[Federal Register Volume 59, Number 237 (Monday, December 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30406]

[[Page Unknown]]

[Federal Register: December 12, 1994]



Office of the Comptroller of the Currency

12 CFR Part 19

[Docket No. 94-21]
RIN 1557-AB15


Uniform Rules of Practice and Procedure

AGENCY: The Office of the Comptroller of the Currency, Treasury.

ACTION: Notice of proposed rulemaking.


SUMMARY: The Comptroller of the Currency (OCC) proposes to amend a 
provision of the Uniform Rules of Practice and Procedure as adopted by 
the OCC (Uniform Rules). This proposal is intended to clarify that the 
Uniform Rules' provisions relating to ex parte communications conform 
to the requirements of the Administrative Procedure Act (APA). In 
particular, this proposal would clarify that the ex parte provisions do 
not apply to intra-agency communications, which are governed by a 
separate provision of the APA.

DATES: Comments must be received by January 11, 1995.

ADDRESSES: Comments be directed to: Communications Division, 250 E 
Street, SW., Washington, DC 20219, Attention: Docket No. 94-21. 
Comments may be inspected and photocopied at the same location.

FOR FURTHER INFORMATION CONTACT: Daniel Stipano, Assistant Director, 
Enforcement and Compliance (202/874-4800), or Daniel Cooke, Attorney, 
Legislative and Regulatory Activities Division (202/874-5090).


I. Background

    Section 916 of the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989 (FIRREA), Pub. L. 73, 103 Stat. 183 (1989) 
required the OCC, Board of Governors of the Federal Reserve System 
(Board of Governors), Federal Deposit Insurance Corporation (FDIC), 
Office of Thrift Supervision (OTS), and National Credit Union 
Administration (NCUA) Federal Deposit Insurance Corporation (FDIC) 
(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, August 9, 1991; Board of Governors, 56 
FR 38052, August 9, 1991; FDIC, 56 FR 37975, August 9, 1991; OTS, 56 FR 
38317, August 12, 1991; and NCUA, 56 FR 37767, August 8, 1991). On 
November 22, 1994 (59 FR 60094), the Board of Governors proposed to 
amend one aspect of the Uniform Rules adopted by the Board of Governors 
relating to ex parte communications to clarify that those rules 
parallel the requirements of the APA. The OCC now proposes the similar 
amendment. The OTS, FDIC, and NCUA are considering a similar amendment.
    Currently, Sec. 19.9 of the Uniform Rules prohibits a party, the 
party's counsel, or another interested person from making an ex parte 
communication to the Comptroller or other decisional official 
concerning the merits of an adjudicatory proceeding. When the Uniform 
Rules were proposed, the joint proposed rule (56 FR 27790, 27793) 
explained that the proposed rule regarding ex parte communications 
would adopt the rules and procedures set forth in the APA (5 U.S.C. 
551(14) and 557(d)) regarding ex parte communications. The OCC did not 
intend at that time to impose a rule more restrictive than that imposed 
by the APA.
    The APA contains two provisions relating to communications with 
agency decisionmakers. The APA's ex parte communication provision 
restricts communications between an interested person outside the 
agency and the agency head, the administrative law judge (ALJ), or the 
agency decisional employees. 5 U.S.C. 557(d). 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 staff at an agency from participating or advising 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 Uniform Rules as proposed and adopted in 1991, however, did not 
mention the separation of functions concept explicitly. Consequently, 
it could have been interpreted 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 and any party, the party's counsel, or another person 
interested in the proceeding. The OCC did not intend this provision to 
limit the OCC's investigatory or prosecutorial 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 
    This proposal would clarify 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 
(ACUS). ACUS, Model Adjudication Rules (December, 1993).

II. Regulatory Flexibility Act

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

III. Executive Order 12866 Statement

    The OCC has determined that this proposal is not a significant 
regulatory action as defined in Executive Order 12866.

List of Subjects in 12 CFR Part 19

    Administrative practice and procedure, Crime, Investigations, 
National banks, Penalties, Securities.

Authority and Issuance

    For the reasons set out in the preamble, part 19 of chapter I of 
title 12 of the Code of Federal Regulations is proposed to be amended 
as set forth below:


    1. The authority citation for part 19 is revised to read as 

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1817, 1818, 1820, 1831o, 1972, 3102, 3108(a), and 3909; 15 U.S.C. 
78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78u, 78u-2, 78u-3, and 78w; 
and 31 U.S.C. 330.

    2. In Sec. 19.9, paragraphs (a) and (b) are revised and a new 
paragraph (e) is added to read as follows:

Sec. 19.9  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 OCC (including such person's 
counsel); and
    (ii) The administrative law judge handling that proceeding, the 
Comptroller, 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 Comptroller until the date that the Comptroller 
issues his or her final decision pursuant to Sec. 19.40(c):
    (1) No interested person outside the OCC shall make or knowingly 
cause to be made an ex parte communication to the Comptroller, the 
administrative law judge, or a decisional employee; and
    (2) The Comptroller, administrative law judge, or decisional 
employee shall not make or knowingly cause to be made to any interested 
person outside the OCC 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 OCC 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. 19.40, except as witness 
or counsel in public proceedings.

    Dated: December 1, 1994.
Eugene A. Ludwig,
Comptroller of the Currency.
[FR Doc. 94-30406 Filed 12-9-94; 8:45 am]