12 CFR Part 263 — Rules of Practice for Hearings

PART 263—RULES OF PRACTICE FOR HEARINGS Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 248, 324, 334, 347a, 504, 505, 1464, 1467, 1467a, 1817(j), 1818, 1820(k), 1829, 1831o, 1831p-1, 1832(c), 1847(b), 1847(d), 1884, 1972(2)(F), 3105, 3108, 3110, 3349, 3907, 3909(d), 4717, 5323, 5362, 5365, 5463, 5464, 5466, 5467; 15 U.S.C. 21, 78l(i), 78o-4, 78o-5, 78u-2; 1639e(K); 28 U.S.C. 2461 note; 31 U.S.C. 5321; and 42 U.S.C. 4012a. Source: 56 FR 38052, Aug. 9, 1991, unless otherwise noted. Subpart A—Uniform Rules of Practice and Procedure Source: 88 FR 89909, Dec. 28, 2023, unless otherwise noted. § 263.1 Scope. This subpart prescribes Uniform Rules of practice and procedure applicable to adjudicatory proceedings required to be conducted on the record after opportunity for a hearing under the following statutory provisions: (a) Cease-and-desist proceedings under section 8(b) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(b)); (b) Removal and prohibition proceedings under section 8(e) of the FDIA (12 U.S.C. 1818(e)); (c) Change-in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) to determine whether the Board of Governors of the Federal Reserve System (“Board”) should issue an order to approve or disapprove a person's proposed acquisition of a state member bank, bank holding company, or savings and loan holding company; (d) Proceedings under section 15C(c)(2) of the Securities Exchange Act of 1934 (“Exchange Act”) (15 U.S.C. 78o-5), to impose sanctions upon any government securities broker or dealer or upon any person associated or seeking to become associated with a government securities broker or dealer for which the Board is the appropriate agency; (e) Assessment of civil money penalties by the Board against institutions, institution-affiliated parties, and certain other persons for which the Board is the appropriate agency for any violation of: (1) Any provision of the Bank Holding Company Act of 1956, as amended (“BHC Act”), or any order or regulation issued thereunder, pursuant to 12 U.S.C. 1847(b) and (d); (2) Sections 19, 22, 23, 23A and 23B of the Federal Reserve Act (“FRA”), or any regulation or order issued thereunder and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 504 and 505; (3) Section 9 of the FRA pursuant to 12 U.S.C. 324; (4) Section 106(b) of the Bank Holding Company Act Amendments of 1970 and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1972(2)(F); (5) Any provision of the Change in Bank Control Act of 1978, as amended, or any regulation or order issued thereunder and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1817(j)(16); (6) Any provision of the International Lending Supervision Act of 1983 (“ILSA”) or any rule, regulation or order issued thereunder, pursuant to 12 U.S.C. 3909; (7) Any provision of the International Banking Act of 1978 (“IBA”) or any rule, regulation or order issued thereunder, pursuant to 12 U.S.C. 3108; (8) Certain provisions of the Exchange Act, pursuant to section 21B of the Exchange Act (15 U.S.C. 78u-2); (9) Section 1120 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation issued thereunder; (10) The terms of any final or temporary order issued under section 8 of the FDIA or of any written agreement executed by the Board or the former Office of Thrift Supervision (“OTS”), the terms of any condition imposed in writing by the Board or the former OTS in connection with the grant of an application or request, and certain unsafe or unsound practices or breaches of fiduciary duty or law or regulation pursuant to 12 U.S.C. 1818(i)(2); (11) Any provision of law referenced in section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued thereunder; (12) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued thereunder; (13) Section 5 of the Home Owners' Loan Act (“HOLA”) or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d), (s) and (v); (14) Section 9 of the HOLA or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1467(d); and (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a(i) and (r); (f) Remedial action under section 102(g) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(g)); (g) Removal, prohibition, and civil monetary penalty proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) for violations of the post-employment restrictions imposed by that section; and (h) This subpart also applies to all other adjudications required by statute to be determined on the record after opportunity for an agency hearing, unless otherwise specifically provided for in the Local Rules (see § 263.3(i)). § 263.2 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. § 263.3 Definitions. For purposes of this subpart, unless explicitly stated to the contrary: (a) Administrative law judge (b) Adjudicatory proceeding (c) Decisional employee (d) Electronic signature (e) Enforcement Counsel (f) Final order (g) Institution (1) Any bank as that term is defined in section 3(a) of the FDIA (12 U.S.C. 1813(a)); (2) Any bank holding company or any subsidiary (other than a bank) of a bank holding company as those terms are defined in the BHC Act (12 U.S.C. 1841 et seq. (3) Any organization organized and operated under section 25A of the FRA (12 U.S.C. 611 et seq. et seq. (4) Any foreign bank or company to which section 8 of the IBA (12 U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; (5) Any branch or agency as those terms are defined in section 1(b) of the IBA (12 U.S.C. 3101(1), (3), (5), (6)); (6) Any savings and loan holding company or any subsidiary (other than a depository institution) of a savings and loan holding company as those terms are defined in the HOLA (12 U.S.C. 1461 et seq. (7) Any U.S. or foreign nonbank financial company that the Financial Stability Oversight Council (“FSOC”) requires the Board to supervise under section 113 of the Dodd-Frank Act (12 U.S.C. 5323(a)(1), (b)(1)), or any subsidiary (other than a bank) thereof; (8) Any financial market utility or financial institution conducting payment, clearing, or settlement activities that FSOC designates as systematically important under section 804 of the Dodd-Frank Act (12 U.S.C. 5463); and (9) Any other entity subject to the supervision of the Board. (h) Institution-affiliated party (i) Local Rules (j) OFIA (k) Party (l) Person (m) Respondent (n) Uniform Rules (o) Violation § 263.4 Authority of the Board. The Board 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. § 263.5 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 § 263.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Board 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 Board a recommended decision as provided in this section; (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. § 263.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the Board 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 paragraph (a)(1) or (2) of this section and is authorized to represent the particular party; and (B) A written acknowledgement that the individual has reviewed and will comply with the Uniform Rules and Local Rules in 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. § 263.7 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. § 263.8 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. § 263.9 Ex parte communications. (a) Definition Ex parte communication. Ex parte communication (i) An interested person outside the Board (including such person's counsel); and (ii) The ALJ handling that proceeding, a member of the Board, or a decisional employee. (2) Exception. ex parte (b) Prohibition of ex parte communications. (1) An interested person outside the Federal Reserve System must not make or knowingly cause to be made an ex parte (2) A member of the Board, ALJ, or decisional employee may not make or knowingly cause to be made to any interested person outside the Federal Reserve System 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 Board. (2) Decision process. § 263.10 Filing of papers. (a) Filing. (b) Manner of filing. (1) Electronic mail or other electronic means designated by the Board 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. (2) Signature. (3) Caption. § 263.11 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 Board or the ALJ. (2) If a respondent has not appeared in the proceeding in accordance with § 263.6, the Board 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. § 263.12 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 Board 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. § 263.13 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 Board pursuant to § 263.38, the Board 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 Board's or the ALJ's own motion. § 263.14 Witness fees and expenses. (a) In general. (b) Exception for testimony by a party. (c) Timing of payment. § 263.15 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. § 263.16 The Board's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the Board to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the Board to conduct or continue any form of investigation authorized by law. § 263.17 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. § 263.18 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 Board. (b) Contents of notice. (1) The legal authority for the proceeding and for the Board's jurisdiction over the proceeding; (2) Matters of fact or law showing that the Board 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. § 263.19 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. § 263.20 Amended pleadings. (a) Amendments. (b) Amendments to conform to the evidence. § 263.21 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 Board a recommended decision containing the findings and the relief sought in the notice. § 263.22 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. § 263.23 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. § 263.24 Scope of document discovery. (a) Limits on discovery. documents (2) Discovery by use of deposition is governed by § 263.53. (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. § 263.25 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. § 263.26 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 § 263.24(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 § 263.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 263.27 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. § 263.28 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. § 263.29 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. § 263.30 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. § 263.31 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. § 263.32 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. § 263.33 Public hearings. (a) General rule. (b) Filing document under seal. § 263.34 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. § 263.35 Conduct of hearings. (a) General rules. Conduct of hearings. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. (c) Electronic presentation. § 263.36 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 Board 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 Board. (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. § 263.37 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. § 263.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 263.39 Exceptions to recommended decision. (a) Filing exceptions. (b) Effect of failure to file or raise exceptions. (2) No exception need be considered by the Board 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. § 263.40 Review by the Board. (a) Notice of submission to the Board. (b) Oral argument before the Board. (c) Board's final decision. (2) The Board 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 Board 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 Board will be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Board or required by statute, upon any appropriate State or Federal supervisory authority. § 263.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the Board may not, unless specifically ordered by the Board or a reviewing court, operate as a stay of any order issued by the Board. The Board may, in the Board's, and on such terms as the Board 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—Board Local Rules Supplementing the Uniform Rules Source: 88 FR 89909, Dec. 28, 2023, unless otherwise noted. § 263.50 Purpose and scope. (a) This subpart prescribes the rules of practice and procedure governing formal adjudications set forth in paragraph (b) of this section, and supplements the rules of practice and procedure contained in subpart A of this part. (b) The rules and procedures of this subpart and subpart A of this part will apply to the formal adjudications set forth in § 263.1 and to the following adjudications: (1) Suspension of a member bank from use of credit facilities of the Federal Reserve System under section 4 of the FRA (12 U.S.C. 301); (2) Termination of a bank's membership in the Federal Reserve System under section 9 of the FRA (12 U.S.C. 327); (3) Issuance of a cease-and-desist order under section 11 of the Clayton Act (15 U.S.C. 21); (4) Adjudications under sections 2, 3, or 4 of the BHC Act (12 U.S.C. 1841, 1842, or 1843); (5) Formal adjudications on bank merger applications under section 18(c) of the FDIA (12 U.S.C. 1828(c)); (6) Issuance of a divestiture order under section 5(e) of the BHC Act (12 U.S.C. 1844(e)); (7) Imposition of sanctions upon any municipal securities dealer for which the Board is the appropriate regulatory agency, or upon any person associated or seeking to become associated with such a municipal securities dealer, under section 15B(c)(5) of the Exchange Act (15 U.S.C. 78o-4); (8) Proceedings where the Board otherwise orders that a formal hearing be held; (9) Termination of the activities of a state branch, state agency, or commercial lending company subsidiary of a foreign bank in the United States, pursuant to section 7(e) of the IBA (12 U.S.C. 3105(d)); (10) Termination of the activities of a representative office of a foreign bank in the United States, pursuant to section 10(b) of the IBA (12 U.S.C. 3107(b)); (11) Issuance of a prompt corrective action directive to a member bank under section 38 of the FDI Act (12 U.S.C. 1831o); (12) Reclassification of a member bank on grounds of unsafe or unsound condition under section 38(g)(1) of the FDI Act (12 U.S.C. 1831o(g)(1)); (13) Reclassification of a member bank on grounds of unsafe and unsound practice under section 38(g)(1) of the FDI Act (12 U.S.C. 1831o(g)(1)); (14) Issuance of an order requiring a member bank to dismiss a director or senior executive officer under section 38 (e)(5) and 38(f)(2) (F)(ii) of the FDI Act (12 U.S.C. 1831o(e)(5) and 1831o(f)(2) (F)(ii)); and (15) Adjudications under section 10 of the HOLA (12 U.S.C. 1467a). § 263.51 Definitions. As used in subparts B through G of this part: (a) Secretary (b) Member bank (c) Institution § 263.52 Address for filing. All papers to be filed with the Board must be filed with the Secretary of the Board of Governors of the Federal Reserve System, Washington, DC 20551. All papers to be filed with the Board electronically must be sent to: [email protected] § 263.53 Discovery depositions. (a) In general. (b) Application. e.g., (c) Issuance of subpoena. duces tecum duces tecum (d) Motion to quash or modify. duces tecum (e) Enforcement of a deposition subpoena. (f) Conduct of the deposition. (g) Protective orders. (1) Unreasonably annoy, embarrass, or oppress the deponent; (2) Unreasonably probe into privilege, irrelevant, or immaterial matters; or (3) Unreasonably attempt to pry into a party's preparation for trial. § 263.54 Delegation to the Office of Financial Institution Adjudication. Unless otherwise ordered by the Board, administrative adjudications subject to subpart A of this part must be conducted by an ALJ of OFIA. § 263.55 Board as Presiding Officer. The Board may, in its discretion, designate itself, one or more of its members, or an authorized officer, to act as presiding officer in a formal hearing. In such a proceeding, the authority of Board or its designee will include all the authority provided to an ALJ under this part. Proposed findings and conclusions, briefs, and other submissions by the parties permitted in subpart A of this part must be filed with the Secretary for consideration by the Board. Sections 263.38 and 263.39 will not apply to proceedings conducted under this section. § 263.56 Initial licensing proceedings. Proceedings with respect to applications for initial licenses will include, but not be limited to, applications for Board approval under section 3 of the BHC Act and section 10 of HOLA and such proceedings as may be ordered by the Board with respect to applications under section 18(c) of the FDIA. In such initial licensing proceedings, the procedures set forth in subpart A of this part will apply, except that the Board may designate a Board Counsel to represent the Board in a nonadversary capacity for the purpose of developing for the record information relevant to the issues to be determined by the Presiding Officer and the Board. In such proceedings, Board Counsel will be considered to be a decisional employee for purposes of §§ 263.9 and 263.40. § 263.57 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: (i) Contesting specific issues or findings; (ii) Offering certain evidence or challenging or contesting certain evidence offered by another party; or (iii) Making a late filing or conditioning a late filing on any terms that are just; (4) Assessing reasonable expenses, including attorney's fees, incurred by any other party as a result of the improper action or failure to act; and (5) Excluding or suspending a party or person from the adjudicatory proceeding. (c) Procedure for imposition of sanctions. (2) No sanction authorized by this section, other than refusal to accept late filings, must be imposed without prior notice to all parties and an opportunity for any party or person against whom sanctions would be imposed to be heard. Such opportunity to be heard may be on such notice, and the response may be in such form, as the ALJ directs. The ALJ may limit the opportunity to be heard to an opportunity of a party or person to respond orally immediately after the act or inaction covered by this section is noted by the ALJ. (3) Requests for the imposition of sanctions by any party, and the imposition of sanctions, are subject to interlocutory review in the same manner as any other ruling by the ALJ. (d) Section not exclusive. Subpart C—Rules and Procedures for Assessment and Collection of Civil Money Penalties § 263.60 Scope. The Uniform Rules set forth in subpart A of this part shall govern the procedures for assessment of civil money penalties, except as otherwise provided in this subpart. § 263.61 Opportunity for informal proceeding. In the sole discretion of the Board's General Counsel, the General Counsel may, prior to the issuance by the Board of a notice of assessment of civil penalty, advise the affected person that the issuance of a notice of assessment of civil penalty is being considered and the reasons and authority for the proposed assessment. The General Counsel may provide the person an opportunity to present written materials or request a conference with members of the Board's staff to show that the penalty should not be assessed or, if assessed, should be reduced in amount. § 263.62 Relevant considerations for assessment of civil penalty. In determining the amount of the penalty to be assessed, the Board shall take into account the appropriateness of the penalty with respect to the financial resources and good faith of the person charged, the gravity of the misconduct, the history of previous misconduct, the economic benefit derived by the person from the misconduct, and such other matters as justice may require. § 263.63 Assessment order. (a) In the event of consent to an assessment by the person concerned, or if, upon the record made at an administrative hearing, the Board finds that the grounds for having assessed the penalty have been established, the Board may issue a final order of assessment of civil penalty. In its final order, the Board may modify the amount of the penalty specified in the notice of assessment. (b) An assessment order is effective immediately upon issuance, or upon such other date as may be specified therein, and shall remain effective and enforceable until it is stayed, modified, terminated, or set aside by action of the Board or a reviewing court. § 263.64 Payment of civil penalty. (a) The date designated in the notice of assessment for payment of the civil penalty will normally be 60 days from the issuance of the notice. If, however, the Board finds in a specific case that the purposes of the authorizing statute would be better served if the 60-day period is changed, the Board may shorten or lengthen the period or make the civil penalty payable immediately upon receipt of the notice of assessment. If a timely request for a formal hearing to challenge an assessment of civil penalty is filed, payment of the penalty shall not be required unless and until the Board issues a final order of assessment following the hearing. If an assessment order is issued, it will specify the date by which the civil penalty should be paid or collected. (b) Checks in payment of civil penalties should be made payable to the “Board of Governors of the Federal Reserve System.” Upon collection, the Board shall forward the amount of the penalty to the Treasury of the United States. § 263.65 Civil money penalty inflation adjustments. (a) Inflation adjustments. (b) Maximum civil money penalties. Table 1 to Paragraph ( b Statute Adjusted civil 12 U.S.C. 324: Inadvertently late or misleading reports, inter alia $5,026 Other late or misleading reports, inter alia 50,265 Knowingly or reckless false or misleading reports, inter alia 2,513,215 12 U.S.C. 334 365 12 U.S.C. 374a 365 12 U.S.C. 504: First Tier 12,567 Second Tier 62,829 Third Tier 2,513,215 12 U.S.C. 505: First Tier 12,567 Second Tier 62,829 Third Tier 2,513,215 12 U.S.C. 1464(v)(4) 5,026 12 U.S.C. 1464(v)(5) 50,265 12 U.S.C. 1464(v)(6) 2,513,215 12 U.S.C. 1467a(i)(2) 62,829 12 U.S.C. 1467a(i)(3) 62,829 12 U.S.C. 1467a(r): First Tier 5,026 Second Tier 50,265 Third Tier 2,513,215 12 U.S.C. 1817(j)(16): First Tier 12,567 Second Tier 62,829 Third Tier 2,513,215 12 U.S.C. 1818(i)(2): First Tier 12,567 Second Tier 62,829 Third Tier 2,513,215 12 U.S.C. 1820(k)(6)(A)(ii) 413,388 12 U.S.C. 1832(c) 3,650 12 U.S.C. 1847(b) 62,829 12 U.S.C. 1847(d): First Tier 5,026 Second Tier 50,265 Third Tier 2,513,215 12 U.S.C. 1884 365 12 U.S.C. 1972(2)(F): First Tier 12,567 Second Tier 62,829 Third Tier 2,513,215 12 U.S.C. 3110(a) 57,435 12 U.S.C. 3110(c): First Tier 4,596 Second Tier 45,946 Third Tier 2,297,385 12 U.S.C. 3909(d) 3,126 15 U.S.C. 78u-2(b)(1): For a natural person 11,823 For any other person 118,225 15 U.S.C. 78u-2(b)(2): For a natural person 118,225 For any other person 591,127 15 U.S.C. 78u-2(b)(3): For a natural person 236,451 For any other person 1,182,251 15 U.S.C. 1639e(k)(1) 14,435 15 U.S.C. 1639e(k)(2) 28,866 42 U.S.C. 4012a(f)(5) 2,730 [Reg. 1864, 90 FR 2607, Jan. 13, 2025] Subpart D—Rules and Procedures Applicable to Suspension or Removal of an Institution-Affiliated Party Where a Felony is Charged or Proven § 263.70 Purpose and scope. The rules and procedures set forth in this subpart apply to informal hearings afforded to any institution-affiliated party for whom the Board is the appropriate regulatory agency, who has been suspended or removed from office or prohibited from further participation in any manner in the conduct of the institution's affairs by a notice or order issued by the Board upon the grounds set forth in section 8(g) of the FDIA (12 U.S.C. 1818(g)). § 263.71 Notice or order of suspension, removal, or prohibition. (a) Grounds. (b) Contents. (c) Service. § 263.72 Request for informal hearing. An institution-affiliated party who is suspended or removed from office or prohibited from participation in the institution's affairs may request an informal hearing within 30 days of service of the notice or order. The request shall be filed in writing with the Secretary, Board of Governors of the Federal Reserve System, Washington, DC 20551. The request shall state with particularity the relief desired and the grounds therefor and shall include, when available, supporting evidence in the form of affidavits. If the institution-affiliated party desires to present oral testimony or witnesses at the hearing, the institution-affiliated party must include a request to do so with the request for informal hearing. The request to present oral testimony or witnesses shall specify the names of the witnesses and the general nature of their expected testimony. § 263.73 Order for informal hearing. (a) Issuance of hearing order. (b) Waiver of oral hearing. (c) Hearing procedures. (2) The informal hearing shall be recorded and a transcript shall be furnished to the institution-affiliated party upon request and after the payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officers. The presiding officers may ask questions of any witness. (3) The presiding officers may order the record to be kept open for a reasonable period following the hearing (normally five business days), during which time additional submissions to the record may be made. Thereafter, the record shall be closed. (d) Authority of presiding officers. (e) Recommendation of presiding officers. § 263.74 Decision of the Board. (a) Within 60 days following the close of the record on the hearing, or receipt of written submissions where a hearing has been waived, the Board shall notify the institution-affiliated party whether the notice of suspension or prohibition will be continued, terminated, or otherwise modified, or whether the order of removal or prohibition will be rescinded or otherwise modified. The notification shall contain a statement of the basis for any adverse decision by the Board. In the case of a decision favorable to the institution-affiliated party, the Board shall take prompt action to rescind or otherwise modify the order of suspension, removal or prohibition. (b) In deciding the question of suspension, removal, or prohibition under this subpart, the Board shall not rule on the question of the guilt or innocence of the individual with respect to the crime with which the individual has been charged. Subpart E—Procedures for Issuance and Enforcement of Directives To Maintain Adequate Capital § 263.80 Purpose and scope. This subpart establishes procedures under which the Board may issue a directive or take other action to require a state member bank, bank holding company, or a savings and loan holding company to achieve and maintain adequate capital. [76 FR 56604, Sept. 13, 2011] § 263.81 Definitions. (a) Bank holding company (b) Capital Adequacy Guidelines (c) Directive (1) Pursuant to ILSA (12 U.S.C. 3907(b)(2)) requiring a state member bank or bank holding company to increase capital to or maintain capital at the minimum level set forth in the Board's Capital Adequacy Guidelines or as otherwise established under procedures described in § 263.85; or (2) Pursuant to HOLA (12 U.S.C. 1467a(g)(1)) requiring a savings and loan holding company to increase capital to or maintain capital at a certain level. (d) State member bank (e) Savings and loan holding company [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56604, Sept. 13, 2011] § 263.82 Establishment of minimum capital levels. The Board has established minimum capital levels for state member banks and bank holding companies in its Capital Adequacy Guidelines. The Board may set higher capital levels as necessary and appropriate for a particular state member bank or bank holding company based upon its financial condition, managerial resources, prospects, or similar factors, pursuant to the procedures set forth in § 263.85 of this subpart. § 263.83 Issuance of capital directives. (a) Notice of intent to issue directive. (b) Contents of notice. (1) The required minimum level of capital to be achieved or maintained by the institution; (2) Its current level of capital; (3) The proposed increase in capital needed to meet the minimum requirements; (4) The proposed date or schedule for meeting these minimum requirements; (5) When deemed appropriate, specific details of a proposed plan for meeting the minimum capital requirements; and (6) The date for a written response by the bank or bank holding company to the proposed directive, which shall be at least 14 days from the date of issuance of the notice unless the Board determines a shorter period is necessary because of the financial condition of the bank or bank holding company. (c) Response to notice. (1) An explanation why a directive should not be issued; (2) Any proposed modification of the terms of the directive; (3) Any relevant information, mitigating circumstances, documentation or other evidence in support of the institution's position regarding the proposed directive; and (4) The institution's plan for attaining the required level of capital. (d) Failure to file response. (e) Board consideration of response. (1) Issue the directive as originally proposed or in modified form; (2) Determine not to issue a directive and so notify the bank or bank holding company; or (3) Seek additional information or clarification of the response by the bank or bank holding company. (f) Contents of directive. (1) Achieve or maintain the minimum capital requirement established pursuant to the Board's Capital Adequacy Guidelines or the procedures in § 263.85 of this subpart by a certain date; (2) Adhere to a previously submitted plan or submit for approval and adhere to a plan for achieving the minimum capital requirement by a certain date; (3) Take other specific action as the Board directs to achieve the minimum capital levels, including requiring a reduction of assets or asset growth or restriction on the payment of dividends; or (4) Take any combination of the above actions. (g) Request for reconsideration of directive. [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56604, Sept. 13, 2011] § 263.84 Enforcement of directive. (a) Judicial and administrative remedies. (2) The Board, pursuant to section 910(d) of ILSA (12 U.S.C. 3909(d)), may also assess civil money penalties for violation of the directive against any bank or bank holding company and any institution-affiliated party of the bank or bank holding company, in the same manner and to the same extent as if the directive were a final cease-and-desist order. The Board, pursuant to section 10(i) (12 U.S.C. 1467a(i)), may also assess civil money penalties for violation of the directive against any savings and loan holding company and any institution-affiliated party of the savings and loan holding company, in the same manner and to the same extent as if the directive were a final cease-and-desist order. (b) Other enforcement actions. (c) Consideration in application proceedings. [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56604, Sept. 13, 2011] § 263.85 Establishment of increased capital level for specific institutions. (a) Establishment of capital levels for specific institutions. (1) A written agreement or memorandum of understanding between the Board or the appropriate Federal Reserve Bank and the bank or bank holding company; (2) A temporary or final cease-and-desist order issued pursuant to section 8(b) or (c) of the FDIA (12 U.S.C. 1818(b) or (c)); (3) A condition for approval of an application or issuance of a notice of intent not to disapprove a proposal; (4) Or other similar means; or (5) The procedures set forth in paragraph (b) of this section. (b) Procedure to establish higher capital requirement Notice. (2) Response. (3) Board decision. (4) Enforcement of higher capital level. [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56604, Sept. 13, 2011] Subpart F—Practice Before the Board § 263.90 Scope. This subpart prescribes rules relating to general practice before the Board on one's own behalf or in a representational capacity, including the circumstances under which disciplinary sanctions—censure, suspension, or debarment—may be imposed upon persons appearing in a representational capacity, including attorneys and accountants, but not including employees of the Board. These disciplinary sanctions, which continue in effect beyond the duration of a specific proceeding, supplement the provisions of § 263.6(b) of subpart A, which address control of a specific proceeding. § 263.91 Censure, suspension or debarment. The Board may censure an individual or suspend or debar such individual from practice before the Board if he or she engages, or has engaged, in conduct warranting sanctions as set forth in § 263.94; 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 shall be initiated only upon a finding by the Board that the conduct that forms the basis for the disciplinary action is egregious. § 263.92 Definitions. (a) As used in this subpart, the following terms shall have the meaning given in this section unless the context otherwise requires. (b)(1) Practice before the Board (2) Practice before the Board (c) Attorney (d) Accountant § 263.93 Eligibility to practice. (a) Attorneys. (b) Accountants. § 263.94 Conduct warranting sanctions. Conduct for which an individual may be censured, debarred or suspended from practice before the Board includes, but is not limited to: (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 Board or to any Board officer or employee, or to any tribunal authorized to pass upon matters administered by the Board 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, 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 Board 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, commonwealth, or the District of Columbia for the conviction of a felony or misdemeanor involving personal dishonesty or breach of trust in matters relating to the supervisory responsibilities of the Board, where the conviction has not been reversed on appeal; (e) Knowingly aiding or abetting another individual to practice before the Board during that individual's period of suspension, debarment, or ineligibility; (f) Contemptuous conduct in connection with practice before the Board, and knowingly making false accusations and statements, or circulating or publishing malicious or libelous matter; (g) Suspension or debarment from practice before the OCC, the FDIC, the Office of Thrift Supervision, the Securities and Exchange Commission, the NCUA, or any other Federal agency based on matters relating to the supervisory responsibilities of the Board; (h) Willful or knowing violation of any of the regulations contained in this part. [56 FR 38052, Aug. 9, 1991, as amended at 68 FR 48267, Aug. 13, 2003; 76 FR 56605, Sept. 13, 2011] § 263.95 Initiation of disciplinary proceeding. (a) Receipt of information. (b) Censure without formal proceeding. (c) Institution of formal disciplinary proceeding. § 263.96 Conferences. (a) General. (b) Resignation or voluntary suspension. § 263.97 Proceedings under this subpart. Except as otherwise provided in this subpart, any hearing held under this subpart shall be held before an administrative law judge of the OFIA pursuant to procedures set forth in subparts A and B of this part. The Board shall appoint a person to represent the Board in the hearing. Any person having prior involvement in the matter which is the basis for the suspension or debarment proceeding shall be disqualified from representing the Board in the hearing. The hearing shall be closed to the public unless the Board, sua sponte or on the request of a party, otherwise directs. The administrative law judge shall refer a recommended decision to the Board, which shall issue the final decision and order. In its final decision and order, the Board may censure, debar or suspend an individual, or take such other disciplinary action as the Board deems appropriate. § 263.98 Effect of suspension, debarment or censure. (a) Debarment. (b) Suspension. (c) Censure. (d) Notice of debarment or suspension. § 263.99 Petition for reinstatement. The Board may entertain a petition for reinstatement from any person debarred from practice before the Board. The Board shall grant reinstatement only if the Board finds 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 Board, in its discretion, affords the petitioner an informal hearing. Subpart G—Rules Regarding Claims Under the Equal Access to Justice Act § 263.100 Authority and scope. This subpart implements the provisions of the Equal Access to Justice Act (5 U.S.C. 504) as they apply to formal adversary adjudications before the Board. The types of proceedings covered by this subpart are listed in §§ 263.1 and 263.50. § 263.101 Standards for awards. A respondent in a covered proceeding that prevails on the merits of that proceeding against the Board, and that is eligible under this subpart as defined in § 263.103, may receive an award for fees and expenses incurred in the proceeding unless the position of the Board during the proceeding was substantially justified or special circumstances make an award unjust. The position of the Board includes, in addition to the position taken by the Board in the adversary proceeding, the action or failure to act by the Board upon which the adversary proceeding was based. An award will be reduced or denied if the applicant has unduly or unreasonably protracted the proceedings. § 263.102 Prevailing party. Only an eligible applicant that prevailed on the merits of an adversary proceeding may qualify for an award under this subpart. § 263.103 Eligibility of applicants. (a) General rule. (b) Types of eligible applicant. (1) An individual with a net worth of not more than $2 million at the time the adversary adjudication was initiated; (2) Any sole owner of an unincorporated business, or any partnership, corporation, associations, unit of local government or organization, the net worth of which did not exceed $7,000,000 and which did not have more than 500 employees at the time the adversary adjudication was initiated; (3) A charitable or other tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) with not more than 500 employees at the time the adversary proceeding was initiated; or (4) A cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 employees at the time the adversary proceeding was initiated. (c) Factors to be considered. (1) An applicant who owns an unincorporated business shall be considered as an individual sole owner of an unincorporated business (2) An applicant's net worth includes the value of any assets disposed of for the purpose of meeting an eligibility standard and excludes the value of any obligations incurred for this purpose. Transfers of assets or obligations incurred for less than reasonably equivalent value will be presumed to have been made for this purpose. (3) The net worth of a financial institution shall be established by the net worth information reported in conformity with applicable instructions and guidelines on the financial institution's financial report to its supervisory agency for the last reporting date before the initiation of the adversary proceeding. A bank holding company's and a savings and loan holding company's net worth will be considered on a consolidated basis even if the bank holding company or the savings and loan holding company is not required to file its regulatory reports to the Board on a consolidated basis. (4) The employees of an applicant include all those persons who were regularly providing services for remuneration for the applicant, under its direction and control, on the date the adversary proceeding was initiated. Part-time employees are counted on a proportional basis. (5) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. As used in this subpart, affiliates [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56605, Sept. 13, 2011] § 263.104 Application for awards. (a) Time to file. (b) Contents. (1) The name of the applicant and an identification of the proceeding; (2) A showing that the applicant has prevailed, and an identification of the way in which the applicant believes that the position of the Board in the proceeding was not substantially justified; (3) If the applicant is not an individual, a statement of the number of its employees on the date the proceeding was initiated; (4) A description of any affiliated individuals or entities, as defined in § 263.103(c)(5), or a statement that none exist; (5) A declaration that the applicant, together with any affiliates, had a net worth not more than the maximum set forth in § 263.103(b) as of the date the proceeding was initiated, supported by a net worth statement conforming to the requirements of § 263.105; (6) A statement of the amount of fees and expenses for which an award is sought conforming to § 263.107; and (7) Any other matters that the applicant wishes the Board to consider in determining whether and in what amount an award should be made. (c) Verification. (d) Service. (e) Presiding officer. § 263.105 Statement of net worth. (a) General rule. (b) Contents. (2) In the case of applicants or affiliates that are not banks, net worth shall 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, except as adjusted under § 263.103(c)(5). The net worth of a bank holding company or a savings and loan holding company shall be considered on a consolidated basis. Assets and liabilities of individuals shall include those beneficially owned. (3) If the applicant or any of its affiliates is a bank or a savings association, the portion of the statement of net worth which relates to the bank or the savings association shall consist of a copy of the bank's or a savings association's last Consolidated Report of Condition and Income filed before the initiation of the adversary adjudication. Net worth shall be considered for the purposes of this subpart to be the total equity capital (or, in the case of mutual savings banks or mutual savings associations, the total surplus accounts) 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. (c) Statement confidential. [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56605, Sept. 13, 2011] § 263.106 Measure of awards. (a) General rule. (b) Determination of reasonableness of fees. (1) If the attorney, agent, or expert witness is in private practice, his or her customary fee for like services; (2) The prevailing rate for similar services in the community in which the attorney, agent, or expert witness ordinarily performs services; (3) The time actually spent in the representation of the applicant; (4) The time reasonably spent in light of the difficulty or complexity of the issues in the proceeding; and (5) Such other factors as may bear on the value of the services provided. (c) Awards for studies. § 263.107 Statement of fees and expenses. The application shall be accompanied by a statement fully documenting the fees and expenses for which an award is sought. A separate itemized statement shall be submitted for each professional firm or individual whose services are covered by the application, showing the hours spent in work 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 performed. The administrative law judge or the Board may require the applicant to provide vouchers, receipts, or other substantiation for any expenses claimed. § 263.108 Responses to application. (a) By counsel for the Board. (2) The answer shall explain in detail any objections to the award requested and identify the facts relied on in support of the Board's position. If the answer is based on any alleged facts not already in the record of the proceeding, the answer shall include either supporting affidavits or a request for further proceedings under § 263.109, or both. (b) Reply to answer. (c) Additional response. § 263.109 Further proceedings. (a) General rule. (b) Request for further proceedings. (c) Hearing. § 263.110 Recommended decision. The administrative law judge shall file with the Board a recommended decision on the fee application not later than 30 days after the submission of all pleadings and evidentiary material concerning the application. The recommended decision shall include written proposed findings and conclusions on the applicant's eligibility and its status as a prevailing party and, if applicable, an explanation of the reasons for any difference between the amount requested and the amount of the recommended award. The recommended decision shall also include, if at issue, proposed findings as to whether the Board's position was substantially justified, whether the applicant unduly protracted the proceedings, or whether special circumstances make an award unjust. The administrative law judge shall file the record of the proceeding on the fee application upon the filing of the recommended decision and, at the same time, serve upon each party a copy of the recommended decision, findings, conclusions, and proposed order. § 263.111 Action by the Board. (a) Exceptions to recommended decision. (b) Decision by the Board. Subpart H—Issuance and Review of Orders Pursuant to Prompt Corrective Action Provisions of the Federal Deposit Insurance Act Source: 57 FR 44888, Sept. 29, 1992, unless otherwise noted. § 263.201 Scope. (a) The rules and procedures set forth in this subpart apply to state member banks, companies that control state member banks or are affiliated with such banks, and senior executive officers and directors of state member banks that are subject to the provisions of section 38 of the Federal Deposit Insurance Act (section 38) and subpart D of part 208 of this chapter. (b) [Reserved] [57 FR 44888, Sept. 29, 1992, as amended at 63 FR 58621, Nov. 2, 1998] § 263.202 Directives to take prompt regulatory action. (a) Notice of intent to issue directive In general. (2) Immediate issuance of final directive. (b) Contents of notice. (1) A statement of the bank's capital measures and capital levels; (2) A description of the restrictions, prohibitions, or affirmative actions that the Board proposes to impose or require; (3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for completion of such affirmative actions; and (4) The date by which the bank or company subject to the directive may file with the Board a written response to the notice. (c) Response to notice Time for response. (2) Content of response. (i) An explanation why the action proposed by the Board is not an appropriate exercise of discretion under section 38; (ii) Any recommended modification of the proposed directive; and (iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the bank or company regarding the proposed directive. (d) Board consideration of response. (1) Issue the directive as proposed or in modified form; (2) Determine not to issue the directive and so notify the bank or company; or (3) Seek additional information or clarification of the response from the bank or company, or any other relevant source. (e) Failure to file response. (f) Request for modification or rescission of directive. § 263.203 Procedures for reclassifying a state member bank based on criteria other than capital. (a) Reclassification based on unsafe or unsound condition or practice Issuance of notice of proposed reclassification 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 bank's capital measures and capital levels and the category to which the bank would be reclassified; (ii) The reasons for reclassification of the bank; (iii) The date by which the bank subject to the notice of reclassification may file with the Board 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 Board determines that a shorter period is appropriate in light of the financial condition of the bank or other relevant circumstances. (3) Response to notice of proposed reclassification. (i) An explanation of why the bank is not in unsafe or unsound condition or otherwise should not be reclassified; (ii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the bank 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 shall be 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. (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. [57 FR 44888, Sept. 29, 1992, as amended at 63 FR 58621, Nov. 2, 1998] § 263.204 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 shall be 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 officers. (g) Time for decision. § 263.205 Enforcement of directives. (a) Judicial remedies. (b) Administrative remedies Failure to comply with directive. (2) Failure to implement capital restoration plan. (c) Other enforcement action. [57 FR 44888, Sept. 29, 1992, as amended at 63 FR 58621, Nov. 2, 1998] Subpart I—Submission and Review of Safety and Soundness Compliance Plans and Issuance of Orders To Correct Safety and Soundness Deficiencies Source: 60 FR 35682, July 10, 1995, unless otherwise noted. § 263.300 Scope. The rules and procedures set forth in this subpart apply to State member banks that are subject to the provisions of section 39 of the Federal Deposit Insurance Act (section 39) (12 U.S.C. 1831p-1). § 263.301 Purpose. Section 39 of the FDI Act requires the Board to establish safety and soundness standards. Pursuant to section 39, a bank may be required to submit a compliance plan if it is not in compliance with a safety and soundness standard established by guideline under section 39(a) or (b). An enforceable order under section 8 may be issued if, after being notified that it is in violation of a safety and soundness standard established under section 39, the bank fails to submit an acceptable compliance plan or fails in any material respect to implement an accepted plan. This subpart establishes procedures for requiring submission of a compliance plan and issuing an enforceable order pursuant to section 39. § 263.302 Determination and notification of failure to meet safety and soundness standard and request for compliance plan. (a) Determination. (b) Request for compliance plan. [60 FR 35682, July 10, 1995, as amended at 63 FR 55488, Oct. 15, 1998; 66 FR 8637, Feb. 1, 2001] § 263.303 Filing of safety and soundness compliance plan. (a) Schedule for filing compliance plan In general. (2) Other plans. (b) Contents of plan. (c) Review of safety and soundness compliance plans. (d) Failure to submit or implement a compliance plan Supervisory actions. (2) Extraordinary growth. extraordinary growth (e) Amendment of compliance plan. § 263.304 Issuance of orders to correct deficiencies and to take or refrain from taking other actions. (a) Notice of intent to issue order In general. (2) Immediate issuance of final order. (b) Contents of notice. (1) A statement of the safety and soundness deficiency or deficiencies that have been identified at the bank; (2) A description of any restrictions, prohibitions, or affirmative actions that the Board proposes to impose or require; (3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for completion of any required action; and (4) The date by which the bank subject to the order may file with the Board a written response to the notice. (c) Response to notice Time for response. (2) Contents of response. (i) An explanation why the action proposed by the Board is not an appropriate exercise of discretion under section 39; (ii) Any recommended modification of the proposed order; and (iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the bank regarding the proposed order. (d) Agency consideration of response. (1) Issue the order as proposed or in modified form; (2) Determine not to issue the order and so notify the bank; or (3) Seek additional information or clarification of the response from the bank, or any other relevant source. (e) Failure to file response. (f) Request for modification or rescission of order. § 263.305 Enforcement of orders. (a) Judicial remedies. (b) Failure to comply with order. (c) Other enforcement action. Subpart J—Removal, Suspension, and Debarment of Accountants From Performing Audit Services Source: 68 FR 48267, Aug. 13, 2003, unless otherwise noted. § 263.400 Scope. This subpart, which implements section 36(g)(4) of the Federal Deposit Insurance Act (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 for insured state member banks, bank holding companies, and savings and loan holding companies required by section 36 of the FDIA (12 U.S.C. 1831m). [68 FR 48267, Aug. 13, 2003, as amended at 76 FR 56605, Sept. 13, 2011] § 263.401 Definitions. As used in this subpart, the following terms shall have the meaning given below unless the context requires otherwise: (a) Accounting firm (b) Audit services (c) Banking organization (d) Independent public accountant [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56605, Sept. 13, 2011] § 263.402 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 conflict of interest provisions applicable to accountants through the Sarbanes-Oxley Act of 2002, Pub. L. 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 Board or any officer or employee of the Board; (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 § 263.403, 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 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) Hearing 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 to stay. (4) Hearing on petition. (5) Decision on petition. (6) Review of presiding officer's decision. § 263.403 Automatic removal, suspension, and debarment. (a) An independent public accountant or accounting firm may not perform audit services for banking organizations 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 Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, or the Office of Thrift Supervision under section 36 of the FDIA; (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 of 2002 (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 Board, for good cause shown, may grant written permission to such accountant or firm to perform audit services for banking organizations. The request shall contain a concise statement of the action requested. The Board may require the applicant to submit additional information. § 263.404 Notice of removal, suspension, or debarment. (a) Notice to the public. (b) Notice to the Board by accountants and firms. (1) Any currently effective order or other action described in § 263.402(a)(1)(vi) through (a)(1)(vii) or § 263.403(a)(2) through (a)(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 of 2002 (15 U.S.C. 7215(c)(4)(C) or (G)). (c) Timing of notice. § 263.405 Petition for reinstatement. (a) Form of petition. (b) Procedure. Subpart K—Formal Investigative Proceedings Source: 88 FR 89921, Dec. 28, 2023, unless otherwise noted. § 263.450 Scope. (a) The procedures of this subpart must be followed when a formal investigation is instituted and conducted pursuant to: section 8(n) of the FDIA (12 U.S.C. 1818(n)); section 10(c) of the FDIA (12 U.S.C. 1820(c)); section 7(j)(15) of the FDIA (12 U.S.C. 1817(j)(15)); section 5(f) of the Bank Holding Company Act (12 U.S.C. 1844(f)); sections 10(b)(4) and 10(g)(2) of HOLA (12 U.S.C. 1464(b)(4) and 1467a(g)(2)); or section 162 of the Dodd-Frank Act (12 U.S.C. 5362). (b) Nothing in this subpart prohibits the Board from conducting informal investigations or obtaining information by any means other than a subpoena issued pursuant to this subpart. (c) This subpart does not apply to adjudicatory proceedings as to which hearings are required by statute, the rules for which are contained in part 262 of this chapter and subpart A of this part. § 263.451 Definitions. As used in this subpart: (a) Formal investigative proceeding (b) Designated representative § 263.452 Conduct of a formal investigative proceeding. (a) A formal investigative proceeding may be initiated upon issuance of an order of investigation by the Board or by the General Counsel or his or her designees in accordance with 12 CFR 265.6. The order of investigation must indicate the purpose of the formal investigative proceeding and designate the Board's representatives to direct the conduct of the investigation. (b) Any person who is compelled or requested to furnish documentary evidence or testimony at a formal investigative proceeding may, upon request, inspect a copy of the order of investigation at a time and place that the Board's designated representative determines to be appropriate. Any person who is compelled or requested to furnish documentary evidence or testimony in a formal investigative proceeding may not refuse to comply with a subpoena on the grounds that the order of investigation was not made available in advance of the date of production or testimony set forth in a subpoena. (c) Copies of an order of investigation may not be produced to or retained by any person except with the express written approval of the Board officer supervising the investigation. The Board may provide a copy of an order of investigation, in whole or in part, if the Board officer concludes, in the officer's discretion, that disclosure of the order of investigation would not infringe upon the privacy of persons involved in the investigation or impede the conduct of the investigation. § 263.453 Powers of the designated representative. The designated representative conducting the formal investigative proceeding will have the power to administer oaths and affirmations, to take and preserve testimony under oath, to issue subpoenas ad testificandum duces tecum § 263.454 Confidentiality of proceedings. Formal investigative proceedings conducted pursuant to this subpart are confidential and, unless otherwise ordered or permitted by the Board, or required by law, the entire record of any formal investigative proceeding, including the order of investigation authorizing the proceeding, the transcripts of such proceeding, and all documents and information obtained by the designated representative(s) during the course of the formal investigative proceeding will be confidential. If the Board issues a notice of charges or otherwise initiates an administrative (adjudicatory) hearing, disclosure of documents and information obtained by the Board's designated representative(s) during the course of the formal investigative proceeding will be governed by the Uniform Rules and the Board Local Rules Supplementing the Uniform Rules (subparts A and B of this part). § 263.455 Transcripts. (a) Transcripts of testimony, if any, must be recorded by an official reporter, or by any other person or means designated by the designated representative conducting the investigation. (b) Transcripts will be treated as confidential and must not be disclosed to any party except as provided in this subpart or as otherwise ordered or permitted by the Board, or required by law or regulation. § 263.456 Rights of witnesses. (a) Any witness in a formal investigative proceeding may be accompanied and advised by an attorney personally representing that witness. (1) Such attorney must be a member in good standing of the bar of any state, Commonwealth, possession, territory, or the District of Columbia, who has not been suspended or debarred from practice before the Board in accordance with any provision of this part, including paragraph (a)(4) of this section. (2) Such attorney may advise the witness before, during, and after the taking of the witness' testimony and may briefly question the witness, on the record, at the conclusion of the witness' testimony, for the sole purpose of clarifying any of the answers the witness has given. During the taking of the testimony of a witness, such attorney may make summary notes solely for the attorney's use in representing the witness. Neither the attorney nor witness may retain copies of exhibits used or introduced in the course of a witness' testimony. (3) All witnesses must be sequestered, and, unless permitted in the discretion of the designated representative, no witness or accompanying attorney may be present during the taking of testimony of any other witness called in such formal investigative proceeding. Attorneys for any other interested persons or entities will not, unless permitted in the discretion of the designated representative, have a right to be present during the testimony of any witness not personally being represented by such attorneys. (4) The Board, for good cause, may exclude a particular attorney from further participation in any formal investigative proceeding in which the Board has found the attorney to have engaged in dilatory, obstructionist, egregious, contemptuous, or contumacious conduct. The designated representative conducting the formal investigative proceeding may report to the Board instances of apparently dilatory, obstructionist, egregious, contemptuous, or contumacious conduct on the part of an attorney. After due notice to the attorney, the Board may take such action as the circumstances warrant, including suspending any attorney representing a witness from further participation in the investigative proceeding, based upon a written record evidencing the conduct of the attorney in the formal investigative proceeding or such other or additional written or oral presentation as the Board may permit or direct. (b) A witness may inspect the transcript of the witness' own testimony, without retaining a copy thereof, for the purpose of making non-substantive corrections to the transcript at a time and place that the designated representative determines to be appropriate in consideration of all relevant factors, including the convenience of the witness. (c) A witness may, solely for the use of the witness and the witness' attorney, obtain a copy of the transcript of the witness' testimony, provided that the witness submits a written request for the transcript and the witness requesting a copy of the witness' testimony bears the cost thereof. However, the Board officer supervising the formal investigative proceeding may deny such a request if, in the officer's discretion, the provision of the transcript may infringe the privacy of third persons involved in the investigation, or impede or interfere with the conduct of any investigation. If the Board issues a notice of charges or otherwise initiates an administrative (adjudicatory) hearing, disclosure of formal investigative transcripts obtained by the Board's designated representative(s) during the course of the formal investigative proceeding will be governed by the Uniform Rules and the Board Local Rules Supplementing the Uniform Rules (subparts A and B of this part). § 263.457 Subpoenas. (a) Service. (1) By personal service; (2) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works; (3) By delivery to an agent which, in the case of a corporation or other association, is delivery to an officer, director, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the party; (4) By registered or certified mail or by an express delivery service addressed to the person's or authorized agent's last known address; or (5) In such other manner as is reasonably calculated to give actual notice. (b) Area of service. (c) Witness fees and mileage. Appendix A to Part 263—Rules Applicable to Proceedings Initiated Before April 1, 2024 Source: 88 FR 89923, Dec. 28, 2023, unless otherwise noted. Note: The content of this appendix reproduces the Uniform Rules of Practice and Procedure and Board Local Rules Supplementing the Uniform Rules in 12 CFR part 263, subparts A and B, respectively, as of April 1, 2024, and apply only to adjudicatory proceedings initiated before April 1, 2024. Proceedings initiated on or after April 1, 2024, are not governed by the version of the rules set out in this appendix. Cross-references to part 263 (as well as to included sections) in this appendix are to those provisions as contained within this appendix. Subpart A—Uniform Rules of Practice and Procedure 263.1

Scope. 263.2

Rules of construction. 263.3

Definitions. 263.4

Authority of the Board. 263.5

Authority of the administrative law judge. 263.6

Appearance and practice in adjudicatory proceedings. 263.7

Good faith certification. 263.8

Conflicts of interest. 263.9

Ex parte communications. 263.10

Filing of papers. 263.11

Service of papers. 263.12

Construction of time limits. 263.13

Change of time limits. 263.14

Witness fees and expenses. 263.15

Opportunity for informal settlement. 263.16

The Board's right to conduct examination. 263.17

Collateral attacks on adjudicatory proceeding. 263.18

Commencement of proceeding and contents of notice. 263.19

Answer. 263.21

Failure to appear. 263.22

Consolidation and severance of actions. 263.23

Motions. 263.24

Scope of document discovery. 263.25

Request for document discovery from parties. 263.26

Document subpoenas to nonparties. 263.27

Deposition of witness unavailable for hearing. 263.28

Interlocutory review. 263.29

Summary disposition. 263.30

Partial summary disposition. 263.31

Scheduling and prehearing conferences. 263.32

Prehearing submissions. 263.33

Public hearings. 263.34

Hearing subpoenas. 263.35

Conduct of hearings. 263.36

Evidence. 263.37

Post-hearing filings. 263.38

Recommended decision and filing of record. 263.39

Exceptions to recommended decision. 263.40

Review by the Board. 263.41

Stays pending judicial review. Subpart B—Board Local Rules Supplementing Uniform Rules 263.50

Purpose and scope. 263.51

Definitions. 263.52

Address for filing. 263.53

Discovery depositions. 263.54

Delegation to the Office of Financial Institution Adjudication. 263.55

Board as Presiding Officer. 263.56

Initial licensing proceedings. Subpart A—Uniform Rules of Practice and Procedure § 263.1 Scope. This subpart prescribes Uniform Rules of practice and procedure applicable to adjudicatory proceedings required to be conducted on the record after opportunity for hearing under the following statutory provisions: (a) Cease-and-desist proceedings under section 8(b) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(b)); (b) Removal and prohibition proceedings under section 8(e) of the FDIA (12 U.S.C. 1818(e)); (c) Change-in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) to determine whether the Board of Governors of the Federal Reserve System (“Board”) should issue an order to approve or disapprove a person's proposed acquisition of a state member bank, bank holding company, or savings and loan holding company; (d) Proceedings under section 15C(c)(2) of the Securities Exchange Act of 1934 (“Exchange Act”) (15 U.S.C. 78o-5), to impose sanctions upon any government securities broker or dealer or upon any person associated or seeking to become associated with a government securities broker or dealer for which the Board is the appropriate agency; (e) Assessment of civil money penalties by the Board against institutions, institution-affiliated parties, and certain other persons for which the Board is the appropriate agency for any violation of: (1) Any provision of the Bank Holding Company Act of 1956, as amended (“BHC Act”), or any order or regulation issued thereunder, pursuant to 12 U.S.C. 1847(b) and (d); (2) Sections 19, 22, 23, 23A and 23B of the Federal Reserve Act (“FRA”), or any regulation or order issued thereunder and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 504 and 505; (3) Section 9 of the FRA pursuant to 12 U.S.C. 324; (4) Section 106(b) of the Bank Holding Company Act Amendments of 1970 and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1972(2)(F); (5) Any provision of the Change in Bank Control Act of 1978, as amended, or any regulation or order issued thereunder and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1817(j)(16); (6) Any provision of the International Lending Supervision Act of 1983 (“ILSA”) or any rule, regulation or order issued thereunder, pursuant to 12 U.S.C. 3909; (7) Any provision of the International Banking Act of 1978 (“IBA”) or any rule, regulation or order issued thereunder, pursuant to 12 U.S.C. 3108; (8) Certain provisions of the Exchange Act, pursuant to section 21B of the Exchange Act (15 U.S.C. 78u-2); (9) Section 1120 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation issued thereunder; (10) The terms of any final or temporary order issued under section 8 of the FDIA or of any written agreement executed by the Board, the terms of any condition imposed in writing by the Board in connection with the grant of an application or request, and certain unsafe or unsound practices or breaches of fiduciary duty or law or regulation pursuant to 12 U.S.C. 1818(i)(2); (11) Any provision of law referenced in section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued thereunder; (12) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued thereunder; (13) Section 5 of the Home Owners' Loan Act (“HOLA”) or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1464 (d), (s) and (v); (14) Section 9 of the HOLA or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1467(d); and (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and (r); (f) Remedial action under section 102(g) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(g)); (g) Removal, prohibition, and civil monetary penalty proceedings under section 10(k) of the FDI Act (12 U.S.C. 1820(k)) for violations of the special 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. § 263.2 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) 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. § 263.3 Definitions. For purposes of this subpart, unless explicitly stated to the contrary: (a) Administrative law judge (b) Adjudicatory proceeding (c) Decisional employee (d) Enforcement Counsel (e) Final order (f) Institution (2) Any bank holding company or any subsidiary (other than a bank) of a bank holding company as those terms are defined in the BHC Act (12 U.S.C. 1841 et seq. (3) Any organization operating under section 25 of the FRA (12 U.S.C. 601 et seq. (4) Any foreign bank or company to which section 8 of the IBA (12 U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; (5) Any Federal agency as that term is defined in section 1(b) of the IBA (12 U.S.C. 3101(5)); and (6) Any savings and loan holding company or any subsidiary (other than a savings association) of a savings and loan holding company as those terms are defined in the HOLA (12 U.S.C. 1461 et seq. (g) Institution-affiliated party (h) Local Rules (i) OFIA OCC FDIC NCUA (j) Party (k) Person (l) Respondent (m) Uniform Rules (n) Violation § 263.4 Authority of the Board. The Board 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. § 263.5 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 § 263.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Board 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 Board 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. § 263.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the Board or an administrative law judge By attorneys. (2) By non-attorneys. (3) Notice of appearance. pro se (b) Sanctions. § 263.7 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. § 263.8 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. § 263.9 Ex parte communications. (a) Definition Ex parte communication (i) An interested person outside the Board (including such person's counsel); and (ii) The administrative law judge handling that proceeding, a member of the Board, or a decisional employee. (2) Exception. ex parte (b) Prohibition of ex parte communications. (1) No interested person outside the Federal Reserve System shall make or knowingly cause to be made an ex parte (2) A member of the Board, administrative law judge, or decisional employee shall not make or knowingly cause to be made to any interested person outside the Federal Reserve System any ex parte (c) Procedure upon occurrence of ex parte communication. ex parte (d) Sanctions. (e) Separation of functions. ex parte § 263.10 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 Board 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. § 263.11 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 § 263.10(c). (c) By the Board or the administrative law judge. (2) If a party has not appeared in the proceeding in accordance with § 263.6, the Board 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 as is reasonably calculated to give actual notice. (e) Area of service. § 263.12 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 Board 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 Board or the administrative law judge in the case of filing, or by agreement among the parties in the case of service. § 263.13 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 Board pursuant to § 263.38, the Board 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 sua sponte § 263.14 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 Board is the party requesting the subpoena. The Board shall not be required to pay any fees to, or expenses of, any witness not subpoenaed by the Board. § 263.15 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 Board 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. § 263.16 The Board's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the Board or any Federal Reserve Bank to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the Board or any Federal Reserve Bank to conduct or continue any form of investigation authorized by law. § 263.17 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. § 263.18 Commencement of proceeding and contents of notice. (a) Commencement of proceeding. (ii) The notice must be served by the Board 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 Board. (b) Contents of notice. (1) The legal authority for the proceeding and for the Board's jurisdiction over the proceeding; (2) A statement of the matters of fact or law showing that the Board 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. § 263.19 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. (a) Amendments. (b) Amendments to conform to the evidence. § 263.21 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 Board a recommended decision containing the findings and the relief sought in the notice. § 263.22 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 shall 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. § 263.23 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. § 263.24 Scope of document discovery. (a) Limits on discovery. (2) Discovery by use of deposition is governed by § 263.53 of subpart B of this part. (3) Discovery by use of interrogatories is not permitted. (b) Relevance. (c) Privileged matter. (d) Time limits. § 263.25 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. § 263.26 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 § 263.24(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 § 263.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 263.27 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's 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. § 263.28 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. § 263.29 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. § 263.30 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. § 263.31 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. § 263.32 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. § 263.33 Public hearings. (a) General rule. (b) Filing document under seal. § 263.34 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. § 263.35 Conduct of hearings. (a) General rules. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. § 263.36 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 Board 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 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 Board. (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. § 263.37 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. § 263.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 263.39 Exceptions to recommended decision. (a) Filing exceptions. (b) Effect of failure to file or raise exceptions. (2) No exception need be considered by the Board 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. § 263.40 Review by the Board. (a) Notice of submission to the Board. (b) Oral argument before the Board. (c) Agency final decision. (2) The Board 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 Board 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 Board shall be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Board or required by statute, upon any appropriate state or Federal supervisory authority. § 263.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the Board may not, unless specifically ordered by the Board or a reviewing court, operate as a stay of any order issued by the Board. The Board 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 that order. Subpart B—Board Local Rules Supplementing the Uniform Rules § 263.50 Purpose and scope. (a) This subpart prescribes the rules of practice and procedure governing formal adjudications set forth in § 263.50(b) of this subpart, and supplements the rules of practice and procedure contained in subpart A of this part. (b) The rules and procedures of this subpart and subpart A of this part shall apply to the formal adjudications set forth in § 263.1 of subpart A and to the following adjudications: (1) Suspension of a member bank from use of credit facilities of the Federal Reserve System under section 4 of the FRA (12 U.S.C. 301); (2) Termination of a bank's membership in the Federal Reserve System under section 9 of the FRA (12 U.S.C. 327); (3) Issuance of a cease-and-desist order under section 11 of the Clayton Act (15 U.S.C. 21); (4) Adjudications under sections 2, 3, or 4 of the BHC Act (12 U.S.C. 1841, 1842, or 1843); (5) Formal adjudications on bank merger applications under section 18(c) of the FDIA (12 U.S.C. 1828(c)); (6) Issuance of a divestiture order under section 5(e) of the BHC Act (12 U.S.C. 1844(e)); (7) Imposition of sanctions upon any municipal securities dealer for which the Board is the appropriate regulatory agency, or upon any person associated or seeking to become associated with such a municipal securities dealer, under section 15B(c)(5) of the Exchange Act (15 U.S.C. 78o-4); (8) Proceedings where the Board otherwise orders that a formal hearing be held; (9) Termination of the activities of a state branch, state agency, or commercial lending company subsidiary of a foreign bank in the United States, pursuant to section 7(e) of the IBA (12 U.S.C. 3105(d)); (10) Termination of the activities of a representative office of a foreign bank in the United States, pursuant to section 10(b) of the IBA (12 U.S.C. 3107(b)); (11) Issuance of a prompt corrective action directive to a member bank under section 38 of the FDI Act (12 U.S.C. 1831o); (12) Reclassification of a member bank on grounds of unsafe or unsound condition under section 38(g)(1) of the FDI Act (12 U.S.C. 1831o(g)(1)); (13) Reclassification of a member bank on grounds of unsafe and unsound practice under section 38(g)(1) of the FDI Act (12 U.S.C. 1831o(g)(1)); (14) Issuance of an order requiring a member bank to dismiss a director or senior executive officer under section 38 (e)(5) and 38(f)(2) (F)(ii) of the FDI Act (12 U.S.C. 1831o(e)(5) and 1831o(f)(2) (F)(ii)); (15) Adjudications under section 10 of the HOLA (12 U.S.C. 1467a). § 263.51 Definitions. As used in subparts B through G of this part: (a) Secretary (b) Member bank (c) Institution § 263.52 Address for filing. All papers to be filed with the Board shall be filed with the Secretary of the Board of Governors of the Federal Reserve System, Washington, DC 20551. § 263.53 Discovery depositions. (a) In general. (b) Application. (c) Issuance of subpoena. (d) Motion to quash or modify. (e) Enforcement of a deposition subpoena. (f) Conduct of the deposition. (g) Protective orders. (1) Unreasonably annoy, embarrass, or oppress the deponent; (2) Unreasonably probe into privilege, irrelevant or immaterial matters; or (3) Unreasonably attempt to pry into a party's preparation for trial. § 263.54 Delegation to the Office of Financial Institution Adjudication. Unless otherwise ordered by the Board, administrative adjudications subject to subpart A of this part shall be conducted by an administrative law judge of OFIA. § 263.55 Board as Presiding Officer. The Board may, in its discretion, designate itself, one or more of its members, or an authorized officer, to act as presiding officer in a formal hearing. In such a proceeding, proposed findings and conclusions, briefs, and other submissions by the parties permitted in subpart A shall be filed with the Secretary for consideration by the Board. Sections 263.38 and 263.39 of subpart A will not apply to proceedings conducted under this section. § 263.56 Initial licensing proceedings. Proceedings with respect to applications for initial licenses shall include, but not be limited to, applications for Board approval under section 3 of the BHC Act and section 10 of HOLA and such proceedings as may be ordered by the Board with respect to applications under section 18(c) of the FDIA. In such initial licensing proceedings, the procedures set forth in subpart A of this part shall apply, except that the Board may designate a Board Counsel to represent the Board in a nonadversary capacity for the purpose of developing for the record information relevant to the issues to be determined by the Presiding Officer and the Board. In such proceedings, Board Counsel shall be considered to be a decisional employee for purposes of §§ 263.9 and 263.40 of subpart A.

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