[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Rules and Regulations]
[Pages 24761-24762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11481]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Rules
and Regulations
[[Page 24761]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 308
RIN 3064-AB52
Uniform Rules of Practice and Procedure
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
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SUMMARY: The FDIC is amending a provision of the Uniform Rules of
Practice and Procedure (Rules) adopted by the Board of Directors. The
final rule is intended to clarify that the Rules' provisions relating
to ex parte communications conform to the requirements of the
Administrative Procedure Act (APA). The Board of Governors of the
Federal Reserve System (FRB) has adopted such an amendment, the
Comptroller of the Currency (OCC), the Office of Thrift Supervision
(OTS), and the National Credit Union Administration (NCUA) have
proposed similar amendments. In particular, the amendment would clarify
that the ex parte provisions do not apply to intra-agency
communications, which are governed by a separate provision of the APA.
EFFECTIVE DATE: June 9, 1995.
FOR FURTHER INFORMATION CONTACT: Andrea Winkler (202/898-3764) or
Grovetta Gardineer (202/898-3905), Counsel, Legal Division, Compliance
and Enforcement Section.
SUPPLEMENTARY INFORMATION:
I. Background
In August 1991, the FDIC adopted the Uniform Rules of Practice and
Procedure (Rules) (56 FR 37975, Aug. 9, 1991). 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 also adopted the Rules (OCC, 56 FR
38024, Aug. 9, 1991; Board of Governors, 56 FR 38048, Aug. 9, 1991;
OTS, 56 FR 38302, Aug. 12, 1991; and NCUA, 56 FR 37762, Aug. 8, 1991).
The FDIC is amending one aspect of the Rules relating to ex parte
communications to ensure that the Rules conform to the requirements of
the APA. The Board of Governors has adopted such an amendment (59 FR
65244, Dec. 19, 1994), and the other agencies have proposed a similar
amendment (OCC, 59 FR 63936, Dec. 12, 1994; OTS, 59 FR 62354, Dec. 5,
1994; NCUA, 59 FR 67655, Dec. 30, 1994). The FDIC issued this amendment
as a proposed rule on November 29, 1994 (59 FR 60921, Nov. 29, 1994).
It is now adopting the rule in the form proposed.
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 (Board) 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 does 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 FDIC did not intend this
result.
The 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.
The FDIC received one comment on the proposed rule, which supported
it. The commenter suggested that the FDIC explain the so-called
``Chinese wall'' that prevents those staff members involved in the
prosecutorial function from communicating with those who advise the
Board on a particular matter. The amended rule specifically sets out
the APA's separation of function provision, which prohibits agency
prosecutorial personnel in one case from participating in the Board's
decision on that or a factually-related case. This provision clearly
prevents prosecutorial staff from communicating [[Page 24762]] about
the merits of a case with those staff members who advise the Board
regarding a final decision in the case. It is unnecessary to set out
internal procedures implementing this statutory prohibition in a formal
rulemaking, and to do so could limit the Board's flexibility with
respect to internal organization.
II. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
FDIC hereby certifies that the final rule will not have a significant
economic impact on a substantial number of small entities. Accordingly,
a regulatory flexibility analysis is not required.
The final 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.
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 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, DC, this 24th day of April, 1995.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 95-11481 Filed 5-9-95; 8:45 am]
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