[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2024 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 12
Banks and Banking
________________________
Parts 300 to 346
Revised as of January 1, 2024
Containing a codification of documents of general
applicability and future effect
As of January 1, 2024
Published by the Office of the Federal Register
National Archives and Records Administration as
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter III--Federal Deposit Insurance Corporation 3
Finding Aids:
Table of CFR Titles and Chapters........................ 753
Alphabetical List of Agencies Appearing in the CFR...... 773
List of CFR Sections Affected........................... 783
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 12 CFR 302.1 refers
to title 12, part 302,
section 1.
----------------------------
[[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.
LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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To determine whether a Code volume has been amended since its
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EFFECTIVE AND EXPIRATION DATES
Each volume of the Code contains amendments published in the Federal
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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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requirements.
PAST PROVISIONS OF THE CODE
Provisions of the Code that are no longer in force and effect as of
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for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.
``[RESERVED]'' TERMINOLOGY
The term ``[Reserved]'' is used as a place holder within the Code of
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This material, like any other properly issued regulation, has the force
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What is a proper incorporation by reference? The Director of the
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(a) The incorporation will substantially reduce the volume of
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(b) The matter incorporated is in fact available to the extent
necessary to afford fairness and uniformity in the administrative
process.
(c) The incorporating document is drafted and submitted for
publication in accordance with 1 CFR part 51.
What if the material incorporated by reference cannot be found? If
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this volume.
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that volume.
[[Page vii]]
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the revision dates of the 50 CFR titles.
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available at www.ecfr.gov.
Oliver A. Potts,
Director,
Office of the Federal Register
January 1, 2024
[[Page ix]]
THIS TITLE
Title 12--Banks and Banking is composed of ten volumes. The parts in
these volumes are arranged in the following order: Parts 1-199, 200-219,
220-229, 230-299, 300-346, 347-599, 600-899, 900-1025, 1026-1099, and
1100-End. The contents of these volumes represent all current
regulations codified under this title of the CFR as of January 1, 2024.
For this volume, Gabrielle E. Burns was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains parts 300 to 346)
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Part
chapter iii--Federal Deposit Insurance Corporation.......... 302
[[Page 3]]
CHAPTER III--FEDERAL DEPOSIT INSURANCE CORPORATION
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SUBCHAPTER A--PROCEDURE AND RULES OF PRACTICE
Part Page
300-301
[Reserved]
302 Use of supervisory guidance................. 5
303 Filing procedures........................... 6
304 Forms, instructions, and reports............ 60
305-306
[Reserved]
307 Certification of assumption of deposits and
notification of changes of insured
status.................................. 64
308 Rules of practice and procedure............. 66
309 Disclosure of information................... 166
310 Privacy Act regulations..................... 197
311 Rules governing public observation of
meetings of the Corporation's Board of
Directors............................... 202
312
[Reserved]
313 Procedures for collection of corporate debt,
criminal restitution debt, and civil
money penalty debt...................... 207
SUBCHAPTER B--REGULATIONS AND STATEMENTS OF GENERAL POLICY
323 Appraisals.................................. 227
324 Capital adequacy of FDIC-Supervised
institutions............................ 235
325 Stress testing.............................. 465
326 Minimum security devices and procedures and
Bank Secrecy Act compliance............. 470
327 Assessments................................. 472
328 Advertisement of membership, false
advertising, misrepresentation of
insured status, and misuse of the FDIC's
name or logo............................ 560
329 Liquidity risk measurement standards........ 568
330 Deposit insurance coverage.................. 610
331 Federal interest rate authority............. 628
332 Privacy of consumer financial information... 630
333 Extension of corporate powers............... 657
334 Fair credit reporting....................... 659
[[Page 4]]
335 Securities of State nonmember banks and
State savings associations.............. 666
336 FDIC employees.............................. 674
337 Unsafe and unsound banking practices........ 679
338 Fair housing................................ 688
339 Loans in areas having special flood hazards. 691
340 Restrictions on sale of assets of a failed
institution by the Federal Deposit
Insurance Corporation................... 699
341 Registration of securities transfer agents.. 703
342
[Reserved]
343 Consumer protection in sales of insurance... 705
344 Recordkeeping and confirmation requirements
for securities transactions............. 709
345 Community reinvestment...................... 716
346 Disclosure and reporting of CRA-related
agreements.............................. 737
[[Page 5]]
SUBCHAPTER A_PROCEDURE AND RULES OF PRACTICE
PARTS 300 301 [RESERVED]
PART 302_USE OF SUPERVISORY GUIDANCE--Table of Contents
Sec.
302.1 Purpose.
302.2 Implementation of the Statement Clarifying the Role of Supervisory
Guidance.
302.3 Rule of construction.
Appendix A to Part 302--Statement Clarifying the Role of Supervisory
Guidance
Authority: 5 U.S.C. 552; 12 U.S.C. 1818, 1819(a) (Seventh and
Tenth), 1831p-1.
Source: 86 FR 12085, Mar. 2, 2021, unless otherwise noted.
Sec. 302.1 Purpose.
The FDIC issues regulations and guidance as part of its supervisory
function. This subpart reiterates the distinctions between regulations
and guidance, as stated in the Statement Clarifying the Role of
Supervisory Guidance (appendix A to this part) (Statement).
Sec. 302.2 Implementation of the Statement Clarifying the Role of
Supervisory Guidance.
The Statement describes the official policy of the FDIC with respect
to the use of supervisory guidance in the supervisory process. The
Statement is binding on the FDIC.
Sec. 302.3 Rule of construction.
This subpart does not alter the legal status of guidelines
authorized by statute, including but not limited to, 12 U.S.C. 1831p-1,
to create binding legal obligations.
Sec. Appendix A to Part 302--Statement Clarifying the Role of
Supervisory Guidance
Statement Clarifying the Role of Supervisory Guidance
The FDIC is issuing this statement to explain the role of
supervisory guidance and to describe the FDIC's approach to supervisory
guidance.
Difference Between Supervisory Guidance and Laws or Regulations
The FDIC issues various types of supervisory guidance, including
interagency statements, advisories, policy statements, questions and
answers, and frequently asked questions, to its supervised institutions.
A law or regulation has the force and effect of law.\1\ Unlike a law or
regulation, supervisory guidance does not have the force and effect of
law, and the FDIC does not take enforcement actions based on supervisory
guidance. Rather, supervisory guidance outlines the FDIC's supervisory
expectations or priorities and articulates the FDIC's general views
regarding appropriate practices for a given subject area. Supervisory
guidance often provides examples of practices that the FDIC generally
considers consistent with safety-and-soundness standards or other
applicable laws and regulations, including those designed to protect
consumers. Supervised institutions at times request supervisory
guidance, and such guidance is important to provide insight to industry,
as well as supervisory staff, in a transparent way that helps to ensure
consistency in the supervisory approach.
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\1\ Government agencies issue regulations that generally have the
force and effect of law. Such regulations generally take effect only
after the agency proposes the regulation to the public and responds to
comments on the proposal in a final rulemaking document.
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Ongoing Efforts To Clarify the Role of Supervisory Guidance
The FDIC is clarifying the following policies and practices related
to supervisory guidance:
The FDIC intends to limit the use of numerical
thresholds or other ``bright-lines'' in describing expectations in
supervisory guidance. Where numerical thresholds are used, the FDIC
intends to clarify that the thresholds are exemplary only and not
suggestive of requirements. The FDIC will continue to use numerical
thresholds to tailor, and otherwise make clear, the applicability of
supervisory guidance or programs to supervised institutions, and as
required by statute.
Examiners will not criticize through supervisory
recommendations (including matters requiring board attention) a
supervised financial institution for, and the FDIC will not issue an
enforcement action on the basis of, a ``violation'' of or ``non-
compliance'' with supervisory guidance. In some situations, examiners
may reference (including in
[[Page 6]]
writing) supervisory guidance to provide examples of safe and sound
conduct, appropriate consumer protection and risk management practices,
and other actions for addressing compliance with laws or regulations.
Supervisory criticisms should continue to be
specific as to practices, operations, financial conditions, or other
matters that could have a negative effect on the safety and soundness of
the financial institution, could cause consumer harm, or could cause
violations of laws, regulations, final agency orders, or other legally
enforceable conditions.
The FDIC also has at times sought, and may
continue to seek, public comment on supervisory guidance. Seeking public
comment on supervisory guidance does not mean that the guidance is
intended to be a regulation or have the force and effect of law. The
comment process helps the FDIC to improve its understanding of an issue,
to gather information on institutions' risk management practices, or to
seek ways to achieve a supervisory objective most effectively and with
the least burden on institutions.
The FDIC will aim to reduce the issuance of
multiple supervisory guidance documents on the same topic and will
generally limit such multiple issuances going forward.
The FDIC will continue efforts to make the role of supervisory
guidance clear in communications to examiners and to supervised
financial institutions and encourage supervised institutions with
questions about this statement or any applicable supervisory guidance to
discuss the questions with their appropriate agency contact.
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 Financial education programs that include the provision of bank
products and services.
303.47-303.59 [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 Act
303.80 Scope.
303.81 Definitions.
303.82 Transactions that require prior notice.
303.83 Transactions that require notice, but not prior notice.
303.84 Transactions that do not require notice.
303.85 Filing procedures.
303.86 Processing.
303.87 Public notice requirements.
303.88 Reporting of stock loans and changes in chief executive officers
and directors.
303.89-303.99 [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]
[[Page 7]]
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 Investment by 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.
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, or Who Have Program Entries for, Certain Criminal
Offenses)
303.220 What is section 19 of the FDI Act?
303.221 Who is covered by section 19?
303.222 What offenses are covered under section 19?
303.223 What constitutes a conviction under section 19?
303.224 What constitutes a pretrial diversion or similar program
(program entry) under section 19?
303.225 What are the types of applications that can be filed?
303.226 When must an application be filed?
303.227 When is an application not required for a covered offense or
program entry (de minimis offenses)?
303.228 How to file an application.
303.229 How an application is evaluated.
303.230 What will the FDIC do if the application is denied?
303.231 Waiting time for a subsequent application if an application is
denied.
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 deposits.
303.244 Golden parachute and severance plan payments.
303.245 Waiver of liability for commonly controlled depository
institutions.
303.246 Conversion with diminution of capital.
303.247 Continue or resume status as an insured institution following
termination under section 8 of the FDI Act.
303.248 Truth in Lending Act--Relief from reimbursement.
303.249 Management official interlocks.
303.250 Modification of conditions.
303.251 Extension of time.
303.252-303.259 [Reserved]
Subpart N [Reserved]
Authority: 12 U.S.C. 378, 1463, 1467a, 1813, 1815, 1817, 1818,
1819(a) (Seventh and Tenth), 1820, 1823, 1828, 1831i, 1831e, 1831o,
1831p-1, 1831w, 1831z, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5412; 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,
[[Page 8]]
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 324 total assets means adjusted 12 CFR part 324
total assets as 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.
[[Page 9]]
(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 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) Notice means a submission notifying the FDIC that a depository
institution intends to engage in or has commenced certain corporate
activities or transactions.
(x) 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)).
(y) Regional counsel means a regional counsel of the Legal Division
or, in the event the title becomes obsolete, any
[[Page 10]]
official of equivalent authority within the Legal Division.
(z) 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.
(aa) [Reserved]
(bb) 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 ] 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.
(cc) Tier 1 capital shall have the same meaning as provided in Sec.
324.2 of this chapter.
(dd) Total assets shall have the same meaning as provided in Sec.
324.401(g) of this chapter.
(ee) FDIC-supervised institution means any entity for which the FDIC
is the appropriate Federal banking agency pursuant to section 3(q) of
the FDI Act, 12 U.S.C. 1813(q).
[67 FR 79247, Dec. 27, 2002, as amended at 68 FR 50459, Aug. 21, 2003;
78 FR 55470, Sept. 10, 2013; 83 FR 17739, Apr. 24, 2018; 85 FR 3243,
Jan. 21, 2020; 85 FR 72555, Nov. 13, 2020]
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.
[[Page 11]]
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) In the case of an application for deposit insurance for a de
novo depository institution, 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 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 of this part; 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.
[[Page 12]]
(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.
[67 FR 79247, Dec. 27, 2002, as amended at 86 FR 8097, Feb. 3, 2021]
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
(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
[[Page 13]]
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.
(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
[[Page 14]]
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 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.
[[Page 15]]
(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
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.
[[Page 16]]
(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 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]
[[Page 17]]
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 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 depository institution chartered as an
LLC, including a member or participant;
(2) The term ``director'' includes a manager or director of a
depository institution chartered as an LLC, or other person who has,
with respect to such a depository institution, authority substantially
similar to that of a director of a corporation;
(3) The term ``officer'' includes an officer of a depository
institution chartered as an LLC, or other person who has, with respect
to such a depository institution, 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 depository
institution chartered as an
[[Page 18]]
LLC, as well as any certificates or other evidence of such ownership
interests.
[68 FR 7308, Feb. 13, 2003, as amended at 86 FR 8097, Feb. 3, 2021]
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. Each bank
that results from the conversion of a Federal savings association into
multiple banks pursuant to section 5(i)(5) of the Home Owners' Loan Act,
12 U.S.C. 1464(i)(5), is treated as a proposed depository institution or
a de novo institution, as appropriate, for purposes of this subpart.
[67 FR 79247, Dec. 27, 2002, as amended at 73 FR 2145, Jan. 14, 2008]
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 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
[[Page 19]]
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.
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
[[Page 20]]
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, except as provided in this paragraph, 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 received or checks paid or money
lent. A branch does not include an automated teller machine, an
automated loan machine, a remote service unit, or a facility described
in section 303.46. 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
[[Page 21]]
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.
[67 FR 79247, Dec. 27, 2002, as amended at 73 FR 35338, June 23, 2008;
73 FR 55432, Sept. 25, 2008]
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) 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;
(5) 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;
(6) 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.
[67 FR 79247, Dec. 27, 2002, as amended at 85 FR 72555, Nov. 13, 2020]
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
[[Page 22]]
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.
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. 303.46 Financial education programs that include the provision
of bank products and services.
No branch application or prior approval is required in order for a
state nonmember bank to participate in one or more financial education
programs that involve receiving deposits, paying withdrawals, or lending
money if:
(a) Such service or services are provided on school premises, or a
facility used by the school;
(b) Such service or services are provided at the discretion of the
school;
(c) The principal purpose of each program is financial education.
For example, the principal purpose of a program would be considered to
be financial education if the program is designed to teach students the
principles of personal financial management, banking operations, or the
benefits of saving for
[[Page 23]]
the future, and is not designed for the purpose of profit-making; and
(d) Each program is conducted in a manner that is consistent with
safe and sound banking practices and complies with applicable law.
[73 FR 35338, June 23, 2008]
Sec. Sec. 303.47-303.59 [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 that
involves solely an insured depository institution and one or more of its
affiliates.
(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) Resulting institution refers to the acquiring, assuming or
resulting institution in a merger transaction.
[67 FR 79247, Dec. 27, 2002, as amended at 71 FR 20526, Apr. 21, 2006;
73 FR 2145, Jan. 14, 2008]
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 FDIC-supervised institution; and
(2) Any merger transaction, including any corporate reorganization,
or interim merger transaction, that involves an uninsured bank or
institution.
(b) Related regulations. Transactions covered by this subpart also
may be subject to other regulations 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
regulations 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
[[Page 24]]
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) 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).
(4) 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.
(5) Certification of assumption of deposit liability. Whenever all
of the deposit liabilities of an insured depository institution are
assumed by one or more insured depository institutions by merger,
consolidation, other statutory assumption, or by contract, the
transferring insured depository institution, or its legal successor,
shall provide an accurate written certification to the FDIC that its
deposit liabilities have been assumed, in accordance with 12 CFR part
307.
[85 FR 3243, Jan. 21, 2020]
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.
(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.
[67 FR 79247, Dec. 27, 2002, as amended at 73 FR 2145, Jan. 14, 2008]
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) Timing. 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) No automatic approval. Notwithstanding paragraph (a)(1) or (2)
of this section, if the FDIC does not act within
[[Page 25]]
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 H of part
324 of this chapter (12 CFR part 324), as applicable; 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.
(c) Processing for State savings associations. Notwithstanding
paragraphs (a) and (b) of this section, the FDIC will approve or
disapprove an application filed by a State savings association to
acquire or be acquired by another insured depository institution that is
required to be filed with the FDIC within 60 days after the date of the
FDIC's receipt of a substantially complete merger application, subject
to the FDIC's discretion to extend such period by an additional 30 days
if any material information submitted is substantially inaccurate or
incomplete.
(1) The FDIC shall notify an applicant that is a State savings
association in writing of the date the application is deemed
substantially complete. The FDIC may request additional information at
any time.
(2) Notwithstanding this paragraph (c), if the FDIC does not approve
or disapprove an application within the 60-day or extended processing
period it does not constitute an automatic or default approval.
[85 FR 3244, Jan. 21, 2020]
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.
(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]).
[[Page 26]]
(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
Source: 80 FR 65899, Oct. 28, 2015, unless otherwise noted.
Sec. 303.80 Scope.
This subpart implements the provisions of the Change in Bank Control
Act of 1978, section 7(j) of the FDI Act (12 U.S.C. 1817(j)) (CBCA), and
sets forth the filing requirements and processing procedures for a
notice of change in control with respect to the acquisition of control
of a State nonmember bank, a State savings association, or certain
parent companies of either a State nonmember bank or a State savings
association.
Sec. 303.81 Definitions.
For purposes of this subpart:
(a) Acting in concert means knowing participation in a joint
activity or parallel action towards a common goal of acquiring control
of a covered institution whether or not pursuant to an express
agreement.
(b) Company means a company as defined in section 2 of the Bank
Holding Company Act of 1956, as amended (12 U.S.C. 1841 et seq.) and any
person that is not an individual including for example, a limited
liability company.
(c) Control means the power, directly or indirectly, to direct the
management or policies of a covered institution or to vote 25 percent or
more of any class of voting securities of a covered institution.
(d) Convertible securities mean debt or equity interests that may be
converted into voting securities.
(e) Covered institution means an insured State nonmember bank, an
insured State savings association, and any company that controls,
directly or indirectly, an insured State nonmember bank or an insured
State savings association other than a holding company that is the
subject of an exemption described in either section 303.84(a)(3) or
(a)(8).
(f) Immediate family means a person's parents, mother-in-law,
father-in-law, children, step-children, siblings, step-siblings,
brothers-in-law, sisters-in-law, grandparents, and grandchildren,
whether biological, adoptive, adjudicated, contractual, or de facto; the
spouse of any of the foregoing; and the person's spouse.
(g) Person means an individual, corporation, limited liability
company (LLC), partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, voting
trust, or any other form of entity; and includes each party to a voting
agreement and any group of persons acting in concert.
(h) Management official means any officer, LLC manager, director,
partner, or trustee of an entity, or other person with similar functions
and powers with respect to a company.
(i)(1) Voting securities means shares of common or preferred stock,
general or limited partnership shares or interests, membership
interests, or similar interests if the shares or interests, by statute,
charter, or in any manner, entitle the holder:
(i) To vote for, or to select, directors, trustees, managers of an
LLC, partners, or other persons exercising similar functions of the
issuing entity; or
(ii) To vote on, or to direct, the conduct of the operations or
significant policies of the issuing entity.
(2) Nonvoting shares: Shares of common or preferred stock, limited
partnership shares or interests, membership interests, or similar
interests are not ``voting securities'' if:
[[Page 27]]
(i) Any voting rights associated with the shares or interests are
limited solely to the type customarily provided by State statute with
regard to matters that would significantly and adversely affect the
rights or preference of the security or other interest, such as the
issuance of additional amounts or classes of senior securities, the
modification of the terms of the security or interest, the dissolution
of the issuing entity, or the payment of dividends by the issuing entity
when preferred dividends are in arrears;
(ii) The shares or interests represent an essentially passive
investment or financing device and do not otherwise provide the holder
with control over the issuing entity; and
(iii) The shares or interests do not entitle the holder, by statute,
charter, or in any manner, to select, or to vote for the selection of,
directors, trustees, managers of an LLC, partners, or persons exercising
similar functions of the issuing entity.
(3) Class of voting securities: Voting securities issued by a single
issuer are deemed to be the same class of voting securities, regardless
of differences in dividend rights or liquidation preference, if the
securities are voted together as a single class on all matters for which
the securities have voting rights other than matters described in
paragraph (i)(2)(i) of this section that affect solely the rights or
preferences of the securities.
Sec. 303.82 Transactions that require prior notice.
(a) Prior notice requirement. (1) Except as provided in Sec. Sec.
303.83 and 303.84, no person, acting directly or indirectly, or through
or in concert with one or more persons, shall acquire control of a
covered institution unless the person shall have given the FDIC prior
notice of the proposed acquisition as provided in the CBCA and this
subpart, and the FDIC has not disapproved the acquisition within 60 days
or such longer period as may be permitted under the CBCA; and
(2) Except as provided in Sec. Sec. 303.83 and 303.84, and unless
waived by the FDIC, no person who has been approved to acquire control
of a covered institution and who has maintained that control shall
acquire, directly or indirectly, or through or in concert with one or
more persons, voting securities of such covered institution if that
person's ownership, control, or power to vote will increase from less
than 25 percent to 25 percent or more of any class of voting securities
of the covered institution, unless the person shall have given the FDIC
prior notice of the proposed acquisition as provided in the CBCA and
this subpart, and the FDIC has not disapproved the acquisition within 60
days or such longer period as may be permitted under the CBCA.
(b) Rebuttable presumptions--(1) Rebuttable presumptions of control.
The FDIC presumes that an acquisition of voting securities of a covered
institution constitutes the acquisition of the power to direct the
management or policies of that institution requiring prior notice to the
FDIC, if, immediately after the transaction, the acquiring person will
own, control, or hold with power to vote 10 percent or more of any class
of voting securities of the institution, and if:
(i) The institution has registered securities 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 securities immediately after
the transaction.
(2) Rebuttable presumptions of acting in concert. The following
persons who own or control, or propose to own or control voting
securities in a covered institution, shall be presumed to be acting in
concert for purposes of this subpart:
(i) A company and any controlling shareholder or management official
of the company;
(ii) An individual and one or more members of the individual's
immediate family;
(iii) Companies under common control or a company and each company
it controls;
(iv) Two or more persons that have made, or propose to make, a joint
filing related to the proposed acquisition under sections 13 or 14 of
the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78n), and the
rules promulgated thereunder by the Securities and Exchange Commission;
[[Page 28]]
(v) A person and any trust for which the person serves as trustee or
any trust for which the person is a beneficiary; and
(vi) Persons that are parties to any agreement, contract,
understanding, relationship, or other arrangement, whether written or
otherwise, regarding the acquisition, voting, or transfer of control of
voting securities of a covered institution, other than through revocable
proxies as described in Sec. 303.84(a)(5).
(3) Convertible securities, options, and warrants. The acquisition
of convertible securities, or options or warrants to acquire voting
securities is presumed to constitute the acquisition of voting
securities.
(4) Rebuttal of presumptions. The FDIC will afford any person
seeking to rebut a presumption in this paragraph (b) an opportunity to
present its views in writing.
(c) Acquisition of loans in default. An acquisition of a loan in
default that is secured by voting securities of a covered institution is
deemed to be an acquisition of the underlying securities for purposes of
this subpart. Before acquiring a loan in default that upon foreclosure
would result in the acquiring person owning, controlling, or holding
with the power to vote a controlling amount of a covered institution's
voting securities, the potential acquirer must give the FDIC prior
written notice as specified in this subpart.
Sec. 303.83 Transactions that require notice, but not prior notice.
(a) Notice within 90 days after the acquisition. The following
acquisitions of voting securities of a covered institution, which
otherwise would require prior notice under this subpart, instead require
the acquirer to provide to the appropriate FDIC office within 90
calendar days after the acquisition all relevant information requested
by the FDIC:
(1) The acquisition of voting securities as a bona fide gift;
(2) The acquisition of voting securities in satisfaction of a debt
previously contracted in good faith, except as provided in Sec.
303.82(c); and
(3) The acquisition of voting securities through inheritance.
(b) Notice within 90 days after receiving notice of the event giving
rise to the acquisition of control. The following acquisitions of
control of a covered institution, which otherwise would require prior
notice under this subpart, instead require the person acquiring control
to provide to the appropriate FDIC office, within 90 calendar days after
receiving notice of the event giving rise to the acquisition of control,
all relevant information requested by the FDIC:
(1) The acquisition of control resulting from a redemption of voting
securities by the issuing covered institution; and
(2) The acquisition of control as a result of any event or action
(including without limitation the sale of securities) by any third party
that is not within the control of the person acquiring control.
(c) The FDIC may disapprove a notice filed after an acquisition of
control, and nothing in this section limits the authority of the FDIC to
disapprove a notice pursuant to Sec. 303.86(c).
(d) The relevant information that the FDIC may require under this
section may include all information and documents routinely required for
a prior notice as provided in Sec. 303.85.
(e) If the FDIC disapproves a Notice filed under this Sec. 303.83,
the notificant(s) must divest control of the covered institution which
may include, without limitation, disposing of some or all of the voting
securities so that the notificant(s) is no longer in control of the
covered institution, within such period of time and in the manner that
the FDIC may determine.
Sec. 303.84 Transactions that do not require notice.
(a) Exempt transactions. The following transactions do not require
notice to the FDIC under this subpart:
(1) The acquisition of additional voting securities of a covered
institution by a person who:
(i) Held the power to vote 25 percent or more of any class of voting
securities of the institution continuously since the later of March 9,
1979, or the date that the institution commenced business; or
[[Page 29]]
(ii) Is presumed, under Sec. 303.82(b) to have controlled the
institution continuously since March 9, 1979, if the aggregate amount of
voting securities held does not exceed 25 percent or more of any class
of voting securities 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 voting securities of a covered
institution by a person who has lawfully acquired and maintained control
of the institution (for purposes of Sec. 303.82) after obtaining the
FDIC's non-objection under the CBCA and the FDIC's regulations or the
OTS's non-objection under the repealed Change in Savings and Loan
Control Act, 12 U.S.C. 1730(q), and the regulations thereunder then in
effect, to acquire control of the institution, unless a notice is
required for an increase in ownership described in 12 CFR 303.82(a)(2);
(3) Acquisitions of voting securities 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 Home
Owners' Loan Act (12 U.S.C. 1467a);
(4) Any transaction described in sections 2(a)(5), 3(a)(A), or
3(a)(B) of the Bank Holding Company Act (12 U.S.C. 1841(a)(5),
1842(a)(A), or 1842(a)(B)) by a person described in those provisions;
(5) A customary one-time solicitation of a revocable proxy;
(6) The receipt of voting securities of a covered institution
through a pro rata stock dividend or stock split if the proportional
interests of the recipients remain substantially the same;
(7) The acquisition of voting securities in a foreign bank that has
an insured branch in the United States. (This exemption does not extend
to the reports and information required under paragraphs 9, 10, and 12
of the CBCA (12 U.S.C. 1817(j)(9), (10), and (12)); and
(8) The acquisition of voting securities of a depository institution
holding company for which the Board of Governors of the Federal Reserve
System reviews a notice pursuant to the CBCA (12 U.S.C. 1817(j)).
Sec. 303.85 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 CBCA, section 7(j) of the FDI
Act, (12 U.S.C. 1817(j)(6)), or prescribed in the designated interagency
forms 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 the information contained 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 comply with the federal
securities laws or other laws.
Sec. 303.86 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 commence 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 as provided in the
CBCA.
[[Page 30]]
(2) The notificant(s) may consummate the proposed transaction before
the expiration of the 60-day period, including any extensions, if the
FDIC notifies the notificant(s) in writing of its intention not to
disapprove the acquisition.
(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.
Sec. 303.87 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 covered institution to be acquired is
located.
(2) Timing of publication. 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. If the filing is not filed in
accordance with the CBCA and this subpart within the time periods
specified herein, the acquiring person(s) shall, within 10 days of being
directed by the FDIC to file a Notice, publish an announcement of the
acquisition of control.
(3) Contents of newspaper announcement. The newspaper announcement
shall conform to the public notice requirements set forth in Sec.
303.7. If the filing is not filed in accordance with the CBCA and this
subpart within the time periods specified herein, the announcement shall
also include the date of the acquisition and contain a statement
indicating that the FDIC is currently reviewing the acquisition of
control.
(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 State nonmember
bank or State savings association 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.
Sec. 303.88 Reporting of stock loans and changes in chief executive
officers and directors.
(a) Requirements of reporting stock loans. (1) Any foreign bank or
affiliate of a foreign bank that has credit outstanding to any person or
group of persons, in the aggregate, which is secured, directly or
indirectly, by 25 percent or more of any class of voting securities of a
covered institution, shall file a consolidated report with the
appropriate FDIC office.
(2) Any voting securities of the covered institution held by the
foreign bank or any affiliate of the foreign bank as principal must be
included in the calculation of the number of voting securities in which
the foreign bank or its affiliate has a security interest for purposes
of this paragraph (a).
(b) Definitions. For purposes of paragraph (a) of this section:
(1) Foreign bank shall have the same meaning as in section 1(b) of
the International Banking Act of 1978 (12 U.S.C. 3101).
(2) Affiliate shall have the same meaning as in section 1(b) of the
International Banking Act of 1978 (12 U.S.C. 3101).
(3) Credit outstanding includes any loan or extension of credit; the
issuance of a guarantee, acceptance, or
[[Page 31]]
letter of credit, including an endorsement or standby letter of credit;
and any other type of transaction that extends credit or financing to
the person or group of persons.
(4) Group of persons includes any number of persons that the foreign
bank or any affiliate of a foreign bank has reason to believe:
(i) Are acting together, in concert, or with one another to acquire
or control voting securities of the same covered institution, including
an acquisition of voting securities of the same covered institution at
approximately the same time under substantially the same terms; or
(ii) Have made, or propose to make, a joint filing under section 13
or 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78n), and
the rules promulgated thereunder by the Securities and Exchange
Commission regarding ownership of the voting securities of the same
covered institution.
(c) Exceptions. Compliance with paragraph (a) of this section is not
required if:
(1) The person or group of persons referred to in paragraph (a) has
disclosed the amount borrowed and the security interest therein to the
appropriate FDIC office in connection with a notice filed under the
CBCA, an application filed under either 12 U.S.C. 1841, et seq. or 12
U.S.C. 1467a, or any other application filed with the FDIC as a
substitute for a notice under Sec. 303.82 of this subpart, including an
application filed under section 18(c) of the FDI Act (Bank Merger Act,
12 U.S.C. 1828(c)) or section 5 of the FDI Act (12 U.S.C. 1815); or
(2) The transaction involves a person or group of persons that has
been the owner or owners of record of the stock for a period of one year
or more; or, if the transaction involves stock issued by a newly
chartered bank, before the bank is opened for business.
(d) Report requirements for purposes of paragraph (a) of this
section. (1) The consolidated report must indicate the number and
percentage of voting securities securing each applicable extension of
credit, the identity of the borrower, the number of voting securities
held as principal by the foreign bank and any affiliate thereof, and any
additional information that the FDIC may require in connection with a
particular report.
(2) A foreign bank, or any affiliate of a foreign bank, shall file
the consolidated report in writing within 30 days of the date on which
the foreign bank or affiliate first believes that the security for any
outstanding credit consists of 25 percent or more of any class of voting
securities of a covered institution.
(e) Foreign bank or affiliate not supervised by FDIC. If the foreign
bank, or any affiliate thereof, is not supervised by the FDIC, it shall
file a copy of the report filed under paragraph (a) of this section with
its appropriate Federal banking agency.
(f) Reporting requirement. After the consummation of a change in
control, a covered institution must notify the FDIC in writing of any
changes or replacements of its chief executive officer or of any
director occurring during the 12-month period beginning on the date of
consummation. This notice must be filed within 10 days of such change or
replacement and must include a statement of the past and current
business and professional affiliations of the new chief executive
officers or directors.
Sec. Sec. 303.89-303.99 [Reserved]
Subpart F_Change of Director or Senior Executive Officer
Sec. 303.100 Scope.
This subpart sets forth the circumstances under which an FDIC-
supervised institution 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).
[85 FR 3244, Jan. 21, 2020]
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 FDIC-supervised institution, except that this
term does not include an advisory director who:
[[Page 32]]
(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, 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 FDIC-supervised institution.
(c) Troubled condition means any FDIC-supervised institution 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 FDIC-
supervised institution 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 FDIC-
supervised institution, 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 FDIC-supervised institution's most recent report of condition or
report of examination, or other information available to the FDIC.
(d) FDIC-supervised institution means any entity for which the FDIC
is the appropriate Federal banking agency pursuant to section 3(q) of
the FDI Act, 12 U.S.C. 1813(q).
[67 FR 79247, Dec. 27, 2002, as amended at 85 FR 3244, Jan. 21, 2020]
Sec. 303.102 Filing procedures and waiver of prior notice.
(a) FDIC-supervised institutions. An FDIC-supervised institution
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 institution, or changing the responsibilities of any
senior executive officer so that the person would assume a different
senior executive officer position, if the FDIC-supervised institution:
(1) Is not in compliance with all minimum capital requirements
applicable to the FDIC-supervised institution as determined on the basis
of the institution's most recent report of condition or report of
examination;
(2) 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, 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 FDIC-supervised institution 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:
[[Page 33]]
(i) Delay would threaten the safety and soundness of the FDIC-
supervised institution;
(ii) Delay would not be in the public interest; or
(iii) Other extraordinary circumstances exist that justify waiver of
prior notice.
(2) Automatic waiver. The prior 30-day notice is automatically
waived in the case of the election of a new director not proposed by
management at a meeting of the shareholders of an FDIC-supervised
institution, 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.
[67 FR 79247, Dec. 27, 2002, as amended at 85 FR 3245, Jan. 21, 2020]
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 FDIC-supervised institution 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
with 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 the 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 FDIC-supervised institution 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 depositors of the FDIC-supervised institution or in the best
interests of the public to permit the individual to be employed by, or
associated with the FDIC-supervised institution. Subpart L of 12 CFR
part 308 sets forth the rules of practice and procedure for a notice of
disapproval.
[85 FR 3245, Jan. 21, 2020]
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 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
[[Page 34]]
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 upon written notice to the bank),
but failure of the FDIC to act prior to the expiration of these periods
does not constitute approval.
[[Page 35]]
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 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
[[Page 36]]
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.
(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
[[Page 37]]
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 Deposit Insurance Fund, or to the public interest.
[67 FR 79247, Dec. 27, 2002, as amended at 71 FR 20526, Apr. 21, 2006]
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:
(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.
[[Page 38]]
(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 H of part 324 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.
(h) Insured branch means an insured branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
[[Page 39]]
(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.
[67 FR 79247, Dec. 27, 2002, as amended at 78 FR 55470, Sept. 10, 2013;
83 FR 17739, Apr. 24, 2018]
Sec. 303.182 Establishing, moving or closing a foreign branch of an
insured state nonmember bank.
(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. 347.117(a) of this chapter
must be provided to the appropriate FDIC office no later than 30 days
after taking such action. The notice must include the location of the
foreign branch, including a street address. 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. 347.117(a) of this chapter shall submit an application to
the appropriate FDIC office.
(2) Content of filing. A complete letter application must include
the following information:
(i) The exact location of the proposed foreign branch, 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) of this part,
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 proposed activities of the branch
and, to the extent any of the proposed activities are not authorized by
Sec. 347.115 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. 347.118(a) 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) of this part. 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 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.
(d) Closing. Notices of branch closing under Sec. 347.121 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.
[70 FR 17558, Apr. 6, 2005, as amended at 85 FR 72555, Nov. 13, 2020]
Sec. 303.183 Investment by insured state nonmember banks in foreign
organization.
(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. 347.117(b) of
this chapter shall be provided to the appropriate FDIC office no 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.
347.117(b) 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
[[Page 40]]
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. 347.118(b) of this
chapter by an eligible depository institution as defined in Sec.
303.2(r) of this part 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) of this part. 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) 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.
[67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17558, Apr. 6, 2005]
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 property,
leasing of property, and construction contracts;
(iii) 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
(iv) A copy of the newspaper publication required by paragraph (c)
of this
[[Page 41]]
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) of this part will be acknowledged in writing by the
FDIC and will receive expedited processing if the applicant is proposing
to move within the same state, 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) of this part. 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 H of part 324 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 could have been
made with independent third parties;
(iv) Compliance with the CRA 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.
(e) Relocation of insured branch from one state to another. If the
foreign bank proposes to relocate an insured state branch to a state
that is outside the state where the branch is presently located, in
addition to meeting the approval criteria contained in paragraph (d) of
this section, the foreign bank must:
[[Page 42]]
(i) Comply with any applicable state laws or regulations of the
states affected by the proposed relocation; and
(ii) Obtain any required regulatory approvals from the appropriate
state licensing authority of the state to which the insured branch
proposes to relocate before relocating the existing branch operations
and surrendering its existing license to the appropriate state licensing
authority of the state from which the branch is relocating.
[67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17559, Apr. 6, 2005; 78
FR 55470, Sept. 10, 2013; 83 FR 17739, Apr. 24, 2018; 85 FR 72555, Nov.
13, 2020; 86 FR 9433, Feb. 16, 2021]
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 requirements for a state
branch of a foreign bank.
(a) Filing procedures--(1) Where to file. An application by a
foreign bank for consent to operate as a noninsured state branch, as
permitted by Sec. 347.215(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.
[67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17559, Apr. 6, 2005]
Sec. 303.187 Approval for an insured state branch of a foreign bank
to conduct activities not permissible for federal branches.
(a) Filing procedures--(1) Where to file. An application by an
insured state
[[Page 43]]
branch seeking approval to conduct activities not permissible for a
federal branch, as required by Sec. 347.212(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 sections 347.209 and 347.210 of this chapter;
(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 Deposit 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.
347.212(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.
[67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17559, Apr. 6, 2005; 71
FR 20526, Apr. 21, 2006]
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 H of part 324 of this
chapter.
(b) Institutions covered. Restrictions and prohibitions contained in
subpart H of part 324 of this chapter apply primarily to FDIC-supervised
institutions, as well as to directors and senior executive officers of
those institutions. Portions of subpart H of part 324 of this chapter
also apply to all insured depository institutions that are deemed to be
critically undercapitalized.
[67 FR 79247, Dec. 27, 2002, as amended at 78 FR 55470, Sept. 10, 2013;
83 FR 17739, Apr. 24, 2018; 85 FR 3245, Jan. 21, 2020]
[[Page 44]]
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 FDIC-supervised institution shall submit an
application for a 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 FDIC-
supervised institution shall describe the proposal, the shares or
obligations that are the subject thereof, and the additional shares or
obligations of the institution that 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 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).
[85 FR 3245, Jan. 21, 2020]
Sec. 303.204 Applications for acquisitions, branching, and new lines
of business.
(a) Scope. (1) Any insured State nonmember bank, any insured State
savings association, 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).
[86 FR 8097, Feb. 3, 2021]
Sec. 303.205 Applications for bonuses and increased compensation for
senior executive officers.
(a) Scope. Any insured State nonmember bank, insured State savings
association, or insured branch of a foreign bank that is significantly
or critically undercapitalized, or any insured State nonmember bank, any
insured State savings association, or any insured branch of a foreign
bank that is undercapitalized and which has failed
[[Page 45]]
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.
(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.
[67 FR 79247, Dec. 27, 2002, as amended at 86 FR 8097, Feb. 3, 2021]
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. A highly
leveraged transaction means an extension of credit to or investment in a
business by an insured depository institution where the financing
transaction involves a buyout, acquisition, or recapitalization of an
existing business and one of the following criteria is met:
(i) The transaction results in a liabilities-to-assets leverage
ratio higher than 75 percent; or
(ii) The transaction at least doubles the subject company's
liabilities and results in a liabilities-to-assets leverage ratio higher
than 50 percent; or
(iii) The transaction is designated an highly leverage transaction
by a syndication agent or a federal bank regulator.
(iv) Loans and exposures to any obligor in which the total financing
package, including all obligations held by all participants is $20
million or more, or such lower level as the FDIC may establish by order
on a case-by-case basis, will be excluded from this definition.
(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
[[Page 46]]
this provision does not supersede the general prohibitions contained in
Sec. 337.6.
[67 FR 79247, Dec. 27, 2002, as amended at 78 FR 55470, Sept. 10, 2013]
Sec. Sec. 303.208-303.219 [Reserved]
Subpart L_Section 19 of the FDI Act (Consent to Service of Persons
Convicted of, or Who Have Program Entries for, Certain Criminal
Offenses)
Source: 85 FR 51319, Aug. 20, 2020, unless otherwise noted.
Sec. 303.220 What is section 19 of the FDI Act?
(a) This subpart covers applications under section 19 of the Federal
Deposit Insurance Act (FDI Act), 12 U.S.C. 1829. Under 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 (program entry) in
connection with a prosecution for such offense, may not become, or
continue as, an institution-affiliated party (IAP) of an insured
depository institution (IDI); own or control, directly or indirectly,
any IDI; or otherwise participate, directly or indirectly, in the
conduct of the affairs of any IDI without the prior written consent of
the FDIC.
(b) In addition, the law bars an IDI from permitting such a person
to engage in any conduct or to continue any relationship prohibited by
section 19. IDIs should therefore make a reasonable inquiry regarding an
applicant's history to ensure that a person who has a conviction or
program entry covered by the provisions of section 19 is not hired or
permitted to participate in its affairs without the written consent of
the FDIC issued under this subpart. FDIC-supervised IDIs may extend a
conditional offer of employment contingent on the completion of a
background check satisfactory to the institution and to determine if the
applicant is barred under section 19, but the job applicant may not work
for, be employed by, or otherwise participate in the affairs of the IDI
until the IDI has determined that the applicant is not barred under
section 19.
(c) If there is a conviction or program entry covered by the bar of
section 19, an application under this subpart must be filed seeking the
FDIC's consent to become, or to continue as, an IAP; to own or control,
directly or indirectly, an IDI; or to otherwise participate, directly or
indirectly, in the affairs of the IDI. The application must be filed,
and consented to, prior to serving in any of the foregoing capacities
unless such application is not required under the subsequent provisions
of this subpart. The purpose of an application is to provide the
applicant an opportunity to demonstrate that, notwithstanding the bar, a
person is fit to participate in the conduct of the affairs of an IDI
without posing a risk to its safety and soundness or impairing public
confidence in that institution. The burden is upon the applicant to
establish that the application warrants approval.
Sec. 303.221 Who is covered by section 19?
(a) Section 19 covers IAPs, as defined by 12 U.S.C. 1813(u), and
others who are participants in the conduct of the affairs of an IDI.
Therefore, all employees of an IDI that fall within the scope of section
19, including de facto employees, as determined by the FDIC based upon
generally applicable standards of employment law, will also be subject
to section 19. Whether other persons who are not IAPs are covered
depends upon their degree of influence or control over the management or
affairs of an IDI. In the context of the FDIC's application of section
19, coverage would apply to an IDI's holding company's directors and
officers to the extent that they have the power to define and direct the
management or affairs of an IDI. Similarly, directors and officers of
affiliates, subsidiaries or joint ventures of an IDI or its holding
company will be covered if they participate in the affairs of the IDI or
are in a position to influence or control the management or affairs of
the insured institution. Typically, an independent contractor does not
have a relationship with the IDI other than the activity for which the
institution has contracted. An independent contractor who influences or
controls the management or
[[Page 47]]
affairs of the IDI would be covered by section 19.
(b) The term ``person,'' for purposes of section 19, means an
individual, and does not include a corporation, firm, or other business
entity.
(c) Individuals who file an application with the FDIC under the
provisions of section 19 who also seek to participate in the affairs of
a bank holding company or savings and loan holding company may have to
comply with any filing requirements of the Board of the Governors of the
Federal Reserve System under 12 U.S.C. 1829(d) and (e).
(d) Section 19 specifically prohibits a person subject to its
provisions from owning or controlling an IDI. The terms ``control'' and
``ownership'' under section 19 shall have the meaning given to the term
``control'' in the Change in Bank Control Act (12 U.S.C. 1817(j)(8)(B)).
A person will be deemed to exercise ``control'' if that person has the
power to vote 25 percent or more of the voting shares of an IDI (or 10
percent of the voting shares if no other person has more shares) or the
ability to direct the management or policies of the institution. Under
the same standards, a person will be deemed to ``own'' an IDI if that
person owns 25 percent or more of the institution's voting stock, or 10
percent of the voting shares if no other person owns more. These
standards would also apply to an individual acting in concert with
others so as to have such ownership or control. Absent the FDIC's
consent, persons subject to the prohibitions of section 19 will be
required to divest their control or ownership of shares above the
foregoing limits.
Sec. 303.222 What offenses are covered under section 19?
(a) The conviction or program entry must be for a criminal offense
involving dishonesty, breach of trust, or money laundering.
``Dishonesty'' means directly or indirectly to cheat or defraud, to
cheat or defraud for monetary gain or its equivalent, or wrongfully to
take property belonging to another in violation of any criminal statute.
Dishonesty includes acts involving want of integrity, lack of probity,
or a disposition to distort, cheat, or act deceitfully or fraudulently,
and includes offenses that Federal, state or local laws define as
dishonest. ``Breach of trust'' means a wrongful act, use,
misappropriation, or omission with respect to any property or fund that
has been committed to a person in a fiduciary or official capacity, or
the misuse of one's official or fiduciary position to engage in a
wrongful act, use, misappropriation, or omission.
(b) Whether a crime involves dishonesty, breach of trust, or money
laundering will be determined from the statutory elements of the offense
itself or from court determinations that the statutory provisions of the
offense involve dishonesty, breach of trust, or money laundering.
(c) All convictions or program entries for offenses concerning the
illegal manufacture, sale, distribution of, or trafficking in controlled
substances shall require an application unless no application is
required under this subpart. Convictions or program entries for criminal
offenses involving the simple possession of a controlled substance are
not covered under section 19.
Sec. 303.223 What constitutes a conviction under section 19?
(a) Convictions requiring an application. There must be a conviction
of record. Section 19 does not cover arrests or pending cases not
brought to trial, unless the person has a program entry as set out in
Sec. 303.224. Section 19 does not cover acquittals or any conviction
that has been reversed on appeal, unless the reversal was for the
purpose of re-sentencing. A conviction with regard to which an appeal is
pending requires an application. A conviction for which a pardon has
been granted will require an application.
(b) Convictions not requiring an application. When an individual is
charged with a covered offense and, in the absence of a program entry as
set out in Sec. 303.224, is subsequently convicted of an offense that
is not a covered offense, the conviction is not subject to section 19.
(c) Expungements. If an order of expungement or an order to seal has
been issued in regard to a conviction, or if a record has been otherwise
expunged by operation of law, then the conviction shall not be
considered a
[[Page 48]]
conviction of record and shall not require an application.
(d) Youthful offenders. An adjudication by a court against a person
as a ``youthful offender'' under any youth-offender law applicable to
minors as defined by state law, or any judgment as a ``juvenile
delinquent'' by any court having jurisdiction over minors as defined by
state law, does not require an application. Such an adjudication does
not constitute a matter covered under section 19 and is not a conviction
or program entry for determining the applicability of Sec. 303.227.
Sec. 303.224 What constitutes a pretrial diversion or similar program
(program entry) under section 19?
(a) A program entry is characterized by a suspension or eventual
dismissal or reversal of charges or criminal prosecution upon agreement,
whether formal or informal, by the accused to treatment, rehabilitation,
restitution, or other non-criminal or non-punitive alternatives. Whether
the outcome of a case constitutes a program entry is determined by
relevant Federal, State, or local law, and, if not so designated under
applicable law, then the determination of whether a disposition is a
program entry will be made by the FDIC on a case-by-case basis. Program
entries prior to November 29, 1990, are not covered by section 19.
(b) When a covered offense either is reduced by a program entry to
an offense that would otherwise not be covered by section 19 or is
dismissed upon successful completion of a program entry, the covered
offense remains a covered offense for purposes of section 19. The
covered offense will require an application unless it is de minimis as
provided by Sec. 303.227 of this subpart.
(c) Expungements or sealings of program entries will be treated the
same as those for convictions.
Sec. 303.225 What are the types of applications that can be filed?
(a) Institution filing requirement (bank-sponsored applications).
Applications are required to be filed by the IDI, which intends for a
person covered by the provisions of section 19 to participate in its
affairs. Bank-sponsored applications shall be filed with the appropriate
FDIC Regional Office, as required by this subpart.
(b) Waiver applications. If an IDI does not file an application
regarding an individual, the individual may file a request for a waiver
of the institution filing requirement. Such a waiver application shall
be filed with the appropriate FDIC Regional Office and shall set forth
substantial good cause why the application should be granted.
Sec. 303.226 When must an application be filed?
Except for situations in which no application is required under this
subpart, an application must be filed when there is present a conviction
by a court of competent jurisdiction for a covered offense by any adult
or minor treated as an adult, or when such person has a program entry
regarding that offense. Before an application is considered by the FDIC,
all of the sentencing requirements associated with a conviction, or
conditions imposed by the program entry, including but not limited to,
imprisonment, fines, condition of rehabilitation, and probation
requirements, must be completed, and the case must be considered final
by the procedures of the applicable jurisdiction. The FDIC's application
forms as well as additional information concerning section 19 can be
accessed at the FDIC's regional offices or on the FDIC's website.
Sec. 303.227 When is an application not required for a covered offense
or program entry (de minimis offenses)?
(a) In general. Approval is automatically granted and an application
will not be required where all of the following de minimis criteria are
met.
(1) The individual has been convicted of, or has program entries
for, no more than two covered offenses, including those subject to
paragraph (b) of this section; and for each covered offense, all of the
sentencing requirements associated with the conviction, or conditions
imposed by the program entry, have been completed (the sentence- or
program-completion requirement does not apply under paragraphs (b)(2)
and (4) of this section);
(2) Each covered offense was punishable by imprisonment for a term
of one
[[Page 49]]
year or less and/or a fine of $2,500 or less, and the individual served
three days or less of jail time for each covered offense. The FDIC
considers jail time to include any significant restraint on an
individual's freedom of movement which includes, as part of the
restriction, confinement to a specific facility or building on a
continuous basis where the person may leave temporarily only to perform
specific functions or during specified times periods or both. Jail time
includes confinement to a psychiatric treatment center in lieu of a
jail, prison, or house of correction on mental-competency grounds. The
definition is not intended to include any of the following:
(i) Persons on probation or parole who may be restricted to a
particular jurisdiction, or who must report occasionally to an
individual or to a specified location;
(ii) Persons who are restricted to a substance-abuse treatment
program facility for part or all of the day; and
(iii) Persons who are ordered to attend outpatient psychiatric
treatment;
(3) If there are two convictions or program entries for a covered
offense, each conviction or program entry was entered at least three
years prior to the date an application would otherwise be required,
except as provided in paragraph (b)(1) of this section; and
(4) Each covered offense was not committed against an IDI or insured
credit union.
(b) Other types of offenses for which the de minimis exception
applies and no application is required--(1) Age of person at time of
covered offense. If there are two convictions or program entries for a
covered offense, and the actions that resulted in both convictions or
program entries all occurred when the individual was 21 years of age or
younger, then the de minimis criteria in paragraph (a)(3) of this
section shall be met if the convictions or program entries were entered
at least 18 months prior to the date an application would otherwise be
required.
(2) Convictions or program entries for insufficient funds checks.
Convictions or program entries of record based on the writing of ``bad''
or insufficient funds check(s) shall be considered de minimis offenses
under this provision if the following conditions apply:
(i) The aggregate total face value of all ``bad'' or insufficient
funds check(s) cited across all the conviction(s) or program entry(ies)
for ``bad'' or insufficient funds checks is $1,000 or less;
(ii) No IDI or insured credit union was a payee on any of the
``bad'' or insufficient funds checks that were the basis of the
conviction(s) or program entry(ies); and
(iii) The individual has no more than one other de minimis offense
under this section.
(3) Convictions or program entries for small-dollar, simple theft.
Convictions or program entries based on the simple theft of goods,
services, or currency (or other monetary instrument) shall be considered
de minimis offenses under this provision if the following conditions
apply. Simple theft excludes burglary, forgery, robbery, identity theft,
and fraud.
(i) The value of the currency, goods, or services taken is $1,000 or
less;
(ii) The theft was not committed against an IDI or insured credit
union;
(iii) The individual has no more than one other de minimis offense
under this section; and
(iv) If there are two de minimis offenses under this section, each
conviction or program entry was entered at least three years prior to
the date an application would otherwise be required, or at least 18
months prior to the date an application would otherwise be required if
the actions that resulted in the conviction or program entry all
occurred when the individual was 21 years of age or younger.
(4) Convictions or program entries for the use of a fake, false, or
altered identification. A conviction or program entry for the creation
or possession of a fake, false, or altered form of identification by a
person under the age of 21, or the use of a fake, false, or altered form
of identification by such a person to circumvent age-based restrictions
on purchases, activities, or premises entry, shall be considered a de
minimis offense under this provision if the following conditions apply.
(i) The individual has no more than one other de minimis offense
under this section; and
[[Page 50]]
(ii) If there are two de minimis offenses under this section, each
conviction or program entry was entered at least three years prior to
the date an application would otherwise be required; or at least 18
months prior to the date an application would otherwise be required if
the actions that resulted in the conviction or program entry all
occurred when the individual was 21 years of age or younger.
(c) Fidelity bond coverage and disclosure to institutions. Any
person who meets the criteria under this section shall be covered by a
fidelity bond to the same extent as others in similar positions, and
shall disclose the presence of the conviction(s) or program entry(ies)
to all IDIs in the affairs of which he or she intends to participate.
(d) Non-qualifying convictions or program entries. No conviction or
program entry for a violation of the Title 18 sections set out in 12
U.S.C. 1829(a)(2) can qualify under any of the de minimis exceptions set
out in this section.
Sec. 303.228 How to file an application.
Forms and instructions should be obtained from the FDIC's website
(www.fdic.gov), and the application must be filed with the appropriate
FDIC Regional Director. The application must be filed by an IDI on
behalf of a person (bank-sponsored) unless the FDIC grants a waiver of
that requirement (individual waiver). Individual waivers will be
considered on a case-by-case basis where substantial good cause for
granting a waiver is shown. A person may request an individual waiver
and file an application on her or his own behalf within the same
application. The appropriate Regional Office for a bank-sponsored
application is the office covering the state where the IDI's home office
is located. The appropriate Regional Office for an individual filing for
a waiver of the institution filing requirement is the office covering
the state where the person resides. States covered by each FDIC Regional
Office can be located on the FDIC's website.
Sec. 303.229 How an application is evaluated.
(a) The ultimate determinations in assessing an application are
whether the person has demonstrated his or her fitness to participate in
the conduct of the affairs of an IDI, and whether the affiliation,
ownership, control, or participation by the person in the conduct of the
affairs of the institution may constitute a threat to the safety and
soundness of the institution or the interests of its depositors or
threaten to impair public confidence in the institution. In determining
the degree of risk, the FDIC will consider:
(1) Whether the conviction or program entry is for a criminal
offense involving dishonesty, breach of trust, or money laundering and
the specific nature and circumstances of the offense;
(2) Whether the participation directly or indirectly by the person
in any manner in the conduct of the affairs of the IDI constitutes a
threat to the safety and soundness of the institution or the interests
of its depositors or threatens to impair public confidence in the
institution;
(3) Evidence of rehabilitation including the person's age at the
time of the covered offense, the amount of time that has elapsed since
the occurrence of the conviction or program entry, and the person's
employment history and full legal history;
(4) The position to be held or the level of participation by the
person at an IDI;
(5) The amount of influence the person will be able to exercise over
the operation, management, or affairs of an IDI;
(6) The ability of management of the IDI to supervise and control
the person's activities;
(7) The level of ownership or control the person will have at an
insured depository institution;
(8) The applicability of the IDI's fidelity bond coverage to the
person; and
(9) Any additional factors in the specific case that appear relevant
to the application or the applicant including, but not limited to, the
opinion or position of the primary Federal or State regulator.
(b) The question of whether a person, who was convicted of a crime
or who agreed to a program entry, was guilty of that crime shall not be
at issue in a proceeding under this subpart or under 12 CFR part 308,
subpart M.
[[Page 51]]
(c) The foregoing factors will also be applied by the FDIC to
determine whether the interests of justice are served in seeking an
exception in the appropriate court when an application is made to
terminate the ten-year ban prior to its expiration date under 12 U.S.C.
1829(a)(2) for certain Federal offenses.
(d) All approvals and orders will be subject to the condition that
the person be covered by a fidelity bond to the same extent as others in
similar positions. In cases in which a waiver of the institution filing
requirement has been granted to an individual, approval of the
application will also be conditioned upon that person disclosing the
presence of the conviction(s) or program entry(ies) to all IDIs in the
affairs of which he or she wishes to participate.
(e) When deemed appropriate, bank-sponsored applications are to
allow the person to work in a specific job at a specific bank and may
also be subject to the additional conditions, including that the prior
consent of the FDIC will be required for any proposed significant
changes in the person's duties or responsibilities. In the case of bank-
sponsored applications, such proposed changes may, in the discretion of
the Regional Director, require a new application.
(f) In situations in which an approval has been granted for a person
to participate in the affairs of a particular IDI and the person
subsequently seeks to participate at another IDI, another application
must be submitted and approved by the FDIC prior to the person
participating in the affairs of the other IDI.
Sec. 303.230 What will the FDIC do if the application is denied?
(a) The FDIC will inform the applicant in writing that the
application has been denied and summarize or cite the relevant
considerations specified in Sec. 303.229 of this subpart.
(b) The denial will also notify the applicant that a written request
for a hearing under 12 CFR part 308, subpart M, may be filed with the
Executive Secretary within 60 days after the denial. The request for a
hearing must include the relief desired, the grounds supporting the
request for relief, and any supporting evidence.
Sec. 303.231 Waiting time for a subsequent application if an application
is denied.
An application under section 19 may be made in writing at any time
more than one year after the issuance of a decision denying an
application under section 19. If the original denial is subject to a
request for a hearing, then the subsequent application may be filed at
any time more than one year after the decision of the Board of
Directors, or its designee, denying the application. The prohibition
against participating in the affairs of an IDI under section 19 shall
continue until the individual has been granted consent in writing to
participate in the affairs of an IDI by the Board of Directors or its
designee.
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--(1) Insured State nonmember banks. The procedures
contained in this section are 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 FDI Act (12 U.S.C. 1828(i)(1)).
(2) Insured State savings associations. The procedures contained in
this section are to be followed by an insured State savings association
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
[[Page 52]]
any part of its capital notes or debentures, as if the insured State
savings association were a State nonmember bank subject 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 324 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 section 38 and this section
should 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 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.
[67 FR 79247, Dec. 27, 2002, as amended at 78 FR 55470, Sept. 30, 2013;
83 FR 17739, Apr. 24, 2018; 85 FR 3245, Jan. 21, 2020]
Sec. 303.242 Exercise of trust powers.
(a) Scope. This section contains the procedures to be followed by a
State nonmember bank or State savings association that seeks to obtain
the FDIC's prior written consent to exercise trust powers. The FDIC's
prior written consent to exercise trust powers is not required in the
following circumstances:
(1) Where a State nonmember bank or State savings association
received authority to exercise trust powers from its chartering
authority prior to December 1, 1950; or
(2) Where the 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.
[[Page 53]]
(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.
[83 FR 60337, Nov. 26, 2018]
Sec. 303.243 Brokered deposits.
(a) Brokered deposit waivers--(1) 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.
(2) Where to file. Applicants shall submit a letter application to
the appropriate FDIC office.
(3) Content of filing. The application shall contain the following:
(i) The time period for which the waiver is requested;
(ii) A statement of the policy governing the use of brokered
deposits in the institution's overall funding and liquidity management
program;
(iii) 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;
(iv) 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;
(v) Procedures and practices used to solicit brokered deposits,
including an identification of the principal sources of such deposits;
(vi) Management systems overseeing the solicitation, acceptance and
use of brokered deposits;
(vii) A recent consolidated financial statement with balance sheet
and income statements; and
(viii) The reasons the institution believes its acceptance, renewal,
or rollover of brokered deposits would pose no undue risk.
(4) Additional information. The FDIC may request additional
information at any time during processing of the application.
(5) 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
[[Page 54]]
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.
(6) 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.
(7) Conditions for approval. A waiver issued pursuant to this
section shall:
(i) Be for a fixed period, generally no longer than two years, but
may be extended upon refiling; and
(ii) May be revoked by the FDIC at any time by written notice to the
institution.
(b) Primary purpose exception notices and applications--(1) Scope.
This section sets forth a process for an agent or nominee, or an insured
depository institution on behalf of an agent or nominee, to notify the
FDIC that it will rely upon a designated exception in Sec.
337.6(a)(5)(v)(I)(1)(i) and (ii) of this chapter. This section also sets
forth a process for an agent or nominee, or an insured depository
institution on behalf of an agent or nominee, to apply for the primary
purpose exception, as described in Sec. 337.6(a)(5)(v)(I)(2) of this
chapter.
(2) Definitions. For purposes of this paragraph (b):
(i) Third party means an agent or nominee that submits a notice that
it will rely upon a designated exception in Sec.
337.6(a)(5)(v)(I)(1)(i) and (ii) of this chapter or applies to be
excluded from the definition of deposit broker pursuant to the primary
purpose exception as described in Sec. 337.6(a)(5)(v)(I)(2) of this
chapter.
(ii) Notice filer means a third party or an insured depository
institution on behalf of a third party, that submits a written notice
that the third party will rely upon a designated business exception in
Sec. 337.6(a)(5)(v)(I)(1)(i) and (ii) of this chapter.
(iii) Applicant means a third party, or an insured depository
institution on behalf of a third party, that applies to be excluded from
the definition of deposit broker pursuant to the primary purpose
exception, as described in Sec. 337.6(a)(5)(v)(I)(2) of this chapter.
(3) Notice requirement for designated business exceptions. A third
party, or an insured depository institution on behalf of a third party,
must notify the FDIC through a written notice that the third party will
rely upon a designated business exception described in Sec.
337.6(a)(5)(v)(I)(1)(i) and (ii) of this chapter in order to rely on
that designated business exception.
(i) Contents of notice. The notice must include: The designated
exception upon which the third party will rely; a brief description of
the business line; the applicable specific contents for the designated
exception; either a statement that there is no involvement of any
additional third party who qualifies as a deposit broker or a brief
description of any additional third party that may qualify as a deposit
broker; and if the notice is provided by a nonbank third party, a list
of the insured depository institutions that are receiving deposits by or
through the particular business line. The applicable specific contents
for the following designated exceptions are:
(A) 25 percent test (as described in Sec. 337.6(a)(5)(v)(I)(1)(i)
of this chapter). (1) The total amount of customer assets under
administration by the third party for that particular business line; and
(2) The total amount of deposits placed by the third party on behalf
of its customers, for that particular business line, at all depository
institutions, being placed by that third party.
(B) Enabling transactions test (as described in Sec.
337.6(a)(5)(v)(I)(1)(ii) of this chapter). (1) Contractual evidence that
there is no interest, fees, or other remuneration, being paid to any
customer accounts; and
(2) A certification that all customer deposits that are placed at
insured depository institutions are in transaction accounts.
(ii) Additional information for notices. The FDIC may request
additional information from the notice filer at any time after receipt
of the notice.
[[Page 55]]
(iii) Additional notice filers. The FDIC may include notice and/or
reporting requirements as part of a designated exception identified
under Sec. 337.6(a)(5)(v)(I)(2)(xiv) of this chapter.
(iv) Subsequent notices. A notice filer that previously submitted a
notice under this section shall submit a subsequent notice to the FDIC
if, at any point, the notice filer no longer meets the designated
business exception that was the subject of its previous notice.
(v) Ongoing requirements for notice filers. Notice filers that
submit a notice under the 25 percent test must provide quarterly updates
to the FDIC on the figures described in paragraph (b)(3)(i)(A) of this
section that were provided as part of the written notice. Notice filers
that submit a notice under the enabling transactions test must provide
an annual certification to the FDIC that the third party continues to
place all customer funds at insured depository institutions into
transaction accounts and that customers do not receive any interest,
fees, or other remuneration.
(vi) Revocation of primary purpose exception. The FDIC may, with
notice, revoke a primary purpose exception of a third party, or a person
required to submit a notice under paragraph (b)(3)(iii) of this section,
that qualifies for the primary purpose exception due to reliance on a
designated exception, if:
(A) The third party no longer meets the criteria for a designated
exception;
(B) The notice or subsequent reporting is inaccurate; or
(C) The notice filer fails to submit required reports.
(4) Application requirements. A third party, or an insured
depository institution on behalf of a third party, may submit an
application to the FDIC seeking a primary purpose exception for business
relationships not designated in Sec. 337.6(a)(5)(v)(I)(1) of this
chapter.
(i) For applications for primary purpose exception to enable
transactions with fees, interest, or other remuneration provided to the
depositor. Applicants that seek the primary purpose exception where
customer funds that are placed at depository institutions are placed
into transaction accounts, and fees, interest, or other remuneration are
provided to the depositor, must include the following information, with
respect to the particular business line:
(A) Contractual evidence on the amount of interest, fees, or other
remuneration, being paid on customer accounts;
(B) Any marketing materials provided by the third party to insured
depository institutions or its customers;
(C) The average number of transactions for all customer accounts,
and an explanation of how its customers utilize its services for the
purpose of making payments and not for the receipt of a deposit
placement service or deposit insurance;
(D) The percentage of customer funds placed in deposit accounts that
are not transaction accounts;
(E) A description of any additional third parties that provide
assistance with the placement of deposits at insured depository
institutions; and
(F) Any other information that the FDIC requires to initiate its
review and render the application complete.
(ii) For applications for primary purpose exception not covered by
paragraph (b)(4)(i) of this section. Applicants that seek the primary
purpose exception, other than applications under paragraph (b)(4)(i) of
this section, must include, to the extent applicable:
(A) A description of the deposit placement arrangements between the
third party and insured depository institutions for the particular
business line, including the services provided by any relevant third
parties;
(B) A description of the particular business line;
(C) A description of the primary purpose of the particular business
line;
(D) The total amount of customer assets under management by the
third party, with respect to the particular business line;
(E) The total amount of deposits placed by the third party at all
insured depository institutions, including the amounts placed with the
applicant, if the applicant is an insured depository institution, with
respect to the particular business line. This includes the total amount
of term deposits and transactional deposits placed by the third party,
but should be exclusive of
[[Page 56]]
the amount of brokered CDs, as defined in Sec. 337.6(a)(5)(v)(I)(3) of
this chapter, being placed by that third party;
(F) Revenue generated from the third party's activities related to
the placement, or facilitating the placement, of deposits, with respect
to the particular business line;
(G) Revenue generated from the third party's activities not related
to the placement, or facilitating the placement, of deposits, with
respect to the particular business line;
(H) A description of the marketing activities provided by the third
party, with respect to the particular business line;
(I) The reasons the third party meets the primary purpose exception;
(J) Any other information the applicant deems relevant; and
(K) Any other information that the FDIC requires to initiate its
review and render the application complete.
(iii) Additional information for applications. The FDIC may request
additional information from the applicant at any time during processing
of the application.
(iv) Application timing. (A) An applicant that submits a complete
application under this section will receive a written determination by
the FDIC within 120 days of receipt of a complete application.
(B) If an application is submitted that is not complete, the FDIC
will, within 45 days of submission, notify the applicant and explain
what is needed to render the application complete.
(C) The FDIC may extend the 120-day timeframe, if necessary, to
complete its review of a complete application, with notice to the
applicant, for a maximum of 120 additional days.
(v) Application approvals. The FDIC will approve an application--
(A) Submitted under paragraph (b)(4)(i) of this section if the FDIC
finds that the third party's marketing materials indicate that the
primary purpose of placing customer deposits at insured depository
institutions is to enable transactions, and:
(1) Nominal interest, fees, or other remuneration is being paid on
any customer accounts, or
(2) The third party's customers make, on average, more than 6
transactions a month.
(B) Submitted under paragraph (b)(4)(ii) of this section if the FDIC
finds that the applicant demonstrates that, with respect to the
particular business line under which the third party places or
facilitates the placement of deposits, the primary purpose of the third
party's business relationship with its customers is a purpose other than
the placement or facilitation of the placement of deposits.
(vi) Ongoing reporting for applications. (A) The FDIC will describe
any reporting requirements, if applicable, as part of its written
approval for a primary purpose exception.
(B) Applicants that receive a written approval for the primary
purpose exception, shall provide reporting to the FDIC and, in the case
of an insured depository institution, to its primary Federal regulator,
if required under this section.
(vii) Requesting additional information, requiring re-application,
imposing additional conditions, and withdrawing approvals. At any time
after approval of an application for the primary purpose exception, the
FDIC may at its discretion, with written notice and adequate
justification:
(A) Require additional information from an applicant to ensure that
the approval is still appropriate, or for purposes of verifying the
accuracy and correctness of the information provided to an insured
depository institution or submitted to the FDIC as part of the
application under this section;
(B) Require the applicant to reapply for approval;
(C) Impose additional conditions on an approval; or
(D) Withdraw an approval.
[86 FR 6787, Jan. 22, 2021]
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
[[Page 57]]
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).
(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 Deposit Insurance Fund. 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
[[Page 58]]
(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.
[67 FR 79247, Dec. 27, 2002, as amended at 71 FR 20526, Apr. 21, 2006]
Sec. 303.246 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.
[67 FR 79247, Dec. 27, 2002. Redesignated at 71 FR 20526, Apr. 21, 2006]
Sec. 303.247 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 of the final action as soon as the decision is rendered.
[67 FR 79247, Dec. 27, 2002. Redesignated at 71 FR 20526, Apr. 21, 2006]
[[Page 59]]
Sec. 303.248 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).
[67 FR 79247, Dec. 27, 2002. Redesignated at 71 FR 20526, Apr. 21, 2006]
Sec. 303.249 Management official interlocks.
(a) Scope. This section contains the procedures to be followed by an
insured State nonmember bank or an insured State savings association 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.
(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.
348.6 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.
[67 FR 79247, Dec. 27, 2002. Redesignated at 71 FR 20526, Apr. 21, 2006;
84 FR 2706, Feb. 8, 2019; 86 FR 8097, Feb. 3, 2021]
Sec. 303.250 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.
[67 FR 79247, Dec. 27, 2002. Redesignated at 71 FR 20526, Apr. 21, 2006]
Sec. 303.251 Extension of time.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the prior
[[Page 60]]
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 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.
[67 FR 79247, Dec. 27, 2002. Redesignated at 71 FR 20526, Apr. 21, 2006]
Sec. Sec. 303.252-303.259 [Reserved]
PART 304_FORMS, INSTRUCTIONS, AND REPORTS--Table of Contents
Subpart A_In General
Sec.
304.1 Purpose.
304.2 Where to obtain forms and instructions.
304.3 Reports.
304.4-304.10 [Reserved]
Subpart B_Implementation of Reduced Reporting Requirement
304.11 Authority, purpose, and scope.
304.12 Definitions.
304.13 Reduced reporting.
304.14 Reservation of authority.
304.15-304.20 [Reserved]
Subpart C_Computer-Security Incident Notification
304.21 Authority, purpose, and scope.
304.22 Definitions.
304.23 Notification.
304.24 Bank service provider notification.
304.25-304.30 [Reserved]
Authority: 5 U.S.C. 552; 12 U.S.C. 1463, 1464, 1811, 1813, 1817,
1819, 1831, and 1861-1867.
Source: 84 FR 29052, June 21, 2019, unless otherwise noted.
Subpart A_In General
Sec. 304.1 Purpose.
This subpart informs the public where it may obtain forms and
instructions for reports, applications, and other submittals used by the
Federal Deposit Insurance Corporation (FDIC), and describes certain
forms that are not described elsewhere in FDIC regulations in this
chapter.
[86 FR 66443, Nov. 23, 2021]
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 (550 17th Street NW,
Washington, DC 20429; telephone: (877) 275-3342 or (703) 562-2200),
except as noted 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 website at http://www.fdic.gov, or in the directory
of FDIC Law, Regulations, Related Acts published by the FDIC.
Sec. 304.3 Reports.
(a) Consolidated Reports of Condition and Income, Forms FFIEC 031,
041, and 051. Pursuant to section 7(a) of the Federal Deposit Insurance
Act (12 U.S.C. 1817(a)) and other applicable law, every insured
depository institution 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 from all insured depository institutions to
calculate deposit insurance assessments and monitor the condition,
performance, and risk profile of
[[Page 61]]
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 Insurance and Research (DIR), FDIC, 550
17th Street NW, Washington, DC 20429 or through the website of the
Federal Financial Institutions Examination Council, http://
www.ffiec.gov/.
(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)) and other applicable
law, 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 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 website of
the Federal Financial Institutions Examination Council, http://
www.ffiec.gov/.
(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
depository institution with branches; institutions with only a main
office are exempt from reporting. 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 institutions by, or may be obtained upon request
from, the Division of Insurance and Research (DIR), FDIC, 550 17th
Street NW, Washington, DC 20429.
(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 institutions 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 institution, 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 Risk Management
Supervision (RMS) of the region in which the institution's main office
is located.
(Approved by the Office of Management and Budget under control numbers
3064-0052, 7100-0032, 3064-0061, and 3064-0029)
Sec. Sec. 304.4-304.10 [Reserved]
Subpart B_Implementation of Reduced Reporting Requirement
Authority: 12 U.S.C. 1464(v), 1817(a), and 1819 Tenth.
Sec. 304.11 Authority, purpose, and scope.
(a) Authority. This subpart is issued pursuant to 12 U.S.C. 1464(v),
and section 7 (12 U.S.C. 1817(a)(12)) and section 9 (12 U.S.C. 1819
Tenth) of the Federal Deposit Insurance Act.
(b) Purpose. This subpart implements 12 U.S.C. 1817(a)(12) to allow
reduced reporting for a covered depository institution when such
institution makes its reports of condition for the first and third
calendar quarters of a year.
(c) Scope. This subpart applies to an insured depository
institution, as that term is defined in section 3(c) of the Federal
Deposit Insurance Act, 12 U.S.C. 1813(c), that meets the definition of a
covered depository institution under Sec. 304.12.
[[Page 62]]
(d) Preservation of authority. Nothing in this subpart in any way
limits the authority of the Corporation under other provisions of
applicable law and regulation.
Sec. 304.12 Definitions.
(a) Covered depository institution means an insured depository
institution, as such term is defined in section 3 of the Federal Deposit
Insurance Act, 12 U.S.C. 1813, for which the Corporation is the
appropriate Federal banking agency and that meets all of the following
criteria:
(1) Has less than $5 billion in total consolidated assets as
reported in its report of condition for the second calendar quarter of
the preceding year;
(2) Has no foreign offices, as defined in this section;
(3) Is not required to or has not elected to use 12 CFR part 324,
subpart E, to calculate its risk-based capital requirements;
(4) Is not a large institution or highly complex institution, as
such terms are defined in 12 CFR 327.8, or treated as a large
institution, as requested under 12 CFR 327.16(f); and
(5) Is not a state-licensed insured branch of a foreign bank, as
such terms are defined in section 3(s) of the Federal Deposit Insurance
Act, 12 U.S.C. 1813(s).
(6) In determining whether an insured depository institution meets
the asset threshold in paragraph (1) of the definition of ``covered
depository institution'' in paragraph (a)(1) of this section, for
purposes of a report required to be submitted for calendar year 2021, an
insured depository institution may refer to the lesser of its total
consolidated assets as reported in its report of condition as of
December 31, 2019, and its total consolidated assets as reported in its
report of condition for the second calendar quarter of 2020.
(b) Foreign country refers to one or more foreign nations, and
includes the overseas territories, dependencies, and insular possessions
of those nations and of the United States.
(c) Foreign office means:
(1) A branch or consolidated subsidiary in a foreign country, unless
the branch is located on a U.S. military facility;
(2) An international banking facility as such term is defined in 12
CFR 204.8;
(3) A majority-owned Edge Act or Agreement subsidiary including both
its U.S. and its foreign offices; and
(4) For an institution chartered or headquartered in any U.S. state
or the District of Columbia, a branch or consolidated subsidiary located
in a U.S. territory or possession.
(d) Report of condition means the FFIEC 031, FFIEC 041, or FFIEC 051
versions of the Consolidated Report of Condition and Income (Call
Report) or the FFIEC 002 (Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks), as applicable, and as they may
be amended or superseded from time to time in accordance with the
Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
(e) Total consolidated assets means total assets as reported in an
insured depository institution's report of condition.
[84 FR 29052, June 21, 2019, as amended at 85 FR 77363, Dec. 2, 2020]
Sec. 304.13 Reduced reporting.
A covered depository institution may file the FFIEC 051 version of
the report of condition, or any successor thereto, which shall provide
for reduced reporting for the reports of condition for the first and
third calendar quarters for a year.
Sec. 304.14 Reservation of authority.
Notwithstanding Sec. 304.13, the Corporation, in consultation with
the applicable state chartering authority, may require an otherwise
eligible covered depository institution to file the FFIEC 041 version of
the report of condition, or any successor thereto, based on an
institution-specific determination. In making this determination, the
Corporation may consider criteria including, but not limited to, whether
the institution is significantly engaged in one or more complex,
specialized, or other higher-risk activities, such as those for which
limited information is reported in the FFIEC 051 version of the report
of condition compared to the FFIEC 041 version of the report of
condition. Nothing in this part shall be construed to limit the
Corporation's
[[Page 63]]
authority to obtain information from insured depository institutions.
Sec. Sec. 304.15-304.20 [Reserved]
Subpart C_Computer-Security Incident Notification
Source: 86 FR 66443, Nov. 23, 2021, unless otherwise noted.
Sec. 304.21 Authority, purpose, and scope.
(a) Authority. This subpart is issued under the authority of 12
U.S.C. 1463, 1811, 1813, 1817, 1819, and 1861-1867.
(b) Purpose. This subpart promotes the timely notification of
computer-security incidents that may materially and adversely affect
FDIC-supervised institutions.
(c) Scope. This subpart applies to all insured state nonmember
banks, insured state licensed branches of foreign banks, and insured
State savings associations. This subpart also applies to bank service
providers, as defined in Sec. 304.22(b)(2).
Sec. 304.22 Definitions.
(a) Except as modified in this subpart, or unless the context
otherwise requires, the terms used in this subpart have the same
meanings as set forth in 12 U.S.C. 1813.
(b) For purposes of this subpart, the following definitions apply.
(1) Banking organization means an FDIC-supervised insured depository
institution, including all insured state nonmember banks, insured state-
licensed branches of foreign banks, and insured State savings
associations; provided, however, that no designated financial market
utility shall be considered a banking organization.
(2) Bank service provider means a bank service company or other
person that performs covered services; provided, however, that no
designated financial market utility shall be considered a bank service
provider.
(3) Business line means a product or service offered by a banking
organization to serve its customers or support other business needs.
(4) Computer-security incident is an occurrence that results in
actual harm to the confidentiality, integrity, or availability of an
information system or the information that the system processes, stores,
or transmits.
(5) Covered services are services performed, by a person, that are
subject to the Bank Service Company Act (12 U.S.C. 1861-1867).
(6) Designated financial market utility has the same meaning as set
forth at 12 U.S.C. 5462(4).
(7) Notification incident is a computer-security incident that has
materially disrupted or degraded, or is reasonably likely to materially
disrupt or degrade, a banking organization's--
(i) Ability to carry out banking operations, activities, or
processes, or deliver banking products and services to a material
portion of its customer base, in the ordinary course of business;
(ii) Business line(s), including associated operations, services,
functions, and support, that upon failure would result in a material
loss of revenue, profit, or franchise value; or
(iii) Operations, including associated services, functions and
support, as applicable, the failure or discontinuance of which would
pose a threat to the financial stability of the United States.
(8) Person has the same meaning as set forth at 12 U.S.C.
1817(j)(8)(A).
Sec. 304.23 Notification.
A banking organization must notify the appropriate FDIC supervisory
office, or an FDIC-designated point of contact, about a notification
incident through email, telephone, or other similar methods that the
FDIC may prescribe. The FDIC must receive this notification from the
banking organization as soon as possible and no later than 36 hours
after the banking organization determines that a notification incident
has occurred.
Sec. 304.24 Bank service provider notification.
(a) A bank service provider is required to notify at least one bank-
designated point of contact at each affected banking organization
customer as soon as possible when the bank service provider determines
that it has experienced a computer-security incident
[[Page 64]]
that has materially disrupted or degraded, or is reasonably likely to
materially disrupt or degrade, covered services provided to such banking
organization for four or more hours.
(1) A bank-designated point of contact is an email address, phone
number, or any other contact(s), previously provided to the bank service
provider by the banking organization customer.
(2) If the banking organization customer has not previously provided
a bank-designated point of contact, such notification shall be made to
the Chief Executive Officer and Chief Information Officer of the banking
organization customer, or two individuals of comparable
responsibilities, through any reasonable means.
(b) The notification requirement in paragraph (a) of this section
does not apply to any scheduled maintenance, testing, or software update
previously communicated to a banking organization customer.
Sec. Sec. 304.25-304.30 [Reserved]
PARTS 305 306 [RESERVED]
PART 307_CERTIFICATION OF ASSUMPTION OF DEPOSITS AND NOTIFICATION OF
CHANGES OF INSURED STATUS--Table of Contents
Sec.
307.1 Scope and purpose.
307.2 Certification of assumption of deposit liabilities.
307.3 Notice to depositors when insured status is voluntarily terminated
and deposits are not assumed.
Appendix A to Part 307--Transferring Institution Letterhead
Appendix B to Part 307--Institution Letterhead
Authority: 12 U.S.C. 1818(a)(6); 1818(q); and 1819(a) [Tenth].
Source: 71 FR 8791, Feb. 21, 2006, unless otherwise noted.
Sec. 307.1 Scope and purpose.
(a) Scope. This Part applies to all insured depository institutions,
as defined in section 3(c)(2) of the Federal Deposit Insurance Act (FDI
Act) (12 U.S.C. 1813(c)(2)).
(b) Purpose. This Part sets forth the rules governing:
(1) The time and manner for providing certification to the FDIC
regarding the assumption of all of the deposit liabilities of an insured
depository institution by one or more insured depository institutions;
and
(2) The notification that an insured depository institution shall
provide its depositors when a depository institution's insured status is
being voluntarily terminated without its deposits being assumed by one
or more insured depository institutions.
Sec. 307.2 Certification of assumption of deposit liabilities.
(a) When certification is required. Whenever all of the deposit
liabilities of an insured depository institution are assumed by one or
more insured depository institutions by merger, consolidation, other
statutory assumption, or by contract, the transferring insured
depository institution, or its legal successor, shall provide an
accurate written certification to the FDIC that its deposit liabilities
have been assumed. No certification shall be required when deposit
liabilities are assumed by an operating insured depository institution
from an insured depository institution in default, as defined in section
3(x)(1) of the FDI Act (12 U.S.C. 1813(x)(1)), and that has been placed
under FDIC receivership.
(b) Certification requirements. The certification required by
paragraph (a) of this section shall be provided on official letterhead
of the transferring insured depository institution or its legal
successor, signed by a duly authorized official, and state the date the
assumption took effect. The certification shall indicate the date on
which the transferring institution's authority to engage in banking has
terminated or will terminate as well as the method of termination (e.g.,
whether by the surrender of its charter, by the cancellation of its
charter or license to conduct a banking business, or otherwise). The
certification may follow the form contained in Appendix A of this part.
In a merger or consolidation where there is only one surviving entity
which is the legal successor to both the transferring and assuming
institutions, the surviving entity shall provide any required
certification.
[[Page 65]]
(c) Filing. The certification required by paragraph (a) of this
section shall be provided within 30 calendar days after the assumption
takes effect, and shall be submitted to the appropriate Regional
Director of the FDIC's Division of Supervision and Consumer Protection,
as defined in 12 CFR 303.2(g).
(d) Evidence of assumption. The receipt by the FDIC of an accurate
certification for a total assumption as required by paragraphs (a), (b)
and (c) of this section shall constitute satisfactory evidence of such
deposit assumption, as required by section 8(q) of the FDI Act (12
U.S.C. 1818(q)), and the insured status of the transferring institution
shall terminate on the date of the receipt of the certification. In
appropriate circumstances, the FDIC, in its sole discretion, may require
additional information, or may consider other evidence of a deposit
assumption to constitute satisfactory evidence of such assumption for
purposes of section 8(q).
(e) Issuance of an order. The Executive Secretary, upon request from
the Director of the Division of Supervision and Consumer Protection and
with the concurrence of the General Counsel, or their respective
designees, shall issue an order terminating the insured status of the
transferring insured depository institution as of the date of receipt by
the FDIC of satisfactory evidence of such assumption, pursuant to
section 8(q) of the FDI Act and this regulation. Generally, no order
shall be issued, under this paragraph, and insured status shall be
cancelled by operation of law:
(1) If the charter of the transferring institution has been
cancelled, revoked, rescinded, or otherwise terminated by operation of
applicable state or federal statutes or regulations, or by action of the
chartering authority for the transferring institution essentially
contemporaneously, that is, generally within five business days after
all deposits have been assumed; or
(2) If the transferring institution is an insured depository
institution in default and for which the FDIC has been appointed
receiver.
Sec. 307.3 Notice to depositors when insured status is voluntarily
terminated and deposits are not assumed.
(a) Notice required. An insured depository institution that has
obtained authority from the FDIC to terminate its insured status under
sections 8(a), 8(p) or 18(i)(3) of the FDI Act without its deposit
liabilities being assumed by one or more insured depository institutions
shall provide to each of its depositors, at the depositor's last known
address of record on the books of the institution, prior written
notification of the date the institution's insured status shall
terminate.
(b) Prior approval of notice. The insured depository institution
shall provide the appropriate Regional Director of the FDIC's Division
of Supervision and Consumer Protection, as defined in 12 CFR 303.2(g), a
copy of the proposed notice for approval. After being approved, the
notice shall be provided to depositors by the insured depository
institution at the time and in the manner specified by the appropriate
Regional Director.
(c) Form of notice. The notice to depositors required by paragraph
(a) of this section shall be provided on the official letterhead of the
insured depository institution, shall bear the signature of a duly
authorized officer, and, unless otherwise specified by the appropriate
Regional Director, may follow the form of the notice contained in
Appendix B of this part.
(d) Other requirements possible. The FDIC may require the insured
depository institution to take such other actions as the FDIC considers
necessary and appropriate for the protection of depositors.
Sec. Appendix A to Part 307--Transferring Institution Letterhead
[Date]
[Name and Address of appropriate FDIC Regional Director]
SUBJECT: Certification of Total Assumption of Deposits
This certification is being provided pursuant to 12 U.S.C. 1818(q)
and 12 CFR 307.2. On [state the date the deposit assumption took
effect], [state the name of the depository institution assuming the
deposit liabilities] assumed
[[Page 66]]
all of the deposits of [state the name and location of the transferring
institution whose deposits were assumed]. [If applicable, state the date
and method by which the transferring institution's authority to engage
in banking was or will be terminated.] Please contact the undersigned,
at [telephone number], if additional information is needed.
Sincerely,
By:
[Name and Title of Authorized Representative]
Sec. Appendix B to Part 307--Institution Letterhead
[Date]
[Name and Address of Depositor]
SUBJECT: Notice to Depositor of Voluntary Termination of Insured Status
The insured status of [name of insured depository institution],
under the provisions of the Federal Deposit Insurance Act, will
terminate as of the close of business on [state the date] (``termination
date''). Insured deposits in the [name of insured depository
institution] on the termination date, less all withdrawals from such
deposits made subsequent to that date, will continue to be insured by
the Federal Deposit Insurance Corporation, to the extent provided by
law, until [state the date]. The Federal Deposit Insurance Corporation
will not insure any new deposits or additions to existing deposits made
by you after the termination date.
This Notice is being provided pursuant to 12 CFR 307.3.
Please contact [name of institution official in charge of depositor
inquiries], at [name and address of insured depository institution] if
additional information is needed regarding this Notice or the insured
status of your account(s).
Sincerely,
By:
[Name and Title of Authorized Representative]
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 Administrative Officer.
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.
[[Page 67]]
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.
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 Applicable to the Request for and Conduct of a
Hearing after Denial of an Application Under Section 19 of the FDI Act
308.156 Scope.
308.157 Denial of applications.
308.158 Hearings.
308.159-308.160 [Reserved]
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 or prohibition, and orders of removal or
prohibition.
308.164 Hearings.
Subpart O_Liability of Commonly Controlled Depository Institutions
308.165 Scope.
[[Page 68]]
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 an FDIC-supervised institution
based on criteria other than capital.
308.203 Order to dismiss a director or senior executive officer.
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.
[[Page 69]]
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.
Appendix A to Part 308--Rules of Practice and Procedure
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 1464,
1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 1829,
1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 1972,
3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 U.S.C.
78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 78u-2, 78u-
3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 U.S.C. 330, 5321;
42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s), 110 Stat. 1321; Pub. L.
109-351, 120 Stat. 1966; Pub. L. 111-203, 124 Stat. 1376; Pub. L. 114-
74, sec. 701, 129 Stat. 584.
Source: 56 FR 37975, Aug. 9, 1991, unless otherwise noted.
Subpart A_Uniform Rules of Practice and Procedure
Effective Date Note: At 88 FR 89935, Dec. 28, 2023, subpart A to
part 308 was revised, effective Apr. 1, 2024. For the convenience of the
user, the revised subpart follows the text of this subpart
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:
(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) or 12 U.S.C.
1468;
(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 or the
former Office of Thrift Supervision (OTS), the
[[Page 70]]
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;
(12) Certain provisions of Section 5 of the Home Owners' Loan Act
(HOLA) or any regulation or order issued thereunder, pursuant to 12
U.S.C. 1464(d)(1), (5)-(8), (s), and (v);
(13) Section 9 of the HOLA or any regulation or order issued
thereunder, pursuant to 12 U.S.C. 1467(d);
(14) Section 10 of HOLA, pursuant to 12 U.S.C. 1467a(a)(2)(D), (g),
(i)(2)-(4) and (r); and
(f) Remedial action under section 102(g) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g));
(g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k))
to impose penalties for violations of the post-employment restrictions
under that subsection; and
(h) 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; 70
FR 69639, Nov. 17, 2005; 80 FR 5011, Jan. 30, 2015]
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.
Sec. 308.3 Definitions.
For purposes of this subpart, unless explicitly stated to the
contrary:
Administrative law judge means one who presides at an administrative
hearing under authority set forth at 5 U.S.C. 556.
Administrative Officer means an inferior officer of the Federal
Deposit Insurance Corporation, duly appointed by the Board of Directors
of the Federal Deposit Insurance Corporation to serve as the Board's
designee to hear certain motions or requests in an adjudicatory
proceeding and to be the official custodian of the record for the
Federal Deposit Insurance Corporation.
Adjudicatory proceeding means a proceeding conducted pursuant to
these rules and leading to the formulation of a final order other than a
regulation.
Assistant Administrative Officer means an inferior officer of the
Federal Deposit Insurance Corporation, duly appointed by the Board of
Directors of the Federal Deposit Insurance Corporation to serve as the
Board's designee to hear certain motions or requests in an adjudicatory
proceeding upon the designation or unavailability of the Administrative
Officer.
Board of Directors or Board means the Board of Directors of the
Federal Deposit Insurance Corporation or its designee.
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, the administrative law judge, or
the Administrative Officer, or the Assistant Administrative Officer, in
preparing orders, recommended decisions, decisions, and other documents
under the Uniform Rules.
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.
Enforcement Counsel means any individual who files a notice of
appearance
[[Page 71]]
as counsel on behalf of the FDIC in an adjudicatory proceeding.
FDIC means the Federal Deposit Insurance Corporation.
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.
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. 1467a(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)).
Investigation means any investigation conducted pursuant to section
10(c) of the FDIA or pursuant to section 5(d)(1)(B) of HOLA (12 U.S.C.
1464(d)(1)(B)).
Local Rules means those rules promulgated by the FDIC in those
subparts of this part other than subpart A.
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, and the National Credit Union Administration
(NCUA).
Party means the FDIC and any person named as a party in any notice.
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 this section.
Respondent means any party other than the FDIC.
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. 308.1 and as specified in subparts B through P of this
part.
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.
[56 FR 37975, Aug. 9, 1991, as amended at 80 FR 5012, Jan. 30, 2015; 86
FR 2247, Jan. 12, 2021]
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;
[[Page 72]]
(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.
(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.
[[Page 73]]
(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.
(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
[[Page 74]]
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\ x 11 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 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
[[Page 75]]
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 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
[[Page 76]]
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.
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 Enforcement Counsel upon the
respondent
[[Page 77]]
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.
[56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2247, Jan. 12, 2021]
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.
(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
[[Page 78]]
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 of the recommended decision,
motions must be filed with the Administrative Officer for disposition by
the Board of Directors.
(d) Responses. (1) Except as otherwise provided in this paragraph
(d), 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 Administrative Officer, 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.
[56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2247, Jan. 12, 2021]
Sec. 308.24 Scope of document discovery.
(a) Limits on discovery. (1) Subject to the limitations set out in
paragraphs
[[Page 79]]
(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, 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 309 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.
[[Page 80]]
(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 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; 80
FR 5011, Jan. 30, 2015]
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.
[[Page 81]]
(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:
(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.
[[Page 82]]
(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 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
[[Page 83]]
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 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
[[Page 84]]
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 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
Administrative Officer 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 Administrative Officer. 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; 86
FR 2248, Jan. 12, 2021]
[[Page 85]]
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 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
[[Page 86]]
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 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
[[Page 87]]
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 Administrative Officer, 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 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 Administrative Officer for final
determination the record of the proceeding, the administrative law judge
shall furnish to the Administrative Officer 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
[[Page 88]]
not admitted into evidence after the completion of the hearing.
[86 FR 2248, Jan. 12, 2021]
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 Administrative Officer 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.
[56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2248, Jan. 12, 2021]
Sec. 308.40 Review by Board of Directors.
(a) Notice of submission to Board of Directors. When the
Administrative Officer determines that the record in the proceeding is
complete, the Administrative Officer 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 Administrative Officer 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 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.
[56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2248, Jan. 12, 2021]
Sec. 308.41 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision
[[Page 89]]
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.
Effective Date Note: At 88 FR 89935, Dec. 28, 2023, subpart A to
part 308 was revised, effective Apr. 1, 2024. For the convenience of the
user, the revised text is set forth as follows:
Subpart A_Uniform Rules of Practice and Procedure
Sec. 308.0 Applicability date.
These Uniform Rules set out in this subpart apply to adjudicatory
proceedings initiated on or after April 1, 2024. Any adjudicatory
proceedings initiated before April 1, 2024, continue to be governed by
the previous version of the Uniform Rules included in appendix A of this
part.
Sec. 308.1 Scope.
This subpart prescribes Uniform Rules of practice and procedure
applicable to adjudicatory proceedings required to be conducted on the
record after opportunity for a hearing under the following statutory
provisions:
(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;
(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 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 agency for any violation of:
(1) Sections 22(h) and 23 of the Federal Reserve Act (FRA), or any
implementing regulation, and certain unsafe or unsound practices or
breaches of fiduciary duty under 12 U.S.C. 1828(j) or 12 U.S.C. 1468;
(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 under 12 U.S.C. 1972(2)(F);
(3) Any provision of the Change in Bank Control Act of 1978, as
amended (CBCA), or any implementing regulation or order issued, and
certain unsafe or unsound practices, or breaches of fiduciary duty under
12 U.S.C. 1817(j)(16);
(4) Section 7(a)(1) of the FDIA under 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 under 12 U.S.C.
3909;
(6) Any provision of the International Banking Act of 1978 (IBA), or
any rule, regulation or order issued under 12 U.S.C. 3108;
(7) Certain provisions of the Exchange Act under 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 under;
(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, or the
former Office of Thrift Supervision (OTS), 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 under
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 under; and
(11) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued under;
(12) Certain provisions of Section 5 of the Home Owners' Loan Act
(HOLA) or any regulation or order issued under 12 U.S.C. 1464(d)(1),
(5)-(8), (s), and (v);
(13) Section 9 of the HOLA or any regulation or order issued under
12 U.S.C. 1467(d); and
(14) Section 10 of HOLA under 12 U.S.C. 1467a(a)(2)(D), (g), (i)(2)-
(4) and (r);
(f) Remedial action under section 102(g) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g));
(g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k))
to impose penalties for violations of the post-employment restrictions
under section 10(k); and
(h) This subpart also applies to all other adjudications required by
statute to be determined on the record after opportunity for
[[Page 90]]
an agency hearing, unless otherwise specifically provided for in the
Local Rules (see Sec. 308.3(n)).
Sec. 308.2 Rules of construction.
For purposes of this part:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) The term counsel includes a non-attorney representative; and
(c) 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.
Sec. 308.3 Definitions.
For purposes of this subpart, unless explicitly stated to the
contrary:
(a) Administrative law judge (ALJ) means one who presides at an
administrative hearing under authority set forth at 5 U.S.C. 556.
(b) Administrative Officer means an inferior officer of the Federal
Deposit Insurance Corporation (FDIC), duly appointed by the Board of
Directors of the FDIC to serve as the Board's designee to hear certain
motions or requests in an adjudicatory proceeding and to be the official
custodian of the record for the FDIC.
(c) Adjudicatory proceeding means a proceeding conducted pursuant to
these rules and leading to the formulation of a final order other than a
regulation.
(d) Assistant Administrative Officer means an inferior officer of
the FDIC, duly appointed by the Board of Directors of the FDIC to serve
as the Board's designee to hear certain motions or requests in an
adjudicatory proceeding upon the designation or unavailability of the
Administrative Officer.
(e) Board of Directors or Board means the Board of Directors of the
FDIC or its designee.
(f) Decisional employee means any member of the FDIC's or ALJ's
staff who has not engaged in an investigative or prosecutorial role in a
proceeding and who may assist the Board of Directors, ALJ or the
Administrative Officer, in preparing orders, recommended decisions,
decisions, and other documents under the Uniform Rules.
(g) Designee of the Board of Directors means officers or officials
of the FDIC acting pursuant to authority delegated by the Board of
Directors.
(h) Electronic signature means affixing the equivalent of a
signature to an electronic document filed or transmitted electronically.
(i) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the FDIC in an adjudicatory
proceeding.
(j) FDIC means the Federal Deposit Insurance Corporation.
(k) 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.
(l) 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. 1467a(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)).
(m) 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).
(n) Local Rules means those rules promulgated by the FDIC in those
subparts of this part other than this subpart.
(o) 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 (Board of Governors), the FDIC, and the National Credit Union
Administration (NCUA).
(p) Party means the FDIC and any person named as a party in any
notice.
(q) 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 this section.
(r) Respondent means any party other than the FDIC.
(s) Uniform Rules means those rules in this subpart A that pertain
to the types of formal administrative enforcement actions set forth at
Sec. 308.1, and as specified in subparts B through P of this part.
(t) Violation means any violation as that term is defined in section
3(v) of the FDIA (12 U.S.C. 1813(v)).
Sec. 308.4 Authority of the Board of Directors.
The Board of Directors may, at any time during the pendency of a
proceeding, perform, direct the performance of, or waive
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performance of, any act which could be done or ordered by the ALJ.
Sec. 308.5 Authority of the administrative law judge (ALJ).
(a) General rule. All proceedings governed by this part must be
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The
ALJ has all powers necessary to conduct a proceeding in a fair and
impartial manner and to avoid unnecessary delay.
(b) Powers. The ALJ has 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, protective orders,
and other 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 has 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 in this subpart;
(9) To recuse oneself by motion made by a party or on the ALJ's 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 an ALJ.
Sec. 308.6 Appearance and practice in adjudicatory proceedings.
(a) Appearance before the FDIC or an ALJ--(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 the individual's
own behalf.
(3) Notice of appearance. (i) Any individual acting on the
individual's own behalf or as counsel on behalf of a party, including
the FDIC, must file a notice of appearance with OFIA at or before the
time that the individual submits papers or otherwise appears on behalf
of a party in the adjudicatory proceeding. The notice of appearance must
include:
(A) A written declaration that the individual is currently qualified
as provided in paragraph (a)(1) or (2) of this section and is authorized
to represent the particular party; and
(B) A written acknowledgement that the individual has reviewed and
will comply with the Uniform Rules and Local Rules in subpart B of this
part.
(ii) By filing a notice of appearance on behalf of a party in an
adjudicatory proceeding, the counsel agrees and represents that the
counsel is authorized to accept service on behalf of the represented
party and that, in the event of withdrawal from representation, the
counsel will, if required by the ALJ, continue to accept service until
new counsel has filed a notice of appearance or until the represented
party indicates that the party will proceed on a pro se basis.
(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.
Sec. 308.7 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice must be signed by at least one
counsel of record in the counsel's individual name and must state that
counsel's mailing address, electronic mail address, and telephone
number. A party who acts as the party's own counsel must sign that
person's individual name and state that person's mailing address,
electronic mail address, and telephone number on every filing or
submission of record. Electronic signatures may be used to satisfy the
signature requirements of this section.
(b) Effect of signature. (1) The signature of counsel or a party
will constitute a certification: the counsel or party has read the
filing or submission of record; to the best of the counsel's or party's
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 ALJ will
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.
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(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 the counsel's or party's knowledge,
information, and belief formed after reasonable inquiry, the counsel's
or party's 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 may 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 ALJ 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.
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 ALJ 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.
(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
a final decision pursuant to Sec. 308.40(c):
(1) An interested person outside the FDIC must not make or knowingly
cause to be made an ex parte communication to any member of the Board of
Directors, the ALJ, or a decisional employee; and
(2) Any member of the Board of Directors, ALJ, or decisional
employee may not 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 ALJ, any member of the Board of
Directors, or any other person identified in paragraph (a) of this
section, that person will 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 may, within ten days
of service of the ex parte communication, file responses thereto and to
recommend any sanctions that they believe to be appropriate under the
circumstances. The ALJ or the Board of Directors then determines whether
any action should be taken concerning the ex parte communication in
accordance with paragraph (d) of this section.
(d) Sanctions. Any party or counsel to a party 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 ALJ
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--(1) In general. Except to the extent
required for the disposition of ex parte matters as authorized by law,
the ALJ may not:
(i) Consult a person or party on a fact in issue unless on notice
and opportunity for all parties to participate; or
(ii) Be responsible to or subject to the supervision or direction of
an employee or agent engaged in the performance of investigative or
prosecuting functions for the FDIC.
(2) Decision process. 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
administrative or judicial proceedings.
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
[[Page 93]]
308.26, must be filed with OFIA, except as otherwise provided.
(b) Manner of filing. Unless otherwise specified by the Board of
Directors or the ALJ, filing may be accomplished by:
(1) Electronic mail or other electronic means designated by the
Board of Directors or the ALJ;
(2) Personal service;
(3) Delivering the papers to a same day courier service or overnight
delivery service; or
(4) Mailing the papers by first class, registered, or certified
mail.
(c) Formal requirements as to papers filed--(1) Form. All papers
filed must set forth the name, mailing address, electronic mail 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 an 8 1/2x11 inch page 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 filing party, the title
and docket number of the proceeding, and the subject of the particular
paper.
Sec. 308.11 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers must 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 must use one of the following
methods of service:
(1) Electronic mail or other electronic means;
(2) Personal service;
(3) Delivering the papers by same day courier service or overnight
delivery service; or
(4) Mailing the papers by first class, registered, or certified
mail.
(c) By the Board of Directors or the ALJ. (1) All papers required to
be served by the Board of Directors or the ALJ upon a party who has
appeared in the proceeding in accordance with Sec. 308.6 will be served
by electronic mail or other electronic means designated by the Board of
Directors or ALJ.
(2) If a respondent has not appeared in the proceeding in accordance
with Sec. 308.6, the Board of Directors or the ALJ will serve the
respondent 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 respondent;
(iv) By registered or certified mail, delivery by a same day courier
service, or by an overnight delivery service to the respondent's last
known mailing 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) 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;
(4) By registered or certified mail, delivery by a same day courier
service, or by an overnight delivery service to the person's last known
mailing address; or
(5) By any other method 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 must be made on at least one branch or
agency so involved.
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 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,
[[Page 94]]
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 transmission by electronic mail or other
electronic means, upon transmittal by the serving party;
(ii) In the case of overnight delivery service or first class,
registered, or certified mail, upon deposit in or delivery to an
appropriate point of collection; or
(iii) In the case of personal service or same day courier delivery,
upon actual 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 ALJ
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 electronic mail or other electronic means
or by same day courier delivery, add one calendar day to the prescribed
period;
(2) If service is made by overnight delivery service, add two
calendar days to the prescribed period; or
(3) If service is made by first class, registered, or certified
mail, add three calendar days to the prescribed period.
Sec. 308.13 Change of time limits.
Except as otherwise provided by law, the ALJ 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 after notice and
opportunity to respond is afforded all non-moving parties or on the
Board of Directors' or the ALJ's own motion.
Sec. 308.14 Witness fees and expenses.
(a) In general. A witness, including an expert witness, who
testifies at a deposition or hearing will 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, except as provided
in paragraph (b) of this section and unless otherwise waived.
(b) Exception for testimony by a party. In the case of testimony by
a party, no witness fees or mileage need to be paid. The FDIC will not
be required to pay any fees to, or expenses of, any witness not
subpoenaed by the FDIC.
(c) Timing of payment. Fees and mileage in accordance with this
paragraph (c) must be paid 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.
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.
Any such offer or proposal may only be made to 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.
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 will 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 will 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 Enforcement Counsel upon the
respondent and given to any other appropriate financial institution
supervisory authority where required by law. Enforcement Counsel may
serve the notice upon counsel for the respondent, provided that
Enforcement Counsel has confirmed that counsel represents the respondent
in the matter and will accept service of the notice on behalf of the
respondent.
(iii) Enforcement Counsel must file the notice with OFIA.
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(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. Notice pleading applies. The notice must
provide:
(1) The legal authority for the proceeding and for the FDIC's
jurisdiction over the proceeding;
(2) 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 must be filed with
OFIA.
Sec. 308.19 Answer.
(a) When. Within 20 days of service of the notice, respondent must
file an answer as designated in the notice. In a civil money penalty
proceeding, respondent must 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 respondent 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 is 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 the respondent's 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 ALJ will 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.
(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 of the Board of Directors without further action
by the ALJ.
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 ALJ 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 ALJ 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
ALJ that the admission of such evidence would unfairly prejudice that
party's action or defense upon the merits. The ALJ may grant a
continuance to enable the objecting party to meet such evidence.
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 ALJ will 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 ALJ's
own motion, the ALJ 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.
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(b) Severance. The ALJ may, upon the motion of any party, sever the
proceeding for separate resolution of the matter as to any respondent
only if the ALJ finds:
(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 in this section, 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 ALJ. 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 ALJ directs that such motion be reduced to writing.
(c) Filing of motions. Motions must be filed with the ALJ, except
that following the filing of the recommended decision, motions must be
filed with the Board of Directors.
(d) Responses. (1) Except as otherwise provided in this section,
within ten days after service of any written motion, or within such
other period of time as may be established by the ALJ or the
Administrative Officer, any party may file a written response to a
motion. The ALJ will 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 includes writings, drawings, graphs,
charts, photographs, recordings, electronically stored information, and
other data or data compilations stored in any medium from which
information can be obtained either directly or, if necessary, after
translation by the responding party, into a reasonably usable form.
(2) Discovery by use of deposition is governed by subpart B of this
part.
(3) Discovery by use of either interrogatories or requests for
admission is not permitted.
(4) Any request to produce documents that calls for irrelevant
material; or 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, or the
time provided to respond in the request is inadequate.
(b) Relevance. A party may obtain document discovery regarding any
non-privileged matter that has material relevance to the merits of the
pending action.
(c) Privileged matter. Privileged documents are not discoverable.
Privileges include the attorney-client privilege, attorney work-product
doctrine, bank examination privilege, law enforcement 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 document discovery, including all responses to
discovery requests, must be completed by the date set by the ALJ and no
later than 30 days prior to the date scheduled for the commencement of
the hearing, except as provided in the Local Rules. No exceptions to
this time limit are permitted, unless the ALJ finds on the record that
good cause exists for waiving the requirements of this paragraph (d).
Sec. 308.25 Request for document discovery from parties.
(a) Document requests. (1) Any party may serve on any other party a
request to produce and permit the requesting party or its representative
to inspect or copy any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. In the case of a request for inspection, the responding party
may produce copies of documents or of electronically stored information
instead of permitting inspection.
(2) The request:
(i) Must describe with reasonable particularity each item or
category of items to be inspected or produced; and
(ii) Must specify a reasonable time, place, and manner for the
inspection or production.
(b) Production or copying--(1) General. Unless otherwise specified
by the ALJ or agreed
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upon by the parties, the producing party must produce copies of
documents as they are kept in the usual course of business or organized
to correspond to the categories of the request, and electronically
stored information must be produced in a form in which it is ordinarily
maintained or in a reasonably usable form.
(2) Costs. The producing party must pay its own costs to respond to
a discovery request, unless otherwise agreed by the parties.
(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:
(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 20 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
must 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 ten 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
attorney-client privilege, attorney work-product doctrine, bank
examination privilege, law enforcement privilege, any government's or
government agency's deliberative process privilege, or any other
privileges of the Constitution, any applicable act of Congress, or the
principles of common law, or are voluminous, these documents may be
identified by category instead of by individual document. The ALJ
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 document request may file a written response to a motion to compel
within ten 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 ALJ will rule promptly on all motions
filed pursuant to this section. If the ALJ 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, the ALJ 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 ALJ. Notwithstanding any
other provision in this part, the ALJ may not release, or order a party
to produce, documents withheld on grounds of privilege if the party has
stated to the ALJ its intention to file a timely motion for
interlocutory review of the ALJ's order to produce the documents, and
until the motion for interlocutory review has been decided.
(h) Enforcing discovery subpoenas. If the ALJ issues a 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 will not in any manner limit the
sanctions that may be imposed by the ALJ against a party who fails to
produce subpoenaed documents.
Sec. 308.26 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the ALJ 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 must specify a reasonable time, place, and manner for making
production in response to the document subpoena.
(2) A party may apply for a document subpoena under this section
only 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.
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(3) The ALJ will promptly issue any document subpoena requested
pursuant to this section. If the ALJ 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, the ALJ 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
with the ALJ. The motion must be accompanied by a statement of the basis
for quashing or modifying the subpoena. The movant must 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 ALJ, 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 ALJ has not quashed or modified. A party's
right to seek court enforcement of a document subpoena will in no way
limit the sanctions that may be imposed by the ALJ 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 ALJ for the issuance of a
subpoena, including a subpoena duces tecum, requiring the attendance of
the witness at a deposition. The ALJ may issue a deposition subpoena
under this section upon showing:
(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, manner, 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, by remote means, or such other convenient place or
manner, as the ALJ fixes.
(3) Any requested subpoena that sets forth a valid basis for its
issuance must be promptly issued, unless the ALJ 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 ALJ orders otherwise, no deposition under this section may be taken
on fewer than ten days' notice to the witness and all parties.
(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 ALJ 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. By stipulation of the
parties or by order of the ALJ, a court reporter or other person
authorized to administer an oath may administer the oath remotely
without being in the physical presence of the deponent. Each party must
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 ALJ 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
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subscribed by the witness, the court reporter taking the deposition must
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 subpoena issued pursuant to this section, or fails to comply with
any order of the ALJ, which directs compliance with all or any portion
of a deposition subpoena under paragraph (b) or (c)(2) 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 with which the subpoenaed party has not complied. A party's
right to seek court enforcement of a deposition subpoena in no way
limits the sanctions that may be imposed by the ALJ on a party who fails
to comply with, or procures a failure to 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
ALJ 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 ALJ if the Board of Directors
finds:
(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 must be filed by
a party with the ALJ within ten days of the ruling and must 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 ALJ will 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 ALJ or the Board of Directors.
Sec. 308.29 Summary disposition.
(a) In general. The ALJ will 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:
(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
there is no genuine issue of material fact to be determined and that the
party 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 ALJ, 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 supports the moving party's 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 the opposing party 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 written request of any party or on the
ALJ's own motion, the ALJ 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 ALJ will determine whether
the moving party is entitled to summary disposition. If the ALJ
determines that summary disposition is warranted, the ALJ will submit a
recommended decision to that effect to the Board of Directors. If the
ALJ finds that no party is entitled to summary disposition, the ALJ will
make a ruling denying the motion.
Sec. 308.30 Partial summary disposition.
If the ALJ determines that a party is entitled to summary
disposition as to certain claims only, the ALJ will defer submitting a
recommended decision as to those claims. A hearing on the remaining
issues must be ordered. Those claims for which the ALJ has
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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, the ALJ will direct counsel for all
parties to meet with the ALJ at a specified time and manner prior to the
hearing for the purpose of scheduling the course and conduct of the
proceeding. This meeting is called a ``scheduling conference.'' The
schedule for 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 ALJ may, in addition to the
scheduling conference, on the ALJ's own motion or at the request of any
party, direct counsel for the parties to confer with the ALJ 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 ALJ 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 the party's expense.
(d) Scheduling or prehearing orders. At or within a reasonable time
following the conclusion of the scheduling conference or any prehearing
conference, the ALJ will serve on each party an order setting forth any
agreements reached and any procedural determinations made.
Sec. 308.32 Prehearing submissions.
(a) Party prehearing submissions. Within the time set by the ALJ,
but in no case later than 20 days before the start of the hearing, each
party must file with the ALJ and serve on every other party:
(1) A prehearing statement that states:
(i) The party's position with respect to the legal issues presented;
(ii) The statutory and case law upon which the party relies; and
(iii) The facts that the party expects to prove at the hearing;
(2) A final list of witnesses to be called to testify at the
hearing, including the name, mailing address, and electronic mail
address of each witness and a short summary of the expected testimony of
each witness, which need not identify the exhibits to be relied upon by
each witness at the hearing;
(3) A list of the exhibits expected 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 must be open to the public, unless
the FDIC, in its discretion, determines that holding an open hearing
would be contrary to 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
Administrative Officer a request for a private hearing, and any party
may file a reply to such a request. A party must serve on the ALJ a copy
of any request or reply the party files with the Administrative Officer.
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 Enforcement
Counsel's 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 ALJ will take all appropriate steps to preserve the
confidentiality of such documents or parts thereof, including closing
portions of the hearing to the public.
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 ALJ 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
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as otherwise provided by law at any designated place where the hearing
is being conducted. The party making the application must 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 ALJ.
(3) The ALJ will promptly issue any hearing subpoena requested
pursuant to this section. If the ALJ 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, the ALJ 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 ALJ, the party making the application must
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 ALJ
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).
Sec. 308.35 Conduct of hearings.
(a) General rules. (1) Conduct of hearings. Hearings must 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 may be required for full disclosure of the facts.
(2) Order of hearing. Enforcement Counsel will present its case-in-
chief first, unless otherwise ordered by the ALJ, or unless otherwise
expressly specified by law or regulation. Enforcement Counsel will 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 ALJ will 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 ALJ 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 ALJ 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 ALJ may
order the record corrected, either upon motion to correct, upon
stipulation of the parties, or following notice to the parties upon the
ALJ's own motion.
(c) Electronic presentation. Based on the circumstances of each
hearing, the ALJ may direct the use of, or any party may use, an
electronic presentation during the hearing. If the ALJ requires an
electronic presentation during the hearing, each party will be
responsible for their own presentation and related costs, unless the
parties agree to another manner in which to allocate presentation
responsibilities and costs.
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.
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(2) All matters officially noticed by the ALJ or the Board of
Directors must appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, must 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
institutions regulatory agency or by a 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 ALJ'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 witness is sustained, the examining counsel may make a
specific proffer on the record of what the examining counsel expected to
prove by the expected testimony of the witness either by representation
of counsel or by direct questioning of the witness.
(3) The ALJ will 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 ALJ 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 ALJ will 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 ALJ proposed
findings of fact, proposed conclusions of law, and a proposed order
within 30 days following service of this notice by the ALJ or within
such longer period as may be ordered by the ALJ.
(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
ALJ 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 ALJ will not order the filing
by any party of any brief or reply brief in advance of the other party's
filing of its brief.