[Federal Register Volume 64, Number 220 (Tuesday, November 16, 1999)]
[Rules and Regulations]
[Pages 62096-62103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29830]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 308 and 330

RIN 3064-AC30


Technical Amendments to FDIC Regulations Relating to Rules of 
Practice and Procedure and Deposit Insurance Coverage

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is amending various sections of its Local Rules of 
Practice and Procedure (Local Rules) governing administrative 
enforcement proceedings. The amendments are generally technical in 
nature, and are necessary to ensure that the rules are consistent with 
statutory provisions and procedural changes that have occurred since 
the rules were first adopted. The FDIC also is making a conforming, 
technical amendment that was inadvertently omitted from recent 
revisions to the FDIC's deposit insurance regulations.

EFFECTIVE DATE: November 16, 1999.

FOR FURTHER INFORMATION CONTACT: On the Part 308 amendments, Andrea 
Winkler, Counsel, Legal Division (202) 898-3727; on the Part 330 
amendment, Joseph A. DiNuzzo, Counsel, Legal Division (202) 898-7349, 
Federal Deposit Insurance Corporation, 550 17th Street, N.W., 
Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION:

I. Part 308 Amendments

A. Background

    On August 9, 1991, the federal banking agencies \1\ published one 
set of final uniform rules and procedures (Uniform Rules) for formal 
administrative enforcement hearings required to be conducted on the 
record under the Administrative Procedure Act (APA)(5 U.S.C. 554-
557).\2\ In addition, each agency published separate ``Local Rules'' 
applicable to that agency to supplement the Uniform Rules in order to 
address some or all of the following: formal enforcement actions not 
within the scope of the Uniform Rules, informal actions which are not 
subject to the APA, and procedures to supplement or facilitate the 
processing of administrative enforcement actions within the FDIC and 
the other agencies.
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    \1\ The agencies were the FDIC, Office of the Comptroller of the 
Currency, Board of Governors of the Federal Reserve System, Office 
of Thrift Supervision and National Credit Union Administration.
    \2\ 56 FR 37975 (1991) (amended at 61 FR 20347 (1996)). The 
uniform rules, which are contained in subpart A of part 308 ((12 CFR 
part 308, subpart A), are intended to standardize procedures for 
actions common to at least four of the five Agencies.
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B. Summary of the Amendments

    The FDIC is amending various subparts of its Local Rules as 
described below.
    Authority. The section listing the authority for the Uniform Rules 
and Local Rules has been amended to incorporate references to the cross 
guaranty provisions of the Federal Deposit Insurance Act (FDIA) (12 
U.S.C. 1815(e)), which were initially omitted by technical oversight, 
and to the prompt corrective action and safety and

[[Page 62097]]

soundness provisions of the FDIA (12 U.S.C. 1831o and 1831p-1), which 
were enacted after the Local Rules were first promulgated.

Subpart B--General Rules of Procedure

    Section 308.101. As presently written, Sec. 308.101, ``Scope of 
Local Rules,'' makes clear that the rules contained in subpart A, 
``Uniform Rules,'' and subpart B of the Local Rules, ``General Rules of 
Procedure,'' do not apply to subparts D through P of part 308 unless 
specifically provided. Since 1991, three additional subparts have been 
added--subpart Q, which pertains to prompt corrective action, was added 
in 1992 (57 FR 48426); subpart R, which pertains to safety and 
soundness compliance plans, was added in 1995 (60 FR 35684); and 
subpart S, which pertains to bank clearing agencies, was added in 1996 
(61 FR 48403). Therefore, a technical amendment is made to include a 
reference to those subparts to indicate that subparts A and B do not 
apply to subparts D through S of part 308 unless specifically provided.
    Section 308.102. Section 308.102 sets forth the authority of the 
Board of Directors and Executive Secretary. Since the enactment of the 
Local Rules, certain authority to act upon routine and procedural 
matters in enforcement cases has been delegated by Resolution of the 
Board of Directors to the Executive Secretary, Deputy Executive 
Secretary and or the Assistant Executive Secretary (Operations). In 
exercising such delegated authority, those persons can only act upon 
the advice and recommendations of the Deputy General Counsel for 
Litigation, or, in his absence, the Assistant General Counsel, Trial 
Litigation Section.
    The delegation resulted from the fact that there are a variety of 
procedural matters that arise in enforcement cases that are of a 
technical legal nature, subject to well-settled case law and that do 
not involve important policy issues. Thus, the authority to issue 
rulings in the context of sections 7(j), 8, 18(j), 19, 32 and 38 of the 
FDIA (12 U.S.C. 1817(j), 1818, 1828(j), 1829, 1831i and 1831o 
concerning denials of requests for private hearing, interlocutory 
appeals; stays pending judicial review; reopenings of the record and/or 
remands of the record to the administrative law judge; supplementation 
of the evidence in the record; all remands from the courts of appeals 
not involving substantive issues; extensions of stays of orders 
terminating deposit insurance; and all matters, including final 
decisions, in proceedings under section 8(g) of the FDIA (12 U.S.C. 
1818(g)) have been delegated.
    The authority to act on such matters was delegated in order to 
allow the Board to concentrate its limited available time upon 
important policy matters. A delegation, which initially was a more 
limited delegation concerning interlocutory and procedural matters, 
first became effective in 1992, and was later expanded in 1997, because 
it worked well in allowing the FDIC to operate more efficiently. 
Therefore, Sec. 308.102 has been revised to reflect the current 
delegations and practice.

Subpart C--Rules of Practice Before the FDIC and Standards of 
Conduct

    Section 308.109. This section, which pertains to suspension and 
disbarment, authorizes summary suspension from practice in a particular 
FDIC matter based upon contemptuous conduct in that matter. Section 
308.109(b) of the regulations provides for mandatory and automatic 
suspension and disbarment of attorneys under certain circumstances and 
gives the Board of Directors discretion to suspend and disbar under 
other circumstances. The current rule is somewhat confusing insofar as 
it provides simply that an application to be reinstated may be filed at 
any time not less than one year after the applicant's most recent 
application. The FDIC intends that once suspended or disbarred from 
practice before the FDIC by the Board, a counsel may not make an 
application for reinstatement for at least one year, and thereafter, 
may make a new request for reinstatement no sooner than one year after 
the counsel's most recent reinstatement application. A technical, 
clarifying amendment reflecting this intent is made.
    An applicant for reinstatement under either the discretionary or 
mandatory suspension and disbarment provisions may, in the Board's sole 
discretion, be afforded a hearing. Section 308.109(c) provides that 
hearings conducted pursuant to this section shall be handled in the 
same manner as other hearings under the Uniform Rules, except that in 
proceedings to terminate an existing FDIC suspension or disbarment 
order, the person seeking the termination shall bear the burden of 
going forward with the application and with proof, and the Board of 
Directors may limit any such hearings to written submissions. A 
clarifying amendment is proposed to make explicit that the applicant 
has the burden of proof with regard to the grounds supporting the 
application.

Subpart G--Rules and Procedures Applicable to Proceedings Relating 
to Cease-and-Desist Orders

    Section 308.127. This section defines the scope of the Uniform and 
Local Rules as they pertain to cease-and-desist proceedings under 
section 8(b) of the FDIA (12 U.S.C. 1818(b)). Paragraph (a) contains a 
statement regarding the applicability of those rules to temporary 
cease-and-desist proceedings under section 8(c) of the FDIA (12 U.S.C. 
1818(c)). Insofar as Sec. 308.131 pertains specifically to temporary 
cease-and-desist orders, and paragraph (c) of that section indicates 
that the Uniform Rules and subpart B of the Local Rules do not apply to 
the issuance of temporary cease-and-desist orders pursuant to section 
8(c) of the FDIA, that same language in Sec. 308.127(a) is redundant, 
and a technical amendment deleting that phrase in Sec. 308.127(a) has 
been made.

Subpart H--Rules and Procedures Applicable to Proceedings Relating 
to Assessment and Collection of Civil Money Penalties for Violation 
of Cease-and-Desist Orders and of Certain Federal Statutes, 
Including Call Report Penalties

    Section 308.132. The FDIC is making a technical correction to 
Sec. 308.132(c)(3) which inadvertently refers to the Debt Collection 
Act rather than the appropriate title of that law which is the Debt 
Collection Improvement Act.

Subpart K--Procedures Applicable to Investigations Pursuant to 
Section 10(c) of the FDIA

    Section 308.145. A technical amendment is made to correct the 
citation to Sec. 303.9, which is now codified at Sec. 303.272.
    Section 308.148. A technical amendment is made to paragraph (b) to 
correct the citation to Sec. 308.6, which is incorrectly cited as 
Sec. 308.06. A similar amendment is made to paragraph (d) to correct 
the citation to Sec. 308.8, which is incorrectly cited as Sec. 308.08.

Subpart L--Procedures and Standards Applicable to a Notice of 
Change in Senior Executive Officer or Director Pursuant to Section 
32 of the FDIA

    Section 308.151. Subpart L governs proceedings for the disapproval 
of candidates for senior executive officer and director. Section 2208 
of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 
(Pub. L. 104-208) amended the circumstances that require an insured 
state nonmember bank to notify the FDIC of a proposed addition or 
employment of a director or senior executive officer. After 1996,

[[Page 62098]]

there is no longer a requirement that a bank which has been chartered 
less than two years or which has undergone a change in control within 
the preceding two years submit such a notice. Instead, the law now 
requires that a bank must file a prior notice where (i) it is not in 
compliance with all minimum capital requirements applicable to it as 
determined by the FDIC on the basis of such institution's most recent 
report of condition or report of examination or inspection; (ii) the 
bank is in a troubled condition; or (iii) the FDIC determines, in 
connection with the review of a plan required under section 38 of the 
FDIA (12 U.S.C. 1831o) or otherwise, that such prior notice is 
appropriate. Section 308.151(a) has been revised to incorporate these 
statutory changes.
    Sections 308.152, 308.153 and 308.155. Technical amendments to 
correct grammatical errors or incorrect citations to other parts of the 
regulations are made.

Subpart M--Procedures and Standards Applicable to an Application 
Pursuant to Section 19 of the FDIA

    Subpart M governs procedures for FDIC approval of applications 
filed pursuant to section 19 of the FDIA (12 U.S.C. 1829) by persons 
convicted of certain crimes who wish to participate in banking. This 
subpart has been revised in order to comply with the changes to section 
19 made by the Housing and Community Development Act (Pub. L. 102-550) 
which added convictions for money laundering to the list of covered 
crimes for which an application must be filed, and to make this subpart 
consistent with current policy and practice, especially in light of the 
FDIC's Statement of Policy on Section 19 of the FDI Act which became 
effective December 1, 1998 (63 FR 66177 (1998)).
    Sections 308.156 and 308.157. These sections pertain to the scope 
of the regulation and relevant considerations for granting 
applications. Section 308.156 has been amended to reflect that under 
current policy and consistent with the revised regulations, an insured 
depository institution may file an application on behalf of an 
individual, or in certain cases, an individual may directly file an 
application. Both sections have been amended to include convictions for 
money laundering consistent with the statutory language of section 19.
    Section 308.158. Section 308.158(a) of subpart M directs that 
applications be filed with the appropriate FDIC regional office, but it 
is silent as to who must file the application. Longstanding FDIC policy 
has been that an application must be filed by the insured depository 
institution at which the convicted individual intends to be employed or 
otherwise participate, or which the individual intends to own or 
control. Two recent policy changes affect filing requirements. The FDIC 
has adopted an approach of granting blanket approval, and not requiring 
an application, in cases in which an individual meets the criteria of 
the de minimis exception set forth in the FDIC's Statement of Policy on 
Section 19 of the FDI Act (63 FR 66177 (1998)). In addition, the FDIC 
will consider waivers of the institution filing requirement, on a case-
by-case basis, in instances in which an individual can show substantial 
good cause why an application should be granted.
    Therefore, paragraph (a) has been amended to clarify that an 
institution must file the application unless a waiver is granted for 
substantial good cause shown which allows the individual to file, or 
unless no application is required because the de minimis exception 
applies. Paragraph (b) has been amended to clarify that the prohibition 
pursuant to section 19 shall continue until the individual has been 
reinstated by the Board of Directors or its designee for good cause 
shown. In addition, a new paragraph (c) has been added to reflect the 
current policy and practice regarding the filing requirements and 
delegations of authority for waiver applications.
    Section 308.160. This section pertains to the hearing procedure in 
section 19 cases. A technical correction has been made to change the 
reference to 308.06 to 308.6.

Subpart N--Rules and Procedures Applicable to Proceedings Relating 
to Suspension, Removal, and Prohibition Where a Felony Is Charged

    Subpart N governs proceedings for suspension, removal, and 
prohibition pursuant to section 8(g) of the FDIA (12 U.S.C. 1818(g)) 
where a felony is charged. The changes in subpart N were made for 
purposes of clarity and to reflect the amendments to section 8(g) made 
by the Housing and Community Development Act of 1992 (1992 
Amendments)(Pub. L. 102-550).
    Section 308.161. This section sets forth the scope of the rules as 
they apply to suspension, removal and prohibition proceedings. Where an 
institution-affiliated party is charged in any information, indictment, 
or complaint with the commission of, or participation in, a crime 
involving dishonesty or breach of trust punishable by imprisonment 
exceeding one year under state or federal law, section 8(g) of the FDIA 
allows the FDIC to suspend that individual or to prohibit that party, 
absent prior written FDIC consent, from further participation in the 
conduct of the affairs of the depository institution, if his or her 
continued service or participation poses a threat to the interests of 
the depository institution's depositors or threatens to impair public 
confidence in the depository institution. The 1992 Amendments added, as 
a cause justifying suspension, an individual being charged with the 
commission of a criminal violation involving money laundering (section 
1956, 1957, or 1960 of Title 18) or violations of the Bank Secrecy Act 
(section 5322 or 5324 of Title 31).
    In addition, where a conviction or an agreement to enter a pre-
trial diversion or other similar program has been entered against an 
institution-affiliated party in connection with a crime involving 
dishonesty or breach of trust punishable by imprisonment exceeding one 
year under state or federal law, and the conviction is not subject to 
further appellate review, the FDIC may remove or prohibit the party, 
absent prior FDIC consent, from further participation in the conduct of 
the affairs of the depository institution, if continued service or 
participation by such party poses a threat to the interests of the 
depository institution's depositors or threatens to impair public 
confidence in the depository institution. The 1992 Amendments added as 
a mandatory cause of removal or prohibition, the entry of a judgment of 
conviction or an agreement to enter a pre-trial diversion or other 
similar program against such party in connection with a criminal 
violation of section 1956, 1957, or 1960 of Title 18 or section 5322 or 
5324 of Title 31. Amendments to this section reflect these statutory 
changes.
    Section 308.162. This section sets forth relevant considerations 
for the issuance of a suspension, removal or prohibition. Consistent 
with the statutory changes described above, whether the alleged offense 
is a criminal violation of section 1956, 1957, or 1960 of Title 18 or 
section 5322 or 5324 of Title 31 has been added as a factor.
    Section 308.163. This section pertains to orders of removal or 
prohibition. Amendments have been proposed to incorporate the 1992 
Amendments which direct that an order be entered where a final judgment 
of conviction is entered against the individual for a criminal 
violation of section 1956, 1957, or 1960 of Title 18 or section 5322 or 
5324 of Title 31.
    Section 308.164. A technical amendment has been made to correct the 
citation to Sec. 308.6 of the Uniform Rules.

[[Page 62099]]

Subpart P--Rules and Procedures Relating to the Recovery of 
Attorney Fees and Other Expenses

    Subpart P governs proceedings relating to the recovery of attorney 
fees and other expenses under the Equal Access to Justice Act (EAJA) (5 
U.S.C. 504). The revisions to this subpart are made to conform to 
statutory changes made by the Small Business Regulatory Enforcement 
Fairness Act (1996 Amendments) (Pub. L. 104-121, 110 Stat. 857 (1996)). 
The EAJA allows individuals and small businesses who have been sued by 
the government to recover their attorneys fees and costs if they 
prevailed in the suit, unless the agency's position was substantially 
justified or special circumstances make an award unjust. The 1996 
Amendments added a new grounds for recovery in an adversary 
adjudication arising from an agency action to enforce a party's 
compliance with a statutory or regulatory requirement where the demand 
by the agency is substantially in excess of the decision of the 
adjudicative officer and is unreasonable when compared with such 
decision under the facts or circumstances of the case. A party may seek 
such an award unless the party has committed a willful violation of law 
or otherwise acted in bad faith, or special circumstances make an award 
unjust. Fees and expenses awarded under the foregoing grounds shall be 
paid only as a consequence of appropriations paid in advance. In 
addition, the 1996 Amendments added ``small entities'' to the 
applicants that are eligible for an award pursuant to the new 
provisions and increased the maximum amount of attorneys fees for all 
EAJA actions from $75.00 per hour to $125.00 per hour.
    Section 308.170. This section pertains to the filing, content, and 
service of documents. Proposed amendments have been made to clarify 
filing requirements and to include in this section a reference to 
applications concerning excessive demands.
    Section 308.171. This section pertains to responses to 
applications. It has been revised to incorporate references to answers 
and replies in applications involving excessive demands.
    Section 308.172. This section addresses the eligibility of 
applicants. It has been amended to add a small entity as defined in 5 
U.S.C. 601 as an eligible applicant for awards based upon excessive 
demands.
    Section 308.174. This section sets the standards for awards. It has 
been amended to reference applications based upon excessive awards.
    Section 308.175. This section addresses the measure of awards and 
has been amended to change references to the maximum amount of 
attorneys fees that may be awarded in an EAJA claim from $75.00 per 
hour to $125.00 per hour, and to include a statement incorporating the 
1996 Amendments that fees and expenses related to defending against an 
excessive demand shall be paid only as a consequence of appropriations 
paid in advance.
    Section 308.176. This section contains guidelines for the contents 
of applications for awards. It has been amended to include requirements 
relevant to an application concerning an excessive award.
    Section 308.179. This section pertains to settlement. It has been 
amended to indicate that while a statement of intent to negotiate a 
settlement should be filed with the Executive Secretary, a copy of a 
statement should also be filed with the administrative law judge. This 
is to ensure that, in cases in which an answer has not yet been filed, 
the administrative law judge will be aware of potential settlement. In 
addition, the time within which an answer must be filed pending 
settlement negotiations has been extended from 20 to 30 days. This time 
frame better reflects the timetable within which settlements are able 
to be approved.

II. Part 330 Amendment

    Effective April 1, 1999, the FDIC revised its deposit insurance 
rules on the coverage of joint accounts and payable-on-death accounts 
(64 FR 15653, April 1, 1999). In amending the joint account provisions, 
however, the FDIC failed to revise Sec. 330.9(a) of the FDIC's 
regulations (12 CFR 330.9(a)) to indicate that joint accounts comprised 
of community property funds would continue to be treated as any other 
type of qualifying joint account. The final rule makes this technical, 
conforming amendment to Sec. 330.9(a).

III. Exemption From Public Notice and Comment

    Chapter 6 of Title 5 of the United States Code which pertains to 
``The Analysis of Regulatory Functions'' does not apply to the final 
rule. The revisions to part 308 and part 330 do not constitute a 
``rule'' for which the FDIC is required to publish a general notice of 
proposed rulemaking under section 553(b) of Title 5 of the United 
States Code. This is because the final rule contains only 
clarifications and technical changes intended to bring the agency's 
rules of practice and procedure and deposit insurance rules into 
conformity with statutory changes or current agency practices and 
procedures. Thus, the FDIC has determined for good cause that public 
notice and comment are unnecessary and that the rule should be 
published in final form.

IV. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an 
agency to publish an initial regulatory flexibility analysis, except to 
the extent provided in 5 U.S.C. 605(b), whenever the agency is required 
to publish a general notice of proposed rulemaking for a proposed rule. 
For the reasons discussed above, the FDIC is publishing this rule as a 
final rule, for which no publication of a general notice of proposed 
rulemaking is necessary. No regulatory flexibility analysis is 
required.

V. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the final 
rule is not a ``major rule'' within the meaning of the relevant 
sections of the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA) (5 U.S.C. 801 et seq.). As required by SBREFA, the FDIC 
will file the appropriate reports with Congress and the General 
Accounting Office so that the final rule may be reviewed.

VI. Paperwork Reduction Act

    No collections of information pursuant to the Paperwork Reduction 
Act of 1980 (44 U.S.C. 3501 et seq.) are contained in this rule. 
Consequently, no information has been submitted to the Office of 
Management and Budget for review.

VII. Assessment of Impact of Federal Regulation on Families

    The FDIC has determined that this regulation will not affect family 
well-being within the meaning of section 654 of the Treasury Department 
Appropriations Act of 1999, enacted as part of the Omnibus Consolidated 
and Emergency Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681).

VIII. Effective Date

    The APA (5 U.S.C. 551 et seq.) provides that regulations shall 
become effective thirty (30) days after their publication in the 
Federal Register (5 U.S.C. 553). One exception to this requirement is 
for a finding of ``good cause''(Id. at 553(d)). For the final rule, the 
Board finds ``good cause'' to make the amendments effective immediately 
upon publication in the Federal Register because the amendments are

[[Page 62100]]

technical and conforming to pre-existing statutory and regulatory 
requirements.

IX. Authority for the Regulation

    This regulation is authorized by the FDIC's general rulemaking 
authority and pursuant to its fundamental responsibilities to ensure 
the safety and soundness of insured depository institutions. 
Specifically, 12 U.S.C. 1819(a) Tenth provides the FDIC with general 
authority to issue such rules and regulations as it deems necessary to 
carry out the statutory mandates of the Federal Deposit Insurance Act 
and other laws that the FDIC is charged with administering or 
enforcing.

List of Subjects

12 CFR Part 308

    Administrative practice and procedure, Banks, banking, Claims, 
Crime, Equal access to justice, Lawyers, Penalties, State nonmember 
banks.

12 CFR Part 330

    Bank deposit insurance, Banks, banking, Reporting and recordkeeping 
requirements, Savings and loan associations, Trusts and trustees.

Adoption of Technical Amendments

    For the reasons set forth in the preamble, the FDIC hereby amends 
chapter III of title 12 of the Code of Federal Regulations as set forth 
below:

PART 308--RULES OF PRACTICE AND PROCEDURE

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

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1815(e), 1817, 1818, 1820, 1828, 1829, 1829b, 1831i, 1831o, 1831p-1, 
1832(c), 1884(b), 1972, 3102, 3108(a), 3349, 3909, 4717; 15 U.S.C. 
78 (h) and (i), 78o-4(c), 78o-5, 78q-1, 78s 78u, 78u-2, 78u-3 and 
78w; 28 U.S.C. 2461 note; 31 U.S.C. 330, 5321; 42 U.S.C. 4012a; sec. 
31001(s), Pub. L. 104-134, 110 Stat. 1321-358.

    2. In Sec. 308.101, paragraph (b) is revised to read as follows:


Sec. 308.101  Scope of Local Rules.

* * * * *
    (b) Except as otherwise specifically provided, the Uniform Rules 
and subpart B of the Local Rules shall not apply to subparts D through 
S of the Local Rules.
* * * * *
    3. In Sec. 308.102, paragraph (b) is revised to read as follows:


Sec. 308.102  Authority of Board of Directors and Executive Secretary.

* * * * *
    (b) The Executive Secretary. (1) When no administrative law judge 
has jurisdiction over a proceeding, the Executive Secretary may act in 
place of, and with the same authority as, an administrative law judge, 
except that the Executive Secretary may not hear a case on the merits 
or make a recommended decision on the merits to the Board of Directors.
    (2) Pursuant to authority delegated by the Board of Directors, the 
Executive Secretary, Deputy Executive Secretary or the Assistant 
Executive Secretary (Operations), upon the advice and recommendation of 
the Deputy General Counsel for Litigation or, in his absence, the 
Assistant General Counsel, Trial Litigation Section, may issue rulings 
in proceedings under sections 7(j), 8, 18(j), 19, 32 and 38 of the FDIA 
(12 USC 1817(j), 1818, 1828(j), 1829, 1831i and 1831o concerning:
    (i) Denials of requests for private hearing;
    (ii) Interlocutory appeals;
    (iii) Stays pending judicial review;
    (iv) Reopenings of the record and/or remands of the record to the 
ALJ;
    (v) Supplementation of the evidence in the record;
    (vi) All remands from the courts of appeals not involving 
substantive issues;
    (vii) Extensions of stays of orders terminating deposit insurance; 
and
    (viii) All matters, including final decisions, in proceedings under 
section 8(g) of the FDIA (12 U.S.C. 1818(g)).
* * * * *
    4. In Sec. 308.109, paragraphs (b)(3) and (c) are revised to read 
as follows:


Sec. 308.109  Suspension and disbarment.

* * * * *
    (b) * * *
    (3) A suspension or disbarment under paragraph (b)(1) of this 
section from practice before the FDIC shall continue until the 
applicant has been reinstated by the Board of Directors for good cause 
shown, provided that any person suspended or disbarred under paragraph 
(b)(1) of this section shall be automatically reinstated by the 
Executive Secretary, upon appropriate application, if all the grounds 
for suspension or disbarment under paragraph (b)(1) of this section are 
subsequently removed by a reversal of the conviction (or the passage of 
time since the conviction) or termination of the underlying suspension 
or disbarment. An application for reinstatement on any other grounds by 
any person suspended or disbarred under paragraph (b)(1) of this 
section may be filed no sooner than one year after the suspension or 
disbarment, and thereafter, a new request for reinstatement may be made 
no sooner than one year after the counsel's most recent reinstatement 
application. An applicant for reinstatement under this provision may, 
in the Board of Directors' sole discretion, be afforded a hearing.
    (c) Hearings under this section. Hearings conducted under this 
section shall be conducted in substantially the same manner as other 
hearings under the Uniform Rules, provided that in proceedings to 
terminate an existing FDIC suspension or disbarment order, the person 
seeking the termination of the order shall bear the burden of going 
forward with an application and with the burden of proving the grounds 
supporting the application, and that the Board of Directors may, in its 
sole discretion, direct that any proceeding to terminate an existing 
suspension or disbarment by the FDIC be limited to written submissions.
* * * * *


Sec. 308.127  [Amended]

    6. In Sec. 308.127, paragraph (a) is amended by adding a period 
after ``12 U.S.C. 1818(b)'', and removing the words ``; provided that 
the provisions of the Uniform Rules and subpart B of the Local Rules 
shall not apply to the issuance of temporary cease-and-desist orders 
pursuant to section 8(c) of the FDIA (12 U.S.C. 1818(c))''.


Sec. 308.132  [Amended]

    7. In Sec. 308.132, the paragraph (c)(3) heading and introductory 
text are amended by removing the words ``Debt Collection Act'' and 
adding the words ``Debt Collection Improvement Act''.


Sec. 308.145  [Amended]

    8. The first sentence of Sec. 308.145 is amended by removing `` 
Sec. 303.9'' and adding in its place ``Sec. 303.272.''


Sec. 308.148  [Amended]

    9. In Sec. 308.148, paragraph (b) is amended by removing 
``Sec. 308.06'' and adding in its place ``Sec. 308.6'', and paragraph 
(d) is amended by removing ``Sec. 308.08'' and adding in its place 
``Sec. 308.8''.
    10. Sec. 308.151 is revised to read as follows:


Sec. 308.151  Scope.

    The rules and procedures set forth in this subpart shall apply to 
the notice filed by a state nonmember bank pursuant to section 32 of 
the FDIA (12 U.S.C. 1831i) and Sec. 303.102 of this chapter for the 
consent of the FDIC to add or replace an individual on the Board of 
Directors, or to employ any

[[Page 62101]]

individual as a senior executive officer, or change the 
responsibilities of any individual to a position of senior executive 
officer where:
    (a) The bank is not in compliance with all minimum capital 
requirements applicable to it as determined by the FDIC on the basis of 
such institution's most recent report of condition or report of 
examination or inspection;
    (b) The bank is in a troubled condition as defined in 
Sec. 303.101(c) of this chapter; or
    (c) The FDIC determines, in connection with the review of a capital 
restoration plan required under section 38(e)(2) of the FDIA (12 U.S.C. 
1831o(e)(2)) or otherwise, that such prior notice is appropriate.


Sec. 308.152  [Amended]

    11. In Sec. 308.152, paragraph (a) is amended by adding the word 
``is'' after the word ``notice'', and paragraph (b) is amended by 
removing the word ``indicated'' and adding in its place the word 
``indicates''.


Sec. 308.153  [Amended]

    12. In Sec. 308.153, the section heading is amended by removing 
``Sec. 303.14'' and adding in its place ``Sec. 303.103(c)''.


Sec. 308.155  [Amended]

    13. In Sec. 308.155, paragraph (c)(2) is amended by removing 
``Sec. 308.06'' and adding in its place ``Sec. 308.6.''


Sec. 308.156  [Amended]

    14. Sec. 308.156 is amended by removing the words ``and/or an 
individual'' and adding in their place the words ``and a person'' and 
by adding the words ``or money laundering'' after the word ``trust''.


Sec. 308.157  [Amended]

    15. In Sec. 308.157, paragraph (a)(1) is amended by adding the 
words ``or money laundering'' after the word ``trust''.
    16. Sec. 308.158 is revised to read as follows:


Sec. 308.158  Filing papers and effective date.

    (a) Filing with the regional office. Applications pursuant to 
section 19 shall be filed by in the appropriate regional office. Unless 
a waiver has been granted pursuant to paragraph (c) of this section, 
only an insured depository institution may file an application. Persons 
meeting the de minimis criteria set forth in the FDIC's Statement of 
Policy on Section 19 of the FDIA (63 FR 66177 (1998)) need not file an 
application.
    (b) Effective date. An application pursuant to section 19 may be 
made in writing at any time more than one year after the issuance of a 
decision denying an application pursuant to section 19. The removal 
and/or prohibition pursuant to section 19 shall continue until the 
individual has been reinstated by the Board of Directors or its 
designee for good cause shown.
    (c) Waiver applications. If an institution does not file an 
application regarding an individual, the individual may file a request 
for a waiver of the institution filing requirement for section 19 of 
the FDIA. Such a waiver application shall be filed with the appropriate 
regional office and shall set forth substantial good cause why the 
application should be granted. The Director of the Division of 
Supervision and, where confirmed in writing by the director, a deputy 
director or an associate director may grant or deny applications 
requesting waivers of the institution filing requirement. The authority 
delegated under this section shall be exercised only upon the 
concurrent certification of the General Counsel or his designee that 
the action to be taken is not inconsistent with section 19 of the FDIA.


Sec. 308.160  [Amended]

    17. In Sec. 308.160, paragraph (c)(2) is amended by removing 
``Sec. 308.06'' and adding in its place ``Sec. 308.6''.
    18. Sec. 308.161 is revised to read as follows:


Sec. 308.161  Scope.

    The rules and procedures set forth in this subpart shall apply to 
the following:
    (a) Proceedings to suspend an institution-affiliated party of an 
insured state nonmember bank, or to prohibit such party from further 
participation in the conduct of the affairs of the bank, if continued 
service or participation by such party poses a threat to the interests 
of the bank's depositors or threatens to impair public confidence in 
the depository institution, where the individual is charged in any 
state or federal information, indictment, or complaint, with the 
commission of, or participation in:
    (1) A crime involving dishonesty or breach of trust punishable by 
imprisonment exceeding one year under state or federal law; or (2) A 
criminal violation of section 1956, 1957, or 1960 of Title 18 or 
section 5322 or 5324 of Title 31.
    (b) Proceedings to remove from office or to prohibit an 
institution-affiliated party from further participation in the conduct 
of the affairs of the bank without the consent of the Board of 
Directors or its designee where:
    (1) A judgment of conviction or an agreement to enter a pre-trial 
diversion or other similar program has been entered against such party 
in connection with a crime described in paragraph (a)(1) of this 
section that is not subject to further appellate review, if continued 
service or participation by such party poses a threat to the interests 
of the bank's depositors or threatens to impair public confidence in 
the depository institution; or
    (2) A judgment of conviction or an agreement to enter a pre-trial 
diversion or other similar program has been entered against such party 
in connection with a crime described in paragraph (a)(2) of this 
section.
    19. In Sec. 308.162, paragraph (a) is revised to read as follows:


Sec. 308.162  Relevant considerations.

    (a)(1) In proceedings under Sec. 308.161 (a) and (b) for a 
suspension, removal or prohibition order, the following shall be 
considered:
    (i) Whether the alleged offense is a crime which is punishable by 
imprisonment for a term exceeding one year under state or federal law 
and which involves dishonesty or breach of trust; and
    (ii) Whether the alleged offense is a criminal violation of section 
1956, 1957, or 1960 of Title 18 or section 5322 or 5324 of Title 31; 
and
    (iii) Whether continued service or participation by the 
institution-affiliated party may pose a threat to the interest of the 
bank's depositors, or threatens to impair public confidence in the 
bank.
* * * * *
    20. In Sec. 308.163, paragraph (b) is revised to read as follows:


Sec. 308.163  Notice of suspension, and orders of removal or 
prohibition.

* * * * *
    (b) Order of removal or prohibition. (1) The Board of Directors or 
its designee may issue an order removing or prohibiting from further 
participation in the conduct of the affairs of the bank an institution-
affiliated party, when a final judgment of conviction not subject to 
further appellate review is entered against the individual for a crime 
referred to in Sec. 308.161(a)(1) and continued service or 
participation by such party poses a threat to the interests of the 
bank's depositors or threatens to impair public confidence in the 
depository institution.
    (2) An order of removal or prohibition shall be entered if a 
judgment of conviction is entered against the individual for a crime 
described in Sec. 308.161(a)(ii).

[[Page 62102]]

Sec. 308.164  [Amended]

    21. In Sec. 308.164, paragraph (b)(2) is amended by removing 
``Sec. 308.06'' and adding in its place ``Sec. 308.6.''
    22. In Sec. 308.170, paragraphs (a) and (b) are revised to read as 
follows:


Sec. 308.170  Filing, content, and service of documents.

    (a) Time to file. An application and any other pleading or document 
related to the application shall be filed with the Executive Secretary 
within 30 days after service of the final order of the Board of 
Directors in disposition of the proceeding whenever:
    (1) The applicant seeks an award pursuant to 5 U.S.C. 504(a)(1) as 
the prevailing party in the adversary adjudication or in a discrete 
significant substantive portion of the proceeding; or
    (2) The applicant, in an adversary adjudication arising from an 
action to enforce compliance with a statutory or regulatory 
requirement, asserts pursuant to 5 U.S.C. 504(a)(4) that the demand by 
the FDIC is substantially in excess of the decision of the 
administrative law judge and is unreasonable when compared with such 
decision under the facts and circumstances of the case.
    (b) Content. The application and related documents shall conform to 
the requirements of Sec. 308.10(b) and (c) of the Uniform Rules.
* * * * *
    23. In Sec. 308.171, paragraph (b) is revised to read as follows:


Sec. 308.171  Responses to application.

* * * * *
    (b) Reply to answer. The applicant may file a reply with regard to 
an application filed pursuant to 5 U.S.C. 504 (a)(1), if the FDIC has 
addressed in its answer any of the following issues: that the position 
of the FDIC was substantially justified, that the applicant unduly 
protracted the proceedings, or that special circumstances make an award 
unjust. The applicant may file a reply with regard to an application 
filed pursuant to 5 U.S.C. 504 (a)(4), if the FDIC has addressed in its 
answer any of the following issues: that the applicant has committed a 
willful violation of law or otherwise acted in bad faith, that the 
FDIC's demand is reasonable when compared to the decision of the 
administrative law judge or that special circumstances make an award 
unjust. The reply shall be filed within 15 days after service of the 
answer. If the reply is based on any alleged facts not already in the 
record of the proceeding, the reply shall include either supporting 
affidavits or a request for further proceedings under Sec. 308.180.
* * * * *
    24. In Sec. 308.172, paragraph (b) is amended by adding a new 
paragraph (b)(3) to read as follows:


Sec. 308.172  Eligibility of applicants.

* * * * *
    (b) * * *
    (3) For purposes of an application filed pursuant to 5 U.S.C. 
504(a)(4), a small entity as defined in 5 U.S.C. 601.
* * * * *
    25. Sec. 308.174 is revised to read as follows:


Sec. 308.174  Standards for awards.

    (a) For applications filed pursuant to 5 U.S.C. 504(a)(1), a 
prevailing applicant may receive an award for fees and expenses unless 
the position of the FDIC during the proceeding was substantially 
justified or special circumstances make the award unjust. An award will 
be reduced or denied if the applicant has unduly or unreasonably 
protracted the proceedings. Awards for fees and expenses incurred 
before the date on which the adversary adjudication was initiated are 
allowable if their incurrence was necessary to prepare for the 
proceeding.
    (b) For applications filed pursuant to 5 U.S.C. 504(a)(4), an 
applicant may receive an award unless the demand by the FDIC was 
reasonable when compared with the decision of the administrative law 
judge, the applicant has committed a willful violation of law or 
otherwise acted in bad faith, or special circumstances make an award 
unjust.


Sec. 308.175  [Amended]

    26. In Sec. 308.175, paragraph (a) is amended by removing ``$75'' 
and adding in its place ``$125'', and by adding at the end of the 
paragraph the following sentence: ``Fees and expenses awarded under 5 
U.S.C. 504(a)(4) related to defending against an excessive demand shall 
be paid only as a consequence of appropriations paid in advance''.
    27. In Sec. 308.176, paragraph (a) is revised to read as follows:


Sec. 308.176  Application for awards.

    (a) Contents. An application for an award of fees and expenses 
under this subpart shall contain:
    (1) The name of the applicant and an identification of the 
proceeding;
    (2) For applications filed pursuant to 5 U.S.C. 504(a)(1), a 
showing that the applicant has prevailed, and an identification of each 
issue with regard to which the applicant believes that the position of 
the FDIC in the proceeding was not substantially justified;
    (3) For applications filed pursuant to 5 U.S.C. 504(a)(4), a 
showing that the demand by the FDIC is substantially in excess of the 
decision of the administrative law judge and is unreasonable when 
compared with such decision under the facts and circumstances of the 
case;
    (4) A statement of the amount of fees and expenses for which an 
award is sought;
    (5) For applications filed pursuant to 5 U.S.C. 504(a)(4), a 
statement of the amount of fees and expenses which constitute 
appropriations paid in advance;
    (6) If the applicant is not an individual, a statement of the 
number of its employees on the date the proceeding was initiated;
    (7) A description of any affiliated individuals or entities, as 
defined in Sec. 308.172(c)(5), or a statement that none exist;
    (8) A declaration that the applicant, together with any affiliates, 
had a net worth not more than the ceiling established for it by 
Sec. 308.172(b) as of the date the proceeding was initiated;
    (9) For applications filed pursuant to 5 U.S.C. 504(a)(1), a 
statement whether the applicant is a small entity as defined in 5 
U.S.C. 601; and
    (10) Any other matters that the applicant wishes the FDIC to 
consider in determining whether and in what amount an award should be 
made.
* * * * *


Sec. 308.179  [Amended]

    28. Sec. 308.179 is amended by adding the words ``with a copy to 
the administrative law judge'' after the word ``Secretary'' and by 
removing ``20'' and in its place adding ``30''.

PART 330--DEPOSIT INSURANCE COVERAGE

    29. The Authority citation for part 330 continues to read as 
follows:

    Authority: 12 U.S.C. 1813(l), 1813(m), 1817(i), 1818(q), 
1819(Tenth), 1820(f), 1821(a), 1822(c).

    30. In Sec. 330.9, paragraph (a) is revised to read as follows:


Sec. 330.9  Joint ownership accounts.

    (a) Separate insurance coverage. Qualifying joint accounts, whether 
owned as joint tenants with the right of survivorship, as tenants in 
common or as tenants by the entirety, shall be insured separately from 
any individually owned (single ownership) deposit accounts maintained 
by the co-owners. (Example: If A has a single ownership account and 
also is a joint owner of a qualifying joint account, A's interest in 
the joint account would be insured separately from his or her

[[Page 62103]]

interest in the individual account.) Qualifying joint accounts in the 
names of both husband and wife which are comprised of community 
property funds shall be added together and insured up to $200,000, 
separately from any funds deposited into accounts bearing their 
individual names.
* * * * *
    By order of the Board of Directors.

    Dated at Washington, D.C., this 8th day of November, 1999.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 99-29830 Filed 11-15-99; 8:45 am]
BILLING CODE 6714-01-P