(1) of this section shall promptly file with the
Executive Secretary a copy thereof, together with any related opinion or
statement of the agency or tribunal involved. Failure to file any such
paper shall not impair the operation of any other provision of this
section.
(3) A suspension or disbarment under paragraph (b)(1) of this
section from practice before the FDIC shall continue until the applicant
has been reinstated by the Board of Directors for good cause shown,
provided that any person suspended or disbarred under paragraph (b)(1)
of this section shall be automatically reinstated by the Executive
Secretary, upon appropriate application, if all the grounds for
suspension or disbarment under paragraph (b)(1) of this section are
subsequently removed
[[Page 76]]
by a reversal of the conviction (or the passage of time since the
conviction) or termination of the underlying suspension or disbarment.
An application for reinstatement on any other grounds by any person
suspended or disbarred under paragraph (b)(1) of this section may be
filed no sooner than one year after the suspension or disbarment, and
thereafter, a new request for reinstatement may be made no sooner than
one year after the counsel's most recent reinstatement application. The
application must comply with the requirements of Sec. 303.3 of this
chapter. An applicant for reinstatement under this provision may, in the
Board of Directors' sole discretion, be afforded a hearing.
(c) Hearings under this section. Hearings conducted under this
section shall be conducted in substantially the same manner as other
hearings under the Uniform Rules, provided that in proceedings to
terminate an existing FDIC suspension or disbarment order, the person
seeking the termination of the order shall bear the burden of going
forward with an application and with the burden of proving the grounds
supporting the application, and that the Board of Directors may, in its
sole discretion, direct that any proceeding to terminate an existing
suspension or disbarment by the FDIC be limited to written submissions.
(d) Summary suspension for contemptuous conduct. A finding by the
administrative law judge of contemptuous conduct during the course of
any proceeding shall be grounds for summary suspension by the
administrative law judge of a counsel or other representative from any
further participation in that proceeding for the duration of that
proceeding.
(e) Practice defined. Unless the Board of Directors orders
otherwise, for the purposes of this section, practicing before the FDIC
includes, but is not limited to, transacting any business with the FDIC
as counsel or agent for any other person and the preparation of any
statement, opinion, or other paper by a counsel, which statement,
opinion, or paper is filed with the FDIC in any registration statement,
notification, application, report, or other document, with the consent
of such counsel.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999; 68
FR 48270, Aug. 13, 2003]
Subpart D_Rules and Procedures Applicable to Proceedings Relating to
Disapproval of Acquisition of Control
Sec. 308.110 Scope.
Except as specifically indicated in this subpart, the rules and
procedures in this subpart, subpart B of the Local Rules, and the
Uniform Rules shall apply to proceedings in connection with the
disapproval by the Board of Directors or its designee of a proposed
acquisition of control of an insured nonmember bank.
Sec. 308.111 Grounds for disapproval.
The following are grounds for disapproval of a proposed acquisition
of control of an insured nonmember bank:
(a) The proposed acquisition of control would result in a monopoly
or would be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the banking business in any part of
the United States;
(b) The effect of the proposed acquisition of control in any section
of the United States may be to substantially lessen competition or to
tend to create a monopoly or would in any other manner be in restraint
of trade, and the anticompetitive effects of the proposed acquisition of
control are not clearly outweighed in the public interest by the
probable effect of the transaction in meeting the convenience and needs
of the community to be served;
(c) The financial condition of any acquiring person might jeopardize
the financial stability of the bank or prejudice the interests of the
depositors of the bank;
(d) The competence, experience, or integrity of any acquiring person
or of any of the proposed management personnel indicates that it would
not be in the interest of the depositors of the bank, or in the interest
of the public, to permit such person to control the bank;
[[Page 77]]
(e) Any acquiring person neglects, fails, or refuses to furnish to
the FDIC all the information required by the FDIC; or
(f) The FDIC determines that the proposed acquisition would result
in an adverse effect on the Bank Insurance Fund or the Savings
Association Insurance Fund.
Sec. 308.112 Notice of disapproval.
(a) General rule. (1) Within three days of the decision by the Board
of Directors or its designee to disapprove a proposed acquisition of
control of an insured nonmember bank, a written notice of disapproval
shall be mailed by first class mail to, or otherwise served upon, the
party seeking acquire control.
(2) The notice of disapproval shall:
(i) Contain a statement of the basis for the disapproval; and
(ii) Indicate that a hearing may be requested by filing a written
request with the Executive Secretary within ten days after service of
the notice of disapproval; and if a hearing is requested, that an answer
to the notice of disapproval, as required by Sec. 308.113, must be
filed within 20 days after service of the notice of disapproval.
(b) Waiver of hearing. Failure to request a hearing pursuant to this
section shall constitute a waiver of the opportunity for a hearing and
the notice of disapproval shall constitute a final and unappealable
order.
(c) Section 308.18(b) of the Uniform Rules shall not apply to the
content of the Notice of Disapproval.
Sec. 308.113 Answer to notice of disapproval.
(a) Contents. (1) An answer to the notice of disapproval of a
proposed acquisition of control shall be filed within 20 days after
service of the notice of disapproval and shall specifically deny those
portions of the notice of disapproval which are disputed. Those portions
of the notice of disapproval which are not specifically denied are
deemed admitted by the applicant.
(2) Any hearing under this subpart shall be limited to those parts
of the notice of disapproval that are specifically denied.
(b) Failure to answer. Failure of a respondent to file an answer
required by this section within the time provided constitutes a waiver
of his or her right to appear and contest the allegations in the notice
of disapproval. If no timely answer is filed, Enforcement Counsel may
file a motion for entry of an order of default. Upon a finding that no
good cause has been shown for the failure to file a timely answer, the
administrative law judge shall file a recommended decision containing
the findings and relief sought in the notice. A final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
Sec. 308.114 Burden of proof.
The ultimate burden of proof shall be upon the person proposing to
acquire a depository institution. The burden of going forward with a
prima facie case shall be upon the FDIC.
Subpart E_Rules and Procedures Applicable to Proceedings Relating to
Assessment of Civil Penalties for Willful Violations of the Change in
Bank Control Act
Sec. 308.115 Scope.
The rules and procedures of this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings to assess civil
penalties against any person for willful violation of the Change in Bank
Control Act of 1978 (12 U.S.C. 1817(j)), or any regulation or order
issued pursuant thereto, in connection with the affairs of an insured
nonmember bank.
Sec. 308.116 Assessment of penalties.
(a) In general. The civil money penalty shall be assessed upon the
service of a Notice of Assessment which shall become final and
unappealable unless the respondent requests a hearing pursuant to Sec.
308.19(c)(2).
(b) Amount. (1) Any person who violates any provision of the Change
in Bank Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto, shall forfeit and pay a civil money penalty of not
more than
[[Page 78]]
$5,000 for each day the violation continues.
(2) Any person who violates any provision of the Change in Bank
Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto; or recklessly engages in any unsafe or unsound
practice in conducting the affairs of a depository institution; or
breaches any fiduciary duty; which violation, practice or breach is part
of a pattern of misconduct; or causes or is likely to cause more than a
minimal loss to such institution; or results in pecuniary gain or other
benefit to such person, shall forfeit and pay a civil money penalty of
not more than $25,000 for each day such violation, practice or breach
continues.
(3) Any person who knowingly violates any provision of the Change in
Bank Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto; or engages in any unsafe or unsound practice in
conducting the affairs of a depository institution; or breaches any
fiduciary duty; and knowingly or recklessly causes a substantial loss to
such institution or a substantial pecuniary gain or other benefit to
such institution or a substantial pecuniary gain or other benefit to
such person by reason of such violation, practice or breach, shall
forfeit and pay a civil money penalty not to exceed:
(i) In the case of a person other than a depository institution--
$1,000,000 per day for each day the violation, practice or breach
continues; or
(ii) In the case of a depository institution--an amount not to
exceed the lesser of $1,000,000 or one percent of the total assets of
such institution for each day the violation, practice or breach
continues.
(4) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Improvement Act.
After November 12, 1996:
(i) Any person who engages in a violation as set forth in paragraph
(b)(1) of this section shall forfeit and pay a civil money penalty of
not more than $5,500 for each day the violation continues.
(ii) Any person who engages in a violation, unsafe or unsound
practice or breach of fiduciary duty, as set forth in paragraph (b)(2)
of this section, shall forfeit and pay a civil money penalty of not more
than $27,500 for each day such violation, practice or breach continues.
(iii) Any person who knowingly engages in a violation, unsafe or
unsound practice or breach of fiduciary duty, as set forth in paragraph
(b)(3) of this section, shall forfeit and pay a civil money penalty not
to exceed:
(A) In the case of a person other than a depository institution--
$1,175,000 per day for each day the violation, practice or breach
continues; or
(B) In the case of a depository institution--an amount not to exceed
the lesser of $1,175,000 or one percent of the total assets of such
institution for each day the violation, practice or breach continues.
(c) Mitigating factors. In assessing the amount of the penalty, the
Board of Directors or its designee shall consider the gravity of the
violation, the history of previous violations, respondent's financial
resources, good faith, and any other matters as justice may require.
(d) Failure to answer. Failure of a respondent to file an answer
required by this section within the time provided constitutes a waiver
of his or her right to appear and contest the allegations in the notice
of disapproval. If no timely answer is filed, Enforcement Counsel may
file a motion for entry of an order of default. Upon a finding that no
good cause has been shown for the failure to file a timely answer, the
administrative law judge shall file a recommended decision containing
the findings and relief sought in the notice. A final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57990, Nov. 12, 1996; 65
FR 64887, Oct. 31, 2000]
Sec. 308.117 Effective date of, and payment under, an order to pay.
If the respondent both requests a hearing and serves an answer,
civil penalties assessed pursuant to this subpart are due and payable 60
days after an order to pay, issued after the hearing or upon default, is
served upon the respondent, unless the order provides for a different
period of payment. Civil penalties assessed pursuant to an order
[[Page 79]]
to pay issued upon consent are due and payable within the time specified
therein.
Sec. 308.118 Collection of penalties.
The FDIC may collect any civil penalty assessed pursuant to this
subpart by agreement with the respondent, or the FDIC may bring an
action against the respondent to recover the penalty amount in the
appropriate United States district court. All penalties collected under
this section shall be paid over to the Treasury of the United States.
Subpart F_Rules and Procedures Applicable to Proceedings for Involuntary
Termination of Insured Status
Sec. 308.119 Scope.
(a) Involuntary termination of insurance pursuant to section 8(a) of
the FDIA. The rules and procedures in this subpart, subpart B of the
Local Rules and the Uniform Rules shall apply to proceedings in
connection with the involuntary termination of the insured status of an
insured bank depository institution or an insured branch of a foreign
bank pursuant to section 8(a) of the FDIA (12 U.S.C. 1818(a)), except
that the Uniform Rules and subpart B of the Local Rules shall not apply
to the temporary suspension of insurance pursuant to section 8(a)(8) of
the FDIA (12 U.S.C. 1818(a)(8)).
(b) Involuntary termination of insurance pursuant to section 8(p) of
the Act. The rules and procedures in Sec. 308.124 of this subpart F
shall apply to proceedings in connection with the involuntary
termination of the insured status of an insured depository institution
or an insured branch of a foreign bank pursuant to section 8(p) of the
FDIA (12 U.S.C. 1818(p)). The Uniform Rules shall not apply to
proceedings under section 8(p) of the FDIA.
Sec. 308.120 Grounds for termination of insurance.
(a) General rule. The following are grounds for involuntary
termination of insurance pursuant to section 8(a) of the FDIA:
(1) An insured depository institution or its directors or trustees
have engaged or are engaging in unsafe or unsound practices in
conducting the business of such depository institution;
(2) An insured depository institution is in an unsafe or unsound
condition such that it should not continue operations as an insured
depository institution; or
(3) An insured depository institution or its directors or trustees
have violated an applicable law, rule, regulation, order, condition
imposed in writing by the FDIC in connection with the granting of any
application or other request by the insured depository institution or
have violated any written agreement entered into between the insured
depository institution and the FDIC.
(b) Extraterritorial acts of foreign banks. An act or practice
committed outside the United States by a foreign bank or its directors
or trustees which would otherwise be a ground for termination of insured
status under this section shall be a ground for termination if the Board
of Directors finds:
(1) The act or practice has been, is, or is likely to be a cause of,
or carried on in connection with or in furtherance of, an act or
practice committed within any state, territory, or possession of the
United States or the District of Columbia that, in and of itself, would
be an appropriate basis for action by the FDIC; or
(2) The act or practice committed outside the United States, if
proven, would adversely affect the insurance risk of the FDIC.
(c) Failure of foreign bank to secure removal of personnel. The
failure of a foreign bank to comply with any order of removal or
prohibition issued by the Board of Directors or the failure of any
person associated with a foreign bank to appear promptly as a party to a
proceeding pursuant to section 8(e) of the FDIA (12 U.S.C. 1818(e)),
shall be a ground for termination of insurance of deposits in any branch
of the bank.
Sec. 308.121 Notification to primary regulator.
(a) Service of notification. (1) Upon a determination by the Board
of Directors or its designee pursuant to Sec. 308.120
[[Page 80]]
of an unsafe or unsound practice or condition or of a violation, a
notification shall be served upon the appropriate Federal banking agency
of the insured depository institution, or the State banking supervisor
if the FDIC is the appropriate Federal banking agency.
The notification shall be served not less than 30 days before the Notice
of Intent to Terminate Insured Status required by section 8(a)(2)(B) of
the FDIA (12 U.S.C. 1818(a)(2)(B)), and Sec. 308.122, except that this
period for notification may be reduced or eliminated with the agreement
of the appropriate Federal banking agency.
(2) Appropriate Federal banking agency shall have the meaning given
that term in section 3(q) of the FDIA (12 U.S.C. 1813(q)), and shall be
the OCC in the case of a national bank, a District bank or an insured
Federal branch of a foreign bank; the FDIC in the case of an insured
nonmember bank, including an insured State branch of a foreign bank; the
Board of Governors in the case of a state member bank; or the OTS in the
case of an insured Federal or state savings association.
(3) In the case of a state nonmember bank, insured Federal branch of
a foreign bank, or state member bank, in addition to service of the
notification upon the appropriate Federal banking agency, a copy of the
notification shall be sent to the appropriate State banking supervisor.
(4) In instances in which a Temporary Order Suspending Insurance is
issued pursuant to section 8(a)(8) of the FDIA (12 U.S.C. 1818(a)(8)),
the notification may be served concurrently with such order.
(b) Contents of notification. The notification shall contain the
FDIC's determination, and the facts and circumstances upon which such
determination is based, for the purpose of securing correction of such
practice, condition, or violation.
Sec. 308.122 Notice of intent to terminate.
(a) If, after serving the notification under Sec. 308.121, the
Board of Directors determines that any unsafe or unsound practices,
condition, or violation, specified in the notification, requires the
termination of the insured status of the insured depository institution,
the Board of Directors or its designee, if it determines to proceed
further, shall cause to be served upon the insured depository
institution a notice of its intention to terminate insured status not
less than 30 days after service of the notification, unless a shorter
time period has been agreed upon by the appropriate Federal banking
agency.
(b) The Board of Directors or its designee shall cause a copy of the
notice to be sent to the appropriate Federal banking agency and to the
appropriate state banking supervisor, if any.
Sec. 308.123 Notice to depositors.
If the Board of Directors enters an order terminating the insured
status of an insured depository institution or branch, the insured
depository institution shall, on the day that order becomes final, or on
such other day as that order prescribes, mail a notification of
termination of insured status to each depositor at the depositor's last
address of record on the books of the insured depository institution or
branch. The insured depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)----------.
1. The status of the ----------, as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will terminate as of the close of business on the
-------- day of------------, 19----.
2. Any deposits made by you after that date, either new deposits or
additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on the
-------- day of------------, 19----, will continue to be insured, as
provided by Federal Deposit Insurance Act, for 2 years after the close
of business on the -------- day of ------------, 19----. Provided,
however, that any withdrawals after the close of business on the ------
-- day of ------------, 19----, will reduce the insurance coverage by
the amount of such withdrawals.
________________________________________________________________________
(Name of (depository institution or branch)
[[Page 81]]
________________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.124 Involuntary termination of insured status for failure
to receive deposits.
(a) Notice to show cause. When the Board of Directors or its
designee has evidence that an insured depository institution is not
engaged in the business of receiving deposits, other than trust funds,
the Board of Directors or its designee shall give written notice of this
evidence to the depository institution and shall direct the depository
institution to show cause why its insured status should not be
terminated under the provisions of section 8(p) of the FDIA (12 U.S.C.
1818(p)). The insured depository institution shall have 30 days after
receipt of the notice, or such longer period as is prescribed in the
notice, to submit affidavits, other written proof, and any legal
arguments that it is engaged in the business of receiving deposits other
than trust funds.
(b) Notice of termination date. If, upon consideration of the
affidavits, other written proof, and legal arguments, the Board of
Directors determines that the depository institution is not engaged in
the business of receiving deposits, other than trust funds, the finding
shall be conclusive and the Board of Directors shall notify the
depository institution that its insured status will terminate at the
expiration of the first full semiannual assessment period following
issuance of that notification.
(c) Notification to depositors of termination of insured status.
Within the time specified by the Board of Directors and prior to the
date of termination of its insured status, the depository institution
shall mail a notification of termination of insured status to each
depositor at the depositor's last address of record on the books of the
depository institution. The depository institution shall also publish
the notification in two issues of a local newspaper of general
circulation and shall furnish the FDIC with proof of such publications.
The notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)----------.
The status of the ----------, as an (insured depository institution)
(insured branch) under the Federal Deposit Insurance Act, will terminate
on the -------- day of------------, 19----, and its deposits will
thereupon cease to be insured.
________________________________________________________________________
(Name of depository institution or branch)
________________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.125 Temporary suspension of deposit insurance.
(a) If, while an action is pending under section 8(a)(2) of the FDIA
(12 U.S.C. 1818(a)(2)), the Board of Directors, after consultation with
the appropriate Federal banking agency, finds that an insured depository
institution (other than a special supervisory association to which Sec.
308.126 of this subpart applies) has no tangible capital under the
capital guidelines or regulations of the appropriate Federal banking
agency, the Board of Directors may issue a Temporary Order Suspending
Deposit Insurance, pending completion of the proceedings under section
8(a)(2) of the FDIA (12 U.S.C. 1818(a)(2)).
(b) The temporary order shall be served upon the insured institution
and a copy sent to the appropriate Federal banking agency and to the
appropriate State banking supervisor.
(c) The temporary order shall become effective ten days from the
date of service upon the insured depository institution. Unless set
aside, limited, or suspended in proceedings under section 8(a)(8)(D) of
the FDIA (12 U.S.C. 1818 (a)(8)(D)), the temporary order shall remain
effective and enforceable until an order terminating the insured status
of the institution is entered by the Board of Directors and becomes
final, or the Board of Directors dismisses the proceedings.
[[Page 82]]
(d) Notification to depositors of suspension of insured status.
Within the time specified by the Board of Directors and prior to the
suspension of insured status, the depository institution shall mail a
notification of suspension of insured status to each depositor at the
depositor's last address of record on the books of the depository
institution. The depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)------------.
1. The status of the ----------, as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will be suspended as of the close of business on
the -------- day of ------------, 19----, pending the completion of
administrative proceedings under section 8(a) of the Federal Deposit
Insurance Act.
2. Any deposits made by you after that date, either new deposits or
additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on the
-------- day of ------------, 19----, will continue to be insured for --
---------- after the close of business on the---------- day of --------
--, 19----. Provided, however, that any withdrawals after the close of
business on the -------- day of------------, 19----, will reduce the
insurance coverage by the amount of such withdrawals.
________________________________________________________________________
(Name of depository institution or branch)
________________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.126 Special supervisory associations.
If the Board of Directors finds that a savings association is a
special supervisory association under the provisions of section
8(a)(8)(B) of the FDIA (12 U.S.C. 1818(a)(8)(B)) for purposes of
temporary suspension of insured status, the Board of Directors shall
serve upon the association its findings with regard to the determination
that the capital of the association, as computed using applicable
accounting standards, has suffered a material decline; that such
association or its directors or officers, is engaging in an unsafe or
unsound practice in conducting the business of the association; that
such association is in an unsafe or unsound condition to continue
operating as an insured association; or that such association or its
directors or officers, has violated any law, rule, regulation, order,
condition imposed in writing by any Federal banking agency, or any
written agreement, or that the association failed to enter into a
capital improvement plan acceptable to the Corporation prior to January,
1990.
Subpart G_Rules and Procedures Applicable to Proceedings Relating to
Cease-and-Desist Orders
Sec. 308.127 Scope.
(a) Cease-and-desist proceedings under section 8 of the FDIA. The
rules and procedures of this subpart, subpart B of the Local Rules and
the Uniform Rules shall apply to proceedings to order an insured
nonmember bank or an institution-affiliated party to cease and desist
from practices and violations described in section 8(b) of the FDIA, 12
U.S.C. 1818(b).
(b) Proceedings under the Securities Exchange Act of 1934. (1) The
rules and procedures of this subpart, subpart B of the Local Rules and
the Uniform Rules shall apply to proceedings by the Board of Directors
to order a municipal securities dealer to cease and desist from any
violation of law or regulation specified in section 15B(c)(5) of the
Securities Exchange Act, as amended (15 U.S.C. 78o-4(c)(5)) where the
municipal securities dealer is an insured nonmember bank or a subsidiary
thereof.
(2) The rules and procedures of this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings by the Board of
Directors to order a clearing agency or transfer agent to cease and
desist from failure
[[Page 83]]
to comply with the applicable provisions of section 17, 17A and 19 of
the Securities Exchange Act of 1934, as amended (15 U.S.C. 78q, 78q-l,
78s), and the applicable rules and regulations thereunder, where the
clearing agency or transfer agent is an insured nonmember bank or a
subsidiary thereof.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999]
Sec. 308.128 Grounds for cease-and-desist orders.
(a) General rule. The Board of Directors or its designee may issue
and have served upon any insured nonmember bank or an institution-
affiliated party a notice, as set forth in Sec. 308.18 of the Uniform
Rules for practices and violations as described in Sec. 308.127.
(b) Extraterritorial acts of foreign banks. An act, violation or
practice committed outside the United States by a foreign bank or an
institution-affiliated party that would otherwise be a ground for
issuing a cease-and-desist order under paragraph (a) of this section or
a temporary cease-and-desist order under Sec. 308.131 of this subpart,
shall be a ground for an order if the Board of Directors or its designee
finds that:
(1) The act, violation or practice has been, is, or is likely to be
a cause of, or carried on in connection with or in furtherance of, an
act, violation or practice committed within any state, territory, or
possession of the United States or the District of Columbia which act,
violation or practice, in and of itself, would be an appropriate basis
for action by the FDIC; or
(2) The act, violation or practice, if proven, would adversely
affect the insurance risk of the FDIC.
Sec. 308.129 Notice to state supervisory authority.
The Board of Directors or its designee shall give the appropriate
state supervisory authority notification of its intent to institute a
proceeding pursuant to subpart G of this part, and the grounds thereof.
Any proceedings shall be conducted according to subpart G of this part,
unless, within the time period specified in such notification, the state
supervisory authority has effected satisfactory corrective action. No
insured institution or other party who is the subject of any notice or
order issued by the FDIC under this section shall have standing to raise
the requirements of this subpart as grounds for attacking the validity
of any such notice or order.
Sec. 308.130 Effective date of order and service on bank.
(a) Effective date. A cease-and-desist order issued by the Board of
Directors after a hearing, and a cease-and-desist order issued based
upon a default, shall become effective at the expiration of 30 days
after the service of the order upon the bank or its official. A cease-
and-desist order issued upon consent shall become effective at the time
specified therein. All cease-and-desist orders shall remain effective
and enforceable, except to the extent they are stayed, modified,
terminated, or set aside by the Board of Directors or its designee or by
a reviewing court.
(b) Service on banks. In cases where the bank is not the respondent,
the cease-and-desist order shall also be served upon the bank.
Sec. 308.131 Temporary cease-and-desist order.
(a) Issuance. (1) When the Board of Directors or its designee
determines that the violation, or the unsafe or unsound practice, as
specified in the notice, or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the bank,
or is likely to weaken the condition of the bank or otherwise prejudice
the interests of its depositors prior to the completion of the
proceedings under section 8(b) of the FDIA (12 U.S.C. 1818(b)) and Sec.
308.128 of this subpart, the Board of Directors or its designee may
issue a temporary order requiring the bank or an institution-affiliated
party to immediately cease and desist from any such violation, practice
or to take affirmative action to prevent such insolvency, dissipation,
condition or prejudice pending completion of the proceedings under
section 8(b) of the FDIA (12 U.S.C. 1818(b)).
(2) When the Board of Directors or its designee issues a Notice of
charges pursuant to 12 U.S.C. 1818(b)(1) which specifies on the basis of
particular
[[Page 84]]
facts and circumstances that a bank's books and records are so
incomplete or inaccurate that the FDIC is unable, through the normal
supervisory process, to determine the financial condition of the bank or
the details or purpose of any transaction or transactions that may have
a material effect on the financial condition of the bank, then the Board
of Directors or its designee may issue a temporary order requiring:
(i) The cessation of any activity or practice which gave rise,
whether in whole or in part, to the incomplete or inaccurate state of
the books or records; or
(ii) Affirmative action to restore such books or records to a
complete and accurate state, until the completion of the proceedings
under section 8(b) of the FDIA (12 U.S.C. 1818(b)).
(3) The temporary order shall be served upon the bank or the
institution-affiliated party named therein and shall also be served upon
the bank in the case where the temporary order applies only to an
institution-affiliated party.
(b) Effective date. A temporary order shall become effective when
served upon the bank or the institution-affiliated party. Unless the
temporary order is set aside, limited, or suspended by a court in
proceedings authorized under section 8(c)(2) of the FDIA (12 U.S.C.
1818(c)(2)), the temporary order shall remain effective and enforceable
pending completion of administrative proceedings pursuant to section
8(b) of the FDIA (12 U.S.C. 1818(b)) and entry of an order which has
become final, or with respect to paragraph (a)(2) of this section the
FDIC determines by examination or otherwise that the bank's books and
records are accurate and reflect the financial condition of the bank.
(c) Uniform Rules do not apply. The Uniform Rules and subpart B of
the Local Rules shall not apply to the issuance of temporary orders
under this section.
Subpart H_Rules and Procedures Applicable to Proceedings Relating to
Assessment and Collection of Civil Money Penalties for Violation of
Cease-and-Desist Orders and of Certain Federal Statutes, Including Call
Report Penalties
Sec. 308.132 Assessment of penalties.
(a) Scope. The rules and procedures of this subpart, subpart B of
the Local Rules, and the Uniform Rules shall apply to proceedings to
assess and collect civil money penalties, including civil money
penalties for violation of section 7(a) of the FDIA (12 U.S.C. 1817(a)).
(b) Relevant considerations. In determining the amount of the civil
penalty to be assessed, the Board of Directors or its designee shall
consider the financial resources and good faith of the bank or official,
the gravity of the violation, the history of previous violations, and
any such other matters as justice may require.
(c) Amount. (1) The Board of Directors or its designee may assess
civil money penalties pursuant to section 8(i) of the FDIA (12 U.S.C.
1818(i)), and Sec. 308.01(e)(1) of the Uniform Rules.
(2) The Board of Directors or its designee may assess civil money
penalties pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) as
follows:
(i) Late filing--Tier One penalties. In cases in which a bank fails
to make or publish its Report of Condition and Income (Call Report)
within the appropriate time periods, a civil money penalty of not more
than $2,200 per day may be assessed where the bank maintains procedures
in place reasonably adapted to avoid inadvertent error and the late
filing occurred unintentionally and as a result of such error; or the
bank inadvertently transmitted a Call Report which is minimally late.
(A) First offense. Generally, in such cases, the amount assessed
shall be $300 per day for each of the first 15 days for
[[Page 85]]
which the failure continues, and $600 per day for each subsequent day
the failure continues, beginning on the sixteenth day. For banks with
less than $25,000,000 in assets, the amount assessed shall be the
greater of $100 per day or \1/1000\th of the bank's total assets (\1/
10\th of a basis point) for each of the first 15 days for which the
failure continues, and $200 or \1/500\th of the bank's total assets, \1/
5\ of a basis point) for each subsequent day the failure continues,
beginning on the sixteenth day.
(B) Second offense. Where the bank has been delinquent in making or
publishing its Call Report within the preceding five quarters, the
amount assessed for the most current failure shall generally be $500 per
day for each of the first 15 days for which the failure continues, and
$1,000 per day for each subsequent day the failure continues, beginning
on the sixteenth day. For banks with less than $25,000,000 in assets,
those amounts, respectively, shall be \1/500\th of the bank's total
assets and \1/250\th of the bank's total assets.
(C) Mitigating factors. The amounts set forth in paragraph
(c)(2)(i)(A) of this section may be reduced based upon the factors set
forth in paragraph (b) of this section.
(D) Lengthy or repeated violations. The amounts set forth in this
paragraph (c)(2)(i) will be assessed on a case-by-case basis where the
amount of time of the bank's delinquency is lengthy or the bank has been
delinquent repeatedly in making or publishing its Call Reports.
(E) Waiver. Absent extraordinary circumstances outside the control
of the bank, penalties assessed for late filing shall not be waived.
(ii) Late filing--Tier Two penalties. Where a bank fails to make or
publish its Call Report within the appropriate time period, the Board of
Directors or its designee may assess a civil money penalty of not more
than $20,000 per day for each day the failure continues. Pursuant to the
Debt Collection Improvement Act of 1996, for violations which occur
after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the failure continues.
(iii) False or misleading reports or information--(A) Tier One
penalties. In cases in which a bank submits or publishes any false or
misleading Call Report or information, the Board of Directors or its
designee may assess a civil money penalty of not more than $2,200 per
day for each day the information is not corrected, where the bank
maintains procedures in place reasonably adapted to avoid inadvertent
error and the violation occurred unintentionally and as a result of such
error; or the bank inadvertently transmits a Call Report or information
which is false or misleading.
(B) Tier Two penalties. Where a bank submits or publishes any false
or misleading Call Report or other information, the Board of Directors
or its designee may assess a civil money penalty of not more than
$20,000 per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the information is not
corrected.
(C) Tier Three penalties. Where a bank knowingly or with reckless
disregard for the accuracy of any Call Report or information submits or
publishes any false or misleading Call Report or other information, the
Board of Directors or its designee may assess a civil money penalty of
not more than the lesser of $1,175,000 or 1 percent of the bank's total
assets per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Three penalty amount
will increase to the lesser of $1,175,000 per day or 1 percent of the
bank's total assets per day for each day the information is not
corrected.
(D) Mitigating factors. The amounts set forth in this paragraph
(c)(2) may be reduced based upon the factors set forth in paragraph (b)
of this section.
(3) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Improvement Act.
Pursuant to section 31001(s) of the Debt Collection Improvement Act, for
violations which occur after November 12, 1996, the Board of Directors
or its designee may assess
[[Page 86]]
civil money penalties in the maximum amounts as follows:
(i) Civil money penalties assessed pursuant to section 8(i)(2) of
the FDIA. Tier One civil money penalties may be assessed pursuant to
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount
not to exceed $5,500 for each day during which the violation continues.
Tier Two civil money penalties may be assessed pursuant to section
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to
exceed $27,500 for each day during which the violation, practice or
breach continues. Tier Three civil money penalties may be assessed
pursuant to section 8(i)(2)(C)(12 U.S.C. 1818(i)(2)(C)) in an amount not
to exceed, in the case of any person other than an insured depository
institution $1,175,000 or, in the case of any insured depository
institution, an amount not to exceed the lesser of $1,175,000 or 1
percent of the total assets of such institution for each day during
which the violation, practice, or breach continues.
(A) Civil money penalties may be assessed pursuant to section
8(i)(2) of the FDIA in the amounts set forth in this paragraph (c)(3)(i)
for violations of various consumer laws, including, the Home Mortgage
Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited
Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings
Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act
(12 U.S.C. 2601 et seq. and 12 CFR part 3500), the Truth in Lending Act
(15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681
et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) the
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and the Fair
Housing Act (42 U.S.C. 3601 et seq.) in the amounts set forth in
paragraphs (c)(3)(i) through (c)(3)(iii) of this section.
(ii) Civil money penalties assessed pursuant to section 7(c) of the
FDIA for late filing or the submission false or misleading certified
statements. Tier One civil money penalties may be assessed pursuant to
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount
not to exceed 2,200 for each day during which the failure to file
continues or the false or misleading information is not corrected. Tier
Two civil money penalties may be assessed pursuant to section 7(c)(4)(B)
of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to exceed $22,000
for each day during which the failure to file continues or the false or
misleading information is not corrected. Tier Three civil money
penalties may be assessed pursuant to section 7(c)(4)(C) in an amount
not to exceed the lesser of $1,100,000 or 1 percent of the total assets
of the institution for each day during which the failure to file
continues or the false or misleading information is not corrected.
(iii) Civil money penalties assessed pursuant to section 10(e)(4) of
the FDIA for refusal to allow examination or to provide required
information during an examination. Pursuant to section 10(e)(4) of the
FDIA (12 U.S.C. 1820(e)(4)), civil money penalties may be assessed
against any affiliate of an insured depository institution which refuses
to permit a duly-appointed examiner to conduct an examination or to
provide information during the course of an examination as set forth in
section 20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount not to
exceed $5,500 for each day the refusal continues.
(iv) Civil money penalties assessed pursuant to section 18(a)(3) of
the FDIA for incorrect display of insurance logo. Pursuant to section
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may
be assessed against an insured depository institution which fails to
correctly display its insurance logo pursuant to that section, in an
amount not to exceed $110 for each day the violation continues.
(v) Civil money penalties assessed pursuant to section 18(h) of the
FDIA for failure to file a certified statement or to pay assessment.
Pursuant to section 18(h) of the FDIA (12 U.S.C. 1828(h)), a civil money
penalty may be assessed against an insured depository institution which
wilfully fails or refuses to file a certified statement or pay any
assessment required under the FDIA in an amount not to exceed $110 for
each day the violation continues.
(vi) Civil money penalties assessed pursuant to section 19b(j) of
the FDIA for
[[Page 87]]
recordkeeping violations. Pursuant to section 19b(j) of the FDIA (12
U.S.C. 1829b(j)), civil money penalties may be assessed against an
insured depository institution and any director, officer or employee
thereof who wilfully or through gross negligence violates or causes a
violation of the recordkeeping requirements of that section or its
implementing regulations in an amount not to exceed $11,000 per
violation.
(vii) Civil fine pursuant to 12 U.S.C. 1832(c) for violation of
provisions forbidding interest-bearing demand deposit accounts. Pursuant
to 12 U.S.C. 1832(c), any depository institution which violates the
prohibition on deposit or withdrawal from interest-bearing accounts via
negotiable or transferable instruments payable to third parties shall be
subject to a fine of $1,100 per violation.
(viii) Civil penalties for violations of security measure
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an
institution which violates a rule establishing minimum security
requirements as set forth in 12 U.S.C. 1882, shall be subject to a civil
penalty not to exceed $110 for each day of the violation.
(ix) Civil money penalties assessed pursuant to the Bank Holding
Company Act of 1970 for prohibited tying arrangements. Pursuant to the
Bank Holding Company Act of 1970, Tier One civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed
$5,500 for each day during which the violation continues. Tier Two civil
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(ii) in
an amount not to exceed $27,500 for each day during which the violation,
practice or breach continues. Tier Three civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) in an amount not to
exceed, in the case of any person other than an insured depository
institution $1,175,000 for each day during which the violation,
practice, or breach continues or, in the case of any insured depository
institution, an amount not to exceed the lesser of $1,175,000 or 1
percent of the total assets of such institution for each day during
which the violation, practice, or breach continues.
(x) Civil money penalties assessed pursuant to the International
Banking Act of 1978. Pursuant to the International Banking Act of 1978
(IBA) (12 U.S.C. 3108(b)), civil money penalties may be assessed for
failure to comply with the requirements of the IBA pursuant to section
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in
paragraph (c)(3)(i) of this section.
(xi) Civil money penalties assessed for appraisal violations.
Pursuant to 12 U.S.C. 3349(b), where a financial institution seeks,
obtains, or gives any other thing of value in exchange for the
performance of an appraisal by a person that the institution knows is
not a state certified or licensed appraiser in connection with a
federally related transaction, a civil money penalty may be assessed
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the
amounts set forth in paragraph (c)(3)(i) of this section.
(xii) Civil money penalties assessed pursuant to International
Lending Supervision Act. Pursuant to the International Lending
Supervision Act (ILSA) (12 U.S.C. 3909(d)), the CMP that may be assessed
against any banking institution or any officer, director, employee,
agent or other person participating in the conduct of the affairs of
such banking institution is amount not to exceed $1,100 for each day a
violation of the ILSA or any rule, regulation or order issued pursuant
to ILSA continues.
(xiii) Civil money penalties assessed for violations of the
Community Development Banking and Financial Institution Act. Pursuant to
the Community Development Banking and Financial Institution Act
(Community Development Banking Act) (12 U.S.C. 4717(b)) a civil money
penalty may be assessed for violations of the Community Development
Banking Act pursuant to section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)), in the amounts set forth in paragraph (c)(3)(i) of this
section.
(xiv) Civil money penalties assessed for violations of the
Securities Exchange Act of 1934. Pursuant to section 21B of the
Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78u-2), civil
money penalties may be assessed for violations of certain provisions of
the Exchange Act, where such penalties are
[[Page 88]]
in the public interest. Tier One civil money penalties may be assessed
pursuant to 15 U.S.C. 78u-2(b)(1) in an amount not to exceed $5,500 for
a natural person or $60,000 for any other person for violations set
forth in 15 U.S.C. 78u-2(a). Tier Two civil money penalties may be
assessed pursuant to 15 U.S.C. 78u-2(b)(2) in an amount not to exceed--
for each violation set forth in 15 U.S.C. 78u-2(a)--$60,000 for a
natural person or $300,000 for any other person if the act or omission
involved fraud, deceit, manipulation, or deliberate or reckless
disregard of a regulatory requirement. Tier Three civil money penalties
may be assessed pursuant to 15 U.S.C. 78u-2(b)(3) for each violation set
forth in 15 U.S.C. 78u-2(a), in an amount not to exceed $120,000 for a
natural person or $575,000 for any other person, if the act or omission
involved fraud, deceit, manipulation, or deliberate or reckless
disregard of a regulatory requirement; and such act or omission directly
or indirectly resulted in substantial losses, or created a significant
risk of substantial losses to other persons or resulted in substantial
pecuniary gain to the person who committed the act or omission.
(xv) Civil money penalties assessed for false claims and statements
pursuant to the Program Fraud Civil Remedies Act. Pursuant to the
Program Fraud Civil Remedies Act (31 U.S.C. 3802), civil money penalties
of not more than $5,500 per claim or statement may be assessed for
violations involving false claims and statements.
(xvi) Civil money penalties assessed for violations of the Flood
Disaster Protection Act. Pursuant to the Flood Disaster Protection Act
(FDPA)(42 U.S.C. 4012a(f)), civil money penalties may be assessed
against any regulated lending institution that engages in a pattern or
practice of violations of the FDPA in an amount not to exceed $350 per
violation, and not to exceed a total of $115,000 annually.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57991, Nov. 12, 1996; 64
FR 62100, Nov. 16, 1999; 65 FR 64887, Oct. 31, 2000; 66 FR 9189, Feb. 7,
2001]
Sec. 308.133 Effective date of, and payment under, an order to pay.
(a) Effective date. (1) Unless otherwise provided in the Notice,
except in situations covered by paragraph (a)(2) of this section, civil
penalties assessed pursuant to this subpart are due and payable 60 days
after the Notice is served upon the respondent.
(2) If the respondent both requests a hearing and serves an answer,
civil penalties assessed pursuant to this subpart are due and payable 60
days after an order to pay, issued after the hearing or upon default, is
served upon the respondent, unless the order provides for a different
period of payment. Civil penalties assessed pursuant to an order to pay
issued upon consent are due and payable within the time specified
therein.
(b) Payment. All penalties collected under this section shall be
paid over to the Treasury of the United States.
Subpart I_Rules and Procedures for Imposition of Sanctions Upon
Municipal Securities Dealers or Persons Associated With Them and
Clearing Agencies or Transfer Agents
Sec. 308.134 Scope.
The rules and procedures in this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings by the Board of
Directors or its designee:
(a) To censure, limit the activities of, suspend, or revoke the
registration of, any municipal securities dealer for which the FDIC is
the appropriate regulatory agency;
(b) To censure, suspend, or bar from being associated with such a
municipal securities dealer, any person associated with such a municipal
securities dealer; and
(c) To deny registration, to censure limit the activities of,
suspend, or revoke the registration of, any transfer agent or clearing
agency for which the FDIC is the appropriate regulatory agency. This
subpart and the Uniform Rules shall not apply to proceedings to postpone
or suspend registration of a
[[Page 89]]
transfer agent or clearing agency pending final determination of denial
or revocation of registration.
Sec. 308.135 Grounds for imposition of sanctions.
(a) Action under section 15(b)(4) of the Exchange Act. The Board of
Directors or its designee may issue and have served upon any municipal
securities dealer for which the FDIC is the appropriate regulatory
agency, or any person associated or seeking to become associated with a
municipal securities dealer for which the FDIC is the appropriate
regulatory agency, a written notice of its intention to censure, limit
the activities or functions or operations of, suspend, or revoke the
registration of, such municipal securities dealer, or to censure,
suspend, or bar the person from being associated with the municipal
securities dealer, when the Board of Directors or its designee
determines:
(1) That such municipal securities dealer or such person
(i) Has committed any prohibited act or omitted any required act
specified in subparagraph (A), (D), or (E) of section 15(b)(4) of the
Exchange Act, as amended (15 U.S.C. 78o);
(ii) Has been convicted of any offense specified in section
15(b)(4)(B) of the Exchange Act within ten years of commencement of
proceedings under this subpart; or
(iii) Is enjoined from any act, conduct, or practice specified in
section 15(b)(4)(C) of the Exchange Act; and
(2) That it is in the public interest to impose any of the sanctions
set forth in paragraph (a) of this section.
(b) Action under sections 17 and 17A of the Exchange Act. The Board
of Directors or its designee may issue, and have served upon any
transfer agent or clearing agency for which the FDIC is the appropriate
regulatory agency, a written Notice of its intention to deny
registration to, censure, place limitations on the activities or
function or operations of, suspend, or revoke the registration of, the
transfer agent or clearing agency, when the Board of Directors or its
designee determines:
(1) That the transfer agent or clearing agency has willfully
violated, or is unable to comply with, any applicable provision of
section 17 or 17A of the Exchange Act, as amended, or any applicable
rule or regulation issued pursuant thereto; and
(2) That it is in the public interest to impose any of the sanctions
set forth in paragraph (b) of this section.
Sec. 308.136 Notice to and consultation with the Securities and Exchange
Commission.
Before initiating any proceedings under Sec. 308.135, the FDIC
shall:
(a) Notify the Securities and Exchange Commission of the identity of
the municipal securities dealer or associated person against whom
proceedings are to be initiated, and the nature of and basis for the
proposed action; and
(b) Consult with the Commission concerning the effect of the
proposed action on the protection of investors and the possibility of
coordinating the action with any proceeding by the Commission against
the municipal securities dealer or associated person.
Sec. 308.137 Effective date of order imposing sanctions.
An order issued by the Board of Directors after a hearing or an
order issued upon default shall become effective at the expiration of 30
days after the service of the order, except that an order of censure,
denial, or revocation of registration is effective when served. An order
issued upon consent shall become effective at the time specified
therein. All orders shall remain effective and enforceable except to the
extent they are stayed, modified, terminated, or set aside by the Board
of Directors, its designee, or a reviewing court, provided that orders
of suspension shall continue in effect no longer than 12 months.
Subpart J_Rules and Procedures Relating to Exemption Proceedings Under
Section 12(h) of the Securities Exchange Act of 1934
Sec. 308.138 Scope.
The rules and procedures of this subpart J shall apply to
proceedings by the Board of Directors or its designee to exempt, in
whole or in part, an
[[Page 90]]
issuer of securities from the provisions of sections 12(g), 13, 14(a),
14(c), 14(d), or 14(f) of the Exchange Act, as amended (15 U.S.C. 781,
78m, 78n (a), (c) (d) or (f)), or to exempt an officer or a director or
beneficial owner of securities of such an issuer from the provisions of
section 16 of the Exchange Act (15 U.S.C. 78p).
Sec. 308.139 Application for exemption.
Any interested person may file a written application for an
exemption under this subpart with the Executive Secretary, Federal
Deposit Insurance Corporation, 550 17th Street NW., Washington, DC
20429. The application shall specify the exemption sought and the reason
therefor, and shall include a statement indicating why the exemption
would be consistent with the public interest or the protection of
investors.
Sec. 308.140 Newspaper notice.
(a) General rule. If the Board of Directors or its designee, in its
sole discretion, decides to further consider an application for
exemption, there shall be served upon the applicant instructions to
publish one notification in a newspaper of general circulation in the
community where the main office of the issuer is located. The applicant
shall furnish proof of such publication to the Executive Secretary or
such other person as may be directed in the instructions.
(b) Contents. The notification shall contain the name and address of
the issuer and the name and title of the applicant, the exemption
sought, a statement that a hearing will be held, and a statement that
within 30 days of publication of the newspaper notice, interested
persons may submit to the FDIC written comments on the application for
exemption and a written request for an opportunity to be heard. The
address of the FDIC must appear in the notice.
Sec. 308.141 Notice of hearing.
Within ten days after expiration of the period for receipt of
comments pursuant to Sec. 308.140, the Executive Secretary shall serve
upon the applicant and any person who has requested an opportunity to be
heard written notification indicating the place and time of the hearing.
The hearing shall be held not later than 30 days after service of the
notification of hearing. The notification shall contain the name and
address of the presiding officer designated by the Executive Secretary
and a statement of the matters to be considered.
Sec. 308.142 Hearing.
(a) Proceedings are informal. Formal rules of evidence, the
adjudicative procedures of the APA (5 U.S.C. 554-557), the Uniform Rules
and Sec. 308.108 of subpart B of the Local Rules shall not apply to
hearings under this subpart.
(b) Hearing Procedure. (1) Parties to the hearing may appear
personally or through counsel and shall have the right to introduce
relevant and material documents and to make an oral statement.
(2) There shall be no discovery in proceeding under this subpart J.
(3) The presiding officer shall have discretion to permit
presentation of witnesses within specified time limits, provided that a
list of witnesses is furnished to the presiding officer prior to the
hearing. Witnesses shall be sworn, unless otherwise directed by the
presiding officer. The presiding officer may ask questions of any
witness and each party may cross-examine any witness presented by an
opposing party.
(4) The proceedings shall be on the record and the transcript shall
be promptly submitted to the Board of Directors. The presiding officer
shall make recommendations to the Board of Directors, unless the Board
of Directors, in its sole discretion, directs otherwise.
Sec. 308.143 Decision of Board of Directors.
Following submission of the hearing transcript to the Board of
Directors, the Board of Directors may grant the exemption where it
determines, by reason of the number of public investors, the amount of
trading interest in the securities, the nature and extent of the
issuer's activities, the issuer's income or assets, or otherwise, that
the exemption is consistent with the public interest or the protection
of investors. Any exemption shall be set forth in an order
[[Page 91]]
specifying the terms of the exemption, the person to whom it is granted,
and the period for which it is granted. A copy of the order shall be
served upon each party to the proceeding.
Subpart K_Procedures Applicable to Investigations Pursuant to Section
10(c) of the FDIA
Sec. 308.144 Scope.
The procedures of this subpart shall be followed when an
investigation is instituted and conducted in connection with any open or
failed insured depository institution, any institutions making
application to become insured depository institutions, and affiliates
thereof, or with other types of investigations to determine compliance
with applicable law and regulations, pursuant to section 10(c) of the
FDIA (12 U.S.C. 1820(c)). The Uniform Rules and subpart B of the Local
Rules shall not apply to investigations under this subpart.
Sec. 308.145 Conduct of investigation.
An investigation conducted pursuant to section 10(c) of the FDIA
shall be initiated only upon issuance of an order by the Board of
Directors; or by the General Counsel, the Director of the Division of
Supervision and Consumer Protection (DSC), the Director of the Division
of Depositor and Asset Services, or their respective designees as set
forth at Sec. 303.272 of this chapter. The order shall indicate the
purpose of the investigation and designate FDIC's representative(s) to
direct the conduct of the investigation. Upon application and for good
cause shown, the persons who issue the order of investigation may limit,
quash, modify, or withdraw it. Upon the conclusion of the investigation,
an order of termination of the investigation shall be issued by the
persons issuing the order of investigation.
[56 FR 37975, Aug. 9, 1991, as amended at 60 FR 31384, June 15, 1995; 64
FR 62100, Nov. 16, 1999]
Sec. 308.146 Powers of person conducting investigation.
The person designated to conduct a section 10(c) investigation shall
have the power, among other things, to administer oaths and
affirmations, to take and preserve testimony under oath, to issue
subpoenas and subpoenas duces tecum and to apply for their enforcement
to the United States District Court for the judicial district or the
United States court in any territory in which the main office of the
bank, institution, or affiliate is located or in which the witness
resides or conducts business. The person conducting the investigation
may obtain the assistance of counsel or others from both within and
outside the FDIC. The persons who issue the order of investigation may
limit, quash, or modify any subpoena or subpoena duces tecum, upon
application and for good cause shown. The person conducting an
investigation may report to the Board of Directors any instance where
any attorney has been guilty of contemptuous conduct. The Board of
Directors, upon motion of the person conducting the investigation, or on
its own motion, may make a finding of contempt and may then summarily
suspend, without a hearing, any attorney representing a witness from
further participation in the investigation.
Sec. 308.147 Investigations confidential.
lnvestigations conducted pursuant to section 10(c) shall be
confidential. Information and documents obtained by the FDIC in the
course of such investigations shall not be disclosed, except as provided
in part 309 of this chapter and as otherwise required by law.
Sec. 308.148 Rights of witnesses.
In an investigation pursuant to section 10(c):
(a) Any person compelled or requested to furnish testimony,
documentary evidence, or other information, shall upon request be shown
and provided with a copy of the order initiating the proceeding;
(b) Any person compelled or requested to provide testimony as a
witness or to furnish documentary evidence may be represented by a
counsel who meets the requirements of Sec. 308.6 of the Uniform Rules.
That counsel may be present and may:
(1) Advise the witness before, during, and after such testimony;
[[Page 92]]
(2) Briefly question the witness at the conclusion of such testimony
for clarification purposes; and
(3) Make summary notes during such testimony solely for the use and
benefit of the witness;
(c) All persons testifying shall be sequestered. Such persons and
their counsel shall not be present during the testimony of any other
person, unless permitted in the discretion of the person conducting the
investigation;
(d) In cases of a perceived or actual conflict of interest arising
out of an attorney's or law firm's representation of multiple witnesses,
the person conducting the investigation may require the attorney to
comply with the provisions of Sec. 308.8 of the Uniform Rules; and
(e) Witness fees shall be paid in accordance with Sec. 308.14 of
the Uniform Rules.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999]
Sec. 308.149 Service of subpoena.
Service of a subpoena shall be accomplished in accordance with Sec.
308.11 of the Uniform Rules.
Sec. 308.150 Transcripts.
(a) General rule. Transcripts of testimony, if any, in an
investigation pursuant to section 10(c) shall be recorded by an official
reporter, or by any other person or means designated by the person
conducting the investigation. A witness may, solely for the use and
benefit of the witness, obtain a copy of the transcript of his or her
testimony at the conclusion of the investigation or, at the discretion
of the person conducting the investigation, at an earlier time, provided
the transcript is available. The witness requesting a copy of his or her
testimony shall bear the cost thereof.
(b) Subscription by witness. The transcript of testimony shall be
subscribed by the witness, unless the person conducting the
investigation and the witness, by stipulation, have waived the signing,
or the witness is ill, cannot be found, or has refused to sign. If the
transcript of the testimony is not subscribed by the witness, the
official reporter taking the testimony shall certify that the transcript
is a true and complete transcript of the testimony.
Subpart L_Procedures and Standards Applicable to a Notice of Change in
Senior Executive Officer or Director Pursuant to Section 32 of the FDIA
Sec. 308.151 Scope.
The rules and procedures set forth in this subpart shall apply to
the notice filed by a state nonmember bank pursuant to section 32 of the
FDIA (12 U.S.C. 1831i) and Sec. 303.102 of this chapter for the consent
of the FDIC to add or replace an individual on the Board of Directors,
or to employ any individual as a senior executive officer, or change the
responsibilities of any individual to a position of senior executive
officer where:
(a) The bank is not in compliance with all minimum capital
requirements applicable to it as determined by the FDIC on the basis of
such institution's most recent report of condition or report of
examination or inspection;
(b) The bank is in a troubled condition as defined in Sec.
303.101(c) of this chapter; or
(c) The FDIC determines, in connection with the review of a capital
restoration plan required under section 38(e)(2) of the FDIA (12 U.S.C.
1831o(e)(2)) or otherwise, that such prior notice is appropriate.
[64 FR 62100, Nov. 16, 1999]
Sec. 308.152 Grounds for disapproval of notice.
The Board of Directors or its designee may issue a notice of
disapproval with respect to a notice submitted by a state nonmember bank
pursuant to section 32 of the FDIA (12 U.S.C. 1831i) where:
(a) The competence, experience, character, or integrity of the
individual with respect to whom such notice is submitted indicates that
it would not be in the best interests of the depositors of the state
nonmember bank to permit the individual to be employed by or associated
with such bank; or
(b) The competence, experience, character, or integrity of the
individual
[[Page 93]]
with respect to whom such notice is submitted indicates that it would
not be in the best interests of the public to permit the individual to
be employed by, or associated with, the state nonmember bank.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999]
Sec. 308.153 Procedures where notice of disapproval issues pursuant to
Sec. 303.103(c) of this chapter.
(a) The Notice of Disapproval shall be served upon the insured state
nonmember bank and the candidate for director or senior executive
officer. The Notice of Disapproval shall:
(1) Summarize or cite the relevant considerations specified in Sec.
308.152;
(2) Inform the individual and the bank that a request for review of
the disapproval may be filed within fifteen days of receipt of the
Notice of Disapproval; and
(3) Specify that additional information, if any, must be contained
in the request for review.
(b) The request for review must be filed at the appropriate regional
office.
(c) The request for review must be in writing and should:
(1) Specify the reasons why the FDIC should reconsider its
disapproval; and
(2) Set forth relevant, substantive and material documents, if any,
that for good cause were not previously set forth in the notice required
to be filed pursuant to section 32 of the FDIA (12 U.S.C. 1831i).
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999]
Sec. 308.154 Decision on review.
(a) Within 30 days of receipt of the request for review, the Board
of Directors or its designee, shall notify the bank and/or the
individual filing the reconsideration (hereafter ``petitioner'') of the
FDIC's decision on review.
(b) If the decision is to grant the review and approve the notice,
the bank and the individual involved shall be so notified.
(c) A denial of the request for review pursuant to section 32 of the
FDIA shall:
(1) Inform the petitioner that a written request for a hearing,
stating the relief desired and the grounds therefore, may be filed with
the Executive Secretary within 15 days after the receipt of the denial;
and
(2) Summarize or cite the relevant considerations specified in Sec.
308.152.
(d) If a decision is not rendered within 30 days, the petitioner may
file a request for a hearing within fifteen days from the date of
expiration.
Sec. 308.155 Hearing.
(a) Hearing dates. The Executive Secretary shall order a hearing to
be commenced within 30 days after receipt of a request for a hearing
filed pursuant to Sec. 308.154. Upon request of the petitioner or the
FDIC, the presiding officer or the Executive Secretary may order a later
hearing date.
(b) Burden of proof. The ultimate burden of proof shall be upon the
candidate for director or senior executive officer. The burden of going
forward with a prima facie case shall be upon the FDIC.
(c) Hearing procedure. (1) The hearing shall be held in Washington,
DC or at another designated place, before a presiding officer designated
by the Executive Secretary.
(2) The provisions of Sec. Sec. 308.6 through 308.12, 308.16, and
308.21 of the Uniform Rules and Sec. Sec. 308.101 through 308.102, and
308.104 through 308.106 of subpart B of the Local Rules shall apply to
hearings held pursuant to this subpart.
(3) The petitioner may appear at the hearing and shall have the
right to introduce relevant and material documents and make an oral
presentation. Members of the FDIC enforcement staff may attend the
hearing and participate as representatives of the FDIC enforcement
staff.
(4) There shall be no discovery in proceedings under this subpart.
(5) At the discretion of the presiding officer, witnesses may be
presented within specified time limits, provided that a list of
witnesses is furnished to the presiding officer and to all other parties
prior to the hearing. Witnesses shall be sworn, unless otherwise
directed by the presiding officer. The presiding officer may ask
questions of any witness. Each party shall have the opportunity to
cross-examine any witness presented by an opposing party. The transcript
of the proceedings shall be
[[Page 94]]
furnished, upon request and payment of the cost thereof, to the
petitioner afforded the hearing.
(6) In the course of or in connection with any hearing under
paragraph (c) of this section the presiding officer shall have the power
to administer oaths and affirmations, to take or cause to be taken
depositions of unavailable witnesses, and to issue, revoke, quash, or
modify subpoenas and subpoenas duces tecum. Where the presentation of
witnesses is permitted, the presiding officer may require the attendance
of witnesses from any state, territory, or other place subject to the
jurisdiction of the United States at any location where the proceeding
is being conducted. Witness fees shall be paid in accordance with Sec.
308.14 of the Uniform Rules.
(7) Upon the request of the applicant afforded the hearing, or the
members of the FDIC enforcement staff, the record shall remain open for
five business days following the hearing for the parties to make
additional submissions to the record.
(8) The presiding officer shall make recommendations to the Board of
Directors or its designee, where possible, within fifteen days after the
last day for the parties to submit additions to the record.
(9) The presiding officer shall forward his or her recommendation to
the Executive Secretary who shall promptly certify the entire record,
including the recommendation to the Board of Directors or its designee.
The Executive Secretary's certification shall close the record.
(d) Written submissions in lieu of hearing. The petitioner may in
writing waive a hearing and elect to have the matter determined on the
basis of written submissions.
(e) Failure to request or appear at hearing. Failure to request a
hearing shall constitute a waiver of the opportunity for a hearing.
Failure to appear at a hearing in person or through an authorized
representative shall constitute a waiver of hearing. If a hearing is
waived, the order shall be final and unappealable, and shall remain in
full force and effect.
(f) Decision by Board of Directors or its designee. Within 45 days
following the Executive Secretary's certification of the record to the
Board of Directors or its designee, the Board of Directors or its
designee shall notify the affected individual whether the denial of the
notice will be continued, terminated, or otherwise modified. The
notification shall state the basis for any decision of the Board of
Directors or its designee that is adverse to the petitioner. The Board
of Directors or its designee shall promptly rescind or modify the denial
where the decision is favorable to the petitioner.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999]
Subpart M_Procedures and Standards Applicable to an Application Pursuant
to Section 19 of the FDIA
Sec. 308.156 Scope.
The rules and procedures set forth in this subpart shall apply to an
application filed pursuant to section 19 of the FDIA (12 U.S.C. 1829) by
an insured depository institution and/or an individual, who has been
convicted of any criminal offense involving dishonesty or a breach of
trust or money laundering or who has agreed to enter into a pretrial
diversion or similar program in connection with the prosecution of such
offense, to seek the prior written consent of the FDIC to become or
continue as an institution-affiliated party with respect to an insured
depository institution; to own or control directly or indirectly an
insured depository institution; or to participate directly or indirectly
in any manner in the conduct of the affairs of an insured depository
institution.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999; 64
FR 72913, Dec. 29, 1999]
Sec. 308.157 Relevant considerations.
(a) In proceedings under Sec. 308.156 on an application to become
or continue as an institution-affiliated party with respect to an
insured depository institution; to own or control directly or indirectly
an insured depository institution; or to participate directly or
indirectly in any manner in the conduct of
[[Page 95]]
the affairs of an insured depository institution, the following shall be
considered:
(1) Whether the conviction or entry into a pretrial diversion or
similar program is for a criminal offense involving dishonesty or breach
of trust or money laundering;
(2) Whether participation directly or indirectly by the person in
any manner in the conduct of the affairs of the insured depository
institution constitutes a threat to the safety or soundness of the
insured depository institution or the interests of its depositors, or
threatens to impair public confidence in the insured depository
institution;
(3) Evidence of the applicant's rehabilitation;
(4) The position to be held by the applicant;
(5) The amount of influence and control the applicant will be able
to exercise over the affairs and operations of the insured depository
institution;
(6) The ability of the management at the insured depository
institution to supervise and control the activities of the applicant;
(7) The level of ownership which the applicant will have at the
insured depository institution;
(8) Applicable fidelity bond coverage for the applicant; and
(9) Additional factors in the specific case that appear relevant.
(b) The question of whether a person, who was convicted of a crime
or who agreed to enter a pretrial diversion or similar program, was
guilty of that crime shall not be at issue in a proceeding under this
subpart.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999]
Sec. 308.158 Filing papers and effective date.
(a) Filing with the regional office. Applications pursuant to
section 19 shall be filed by in the appropriate regional office. Unless
a waiver has been granted pursuant to paragraph (c) of this section,
only an insured depository institution may file an application. Persons
meeting the de minimis criteria set forth in the FDIC's Statement of
Policy on Section 19 of the FDIA (63 FR 66177 (1998)) need not file an
application.
(b) Effective date. An application pursuant to section 19 may be
made in writing at any time more than one year after the issuance of a
decision denying an application pursuant to section 19. The removal and/
or prohibition pursuant to section 19 shall continue until the
individual has been reinstated by the Board of Directors or its designee
for good cause shown.
(c) Waiver applications. If an institution does not file an
application regarding an individual, the individual may file a request
for a waiver of the institution filing requirement for section 19 of the
FDIA. Such a waiver application shall be filed with the appropriate
regional office and shall set forth substantial good cause why the
application should be granted. The Director of the Division of
Supervision and Consumer Protection (DSC) and, where confirmed in
writing by the director, a deputy director or an associate director may
grant or deny applications requesting waivers of the institution filing
requirement. The authority delegated under this section shall be
exercised only upon the concurrent certification of the General Counsel
or his designee that the action to be taken is not inconsistent with
section 19 of the FDIA.
[64 FR 62101, Nov. 16, 1999]
Sec. 308.159 Denial of applications.
A denial of an application pursuant to section 19 shall:
(a) Inform the applicant that a written request for a hearing,
stating the relief desired and the grounds therefor and any supporting
evidence, may be filed with the Executive Secretary within 60 days after
the denial; and
(b) Summarize or cite the relevant considerations specified in Sec.
308.157 of this subpart.
Sec. 308.160 Hearings.
(a) Hearing dates. The Executive Secretary shall order a hearing to
be commenced within 60 days after receipt of a request for hearing on an
application filed pursuant to Sec. 308.159. Upon the request of the
applicant or FDIC enforcement counsel, the presiding officer or
[[Page 96]]
the Executive Secretary may order a later hearing date.
(b) Burden of proof. The ultimate burden of proof shall be upon the
person proposing to become or continue as an institution-affiliated
party with respect to an insured depository institution; to own or
control directly or indirectly an insured depository institution; or to
participate directly or indirectly in any manner in the conduct of the
affairs of an insured depository institution. The burden of going
forward with a prima facie case shall be upon the FDIC.
(c) Hearing procedure. (1) The hearing shall be held in Washington,
DC, or at another designated place, before a presiding officer
designated by the Executive Secretary.
(2) The provisions of Sec. Sec. 308.6 through 308.12, 308.16, and
308.21 of the Uniform Rules and Sec. Sec. 308.101 through 308.102 and
308.104 through 308.106 of subpart B of the Local Rules shall apply to
hearings held pursuant to this subpart.
(3) The applicant may appear at the hearing and shall have the right
to introduce relevant and material documents and oral argument. Members
of the FDIC enforcement staff may attend the hearing and participate as
a party.
(4) There shall be no discovery in proceedings under this subpart.
(5) At the discretion of the presiding officer, witnesses may be
presented within specified time limits, provided that a list of
witnesses is furnished to the presiding officer and to all other parties
prior to the hearing. Witnesses shall be sworn, unless otherwise
directed by the presiding officer. The presiding officer may ask
questions of any witness. Each party shall have the opportunity to
cross-examine any witness presented by an opposing party. The transcript
of the proceedings shall be furnished, upon request and payment of the
cost thereof, to the applicant afforded the hearing.
(6) In the course of or in connection with any hearing under this
subsection, the presiding officer shall have the power to administer
oaths and affirmations, to take or cause to be taken depositions of
unavailable witnesses, and to issue, revoke, quash, or modify subpoenas
and subpoenas duces tecum. Where the presentation of witnesses is
permitted, the presiding officer may require the attendance of witnesses
from any state, territory, or other place subject to the jurisdiction of
the United States at any location where the proceeding is being
conducted. Witness fees shall be paid in accordance with Sec. 308.14 of
the Uniform Rules.
(7) Upon the request of the applicant afforded the hearing, or FDIC
enforcement staff, the record shall remain open for five business days
following the hearing for the parties to make additional submissions to
the record.
(8) The presiding officer shall make recommendations to the Board of
Directors, where possible, within 20 days after the last day for the
parties to submit additions to the record.
(9) The presiding officer shall forward his or her recommendation to
the Executive Secretary who shall promptly certify the entire record,
including the recommendation to the Board of Directors or its designee.
The Executive Secretary's certification shall close the record.
(d) Written submissions in lieu of hearing. The applicant or the
bank may in writing waive a hearing and elect to have the matter
determined on the basis of written submissions.
(e) Failure to request or appear at hearing. Failure to request a
hearing shall constitute a waiver of the opportunity for a hearing.
Failure to appear at a hearing in person or through an authorized
representative shall constitute a waiver of hearing. If a hearing is
waived, the person shall remain barred under section 19.
(f) Decision by Board of Directors or its designee. Within 60 days
following the Executive Secretary's certification of the record to the
Board of Directors or its designee, the Board of Directors or its
designee shall notify the affected person whether the person shall
remain barred under section 19. The notification shall state the basis
for any decision of the Board of Directors or its designee that is
adverse to the applicant.
[56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999]
[[Page 97]]