[Federal Register Volume 87, Number 71 (Wednesday, April 13, 2022)]
[Proposed Rules]
[Pages 22034-22092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04454]



[[Page 22033]]

Vol. 87

Wednesday,

No. 71

April 13, 2022

Part II





Department of the Treasury





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 Office of the Comptroller of the Currency





Federal Reserve System

Federal Deposit Insurance Corporation

National Credit Union Administration





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12 CFR Parts 3, 4, 6, et al.





Rules of Practice and Procedure; Proposed Rule

  Federal Register / Vol. 87 , No. 71 / Wednesday, April 13, 2022 / 
Proposed Rules  

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3, 4, 6, 19, 108, 109, 112, and 165

[Docket ID OCC-2021-0007]
RIN 1557-AE33

FEDERAL RESERVE SYSTEM

12 CFR Parts 238 and 263

[Docket No. R-1766]
RIN 7100-AG26

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AF10

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 747

[NCUA 2021-0079]
RIN 3133-AF37


Rules of Practice and Procedure

AGENCY: Office of the Comptroller of the Currency, Treasury; Board of 
Governors of the Federal Reserve System; Federal Deposit Insurance 
Corporation; National Credit Union Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Comptroller of the Currency (OCC), Board of Governors of 
the Federal Reserve System (Board), Federal Deposit Insurance 
Corporation (FDIC), and the National Credit Union Administration (NCUA) 
(collectively, the Agencies) are proposing changes to the Uniform Rules 
of Practice and Procedure (Uniform Rules) to recognize the use of 
electronic communications in all aspects of administrative hearings and 
to otherwise increase the efficiency and fairness of administrative 
adjudications. The OCC, Board, and FDIC are also proposing to modify 
their agency-specific rules of administrative practice and procedure 
(Local Rules). The OCC also proposes to integrate its Uniform Rules and 
Local Rules so that one set of rules applies to both national banks and 
Federal savings associations and to amend its rules on organization and 
functions to address service of process.

DATES: Comments must be received on or before June 13, 2022.

ADDRESSES: Comments should be directed to: OCC: Commenters are 
encouraged to submit comments through the Federal eRulemaking Portal. 
Please use the title ``Uniform Rules of Practice and Procedure'' to 
facilitate the organization and distribution of the comments. You may 
submit comments by any of the following methods:
    [ballot] Federal eRulemaking Portal--Regulations.gov: Go to https://regulations.gov/. Enter ``Docket ID OCC-2021-0007'' in the Search Box 
and click ``Search.'' Public comments can be submitted via the 
``Comment'' box below the displayed document information or by clicking 
on the document title and then clicking the ``Comment'' box on the top-
left side of the screen. For help with submitting effective comments 
please click on ``Commenter's Checklist.'' For assistance with the 
Regulations.gov site, please call (877) 378-5457 (toll free) or (703) 
454-9859 Monday-Friday, 9 a.m.-5 p.m. ET or email 
[email protected].
    [ballot] Mail: Chief Counsel's Office, Attention: Comment 
Processing, Office of the Comptroller of the Currency, 400 7th Street 
SW, Suite 3E-218, Washington, DC 20219.
    [ballot] Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2021-0007'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website without change, including any business or 
personal information provided such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this action by the following method:
    [ballot] Viewing Comments Electronically--Regulations.gov: Go to 
https://regulations.gov/. Enter ``Docket ID OCC-2021-0007'' in the 
Search Box and click ``Search.'' Click on the ``Documents'' tab and 
then the document's title. After clicking the document's title, click 
the ``Browse Comments'' tab. Comments can be viewed and filtered by 
clicking on the ``Sort By'' drop-down on the right side of the screen 
or the ``Refine Results'' options on the left side of the screen. 
Supporting materials can be viewed by clicking on the ``Documents'' tab 
and filtered by clicking on the ``Sort By'' drop-down on the right side 
of the screen or the ``Refine Documents Results'' options on the left 
side of the screen.'' For assistance with the Regulations.gov site, 
please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 
9 a.m.-5 p.m. ET or email [email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.
    Board: You may submit comments, identified by Docket No. R-1766 and 
RIN 7100-AG26 by any of the following methods:
     Agency Website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include the 
docket number in the subject line of the message.
     Fax: (202) 452-3819.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments are available from the Board's website at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any identifying or 
contact information. Public comments may also be viewed electronically 
or in paper in Room 146, 1709 New York Avenue NW, Washington, DC 20006, 
between 9:00 a.m. and 5:00 p.m. on weekdays.
    FDIC: You may submit comments, identified by RIN 3064-AF10 by any 
of the following methods:
     FDIC Website: https://www.fdic.gov/resources/regulations/federal-register-publications/. Follow instructions for submitting 
comments on the agency website.
     Email: [email protected]. Include RIN 3064-AF10 on the 
subject line of the message.
     Mail: James P. Sheesley, Assistant Executive Secretary, 
Attention: Comments, Federal Deposit Insurance Corporation, 550 17th 
Street NW, Washington, DC 20429.
     Hand Delivery to FDIC: Comments may be hand-delivered to 
the guard station at the rear of the 550 17th Street NW building 
(located on F Street) on business days between 7 a.m. and 5 p.m.

[[Page 22035]]

    Please include your name, affiliation, address, email address, and 
telephone number(s) in your comment. All statements received, including 
attachments and other supporting materials, are part of the public 
record and are subject to public disclosure. You should submit only 
information that you wish to make publicly available.
    Please note: All comments received will be posted generally without 
change to https://www.fdic.gov/resources/regulations/federal-register-publications/, including any personal information provided.
    NCUA: You may submit comments, identified by RIN 3133-AF37 by any 
of the following methods (please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments for docket number NCUA-
2021-0079.
     Fax: (703) 518-6319. Use the subject line ``[Your name] 
Comments on ``Uniform Rules of Practice and Procedure'' on the 
transmission cover sheet.
     Mail: Address to Melane Conyers-Ausbrooks, Secretary of 
the Board, National Credit Union Administration, 1775 Duke Street, 
Alexandria, Virginia 22314-3428.
     Hand Delivery/Courier: Use the same address as for mailed 
comments.
    Public Inspection: You can view all public comments on the NCUA 
website at: http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as 
submitted, except for those we cannot post for technical reasons. The 
NCUA will not edit or remove any identifying or contact information 
from the public comments. Due to social distancing measures in effect, 
the usual opportunity to inspect paper copies of comments in the NCUA's 
law library is not currently available. After social distancing 
measures are relaxed, visitors may make an appointment to review paper 
copies by calling (703) 518-6540 or emailing [email protected].

FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, and Heidi 
Thomas, Special Counsel, Chief Counsel's Office, (202) 649-5490. If you 
are deaf, hard of hearing, or have a speech disability, please dial 7-
1-1 to access telecommunications relay services. Board: David Williams, 
Associate General Counsel, [email protected], (202) 452-3973, and 
H[eacute]ctor G. Bladuell, Senior Counsel, Legal Division, 
[email protected], (202) 452-2491. FDIC: Heather M. Walters, 
Counsel, Legal Division, [email protected], (202) 898-6729 and Michael 
P. Farrell, Counsel, Legal Division, [email protected], (202) 898-3853. 
For users of Telecommunications Device for the Deaf (TDD) only, contact 
(202) 263-4869. NCUA: Damon P. Frank, Senior Trial Attorney, and John 
H. Brolin, Senior Staff Attorney, Office of General Counsel, at (703) 
518-6540.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 916 of the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989, Public Law 101-73, 103 Stat. 183 (1989), 
required the Agencies, together with the Office of Thrift Supervision 
(OTS), to develop uniform rules and procedures for administrative 
hearings. In August 1991, the Agencies and OTS each adopted final 
Uniform Rules as well as Local Rules specific to each agency.\1\ Based 
on the experience gained in administrative hearings, the Agencies, 
together with OTS, modified the Uniform Rules and Local Rules in 
1996.\2\
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    \1\ The Agencies, together with the OTS, issued a joint notice 
of proposed rulemaking on June 17, 1991 (56 FR 27790). Each agency 
issued a final rule on the following dates: OCC on August 9, 1991 
(56 FR 38024); Board on August 9, 1991 (56 FR 38052); FDIC on August 
9, 1991 (56 FR 37968); and NCUA on August 8, 1991 (56 FR 37767). The 
OTS, whose rules and procedures were transferred to the OCC in 2011, 
published its rules on August 12, 1991 (56 FR 38317). The Agencies' 
rules are codified at 12 CFR part 19, subpart A (OCC); 12 CFR part 
263, subpart A (Board); 12 CFR part 308, subpart A (FDIC); and 12 
CFR part 747, subpart A (NCUA).
    \2\ 61 FR 20330, May 6, 1996.
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    The Uniform Rules and Local Rules have remained largely unchanged 
since the 1996 amendments, while the practice of administrative 
hearings has changed fundamentally with the introduction of electronic 
communication and transmission. The current Uniform Rules were 
promulgated at a time when the Agencies accepted only paper pleadings. 
However, beginning in 2005, the Office of Financial Institution 
Adjudication (OFIA) established a dedicated electronic mailbox to 
accept electronic pleadings and service and, by 2006, paper pleadings 
were virtually eliminated in administrative hearings. Without rules in 
place to address electronic pleadings, the Administrative Law Judges 
(ALJs) opted to dictate procedures pertaining to electronic filing and 
other items on an ad hoc basis in their scheduling orders.
    The Agencies have identified sections of the Uniform Rules that 
should be modified to recognize electronic pleadings and communications 
in administrative hearings and other sections that require modification 
based on the experience of the Agencies in administrative litigation. 
The Agencies also propose to remove the remaining references to the 
Office of Thrift Supervision (OTS), which was abolished in 2011.\3\ In 
addition, the OCC, Board, and FDIC propose to amend certain sections of 
their Local Rules that they believe should be updated, improved, or 
clarified. Furthermore, the OCC proposes to consolidate its uniform and 
local rules by applying part 19 to both national bank- and Federal 
savings association-related proceedings and investigations and removing 
its separate enforcement-related rules for Federal savings 
associations, 12 CFR parts 108, 109, 112, and 165. Finally, the OCC 
proposes to amend subpart A of 12 CFR part 4, Organization and 
Functions, to add a new Sec.  4.8 that would address service of 
process. The Agencies intend that any final rules issued in connection 
with this rulemaking will only apply to actions filed after the 
effective date of any final rule.
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    \3\ The FDIC removed references to the OTS and updated its 
definitions by Final Rule on Jan. 30, 2015 (80 FR 5009). The Board 
similarly removed references to the OTS from its definitions on 
September 13, 2011 (76 FR 56603).
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    The Agencies invite comments on all aspects of this joint proposed 
rule. Comments on the Local Rules should be sent only to the 
appropriate agency.

II. Section-by-Section Discussion of Proposed Amendments to the Uniform 
Rules

General Comments

    The text of the proposed amendments to the Uniform Rules appears at 
the end of the preamble. Agency-specific proposed amendments to the 
Uniform Rules and Local Rules appear in the instructions below. Where 
appropriate, the Agencies propose to replace gender references such as 
``him or her,'' ``his or her,'' and ``himself or herself'' with gender 
neutral terminology. Consistent with Federal Register drafting 
guidelines,\4\ the Agencies also propose to replace the word ``shall'' 
throughout the rule with the terms ``must,'' ``will,'' or other 
appropriate language. The Agencies are also proposing to use the 
abbreviation ``ALJ'' for ``administrative law judge,'' as this 
abbreviation is commonly used and understood, and using this 
abbreviation will reduce the length of the rules. These changes are 
proposed throughout the Uniform Rules and will not be discussed further 
in the individual sections below.
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    \4\ National Archives, Federal Register Writing Resources for 
Federal Agencies: Drafting Legal Documents, https://www.archives.gov/federal-register/write/legal-docs/clear-writing.html.

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Section __.1 Scope
    Section __.1 lists the types of adjudicatory proceeding to which 
the Uniform Rules apply. To the extent necessary, the Agencies propose 
to update the list of civil money penalty proceedings covered by the 
Uniform Rules described in Sec.  __.1(e) to include section 5, section 
9, and section 10 of the Home Owners' Loan Act (HOLA).\5\ These 
sections of the HOLA are applicable to Federal savings associations now 
supervised by the OCC, State-chartered savings associations now 
supervised by the FDIC, and savings and loan holding companies 
supervised by the Board. The Agencies also propose to add references to 
``the former Office of Thrift Supervision'' in Sec.  __.1(e)(10), to 
clarify that the Uniform Rules will apply to civil money proceedings 
for violations of orders issued, written agreements executed, and 
conditions imposed in writing by OTS.
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    \5\ The Board made these updates on September 13, 2011 (76 FR 
56603).
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Section__.3 Definitions
    Section __.3 of the Uniform Rules includes definitions applicable 
to the Uniform Rules and, unless otherwise specified, the Local Rules. 
The Agencies propose adding a definition of the term ``electronic 
signature'' in Sec.  __.3. The Agencies are proposing that electronic 
signatures be used to satisfy the good faith certification requirement 
in Sec.  __.7 and, therefore, are including a definition of the term 
``electronic signature'' in this section. The OCC, Board, and FDIC are 
proposing to replace the definition of violation in Sec.  __.3 with a 
cross-reference to the identical definition in section 3(v) of the 
Federal Deposit Insurance Act (FDIA), 12 U.S.C. 1813(v). To the extent 
necessary, the Agencies also propose to remove the legacy reference to 
the Office of Thrift Supervision both in the definition of ``OFIA'' and 
the definition of ``Uniform Rules'' in Sec.  __.3.
    The OCC proposes to add the term ``Federal savings association'' to 
its definition of ``institution'' in order to make the Uniform Rules 
and the OCC's Local Rules in part 19 of title 12 applicable to Federal 
savings associations, which have been regulated by the OCC since 
2011.\6\
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    \6\ As described elsewhere in this Supplementary Information, 
the OCC is proposing to remove its Uniform Rules and Local Rules 
applicable to Federal savings associations, parts 108, 109, 112, and 
165 of title 12.
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    The Board proposes to add ``nonbank financial companies'' and 
``financial market utilities'' designated by the Financial Stability 
Oversight Council to its definition of ``institution'' to clarify that 
the Uniform Rules are applicable to these entities, which are 
supervised by the Board pursuant to the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Dodd-Frank Act).\7\ In addition, the Board 
proposes to clarify that organizations operating under section 25A of 
the Federal Reserve Act, Federal and state ``branches,'' as well as 
``agencies'' as defined in section 1(b) of the International Banking 
Act, and ``any other entity subject to the supervision of the Board,'' 
are included in its definition of ``institution.'' The Board also 
proposes to replace the word ``savings association'' with ``depository 
institution'' in 12 CFR 263(f)(6) to conform this language to the 
language in 12 U.S.C. 1818(b)(3).
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    \7\ Public Law 111-203, 124 Stat. 1376 (2010).
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Section __.5 Authority of the Administrative Law Judge (ALJ)
    Section __.5 of the Uniform Rules addresses the authority of the 
ALJ. The Agencies propose to amend Sec.  __.5(b)(2) to add the term 
``other orders'' to the list of specific orders an ALJ is authorized to 
issue, quash, or modify. The Agencies are proposing this change to 
clarify that the authority of the ALJ to issue orders is not limited to 
subpoenas, subpoenas duces tecum, and protective orders and may include 
other types of orders that are not enumerated in this section. The 
Agencies also propose to amend Sec.  __.5(b)(11) to change the term 
``presiding officer'' to ``ALJ'' in order to avoid confusion and 
clarify that the ALJ has the powers necessary and appropriate to 
discharge the duties of this role.
Section __.6 Appearance and Practice in Adjudicatory Proceedings
    Section __.6 of the Uniform Rules addresses appearance and practice 
in adjudicatory proceedings. The Agencies propose to amend Sec.  
__.6(a)(2) to state simply that an individual may appear on their own 
behalf. In making this change, the Agencies would eliminate the 
additional language that is duplicative and unnecessary to the meaning 
of the provision. The Agencies also propose to amend Sec.  __.6(a)(3) 
to include a requirement that a notice of appearance include a written 
acknowledgment that the individual has reviewed and will comply with 
the Uniform Rules and Local Rules. The Agencies propose to add this 
requirement in order to ensure that representatives appearing in the 
proceeding are informed of the rules that govern the proceedings.
Section __.7 Good Faith Certification
    Section __.7 of the Uniform Rules addresses the requirement for 
good faith certification for every filing or submission of record 
following the issuance of a notice. The Agencies propose to amend Sec.  
__.7(a) to require that the counsel of record, including an individual 
who acts as their own counsel, include a mailing address, an electronic 
mail address, and a telephone number with every certification. The 
Agencies also propose to amend this section to permit electronic 
signatures to satisfy the signature requirements of the certification. 
These proposed changes to the rules conform the rules to the current 
practice of electronic filing.
Section __.9 Ex Parte Communications
    Section __.9 of the Uniform Rules addresses ex parte communications 
in administrative proceedings. The Agencies propose to amend Sec.  
__.9(c) to clarify that upon the occurrence of ex parte communication, 
the ALJ or the Agency Head must determine whether any action in the 
form of sanctions should be taken concerning the ex parte 
communication. The Agencies also propose to amend Sec.  __.9(e)(1) to 
better align it with section 5 of the Administrative Procedure Act, 5 
U.S.C. 554(d). Specifically, the Agencies propose to add language 
stating that the ALJ may not consult with a person or party on a fact 
in issue without giving all parties notice and an opportunity to 
participate and may not be responsible to or subject to the supervision 
or direction of an employee agent engaged in the performance of 
investigative or prosecuting functions for any of the Agencies. 
Finally, the Agencies propose to amend Sec.  __.9(e)(2) to refer to 
administrative or judicial proceedings rather than public proceedings. 
The Agencies are proposing this change to better describe the type of 
proceedings subject to the rule.
Section __.10 Filing of Papers
    Section __.10 of the Uniform Rules addresses the requirements for 
the filing of papers. The Agencies propose to amend and renumber Sec.  
__.10(b) to remove an outdated section on rules governing transmission 
by electronic media and replace it with a section stating that filing 
may be accomplished by electronic mail or other electronic means 
designated by the Agency Head or the ALJ. The Agencies further propose 
to amend Sec.  __.10(b) to eliminate references to specific carriers 
and names of mail delivery services and

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instead refer generally to same day courier services and overnight 
delivery services. The Agencies propose to amend Sec.  __.10(c), which 
addresses the formal requirements as to papers filed, to require papers 
to include the mailing address, electronic mail address, and telephone 
number of the counsel or party making the filing. Finally, the Agencies 
propose to strike Sec.  __.10(c)(4), which requires the filing of an 
original and one copy of each filing. The Agencies believe this 
requirement is no longer necessary, especially given that the vast 
majority of papers are filed electronically, consistent with current 
adjudicatory practice. The Agencies also propose to retain the existing 
methods of filing by paper, such as personal service, same day courier, 
overnight delivery, and mail, and have modified the descriptions of 
those methods to conform to current terminology and standards for 
delivery.
Section __.11 Service of Papers
    Section __.11 of the Uniform Rules addresses the requirements for 
service of papers. The proposed modifications to Sec.  __.11 are 
intended to provide for electronic filing, where appropriate, and 
simplify and update the descriptions for other, non-electronic, means 
of filing. The Agencies propose to amend Sec.  __.11(b) to add service 
by electronic mail or other electronic means as a method for serving 
papers, consistent with current practice. The Agencies also propose to 
retain the existing methods of service by paper, such as personal 
service, same day courier, overnight delivery, and mail, and have 
replaced references to specific carriers and delivery services with 
general references to same day courier service and overnight delivery 
service. The Agencies also propose to amend Sec.  __.11(c)(1) to 
require that all papers required to be served by the Agency Head or the 
ALJ upon a party that has appeared in the proceeding will be served by 
electronic mail or other electronic means designated by the Agency Head 
or the ALJ. For parties that have not appeared in the proceeding in 
accordance with Sec.  __.6, the Agencies have preserved the option for 
non-electronic methods of service. The Agencies propose to modify the 
descriptions of some of those methods to conform to current terminology 
and standards for delivery. Finally, in Sec.  __.11(d), the Agencies 
propose to generally retain the existing methods for the service of 
subpoenas with appropriate modifications to the descriptions of the 
methods to conform to current terminology and standards for delivery.
Section __.12 Construction of Time Limits
    Section __.12 of the Uniform Rules addresses the construction of 
time limits. The Agencies propose to amend Sec.  __.12(b), which 
addresses when papers are deemed to be filed or served, to provide that 
in the case of transmission by electronic mail or other electronic 
means, filing and service are deemed to be effective upon transmittal 
by the serving party. The Agencies also propose to retain the existing 
times for non-electronic methods of filing and service and update the 
descriptions of these methods to make them consistent with the updated 
descriptions in Sec. Sec.  __.10 and __.11. The Agencies propose to 
amend Sec.  __.12(c), which addresses the calculation of time for 
service and filing of responsive papers, to provide that in the case of 
service by electronic mail or other electronic means, the time limits 
are calculated by adding one calendar day to the prescribed period. The 
Agencies further propose to modify the rule to provide for the addition 
of two calendar days, rather than one, in the case of service by 
overnight delivery service and retain the rule providing for the 
addition of three calendar days for service made by mail.
Section __.14 Witness Fees and Expenses
    Section __.14 of the Uniform Rules addresses witness fees and 
expenses in administrative proceedings. The Agencies propose to amend 
Sec.  __.14 to clarify the general rule, in Sec.  __.14(a), that all 
witnesses, including an expert witness who testifies at a deposition or 
hearing, will 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. The Agencies further propose to add language 
in Sec.  __.14(b) to clarify that the Agencies are not required to pay 
witness fees and mileage for testimony by a party. The Agencies propose 
to retain existing language governing the timing of witness payments in 
a new Sec.  __.14(c).
Section __.15 Opportunity for Informal Settlement
    Section __.15 of the Uniform Rules addresses the rules and process 
for informal settlement once a proceeding has been initiated. The 
Agencies propose to revise the language of this section to more plainly 
express the existing rule that an offer or proposal for informal 
settlement may only be made to Enforcement Counsel.
Section __.18 Commencement of Poceeding and Contents of Notice
    Section __.18(a) of the Uniform Rules governs the commencement of 
administrative proceedings. The Agencies propose to amend Sec.  
__.18(a)(ii) to provide that Enforcement Counsel serves the notice upon 
the respondent to begin proceedings.\8\ The Agencies also propose to 
amend this section to provide that Enforcement Counsel may serve the 
notice upon counsel for the respondent, rather than the respondent, 
provided that counsel for the respondent has confirmed that counsel 
represents the respondent in the matter and will accept service of the 
notice on behalf of the respondent. By requiring counsel to confirm 
representation of a respondent, the Agencies hope to clarify when it is 
appropriate to serve notice on an individual who purports to represent 
the respondent. The Agencies propose to amend Sec.  __.18(a)(iii) to 
make it clear that Enforcement Counsel files the notice with OFIA.\9\
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    \8\ The FDIC has already made this change in its version of the 
Uniform Rules in connection with amendments that became effective on 
January 12, 2021.
    \9\ The NCUA proposes to delete the reference to change-in-
control proceedings from part 747 under 12 U.S.C. 1817(j), which 
does not apply to credit unions or the NCUA. The NCUA proposes the 
same deletion under Sec.  __.33.
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    Section __.18(b) of the Uniform Rules addresses the contents of the 
notice in administrative proceedings. The Agencies propose to amend 
Sec.  __.18(b) to provide that notice pleading applies in 
administrative proceedings, meaning that a notice need only provide a 
short and plain statement of the claim(s) showing that the Agency is 
entitled to relief. The Agencies further propose to make a technical 
change to Sec.  __.18(b)(2) to change the description from ``a 
statement of the matters of fact or law showing the [Agency] is 
entitled to relief'' to simply ``matters of fact or law showing that 
the [Agency] is entitled to relief.'' The Agencies believe the 
reference to ``a statement'' in this section has no substantive meaning 
and, thus, propose to remove it.
Section __.19 Answer
    Section __.19 of the Uniform Rules sets out the requirements for an 
answer in an administrative proceeding. The Agencies propose to amend 
Sec.  __.19(c)(2) to provide that if a respondent fails to request a 
hearing as required by law within the applicable time frame, the notice 
of assessment constitutes a final and unappealable order, in accordance 
with 12 U.S.C. 1818(i)(2)(E)(ii) and 12 U.S.C.

[[Page 22038]]

1786(k)(2)(E)(ii), without further action by the ALJ. In the past, 
there has been confusion about whether any additional action on the 
part of the ALJ is required in this situation, and the proposed 
language clarifies that no further action is necessary.
Section __.24 Scope of Document Discovery
    Section __.24 of the Uniform Rules addresses the scope of discovery 
in an administrative proceeding and Sec.  __.24(a) addresses 
limitations on discovery. The Agencies propose to update the definition 
of the term ``documents'' in Sec.  __.24(a)(1) to include not only 
writings, drawings, graphs, charts, photographs, and recordings, but 
electronically stored information and data or data compilations stored 
in any medium from which information can be obtained. This expanded 
definition of the term ``document'' is necessary to account for the 
range of digital information now available. The Agencies further 
propose to amend Sec.  __.24(a)(3) to clarify that discovery by the use 
of either interrogatories or requests for admission is not permitted. 
The Agencies propose to move the paragraph on relevance currently in 
Sec.  __.24(b) to a new paragraph Sec.  __.24(a)(4) because that 
provision functions as a limitation on discovery. The Agencies propose 
to amend Sec.  __.24(c) to clarify the list of privileges applicable to 
otherwise discoverable documents. In addition to the attorney-client 
privilege and the work-product doctrine, the proposed language would 
also specifically identify the bank examination privilege and the law 
enforcement privilege and exclude those privileged documents from 
discovery. Finally, the Agencies propose to add language to Sec.  
__.24(d) to provide that document discovery, including all responses to 
discovery requests, must be completed by the date set by the ALJ and no 
later than 30 days prior to the date scheduled for the commencement of 
the hearing. This proposed language recognizes the role of the ALJ in 
establishing a schedule for discovery while also providing for 
discovery to be completed earlier in the hearing process.
Section __.25 Request for Document Discovery by Parties
    Section __.25 of the Uniform Rules addresses requests for document 
discovery from parties in administrative proceedings. The Agencies 
propose to reorganize the section to improve clarity and make 
additional changes. The Agencies propose to replace the heading 
``General rule'' with ``Document requests'' in Sec.  __.25(a) to better 
identify the subject matter of the section. The Agencies propose to 
amend Sec.  __.25(a) to add a paragraph (1) stating that a party may 
serve on another party a request to not only produce discoverable 
documents but to permit the requesting party or its representative to 
inspect or copy discoverable documents that are in the possession, 
custody, or control of the party upon whom the request is served. It 
has been the practice of parties in administrative proceedings to 
permit the inspection and copying of discoverable documents, and the 
proposed language formalizes that practice under the rules. The 
Agencies propose to include language to provide that a party responding 
to a request for inspection may produce copies of documents or 
electronically stored information instead of permitting inspection. In 
many cases, providing documents or electronically stored information 
directly is more efficient than permitting inspection, and the proposed 
amendment preserves the right of a responding party to make that 
choice. The Agencies further propose to add a new paragraph (2) to 
simplify the language that previously appeared in Sec.  __.25(b) 
regarding the identification of documents to be produced. The proposal 
would require that the request describe with reasonable particularity 
each item or category of items to be inspected and specify a reasonable 
time, place, and manner for the inspection or production.
    The Agencies propose to amend the rules governing production or 
copying, as set out in a new Sec.  __.25(b)(1), to require that, unless 
a particular form is specified by the ALJ or agreed upon by the 
parties, the producing party must produce copies of documents as they 
are kept in the usual course of business or organized to correspond to 
the categories of the request, and produce electronically stored 
information in a form in which it is ordinarily maintained or in a 
reasonably usable form. The Agencies recognize that the ways in which 
electronically stored information may be stored and transmitted may 
change over time and are adopting the reasonably usable standard for 
electronically stored information to provide flexibility.
    The Agencies propose to simplify the rules associated with the 
costs of document production in a new Sec.  __.25(b)(2), which would 
require the producing party to pay its own costs to respond to a 
discovery request unless otherwise agreed by the parties. This proposed 
language would eliminate the earlier requirement that a requesting 
party prepay the producing party for certain costs while also allowing 
the parties to agree to share costs, as appropriate in a particular 
case.
    The Agencies propose to modify the time limits for motions to limit 
discovery in Sec.  __.25(d). In Sec.  __.25(d)(1), the Agencies propose 
to extend the time limit for a party to object to a discovery request 
from within ten to within 20 days of being served with such a request. 
In Sec.  __.25(d)(2), the Agencies propose to extend the time limit for 
a party to file a written response from within five to within ten days 
of service of the motion. Additional time allows the parties to digest 
such requests and engage with each other to narrow the scope of the 
request before having to file a motion with the ALJ. The Agencies 
believe that parties making motions to limit discovery and responding 
to motions to limit discovery will benefit from additional time to 
review and respond to such requests.
    Finally, the Agencies propose to amend Sec.  __.25(e) to specify 
the available privileges that may be asserted in connection with a 
request for production. The section includes attorney-client privilege, 
attorney work-product doctrine, bank examination privilege, law 
enforcement privilege, any government deliberative process privilege, 
other privileges of the Constitution, any applicable act of Congress, 
and other principles of common law as grounds for withholding 
documents.
Section __.26 Document Subpoenas to Non-Parties
    Section __.26 of the Uniform Rules addresses document subpoenas to 
third parties in administrative proceedings. The Agencies propose to 
amend Sec.  __.26(b)(1) to provide that a person to whom a document 
subpoena is directed may file a motion to quash or modify such subpoena 
with the ALJ. This amendment clarifies to whom the motion to quash 
should be directed.
Section __.27 Deposition of Witness Unavailable for Hearing
    Section __.27 of the Uniform Rules addresses the deposition of 
witnesses unavailable for an administrative hearing. The Agencies 
propose to amend Sec.  __.27(a)(2) to require that the application for 
a subpoena state the manner in which the deposition is to be taken, in 
addition to the time and place, and provide explicitly that a 
deposition may be taken by remote means. These changes modernize the 
rules and conform the rules to existing practice. The Agencies propose 
to simplify

[[Page 22039]]

Sec.  __.27(a)(4) by eliminating unnecessary language related to where 
subpoenas may be served. In order to further provide for remote 
depositions, the Agencies propose to amend Sec.  __. 27(c)(1) to 
provide that a court reporter or other person authorized to administer 
an oath may administer the oath remotely without being in the physical 
presence of the deponent, by stipulation of the parties or order by the 
ALJ. The Agencies further propose to amend Sec.  __.27(d) to clarify 
that if a subpoenaed person fails to comply with any subpoena issued 
pursuant to this section the aggrieved party may apply to the 
appropriate United States district court for an order requiring 
compliance with the portions of the subpoena with which the subpoenaed 
party has not complied. Finally, the Agencies are making a correction 
to an inaccurate cross-reference in the rule. The cross reference to 
paragraph (c)(3) has been changed to correctly reference paragraph 
(c)(2).
Section __.29 Summary Disposition
    Section __.29 of the Uniform Rules addresses summary disposition. 
The Agencies propose to modify Sec.  __.29(c) to provide that a request 
for a hearing on a motion must be made in writing. This change will 
formalize the process of requesting a hearing and increase the clarity 
of the process.
Section __.31 Scheduling and Prehearing Conferences
    Section __.31 of the Uniform Rules addresses scheduling and 
prehearing conferences. The Agencies propose to amend Sec.  __.31(a) to 
clarify that the prehearing conference must be set within 30 days of 
service of the notice or an order commencing a proceeding and eliminate 
the option in the current rule for the parties to agree on another 
time. The Agencies also propose to add language to clarify that it is a 
schedule for discovery, and not actual discovery, that the parties may 
determine at the scheduling conference. Finally, the Agencies propose 
to eliminate references to ``telephone'' conferences in order to make 
the provision more technologically neutral.
Section __.32 Prehearing Submission
    Section __.32 of the Uniform Rules addresses prehearing 
submissions. The Agencies propose to amend Sec.  __.32(a) to extend the 
time for a party to file prehearing submissions with the ALJ from 14 
days to 20 days before the start of the hearing. The Agencies propose 
this change to give the parties more flexibility in completing their 
filings. The Agencies propose to further amend Sec.  __.32 to update 
the required prehearing submissions. The Agencies propose to amend 
Sec.  __.32(a)(1) to require the submission of a prehearing statement 
that states the party's position with respect to the legal issues 
presented, the statutory and case law upon which the party relies, and 
the facts the party expects to prove at the hearing. The Agencies 
propose to amend Sec.  __.32(a)(2) to require that the final list of 
witnesses include the name, mailing address, and electronic mail 
address for each witness and to clarify that the list of witnesses need 
not identify the exhibits to be relied upon by each witness at the 
hearing and that the list of exhibits should be a list of exhibits 
expected to be introduced at the hearing.
Section __.35 Conduct of Hearings
    Section __.35 of the Uniform Rules addresses the conduct of 
administrative hearings. The Agencies propose to add a new Sec.  
__.35(c) to provide rules governing electronic presentations in a 
hearing. The new language provides that the ALJ may direct the use of, 
or any party may use, an electronic presentation during the hearing. If 
an ALJ requires an electronic presentation, each party will be 
responsible for their own presentation or related costs unless the 
parties agree to another manner in which to allocate responsibilities 
and costs. This new language is necessary to account for electronic 
presentations that are not addressed in the existing rules but are used 
routinely in hearings.
Section __.36 Evidence
    Section __.36 of the Uniform Rules sets forth the rules governing 
evidence in an adjudicatory proceeding. The Agencies propose to amend 
Sec.  __.36(b)(2) to refer to ``direct questioning'' rather than 
``direct interrogation'' of witnesses in order to clarify, in plain 
language, the meaning of this section.

III. Section-by-Section Summary and Discussion of Proposed Amendments 
to the Local Rules of Each Agency

A. Proposed Amendments to the OCC Local Rules

    Part 19, subparts B through P, address local rules of practice and 
procedure specific to OCC investigations, hearings before the OCC, and 
other OCC-related proceedings involving national banks. The 
corresponding rules for Federal savings association-related proceedings 
and investigations, transferred from the former OTS to the OCC by the 
Dodd-Frank Act, are set forth at 12 CFR parts 108, 109, 112, and 165. 
Many of the national bank and Federal savings association-related 
provisions are similar, but in some cases no corresponding rule exists 
or one set of rules provides more specificity than the other. The 
proposed rule would consolidate these rules by applying part 19 to both 
national bank- and Federal savings association-related proceedings and 
investigations and remove parts 108, 109, 112, and 165. The proposed 
rule also would amend the local rules to add certain provisions of the 
Federal savings association rules that are not currently included in 
part 19 but that the OCC believes should apply to both Federal savings 
associations and national banks. In addition, the OCC proposes to 
reorganize certain rules in part 19, including subparts D, E, F, and G 
relating to actions under the Federal securities laws; add new 
provisions addressing the Equal Access to Justice Act (EAJA); and add a 
new subpart O addressing the forfeiture of a national bank, Federal 
savings association, or Federal branch and agency charter or franchise 
for certain money laundering or cash transaction offenses. As set forth 
in proposed subpart R, the revised consolidated rules would apply to 
adjudicatory actions filed on or after the effective date of the final 
rule resulting from this proposal.
    The proposed amendments to the OCC's local rules are discussed 
below.
Subpart B--Procedural Rules for OCC Adjudications
19.100--Filing Documents
    Sections 19.100 and 109.104(g) require that all filings with or 
referred to the Comptroller or ALJ in any proceeding under parts 19 or 
109, respectively, be filed with the OCC Hearing Clerk. The two 
provisions are substantively the same except that Sec.  19.100 provides 
a more detailed description of the types of filings to which the rule 
applies. As a result of the proposed application of part 19 to Federal 
savings associations and removal of part 109, Sec.  19.100 also would 
apply to filings in Federal savings association-related proceedings. 
Furthermore, the proposed rule would amend Sec.  19.100 to remove the 
OCC filing street address and to require the filing to be made in a 
manner prescribed by Sec.  19.10(b) and (c). Section 19.10(b) and (c) 
prescribe the permissible filing methods and list form and content 
requirements for filing papers with the OCC. As amended by this 
proposal, filings would be permitted by electronic mail or other 
electronic means designated by the Comptroller or the

[[Page 22040]]

ALJ. Lastly, the proposal would amend the current provision to clarify 
that the materials filed include any attachments or exhibits to the 
listed documents.
19.101 Delegation to OFIA
    Both Sec. Sec.  19.101 and 109.101 provide that an ALJ at the 
Office of Financial Institution Adjudication (OFIA) will conduct 
actions brought under the respective subpart A rules. As a result of 
the proposed application of part 19 to Federal savings associations, 
Sec.  19.101 would apply to adjudicatory actions brought against either 
national banks or Federal savings associations. The proposal would make 
one stylistic revision to Sec.  19.101 to remove the passive sentence 
structure.
19.102 Civil Money Penalties
    The proposed rule would add a new Sec.  19.102 that would 
incorporate parts of Sec.  109.103(b), which provides rules for the 
payment of civil money penalties. The national bank rules do not 
address this topic with specificity, and the OCC has determined that 
these provisions, which clarify when parties must pay civil money 
payments, should be applicable to both national banks and Federal 
savings associations. As a result of this amendment, respondents would 
be required to pay civil money penalties assessed pursuant to subpart A 
of part 19 within 60 days after the issuance of the notice of 
assessment, unless the OCC requires a different time for payment. If a 
respondent has made a timely request for a hearing to challenge the 
assessment of the penalty, the respondent would not be required to pay 
the penalty until the OCC has issued a final order of assessment. In 
such instances, the respondent would be required to pay the penalty 
within 60 days of service of the final order unless the OCC requires a 
different time for payment.
Subpart C--Removals, Suspensions, and Prohibitions When a Crime Is 
Charged or a Conviction Is Obtained
    Subpart C of part 19 includes the rules applicable in hearings 
brought against any institution-affiliated party \10\ who the OCC has 
suspended or removed from office or prohibited from further 
participation in the affairs a depository institution pursuant to 
section 8(g) of the FDIA (12 U.S.C. 1818(g)). Part 108 applies similar 
rules to officers, directors, or other persons participating in the 
conduct of the affairs of a Federal savings association, Federal 
savings association subsidiary, or affiliate service corporation, 
although part 108 differs slightly on certain procedural issues. As 
described below, the proposed rule would amend subpart C to incorporate 
certain provisions of part 108 that would be helpful to the OCC in 
these adjudicatory actions, specifically apply amended subpart C to 
both national banks and Federal savings associations, and remove part 
108. Although part 108 does not use the term ``institution-affiliated 
party,'' the OCC believes that the scope of part 108 is similar in 
substance to this term as defined in Sec.  19.3 by reference to the 
FDIA.
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    \10\ ``Institution-affiliated party,'' as defined in Sec.  19.3 
by reference to section 3(u) of the FDIA (12 U.S.C. 1813(u)), means: 
(1) Any director, officer, employee, or controlling stockholder 
(other than a bank holding company or savings and loan holding 
company) of, or agent for, an insured depository institution; (2) 
any other person who has filed or is required to file a change-in-
control notice with the appropriate Federal banking agency under 12 
U.S.C. 1817(j); (3) any shareholder (other than a bank holding 
company or savings and loan holding company), consultant, joint 
venture partner, and any other person as determined by the 
appropriate Federal banking agency who participates in the conduct 
of the affairs of an insured depository institution; and (4) any 
independent contractor (including any attorney, appraiser, or 
accountant) who knowingly or recklessly participates in any 
violation of any law or regulation, any breach of fiduciary duty, or 
any unsafe or unsound practice which caused or is likely to cause 
more than a minimal financial loss to, or a significant adverse 
effect on, the insured depository institution.
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19.110 Scope
    The proposed rule would amend Sec.  19.110 to include a definitions 
section for subpart C similar to the one for Federal savings 
associations in Sec.  108.2 to enhance the understanding and 
application of the rule and simplify the rule text. New Sec.  19.110(b) 
would define ``petitioner'' to mean an individual who has filed a 
petition for informal hearing under subpart C; ``depository 
institution'' to mean any national bank, Federal savings association, 
or Federal branch of a foreign bank; and ``OCC Supervisory Office'' to 
mean the Senior Deputy Comptroller or Deputy Comptroller of the OCC 
department or office responsible for supervision of the depository 
institution, or, in the case of an individual no longer affiliated with 
a particular depository institution, the Deputy Comptroller for Special 
Supervision. Furthermore, the proposal would label the existing 
paragraph in Sec.  19.110 as paragraph (a), Scope, and retitle the 
section heading to account for the addition of definitions.
19.111 Suspension, Removal, or Prohibition
    The proposed rule would reorganize Sec.  19.111 into paragraphs; 
retitle the section heading, as well as the subpart, to clarify that it 
applies to institution-affiliated parties and remove passive sentence 
structure. In newly designated Sec.  19.111(a), the proposal would 
correct an omission in current Sec.  19.111, which provides that the 
Comptroller may serve a notice of suspension or order of removal or 
prohibition pursuant to 12 U.S.C. 1818(g) on an institution-affiliated 
party and must serve a copy of this notice or order on the appropriate 
depository institution. Because 12 U.S.C. 1818(g) also provides for a 
notice of prohibition, the proposed rule would add a reference to this 
notice of prohibition to this paragraph. In addition, Sec.  108.4 
provides for method of service by the Comptroller. Like Sec.  108.4, 
newly designated Sec.  19.111(a) would specify the manner of service by 
the Comptroller, providing that the Comptroller serve the notice or 
order in the manner set forth in Sec.  19.11(c), Service of papers. The 
OCC also proposes to move the information regarding a request for a 
hearing by the institution-affiliated party to a separate paragraph 
Sec.  19.111(b); add the ability to send the hearing request by same 
day courier service or overnight delivery service, in addition to by 
certified mail or by personal service with a signed receipt as provided 
under the current rule; and add the caveat that this submission rule 
applies unless instructed otherwise by the Comptroller. This proposed 
revision also utilizes the newly defined term ``OCC Supervisory 
Office.''
    In addition, the proposed rule would include in Sec.  19.111(b)(2) 
a provision similar to Sec.  108.5(b) that requires an institution-
affiliated party in a request for a hearing to admit or deny each 
allegation, or state that they lack sufficient information to admit or 
deny each allegation, which would be treated as a denial. Proposed 
Sec.  19.111(b)(2) also provides that denials must fairly meet the 
substance of each allegation denied and that general denials are not 
permitted; when the institution-affiliated party denies part of an 
allegation, that part must be denied and the remainder specifically 
admitted; and any allegation in the notice or order which is not denied 
is deemed admitted for purposes of the proceeding. Furthermore, similar 
to Sec.  108.5(c), proposed Sec.  19.111(b)(2) provides that the 
request must state with particularity how the institution-affiliated 
party intends to show that its continued service to or participation in 
the affairs of the institution would not pose a threat to the interests 
of the institution's depositors or impair public confidence in any 
institution. The OCC believes that adopting these provisions from the

[[Page 22041]]

Federal savings association rule should help narrow the issues to be 
contested and make this rule more consistent with the adjudicatory rule 
in Sec.  19.19.
    Furthermore, the proposed rule would add the default provision 
included in Sec.  108.8 to Sec.  19.111, as new paragraph (c). Under 
this new paragraph, if the institution-affiliated party fails to timely 
file a petition for a hearing pursuant to Sec.  19.111(b); fails to 
appear at a hearing either in person or by attorney, or fails to submit 
a written argument where oral argument has been waived pursuant to 
Sec.  19.112(c), the notice of suspension or prohibition would remain 
in effect until the information, indictment, or complaint is finally 
disposed of and the order of removal or prohibition would remain in 
effect until terminated by the OCC. The OCC believes the application of 
this provision to national banks should clarify that there are 
consequences if a petitioner fails to appear or fails to answer.
19.112 Informal Hearing
    The proposal would make a number of changes to Sec.  19.112, which 
provides the procedures for informal suspension or removal hearings 
before the OCC involving an institution-affiliated party. In Sec.  
19.112(a), the proposal would update the name of the OCC's Enforcement 
and Compliance Division to OCC Enforcement. The proposal also would 
remove the requirement in this paragraph that the OCC Supervisory 
Office notify the appropriate OCC District Counsel of the hearing, as 
this is an unnecessary step.
    In Sec.  19.112(c)(2), the proposal would add language to clarify 
that, when responding to a petitioner's submissions, the OCC would 
serve other parties in the manner set forth in Sec.  19.11(c).
    In Sec.  19.112(d), the proposal would amend paragraph (d)(2), 
which provides that the informal hearing is not governed by formal 
rules of evidence, to clarify that these inapplicable formal rules of 
evidence include the Federal Rules of Evidence, as provided in Sec.  
19.36. The proposal also would clarify paragraph (d)(3)(i) by breaking 
up the first sentence into two sentences. In paragraph (d)(3)(ii), the 
proposal would provide that the presiding officer may require, instead 
of permit as in the current paragraph, a shorter time period in which 
the parties may request oral testimony or witnesses at a hearing, which 
is the more accurate action for a presiding officer. As in Sec.  
19.27(c), the proposal also would amend Sec.  19.112(d)(3)(ii) to 
provide that, by stipulation of the parties or by order of the 
presiding officer, a court reporter or other authorized person may 
administer the required oath to a witness remotely without being in the 
physical presence of the witness. This amendment would update the 
current oath requirement for witnesses to account for remote 
proceedings and conform this provision to Sec.  19.112(d)(4), which 
permits electronic presentations at the hearing. In paragraph 
(d)(3)(iii), the proposal would make technical changes to the different 
actions a presiding officer may take related to a suspension or 
prohibition based on an indictment, information, or complaint and a 
removal or prohibition with respect to a conviction or pre-trial 
diversion program to better reflect 12 U.S.C. 1818(g). Throughout 
paragraph (d) the proposal would make technical corrections by 
replacing ``appointed OCC attorney'' with ``OCC.''
    The proposed rule also would add a new paragraph (d)(4) to Sec.  
19.112 to provide rules governing electronic presentations in the 
course of a hearing. As in proposed Sec.  19.35(c), this provision 
would provide that, based on the circumstances of each hearing, the 
presiding officer may direct the use of, or any party may elect to use, 
an electronic presentation during the hearing. If the presiding officer 
requires an electronic presentation, each party would be responsible 
for its own presentation or related costs unless the parties agree to 
allocate presentation responsibilities and costs differently. This new 
language is necessary to account for the routine use of electronic 
presentations in hearings that existing rules do not address.
    Throughout Sec.  19.112, the proposal would utilize the newly 
defined term ``OCC Supervisory Office'' and remove passive sentence 
structure.
19.113 Recommended and Final Decisions
    The proposed rule would make a number of changes to Sec.  19.113, 
which provides the procedures for decisions by the presiding officer 
and the OCC. The proposal would update Sec.  19.113(c) to permit the 
Comptroller to notify the petitioner of a decision by electronic mail 
or other electronic means, if the petitioner consents, instead of by 
registered mail. The proposal also would make technical changes to 
paragraph (c) by replacing ``when'' with ``if'' in describing whether 
the petitioner has waived an oral hearing, replacing the ``must'' with 
``will'' in describing the Comptroller's notification of the decision, 
and replacing the ``and'' with ``or'' in describing the actions that 
the Comptroller may affirm, terminate, or modify in its final decision. 
In Sec.  19.113(d), the proposal would clarify that there could be more 
than one charge against an institution-affiliated party. In Sec.  
19.113(f), the proposal would remove the passive sentence structure. 
Lastly, the proposal would add headings to each paragraph.
Subparts D Through G--Actions Under the Federal Securities Laws
    Subparts D, E, F, and G of part 19 set forth the procedures 
applicable to actions taken by the OCC with respect to banks pursuant 
to various provisions of the Federal securities laws, including the 
Securities Exchange Act of 1934 (Exchange Act). Specifically, subpart D 
addresses exemption hearings under section 12(h) of the Exchange Act, 
subpart E addresses disciplinary proceedings, subpart F addresses civil 
money penalties, and subpart G addresses cease and desist authority. 
Although these Federal securities laws also apply to Federal savings 
associations, there are no comparable provisions in OCC regulations for 
Federal savings associations. Instead, the former OTS relied on the 
authority granted under the Exchange Act for these actions rather than 
incorporating the authority into its rules and specified in Sec.  
109.100(c) that the Uniform Rules of Practice and Procedure in part 
109, subpart A applied to proceedings under the Exchange Act. The OCC 
proposes to amend the rules in subparts D, E, F, and G to apply to 
Federal savings associations and to make other changes, described 
below. To streamline the rules, the OCC also proposes to combine 
subparts D, E, F, and G into one subpart D entitled ``Actions under the 
Federal Securities Laws,'' reserve subparts E, F and G; and remove 
Sec.  109.100(c).
19.120 Exemption Hearings Under Section 12(h) of the Securities 
Exchange Act of 1934
    The proposed rule would move the provisions in subpart D of part 19 
to a new Sec.  19.120. Current subpart D governs informal hearings by 
the Comptroller to determine whether, pursuant to authority in sections 
12(h) and (i) of the Exchange Act (15 U.S.C. 78l(h) and (i)), to exempt 
an issuer or a class of issuers from the provisions of sections 12(g), 
13, or 14 of the Exchange Act (15 U.S.C. 78l(g), 78m or 78n) or whether 
to exempt any officer, director, or beneficial owner of securities of 
an issuer from section 16 of the Exchange Act (15 U.S.C. 78p). This 
subpart currently covers issuers that are banks whose securities are 
registered pursuant to section 12(g) of the Exchange Act (15 U.S.C. 
78l(g)). In addition to proposing to apply this provision to issuers 
that

[[Page 22042]]

are Federal savings associations, the OCC proposes the following 
changes.
    Specifically, the proposal would clarify in proposed Sec.  
19.120(a) that this section would apply to national bank and Federal 
savings association issued securities that may be subject to 
registration in addition to those securities already registered. This 
change would permit a national bank or Federal savings association to 
obtain an exemption from the OCC in advance of registering.
    The OCC also proposes that when an applicant provides a copy of its 
newspaper notice of an exemption hearing to its shareholders pursuant 
to Sec.  19.120(c) it must do so in the same manner as is customary for 
shareholder communications, which could be through electronic means. 
This change should make it easier and less burdensome to comply with 
this notice requirement.
    In addition, as in proposed Sec. Sec.  19.35(c) and 19.112(d)(4), 
the proposed rule would add a provision, Sec.  19.120(d)(8), governing 
electronic presentations in the course of an Exchange Act-related 
hearing. This provision would provide that, based on the circumstances 
of each hearing, the presiding officer may direct the use of, or any 
party may elect to use, an electronic presentation during the hearing. 
If the presiding officer requires an electronic presentation during the 
hearing, each party would be responsible for its own presentation and 
related costs unless the parties agree to another manner by which to 
allocate presentation responsibilities and costs. As indicated above, 
this new language is necessary to account for the routine use of 
electronic presentations in hearings that the existing rule does not 
currently address. The proposed rule would make a conforming change in 
Sec.  19.120(d)(6) that would allow, by stipulation of the parties or 
by order of the presiding officer, a court reporter or other authorized 
person to administer the required oath to a witness remotely without 
being in the physical presence of the witness. Furthermore, the 
proposed rule would clarify in proposed Sec.  19.120(d)(9) that a 
transcript of the hearing may be provided by electronic means.
    Lastly, the OCC proposes technical changes to Sec.  19.120. The 
proposed rule would make minor, non-substantive changes in provisions 
redesignated as paragraphs (b) and (c), remove passive sentence 
structure in text redesignated as paragraph (d)(9), allow for more than 
one applicant in provisions redesignated as paragraphs (d)(4) and (5) 
and (e), and change references in this section to the ``Securities and 
Corporate Practices Division'' to ``Bank Advisory'' to reflect the 
reorganization of the OCC's Law Department.
19.121 Disciplinary Proceedings Involving the Federal Securities Laws
    The proposed rule would move the provisions in subpart E of part 19 
to a new Sec.  19.121. Current subpart E governs proceedings by the 
Comptroller to determine whether to take disciplinary actions against 
banks that are transfer agents, municipal securities dealers, 
government securities brokers, government securities dealers, or 
persons associated with or seeking to become associated with these 
institutions.\11\ The proposal would apply this section to Federal 
savings associations by defining ``bank'' to mean a national bank or 
Federal savings association, and, when referring to a government 
securities broker or government securities dealer, a Federal branch or 
agency of a foreign bank. In addition, the proposed rule would define 
``transfer agent,'' ``municipal securities dealer,'' ``government 
securities broker,'' ``government securities dealer,'' and person 
associated with a person engaged in these activities or with a bank 
engaged in these activities by cross-referencing to definitions in the 
Exchange Act. The proposal also makes conforming changes to these 
defined terms throughout the section. The OCC also is proposing 
technical changes to terms used in this section to correlate them more 
closely with terms used in the Exchange Act, including the addition to 
the scope of Sec.  19.121 of any person seeking to become associated 
with a government securities broker or government securities dealer. 
Furthermore, the OCC proposes to remove the reference to the 
Comptroller's delegate in redesignated paragraph (a)(2). The definition 
of ``Comptroller'' in Sec.  19.3, which applies to Sec.  19.121, 
includes a person delegated to perform the functions of the Comptroller 
of the Currency. Therefore, this reference is unnecessary. Lastly, the 
OCC proposes a clarifying change to replace the term ``party'' with the 
more accurate term ``respondent'' in redesignated paragraphs (b)(1) and 
(c)(2).
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    \11\ Pursuant to sections 3(a)(34)(G)(i) and 15C(c)(2)(A) of the 
Exchange Act (15 U.S.C. 78c(a)(34)(G)(i) and 78o-5(c)(2)(A), the OCC 
also may take disciplinary actions against Federal branches and 
agencies of foreign banks that are government securities brokers or 
government securities dealers or persons associated with or seeking 
to become associated with these entities.
---------------------------------------------------------------------------

19.122 Civil Money Penalty Authority Under Federal Securities Laws
    The proposed rule would move the provisions in subpart F of part 19 
to a new Sec.  19.122. Current subpart F governs proceedings by the 
Comptroller to determine whether to impose a civil money penalty 
against banks that are transfer agents, municipal securities dealers, 
government securities brokers, government securities dealers, or 
persons associated with or seeking to become associated with these 
institutions.\12\ As with proposed Sec.  19.121, the proposed rule 
would apply this provision to Federal savings associations by defining 
``bank'' to mean a national bank or Federal savings association and, 
when referring to a government securities broker or government 
securities dealer, a Federal branch or agency of a foreign bank. The 
OCC also proposes to define ``transfer agent,'' ``municipal securities 
dealer,'' ``government securities broker,'' ``government securities 
dealer,'' and person engaged in these activities or person associated 
with a bank engaged in these activities by cross-referencing to 
definitions in the Exchange Act. Lastly, as with proposed Sec.  19.121, 
the OCC has made other technical changes to terms used in this section 
to correlate them more closely with terms used in the Exchange Act, 
including the addition of persons seeking to become associated with a 
government securities broker or government securities dealer to the 
scope of this section.
---------------------------------------------------------------------------

    \12\ Id.
---------------------------------------------------------------------------

19.123 Cease and Desist Authority Under Federal Securities Laws
    The proposed rule would move the provisions in subpart G of part 19 
to a new Sec.  19.123. Current subpart G governs proceedings by the 
Comptroller to determine whether to initiate cease-and-desist 
proceedings against a national bank for violations of sections 12, 13, 
14(a), 14(c), 14(d), 14(f), and 16 of the Exchange Act (15 U.S.C. 78l, 
78m, 78n(a), 78n(c), 78n(d), 78n(f), and 78p) or implementing 
regulations. The proposed rule would apply this provision to both 
national banks and Federal savings associations. It also would update 
this provision by adding violations enacted by, or rules or regulations 
enacted thereunder, the Sarbanes-Oxley Act in 2002, as amended,\13\ 
specifically sections 301 \14\ (audit committees), 302 (corporate 
responsibility for financial reports), 303 (improper influence on 
conduct of audits), 304 (forfeiture of certain

[[Page 22043]]

bonuses and profits), 306 (insider trades during pension fund blackout 
periods), 401(b) (accuracy of financial reports), 404 (management 
assessment of internal controls), 406 (code of ethics for senior 
financial officers), and 407 (disclosure of audit committee financial 
expert) \15\ (15 U.S.C. 78j-1(m), 7241, 7242, 7243, 7244, 7261, 7262, 
7264, and 7265).
---------------------------------------------------------------------------

    \13\ Public Law 107-204, 116 Stat. 745 (2002).
    \14\ Adding section 10A(m) to the Exchange Act.
    \15\ 15 U.S.C. 78j-1(m), 7241, 7242, 7243, 7244, 7261, 7262, 
7264, and 7265.
---------------------------------------------------------------------------

Subpart H--Change in Bank Control
    The Change in Bank Control Act (CBCA), which added section 7(j) to 
the FDIA (12 U.S.C. 1817(j)) and which the OCC has implemented at 12 
CFR 5.50, provides that no person may acquire control of an insured 
depository institution unless the appropriate Federal bank regulatory 
agency has been given prior written notice of the proposed acquisition. 
If, after investigating and soliciting comment on the proposed 
acquisition, the agency disapproves the acquisition, the agency must 
mail a written notification to the filer within three days of the 
decision. The filer may then request an agency hearing on the proposed 
acquisition within 10 days of receipt of the disapproval notice. The 
Uniform Rules in part 19, subpart A, and part 109, subpart A, apply to 
hearings for filers whose proposed acquisition of a national bank or 
Federal savings association, respectively, under the CBCA has been 
disapproved by the OCC. Subpart H of part 19 provides additional 
hearing procedures for insured national banks. Section 5.50, which 
applies to both national banks and Federal savings associations, 
directs filers who wish to pursue a hearing for a disapproval decision 
to part 19, subpart H. However, subpart H refers only to national 
banks.
    Because 12 CFR 5.50 applies to both national banks and Federal 
savings associations, the proposed rule would amend subpart H by adding 
language that would make it specifically applicable to Federal savings 
associations in addition to national banks. Furthermore, because 12 CFR 
5.50 applies to both insured and uninsured institutions and refers all 
filers who have been disapproved under Sec.  5.50 to the part 19 
procedures, the proposed rule would amend subpart H to make it also 
applicable to uninsured institutions. In addition, the proposed rule 
would streamline subpart H by removing a description of the CBCA 
disapproval process and instead cross-referencing to 12 CFR 5.50 in the 
scope of Sec.  19.160 and removing current paragraph (a) in Sec.  
19.161, which contains provisions relating to disapproval notification 
that are duplicative of 12 CFR 5.50(f). The proposal also would add 
section headings to Sec.  19.160 and revise the section heading in 
Sec.  19.161.
Subpart I--Discovery Depositions and Subpoenas
    Subpart I of part 19 and Sec.  109.102 address the rules applicable 
to discovery depositions and subpoenas relating to national banks and 
Federal savings associations, respectively. These provisions are 
substantively similar but have slightly different wording. The proposed 
rule would apply part 19, subpart I to Federal savings associations and 
remove Sec.  109.102. The OCC also proposes further changes to subpart 
I. In Sec.  19.170(a) and (d), the proposal revises the phrase ``direct 
knowledge of matters that are non-privileged, relevant, and material to 
the proceeding'' to ``direct knowledge of matters that are non-
privileged and of material relevance to the proceeding.'' This change 
would clarify that persons being deposed have information of material 
relevance to the proceeding and would be consistent with the 
requirements for document discovery in current and proposed Sec.  
19.24(b). Furthermore, the proposal would amend paragraph (a) to 
specify that a party also may take a deposition of a hybrid fact-expert 
witness in addition to an expert and a person, including another party, 
who has direct knowledge of matters that meet the standards of the 
paragraph, labeled as a ``fact witness'' by this amendment. This 
amendment would define a hybrid fact-expert witness as a fact witness 
who also will provide relevant expert opinion testimony based on the 
witness's training and experience.
    The proposal also adds a new paragraph (a)(1) to Sec.  19.170 to 
require a party to produce an expert report for any testifying expert 
or hybrid fact-expert witness before the witness's deposition and that, 
unless otherwise provided by the ALJ, the party must produce such 
report at least 20 days prior to the deposition. This new provision 
would ensure that a deposing party has the benefit of the expert report 
prior to the deposition of an expert or hybrid fact-expert witness and 
that the deposing party has sufficient time to review the report prior 
to the deposition. Furthermore, new paragraph (a)(2) of Sec.  19.170 
would provide that respondents, collectively, are limited to a combined 
total of five depositions from all fact witnesses and hybrid fact-
expert witnesses. This paragraph also would provide that Enforcement 
Counsel has the same deposition limit. This limit in the number of 
depositions would add efficiencies to the discovery process and prevent 
deposition requests from delaying the completion of the proceeding. 
Lastly, proposed Sec.  19.170(a)(2) provides that a party is entitled 
to take a deposition of each expert witness designated by an opposing 
party. This provision would codify the right of a party to depose the 
opposing party's designated expert witness.
    The proposal would amend Sec.  19.170(b) to require that a 
deposition notice provide the manner for taking the deposition in 
addition to the time and place. In addition, the proposal would add 
language to Sec.  19.170(b) to indicate that a deposition notice may 
require the witness to be deposed at any place within a State, 
territory, or possession of the United States or the District of 
Columbia in which that witness resides or has a regular place of 
employment or such other convenient place as agreed by the noticing 
party and the witness. Paragraph (b) also would permit the parties to 
stipulate, or the ALJ to order, that a deposition be taken by telephone 
or other remote means. The OCC believes these changes would make it 
easier and perhaps less costly for parties to obtain, and witnesses to 
provide, depositions, thereby improving the fact-finding process.
    In Sec.  19.170(c), the proposal would provide that a party may 
take depositions no later than 20 days before the scheduled hearing 
date, instead of 10 days as in the current rule, except with permission 
of the ALJ for good cause shown. Increasing this time before a hearing 
will allow all parties more time to prepare for the hearing.
    As elsewhere in this proposal, the OCC proposes to amend Sec.  
19.170(d), Conduct of a deposition, to provide that, by stipulation of 
the parties or by order of the ALJ, a court reporter or other 
authorized person may administer the required oath to a deponent 
remotely without being in the physical presence of the deponent. This 
amendment would update the current oath requirement for witnesses to 
account for remote proceedings and conform this provision to Sec.  
19.170(b)(ii), which allows depositions to be taken by telephone or 
other remote means.
    The proposal would update Sec.  19.170(e)(1)(i) to allow for the 
witness's testimony to be recorded by electronic means such as by a 
video recording device. The current rule only allows for recording by a 
stenotype machine and electronic sound recording device. The proposed 
change would update the rule to reflect new

[[Page 22044]]

technology and add flexibility to the testimony process.
    Lastly, the proposal would make a non-substantive change to the 
heading in paragraph (a) and change the heading of paragraph (g) from 
``Fees'' to ``Expenses'' to more accurately describe the subject of the 
paragraph.
    With respect to Sec.  19.171, the proposal would amend paragraph 
(a) to correct a cross-reference and conform the reference to a place 
located in the United States to that used elsewhere in part 19. The 
proposal also would amend paragraph (b)(2), which requires the party 
serving a subpoena to file proof of service with the ALJ, to provide 
that this proof of service is not required if so ordered by the ALJ. 
The OCC is proposing this change because, in some OCC proceedings, the 
ALJ indicated they did not wish to receive this proof of service. 
Finally, the proposal would amend paragraph (c) to provide that any 
party, in addition to a person named in a subpoena, may file a motion 
to quash or modify the subpoena. This amendment would ensure that a 
party has the right to seek to quash or modify a third-party deposition 
subpoena.
Subpart J--Formal Investigations
    Subpart J of part 19 and part 112 address formal investigations 
against national banks and Federal savings associations, respectively. 
The proposed rule would amend subpart J to make it applicable to both 
national banks and Federal savings associations and remove part 112. 
Unlike the Federal savings association rule at Sec.  112.7(b), subpart 
J does not include a provision specifically providing for motions to 
quash subpoenas. The OCC has determined that it is neither necessary 
nor appropriate to include this provision because the recipient may 
challenge investigative subpoenas in Federal court. However, the 
proposal would add a new paragraph (c) to Sec.  19.184 of subpart J 
that is similar to the Federal savings association rule at Sec.  
112.7(c). This new paragraph would permit subpoenas that require the 
attendance and testimony of witnesses or the production of documents, 
including electronically stored information, to be served on any person 
or entity within any State, territory, or possession of the United 
States or the District of Columbia or as otherwise provided by law. 
This proposed provision also would subject foreign nationals to 
subpoenas if service is made upon a duly authorized agent located in 
the United States or in accordance with international requirements for 
service of subpoenas. The existing rule for national banks is not clear 
on service of foreign nationals, and the adoption of specific language 
from the Federal savings association rule should eliminate the disputes 
that previously have arisen on this issue. Furthermore, the addition of 
language regarding international subpoena requirements would codify 
existing OCC practice.
    The OCC also proposes further changes to subpart J. First, the OCC 
is proposing to amend Sec.  19.181, Confidentiality of formal 
investigations. Currently, this provision provides that information or 
documents obtained in the course of a formal investigation are 
confidential and may be disclosed only in accordance with the 
provisions of 12 CFR part 4. The OCC proposes to describe in more 
detail the information or documents that are confidential to better 
ensure the confidentiality of formal investigations. Specifically, 
proposed Sec.  19.181 would state that the entire record of any formal 
investigative proceeding, including the resolution or order of the 
Comptroller authorizing or terminating the proceeding; all subpoenas 
issued by the OCC during the investigation; and all information, 
documents, and transcripts obtained by the OCC in the course of a 
formal investigation, are confidential and may be disclosed only in 
accordance with the provisions of part 4. The proposal also would add 
that this information may be disclosed pursuant to the OCC discovery 
obligations under subpart A of part 19.
    Second, the OCC proposes to amend Sec.  19.182, Order to conduct a 
formal investigation, to clarify the list of actions persons authorized 
to conduct an investigation may take. Currently, this section provides 
that these persons may, among other things, issue subpoenas duces 
tecum, administer oaths, and receive affirmations as to any matter 
under investigation by the Comptroller. The proposal would add that 
these authorized persons also may take or cause to be taken testimony 
under oath, issue subpoenas other than subpoenas duces tecum, and 
modify subpoenas. This amendment would make this section more 
consistent with the powers enumerated in the relevant underlying 
statutes, including 12 U.S.C. 1818(n) and 1820(c). The proposal also 
would make a technical correction to indicate that authorized persons 
may administer affirmations rather than receive affirmations. Section 
19.182 also currently provides that, upon application and for good 
cause, the Comptroller may limit, modify, or withdraw the order at any 
stage of the proceedings. The proposal would clarify that the 
Comptroller may also terminate the order. Finally, the proposal would 
amend Sec.  19.182 to specifically indicate that the persons conducting 
the investigation are empowered by the Comptroller to do so.
    Third, the proposed rule would amend Sec.  19.183, Rights of 
witnesses. Current paragraph (a) provides that any person who is 
compelled or requested to furnish testimony, documentary evidence, or 
other information with respect to any matter under formal investigation 
must, on request, be shown the order initiating the investigation. The 
proposal would amend this provision to provide that such persons may 
not retain copies of the order without first receiving written approval 
of the OCC. This amendment would ensure the confidentiality of the 
order.
    Current paragraph (b) of Sec.  19.183 provides that a person 
testifying in a formal investigation may be accompanied, represented, 
and advised by counsel, and indicates that this right to counsel means 
that the attorney may be present at all times while the person is 
testifying and that the attorney may, among other things, question the 
person briefly at the conclusion of the testimony to clarify answers 
and make summary notes during the testimony solely for use of the 
person testifying. The proposal would amend this description of 
permissible attorney activities to provide that the attorney's 
questioning of the person may be on the record. This change would 
ensure a more complete formal record of the proceeding. In addition, 
the proposal would provide that the notes taken by the attorney during 
testimony may be used solely in representing the person. This change 
would allow the attorney to use these notes and not restrict use of the 
notes to the person testifying thereby enabling the attorney to better 
represent their client.
    Current paragraph (c) of Sec.  19.183 provides that any person who 
has given or will give testimony and counsel representing the person 
may be excluded from the proceedings during the taking of testimony of 
any other witness. The proposal would amend this provision to specify 
that such person and counsel may be excluded during the testimony of 
any other person at the discretion of the OCC or the OCC's designated 
representative. Furthermore, the proposal would provide that neither 
attorney(s) for the institution(s) affiliated with the testifying 
person nor attorneys for any other interested persons have any right to 
be present during the testimony of any person not personally 
represented by such attorney. These changes would ensure the 
confidentiality and integrity

[[Page 22045]]

of the proceeding by mitigating conflicts of interest and clarify that 
it is the OCC or OCC's designated representative who makes the decision 
on exclusion.
    Current paragraph (d) of Sec.  19.183 provides that any person who 
is compelled to give testimony is entitled to inspect any transcript 
that has been made of the testimony but may not obtain a copy if the 
Comptroller's representatives conducting the proceedings have cause to 
believe that the contents should not be disclosed pending completion of 
the investigation. The proposal would remove the burden of proving 
``cause'' included in this provision, as the OCC finds this 
unnecessary. The proposal also would eliminate the language that limits 
the release of the transcript pending completion of the investigation 
because the reasons for not disclosing the transcript may persist 
beyond the conclusion of any pending investigation.
    Paragraph (e) of Sec.  19.183 provides that any designated 
representative conducting an investigative proceeding must report to 
the Comptroller any instances where a person has been guilty of 
dilatory, obstructionist, or insubordinate conduct during the course of 
the proceeding or any other instance involving a violation of this 
part. As this paragraph does not pertain to rights of witnesses, and to 
make clear that this provision applies to all formal investigations 
covered by subpart J, the OCC proposes to redesignate this paragraph as 
a new Sec.  19.185. In redesignated Sec.  19.185, the OCC proposes 
replacing the phrase ``has been guilty of'' with ``has engaged in.'' 
The phrase ``has been guilty of'' is unclear in the context of this 
rule. Furthermore, the OCC does not believe it is appropriate for a 
person to be found guilty of this behavior before the designated 
representative reports this person to the OCC. With this change, the 
OCC may investigate or take other action with respect to this 
individual to ensure the fairness and accuracy of the proceeding in a 
more timely manner. This change also conforms the scope of this 
provision with the scope of a similar provision, Sec.  19.197, which 
involves the reporting of certain conduct of an individual practicing 
before the OCC.
    Fourth, the proposal would amend Sec.  19.184, Service of subpoena 
and payment of witness expenses, by removing the specific language in 
paragraph (b) regarding the payment of witnesses and instead cross-
reference to the more detailed rule for witness payments contained in 
revised Sec.  19.14, discussed previously.
    Lastly, the OCC proposes technical changes to subpart J. The 
proposal would replace references to ``the Comptroller'' with ``the 
OCC'' in Sec.  19.183(b) and (d) and in redesignated Sec.  19.185 and 
replace the term ``representatives'' with ``designated 
representatives'' in Sec.  19.183(d)'' to align the provisions more 
closely with the statute. The proposal also would remove the references 
to the ``Comptroller's delegate'' in Sec. Sec.  19.180 and 19.182 as 
the definition of ``Comptroller'' in Sec.  19.3, which applies to 
subpart J, includes a person delegated to perform the functions of the 
Comptroller of the Currency. In addition, the proposal would add 
reference to Federal branches and agencies in Sec.  19.180 to more 
completely describe those entities that are subject to the OCC's 
examination authority. Finally, the proposal would add section headings 
to Sec.  19.183.
Subpart K--Parties and Representational Practice Before the OCC; 
Standards of Conduct
    Subpart K of part 19 contains rules relating to parties and 
representational practice before the OCC. The OCC is proposing mostly 
technical changes to this subpart.
    First, in Sec.  19.190, Scope, the proposal would make a confirming 
change to a cross-reference to reflect this rulemaking's proposed 
amendments to subpart D.
    Second, the proposal would amend the definition of ``practice 
before the OCC'' in paragraph (a) of Sec.  19.191, Definitions. 
Currently, the OCC defines the term to include any matters connected 
with presentations to the OCC or any of its officers or employees 
relating to a client's rights, privileges, or liabilities under laws or 
regulations administered by the OCC. The proposed rule would clarify 
this statement so that it applies to both written and oral 
presentations. Section 19.191(a) also provides that the term ``practice 
before the OCC'' does not include work prepared for a bank solely at 
its request for use in the ordinary course of its business. The 
proposal would amend this statement so that it also includes work 
prepared for a Federal savings association and a Federal branch or 
agency of a foreign bank, and change ``bank'' to ``national bank.'' 
These changes are part of the OCC's application of part 19 to Federal 
savings associations and the OCC's specific inclusion of Federal 
branches and agencies in part 19 to clarify the application of part 19 
to all entities supervised by the OCC.
    Third, the proposal would amend Sec.  19.194, Eligibility of 
attorneys and accountants to practice, by removing the phrase ``who is 
qualified to practice as an attorney'' in paragraph (a) and the phrase 
``who is qualified to practice as a certified public accountant or 
public accountant'' in paragraph (b). Section 19.191 defines the terms 
``attorney'' and ``accountant'' and these definitions reference 
qualification requirements. Therefore, these phrases are superfluous.
    Fourth, the proposal would amend Sec.  19.196, Disreputable 
conduct, which provides a nonexclusive list of disreputable conduct for 
which an individual may be censured, debarred, or suspended from 
practice before the OCC. Paragraph (d) of this section includes on this 
list disbarment or suspension from practice as an attorney or as a 
certified public accountant or public accountant by any duly 
constituted authority of any State, possession, or commonwealth of the 
United States or the District of Columbia for the conviction of a 
felony or misdemeanor involving moral turpitude in matters relating to 
the supervisory responsibilities of the OCC, where the conviction has 
not been reversed on appeal. The proposed rule would delete the phrase 
``in matters relating to the supervisory responsibilities of the OCC'' 
so as not to limit the felony or misdemeanor conviction to only OCC-
related matters. The OCC believes that an individual engaged in any of 
the conduct listed in this section, whether or not related to OCC 
supervisory matters, should not practice before the OCC.
    Fifth, the proposal would replace the reference to the OTS in Sec.  
19.196(g) with ``the former OTS,'' as the OTS no longer exists.
    Sixth, the proposal would amend Sec.  19.197, which provides the 
standards and rules for initiating disciplinary proceedings. Paragraph 
(a) of this section provides that an individual, including any employee 
of the OCC, who has reason to believe that an individual practicing 
before the OCC in a representative capacity has engaged in any conduct 
that would serve as a basis for censure, suspension, or debarment under 
Sec.  19.192 (such as contemptuous conduct, materially injuring or 
prejudicing another party, violating a law or order, or unduly delaying 
proceedings) may report this conduct to the OCC or a person delegated 
to receive this information by the Comptroller. The OCC is proposing to 
broaden the application of this paragraph to conduct under all of 
subpart K, which includes incompetence (Sec.  19.195) and

[[Page 22046]]

disreputable conduct (Sec.  19.196), instead of conduct only under 
Sec.  19.192. The OCC believes that an individual found to be 
incompetent or to have engaged in disreputable conduct also should be 
subject to a disciplinary proceeding under this section.
    Seventh, the proposal would amend Sec.  19.198, Conferences, to add 
the terms ``censure'' in paragraph (a) and ``debarment'' in paragraph 
(b) to correct missing references. The proposal also would change the 
heading on Sec.  19.198(b) from ``Resignation or voluntary suspension'' 
to ``Voluntary suspension or debarment'' so that it more accurately 
reflects the subject of the paragraph.
    Eighth, the proposal would amend paragraph (a) of Sec.  19.200, 
which provides that if the final order against the respondent is for 
debarment, the individual may not practice before the OCC unless 
otherwise permitted to do so by the Comptroller, by clarifying that the 
Comptroller's permission to permit such practice is pursuant to Sec.  
19.201. Section 19.201 provides that the Comptroller may entertain a 
petition for reinstatement after the expiration of the time period 
designated in the order of debarment and that the Comptroller may grant 
reinstatement only if satisfied that the petitioner is likely to act in 
accordance with part 19 and if granting reinstatement would not be 
contrary to the public interest. Section 19.201 further provides that 
any request for reinstatement is limited to written submissions unless 
the Comptroller, in their discretion, affords the petitioner a hearing. 
The amendment merely confirms that a debarred respondent only may be 
reinstated pursuant to the process set forth in Sec.  19.201. It makes 
no substantive change. The proposal also would revise the heading of 
Sec.  19.200 to reflect the order of topics covered by the section.
    Ninth, the proposal would remove the references to the 
``Comptroller's delegate'' in Sec. Sec.  19.197(b) and (c), 19.199, and 
19.200(d) as the definition of ``Comptroller'' in Sec.  19.3, which 
applies to subpart K, includes a person delegated to perform the 
functions of the Comptroller of the Currency.
    Finally, the proposal would make several minor, nonsubstantive 
wording changes throughout subpart K.
Subpart L--Equal Access to Justice Act
    In general, EAJA,\16\ codified at 5 U.S.C. 504, authorizes the 
payment of attorney's fees and other expenses to eligible parties who 
prevail over the United States in certain adversary adjudications, 
absent a showing by the government that its position was substantially 
justified or that special circumstances make an EAJA award unjust. EAJA 
requires each agency to issue rules that establish uniform procedures 
for the submission and consideration of applications for an EAJA 
award.\17\ The OCC currently meets this requirement in subpart L of 
part 19, which provides that EAJA implementing regulation promulgated 
by the U.S. Department of the Treasury (Treasury), set forth at 31 CFR 
part 6, are applicable to formal adjudicatory proceedings under part 
19. The OCC is proposing to delete the cross-reference to the Treasury 
regulation and amend subpart L to set forth EAJA regulations 
specifically applicable to certain OCC adversary adjudications 
conducted under part 19.
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    \16\ Public Law 96-481, title II, sec. 203(a)(1), (c) (1980), 
revived and amended Public Law 99-80, sec. 1, 6 (1985).
    \17\ 5 U.S.C. 504(c)(1). EAJA also requires that each agency 
issue its EAJA rule after consultation with the Chairman of ACUS. 5 
U.S.C. 504(c)(1). Pursuant to instructions provided by ACUS in the 
preamble to the Model Rule, the OCC will notify the Office of the 
Chairman of ACUS of the proposed rule and will consider any comments 
provided by ACUS when drafting a final rule. See 84 FR 38934.
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    The OCC has based proposed subpart L on the revised model rule 
implementing EAJA published in 2019 by the Administrative Conference of 
the United States (ACUS) (Model Rule).\18\ As discussed below, the OCC 
has customized the proposed rule in certain places to reflect the OCC's 
procedures in adversary adjudications, reorganized a few provisions 
included in the Model Rule, made other changes based on the Treasury 
EAJA rule as well as the EAJA rules of the Board and FDIC \19\ and made 
non-substantive grammatical or stylistic changes. Although the 
Treasury, Board, and FDIC EAJA rules are based on earlier versions of 
the ACUS model rule, the OCC believes that these provisions remain 
useful and clarify the application of EAJA to OCC adversary 
proceedings.
---------------------------------------------------------------------------

    \18\ 84 FR 38934 (Aug. 18, 2019). ACUS originally issued an EAJA 
model rule in 1981 (46 FR 32900 (June 25, 1981)) and previously 
revised its model rule in 1986 (51 FR 16659 (May 6, 1986) 
(previously codified at 1 CFR 315)). ACUS issued its model rule to 
assist agencies when adopting their EAJA rules and encourages 
agencies to set out and implement this model rule as part of their 
own EAJA rules. Id. The Treasury EAJA rule is based on the 1981 EAJA 
model rule.
    \19\ 12 CFR 263, subpart G (Board) and 12 CFR 308, subpart P 
(FDIC). Both the Board and FDIC EAJA rules are based on the earlier 
versions of the ACUS model rule.
---------------------------------------------------------------------------

    Authority and scope; waiver. Proposed Sec.  19.205 describes the 
general purpose and scope of EAJA. Specifically, an eligible party may 
receive an award of attorney fees and other expenses when it prevails 
over an agency in certain administrative proceedings (adversary 
adjudications) unless the agency's position was substantially justified 
or special circumstances make an award unjust. Furthermore, as provided 
in the Treasury regulations, and as determined by EAJA caselaw, this 
proposed provision provides that no presumption under this subpart 
arises that the agency's position was not substantially justified 
because the agency did not prevail.\20\
---------------------------------------------------------------------------

    \20\ See 31 CFR 6.5. See also, e.g., Pierce v. Underwood, 487 
U.S. 552 (1988); Miles v. Bowen, 632 F. Supp. 282 (M.D. Ala. 1986).
---------------------------------------------------------------------------

    The proposed rule does not contain the provision in the Model Rule 
that permits an eligible party, even if not a prevailing party, to 
receive an award under EAJA when it successfully defends against an 
excessive demand made by the agency. Although EAJA permits excessive 
demand awards, EAJA specifically provides that excessive demand awards 
be paid ``only as a consequence of appropriations provided in 
advance.'' \21\ Because the OCC is not an appropriated agency and 
instead receives its funding through assessments on the institutions it 
regulates, the OCC believes that this EAJA excessive demand provision 
does not apply to the OCC. Consequently, the OCC's proposed EAJA rule 
does not include provisions in the Model Rule specifically related to 
excessive demand awards.
---------------------------------------------------------------------------

    \21\ 5 U.S.C. 504(a)(4).
---------------------------------------------------------------------------

    As provided in proposed Sec.  19.205(b), the OCC has determined 
that proceedings listed in Sec. Sec.  19.1, 19.110, 19.120, 19.190, 
19.230, and 19.241 meet the EAJA definition of ``adjudicatory 
adjudications'' and are covered by subpart L.
    Paragraph (c) of Sec.  19.205 provides that after reasonable notice 
to the parties, the presiding officer or OCC may waive, for good cause 
shown, any provision contained in subpart L as long as the waiver is 
consistent with the terms and purpose of the EAJA. Although this 
provision is not included in the ACUS model rule, the OCC finds that 
this provision would provide useful discretion to the presiding officer 
and the OCC, as relevant, during the EAJA process and would provide for 
the smoother conduct of EAJA proceedings should Congress subsequently 
amend EAJA and the OCC has not yet updated its corresponding EAJA 
implementing regulations.
    Definitions. Proposed Sec.  19.206 sets forth definitions of terms 
used in this subpart. Unless otherwise noted, these

[[Page 22047]]

definitions are substantively identical to the definitions in the Model 
Rule and based on the definitions in EAJA.
    Paragraph (a) would define ``adversary adjudication'' to mean an 
adjudication under 5 U.S.C. 554 in which the position of the OCC is 
represented by Enforcement Counsel.\22\ With certain exceptions, 
section 554 applies to adjudications required by statute to be 
determined on the record after opportunity for an agency hearing.\23\ 
19.230, and 19.241. Unlike EAJA and the Model Rule, the OCC's proposed 
definition would not specifically exclude from this definition 
adjudications related to setting rates, licensing decisions, contract 
appeals, and the Religious Freedom Restoration Act of 1993.\24\ These 
categories of adjudications are not covered by part 19 and therefore a 
specific exclusion in the OCC rule is not necessary.
---------------------------------------------------------------------------

    \22\ See 5 U.S.C. 504(b)(1)(C) and Sec.  2.01(b) of the Model 
Rule.
    \23\ Section 554 of title 5 does not apply to: (1) A matter 
subject to a subsequent trial of the law and the facts de novo in a 
court; (2) the selection or tenure of an employee, except a [sic] 
administrative law judge appointed under section 3105 of this title; 
(3) proceedings in which decisions rest solely on inspections, 
tests, or elections; (4) the conduct of military or foreign affairs 
functions; (5) cases in which an agency is acting as an agent for a 
court; or (6) the certification of worker representatives. 5 U.S.C. 
504(a).
    \24\ EAJA and the Model Rule specifically (i) exclude an 
adjudication for the purpose of establishing or fixing a rate or for 
the purpose of granting or renewing a license, (ii) any appeal of a 
decision made pursuant to section 7103 of title 41 before an agency 
board of contract appeals as provided in section 7105 of title 41, 
(iii) any hearing conducted under chapter 38 of title 31, and (iv) 
the Religious Freedom Restoration Act of 1993.
---------------------------------------------------------------------------

    Paragraph (b) would define ``final disposition'' as the date on 
which a decision or order disposing of the merits of the proceeding, or 
any other complete resolution of the proceeding such as a settlement or 
voluntary dismissal becomes final and unappealable, both within the OCC 
and to the courts.\25\
---------------------------------------------------------------------------

    \25\ See Sec.  2.01(e) of the Model Rule.
---------------------------------------------------------------------------

    Paragraph (c) would define ``party'' to mean a party, defined in 5 
U.S.C. 551(3),\26\ that is (1) an individual whose net worth did not 
exceed $2,000,000 at the time that the adversary adjudication was 
initiated or (2) any owner of an unincorporated businesses, or any 
partnership, corporation, unit of local government or organization with 
a net worth not exceeding $7,000,000 and no more than 500 employees at 
the time that the adversary adjudication was initiated, except that the 
net worth limitation does not apply to certain tax-exempt organizations 
described in section 501(c)(3) of the Internal Revenue Code of 1986 or 
a cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act.\27\ This proposed definition also provides 
that the net worth and number of employees of the applicant and, where 
appropriate, any of its affiliates must be aggregated when determining 
the applicability of this definition. The OCC is including this 
aggregation provision, which is not included in the Model Rule, 
because, as discussed below, the OCC is proposing to require 
information on affiliates for certain parties.
---------------------------------------------------------------------------

    \26\ Section 551(3) defines ``party'' to include a person or 
agency named or admitted as a party, or properly seeking and 
entitled as of right to be admitted as a party, in an agency 
proceeding, and a person or agency admitted by an agency as a party 
for limited purposes.
    \27\ See 5 U.S.C. 504(b)(1)(B) and Sec.  2.01(f) of the Model 
Rule.
---------------------------------------------------------------------------

    Paragraph (d) would define ``position of the OCC'' to mean the 
OCC's position in an adversary adjudication as well as the action or 
failure to act by the OCC upon which the adversary adjudication is 
based. This paragraph also would provide that fees and other expenses 
may not be awarded to a party for any portion of the adversary 
adjudication if the party has unreasonably drawn out the 
proceeding.\28\
---------------------------------------------------------------------------

    \28\ See 5 U.S.C. 504(b)(1)(E) and Sec.  2.01(g) of the Model 
Rule.
---------------------------------------------------------------------------

    Paragraph (e) would define ``presiding officer'' as an official, 
whether an administrative law judge or otherwise, that presided over 
the adversary adjudication or the official presiding over an EAJA 
proceeding.\29\ As noted below in proposed Sec.  19.207, upon receipt 
of an EAJA application, the OCC will, to the extent feasible, refer the 
matter to the official who heard the underlying adversary adjudication.
---------------------------------------------------------------------------

    \29\ See the definition of ``adjudicative officer'' in 5 U.S.C. 
504(b)(1)(D) and Sec.  2.01(a) of the Model Rule. The OCC has chosen 
to use the term ``presiding officer'' instead of ``adjudicative 
officer'' as that is the term used elsewhere in part 19.
---------------------------------------------------------------------------

    Application requirements. Proposed Sec.  19.207 sets out 
application requirements for a party seeking an award under EAJA. This 
section would require a party to file an application with the OCC 
within 30 days after the OCC's final disposition of the adversary 
adjudication. It would require the application to include (1) the 
identity of the applicant and the adjudicatory proceeding for which an 
award is sought; (2) a showing that the applicant has prevailed and 
identification of the OCC position that the applicant alleges was not 
substantially justified; (3) the basis for the applicant's belief that 
the position was not substantially justified; (4) unless the applicant 
is an individual, the number of employees of the applicant and a brief 
description of the type and purpose of the organization or business; 
(5) a showing of how the applicant meets the definition of ``party'' 
under proposed Sec.  19.206(e), including documentation of net worth 
pursuant to proposed Sec.  19.208; (6) documentation of the fees and 
expenses sought per proposed Sec.  19.209; (7) signature by the 
applicant or the applicant's authorized officer or attorney; (8) any 
other matter the applicant wishes the OCC to consider in determining 
whether and in what amount an award should be made; and (9) written 
verification under penalty of perjury that the information contained in 
the information provided is true and correct. These application 
requirements are based on Sec.  3.01 of the Model Rule,\30\ except for 
the provision, taken from the Treasury rule,\31\ providing that the 
applicant may include other matters for the OCC to consider. The OCC 
believes that this further information could assist the presiding 
officer when reviewing the EAJA claim and, by including this 
information at the application stage, may make the EAJA process more 
efficient.
---------------------------------------------------------------------------

    \30\ See also 5 U.S.C. 504(a)(2).
    \31\ 31 CFR 6.8(d).
---------------------------------------------------------------------------

    Although not included in EAJA or the Model Rule, proposed Sec.  
19.207(c) provides that, upon receipt of an EAJA application, the OCC 
will to the extent feasible refer the matter to the official who heard 
the underlying adversary adjudication. The OCC is proposing this 
provision because it believes that the official presiding over the 
adversary proceeding subject to the EAJA application is in the best 
position to review the EAJA application, and that this referral 
directive should be included in the proposed rule for clarity.
    Net worth exhibit. Proposed Sec.  19.208 requires specific net 
worth documentation to accompany certain EAJA applications. This 
documentation is necessary to determine whether the applicant meets the 
definition of ``party'' under proposed Sec.  19.206(c) and therefore be 
eligible for an EAJA award. Paragraph (a) would require an applicant, 
other than an applicant that is a non-profit or a cooperative 
association, to provide with its EAJA application a detailed exhibit of 
the applicant's, and where applicable, any of its affiliates' net worth 
at the time the adversary adjudication was initiated. Unless otherwise 
required, this paragraph would permit this exhibit to be in any form 
convenient to the applicant that provides full disclosure of the 
applicant's and affiliates' assets and liabilities sufficient to 
determine whether the applicant qualifies under

[[Page 22048]]

the standards of this subpart. Furthermore, this paragraph would permit 
a presiding officer to require an applicant to file additional 
information to determine its eligibility for an award. These net worth 
exhibit requirements are taken from Sec.  3.02 of the Model Rule, 
except that the proposal would require the net worth information from 
affiliates, where appropriate. Because of the structure and 
interrelatedness of many financial institutions, the OCC believes that 
affiliate net worth will often prove relevant when determining 
eligibility for an EAJA award. The OCC notes that the EAJA rules issued 
by Treasury, the Board, and the FDIC require net worth information from 
affiliates to determine eligibility under EAJA.\32\
---------------------------------------------------------------------------

    \32\ See 31 CFR 6.4(f) (Treasury); 12 CFR part 263.105 (Board); 
and 12 CFR part 308.177 (FDIC).
---------------------------------------------------------------------------

    Proposed Sec.  19.208 also includes further provisions included in 
the Board's and the FDIC's EAJA regulation but not included in the 
Model Rule.\33\ These provisions provide more detailed information as 
to what the OCC will accept in satisfaction of the net worth exhibit 
requirement or pertain specifically to national banks and Federal 
savings associations. Specifically, paragraph (a)(1) would permit the 
use of unaudited financial statements for individual applicants as well 
as certain financial statements or reports submitted to a Federal or 
State agency for determining individual net worth, unless the presiding 
officer or the OCC otherwise requires. For applicants or affiliates 
that are not banks or savings associations, paragraph (a)(2) provides 
that net worth will be considered to be the excess of total assets over 
total liabilities as of the date the underlying proceeding was 
initiated. For banks and savings associations, paragraph (a)(3) would 
require the submission of a Consolidated Report of Condition and Income 
(Call Report) and would provide that net worth would be the total 
equity capital as reported in the Call Report filed for the last 
reporting date before the initiation of the proceeding.
---------------------------------------------------------------------------

    \33\ Id.
---------------------------------------------------------------------------

    Similar to Sec.  3.02 of the model rule, paragraph (b) would 
provide that the net worth exhibit will be included in the public 
record of the proceeding unless an applicant believes that there are 
legal grounds for withholding it from disclosure and requests that the 
documents be filed under seal or otherwise treated as confidential.
    Documentation of fees and expenses. As provided in the Sec.  3.03 
of the Model Rule, proposed Sec.  19.209 would require applications to 
be accompanied by adequate documentation of the fees and other expenses 
incurred after initiation of the adversary adjudication. This 
information is necessary to determine any EAJA award. Specifically, 
this section would require a separate itemized statement for each 
professional firm or individual whose services are covered by the 
application showing the hours spent in connection with the proceeding 
by each individual, a description of the specific services provided, 
the rate at which each fee has been computed, any expenses for which 
reimbursement is sought, the total amount claimed, and the total amount 
paid or payable by the applicant or by any other person or entity for 
the services provided. This section also would authorize a presiding 
officer to require an applicant to provide vouchers, receipts, or other 
substantiation for any fees or expenses claimed.
    Unlike the Model Rule, this provision also provides that an 
application seeking an increase in fees to account for inflation 
pursuant to proposed Sec.  19.215(d)(1)(i), discussed below, also must 
include adequate documentation of the change in the consumer price 
index for the attorney or agent's locality.
    Filing and service of documents. As in Sec.  4.01 of the Model 
Rule, proposed Sec.  19.210 requires that applications for an award, or 
any accompanying documentation related to an application, be filed and 
served on all parties to the proceeding in accordance with Sec.  19.11, 
Service of papers, except for confidential information pursuant to 
proposed Sec.  19.208(b).
    Answer to application. As provided in Sec.  4.02 of the Model Rule, 
proposed Sec.  19.211 provides that Enforcement Counsel may file an 
answer to an EAJA application within 30 days after service of the 
application except in cases involving settlement negotiations under 
proposed Sec.  19.213. This section would provide that failure to file 
an answer within 30 days may be treated as consent to the award 
requested unless Enforcement Counsel requests an extension of time for 
filing or files a statement of intent to negotiate a settlement under 
proposed Sec.  19.213. This section would require the answer to explain 
in detail any objections to the award requested and identify the facts 
supporting Enforcement Counsel's position. For any facts not already in 
the record of the proceeding, Enforcement Counsel would be required to 
provide supporting affidavits or a request for further proceedings 
under proposed Sec.  19.214 with the answer. Unlike the Model Rule, 
proposed Sec.  19.211 does not include information related to 
settlement negotiations and instead cross-references to Sec.  19.213, 
which discusses settlement of an EAJA award. The OCC believes that, for 
ease of use, all settlement provisions should be included in the same 
section of the regulation.
    Reply. As in Sec.  4.03 of the Model Rule, proposed Sec.  19.212 
would permit an applicant to reply within 15 days after service of an 
answer. For facts not already in the record, the applicant would be 
required to provide supporting affidavits or a request for further 
proceedings pursuant to Sec.  19.214 with the answer.
    Settlement. As in Sec.  4.04 of the Model Rule, proposed Sec.  
19.213 would provide that the applicant and Enforcement Counsel may 
agree to a proposed settlement before final action on the application, 
either in connection with a settlement of the underlying proceeding or 
after conclusion of an underlying proceeding, in accordance with the 
OCC's standard settlement procedure pursuant to Sec.  19.15, 
Opportunity for informal settlement. In a case where a prevailing party 
and Enforcement Counsel agree on a proposed settlement of an award 
before an EAJA application has been filed, this section would require 
the application to be filed with the proposed settlement. Proposed 
Sec.  19.213 also would clarify that, if a proposed settlement of an 
underlying proceeding provides for each side to pay its own expenses 
and the settlement is accepted, no application under this subpart may 
be filed. However, this section differs from Sec.  4.04 of the Model 
Rule by including a provision the Model Rule includes in its section 
relating to an answer to an application, Sec.  4.02. Specifically, 
proposed Sec.  19.213 would specify that, if after an application is 
submitted, Enforcement Counsel and the applicant believe that they can 
reach a settlement, they may file a joint statement of their intent to 
negotiate a settlement. Filing this statement would extend the time for 
filing an answer under proposed Sec.  19.211 for an additional 30 days. 
Further extensions could be granted by the presiding officer at the 
joint request of the applicant and Enforcement Counsel. As indicated 
above, the OCC believes that this provision is better placed in Sec.  
19.213 so that all settlement information is included in the same 
section of the regulation.
    Further Proceedings. Ordinarily, the determination of an EAJA award 
would be made on the basis of the written record. However, proposed 
Sec.  19.214(a) would permit an applicant or Enforcement Counsel to 
request the

[[Page 22049]]

filing of additional written submissions, an informal conference, oral 
argument, discovery, or an evidentiary hearing with respect to issues 
other than whether the OCC's position was substantially justified, such 
as issues involving the applicant's eligibility or substantiation of 
fees or expenses. The presiding officer may permit these further 
proceedings if necessary for a full and fair decision on the 
application. The presiding officer also may order these additional 
proceedings on its own initiative. In addition, paragraph (a) would 
require that further proceedings be held as promptly as possible so as 
not to delay resolution of the EAJA application. The proposed rule 
lists applicant eligibility or substantiation of fees and expenses as 
examples of permissible issues for further proceedings. Paragraph (a) 
is based on Sec.  4.05 of the Model Rule. However, proposed Sec.  
19.214 does not contain the Model Rule's statement regarding the basis 
for a decision on whether the OCC's position was substantially 
justified. The OCC believes it is more appropriate to include this 
statement in Sec.  19.215, Decisions. In addition, to list all possible 
further proceedings available more completely, the proposed rule also 
permits the applicant or Enforcement Counsel to request an informal 
conference, which is not listed in the Model Rule.
    As in Sec.  4.05 of the Model Rule, paragraph (b) of proposed Sec.  
19.214 would require that any request for further proceedings 
specifically identify the information sought or any disputed issues and 
explain why additional proceedings are necessary to resolve the issues.
    Decision. The OCC's proposed section on EAJA decisions, Sec.  
19.215, is based on 5 U.S.C. 504(a)(3) and in part on Sec.  4.06 of the 
Model Rule. Proposed paragraph (a) of Sec.  19.215 provides that a 
presiding officer must base its decision on whether the position of the 
OCC was substantially justified on the administrative record as a whole 
of the adversary adjudication for which fees and other expenses are 
sought. The Model Rule includes this provision in its section on 
further proceedings, Sec.  19.214. However, the OCC believes this 
requirement better belongs in the section of the rule outlining EAJA 
decisions because it provides parameters for the presiding officer's 
decision.
    As in Sec.  4.06 of the Model Rule, proposed paragraph (b) of Sec.  
19.215 would mandate the timing of the presiding officer's decisions. 
It would require the presiding officer to issue a recommended decision 
in writing on an EAJA application within 90 days after the time for 
filing a reply or within 90 days of the completion of further 
proceedings held pursuant to proposed Sec.  19.214.\34\
---------------------------------------------------------------------------

    \34\ The Model Rule provides that an agency may determine the 
specific time period for this section.
---------------------------------------------------------------------------

    Also, as in Sec.  4.06 of the Model Rule, proposed paragraph (c) of 
Sec.  19.215 provides that a decision must include written findings and 
conclusions on an applicant's eligibility and status as a prevailing 
party. The decision must also include, if applicable, an explanation of 
the reasons for any difference between the amount requested and the 
amount awarded, findings on whether the OCC's position was 
substantially justified, whether the applicant unduly and unreasonably 
protracted the proceedings, or whether special circumstances would make 
an award unjust. Paragraph (c) differs from Sec.  4.06 of the Model 
Rule in that it includes language taken from Sec.  4.05 of the Model 
Rule. Specifically, paragraph (c) provides that the presiding officer 
must determine whether or not the position of the OCC was substantially 
justified on the basis of the administrative record as a whole of the 
adversary adjudication for which fees and other expenses are sought.
    Proposed paragraph (d) of Sec.  19.215 would provide the 
requirements for EAJA decisions. Paragraphs (d)(1), (2) and (3) of 
proposed Sec.  19.215 are not included in the Model Rule but are based 
on the EAJA statute, provisions included in the FDIC and Board EAJA 
rules,\35\ and provisions included in the prior ACUS model rule that 
ACUS determined were largely substantive matters beyond the 
Conference's statutory charge.\36\ The OCC believes that these 
provisions provide important details on the basis for EAJA award 
amounts that should apply to all EAJA applications and be included in 
its EAJA regulation.
---------------------------------------------------------------------------

    \35\ 12 CFR 263.106, 308.175.
    \36\ See 84 FR 38934.
---------------------------------------------------------------------------

    Specifically, proposed Sec.  19.215(d)(1) provides that EAJA awards 
may include the reasonable expenses of expert witnesses; the reasonable 
cost of any study, analysis, report, test, or project; and reasonable 
attorney or agent fees incurred after initiation of the adversary 
adjudication subject to the EAJA application. This paragraph also 
provides that the presiding officer will base awards on prevailing 
market rates for the kind and quality of the services furnished, even 
if the services were provided without charge or at reduced rate to the 
applicant. However, no award for the fee of an attorney or agent under 
this subpart may exceed the hourly rate specified in EAJA (5 U.S.C. 
504(b)(1)(A)) except, as permitted by EAJA, to account for inflation as 
requested by the applicant and documented in the EAJA application or if 
a special factor, such as the limited availability of qualified 
attorneys or agents for the proceedings involved, justifies a higher 
fee.\37\ Pursuant to EAJA, this paragraph also would prohibit an award 
for expert witness fees that exceed the highest rate paid for expert 
witnesses by the OCC.\38\
---------------------------------------------------------------------------

    \37\ 5 U.S.C. 504(b)(1)(A).
    \38\ Id.
---------------------------------------------------------------------------

    Proposed Sec.  19.215(d)(2) would provide factors the presiding 
officer should consider in determining the reasonableness of the 
attorney, agent, or expert witness fees. These factors are: (1) If in 
private practice, the attorney's, agent's, or witness's customary fee 
for similar services; (2) if an employee of the applicant, the fully 
allocated cost of the attorney's, agent's, or witness's services; (3) 
the prevailing rate for similar services in the community in which the 
attorney, agent, or witness ordinarily perform services; (4) the time 
actually spent in the representation of the applicant; (5) the time 
reasonably spent in light of the difficulty or complexity of the issues 
in the proceeding; and (6) any other factors as may bear on the value 
of the services provided.
    Proposed Sec.  19.215(d)(3) would provide parameters for the award 
of costs for any study, analysis, report, test, project, or similar 
matter. Specifically, the presiding officer may award the reasonable 
cost of these services prepared on behalf of the applicant to the 
extent that the charge for the service does not exceed the prevailing 
rate for similar services and the presiding officer finds that the 
service was necessary for preparation of the applicant's case.
    As in Sec.  4.06 of the Model Rule, proposed paragraph (d)(4) would 
permit a presiding officer to reduce the amount to be awarded or deny 
an award to the extent that the party during the proceedings engaged in 
conduct that unduly and unreasonably protracted final resolution of the 
matter in controversy. Unlike Sec.  4.06 of the Model Rule, paragraph 
(d)(4) also would permit the presiding officer to reduce or deny the 
award if special circumstances would make the award sought unjust. This 
provision is included in 5 U.S.C. 504(a)(1) and in the Treasury rule 
\39\ and is noted in the authority and scope section of this rule, 
proposed

[[Page 22050]]

Sec.  19.205(a). The OCC believes it would be helpful to include it in 
Sec.  19.215 as this section is specifically related to the decision 
making of the presiding officer.
---------------------------------------------------------------------------

    \39\ See 31 CFR 6.14.
---------------------------------------------------------------------------

    Finally, proposed paragraph (e) of Sec.  19.215 would provide that 
the Comptroller will issue a final decision on the EAJA application or 
remand the application to the presiding officer for further proceedings 
in accordance with Sec.  19.40, Review by the Comptroller. This 
provision is not included in the Model Rule. However, the OCC believes 
for clarity and completeness that its proposed EAJA rule should specify 
the final agency action on the EAJA application, as delineated in part 
19.
    Agency review. As in Sec.  4.07 of the Model Rule, proposed Sec.  
19.216 allows an applicant or Enforcement Counsel to seek review of the 
presiding officer's decision on the EAJA application, in accordance 
with Sec.  19.39, Exceptions to recommended decision. However, proposed 
Sec.  19.216 does not include the provision in the Model Rule that 
permits the agency to review the decision on its own initiative. The 
OCC does not believe that this provision is necessary because the 
proposed rule includes a separate provision in Sec.  19.215(d) that is 
not included in the Model rule that provides for a final decision on 
the EAJA application by the Comptroller or the Comptroller's remand of 
the application to the presiding officer for further proceedings.
    Judicial review. As provided by 5 U.S.C. 504(c)(2) and in Sec.  
4.08 of the Model Rule, proposed Sec.  19.217 provides for judicial 
review of final OCC decisions on awards in accordance with 5 U.S.C. 
504(c)(2).
    Stay of decision concerning award. As in Sec.  4.09 of the Model 
Rule, proposed Sec.  19.218 provides for an automatic stay of an EAJA 
proceeding until the OCC's final disposition of the decision on which 
the application is based and either the time period for judicial review 
has expired, or if judicial review is sought, final disposition is made 
by a court and no further judicial review is available.
    Payment of award. As in Sec.  4.10 of the Model Rule, proposed 
Sec.  19.219 provides that an applicant seeking payment of an award 
must submit to the OCC's Litigation Group a copy of the final decision 
granting the award accompanied by a certification that the applicant 
will not seek review of the decision in the United States courts. This 
proposed section also would provide that the OCC pay any amount owed to 
an applicant within 90 days.
Subpart M--Procedures for Reclassifying an Insured Depository 
Institution Based on Criteria Other Than Capital
    Subpart M of part 19 and 12 CFR 165.8 set out procedures for 
reclassifying a national bank or Federal savings association, 
respectively, to a lower capital category based on criteria other than 
capital, pursuant to section 38 of the FDIA (12 U.S.C. 1831o) and the 
prompt corrective action rule, 12 CFR part 6. These procedures are 
substantively the same, and the proposed rule would amend subpart M to 
include Federal savings associations in addition to national banks and 
remove Sec.  165.8. As this subpart currently also applies to insured 
Federal branches of foreign banks, the proposed rule would specifically 
include insured Federal branches in the scope section. Specifically, 
the proposal would replace the term ``bank'' each time it appears in 
subpart M with the term ``insured depository institution,'' and define 
this term to mean an insured national bank, an insured Federal savings 
association, an insured Federal savings bank, and an insured Federal 
branch of a foreign bank. The proposal also would replace the incorrect 
reference to subpart M with a reference to part 6 in Sec.  19.220. In 
addition, the proposal would make a conforming change to Sec.  
19.221(b)(3) to replace the phrase ``a written appeal of the proposed 
classification'' with ``a written response to the proposed 
reclassification,'' which is the terminology used elsewhere in this 
section. Furthermore, as in proposed Sec. Sec.  19.35, 19.112, and 
19.120, the OCC proposes to add a new paragraph (3) to Sec.  19.221(g) 
to provide rules governing electronic presentations in the course of a 
hearing. Specifically, this provision would provide that, based on the 
circumstances of each hearing, the presiding officer may direct the use 
of, or any party may elect to use, an electronic presentation during 
the hearing. If required by the presiding officer, each party would be 
responsible for its own presentation and related costs unless the 
parties agree otherwise. As indicated previously, this new language is 
necessary to account for the routine use of electronic presentations 
that current part 19 does not address. The OCC also proposes a 
conforming change in paragraph (g)(2) that would allow, by stipulation 
of the parties or by order of the presiding officer, a court reporter 
or other authorized person to administer the required oath to a witness 
remotely without being in the physical presence of the witness. 
Additionally, the proposal would revise the heading to subpart M to 
include insured depository institutions and to describe the subject of 
the subpart more accurately. Lastly, the proposal would make technical 
changes to 12 CFR 6.3, 6.4, and 6.5 to remove the separate references 
to Sec.  165.8 with respect to savings associations.
Subpart N--Order To Dismiss a Director or Senior Executive Officer
    Subpart N of part 19 and 12 CFR 165.9 set out procedures associated 
with an order to dismiss a director or senior executive officer of a 
national bank or Federal savings association, respectively, pursuant to 
an order issued under section 38 of the FDIA (12 U.S.C. 1831o) and, 
with respect to national banks, the prompt corrective action rule, 12 
CFR part 6. Subpart N and Sec.  165.9 are substantively the same, and 
the proposed rule would apply subpart N to Federal savings associations 
in addition to national banks and remove Sec.  165.9. The proposal also 
would replace the term ``bank'' each time it appears in Sec.  19.230 
with the term ``insured depository institution'' and define the term 
based on section 3 of the FDIA (12 U.S.C. 1813(c)(2)) to mean an 
insured national bank, an insured Federal savings association, an 
insured Federal savings bank, or an insured Federal branch of a foreign 
bank.
    The OCC also is proposing to amend paragraph (b) of Sec.  19.231 
This paragraph provides that a director or senior executive officer who 
has been served with a directive for dismissal has 10 calendar days to 
file a written request for reinstatement, unless the OCC allows further 
time as requested of the Respondent. The proposal would provide that 
failure by the Respondent to file this request within the specified 
time period will constitute a waiver of the opportunity to respond and 
consent to the dismissal. The OCC is proposing to add this statement to 
the rule to clarify the result of a failure to request reinstatement. 
The OCC also is proposing a stylistic revision to Sec.  19.231(b) to 
remove passive sentence structure.
    In addition, the proposal would amend Sec.  19.231(c), which 
requires that the OCC issue an order directing an informal hearing to 
commence no later than 30 days after receipt of the request for a 
hearing unless the respondent requests a later date. The proposed 
amendment would provide that a later hearing date may occur only if 
permitted by the OCC, and, therefore, the request for an extension 
would not be automatically approved. This change would allow the OCC 
some discretion as

[[Page 22051]]

to how far into the future a hearing may take place.
    The OCC also proposes to amend Sec.  19.231(d) to provide rules 
governing electronic presentations in the course of a hearing. 
Specifically, this provision would provide that, based on the 
circumstances of each hearing, the presiding officer may direct the use 
of, or any party may elect to use, an electronic presentation during 
the hearing. If required by the presiding officer, each party would be 
responsible for its own presentation and related costs unless the 
parties agree otherwise. This new language is necessary to account for 
the routine use of electronic presentations that current part 19 does 
not address. The OCC also proposes a conforming change in Sec.  
19.231(d)(5) that would allow, by stipulation of the parties or by 
order of the presiding officer, a court reporter or other authorized 
person to administer the required oath to a witness remotely without 
being in the physical presence of the witness. The proposed rule also 
would make a clarifying change in paragraph (d)(1), Hearing procedures. 
Among other things, this paragraph provides that a Respondent has the 
right to introduce relevant written materials and to present oral 
argument. The proposal would clarify that these written materials and 
oral arguments would be made at the hearing. This clarification ensures 
that the Respondent is aware that this right is provided during the 
hearing and not outside of the hearing context. The proposed rule also 
would move the sentence regarding oral testimony and witnesses in 
paragraph (d)(1) to paragraph (d)(5) to better organize paragraph (d) 
and add paragraph headings.
    Furthermore, the proposal would revise the heading of subpart N to 
describe the subject of the subpart more accurately.
    Lastly, the proposal would make technical changes to 12 CFR 6.6 to 
remove the separate reference to Sec.  165.9 with respect to Federal 
savings associations.
    Because Sec. Sec.  165.8 and 165.9 are the only sections in current 
part 165, the proposal would remove part 165 in its entirety.
Subpart O--Civil Money Penalty Inflation Adjustments
    Subpart O of part 19 and Sec.  109.103 provide the statutorily 
required formula to calculate inflation adjustments for civil money 
penalties assessed against national banks and savings associations, 
respectively. These sections also indicate that the OCC will publish, 
on or before January 15 of each calendar year, an annual notice in the 
Federal Register of the maximum penalties the OCC may assess. The OCC 
is proposing to retain subpart O and remove Sec.  109.103. No 
amendments are necessary to apply subpart O to Federal savings 
associations. The proposal would amend the section heading to be more 
descriptive and make a stylistic revision in paragraph (a) to remove 
passive sentence structure.
Subpart Q--Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses
    Twelve U.S.C. 93(d)(1) requires the Comptroller, after receiving 
notification from the U.S. Attorney General of a conviction of a 
criminal offense under section 1956 or 1957 of title 18 (18 U.S.C. 
1956, 1957) or under section 5322 or 5324 of title 31 (31 U.S.C. 5322, 
5324), to issue to the convicted national bank or Federal branch or 
agency of foreign bank a notice of the Comptroller's intent to 
terminate all rights, privileges and franchises of the bank or Federal 
branch or agency and to schedule a pretermination hearing. The offenses 
include financial crimes, including money laundering (18 U.S.C. 1956), 
engaging in monetary transactions in criminally derived property (18 
U.S.C. 1957), and structuring transactions to evade reporting 
requirements (31 U.S.C. 5324). Twelve U.S.C. 1464(w) imposes the same 
requirement with respect to convicted Federal savings associations.
    Part 19 currently does not include specific procedures for a 
charter pretermination hearing. The OCC proposes adding a new subpart Q 
that sets forth APA compliant procedures for pretermination hearings, 
which will be conducted before a presiding officer appointed by the 
Comptroller. The proposed procedures are largely analogous to the 
deposit insurance termination hearing procedures instituted by the FDIC 
and NCUA for insured State depository institutions and Federally 
insured credit unions, respectively, that are convicted of the same 
offenses.
    Specifically, proposed Sec.  19.250 makes subpart A applicable, 
except as provided in new subpart Q, to proceedings by the Comptroller 
to determine whether, pursuant to 12 U.S.C. 93(d) or 12 U.S.C. 1464(w), 
as applicable, to terminate all rights, privileges, and franchises of a 
national bank, Federal savings association, or Federal branch or agency 
convicted of a criminal offense under 18 U.S.C. 1956 or 1957 or 31 
U.S.C. 5322 or 5324.
    Proposed Sec.  19.251(a) provides that, after receiving written 
notification from the U.S. Attorney General of a conviction of a 
criminal offense under sections 18 U.S.C. 1956 or 1957 or 31 U.S.C. 
5322 or 5324, the Comptroller will issue a written notice of intent to 
terminate all rights, privileges and franchises to the convicted 
national bank, Federal savings association, or Federal branch or agency 
and schedule a pretermination hearing. Proposed Sec.  19.251(b) details 
the requisite contents of the notice and proposed Sec.  19.251(c) 
provides that failure to answer the notice would be deemed consent to 
the termination and that the Comptroller may order the termination. The 
proposed notice of intent to terminate is similar to the notice in 
Sec.  19.18 except that the subpart Q notice of intent would list the 
basis of termination pursuant to factors listed in proposed Sec.  
19.253 instead of the statement of matters of fact or law; the time 
within which to file an answer in response to the notice of intent will 
be established by the presiding officer instead of by law or 
regulation; and the answer must be filed with the OCC instead of with 
OFIA. Proposed Sec.  19.251(d) provides that the OCC will serve the 
notice upon the national bank, Federal savings association, or Federal 
branch or agency in the manner set forth in Sec.  19.11(c).
    Proposed Sec.  19.252 provides that the Comptroller will designate 
a presiding officer to conduct the pretermination hearing. The 
presiding officer would have the same powers set forth in Sec.  19.5, 
including the discretion necessary to conduct the pretermination 
hearing in a manner that avoids unnecessary delay. Proposed Sec.  
19.252 also provides that the presiding officer may limit the use of 
discovery and limit opportunities to file written memoranda, briefs, 
affidavits, or other materials or documents to avoid relitigating facts 
already stipulated to by the parties, conceded to by the institution, 
or otherwise already firmly established by the underlying criminal 
conviction.
    Proposed Sec.  19.253 provides the factors the Comptroller will 
take into account when determining whether or not to terminate a 
franchise as set forth in 12 U.S.C. 93(d)(1)(C)(2) and 
1464(w)(1)(C)(2). The factors are the extent to which directors or 
senior executive officials knew of or were involved in the criminal 
offense; the extent to which the offense occurred despite the existence 
of policies and procedures within the institution designed to prevent 
the occurrence of the offense; the extent to which the institution 
fully cooperated with law enforcement authorities regarding the

[[Page 22052]]

investigation of the offense; the extent to which the institution has 
implemented additional internal controls since the commission of the 
offense to prevent a reoccurrence; and the extent to which the interest 
of the local community in having adequate deposit and credit services 
available would be threatened by the forfeiture of the franchise.
    Lastly, proposed Sec.  19.254 delineates the right of judicial 
review under 12 U.S.C. 1818(h) of a termination order as required by 12 
U.S.C. 93(d)(1)(C) and 1464(w)(1)(C).
Subpart R--Effective Date
    The OCC is proposing a new subpart R to part 19 to address 
questions about the effective date of the amendments to part 19 and 
their application to proceedings and investigations in progress. 
Specifically, subpart R provides that the rules of practice and 
procedure set forth in subparts A through E and H, I, J, L, M, N, P, 
and Q (as revised or added by this rulemaking) would apply to 
adjudicatory proceedings initiated on or after the effective date of a 
final rule. Rules applicable to national banks, Federal savings 
associations, or Federal branches and agencies in effect prior to this 
effective date would continue to govern actions initiated and in 
process prior to this effective date. This timing would ensure that 
parties to adjudicatory proceedings involving national banks, Federal 
savings associations, or Federal branches and agencies would have 
adequate notice of the rules governing those proceedings.
Technical Changes
    The proposed rule would make technical changes throughout parts B 
through P by (1) replacing the word ``shall'' with ``must,'' ``will,'' 
or other appropriate language, which is the more current rule writing 
convention for imposing an obligation and is the recommended drafting 
style of the Federal Register; (2) conforming citation styles and 
providing more detailed references to the cited statutes; (3) 
conforming abbreviations, including replacing the use of the term 
``administrative law judge'' with ``ALJ; (4) replacing gender 
references such as ``him,'' ``his'' or ``her'' with gender neutral 
terminology; and (5) and making other non-substantive grammatical, 
clarifying, organizational, and stylistic changes. The proposal also 
makes a technical change to 12 CFR 3.405 to correct the reference to 
part 19 and remove the reference to part 109 with respect to savings 
associations because this rulemaking proposes to remove part 109 and 
apply part 19 to Federal savings associations.

B. Proposed Amendments to the Board's Local Rules

    Part 263, subparts B through J, contain rules specific to Board 
proceedings. The Board proposes several amendments to subpart B that 
supplement the Uniform Rules, the creation of a new subpart K 
establishing rules governing all Board formal investigations, and the 
elimination of subpart L of Regulation LL (12 CFR part 238), which 
would be replaced by the new subpart K. The proposed amendments are 
described below. The Board invites comments on all aspects of this 
proposal.
Subpart B--Board Local Rules Supplementing the Uniform Rules
Technical Changes
    The proposal makes three general non-substantive changes to the 
language of the Board's Local Rules (12 CFR 265.50-263.56). First, 
consistent with Federal Register drafting guidelines, the proposal 
replaces the word ``shall'' throughout the Local Rules with the terms 
``must,'' ``will,'' or other appropriate language. Second, the proposal 
replaces gender specific references with gender neutral language. And 
third, the proposal replaces the term ``administrative law judge'' with 
the abbreviation ``ALJ'' as this shortened form is commonly used and 
understood. These changes are proposed throughout the Local Rules and 
will not be discussed in the individual sections below.
Section 263.52 Address for Filing
    The proposal adds a second sentence providing an electronic mail 
address ([email protected]) for papers to be filed electronically 
with the Secretary of the Board. The Board recognizes that electronic 
filings have become more frequent and deems it appropriate to identify 
the electronic mail address that must be used to file papers 
electronically with the Board.
Section 263.53 Discovery Depositions
    The proposal makes four changes to this section to provide for the 
increasing frequency of depositions by remote means. First, the 
proposal changes Sec.  263.53(b) to require parties to state in the 
application the manner (e.g., remote means, in person) in which the 
deposition is to be taken, in addition to the place and time. Second, 
the proposal changes Sec.  263.53(c) to include the proposed manner of 
the deposition as a factor to be considered by the ALJ in determining 
whether a deposition is unnecessary, unreasonable, oppressive, 
excessive in scope or unduly burdensome. Third, the proposal adds that 
a deposition subpoena may require the witness to be deposed where the 
witness resides or has a regular place of employment, by remote means, 
or such other convenient place or manner as the ALJ fixes. This 
language is consistent with Sec.  263.27(a)(2) and provides explicitly 
for depositions by remote means. And fourth, the proposal adds a 
sentence in Sec.  263.53(f) indicating that, by stipulation of the 
parties or order by the ALJ, a deponent may be sworn remotely and is 
not required to be in the physical presence of the person administering 
the oath. The Board believes these changes would facilitate discovery 
by making depositions more flexible and less burdensome.
Section 263.55 Board as Presiding Officer
    Section 263.55 authorizes the Board to designate itself, one or 
more of its members, or an authorized officer, to act as presiding 
officer in a formal hearing. The proposal adds a sentence clarifying 
that when such designations occur, the authority of the Board or its 
designee will include all the authority provided to an ALJ under the 
rules governing formal hearings. This ensures that the authority of the 
Board or its designee will include all powers vested in the ALJ by the 
language of the rules.
Section 263.57 Sanctions Related to Conduct in Adjudicatory Proceedings
    Several sections of the Uniform Rules authorize the ALJ to impose 
sanctions for particular types of misconduct.\40\ However, the Uniform 
Rules do not specify the rules and procedures governing the sanctions 
available where a party generally engages in contemptuous conduct. 
Sanctions provisions are instead found in the local rules of other 
banking regulators.\41\ To date, the Board has not adopted a similar 
sanctions provision. The proposal fills this void by adding a new 
section establishing the rules governing the imposition of sanctions 
against parties or persons participating in administrative adjudicatory 
proceedings. The proposed new section: (a) Explicitly authorizes the 
ALJ to impose sanctions against parties or persons; (b) describes the 
sanctions the ALJ may impose; (c) describes

[[Page 22053]]

procedures for imposing sanctions: And (d) establishes that the ALJ or 
the Board may impose other sanctions authorized by applicable statute 
or regulation.
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    \40\ See, e.g., 12 CFR 263.6(b) (authorizing the exclusion or 
suspension of counsel for misconduct); 12 CFR 263.9 (authorizing 
various sanctions against a party or counsel for ex parte 
communications); 12 CFR 263.23(e) (authorizing sanctions for 
dilatory conduct).
    \41\ See 12 CFR 308.108 (FDIC); 12 CFR 19.192 (OCC).
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    First, subsection (a) establishes that the ALJ may impose sanctions 
against any party or person who violates a statute, regulation, or 
order. In addition, sanctions may only be imposed where such violation 
constitutes contemptuous conduct, materially injures another party, 
amounts to a clear and unexcused violation, or unduly delays the 
proceedings.
    Second, subsection (b) describes the sanctions the ALJ may impose 
against parties or persons. Appropriate sanctions include: (1) Issuing 
an order making findings against a party; (2) rejecting or striking 
testimony or other evidence offered by a party; (3) precluding the 
party from contesting specific issues or findings, offering or 
challenging certain evidence, or making late filings or conditioning 
such late filings; (4) assessing reasonable expenses incurred by the 
other party as a result of the misconduct; and (5) excluding the party 
or person from the adjudicatory proceeding. This list is non-
exhaustive. As expressed in subsection (d), the ALJ or the Board may 
impose other sanctions authorized by an applicable statute or 
regulation.
    Third, subsection (c) describes procedures for imposing and 
reviewing sanctions. First, sanctions could be imposed upon the motion 
of any party or upon the ALJ's own motion, although the ALJ would be 
required to submit to the Board any sanction that includes a final 
order on the merits. Second, no sanction beyond refusal to accept late 
filings may imposed without affording the party or person to be 
sanctioned the opportunity to be heard. And third, an order imposing 
sanctions would be subject to interlocutory review like any other 
order. Finally, subsection (d) clarifies that an ALJ or the Board may 
also impose any other restriction or sanction authorized by another 
applicable statute or regulation.
    The Board believes that this new proposed section promotes fairness 
and transparency in adjudicatory proceedings by providing clear 
standards governing the authority of the ALJ to manage the conduct of 
the proceedings when presented with contemptuous conduct.\42\ In 
addition, because this proposed section is modeled on the sanctions 
provisions already adopted by other banking regulators, it promotes 
uniformity in the rules of banking regulators.
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    \42\ The Board believes that the power to impose sanctions is 
inherent in the ALJ's power to ``regulate the course of a 
proceeding,'' 5 U.S.C. 556(c)(5), and to ``do all things necessary 
and appropriate to discharge the duties of a presiding officer.'' 12 
CFR 263.5(b)(11).
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Subpart K--Formal Investigative Proceedings
    Under section 8(n) of the Federal Deposit Insurance Act and other 
statutory provisions, the Board has authority to conduct formal 
investigations, including authority to administer oaths, take 
depositions, and issue subpoenas in connection with the Board's 
examination and enforcement authority.\43\ In 2011, the Board adopted 
regulations previously issued by the OTS which govern formal 
investigations of savings and loan holding companies and their 
subsidiaries under Home Owners' Loan Act.\44\ These regulations, which 
are found in subpart L of Regulation LL (12 CFR part 238), do not 
govern formal investigations of other banking institutions or 
individuals under the Board's jurisdiction. While the Board has long-
standing practices concerning the conduct of formal administrative 
investigations involving other banking organizations or individuals 
within its jurisdiction, these practices have heretofore not been 
incorporated in regulations governing such formal investigations.
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    \43\ 12 U.S.C. 1818(n).
    \44\ In 2011, pursuant to section 312 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (``Dodd-Frank Act'') (12 
U.S.C. 5412), the responsibility for the supervision and regulation 
of savings and loan holding companies and their non-savings 
association subsidiaries transferred from the former-OTS to the 
Board. Shortly thereafter, the Board adopted an interim final rule 
that provided for the corresponding transfer of certain OTS 
regulations necessary for the Board to administer the statutes 
relating to supervision of savings and loan holding companies, 
including provisions governing formal investigative proceedings set 
forth at subpart L of Regulation LL (12 CFR 238.111-117) (see 76 FR 
56508 (September 13, 2011)).
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    The Board now proposes to codify and clarify its long-standing 
practices concerning the conduct of formal administrative 
investigations and promulgate rules governing all formal investigations 
of organizations and individuals within the Board's jurisdiction. The 
proposal deletes subpart L of Regulation LL and replaces it with a new 
section (subpart K to 12 CFR part 263). This new section establishes a 
single set of rules governing formal investigations for all Board-
regulated organizations, including but not limited to state member 
banks, foreign banks, bank holding companies and their subsidiaries, 
savings and loan holding companies and their subsidiaries, Edge Act and 
agreement corporations, nonbank financial companies that the Financial 
Stability Oversight Council has determined should be supervised by the 
Board pursuant to section 113 of the Dodd-Frank Act (nonbank financial 
companies) or any subsidiaries of such companies,\45\ and any other 
entity or individual that the Board has authority to investigate or 
bring an enforcement action against. Proposed subpart K would govern 
only the conduct of formal investigations; administrative adjudicatory 
proceedings would continue to be governed by the Board's Uniform Rules 
and Local Rules (subparts A and B of 12 CFR 263).
---------------------------------------------------------------------------

    \45\ 12 U.S.C. 5323; 12 U.S.C. 5362.
---------------------------------------------------------------------------

    Proposed subpart K is modeled on the investigative procedures of 
other Federal financial industry enforcement agencies, including the 
FDIC and OCC. Like the existing rules of these agencies, proposed 
subpart K would, among other things, define a formal investigative 
proceeding by the Board and its scope; delineate some of the powers of 
the Board's designated representatives conducting formal investigative 
proceedings; require the confidentiality of formal investigative 
proceedings; provide for certain rights of witnesses in formal 
investigative proceedings; and establish investigative subpoena 
procedures.
    The proposed rules authorize the Board or the General Counsel or 
the General Counsel's designee (in accordance with 12 CFR 265.6) to 
commence a formal investigation by issuing an order of investigation 
which designates both the purpose of the investigation and the 
``designated representatives'' of the Board. These designated 
representatives would be authorized to administer oaths, to take and 
preserve testimony under oath, and to issue subpoenas ad testificandum 
and subpoenas duces tecum and to apply to the appropriate court to 
enforce such subpoenas.
    The proposed rules also set forth the rights of persons from whom 
the Board seeks to compel information in a formal investigation. 
Specifically, the proposed rules describe a person's right to counsel 
during investigative testimony, an attorney's ability to advise and 
question a witness during investigative testimony, and the ability of a 
witness to obtain a copy of any testimony the witness provided. The 
proposed rules would also require the confidentiality of formal 
investigative proceedings and generally require sequestration of 
witnesses.
    Proposed subpart K generally incorporates the substantive 
provisions currently contained in subpart L of Regulation LL with two 
major exceptions. First, the proposed subpart

[[Page 22054]]

K does not include provisions (currently found in 12 CFR part 
238.117(b)) providing for the filing and resolution of applications 
seeking to quash or modify subpoenas within 10 days of their service. 
Since the Board already vests with the General Counsel or his or her 
designee the authority to quash, modify, or revoke subpoenas that have 
been issued,\46\ any person or entity to whom a subpoena is directed 
may seek a modification or revocation of a subpoena by application to 
the General Counsel. A separate procedure is not necessary.
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    \46\ See 12 CFR part 265.6.
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    Second, the proposed subpart K provides that the officer 
supervising a formal investigative proceeding may, in certain 
circumstances, deny a written request for a copy of a transcript. Both 
subpart L of Regulation LL and the proposed rules (see 12 CFR part 
238.114 and proposed rule 263.456(b)) provide that a witness may 
inspect a copy of the transcript without retaining a copy. Similarly, 
both subpart L of Regulation LL and the proposed rules (see 12 CFR part 
238.114 and proposed rule 263.456(c)) provide that any request for a 
copy of a transcript may be denied. Although subpart L of Regulation LL 
vests the Board with the authority to deny a witness's request to 
inspect a copy of a transcript (see 12 CFR part 238.114), proposed 
subpart K vests the officer supervising a formal investigative 
proceeding with the authority to deny such request if provision of the 
transcript may infringe the privacy of third persons involved in the 
investigation, or impede or interfere with the conduct of any Board 
investigation.
    The proposed subpart K also reorganizes or re-orders provisions 
currently found in subpart L of Regulation LL. For example, subpart L 
of Regulation LL had a separate provision regarding transcripts of 
investigative testimony (12 CFR part 238.114) that provides, among 
other things, that a witness may inspect the transcript of the 
witness's testimony. Proposed subpart K instead places the provision to 
permit inspection of a transcript of a witness's testimony in the 
proposed rule concerning the rights of witnesses (see proposed subpart 
K rule 263.456). Other provisions of proposed subpart K conform 
provisions of subpart L of Regulation LL to current practices followed 
in Board investigations. For example, proposed subpart K rule 263.457, 
governing service of subpoenas in formal investigations, conforms to 
the current rules governing service of subpoenas in adjudicatory 
proceedings, 12 CFR part 263.11(d). These technical modifications are 
not intended to affect the substantive rights of parties.
    In summary, proposed subpart K clarifies and centralizes the 
Board's existing investigative practices by codifying those procedures 
uniformly across all Board formal investigations.

C. Proposed Amendments to the FDIC's Local Rules

    When the Uniform Rules were adopted in 1991, each Agency also 
adopted Local Rules to address procedures to supplement the Uniform 
Rules or otherwise facilitate the processing of administrative 
enforcement actions within an Agency. The Local Rules at issue here are 
set forth at 12 CFR part 308, subpart B: General Rules of Procedure, 
and supplement the Uniform Rules and procedures set forth in 12 CFR 
part 308, subpart A.
    The FDIC requests comment on proposed amendments to the FDIC's 
Local Rules at subpart B. These revisions are intended to enhance the 
Uniform Rules and to further modernize and streamline the discovery 
process in administrative enforcement actions brought by the FDIC. The 
FDIC proposes changes that reflect the current processes and procedures 
routinely ordered by the administrative law judges (ALJs) that mirror 
procedures followed in the Federal court system. The FDIC also proposes 
to add new provisions regarding modern discovery practices, 
depositions, and disclosure of expert witness testimony to promote 
cooperation, fairness, and transparency.
    Since the Local Rules were last updated, the development and 
utilization of electronically stored information has drastically 
increased the amount of potentially discoverable materials. In 2015, 
the Federal Rules of Civil Procedure (FRCP) were amended, in part, to 
address concerns regarding the volume of available materials and the 
effort and expense in processing those materials for discovery 
purposes. Although neither the FRCP, nor the Federal Rules of Evidence, 
apply to administrative proceedings at the FDIC, they do provide 
guidance and direction. Additionally, the FRCP are thoroughly vetted 
and considered to be best practices and procedures by the legal 
community. The FDIC is not adopting the FRCP; however, there are 
certain best practices and procedures that the FDIC believes would be 
advantageous to all parties to the administrative proceedings. Over the 
past few years, the ALJs have implemented, on a case-by-case basis, 
certain case management orders related to discovery procedures and 
requirements that mirror certain provisions of the FRCP. The FDIC 
wishes to formalize these procedures in the Local Rules to provide 
notice and clarity of the discovery rules applicable to administrative 
proceedings.
    Similar to the changes in the Uniform Rules, the FDIC also proposes 
to update the language throughout its Local Rules to reflect the 
modernized language used in rulemaking. Where appropriate, the FDIC 
proposes to replace the term ``shall'' with ``must'' or ``will'' to 
reflect the current convention for a legal requirement and changes made 
to the FRCP in 2000. Additionally, the FDIC proposes to provide 
shortened references to ``administrative law judge'' (ALJ) and 
``electronically stored information'' (ESI) because the shortened terms 
are well understood and the repetition of the shortened terms reduces 
the length of the regulations. These changes are proposed throughout 
the Local Rules and will not be discussed further in the individual 
sections below.
Section 308.102 Authority of Board of Directors and Administrative 
Officer
    Section 308.102 contains minor changes to reflect the current 
internal organization of the FDIC.
Section 308.103 Assignment to Administrative Law Judge (ALJ)
    Section 308.103 is being renamed to better reflect additional 
changes to how matters are currently assigned to an ALJ.
Section 308.104 Filings With the Board of Directors
    Section 308.104 provides an electronic mail address for the FDIC's 
Administrative Officer, who is the official custodian of the record for 
administrative proceedings, and with whom all parties must file an 
electronic copy of all pleadings.
Section 308.107 Supplemental Discovery Rules
    Section 308.107 is being renamed to reflect the updates to the 
FDIC's discovery processes to include modern discovery practices and 
procedural orders issued by the ALJs and to allow for limited 
depositions.
Section 308.107(a) Scope of Discovery
    Section 308.107(a) is a new section that describes the permitted 
scope of discovery. The FDIC proposes to adopt the concept of 
``proportionality'' in discovery production and set forth limits on 
ESI, both of which were added to the FRCP in 2015. Because the FDIC 
maintains the data collected from failed insured depository 
institutions in its

[[Page 22055]]

role as Receiver, it has custody and control of voluminous amounts of 
failed bank data. Generally, the vast majority of this information 
would not be materially relevant to an administrative enforcement 
proceeding. Instituting a requirement that discovery be proportional 
will decrease unnecessary expenditures and promote a more efficient 
process for all parties to the administrative proceedings.
Section 308.107(b) Joint Discovery Plan
    Section 308.107(b) sets forth the FDIC's proposal to add a Joint 
Discovery Plan to the discovery process. Currently, the ALJs routinely 
require both parties agree to an ESI Plan that governs the production 
of ESI. The FDIC proposes to combine the current practice with certain 
provisions similar to the FRCP Rule 26(f)(3). This new section would 
require the parties to meet and confer at the beginning of the 
discovery process to facilitate communication and cooperation on 
discovery matters. The purpose is to develop a Joint Discovery Plan 
that meets the parties' needs, decreases discovery disputes, encourages 
collegiality, and conserves resources. If necessary, this section 
provides a mechanism for resolution of discovery disputes.
Section 308.107(c) Document and Electronically Stored Information (ESI) 
Discovery
    Section 308.107(c) was created to integrate the proposed provisions 
of the Local Rules with the Uniform Rules. Additionally, the provisions 
related to the production of documents now include modern concepts from 
the FRCP related to the production of ESI.
Section 308.107(d) Expert Witness Disclosures
    Section 308.107(d) is a new section mirroring the 1993 updates to 
the FRCP 26(a)(2) that describe the proposed disclosures for expert 
witness testimony. The vast majority of modern administrative 
enforcement proceedings involve expert testimony; however, there are 
currently no rules governing how expert testimony is fairly and 
properly disclosed to the opposing party. As a result, the ALJs began 
issuing orders, on a case-by-case basis, requiring disclosure of expert 
testimony similar to the requirements set forth in FRCP 26(a)(2). The 
FDIC proposes to incorporate these expert witness disclosure 
requirements into the written rules to improve transparency and promote 
fairness. Similar to the 1993 and 2010 revisions to the FRCP 26(a)(2), 
Sec.  308.107(d) provides two categories of expert witnesses with two 
different levels of required disclosures. Section 308.107(d)(2)(i) is 
intended for professional experts who generally do not work for a party 
but are specifically engaged for the purpose of providing expert 
testimony. Section 308.107(d)(2)(ii) is intended to cover those 
individuals whose expertise comes from the person's regular course of 
business such as, a commissioned bank examiner or bank personnel, who 
will be offered as an expert witness at the hearing. Consistent with 
the FRCP 26(a)(2), these rules are intended as disclosure requirements. 
Similar to the Federal rules of evidence and case law, these documents 
are prior written disclosures of future opinion testimony to be offered 
at the hearing to assist the ALJ. Neither category of written 
disclosures is intended to serve as substitutes for expert witness 
testimony at the hearing. Moreover, occasionally the ALJ orders 
mandated more disclosure from expert witnesses than the FRCP 26(a)(2) 
required. The FDIC believes that the FRCP 26(a)(2) created a two-tier 
system for disclosure that represents a legitimate and reasonable 
divide between the two categories of expert witnesses. Those 
individuals who are not in the business of providing professional 
expert testimony do not need to provide a heightened level of 
disclosures. As the Federal Rules Committee notes stated in the 2010 
Amendments ``[c]ourts must take care against requiring undue detail, 
keeping in mind that these witnesses have not been specially retained 
and may not be as responsive to counsel as those who have.''
Section 308.107(e) Depositions
    Section 308.107(e) is a new section that provides for the 
possibility of depositions during the discovery process in cases where 
such discovery is appropriate. The FDIC does not currently allow for 
deposition discovery in its enforcement matters, and parties are not 
legally entitled to take depositions in administrative actions under 
the Administrative Procedure Act.\47\ Nonetheless, the FDIC has 
observed that the OCC, the Board, and other Federal agencies have 
voluntarily provided respondents in administrative proceedings with an 
opportunity for limited depositions in appropriate cases.\48\ For these 
reasons, the FDIC proposes adding the option for the parties to pursue 
limited depositions of individuals with direct knowledge of facts 
relevant to the proceeding and individuals designated as an expert in 
cases where such discovery is appropriate and proportional to the needs 
of the case.
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    \47\ See, e.g., Starr Comm'r of Internal Revenue, 226 F.2d 
721,722 (7th Cir. 1955), cert. denied, 350 U.S. 993 (1955); 
McClelland v. Andrus, 606 F.2d 1278, 1285 (D.C. Cir. 1979); Jones 
Total Health Care Pharmacy, LLC v. Drug Enforcement Administration, 
881 F.3d 823, 834 (C.A.11, 2018).
    \48\ Until recently, the rules of practice governing 
administrative actions before the Securities and Exchange Commission 
(SEC) were similar to those in the Uniform Rules, allowing for the 
taking of depositions only upon a showing that a deponent will be 
unlikely to be able to attend and testify at a hearing. In 2016, the 
SEC amended its rules of practice to remove this restriction and to 
allow parties with broader, albeit still limited, access to 
depositions in administrative proceedings. 81 FR 50211 (July 13, 
2016).
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    Under Sec.  308.107(e)(1), the FDIC is proposing limitations to 
ensure that any depositions that do take place do not cause undue delay 
or burden. Under the FDIC's proposed rules, any deposition discovery 
would be limited by the requirement that discovery be proportional to 
the needs of the case, as required for all discovery under Sec.  
308.107(a). Additionally, depositions would only be allowed where the 
information sought from the depositions cannot be obtained from another 
source that is more convenient, less burdensome, or less expensive. 
Finally, the FDIC is proposing that, in the absence of extraordinary 
circumstances, depositions will be limited to individuals expected to 
testify at the hearing. The FDIC believes that the limitations proposed 
strike an appropriate balance between the potential for a demonstrable 
need for depositions in some cases and the interest in resolving cases 
efficiently.
    The remainder of the Sec.  308.107(e) sets forth various procedural 
rules that will apply to any deposition discovery, including notices, 
transcription, timing and duration of depositions. These provisions are 
largely adapted from procedures under the FRCP and those used by the 
OCC and the Board.
Section 308.107(f) Discovery Motions
    Section 308.107(f) is a new section aimed at clarifying certain 
matters related to discovery motions. Section 308.107(f)(1) clarifies 
that the ALJ must limit inappropriate discovery either on motion, or on 
their own initiative. Section 308.107(f)(2) provides that parties may 
move to terminate depositions that are being conducted in bad faith or 
an inappropriate manner. Section 308.107(f)(3) clarifies that the 
provisions of Sec.  308.25(f), governing motions to compel document 
discovery, apply equally to all motions to compel discovery.

[[Page 22056]]

IV. Discussion of OCC Changes to Part 4, Service of Process

    The OCC proposes to amend subpart A of 12 CFR part 4, Organization 
and Functions, to add a new Sec.  4.8 that would address service of 
process. This new provision would put private parties on notice of the 
established process they should use in serving the OCC, Comptroller, or 
officers or employees of the OCC in a private action. Codifying this 
process in the rule should help avoid possible confusion as to where 
and how private parties serve the OCC, Comptroller, or officers or 
employees of the OCC, which should ensure that the OCC has adequate 
notice to respond to a complaint or other filing. The proposal provides 
that ``officers'' are officials who are not employees of the OCC, such 
as an ALJ.
    Specifically, proposed Sec.  4.8(a) provides that paragraphs (b), 
(c), and (d) of this section apply to service of process upon the OCC, 
the Comptroller acting in his official capacity, officers or employees 
of the OCC who are sued in their official capacity, and officers or 
employees of the OCC who are sued in an individual capacity for an act 
or omission occurring in connection with duties performed on the behalf 
of the OCC. Proposed Sec.  4.8(b) provides that service of process for 
actions in Federal courts should be made upon the OCC, the Comptroller, 
or officers or employees of the OCC by serving the United States under 
the procedures set forth in the Federal Rules of Civil Procedure 
governing the service of process upon the United States and its 
agencies, corporations, officers, or employees.\49\ Proposed Sec.  
4.8(c) provides that service of process for actions brought in State 
courts should be made upon the OCC, the Comptroller, or officers or 
employees of the OCC by sending copies of the summons and complaint by 
registered or certified mail to the Chief Counsel, Office of the 
Comptroller of the Currency, Washington, DC 20219. Proposed Sec.  
4.8(c) also encourages parties to provide copies of the summons and 
complaint to the appropriate United States Attorney in accordance with 
the procedures set forth in the Federal Rules of Civil Procedure 
governing the service of process upon the United States and its 
agencies, corporations, officers, or employees.\50\ Proposed Sec.  
4.8(d) provides that only the Washington, DC headquarters office of the 
OCC is authorized to accept service of a summons or complaint and that 
the OCC, the Comptroller, or officers or employees of the OCC should be 
served with a copy of the summons or complaint at the Washington, DC 
headquarters office in accordance with Sec.  4.8(b) or (c). This 
provision would clarify that a summons or complaint should not be sent 
to another office of the OCC.
---------------------------------------------------------------------------

    \49\ See Rule 4(i) of the Federal Rules of Civil Procedure.
    \50\ Id.
---------------------------------------------------------------------------

    Finally, proposed Sec.  4.8(e) provides that the OCC is not an 
agent for service of process upon a national bank, Federal savings 
association, or Federal branch or agency of a foreign bank. Instead, it 
directs parties to serve a summons or complaint upon the institution in 
accordance with the laws and procedures for the court in which the 
action has been filed. The OCC intends this provision to prevent 
further instances of parties attempting to serve a national bank 
through the OCC.

V. Regulatory Analysis

A. Regulatory Flexibility Act

    OCC: The Regulatory Flexibility Act (RFA) \51\ requires an agency, 
in connection with a proposed rule, to prepare an Initial Regulatory 
Flexibility Analysis (IRFA) describing the impact of the rule on small 
entities (defined by the Small Business Administration (SBA) for 
purposes of the RFA to include commercial banks and savings 
institutions with total assets of $600 million or less and trust 
companies with total assets of $41.5 million or less) \52\ or to 
certify that the proposed rule would not have a significant economic 
impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \51\ 5 U.S.C. 601 et seq.
    \52\ See the SBA's size thresholds for commercial banks and 
savings institutions, and trust companies, 13 CFR 121.201.
---------------------------------------------------------------------------

    The OCC currently supervises approximately 1,122 institutions 
(commercial banks, trust companies, Federal savings associations, and 
branches or agencies of foreign banks, collectively banks), of which 
669 are small entities.\53\ The rule could impact any OCC-supervised 
institution, including any of these small entities. However, it is 
unlikely that the proposed rule, if implemented, would impact more than 
a de minimis number of OCC-supervised institutions in any given 
year.\54\ Furthermore, the proposed rule would facilitate the orderly 
determination of administrative proceedings and its proposed changes 
are primarily updates and clarifications of administrative procedure 
and in general reflect current practices. Therefore, the OCC concludes 
that the proposed rule would not impose more than minimal costs on 
institutions that may be impacted. Because the OCC estimates that 
expenditures, if any, associated with the proposed rule would be de 
minimis, the OCC certifies that the proposed rule would not have a 
significant economic impact on a substantial number of small entities 
supervised by the OCC. Accordingly, an IRFA is not required.
---------------------------------------------------------------------------

    \53\ Consistent with the General Principles of Affiliation 13 
CFR 121.103(a), the OCC counts the assets of affiliated financial 
institutions when determining if it should classify an institution 
as a small entity. The OCC used December 31, 2020, to determine size 
because a ``financial institution's assets are determined by 
averaging the assets reported on its four quarterly financial 
statements for the preceding year.'' See footnote 8 of the SBA's 
Table of Size Standards.
    \54\ Based on activity during the past five years, approximately 
23 banks (an average of less than 5 per year) would be impacted by 
the proposed changes to part 19 subparts A, B, C, I, L, and M. 
Furthermore, during the past five years the OCC has not received any 
Equal Access to Justice Act (EAJA) applications from a bank for the 
payment of attorney's fees.
---------------------------------------------------------------------------

    Board: The RFA generally requires an agency to consider the impact 
of the agency's proposed rules on small entities and to conduct an IRFA 
of any rule subject to notice-and-comment rulemaking requirements, 
unless the head of the agency certifies that the rule will not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.\55\ An IRFA must contain (1) a description of the 
reasons why action by agency is being considered; (2) a succinct 
statement of the objectives of, and legal basis for, the proposed rule; 
(3) a description of, and where feasible, an estimate of the number of 
small entities to which the proposed rule will apply; (4) a description 
of the projected reporting, recordkeeping, and other compliance 
requirements of the proposed rule; (5) an identification, to the extent 
practicable, of all relevant Federal rules which may duplicate, overlap 
with, or conflict with the proposed rule; and (6) a description of any 
significant alternatives to the proposed rule which accomplish its 
stated objectives.
---------------------------------------------------------------------------

    \55\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    As stated in this notice of proposed rulemaking, the Agencies are 
proposing amendments to the Uniform Rules and to their local rules to 
recognize the use of electronic communications in all aspects of 
administrative hearings and to otherwise increase the efficiency and 
fairness of administrative adjudications. In addition, the Board is 
proposing to establish a single set of rules governing all formal 
investigations. The proposed rules only establish procedures

[[Page 22057]]

governing Board formal investigations and adjudicatory proceedings. The 
proposed rules would not impose any requirement on regulated entities, 
and regulated entities would not need to take any action in response to 
the proposed rules. As such, the proposed rules will not have a 
significant economic impact on a substantial number of small entities. 
The proposed rules will not duplicate, overlap with, or conflict with 
other Federal rules, as they would only apply to Board formal 
investigations and administrative adjudications. Finally, the Board 
believes there are no significant alternatives to the proposed rules. 
The Board welcomes comments on this analysis.
    FDIC: The RFA requires that, in connection with a notice of 
proposed rulemaking, an agency prepare and make available for public 
comment an initial regulatory flexibility analysis that describes the 
impact of the proposed rule on small entities.\56\ However, a 
regulatory flexibility analysis is not required if the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities, and publishes its certification 
and a short explanatory statement in the Federal Register together with 
the rule. The SBA has defined ``small entities'' to include banking 
organizations with total assets of less than or equal to $600 
million.\57\ Generally, the FDIC considers a significant effect to be a 
quantified effect in excess of 5 percent of total annual salaries and 
benefits per institution, or 2.5 percent of total noninterest expenses. 
The FDIC believes that effects in excess of these thresholds typically 
represent significant effects for FDIC-supervised institutions.
---------------------------------------------------------------------------

    \56\ 5 U.S.C. 601, et seq.
    \57\ The SBA defines a small banking organization as having $600 
million or less in assets, where ``a financial institution's assets 
are determined by averaging the assets reported on its four 
quarterly financial statements for the preceding year.'' See 13 CFR 
121.201 (as amended by 84 FR 34261, effective August 19, 2019). 
``SBA counts the receipts, employees, or other measure of size of 
the concern whose size is at issue and all of its domestic and 
foreign affiliates.'' See 13 CFR 121.103. Following these 
regulations, the FDIC uses a covered entity's affiliated and 
acquired assets, averaged over the preceding four quarters, to 
determine whether the FDIC-supervised institution is ``small'' for 
the purposes of RFA.
---------------------------------------------------------------------------

    As of the quarter ending March 31, 2021, the FDIC supervised 3,215 
depository institutions,\58\ of which 2,333 were considered small for 
the purposes of the RFA.\59\ As previously discussed, the Agencies are 
proposing changes to the Uniform Rules to recognize the use of 
electronic communications in all aspects of administrative hearings and 
to otherwise increase the efficiency and fairness of administrative 
adjudications. The FDIC is also proposing to modify the Local Rules of 
administrative practice and procedure. If adopted, the proposed 
amendments would apply to administrative proceedings held by the FDIC 
and would not impose any requirement on regulated entities. Further, 
the FDIC typically brings less than five formal administrative 
proceedings annually. Finally, the proposed amendments are primarily 
updates and clarifications of administrative procedure and impose no 
significant additional burdens on small entities. Therefore, the FDIC 
concludes that the proposed rule will not have a significant impact on 
a substantial number of small entities. For the reasons described above 
and pursuant to 5 U.S.C. 605(b), the FDIC certifies that the proposed 
rule will not have a significant economic impact on a substantial 
number of small entities. The FDIC invites comments on all aspects of 
the supporting information provided in this RFA section. In particular, 
would this proposed rule have any significant effects on small entities 
that the FDIC has not identified?
---------------------------------------------------------------------------

    \58\ FDIC-supervised institutions are set forth in 12 U.S.C. 
1813(q)(2).
    \59\ FDIC Call Report data, March 31, 2021.
---------------------------------------------------------------------------

    NCUA: The RFA generally requires that, in connection with a notice 
of proposed rulemaking, an agency prepare and make available for public 
comment an initial regulatory flexibility analysis that describes the 
impact of a proposed rule on small entities. A regulatory flexibility 
analysis is not required, however, if the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities (defined for purposes of the RFA to include 
Federally insured credit unions with assets less than $100 million) and 
publishes its certification and a short, explanatory statement in the 
Federal Register together with the rule. The proposed rule would amend 
the Uniform Rules to recognize the use of electronic communications in 
all aspects of administrative hearings and to otherwise increase the 
efficiency and fairness of administrative adjudications. The proposed 
changes consist of updates and clarifications of administrative 
procedure and impose no significant new burdens on credit unions, 
parties to administrative actions, or counsel. Accordingly, the NCUA 
certifies that the proposed rule will not have a significant economic 
impact on a substantial number of small credit unions.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 \60\ (PRA) states that no 
agency may conduct or sponsor, nor is the respondent required to 
respond to, an information collection unless it displays a currently 
valid Office of Management and Budget (OMB) control number. The 
Agencies have reviewed this proposed rule and determined that it does 
not create any information collection or revise any existing collection 
of information. Accordingly, no PRA submissions to OMB will be made 
with respect to this proposed rule. The Board reviewed the rule under 
the authority delegated to the Board by OMB.
---------------------------------------------------------------------------

    \60\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

C. OCC Unfunded Mandates Reform Act of 1995

    The OCC analyzed the proposed rule under the factors set forth in 
the Unfunded Mandates Reform Act of 1995.\61\ Under this analysis, the 
OCC considered whether the proposal includes 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 million or more in any 
one year ($158 million as adjusted for inflation). The UMRA does not 
apply to regulations that incorporate requirements specifically set 
forth in law.
---------------------------------------------------------------------------

    \61\ 2 U.S.C. 1532.
---------------------------------------------------------------------------

    As discussed above, the OCC estimates that expenditures, if any, 
associated with the proposed rule would be de minimis. Therefore, the 
OCC concludes that the proposed rule would not result in an expenditure 
of $158 million or more annually by State, local, and tribal 
governments, or by the private sector. Because the proposed rule does 
not trigger the UMRA cost threshold, the OCC has not prepared the 
written statement described in section 202 of the UMRA.

D. Riegle Community Development and Regulatory Improvement Act

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\62\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), the OCC, Board, and FDIC must 
consider, consistent with principles of safety and

[[Page 22058]]

soundness and the public interest: (1) Any administrative burdens that 
such regulations would place on depository institutions, including 
small depository institutions, and customers of depository 
institutions; and (2) the benefits of such regulations. In addition, 
section 302(b) of RCDRIA requires new regulations and amendments to 
regulations that impose additional reporting, disclosures, or other new 
requirements on IDIs generally to take effect on the first day of a 
calendar quarter that begins on or after the date on which the 
regulations are published in final form.\63\ The Agencies invite 
comments that will further inform their consideration of RCDRIA.
---------------------------------------------------------------------------

    \62\ 12 U.S.C. 4802(a).
    \63\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

E. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \64\ requires the OCC, 
Board, and FDIC to use plain language in all proposed and final rules 
published after January 1, 2000. The Agencies have sought to present 
the proposed rule in a simple and straightforward manner and invite 
comment on the use of plain language. For example:
---------------------------------------------------------------------------

    \64\ Public Law 106-102, section 722, 113 Stat. 1338, 1471 
(1999), 12 U.S.C. 4809.
---------------------------------------------------------------------------

     Have the Agencies organized the material to inform your 
needs? If not, how could the Agencies present the proposed rule more 
clearly?
     Are the requirements in the proposed rule clearly stated? 
If not, how could the proposed rule be more clearly stated?
     Does the proposed rule contain technical language or 
jargon that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the proposed rule easier to 
understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the Agencies incorporate to make 
the proposed rule easier to understand?

F. NCUA Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. In 
adherence to fundamental federalism principles, the NCUA, an 
independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the principles of the executive order. This 
rulemaking will not have a substantial direct effect on the states, on 
the connection between the National Government and the states, or on 
the distribution of power and responsibilities among the various levels 
of government. The NCUA has determined that this proposed rule does not 
constitute a policy that has federalism implications for purposes of 
the executive order.

G. NCUA Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999.\65\
---------------------------------------------------------------------------

    \65\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------

Common Text of Proposed Uniform Rules (All Agencies)

Subpart A--Uniform Rules of Practice and Procedure
Sec.
__.1 [Reserved]
__.2 Rules of construction.
__.3 [Reserved]
__.4 Authority of the [Agency Head].
__.5 Authority of the administrative law judge.
__.6 Appearance and practice in adjudicatory proceedings.
__.7 Good faith certification.
__.8 Conflicts of interest.
__.9 Ex parte communications.
__.10 Filing of papers.
__.11 Service of papers.
__.12 Construction of time limits.
__.13 Change of time limits.
__.14 Witness fees and expenses.
__.15 Opportunity for informal settlement.
__.16 [AGENCY]'s right to conduct examination.
__.17 Collateral attacks on adjudicatory proceeding.
__.18 Commencement of proceeding and contents of notice.
__.19 Answer.
__.20 Amended pleadings.
__.21 Failure to appear.
__.22 Consolidation and severance of actions.
__.23 Motions.
__.24 Scope of document discovery.
__.25 Request for document discovery from parties.
__.26 Document subpoenas to nonparties.
__.27 Deposition of witness unavailable for hearing.
__.28 Interlocutory review.
__.29 Summary disposition.
__.30 Partial summary disposition.
__.31 Scheduling and prehearing conferences.
__.32 Prehearing submissions.
__.33 Public hearings.
__.34 Hearing subpoenas.
__.35 Conduct of hearings.
__.36 Evidence.
__.37 Post-hearing filings.
__.38 Recommended decision and filing of record.
__.39 Exceptions to recommended decision.
__.40 Review by the [Agency Head].
__.41 Stays pending judicial review.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  __.1  [Reserved]


Sec.  __.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;
    (c) The term counsel includes a non-attorney representative; and
    (d) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  __.3   [Reserved]


Sec.  __.4   Authority of the [Agency Head].

    The [Agency Head] may, at any time during the pendency of a 
proceeding, perform, direct the performance of, or waive performance 
of, any act which could be done or ordered by the ALJ.


Sec.  __.5  Authority of the administrative law judge (ALJ).

    (a) General rule. All proceedings governed by this part must be 
conducted in accordance with the provisions of chapter 5 of title 5 of 
the United States Code. The ALJ has all powers necessary to conduct a 
proceeding in a fair and impartial manner and to avoid unnecessary 
delay.
    (b) Powers. The ALJ has all powers necessary to conduct the 
proceeding in accordance with paragraph (a) of this section, including 
the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, protective orders, 
and other orders, as authorized by this part, and to quash or modify 
any such subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  __.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory

[[Page 22059]]

proceeding, provided that only the [Agency Head] has the power to grant 
any motion to dismiss the proceeding or to decide any other motion that 
results in a final determination of the merits of the proceeding;
    (8) To prepare and present to the [Agency Head] a recommended 
decision as provided herein;
    (9) To recuse oneself by motion made by a party or on the ALJ's own 
motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of an ALJ.


Sec.  __.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the [AGENCY] or an ALJ--(1) By attorneys. Any 
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 may represent others before the [AGENCY] if such 
attorney is not currently suspended or debarred from practice before 
the [AGENCY].
    (2) By non-attorneys. An individual may appear on the individual's 
own behalf.
    (3) Notice of appearance. (i) Any individual acting on the 
individual's own behalf or as counsel on behalf of a party, including 
the [Agency Head], must file a notice of appearance with OFIA at or 
before the time that the individual submits papers or otherwise appears 
on behalf of a party in the adjudicatory proceeding. The notice of 
appearance must include:
    (A) A written declaration that the individual is currently 
qualified as provided in paragraph (a)(1) or (2) of this section and is 
authorized to represent the particular party; and
    (B) A written acknowledgement that the individual has reviewed and 
will comply with the Uniform Rules and Local Rules in [agency specific 
reference].
    (ii) By filing a notice of appearance on behalf of a party in an 
adjudicatory proceeding, the counsel agrees and represents that the 
counsel is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, the 
counsel will, if required by the ALJ, continue to accept service until 
new counsel has filed a notice of appearance or until the represented 
party indicates that the party will proceed on a pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  __.7   Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice must be signed by at least one 
counsel of record in the counsel's individual name and must state that 
counsel's mailing address, electronic mail address, and telephone 
number. A party who acts as the party's own counsel must sign that 
person's individual name and state that person's mailing address, 
electronic mail address, and telephone number on every filing or 
submission of record. Electronic signatures may be used to satisfy the 
signature requirements of this section.
    (b) Effect of signature. (1) The signature of counsel or a party 
will constitute a certification: The counsel or party has read the 
filing or submission of record; to the best of the counsel's or party's 
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 argument for the extension, 
modification, or reversal of existing law; and 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 ALJ will 
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 counsel or party constitutes a 
certification that to the best of the counsel's or party's knowledge, 
information, and belief formed after reasonable inquiry, the counsel's 
or party's statements are well-grounded in fact and are warranted by 
existing law or a good faith 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.  __.8   Conflicts of interest.

    (a) Conflict of interest in representation. No person may appear as 
counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The ALJ 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 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  __.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party 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.  __.9   Ex parte communications.

    (a) Definition--(1) Ex parte communication means any material oral 
or written communication relevant to the merits of an adjudicatory 
proceeding that was neither on the record nor on reasonable prior 
notice to all parties that takes place between:
    (i) An interested person outside the [AGENCY] (including such 
person's counsel); and
    (ii) The ALJ handling that proceeding, the [Agency Head], or a 
decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the [Agency Head] until the date that the [Agency 
Head] issues a final decision pursuant to Sec.  __.40(c):
    (1) An interested person outside the [AGENCY] must not make or 
knowingly cause to be made an ex parte communication to the [Agency 
Head], the ALJ, or a decisional employee; and
    (2) The [Agency Head], ALJ, or decisional employee may not make or 
knowingly cause to be made to any interested person outside the 
[AGENCY] any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the ALJ, the [Agency Head] or any 
other person identified in paragraph (a) of this section, that person 
will cause all such written communications (or, if the

[[Page 22060]]

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 other parties to the proceeding may, within ten 
days of service of the ex parte communication, file responses thereto 
and to recommend any sanctions that they believe to be appropriate 
under the circumstances. The ALJ or the [Agency Head] then determines 
whether any action should be taken concerning the ex parte 
communication in accordance with paragraph (d) of this section.
    (d) Sanctions. Any party or counsel to a party who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the [Agency Head] or the 
ALJ including, but not limited to, exclusion from the proceedings and 
an adverse ruling on the issue which is the subject of the prohibited 
communication.
    (e) Separation of functions--(1) In general. Except to the extent 
required for the disposition of ex parte matters as authorized by law, 
the ALJ may not:
    (i) Consult a person or party on a fact in issue unless on notice 
and opportunity for all parties to participate; or
    (ii) Be responsible to or subject to the supervision or direction 
of an employee or agent engaged in the performance of investigative or 
prosecuting functions for the [AGENCY].
    (2) Decision process. An employee or agent engaged in the 
performance of investigative or prosecuting functions for the [AGENCY] 
in a case may not, in that or a factually related case, participate or 
advise in the decision, recommended decision, or agency review of the 
recommended decision under Sec.  __.40, except as witness or counsel in 
administrative or judicial proceedings.


Sec.  __.10   Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
__.25 and __.26, must be filed with OFIA, except as otherwise provided.
    (b) Manner of filing. Unless otherwise specified by the [Agency 
Head] or the ALJ, filing may be accomplished by:
    (1) Electronic mail or other electronic means designated by the 
[Agency Head] or the ALJ;
    (2) Personal service;
    (3) Delivering the papers to a same day courier service or 
overnight delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, mailing address, electronic mail 
address, and telephone number of the counsel 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 
double-spaced and printed or typewritten on an 8\1/2\ x 11 inch page 
and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  __.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the [AGENCY] and of the filing party, the 
title and docket number of the proceeding, and the subject of the 
particular paper.


Sec.  __.11   Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers must serve a copy upon the counsel of record for all other 
parties 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 must use one of the following 
methods of service:
    (1) Electronic mail or other electronic means;
    (2) Personal service;
    (3) Delivering the papers by same day courier service or overnight 
delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) By the [Agency Head] or the ALJ. (1) All papers required to be 
served by the [Agency Head] or the ALJ upon a party who has appeared in 
the proceeding in accordance with Sec.  __.6 will be served by 
electronic mail or other electronic means designated by the [Agency 
Head] or ALJ.
    (2) If a respondent has not appeared in the proceeding in 
accordance with Sec.  __.6, the [Agency Head] or the ALJ will serve the 
respondent 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 
respondent;
    (iv) By registered or certified mail, delivery by a same day 
courier service, or by an overnight delivery service to the 
respondent's last known mailing address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to an 
individual 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;
    (4) By registered or certified mail, delivery by a same day courier 
service, or by an overnight delivery service to the person's last known 
mailing address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
must be made on at least one branch or agency so involved.


Sec.  __.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed 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 runs 
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 ten

[[Page 22061]]

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 transmission by electronic mail or other 
electronic means, upon transmittal by the serving party;
    (ii) In the case of overnight delivery service or first class, 
registered, or certified mail, upon deposit in or delivery to an 
appropriate point of collection; or
    (iii) In the case of personal service or same day courier delivery, 
upon actual service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the [Agency Head] or ALJ 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 are 
calculated as follows:
    (1) If service is made by electronic mail or other electronic means 
or by same day courier delivery, add one calendar day to the prescribed 
period;
    (2) If service is made by overnight delivery service, add two 
calendar days to the prescribed period; or
    (3) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period.


Sec.  __.13  Change of time limits.

    Except as otherwise provided by law, the ALJ may, for good cause 
shown, extend the time limits prescribed by the Uniform Rules or by any 
notice or order issued in the proceedings. After the referral of the 
case to the [Agency Head] pursuant to Sec.  __.38, the [Agency Head] 
may grant extensions of the time limits for good cause shown. 
Extensions may be granted at the motion of a party after notice and 
opportunity to respond is afforded all non-moving parties or on the 
[Agency Head]'s or the ALJ's own motion.


Sec.  __.14  Witness fees and expenses.

    (a) In general. A witness, including an expert witness, who 
testifies at a deposition or hearing will 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, except as 
provided in paragraph (b) and unless otherwise waived.
    (b) Exception for testimony by a party. In the case of testimony by 
a party, no witness fees or mileage need to be paid. The [AGENCY] will 
not be required to pay any fees to, or expenses of, any witness not 
subpoenaed by the [AGENCY].
    (c) Timing of payment. Fees and mileage in accordance with this 
paragraph must be paid in advance by the party requesting the subpoena, 
except that fees and mileage need not be tendered in advance where the 
[AGENCY] is the party requesting the subpoena.


Sec.  __.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. Any such offer or proposal may only be made to Enforcement 
Counsel. 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.  __.16   [AGENCY]'s right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the [AGENCY] to conduct any examination, inspection, or visitation of 
any institution or institution-affiliated party, or the right of the 
[AGENCY] to conduct or continue any form of investigation authorized by 
law.


Sec.  __.17   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 will 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 will be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  __.18   Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA, 12 U.S.C. 1817(j)(4), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the [Agency Head].
    (ii) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law. Enforcement Counsel may 
serve the notice upon counsel for the respondent, provided that 
Enforcement Counsel has confirmed that counsel represents the 
respondent in the matter and will accept service of the notice on 
behalf of the respondent.
    (iii) Enforcement Counsel must file the notice with OFIA.
    (2) Change-in control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
[Agency Head].
    (b) Contents of notice. Notice pleading applies. The notice must 
provide:
    (1) The legal authority for the proceeding and for the [AGENCY]'s 
jurisdiction over the proceeding;
    (2) Matters of fact or law showing that the [AGENCY] is entitled to 
relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing must be filed with 
OFIA.


Sec.  __.19   Answer.

    (a) When. Within 20 days of service of the notice, respondent must 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent must also file a request for a hearing within 20 
days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the respondent lacks sufficient information to 
admit or deny each allegation of fact. A statement of lack of 
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 which 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.

[[Page 22062]]

    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of the respondent's right to appear and 
contest the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel 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 ALJ will file with the [Agency Head] a 
recommended decision containing the findings and the relief sought in 
the notice. Any final order issued by the [Agency Head] based upon a 
respondent's failure to answer is deemed to be an order issued upon 
consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order of the [Agency Head] without further 
action by the ALJ.


Sec.  __.20   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 ten days after service of the amended 
notice, whichever period is longer, unless the [Agency Head] or ALJ 
orders otherwise for good cause.
    (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 ALJ may 
admit the evidence when admission is likely to assist in adjudicating 
the merits of the action and the objecting party fails to satisfy the 
ALJ that the admission of such evidence would unfairly prejudice that 
party's action or defense upon the merits. The ALJ may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  __.21   Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel 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 ALJ will file with the [Agency Head] a 
recommended decision containing the findings and the relief sought in 
the notice.


Sec.  __.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the ALJ's 
own motion, the ALJ 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.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The ALJ may, upon the motion of any party, sever the 
proceeding for separate resolution of the matter as to any respondent 
only if the ALJ finds:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  __.23   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 ALJ. 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 ALJ directs that such motion be reduced to writing.
    (c) Filing of motions. Motions must be filed with the ALJ, except 
that following the filing of the recommended decision, motions must be 
filed with the [Agency Head].
    (d) Responses. (1) Except as otherwise provided herein, within ten 
days after service of any written motion, or within such other period 
of time as may be established by the ALJ or the [Agency Head], any 
party may file a written response to a motion. The ALJ will not rule on 
any 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 
Sec. Sec.  __.29 and __.30.


Sec.  __.24   Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) 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 includes writings, drawings, graphs, 
charts, photographs, recordings, electronically stored information, and 
other data or data compilations stored in any medium from which 
information can be obtained either directly or, if necessary, after 
translation by the responding party, into a reasonably usable form.
    (2) Discovery by use of deposition is governed by [agency specific 
reference] of this part.
    (3) Discovery by use of either interrogatories or requests for 
admission is not permitted.
    (4) Any request to produce documents that calls for irrelevant 
material; or 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, or the 
time provided to respond in the request is inadequate.
    (b) Relevance. A party may obtain document discovery regarding any 
non-privileged matter that has material relevance to the merits of the 
pending action.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, attorney work-product 
doctrine, bank examination privilege, law enforcement privilege, any

[[Page 22063]]

government's or government agency's deliberative process privilege, and 
any other privileges the Constitution, any applicable act of Congress, 
or the principles of common law provide.
    (d) Time limits. All document discovery, including all responses to 
discovery requests, must be completed by the date set by the ALJ and no 
later than 30 days prior to the date scheduled for the commencement of 
the hearing, except as provided in the Local Rules. No exceptions to 
this time limit are permitted, unless the ALJ finds on the record that 
good cause exists for waiving the requirements of this paragraph.


Sec.  __.25  Request for document discovery from parties.

    (a) Document requests. (1) Any party may serve on any other party a 
request to produce and permit the requesting party or its 
representative to inspect or copy any discoverable documents that are 
in the possession, custody, or control of the party upon whom the 
request is served. In the case of a request for inspection, the 
responding party may produce copies of documents or of electronically 
stored information instead of permitting inspection.
    (2) The request:
    (i) Must describe with reasonable particularity each item or 
category of items to be inspected or produced; and
    (ii) Must specify a reasonable time, place, and manner for the 
inspection or production.
    (b) Production or copying--(1) General. Unless otherwise specified 
by the ALJ or agreed upon by the parties, the producing party must 
produce copies of documents as they are kept in the usual course of 
business or organized to correspond to the categories of the request, 
and electronically stored information must be produced in a form in 
which it is ordinarily maintained or in a reasonably usable form.
    (2) Costs. The producing party must pay its own costs to respond to 
a discovery request, unless otherwise agreed by the parties.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within 20 days of being served with such 
request, file a motion in accordance with the provisions of Sec.  __.23 
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 portion 
objected to must be specified. Any objections not made in accordance 
with this paragraph and Sec.  __.23 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 ten days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
attorney-client privilege, attorney work-product doctrine, bank 
examination privilege, law enforcement privilege, any government's or 
government agency's deliberative process privilege, or any other 
privileges of the Constitution, any applicable act of Congress, or the 
principles of common law, or are voluminous, these documents may be 
identified by category instead of by individual document. The ALJ 
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 ten 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.  __.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the document request may file a written response to a motion to compel 
within ten days of service of the motion. No other party may file a 
response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the ALJ will rule promptly on all motions 
filed pursuant to this section. If the ALJ 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, the ALJ 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 is not a basis for staying or continuing the 
proceeding, unless otherwise ordered by the ALJ. Notwithstanding any 
other provision in this part, the ALJ may not release, or order a party 
to produce, documents withheld on grounds of privilege if the party has 
stated to the ALJ its intention to file a timely motion for 
interlocutory review of the ALJ's order to produce the documents, and 
until the motion for interlocutory review has been decided.
    (h) Enforcing discovery subpoenas. If the ALJ 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 will not in any manner limit the 
sanctions that may be imposed by the ALJ against a party who fails to 
produce subpoenaed documents.


Sec.  __.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the ALJ 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 must specify a reasonable time, place, and manner for 
making production in response to the document subpoena.
    (2) A party may apply for a document subpoena under this section 
only within the time period during which such party could serve a 
discovery request under Sec.  __.24(d). 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 ALJ will promptly issue any document subpoena requested 
pursuant to this section. If the ALJ 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, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon such conditions as may be consistent 
with the Uniform Rules.

[[Page 22064]]

    (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 
with the ALJ. The motion must be accompanied by a statement of the 
basis for quashing or modifying the subpoena. The movant must serve the 
motion on all parties, and any party may respond to such motion within 
ten 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.  __.25(d), 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 ALJ, which 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 so much of the document subpoena as the ALJ has not 
quashed or modified. A party's right to seek court enforcement of a 
document subpoena will in no way limit the sanctions that may be 
imposed by the ALJ on a party who induces a failure to comply with 
subpoenas issued under this section.


Sec.  __.27   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's testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the ALJ for the issuance of a 
subpoena, including a subpoena duces tecum, requiring the attendance of 
the witness at a deposition. The ALJ may issue a deposition subpoena 
under this section upon showing:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured 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, manner, and place for taking the deposition. A 
deposition subpoena may require the witness to be deposed at any place 
within the country in which that witness resides or has a regular place 
of employment, by remote means, or such other convenient place or 
manner, as the ALJ fixes.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the ALJ requires a written 
response or requires attendance at a conference concerning whether the 
requested subpoena should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the ALJ orders otherwise, no deposition under this section may be taken 
on fewer than ten days' notice to the witness and all parties.
    (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 with the ALJ to quash or 
modify the subpoena prior to the time for compliance specified in the 
subpoena, but not more than ten 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. By stipulation of the 
parties or by order of the ALJ, a court reporter or other person 
authorized to administer an oath may administer the oath remotely 
without being in the physical presence of the deponent. Each party must 
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 the objection might have been avoided if 
the objection had been timely presented. All questions, answers, and 
objections must be recorded.
    (2) Any party may move before the ALJ for an order compelling the 
witness to answer any questions the witness has refused to answer or 
submit any evidence the witness has refused to submit during the 
deposition.
    (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 must 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 fails to comply 
with any order of the ALJ, which directs compliance with all or any 
portion of a deposition subpoena under paragraph (b) or (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 with which the subpoenaed party has not 
complied. A party's right to seek court enforcement of a deposition 
subpoena in no way limits the sanctions that may be imposed by the ALJ 
on a party who fails to comply with, or procures a failure to comply 
with, a subpoena issued under this section.


Sec.  __.28   Interlocutory review.

    (a) General rule. The [Agency Head] may review a ruling of the ALJ 
prior to the certification of the record to the [Agency Head] only in 
accordance with the procedures set forth in this section and Sec.  
__.23.
    (b) Scope of review. The [Agency Head] may exercise interlocutory 
review of a ruling of the ALJ if the [Agency Head] finds:
    (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 request for interlocutory review must be filed 
by a party with the ALJ within ten days of the ruling and must 
otherwise comply with Sec.  __.23. Any party may file a response to a 
request for interlocutory review in accordance with Sec.  __.23(d). 
Upon the expiration of the time for filing all responses, the ALJ will 
refer the matter to the [Agency Head] for final disposition.

[[Page 22065]]

    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the [Agency Head] under 
this section suspends or stays the proceeding unless otherwise ordered 
by the ALJ or the [Agency Head].


Sec.  __.29   Summary disposition.

    (a) In general. The ALJ will recommend that the [Agency Head] 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:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party 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 
the 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 a motion, 
or within such time period as allowed by the ALJ, may file a response 
to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits and any other evidentiary materials that the moving party 
contends supports the moving party's position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which the opposing 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 written request of any party or on 
the ALJ's own motion, the ALJ 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 ALJ will determine whether 
the moving party is entitled to summary disposition. If the ALJ 
determines that summary disposition is warranted, the ALJ will submit a 
recommended decision to that effect to the [Agency Head]. If the ALJ 
finds that no party is entitled to summary disposition, the ALJ will 
make a ruling denying the motion.


Sec.  __.30  Partial summary disposition.

    If the ALJ determines that a party is entitled to summary 
disposition as to certain claims only, the ALJ will defer submitting a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered. Those claims for which the ALJ has determined 
that summary disposition is warranted will be addressed in the 
recommended decision filed at the conclusion of the hearing.


Sec.  __.31   Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding, the ALJ will direct counsel for all 
parties to meet with the ALJ at a specified time and manner prior to 
the hearing for the purpose of scheduling the course and conduct of the 
proceeding. This meeting is called a ``scheduling conference.'' The 
schedule for 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 ALJ may, in addition to the 
scheduling conference, on the ALJ's own motion or at the request of any 
party, direct counsel for the parties to confer with the ALJ 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; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The ALJ 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 the party's expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the ALJ will serve on each party an order setting forth any 
agreements reached and any procedural determinations made.


Sec.  __.32   Prehearing submissions.

    (a) Party prehearing submissions. Within the time set by the ALJ, 
but in no case later than 20 days before the start of the hearing, each 
party must file with the ALJ and serve on every other party:
    (1) A prehearing statement that states:
    (i) The party's position with respect to the legal issues 
presented,
    (ii) The statutory and case law upon which the party relies, and
    (iii) The facts that the party expects to prove at the hearing;
    (2) A final list of witnesses to be called to testify at the 
hearing, including the name, mailing address, and electronic mail 
address of each witness and a short summary of the expected testimony 
of each witness, which need not identify the exhibits to be relied upon 
by each witness at the hearing;
    (3) A list of the exhibits expected 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.  __.33   Public hearings.

    (a) General rule. All hearings must be open to the public, unless 
the [Agency Head], in the [Agency Head]'s discretion, determines that 
holding an open hearing would be contrary to the public interest. 
Within 20 days of service of the notice or, in the case of change-in-
control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 
1817(j)(4)), within 20 days from service of the hearing order, any 
respondent may file with the [Agency Head] a request for a private 
hearing, and any party may file a reply to such a request. A party must 
serve on the ALJ a copy of any request or reply the party files with 
the [Agency Head]. The form of,

[[Page 22066]]

and procedure for, these requests and replies are governed by Sec.  
__.23. A party's failure to file a request or a reply constitutes a 
waiver of any objections regarding whether the hearing will be public 
or private.
    (b) Filing document under seal. Enforcement Counsel, in Enforcement 
Counsel's discretion, may file any document or part of a document under 
seal if disclosure of the document would be contrary to the public 
interest. The ALJ will take all appropriate steps to preserve the 
confidentiality of such documents or parts thereof, including closing 
portions of the hearing to the public.


Sec.  __.34   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 ALJ 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 the 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, 
territory, or possession of the United States, 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 must 
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 a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the ALJ.
    (3) The ALJ will promptly issue any hearing subpoena requested 
pursuant to this section. If the ALJ 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, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon any conditions consistent with this 
subpart. Upon issuance by the ALJ, the party making the application 
must 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 
the 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 respond 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 not more 
than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
ALJ which directs compliance with all or any portion of a document 
subpoena, the subpoenaing party or any other aggrieved party may seek 
enforcement of the subpoena pursuant to__.26(c).


Sec.  __.35   Conduct of hearings.

    (a) General rules. (1) Hearings must be conducted so as to provide 
a fair and expeditious presentation of the relevant disputed issues. 
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. Enforcement Counsel will present its case-in-
chief first, unless otherwise ordered by the ALJ, or unless otherwise 
expressly specified by law or regulation. Enforcement Counsel will 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 of presentation of their cases, but 
if they do not agree, the ALJ will fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the ALJ may permit more than one counsel 
for the party presenting the witness to conduct the examination. A 
party may have one counsel conduct the direct examination and another 
counsel conduct re-direct examination of a witness, or may have one 
counsel conduct the cross examination of a witness and another counsel 
conduct the re-cross examination of a witness.
    (4) Stipulations. Unless the ALJ directs otherwise, all 
stipulations of fact and law previously agreed upon by the parties, and 
all documents, the admissibility of which have been previously 
stipulated, will be admitted into evidence upon commencement of the 
hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The ALJ 
may order the record corrected, either upon motion to correct, upon 
stipulation of the parties, or following notice to the parties upon the 
ALJ's own motion.
    (c) Electronic presentation. Based on the circumstances of each 
hearing, the ALJ may direct the use of, or any party may use, an 
electronic presentation during the hearing. If the ALJ requires an 
electronic presentation during the hearing, each party will be 
responsible for their own presentation and related costs, unless the 
parties agree to another manner in which to allocate presentation 
responsibilities and costs.


Sec.  __.36   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 Procedure 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 which 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 ALJ or the [Agency Head] 
must appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, must 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) of this section, 
any document, including a report of examination, supervisory activity, 
inspection or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or by a State regulatory agency, is 
admissible either with or without a sponsoring witness.

[[Page 22067]]

    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the ALJ'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 on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what the examining counsel expected 
to prove by the expected testimony of the witness either by 
representation of counsel or by direct questioning of the witness.
    (3) The ALJ will retain rejected exhibits, adequately marked for 
identification, for the record, and transmit such exhibits to the 
[Agency Head].
    (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 to which all parties in a proceeding had notice and an 
opportunity to participate, 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 ALJ 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.  __.37   Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the ALJ will 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 ALJ 
proposed findings of fact, proposed conclusions of law, and a proposed 
order within 30 days following service of this notice by the ALJ or 
within such longer period as may be ordered by the ALJ.
    (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 post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
ALJ any proposed finding or conclusion is deemed to have waived the 
right to raise in any subsequent filing or submission any issue not 
addressed in such party's proposed finding or conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited 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 post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The ALJ will not order the filing 
by any party of any brief or reply brief in advance of the other 
party's filing of its brief.


Sec.  __.38  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.  
__.37(b), the ALJ will file with and certify to the [Agency Head], for 
decision, the record of the proceeding. The record must include the 
ALJ's recommended decision, recommended findings of fact, recommended 
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 
ALJ will serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the ALJ files with and 
certifies to the [Agency Head] for final determination the record of 
the proceeding, the ALJ will furnish to the [Agency Head] a certified 
index of the entire record of the proceeding. The certified index must 
include, at a minimum, an entry for each paper, document or motion 
filed with the ALJ in the proceeding, the date of the filing, and the 
identity of the filer. The certified index must 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; 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.  __.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  __.38, a party may file with the [Agency Head] written exceptions 
to the ALJ's recommended decision, findings, conclusions or proposed 
order, to the admission or exclusion of evidence, or to the failure of 
the ALJ 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. (1) 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 [Agency Head] if the 
party taking exception had an opportunity to raise the same objection, 
issue, or argument before the ALJ 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 ALJ'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 ALJ'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.


Sec.  __.40   Review by the [Agency Head].

    (a) Notice of submission to the [Agency Head]. When the [Agency 
Head] determines that the record in the proceeding is complete, the 
[Agency Head] will serve notice upon the parties that the proceeding 
has been submitted to the [Agency Head] for final decision.
    (b) Oral argument before the [Agency Head]. Upon the initiative of 
the [Agency Head] or on the written request

[[Page 22068]]

of any party filed with the [Agency Head] within the time for filing 
exceptions, the [Agency Head] may order and hear oral argument on the 
recommended findings, conclusions, decision, and order of the ALJ. 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 [Agency 
Head]'s final decision. Oral argument before the [Agency Head] must be 
on the record.
    (c) [Agency Head]'s final decision. (1) Decisional employees may 
advise and assist the [Agency Head] in the consideration and 
disposition of the case. The final decision of the [Agency Head] will 
be based upon review of the entire record of the proceeding, except 
that the [Agency Head] 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 [Agency Head] will render a final decision within 90 days 
after notification of the parties that the case has been submitted for 
final decision, or 90 days after oral argument, whichever is later, 
unless the [Agency Head] orders that the action or any aspect thereof 
be remanded to the ALJ for further proceedings. Copies of the final 
decision and order of the [Agency Head] will be served upon each party 
to the proceeding, upon other persons required by statute, and, if 
directed by the [Agency Head] or required by statute, upon any 
appropriate State or Federal supervisory authority.


Sec.  __.41   Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the [Agency Head] may not, unless specifically 
ordered by the [Agency Head] or a reviewing court, operate as a stay of 
any order issued by the [Agency Head]. The [Agency Head] may, in the 
[Agency Head's discretion], and on such terms as the [Agency Head] 
finds just, stay the effectiveness of all or any part of an order 
pending a final decision on a petition for review of that order.

End of Common Rule Text

Proposed Adoption of the Uniform Rules

    The agency specific adoptions of the amendments to the Common Rule 
text which appears at the end of the common preamble, as well as other 
amendments to agency rules, appear below.

List of Subjects

12 CFR Part 3

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Investments, National banks, Reporting and 
recordkeeping requirements, Savings associations.

12 CFR Part 4

    Administrative practice and procedure, Freedom of information, 
Individuals with disabilities, Minority businesses, Organization and 
functions (Government agencies), Reporting and recordkeeping 
requirements, Service of process, Women.

12 CFR Part 6

    Federal Reserve System, Federal savings associations, National 
banks, Penalties.

12 CFR Part 19

    Administrative practice and procedure, Crime, Equal access to 
justice, Federal savings associations, Investigations, National banks, 
Penalties, Securities.

12 CFR Part 108

    Administrative practice and procedure, Crime, Savings associations.

12 CFR Part 109

    Administrative practice and procedure, Penalties.

12 CFR Part 112

    Administrative practice and procedure.

12 CFR Part 165

    Administrative practice and procedure, Savings associations.

12 CFR Part 238

    Administrative practice and procedure, Savings and loan holding 
companies, Banks, Banking, Federal Reserve System, Holding companies, 
Reporting and recordkeeping requirements, Investigations, Securities.

12 CFR Part 263

    Administrative practice and procedure, Investigations, Federal 
Reserve System.

12 CFR Part 308

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Claims, Crime, Equal access to justice, Fraud, 
Investigations, Lawyers, Penalties, Savings associations.

12 CFR Part 747

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

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

    For the reasons set out in the preamble, and under the authority of 
12 U.S.C. 93a, the OCC proposes to amend 12 CFR chapter I as follows:

PART 3--CAPITAL ADEQUACY STANDARDS

0
1. The authority citation for part 3 continues to read as follows:

    Authority:  12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and 
Pub. L. 116-136, 134 Stat. 281.


Sec.  3.405  [Amended]

0
2. Section 3.405 is amended by removing the phrase ``(12 CFR 19.0 
through 19.21 for national banks and 12 CFR part 109 for Federal 
savings associations)'' and adding in its place the phrase ``(12 CFR 
part 19)''.

PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF 
INFORMATION, CONTRACTING OUTREACH PROGRAM, POST-EMPLOYMENT 
RESTRICTIONS FOR SENIOR EXAMINERS

0
3. The authority citation for part 19 is revised to read as follows:

    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 93, 93(d), 93a, 
164, 481, 504, 1464(w); 1817, 1818, 1820, 1831m, 1831o, 1832, 1884, 
1972, 3102, 3108, 3110, 3909, and 4717; 15 U.S.C. 78l, 78o-4(c), 
78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3, 78w, and 1639e; 28 U.S.C. 2461 
note; 31 U.S.C. 330; and 42 U.S.C. 4012a.

0
4. Add Sec.  4.8 to subpart A to read as follows:


Sec.  4.8  Service of process upon the OCC or the Comptroller.

    (a) Scope. Paragraphs (b), (c), and (d) of this section apply to 
service of process upon the OCC, the Comptroller acting in his official 
capacity, officers (officials who are not employees of the OCC, such as 
an ALJ) or employees of the OCC who are sued in their official 
capacity, and officers or employees of the OCC who are sued in an 
individual capacity for an act or omission occurring in connection with 
duties performed on the behalf of the OCC.
    (b) Actions in Federal courts. Service of process for actions in 
Federal courts should be made upon the OCC, the Comptroller, or 
officers or employees of the OCC under the procedures set forth

[[Page 22069]]

in the Federal Rules of Civil Procedure governing the service of 
process upon the United States and its agencies, corporations, 
officers, or employees.
    (c) Actions in State courts. Service of process for actions in 
State courts should be made upon the OCC, the Comptroller, or officers 
or employees of the OCC by sending copies of the summons and complaint 
by registered or certified mail, same day courier service, or overnight 
delivery service to the Chief Counsel, Office of the Comptroller of the 
Currency, 400 7th Street SW, Washington, DC 20219. In these actions, 
parties also are encouraged to provide copies of the summons and 
complaint to the appropriate United States Attorney in accordance with 
the procedures set forth in Rule 4(i) of the Federal Rules of Civil 
Procedure.
    (d) Receipt of summons or complaint. Only the Washington, DC 
headquarters office of the OCC is authorized to accept service of a 
summons or complaint. The OCC, the Comptroller, and officers or 
employees of the OCC should be served with a copy of the summons or 
complaint at the Washington, DC headquarters office in accordance with 
paragraph (b) or (c) of this section.
    (e) Service of process upon a national bank, Federal savings 
association, or Federal branch or agency of a foreign bank. The OCC is 
not an agent for service of process upon a national bank, Federal 
savings association, or Federal branch or agency of a foreign bank. 
Parties seeking to serve a national bank, Federal savings association, 
or Federal branch or agency of a foreign bank must serve the summons or 
complaint upon the institution in accordance with the laws and 
procedures for the court in which the action has been filed.

PART 6--PROMPT CORRECTIVE ACTION

0
5. The authority citation for part 6 continues to read as follows:

    Authority: 12 U.S.C. 93a, 1831o, 5412(b)(2)(B).


Sec.  6.3  [Amended]

0
6. Section 6.3 is amended in paragraph (b)(3) by removing the phrase 
``and with respect to national banks, subpart M of part 19 of this 
chapter, and with respect to Federal savings associations Sec.  165.8 
of this chapter'' and adding in its place the phrase ``and subpart M of 
part 19 of this chapter''.


Sec.  6.4  [Amended]

0
7. Section 6.4 is amended in paragraphs (d)(1) and (2) by removing the 
phrase ``with respect to national banks and Sec.  165.8 of this chapter 
with respect to Federal savings associations'' each time it appears.


Sec.  6.5  [Amended]

0
8. Section 6.5 is amended in paragraphs (a)(1) and (2) and paragraph 
(b) by removing the phrase ``with respect to national banks, and 
Sec. Sec.  6.4 and 165.8 of this chapter with respect to Federal 
savings associations'' each time it appears.


Sec.  6.6  [Amended]

0
9. Section 6.6 is amended in paragraph (b) by removing the phrase 
``with respect to national banks and subpart B of this part and Sec.  
165.9 of this chapter with respect to Federal savings associations''.

PART 19--RULES OF PRACTICE AND PROCEDURE

0
10. The authority citation for part 19 is revised to read as follows:

    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 93, 93a, 161, 164, 
481, 504, 1462a, 1463(a), 1464; 1467(d), 1467a(r), 1817(j), 1818, 
1820, 1831m, 1831o, 1832, 1884, 1972, 3102, 3108, 3110, 3349, 3909, 
4717, and 5412(b)(2)(B); 15 U.S.C. 78l, 78o-4, 78o-5, 78q-1, 78s, 
78u, 78u-2, 78u-3, 78w, and 1639e; 28 U.S.C. 2461; 31 U.S.C. 330 and 
5321; and 42 U.S.C. 4012a.

Subpart A--Uniform Rules of Practice and Procedure

0
11. Revise subpart A as set forth at the end of the common preamble.
0
12. Section 19.1 is added to read as follows:


Sec.  19.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Office of the 
Comptroller of the Currency (``OCC'') should issue an order to approve 
or disapprove a person's proposed acquisition of an institution;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the OCC is the appropriate agency;
    (e) Assessment of civil money penalties by the OCC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate agency for any violation of:
    (1) Any provision of law referenced in 12 U.S.C. 93, or any 
regulation issued thereunder, and certain unsafe or unsound practices 
and breaches of fiduciary duty, pursuant to 12 U.S.C. 93;
    (2) Sections 22 and 23 of the Federal Reserve Act (``FRA''), or any 
regulation issued thereunder, and certain unsafe or unsound practices 
and breaches of fiduciary duty, pursuant to 12 U.S.C. 504 and 505;
    (3) Section 106(b) of the Bank Holding Company Amendments of 1970, 
pursuant to 12 U.S.C. 1972(2)(F);
    (4) Any provision of the Change in Bank Control Act of 1978 or any 
regulation or order issued thereunder, and certain unsafe or unsound 
practices and breaches of fiduciary duty, pursuant to 12 U.S.C. 
1817(j)(16);
    (5) Any provision of the International Lending Supervision Act of 
1983 (``ILSA''), or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (6) Any provision of the International Banking Act of 1978 
(``IBA''), or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (7) Section 5211 of the Revised Statutes (12 U.S.C. 161), pursuant 
to 12 U.S.C. 164;
    (8) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (9) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order 
or regulation issued thereunder;
    (10) The terms of any final or temporary order issued under section 
8 of the FDIA or any written agreement executed by the OCC or the 
former Office of Thrift Supervision (OTS), the terms of any condition 
imposed in writing by the OCC or the former OTS in connection with the 
grant of an application or request, certain unsafe or unsound 
practices, breaches of fiduciary duty, or any law or regulation not 
otherwise provided herein, pursuant to 12 U.S.C. 1818(i)(2);
    (11) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;

[[Page 22070]]

    (12) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (13) Section 5 of the Home Owners' Loan Act (HOLA) or any 
regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d), 
(s), and (v);
    (14) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d); and
    (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a(r);(f) 
Remedial action under section 102(g) of the Flood Disaster Protection 
Act of 1973 (42 U.S.C. 4012a(g));
    (g) Removal, prohibition, and civil monetary penalty proceedings 
under section 10(k) of the FDIA (12 U.S.C. 1820(k)) for violations of 
the post-employment restrictions imposed by that section; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.
0
13. Section 19.3 is added to read as follows:


Sec.  19.3   Definitions.

    For purposes of this part, unless explicitly stated to the 
contrary:
    (a) Administrative law judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Comptroller means the Comptroller of the Currency or a person 
delegated to perform the functions of the Comptroller of the Currency.
    (d) Decisional employee means any member of the Comptroller's or 
ALJ's staff who has not engaged in an investigative or prosecutorial 
role in a proceeding and who may assist the Comptroller or the 
administrative law judge, respectively, in preparing orders, 
recommended decisions, decisions, and other documents under the Uniform 
Rules.
    (e) Electronic signature means electronically affixing the 
equivalent of a signature to an electronic document filed or 
transmitted electronically.
    (f) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the OCC in an adjudicatory 
proceeding.
    (g) Final order means an order issued by the Comptroller with or 
without the consent of the affected institution or the institution-
affiliated party, that has become final, without regard to the pendency 
of any petition for reconsideration or review.
    (h) Institution includes any national bank, Federal savings 
association, or Federal branch or agency of a foreign bank.
    (i) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (j) Local Rules means those rules promulgated by the OCC in the 
subparts of this part excluding subpart A.
    (k) OCC means the Office of the Comptroller of the Currency.
    (l) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the OCC, the Board of 
Governors of the Federal Reserve System (``Board of Governors''), the 
Federal Deposit Insurance Corporation (``FDIC''), and the National 
Credit Union Administration (``NCUA'').
    (m) Party means the OCC and any person named as a party in any 
notice.
    (n) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in paragraph (h) of this section.
    (o) Respondent means any party other than the OCC.
    (p) Uniform Rules means those rules in subpart A of this part that 
are common to the OCC, the Board of Governors, the FDIC, and the NCUA.
    (q) Violation means any violation as that term is defined in 
section 3(v) of the FDIA (12 U.S.C. 1813(v).

Subpart B--Procedural Rules for OCC Adjudications


Sec.  19.100  [Amended]

0
14. Section 19.100 is amended by:
0
a. Removing the phrase ``administrative law judge'' wherever it appears 
and adding in its place ``ALJ'';
0
b. Removing the phrase ``Hearing Clerk, Office of the Comptroller of 
the Currency, 400 7th Street SW, Washington, DC 20219'' and adding in 
its place the phrase ``OCC Hearing Clerk in a manner prescribed by 
Sec.  19.10(b) and (c)'';
0
c. Removing the word ``and'' before ``any other papers required to be 
filed with the Comptroller'' in the second sentence; and
0
d. Adding before the period at the end of the second sentence the 
phrase ``; and any attachments or exhibits to such documents''.
0
15. Section 19.101 is revised to read as follows:


Sec.  19.101  Delegation to OFIA.

    Unless otherwise ordered by the Comptroller, an ALJ assigned to 
OFIA conducts administrative adjudications subject to subpart A of this 
part.
0
16. Section 19.102 is added to read as follows:


Sec.  19.102  Civil money penalties.

    A respondent must pay civil money penalties assessed pursuant to 
subpart A of this part within 60 days after the issuance of the notice 
of assessment unless the OCC requires a different time for payment. A 
respondent that has made a timely request for a hearing to challenge 
the assessment of the penalty is not required to pay the penalty until 
the OCC has issued a final order of assessment. In these instances, the 
respondent must pay the penalty within 60 days of service of the order 
unless the OCC requires a different time for payment.

Subpart C--Removals, Suspensions, and Prohibitions of an 
Institution-Affiliated Party When a Crime Is Charged or a 
Conviction Is Obtained

0
17. The heading for subpart C is revised to read as set forth above.
0
18. Section 19.110 is revised to read as follows:


Sec.  19.110  Scope and definitions.

    (a) Scope. This subpart applies to informal hearings afforded to 
any institution-affiliated party who has been suspended or removed from 
office or prohibited from further participation in the affairs of any 
depository institution pursuant to section 8(g) of the FDIA (12 U.S.C. 
1818(g)) by a notice or order issued by the Comptroller.
    (b) Definitions. As used in this subpart--
    (1) The term petitioner means an individual who has filed a 
petition for an informal hearing under this subpart.
    (2) The term depository institution means any national bank, 
Federal savings association, or Federal branch or agency of a foreign 
bank.
    (3) The term OCC Supervisory Office means the Senior Deputy 
Comptroller or Deputy Comptroller of the OCC department or office 
responsible for supervision of the depository institution or, in the 
case of an individual no longer affiliated with a particular depository 
institution, the Deputy Comptroller for Special Supervision.
0
19. Section 19.111 is revised to read as follows:


Sec.  19.111  Suspension, removal, or prohibition of institution-
affiliated party.

    (a) Issuance of notice or order. The Comptroller may serve a notice 
of

[[Page 22071]]

suspension or prohibition or order of removal or prohibition pursuant 
to section 8(g) of the FDIA (12 U.S.C. 1818(g)) on an institution-
affiliated party. The Comptroller will serve a copy of this notice or 
order on any depository institution that the subject of the notice or 
order is affiliated with at the time the OCC issues the notice or 
order. After service of the notice or order, the institution-affiliated 
party must immediately cease service to, or participation in the 
affairs of, that depository institution and, if so determined by the 
OCC, any other depository institution. The notice or order will 
indicate the basis for suspension, removal, or prohibition and will 
inform the institution-affiliated party of the right to request in 
writing, within 30 days from the date that the institution-affiliated 
party was served, an opportunity to show at an informal hearing that 
continued service to or participation in the conduct of the affairs of 
any depository institution has not posed, does not pose, or is not 
likely to pose a threat to the interests of the depositors of, or has 
not threatened, does not threaten, or is not likely to threaten to 
impair public confidence in, any relevant depository institution. The 
Comptroller will serve the notice or order upon the institution-
affiliated party and the related institution in the manner set forth in 
Sec.  19.11(c).
    (b) Request for hearing--(1) Submission. Unless instructed 
otherwise in writing by the Comptroller, an institution-affiliated 
party must send the written request for an informal hearing referenced 
in paragraph (a) of this section to the OCC Supervisory Office by 
certified mail, a same day courier service, an overnight delivery 
service, or by personal service with a signed receipt.
    (2) Content of request for a hearing. The request filed under this 
section must state specifically the relief desired and the grounds on 
which that relief is based and must admit, deny, or state that the 
institution-affiliated party lacks sufficient information to admit or 
deny each allegation in the notice or order. A statement of lack of 
information has the effect of a denial. Denials must fairly meet the 
substance of each allegation denied; general denials are not permitted. 
When the institution-affiliated party denies part of an allegation, 
that part must be denied and the remainder specifically admitted. Any 
allegation in the notice or order which is not denied is deemed 
admitted for purposes of the proceeding. The request must state with 
particularity how the institution-affiliated party intends to show that 
its continued service to or participation in the affairs of the 
institution would not pose a threat to the interests of the 
institution's depositors or impair public confidence in any 
institution.
    (c) Default. If the institution-affiliated party fails to timely 
file a petition for a hearing pursuant to paragraph (b) of this 
section, or fails to appear at a hearing, either in person or by 
attorney, or fails to submit a written argument where oral argument has 
been waived pursuant to Sec.  19.112(c) of this part, the notice will 
remain in effect until the information, indictment, or complaint is 
finally disposed of and the order will remain in effect until 
terminated by the OCC.
0
20. Section 19.112 is revised to read as follows:


Sec.  19.112  Informal hearing.

    (a) Issuance of hearing order. After receipt of a request for 
hearing, the OCC Supervisory Office must notify the petitioner 
requesting the hearing and OCC Enforcement of the date, time, and place 
fixed for the hearing. The OCC will hold the hearing no later than 30 
days from the date when the OCC receives the request for a hearing, 
unless the time is extended in response to a written request of the 
petitioner. The OCC Supervisory Office may extend the hearing date only 
for a specific period of time and must take appropriate action to 
ensure that the hearing is not unduly delayed.
    (b) Appointment of presiding officer. The OCC Supervisory Office 
must appoint one or more OCC employees as the presiding officer to 
conduct the hearing. The presiding officer(s) may not have been 
involved in a prosecutorial or investigative role in the proceeding, a 
factually related proceeding, or the underlying enforcement action.
    (c) Waiver of oral hearing--(1) Petitioner. When the petitioner 
requests a hearing, the petitioner may elect to have the matter 
determined by the presiding officer solely on the basis of written 
submissions by serving on the OCC Supervisory Office and all parties a 
signed document waiving the statutory right to appear and make oral 
argument. The petitioner must present the written submissions to the 
presiding officer and serve the other parties not later than ten days 
prior to the date fixed for the hearing or within a shorter time period 
as the presiding officer may permit.
    (2) OCC. The OCC may respond to the petitioner's submissions by 
presenting the presiding officer with a written response and by serving 
the other parties in the manner prescribed by Sec.  19.11(c) not later 
than the date fixed for the hearing or within such other time period as 
the presiding officer may require.
    (d) Hearing procedures--(1) Conduct of hearing. Hearings under this 
subpart are not subject to the provisions of subpart A of this part or 
the adjudicative provisions of the Administrative Procedure Act (5 
U.S.C. 554-557).
    (2) Powers of the presiding officer. The presiding officer must 
determine all procedural issues that are governed by this subpart. The 
presiding officer also may permit witnesses, limit the number of 
witnesses, and impose time limitations as they deem reasonable. The 
informal hearing will not be governed by formal rules of evidence, 
including the Federal Rules of Evidence. The presiding officer must 
consider all oral presentations, when permitted, and all documents the 
presiding officer deems to be relevant and material to the proceeding 
and not unduly repetitious. The presiding officer may ask questions of 
any person participating in the hearing and may make any rulings 
reasonably necessary to facilitate the effective and efficient 
operation of the hearing.
    (3) Presentation. (i) The OCC and the petitioner may present 
relevant written materials and oral argument at the hearing. The 
petitioner may appear at the hearing personally or through counsel. 
Except as permitted in paragraph (c) of this section, each party, 
including the OCC, must file a copy of any affidavit, memorandum, or 
other written material to be presented at the hearing with the 
presiding officer and must serve the other parties not later than ten 
days prior to the hearing or within such shorter time period as 
permitted by the presiding officer.
    (ii) If the petitioner or the OCC desires to present oral testimony 
or witnesses at the hearing, they must file a written request with the 
presiding officer not later than ten days prior to the hearing, or 
within a shorter time period as required by the presiding officer. The 
written request must include the names of proposed witnesses, along 
with the general nature of the expected testimony, and the reasons why 
oral testimony is necessary. The presiding officer generally will not 
admit oral testimony or witnesses unless a specific and compelling need 
is demonstrated. Witnesses, if admitted, must be sworn. By stipulation 
of the parties or by order of the presiding officer, a court reporter 
or other person authorized to administer an oath may administer the 
oath remotely without being in the physical presence of the witness.
    (iii) In deciding on any suspension or prohibition based on an 
indictment, information, or complaint, the presiding

[[Page 22072]]

officer may not consider the ultimate question of the guilt or 
innocence of the individual with respect to the criminal charges that 
are outstanding. In deciding on any removal or prohibition with respect 
to a conviction or pre-trial diversion program, the presiding officer 
may not consider challenges to or efforts to impeach the validity of 
the conviction or the agreement to enter a pre-trial diversion program 
or other similar program. The presiding officer may consider facts in 
either situation, however, that show the nature of the events on which 
the criminal charges, conviction, or agreement to enter a pre-trial 
diversion program or other similar program was based.
    (4) Electronic presentation. Based on the circumstances of each 
hearing, the presiding officer may direct the use of, or any party may 
elect to use, an electronic presentation during the hearing. If the 
presiding officer requires an electronic presentation during the 
hearing, each party will be responsible for their own presentation and 
related costs unless the parties agree to another manner by which to 
allocate presentation responsibilities and costs.
    (5) Record. A transcript of the proceedings may be taken if the 
petitioner requests a transcript and agrees to pay all expenses or if 
the presiding officer determines that the nature of the case warrants a 
transcript. The presiding officer may order the record to be kept open 
for a reasonable period following the hearing, not to exceed five 
business days, to permit the petitioner or the OCC to submit additional 
documents for the record. Thereafter, no further submissions may be 
accepted except for good cause shown.
0
21. Section 19.113 is amended by:
0
a. Adding paragraph headings to paragraphs (a) and (b);
0
b. Adding a paragraph heading to, and revising the first sentence in, 
paragraph (c);
0
c. Adding a paragraph heading to, and adding the phrase ``or charges'' 
after the phrase ``or other disposition of the charge'' in, paragraph 
(d);
0
d. Adding a paragraph heading to paragraph (e); and
0
e. Adding a paragraph heading to, and removing the phrase ``No hearing 
need be granted'' and adding in its place the phrase ``The Comptroller 
is not required to grant a hearing'' in, the last sentence of paragraph 
(f).
    The additions and revision read as follows:


Sec.  19.113  Recommended and final decisions.

    (a) Issuance of recommended decision. * * *
    (b) Comments. * * *
    (c) Issuance of final decision. Within 60 days of the conclusion of 
the hearing or, if the petitioner has waived an oral hearing, within 60 
days from the date fixed for the hearing, the Comptroller will notify 
the petitioner by registered mail, or electronic mail or other 
electronic means if the petitioner consents, whether the suspension or 
removal from office or prohibition from participation in any manner in 
the affairs of any depository institution will be affirmed, terminated, 
or modified. * * *
    (d) Other actions. * * *
    (e) Expiration of order. * * *
    (f) Petition for reconsideration. * * *
0
22. Revise subpart D to read as follows:
Subpart D--Actions Under the Federal Securities Laws
Sec.
19.120 Exemption hearings under section 12(h) of the Securities 
Exchange Act of 1934.
19.121 Disciplinary proceedings.
19.122 Civil money penalty authority under Federal securities laws.
19.123 Cease-and-desist authority.

Subpart D--Actions Under the Federal Securities Laws


Sec.  19.120  Exemption hearings under section 12(h) of the Securities 
Exchange Act of 1934.

    (a) Scope. The rules in this section apply to informal hearings 
that may be held by the Comptroller to determine whether, pursuant to 
authority in sections 12(h) and (i) of the Securities Exchange Act of 
1934 (Exchange Act) (15 U.S.C. 78l(h) and (i)), to exempt in whole or 
in part an issuer or a class of issuers from the provisions of section 
12(g), or from section 13 or 14 of the Exchange Act (15 U.S.C. 78l(g), 
78m or 78n), or whether to exempt from section 16 of the Exchange Act 
(15 U.S.C. 78p) any officer, director, or beneficial owner of 
securities of an issuer. The only issuers covered by this section are 
national banks and Federal savings associations whose securities are 
registered, or which may be subject to registration, pursuant to 
section 12(g) of the Exchange Act (15 U.S.C. 78l(g)). The Comptroller 
may deny an application for exemption without a hearing.
    (b) Application for exemption. An issuer or an individual (officer, 
director, or shareholder) may submit a written application for an 
exemption order to Bank Advisory, Office of the Comptroller of the 
Currency, Washington, DC 20219. The application must specify the type 
of exemption sought and the reasons for the exemption, including an 
explanation of why an exemption would not be inconsistent with the 
public interest or the protection of investors. Bank Advisory will 
inform the applicant in writing whether a hearing will be held to 
consider the matter.
    (c) Newspaper notice. Upon being informed that an application will 
be considered at a hearing, the applicant must publish a notice one 
time in a newspaper of general circulation in the community where the 
issuer's main office is located. The notice must state: The name and 
title of any individual applicants; the type of exemption sought; the 
fact that a hearing will be held; and a statement that interested 
persons may submit to Bank Advisory, Office of the Comptroller of the 
Currency, Washington, DC 20219 within 30 days from the date of the 
newspaper notice, written comments concerning the application and a 
written request for an opportunity to be heard. The applicant must 
promptly provide a copy of the notice to Bank Advisory and to the 
national bank's or Federal savings association's shareholders in the 
same manner as is customary for shareholder communications.
    (d) Informal hearing--(1) Conduct of proceeding. The adjudicative 
provisions of the Administrative Procedure Act, formal rules of 
evidence, and subpart A of this part do not apply to hearings conducted 
under this section, except as provided in Sec.  19.100.
    (2) Notice of hearing. Following the comment period, the 
Comptroller will send a notice that fixes a date, time, and place for 
hearing to each applicant and to any person who has requested an 
opportunity to be heard.
    (3) Presiding officer. The Comptroller will designate a presiding 
officer to conduct the hearing. The presiding officer must determine 
all procedural questions not governed by this section and may limit the 
number of witnesses and impose time and presentation limitations as are 
deemed reasonable. At the conclusion of the informal hearing, the 
presiding officer must issue a recommended decision to the Comptroller 
as to whether the exemption should be issued. The decision must include 
a summary of the facts and arguments of the parties.
    (4) Attendance. Each applicant and any person who has requested an 
opportunity to be heard may attend the hearing with or without counsel. 
The hearing will be open to the public. In addition, each applicant and 
any other

[[Page 22073]]

hearing participant may introduce oral testimony through such witnesses 
as the presiding officer may permit.
    (5) Order of presentation. (i) Each applicant may present an 
opening statement of a length decided by the presiding officer. Each of 
the hearing participants, or one among them selected with the approval 
of the presiding officer, may then present an opening statement. The 
opening statement should summarize concisely what each applicant and 
participant intends to show.
    (ii) Each applicant will have an opportunity to make an oral 
presentation of facts and materials or submit written materials for the 
record. One or more of the hearing participants may make an oral 
presentation or a written submission.
    (iii) After the above presentations, each applicant, followed by 
one or more of the hearing participants, may make concise summary 
statements reviewing their position.
    (6) Witnesses. The obtaining and use of witnesses is the 
responsibility of the parties afforded the hearing. All witnesses must 
be present on their own volition, but any person appearing as a witness 
may be questioned by each applicant, any hearing participant, and the 
presiding officer. Witnesses must be sworn unless otherwise directed by 
the presiding officer. By stipulation of the parties or by order of the 
presiding officer, a court reporter or other person authorized to 
administer an oath may administer the oath remotely without being in 
the physical presence of the witness.
    (7) Evidence. The presiding officer may exclude data or materials 
deemed to be improper or irrelevant. Formal rules of evidence do not 
apply. Documentary material must be of a size consistent with ease of 
handling and filing. The presiding officer may determine the number of 
copies that must be furnished for purposes of the hearing.
    (8) Electronic presentation. Based on the circumstances of each 
hearing, the presiding officer may direct the use of, or any party may 
elect to use, an electronic presentation during the hearing. If the 
presiding officer requires an electronic presentation during the 
hearing, each party will be responsible for their own presentation and 
related costs unless the parties agree to another manner in which to 
allocate presentation responsibilities and costs.
    (9) Transcript. The OCC will arrange a transcript of each 
proceeding with all expenses, including the furnishing of a copy to the 
presiding officer by electronic means or otherwise, paid by the 
applicant or applicants.
    (e) Decision of the Comptroller. Following the conclusion of the 
hearing and the submission of the record and the presiding officer's 
recommended decision to the Comptroller for decision, the Comptroller 
will notify each applicant and all persons who have so requested in 
writing of the final disposition of the application. Exemptions granted 
must be in the form of an order that specifies the type of exemption 
granted and its terms and conditions.


Sec.  19.121  Disciplinary proceedings.

    (a) Scope--(1) In general. Except as provided in this section, 
subpart A of this part applies to proceedings by the Comptroller to 
determine whether, pursuant to authority contained in sections 
15B(c)(5), 15C(c)(2)(A), 17A(c)(3), and 17A(c)(4)(C) of the Exchange 
Act (15 U.S.C. 78o-4(c)(5), 78o-5(c)(2)(A), 78q-1(c)(3)(A), and 78q-
1(c)(4)(C)), to take disciplinary action against the following:
    (i) A bank that is a municipal securities dealer, any person 
associated with a bank that is a municipal securities dealer, or any 
person seeking to become associated with a bank that is a municipal 
securities dealer;
    (ii) A bank that is a government securities broker or government 
securities dealer, any person associated with a bank that is a 
government securities broker or government securities dealer, or any 
person seeking to become associated with a government securities broker 
or government securities dealer; or
    (iii) A bank that is a transfer agent, any person associated with a 
bank that is a transfer agent, or any person seeking to become 
associated with a bank that is a transfer agent.
    (2) Other actions. In addition to the issuance of disciplinary 
orders after opportunity for hearing, the Comptroller may issue and 
serve any notices and temporary or permanent cease-and-desist orders 
and take any actions that are authorized by section 8 of the FDIA (12 
U.S.C. 1818); sections 15B(c)(5), 15C(c)(2)(B), and 17A(d)(2) of the 
Exchange Act (15 U.S.C. 78o-4(c)(5), 78o-5(c)(2)(B), and 78q-1(d)(2)); 
and other sections of this part against the following:
    (i) The parties listed in paragraph (a)(1) of this section; and
    (ii) A bank that is a clearing agency.
    (3) Definitions. As used in this section:
    (i) The term bank means a national bank or Federal savings 
association, and, when referring to a government securities broker or 
government securities dealer, a Federal branch or agency of a foreign 
bank.
    (ii) The terms transfer agent, municipal securities dealer, 
government securities broker, and government securities dealer have the 
same meaning as the terms in sections 3(a)(25), 3(a)(30), 3(a)(43), and 
3(a)(44) of the Exchange Act (15 U.S.C. 78c(a)(25), 78c(a)(30), 
78c(a)(43), and 78c(a)(44)), respectively.
    (iii) The terms person associated with a bank that is a municipal 
securities dealer and person associated with a municipal securities 
dealer have the same meaning as person associated with a municipal 
securities dealer in section 3(a)(32) of the Exchange Act (15 U.S.C. 
78c(a)(32));
    (iv) The terms person associated with a bank that is a government 
securities broker or government securities dealer and person associated 
with a government securities broker or government securities dealer 
have the same meaning as person associated with a government securities 
broker or government securities dealer in section 3(a)(45) of the 
Exchange Act (15 U.S.C. 78c(a)(45)); and
    (v) The terms person associated with a bank that is a transfer 
agent and person associated with a transfer agent have the same meaning 
as person associated with a transfer agent in section 3(a)(49) of the 
Exchange Act (15 U.S.C. 78c(a)(49)).
    (4) Preservation of authority. Nothing in this section impairs the 
powers conferred on the Comptroller by other provisions of law.
    (b) Notice of charges and answer--(1) In general. Proceedings are 
commenced when the Comptroller serves a notice of charges on a bank or 
associated person. The notice must indicate the type of disciplinary 
action being contemplated and the grounds therefor and fix a date, 
time, and place for hearing. The hearing must be set for a date at 
least 30 days after service of the notice. A respondent served with a 
notice of charges may file an answer as prescribed in Sec.  19.19. Any 
respondent who fails to appear at a hearing personally or by a duly 
authorized representative is deemed to have consented to the issuance 
of a disciplinary order.
    (2) Public basis of proceedings; private hearings. All proceedings 
under this section must be commenced, and the notice of charges must be 
filed, on a public basis unless otherwise ordered by the Comptroller. 
Pursuant to Sec.  19.33(a), a request for a private hearing may be 
filed within 20 days of service of the notice.

[[Page 22074]]

    (c) Disciplinary orders--(1) Service of order; content. In the 
event of consent, or if on the record filed by the ALJ, the Comptroller 
finds that any act or omission or violation specified in the notice of 
charges has been established, the Comptroller may serve on the bank or 
persons concerned a disciplinary order, as provided in the Exchange 
Act. The order may:
    (i) Censure; limit the activities, functions, or operations of; or 
suspend or revoke the registration of a bank that is a municipal 
securities dealer;
    (ii) Censure, suspend, or bar any person associated with a 
municipal securities dealer or seeking to become a person associated 
with a municipal securities dealer;
    (iii) Censure; limit the activities, functions, or operations of; 
or suspend or bar a bank that is a government securities broker or 
government securities dealer;
    (iv) Censure; limit the activities, functions, or operations of; or 
suspend or bar any person associated with or seeking to become a person 
associated with a government securities broker or government securities 
dealer;
    (v) Deny registration to; limit the activities, functions, or 
operations of; or suspend or revoke the registration of a bank that is 
a transfer agent; or
    (vi) Censure, limit the activities or functions of, or suspend or 
bar any person associated with a transfer agent or seeking to become a 
person associated with a transfer agent.
    (2) Effective date of order. A disciplinary order is effective when 
served on the respondent or respondents involved and remains effective 
and enforceable until it is stayed, modified, terminated, or set aside 
by action of the Comptroller or a reviewing court.
    (d) Applications for stay or review of disciplinary actions imposed 
by registered clearing agencies--(1) Stays. The rules adopted by the 
Securities and Exchange Commission (SEC) pursuant to section 19 of the 
Exchange Act (15 U.S.C. 78s) regarding applications by persons for whom 
the SEC is the appropriate regulatory agency for stays of disciplinary 
sanctions or summary suspensions imposed by registered clearing 
agencies (17 CFR 240.19d-2) apply to applications by banks. References 
to the ``Commission'' are deemed to refer to the ``OCC.''
    (2) Reviews. The regulations adopted by the SEC pursuant to section 
19 of the Exchange Act (15 U.S.C. 78s) regarding applications by 
persons for whom the SEC is the appropriate regulatory agency for 
reviews of final disciplinary sanctions, denials of participation, or 
prohibitions or limitations of access to services imposed by registered 
clearing agencies (17 CFR 240.19d-3(a) through (f)) apply to 
applications by banks. References to the ``Commission'' are deemed to 
refer to the ``OCC.''


Sec.  19.122  Civil money penalty authority under Federal securities 
laws.

    (a) Scope. Except as provided in this section, subpart A of this 
part applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in section 21B of the Exchange Act (15 
U.S.C. 78u-2), in proceedings commenced pursuant to sections 15B, 15C, 
and 17A of the Exchange Act (15 U.S.C. 78o-4, 78o-5, or 78q-1) for 
which the OCC is the appropriate regulatory agency under section 
3(a)(34) of the Exchange Act (15 U.S.C. 78c(a)(34)), the Comptroller 
may impose a civil money penalty against the following:
    (1) A bank that is a municipal securities dealer, any person 
associated with a bank that is a municipal securities dealer, or any 
person seeking to become associated with a bank that is a municipal 
securities dealer;
    (2) A bank that is a government securities broker or government 
securities dealer, any person associated with a bank that is a 
government securities broker or government securities dealer, or any 
person seeking to become associated with a government securities broker 
or government securities dealer; or
    (3) A bank that is a transfer agent, any person associated with a 
bank that is a transfer agent, or any person seeking to become 
associated with a bank that is a transfer agent.
    (b) Definitions. As used in this section:
    (1) The term bank means a national bank or Federal savings 
association, and, when referring to a government securities broker or 
government securities dealer, a Federal branch or agency of a foreign 
bank.
    (2) The terms transfer agent, municipal securities dealer, 
government securities broker, and government securities dealer have the 
same meaning as such terms in sections 3(a)(25), 3(a)(30), 3(a)(43), 
and 3(a)(44) of the Exchange Act (15 U.S.C. 78c(a)(25), 78c(a)(30), 
78c(a)(43), and 78c(a)(44)), respectively.
    (3) The term person associated with a bank that is a municipal 
securities dealer has the same meaning as person associated with a 
municipal securities dealer in section 3(a)(32) of the Exchange Act (15 
U.S.C. 78c(a)(32));
    (4) The term person associated with a bank that is a government 
securities broker or government securities dealer has the same meaning 
as person associated with a government securities broker or government 
securities dealer in section 3(a)(45) of the Exchange Act (15 U.S.C. 
78c(a)(45)); and
    (5) The term person associated with a bank that is a transfer agent 
has the same meaning as person associated with a transfer agent in 
section 3(a)(49) of the Exchange Act (15 U.S.C. 78c(a)(49)).
    (c) Public basis of proceedings; private hearings. All proceedings 
under this section must be commenced, and the notice of assessment must 
be filed, on a public basis, unless otherwise ordered by the 
Comptroller. Pursuant to Sec.  19.33(a), any request for a private 
hearing may be filed within 20 days of service of the notice.


Sec.  19.123  Cease-and-desist authority.

    (a) Scope. Except as provided in this section, subpart A of this 
part applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in sections 12(i) and 21C of the 
Exchange Act (15 U.S.C. 78l(i) and 78u-3), the Comptroller may initiate 
cease-and-desist proceedings against a national bank or Federal savings 
association for violations of sections 10A(m), 12, 13, 14(a), 14(c), 
14(d), 14(f), and 16 of the Exchange Act (15 U.S.C. 78j-1(m), 78l, 78m, 
78n(a), 78n(c), 78n(d), 78n(f), and 78p); sections 302, 303, 304, 306, 
401(b), 404, 406, and 407 of the Sarbanes-Oxley Act of 2002 as amended 
(15 U.S.C. 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265); or 
regulations or rules issued thereunder.
    (b) Public basis of proceedings; private hearings. All proceedings 
under this section must be commenced, and the notice of charges must be 
filed, on a public basis, unless otherwise ordered by the Comptroller. 
Pursuant to Sec.  19.33(a), any request for a private hearing may be 
filed within 20 days of service of the notice.

Subparts E, F, and G [Removed and Reserved]

0
23. Remove and reserve subparts E, F, and G.

Subpart H--Change in Bank Control

0
24. Section 19.160 is revised to read as follows:


Sec.  19.160  Scope.

    (a) Scope. This subpart governs the procedures for a hearing 
requested by a person who has filed a notice that has been disapproved 
by the OCC for a change in control of:
    (1) An insured national bank or Federal savings association 
pursuant to

[[Page 22075]]

section 7(j) of the FDIA (12 U.S.C. 1817(j)) and 12 CFR 5.50; or
    (2) An uninsured national bank pursuant to 12 CFR 5.50.
    (b) Applicability of subpart A. Unless otherwise provided in this 
subpart, the rules in subpart A of this part set forth the procedures 
applicable to requests for OCC hearings under this subpart.
0
25. Section 19.161 is amended by:
0
a. Revising the section heading;
0
b. Removing paragraph (a);
0
c. Redesignating paragraphs (b) through (e) as paragraphs (a) through 
(d), respectively;
0
d. Revising newly redesignated paragraph (a) introductory text;
0
e. Removing the word ``shall'' and adding in its place the word 
``will'' in newly redesignated paragraph (b) introductory text; and
0
f. In newly redesignated paragraph (d):
0
i. Removing the phrase ``enforcement counsel'' in the second sentence 
and adding in its place the phrase ``Enforcement Counsel'' and removing 
the word ``shall'' and adding in its place the word ``will'' in the 
third sentence; and
0
ii. Removing the phrase ``administrative law judge'' in the third 
sentence and adding in its place the word ``ALJ''.
    The revisions read as follows:


Sec.  19.161  Hearing process.

    (a) Hearing request. Pursuant to 12 CFR 5.50(f)(6), following 
receipt of a notice of disapproval of a proposed acquisition of control 
of a national bank or Federal savings association, a filer may request 
a hearing by the OCC on the proposed acquisition. A hearing request 
must:
* * * * *

Subpart I--Discovery Depositions and Subpoenas

0
26. Section 19.170 is amended by:
0
a. Revising paragraphs (a) and (b);
0
b. Removing the phrase ``ten days'' and adding in its place the phrase 
``20 days'' and removing the phrase ``administrative law judge'' and 
adding in its place the word ``ALJ'' in paragraph (c);
0
c. Revising the first sentence of paragraph (d);
0
d. Removing the phrase ``electronic sound'' and adding in its place the 
phrase ``electronic means, such as by sound or video'' in paragraph 
(e)(1)(i);
0
e. Removing the phrase ``administrative law judge'' and adding in its 
place the word ``ALJ'' in paragraph (e)(1)(iii); and
0
f. Removing the phrase ``the cost of the recording'' and adding in its 
place the phrase ``the cost of recording'' in paragraph (e)(2);
0
g. In paragraph (f) introductory text, removing the phrase 
``administrative law judge shall grant such protective order'', and 
adding in its place the phrase ``ALJ may grant a protective order''; 
and
0
h. Revising the heading and removing the word ``shall'' and adding in 
its place the word ``must'' wherever it appears in paragraph (g).
    The revisions read as follows:


Sec.  19.170  Discovery depositions.

    (a) In general. In any proceeding instituted under or subject to 
the provisions of subpart A of this part, a party may take the 
deposition of a fact witness, an expert, or a hybrid fact-expert where 
there is need for the deposition. A fact witness is a person, including 
another party, who has direct knowledge of matters that are non-
privileged and of material relevance to the proceeding. A hybrid fact-
expert witness is a fact witness who will also provide relevant expert 
opinion testimony based on the witness's training and experience. The 
deposition of experts is limited to those experts who are expected to 
testify at the hearing.
    (1) Report. A party must produce an expert report for any 
testifying expert or hybrid fact-expert witness before the witness's 
deposition. Unless otherwise provided by the ALJ, the party must 
produce this report at least 20 days prior to any deposition of the 
expert or hybrid fact-expert witness.
    (2) Limits on depositions. Respondents, collectively, are limited 
to a combined total of five depositions from fact witnesses and hybrid 
fact-expert witnesses. Enforcement Counsel are limited to a combined 
total of five depositions from fact witnesses and hybrid fact-expert 
witnesses. A party is entitled to take a deposition of each expert 
witness designated by an opposing party.
    (b) Notice. A party desiring to take a deposition must give 
reasonable notice in writing to the deponent and to every other party 
to the proceeding. The notice must state the time, manner, and place 
for taking the deposition, and the name and address of the person to be 
deposed.
    (1) Location. A deposition notice may require the witness to be 
deposed at any place within a State, territory, or possession of the 
United States or the District of Columbia in which that witness resides 
or has a regular place of employment, or such other convenient place as 
agreed by the noticing party and the witness.
    (2) Remote participation. The parties may stipulate, or the ALJ may 
order, that a deposition be taken by telephone or other remote means.
* * * * *
    (d) * * * The witness must be duly sworn. By stipulation of the 
parties or by order of the ALJ, a court reporter or other person 
authorized to administer an oath may administer the oath remotely 
without being in the physical presence of the deponent. Each party will 
have the right to examine the witness with respect to all matters that 
are non-privileged and of material relevance to the proceeding and of 
which the witness has factual, direct, and personal knowledge. * * *
* * * * *
    (g) Expenses. * * *


Sec.  19.171  [Amended]

0
27. Section 19.171 is amended:
0
a. In paragraph (a) by:
0
i. Removing the phrase ``administrative law judge shall'' and adding in 
its place the phrase ``ALJ may'';
0
ii. Removing the phrase ``under paragraph (a) of this section'' and 
adding in its place the phrase ``under Sec.  19.170''; and
0
iii. Removing the phrase ``state or territory that is subject to the 
jurisdiction of the United States'' and adding in its place the phrase 
``State, territory, or possession of the United States or the District 
of Columbia'';
0
b. By removing the phrase ``administrative law judge'' and adding in 
its place the phrase ``ALJ, unless the ALJ issues an order indicating 
the filing of proof of service is not required'' in paragraph (b)(2);
0
c. Adding the phrase ``, or any party,'' in the first sentence after 
the phrase ``A person named in a subpoena'' and removing the word 
``which'' in the second sentence and adding in its place the word 
``that'' in paragraph (c); and
0
d. Removing the word ``shall'' and adding in its place the word 
``must'' in paragraph (d).

Subpart J--Formal Investigations

0
28. Section 19.180 is revised to read as follows:


Sec.  19.180  Scope.

    This subpart and Sec.  19.8 apply to formal investigations 
initiated by order of the Comptroller and pertain to the exercise of 
powers specified in section 5240 of the Revised Statutes of the United 
States (12 U.S.C. 481); section 5(d)(1)(B) of the Home Owners' Loan Act 
(12 U.S.C. 1464(d)(1)(B)); sections 7(j)(15), 8(n), and 10(c) of the 
FDIA (12

[[Page 22076]]

U.S.C. 1817(j)(15), 1818(n), and 1820(c)); sections 4(b) and 13(a) and 
(b) of the International Banking Act of 1978 (12 U.S.C. 3102(b) and 
3108(a) and (b)); and section 21 of the Exchange Act (15 U.S.C. 78u). 
This subpart does not restrict or in any way affect the authority of 
the Comptroller to conduct examinations into the affairs or ownership 
of national banks, Federal savings associations, Federal branches and 
agencies, and their affiliates.
0
29. Section 19.181 is revised to read as follows:


Sec.  19.181  Confidentiality of formal investigations.

    The entire record of any formal investigative proceeding, including 
the resolution or order of the Comptroller authorizing or terminating 
the proceeding; all subpoenas issued by the OCC during the 
investigation; and all information, documents, and transcripts obtained 
by the OCC in the course of a formal investigation, are confidential 
and may be disclosed only in accordance with the provisions of part 4 
of this chapter or pursuant to OCC discovery obligations under subpart 
A of this part.
0
30. Section 19.182 is revised to read as follows:


Sec.  19.182  Order to conduct a formal investigation.

    A formal investigation begins with the issuance of an order signed 
by the Comptroller. The order must designate the person or persons 
empowered by the Comptroller to conduct the investigation. These 
persons are authorized, among other things, to administer oaths and 
affirmations, to take or cause to be taken testimony under oath, and to 
issue or modify subpoenas, including subpoenas duces tecum, as to any 
matter under investigation by the Comptroller. Upon application and for 
good cause shown, the Comptroller may limit, modify, withdraw, or 
terminate the order at any stage of the proceedings.
0
31. Section 19.183 is revised to read as follows:


Sec.  19.183  Rights of witnesses.

    (a) Right to be shown order. Any person who is compelled or 
requested to furnish testimony, documentary evidence, or other 
information with respect to any matter under formal investigation must, 
on request, be shown the order initiating the investigation. These 
persons may not retain copies of the order without first receiving 
written approval of the OCC.
    (b) Right to counsel. Any person who, in a formal investigation, is 
compelled to appear and testify, or who appears and testifies by 
request or permission of the OCC, may be accompanied, represented, and 
advised by counsel. The right to be accompanied, represented, and 
advised by counsel means the right of a person testifying to have an 
attorney present at all times while testifying and to have the 
attorney--
    (1) Advise the person before, during, and after the conclusion of 
testimony;
    (2) Question the person, on the record, briefly at the conclusion 
of testimony for the purpose of clarifying any of the answers given; 
and
    (3) Make summary notes during the testimony solely for use in 
representing the person.
    (c) Exclusion from proceedings. Any person who has given or will 
give testimony and counsel representing the person may be excluded from 
the proceedings during the taking of testimony of any other person at 
the discretion of the OCC or the OCC's designated representatives. 
Neither attorney(s) for the institution(s) affiliated with the 
testifying person nor attorneys for any other interested persons have 
any right to be present during the testimony of any person not 
personally represented by such attorney.
    (d) Right to inspect testimony transcript. Any person who is 
compelled to give testimony is entitled to inspect any transcript that 
has been made of the testimony but may not obtain a copy if the OCC or 
the OCC's designated representatives conducting the proceedings 
determine that the contents should not be disclosed.
0
32. Section 19.184 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


Sec.  19.184  Service of subpoena and payment of witness expenses.

* * * * *
    (b) Expenses. The fees and expenses specified in Sec.  19.14 apply 
to a witness who is subpoenaed to testify pursuant to this subpart.
    (c) Area of service. Subpoenas issued in connection with a formal 
investigation proceeding that require the attendance and testimony of 
witnesses or the production of documents, including electronically 
stored information, may be served on any person or entity within any 
State, territory, or possession of the United States or the District of 
Columbia, or as otherwise provided by law. Foreign nationals are 
subject to such subpoenas if service is made upon a duly authorized 
agent located in the United States or in accordance with international 
requirements for service of subpoenas.
0
33. Section 19.185 is added to read as follows:


Sec.  19.185  Dilatory, obstructionist, or insubordinate conduct.

    Any OCC designated representative conducting an investigative 
proceeding will report to the Comptroller any instances where any 
person has engaged in dilatory, obstructionist, or insubordinate 
conduct during the course of the proceeding or any other instance 
involving a violation of this part. The Comptroller may take such 
action as the circumstances warrant, including exclusion of the 
offending individual or individuals from participation in the 
proceedings.

Subpart K--Parties and Representational Practice Before the OCC; 
Standards of Conduct


Sec.  19.190  [Amended]

0
34. Section 19.190 is amended:
0
a. In the second sentence by:
0
i. Removing the phrase ``administrative law judge'' and adding in its 
place the word ``ALJ''; and
0
ii. Removing the phrase ``subparts C and D of this part'' and adding in 
its place the phrase ``subpart C of this part and Sec.  19.120''; and
0
b. In the third sentence, by removing the phrase ``censure, suspension 
or debarment'' and adding in its place the phrase ``censure, 
suspension, or debarment''.


Sec.  19.191  [Amended]

0
35. Section 19.191 is amended by:
0
a. In the introductory text, removing the word ``shall'';
0
b. In paragraph (a):
0
i. Adding the phrase ``written or oral'' before the phrase 
``presentations to the OCC'' and adding a coma after the word 
``privileges'' in the first sentence;
0
ii. Removing the word ``which'' and adding in its place the word 
``that'' in the second sentence; and
0
iii. Removing the word ``bank'' and adding in its place the phrase 
``national bank, Federal savings association, or Federal branch or 
agency of a foreign bank'' in the last sentence;
0
c. In paragraph (b), removing the phrase ``territory, commonwealth, of 
the United States'' and adding in its place the phrase ``territory, or 
commonwealth of the United States'' and
0
d. In paragraph (c), adding the word ``or'' before ``commonwealth'' and 
removing the comma after the phrase ``of the United States''.
0
36. Section 19.192 is amended by:
0
a. Revising the paragraph (a) heading;
0
b. Removing the phrase ``his or her'' and adding in its place the word

[[Page 22077]]

``their'', removing the phrase ``administrative law judge'' and adding 
in its place the word ``ALJ'', and removing the word ``shall'' and 
adding in its place the word ``will'' in paragraph (c)(1);
0
c. Removing the phrase ``administrative law judge and adding in its 
place the word ``ALJ'' in paragraph (c)(2); and
0
d. In paragraph (d), removing the phrase ``Nothing in this section 
shall be read as precluding the administrative law judge'' and adding 
in its place the phrase ``This section does not preclude the ALJ''.
    The revision reads as follows:


Sec.  19.192  Sanctions relating to conduct in an adjudicatory 
proceeding.

    (a) In general. * * *
* * * * *
0
37. Section 19.193 is amended by:
0
a. Revising the section heading; and
0
b. Removing the phrase ``such an individual from practice before the 
OCC if he or she'' and adding in its place the phrase ``an individual 
from practice before the OCC if the individual'' in the first sentence.
    The revision reads as follows:


Sec.  19.193  Censure, suspension, or debarment.

* * * * *


Sec.  19.194  [Amended]

0
38. Section 19.194 is amended by:
0
a. Removing the phrase ``who is qualified to practice as an attorney 
and is'' in paragraph (a); and
0
b. Removing the phrase ``who is qualified to practice as a certified 
public accountant or public accountant and is'' in paragraph (b).


Sec.  19.195  [Amended]

0
39. Section 19.195 is amended:
0
a. In the introductory text, by adding a comma after the word 
``judgment'';
0
b. In paragraph (a), by:
0
i. Removing the word ``which'' and adding in its place the word 
``that''; and
0
ii. Removing the phrase ``he or she'' and adding in its place the word 
``they'';
0
iii. Removing the period at the end of the paragraph and adding in its 
place a semi-colon; and
0
c. By removing the period at the end of paragraph (b) and adding in its 
place ``; or'';


Sec.  19.196  [Amended]

0
40. Section 19.196 is amended:
0
a. In paragraph (c) by:
0
i. Adding a comma after the word ``duress'';
0
ii. Removing the comma after the word ``coercion'' and adding a 
semicolon in its place; and
0
iii. Adding a semi-colon after the word ``advantage'';
0
b. In paragraph (d), by removing the comma after the phrase ``of the 
United States'' and removing the phrase ``in matters relating to the 
supervisory responsibilities of the OCC'';
0
c. In paragraph (g) by adding a comma after the word ``debarment'' and 
adding the word ``former'' before ``OTS''; and
0
d. In paragraph (h), by removing the phrase ``Willful violation of'' 
and adding in its place the phrase ``Willfully violating''.


Sec.  19.197  [Amended]

0
41. Section 19.197 is amended by:
0
a. Adding a comma after the word ``suspension'' and removing the 
citation ``Sec.  19.192'' and adding in its place the phrase ``this 
subpart'' in paragraph (a);
0
b. Removing the phrase ``or the Comptroller's delegate'' in paragraph 
(b); and
0
c. Adding a comma after the word ``suspension'' in the first sentence, 
removing the word ``which'' wherever it appears in the second and third 
sentences and adding in its place the word ``that'', and removing the 
phrase ``or the Comptroller's delegate'' in paragraph (c).
0
42. Section 19.198 is amended:
0
a. In paragraph (a), in the first sentence, by;
0
i. Adding a comma after the word ``debarment'' the first time it 
appears;
0
ii. Removing the phrase ``proceeding for debarment'' and adding in its 
place the phrase ``proceeding for censure, debarment,'';
0
b. In paragraph (b), by:
0
i. Revising the paragraph heading; and
0
ii. Adding the phrase ``or debarment'' before the phrase ``from 
practice'' in the first sentence.
    The revision reads as follows:


Sec.  19.198  Conferences.

* * * * *
    (b) Voluntary suspension or debarment. * * *


Sec.  19.199  [Amended]

0
43. Section 19.199 is amended by:
0
a. Removing the phrase ``administrative law judge'' wherever it appears 
and adding in its place the word ``ALJ'';
0
b. Removing the phrase ``or the Comptroller's delegate'';
0
c. Removing the word ``shall'' wherever it appears and adding in its 
place the word ``will'';
0
d. Removing the word ``which'' and adding in its place the word 
``that'';
0
e. Removing the phrase ``the Comptroller on his or her own initiative, 
or'' and adding the phrase ``the Comptroller, on the Comptroller's 
initiative or''
0
f. Adding a comma after the phrase ``decision to the Comptroller''; and
0
g. Adding a comma after the word ``debar'' in the last sentence.
0
44. Section 19.200 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a), adding the phrase ``pursuant to Sec.  19.201'' at 
the end; and
0
c. In paragraph (d),:
0
i. Removing the word ``shall'' wherever it appears and adding in its 
place the word ``will''; and
0
ii. Removing the phrase ``or the Comptroller's delegate''.
    The revision reads as follows:


Sec.  19.200  Effect of debarment, suspension, or censure.

* * * * *


Sec.  19.201  [Amended]

0
45. Section 19.201 is amended in the last sentence by:
0
a. Removing the phrase ``shall be'' and adding in its place the word 
``is''; and
0
b. Removing the phrase ``in his or her'' and adding in its place the 
phrase ``at the Comptroller's''.
0
46. Subpart L is revised to read as follows:
Subpart L--Equal Access to Justice Act
Sec.
19.205 Authority and scope; waiver.
19.206 Definitions.
19.207 Application requirements.
19.208 Net worth exhibit.
19.209 Documentation of fees and expenses.
19.210 Filing and service of documents.
19.211 Answer to application.
19.212 Reply.
19.213 Settlement.
19.214 Further proceedings.
19.215 Decision.
19.216 Agency review.
19.217 Judicial review.
19.218 Stay of decision concerning award.
19.219 Payment of award.

Subpart L--Equal Access to Justice Act


Sec.  19.205  Authority and scope; waiver.

    (a) In general. This subpart implements section 203 of the Equal 
Access to Justice Act (EAJA) (5 U.S.C. 504). EAJA provides for the 
award of attorney fees and other expenses to eligible individuals and 
entities that are parties in certain administrative proceedings 
(adversary adjudications) before agencies of the Government of the 
United States. An eligible party may receive an award when it prevails 
over an agency unless the agency's position was substantially justified 
or special circumstances make an award unjust. However, no presumption 
under this subpart arises that the agency's position

[[Page 22078]]

was not substantially justified because the agency did not prevail.
    (b) Scope. The types of adversary adjudications covered by this 
subpart are those proceedings listed in Sec. Sec.  19.1, 19.110, 
19.120, 19.190. 19.230, and 19.241.
    (c) Waiver. After reasonable notice to the parties, the presiding 
officer or OCC may waive, for good cause shown, any provision contained 
in this subpart as long as the waiver is consistent with the terms and 
purpose of the EAJA.


Sec.  19.206  Definitions.

    For purposes of this subpart:
    (a) Adversary adjudication means an adjudication under 5 U.S.C. 554 
in which the position of the OCC is represented by Enforcement Counsel.
    (b) Final disposition means the date on which a decision or order 
disposing of the merits of a proceeding or any other complete 
resolution of the proceeding, such as a settlement or voluntary 
dismissal, becomes final and unappealable both within the OCC and to 
the courts.
    (c) Party means a party, as defined in 5 U.S.C. 551(3), that is:
    (1) An individual whose net worth did not exceed $2,000,000 at the 
time the adversary adjudication was initiated; or
    (2) Any owner of an unincorporated business, or any partnership, 
corporation, association, unit of local government, or organization, 
the net worth of which did not exceed $7,000,000 at the time the 
adversary adjudication was initiated, and which had not more than 500 
employees at the time the adversary adjudication was initiated; except 
that an organization described in section 501(c)(3) of the Internal 
Revenue Code of 1986 exempt from taxation under section 501(a) of such 
Code, or a cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act, may be a party regardless of the net worth 
of the organization or cooperative association. The net worth and 
number of employees of the applicant and any of its affiliates must be 
aggregated when determining the applicability of this definition.
    (d) Position of the OCC means, in addition to the position taken by 
the OCC in the adversary adjudication, the action or failure to act by 
the OCC upon which the adversary adjudication is based, except that 
fees and other expenses may not be awarded to a party for any portion 
of the adversary adjudication in which the party has unreasonably 
protracted the proceedings.
    (e) Presiding officer means the official, whether the official is 
designated as an ALJ or otherwise, that presided over the adversary 
adjudication or the official that presides over an EAJA proceeding.


 Sec.  19.207  Application requirements.

    (a) Timing of application. A party seeking an award under this 
subpart must file an application with the OCC within 30 days after the 
OCC's final disposition of the adversary adjudication.
    (b) Contents of application. An application for an award of fees 
and expenses under this section must:
    (1) Identify the applicant and the proceeding for which an award is 
sought;
    (2) Show that the applicant has prevailed and identify the position 
of the OCC that the applicant alleges was not substantially justified;
    (3) State the basis for the applicant's belief that the OCC 
position was not substantially justified;
    (4) Unless the applicant is an individual, state the number of 
employees of the applicant and describe briefly the type and purpose of 
its organization or business;
    (5) Show that the applicant meets the definition of ``party'' in 
Sec.  19.206(e), including documentation of its net worth pursuant to 
Sec.  19.208, if applicable;
    (6) State the amount of fees and expenses for which an award is 
sought, as documented pursuant to Sec.  19.209;
    (7) Be signed by the applicant if the applicant is an individual or 
by an authorized officer or attorney of the applicant;
    (8) Any other matter the applicant wishes the OCC to consider in 
determining whether and in what amount an award should be made; and
    (9) Contain or be accompanied by a written verification under 
penalty of perjury that the information provided in the application is 
true and correct.
    (c) Referral of application. Upon receipt of an EAJA application, 
the OCC will, if feasible, refer the matter to the official who heard 
the underlying adversary adjudication.


Sec.  19.208  Net worth exhibit.

    (a) Required information. Each applicant, except a qualified tax-
exempt organization or cooperative association, must provide with its 
application a detailed exhibit showing the net worth of the applicant 
and, where appropriate, any of its affiliates at the time the adversary 
adjudication was initiated. Except as otherwise provided herein, this 
exhibit may be in any form convenient to the applicant that provides 
full disclosure of the applicant's and its affiliates' assets and 
liabilities and is sufficient to determine whether the applicant 
qualifies under the standards in this subpart. A presiding officer may 
require an applicant to file additional information to determine its 
eligibility for an award.
    (1) Unaudited financial statements are acceptable for individual 
applicants as long as the statement provides a reliable basis for 
evaluation, unless the presiding officer or the OCC otherwise requires. 
Financial statements or reports filed with or reported to a Federal or 
State agency before the initiation of the adversary adjudication for 
other purposes and accurate as of a date not more than three months 
prior to the initiation of the proceeding are acceptable in 
establishing net worth as of the time of the initiation of the 
proceeding, unless the presiding officer or the OCC otherwise requires.
    (2) In the case of applicants or affiliates that are not banks or 
savings associations, net worth will be considered for the purposes of 
this subpart to be the excess of total assets over total liabilities as 
of the date the underlying proceeding was initiated.
    (3) If the applicant or any of its affiliates is a bank or a 
savings association, the portion of the statement of net worth that 
relates to the bank or the savings association must consist of a copy 
of the bank's or savings association's last Consolidated Report of 
Condition and Income filed before the initiation of the adversary 
adjudication. Net worth will be considered for the purposes of this 
subpart to be the total equity capital as reported, in conformity with 
applicable instructions and guidelines, on the bank's or the savings 
association's Consolidated Report of Condition and Income filed for the 
last reporting date before the initiation of the proceeding.
    (b) Confidentiality of net worth submissions. Ordinarily, the net 
worth exhibit will be included in the public record of the proceeding. 
However, an applicant that objects to public disclosure of information 
in any portion of the exhibit and believes there are legal grounds for 
withholding it from disclosure may request that the documents be filed 
under seal or otherwise be treated as confidential.


Sec.  19.209  Documentation of fees and expenses.

    The application must be accompanied by adequate documentation of 
the fees and expenses incurred after initiation of the adversary 
adjudication, including the cost of any study, analysis, report, test, 
or project. An application seeking an increase in fees to account for 
inflation pursuant to Sec.  19.215(d)(1)(i)

[[Page 22079]]

also must include adequate documentation of the change in the consumer 
price index for the attorney or agent's locality. The applicant must 
submit a separate itemized statement for each professional firm or 
individual whose services are covered by the application showing the 
hours spent in connection with the proceeding by each individual, a 
description of the specific services performed, the rate at which each 
fee has been computed, any expenses for which reimbursement is sought, 
the total amount claimed, and the total amount paid or payable by the 
applicant or by any other person or entity for the services provided. 
The presiding officer may require the applicant to provide vouchers, 
receipts, or other substantiation for any fees or expenses claimed.


Sec.  19.210  Filing and service of documents.

    Any application for an award, or any accompanying documentation 
related to an application, must be filed and served on all parties to 
the proceeding in accordance with Sec.  19.11, except as provided in 
Sec.  19.208(b) for confidential financial information.


Sec.  19.211  Answer to application.

    (a) Filing of answer. Except as provided in Sec.  19.213, 
Enforcement Counsel may file an answer to an application within 30 days 
after service of the application. Unless Enforcement Counsel requests 
an extension of time for filing or files a statement of intent to 
negotiate a settlement under Sec.  19.213, failure to file an answer 
within the 30-day period may be treated as a consent to the award 
requested.
    (b) Content of answer. The answer must explain in detail any 
objections to the award requested and identify the facts relied on in 
support of the Enforcement Counsel's position. If the answer is based 
on any alleged facts not already in the record of the proceeding, 
Enforcement Counsel must include with the answer either supporting 
affidavits or a request for further proceedings under Sec.  19.214.


Sec.  19.212  Reply.

    Within 15 days after service of an answer, the applicant may file a 
reply. If the reply is based on any alleged facts not already in the 
record of the proceeding, the applicant must include with the reply 
either supporting affidavits or a request for further proceedings under 
Sec.  19.214.


Sec.  19.213  Settlement.

    The applicant and Enforcement Counsel may agree on a proposed 
settlement of the award before final action on the application, either 
in connection with a settlement of the underlying proceeding or after 
the underlying proceeding has been concluded, in accordance with Sec.  
19.15. If a prevailing party and Enforcement Counsel agree on a 
proposed settlement of an award before an application has been filed, 
the application must be filed with the proposed settlement. If a 
proposed settlement of an underlying proceeding provides that each side 
must bear its own expenses and the settlement is accepted, no 
application may be filed. If, after an application is filed under Sec.  
19.211, Enforcement Counsel and the applicant believe that the issues 
in the application can be settled, they may jointly file a statement of 
their intent to negotiate a settlement. The filing of this statement 
will extend the time for filing an answer for an additional 30 days, 
and further extensions may be granted by the presiding officer upon 
request by Enforcement Counsel and the applicant.


Sec.  19.214  Further proceedings.

    (a) Process for requesting further proceedings or additional 
information. At the request of either the applicant or Enforcement 
Counsel, or on the presiding officer's own initiative, the presiding 
officer may, if necessary for a full and fair decision on the 
application, order the filing of additional written submissions; hold 
an informal conference or oral argument; or allow for discovery or hold 
an evidentiary hearing with respect to issues other than whether the 
OCC's position was substantially justified (such as those involving the 
applicant's eligibility or substantiation of fees or expenses). Any 
written submissions must be made, oral argument held, discovery 
conducted, and evidentiary hearing held as promptly as possible so as 
not to delay a decision on the application for fees.
    (b) Requirement to identify additional information sought and 
reason for requesting additional proceedings. A request for further 
proceedings under this section must specifically identify the 
information sought or the disputed issues and must explain why the 
additional proceedings are necessary to resolve the issues.


Sec.  19.215  Decision.

    (a) Basis for decision. The presiding officer must determine 
whether the position of the OCC was substantially justified on the 
basis of the administrative record as a whole of the adversary 
adjudication for which fees and other expenses are sought.
    (b) Timing of decision. The presiding officer in a proceeding under 
this subpart will issue a recommended decision, in writing, on the 
application within 90 days after the time for filing a reply or when 
further proceedings are held within 90 days after completion of 
proceedings.
    (c) Contents of decision. The decision on the application must 
include written findings and conclusions on the applicant's eligibility 
and status as a prevailing party, and, if applicable, an explanation of 
the reasons for any difference between the amount requested and the 
amount awarded. The decision also must include, if applicable, findings 
on whether Enforcement Counsel's or the OCC's position was 
substantially justified, whether the applicant unduly and unreasonably 
protracted the adversary adjudication, or whether special circumstances 
make an award unjust.
    (d) Awards--(1) In general. Awards under this subpart may include 
the reasonable expenses of expert witnesses; the reasonable cost of any 
study, analysis, report, test, or project; and reasonable attorney or 
agent fees. The applicant must have incurred these expenses, costs, and 
fees after initiation of the adversary adjudication subject to the EAJA 
application. The presiding officer will base awards on prevailing 
market rates for the kind and quality of the services furnished, even 
if the services were provided without charge or at reduced rate to the 
applicant, except that:
    (i) No award for the fee of an attorney or agent under this subpart 
may exceed the hourly rate specified in 5 U.S.C. 504(b)(1)(A) except to 
account for inflation since the last update of the statute's maximum 
award upon the request of the applicant as documented in the 
application pursuant to Sec.  19.209 or if a special factor, such as 
the limited availability of qualified attorneys or agents for the 
proceedings involved, justifies a higher fee; and
    (ii) No award to compensate an expert witness may exceed the 
highest rate at which the OCC pays expert witnesses.
    (2) Award for fees of an attorney, agent, or expert witness. In 
determining the reasonableness of the fee sought for an attorney, 
agent, or expert witness the presiding officer should consider:
    (i) If in private practice, the attorney's, agent's, or witness's 
customary fee for similar services;
    (ii) If an employee of the applicant, the fully allocated cost of 
the attorney's, agent's, or witness's services;
    (iii) The prevailing rate for similar services in the community in 
which the attorney, agent, or witness ordinarily perform services;

[[Page 22080]]

    (iv) The time actually spent in the representation of the 
applicant;
    (v) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (vi) Any other factors that may bear on the value of the services 
provided.
    (3) Awards for costs of a study, analysis, report, test, project, 
or similar matter. The presiding officer may award the reasonable cost 
of any study, analysis, report, test, project, or similar matter 
prepared on behalf of the applicant to the extent that the charge for 
the service does not exceed the prevailing rate for similar services 
and the presiding officer finds that the study or other matter was 
necessary for preparation of the applicant's case.
    (4) Reduction or denial of an award. A presiding officer may reduce 
the amount to be awarded, or deny any award, to the extent that the 
party during the course of the proceedings engaged in conduct which 
unduly and unreasonably protracted the final resolution of the matter 
in controversy or if special circumstances make the award sought 
unjust.
    (e) Final agency decision. The Comptroller will issue a final 
decision on the application or remand the application to the presiding 
officer for further proceedings in accordance with Sec.  19.40.


Sec.  19.216  Agency review.

    Either the applicant or Enforcement Counsel may seek review of the 
presiding officer's decision on the fee application, in accordance with 
Sec.  19.39.


Sec.  19.217  Judicial review.

    An applicant may seek judicial review of final agency decisions on 
awards made under this section as provided in 5 U.S.C. 504(c)(2).


Sec.  19.218  Stay of decision concerning award.

    Any proceedings on an application for fees under this subpart will 
be automatically stayed until the OCC's final disposition of the 
decision on which the application is based and either the time period 
for seeking judicial review expires, or if review has been sought, 
until final disposition is made by a court and no further judicial 
review is available.


Sec.  19.219  Payment of award.

    (a) Requirement to submit final decision. An applicant seeking 
payment of an award must submit to the OCC's Litigation Group a copy of 
the OCC's final decision granting the award, accompanied by a 
certification that the applicant will not seek review of the decision 
in the United States courts. Applicants should send the submissions to: 
Office of the Comptroller of the Currency, 400 7th St. SW, Washington, 
DC 20219, Attention: Director, Litigation Group.
    (b) Time frame for award payment. The OCC will pay the amount 
awarded to the applicant within 90 days.

Subpart M--Procedures for Reclassifying an Insured Depository 
Institution Based on Criteria Other Than Capital Under Prompt 
Corrective Action

0
47. The heading for subpart M is revised to read as set forth above.
0
48. Section 19.220 is revised to read as follows:


Sec.  19.220  Scope.

    This subpart applies to the procedures afforded to any insured 
depository institution that has been reclassified to a lower capital 
category by a notice or order issued by the OCC pursuant to section 38 
of the FDIA (12 U.S.C. 1831o) and 12 CFR part 6 (prompt corrective 
action). For purposes of this subpart, insured depository institution 
means an insured national bank, an insured Federal savings association, 
an insured Federal savings bank, or an insured Federal branch of a 
foreign bank.
0
49. Section 19.221 is revised to read as follows:


Sec.  19.221  Reclassification of an insured depository institution 
based on unsafe or unsound condition or practice.

    (a) Issuance of notice of proposed reclassification--(1) Grounds 
for reclassification. (i) Pursuant to Sec.  6.4 of this chapter, the 
OCC may reclassify a well capitalized insured depository institution as 
adequately capitalized or subject an adequately capitalized or 
undercapitalized insured depository institution to the supervisory 
actions applicable to the next lower capital category if:
    (A) The OCC determines that the insured depository institution is 
in an unsafe or unsound condition; or
    (B) The OCC deems the insured depository institution to be engaging 
in an unsafe or unsound practice and not to have corrected the 
deficiency.
    (ii) Any action pursuant to this paragraph (a)(1) hereinafter is 
referred to as ``reclassification.''
    (2) Prior notice to institution. Prior to taking action pursuant to 
Sec.  6.4 of this chapter, the OCC will issue and serve on the insured 
depository institution a written notice of the OCC's intention to 
reclassify the insured depository institution.
    (b) Contents of notice. A notice of intention to reclassify an 
insured depository institution based on unsafe or unsound condition 
will include:
    (1) A statement of the insured depository institution's capital 
measures and capital levels and the category to which the insured 
depository institution would be reclassified;
    (2) The reasons for reclassification of the insured depository 
institution; and
    (3) The date by which the insured depository institution subject to 
the notice of reclassification may file with the OCC a written response 
to the proposed reclassification and a request for a hearing, which 
must be at least 14 calendar days from the date of service of the 
notice unless the OCC determines that a shorter period is appropriate 
in light of the financial condition of the insured depository 
institution or other relevant circumstances.
    (c) Response to notice of proposed reclassification. An insured 
depository institution may file a written response to a notice of 
proposed reclassification within the time period set by the OCC. The 
response should include:
    (1) An explanation of why the insured depository institution is not 
in unsafe or unsound condition or otherwise should not be reclassified;
    (2) Any other relevant information, mitigating circumstances, 
documentation, or other evidence in support of the position of the 
insured depository institution or company regarding the 
reclassification.
    (d) Failure to file response. Failure by an insured depository 
institution to file, within the specified time period, a written 
response with the OCC to a notice of proposed reclassification will 
constitute a waiver of the opportunity to respond and will constitute 
consent to the reclassification.
    (e) Request for hearing and presentation of oral testimony or 
witnesses. The response may include a request for an informal hearing 
before the OCC under this section. If the insured depository 
institution desires to present oral testimony or witnesses at the 
hearing, the insured depository institution must include a request to 
do so with the request for an informal hearing. A request to present 
oral testimony or witnesses must specify the names of the witnesses and 
the general nature of their expected testimony. Failure to request a 
hearing will constitute a waiver of any right to a hearing, and failure 
to request the opportunity to present oral testimony or witnesses will 
constitute a waiver of any right to present oral testimony or 
witnesses.
    (f) Order for informal hearing. Upon receipt of a timely written 
request that includes a request for a hearing, the

[[Page 22081]]

OCC will issue an order directing an informal hearing to commence no 
later than 30 days after receipt of the request, unless the OCC allows 
further time at the request of the insured depository institution. The 
hearing will be held in Washington, DC or at such other place as may be 
designated by the OCC before a presiding officer(s) designated by the 
OCC to conduct the hearing.
    (g) Hearing procedures. (1) The insured depository institution has 
the right to introduce relevant written materials and to present oral 
argument at the hearing. The insured depository institution may 
introduce oral testimony and present witnesses only if expressly 
authorized by the OCC or the presiding officer(s). Neither the 
provisions of the Administrative Procedure Act (5 U.S.C. 554-557) 
governing adjudications required by statute to be determined on the 
record nor the Uniform Rules apply to an informal hearing under this 
section unless the OCC orders that such procedures will apply.
    (2) The informal hearing will be recorded and a transcript 
furnished to the insured depository institution upon request and 
payment of the cost thereof. Witnesses need not be sworn unless 
specifically requested by a party or the presiding officer(s). If so 
requested, and by stipulation of the parties or by order of the 
presiding officer, a court reporter or other person authorized to 
administer an oath may administer the oath remotely without being in 
the physical presence of the witness. The presiding officer(s) may ask 
questions of any witness.
    (3) Based on the circumstances of each hearing, the presiding 
officer may direct the use of, or any party may elect to use, an 
electronic presentation during the hearing. If the presiding officer 
requires an electronic presentation during the hearing, each party will 
be responsible for its own presentation and related costs unless the 
parties agree to another manner by which to allocate presentation 
responsibilities and costs.
    (4) The presiding officer(s) may order that the hearing be 
continued for a reasonable period (normally five business days) 
following completion of oral testimony or argument to allow additional 
written submissions to the hearing record.
    (h) Recommendation of presiding officer(s). Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) will make a recommendation to the OCC 
on the reclassification.
    (i) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC will decide whether to reclassify the 
insured depository institution and notify the insured depository 
institution of the OCC's decision.


Sec.  19.222  [Amended]

0
50. Section 19.222 is amended by:
0
a. Removing the word ``bank'' in the first and second sentences and 
adding in its place the phrase ``insured depository institution''; and
0
b. Removing the word ``shall'' in the second sentence and adding in its 
place the word ``will''.

Subpart N--Order to Dismiss a Director or Senior Executive Officer 
Under Prompt Corrective Action

0
51. The heading for subpart N is revised to read as set forth above.
0
52. Section 19.230 is amended by:
0
a. Removing the phrase ``12 U.S.C. 1831o and part 6 of this chapter'' 
and adding in its place the phrase ``section 38 of the FDIA (12 U.S.C. 
1831o) and 12 CFR part 6 (prompt corrective action)''; and
0
b. Adding a second sentence.
    The addition reads as follows:


Sec.  19.230  Scope.

    * * * For purposes of this subpart, insured depository institution 
means an insured national bank, an insured Federal savings association, 
an insured Federal savings bank, or an insured Federal branch of a 
foreign bank.
0
53. Section 19.231 is revised to read as follows:


Sec.  19.231  Order to dismiss a director or senior executive officer.

    (a) Service of notice. When the OCC issues and serves a directive 
on an insured depository institution pursuant to subpart B of 12 CFR 
part 6 requiring the insured depository institution to dismiss from 
office any director or senior executive officer under section 
38(f)(2)(F)(ii) of the FDIA, the OCC will also serve a copy of the 
directive, or the relevant portions of the directive where appropriate, 
upon the person to be dismissed.
    (b) Response to directive--(1) Request for reinstatement. A 
director or senior executive officer who has been served with a 
directive under paragraph (a) of this section (Respondent) may file a 
written request for reinstatement. The Respondent must file this 
request for reinstatement within 10 calendar days of the receipt of the 
OCC directive, unless further time is allowed by the OCC at the request 
of the Respondent. Failure by the Respondent to file a written request 
for reinstatement with the OCC within the specified time period will 
constitute a waiver of the opportunity to respond and will constitute 
consent to the dismissal.
    (2) Contents of request; informal hearing. The request for 
reinstatement must include reasons why the Respondent should be 
reinstated and may include a request for an informal hearing before the 
OCC or its designee under this section. If the Respondent desires to 
present oral testimony or witnesses at the hearing, the Respondent must 
include a request to do so with the request for an informal hearing. 
The request to present oral testimony or witnesses must specify the 
names of the witnesses and the general nature of their expected 
testimony. Failure to request a hearing will constitute a waiver of any 
right to a hearing, and failure to request the opportunity to present 
oral testimony or witnesses will constitute a waiver of any right or 
opportunity to present oral testimony or witnesses.
    (3) Effective date. Unless otherwise ordered by the OCC, the 
dismissal will remain in effect while a request for reinstatement is 
pending.
    (c) Order for informal hearing. Upon receipt of a timely written 
request from a Respondent for an informal hearing on the portion of a 
directive requiring an insured depository institution to dismiss from 
office any director or senior executive officer, the OCC will issue an 
order directing an informal hearing to commence no later than 30 days 
after receipt of the request, unless the OCC allows further time at the 
request of the Respondent. The hearing will be held in Washington, DC, 
or at such other place as may be designated by the OCC, before a 
presiding officer(s) designated by the OCC to conduct the hearing.
    (d) Hearing procedures--(1) Role of respondent. A Respondent may 
appear at the hearing personally or through counsel. A Respondent has 
the right to introduce relevant written materials and to present oral 
argument at the hearing.
    (2) Application of Administrative Procedure Act and Uniform Rules. 
Neither the provisions of the Administrative Procedure Act (5 U.S.C. 
554-557) governing adjudications required by statute to be determined 
on the record nor the Uniform Rules apply to an informal hearing under 
this section unless the OCC orders that such procedures will apply.
    (3) Electronic presentation. Based on the circumstances of each 
hearing, the presiding officer may direct the use of, or any party may 
elect to use, an electronic presentation during the hearing. If the 
presiding officer requires

[[Page 22082]]

an electronic presentation during the hearing, each party will be 
responsible for its own presentation and related costs unless the 
parties agree to another manner in which to allocate presentation 
responsibilities and costs.
    (4) Recordings; transcript. The informal hearing will be recorded 
and a transcript furnished to the Respondent upon request and payment 
of the cost thereof.
    (5) Witnesses. A Respondent may introduce oral testimony and 
present witnesses only if expressly authorized by the OCC or the 
presiding officer(s). Witnesses need not be sworn, unless specifically 
requested by a party or the presiding officer(s). If so requested, and 
by stipulation of the parties or by order of the presiding officer, a 
court reporter or other person authorized to administer an oath may 
administer the oath remotely without being in the physical presence of 
the witness. The presiding officer(s) may ask questions of any witness.
    (6) Continuance. The presiding officer(s) may order that the 
hearing be continued for a reasonable period (normally five business 
days) following completion of oral testimony or argument to allow 
additional written submissions to the hearing record.
    (e) Standard for review. A Respondent bears the burden of 
demonstrating that their continued employment by or service with the 
insured depository institution would materially strengthen the insured 
depository institution's ability:
    (1) To become adequately capitalized, to the extent that the 
directive was issued as a result of the insured depository 
institution's capital level or failure to submit or implement a capital 
restoration plan; and
    (2) To correct the unsafe or unsound condition or unsafe or unsound 
practice, to the extent that the directive was issued as a result of 
classification of the insured depository institution based on 
supervisory criteria other than capital, pursuant to section 38(g) of 
the FDIA.
    (f) Recommendation of presiding officer. Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) will make a recommendation to the OCC 
concerning the Respondent's request for reinstatement with the insured 
depository institution.
    (g) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC will grant or deny the request for 
reinstatement and notify the Respondent of the OCC's decision. If the 
OCC denies the request for reinstatement, the OCC will set forth in the 
notification the reasons for the OCC's action.

Subpart O--Civil Money Penalty Inflation Adjustments

0
54. The heading for subpart O is revised to read as set forth above.


Sec.  19.240  [Amended]

0
55. Section 19.240 is amended in paragraph (a) by removing the phrase 
``inflation adjustment is calculated by'' and adding in its place the 
phrase ``OCC calculates the inflation adjustment by''.
0
56. Subpart Q is added to read as follows:
Subpart Q--Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses
Sec.
19.250 Scope.
19. 251 Notice and hearing.
19.252 Presiding officer.
19.253 Grounds for termination.
19.254 Judicial review.

Subpart Q--Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses


Sec.  19.250  Scope.

    Except as provided in this subpart, subpart A of this part applies 
to proceedings by the Comptroller to determine whether, pursuant to 12 
U.S.C. 93(d) or 12 U.S.C. 1464(w), as applicable, to terminate all 
rights, privileges, and franchises of a national bank, Federal savings 
association, or Federal branch or agency convicted of a criminal 
offense under 18 U.S.C. 1956 or 1957 or 31 U.S.C. 5322 or 5324.


Sec.  19.251  Notice and hearing.

    (a) In general. After receiving written notification from the 
Attorney General of the United States of a conviction of a criminal 
offense under 18 U.S.C. 1956 or 1957 or 31 U.S.C. 5322 or 5324, the 
Comptroller will:
    (1) Issue to the national bank, Federal savings association, or 
Federal branch or agency a written notice of the Comptroller's 
intention to terminate all rights, privileges, and franchises of the 
national bank, Federal savings association, or Federal branch or agency 
pursuant to section 12 U.S.C. 93(d) or 12 U.S.C. 1464(w); and
    (2) Schedule a pretermination hearing.
    (b) Contents of notice. The notice issued pursuant to paragraph 
(a)(1) of this section must set forth:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) The basis of termination pursuant to the factors listed in 
Sec.  19.253;
    (3) A proposed order or prayer for an order of termination;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as established by the 
presiding officer;
    (6) That the answer must be filed with the OCC.
    (c) Failure to file an answer. Unless the national bank, Federal 
savings association, or Federal branch or agency files an answer within 
the time specified in the notice, it will be deemed to have consented 
to termination of its rights, privileges and franchises and the 
Comptroller may order the termination of such rights, privileges, and 
franchises.
    (d) Service. The OCC will serve the notice upon the national bank, 
Federal savings association, or Federal branch or agency in the manner 
set forth in Sec.  19.11(c).


Sec.  19.252  Presiding officer.

    (a) Appointment. The Comptroller will designate a presiding officer 
to conduct the pretermination hearing under this subpart.
    (b) Powers. The presiding officer has the same powers set forth in 
12 CFR 19.5, including the discretion necessary to conduct the 
pretermination hearing in a manner that avoids unnecessary delay. In 
addition, the presiding officer may limit the use of discovery and 
limit opportunities to file written memoranda, briefs, affidavits, or 
other materials or documents to avoid relitigation of facts already 
stipulated to by the parties; conceded to by the national bank, Federal 
savings association, or Federal branch or Federal agency; or otherwise 
already firmly established by the underlying criminal conviction.


Sec.  19.253  Grounds for termination.

    In determining whether to terminate a franchise, the Comptroller 
will take into account the following factors:
    (a) The extent to which directors or senior executive officers of 
the national bank, Federal savings association, or Federal branch or 
agency knew of, or were involved in, the commission of the money 
laundering offense of which the national bank, Federal savings 
association, or Federal branch or agency was found guilty;
    (b) The extent to which the offense occurred despite the existence 
of policies and procedures within the national bank, Federal savings 
association, or Federal branch or Federal agency which were designed to 
prevent the occurrence of the offense;

[[Page 22083]]

    (c) The extent to which the national bank, Federal savings 
association, or Federal branch or agency has fully cooperated with law 
enforcement authorities with respect to the investigation of the money 
laundering offense of which the national bank, Federal savings 
association, or Federal branch or agency was found guilty;
    (d) The extent to which the national bank, Federal savings 
association, or Federal branch or agency has implemented additional 
internal controls (since the commission of the offense of which the 
national bank, Federal savings association, or Federal branch or agency 
was found guilty) to prevent the occurrence of any money laundering 
offense; and
    (e) The extent to which the interest of the local community in 
having adequate deposit and credit services available would be 
threatened by the forfeiture of the franchise.


Sec.  19.254  Judicial review.

    Any national bank, Federal savings association, or Federal branch 
or agency of a foreign bank whose rights, privileges and franchises 
have been terminated by order of the Comptroller under this part has 
the right of judicial review of such order pursuant to 12 U.S.C. 
1818(h).
0
57. Subpart R, consisting of Sec.  19.260, is added to read as follows:

Subpart R--Effective Date


Sec.  19.260  Effective date.

    Subparts A through E and H, I, J, L, M, N, P, and Q of this part 
will apply to adjudicatory proceedings initiated on or after [EFFECTIVE 
DATE OF FINAL RULE]. Actions filed and in process before the effective 
date will continue to be governed by the Rules of Practice and 
Procedure for national banks, Federal savings associations, and Federal 
branches and agencies that were in place prior to [EFFECTIVE DATE OF 
FINAL RULE].

PART 108--[REMOVED]

0
58. Part 108 is removed.

PART 109--[REMOVED]

0
59. Part 109 is removed.

PART 112--[REMOVED]

0
60. Part 112 is removed.

PART 165--[REMOVED]

0
61. Part 165 is removed.

Board of Governors of the Federal Reserve System

Authority and Issuance

    For the reasons stated in the preamble, the Board proposes to amend 
parts 238 and 263 in title 12 of the Code of Federal Regulations as 
follows:

PART 238--SAVINGS AND LOAN HOLDING COMPANIES

0
62. The authority citation for part 238 continues to read as follows:

    Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 1464, 
1467, 1467a, 1468, 5365; 1813, 1817, 1829e, 1831i, 1972, 15 U.S.C. 
78l.

Subpart L--[Removed and Reserved]

0
63. Remove and reserve subpart L, consisting of Sec. Sec.  238.111 
through 238.117.

PART 263--RULES OF PRACTICE FOR HEARINGS

0
64. The authority citation for part 263 is revised as follows:

    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 248, 324, 334, 
347a, 504, 505, 1464, 1467, 1467a, 1817(j), 1818, 1820(k), 1829, 
1831o, 1831p-1, 1832(c), 1847(b), 1847(d), 1884, 1972(2)(F), 3105, 
3108, 3110, 3349, 3907, 3909(d), 4717, 5323, 5362, 5365, 5463, 5464, 
5466, 5467; 15 U.S.C. 21, 78l(i), 78o-4, 78o-5, 78u-2; 1639e(K); 28 
U.S.C. 2461 note; 31 U.S.C. 5321; and 42 U.S.C. 4012a.

Subpart A--Uniform Rules of Practice and Procedure

0
65. Revise subpart A as set forth at the end of the common preamble.
0
66. Section 263.1 is added to read as follows:


Sec.  263.1   Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Board of Governors of 
the Federal Reserve System (``Board'') should issue an order to approve 
or disapprove a person's proposed acquisition of a state member bank, 
bank holding company, or savings and loan holding company;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the Board is the appropriate agency;
    (e) Assessment of civil money penalties by the Board against 
institutions, institution-affiliated parties, and certain other persons 
for which the Board is the appropriate agency for any violation of:
    (1) Any provision of the Bank Holding Company Act of 1956, as 
amended (``BHC Act''), or any order or regulation issued thereunder, 
pursuant to 12 U.S.C. 1847(b) and (d);
    (2) Sections 19, 22, 23, 23A and 23B of the Federal Reserve Act 
(``FRA''), or any regulation or order issued thereunder and certain 
unsafe or unsound practices or breaches of fiduciary duty, pursuant to 
12 U.S.C. 504 and 505;
    (3) Section 9 of the FRA pursuant to 12 U.S.C. 324;
    (4) Section 106(b) of the Bank Holding Company Act Amendments of 
1970 and certain unsafe or unsound practices or breaches of fiduciary 
duty, pursuant to 12 U.S.C. 1972(2)(F);
    (5) Any provision of the Change in Bank Control Act of 1978, as 
amended, or any regulation or order issued thereunder and certain 
unsafe or unsound practices or breaches of fiduciary duty, pursuant to 
12 U.S.C. 1817(j)(16);
    (6) Any provision of the International Lending Supervision Act of 
1983 (``ILSA'') or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (7) Any provision of the International Banking Act of 1978 
(``IBA'') or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (8) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (9) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or 
regulation issued thereunder;
    (10) The terms of any final or temporary order issued under section 
8 of the FDIA or of any written agreement executed by the Board or the 
former Office of Thrift Supervision (``OTS''), the terms of any 
condition imposed in writing by the Board or the former OTS in 
connection with the grant of an application or request, and certain 
unsafe or unsound practices or breaches of fiduciary duty or law or 
regulation pursuant to 12 U.S.C. 1818(i)(2);

[[Page 22084]]

    (11) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;
    (12) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (13) Section 5 of the Home Owners' Loan Act (``HOLA'') or any 
regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d), 
(s) and (v);
    (14) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d); and
    (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a(i) and 
(r);
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Removal, prohibition, and civil monetary penalty proceedings 
under section 10(k) of the FDIA (12 U.S.C. 1820(k)) for violations of 
the post-employment restrictions imposed by that section; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.
0
67. Section 263.3 is added to read as follows:


Sec.  263.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    (a) Administrative law judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Decisional employee means any member of the Board's or ALJ's 
staff who has not engaged in an investigative or prosecutorial role in 
a proceeding and who may assist the Agency or the ALJ, respectively, in 
preparing orders, recommended decisions, decisions, and other documents 
under the Uniform Rules.
    (d) Electronic signature means electronically affixing the 
equivalent of a signature to an electronic document filed or 
transmitted electronically.
    (e) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the Board in an adjudicatory 
proceeding.
    (f) Final order means an order issued by the Board with or without 
the consent of the affected institution or the institution-affiliated 
party, that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (g) Institution includes:
    (1) Any bank as that term is defined in section 3(a) of the FDIA 
(12 U.S.C. 1813(a));
    (2) Any bank holding company or any subsidiary (other than a bank) 
of a bank holding company as those terms are defined in the BHC Act (12 
U.S.C. 1841 et seq.);
    (3) Any organization organized and operated under section 25A of 
the FRA (12 U.S.C. 611 et seq.) or operating under section 25 of the 
FRA (12 U.S.C. 601 et seq.);
    (4) Any foreign bank or company to which section 8 of the IBA (12 
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof;
    (5) Any branch or agency as those terms are defined in section 1(b) 
of the IBA (12 U.S.C. 3101(1), (3), (5), (6));
    (6) Any savings and loan holding company or any subsidiary (other 
than a depository institution) of a savings and loan holding company as 
those terms are defined in the HOLA (12 U.S.C. 1461 et seq.);
    (7) Any U.S. or foreign nonbank financial company that the 
Financial Stability Oversight Council (``FSOC'') requires the Board to 
supervise under section 113 of the Dodd-Frank Act (12 U.S.C. 
5323(a)(1), (b)(1)), or any subsidiary (other than a bank) thereof;
    (8) Any financial market utility or financial institution 
conducting payment, clearing, or settlement activities that FSOC 
designates as systematically important under section 804 of the Dodd-
Frank Act (12 U.S.C. 5463); and
    (9) Any other entity subject to the supervision of the Board.
    (h) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (i) Local Rules means those rules promulgated by the Board in this 
part other than subpart A.
    (j) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the Board, the Office of 
Comptroller of the Currency (the OCC), the Federal Deposit Insurance 
Corporation (the FDIC), and the National Credit Union Administration 
(the NCUA).
    (k) Party means the Board and any person named as a party in any 
notice.
    (l) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in paragraph (g) of this section.
    (m) Respondent means any party other than the Board.
    (n) Uniform Rules means those rules in subpart A of this part that 
are common to the Board, the OCC, the FDIC, and the NCUA.
    (o) Violation means any violation as that term is defined in 
section 3(v) of the FDIA (12 U.S.C. 1813(v)).

Subpart B--Board Local Rules Supplementing the Uniform Rules


Sec.  263.50  [Amended]

0
68. Section 263.50 is amended:
0
a. By removing ``Sec.  263.50(b) of this subpart'' and adding in its 
place ``paragraph (b) of this section'' in paragraph (a); and
0
b. By removing ``shall'' and adding in its place the word ``will'' in 
paragraph (b) introductory text.


Sec.  263.51  [Amended]

0
69. Section 263.51 is amended by removing ``Sec.  263.3(f) of'' and 
adding ``of this part'' after ``subpart A'' in its place in paragraph 
(c).
0
70. Section 263.52 is amended by:
0
a. Removing ``shall'' and adding in its place ``must''; and
0
b. Adding a second sentence.
    The addition reads as follows:


Sec.  263.52  Address for filing.

    * * * All papers to be filed with the Board electronically must be 
sent to: [email protected].
0
71. Section 263.53 is amended by:
0
a. Removing ``shall'' and adding in its place ``will'' in the first 
sentence in paragraph (a);
0
b. Removing ``administrative law judge'' and adding in its place 
``ALJ'' in the first sentence of paragraph (b).
0
c. Adding in the second sentence of paragraph (b) ``, the manner (e.g., 
remote means, in person),'' after ``and the address of the place''; and 
in the last sentence of paragraph (b) removing ``shall'' and adding in 
its place ``must'';
0
d. Revising paragraph (c);
0
e. Removing ``shall'' and adding in its place ``must'' in the last 
sentence of paragraph (d);
0
f. Removing ``shall'' and adding in its place ``must'' in paragraph 
(e);
0
g. Revising paragraph (f); and
0
h. Removing ``administrative law judge'' and adding in its place 
``ALJ'' in the first sentence of paragraph (g).
    The revisions read as follows:


Sec.  263.53  Discovery depositions.

* * * * *
    (c) Issuance of subpoena. The ALJ must issue the requested 
deposition subpoena or subpoena duces tecum upon a finding that the 
application satisfies the requirements of this section

[[Page 22085]]

and of Sec.  263.24. If the ALJ determines that the taking of the 
deposition or its proposed location or manner is, in whole or in part, 
unnecessary, unreasonable, oppressive, excessive in scope or unduly 
burdensome, the ALJ may deny the application or may grant it upon such 
conditions as justice may require. The party obtaining the deposition 
subpoena or subpoena duces tecum will be responsible for serving it on 
the deponent and all parties to the proceeding in accordance with Sec.  
263.11. A deposition subpoena may require the witness to be deposed at 
any place within the country in which that witness resides or has a 
regular place of employment, by remote means, or such other convenient 
place or manner, as the ALJ fixes.
* * * * *
    (f) Conduct of the deposition. The deponent must be duly sworn. By 
stipulation of the parties or order by the ALJ, a court reporter or 
other person authorized to administer an oath may administer the oath 
remotely, without being in the physical presence of the deponent. Each 
party may examine the deponent with respect to all non-privileged, 
relevant and material matters. Objections to questions or evidence must 
be in the short form, stating the ground for the objection. Failure to 
object to questions or evidence will not be deemed a waiver except 
where the grounds for the objection might have been avoided if the 
objection had been timely presented. The discovery deposition must be 
transcribed or otherwise recorded as agreed among the parties.
* * * * *


Sec.  263.54  [Amended]

0
72. Section 263.54 is amended by removing ``shall'' and adding in its 
place ``must'' and removing ``administrative law judge'' and adding in 
its place ``ALJ''.
0
73. Section 263.55 is revised to read as follows:


Sec.  263.55  Board as Presiding Officer.

    The Board may, in its discretion, designate itself, one or more of 
its members, or an authorized officer, to act as presiding officer in a 
formal hearing. In such a proceeding, the authority of Board or its 
designee will include all the authority provided to an ALJ under these 
rules. Proposed findings and conclusions, briefs, and other submissions 
by the parties permitted in subpart A must be filed with the Secretary 
for consideration by the Board. Sections 263.38 and 263.39 of subpart A 
will not apply to proceedings conducted under this section.


Sec.  263.56   [Amended]

0
74. Section 263.56 is amended by removing ``shall'' wherever it appears 
and adding in its place ``will''.
0
75. Section 263.57 is added to read as follows:


Sec.  263.57  Sanctions relating to conduct in an adjudicatory 
proceeding.

    (a) General rule. The ALJ may impose sanctions when any party or 
person in an adjudicatory proceeding under this part has failed to 
comply with an applicable statute, regulation, or order, and that 
failure to comply:
    (1) Constitutes contemptuous conduct;
    (2) Materially injures or prejudices another party in terms of 
substantive injury, incurring additional expenses including attorney's 
fees, prejudicial delay, or otherwise;
    (3) Is a clear and unexcused violation of an applicable statute, 
regulation, or order; or
    (4) Unduly delays the proceeding.
    (b) Sanctions. Sanctions which may be imposed include any one or 
more of the following:
    (1) Issuing an order against the party;
    (2) Rejecting or striking any testimony or documentary evidence 
offered, or other papers filed, by the party;
    (3) Precluding the party from:
    (i) Contesting specific issues or findings;
    (ii) Offering certain evidence or challenging or contesting certain 
evidence offered by another party; or
    (iii) Making a late filing or conditioning a late filing on any 
terms that are just;
    (4) Assessing reasonable expenses, including attorney's fees, 
incurred by any other party as a result of the improper action or 
failure to act; and
    (5) Excluding or suspending a party or person from the adjudicatory 
proceeding.
    (c) Procedure for imposition of sanctions. (1) Upon the motion of 
any party, or on the ALJ's own motion, the ALJ may impose sanctions in 
accordance with this section. The ALJ must submit to the Board for 
final ruling the sanction of entering a final order determining the 
case on the merits.
    (2) No sanction authorized by this section, other than refusal to 
accept late filings, must be imposed without prior notice to all 
parties and an opportunity for any party or person against whom 
sanctions would be imposed to be heard. Such opportunity to be heard 
may be on such notice, and the response may be in such form, as the ALJ 
directs. The ALJ may limit the opportunity to be heard to an 
opportunity of a party or person to respond orally immediately after 
the act or inaction covered by this section is noted by the ALJ.
    (3) Requests for the imposition of sanctions by any party, and the 
imposition of sanctions, are subject to interlocutory review in the 
same manner as any other ruling by the ALJ.
    (d) Section not exclusive. Nothing in this section precludes the 
ALJ or the Board from taking any other action, or imposing any 
restriction or sanction, authorized by applicable statute or 
regulation.
0
76. Subpart K is added to read as follows:
Subpart K--Formal Investigative Proceedings
Sec.
263.450 Scope.
263.451 Definitions.
263.452 Conduct of a formal investigative proceeding.
263.453 Powers of the designated representative.
263.454 Confidentiality of proceedings.
263.455 Transcripts.
263.456 Rights of witnesses.
263.457 Subpoenas.

Subpart K--Formal Investigative Proceedings


Sec.  263.450  Scope.

    (a) The procedures of this subpart must be followed when a formal 
investigation is instituted and conducted pursuant to: section 8(n) of 
the FDIA (12 U.S.C. 1818(n)); section 10(c) of the FDIA (12 U.S.C. 
1820(c)); section 7(j)(15) of the FDIA (12 U.S.C. 1817(j)(15)); section 
5(f) of the Bank Holding Company Act (12 U.S.C. 1844(f)); sections 
10(b)(4) and 10(g)(2) of HOLA (12 U.S.C. 1464(b)(4) and 1467a(g)(2)); 
or section 162 of the Dodd-Frank Act (12 U.S.C. 5362).
    (b) Nothing in this subpart prohibits the Board from conducting 
informal investigations or obtaining information by any means other 
than a subpoena issued pursuant to this subpart.
    (c) This subpart does not apply to adjudicatory proceedings as to 
which hearings are required by statute, the rules for which are 
contained in part 262 of this chapter and subpart A of this part.


Sec.  263.451  Definitions.

    As used in this subpart:
    (a) Formal investigative proceeding means an investigation 
conducted pursuant to an order of investigation as provided in Sec.  
263.452(a).
    (b) Designated representative means the person or persons empowered 
by the Board or by the General Counsel or his or her designees in 
accordance with 12 CFR 265.6 to conduct a formal investigative 
proceeding.

[[Page 22086]]

Sec.  263.452  Conduct of a formal investigative proceeding.

    (a) A formal investigative proceeding may be initiated upon 
issuance of an order of investigation by the Board or by the General 
Counsel or his or her designees in accordance with 12 CFR 265.6. The 
order of investigation must indicate the purpose of the formal 
investigative proceeding and designate the Board's representatives to 
direct the conduct of the investigation.
    (b) Any person who is compelled or requested to furnish documentary 
evidence or testimony at a formal investigative proceeding may, upon 
request, inspect a copy of the order of investigation at a time and 
place that the Board's designated representative determines to be 
appropriate. Any person who is compelled or requested to furnish 
documentary evidence or testimony in a formal investigative proceeding 
may not refuse to comply with a subpoena on the grounds that the order 
of investigation was not made available in advance of the date of 
production or testimony set forth in a subpoena.
    (c) Copies of an order of investigation may not be produced to or 
retained by any person except with the express written approval of the 
Board officer supervising the investigation. The Board may provide a 
copy of an order of investigation, in whole or in part, if the Board 
officer concludes, in the officer's discretion, that disclosure of the 
order of investigation would not infringe upon the privacy of persons 
involved in the investigation or impede the conduct of the 
investigation.


Sec.  263.453  Powers of the designated representative.

    The designated representative conducting the formal investigative 
proceeding will have the power to administer oaths and affirmations, to 
take and preserve testimony under oath, to issue subpoenas ad 
testificandum and subpoenas duces tecum and to apply for their 
enforcement to the United States District Court for the judicial 
district or the United States court in any territory in which the 
witness or company subpoenaed resides or conducts business, or such 
other judicial district provided by law.


Sec.  263.454  Confidentiality of proceedings.

    Formal investigative proceedings conducted pursuant to this subpart 
are confidential and, unless otherwise ordered or permitted by the 
Board, or required by law, the entire record of any formal 
investigative proceeding, including the order of investigation 
authorizing the proceeding, the transcripts of such proceeding, and all 
documents and information obtained by the designated representative(s) 
during the course of the formal investigative proceeding will be 
confidential. If the Board issues a notice of charges or otherwise 
initiates an administrative (adjudicatory) hearing, disclosure of 
documents and information obtained by the Board's designated 
representative(s) during the course of the formal investigative 
proceeding will be governed by the Uniform Rules and the Board Local 
Rules Supplementing the Uniform Rules (subparts A and B of this part).


Sec.  263.455  Transcripts.

    (a) Transcripts of testimony, if any, must be recorded by an 
official reporter, or by any other person or means designated by the 
designated representative conducting the investigation.
    (b) Transcripts will be treated as confidential and must not be 
disclosed to any party except as provided in this subpart or as 
otherwise ordered or permitted by the Board, or required by law or 
regulation.


Sec.  263.456  Rights of witnesses.

    (a) Any witness in a formal investigative proceeding may be 
accompanied and advised by an attorney personally representing that 
witness.
    (1) Such attorney must be a member in good standing of the bar of 
any state, Commonwealth, possession, territory, or the District of 
Columbia, who has not been suspended or debarred from practice before 
the Board in accordance with any provision of this part, including 
paragraph (a)(4) of this section.
    (2) Such attorney may advise the witness before, during, and after 
the taking of the witness's testimony and may briefly question the 
witness, on the record, at the conclusion of the witness's testimony, 
for the sole purpose of clarifying any of the answers the witness has 
given. During the taking of the testimony of a witness, such attorney 
may make summary notes solely for the attorney's use in representing 
the witness. Neither the attorney nor witness may retain copies of 
exhibits used or introduced in the course of a witness's testimony.
    (3) All witnesses must be sequestered, and, unless permitted in the 
discretion of the designated representative, no witness or accompanying 
attorney may be present during the taking of testimony of any other 
witness called in such formal investigative proceeding. Attorneys for 
any other interested persons or entities will not, unless permitted in 
the discretion of the designated representative, have a right to be 
present during the testimony of any witness not personally being 
represented by such attorneys.
    (4) The Board, for good cause, may exclude a particular attorney 
from further participation in any formal investigative proceeding in 
which the Board has found the attorney to have engaged in dilatory, 
obstructionist, egregious, contemptuous or contumacious conduct. The 
designated representative conducting the formal investigative 
proceeding may report to the Board instances of apparently dilatory, 
obstructionist, egregious, contemptuous or contumacious conduct on the 
part of an attorney. After due notice to the attorney, the Board may 
take such action as the circumstances warrant, including suspending any 
attorney representing a witness from further participation in the 
investigative proceeding, based upon a written record evidencing the 
conduct of the attorney in the formal investigative proceeding or such 
other or additional written or oral presentation as the Board may 
permit or direct.
    (b) A witness may inspect the transcript of the witness's own 
testimony, without retaining a copy thereof, for the purpose of making 
non-substantive corrections to the transcript at a time and place that 
the designated representative determines to be appropriate in 
consideration of all relevant factors, including the convenience of the 
witness.
    (c) A witness may, solely for the use of the witness and the 
witness's attorney, obtain a copy of the transcript of the witness's 
testimony, provided that the witness submits a written request for the 
transcript and the witness requesting a copy of the witness's testimony 
bears the cost thereof. However, the Board officer supervising the 
formal investigative proceeding may deny such a request if, in the 
officer's discretion, the provision of the transcript may infringe the 
privacy of third persons involved in the investigation, or impede or 
interfere with the conduct of any investigation. If the Board issues a 
notice of charges or otherwise initiates an administrative 
(adjudicatory) hearing, disclosure of formal investigative transcripts 
obtained by the Board's designated representative(s) during the course 
of the formal investigative proceeding will be governed by the Uniform 
Rules and the Board Local Rules Supplementing the Uniform Rules 
(subparts A and B of this part).

[[Page 22087]]

Sec.  263.457  Subpoenas.

    (a) Service. Service of a subpoena may be made:
    (1) By personal 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) By delivery to an agent which, in the case of a corporation or 
other association, is delivery to an officer, director, 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;
    (4) By registered or certified mail or by an express delivery 
service addressed to the person's or authorized agent's last known 
address; or
    (5) In such other manner as is reasonably calculated to give actual 
notice.
    (b) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing or testimony is held, provided that if service is 
made on a foreign bank in connection with an action or proceeding 
involving one or more of its branches or agencies located in any state, 
territory, possession of the United States, or the District of 
Columbia, service must be made on at least one branch or agency so 
involved. Foreign nationals are subject to such subpoenas if such 
service is made upon a duly authorized agent located in the United 
States or such other means permissible by law.
    (c) Witness fees and mileage. Witnesses summoned in any proceeding 
under this subpart must be paid the same fees and mileage that are paid 
witnesses in the district courts of the United States. Such fees and 
mileage need not be tendered when the subpoena is issued on behalf of 
the Board by any of its designated representatives.

FEDERAL DEPOSIT INSURANCE CORPORATION

    For the reasons set out in the joint preamble, the FDIC proposes to 
amend 12 CFR part 308 as follows.

PART 308--RULES OF PRACTICE AND PROCEDURE

0
77. The authority citation for part 308 continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 
1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s), 
110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 
124 Stat. 1376; Pub. L. 114- 74, sec. 701, 129 Stat. 584.

Subpart A--Uniform Rules of Practice and Procedure

0
78. Revise subpart A as set forth at the end of the common preamble.
0
79. Section 308.1 is added to read as follows:


Sec.  308.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit 
Insurance Corporation (FDIC) should issue an order to approve or 
disapprove a person's proposed acquisition of an institution;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (Exchange Act) (15 U.S.C. 78o-5), to impose sanctions upon 
any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the FDIC is the appropriate agency;
    (e) Assessment of civil money penalties by the FDIC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate agency for any violation of:
    (1) Sections 22(h) and 23 of the Federal Reserve Act (FRA), or any 
implementing regulation, and certain unsafe or unsound practices or 
breaches of fiduciary duty under 12 U.S.C. 1828(j) or 12 U.S.C. 1468;
    (2) Section 106(b) of the Bank Holding Company Act Amendments of 
1970 (BHCA Amendments of 1970), and certain unsafe or unsound practices 
or breaches of fiduciary duty under 12 U.S.C. 1972(2)(F);
    (3) Any provision of the Change in Bank Control Act of 1978, as 
amended (CBCA), or any implementing regulation or order issued, and 
certain unsafe or unsound practices, or breaches of fiduciary duty 
under 12 U.S.C. 1817(j)(16);
    (4) Section 7(a)(1) of the FDIA under 12 U.S.C. 1817(a)(1);
    (5) Any provision of the International Lending Supervision Act of 
1983 (ILSA), or any rule, regulation or order issued under 12 U.S.C. 
3909;
    (6) Any provision of the International Banking Act of 1978 (IBA), 
or any rule, regulation or order issued under 12 U.S.C. 3108;
    (7) Certain provisions of the Exchange Act under section 21B of the 
Exchange Act (15 U.S.C. 78u-2);
    (8) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3349), or any order or 
regulation issued under;
    (9) The terms of any final or temporary order issued under section 
8 of the FDIA or of any written agreement executed by the FDIC, or the 
former Office of Thrift Supervision (OTS), the terms of any condition 
imposed in writing by the FDIC in connection with the grant of an 
application or request, certain unsafe or unsound practices or breaches 
of fiduciary duty, or any law or regulation not otherwise provided 
under 12 U.S.C. 1818(i)(2);
    (10) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued under; and
    (11) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued under;
    (12) Certain provisions of Section 5 of the Home Owners' Loan Act 
(HOLA) or any regulation or order issued under 12 U.S.C. 1464(d)(1), 
(5)-(8), (s), and (v);
    (13) Section 9 of the HOLA or any regulation or order issued under 
12 U.S.C. 1467(d); and
    (14) Section 10 of HOLA under 12 U.S.C. 1467a(a)(2)(D), (g), 
(i)(2)-(4) and (r).
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) 
to impose penalties for violations of the post-

[[Page 22088]]

employment restrictions under that subsection; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.
0
80. Section 308.3 is added to read as follows:


Sec.  308.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    (a) Administrative law judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Administrative Officer means an inferior officer of the Federal 
Deposit Insurance Corporation (FDIC), duly appointed by the Board of 
Directors of the FDIC to serve as the Board's designee to hear certain 
motions or requests in an adjudicatory proceeding and to be the 
official custodian of the record for the FDIC.
    (c) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (d) Assistant Administrative Officer means an inferior officer of 
the FDIC, duly appointed by the Board of Directors of the FDIC to serve 
as the Board's designee to hear certain motions or requests in an 
adjudicatory proceeding upon the designation or unavailability of the 
Administrative Officer.
    (e) Board of Directors or Board means the Board of Directors of the 
FDIC or its designee.
    (f) Decisional employee means any member of the FDIC's or ALJ's 
staff who has not engaged in an investigative or prosecutorial role in 
a proceeding and who may assist the Board of Directors, ALJ or the 
Administrative Officer, in preparing orders, recommended decisions, 
decisions, and other documents under the Uniform Rules.
    (g) Designee of the Board of Directors means officers or officials 
of the FDIC acting pursuant to authority delegated by the Board of 
Directors.
    (h) Electronic signature means affixing the equivalent of a 
signature to an electronic document filed or transmitted 
electronically.
    (i) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the FDIC in an adjudicatory 
proceeding.
    (j) FDIC means the Federal Deposit Insurance Corporation.
    (k) Final order means an order issued by the FDIC with or without 
the consent of the affected institution or the institution-affiliated 
party that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (l) Institution includes:
    (1) Any bank as that term is defined in section 3(a) of the FDIA 
(12 U.S.C. 1813(a));
    (2) Any bank holding company or any subsidiary (other than a bank) 
of a bank holding company as those terms are defined in the BHCA (12 
U.S.C. 1841 et seq.);
    (3) Any savings association as that term is defined in section 3(b) 
of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company 
or any subsidiary thereof (other than a bank) as those terms are 
defined in section 10(a) of the HOLA (12 U.S.C. 1467a(a));
    (4) Any organization operating under section 25 of the FRA (12 
U.S.C. 601 et seq.);
    (5) Any foreign bank or company to which section 8 of the IBA (12 
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; 
and
    (6) Any Federal agency as that term is defined in section 1(b) of 
the IBA (12 U.S.C. 3101(5)).
    (m) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u).
    (n) Local Rules means those rules promulgated by the FDIC in those 
subparts of this part other than subpart A.
    (o) Office of Financial Institution Adjudication (OFIA) means the 
executive body charged with overseeing the administration of 
administrative enforcement proceedings of the Office of the Comptroller 
of the Currency (OCC), the Board of Governors of the Federal Reserve 
Board (Board of Governors), the FDIC, and the National Credit Union 
Administration (NCUA).
    (p) Party means the FDIC and any person named as a party in any 
notice.
    (q) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in this section.
    (r) Respondent means any party other than the FDIC.
    (s) Uniform Rules means those rules in subpart A of this part that 
pertain to the types of formal administrative enforcement actions set 
forth at Sec.  308.1, and as specified in subparts B through P of this 
part.
    (v) Violation means any violation as that term is defined in 
section 3(v) of the FDIA (12 U.S.C. 1813(v)).

Subpart B--General Rules of Procedure


Sec.  308.101  [Amended]

0
81. Section 308.101 is amended by:
0
a. Removing the word ``shall'' wherever it appears and adding ``will'' 
in its place in paragraphs (b) and (c); and
0
b. Removing the phrase, ``section 15(c)(4) of the Exchange Act (15 
U.S.C. 78o(c)(4)'' and adding ``15 U.S.C. 78o(c)(4)'' in its place in 
paragraph (d).
0
82. Section 308.102 is amended by:
0
a. Removing the phrase ``administrative law judge'' and adding ``ALJ'' 
in its place wherever it appears in paragraph (b)(1); and
0
b. Revising paragraph (b)(2).
    The revision reads as follows:


Sec.  308.102  Authority of Board of Directors and Administrative 
Officer.

* * * * *
    (b) * * *
    (2) Pursuant to authority delegated by the Board of Directors, the 
Administrative Officer and Assistant Administrative Officer, upon the 
advice and recommendation of the Deputy General Counsel for Litigation 
or, in the Deputy General Counsel's absence, the Assistant General 
Counsel for General Litigation, may issue rulings in proceedings under 
these sections of the FDIA 12 U.S.C. 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 
12 U.S.C. 1818(g).
0
83. Section 308.103 is revised to read as follows:


Sec.  308.103  Assignment of Administrative Law Judge (ALJ).

    (a) Assignment. Unless otherwise directed by the Board of Directors 
or as otherwise provided in the Local Rules, a hearing within the scope 
of this part must be held before an ALJ of the Office of Financial 
Institution Adjudication (OFIA).
    (b) Procedures. Upon receiving a copy of the notice under Sec.  
308.18(a) from Enforcement Counsel, OFIA must assign an ALJ to the 
matter and advise the

[[Page 22089]]

parties, in writing, of the ALJ assignment.
0
84. Section 308.104 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the phrase ``administrative law judge'' and adding ``ALJ'' 
in its place wherever it appears in paragraph (b).
    The revision reads as follows:


Sec.  308.104  Filings with the Board of Directors.

    (a) General rule. All materials required to be filed with or 
referred to the Board of Directors in any proceedings under this part 
must be filed with the Administrative Officer in a manner specified in 
Sec.  308.10(b). The Administrative Officer's address is: Federal 
Deposit Insurance Corporation, Attn: Administrative Officer, 550 17th 
Street NW, Washington, DC 20429. Electronic copies of all pleadings 
must be sent to [email protected] with the docket 
number clearly identified.
* * * * *


Sec.  308.105  [Amended]

0
85. Section 308.105 is amended by:
0
a. Removing the phrase ``administrative law judge'' and adding ``ALJ'' 
in its place in the first sentence; and
0
b. Removing the phrase ``As the official custodian, the'' and adding in 
its place ``The'' in the second sentence; and
0
c. Removing the word ``shall'' in the second sentence and adding 
``will'' in its place in the second sentence.


Sec.  308.106  [Amended]

0
86. Section 308.106 is revised to read as follows:


Sec.  308.106  Written testimony in lieu of oral hearing.

    (a) General rule. (1) At any time more than 15 days before the 
hearing is to commence, on the motion of any party or on the ALJ's own 
motion, the ALJ may order that the parties present part or all of their 
case-in-chief and, if ordered, their rebuttal, in the form of exhibits 
and written statements sworn to by the witness offering such statements 
as evidence, provided that if any party objects, the ALJ will not 
require such a format if that format would violate the objecting 
party's right under the Administrative Procedure Act, or other 
applicable law, or would otherwise unfairly prejudice that party.
    (2) Any such order will provide that each party must, upon request, 
have the same right of oral cross-examination (or redirect examination) 
as would exist had the witness testified orally rather than through a 
written statement. Such order must also provide that any party has a 
right to call any hostile witness or adverse party to testify orally.
    (b) Scheduling of submission of written testimony. (1) If written 
direct testimony and exhibits are ordered under paragraph (a) of this 
section, the ALJ will require that it be filed within the time period 
for commencement of the hearing, and the hearing will be deemed to have 
commenced on the day such testimony is due.
    (2) Absent good cause shown, written rebuttal, if any, must be 
submitted and the oral portion of the hearing begun within 30 days of 
the date set for filing written direct testimony.
    (3) The ALJ will direct, unless good cause requires otherwise, 
that--
    (i) All parties must simultaneously file any exhibits and written 
direct testimony required under paragraph (b)(1) of this section; and
    (ii) All parties must simultaneously file any exhibits and written 
rebuttal required under paragraph (b)(2) of this section.
    (c) Failure to comply with order to file written testimony. (1) The 
failure of any party to comply with an order to file written testimony 
or exhibits at the time and in the matter required under this section 
will be deemed a waiver of that party's right to present any evidence, 
except testimony of a previously identified adverse party or hostile 
witness. Failure to file written testimony or exhibits is, however, not 
a waiver of that party's right of cross-examination or a waiver of the 
right to present rebuttal evidence that was not required to be 
submitted in written form.
    (2) Late filings of papers under this section may be allowed and 
accepted only upon good cause shown.
0
87. Section 308.107 is revised to read as follows:


Sec.  308.107  Supplemental discovery rules.

    (a) Scope of discovery. Subject to the limitations set out in Sec.  
308.24, a party may obtain discovery regarding any non-privileged 
matter that has material relevance to the merits of the pending action, 
and is proportional to the needs of the action, considering the 
importance of the issues at stake in the action, the parties' 
resources, the importance of the discovery in resolving the issues, and 
whether the burden or expense of the proposed discovery outweighs its 
likely benefit. Parties may obtain discovery only through the 
production of documents and depositions, as set forth in the Uniform 
Rules and the Local Rules.
    (b) Joint Discovery Plan. Within the time period set by the ALJ and 
prior to serving any discovery requests, the parties must meet and 
confer to consider the discovery needed to support their claims and 
defenses and discuss any issues about preserving discoverable 
information.
    (1) At the meet and confer, the parties must use reasonable efforts 
to develop a Joint Discovery Plan that should contain the following 
elements:
    (i) The subjects on which discovery may be needed, when discovery 
should be completed, and whether discovery should be conducted in 
phases or be limited to, or focused on, particular issues;
    (ii) Any issues about disclosure, discovery, or preservation of 
ESI, including the form or forms in which it should be produced;
    (iii) Provisions regarding any anticipated discovery of nonparties;
    (iv) Whether depositions are anticipated and the appropriate limits 
on the taking of such depositions, consistent with paragraph (e)(1) of 
this section, including the maximum number of depositions to be 
allowed;
    (v) The anticipated timing of the production of any document 
identifying and describing privileged documents that a party intends to 
redact or withhold from production; and
    (vi) Provisions regarding any inadvertent disclosure of privileged 
information.
    (2) The Joint Discovery Plan must comply with the provisions of 
this section and Sec.  308.24.
    (3) The parties must submit their proposed Joint Discovery Plan to 
the ALJ for review, modification, and/or approval. In the event the 
parties cannot agree to some or all of the provisions, the parties must 
file their respective proposals with the ALJ for resolution. After 
review, the ALJ must issue an approved Joint Discovery Plan, which must 
include any modifications made by the ALJ.
    (c) Document and electronically stored information (ESI) 
discovery--(1) Scope of document discovery. Parties to proceedings set 
forth at Sec.  308.1 of the Uniform Rules and as provided in the Local 
Rules may obtain discovery through the production of documents and ESI.
    (2) Depositions to determine completeness of document production. 
Any counsel is permitted to depose a person producing documents or ESI 
pursuant to a document subpoena on the strictly limited topics of the 
identification of documents and ESI produced by that person, and a 
reasonable examination to determine

[[Page 22090]]

whether the subpoenaed person made an adequate search for, and has 
produced, all subpoenaed documents and ESI.
    (3) Specific limitations on ESI discovery. A party need not provide 
discovery of ESI from sources that the party identifies as not 
reasonably accessible because of undue burden or cost. On motion to 
compel discovery or for a protective order, the party from whom 
discovery is sought must show that the information is not reasonably 
accessible because of undue burden or cost. If that showing is made, 
the ALJ may nonetheless order discovery from such sources if the 
requesting party shows good cause. The ALJ may specify conditions for 
the discovery.
    (4) Request for production. Consistent with the Joint Discovery 
Plan, a party may serve on any other party a request to produce 
documents, and permit the requesting party or its representative to 
inspect, copy, test, or sample documents in the responding party's 
possession, custody, or control.
    (5) Privilege. Consistent with Sec.  308.25(e) and the Joint 
Discovery Plan, and prior to the close of the discovery period set by 
the ALJ, the producing party must reasonably identify all documents 
withheld or redacted on the grounds of privilege and must produce a 
statement of the basis for the assertion of privilege.
    (6) Document subpoenas to nonparties. (i) The provisions of Sec.  
308.26 apply to document subpoenas to nonparties. Any requests for 
nonparty subpoenas must comply with Sec.  308.24(b) and the Joint 
Discovery Plan.
    (ii) If the ALJ determines that the application does not set forth 
a valid basis for the issuance of the subpoena, or that it does not 
otherwise comply with Sec.  308.24(b) or the Joint Discovery Plan, the 
ALJ may refuse to issue the subpoena or may issue it in a modified form 
upon such conditions as may be consistent with the Uniform Rules and 
the Local Rules.
    (d) Expert witness disclosures. (1) When expert witness disclosures 
are required, the disclosures must include: Name, mailing address, and 
electronic mail address of each expert witness:
    (i) If the expert is one retained or specially employed to provide 
expert testimony in the matter, or one whose duties as the party's 
employee regularly involve giving expert testimony, the witness must 
provide a written report in compliance with paragraph (d)(2)(i) of this 
section.
    (ii) If the expert is an employee of a party who does not regularly 
provide expert testimony, including a commissioned bank examiner 
employed by the FDIC, the witness must provide written disclosures in 
compliance with paragraph (d)(2)(ii) of this section.
    (2) Disclosure of expert testimony--(i) Witnesses who must provide 
written report. Unless otherwise stipulated or ordered by the ALJ, 
experts described in paragraph (d)(1)(i) of this section must prepare a 
signed expert report that contains:
    (A) A complete statement of all opinions the witness will express 
and the basis and reasons for them;
    (B) The facts or data considered by the witness in forming the 
opinions;
    (C) Any exhibits that will be used to summarize or support the 
opinions;
    (D) The witness's qualifications, including a list of all 
publications authored in the previous 10 years;
    (E) A list of all other cases in which, during the previous 4 
years, the witness testified as an expert at trial or by deposition; 
and
    (F) A statement of the compensation to be paid for the study and 
testimony in the case.
    (ii) Witnesses who provide written disclosures instead of a written 
report. Unless otherwise stipulated or ordered by the ALJ, expert 
witnesses described in paragraph (d)(1)(ii) of this section are not 
required to provide a written report, but must provide written 
disclosures that state:
    (A) The subject matter on which the witness is expected to present 
evidence; and
    (B) A summary of the facts and opinions to which the witness is 
expected to testify.
    (e) Depositions--(1) In general. In addition to paragraph (c)(2) of 
this section, and subject to the provisions of Sec.  308.24 and 
paragraph (a) of this section, a party may take depositions of 
individuals with direct knowledge of facts relevant to the proceeding 
and individuals designated as an expert under paragraph (d)(1) of this 
section, where the evidence sought cannot be obtained from some other 
source that is more convenient, less burdensome, or less expensive. 
Absent exceptional circumstances, depositions will only be permitted of 
individuals expected to testify at the hearing, including experts.
    (i) Limits on depositions. Unless otherwise stipulated by the 
parties, depositions are only permitted to the extent ordered by the 
ALJ upon a showing of good cause.
    (ii) Privileged matters. Privileged matters are not discoverable by 
deposition. Privileges include those set forth in Sec.  308.24(c).
    (iii) Report. A party must produce any disclosure required by 
paragraph (d)(2) of this section before the deposition of the witness 
required to provide such disclosure. Unless otherwise provided by the 
ALJ, the party must produce this report at least 20 days prior to any 
deposition of the witness.
    (2) Notice. A party desiring to take a deposition must give 
reasonable notice in writing to the deponent and to every other party 
to the proceeding. The notice must state the time, manner, and place 
for taking the deposition, and the name and address of the person to be 
deposed.
    (i) Location. A deposition notice may require the witness to be 
deposed at any place within a State, territory, or possession of the 
United States or the District of Columbia in which that witness resides 
or has a regular place of employment, or such other convenient place as 
agreed by the parties and the witness.
    (ii) Remote participation. The parties may stipulate, or the ALJ 
may order, that a deposition be taken by telephone or other remote 
means.
    (iii) Deposition subpoenas. A deponent's attendance may be 
compelled by subpoena.
    (A) Issuance. At the request of a party, the ALJ will issue a 
subpoena requiring the attendance of a witness at a deposition under 
this paragraph (e) unless the ALJ determines that the requested 
subpoena is outside the scope of paragraph (e)(1) of this section.
    (B) Service. The party requesting the subpoena must serve it on the 
person named therein, or on that person's counsel, by any of the 
methods identified in Sec.  308.11(d). The party serving the subpoena 
must file proof of service with the ALJ, unless the ALJ issues an order 
indicating the filing of proof of service is not required.
    (C) Objection to deposition subpoena. A motion to modify or quash a 
deposition subpoena must be in accordance with the procedures of Sec.  
308.27(b).
    (D) Enforcement of deposition subpoena. Enforcement of a deposition 
subpoena must be in accordance with the procedures of Sec.  
308.27(c)(2) and (d).
    (3) Time for taking depositions. A party may take depositions at 
any time after the issuance of the approved Joint Discovery Plan, but 
no later than 20 days before the scheduled hearing date, except with 
permission of the ALJ for good cause shown.
    (4) Conduct of the deposition. The witness must be duly sworn. By 
stipulation of the parties or by order of the ALJ, a court reporter or 
other person authorized to administer an oath may administer the oath 
remotely without being in the physical presence of the deponent. Unless 
the parties otherwise

[[Page 22091]]

agree, all objections to questions or exhibits must be in short form 
and must state the grounds for the objection. Failure to object to 
questions or exhibits is not a waiver except when the grounds for the 
objection might have been avoided if the objection had been timely 
presented.
    (5) Duration. Unless otherwise stipulated by the parties or ordered 
by the ALJ, a deposition is limited to 1 day of 7 hours. The ALJ may, 
when it is consistent with Sec.  308.24 and paragraph (a) of this 
section, order additional time if it is necessary to fairly examine the 
witness, including when any person or circumstance has impeded the 
examination.
    (6) Recording the testimony--(i) Generally. The party taking the 
deposition must have a certified court reporter record the witness's 
testimony:
    (A) By stenotype machine or electronic means, such as by sound or 
video recording device;
    (B) Upon agreement of the parties, by any other method; or
    (C) For good cause and with leave of the ALJ, by any other method.
    (ii) Cost. The party taking the deposition must bear the cost of 
recording and transcribing the witness's testimony.
    (iii) Transcript. The court reporter must provide a transcript of 
the witness's testimony to the party taking the deposition and must 
make a copy of the transcript available to each party upon payment by 
that party of the cost of the copy. The transcript must be subscribed 
or certified in accordance with Sec.  308.27(c)(3).
    (f) Discovery motions--(1) Motions to limit discovery. In addition 
to Sec.  308.25(d), upon a motion by a party or on the ALJ's own 
motion, the ALJ must limit the frequency or extent of discovery 
otherwise allowed by these rules if the ALJ determines that:
    (i) The discovery sought is unreasonably cumulative or duplicative 
or can be obtained from some other source that is more convenient, less 
burdensome, or less expensive;
    (ii) Involves privileged, irrelevant, or immaterial matters;
    (iii) The party seeking discovery has already had ample opportunity 
to obtain the information by discovery in the action; or
    (iv) The proposed discovery is outside the scope of this section or 
Sec.  308.24.
    (2) Motions to terminate depositions. At any time during a 
deposition, the deponent or a party may move to terminate or limit it 
on the ground that it is being conducted in bad faith or in a manner 
that unreasonably annoys, embarrasses, or oppresses the deponent or 
party. Upon such a motion, the ALJ may order that the deposition be 
terminated or may limit its scope and manner. If terminated, the 
deposition may be resumed only by order of the ALJ.
    (3) Motions to compel discovery. The provisions of Sec.  308.25(f) 
apply to any motion to compel discovery.

NATIONAL CREDIT UNION ADMINISTRATION

    For the reasons set out in the joint preamble, the NCUA proposes to 
amend 12 CFR part 747 as follows:

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

0
88. The authority citation for part 747 continues to read as follows:

    Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 
1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 
104-134; Pub. L. 109-351; Pub. L. 114-74.

Subpart A--Uniform Rules of Practice and Procedure

0
89. Revise subpart A as set forth at the end of the common preamble.
0
90. Section 747.1 is added to read as follows:


Sec.  747.1   Scope.

    This subpart prescribes uniform rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 206(e) of the Act 
(12 U.S.C. 1786(e));
    (b) Removal and prohibition proceedings under section 206(g) of the 
Act (12 U.S.C. 1786(g));
    (c) Assessment of civil money penalties by the NCUA Board against 
institutions and institution-affiliated parties for any violation of:
    (1) Section 202 of the Act (12 U.S.C. 1782);
    (2) Section 1120 of FIRREA (12 U.S.C. 3349), or any order or 
regulation issued thereunder;
    (3) The terms of any final or temporary order issued under section 
206 of the Act or any written agreement executed by the National Credit 
Union Administration (``NCUA''), any condition imposed in writing by 
the NCUA in connection with any action on any application, notice, or 
other request by the credit union or institution-affiliated party, 
certain unsafe or unsound practices or breaches of fiduciary duty, or 
any law or regulation not otherwise provided herein, pursuant to 12 
U.S.C. 1786(k); and
    (4) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;
    (d) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g)); and
    (e) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in subparts 
B through J of this part.
0
91. Section 747.3 is added to read as follows:


Sec.  747.3  Definitions.

    For purposes of this part, unless explicitly stated to the 
contrary:
    (a) Administrative Law Judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Decisional employee means any member of the NCUA Board's or 
ALJ's staff who has not engaged in an investigative or prosecutorial 
role in a proceeding and who may assist the NCUA Board or the ALJ, 
respectively, in preparing orders, recommended decisions, decisions, 
and other documents under the Uniform Rules.
    (d) Electronic signature means affixing the equivalent of a 
signature to an electronic document filed or transmitted 
electronically.
    (e) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the NCUA in an adjudicatory 
proceeding.
    (f) Final order means an order issued by the NCUA with or without 
the consent of the affected institution or the institution-affiliated 
party, that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (g) Institution includes:
    (1) Any Federal credit union as that term is defined in section 
101(1) of the Act (12 U.S.C. 1752(1)); and
    (2) Any insured State-chartered credit union as that term is 
defined in section 101(7) of the FCUA (12 U.S.C. 1752(7)).
    (h) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 206(r) of the Act (12 U.S.C. 
1786(r)).
    (i) Local Rules means those rules promulgated by the NCUA in 
subparts B through I of this part.

[[Page 22092]]

    (j) NCUA means the National Credit Union Administration.
    (k) NCUA Board means the National Credit Union Administration Board 
or a person delegated to perform the functions of the NCUA Board.
    (l) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the NCUA, the Board of 
Governors of the Federal Reserve System (``Board of Governors''), the 
Federal Deposit Insurance Corporation (``FDIC''), and the Office of the 
Comptroller of the Currency (``OCC'').
    (m) Party means the NCUA and any person named as a party in any 
notice.
    (n) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in paragraph (g) of this section.
    (o) Respondent means any party other than the NCUA.
    (p) Uniform Rules means those rules in subpart A of this part that 
are common to the NCUA, the Board, the FDIC, and the OCC.
    (q) Violation means any violation as that term is defined in 
section 3(v) of the Federal Deposit Insurance Act (12 U.S.C. 1813(v)).


Sec.  747.18   [Amended]

0
92. Section 747.18 is amended by removing ``Except for change-in-
control proceedings under section 7(j)(4) of the FDIA, 12 U.S.C. 
1817(j)(4), a'' and adding in its place ``A'' in paragraph (a)(1)(i) 
and removing and reserving paragraph (a)(2).


Sec.  747.33  [Amended]

0
93. Section 747.33 is amended by removing ``or, in the case of change-
in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 
1817(j)(4)), within 20 days from service of the hearing order'' in the 
second sentence in paragraph (a).

Michael J. Hsu,
Acting Comptroller of the Currency.

    By order of the Board of Governors of the Federal Reserve 
System.
Ann Misback,
Secretary of the Board.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on October 21, 2021.
James P. Sheesley,
Assistant Executive Secretary.

    By order of the Board of the National Credit Union 
Administration.

    Dated at Alexandria, VA, this 21st day of October, 2021.
Melane Conyers-Ausbrooks,
Secretary of the Board, National Credit Union Administration.

    Editorial Note: This document was received for publication by 
the Office of the Federal Register on February 28, 2022.

[FR Doc. 2022-04454 Filed 4-12-22; 8:45 am]
BILLING CODE 6210-01; 6714-01; 4810-33- 4810-33- 4810-33- 7535-01-P