12 CFR Part 19 — Rules of Practice and Procedure

PART 19—RULES OF PRACTICE AND PROCEDURE 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. 78 l, Source: 88 FR 89842, Dec. 28, 2023, unless otherwise noted. § 19.0 Applicability date. Subparts A through D and H, I, J, L, M, N, P, and Q of this part apply to adjudicatory proceedings initiated on or after April 1, 2024. The Rules of Practice and Procedure for national banks, Federal savings associations, and Federal branches and agencies that were in effect prior to April 1, 2024, set forth in appendix A to this part, continue to apply to adjudicatory proceedings initiated before April 1, 2024, unless the parties otherwise stipulate that the rules in this part, effective April 1, 2024, apply. Subpart A—Uniform Rules of Practice and Procedure § 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 in this section, 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; (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 section 10(k); 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 (see § 19.3(j)). § 19.2 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) The term counsel (c) 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. § 19.3 Definitions. For purposes of this part, unless explicitly stated to the contrary: (a) Administrative law judge (ALJ) (b) Adjudicatory proceeding (c) Comptroller (d) Decisional employee (e) Electronic signature (f) Enforcement Counsel (g) Final order (h) Institution (i) Institution-affiliated party (j) Local Rules (k) OCC (l) OFIA (m) Party (n) Person (o) Respondent (p) Uniform Rules (q) Violation § 19.4 Authority of the Comptroller. The Comptroller 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. § 19.5 Authority of the administrative law judge (ALJ). (a) General rule. (b) Powers. (1) To administer oaths and affirmations; (2) To issue subpoenas, subpoenas duces tecum, (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 § 19.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Comptroller 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 Comptroller a recommended decision as provided in this part; (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. § 19.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the OCC or an ALJ By attorneys. (2) By non-attorneys. (3) Notice of appearance. (A) A written declaration that the individual is currently qualified as provided in paragraphs (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 subpart B of this part. (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 (b) Sanctions. § 19.7 Good faith certification. (a) General requirement. (b) Effect of signature. (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. § 19.8 Conflicts of interest. (a) Conflict of interest in representation. (b) Certification and waiver. (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. § 19.9 Ex parte communications. (a) Definition Ex parte communication. Ex parte communication (i) An interested person outside the OCC (including such person's counsel); and (ii) The ALJ handling that proceeding, the Comptroller, or a decisional employee. (2) Exception. ex parte (b) Prohibition of ex parte communications. (1) An interested person outside the OCC must not make or knowingly cause to be made an ex parte (2) The Comptroller, ALJ, or decisional employee may not make or knowingly cause to be made to any interested person outside the OCC any ex parte (c) Procedure upon occurrence of ex parte communication. ex parte ex parte ex parte (d) Sanctions. ex parte (e) Separation of functions In general. ex parte (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 OCC. (2) Decision process. § 19.10 Filing of papers. (a) Filing. (b) Manner of filing. (1) Electronic mail or other electronic means designated by the Comptroller 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 Form. 1/2 (2) Signature. (3) Caption. § 19.11 Service of papers. (a) By the parties. (b) Method 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 Comptroller or the ALJ. (2) If a respondent has not appeared in the proceeding in accordance with § 19.6, the Comptroller 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. (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) 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. § 19.12 Construction of time limits. (a) General rule. (b) When papers are deemed to be filed or served. (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 Comptroller 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. (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. § 19.13 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 Comptroller pursuant to § 19.38, the Comptroller 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 Comptroller's or the ALJ's own motion. § 19.14 Witness fees and expenses. (a) In general. (b) Exception for testimony by a party. (c) Timing of payment. § 19.15 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. § 19.16 OCC's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the OCC to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the OCC to conduct or continue any form of investigation authorized by law. § 19.17 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. § 19.18 Commencement of proceeding and contents of notice. (a) Commencement of proceeding. (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 Comptroller. (b) Contents of notice. (1) The legal authority for the proceeding and for the OCC's jurisdiction over the proceeding; (2) Matters of fact or law showing that the OCC 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. § 19.19 Answer. (a) When. (b) Content of answer. (c) Default Effect of failure to answer. (2) Effect of failure to request a hearing in civil money penalty proceedings. § 19.20 Amended pleadings. (a) Amendments. (b) Amendments to conform to the evidence. § 19.21 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 Comptroller a recommended decision containing the findings and the relief sought in the notice. § 19.22 Consolidation and severance of actions. (a) Consolidation (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. (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. § 19.23 Motions. (a) In writing. (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. (c) Filing of motions. (d) Responses. (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. (f) Dispositive motions. § 19.24 Scope of document discovery. (a) Limits on discovery documents (2) Discovery by use of deposition is governed by subpart I 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. (c) Privileged matter. (d) Time limits. § 19.25 Request for document discovery from parties. (a) Document requests. (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 General. (2) Costs. (c) Obligation to update responses. (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. (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. (f) Motions to compel 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. (h) Enforcing discovery subpoenas. § 19.26 Document subpoenas to nonparties. (a) General rules. (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 § 19.24(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. (b) Motion to quash or modify. (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 § 19.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 19.27 Deposition of witness unavailable for hearing. (a) General rules. duces tecum, (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. (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. (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. § 19.28 Interlocutory review. (a) General rule. (b) Scope of review. (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. (d) Suspension of proceeding. § 19.29 Summary disposition. (a) In general. (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. (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. (d) Decision on motion. § 19.30 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. § 19.31 Scheduling and prehearing conferences. (a) Scheduling conference. (b) Prehearing conferences. (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. (d) Scheduling or prehearing orders. § 19.32 Prehearing submissions. (a) Party prehearing submissions. (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. § 19.33 Public hearings. (a) General rule. (b) Filing document under seal. § 19.34 Hearing subpoenas. (a) Issuance. duces tecum (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. (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. § 19.35 Conduct of hearings. (a) General rules Conduct of hearings. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. (c) Electronic presentation. § 19.36 Evidence. (a) Admissibility (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 (2) All matters officially noticed by the ALJ or the Comptroller 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 (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. (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 (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 Comptroller. (4) Failure to object to admission of evidence or to any ruling constitutes a waiver of the objection. (e) Stipulations. (f) Depositions of unavailable witnesses (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. § 19.37 Post-hearing filings. (a) Proposed findings and conclusions and supporting briefs (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. (c) Simultaneous filing required. § 19.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 19.39 Exceptions to recommended decision. (a) Filing exceptions. (b) Effect of failure to file or raise exceptions (2) No exception need be considered by the Comptroller 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. (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. § 19.40 Review by the Comptroller. (a) Notice of submission to the Comptroller. (b) Oral argument before the Comptroller. (c) Comptroller's final decision (2) The Comptroller 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 Comptroller 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 Comptroller will be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Comptroller or required by statute, upon any appropriate State or Federal supervisory authority. § 19.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the Comptroller may not, unless specifically ordered by the Comptroller or a reviewing court, operate as a stay of any order issued by the Comptroller. The Comptroller may, in its discretion, and on such terms as the Comptroller 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. Subpart B—Procedural Rules for OCC Adjudications § 19.100 Filing documents. All materials required to be filed with or referred to the Comptroller or the ALJ in any proceeding under this part must be filed with the OCC Hearing Clerk in a manner prescribed by § 19.10(b) and (c). Filings to be made with the Hearing Clerk include the notice and answer; motions and responses to motions; briefs; the record filed by the ALJ after the issuance of a recommended decision; the recommended decision filed by the ALJ following a motion for summary disposition; referrals by the ALJ of motions for interlocutory review; exceptions and requests for oral argument; any other papers required to be filed with the Comptroller or the ALJ under this part; and any attachments or exhibits to such documents. § 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. § 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 § 19.110 Scope and definitions. (a) Scope. (b) Definitions. (1) The term petitioner (2) The term depository institution (3) The term OCC Supervisory Office § 19.111 Suspension, removal, or prohibition of institution-affiliated party. (a) Issuance of notice or order. (b) Request for hearing Submission. (2) Content of request for a hearing. (c) Default. § 19.112 Informal hearing. (a) Issuance of hearing order. (b) Appointment of presiding officer. (c) Waiver of oral hearing Petitioner. (2) OCC. (d) Hearing procedures Conduct of hearing. (2) Powers of the presiding officer. (3) Presentation. (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 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. (5) Record. § 19.113 Recommended and final decisions. (a) Issuance of recommended decision. (b) Comments. (c) Issuance of final decision. (d) Other actions. (e) Expiration of order. (f) Petition for reconsideration. Subpart D—Actions Under the Federal Securities Laws § 19.120 Exemption hearings under section 12(h) of the Securities Exchange Act of 1934. (a) Scope. l l l (b) Application for exemption. (c) Newspaper notice. (d) Informal hearing Conduct of proceeding. (2) Notice of hearing. (3) Presiding officer. (4) Attendance. (5) Order of presentation. (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. (7) Evidence. (8) Electronic presentation. (9) Transcript. (e) Decision of the Comptroller. § 19.121 Disciplinary proceedings. (a) Scope In general. (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. (i) The parties listed in paragraph (a)(1) of this section; and (ii) A bank that is a clearing agency. (3) Definitions. (i) The term bank (ii) The terms transfer agent, municipal securities dealer, government securities broker, government securities dealer (iii) The terms person associated with a bank that is a municipal securities dealer person associated with a municipal securities dealer person associated with a municipal securities dealer (iv) The terms person associated with a bank that is a government securities broker or government securities dealer person associated with a government securities broker or government securities dealer person associated with a government securities broker or government securities dealer (v) The terms person associated with a bank that is a transfer agent person associated with a transfer agent person associated with a transfer agent (4) Preservation of authority. (b) Notice of charges and answer In general. (2) Public basis of proceedings; private hearings. (c) Disciplinary orders Service of order; content. (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. (d) Applications for stay or review of disciplinary actions imposed by registered clearing agencies Stays. (2) Reviews. § 19.122 Civil money penalty authority under Federal securities laws. (a) Scope. (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. (1) The term bank (2) The terms transfer agent, municipal securities dealer, government securities broker, government securities dealer (3) The term person associated with a bank that is a municipal securities dealer person associated with a municipal securities dealer (4) The term person associated with a bank that is a government securities broker or government securities dealer person associated with a government securities broker or government securities dealer (5) The term person associated with a bank that is a transfer agent person associated with a transfer agent (c) Public basis of proceedings; private hearings. § 19.123 Cease-and-desist authority. (a) Scope. l l, (b) Public basis of proceedings; private hearings. Subparts E through G—Reserved Subpart H—Change in Bank Control § 19.160 Scope. (a) Scope. (1) An insured national bank or Federal savings association pursuant to 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 of this part. § 19.161 Hearing process. (a) Hearing request. (1) Be in writing; and (2) Be filed with the Hearing Clerk of the OCC within ten days after service on the filer of the notice of disapproval. If a filer fails to request a hearing with a timely written request, the notice of disapproval constitutes a final and unappealable order. (b) Hearing order. (1) The legal authority for the proceeding and for the OCC's jurisdiction over the proceeding; (2) The matters of fact or law upon which the disapproval is based; and (3) The requirement for filing an answer to the hearing order with OFIA within 20 days after service of the hearing order. (c) Answer. (d) Effect of failure to answer. Subpart I—Discovery Depositions and Subpoenas § 19.170 Discovery depositions. (a) In general. (1) Report. (2) Limits on depositions. (b) Notice. (1) Location. (2) Remote participation. (c) Time limits. (d) Conduct of the deposition. (e) Recording the testimony Generally. (i) By stenotype machine or electronic means, such as by sound or video recording device; (ii) Upon agreement of the parties, by any other method; or (iii) For good cause and with leave of the ALJ, by any other method. (2) Cost. (3) Transcript. (f) Protective orders. (1) Is unreasonable, oppressive, excessive in scope, or unduly burdensome; (2) Involves privileged, irrelevant, or immaterial matters; (3) Involves unwarranted attempts to pry into a party's preparation for trial; or (4) Is being conducted in bad faith or in such manner as to unreasonably annoy, embarrass, or oppress the witness. (g) Expenses. § 19.171 Deposition subpoenas. (a) Issuance. (b) Service Methods of service. (2) Proof of service. (c) Motion to quash. (d) Enforcement of deposition subpoena. Subpart J—Formal Investigations § 19.180 Scope. This subpart and § 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 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. § 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. § 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, § 19.183 Rights of witnesses. (a) Right to be shown order. (b) Right to counsel. (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. (d) Right to inspect testimony transcript. § 19.184 Service of subpoena and payment of witness expenses. (a) Methods of service. (b) Expenses. (c) Area of service. § 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 § 19.190 Scope. This subpart contains rules relating to parties and representational practice before the OCC. This subpart includes the imposition of sanctions by the ALJ, any other presiding officer appointed pursuant to subpart C of this part and § 19.120, or the Comptroller against parties or their counsel in an adjudicatory proceeding under this part. This subpart also covers other disciplinary sanctions—censure, suspension, or debarment—against individuals who appear before the OCC in a representational capacity either in an adjudicatory proceeding under this part or in any other matters connected with presentations to the OCC relating to a client's rights, privileges, or liabilities. This representation includes, but is not limited to, the practice of attorneys and accountants. Employees of the OCC are not subject to disciplinary proceedings under this subpart. § 19.191 Definitions. As used in §§ 19.190 through 19.201, the following terms have the meaning given in this section unless the context otherwise requires: (a) Accountant (b) Attorney (c) Practice before the OCC practice before the OCC § 19.192 Sanctions relating to conduct in an adjudicatory proceeding. (a) In general. (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. (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 contesting specific issues or findings; (4) Precluding the party from offering certain evidence or from challenging or contesting certain evidence offered by another party; (5) Precluding the party from making a late filing or conditioning a late filing on any terms that are just; and (6) Assessing reasonable expenses, including attorney's fees, incurred by any other party as a result of the improper action or failure to act. (c) Procedure for imposition of sanctions. (2) No sanction authorized by this section, other than refusal to accept late filings, will be imposed without prior notice to all parties and an opportunity for any party 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 or other presiding officer directs. The ALJ or other presiding officer may limit the opportunity to be heard to an opportunity of a party or a party's representative to respond orally immediately after the act or inaction covered by this section is noted by the ALJ or other presiding officer. (3) Requests for the imposition of sanctions by any party, and the imposition of sanctions, are subject to interlocutory review pursuant to § 19.25 in the same manner as any other ruling. (d) Section not exclusive. § 19.193 Censure, suspension, or debarment. The Comptroller may censure an individual or suspend or debar an individual from practice before the OCC if the individual is incompetent in representing a client's rights or interest in a significant matter before the OCC; or engages, or has engaged, in disreputable conduct; or refuses to comply with the rules and regulations in this part; or with intent to defraud in any manner, willfully and knowingly deceives, misleads, or threatens any client or prospective client. The suspension or debarment of an individual may be initiated only upon a finding by the Comptroller that the basis for the disciplinary action is sufficiently egregious. § 19.194 Eligibility of attorneys and accountants to practice. (a) Attorneys. (b) Accountants. § 19.195 Incompetence. Incompetence in the representation of a client's rights and interests in a significant matter before the OCC is grounds for suspension or debarment. The term “incompetence” encompasses conduct that reflects a lack of the knowledge, judgment, and skill that a professional would ordinarily and reasonably be expected to exercise in adequately representing the rights and interests of a client. Such conduct includes, but is not limited to: (a) Handling a matter that the individual knows or should know that they are not competent to handle, without associating with a professional who is competent to handle such matter; (b) Handling a matter without adequate preparation under the circumstances; or (c) Neglect in a matter entrusted to him or her. § 19.196 Disreputable conduct. Disreputable conduct for which an individual may be censured, debarred, or suspended from practice before the OCC includes: (a) Willfully or recklessly violating or willfully or recklessly aiding and abetting the violation of any provision of the Federal banking or applicable securities laws or the rules and regulations thereunder or conviction of any offense involving dishonesty or breach of trust; (b) Knowingly or recklessly giving false or misleading information, or participating in any way in the giving of false information to the OCC or any officer or employee thereof, or to any tribunal authorized to pass upon matters administered by the OCC in connection with any matter pending or likely to be pending before it. The term “information” includes facts or other statements contained in testimony, financial statements, applications for enrollment, affidavits, declarations, or any other document or written or oral statement; (c) Directly or indirectly attempting to influence, or offering or agreeing to attempt to influence, the official action of any officer or employee of the OCC by the use of threats, false accusations, duress, or coercion; by the offer of any special inducement or promise of advantage; or by the bestowing of any gift, favor, or thing of value; (d) Disbarment or suspension from practice as an attorney, or debarment or suspension from practice 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, where the conviction has not been reversed on appeal; (e) Knowingly aiding or abetting another individual to practice before the OCC during that individual's period of suspension, debarment, or ineligibility; (f) Contemptuous conduct in connection with practice before the OCC, and knowingly making false accusations and statements, or circulating or publishing malicious or libelous matter; (g) Suspension, debarment, or removal from practice before the Board of Governors, the FDIC, the former OTS, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or any other Federal or state agency; and (h) Willfully violating any of the regulations contained in this part. § 19.197 Initiation of disciplinary proceeding. (a) Receipt of information. (b) Censure without formal proceeding. (c) Institution of formal disciplinary proceeding. § 19.198 Conferences. (a) General. (b) Voluntary suspension or debarment. § 19.199 Proceedings under this subpart. Any hearing held under this subpart is held before an ALJ pursuant to procedures set forth in subpart A of this part. The Comptroller will appoint a person to represent the OCC in the hearing. Any person having prior involvement in the matter that is the basis for the suspension or debarment proceeding is disqualified from representing the OCC in the hearing. The hearing will be closed to the public unless the Comptroller, on the Comptroller's initiative or on the request of a party, otherwise directs. The ALJ will issue a recommended decision to the Comptroller, who will issue the final decision and order. The Comptroller may censure, debar, or suspend an individual, or take such other disciplinary action as the Comptroller deems appropriate. § 19.200 Effect of debarment, suspension, or censure. (a) Debarment. (b) Suspension. (c) Censure. (d) Notice of debarment or suspension. § 19.201 Petition for reinstatement. At the expiration of the period of time designated in the order of debarment, the Comptroller may entertain a petition for reinstatement from any person debarred from practice before the OCC. The Comptroller may grant reinstatement only if satisfied that the petitioner is likely to act in accordance with the regulations in this part, and that granting reinstatement would not be contrary to the public interest. Any request for reinstatement is limited to written submissions unless the Comptroller, at the Comptroller's discretion, affords the petitioner a hearing. Subpart L—Equal Access to Justice Act § 19.205 Authority and scope; waiver. (a) In general. (b) Scope. (c) Waiver. § 19.206 Definitions. For purposes of this subpart: (a) Adversary adjudication (b) Final disposition (c) Party (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 (the Code) exempt from taxation under section 501(a) of the 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 paragraph (c). (d) Position of the OCC (e) Presiding officer § 19.207 Application requirements. (a) Timing of application. (b) Contents of application. (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 § 19.206(c), including documentation of its net worth pursuant to § 19.208, if applicable; (6) State the amount of fees and expenses for which an award is sought, as documented pursuant to § 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. § 19.208 Net worth exhibit. (a) Required information. (1) An unaudited financial statement is 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. § 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 § 19.215(d)(1)(i) 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. § 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 § 19.11, except as provided in § 19.208(b) for confidential financial information. § 19.211 Answer to application. (a) Filing of answer. (b) Content of answer. § 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 § 19.214. § 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 § 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, 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, under § 19.211, 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. § 19.214 Further proceedings. (a) Process for requesting further proceedings or additional information. (b) Requirement to identify additional information sought and reason for requesting additional proceedings. § 19.215 Decision. (a) Basis for decision. (b) Timing of decision. (c) Contents of decision. (d) Awards. In general. (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 § 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. (i) If in private practice, the attorney's, agent's, or witness' customary fee for similar services; (ii) If an employee of the applicant, the fully allocated cost of the attorney's, agent's, or witness' services; (iii) The prevailing rate for similar services in the community in which the attorney, agent, or witness ordinarily perform services; (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. (4) Reduction or denial of an award. (e) Final agency decision. § 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 § 19.39. § 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). § 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. § 19.219 Payment of award. (a) Requirement to submit final decision. (b) Time frame for award payment. Subpart M—Procedures for Reclassifying an Insured Depository Institution Based on Criteria Other Than Capital Under Prompt Corrective Action § 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 § 19.221 Reclassification of an insured depository institution based on unsafe or unsound condition or practice. (a) Issuance of notice of proposed reclassification Grounds for reclassification. (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) is referred to in this subpart as “reclassification.” (2) Prior notice to institution. (b) Contents of notice. (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. (1) An explanation of why the insured depository institution is not in unsafe or unsound condition or otherwise should not be reclassified; and (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. (e) Request for hearing and presentation of oral testimony or witnesses. (f) Order for informal hearing. (g) Hearing procedures. (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). (i) Time for decision. § 19.222 Request for rescission of reclassification. Any insured depository institution that has been reclassified under part 6 of this chapter and this subpart, may, upon a change in circumstances, request in writing that the OCC reconsider the reclassification, and may propose that the reclassification be rescinded and that any directives issued in connection with the reclassification be modified, rescinded, or removed. Unless otherwise ordered by the OCC, the insured depository institution will remain subject to the reclassification and to any directives issued in connection with that reclassification while such request is pending before the OCC. Subpart N—Order To Dismiss a Director or Senior Executive Officer Under Prompt Corrective Action § 19.230 Scope. This subpart applies to informal hearings afforded to any director or senior executive officer dismissed pursuant to an order issued under 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 § 19.231 Order to dismiss a director or senior executive officer. (a) Service of notice. (b) Response to directive Request for reinstatement. (2) Contents of request; informal hearing. (3) Effective date. (c) Order for informal hearing. (d) Hearing procedures Role of respondent. (2) Application of Administrative Procedure Act and Uniform Rules. (3) Electronic presentation. (4) Recordings; transcript. (5) Witnesses. (6) Continuance. (e) Standard for review. (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. (g) Time for decision. Subpart O—Civil Money Penalty Inflation Adjustments § 19.240 Inflation adjustments. (a) Statutory formula to calculate inflation adjustments. (b) Notice of inflation adjustments. Federal Register Subpart P—Removal, Suspension, and Debarment of Accountants From Performing Audit Services § 19.241 Scope. This subpart, which implements section 36(g)(4) of the FDIA (12 U.S.C. 1831m(g)(4)), provides rules and procedures for the removal, suspension, or debarment of independent public accountants and their accounting firms from performing independent audit and attestation services required by section 36 of the FDIA (12 U.S.C. 1831m) for insured national banks, insured Federal savings associations, and insured Federal branches of foreign banks. § 19.242 Definitions. As used in this subpart, the following terms have the meaning given below unless the context requires otherwise: (a) Accounting firm (b) Audit services (c) Independent public accountant (accountant) § 19.243 Removal, suspension, or debarment. (a) Good cause for removal, suspension, or debarment Individuals. (i) Lacks the requisite qualifications to perform audit services; (ii) Has knowingly or recklessly engaged in conduct that results in a violation of applicable professional standards, including those standards and conflicts of interest provisions applicable to accountants through the Sarbanes-Oxley Act of 2002, Public Law 107-204, 116 Stat. 745 (2002) (Sarbanes-Oxley Act), and developed by the Public Company Accounting Oversight Board and the Securities and Exchange Commission; (iii) Has engaged in negligent conduct in the form of: (A) A single instance of highly unreasonable conduct that results in a violation of applicable professional standards in circumstances in which an accountant knows, or should know, that heightened scrutiny is warranted; or (B) Repeated instances of unreasonable conduct, each resulting in a violation of applicable professional standards, that indicate a lack of competence to perform audit services; (iv) Has knowingly or recklessly given false or misleading information, or knowingly or recklessly participated in any way in the giving of false or misleading information, to the OCC or any officer or employee of the OCC; (v) Has engaged in, or aided and abetted, a material and knowing or reckless violation of any provision of the Federal banking or securities laws or the rules and regulations thereunder, or any other law; (vi) Has been removed, suspended, or debarred from practice before any Federal or State agency regulating the banking, insurance, or securities industries, other than by an action listed in § 19.244, on grounds relevant to the provision of audit services; or (vii) Is suspended or debarred for cause from practice as an accountant by any duly constituted licensing authority of any State, possession, commonwealth, or the District of Columbia. (2) Accounting firms. (i) The gravity, scope, or repetition of the act or failure to act that constitutes good cause for the removal, suspension, or debarment; (ii) The adequacy of, and adherence to, applicable policies, practices, or procedures for the accounting firm's conduct of its business and the performance of audit services; (iii) The selection, training, supervision, and conduct of members or employees of the accounting firm involved in the performance of audit services; (iv) The extent to which managing partners or senior officers of the accounting firm have participated, directly, or indirectly through oversight or review, in the act or failure to act; and (v) The extent to which the accounting firm has, since the occurrence of the act or failure to act, implemented corrective internal controls to prevent its recurrence. (3) Limited scope orders. (4) Remedies not exclusive. (b) Proceedings to remove, suspend, or debar Initiation of formal removal, suspension, or debarment proceedings. (2) Hearings under paragraph (b) of this section. (c) Immediate suspension from performing audit services In general. (i) Has a reasonable basis to believe that the accountant or firm has engaged in conduct (specified in the notice served on the accountant or firm under paragraph (b) of this section) that would constitute grounds for removal, suspension, or debarment under paragraph (a) of this section; (ii) Determines that immediate suspension is necessary to avoid immediate harm to an insured depository institution or its depositors or to the depository system as a whole; and (iii) Serves such respondent with written notice of the immediate suspension. (2) Procedures. (3) Petition for stay. (4) Hearing on petition. (5) Decision on petition. (6) Review of presiding officer's decision. § 19.244 Automatic removal, suspension, or debarment. (a) An independent public accountant or accounting firm may not perform audit services for insured national banks, insured Federal savings associations, or insured Federal branches of foreign banks if the accountant or firm: (1) Is subject to a final order of removal, suspension, or debarment (other than a limited scope order) issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the former Office of Thrift Supervision under section 36 of the FDIA (12 U.S.C. 1831m); (2) Is subject to a temporary suspension or permanent revocation of registration or a temporary or permanent suspension or bar from further association with any registered public accounting firm issued by the Public Company Accounting Oversight Board or the Securities and Exchange Commission under sections 105(c)(4)(A) or (B) of the Sarbanes-Oxley Act (15 U.S.C. 7215(c)(4)(A) or (B)); or (3) Is subject to an order of suspension or denial of the privilege of appearing or practicing before the Securities and Exchange Commission. (b) Upon written request, the Comptroller, for good cause shown, may grant written permission to such accountant or firm to perform audit services for insured national banks, insured Federal savings associations, or insured Federal branches of foreign banks. The request must contain a concise statement of the action requested. The Comptroller may require the applicant to submit additional information. § 19.245 Notice of removal, suspension, or debarment. (a) Notice to the public. (b) Notice to the Comptroller by accountants and firms. (1) Any currently effective order or other action described in § 19.243(a)(1)(vi) through (vii) or § 19.244(a)(2) and (3); and (2) Any currently effective action by the Public Company Accounting Oversight Board under sections 105(c)(4)(C) or (G) of the Sarbanes-Oxley Act (15 U.S.C. 7215(c)(4)(C) or (G)). (c) Timing of notice. § 19.246 Petition for reinstatement. (a) Form of petition. (b) Procedure. Subpart Q—Forfeiture of Franchise for Money Laundering or Cash Transaction Reporting Offenses § 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. § 19.251 Notice and hearing. (a) In general. (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 12 U.S.C. 93(d) or 12 U.S.C. 1464(w); and (2) Schedule a pretermination hearing. (b) Contents of notice. (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 § 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; and (6) That the answer must be filed with the OCC. (c) Failure to file an answer. (d) Service. § 19.252 Presiding officer. (a) Appointment. (b) Powers. § 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; (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. § 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). Appendix A to Part 19—Rules of Practice and Procedure Note: The content of this appendix reproduces 12 CFR parts 19, 108, 109, 112, and 165 as of October 1, 2023, which, pursuant to § 19.0, are applicable to adjudicatory actions initiated before April 1, 2024, unless the parties otherwise stipulate that the rules in this part in effect after April 1, 2024 apply. Cross-references to parts 19, 108, 109, and 112 (as well as to included sections) in this appendix are to those provisions as contained within this appendix. PART 19—RULES OF PRACTICE AND PROCEDURE Authority: Subpart A—Uniform Rules of Practice and Procedure § 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, the terms of any condition imposed in writing by the OCC 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; and (12) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued thereunder; (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 FDI Act (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. § 19.2 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 (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. § 19.3 Definitions. For purposes of this part, unless explicitly stated to the contrary: (a) Administrative law judge (b) Adjudicatory proceeding (c) Comptroller (d) Decisional employee (e) Enforcement Counsel (f) Final order (g) Institution (h) Institution-affiliated party (i) Local Rules (j) OCC (k) OFIA (l) Party (m) Person (n) Respondent (o) Uniform Rules (p) Violation § 19.4 Authority of the Comptroller. The Comptroller 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 administrative law judge. § 19.5 Authority of the administrative law judge. (a) General rule. (b) Powers. (1) To administer oaths and affirmations; (2) To issue subpoenas, subpoenas duces tecum, and protective 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 § 19.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Comptroller shall have 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 Comptroller a recommended decision as provided herein; (9) To recuse himself or herself by motion made by a party or on his or her 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 a presiding officer. § 19.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the OCC or an administrative law judge By attorneys. (2) By non-attorneys. (3) Notice of appearance. pro se (b) Sanctions. § 19.7 Good faith certification. (a) General requirement. (b) Effect of signature. (2) If a filing or submission of record is not signed, the administrative law judge shall strike the filing or submission of record, unless it is signed promptly after the omission is called to the attention of the pleader or movant. (c) Effect of making oral motion or argument. § 19.8 Conflicts of interest. (a) Conflict of interest in representation. (b) Certification and waiver. (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. § 19.9 Ex parte communications. (a) Definition Ex parte communication (i) An interested person outside the OCC (including such person's counsel); and (ii) The administrative law judge handling that proceeding, the Comptroller, or a decisional employee. (2) Exception. (b) Prohibition of ex parte communications. (1) No interested person outside the OCC shall make or knowingly cause to be made an ex parte communication to the Comptroller, the administrative law judge, or a decisional employee; and (2) The Comptroller, administrative law judge, or decisional employee shall not make or knowingly cause to be made to any interested person outside the OCC any ex parte communication. (c) Procedure upon occurrence of ex parte communication. (d) Sanctions. (e) Separation of functions. § 19.10 Filing of papers. (a) Filing. (b) Manner of filing. (1) Personal service; (2) Delivering the papers to a reliable commercial courier service, overnight delivery service, or to the U.S. Post Office for Express Mail delivery; (3) Mailing the papers by first class, registered, or certified mail; or (4) Transmission by electronic media, only if expressly authorized, and upon any conditions specified, by the Comptroller or the administrative law judge. All papers filed by electronic media shall also concurrently be filed in accordance with paragraph (c) of this section. (c) Formal requirements as to papers filed Form. 1/2 (2) Signature. (3) Caption. (4) Number of copies. § 19.11 Service of papers. (a) By the parties. (b) Method of service. (1) Personal service; (2) Delivering the papers to a reliable commercial courier service, overnight delivery service, or to the U.S. Post Office for Express Mail delivery; (3) Mailing the papers by first class, registered, or certified mail; or (4) Transmission by electronic media, only if the parties mutually agree. Any papers served by electronic media shall also concurrently be served in accordance with the requirements of § 19.10(c). (c) By the Comptroller or the administrative law judge. (2) If a party has not appeared in the proceeding in accordance with § 19.6, the Comptroller or the administrative law judge shall make service by any of the following methods: (i) By personal service; (ii) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works; (iii) If the person to be served is a corporation or other association, by delivery to an officer, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the party; (iv) By registered or certified mail addressed to the person's last known address; or (v) By any other method reasonably calculated to give actual notice. (d) Subpoenas. (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, 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 addressed to the person's last known address; or (5) By any other method reasonably calculated to give actual notice. (e) Area of service. § 19.12 Construction of time limits. (a) General rule. (b) When papers are deemed to be filed or served. (i) In the case of personal service or same day commercial courier delivery, upon actual service; (ii) In the case of overnight commercial delivery service, U.S. Express Mail delivery, or first class, registered, or certified mail, upon deposit in or delivery to an appropriate point of collection; (iii) In the case of transmission by electronic media, as specified by the authority receiving the filing, in the case of filing, and as agreed among the parties, in the case of service. (2) The effective filing and service dates specified in paragraph (b)(1) of this section may be modified by the Comptroller or administrative law judge 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. (1) If service is made by first class, registered, or certified mail, add three calendar days to the prescribed period; (2) If service is made by express mail or overnight delivery service, add one calendar day to the prescribed period; or (3) If service is made by electronic media transmission, add one calendar day to the prescribed period, unless otherwise determined by the Comptroller or the administrative law judge in the case of filing, or by agreement among the parties in the case of service. § 19.13 Change of time limits. Except as otherwise provided by law, the administrative law judge 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 Comptroller pursuant to § 19.38, the Comptroller 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 Comptroller's or the administrative law judge's own motion. § 19.14 Witness fees and expenses. Witnesses subpoenaed for testimony or depositions shall be paid the same fees for attendance and mileage as are paid in the United States district courts in proceedings in which the United States is a party, provided that, in the case of a discovery subpoena addressed to a party, no witness fees or mileage need be paid. Fees for witnesses shall be tendered in advance by the party requesting the subpoena, except that fees and mileage need not be tendered in advance where the OCC is the party requesting the subpoena. The OCC shall not be required to pay any fees to, or expenses of, any witness not subpoenaed by the OCC. § 19.15 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. No such offer or proposal shall be made to any OCC representative other than 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. § 19.16 OCC's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the OCC to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the OCC to conduct or continue any form of investigation authorized by law. § 19.17 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 shall continue without regard to the pendency of that court proceeding. No default or other failure to act as directed in the adjudicatory proceeding within the times prescribed in this subpart shall be excused based on the pendency before any court of any interlocutory appeal or collateral attack. § 19.18 Commencement of proceeding and contents of notice. (a) Commencement of proceeding. (ii) The notice must be served by the Comptroller upon the respondent and given to any other appropriate financial institution supervisory authority where required by law. (iii) The notice must be filed 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 Comptroller. (b) Contents of notice. (1) The legal authority for the proceeding and for the OCC's jurisdiction over the proceeding; (2) A statement of the matters of fact or law showing that the OCC 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 shall be filed with OFIA. § 19.19 Answer. (a) When. (b) Content of answer. (c) Default Effect of failure to answer. (2) Effect of failure to request a hearing in civil money penalty proceedings. § 19.20 Amended pleadings. (a) Amendments. (b) Amendments to conform to the evidence. § 19.21 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 administrative law judge shall file with the Comptroller a recommended decision containing the findings and the relief sought in the notice. § 19.22 Consolidation and severance of actions. (a) Consolidation. (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. (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. § 19.23 Motions. (a) In writing. (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 administrative law judge. 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. (c) Filing of motions. (d) Responses. (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. (f) Dispositive motions. § 19.24 Scope of document discovery. (a) Limits on discovery. (2) Discovery by use of deposition is governed by subpart I of this part. (3) Discovery by use of interrogatories is not permitted. (b) Relevance. (c) Privileged matter. (d) Time limits. § 19.25 Request for document discovery from parties. (a) General rule. (b) Production or copying. (c) Obligation to update responses. (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. (2) The party who served the request that is the subject of a motion to strike or limit may file a written response within five days of service of the motion. No other party may file a response. (e) Privilege. (f) Motions to compel production. (2) The party who asserted the privilege or failed to comply with the request may file a written response to a motion to compel within five days of service of the motion. No other party may file a response. (g) Ruling on motions. (h) Enforcing discovery subpoenas. § 19.26 Document subpoenas to nonparties. (a) General rules. (2) A party shall only apply for a document subpoena under this section within the time period during which such party could serve a discovery request under § 19.24(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 administrative law judge shall promptly issue any document subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she 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. (b) Motion to quash or modify. (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 § 19.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 19.27 Deposition of witness unavailable for hearing. (a) General rules. (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 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 or such other convenient place as the administrative law judge shall fix. (3) Any requested subpoena that sets forth a valid basis for its issuance must be promptly issued, unless the administrative law judge on his or her own motion, 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 administrative law judge orders otherwise, no deposition under this section shall be taken on fewer than ten days' notice to the witness and all parties. Deposition subpoenas may be served 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 as otherwise permitted by law. (b) Objections to deposition subpoenas. (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. (2) Any party may move before the administrative law judge 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 shall certify that the transcript is a true and complete transcript of the deposition. (d) Enforcing subpoenas. § 19.28 Interlocutory review. (a) General rule. (b) Scope of review. (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. (d) Suspension of proceeding. § 19.29 Summary disposition. (a) In general. (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. (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 support his or her 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 he or she 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. (d) Decision on motion. § 19.30 Partial summary disposition. If the administrative law judge determines that a party is entitled to summary disposition as to certain claims only, he or she shall defer submitting a recommended decision as to those claims. A hearing on the remaining issues must be ordered. Those claims for which the administrative law judge has determined that summary disposition is warranted will be addressed in the recommended decision filed at the conclusion of the hearing. § 19.31 Scheduling and prehearing conferences. (a) Scheduling conference. (b) Prehearing conferences. (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. (d) Scheduling or prehearing orders. § 19.32 Prehearing submissions. (a) Within the time set by the administrative law judge, but in no case later than 14 days before the start of the hearing, each party shall serve on every other party, his or her: (1) Prehearing statement; (2) Final list of witnesses to be called to testify at the hearing, including name and address of each witness and a short summary of the expected testimony of each witness; (3) List of the exhibits to be introduced at the hearing along with a copy of each exhibit; and (4) Stipulations of fact, if any. (b) Effect of failure to comply. No witness may testify and no exhibits may be introduced at the hearing if such witness or exhibit is not listed in the prehearing submissions pursuant to paragraph (a) of this section, except for good cause shown. § 19.33 Public hearings. (a) General rule. (b) Filing document under seal. § 19.34 Hearing subpoenas. (a) Issuance. duces tecum (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 administrative law judge. (3) The administrative law judge shall promptly issue any hearing subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she 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 administrative law judge, the party making the application shall serve the subpoena on the person named in the subpoena and on each party. (b) Motion to quash or modify. (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. § 19.35 Conduct of hearings. (a) General rules. (2) Order of hearing. Enforcement Counsel shall present its case-in-chief first, unless otherwise ordered by the administrative law judge, or unless otherwise expressly specified by law or regulation. Enforcement Counsel shall be the first party to present an opening statement and a closing statement, and may make a rebuttal statement after the respondent's closing statement. If there are multiple respondents, respondents may agree among themselves as to their order of presentation of their cases, but if they do not agree, the administrative law judge shall 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 administrative law judge 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 administrative law judge 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. § 19.36 Evidence. (a) Admissibility. (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. (2) All matters officially noticed by the administrative law judge or the Comptroller shall appear on the record. (3) If official notice is requested or taken of any material fact, the parties, upon timely request, shall be afforded an opportunity to object. (c) Documents. (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. (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 administrative law judge's discretion, be used with or without being admitted into evidence. (d) Objections. (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 he or she expected to prove by the expected testimony of the witness either by representation of counsel or by direct interrogation of the witness. (3) The administrative law judge shall retain rejected exhibits, adequately marked for identification, for the record, and transmit such exhibits to the Comptroller. (4) Failure to object to admission of evidence or to any ruling constitutes a waiver of the objection. (e) Stipulations. (f) Depositions of unavailable witnesses. (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 administrative law judge 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. § 19.37 Post-hearing filings. (a) Proposed findings and conclusions and supporting briefs. (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 administrative law judge 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. (c) Simultaneous filing required. § 19.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 19.39 Exceptions to recommended decision. (a) Filing exceptions. (b) Effect of failure to file or raise exceptions. (2) No exception need be considered by the Comptroller if the party taking exception had an opportunity to raise the same objection, issue, or argument before the administrative law judge and failed to do so. (c) Contents. (2) All exceptions and briefs in support of exceptions must set forth page or paragraph references to the specific parts of the administrative law judge'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. § 19.40 Review by the Comptroller. (a) Notice of submission to the Comptroller. (b) Oral argument before the Comptroller. (c) Comptroller's final decision. (2) The Comptroller shall 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 Comptroller orders that the action or any aspect thereof be remanded to the administrative law judge for further proceedings. Copies of the final decision and order of the Comptroller shall be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Comptroller or required by statute, upon any appropriate state or Federal supervisory authority. § 19.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the Comptroller may not, unless specifically ordered by the Comptroller or a reviewing court, operate as a stay of any order issued by the Comptroller. The Comptroller may, in his or her discretion, and on such terms as he or she 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. Subpart B—Procedural Rules for OCC Adjudications § 19.100 Filing documents. All materials required to be filed with or referred to the Comptroller or the administrative law judge in any proceeding under this part must be filed with the Hearing Clerk, Office of the Comptroller of the Currency, Washington, DC 20219. Filings to be made with the Hearing Clerk include the notice and answer; motions and responses to motions; briefs; the record filed by the administrative law judge after the issuance of a recommended decision; the recommended decision filed by the administrative law judge following a motion for summary disposition; referrals by the administrative law judge of motions for interlocutory review; exceptions and requests for oral argument; and any other papers required to be filed with the Comptroller or the administrative law judge under this part. § 19.101 Delegation to OFIA. Unless otherwise ordered by the Comptroller, administrative adjudications subject to subpart A of this part shall be conducted by an administrative law judge assigned to OFIA. Subpart C—Removals, Suspensions, and Prohibitions When a Crime Is Charged or a Conviction Is Obtained § 19.110 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 12 U.S.C. 1818(g) by a notice or order issued by the Comptroller. § 19.111 Suspension, removal, or prohibition. 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. A copy of such notice or order will be served on any depository institution that the subject of the notice or order is affiliated with at the time the notice or order is issued, whereupon the institution-affiliated party involved 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, to be received by the OCC within 30 days from the date that the institution-affiliated party was served with such notice or order, 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 written request must be sent by certified mail to, or served personally with a signed receipt on, the District Deputy Comptroller in the OCC district in which the bank in question is located; if the bank is supervised by Large Bank Supervision, to the Senior Deputy Comptroller for Large Bank Supervision for the Office of the Comptroller of the Currency; if the bank is supervised by Mid-Size/Community Bank Supervision, to the Senior Deputy Comptroller for Mid-Size/Community Bank Supervision for the Office of the Comptroller of the Currency; or if the institution-affiliated party is no longer affiliated with a particular national bank, to the Deputy Comptroller for Special Supervision, Washington, DC 20219. The request must state specifically the relief desired and the grounds on which that relief is based. For purposes of this section, the term depository institution § 19.112 Informal hearing. (a) Issuance of hearing order. (b) Appointment of presiding officer. (c) Waiver of oral hearing Petitioner. (2) OCC. (d) Hearing procedures Conduct of hearing. (2) Powers of the presiding officer. (3) Presentation. (ii) If the petitioner or the appointed OCC attorney desires to present oral testimony or witnesses at the hearing, he or she 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 permitted by the presiding officer. The names of proposed witnesses should be included, 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, shall be sworn. (iii) In deciding on any suspension, the presiding officer shall not consider the ultimate question of the guilt or innocence of the individual with respect to the criminal charges which are outstanding. In deciding on any removal, the presiding officer shall not consider challenges to or efforts to impeach the validity of the conviction. The presiding officer may consider facts in either situation, however, which show the nature of the events on which the indictment or conviction was based. (4) Record. § 19.113 Recommended and final decisions. (a) The presiding officer must issue a recommended decision to the Comptroller within 20 days of the conclusion of the hearing or, when the petitioner has waived an oral hearing, within 20 days of the date fixed for the hearing. The presiding officer must serve promptly a copy of the recommended decision on the parties to the proceeding. The decision must include a summary of the facts and arguments of the parties. (b) Each party may, within ten days of being served with the presiding officer's recommended decision, submit to the Comptroller comments on the recommended decision. (c) Within 60 days of the conclusion of the hearing or, when the petitioner has waived an oral hearing, within 60 days from the date fixed for the hearing, the Comptroller must notify the petitioner by registered mail whether the suspension or removal from office, and prohibition from participation in any manner in the affairs of any depository institution, will be affirmed, terminated, or modified. The Comptroller's decision must include a statement of reasons supporting the decision. The Comptroller's decision is a final and unappealable order. (d) A finding of not guilty or other disposition of the charge on which a notice of suspension was based does not preclude the Comptroller from thereafter instituting removal proceedings pursuant to section 8(e) of the FDIA (12 U.S.C. 1818(e)) and subpart: A of this part. (e) A removal or prohibition by order remains in effect until terminated by the Comptroller. A suspension or prohibition by notice remains in effect until the criminal charge is disposed of or until terminated by the Comptroller. (f) A suspended or removed individual may petition the Comptroller to reconsider the decision any time after the expiration of a 12-month period from the date of the decision, but no petition for reconsideration may be made within 12 months of a previous petition. The petition must state specifically the relief sought and the grounds therefor, and may be accompanied by a supporting memorandum and any other documentation the petitioner wishes to have considered. No hearing need be granted on the petition for reconsideration. Subpart D—Exemption Hearings Under Section 12(h) of the Securities Exchange Act of 1934 § 19.120 Scope. The rules in this subpart 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 Exchange Act (15 U.S.C. 78 l l l § 19.121 Application for exemption. An issuer or an individual (officer, director or shareholder) may submit a written application for an exemption order to the Securities and Corporate Practices Division, Office of the Comptroller of the Currency, Washington, DC 20219. The application must specify the type of exemption sought and the reasons therefor, including an explanation of why an exemption would not be inconsistent with the public interest or the protection of investors. The Securities and Corporate Practices Division shall inform the applicant in writing whether a hearing will be held to consider the matter. § 19.122 Newspaper notice. Upon being informed that an application will be considered at a hearing, the applicant shall 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 the Securities and Corporate Practices Division, 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 shall promptly furnish a copy of the notice to the Securities and Corporate Practices Division, and to bank shareholders. § 19.123 Informal hearing. (a) Conduct of proceeding. (b) Notice of hearing. (c) Presiding officer. (d) Attendance. (e) Order of presentation. (2) The applicant shall 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. (3) After the above presentations, the applicant, followed by one or more of the hearing participants, may make concise summary statements reviewing their position. (f) Witnesses. (g) Evidence. (h) Transcript. § 19.124 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 shall notify the 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 which specifies the type of exemption granted and its terms and conditions. Subpart E—Disciplinary Proceedings Involving the Federal Securities Laws § 19.130 Scope. (a) Except as provided in this subpart, 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: (1) A bank which is a municipal securities dealer, or any person associated or seeking to become associated with such a municipal securities dealer; (2) A bank which is a government securities broker or dealer, or any person associated with such government securities broker or dealer; or (3) A bank which is a transfer agent, or any person associated or seeking to become associated with such transfer agent. (b) In addition to the issuance of disciplinary orders after opportunity for hearing, the Comptroller or the Comptroller's delegate 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, and other subparts of this part against the following: (1) The parties listed in paragraph (a) of this section; and (2) A bank which is a clearing agency. (c) Nothing in this subpart impairs the powers conferred on the Comptroller by other provisions of law. § 19.131 Notice of charges and answer. (a) 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 party served with a notice of charges may file an answer as prescribed in § 19.19. Any party who fails to appear at a hearing personally or by a duly authorized representative shall be deemed to have consented to the issuance of a disciplinary order. (b) All proceedings under this subpart must be commenced, and the notice of charges must be filed, on a public basis, unless otherwise ordered by the Comptroller. Pursuant to § 19.33(a), a request for a private hearing may be filed within 20 days of service of the notice. § 19.132 Disciplinary orders. (a) In the event of consent, or if on the record filed by the administrative law judge, 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: (1) Censure, limit the activities, functions or operations, or suspend or revoke the registration of a bank which is a municipal securities dealer; (2) Censure, suspend or bar any person associated or seeking to become associated with a municipal securities dealer; (3) Censure, limit the activities, functions or operations, or suspend or bar a bank which is a government securities broker or dealer; (4) Censure, limit the activities, functions or operations, or suspend or bar any person associated with a government securities broker or dealer; (5) Deny registration to, limit the activities, functions, or operations or suspend or revoke the registration of a bank which is a transfer agent; or (6) Censure or limit the activities or functions, or suspend or bar, any person associated or seeking to become associated with a transfer agent. (b) A disciplinary order is effective when served on the party or parties involved and remains effective and enforceable until it is stayed, modified, terminated, or set aside by action of the Comptroller or a reviewing court. § 19.135 Applications for stay or review of disciplinary actions imposed by registered clearing agencies. (a) Stays. (b) Reviews. Subpart F—Civil Money Penalty Authority Under the Securities Laws § 19.140 Scope. (a) Except as provided in this subpart, 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 which is a municipal securities dealer, or any person associated or seeking to become associated with such a municipal securities dealer; (2) A bank which is a government securities broker or dealer, or any person associated with such government securities broker or dealer; or (3) A bank which is a transfer agent, or any person associated or seeking to become associated with such transfer agent. (b) All proceedings under this subpart must be commenced, and the notice of assessment must be filed, on a public basis, unless otherwise ordered by the Comptroller. Pursuant to § 19.33(a), any request for a private hearing must be filed within 20 days of service of the notice. Subpart G—Cease-and-Desist Authority Under the Securities Laws § 19.150 Scope. (a) Except as provided in this subpart, 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. 78 l l, (b) All proceedings under this subpart must be commenced, and the notice of charges must be filed, on a public basis, unless otherwise ordered by the Comptroller. Pursuant to § 19.33(a), any request for a private hearing must be filed within 20 days of service of the notice. Subpart H—Change in Bank Control § 19.160 Scope. (a) Section 7(j) of the FDIA (12 U.S.C. 1817(j)) 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 decides that the acquisition should be disapproved, the agency shall mail a written notification to the proposed acquiring person in writing within three days of the decision. The party can then request an agency hearing on the proposed acquisition. The OCC's procedures for reviewing notices of proposed acquisitions in change-in-control proceedings are set forth in § 5.50 of this chapter. (b) Unless otherwise provided in this subpart, the rules in subpart A of this part set forth the procedures applicable to requests for OCC hearings. § 19.161 Notice of disapproval and hearing initiation. (a) Notice of disapproval. (1) Contain a statement of the basis for the disapproval; and (2) Indicate that the filer may request a hearing. (b) Hearing request. (1) Be in writing; and (2) Be filed with the Hearing Clerk of the OCC within ten days after service on the filer of the notice of disapproval. If a filer fails to request a hearing with a timely written request, the notice of disapproval constitutes a final and unappealable order. (c) Hearing order. (1) The legal authority for the proceeding and for the OCC's jurisdiction over the proceeding; (2) The matters of fact or law upon which the disapproval is based; and (3) The requirement for filing an answer to the hearing order with OFIA within 20 days after service of the hearing order. (d) Answer. (e) Effect of failure to answer. Subpart I—Discovery Depositions and Subpoenas § 19.170 Discovery depositions. (a) General rule. (b) Notice. (c) Time limits. (d) Conduct of the deposition. (e) Recording the testimony Generally. (i) By stenotype machine or electronic sound recording device; (ii) Upon agreement of the parties, by any other method; or (iii) For good cause and with leave of the administrative law judge, by any other method. (2) Cost. (3) Transcript. (f) Protective orders. (1) Is unreasonable, oppressive, excessive in scope, or unduly burdensome; (2) Involves privileged, irrelevant, or immaterial matters; (3) Involves unwarranted attempts to pry into a party's preparation for trial; or (4) Is being conducted in bad faith or in such manner as to unreasonably annoy, embarrass, or oppress the witness. (g) Fees. § 19.171 Deposition subpoenas. (a) Issuance. (b) Service Methods of service. (2) Proof of service. (c) Motion to quash. (d) Enforcement of deposition subpoena. Subpart J—Formal Investigations § 19.180 Scope. This subpart and § 19.8 apply to formal investigations initiated by order of the Comptroller or the Comptroller's delegate and pertain to the exercise of powers specified in 12 U.S.C. 481, 1818(n) and 1820(c), 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 banks and their affiliates. § 19.181 Confidentiality of formal investigations. Information or documents obtained 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. § 19.182 Order to conduct a formal investigation. A formal investigation begins with the issuance of an order signed by the Comptroller or the Comptroller's delegate. The order must designate the person or persons who will conduct the investigation. Such persons are authorized, among other things, to issue subpoenas duces tecum, to administer oaths, and receive affirmations as to any matter under investigation by the Comptroller. Upon application and for good cause shown, the Comptroller may limit, modify, or withdraw the order at any stage of the proceedings. § 19.183 Rights of witnesses. (a) Any person who is compelled or requested to furnish testimony, documentary evidence, or other information with respect to any matter under formal investigation shall, on request, be shown the order initiating the investigation. (b) Any person who, in a formal investigation, is compelled to appear and testify, or who appears and testifies by request or permission of the Comptroller, 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 briefly at the conclusion of testimony to clarify any of the answers given; and (3) Make summary notes during the testimony solely for the use of the person. (c) 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. (d) 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. (e) Any designated representative conducting an investigative proceeding shall 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. The Comptroller may take such action as the circumstances warrant, including exclusion of the offending individual or individuals from participation in the proceedings. § 19.184 Service of subpoena and payment of witness expenses. (a) Methods of service. (b) Expenses. Subpart K—Parties and Representational Practice Before the OCC; Standards of Conduct § 19.190 Scope. This subpart contains rules relating to parties and representational practice before the OCC. This subpart includes the imposition of sanctions by the administrative law judge, any other presiding officer appointed pursuant to subparts C and D of this part, or the Comptroller against parties or their counsel in an adjudicatory proceeding under this part. This subpart also covers other disciplinary sanctions—censure, suspension or debarment—against individuals who appear before the OCC in a representational capacity either in an adjudicatory proceeding under this part or in any other matters connected with presentations to the OCC relating to a client's rights, privileges, or liabilities. This representation includes, but is not limited to, the practice of attorneys and accountants. Employees of the OCC are not subject to disciplinary proceedings under this subpart. § 19.191 Definitions. As used in §§ 19.190 through 19.201, the following terms shall have the meaning given in this section unless the context otherwise requires: (a) Practice before the OCC (b) Attorney (c) Accountant § 19.192 Sanctions relating to conduct in an adjudicatory proceeding. (a) General rule. (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. (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 contesting specific issues or findings; (4) Precluding the party from offering certain evidence or from challenging or contesting certain evidence offered by another party; (5) Precluding the party from making a late filing or conditioning a late filing on any terms that are just; and (6) Assessing reasonable expenses, including attorney's fees, incurred by any other party as a result of the improper action or failure to act. (c) Procedure for imposition of sanctions. (2) No sanction authorized by this section, other than refusal to accept late filings, shall be imposed without prior notice to all parties and an opportunity for any party 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 administrative law judge or other presiding officer directs. The administrative law judge or other presiding officer may limit the opportunity to be heard to an opportunity of a party or a party's representative to respond orally immediately after the act or inaction covered by this section is noted by the administrative law judge or other presiding officer. (3) Requests for the imposition of sanctions by any party, and the imposition of sanctions, are subject to interlocutory review pursuant to § 19.25 in the same manner as any other ruling. (d) Section not exclusive. § 19.193 Censure, suspension or debarment. The Comptroller may censure an individual or suspend or debar such individual from practice before the OCC if he or she is incompetent in representing a client's rights or interest in a significant matter before the OCC; or engages, or has engaged, in disreputable conduct; or refuses to comply with the rules and regulations in this part; or with intent to defraud in any manner, willfully and knowingly deceives, misleads, or threatens any client or prospective client. The suspension or debarment of an individual may be initiated only upon a finding by the Comptroller that the basis for the disciplinary action is sufficiently egregious. § 19.194 Eligibility of attorneys and accountants to practice. (a) Attorneys. (b) Accountants. § 19.195 Incompetence. Incompetence in the representation of a client's rights and interests in a significant matter before the OCC is grounds for suspension or debarment. The term “incompetence” encompasses conduct that reflects a lack of the knowledge, judgment and skill that a professional would ordinarily and reasonably be expected to exercise in adequately representing the rights and interests of a client. Such conduct includes, but is not limited to: (a) Handling a matter which the individual knows or should know that he or she is not competent to handle, without associating with a professional who is competent to handle such matter. (b) Handling a matter without adequate preparation under the circumstances. (c) Neglect in a matter entrusted to him or her. § 19.196 Disreputable conduct. Disreputable conduct for which an individual may be censured, debarred, or suspended from practice before the OCC includes: (a) Willfully or recklessly violating or willfully or recklessly aiding and abetting the violation of any provision of the Federal banking or applicable securities laws or the rules and regulations thereunder or conviction of any offense involving dishonesty or breach of trust; (b) Knowingly or recklessly giving false or misleading information, or participating in any way in the giving of false information to the OCC or any officer or employee thereof, or to any tribunal authorized to pass upon matters administered by the OCC in connection with any matter pending or likely to be pending before it. The term “information” includes facts or other statements contained in testimony, financial statements, applications for enrollment, affidavits, declarations, or any other document or written or oral statement; (c) Directly or indirectly attempting to influence, or offering or agreeing to attempt to influence, the official action of any officer or employee of the OCC by the use of threats, false accusations, duress or coercion, by the offer of any special inducement or promise of advantage or by the bestowing of any gift, favor, or thing of value. (d) Disbarment or suspension from practice as an attorney, or debarment or suspension from practice 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. (e) Knowingly aiding or abetting another individual to practice before the OCC during that individual's period of suspension, debarment, or ineligibility. (f) Contemptuous conduct in connection with practice before the OCC, and knowingly making false accusations and statements, or circulating or publishing malicious or libelous matter. (g) Suspension, debarment or removal from practice before the Board of Governors, the FDIC, the OTS, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or any other Federal or state agency; and (h) Willful violation of any of the regulations contained in this part. § 19.197 Initiation of disciplinary proceeding. (a) Receipt of information. (b) Censure without formal proceeding. (c) Institution of formal disciplinary proceeding. § 19.198 Conferences. (a) General. (b) Resignation or voluntary suspension. § 19.199 Proceedings under this subpart. Any hearing held under this subpart is held before an administrative law judge pursuant to procedures set forth in subpart A of this part. The Comptroller or the Comptroller's delegate shall appoint a person to represent the OCC in the hearing. Any person having prior involvement in the matter which is the basis for the suspension or debarment proceeding is disqualified from representing the OCC in the hearing. The hearing will be closed to the public unless the Comptroller on his or her own initiative, or on the request of a party, otherwise directs. The administrative law judge shall issue a recommended decision to the Comptroller who shall issue the final decision and order. The Comptroller may censure, debar or suspend an individual, or take such other disciplinary action as the Comptroller deems appropriate. § 19.200 Effect of suspension, debarment or censure. (a) Debarment. (b) S uspension. (c) Censure. (d) Notice of debarment or suspension. § 19.201 Petition for reinstatement. At the expiration of the period of time designated in the order of debarment, the Comptroller may entertain a petition for reinstatement from any person debarred from practice before the OCC. The Comptroller may grant reinstatement only if satisfied that the petitioner is likely to act in accordance with the regulations in this part, and that granting reinstatement would not be contrary to the public interest. Any request for reinstatement shall be limited to written submissions unless the Comptroller, in his or her discretion, affords the petitioner a hearing. Subpart L—Equal Access to Justice Act § 19.210 Scope. The Equal Access to Justice Act regulations applicable to formal OCC adjudicatory proceedings under this part are set forth at 31 CFR part 6. Subpart M—Procedures for Reclassifying a Bank Based on Criteria Other Than Capital § 19.220 Scope. This subpart applies to the procedures afforded to any bank that has been reclassified to a lower capital category by a notice or order issued by the OCC pursuant to section 38 of the Federal Deposit Insurance Act and this part. § 19.221 Reclassification of a bank based on unsafe or unsound condition or practice. (a) Issuance of notice of proposed reclassification Grounds for reclassification. (A) The OCC determines that the bank is in an unsafe or unsound condition; or (B) The OCC deems the bank 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) shall hereinafter be referred to as “reclassification.” (2) Prior notice to institution. (b) Contents of notice. (1) A statement of the bank's capital measures and capital levels and the category to which the bank would be reclassified; (2) The reasons for reclassification of the bank; (3) The date by which the bank subject to the notice of reclassification may file with the OCC a written appeal of the proposed reclassification and a request for a hearing, which shall 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 bank or other relevant circumstances. (c) Response to notice of proposed reclassification. (1) An explanation of why the bank 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 bank or company regarding the reclassification. (d) Failure to file response. (e) Request for hearing and presentation of oral testimony or witnesses. (f) Order for informal hearing. (g) Hearing procedures. (2) The informal hearing shall be recorded, and a transcript furnished to the bank upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). The presiding officer(s) may ask questions of any witness. (3) 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). (i) Time for decision. § 19.222 Request for rescission of reclassification. Any bank that has been reclassified under part 6 of this chapter and this subpart, may, upon a change in circumstances, request in writing that the OCC reconsider the reclassification, and may propose that the reclassification be rescinded and that any directives issued in connection with the reclassification be modified, rescinded, or removed. Unless otherwise ordered by the OCC, the bank shall remain subject to the reclassification and to any directives issued in connection with that reclassification while such request is pending before the OCC. Subpart N—Order To Dismiss a Director or Senior Executive Officer § 19.230 Scope. This subpart applies to informal hearings afforded to any director or senior executive officer dismissed pursuant to an order issued under 12 U.S.C. 1831o and part 6 of this chapter. § 19.231 Order to dismiss a director or senior executive officer. (a) Service of notice. (b) Response to directive Request for reinstatement. (2) Contents of request; informal hearing. (3) Effective date. (c) Order for informal hearing. (d) Hearing procedures. (2) The informal hearing shall be recorded, and a transcript furnished to the Respondent upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). The presiding officer(s) may ask questions of any witness. (3) 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. (1) To become adequately capitalized, to the extent that the directive was issued as a result of the bank'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 bank based on supervisory criteria other than capital, pursuant to section 38(g) of the FDI Act. (f) Recommendation of presiding officer. (g) Time for decision. Subpart O—Civil Money Penalty Adjustments § 19.240 Inflation adjustments. (a) Statutory formula to calculate inflation adjustments. (b) Notice of inflation adjustments. Federal Register Subpart P—Removal, Suspension, and Debarment of Accountants From Performing Audit Services § 19.241 Scope. This subpart, which implements section 36(g)(4) of the FDIA (12 U.S.C. 1831m(g)(4)), provides rules and procedures for the removal, suspension, or debarment of independent public accountants and their accounting firms from performing independent audit and attestation services required by section 36 of the FDIA (12 U.S.C. 1831m) for insured national banks, insured Federal savings associations, and insured Federal branches of foreign banks. § 19.242 Definitions. As used in this subpart, the following terms have the meaning given below unless the context requires otherwise: (a) Accounting firm (b) Audit services (c) Independent public accountant (accountant) § 19.243 Removal, suspension, or debarment. (a) Good cause for removal, suspension, or debarment Individuals. (i) Lacks the requisite qualifications to perform audit services; (ii) Has knowingly or recklessly engaged in conduct that results in a violation of applicable professional standards, including those standards and conflicts of interest provisions applicable to accountants through the Sarbanes-Oxley Act of 2002, Public Law 107-204, 116 Stat. 745 (2002) (Sarbanes-Oxley Act), and developed by the Public Company Accounting Oversight Board and the Securities and Exchange Commission; (iii) Has engaged in negligent conduct in the form of: (A) A single instance of highly unreasonable conduct that results in a violation of applicable professional standards in circumstances in which an accountant knows, or should know, that heightened scrutiny is warranted; or (B) Repeated instances of unreasonable conduct, each resulting in a violation of applicable professional standards, that indicate a lack of competence to perform audit services; (iv) Has knowingly or recklessly given false or misleading information, or knowingly or recklessly participated in any way in the giving of false or misleading information, to the OCC or any officer or employee of the OCC; (v) Has engaged in, or aided and abetted, a material and knowing or reckless violation of any provision of the Federal banking or securities laws or the rules and regulations thereunder, or any other law; (vi) Has been removed, suspended, or debarred from practice before any Federal or State agency regulating the banking, insurance, or securities industries, other than by an action listed in § 19.244, on grounds relevant to the provision of audit services; or (vii) Is suspended or debarred for cause from practice as an accountant by any duly constituted licensing authority of any State, possession, commonwealth, or the District of Columbia. (2) Accounting firms. (i) The gravity, scope, or repetition of the act or failure to act that constitutes good cause for the removal, suspension, or debarment; (ii) The adequacy of, and adherence to, applicable policies, practices, or procedures for the accounting firm's conduct of its business and the performance of audit services; (iii) The selection, training, supervision, and conduct of members or employees of the accounting firm involved in the performance of audit services; (iv) The extent to which managing partners or senior officers of the accounting firm have participated, directly, or indirectly through oversight or review, in the act or failure to act; and (v) The extent to which the accounting firm has, since the occurrence of the act or failure to act, implemented corrective internal controls to prevent its recurrence. (3) Limited scope orders. (4) Remedies not exclusive. (b) Proceedings to remove, suspend, or debar Initiation of formal removal, suspension, or debarment proceedings. (2) Hearings under paragraph (b) of this section. (c) Immediate suspension from performing audit services In general. (i) Has a reasonable basis to believe that the accountant or firm has engaged in conduct (specified in the notice served on the accountant or firm under paragraph (b) of this section) that would constitute grounds for removal, suspension, or debarment under paragraph (a) of this section; (ii) Determines that immediate suspension is necessary to avoid immediate harm to an insured depository institution or its depositors or to the depository system as a whole; and (iii) Serves such respondent with written notice of the immediate suspension. (2) Procedures. (3) Petition for stay. (4) Hearing on petition. (5) Decision on petition. (6) Review of presiding officer's decision. § 19.244 Automatic removal, suspension, or debarment. (a) An independent public accountant or accounting firm may not perform audit services for insured national banks, insured Federal savings associations, or insured Federal branches of foreign banks if the accountant or firm: (1) Is subject to a final order of removal, suspension, or debarment (other than a limited scope order) issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the former Office of Thrift Supervision under section 36 of the FDIA (12 U.S.C. 1831m). (2) Is subject to a temporary suspension or permanent revocation of registration or a temporary or permanent suspension or bar from further association with any registered public accounting firm issued by the Public Company Accounting Oversight Board or the Securities and Exchange Commission under sections 105(c)(4)(A) or (B) of the Sarbanes-Oxley Act (15 U.S.C. 7215(c)(4)(A) or (B)); or (3) Is subject to an order of suspension or denial of the privilege of appearing or practicing before the Securities and Exchange Commission. (b) Upon written request, the Comptroller, for good cause shown, may grant written permission to such accountant or firm to perform audit services for insured national banks, insured Federal savings associations, or insured Federal branches of foreign banks. The request must contain a concise statement of the action requested. The Comptroller may require the applicant to submit additional information. § 19.245 Notice of removal, suspension, or debarment. (a) Notice to the public. (b) Notice to the Comptroller by accountants and firms. (1) Any currently effective order or other action described in § 19.243(a)(1)(vi) through (vii) or § 19.244(a)(2) and (3); and (2) Any currently effective action by the Public Company Accounting Oversight Board under sections 105(c)(4)(C) or (G) of the Sarbanes-Oxley Act (15 U.S.C. 7215(c)(4)(C) or (G)). (c) Timing of notice. § 19.246 Petition for reinstatement. (a) Form of petition. (b) Procedure. PART 108—REMOVALS, SUSPENSIONS, AND PROHIBITIONS WHERE A CRIME IS CHARGED OR PROVEN Authority: § 108.1 Scope. The rules in this part apply to hearings, which are exempt from the adjudicative provisions of the Administrative Procedure Act, afforded to any officer, director, or other person participating in the conduct of the affairs of a Federal savings association, Federal savings association subsidiary, or affiliate service corporation, where such person has been suspended or removed from office or prohibited from further participation in the conduct of the affairs of one of the aforementioned entities by a Notice or Order served by the OCC upon the grounds set forth in section 8(g) of the Federal Deposit Insurance Act, (12 U.S.C. 1818(g)). § 108.2 Definitions. As used in this part— (a) The term OCC (b) [Reserved] (c) The term Notice (d) The term Order (e) The term association (f) The term subject individual (g) The term petitioner § 108.3 Issuance of Notice or Order. (a) The OCC may issue and serve a Notice upon an officer, director, or other person participating in the conduct of the affairs of an association, where the individual is charged in any information, indictment, or complaint with the commission of or participation in a crime involving dishonesty or breach of trust that is punishable by imprisonment for a term exceeding one year under state or Federal law, if the OCC, upon due deliberation, determines that continued service or participation by the individual may pose a threat to the interests of the association's depositors or may threaten to impair public confidence in the association. The Notice shall remain in effect until the information, indictment, or complaint is finally disposed of or until terminated by the OCC. (b) The OCC may issue and serve an Order upon a subject individual against whom a judgment of conviction, or an agreement to enter a pretrial diversion or other similar program has been rendered, where such judgment is not subject to further appellate review, and the OCC, upon the deliberation, has determined that continued service or participation by the subject individual may pose a threat to the interests of the association's depositors or may threaten to impair public confidence in the association. § 108.4 Contents and service of the Notice or Order. (a) The Notice or Order shall set forth the basis and facts in support of the OCC's issuance of such Notice or Order, and shall inform the subject individual of his right to a hearing, in accordance with this part, for the purpose of determining whether the Notice or Order should be continued, terminated, or otherwise modified. (b) The OCC shall serve a copy of the Notice or Order upon the subject individual and the related association in the manner set forth in § 109.11 of this chapter. (c) Upon receipt of the Notice or Order, the subject individual shall immediately comply with the requirements thereof. § 108.5 Petition for hearing. (a) To obtain a hearing, the subject individual must file two copies of a petition with the OCC within 30 days of being served with the Notice or Order. (b) The petition filed under this section shall admit or deny specifically each allegation in the Notice or Order, unless the petitioner is without knowledge or information, in which case the petition shall so state and the statement shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When a petitioner intends in good faith to deny only a part of or to qualify an allegation, he shall specify so much of it as is true and shall deny only the remainder. (c) The petition shall state whether the petitioner is requesting termination or modification of the Notice or Order, and shall state with particularity how the petitioner intends to show that his continued service to or participation in the conduct of the affairs of the association would not, or is not likely to, pose a threat to the interests of the association's depositors or to impair public confidence in the association. § 108.6 Initiation of hearing. (a) Within 10 days of the filing of a petition for hearing, the OCC shall notify the petitioner of the time and place fixed for hearing, and it shall designate one or more OCC employees to serve as presiding officer. (b) The hearing shall be scheduled to be held no later than 30 days from the date the petition was filed, unless the time is extended at the request of the petitioner. (c) A petitioner may appear personally or through counsel, but if represented by counsel, said counsel is required to comply with § 109.6 of this chapter. (d) A representative(s) of the OCC's Enforcement Division also may attend the hearing and participate therein as a party. § 108.7 Conduct of hearings. (a) Hearings provided by this section are not subject to the adjudicative provisions of the Administrative Procedure Act (5 U.S.C. 554-557). The presiding officer is, however, authorized to exercise all of the powers enumerated in § 109.5 of this chapter. (b) Witnesses may be presented, within time limits specified by the presiding officer, provided that at least 10 days prior to the hearing date, the party presenting the witnesses furnishes the presiding officer and the opposing party with a list of such witnesses and a summary of the proposed testimony. However, the requirement for furnishing such a witness list and summary of testimony shall not apply to the presentation of rebuttal witnesses. The presiding officer may ask questions of any witness, and each party shall have an opportunity to cross-examine any witness presented by an opposing party. (c) Upon the request of either the petitioner or a representative of the Enforcement Division, the record shall remain open for a period of 5 business days following the hearing, during which time the parties may make any additional submissions for the record. Thereafter, the record shall be closed. (d) Following the introduction of all evidence, the petitioner and the representative of the Enforcement Division shall have an opportunity for oral argument; however, the parties may jointly waive the right to oral argument, and, in lieu thereof, elect to submit written argument. (e) All oral testimony and oral argument shall be recorded, and transcripts made available to the petitioner upon payment of the cost thereof. A copy of the transcript shall be sent directly to the presiding officer, who shall have authority to correct the record sua sponte (f) The parties may, in writing, jointly waive an oral hearing and instead elect a hearing upon a written record in which all evidence and argument would be submitted to the presiding officer in documentary form and statements of individuals would be made by affidavit. § 108.8 Default. If the subject individual fails to file a petition for a hearing, 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 § 108.7(d) or (f) of this part, the Notice shall remain in effect until the information, indictment, or complaint is finally disposed of and the Order shall remain in effect until terminated by the OCC. § 108.9 Rules of evidence. (a) Formal rules of evidence shall not apply to a hearing, but the presiding officer may limit the introduction of irrelevant, immaterial, or unduly repetitious evidence. (b) All matters officially noticed by the presiding officer shall appear on the record. § 108.10 Burden of persuasion. The petitioner has the burden of showing, by a preponderance of the evidence, that his or her continued service to or participation in the conduct of the affairs of the association does not, or is not likely to, pose a threat to the interests of the association's depositors or threaten to impair public confidence in the association. § 108.11 Relevant considerations. (a) In determining whether the petitioner has shown that his or her continued service to or participation in the conduct of the affairs of the association would not, or is not likely to, pose a threat to the interests of the association's depositors or threaten to impair public confidence in the association, in order to decide whether the Notice or Order should be continued, terminated, or otherwise modified, the OCC will consider: (1) The nature and extent of the petitioner's participation in the affairs of the association; (2) The nature of the offense with which the petitioner has been charged; (3) The extent of the publicity accorded the indictment and trial; and (4) Such other relevant factors as may be entered on the record. (b) When considering a request for the termination or modification of a Notice, the OCC will not consider the ultimate guilt or innocence of the petitioner with respect to the criminal charge that is outstanding. (c) When considering a request for the termination or modification of an Order which has been issued following a final judgment of conviction against a subject individual, the OCC will not collaterally review such final judgment of conviction. § 108.12 Proposed findings and conclusions and recommended decision. (a) Within 30 days after completion of oral argument or the submission of written argument where oral argument has been waived, the presiding officer shall file with and certify to the OCC for decision the entire record of the hearing, which shall include a recommended decision, the Notice or Order, and all other documents filed in connection with the hearing. (b) The recommended decision shall contain: (1) A statement of the issue(s) presented, (2) A statement of findings and conclusions, and the reasons or basis therefor, on all material issues of fact, law, or discretion presented on the record, and (3) An appropriate recommendation as to whether the suspension, removal, or prohibition should be continued, modified, or terminated. § 108.13 Decision of the OCC. (a) Within 30 days after the recommended decision has been certified to the OCC, the OCC shall issue a final decision. (b) The OCC's final decision shall contain a statement of the basis therefor. The OCC may satisfy this requirement where it adopts the recommended decision of the presiding officer upon finding that the recommended decision satisfies the requirements of § 109.38 of this chapter. (c) The OCC shall serve upon the petitioner and the representative of the Enforcement Division a copy of the OCC's final decision and the related recommended decision. § 108.14 Miscellaneous. The provisions of §§ 109.10, 109.11, and 109.12 of this chapter shall apply to proceedings under this part. PART 109—RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY PROCEEDINGS Authority: Subpart A—Uniform Rules of Practice and Procedure § 109.1 Scope. This subpart prescribes Uniform Rules of practice and procedure with regard to Federal savings associations applicable to adjudicatory proceedings as to which hearings on the record are provided for by 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 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) 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); (2) Section 9 of the HOLA or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1467(d); (3) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and (r); (4) Any provisions of the Change in Bank Control Act, any regulation or order issued thereunder or certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1817(j)(16); (5) Sections 22(h) and 23 of the Federal Reserve Act, or any regulation issued thereunder or certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1468; (6) Certain provisions of the Exchange Act, pursuant to section 21B of the Exchange Act (15 U.S.C. 78u-2); (7) Section 1120 of Financial Institutions Reform, Recovery and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation issued thereunder; (8) The terms of any final or temporary order issued or enforceable pursuant to section 8 of the FDIA or of any written agreement executed by the OCC, the terms of any conditions imposed in writing by the OCC 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 herein pursuant to 12 U.S.C. 1818(i)(2); (9) Any provision of law referenced in section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued thereunder; and (10) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued thereunder; (f) Remedial action under section 102 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 on senior examiners for violation of post-employment prohibitions; 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. § 109.2 Rules of construction. For purposes of this subpart: (a) Any term in the singular includes the plural, and the plural includes the singular, if such use would be appropriate; (b) The term counsel (c) 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. § 109.3 Definitions. For purposes of this subpart, unless explicitly stated to the contrary: (a) Administrative law judge (b) Adjudicatory proceeding (c) Decisional employee (d) Comptroller (e) Enforcement Counsel (f) Final order (g) Institution (h) Institution-affiliated party (i) Local Rules (j) OCC (k) Office of Financial Institution Adjudication (l) Party (m) Person (n) Respondent (o) Uniform Rules (p) Violation § 109.4 Authority of the Comptroller. The Comptroller 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 administrative law judge. § 109.5 Authority of the administrative law judge. (a) General rule. (b) Powers. (1) To administer oaths and affirmations; (2) To issue subpoenas, subpoenas duces tecum, (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 § 109.31 of this subpart; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Comptroller shall have 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 Comptroller a recommended decision as provided herein; (9) To recuse himself or herself by motion made by a party or on his or her 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 a presiding officer. § 109.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the OCC or an administrative law judge By attorneys. (2) By non-attorneys. (3) Notice of appearance. pro se (b) Sanctions. § 109.7 Good faith certification. (a) General requirement. (b) Effect of signature. (2) If a filing or submission of record is not signed, the administrative law judge shall strike the filing or submission of record, unless it is signed promptly after the omission is called to the attention of the pleader or movant. (c) Effect of making oral motion or argument. § 109.8 Conflicts of interest. (a) Conflict of interest in representation. (b) Certification and waiver. (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. § 109.9 Ex parte communications. (a) Definition Ex parte communication (i) An interested person outside the OCC (including such person's counsel); and (ii) The administrative law judge handling that proceeding, the Comptroller, or a decisional employee. (2) Exception. ex parte (b) Prohibition of ex parte communications. (1) No interested person outside the OCC shall make or knowingly cause to be made an ex parte (2) The Comptroller, administrative law judge, or decisional employee shall not make or knowingly cause to be made to any interested person outside the OCC any ex parte (c) Procedure upon occurrence of ex parte communication. (d) Sanctions. ex parte (e) Separation-of-functions. ex parte § 109.10 Filing of papers. (a) Filing. (b) Manner of filing. (1) Personal service; (2) Delivering the papers to a reliable commercial courier service, overnight delivery service, or to the U.S. Post Office for Express Mail delivery; (3) Mailing the papers by first class, registered, or certified mail; or (4) Transmission by electronic media, only if expressly authorized, and upon any conditions specified, by the Comptroller or the administrative law judge. All papers filed by electronic media shall also concurrently be filed in accordance with paragraph (c) of this section as to form. (c) Formal requirements as to papers filed Form. (2) Signature. (3) Caption. (4) Number of copies. § 109.11 Service of papers. (a) By the parties. (b) Method of service. (1) Personal service; (2) Delivering the papers to a reliable commercial courier service, overnight delivery service, or to the U.S. Post Office for Express Mail delivery; (3) Mailing the papers by first class, registered, or certified mail; or (4) Transmission by electronic media, only if the parties mutually agree. Any papers served by electronic media shall also concurrently be served in accordance with the requirements of § 109.10(c) of this subpart as to form. (c) By the Comptroller or the administrative law judge. (2) If a party has not appeared in the proceeding in accordance with § 109.6 of this subpart, the Comptroller or the administrative law judge shall make service by any of the following methods: (i) By personal service; (ii) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works; (iii) If the person to be served is a corporation or other association, by delivery to an officer, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the party; (iv) By registered or certified mail addressed to the person's last known address; or (v) By any other method reasonably calculated to give actual notice. (d) Subpoenas. (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, 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 addressed to the person's last known address; or (5) By any other method reasonably calculated to give actual notice. (e) Area of service. § 109.12 Construction of time limits. (a) General rule. (b) When papers are deemed to be filed or served. (i) In the case of personal service or same day commercial courier delivery, upon actual service; (ii) In the case of overnight commercial delivery service, U.S. Express mail delivery, or first class, registered, or certified mail, upon deposit in or delivery to an appropriate point of collection; or (iii) In the case of transmission by electronic media, as specified by the authority receiving the filing, in the case of filing, and as agreed among the parties, in the case of service. (2) The effective filing and service dates specified in paragraph (b)(1) of this section may be modified by the Comptroller or administrative law judge 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. (1) If service is made by first class, registered, or certified mail, add three calendar days to the prescribed period; (2) If service is made by express mail or overnight delivery service, add one calendar day to the prescribed period; or (3) If service is made by electronic media transmission, add one calendar day to the prescribed period, unless otherwise determined by the Comptroller or the administrative law judge in the case of filing, or by agreement among the parties in the case of service. § 109.13 Change of time limits. Except as otherwise provided by law, the administrative law judge may, for good cause shown, extend the time limits prescribed by the Uniform Rules or any notice or order issued in the proceedings. After the referral of the case to the Comptroller pursuant to § 109.38 of this subpart, the Comptroller may grant extensions of the time limits for good cause shown. Extensions may be granted at the motion of a party or on the Comptroller's or the administrative law judge's own motion after notice and opportunity to respond is afforded all non-moving parties. § 109.14 Witness fees and expenses. Witnesses subpoenaed for testimony or deposition shall be paid the same fees for attendance and mileage as are paid in the United States district courts in proceedings in which the United States is a party, provided that, in the case of a discovery subpoena addressed to a party, no witness fees or mileage need be paid. Fees for witnesses shall be tendered in advance by the party requesting the subpoena, except that fees and mileage need not be tendered in advance where the OCC is the party requesting the subpoena. The OCC shall not be required to pay any fees to, or expenses of, any witness not subpoenaed by the OCC. § 109.15 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. No such offer or proposal shall be made to any OCC representative other than 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. § 109.16 OCC's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the OCC to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the OCC to conduct or continue any form of investigation authorized by law. § 109.17 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 shall continue without regard to the pendency of that court proceeding. No default or other failure to act as directed in the adjudicatory proceeding within the times prescribed in this subpart shall be excused based on the pendency before any court of any interlocutory appeal or collateral attack. § 109.18 Commencement of proceeding and contents of notice. (a) Commencement of proceeding. (ii) The notice must be served by the Comptroller upon the respondent and given to any other appropriate financial institution supervisory authority where required by law. (iii) The notice must be filed with the 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 Comptroller. (b) Contents of notice. (1) The legal authority for the proceeding and for the OCC's jurisdiction over the proceeding; (2) A statement of the matters of fact or law showing that the OCC 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) The answer and/or request for a hearing shall be filed with OFIA. § 109.19 Answer. (a) When. (b) Content of answer. (c) Default Effect of failure to answer. (2) Effect of failure to request a hearing in civil money penalty proceedings. § 109.20 Amended pleadings. (a) Amendments. (b) Amendments to conform to the evidence. § 109.21 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 administrative law judge shall file with the Comptroller a recommended decision containing the findings and the relief sought in the notice. § 109.22 Consolidation and severance of actions. (a) Consolidation. (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. (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. § 109.23 Motions. (a) In writing. (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 administrative law judge. 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. (c) Filing of motions. (d) Responses. (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. (f) Dispositive motions. § 109.24 Scope of document discovery. (a) Limits on discovery. (2) Discovery by use of deposition is governed by § 109.102 of this part. (3) Discovery by use of interrogatories is not permitted. (b) Relevance. (c) Privileged matter. (d) Time limits. § 109.25 Request for document discovery from parties. (a) General rule. (b) Production or copying. (c) Obligation to update responses. (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. (2) The party who served the request that is the subject of a motion to revoke or limit may file a written response within five days of service of the motion. No other party may file a response. (e) Privilege. (f) Motions to compel production. (2) The party who asserted the privilege or failed to comply with the request may file a written response to a motion to compel within five days of service of the motion. No other party may file a response. (g) Ruling on motions. (h) Enforcing discovery subpoenas. § 109.26 Document subpoenas to nonparties. (a) General rules. (2) A party shall only apply for a document subpoena under this section within the time period during which such party could serve a discovery request under § 109.24(d) of this subpart. 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 administrative law judge shall promptly issue any document subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she 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. (b) Motion to quash or modify. (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 § 109.25(d) of this subpart, and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 109.27 Deposition of witness unavailable for hearing. (a) General rules. duces tecum, (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 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 or such other convenient place as the administrative law judge shall fix. (3) Any requested subpoena that sets forth a valid basis for its issuance must be promptly issued, unless the administrative law judge on his or her own motion, 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 administrative law judge orders otherwise, no deposition under this section shall be taken on fewer than ten days' notice to the witness and all parties. Deposition subpoenas may be served 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 as otherwise permitted by law. (b) Objections to deposition subpoenas. (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. (2) Any party may move before the administrative law judge 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 shall certify that the transcript is a true and complete transcript of the deposition. (d) Enforcing subpoenas. § 109.28 Interlocutory review. (a) General rule. (b) Scope of review. (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. (d) Suspension of proceeding. § 109.29 Summary disposition. (a) In general. (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. (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 support his or her 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 he or she 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. (d) Decision on motion. § 109.30 Partial summary disposition. If the administrative law judge determines that a party is entitled to summary disposition as to certain claims only, he or she shall defer submitting a recommended decision as to those claims. A hearing on the remaining issues must be ordered. Those claims for which the administrative law judge has determined that summary disposition is warranted will be addressed in the recommended decision filed at the conclusion of the hearing. § 109.31 Scheduling and prehearing conferences. (a) Scheduling conference. (b) Prehearing conferences. (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. (d) Scheduling or prehearing orders. § 109.32 Prehearing submissions. (a) Within the time set by the administrative law judge, but in no case later than 14 days before the start of the hearing, each party shall serve on every other party, his or her: (1) Prehearing statement; (2) Final list of witnesses to be called to testify at the hearing, including name and address of each witness and a short summary of the expected testimony of each witness; (3) List of the exhibits to be introduced at the hearing along with a copy of each exhibit; and (4) Stipulations of fact, if any. (b) Effect of failure to comply. § 109.33 Public hearings. (a) General rule. (b) Filing document under seal. § 109.34 Hearing subpoenas. (a) Issuance. (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 administrative law judge. (3) The administrative law judge shall promptly issue any hearing subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she 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 administrative law judge, the party making the application shall serve the subpoena on the person named in the subpoena and on each party. (b) Motion to quash or modify. (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. § 109.35 Conduct of hearings. (a) General rules. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. § 109.36 Evidence. (a) Admissibility. (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. (2) All matters officially noticed by the administrative law judge or Comptroller shall appear on the record. (3) If official notice is requested or taken of any material fact, the parties, upon timely request, shall be afforded an opportunity to object. (c) Documents. (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 the appropriate Federal banking agency, as defined in section 3(q) of the FDIA (12 U.S.C. 1813(q)), or state regulatory agency, is admissible either with or without a sponsoring witness. (3) Witnesses may use existing or newly created charts, exhibits, calendars, calculations, outlines or other graphic material to summarize, illustrate, or simplify the presentation of testimony. Such materials may, subject to the administrative law judge's discretion, be used with or without being admitted into evidence. (d) Objections. (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 he or she expected to prove by the expected testimony of the witness, either by representation of counsel or by direct interrogation of the witness. (3) The administrative law judge shall retain rejected exhibits, adequately marked for identification, for the record, and transmit such exhibits to the Comptroller. (4) Failure to object to admission of evidence or to any ruling constitutes a waiver of the objection. (e) Stipulations. (f) Depositions of unavailable witnesses. (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 administrative law judge 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. § 109.37 Post-hearing filings. (a) Proposed findings and conclusions and supporting briefs. (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 administrative law judge 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. (c) Simultaneous filing required. § 109.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 109.39 Exceptions to recommended decision. (a) Filing exceptions. (b) Effect of failure to file or raise exceptions. (2) No exception need be considered by the Comptroller if the party taking exception had an opportunity to raise the same objection, issue, or argument before the administrative law judge and failed to do so. (c) Contents. (2) All exceptions and briefs in support of exceptions must set forth page or paragraph references to the specific parts of the administrative law judge'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. § 109.40 Review by the Comptroller. (a) Notice of submission to the Comptroller. (b) Oral argument before the Comptroller. (c) Comptroller's final decision. (2) The Comptroller shall 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 Comptroller orders that the action or any aspect thereof be remanded to the administrative law judge for further proceedings. Copies of the final decision and order of the Comptroller shall be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Comptroller or required by statute, upon any appropriate state or Federal supervisory authority. § 109.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the OCC may not, unless specifically ordered by the Comptroller or a reviewing court, operate as a stay of any order issued by the Comptroller. The Comptroller may, in its discretion, and on such terms as it finds just, stay the effectiveness of all or any part of its order pending a final decision on a petition for review of the order. Subpart B—Local Rules § 109.100 Scope. The rules and procedures in this subpart B shall apply to those proceedings covered by subpart A of this part. In addition, subpart A of this part and this subpart shall apply to adjudicatory proceedings for which hearings on the record are provided for by the following statutory provisions: (a) Proceedings under section 10(a)(2)(D) of the HOLA (12 U.S.C. 1467a(a)(2)(D)) to determine whether any person directly or indirectly exercises a controlling influence over the management or policies of a savings association or any other company; and (b) [Reserved] (c) Proceedings under section 15(c)(4) of the Securities and Exchange Act of 1934 (15 U.S.C. 78o(c)(4)) (Exchange Act) to determine whether any Federal savings association or person subject to the jurisdiction of the OCC pursuant to section 12(i) of the Exchange Act (15 U.S.C. 78 l § 109.101 Appointment of Office of Financial Institution Adjudication. Unless otherwise directed by the OCC, all hearings under subpart A of this part and this subpart shall be conducted by administrative law judges under the direction of the Office of Financial Institution Adjudication. § 109.102 Discovery. (a) In general. (b) Notice. (c) Time limits. (d) Conduct of the deposition. Objections to questions or exhibits shall be in short form, stating the grounds for objection. Failure to object to questions or exhibits is not a waiver except where the grounds for the objection might have been avoided if the objection had been timely presented. The court reporter shall transcribe or otherwise record the witness's testimony, as agreed among the parties. (e) Protective orders. (1) Is unreasonable, oppressive, excessive in scope, or unduly burdensome; (2) Involves privileged, investigative, trial preparation, irrelevant or immaterial matters; or (3) Is being conducted in bad faith or in such manner as to unreasonably annoy, embarrass, or oppress the deponent. (f) Fees. (g) Deposition subpoenas Issuance. (2) Service. (3) Motion to quash. (4) Enforcement of deposition subpoena. § 109.103 Civil money penalties. (a) Assessment. (b) Payment. (2) Checks in payment of civil penalties shall be made payable to the Treasurer of the United States and sent to the OCC. Upon receipt, the OCC shall forward the check to the Treasury of the United States. (c) Maximum amount of civil money penalties Statutory formula. (2) Notice of inflation adjustments. Federal Register § 109.104 Additional procedures. (a) Replies to exceptions. (b) Motions. (c) Authority of administrative law judge. (d) Notification of submission of proceeding to the Comptroller. (e) Extensions of time for final determination. sua sponte, (f) Service upon the OCC. (g) Filings with the Comptroller. (h) Presence of cameras and other recording devices. PART 112—RULES FOR INVESTIGATIVE PROCEEDINGS AND FORMAL EXAMINATION PROCEEDINGS Authority: l. § 112.1 Scope of part. This part prescribes rules of practice and procedure applicable to the conduct of formal examination proceedings with respect to Federal savings associations and their affiliates under section 5(d)(1)(B) of the HOLA, as amended, 12 U.S.C. 1464(d)(1)(B) or section 7(j)(15) of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1817(j)(15) (“FDIA”), section 8(n) of the FDIA, 12 U.S.C. 1818(n), or section 10(c) of the FDIA, 12 U.S.C. 1820(c). This part does not apply to adjudicatory proceedings as to which hearings are required by statute, the rules for which are contained in part 109 of this chapter. § 112.2 Definitions. As used in this part: (a) OCC (b) [Reserved] (c) Formal examination proceeding (d) Designated representative § 112.3 Confidentiality of proceedings. All formal examination proceedings shall be private and, unless otherwise ordered by the OCC, all investigative proceedings shall also be private. Unless otherwise ordered or permitted by the OCC, or required by law, and except as provided in §§ 112.4 and 112.5, the entire record of any investigative proceeding or formal examination proceeding, including the resolution of the OCC or its delegate(s) authorizing the proceeding, the transcript of such proceeding, and all documents and information obtained by the designated representative(s) during the course of said proceedings shall be confidential. § 112.4 Transcripts. Transcripts or other recordings, if any, of investigative proceedings or formal examination proceedings shall be prepared solely by an official reporter or by any other person or means authorized by the designated representative. A person who has submitted documentary evidence or given testimony in an investigative proceeding or formal examination proceeding may procure a copy of his own documentary evidence or transcript of his own testimony upon payment of the cost thereof; provided, § 112.5 Rights of witnesses. (a) Any person who is compelled or requested to furnish documentary evidence or give testimony at an investigative proceeding or formal examination proceeding shall have the right to examine, upon request, the OCC resolution authorizing such proceeding. Copies of such resolution shall be furnished, for their retention, to such persons only with the written approval of the OCC. (b) Any witness at an investigative proceeding or formal examination proceeding may be accompanied and advised by an attorney personally representing that witness. (1) Such attorney shall be a member in good standing of the bar of the highest court of any state, Commonwealth, possession, territory, or the District of Columbia, who has not been suspended or debarred from practice by the bar of any such political entity or before the OCC in accordance with the provisions of part 19 of this chapter and has not been excluded from the particular investigative proceeding or formal examination proceeding in accordance with paragraph (b)(3) of this section. (2) Such attorney may advise the witness before, during, and after the taking of his testimony and may briefly question the witness, on the record, at the conclusion of his 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 his use in representing his client. All witnesses shall be sequestered, and, unless permitted in the discretion of the designated representative, no witness or accompanying attorney may be permitted to be present during the taking of testimony of any other witness called in such proceeding. Neither attorney(s) for the association(s) that are the subjects of the investigative proceedings or formal examination proceedings, nor attorneys for any other interested persons, shall have any right to be present during the testimony of any witness not personally being represented by such attorney. (3) The OCC, for good cause, may exclude a particular attorney from further participation in any investigation in which the OCC has found the attorney to have engaged in dilatory, obstructionist, egregious, contemptuous or contumacious conduct. The person conducting an investigation may report to the OCC instances of apparently dilatory, obstructionist, egregious, contemptuous or contumacious conduct on the part of an attorney. After due notice to the attorney, the OCC may take such action as the circumstances warrant based upon a written record evidencing the conduct of the attorney in that investigation or such other or additional written or oral presentation as the OCC may permit or direct. § 112.6 Obstruction of the proceedings. The designated representative shall report to the Comptroller any instances where any witness or counsel has engaged in dilatory, obstructionist, or contumacious conduct or has otherwise violated any provision of this part during the course of an investigative proceeding or formal examination proceeding; and the OCC may take such action as the circumstances warrant, including the exclusion of counsel from further participation in such proceeding. § 112.7 Subpoenas. (a) Service. (1) Service upon a natural person. (2) Service upon other persons. (b) Motions to quash. (1) Deny the application; (2) Quash or revoke the subpoena; (3) Modify the subpoena; or (4) Condition the granting of the application on such terms as the Deputy Chief Counsel or his designee determines to be just, reasonable, and proper. (c) Attendance of witnesses. (d) Witness fees and mileage. PART 165—PROMPT CORRECTIVE ACTION Authority: §§ 165.1-165.7 [Reserved] § 165.8 Procedures for reclassifying a Federal savings association based on criteria other than capital. (a) Reclassification based on unsafe or unsound condition or practice Issuance of notice of proposed reclassification—(i) Grounds for reclassification. ( 1 ( 2 (B) Any action pursuant to this paragraph (a)(1)(i) shall hereinafter be referred to as “reclassification.” (ii) Prior notice to institution. (2) Contents of notice. (i) A statement of the savings association's capital measures and capital levels and the category to which the savings association would be reclassified; (ii) The reasons for reclassification of the savings association; (iii) The date by which the savings association subject to the notice of reclassification may file with the OCC a written appeal of the proposed reclassification and a request for a hearing, which shall 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 savings association or other relevant circumstances. (3) Response to notice of proposed reclassification. (i) An explanation of why the savings association is not in unsafe or unsound condition or otherwise should not be reclassified; and (ii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the savings association or company regarding the reclassification. (4) Failure to file response. (5) Request for hearing and presentation of oral testimony or witnesses. (6) Order for informal hearing. (7) Hearing procedures. (ii) The informal hearing shall be recorded and a transcript furnished to the savings association upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). The presiding officer(s) may ask questions of any witness. (iii) 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. (8) Recommendation of presiding officers. (9) Time for decision. (b) Request for rescission of reclassification. § 165.9 Order to dismiss a director or senior executive officer. (a) Service of notice. (b) Response to directive Request for reinstatement. (2) Contents of request; informal hearing. (3) Effective date. (c) Order for informal hearing. (d) Hearing procedures. (2) The informal hearing shall be recorded and a transcript furnished to the Respondent upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). The presiding officer(s) may ask questions of any witness. (3) 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. (1) To become adequately capitalized, to the extent that the directive was issued as a result of the savings association'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 savings association based on supervisory criteria other than capital, pursuant to section 38(g) of the FDI Act. (f) Recommendation of presiding officers. (g) Time for decision. § 165.10 [Reserved]

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