[Federal Register Volume 63, Number 185 (Thursday, September 24, 1998)]
[Proposed Rules]
[Pages 51031-51045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25527]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Federal Housing Enterprise Oversight
12 CFR Part 1780
RIN 2550-AA04
Rules of Practice and procedure
AGENCY: Office of Federal Housing Enterprise Oversight, HUD.
ACTION: Notice of proposed rulemeking.
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SUMMARY: The Office of Federal Housing Enterprise Oversight is
proposing to adopt a regulation that establishes the rules of practice
and procedure to be followed when OFHEO conducts hearings on the
record. The proposed regulation implements the provisions of title XIII
of the Housing and Community Development Act of 1992, known as the
Federal Housing Enterprises Financial Safety and Soundness Act of 1992,
regarding hearings on the record in certain enforcement actions against
the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, or directors or executive officers of the
Enterprises. The proposed regulation would provide OFHEO personnel, the
Enterprises, the Enterprises' directors and executive officers and
other interested parties with the guidance necessary to prepare for and
participate in such hearings.
DATES: Written comments regarding the Notice of Proposed Rulemaking
must be received on or before December 23, 1998.
ADDRESSES: Send written comments to Anne E. Dewey, General Counsel,
Office of General Counsel, Office of Federal Housing Enterprise
Oversight, 1700 G Street, NW., Fourth Floor, Washington, DC 20552.
Alternatively, comments may be submitted via E-mail to
RegC[email protected].
FOR FURTHER INFORMATION CONTACT:
David A. Felt, Associate General Counsel, Office of Federal Housing
Enterprise Oversight, 1700 G Street, NW., Fourth Floor, Washington, DC
20552, telephone (202) 414-3750 (not a toll-free number). The telephone
number for the Telecommunications Device for the Deaf is: (800) 877-
8339.
SUPPLEMENTARY INFORMATION: The Supplementary Information is organized
according to this table of contents:
I. Background
II. Regulation Development
III. Synopsis of Proposed Regulation
IV. Regulatory Impact
I. Background
Title XIII of the Housing and Community Development Act of 1992,
Pub. L. No. 102-550, known as the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (1992 Act), established the Office of
Federal Housing Enterprise Oversight (OFHEO) as an independent office
within the Department of Housing and Urban Development (HUD) to ensure
that the Federal National Mortgage Association (Fannie Mae) and the
Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the
Enterprises) are adequately capitalized and operate in a safe and sound
manner. Included among the express statutory authorities of the
Director of OFHEO (Director) is the authority to issue regulations to
carry out the duties of the Director,\1\ to conduct hearings relating
to the issuance of cease-and-desist orders and the assessment of civil
money penalties.\2\ Prior to issuing a cease-and-desist order, OFHEO
must conduct hearings on the record and provide the subjects of the
order with notice and the opportunity to participate in such
hearings.\3\ Prior to imposing civil money penalties, OFHEO must
provide notice and the opportunity for a hearing to the persons subject
to the penalties. The 1992 Act grants responsibility for developing the
rules of practice and procedure governing issuance of these orders and
penalties, including the conduct of hearings, to OFHEO.\4\ Fannie Mae
and Freddie Mac are Government-sponsored enterprises with important
public purposes. These purposes include providing liquidity to the
residential mortgage market and increasing the availability of mortgage
credit benefiting low- and moderate-income families, rural areas,
central cities, and areas that are underserved by lending institutions.
The Enterprises engage in two principal businesses: investing in
residential mortgages and guaranteeing residential mortgage securities.
The securities they guarantee and the debt instruments they issue are
not backed by the full faith and credit of the United States.\5\
Despite the absence of such Federal backing, prices of Enterprise debt
securities reflect a market perception that the U.S. Government would
not permit the Enterprises to default. This perception principally
arises from the public purposes of the Enterprises, their Federal
charters, their potential access to a U.S. Treasury line of credit and
the statutory exemptions of their debt and mortgage-backed securities
from otherwise mandatory investor protection provisions.\6\ This
perception
[[Page 51032]]
is bolstered by concern that the insolvency of either of the
Enterprises would have serious consequences for the nation's housing
markets and financial system.
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\1\ 1992 Act, section 1319G(a) (12 U.S.C. 4526(a)).
\2\ 1992 Act, sections 1371, 1376 (12 U.S.C. 4631, 4636).
\3\ 1992 Act, sections 1371, 1376(c) (12 U.S.C. 4631(c),
4636(c)).
\4\ 1992 Act, section 1313 (12 U.S.C. 4513).
\5\ Sections 301(4), 306(h)(2), Federal Home Loan Mortgage
Corporation Act (12 U.S.C. note (b)(3, 4) to 1451, 1455(h)(2));
sections 301(4), 304(b), Federal National Mortgage Association
Charter Act (12 U.S.C. 1716(3, 4), 1719(b); and section 1302(4),
1992 Act (12 U.S.C. 4501(4)).
\6\ See, e.g., 12 U.S.C. 24 (authorizing unlimited investment by
national banks in obligations of, or issued by, the Enterprises); 12
U.S.C. 1455(g), 1719(d), 1723c (exempting Enterprise securities from
oversight from Federal regulators); 15 U.S.C. 77r-1(a) (preempting
State law that would treat Enterprise securities differently from
obligations of the United States for investment purposes); and 15
U.S.C. 77r-1(c) (exempting Enterprise securities from State
securities laws).
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II. Regulation Development
In designing the structure and substance of the proposed rules,
OFHEO reviewed the rules of practice and procedure of other financial
safety and soundness regulatory agencies; specifically, the Office of
the Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office
of Thrift Supervision, the National Credit Union Administration and the
Farm Credit Administration. OFHEO also reviewed the rules of practice
and procedure established by the Secretary of HUD. OFHEO reviewed the
rules of practice and procedure of these other agencies because, like
OFHEO, each such agency is authorized to issue cease-and-desist orders
and to impose civil money penalties. The proposed regulation is based
upon OFHEO's analysis of comparable rules and the requirements of the
1992 Act.
The practice and procedure rules of the various agencies reviewed
by OFHEO differed from each other in many respects, which reflected the
differences in the missions of those agencies. Likewise, the proposed
regulation is not precisely patterned upon one agency's approach, but
incorporates elements from each that are best suited to OFHEO's mission
and organizational structure.
III. Synopsis of Proposed Regulation
The 1992 Act requires OFHEO to conduct its hearings pertaining to
cease-and-desist orders and civil money penalties in accordance with
the Administrative Procedure Act (APA) \7\ (which is codified in
chapter 5 of title 5 of the Untied States Code).\8\ Thus, the proposed
rules of practice and procedure supplement the APA provisions governing
agency adjudications and include provisions unique to OFHEO's mission.
These proposed rules apply not only to enforcement hearings, but also
to any other adjudication required by statute to be determined on the
record after opportunity for hearing.
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\7\ 1992 Act, section 1373(a)(3)(42 U.S.C. 4633(a)(3)).
\8\ 5 U.S.C. 500-559.
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The proposed regulation includes provisions relating to prehearing
procedures and activities, the conduct of the hearing itself, and the
qualifications and disciplinary rules for practice before OFHEO. The
proposed regulation establishes that hearings are open to the public
unless the Director determines that a public hearing would be contrary
to the public interest. The proposed regulation also defines important
terms used in the regulation and describes the authority of the
Director and the presiding officer.
Under the proposed regulation, the Director commences the hearing
process by issuing and serving a notice of charges on a respondent. A
presiding officer, appointed by the Director, presides over the course
of the hearing from the time of the appointment until the presiding
officer files a recommended decision and order, along with the hearing
record, with the Director for a final decision. During the course of
the hearing, the presiding officer controls virtually all aspects of
the proceeding. The presiding officer determines the hearing schedule,
presides over any prehearing conferences, rules on motions, discovery,
and evidentiary issues and ensures that the proceeding is fair,
equitable, and impartial. The presiding officer does not, however, have
the authority to make a ruling that disposes of the proceeding. Only
the Director has the authority to dismiss the proceeding or make a
final determination of the merits of the proceeding.
Under this proposed regulation, the parties to the proceeding have
the right to present evidence and witnesses at the hearing and have the
right to examine and cross-examine the witnesses. At the completion of
the hearing, the parties may submit proposed findings of fact and
conclusions of law and a proposed order. The presiding officer then
submits the complete record to the Director for consideration and
action. The record includes the presiding officer's recommended
decision, recommended findings of fact and conclusions of law, and
proposed order. The record also includes all prehearing and hearing
transcripts, exhibits, rulings, motions, briefs and memoranda and all
supporting papers filed in connection with the hearing. The Director
shall issue a final ruling within 90 days of the date the Director
serves notice on the parties that the record is complete and the case
has been submitted for final decision.
Subpart D of this proposed regulation contains rules governing
practice by parties or their representatives before OFHEO. This
proposed subpart addresses the imposition of sanctions by the presiding
officer or the Director against parties or their representatives in an
adjudicatory proceeding under this part. This subpart also covers other
disciplinary sanctions--censure, suspension or disbarment--against
individuals who appear before OFNEO in a representational capacity
either in an adjudicatory proceeding under part 1780 or in any other
matters connected with presentations to OFHEO relating to a client's or
other principal's rights, privileges, or liabilities. This
representation includes, but is not limited to, the practice of
attorneys and accountants. Employees of OFHEO are not subject to
disciplinary proceedings under this subpart.
IV. Regulatory Impact
Executive Order 12612, Federalism
Executive Order 12612 requires that Executive departments and
agencies identify regulatory actions that have significant federalism
implications. ``Federalism implications'' is defined to specify
regulations or actions that have substantial, direct effects on the
States, on the relationship or distribution of power between the
national government and the States, or on the distribution of power and
responsibilities between Federal and State government. OFHEO has
determined that this proposed regulation has no federalism implications
that warrant the preparation of a Federalism Assessment in accordance
with Executive Order 12612.
Executive Order 12866, Regulatory Planning and Review
OFHEO has determined that this proposed regulation is not a
significant regulatory action as such term is defined in Executive
Order 12866, has so indicated to the Office of Management and Budget
(OMB) and was not notified by OMB that the proposed regulation must be
reviewed by OMB.
Executive Order 12988, Civil Justice Reform
Executive Order 12988 sets forth guidelines to promote the just and
efficient resolution of civil claims and to reduce the risk of
litigation to the government. The proposed regulation meets the
applicable standards of sections 3(a) and 3(b) of Executive Order
12988.
Unfunded Mandates Reform Act of 1995
This proposed regulation does not include a Federal mandate that
may result in the expenditure by State, local and tribal governments,
in the aggregate, or by the private sector, of $100,000,000 or more
(adjusted annually for inflation) in any one year. Consequently, the
proposed regulation does not warrant
[[Page 51033]]
the preparation of an assessment statement in accordance with the
Unfunded Mandates Reform Act of 1995.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a proposed regulation that has a significant economic impact on a
substantial number of small entities must include an initial regulatory
flexibility analysis describing the rule's impact on small entities.
Such an analysis need not be undertaken if the agency head certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. 5 U.S.C. 605(b).
OFHEO has considered the impacts of the proposed regulation under
the Regulatory Flexibility Act. The proposed regulation does not have a
significant economic impact on a substantial number of small entities,
since it is applicable only to the Enterprises, which are not small
entities. Therefore, OFHEO's General Counsel acting under delegated
authority has certified that the proposed regulation would not have a
significant economic impact on a substantial number of small entities.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35) requires
that regulations involving the collection of information receive
clearance from OMB. The proposed regulation contains no such collection
of information requiring OMB approval under the Paperwork Reduction
Act. Consequently, no information has been submitted to OMB for review.
List of Subjects in 12 CFR Part 1780
Administrative practice and procedure, Penalties.
Accordingly, for the reasons set forth in the preamble, OFHEO
proposes to amend 12 CFR part 1780 as follows:
PART 1780--RULES OF PRACTICE AND PROCEDURE
1. Revise the heading for part 1780 to read as set forth above.
2. Revise the authority citation for part 1780 to read as follows:
Authority: 12 U.S.C. 4513, 4631-4641.
Subpart E also issued under 28 U.S.C. 2461 note.
Subpart E--[Amended]
3. Redesignate Secs. 1780.70 and 1780.71 as Secs. 1780.80 and
1780.81, respectively.
4. Add subparts A through D to part 1780 to read as follows:
Subpart A--General Rules
Sec.
1780.1 Scope.
1780.2 Rules of construction.
1780.3 Definitions.
1780.4 Authority of the Director.
1780.5 Authority of the presiding officer.
1780.6 Public hearings.
1780.7 Good faith certification.
1780.8 Ex parte communications.
1780.9 Filing of papers.
1780.10 Service of papers.
1780.11 Computing time.
1780.12 Change of time limits.
1780.13 Witness fees and expenses.
1780.14 Opportunity for informal settlement.
1780.15 OFHEO's right to conduct examination.
1780.16 Collateral attacks on adjudicatory proceeding.
Subpart B--Prehearing Proceedings
1780.20 Commencement of proceeding and contents of notice of
charges.
1780.21 Answer.
1780.22 Amended pleadings.
1780.23 Failure to appear.
1780.24 Consolidation and severance of actions.
1780.25 Motions.
1780.26 Discovery.
1780.27 Request for document discovery from parties.
1780.28 Document subpoenas to nonparties.
1780.29 Deposition of witness unavailable for hearing.
1780.30 Interlocutory review.
1780.31 Summary disposition.
1780.32 Partial summary disposition.
1780.33 Scheduling of prehearing conferences.
1780.34 Prehearing submissions.
1780.35 Hearing subpoenas.
Subpart C--Hearing and Posthearing Proceedings
1780.50 Conduct of hearings
1780.51 Evidence.
1780.52 Post hearing filings.
1780.53 Recommended decision and filing of record.
1780.54 Exceptions to recommended decision.
1780.55 Review by Director.
1780.56 Exhaustion of administrative remedies.
1780.57 Stays pending judicial review.
Subpart D--Rules of Practice Before the Office of Federal Housing
Enterprise Oversight
1780.70 Scope.
1780.71 Definitions.
1780.72 Appearance and practice in adjudicatory proceedings.
1780.73 Conflicts of interest.
1780.74 Sanctions.
1780.75 Censure, suspension, disbarment and reinstatement.
Subpart A--General Rules
Sec. 1780.1 Scope.
This subpart prescribes rules of practice and procedure applicable
to the following adjudicatory proceedings:
(a) Cease-and-desist proceedings under sections 1371 and 1373,
title XIII of the Housing and Community Development Act of 1992, Pub.
L. No. 102-550, known as the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (1992 Act) (12 U.S.C. 4631 and 4633).
(b) Civil money penalty assessment proceedings against the Federal
National Mortgage Association, the Federal Home Loan Mortgage
Corporation (collectively, the Enterprises), or any executive officer
or director of any Enterprise under sections 1373 and 1376 of the 1992
Act (12 U.S.C. 4633 and 4636).
(c) All other adjudications required by statute to be determined on
the record after opportunity for hearing, except to the extent
otherwise provided in the regulations specifically governing such an
adjudication.
Sec. 1780.2 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) Any use of a masculine, feminine, or neuter gender encompasses
all three, if such use would be appropriate; and
(c) Unless the context requires otherwise, a party's representative
of record, if any, may, on behalf of that party, take any action
required to be taken by the party.
Sec. 1780.3 Definitions.
For purposes of this part, unless explicitly stated to the
contrary--
(a) Adjudicatory proceeding means a proceeding conducted pursuant
to these rules and leading to the formulation of a final order than a
regulation;
(b) Decisional employee means any member of the Director's or the
presiding officer's staff who has not engaged in an investigation or
prosecutorial role in a proceeding and who may assist the Director or
the presiding officer, respectively, in preparing orders, recommended
decisions, decisions and other documents under this subpart.
(c) Director means the Director of OFHEO.
(d) Enterprise means the Federal National Mortgage Association and
any affiliate thereof and the Federal Home Loan Mortgage Corporation
and any affiliate thereof.
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(e) OFHEO means the Office of Federal Housing Enterprise Oversight
of the Department of Housing and Urban Development.
(f) Party means OFHEO and any person named as a party in any
notice.
(g) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency, or other entity or organization.
(h) Presiding officer means an administrative law judge or any
other person designated by the Director to conduct a hearing.
(i) Representative of record means an individual who is authorized
to represent a person or is representing himself and who has filed a
notice of appearance in accordance with Sec. 1780.72.
(j) Respondent means any party other than OFHEO.
(k) 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.
(l) The 1992 Act is Title XIII of the Housing and Community
Development Act of 1992, Pub. L. No. 102-550, known as the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992 (1992
Act).
Sec. 1780.4 Authority of the Director.
The Director may, at any time during the pendency of a proceeding,
perform, direct the performance of, or waive performance of any act
that could be done or ordered by the presiding officer.
Sec. 1780.5 Authority of the presiding officer.
(a) General rule. All proceedings governed by this subpart shall be
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The
presiding officer shall have complete charge of the hearing, conduct a
fair and impartial hearing, avoid unnecessary delay and assure that a
record of the proceeding is made.
(b) Powers. The presiding officer shall have all powers necessary
to conduct the proceeding in accordance with paragraph (a) of this
section and 5 U.S.C. 556(c). The presiding officer is authorized to--
(1) Set and change the date, time and place of the hearing upon
reasonable notice to the parties;
(2) Continue or recess the hearing in whole or in part for a
reasonable period of time;
(3) Hold conferences to identify or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the proceeding;
(4) Administer oaths and affirmations;
(5) Issue Subpoenas and subpoenas duces tecum and revoke, quash, or
modify such subpoenas;
(6) Take and preserve testimony under oath;
(7) Rule on motions and other procedural matters appropriate in an
adjudicatory proceeding, except that only the Director shall have the
power to grant any motion to dismiss the proceeding or make a final
determination of the merits of the proceeding;
(8) Regulate the scope and timing of discovery;
(9) Regulate the course of the hearing and the conduct of
representatives and parties;
(10) Examine witnesses;
(11) Receive, exclude, limit, or otherwise rule on evidence;
(12) Upon motion of a party, take official notice of facts;
(13) Recuse himself upon motion made by a party or on his own
motion;
(14) Prepare and present to the Director a recommended decision as
provided in this part; and
(15) Do all other things necessary and appropriate to discharge the
duties of a presiding officer.
Sec. 1780.6 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the Director, in his discretion, determines that holding an open
hearing would be contrary to the public interest. The Director may make
such determination sua sponte at any time by written notice to all
parties.
(b) Motion for closed hearing. Within 20 days of service of the
notice of charges, any party may file with the presiding officer a
motion for a private hearing and any party may file a pleading in reply
to the motion. The presiding officer shall forward the motion and any
reply, together with a recommended decision on the motion, to the
Director, who shall make a final determination. Such motions and
replies are governed by Sec. 1780.25.
(c) Filing documents under seal. OFHEO's counsel of record, in his
discretion may file any document or part of a document under seal if
such counsel makes a written determination that disclosure of the
document would be contrary to the public interest. The presiding
officer shall take all appropriate steps to preserve the
confidentiality of such documents or parts thereof, including closing
portions of the hearing to the public.
Sec. 1780.7 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice by the Director shall be signed by
at least one representative of record in his individual name and shall
state that representative's address and telephone number and the names,
addresses the telephone numbers of all other representatives of record
for the person making the filing or submission.
(b) Effect of signature. (1) By signing a document, the
representative of record or party certifies that--
(i) The representative of record or party has read the filing of
submission of record;
(ii) To the best of his 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,
nonfrivolous argument for the extension, modification, or reversal of
existing law; and
(iii) 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
presiding officer 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 representative or party shall
constitute a certification that to the best of his knowledge,
information, and belief, formed after reasonable inquiry, his
statements are well-grounded in fact and are warranted by existing law
or a good faith, nonfriviolous 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. 1780.8 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 take place between--
(i) An interested person outside OFHEO (including the person's
representative); and
(ii) The presiding officer handling that proceeding, the Director,
a decisional employee assigned to that proceeding, or any other person
who is or may reasonably be expected to be involved in the decisional
process.
(2) A communication that does not concern the merits of an
adjudicatory proceeding, such as request for status of
[[Page 51035]]
the proceeding, does not constitute an ex parte communication.
(b) Prohibition of ex parte communications. From the time the
notice commencing the proceeding is issued by the Director until the
date that the Director issues his final decision pursuant to
Sec. 1780.55, no person referred to in paragraph (a)(1)(i) of this
section shall knowingly make or cause to be made an ex parte
communication. The Director, presiding officer, or a decisional
employee shall not knowingly make or cause to be made an ex parte
communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by any 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 parties to the proceeding
shall have an opportunity, within 10 days of receipt of service of the
ex parte communication, to file response thereto and to recommend any
sanctions, in accordance with paragraph (d) of this section, that they
believe to be appropriate under the circumstances.
(d) Sanctions. Any party or representative for party who makes an
ex parte communications, or who encourages or solicits another to make
any such communications, may be subject to any appropriate sanction or
sanctions imposed by the Director or the presiding officer, including,
but not limited to, exclusion from the proceedings and an adverse
ruling on the issue that is the subject of the prohibited
communication.
(e) Consultations by presiding officer. Except to the extent
required for the disposition of ex parte matters as authorized by law,
the presiding officer 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.
(f) Separation of functions. An employee or agent engaged in the
performance of investigative or prosecuting functions for OFHEO in a
case may not, in that or a factually related case, participate or
advise in the decision, recommended decision, or Director review under
Sec. 1780.55 of the recommended decision, except as witness or counsel
in public proceedings.
Sec. 1780.9 Filing of papers.
(a) Filing. Any papers required to be filed shall be addressed to
the presiding officer and filed with OFHEO, 1700 G Street, NW., Fourth
Floor, Washington, DC 20552.
(b) Manner of filing. Unless otherwise specified by the Director or
the presiding officer, filing shall be accomplished by:
(1) Personal service;
(2) Delivery to the U.S. Postal Service or to a reliable commercial
delivery service for same day or overnight delivery;
(3) Mailing by first class, registered, or certified mail; or
(4) Transmission by electronic media, only if expressly authorized,
and upon any conditions specified, by the Director or the presiding
officer. 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
must set forth the name, address and telephone number of the
representative 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 doubled-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. 1780.7.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name OFHEO 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 Director or
the presiding officer, 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. 1780.10 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers or serving a subpoena shall serve a copy upon the representative
of record for each party 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) Delivery to the U.S. Postal Service or to a reliable commercial
delivery service for same day or overnight delivery;
(3) Mailing 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. 1780.9(c).
(c) By the Director or the presiding officer. (1) All papers
required to be served by the Director or the presiding officer upon a
party who has appeared in the proceeding in accordance with
Sec. 1780.72 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. 1780.72, the Director or the presiding officer 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 person's last
known address; or
(v) By any other method reasonably calculated to give actual
notice.
(d) Subpoenas. Service of a subpoenas may be made:
(1) By person 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; or
(4) By registered or certified mail addressed to the person's last
known address; or
(5) By any other method reasonably calculated to give actual
notice.
(e) Area of service. Service in any State, commonwealth,
possession, territory of the United States or the District of Columbia
on any person doing business in any State, commonwealth, possession,
territory of the United States or the District of Columbia, or on any
person as otherwise permitted by law, is effective
[[Page 51036]]
without regard to the place where the hearing is held.
(f) Proof of service. Proof of service of papers filed by a party
shall be filed before action is taken thereon. The proof shall show the
date and manner of service and may be written acknowledgment of service
by declaration of the person making service or by certificate of a
representative of record. Failure to make proof of service shall not
affect the validity of service. The presiding officer may allow the
proof to be amended or supplied, unless to do so would result in
material prejudice to a party.
Sec. 1780.11 Computing time.
(a) General rule. In computing any period of time prescribed or
allowed 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 shall
run 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 10 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 reliable commercial
delivery service, upon actual service;
(ii) In the case of U.S. Postal Service or reliable commercial
overnight delivery service, or first class, registered, or certified
mail, upon deposit in or delivery to an appropriate point of
collection; or
(ii) 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 Director or the presiding
officer 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 shall be
calculated as follows:
(1) If service was made by first class, registered, or certified
mail, or by delivery to the U.S. Postal Service for longer than
overnight delivery service, add 3 calendar days to the prescribed
period for the responsive filing.
(2) If service was made by U.S. Postal Service or reliable
commercial overnight delivery service, add 1 calendar day to the
prescribed period for the responsive filing.
(3) If service was made by electronic media transmission, add 1
calendar day to the prescribed period for the responsive filing, unless
otherwise determined by the Director or the presiding officer, in the
case of filing, or by agreement among the parties, in the case of
service.
Sec. 1780.12 Change of time limits.
Except as otherwise provided by law, the presiding officer may, for
good cause shown, extend the time limits prescribed above or prescribed
by any notice or order issued in the proceedings. After the referral of
the case to the Director pursuant to Sec. 1780.53, the Director may
grant extensions of the time limits for good cause shown. Extensions
may be granted on the motion of a party after notice and opportunity to
respond is afforded all nonmoving parties or on the Director's or the
presiding officer's own motion.
Sec. 1780.13 Witness fees and expenses.
Witness (other than parties) subpoenaed for testimony or deposition
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 shall 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 OFHEO is the party requesting the subpoena. OFHEO shall not be
required to pay any fees to or expenses of any witness not subpoenaed
by OFHEO.
Sec. 1780.14 Opportunity for informal settlement.
Any respondent may, at any time in the proceeding, unilaterally
submit to OFHEO's counsel of record written offers or proposals for
settlement of a proceeding without prejudice to the rights of any of
the parties. No such offer proposal shall be made to any OFHEO
representative other than OFHEO's counsel of record. 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. 1780.15 OFHEO's right to conduct examination.
Nothing contained in this part limits in any manner the right of
OFHEO to conduct any examination, inspection, or visitation of any
Enterprise or affiliate, or the right of OFHEO to conduct or continue
any form of investigation authorized by law.
Sec. 1780.16 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.
Subpart B--Prehearing Proceedings
Sec. 1780.20 Commencement of proceeding and contents of notice of
charges.
Proceedings under this subpart are commenced by the issuance of a
notice of charges by the Director, which must be served upon the
respondent. Such notice shall state all of the following:
(a) The legal authority for the proceeding and for OFHEO's
jurisdiction over the proceeding;
(b) A statement of the matters of fact or law showing that OFHEO is
entitled to relief;
(c) A proposed order or prayer for an order granting the requested
relief;
(d) The time, place and nature of the hearing;
(e) The time within which to file an answer;
(f) The time within which to request a hearing; and
(g) The address for filing the answer and/or request for a hearing.
Sec. 1780.21 Answer.
(a) When. Unless otherwise specified by the Director in the notice,
respondent shall file an answer within 20 days of service of the
notice.
(b) Content of answer. An answer must respond specifically 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
[[Page 51037]]
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 that 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. Failure of a respondent to file an answer required by
this section within the time provided constitutes a waiver of such
respondent's right to appear and contest the allegations in the notice.
If no timely answer is filed, OFHEO's counsel of record 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
presiding officer shall file with the Director a recommended decision
containing the finding and the relief sought in the notice. Any final
order issued by the Director based upon a respondent's failure to
answer is deemed to be an order issued upon consent.
Sec. 1780.22 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 10 days after service of the amended notice,
whichever period is longer, unless the Director or presiding officer
orders otherwise for good cause shown.
(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
presiding officer may admit the evidence when admission is likely to
assist in adjudicating the merits of the action. The presiding officer
will do so freely when the determination of the merits of the action is
served thereby and the objecting party fails to satisfy the presiding
officer that the admission of such evidence would unfairly prejudice
that party's action or defense upon the merits. The presiding officer
may grant a continuance to enable the objecting party to meet such
evidence.
Sec. 1780.23 Failure to appear.
Failure of a respondent to appear in person at the hearing or by a
duly authorized representative 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 presiding officer shall
file with the Director a recommended decision containing the findings
and the relief sought in the notice.
Sec. 1780.24 Consolidation and severance of actions.
(a) Consolidation. On the motion of any party, or on the presiding
officer's own motion, the presiding officer 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. In the event of
consolidation under this section, appropriate adjustment to the
prehearing schedule must be made to avoid unnecessary expense,
inconvenience, or delay.
(b) Severance. The presiding officer may, upon the motion of any
party, sever the proceeding for separate resolution of the matter as to
any respondent only if the presiding officer finds that undue prejudice
or injustice to the moving party would result from not severing the
proceeding and such undue prejudice or injustice would outweigh the
interests of judicial economy and expedition in the complete and final
resolution of the proceeding.
1780.25 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 presiding officer. 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 presiding officer directs that such motion be reduced to writing.
(c) Filing of motions. Motions must be filed with the presiding
officer, except that following the filing of a recommended decision,
motions must be filed with the Director.
(d) Responses. (1) Except as otherwise provided herein; any party
may file a written response to a motion within 10 days after service of
any written motion, or within such other period of time as may be
established by the presiding officer or the Director. The presiding
officer shall not rule on any order 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
Secs. 1780.31 and 1780.32.
Sec. 1780.26 Discovery.
(a) Limits on discovery. Subject to the limitations set out in
paragraphs(b), (d), and (e) 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 unable form, as well as written material of all
kinds.
(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
[[Page 51038]]
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. 1780.27.
(c) Forms of discovery. Discovery shall be limited to requests for
production of documents for inspection and copying. No other form of
discovery shall be allowed. Discovery by use of interrogatories is not
permitted. This paragraph shall not be interpreted to require the
creation of a document.
(d) 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 provided by the Constitution, any
applicable act of Congress, or the principles of common law.
(e) 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 exception to
this time limit shall be permitted, unless the presiding officer finds
on the record that good cause exists for waiving the requirements of
this paragraph.
Sec. 1780.27 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. Copies of the request shall be served on all other parties. 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 of they shall be labeled and 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 more than 250
pages of copying, the requesting party shall pay for copying and
shipping charges. Copying charges are at the current rate per page
imposed by OFHEO at Sec. 1710.22(b)(2) of this chapter for requests for
documents filed under the Freedom of Information Act, 12 U.S.C. 552.\1\
The party to whom the request is addressed may require payment in
advance before producing the documents.
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\1\ At the time of publication OFHEO has not issued a final
regulation governing release of information. Until the release of
information regulation is final, charges shall be imposed at the
rate specified in the proposed regulation, 60 FR 25170 (May 11,
1995).
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(c) Obligation to update responses. A party who has responded to a
discovery request is not required to supplement the response, unless:
(1) The responding party learns that in some material respect the
information disclosed is incomplete or incorrect, and
(2) The additional or corrective information has not otherwise been
made known to the other parties during the discovery process or in
writing.
(d) Motions to strike or limit discovery requests. (1) Any party
that objects to a discovery request may, within 10 days of being served
with such request, file a motion in accordance with the provisions of
Sec. 1780.25 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
objection shall specify that portion. Any objections not made in
accordance with this paragraph and Sec. 1780.25 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 5 days of
service of the motion. No other party may file a response.
(e) Privilege. At the time other documents are produced, all
documents withheld on the grounds of privilege must be reasonably
identified, together with a statement of the basis for the assertion of
privilege. When similar documents that are protected by deliberate
process, attorney work-product, or attorney-client privilege are
voluminous, these documents may be identified by category instead of by
individual document. The presiding officer 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 10 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. 1780.25 for the issuance of a subpoena compelling production.
(2) The party who asserted the privilege or failed to comply with
the request may, within 5 days of service of a motion for the issuance
of a subpoena compelling production, file a written response to the
motion. No other party may file a response.
(g) Ruling on motions. After the time for filing responses to
motions pursuant to this section has expired, the presiding officer
shall rule promptly on all such motions. If the presiding officer
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 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 shall not be a basis for staying or continuing the
proceeding, unless otherwise ordered by the presiding officer.
Notwithstanding any other provision in this part, the presiding officer
may not release, or order a party to produce, documents withheld on
grounds of privilege if the party has stated to the presiding officer
its intention to file a timely motion for interlocutory review of the
presiding officer's order to produce the documents, until the motion
for interlocutory review has been decided.
(h) Enforcing discovery subpoenas. If the presiding officer 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 presiding officer
against a party who fails to produce or induces another to fail to
produce subpoenaed documents.
Sec. 1780.28 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the presiding officer
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 production in response to the subpoena.
[[Page 51039]]
(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. 1780.27. 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 presiding officer shall issue promptly any document
subpoena applied for under this section; except that, if the presiding
officer 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
may refuse to issue the subpoena or may issue it in a modified form
upon such conditions as may be determined by the presiding officer.
(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 10 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. 1780.27 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 presiding officer that 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 the subpoena. 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 presiding officer on a party who induces a failure to
comply with subpoenas issued under this section.
Sec. 1780.29 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 presiding officer for the
issuance of a subpoena, including a subpoena duces tecum, requiring the
attendance of the witness at a deposition. The presiding officer may
issue a deposition subpoena under this section upon a 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
be otherwise unavailable;
(ii) The witness' unavailability was not produced 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 anywhere within the
United States and its possessions and territories in which that witness
resides or has a regular place of employment or such other convenient
place as the presiding officer shall fix.
(3) Subpoenas must be issued promptly upon request, unless the
presiding officer determines that the request fails to set forth a
valid basis under this section for its issuance. Before making a
determination that there is no valid basis for issuing the subpoena,
the presiding officer shall require a written response from the party
requesting the subpoena or require attendance at a conference to
determine whether there is a valid basis upon which to issue the
requested subpoena.
(4) The party obtaining a deposition subpoena is responsible for
serving it on the witness and for serving copies of all parties. Unless
the presiding officer orders otherwise, no deposition under this
section shall be taken on fewer than 10 days' notice to the witness and
all parties. Deposition subpoenas may be served anywhere within the
United States or its possessions or territories on any person doing
business anywhere within the United States or its possessions or
territories, 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 under Sec. 1780.25 with the
presiding officer to quash or modify the subpoena prior to the time for
compliance specified in the subpoena, but not more than 10 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 objection might have been avoided if the objection had
been presented timely. All questions, answers and objections must be
recorded.
(2) Any party may move before the presiding officer for an order
compelling the witness to answer any questions the witness has refused
to answer or submit any evidence that, during the deposition, the
witness has refused to submit.
(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 subpoena issued pursuant to this section or with any order of
the presiding officer made upon motion under paragraph (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 that the presiding officer 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
presiding officer on a party who fails to comply with or induces a
failure to comply with a subpoena issued under this section.
Sec. 1780.30 Interlocutory review.
(a) General rule. The Director may review a ruling of the presiding
officer prior to the certification of the record to the Director only
in accordance with the procedures set forth in this section.
[[Page 51040]]
(b) Scope of review. The Director may exercise interlocutory review
of a ruling of the presiding officer if the Director 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 motion for interlocutory review shall be filed
by a party with the presiding officer within 10 days of his ruling.
Upon the expiration of the time for filing all responses, the presiding
officer shall refer the matter to the Director for final disposition.
In referring the matter to the Director, the presiding officer may
indicate agreement or disagreement with the asserted grounds for
interlocutory review of the ruling in question.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Director under this
section suspends or stays the proceeding unless otherwise ordered by
the presiding officer or the Director.
Sec. 1780.31 Summary disposition.
(a) In general. The presiding officer shall recommend that the
Director 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--
There is no genuine issue as to any material fact; or
(2) The movant 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
such 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 motion or
within such time period as allowed by the presiding officer, may file a
response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of material facts as to which the movant contends there is no
genuine issue. Such motion must be supported by documentary evidence,
which may take the form of admissions in pleadings, stipulations,
written interrogatory responses, depositions, investigatory
depositions, transcripts, affidavits and any other evidentiary
materials that the movant contends support its position. The motion
must also be accompanied by a brief containing the points and
authorities in support of the contention of the movant. Any party
opposing a motion for summary disposition must file a statement setting
forth those material facts as to which such 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 request of any party or on his own
motion, the presiding officer 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 presiding officer shall
determine whether the movant is entitled to summary disposition. If the
presiding officer determines that summary disposition is warranted, the
presiding officer shall submit a recommended decision to that effect to
the Director, under Sec. 1780.53. If the presiding officer finds that
the moving party is not entitled to summary disposition, the presiding
officer shall make a ruling denying the motion.
Sec. 1780.32 Partial summary disposition.
If the presiding officer determines that a party is entitled to
summary disposition as to certain claims only, he shall defer
submitting a recommended decision as to those claims. A hearing on the
remaining issues must be ordered. Those claims for which the presiding
officer has determined that summary disposition is warranted will be
addressed in the recommended decision filed at the conclusion of the
hearing.
Sec. 1780.33 Scheduling of prehearing conferences.
(a) Scheduling conference. Within 30 days of service of the notice
or order commencing a proceeding or such other time as the parties may
agree, the presiding officer shall direct representatives for all
parties to meet with him 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
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 presiding officer may, in addition
to the scheduling conference, on his own motion or at the request of
any party, direct representatives for the parties to meet with him (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;
(8) Such other matters as may aid in the orderly disposition of the
proceeding.
(c) Transcript. The presiding officer, in his 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 such party's expense.
(d) Scheduling or prehearing orders. Within a reasonable time
following the conclusion of the scheduling conference or any prehearing
conference, the presiding officer shall serve on each party an order
setting forth any agreements reached and any procedural determinations
made.
Sec. 1780.34 Prehearing submissions.
(a) Within the time set by the presiding officer, but in no case
later than 10 days before the start of the hearing, each party shall
serve on every other party the serving party's--
(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;
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(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. 1780.35 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 presiding officer 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 such
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, commonwealth, possession,
territory of the United States, or 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 or during a hearing. During a hearing, a party may make
an application for a subpoena orally on the record before the presiding
officer.
(3) The presiding officer shall promptly issue any hearing subpoena
applied for under this section; except that, if the presiding officer
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
may refuse to issue the subpoena or may issue the subpoena in a
modified form upon any conditions consistent with this subpart. Upon
issuance by the presiding officer, 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
such 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 responded 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 no more
than 10 days after the date of service of the subpoena upon the movant.
(c) Enforcing subpoenas. If an subpoenaed person fails to comply
with any subpoena issued pursuant to this section or any order of the
presiding officer that directs compliance with all or any portion of a
hearing subpoena, the subpoenaing party or any other aggrieved party
may seek enforcement of the subpoena pursuant to Sec. 1780.28(c). A
party's right to seek court enforcement of a hearing subpoena shall in
no way limit the sanctions that may be imposed by the presiding officer
on a party who induces a failure to comply with subpoenas issued under
this section.
Subpart C--Hearing and Posthearing Proceedings
Sec. 1780.50 Conduct of hearings.
(a) General rules. (1) Hearings shall be conducted in accordance
with 5 U.S.C. chapter 5 and so as to provide a fair and expeditious
presentation of the relevant disputed issues. Except as limited by this
subpart, 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. OFHEO's counsel of record shall present its
case-in-chief first, unless otherwise ordered by the presiding officer
or unless otherwise expressly specified by law or regulation. OFHEO's
counsel of record 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
or presentation of their cases, but if they do not agree, the presiding
officer shall fix the order.
(3) Examination of witnesses. Only one representative for each
party may conduct an examination of a witness, except that in the case
of extensive direct examination, the presiding officer may permit more
than one representative for the party presenting the witness to conduct
the examination. A party may have one representative conduct the direct
examination and another representative conduct re-direct examination of
a witness, or may have one representative conduct the cross examination
of a witness and another representative conduct the re-cross
examination of a witness.
(4) Stipulations. Unless the presiding officer directs otherwise,
all documents that the parties have stipulated as admissible shall be
admitted into evidence upon commencement of the hearing.
(b) Transcript. The hearing shall be recorded and transcribed. The
transcript shall be made available to any party upon payment of the
cost thereof. The presiding officer shall have authority to order the
record corrected, either upon motion to correct, upon stipulation of
the parties, or following notice to the parties upon the presiding
officer's own motion.
Sec. 1780.51 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 Procedures 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 that 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 presiding officer or the
Director shall appear on the record.
(3) If official notice is requested 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)(1) of this
section, any document, including a report of examination, oversight
activity, inspection, or visitation, prepared by OFHEO or by another
Federal or State financial institutions 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
[[Page 51042]]
other graphic material to summarize, illustrate, or simplify the
presentation of testimony. Such materials may, subject to the presiding
officer'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 in the
record.
(2) When an objection to a question or line of questioning is
sustained, the examining representative of record may make a specific
proffer on the record of what he expected to prove by the expected
testimony of the witness. The proffer may be by representation of the
representative or by direct interrogation of the witness.
(3) The presiding officer shall retain exhibits, adequately marked
for identification, for the record and transmit, such exhibits to the
Director.
(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 in accordance with Sec. 1780.29, 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 presiding officer 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. 1780.52 Post hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the presiding officer
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 presiding officer proposed findings of fact, proposed
conclusions of law and a proposed order within 30 days after the
parties have received notice that the transcript has been filed with
the presiding officer, unless otherwise ordered by the presiding
officer.
(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 posthearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document.
(3) Any party is deemed to have waived any issue not raised in
proposed findings or conclusions timely filed by that party.
(b) Reply briefs. Reply briefs may be filed within 15 days after
the date on which the parties' proposed findings and conclusions and
proposed order are due. Reply briefs must be limited strictly 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 posthearing brief may not file a reply brief.
(c) Simultaneous filing required. The presiding officer shall not
order the filing by any party of any brief or reply brief supporting
proposed findings and conclusions in advance of the other party's
finding of its brief.
Sec. 1780.53 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. 1780.52(b), the presiding officer shall file with and certify to
the Director, for decision, the record of the proceeding. The record
must include the presiding officer's recommended decision, recommended
findings of fact and 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 presiding officer shall serve upon
each party the recommended decision, recommended findings and
conclusions, and proposed order.
(b) Filing of index. At the same time the presiding officer files
with and certifies to the Director for final determination the record
of the proceeding, the presiding officer shall furnish to the Director
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 presiding officer 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; and each
exhibit introduced and admitted into evidence after the completion of
the hearing; and each exhibit introduced but not admitted into evidence
after the completion of the hearing.
Sec. 1780.54 Exceptions to recommended decision.
(a) Filing exceptions. Within 30 days after service of the
recommended decision, recommended findings and conclusions, and
proposed order under Sec. 1780.53, a party may file with the Director
written exceptions to the presiding officer's recommended decision,
recommended findings and conclusions, or proposed order; to the
admission or exclusion of evidence; or to the failure of the presiding
officer 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. (a) 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 Director if the party
taking exception had an opportunity to raise the same objection, issue,
or argument before the presiding officer 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 presiding officer'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
presiding officer'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. Exceptions and briefs in support shall not
exceed a total of 30 pages, except by leave of the Director on motion.
(3) One reply brief may be submitted by each party within 10 days
of service of exceptions and briefs in support of exceptions. Reply
briefs shall not exceed 15 pages, except by leave of the Director on
motion.
[[Page 51043]]
Sec. 1780.55 Review by Director.
(a) Notice of submission to the Director. When the Director
determines that the record in the proceeding is complete, the Director
shall serve notice upon the parties that the proceeding has been
submitted to the Director for final decision.
(b) Oral argument before the Director. Upon the initiative of the
Director or on the written request of any party filed with the Director
within the time for filing exceptions under Sec. 1780.54, the Director
may order and hear oral argument on the recommended findings,
conclusions, decision and order of the presiding officer. 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
Director's final decision. Oral argument before the Director must be
transcribed.
(c) Director's final decision. (1) Decisional employees may advise
and assist the Director in the consideration and disposition of the
case. The final decision of the Director will be based upon review of
the entire record of the proceeding, except that the Director 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 Director shall render a final decision and issue an
appropriate order within 90 days after notification of the parties that
the case has been submitted for final decision, unless the Director
orders that the action or any aspect thereof be remanded to the
presiding officer for further proceedings. Copies of the final decision
and order of the Director shall be served upon each party to the
proceeding and upon other persons required by statute.
Sec. 1780.56 Exhaustion of administrative remedies.
To exhaust administrative remedies as to any issue on which a party
disagrees with the presiding officer's recommendations, a party must
file exceptions with the Director under Sec. 1780.54. A party must
exhaust administrative remedies as a precondition to seeking judicial
review of any decision issued under this subpart.
Sec. 1780.57 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision and order of the Director may not, unless specifically ordered
by the Director or a reviewing court, operate as a stay of any order
issued by the Director. The Direct may, in his discretion and on such
terms as he finds just, stay the effectiveness of all or any part of an
order of the Director pending a final decision on a petition for review
of that order.
Subpart D--Rules of Practice Before the Office of Federal Housing
Enterprise Oversight
Sec. 1780.70 Scope.
This subpart contains rules governing practice by parties or their
representatives before OFHEO. This subpart addresses the imposition of
sanctions by the presiding officer or the Director against parties or
their representatives in an adjudicatory proceeding under this part.
This subpart also covers other disciplinary sanctions--censure,
suspension or disbarment--against individuals who appear before OFHEO
in a representational capacity either in an adjudicatory proceeding
under this part or in any other matters connected with presentations to
OFHEO relating to a client's or other principal's rights, privileges,
or liabilities. This representation includes, but is not limited to,
the practice of attorneys and accountants. Employees of OFHEO are not
subject to disciplinary proceedings under this subpart.
Sec. 1780.71 Definitions.
Practice before OFHEO for the purposes of this subpart, includes,
but not is limited to, transacting any business with OFHEO as counsel,
representative or agent for any other person, unless the Director
orders otherwise. Practice before OFHEO also includes the preparation
of any statement, opinion, or other paper by a counsel, representative
or agent that is filed with OFHEO in any certification, notification,
application, report, or other document, with the consent of such
counsel, representative or agent. Practice before OFHEO does not
include work prepared for an Enterprise solely at its request for use
in the ordinary course of its business.
Sec. 1780.72 Appearance and practice in adjudicatory proceedings.
(a) Appearance before OFHEO or a presiding officer. (1) By
attorneys. A party may be represented by an attorney who is a 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 and who is not currently suspended or disbarred
from practice before OFHEO.
(2) By nonattorneys. An individual may appear on his own behalf. A
member of a partnership may represent the partnership and a duly
authorized officer, director, employee, or other agent of any
corporation or other entity not specifically listed herein may
represent such operations or other entity; provided that such officer,
director, employee, or other agent is not currently suspended or
disbarred from practice before OFHEO. A duly authorized officer or
employee of any government unit, agency, or authority may represent
that unit, agency, or authority.
(b) Notice of appearance. Any person appearing in a representative
capacity on behalf of a party, including OFHEO, shall execute and file
a notice of appearance with the presiding officer at or before the time
such person submits papers or otherwise appears on behalf of a party in
the adjudicatory proceeding. Such notice of appearance shall 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
representative thereby agrees and represents that he 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 presiding officer, continue to accept service until a new
representative has filed a notice of appearance or until the
represented party indicates that he or she will proceed on a pro se
basis. Unless the representative filing the notice is an attorney, the
notice of appearance shall also be executed by the person represented
or, if the person is not an individual, by the chief executive officer,
or duly authorized officer of that person.
Sec. 1780.73 Conflicts of interest.
(a) Conflict of interest in representation. No representative shall
represent another person in an adjudicatory proceeding if it reasonably
appears that such representation may be limited materially by that
representative's responsibilities to a third person or by that
representative's own interests. The presiding officer 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 or
other
[[Page 51044]]
representative represents two or more parties to an adjudicatory
proceeding or also represents a nonparty on a matter relevant to an
issue in the proceeding, that representative must certify in writing at
the time of filing the notice of appearance required by Sec. 1780.72--
(1) That the representative has personally and fully discussed the
possibility of conflicts of interest with each such party and nonparty;
(2) That each such party and nonparty 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. 1780.74 Sanctions.
(a) General rule. Appropriate sanctions may be imposed during the
course of any proceeding when any party or representative of record has
acted or failed to act in a manner required by applicable statute,
regulation, or order, and that act or failure to act--
(1) Constitutes contemptuous conduct;
(2) Has caused some other party material and substantive injury,
including, but not limited to, incurring expenses including attorney's
fees or experiencing prejudicial delay;
(3) Is a clear and unexcused violation of an applicable statute,
regulation, or order; or
(4) Has delayed the proceeding unduly.
(b) Sanctions. Sanctions that may be imposed include, but are not
limited to, any one or more of the following:
(1) Issuing an order against a party;
(2) Rejecting or striking any testimony or documentary evidence
offered, or other papers filed, by the party;
(3) Precluding the party from contesting specific issues or
findings;
(4) Precluding the party from offering certain evidence or from
challenging or contesting certain evidence offered by another party;
(5) Precluding the party from making a late filing or conditioning
a late filing on any terms that are just;
(6) Assessing reasonable expenses, including attorney's fees,
incurred by any other party as a result of the improper action or
failure to act.
(c) Procedure for imposition of sanctions. (1) The presiding
officer, on the motion of any party, or on his own motion, may impose
any sanction authorized by this section. The presiding officer shall
submit to the Director for final ruling any sanction that would result
in a final order that terminates the case on the merits or is otherwise
dispositive of the case.
(2) No sanction authorized by this section, other than refusing to
accept late papers, shall be imposed without prior notice to all
parties and an opportunity for any representative or party against whom
sanctions would be imposed to be heard. The presiding officer shall
determine and direct the appropriate notice and form for such
opportunity to be heard. The opportunity to be heard may be limited to
an opportunity to respond verbally, immediately after the act or
inaction in question is noted by the presiding officer.
(3) For purposes of interlocutory review, motions for the
imposition of sanctions by any party and the imposition of sanctions
shall be treated the same as motions for any other ruling by the
presiding officer.
(4) Nothing in this section shall be read to preclude the presiding
officer or the Director from taking any other action or imposing any
other restriction or sanction authorized by any applicable statute or
regulation.
Sec. 1780.75 Censure, suspension, disbarment and reinstatement.
(a) Discretionary censure, suspension and disbarment. (1) The
Director may censure any representative or other individual or suspend
or revoke the privilege to appear or practice before OFHEO of any
representative or other individual if, after notice of and opportunity
for hearing in the matter, that individual is found by the Director--
(i) Not to possess the requisite qualifications or competence to
represent others;
(ii) To be seriously lacking in character or integrity or to have
engaged in material unethical or improper professional conduct;
(iii) To have caused unfair and material injury or prejudice to
another party, such as prejudicial delay or unnecessary expenses
including attorney's fees;
(iv) To have engaged in, or aided and abetted, a material and
knowing violation of the 1992 Act, the Federal Home Loan Mortgage
Corporation Act, the Federal National Mortgage Association Charter Act
or the rules or regulations issued under those statutes or any other
law or regulation governing Enterprise operations;
(v) To have engaged in contemptuous conduct before OFHEO;
(vi) With intent to defraud in any manner, to have willfully and
knowingly deceived, misled, or threatened any client or prospective
client; or
(vii) Within the last 10 years, to have been convicted of an
offense involving moral turpitude, dishonesty or breach of trust, if
the conviction has not been reversed on appeal. A conviction within the
meaning of this paragraph shall be deemed to have occurred when the
convicting court enters its judgment or order, regardless of whether an
appeal is pending or could be taken and includes a judgment or an order
on a plea of nolo contendere or on consent, regardless of whether a
violation is admitted in the consent.
(2) Suspension or revocation on the grounds set forth in paragraphs
(a)(1) (ii), (iii), (iv), (v), (vi), and (vii) of this section shall
only be ordered upon a further finding that the individual's conduct or
character was sufficiently egregious as to justify suspension or
revocation. Suspension or disbarment under this paragraph shall
continue until the applicant has been reinstated by the Director for
good cause shown or until, in the case of a suspension, the suspension
period has expired.
(3) if the final order against the respondent is for censure, the
individual may be permitted to practice before OFHEO, but such
individual's future representations may be subject to conditions
designed to promote high standards of conduct. If a written letter of
censure is issued, a copy will be maintained in OFHEO's files.
(b) Mandatory suspension and disbarment. (1) Any counsel who has
been and remains suspended or disbarred by a court of the United States
or of any State, commonwealth, possession, territory of the United
States or the District of Columbia; any accountant or other licensed
expert whose license to practice has been revoked in any State,
commonwealth, possession, territory of the United or the District of
Columbia; any person who has been and remains suspended or barred from
practice before the Department of Housing and Urban Development, the
Office of the Comptroller of the Currency, the Board of Governors of
the Federal Reserve System, the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation, the National Credit Union
Administration, the Federal Housing Finance Board, the Farm Credit
Administration, the Securities and Exchange Commission, or the
Commodity Futures Trading Commission is also suspended automatically
from appearing or practicing before OFHEO. A disbarment or suspension
within the meaning of this paragraph shall be deemed to have occurred
when the disbarring or suspending agency or tribunal enters its
[[Page 51045]]
judgment or order, regardless of whether an appeal is pending or could
be taken and regardless of whether a violation is admitted in the
consent.
(2) A suspension or disbarment from practice before OFHEO under
paragraph (b)(1) of this section shall continue until the person
suspended or disbarred is reinstated under paragraph (d)(2) of this
section.
(c) Notices to be filed. (1) Any individual appearing or practicing
before OFHEO who is the subject of an order, judgment, decree, or
finding of the types set forth in paragraph (b)(1) of this section
shall file promptly with the Director a copy thereof, together with any
related opinion or statement of the agency or tribunal involved.
(2) Any individual appearing or practicing before OFHEO who is or
within the last 10 years has been convicted of a felony or of a
misdemeanor that resulted in a sentence of prison term or in a fine or
restitution order totaling more than $5,000 shall file a notice
promptly with the Director. The notice shall include a copy of the
order imposing the sentence or fine, together with any related opinion
or statement of the court involved.
(d) Reinstatement. (1) Unless otherwise ordered by the Director, an
application for reinstatement for good cause may be made in writing by
a person suspended or disbarred under paragraph (a)(1) of this section
at any time more than 3 years after the effective date of the
suspension or disbarment and, thereafter, at any time more than 1 year
after the person's most recent application for reinstatement. An
applicant for reinstatement under this paragraph (d)(1) of this section
may, in the Director's sole discretion, be afforded a hearing.
(2) An application for reinstatement for good cause by any person
suspended or disbarred under paragraph (b)(1) of this section may be
filed at any time, but not less than 1 year after the applicant's most
recent application. An applicant for reinstatement for good cause under
this paragraph (d)(2) may, in the Director's sole discretion, be
afforded a hearing. However, if all the grounds for suspension or
disbarment under paragraph (b)(1) of this section have been removed by
a reversal of the order of suspension or disbarment or by termination
of the underlying suspension or disbarment, any person suspended or
disbarred under paragraph (b)(1) of this section may apply immediately
for reinstatement and shall be reinstated by OFHEO upon written
application notifying OFHEO that the grounds have been removed.
(e) Conferences. (1) General. The presiding officer may confer with
a proposed respondent concerning allegations of misconduct or other
grounds for censure, disbarment or suspension, regardless of whether a
proceeding for censure, disbarment or suspension has been commenced. If
a conference results in a stipulation in connection with a proceeding
in which the individual is the respondent, the stipulation may be
entered in the record at the request of either party to the proceeding.
(2) Resignation or voluntary suspension. In order to avoid the
institution of or a decision in a disbarment or suspension proceeding,
a person who practices before OFHEO may consent to censure, suspension
or disbarment from practice. At the discretion of the Director, the
individual may be censured, suspended or disbarred in accordance with
the consent offered.
(f) Hearings under this section. Hearings conducted under this
section shall be conducted in substantially the same manner as other
hearings under this part, provided that in proceedings to terminate an
existing OFHEO suspension or disbarment order, the person seeking the
termination of the order shall bear the burden of going forward with an
application and with proof and that the Director may, in the Director's
sole discretion, direct that any proceeding to terminate an existing
suspension or disbarment by OFHEO be limited to written submissions.
All hearings held under this section shall be closed to the public
unless the Director, on the Director's own motion or upon the request
of a party, otherwise directs.
(g) Sanctions for contemptuous conduct. If, during the course of
any proceeding, a presiding officer finds any representative or any
individual representing himself to have engaged in contemptuous
conduct, the presiding officer may summarily suspend that individual
from participating in that or any related proceeding or impose any
other appropriate sanction. Contemptuous conduct includes dilatory,
obstructionist, egregious, contumacious, unethical, or other improper
conduct at any phase of any adjudicatory proceeding.
Mark A. Kinsey,
Acting Director, Office of Federal Housing Enterprise Oversight.
[FR Doc. 98-25527 Filed 9-23-98; 8:45 am]
BILLING CODE 4220-01-M