[Federal Register Volume 59, Number 228 (Tuesday, November 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29242]


[[Page Unknown]]

[Federal Register: November 29, 1994]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AB52

 

Uniform Rules of Practice and Procedure

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC), is proposing 
to amend a provision of the Uniform Rules of Practice and Procedure 
pertaining to ex parte contacts. The Comptroller of the Currency (OCC), 
Board of Governors of the Federal Reserve System (Board of Governors), 
Office of Thrift Supervision (OTS), and National Credit Union 
Administration (NCUA) have all proposed to make this same change to the 
Uniform Rules, and will be publishing separate notices of proposed 
rulemaking. The proposal is intended to clarify that the rules' 
provisions relating to ex parte communications conform to the 
requirements of the Administrative Procedure Act. In particular, the 
proposed amendment would clarify that the ex parte provisions do not 
apply to intra-agency communications, which are governed by a separate 
provision of the Administrative Procedure Act.

DATES: Comments must be received by December 29, 1994.

ADDRESSES: Comments should be directed to Robert Feldman, Acting 
Executive Secretary, Attention: Room F-402, Federal Deposit Insurance 
Corporation, 550 17th Street, N.W., Washington, DC 20429. Comments may 
be hand-delivered to Room F-400, 1776 F Street, N.W., Washington, DC 
20429, on business days between 8:30 a.m. and 5:00 p.m. (FAX number 
202-898-3838). Comments will be available for inspection and 
photocopying in room 7118, 550 17th Street, N.W., Washington, D.C. 
20429, between 8:30 a.m. and 5:00 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Andrea Winkler, Counsel, Legal 
Division, Compliance and Enforcement Section (202/898-3764).

SUPPLEMENTARY INFORMATION:

I. Background

    Section 916 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (FIRREA), Public Law 101-73, 103 Stat. 183 
(1989) required the OCC, Board of Governors, FDIC, OTS, and NCUA 
(collectively, the ``agencies'') to develop uniform rules and 
procedures for administrative hearings. The agencies issued a joint 
notice of proposed rulemaking on June 17, 1991 (56 FR 27790) and 
promulgated their final Uniform Rules of Practice and Procedure in 
August 1991 (OCC, 56 FR 38024; Board of Governors, 56 FR 38052; FDIC, 
56 FR 37975; OTS, 56 FR 38317; and NCUA, 56 FR 37767). The FDIC and 
other agencies now independently propose to amend one aspect of the 
Uniform Rules relating to ex parte communications to clarify that the 
rules parallel the requirements of the Administrative Procedure Act.
    Currently, Sec. 308.9 of the FDIC's Rules of Practice and Procedure 
(which was adopted as part of the Uniform Rules) prohibits ``a party, 
his or her counsel, or another person interested in the proceeding'' 
from making an ex parte communication to any member of the Board of 
Directors or other decisional official concerning the merits of an 
adjudicatory proceeding. When the Uniform Rules were proposed and 
adopted in 1991, the joint notice of proposed rulemaking (56 FR 27790, 
27793) explained that the proposed rule regarding ex parte 
communications ``adopts the rules and procedures set forth in the APA 
regarding ex parte communications''. There was no intention at that 
time to impose a rule more restrictive than that imposed by the APA 
itself.
    The APA contains two provisions relating to communications with 
agency decision-makers. The APA's ex parte communication provision 
restricts communications between ``interested person[s] outside the 
agency'' and the agency head, the administrative law judge (ALJ), or 
the agency decisional employees. 5 U.S.C. 557(d) (emphasis added). 
Intra-agency communications are governed by the APA's separation of 
functions provision, 5 U.S.C. 554(d). That section prohibits 
investigative or prosecutorial personnel at an agency from 
``participat[ing] or advis[ing] in the decision, recommended decision, 
or agency review'' of an adjudicatory matter pursuant to section 557 of 
the APA except as witness or counsel. The same separation of function 
provision provides that the ALJ in an adjudicatory matter may not 
consult any party on a fact in issue unless the other parties have an 
opportunity to participate. 5 U.S.C. 554(d)(1). The separation of 
functions provision does not prohibit agency investigatory or 
prosecutorial staff from seeking the amendment of a notice or the 
settlement or termination of a proceeding.
    The rule as proposed and adopted in 1991, however, neglected to 
mention the separation of functions concept explicitly, and appeared to 
apply the ex parte communication prohibition to all communications 
concerning the merits of an adjudicatory proceeding between the agency 
head, ALJ or decisional personnel on the one hand, and any ``party, his 
or her counsel, or another person interested in the proceeding'' on the 
other. The FDIC and other agencies do not interpret this provision as 
limiting agency enforcement staff's ability to seek approval of 
amendments to or terminations of existing enforcement actions. As 
drafted, however, the provision could be misinterpreted to expand the 
ex parte communication prohibition beyond the scope of the APA. The 
agencies did not intend this result.
    The proposed amendment clarifies that the regulation is intended to 
conform to the provisions of the APA by limiting the prohibition on ex 
parte communications to communications to or from ``interested persons 
outside the agency'', 5 U.S.C. 557(d), and by incorporating explicitly 
the APA's separation of functions provisions, 5 U.S.C. 554(d). This 
approach is also consistent with the most recent Model Adjudication 
Rules prepared by the Administrative Conference of the United States.

II. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, the 
FDIC hereby certifies that this notice of proposed rulemaking is not 
expected to have a significant economic impact on a substantial number 
of small entities. Accordingly, a regulatory flexibility analysis is 
not required.
    This proposed rule makes a minor amendment to a rule of practice 
already in place, and affects intra-agency procedure exclusively. Thus, 
it should not result in additional burden for regulated institutions. 
The purpose of the revised regulation is to conform the provisions of 
the regulation to those imposed by statute.

III. Proposed Revisions to Uniform Rules of Practice and Procedure

List of Subjects in 12 CFR Part 308

    Administrative practice and procedure, Claims, Equal access to 
justice, Lawyers, Penalties.

Authority and Issuance

    For the reasons set out in the preamble, 12 CFR part 308 is 
proposed to be amended as set forth below:

PART 308--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 308 is revised to read as 
follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1815(e), 1817(a), 
1818(j), 1818, 1820, 1828(j), 1829, 1831i, 1831o; 15 U.S.C 781(h), 
78m, 78n(a), 78n(c), 78n(d), 78n(f), 78o, 78o-4(c)(5), 78p, 78q, 
78q-1, 78s.

    2. In Sec. 308.9, paragraphs (a) and (b) are revised and a new 
paragraph (e) is added to read as follows:


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.
* * * * *
    (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.

    By Order of the Board of Directors.

    Dated at Washington, D.C., this 22d day of November, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-29242 Filed 11-28-94; 8:45 am]
BILLING CODE 6714-01-P