[Federal Register Volume 59, Number 250 (Friday, December 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32103]


[[Page Unknown]]

[Federal Register: December 30, 1994]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR PART 747

 

Uniform Rules of Practice and Procedure

AGENCY: The National Credit Union Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Credit Union Administration (NCUA) proposes 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), 
Federal Deposit Insurance Corporation (FDIC), and Office of Thrift 
Supervision (OTS) have all proposed to make this same change to the 
Uniform Rules, and are publishing separate notices of proposed 
rulemaking. 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 postmarked or received by January 30, 1995.

ADDRESSES: Comments should be directed to Becky Baker, Secretary of the 
Board, National Credit Union Administration, 1775 Duke Street, 
Alexandria, Virginia 22314-3428, or via the electronic bulletin board 
at 703/518-6480. Comments will be available for inspection at the same 
location.

FOR FURTHER INFORMATION CONTACT: Steven W. Widerman, Trial Attorney, 
Office of General Counsel (703/518-6557).

SUPPLEMENTARY INFORMATION:

I. Background

    Section 916 of the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989 (FIRREA), Public Law 73, 103 Stat. 183 (1989) 
required the NCUA, OCC, Board of Governors, FDIC and OTS (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 (NCUA, 56 FR 
37767, August 8, 1991; OCC, 56 FR 38024, August 9, 1991; Board of 
Governors, 56 FR 38052, August 9, 1991; FDIC, 56 FR 37975, August 9, 
1991; and OTS, 56 FR 38317, August 12, 1991). The NCUA and other 
agencies now independently propose to amend one aspect of the Uniform 
Rules relating to ex parte communications to clarify that those rules 
parallel the requirements of the APA.
    Currently, section 747.9 of the Uniform Rules prohibits a party, 
the party's counsel, or another interested person from making an ex 
parte communication to the NCUA Board 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 
``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.
    The APA contains two provisions relating to communications with 
agency decisionmakers. 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 
enforcement 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 enforcement staff from seeking the amendment of a notice or the 
settlement or termination of a proceeding.
    Section 747.9 of the Uniform Rules as proposed and adopted in 1991, 
however, commingled the ex parte and separation of functions concepts, 
thereby allowing the ex parte communication prohibition to be applied 
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 NCUA and other agencies did not intend this provision 
to limit 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 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 
(ACUS). ACUS, Model Adjudication Rules (December, 1993).

II. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, the 
NCUA 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 12612 Statement

    This proposed rule, like the current provision of Part 747 it is 
replacing, will apply to all federally insured credit unions. The NCUA 
Board, pursuant to Executive Order 12612, has determined, however, that 
the proposed rule will not have a substantial direct effect on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among 
various levels of government. Further, the proposed rule will not 
preempt provisions of state law or regulations.

List of Subjects in 12 CFR Part 747

    Administrative practice and procedure, Bank deposit insurance, 
Claims, Credit unions, Equal access to justice, Investigations, 
Lawyers, Penalties.

    By the National Credit Union Administration Board on December 
23, 1994.
Becky Baker,
Secretary of the Board, National Credit Union Administration.

Authority and Issuance

    For the reasons set out in the preamble, 12 CFR part 747 is 
proposed to be amended as set forth below:

PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF 
PRACTICE AND PROCEDURE, AND INVESTIGATIONS

    1. The authority citation for part 747 is revised to read as 
follows:

    Authority: 12 U.S.C. 1766, 1784, 1786, 1787.

    2. In Sec. 747.9, paragraphs (a) and (b) are revised and a new 
paragraph (e) is added to read as follows:


Sec. 747.9  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 NCUA (including such person's 
counsel); and
    (ii) The administrative law judge handling that proceeding, the 
NCUA Board, 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 NCUA Board until the date that the NCUA Board 
issues its final decision pursuant to Sec. 747.40(c):
    (1) No interested person outside the NCUA shall make or knowingly 
cause to be made an ex parte communication to any member of the NCUA 
Board, the administrative law judge, or a decisional employee; and
    (2) No member of the NCUA Board, administrative law judge, or 
decisional employee shall make or knowingly cause to be made to any 
interested person outside the NCUA 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 NCUA 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. 747.40, except as witness 
or counsel in public proceedings.

[FR Doc. 94-32103 Filed 12-29-94; 8:45 am]
BILLING CODE 7535-01-P