12 CFR Part 308 — Rules of Practice and Procedure

PART 308—RULES OF PRACTICE AND PROCEDURE Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 1829, 1829(b), 1831i, 1831m(g)(4), 1831 o, o o o Source: 56 FR 37975, Aug. 9, 1991, unless otherwise noted. Subpart A—Uniform Rules of Practice and Procedure Source: 88 FR 89935, Dec. 28, 2023, unless otherwise noted. § 308.0 Applicability date. These Uniform Rules set out in this subpart apply to adjudicatory proceedings initiated on or after April 1, 2024. Any adjudicatory proceedings initiated before April 1, 2024, continue to be governed by the previous version of the Uniform Rules included in appendix A of this part. § 308.1 Scope. This subpart prescribes Uniform Rules of practice and procedure applicable to adjudicatory proceedings required to be conducted on the record after opportunity for a hearing under the following statutory provisions: (a) Cease-and-desist proceedings under section 8(b) of the Federal Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b)); (b) Removal and prohibition proceedings under section 8(e) of the FDIA (12 U.S.C. 1818(e)); (c) Change-in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit Insurance Corporation (FDIC) should issue an order to approve or disapprove a person's proposed acquisition of an institution; (d) Proceedings under section 15C(c)(2) of the Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78o-5), to impose sanctions upon any Government securities broker or dealer or upon any person associated or seeking to become associated with a Government securities broker or dealer for which the FDIC is the appropriate agency; (e) Assessment of civil money penalties by the FDIC against institutions, institution-affiliated parties, and certain other persons for which it is the appropriate agency for any violation of: (1) Sections 22(h) and 23 of the Federal Reserve Act (FRA), or any implementing regulation, and certain unsafe or unsound practices or breaches of fiduciary duty under 12 U.S.C. 1828(j) or 12 U.S.C. 1468; (2) Section 106(b) of the Bank Holding Company Act Amendments of 1970 (BHCA Amendments of 1970), and certain unsafe or unsound practices or breaches of fiduciary duty under 12 U.S.C. 1972(2)(F); (3) Any provision of the Change in Bank Control Act of 1978, as amended (CBCA), or any implementing regulation or order issued, and certain unsafe or unsound practices, or breaches of fiduciary duty under 12 U.S.C. 1817(j)(16); (4) Section 7(a)(1) of the FDIA under 12 U.S.C. 1817(a)(1); (5) Any provision of the International Lending Supervision Act of 1983 (ILSA), or any rule, regulation or order issued under 12 U.S.C. 3909; (6) Any provision of the International Banking Act of 1978 (IBA), or any rule, regulation or order issued under 12 U.S.C. 3108; (7) Certain provisions of the Exchange Act under section 21B of the Exchange Act (15 U.S.C. 78u-2); (8) Section 1120 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3349), or any order or regulation issued under; (9) The terms of any final or temporary order issued under section 8 of the FDIA or of any written agreement executed by the FDIC, or the former Office of Thrift Supervision (OTS), the terms of any condition imposed in writing by the FDIC in connection with the grant of an application or request, certain unsafe or unsound practices or breaches of fiduciary duty, or any law or regulation not otherwise provided under 12 U.S.C. 1818(i)(2); (10) Any provision of law referenced in section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued under; and (11) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued under; (12) Certain provisions of Section 5 of the Home Owners' Loan Act (HOLA) or any regulation or order issued under 12 U.S.C. 1464(d)(1), (5)-(8), (s), and (v); (13) Section 9 of the HOLA or any regulation or order issued under 12 U.S.C. 1467(d); and (14) Section 10 of HOLA under 12 U.S.C. 1467a(a)(2)(D), (g), (i)(2)-(4) and (r); (f) Remedial action under section 102(g) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(g)); (g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) to impose penalties for violations of the post-employment restrictions under section 10(k); and (h) This subpart also applies to all other adjudications required by statute to be determined on the record after opportunity for an agency hearing, unless otherwise specifically provided for in the Local Rules (see § 308.3(n)). § 308.2 Rules of construction. For purposes of this part: (a) Any term in the singular includes the plural, and the plural includes the singular, if such use would be appropriate; (b) The term counsel (c) Unless the context requires otherwise, a party's counsel of record, if any, may, on behalf of that party, take any action required to be taken by the party. § 308.3 Definitions. For purposes of this subpart, unless explicitly stated to the contrary: (a) Administrative law judge (ALJ) (b) Administrative Officer (c) Adjudicatory proceeding (d) Assistant Administrative Officer (e) Board of Directors Board (f) Decisional employee (g) Designee (h) Electronic signature (i) Enforcement Counsel (j) FDIC (k) Final order (l) 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 BHCA (12 U.S.C. 1841 et seq. (3) Any savings association as that term is defined in section 3(b) of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company or any subsidiary thereof (other than a bank) as those terms are defined in section 10(a) of the HOLA (12 U.S.C. 1467a(a)); (4) Any organization operating under section 25 of the FRA (12 U.S.C. 601 et seq. (5) Any foreign bank or company to which section 8 of the IBA (12 U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; and (6) Any Federal agency as that term is defined in section 1(b) of the IBA (12 U.S.C. 3101(5)). (m) Institution-affiliated party (n) Local Rules (o) Office of Financial Institution Adjudication (OFIA) (p) Party (q) Person (r) Respondent (s) Uniform Rules (t) Violation § 308.4 Authority of the Board of Directors. The Board of Directors 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. § 308.5 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 § 308.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Board of Directors 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 of Directors a recommended decision as provided in this subpart; (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. § 308.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the FDIC 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. § 308.7 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. § 308.8 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. § 308.9 Ex parte communications. (a) Definition Ex parte communication (i) An interested person outside the FDIC (including such person's counsel); and (ii) The ALJ handling that proceeding, the Board of Directors, or a decisional employee. (2) Exception. ex parte (b) Prohibition of ex parte communications. (1) An interested person outside the FDIC must not make or knowingly cause to be made an ex parte (2) Any member of the Board of Directors, ALJ, or decisional employee may not make or knowingly cause to be made to any interested person outside the FDIC 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 FDIC. (2) Decision process. § 308.10 Filing of papers. (a) Filing. (b) Manner of filing. (1) Electronic mail or other electronic means designated by the Board of Directors 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. § 308.11 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 of Directors or the ALJ. (2) If a respondent has not appeared in the proceeding in accordance with § 308.6, the Board of Directors 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. § 308.12 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 of Directors 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. § 308.13 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 of Directors pursuant to § 308.38, the Board of Directors 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 of Directors' or the ALJ's own motion. § 308.14 Witness fees and expenses. (a) In general. (b) Exception for testimony by a party. (c) Timing of payment. § 308.15 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. § 308.16 FDIC's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the FDIC to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the FDIC to conduct or continue any form of investigation authorized by law. § 308.17 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. § 308.18 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 FDIC. (b) Contents of notice. (1) The legal authority for the proceeding and for the FDIC's jurisdiction over the proceeding; (2) Matters of fact or law showing that the FDIC 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. § 308.19 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. § 308.20 Amended pleadings. (a) Amendments. (b) Amendments to conform to the evidence. § 308.21 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 of Directors a recommended decision containing the findings and the relief sought in the notice. § 308.22 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. § 308.23 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. § 308.24 Scope of document discovery. (a) Limits on discovery. documents (2) Discovery by use of deposition is governed by subpart B of this part. (3) Discovery by use of either interrogatories or requests for admission is not permitted. (4) Any request to produce documents that calls for irrelevant material; or that is unreasonable, oppressive, excessive in scope, unduly burdensome, or repetitive of previous requests, or that seeks to obtain privileged documents will be denied or modified. A request is unreasonable, oppressive, excessive in scope, or unduly burdensome if, among other things, it fails to include justifiable limitations on the time period covered and the geographic locations to be searched, or the time provided to respond in the request is inadequate. (b) Relevance. (c) Privileged matter. (d) Time limits. § 308.25 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. § 308.26 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 § 308.24(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 § 308.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 308.27 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. § 308.28 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. § 308.29 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. § 308.30 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. § 308.31 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. § 308.32 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. § 308.33 Public hearings. (a) General rule. (b) Filing document under seal. § 308.34 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. § 308.35 Conduct of hearings. (a) General rules. Conduct of hearings. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. (c) Electronic presentation. § 308.36 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 of Directors 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 of Directors. (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. § 308.37 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. § 308.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 308.39 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 of Directors 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. § 308.40 Review by the Board of Directors. (a) Notice of submission to the Board of Directors. (b) Oral argument before the Board of Directors. (c) Board of Directors' final decision. (2) The Board of Directors 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 of Directors 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 of Directors will be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Board of Directors or required by statute, upon any appropriate State or Federal supervisory authority. § 308.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the FDIC may not, unless specifically ordered by the Board of Directors or a reviewing court, operate as a stay of any order issued by the FDIC. The Board of Directors may, in its discretion, and on such terms as the Board of Directors 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—General Rules of Procedure Source: 88 FR 89935, Dec. 28, 2023, unless otherwise noted. § 308.100 Applicability date. These Local Rules in this subpart B apply to adjudicatory proceedings initiated on or after April 1, 2024. Any adjudicatory proceedings initiated before April 1, 2024, continue to be governed by the previous version of the Local Rules included in appendix A to this part. § 308.101 Scope of Local Rules. (a) This subpart B and subpart C of this part prescribe rules of practice and procedure to be followed in the administrative enforcement proceedings initiated by the FDIC as set forth in § 308.1. (b) Except as otherwise specifically provided, the Uniform Rules and subpart B of the Local Rules will not apply to subparts D through T of this part. (c) Subpart C of this part will apply to any administrative proceeding initiated by the FDIC. (d) Subparts A through C of this part prescribe the rules of practice and procedure to applicable to adjudicatory proceedings as to which hearings on the record are provided for by the assessment of civil money penalties by the FDIC against institutions, institution-affiliated parties, and certain other persons for which it is the appropriate regulatory agency for any violation of 15 U.S.C. 78o(c)(4). § 308.102 Authority of Board of Directors and Administrative Officer. (a) The Board of Directors. (2) Nothing contained in this part shall be construed to limit the power of the Board of Directors granted by applicable statutes or regulations. (b) The Administrative Officer. (2) Pursuant to authority delegated by the Board of Directors, the Administrative Officer and Assistant Administrative Officer, upon the advice and recommendation of the Deputy General Counsel for Litigation or, in the Deputy General Counsel's absence, the Assistant General Counsel for General Litigation, may issue rulings in proceedings under 12 U.S.C. 1817(j), 1818 1828(j), 1829, 1831i, and 1831 o (i) Denials of requests for private hearing; (ii) Interlocutory appeals; (iii) Stays pending judicial review; (iv) Reopenings of the record and/or remands of the record to the ALJ; (v) Supplementation of the evidence in the record; (vi) All remands from the courts of appeals not involving substantive issues; (vii) Extensions of stays of orders terminating deposit insurance; and (viii) All matters, including final decisions, in proceedings under 12 U.S.C. 1818(g). § 308.103 Assignment of Administrative Law Judge (ALJ). (a) Assignment. (b) Procedures. § 308.104 Filings with the Board of Directors. (a) General rule. [email protected] (b) Scope. § 308.105 Custodian of the record. The Administrative Officer is the official custodian of the record when no ALJ has jurisdiction over the proceeding. The Administrative Officer will maintain the official record of all papers filed in each proceeding. § 308.106 Written testimony in lieu of oral hearing. (a) General rule. (2) Any such order will provide that each party must, upon request, have the same right of oral cross-examination (or redirect examination) as would exist had the witness testified orally rather than through a written statement. Such order must also provide that any party has a right to call any hostile witness or adverse party to testify orally. (b) Scheduling of submission of written testimony. (2) Absent good cause shown, written rebuttal, if any, must be submitted and the oral portion of the hearing begun within 30 days of the date set for filing written direct testimony. (3) The ALJ will direct, unless good cause requires otherwise, that— (i) All parties must simultaneously file any exhibits and written direct testimony required under paragraph (b)(1) of this section; and (ii) All parties must simultaneously file any exhibits and written rebuttal required under paragraph (b)(2) of this section. (c) Failure to comply with order to file written testimony. (2) Late filings of papers under this section may be allowed and accepted only upon good cause shown. § 308.107 Supplemental discovery rules. (a) Scope of discovery. (b) Joint Discovery Plan. (1) At the meet and confer, the parties must use reasonable efforts to develop a Joint Discovery Plan that should contain the following elements: (i) The subjects on which discovery may be needed, when discovery should be completed, and whether discovery should be conducted in phases or be limited to, or focused on, particular issues; (ii) Any issues about disclosure, discovery, or preservation of electronically stored information (ESI), including the form or forms in which it should be produced; (iii) Provisions regarding any anticipated discovery of nonparties; (iv) Whether depositions are anticipated and the appropriate limits on the taking of such depositions, consistent with paragraph (e)(1) of this section, including the maximum number of depositions to be allowed; (v) The anticipated timing of the production of any document identifying and describing privileged documents that a party intends to redact or withhold from production; and (vi) Provisions regarding any inadvertent disclosure of privileged information. (2) The Joint Discovery Plan must comply with the provisions of this section and § 308.24. (3) The parties must submit their proposed Joint Discovery Plan to the ALJ for review, modification, and/or approval. In the event the parties cannot agree to some or all of the provisions, the parties must file their respective proposals with the ALJ for resolution. After review, the ALJ must issue an approved Joint Discovery Plan, which must include any modifications made by the ALJ. (c) Document and electronically stored information (ESI) discovery Scope of document discovery. (2) Depositions to determine completeness of document production. (3) Specific limitations on ESI discovery. (4) Request for production. (5) Privilege. (6) Document subpoenas to nonparties. (ii) If the ALJ determines that the application does not set forth a valid basis for the issuance of the subpoena, or that it does not otherwise comply with § 308.24(b) or the Joint Discovery Plan, the ALJ may refuse to issue the subpoena or may issue it in a modified form upon such conditions as may be consistent with the Uniform Rules and the Local Rules. (d) Expert witness disclosures. Required elements. (i) If the expert is one retained or specially employed to provide expert testimony in the matter, or one whose duties as the party's employee regularly involve giving expert testimony, the witness must provide a written report in compliance with paragraph (d)(2)(i) of this section. (ii) If the expert is an employee of a party who does not regularly provide expert testimony, including a commissioned bank examiner employed by the FDIC, the witness must provide written disclosures in compliance with paragraph (d)(2)(ii) of this section. (2) Disclosure of expert testimony Witnesses must provide written report. (A) A complete statement of all opinions the witness will express and the basis and reasons for them; (B) The facts or data considered by the witness in forming the opinions; (C) Any exhibits that will be used to summarize or support the opinions; (D) The witness' qualifications, including a list of all publications authored in the previous 10 years; (E) A list of all other cases in which, during the previous 4 years, the witness testified as an expert at trial or by deposition; and (F) A statement of the compensation to be paid for the study and testimony in the case. (ii) Witnesses who provide written disclosures instead of a written report. (A) The subject matter on which the witness is expected to present evidence; and (B) A summary of the facts and opinions to which the witness is expected to testify. (e) Depositions In general. (i) Limits on depositions. (ii) Privileged matters. (iii) Report. (2) Notice. (i) Location. (ii) Remote participation. (iii) Deposition subpoenas. (A) Issuance. (B) Service. (C) Objection to deposition subpoena. (D) Enforcement of deposition subpoena. (3) Time for taking depositions. (4) Conduct of the deposition. (5) Duration. (6) Recording the testimony Generally. (A) By stenotype machine or electronic means, such as by sound or video recording device; (B) Upon agreement of the parties, by any other method; or (C) For good cause and with leave of the ALJ, by any other method. (ii) Cost. (iii) Transcript. (f) Discovery motions Motions to limit discovery. (i) The discovery sought is unreasonably cumulative or duplicative or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) Involves privileged, irrelevant, or immaterial matters; (iii) The party seeking discovery has already had ample opportunity to obtain the information by discovery in the action; or (iv) The proposed discovery is outside the scope of this section or § 308.24. (2) Motions to terminate depositions. (3) Motions to compel discovery. Subpart C—Rules of Practice Before the FDIC and Standards of Conduct § 308.108 Sanctions. (a) General rule. (1) Constitutes contemptuous conduct; (2) Has in a material way injured or prejudiced some other 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) Has unduly delayed the proceeding. (b) Sanctions. (1) Issuing an order against the party; (2) Rejecting or striking any testimony or documentary evidence offered, or other papers filed, by the party; (3) Precluding the party from contesting specific issues or findings; (4) Precluding the party from offering certain evidence or from challenging or contesting certain evidence offered by another party; (5) Precluding the party from making a late filing or conditioning a late filing on any terms that are just; and (6) Assessing reasonable expenses, including attorney's fees, incurred by any other party as a result of the improper action or failure to act. (c) Limits on dismissal as a sanction. (1) That the delay resulted solely or principally from the conduct of the FDIC enforcement counsel; (2) That the conduct of the FDIC enforcement counsel is unexcused; (3) That the moving respondent took all reasonable steps to oppose and prevent the subject delay; (4) That the moving respondent has been materially prejudiced or injured; and (5) That no lesser or different sanction is adequate. (d) Procedure for imposition of sanctions. (2) No sanction, other than refusing to accept late papers, authorized by this section shall be imposed without prior notice to all parties and an opportunity for any counsel or party against whom sanctions would be imposed to be heard. Such opportunity to be heard may be on such notice, and the response may be in such form, as the administrative law judge directs. The opportunity to be heard may be limited to an opportunity to respond orally immediately after the act or inaction covered by this section is noted by the administrative law judge. (3) Requests for the imposition of sanctions by any party, and the imposition of sanctions, shall be treated for interlocutory review purposes in the same manner as any other ruling by the administrative law judge. (4) Section not exclusive. § 308.109 Suspension and disbarment. (a) Discretionary suspension and disbarment. (i) Not to possess the requisite qualifications to represent others; (ii) To be seriously lacking in character or integrity or to have engaged in material unethical or improper professional conduct; (iii) To have engaged in, or aided and abetted, a material and knowing violation of the FDIA; or (iv) To have engaged in contemptuous conduct before the FDIC. Suspension or revocation on the grounds set forth in paragraphs (a)(1)(ii), (iii), and (iv) of this section shall only be ordered upon a further finding that the counsel's conduct or character was sufficiently egregious as to justify suspension or revocation. (2) Unless otherwise ordered by the Board of Directors, an application for reinstatement by a person suspended or disbarred under paragraph (a)(1) of this section may be made in writing at any time more than three years after the effective date of the suspension or disbarment and, thereafter, at any time more than one year after the person's most recent application for reinstatement. The suspension or disbarment shall continue until the applicant has been reinstated by the Board of Directors for good cause shown or until, in the case of a suspension, the suspension period has expired. An applicant for reinstatement under this provision may, in the Board of Directors' sole discretion, be afforded a hearing. (b) Mandatory suspension and disbarment. (2) Any person appearing or practicing before the FDIC who is the subject of an order, judgment, decree, or finding of the types set forth in paragraph (b)(1) of this section shall promptly file with the Administrative Officer a copy thereof, together with any related opinion or statement of the agency or tribunal involved. Any person who fails to so file a copy of the order, judgment, decree, or finding within 30 days after the entry of the order, judgment, decree, or finding or the date such person initiates practice before the FDIC, for that reason alone may be disqualified from practicing before the FDIC until such time as the appropriate filing shall be made. Failure to file any such paper shall not impair the operation of any other provision of this section. (3) A suspension or disbarment under paragraph (b)(1) of this section from practice before the FDIC shall continue until the applicant has been reinstated by the Board of Directors for good cause shown, provided that any person suspended or disbarred under paragraph (b)(1) of this section shall be automatically reinstated by the Administrative Officer, upon appropriate application, if all the grounds for suspension or disbarment under paragraph (b)(1) of this section are subsequently removed by a reversal of the conviction (or the passage of time since the conviction) or termination of the underlying suspension or disbarment. An application for reinstatement on any other grounds by any person suspended or disbarred under paragraph (b)(1) of this section may be filed no sooner than one year after the suspension or disbarment, and thereafter, a new request for reinstatement may be made no sooner than one year after the counsel's most recent reinstatement application. The application must comply with the requirements of § 303.3 of this chapter. An applicant for reinstatement under this provision may, in the Board of Directors' sole discretion, be afforded a hearing. (c) Hearings under this section. (d) Summary suspension for contemptuous conduct. (e) Practice defined. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999; 68 FR 48270, Aug. 13, 2003; 80 FR 5012, Jan. 30, 2015; 86 FR 2249, Jan. 12, 2021] Subpart D—Rules and Procedures Applicable to Proceedings Relating to Disapproval of Acquisition of Control § 308.110 Scope. Except as specifically indicated in this subpart, the rules and procedures in this subpart, subpart B of the Local Rules, and the Uniform Rules shall apply to proceedings in connection with the disapproval by the Board of Directors or its designee of a proposed acquisition of control of an insured nonmember bank. § 308.111 Grounds for disapproval. The following are grounds for disapproval of a proposed acquisition of control of an insured nonmember bank: (a) The proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the banking business in any part of the United States; (b) The effect of the proposed acquisition of control in any section of the United States may be to substantially lessen competition or to tend to create a monopoly or would in any other manner be in restraint of trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served; (c) Either the financial condition of any acquiring person or the future prospects of the institution might jeopardize the financial stability of the bank or prejudice the interest of the depositors of the bank. (d) The competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the bank, or in the interest of the public, to permit such person to control the bank; (e) Any acquiring person neglects, fails, or refuses to furnish to the FDIC all the information required by the FDIC; or (f) The FDIC determines that the proposed acquisition would result in an adverse effect on the Deposit Insurance Fund. [56 FR 37975, Aug. 9, 1991, as amended at 71 FR 20526, Apr. 21, 2006; 73 FR 2145, Jan. 14, 2008] § 308.112 Notice of disapproval. (a) General rule. (2) The notice of disapproval shall: (i) Contain a statement of the basis for the disapproval; and (ii) Indicate that a hearing may be requested by filing a written request with the Administrative Officer within ten days after service of the notice of disapproval; and if a hearing is requested, that an answer to the notice of disapproval, as required by § 308.113, must be filed within 20 days after service of the notice of disapproval. (b) Waiver of hearing. (c) Section 308.18(b) of the Uniform Rules shall not apply to the content of the Notice of Disapproval. [56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2249, Jan. 12, 2021] § 308.113 Answer to notice of disapproval. (a) Contents. (2) Any hearing under this subpart shall be limited to those parts of the notice of disapproval that are specifically denied. (b) Failure to answer. § 308.114 Burden of proof. The ultimate burden of proof shall be upon the person proposing to acquire a depository institution. The burden of going forward with a prima facie Subpart E—Rules and Procedures Applicable to Proceedings Relating to Assessment of Civil Penalties for Willful Violations of the Change in Bank Control Act § 308.115 Scope. The rules and procedures of this subpart, subpart B of the Local Rules and the Uniform Rules shall apply to proceedings to assess civil penalties against any person for willful violation of the Change in Bank Control Act of 1978 (12 U.S.C. 1817(j)), or any regulation or order issued pursuant thereto, in connection with the affairs of an insured nonmember bank. § 308.116 Assessment of penalties. (a) In general. (b) Maximum penalty amounts. (c) Mitigating factors. (d) Failure to answer. [56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57990, Nov. 12, 1996; 65 FR 64887, Oct. 31, 2000; 69 FR 61305, Oct. 18, 2004; 73 FR 73157, Dec. 2, 2008; 77 FR 74577, Dec. 17, 2012; 81 FR 42239, June 29, 2016; 81 FR 95416, Dec. 28, 2016; 83 FR 1522, Jan. 12, 2018; 83 FR 61114, Nov. 28, 2018] § 308.117 Effective date of, and payment under, an order to pay. If the respondent both requests a hearing and serves an answer, civil penalties assessed pursuant to this subpart are due and payable 60 days after an order to pay, issued after the hearing or upon default, is served upon the respondent, unless the order provides for a different period of payment. Civil penalties assessed pursuant to an order to pay issued upon consent are due and payable within the time specified therein. § 308.118 Collection of penalties. The FDIC may collect any civil penalty assessed pursuant to this subpart by agreement with the respondent, or the FDIC may bring an action against the respondent to recover the penalty amount in the appropriate United States district court. All penalties collected under this section shall be paid over to the Treasury of the United States. Subpart F—Rules and Procedures Applicable to Proceedings for Involuntary Termination of Insured Status § 308.119 Scope. (a) Involuntary termination of insurance pursuant to section 8(a) of the FDIA. (b) Involuntary termination of insurance pursuant to section 8(p) of the Act. § 308.120 Grounds for termination of insurance. (a) General rule. (1) An insured depository institution or its directors or trustees have engaged or are engaging in unsafe or unsound practices in conducting the business of such depository institution; (2) An insured depository institution is in an unsafe or unsound condition such that it should not continue operations as an insured depository institution; or (3) An insured depository institution or its directors or trustees have violated an applicable law, rule, regulation, order, condition imposed in writing by the FDIC in connection with the granting of any application or other request by the insured depository institution or have violated any written agreement entered into between the insured depository institution and the FDIC. (b) Extraterritorial acts of foreign banks. (1) The act or practice has been, is, or is likely to be a cause of, or carried on in connection with or in furtherance of, an act or practice committed within any state, territory, or possession of the United States or the District of Columbia that, in and of itself, would be an appropriate basis for action by the FDIC; or (2) The act or practice committed outside the United States, if proven, would adversely affect the insurance risk of the FDIC. (c) Failure of foreign bank to secure removal of personnel. § 308.121 Notification to primary regulator. (a) Service of notification. The notification shall be served not less than 30 days before the Notice of Intent to Terminate Insured Status required by section 8(a)(2)(B) of the FDIA (12 U.S.C. 1818(a)(2)(B)), and § 308.122, except that this period for notification may be reduced or eliminated with the agreement of the appropriate Federal banking agency. (2) Appropriate Federal banking agency (3) In the case of a state nonmember bank, insured Federal branch of a foreign bank, or state member bank, in addition to service of the notification upon the appropriate Federal banking agency, a copy of the notification shall be sent to the appropriate State banking supervisor. (4) In instances in which a Temporary Order Suspending Insurance is issued pursuant to section 8(a)(8) of the FDIA (12 U.S.C. 1818(a)(8)), the notification may be served concurrently with such order. (b) Contents of notification. § 308.122 Notice of intent to terminate. (a) If, after serving the notification under § 308.121, the Board of Directors determines that any unsafe or unsound practices, condition, or violation, specified in the notification, requires the termination of the insured status of the insured depository institution, the Board of Directors or its designee, if it determines to proceed further, shall cause to be served upon the insured depository institution a notice of its intention to terminate insured status not less than 30 days after service of the notification, unless a shorter time period has been agreed upon by the appropriate Federal banking agency. (b) The Board of Directors or its designee shall cause a copy of the notice to be sent to the appropriate Federal banking agency and to the appropriate state banking supervisor, if any. § 308.123 Notice to depositors. If the Board of Directors enters an order terminating the insured status of an insured depository institution or branch, the insured depository institution shall, on the day that order becomes final, or on such other day as that order prescribes, mail a notification of termination of insured status to each depositor at the depositor's last address of record on the books of the insured depository institution or branch. The insured depository institution shall also publish the notification in two issues of a local newspaper of general circulation and shall furnish the FDIC with proof of such publications. The notification to depositors shall include information provided in substantially the following form: Notice (Date)__________. 1. The status of the __________, as an (insured depository institution) (insured branch) under the provisions of the Federal Deposit Insurance Act, will terminate as of the close of business on the ________ day of____________, 19____. 2. Any deposits made by you after that date, either new deposits or additions to existing deposits, will not be insured by the Federal Deposit Insurance Corporation. 3. Insured deposits in the (depository institution) (branch) on the ________ day of____________, 19____, will continue to be insured, as provided by Federal Deposit Insurance Act, for 2 years (Name of (depository institution or branch) (Address) The notification may include any additional information the depository institution deems advisable, provided that the information required by this section shall be set forth in a conspicuous manner on the first page of the notification. § 308.124 Involuntary termination of insured status for failure to receive deposits. (a) Notice to show cause. (b) Notice of termination date. (c) Notification to depositors of termination of insured status. Notice (Date)__________. The status of the __________, as an (insured depository institution) (insured branch) under the Federal Deposit Insurance Act, will terminate on the ________ day of____________, 19____, and its deposits will thereupon cease to be insured. (Name of depository institution or branch) (Address) The notification may include any additional information the depository institution deems advisable, provided that the information required by this section shall be set forth in a conspicuous manner on the first page of the notification. § 308.125 Temporary suspension of deposit insurance. (a) If, while an action is pending under section 8(a)(2) of the FDIA (12 U.S.C. 1818(a)(2)), the Board of Directors, after consultation with the appropriate Federal banking agency, finds that an insured depository institution (other than a special supervisory association to which § 308.126 of this subpart applies) has no tangible capital under the capital guidelines or regulations of the appropriate Federal banking agency, the Board of Directors may issue a Temporary Order Suspending Deposit Insurance, pending completion of the proceedings under section 8(a)(2) of the FDIA (12 U.S.C. 1818(a)(2)). (b) The temporary order shall be served upon the insured institution and a copy sent to the appropriate Federal banking agency and to the appropriate State banking supervisor. (c) The temporary order shall become effective ten days from the date of service upon the insured depository institution. Unless set aside, limited, or suspended in proceedings under section 8(a)(8)(D) of the FDIA (12 U.S.C. 1818 (a)(8)(D)), the temporary order shall remain effective and enforceable until an order terminating the insured status of the institution is entered by the Board of Directors and becomes final, or the Board of Directors dismisses the proceedings. (d) Notification to depositors of suspension of insured status. Notice (Date)____________. 1. The status of the __________, as an (insured depository institution) (insured branch) under the provisions of the Federal Deposit Insurance Act, will be suspended as of the close of business on the ________ day of ____________, 19____, pending the completion of administrative proceedings under section 8(a) of the Federal Deposit Insurance Act. 2. Any deposits made by you after that date, either new deposits or additions to existing deposits, will not be insured by the Federal Deposit Insurance Corporation. 3. Insured deposits in the (depository institution) (branch) on the ________ day of ____________, 19____, will continue to be insured for ____________ after the close of business on the__________ day of __________, 19____. Provided, however, that any withdrawals after the close of business on the ________ day of____________, 19____, will reduce the insurance coverage by the amount of such withdrawals. (Name of depository institution or branch) (Address) The notification may include any additional information the depository institution deems advisable, provided that the information required by this section shall be set forth in a conspicuous manner on the first page of the notification. § 308.126 Special supervisory associations. If the Board of Directors finds that a savings association is a special supervisory association under the provisions of section 8(a)(8)(B) of the FDIA (12 U.S.C. 1818(a)(8)(B)) for purposes of temporary suspension of insured status, the Board of Directors shall serve upon the association its findings with regard to the determination that the capital of the association, as computed using applicable accounting standards, has suffered a material decline; that such association or its directors or officers, is engaging in an unsafe or unsound practice in conducting the business of the association; that such association is in an unsafe or unsound condition to continue operating as an insured association; or that such association or its directors or officers, has violated any law, rule, regulation, order, condition imposed in writing by any Federal banking agency, or any written agreement, or that the association failed to enter into a capital improvement plan acceptable to the Corporation prior to January, 1990. Subpart G—Rules and Procedures Applicable to Proceedings Relating to Cease-and-Desist Orders § 308.127 Scope. (a) Cease-and-desist proceedings under sections 8 and 50 of the FDIA. (b) Proceedings under the Securities Exchange Act of 1934. (2) The rules and procedures of this subpart, subpart B of the Local Rules and the Uniform Rules shall apply to proceedings by the Board of Directors to order a clearing agency or transfer agent to cease and desist from failure to comply with the applicable provisions of section 17, 17A and 19 of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78q, 78q-l, 78s), and the applicable rules and regulations thereunder, where the clearing agency or transfer agent is an insured nonmember bank or a subsidiary thereof. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999; 72 FR 67235, Nov. 28, 2007] § 308.128 Grounds for cease-and-desist orders. (a) General rule. (b) Extraterritorial acts of foreign banks. (1) The act, violation or practice has been, is, or is likely to be a cause of, or carried on in connection with or in furtherance of, an act, violation or practice committed within any state, territory, or possession of the United States or the District of Columbia which act, violation or practice, in and of itself, would be an appropriate basis for action by the FDIC; or (2) The act, violation or practice, if proven, would adversely affect the insurance risk of the FDIC. § 308.129 Notice to state supervisory authority. The Board of Directors or its designee shall give the appropriate state supervisory authority notification of its intent to institute a proceeding pursuant to subpart G of this part, and the grounds thereof. Any proceedings shall be conducted according to subpart G of this part, unless, within the time period specified in such notification, the state supervisory authority has effected satisfactory corrective action. No insured institution or other party who is the subject of any notice or order issued by the FDIC under this section shall have standing to raise the requirements of this subpart as grounds for attacking the validity of any such notice or order. § 308.130 Effective date of order and service on bank. (a) Effective date. (b) Service on banks. § 308.131 Temporary cease-and-desist order. (a) Issuance. (2) When the Board of Directors or its designee issues a Notice of charges pursuant to 12 U.S.C. 1818(b)(1) which specifies on the basis of particular facts and circumstances that a bank's books and records are so incomplete or inaccurate that the FDIC is unable, through the normal supervisory process, to determine the financial condition of the bank or the details or purpose of any transaction or transactions that may have a material effect on the financial condition of the bank, then the Board of Directors or its designee may issue a temporary order requiring: (i) The cessation of any activity or practice which gave rise, whether in whole or in part, to the incomplete or inaccurate state of the books or records; or (ii) Affirmative action to restore such books or records to a complete and accurate state, until the completion of the proceedings under section 8(b) of the FDIA (12 U.S.C. 1818(b)). (3) The temporary order shall be served upon the bank or the institution-affiliated party named therein and shall also be served upon the bank in the case where the temporary order applies only to an institution-affiliated party. (b) Effective date. (c) Uniform Rules do not apply. Subpart H—Rules and Procedures Applicable to Proceedings Relating to Assessment and Collection of Civil Money Penalties for Violation of Cease-and-Desist Orders and of Certain Federal Statutes, Including Call Report Penalties § 308.132 Assessment of penalties. (a) Scope. (b) Relevant considerations. (c) Authority of the Board of Directors. (d) Maximum civil money penalty amounts. (1) Statutory formula to calculate inflation adjustments. (2) Notice of inflation adjustments. Federal Register (e) Civil money penalties for violations of 12 U.S.C. 1464(v) and 12 U.S.C. 1817(a) Late filing—Tier One penalties. Federal Register (i) First offense. Federal Register Federal Register Federal Register (ii) Subsequent offense. Federal Register Federal Register (iii) Lengthy or repeated violations. (iv) Waiver. (2) Late-filing—Tier Two penalties. Federal Register (3) False or misleading reports or information Tier One penalties. Federal Register (ii) Tier Two penalties. Federal Register (iii) Tier Three penalties. Federal Register (4) Mitigating factors. [77 FR 74577, Dec. 17, 2012, as amended at 81 FR 42239, June 29, 2016; 81 FR 95416, Dec. 28, 2016; 83 FR 1522, Jan. 12, 2018; 83 FR 61114, Nov. 28, 2018] § 308.133 Effective date of, and payment under, an order to pay. (a) Effective date. (2) If the respondent both requests a hearing and serves an answer, civil penalties assessed pursuant to this subpart are due and payable 60 days after an order to pay, issued after the hearing or upon default, is served upon the respondent, unless the order provides for a different period of payment. Civil penalties assessed pursuant to an order to pay issued upon consent are due and payable within the time specified therein. (b) Payment. Subpart I—Rules and Procedures for Imposition of Sanctions Upon Municipal Securities Dealers or Persons Associated With Them and Clearing Agencies or Transfer Agents § 308.134 Scope. The rules and procedures in this subpart, subpart B of the Local Rules and the Uniform Rules shall apply to proceedings by the Board of Directors or its designee: (a) To censure, limit the activities of, suspend, or revoke the registration of, any municipal securities dealer for which the FDIC is the appropriate regulatory agency; (b) To censure, suspend, or bar from being associated with such a municipal securities dealer, any person associated with such a municipal securities dealer; and (c) To deny registration, to censure limit the activities of, suspend, or revoke the registration of, any transfer agent or clearing agency for which the FDIC is the appropriate regulatory agency. This subpart and the Uniform Rules shall not apply to proceedings to postpone or suspend registration of a transfer agent or clearing agency pending final determination of denial or revocation of registration. § 308.135 Grounds for imposition of sanctions. (a) Action under section 15(b)(4) of the Exchange Act. (1) That such municipal securities dealer or such person (i) Has committed any prohibited act or omitted any required act specified in subparagraph (A), (D), or (E) of section 15(b)(4) of the Exchange Act, as amended (15 U.S.C. 78o); (ii) Has been convicted of any offense specified in section 15(b)(4)(B) of the Exchange Act within ten years of commencement of proceedings under this subpart; or (iii) Is enjoined from any act, conduct, or practice specified in section 15(b)(4)(C) of the Exchange Act; and (2) That it is in the public interest to impose any of the sanctions set forth in paragraph (a) of this section. (b) Action under sections 17 and 17A of the Exchange Act. (1) That the transfer agent or clearing agency has willfully violated, or is unable to comply with, any applicable provision of section 17 or 17A of the Exchange Act, as amended, or any applicable rule or regulation issued pursuant thereto; and (2) That it is in the public interest to impose any of the sanctions set forth in paragraph (b) of this section. § 308.136 Notice to and consultation with the Securities and Exchange Commission. Before initiating any proceedings under § 308.135, the FDIC shall: (a) Notify the Securities and Exchange Commission of the identity of the municipal securities dealer or associated person against whom proceedings are to be initiated, and the nature of and basis for the proposed action; and (b) Consult with the Commission concerning the effect of the proposed action on the protection of investors and the possibility of coordinating the action with any proceeding by the Commission against the municipal securities dealer or associated person. § 308.137 Effective date of order imposing sanctions. An order issued by the Board of Directors after a hearing or an order issued upon default shall become effective at the expiration of 30 days after the service of the order, except that an order of censure, denial, or revocation of registration is effective when served. An order issued upon consent shall become effective at the time specified therein. All orders shall remain effective and enforceable except to the extent they are stayed, modified, terminated, or set aside by the Board of Directors, its designee, or a reviewing court, provided that orders of suspension shall continue in effect no longer than 12 months. Subpart J—Rules and Procedures Relating to Exemption Proceedings Under Section 12(h) of the Securities Exchange Act of 1934 § 308.138 Scope. The rules and procedures of this subpart J shall apply to proceedings by the Board of Directors or its designee to exempt, in whole or in part, an issuer of securities from the provisions of sections 12(g), 13, 14(a), 14(c), 14(d), or 14(f) of the Exchange Act, as amended (15 U.S.C. 781, 78m, 78n (a), (c) (d) or (f)), or to exempt an officer or a director or beneficial owner of securities of such an issuer from the provisions of section 16 of the Exchange Act (15 U.S.C. 78p). § 308.139 Application for exemption. Any interested person may file a written application for an exemption under this subpart with the Administrative Officer, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. The application shall specify the exemption sought and the reason therefor, and shall include a statement indicating why the exemption would be consistent with the public interest or the protection of investors. [86 FR 2249, Jan. 12, 2021] § 308.140 Newspaper notice. (a) General rule. (b) Contents. [56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2249, Jan. 12, 2021] § 308.141 Notice of hearing. Within ten days after expiration of the period for receipt of comments pursuant to § 308.140, the Administrative Officer shall serve upon the applicant and any person who has requested an opportunity to be heard written notification indicating the place and time of the hearing. The hearing shall be held not later than 30 days after service of the notification of hearing. The notification shall contain the name and address of the presiding officer designated by the Administrative Officer and a statement of the matters to be considered. [86 FR 2249, Jan. 12, 2021] § 308.142 Hearing. (a) Proceedings are informal. (b) Hearing Procedure. (2) There shall be no discovery in proceeding under this subpart J. (3) The presiding officer shall have discretion to permit presentation of witnesses within specified time limits, provided that a list of witnesses is furnished to the presiding officer prior to the hearing. Witnesses shall be sworn, unless otherwise directed by the presiding officer. The presiding officer may ask questions of any witness and each party may cross-examine any witness presented by an opposing party. (4) The proceedings shall be on the record and the transcript shall be promptly submitted to the Board of Directors. The presiding officer shall make recommendations to the Board of Directors, unless the Board of Directors, in its sole discretion, directs otherwise. § 308.143 Decision of Board of Directors. Following submission of the hearing transcript to the Board of Directors, the Board of Directors may grant the exemption where it determines, by reason of the number of public investors, the amount of trading interest in the securities, the nature and extent of the issuer's activities, the issuer's income or assets, or otherwise, that the exemption is consistent with the public interest or the protection of investors. Any exemption shall be set forth in an order specifying the terms of the exemption, the person to whom it is granted, and the period for which it is granted. A copy of the order shall be served upon each party to the proceeding. Subpart K—Procedures Applicable to Investigations Pursuant to Section 10(c) of the FDIA § 308.144 Scope. The procedures of this subpart shall be followed when an investigation is instituted and conducted in connection with any open or failed insured depository institution, any institutions making application to become insured depository institutions, and affiliates thereof, or with other types of investigations to determine compliance with applicable law and regulations, pursuant to section 10(c) of the FDIA (12 U.S.C. 1820(c)) or section 5(d)(1)(B) of HOLA (12 U.S.C. 1464(d)(1)(B)). The Uniform Rules and subpart B of the Local Rules shall not apply to investigations under this subpart. [80 FR 5013, Jan. 30, 2015] § 308.145 Conduct of investigation. An investigation shall be initiated only upon issuance of an order by the Board of Directors; or by the General Counsel, the Director of the Division of Risk Management Supervision, the Director of the Division of Depositor and Consumer Protection, or their respective designees. The order shall indicate the purpose of the investigation and designate FDIC's representative(s) to direct the conduct of the investigation. Upon application and for good cause shown, the persons who issue the order of investigation may limit, quash, modify, or withdraw it. Upon the conclusion of the investigation, an order of termination of the investigation shall be issued by the persons issuing the order of investigation. [80 FR 5013, Jan. 30, 2015] § 308.146 Powers of person conducting investigation. The person designated to conduct the investigation shall have the power, among other things, to administer oaths and affirmations, to take and preserve testimony under oath, to issue subpoenas and subpoenas duces tecum and to apply for their enforcement to the United States District Court for the judicial district or the United States court in any territory in which the main office of the bank, institution, or affiliate is located or in which the witness resides or conducts business. The person conducting the investigation may obtain the assistance of counsel or others from both within and outside the FDIC. The persons who issue the order of investigation may limit, quash, or modify any subpoena or subpoena duces tecum, upon application and for good cause shown. The person conducting an investigation may report to the Board of Directors any instance where any attorney has engaged in contemptuous, dilatory, obstructionist, or contumacious conduct or has otherwise violated any provision of this part during the course of an investigation. The Board of Directors, upon motion of the person conducting the investigation, or on its own motion, may make a finding of contempt and may then summarily suspend, without a hearing, any attorney representing a witness from further participation in the investigation. [80 FR 5013, Jan. 30, 2015] § 308.147 Investigations confidential. Investigations shall be confidential. Information and documents obtained by the FDIC in the course of such investigations shall not be disclosed, except as provided in part 309 of this chapter and as otherwise required by law. [80 FR 5013, Jan. 30, 2015] § 308.148 Rights of witnesses. In an investigation: (a) Any person compelled or requested to furnish testimony, documentary evidence, or other information, shall upon request be shown and provided with a copy of the order initiating the proceeding; (b) Any person compelled or requested to provide testimony as a witness or to furnish documentary evidence may be represented by a counsel who meets the requirements of § 308.6 of the Uniform Rules. That counsel may be present and may: (1) Advise the witness before, during, and after such testimony; (2) Briefly question the witness at the conclusion of such testimony for clarification purposes; and (3) Make summary notes during such testimony solely for the use and benefit of the witness; (c) All persons testifying shall be sequestered. Such persons and their counsel shall not be present during the testimony of any other person, unless permitted in the discretion of the person conducting the investigation. Neither attorney(s) for the institution that is the subject of the investigation, nor attorney(s) for any other interested persons, shall have any right to be present during the testimony of any witness not personally represented by such attorney; (d) In cases of a perceived or actual conflict of interest arising out of an attorney's or law firm's representation of multiple witnesses, the person conducting the investigation may require the attorney to comply with the provisions of § 308.8 of the Uniform Rules; and (e) Witness fees shall be paid in accordance with § 308.14 of the Uniform Rules. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62100, Nov. 16, 1999; 80 FR 5013, Jan. 30, 2015] § 308.149 Service of subpoena. Service of a subpoena shall be accomplished in accordance with § 308.11 of the Uniform Rules. § 308.150 Transcripts. (a) General rule. (b) Subscription by witness. [56 FR 37975, Aug. 9, 1991, as amended at 80 FR 5013, Jan. 30, 2015] Subpart L—Procedures and Standards Applicable to a Notice of Change in Senior Executive Officer or Director Pursuant to Section 32 of the FDIA § 308.151 Scope. The rules and procedures set forth in this subpart shall apply to the notice filed by a state nonmember bank pursuant to section 32 of the FDIA (12 U.S.C. 1831i) and § 303.102 of this chapter for the consent of the FDIC to add or replace an individual on the Board of Directors, or to employ any individual as a senior executive officer, or change the responsibilities of any individual to a position of senior executive officer where: (a) The bank is not in compliance with all minimum capital requirements applicable to it as determined by the FDIC on the basis of such institution's most recent report of condition or report of examination or inspection; (b) The bank is in a troubled condition as defined in § 303.101(c) of this chapter; or (c) The FDIC determines, in connection with the review of a capital restoration plan required under section 38(e)(2) of the FDIA (12 U.S.C. 1831o(e)(2)) or otherwise, that such prior notice is appropriate. [64 FR 62100, Nov. 16, 1999] § 308.152 Grounds for disapproval of notice. The Board of Directors or its designee may issue a notice of disapproval with respect to a notice submitted by a state nonmember bank pursuant to section 32 of the FDIA (12 U.S.C. 1831i) where: (a) The competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the depositors of the state nonmember bank to permit the individual to be employed by or associated with such bank; or (b) The competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the public to permit the individual to be employed by, or associated with, the state nonmember bank. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999] § 308.153 Procedures where notice of disapproval issues pursuant to § 303.103(c) of this chapter. (a) The Notice of Disapproval shall be served upon the insured state nonmember bank and the candidate for director or senior executive officer. The Notice of Disapproval shall: (1) Summarize or cite the relevant considerations specified in § 308.152; (2) Inform the individual and the bank that a request for review of the disapproval may be filed within fifteen days of receipt of the Notice of Disapproval; and (3) Specify that additional information, if any, must be contained in the request for review. (b) The request for review must be filed at the appropriate regional office. (c) The request for review must be in writing and should: (1) Specify the reasons why the FDIC should reconsider its disapproval; and (2) Set forth relevant, substantive and material documents, if any, that for good cause were not previously set forth in the notice required to be filed pursuant to section 32 of the FDIA (12 U.S.C. 1831i). [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999] § 308.154 Decision on review. (a) Within 30 days of receipt of the request for review, the Board of Directors or its designee, shall notify the bank and/or the individual filing the reconsideration (hereafter “petitioner”) of the FDIC's decision on review. (b) If the decision is to grant the review and approve the notice, the bank and the individual involved shall be so notified. (c) A denial of the request for review pursuant to section 32 of the FDIA shall: (1) Inform the petitioner that a written request for a hearing, stating the relief desired and the grounds therefore, may be filed with the Administrative Officer within 15 days after the receipt of the denial; and (2) Summarize or cite the relevant considerations specified in § 308.152. (d) If a decision is not rendered within 30 days, the petitioner may file a request for a hearing within fifteen days from the date of expiration. [56 FR 37975, Aug. 9, 1991, as amended at 86 FR 2249, Jan. 12, 2021] § 308.155 Hearing. (a) Hearing dates. (b) Burden of proof. prima facie (c) Hearing procedure. (2) The provisions of §§ 308.6 through 308.12, 308.16, and 308.21 of the Uniform Rules and §§ 308.101 through 308.102, and 308.104 through 308.106 of subpart B of the Local Rules shall apply to hearings held pursuant to this subpart. (3) The petitioner may appear at the hearing and shall have the right to introduce relevant and material documents and make an oral presentation. Members of the FDIC enforcement staff may attend the hearing and participate as representatives of the FDIC enforcement staff. (4) There shall be no discovery in proceedings under this subpart. (5) At the discretion of the presiding officer, witnesses may be presented within specified time limits, provided that a list of witnesses is furnished to the presiding officer and to all other parties prior to the hearing. Witnesses shall be sworn, unless otherwise directed by the presiding officer. The presiding officer may ask questions of any witness. Each party shall have the opportunity to cross-examine any witness presented by an opposing party. The transcript of the proceedings shall be furnished, upon request and payment of the cost thereof, to the petitioner afforded the hearing. (6) In the course of or in connection with any hearing under paragraph (c) of this section the presiding officer shall have the power to administer oaths and affirmations, to take or cause to be taken depositions of unavailable witnesses, and to issue, revoke, quash, or modify subpoenas and subpoenas duces tecum. Where the presentation of witnesses is permitted, the presiding officer may require the attendance of witnesses from any state, territory, or other place subject to the jurisdiction of the United States at any location where the proceeding is being conducted. Witness fees shall be paid in accordance with § 308.14 of the Uniform Rules. (7) Upon the request of the applicant afforded the hearing, or the members of the FDIC enforcement staff, the record shall remain open for five business days following the hearing for the parties to make additional submissions to the record. (8) The presiding officer shall make recommendations to the Board of Directors or its designee, where possible, within fifteen days after the last day for the parties to submit additions to the record. (9) The presiding officer shall forward his or her recommendation to the Administrative Officer who shall promptly certify the entire record, including the recommendation to the Board of Directors or its designee. The Administrative Officer's certification shall close the record. (d) Written submissions in lieu of hearing. (e) Failure to request or appear at hearing. (f) Decision by Board of Directors or its designee. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62101, Nov. 16, 1999; 86 FR 2249, Jan. 12, 2021] Subpart M—Procedures Applicable to the Request for and Conduct of a Hearing (or the Request for Written Submissions in Lieu of a Hearing) After Denial of an Application Under Section 19 of the Federal Deposit Insurance Act Source: 85 FR 51323, Aug. 20, 2020, unless otherwise noted. § 308.156 Scope. The rules and procedures set forth in this subpart will apply to an application filed under section 19 of the FDI Act, 12 U.S.C. 1829 (section 19), and 12 CFR part 303, subpart L, by an insured depository institution (IDI), depository institution holding company, or an individual (any of which could be termed an applicant). Section 19 states that if an individual has been convicted of any criminal offense involving dishonesty, a breach of trust, or money laundering, or who has agreed to enter into a pretrial diversion or similar program in connection with the prosecution of such offense, the individual must seek the prior written consent of the FDIC to: become or continue as an institution-affiliated party (IAP) with respect to an IDI; own or control directly or indirectly an IDI; or participate directly or indirectly in any manner in the conduct of the affairs of an IDI. This subpart will apply only after such application has been denied under 12 CFR part 303, subpart L. [89 FR 64366, Aug. 7, 2024] § 308.157 Denial of applications. If an application is denied under 12 CFR part 303, subpart L, then the applicant may request a hearing (or request a written submission in lieu of a hearing) under this subpart M. The applicant will have 60 days after the date of the denial to file a written request with the Administrative Officer. In the request, the applicant must state the relief desired, the grounds supporting the request for relief, and provide any supporting evidence that the applicant believes is responsive to the grounds for the denial. [89 FR 64366, Aug. 7, 2024] § 308.158 Hearings. (a) Hearing dates. (b) Burden of proof. prima facie (c) Hearing procedure. (2) The provisions of §§ 308.6 through 308.12, 308.16, and 308.21 of the Uniform Rules (subpart A of this part) and §§ 308.101, 308.102, and 308.104 through 308.106 the Local Rules (subpart B of this part) shall apply to hearings held under this subpart. (3) The applicant may appear at the hearing and shall have the right to introduce relevant and material documents and oral argument. Members of the FDIC enforcement staff may attend the hearing and participate as a party. (4) There shall be no discovery in proceedings under this subpart. (5) At the discretion of the presiding officer, witnesses may be presented within specified time limits, provided that a list of witnesses is furnished to the presiding officer and to all other parties prior to the hearing. Witnesses shall be sworn, unless otherwise directed by the presiding officer. The presiding officer may ask questions of any witness. Each party shall have the opportunity to cross-examine any witness presented by an opposing party. The transcript of the proceedings shall be furnished, upon request and payment of the cost thereof, to the applicant afforded the hearing. (6) In the course of or in connection with any hearing under this paragraph, the presiding officer shall have the power to administer oaths and affirmations; to take or cause to be taken depositions of unavailable witnesses; and to issue, revoke, quash, or modify subpoenas and subpoenas duces tecum. (7) Upon the request of the applicant afforded the hearing, or FDIC enforcement staff, the record shall remain open for five business days following the hearing for the parties to make additional submissions to the record. (8) The presiding officer shall make recommendations to the Board of Directors, where possible, within 20 days after the last day for the parties to submit additions to the record. (9) The presiding officer shall forward his or her recommendation to the Administrative Officer who shall promptly certify the entire record, including the recommendation to the Board of Directors or its designee. The Administrative Officer certification shall close the record. (d) Written submissions in lieu of hearing. (e) Failure to request or appear at hearing. (f) Decision by Board of Directors or its designee. [85 FR 51323, Aug. 20, 2020, as amended at 86 FR 2250, Jan. 12, 2021; 89 FR 64366, Aug. 7, 2024] §§ 308.159-308.160 [Reserved] Subpart N—Rules and Procedures Applicable to Proceedings Relating to Suspension, Removal, and Prohibition Where a Felony ls Charged Source: 72 FR 67235, Nov. 28, 2007, unless otherwise noted. § 308.161 Scope. The rules and procedures set forth in this subpart shall apply to the following: (a) Proceedings to suspend an institution-affiliated party of an insured State nonmember bank, or an insured State savings association, or to prohibit such party from further participation in the conduct of the affairs of any depository institution, if continued service or participation by such party posed, poses, or may pose a threat to the interests of the depositors of, or threatened, threatens, or may threaten to impair public confidence in, any relevant depository institution (as defined at section 1818(g)(1)(E) of Title 12), where the individual is the subject of any state or federal information, indictment, or complaint, involving the commission of, or participation in: (1) A crime involving dishonesty or breach of trust punishable by imprisonment exceeding one year under state or federal law; or (2) A criminal violation of section 1956, 1957, or 1960 of title 18 or section 5322 or 5324 of title 31. (b) Proceedings to remove from office or to prohibit an institution-affiliated party from further participation in the conduct of the affairs of any depository institution without the consent of the Board of Directors or its designee where: (1) A judgment of conviction or an agreement to enter a pre-trial diversion or other similar program has been entered against such party in connection with a crime described in paragraph (a)(1) of this section that is not subject to further appellate review, if continued service or participation by such party posed, poses, or may pose a threat to the interests of the depositors of, or threatened, threatens, or may threaten to impair public confidence in, any relevant depository institution (as defined at section 1818(g)(1)(E) of title 12); or (2) A judgment of conviction or an agreement to enter a pre-trial diversion or other similar program has been entered against such party in connection with a crime described in paragraph (a)(2) of this section. [72 FR 67235, Nov. 28, 2007, as amended at 80 FR 5013, Jan. 30, 2015] § 308.162 Relevant considerations. (a)(1) In proceedings under § 308.161(a) and (b) for a notice of suspension or prohibition, or a removal or prohibition order, the following shall be considered: (i) Whether the alleged offense is a crime which is punishable by imprisonment for a term exceeding one year under state or federal law and which involves dishonesty or breach of trust; and (ii) Whether the alleged offense is a criminal violation of section 1956, 1957, or 1960 of title 18 or section 5322 or 5324 of title 31; and (iii) Whether continued service or participation by the institution-affiliated party posed, poses, or may pose a threat to the interests of the depositors of, or threatened, threatens, or may threaten to impair public confidence in, any relevant depository institution (as defined at section 1818(g)(1)(E) of title 12). (b) The question of whether an institution-affiliated party is guilty of the subject crime shall not be tried or considered in a proceeding under this subpart. § 308.163 Notice of suspension or prohibition, and orders of removal or prohibition. (a) Notice of suspension or prohibition. (1) The Board of Directors or its designee may suspend or prohibit from further participation in the conduct of the affairs of any depository institution an institution-affiliated party by written notice of suspension or prohibition upon a determination by the Board of Directors or its designee that the grounds for such suspension or prohibition exist. The written notice of suspension or prohibition shall be served upon the institution-affiliated party and any depository institution that the subject of the action is affiliated with at the time the notice is issued. (2) The suspension or prohibition shall be effective immediately upon service on the institution-affiliated party, who shall immediately comply with the requirements thereof, and shall remain in effect until final disposition of the information, indictment, complaint, or until it is terminated by the Board of Directors or its designee under the provisions of § 308.164 or otherwise. (b) Order of removal or prohibition. (1) The Board of Directors or its designee may issue an order removing or prohibiting from further participation in the conduct of the affairs of any depository institution an institution-affiliated party, when a final judgment of conviction not subject to further appellate review is entered against the institution-affiliated party for a crime referred to in § 308.161(a)(1) and continued service or participation by such party posed, poses, or may pose a threat to the interests of the depositors of, or threatened, threatens, or may threaten to impair public confidence in, any relevant depository institution (as defined at section 1818(g)(1)(E) of title 12). (2) An order of removal or prohibition shall be entered if a judgment of conviction is entered against the institution-affiliated party for a crime described in § 308.161(a)(2). (c) The notice of suspension or prohibition or the order of removal or prohibition shall: (1) Inform the institution-affiliated party that a written request for a hearing, stating the relief desired and grounds therefore, and any supporting evidence, may be filed with the Administrative Officer within 30 days after service of the written notice or order; and (2) Set forth the basis and facts in support of the notice or order and address the relevant considerations specified in § 308.162. (d) To obtain a hearing, the institution-affiliated party shall file with the Administrative Officer a written request for a hearing within 30 days after service of the notice of suspension or prohibition or the order of removal or prohibition, which shall: (1) Admit or deny specifically each allegation in the notice or order, or state that the institution-affiliated party is without knowledge or information, which statement shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When an institution-affiliated party intends in good faith to deny only a part of or to qualify an allegation, he shall specify so much of it as is true and shall deny only the remainder; and (2) Shall state whether the institution-affiliated party is requesting termination or modification of the notice or order, and shall state with particularity how he intends to show that his continued service to or participation in the conduct of the affairs of the depository institution would not, or is not likely to, pose a threat to the interests of its depositors or to impair public confidence in the depository institution. [72 FR 67235, Nov. 28, 2007, as amended at 80 FR 5014, Jan. 30, 2015; 86 FR 2250, Jan. 12, 2021] § 308.164 Hearings. (a) Hearing dates. (b) Hearing procedure. (2) The provisions of §§ 308.6 through 308.12, 308.16, and 308.21 of the Uniform Rules and §§ 308.101 through 308.102 and 308.104 through 308.106 of subpart B of the Local Rules shall apply to hearings held pursuant to this subpart. (3) The institution-affiliated party may appear at the hearing and shall have the right to introduce relevant and material documents. Members of the FDIC enforcement staff may attend the hearing and participate as representatives of the FDIC enforcement staff. Following the introduction of all evidence, the applicant and the representative of the FDIC enforcement staff shall have an opportunity for oral argument; however, the parties may jointly waive the right to oral argument, and, in lieu thereof, elect to submit written argument. (4) There shall be no discovery in proceedings under this subpart. (5) At the discretion of the presiding officer, witnesses may be presented within specified time limits, provided that a list of witnesses is furnished to the presiding officer and to all other parties prior to the hearing. Witnesses shall be sworn, unless otherwise directed by the presiding officer. The presiding officer may ask questions of any witness. Each party shall have the opportunity to cross-examine any witness presented by an opposing party. The transcript of the proceedings shall be furnished, upon request and payment of the cost thereof, to the institution-affiliated party afforded the hearing. A copy of the transcript shall be sent directly to the presiding officer, who shall have authority to correct the record sua sponte or upon the motion of any party. (6) In the course of or in connection with any hearing under paragraph (b) of this section, the presiding officer shall have the power to administer oaths and affirmations, to take or cause to be taken depositions of unavailable witnesses, and to issue, revoke, quash, or modify subpoenas and subpoenas duces tecum. Where the presentation of witnesses is permitted, the presiding officer may require the attendance of witnesses from any state, territory, or other place subject to the jurisdiction of the United States at any location where the proceeding is being conducted. Witness fees shall be paid in accordance with § 308.14 of the Uniform Rules. (7) Upon the request of the institution-affiliated party afforded the hearing, or the members of the FDIC enforcement staff, the record shall remain open for five business days following the hearing for the parties to make additional submissions to the record. (8) The presiding officer shall make recommendations to the Board of Directors, where possible, within 10 days after the last day for the parties to submit additions to the record. (9) The presiding officer shall forward his or her recommendation to the Administrative Officer who shall promptly certify the entire record, including the recommendation to the Board of Directors. The Administrative Officer's certification shall close the record. (10) The institution-affiliated party has the burden of showing, by a preponderance of the evidence, that his or her continued service to or participation in the conduct of the affairs of a depository institution does not, or is not likely to, pose a threat to the interests of the depository institution's depositors or threaten to impair public confidence in the depository institution. (c) Written submissions in lieu of hearing. (d) Failure to request or appear at hearing. (e) Decision by Board of Directors or its designee. [72 FR 67235, Nov. 28, 2007, as amended at 80 FR 5014, Jan. 30, 2015; 86 FR 2250, Jan. 12, 2021] Subpart O—Liability of Commonly Controlled Depository Institutions § 308.165 Scope. The rules and procedures in this subpart, subpart B of the Local Rules and the Uniform Rules shall apply to proceedings in connection with the assessment of cross-guaranty liability against commonly controlled depository institutions. § 308.166 Grounds for assessment of liability. Any insured depository institution shall be liable for any loss incurred or reasonably anticipated to be incurred by the corporation, subsequent to August 9, 1989, in connection with the default of a commonly controlled insured depository institution, or any loss incurred or reasonably anticipated to be incurred in connection with any assistance provided by the Corporation to any commonly controlled depository institution in danger of default. § 308.167 Notice of assessment of liability. (a) The amount of liability shall be assessed upon service of a Notice of Assessment of Liability upon the liable depository institution, within two years of the date the Corporation incurred the loss. (b) Contents of Notice. (i) The basis for the FDIC's jurisdiction over the proceeding; (ii) A statement of the Corporation's good faith estimate of the amount of loss it has incurred or anticipates incurring; (iii) A statement of the method by which the estimated loss was calculated; (iv) A proposed order directing payment by the liable institution of the FDIC's estimated amount of loss, and the schedule under which the payment will be due; (v) In cases involving more than one liable institution, the estimated amount of each institution's share of the liability. (2) The Notice of Assessment of Liability shall advise the liable institution(s): (i) That an answer must be filed within 20 days after service of the Notice; (ii) That, if a hearing is requested, a request for a hearing must be filed within 20 days after service of the Notice; (iii) That if a hearing is requested, such hearing will be held within the judicial district in which the liable institution is found, or, in cases involving more than one liable institution, within a judicial district in which at least one liable institution is found; (iv) That, unless the administrative law judge sets a different date, the hearing will commence 120 days after service of the Notice of Assessment of Liability; and (v) That failure to request a hearing shall render the Notice of Assessment a final and unappealable order. § 308.168 Effective date of and payment under an order to pay. (a) Unless otherwise provided in the Notice of Assessment of Liability, payment of the assessment shall be due on or before the 21st day after service of the Assessment of Liability, under the terms of the schedule for payment set forth therein. (b) All payments collected shall be paid to the Corporation. (c) Failure to request a hearing as prescribed herein shall render the order to pay final and unappealable. Subpart P—Rules and Procedures Relating to the Recovery of Attorney Fees and Other Expenses § 308.169 Scope. This subpart, and the Equal Access to Justice Act (5 U.S.C. 504), which it implements, apply to adversary adjudications before the FDIC. The types of adjudication covered by this subpart are those listed in § 308.01 of the Uniform Rules. The Uniform Rules and subpart B of the Local Rules apply to any proceedings to recover fees and expenses under this subpart. § 308.170 Filing, content, and service of documents. (a) Time to file. (1) The applicant seeks an award pursuant to 5 U.S.C. 504(a)(1) as the prevailing party in the adversary adjudication or in a discrete significant substantive portion of the proceeding; or (2) The applicant, in an adversary adjudication arising from an action to enforce compliance with a statutory or regulatory requirement, asserts pursuant to 5 U.S.C. 504(a)(4) that the demand by the FDIC is substantially in excess of the decision of the administrative law judge and is unreasonable when compared with such decision under the facts and circumstances of the case. (b) Content. (c) Service. (d) Referral. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62102, Nov. 16, 1999; 86 FR 2250, Jan. 12, 2021] § 308.171 Responses to application. (a) By FDIC. (2) The answer shall explain in detail any objections to the award requested and identify the facts relied on in support of the FDIC'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 § 308.180. (b) Reply to answer. (c) By other parties. (d) Additional response. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62102, Nov. 16, 1999; 86 FR 2250, Jan. 12, 2021] § 308.172 Eligibility of applicants. (a) Genera1 rule. (b) Types of eligible applicant. (1) An individual with a net worth of not more than $2,000,000 at the time the adversary adjudication was initiated; or (2) Any 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) For purposes of an application filed pursuant to 5 U.S.C. 504(a)(4), a small entity as defined in 5 U.S.C. 601. (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 bank shall be established by the net worth information reported in conformity with applicable instructions and guidelines on the bank's Consolidated Report of Condition and Income filed for the last reporting date before the initiation of the adversary adjudication. (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 adjudication was initiated. Part-time employees are included as though they were full-time employees. (5) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. The aggregated net worth shall be adjusted if necessary to avoid counting the net worth of any entity twice. As used in this subpart, affiliates (6) An applicant that participates in a proceeding primarily on behalf of one or more other persons or entities that would be ineligible is not itself eligible for an award. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62102, Nov. 16, 1999] § 308.173 Prevailing party. (a) General rule. (b) Segregation of costs. § 308.174 Standards for awards. (a) For applications filed pursuant to 5 U.S.C. 504(a)(1), a prevailing applicant may receive an award for fees and expenses unless the position of the FDIC during the proceeding was substantially justified or special circumstances make the award unjust. An award will be reduced or denied if the applicant has unduly or unreasonably protracted the proceedings. Awards for fees and expenses incurred before the date on which the adversary adjudication was initiated are allowable if their incurrence was necessary to prepare for the proceeding. (b) For applications filed pursuant to 5 U.S.C. 504(a)(4), an applicant may receive an award unless the demand by the FDIC was reasonable when compared with the decision of the administrative law judge, the applicant has committed a willful violation of law or otherwise acted in bad faith, or special circumstances make an award unjust. [64 FR 62102, Nov. 16, 1999] § 308.175 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, or, if he or she is an employee of the applicant, the fully allocated cost of the 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. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62102, Nov. 16, 1999] § 308.176 Application for awards. (a) Contents. (1) The name of the applicant and an identification of the proceeding; (2) For applications filed pursuant to 5 U.S.C. 504(a)(1), a showing that the applicant has prevailed, and an identification of each issue with regard to which the applicant believes that the position of the FDIC in the proceeding was not substantially justified; (3) For applications filed pursuant to 5 U.S.C. 504(a)(4), a showing that the demand by the FDIC is substantially in excess of the decision of the administrative law judge and is unreasonable when compared with such decision under the facts and circumstances of the case; (4) A statement of the amount of fees and expenses for which an award is sought; (5) For applications filed pursuant to 5 U.S.C. 504(a)(4), a statement of the amount of fees and expenses which constitute appropriations paid in advance; (6) If the applicant is not an individual, a statement of the number of its employees on the date the proceeding was initiated; (7) A description of any affiliated individuals or entities, as defined in § 308.172(c)(5), or a statement that none exist; (8) A declaration that the applicant, together with any affiliates, had a net worth not more than the ceiling established for it by § 308.172(b) as of the date the proceeding was initiated; (9) For applications filed pursuant to 5 U.S.C. 504(a)(1), a statement whether the applicant is a small entity as defined in 5 U.S.C. 601; and (10) Any other matters that the applicant wishes the FDIC to consider in determining whether and in what amount an award should be made. (b) Verification. [56 FR 37975, Aug. 9, 1991, as amended at 64 FR 62102, Nov. 16, 1999] § 308.177 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 § 308.172(c)(2). Assets and liabilities of individuals shall include those beneficially owned within the meaning of the FDIC's rules and regulations. (3) If the applicant or any of its affiliates is a bank, the portion of the statement of net worth which relates to the bank shall consist of a copy of the bank's last Consolidated Report of Condition and Income filed before the initiation of the adversary adjudication. In all cases the administrative law judge or the Board of Directors may call for additional information needed to establish the applicant's net worth as of the initiation of the proceeding. Except as adjusted by additional information that was called for under the preceding sentence, 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, the total surplus accounts) as reported, in conformity with applicable instructions and guidelines, on the bank's Consolidated Report of Condition and Income filed for the last reporting date before the initiation of the proceeding. (c) Statement confidential. § 308.178 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 of Directors may require the applicant to provide vouchers, receipts, or other substantiation for any expenses claimed. § 308.179 Settlement negotiations. If counsel for the FDIC and the applicant believe that the issues in a fee application can be settled, they may jointly file with the Administrative Officer with a copy to the administrative law judge a statement of their intent to negotiate a settlement. The filing of this statement shall extend the time for filing an answer under § 308.171 for an additional 30 days, and further extensions may be granted by the administrative law judge upon the joint request of counsel for the FDIC and the applicant. [86 FR 2251, Jan. 12, 2021] § 308.180 Further proceedings. (a) General rule. (b) Request for further proceedings. (c) Hearing. § 308.181 Recommended decision. The administrative law judge shall file with the Administrative Officer a recommended decision on the fee application not later than 90 days after the filing of the application or 30 days after the conclusion of the hearing, whichever is later. The recommended decision shall include written proposed findings and conclusions on the applicant's eligibility and its status as a prevailing party and 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 on whether the FDIC'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 and, at the same time, serve upon each party a copy of the recommended decision, findings, conclusions, and proposed order. [86 FR 2251, Jan. 12, 2021] § 308.182 Board of Directors action. (a) Exceptions to recommended decision. (b) Decision of Board of Directors. [86 FR 2251, Jan. 12, 2021] § 308.183 Payment of awards. An applicant seeking payment of an award made by the Board of Directors shall submit to the Administrative Officer a statement that the applicant will not seek judicial review of the decision and order or that the time for seeking further review has passed and no further review has been sought. The FDIC will pay the amount awarded within 30 days after receiving the applicant's statement, unless judicial review of the award or of the underlying decision of the adversary adjudication has been sought by the applicant or any other party to the proceeding. [86 FR 2251, Jan. 12, 2021] Subpart Q—Issuance and Review of Orders Pursuant to the Prompt Corrective Action Provisions of the Federal Deposit Insurance Act Source: 86 FR 8109, Feb. 3, 2021, unless otherwise noted. § 308.200 Scope. The rules and procedures set forth in this subpart apply to FDIC-supervised institutions and senior executive officers and directors of the same that are subject to the provisions of section 38 of the Federal Deposit Insurance Act (section 38) (12 U.S.C. 1831o) and subpart H of part 324 of this chapter. For purposes of this subpart, the term “FDIC-supervised institution” means any insured depository institution for which the Federal Deposit Insurance Corporation is the appropriate Federal banking agency pursuant to section 3(q) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(q). § 308.201 Directives to take prompt corrective 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 FDIC-supervised institution's capital measures and capital levels; (2) A description of the restrictions, prohibitions, or affirmative actions that the FDIC 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 FDIC-supervised institution subject to the directive may file with the FDIC 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 FDIC 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 FDIC-supervised institution regarding the proposed directive. (d) FDIC consideration of response. (1) Issue the directive as proposed or in modified form; (2) Determine not to issue the directive and so notify the FDIC-supervised institution; or (3) Seek additional information or clarification of the response from the FDIC-supervised institution or any other relevant source. (e) Failure to file response. (f) Request for modification or rescission of directive. § 308.202 Procedures for reclassifying an FDIC-supervised institution 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 be referred to in this section as reclassification. (ii) Prior notice to institution. (2) Contents of notice. (i) A statement of the FDIC-supervised institution's capital measures and capital levels and the category to which the FDIC-supervised institution would be reclassified; (ii) The reasons for reclassification of the FDIC-supervised institution; and (iii) The date by which the FDIC-supervised institution subject to the notice of reclassification may file with the FDIC 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 FDIC determines that a shorter period is appropriate in light of the financial condition of the FDIC-supervised institution or other relevant circumstances. (3) Response to notice of proposed reclassification. (i) An explanation of why the FDIC-supervised institution is not in an unsafe or unsound condition or otherwise should not be reclassified; and (ii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the FDIC-supervised institution 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 FDIC-supervised institution upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). 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. § 308.203 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 FDIC-supervised institution's capital level or failure to submit or implement a capital restoration plan; and (2) To correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the directive was issued as a result of classification of the FDIC-supervised institution 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. § 308.204 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. Subpart R—Submission and Review of Safety and Soundness Compliance Plans and Issuance of Orders To Correct Safety and Soundness Deficiencies Source: 80 FR 65906, Oct. 28,2015, unless otherwise noted. § 308.300 Scope. The rules and procedures set forth in this subpart apply to insured state nonmember banks, to state-licensed insured branches of foreign banks, that are subject to the provisions of section 39 of the Federal Deposit Insurance Act (section 39) (12 U.S.C. 1831p-1), and to state savings associations (in aggregate, bank or banks and state savings association or state savings associations). § 308.301 Purpose. Section 39 of the FDI Act requires the FDIC to establish safety and soundness standards. Pursuant to section 39, a bank or savings association 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 of the FDI Act may be issued if, after being notified that it is in violation of a safety and soundness standard established under section 39, the bank or savings association 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. § 308.302 Determination and notification of failure to meet a safety and soundness standard and request for compliance plan. (a) Determination. (b) Request for compliance plan. § 308.303 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. (e) Amendment of compliance plan. § 308.304 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 or state savings association; (2) A description of any restrictions, prohibitions, or affirmative actions that the FDIC 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 or state savings association subject to the order may file with the FDIC 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 FDIC 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 or state savings association 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 state savings association; or (3) Seek additional information or clarification of the response from the bank or state savings association, or any other relevant source. (e) Failure to file response. (f) Request for modification of rescission of order. § 308.305 Enforcement of orders. (a) Judicial remedies. (b) Failure to comply with order. (c) Other enforcement action. Subpart S—Applications for a Stay or Review of Actions of Bank Clearing Agencies Source: 61 FR 48403, Sept. 11, 1996, unless otherwise noted. § 308.400 Scope. This subpart is issued by the Corporation pursuant to sections 17A(b)(3)(g), 17A(b)(5)(C), 19 and 23 of the Securities Exchange Act of 1934 (Exchange Act), as amended (15 U.S.C. 78q-1 (b)(3)(g), (b)(5)(C), 78s, 78w). It applies to applications by banks insured by the Corporation (other than members of the Federal Reserve System) for a stay or review of certain actions by clearing agencies registered under the Exchange Act, for which the Securities and Exchange Commission (Commission) is not the appropriate regulatory agency under section 3(a)(34)(B) of the Exchange Act (bank clearing agencies). § 308.401 Applications for stays of disciplinary sanctions or summary suspensions by a bank clearing agency. Applications to the Corporation for a stay of disciplinary action imposed by registered clearing agencies pursuant to section 17(b)(3)(G) of the Exchange Act, or summary suspension or limitation or prohibition of access under section 17(b)(5)(C) of the Exchange Act shall be made according to the rules adopted by the Commission (17 CFR 240.19d-2). References to the “Commission” in 17 CFR 240.19d-2 are deemed to refer to the “Corporation.” § 308.402 Applications for review of final disciplinary sanctions, denials of participation, or prohibitions or limitations of access to services imposed by bank clearing agencies. Proceedings on an application to the Corporation under section 19(d)(2) of the Exchange Act for review of any final disciplinary sanctions, denials of participation, or prohibitions or limitations of access to services imposed by bank clearing agencies shall be conducted according to the procedures set forth in rules adopted by the Commission (17 CFR 240.19d-3). References to the “Commission” in 17 CFR 240.19d-3 are deemed to refer to the “Corporation.” Subpart T—Program Fraud Civil Remedies and Procedures Source: 66 FR 9189, Feb. 7, 2001, unless otherwise noted. § 308.500 Basis, purpose, and scope. (a) Basis. (b) Purpose. (1) Establishes administrative procedures for imposing civil penalties and assessments against persons who make, submit, or present or cause to be made, submitted, or presented false, fictitious, or fraudulent claims or written statements to the FDIC or to its agents; and (2) Specifies the hearing and appeal rights of persons subject to allegations of liability for such penalties and assessments. (c) Scope. § 308.501 Definitions. For purposes of this subpart: (a) Administrative Law Judge (ALJ) (b) Authority (c) Authority head Board (d) Benefit (e) Claim (1) Made to the FDIC for property, services, or money (including money representing grants, loans, insurance, or benefits); (2) Made to a recipient of property, services, or money from the FDIC or to a party to a contract with the FDIC; (i) For property or services if the United States: (A) Provided such property or services; (B) Provided any portion of the funds for the purchase of such property or services; or (C) Will reimburse such recipient or party for the purchase of such property or services; (ii) For the payment of money (including money representing grants, loans, insurance, or benefits) if the United States: (A) Provided any portion of the money requested or demanded; or (B) Will reimburse such recipient or party for any portion of the money paid on such request or demand; or (3) Made to the FDIC that has the effect of decreasing an obligation to pay or account for property, services, or money. (f) Complaint (g) Corporation (h) Defendant (i) Government (j) Individual (k) Initial decision (l) Investigating official (m) Knows or has reason to know, (1) Has actual knowledge that the claim or statement is false, fictitious, or fraudulent; (2) Acts in deliberate ignorance of the truth or falsity of the claim or statement; or (3) Acts in reckless disregard of the truth or falsity of the claim or statement. (n) Makes, (o) Person (p) Representative (q) Reviewing official (1) Not subject to supervision by, or required to report to, the investigating official; (2) Not employed in the organizational unit of the FDIC in which the investigating official is employed; and (3) Serving in a position that has a rate of basic pay under the pay scale utilized by the FDIC that is equal to or greater than 120 percent of the minimum rate of basic pay for grade 15 under the federal government's General Schedule. (r) Statement (1) With respect to a claim or to obtain the approval or payment of a claim (including relating to eligibility to make a claim); or (2) With respect to (including relating to eligibility for): (i) A contract with, or a bid or proposal for a contract with; or (ii) A grant, loan, or benefit received, directly or indirectly, from the FDIC, or any state, political subdivision of a state, or other party, if the United States government provides any portion of the money or property under such contract or for such grant, loan, or benefit, or if the government will reimburse such state, political subdivision, or party for any portion of the money or property under such contract or for such grant, loan, or benefit. § 308.502 Basis for civil penalties and assessments. (a) Claims. (i) The claim is false, fictitious, or fraudulent; or (ii) The claim includes, or is supported by, a written statement that asserts a material fact which is false, fictitious or fraudulent; or (iii) The claim includes, or is supported by, a written statement that: (A) Omits a material fact; and (B) Is false, fictitious, or fraudulent as a result of that omission; and (C) Is a statement in which the person making the statement has a duty to include the material fact; or (iv) The claim seeks payment for providing property or services that the person has not provided as claimed. (2) Each voucher, invoice, claim form, or other individual request or demand for property, services, or money constitutes a separate claim. (3) A claim will be considered made to the FDIC, recipient, or party when the claim is actually made to an agent, fiscal intermediary, or other entity, including any state or political subdivision thereof, acting for or on behalf of the FDIC, recipient, or party. (4) Each claim for property, services, or money that constitutes any one of the elements in paragraph (a)(1) of this section is subject to a civil penalty regardless of whether the property, services, or money is actually delivered or paid. (5) If the FDIC has made any payment (including transferred property or provided services) on a claim, a person subject to a civil penalty under paragraph (a)(1) of this section will also be subject to an assessment of not more than twice the amount of such claim (or portion of the claim) that is determined to constitute a false, fictitious, or fraudulent claim under paragraph (a)(1) of this section. The assessment will be in lieu of damages sustained by the FDIC because of the claims. (6) The amount of any penalty assessed under paragraph (a)(1) of this section will be adjusted for inflation in accordance with § 308.132(d). (7) The penalty specified in paragraph (a)(1) of this section is in addition to any other remedy allowable by law. (b) Statements. (i) The statement asserts a material fact which is false, fictitious, or fraudulent; or (ii) The statement omits a material fact that the person making the statement has a duty to include in the statement; and (iii) The statement contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement. (2) Each written representation, certification, or affirmation constitutes a separate statement. (3) A statement will be considered made to the FDIC when the statement is actually made to an agent, fiscal intermediary, or other entity, including any state or political subdivision thereof, acting for or on behalf of the FDIC. (4) The amount of any penalty assessed under paragraph (a)(1) of this section will be adjusted for inflation in accordance with § 308.132(d). (5) The penalty specified in paragraph (a)(1) of this section is in addition to any other remedy allowable by law. (c) Failure to file declaration/certification. (d) Civil money penalties that are assessed under this subpart are subject to annual adjustments to account for inflation as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74, sec. 701, 129 Stat. 584) ( see also (e) Liability. (2) In any case in which it is determined that more than one person is liable for making a claim under this section on which the FDIC has made payment (including transferred property or provided services), an assessment may be imposed against any such person or jointly and severally against any combination of such persons. [66 FR 9189, Feb. 7, 2001, as amended at 81 FR 42242, June 29, 2016; 83 FR 61115, Nov. 28, 2018] § 308.503 Investigations. (a) If an investigating official concludes that a subpoena pursuant to the authority conferred by 31 U.S.C. 3804(a) is warranted: (1) The subpoena will identify the person to whom it is addressed and the authority under which the subpoena is issued and will identify the records or documents sought; (2) The investigating official may designate a person to act on his or her behalf to receive the documents sought; and (3) The person receiving such subpoena will be required to provide the investigating official or the person designated to receive the documents a certification that the documents sought have been produced, or that such documents are not available, and the reasons therefor, or that such documents, suitably identified, have been withheld based upon the assertion of an identified privilege. (b) If the investigating official concludes that an action under the PFCRA may be warranted, the investigating official will submit a report containing the findings and conclusions of such investigation to the reviewing official. (c) Nothing in this section will preclude or limit an investigating official's discretion to refer allegations directly to the United States Department of Justice (DOJ) for suit under the False Claims Act (31 U.S.C. 3729 et seq. (d) Nothing in this section modifies any responsibility of an investigating official to report violations of criminal law to the Attorney General. § 308.504 Review by the reviewing official. (a) If, based on the report of the investigating official under § 308.503(b) of this subpart, the reviewing official determines that there is adequate evidence to believe that a person is liable under § 308.502 of this subpart, the reviewing official will transmit to the Attorney General a written notice of the reviewing official's intention to issue a complaint under § 308.506 of this subpart. (b) Such notice will include: (1) A statement of the reviewing official's reasons for issuing a complaint; (2) A statement specifying the evidence that supports the allegations of liability; (3) A description of the claims or statements upon which the allegations of liability are based; (4) An estimate of the amount of money or the value of property, services, or other benefits requested or demanded in violation of § 308.502 of this subpart; (5) A statement of any exculpatory or mitigating circumstances that may relate to the claims or statements known by the reviewing official or the investigating official; and (6) A statement that there is a reasonable prospect of collecting an appropriate amount of penalties and assessments. Such a statement may be based upon information then known, or upon an absence of any information indicating that the person may be unable to pay such amount. § 308.505 Prerequisites for issuing a complaint. (a) The reviewing official may issue a complaint under § 308.506 of this subpart only if: (1) The DOJ approves the issuance of a complaint in a written statement described in 31 U.S.C. 3803(b)(1); and (2) In the case of allegations of liability under § 308.502(a) of this subpart with respect to a claim (or a group of related claims submitted at the same time as defined in paragraph (b) of this section) the reviewing official determines that the amount of money or the value of property or services demanded or requested does not exceed $150,000. (b) For the purposes of this section, a group of related claims submitted at the same time will include only those claims arising from the same transaction (e.g., grant, loan, application, or contract) that are submitted simultaneously as part of a single request, demand, or submission. (c) Nothing in this section will be construed to limit the reviewing official's authority to join in a single complaint against a person claims that are unrelated or were not submitted simultaneously, regardless of the amount of money, or the value of property or services, demanded or requested. § 308.506 Complaint. (a) On or after the date the DOJ approves the issuance of a complaint in accordance with 31 U.S.C. 3803(b)(1), the reviewing official may serve a complaint on the defendant, as provided in § 308.507 of this subpart. (b) The complaint will state: (1) The allegations of liability against the defendant, including the statutory basis for liability, or identification of the claims or statements that are the basis for the alleged liability, and the reasons why liability allegedly arises from such claims or statements; (2) The maximum amount of penalties and assessments for which the defendant may be held liable; (3) Instructions for filing an answer and to request a hearing, including a specific statement of the defendant's right to request a hearing by filing an answer and to be represented by a representative; and (4) That failure to file an answer within 30 days of service of the complaint will result in the imposition of the maximum amount of penalties and assessments without right to appeal, as provided in § 308.509 of this subpart. (c) At the same time the reviewing official serves the complaint, he or she will provide the defendant with a copy of this subpart. § 308.507 Service of complaint. (a) Service of a complaint will be made by certified or registered mail or by delivery in any manner authorized by rule 4(c) of the Federal Rules of Civil Procedure (28 U.S.C. App.). Service is complete upon receipt. (b) Proof of service, stating the name and address of the person on whom the complaint was served, and the manner and date of service, may be made by: (1) Affidavit of the individual serving the complaint by delivery; (2) A United States Postal Service return receipt card acknowledging receipt; or (3) Written acknowledgment of receipt by the defendant or his or her representative. § 308.508 Answer. (a) The defendant may request a hearing by filing an answer with the reviewing official within 30 days of service of the complaint. An answer will be deemed to be a request for hearing. (b) In the answer, the defendant: (1) Must admit or deny each of the allegations of liability made in the complaint; (2) Must state any defense on which the defendant intends to rely; (3) May state any reasons why the defendant contends that the penalties and assessments should be less than the statutory maximum; and (4) Must state the name, address, and telephone number of the person authorized by the defendant to act as defendant's representative, if any. (c) If the defendant is unable to file an answer meeting the requirements of paragraph (b) of this section within the time provided: (1) The defendant may, before the expiration of 30 days from service of the complaint, file with the reviewing official a general answer denying liability and requesting a hearing, and a request for an extension of time within which to file an answer meeting the requirements of paragraph (b) of this section. (2) The reviewing official will file promptly with the ALJ the complaint, the general answer denying liability, and the request for an extension of time as provided in § 308.510 of this subpart. (3) For good cause shown, the ALJ may grant the defendant up to 30 additional days within which to file an answer meeting the requirements of paragraph (b) of this section. § 308.509 Default upon failure to file an answer. (a) If the defendant does not file an answer within the time prescribed in § 308.508(a) of this subpart, the reviewing official may refer the complaint to the ALJ. (b) Upon the referral of the complaint, the ALJ will promptly serve on defendant in the manner prescribed in § 308.507 of this subpart, a notice that an initial decision will be issued under this section. (c) If the defendant fails to answer, the ALJ will assume the facts alleged in the complaint to be true, and, if such facts establish liability under § 308.502 of this subpart, the ALJ will issue an initial decision imposing the maximum amount of penalties and assessments allowed under the statute. (d) Except as otherwise provided in this section, by failing to file a timely answer, the defendant waives any right to further review of the penalties and assessments imposed under paragraph (c) of this section, and the initial decision will become final and binding upon the parties 30 days after it is issued. (e) If, before such an initial decision becomes final, the defendant files a motion with the ALJ seeking to reopen on the grounds that extraordinary circumstances prevented the defendant from filing an answer, the initial decision will be stayed pending the ALJ's decision on the motion. (f) If, in the motion to reopen under paragraph (e) of this section, the defendant can demonstrate extraordinary circumstances excusing the failure to file a timely answer, the ALJ will withdraw the initial decision in paragraph (c) of this section, if such a decision has been issued, and will grant the defendant an opportunity to answer the complaint. (g) A decision of the ALJ denying a defendant's motion to reopen under paragraph (e) of this section is not subject to reconsideration under § 308.537 of this subpart. (h) The decision denying the motion to reopen under paragraph (e) of this section may be appealed by the defendant to the Board by filing a notice of appeal with the Board within 15 days after the ALJ denies the motion. The timely filing of a notice of appeal will stay the initial decision until the Board decides the issue. (i) If the defendant files a timely notice of appeal with the Board, the ALJ will forward the record of the proceeding to the Board. (j) The Board will decide whether extraordinary circumstances excuse the defendant's failure to file a timely answer based solely on the record before the ALJ. (k) If the Board decides that extraordinary circumstances excuse the defendant's failure to file a timely answer, the Board will remand the case to the ALJ with instructions to grant the defendant an opportunity to answer. (l) If the Board decides that the defendant's failure to file a timely answer is not excused, the Board will reinstate the initial decision of the ALJ, which will become final and binding upon the parties 30 days after the Board issues such decision. § 308.510 Referral of complaint and answer to the ALJ. Upon receipt of an answer, the reviewing official will file the complaint and answer with the ALJ. The reviewing official will include the name, address, and telephone number of a representative of the Corporation. § 308.511 Notice of hearing. (a) When the ALJ receives the complaint and answer, the ALJ will promptly serve a notice of hearing upon the defendant in the manner prescribed by § 308.507 of this subpart. At the same time, the ALJ will send a copy of such notice to the representative of the Corporation. (b) The notice will include: (1) The tentative time, date, and place, and the nature of the hearing; (2) The legal authority and jurisdiction under which the hearing is to be held; (3) The matters of fact and law to be asserted; (4) A description of the procedures for the conduct of the hearing; (5) The name, address, and telephone number of the representative of the Corporation and of the defendant, if any; and (6) Other matters as the ALJ deems appropriate. § 308.512 Parties to the hearing. (a) The parties to the hearing will be the defendant and the Corporation. (b) Pursuant to the False Claims Act (31 U.S.C. 3730(c)(5)), a private plaintiff under the False Claims Act may participate in these proceedings to the extent authorized by the provisions of that Act. § 308.513 Separation of functions. (a) The investigating official, the reviewing official, and any employee or agent of the FDIC who takes part in investigating, preparing, or presenting a particular case may not, in such case or a factually related case: (1) Participate in the hearing as the ALJ; (2) Participate or advise in the initial decision or the review of the initial decision by the Board, except as a witness or a representative in public proceedings; or (3) Make the collection of penalties and assessments under 31 U.S.C. 3806. (b) The ALJ will not be responsible to, or subject to the supervision or direction of, the investigating official or the reviewing official. (c) Except as provided in paragraph (a) of this section, the representative for the FDIC will be an attorney employed in the FDIC's Legal Division; however, the representative of the FDIC may not participate or advise in the review of the initial decision by the Board. § 308.514 Ex parte contacts. No party or person (except employees of the ALJ's office) will communicate in any way with the ALJ on any matter at issue in a case, unless on notice and opportunity for all parties to participate. This provision does not prohibit a person or party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures. § 308.515 Disqualification of reviewing official or ALJ. (a) A reviewing official or ALJ in a particular case may disqualify himself or herself at any time. (b) A party may file with the ALJ a motion for disqualification of a reviewing official or an ALJ. An affidavit alleging conflict of interest or other reason for disqualification must accompany the motion. (c) Such motion and affidavit must be filed promptly upon the party's discovery of reasons requiring disqualification, or such objections will be deemed waived. (d) Such affidavit must state specific facts that support the party's belief that personal bias or other reason for disqualification exists and the time and circumstances of the party's discovery of such facts. The representative of record must certify that the affidavit is made in good faith and this certification must accompany the affidavit. (e) Upon the filing of such a motion and affidavit, the ALJ will proceed no further in the case until he or she resolves the matter of disqualification in accordance with paragraph (f) of this section. (f)(1) If the ALJ determines that a reviewing official is disqualified, the ALJ will dismiss the complaint without prejudice. (2) If the ALJ disqualifies himself or herself, the case will be reassigned promptly to another ALJ. (3) If the ALJ denies a motion to disqualify, the Board may determine the matter only as part of the Board's review of the initial decision upon appeal, if any. § 308.516 Rights of parties. Except as otherwise limited by this subpart, all parties may: (a) Be accompanied, represented, and advised by a representative; (b) Participate in any conference held by the ALJ; (c) Conduct discovery; (d) Agree to stipulations of fact or law which will be made part of the record; (e) Present evidence relevant to the issues at the hearing; (f) Present and cross-examine witnesses; (g) Present oral arguments at the hearing as permitted by the ALJ; and (h) Submit written briefs and proposed findings of fact and conclusions of law. § 308.517 Authority of the ALJ. (a) The ALJ will conduct a fair and impartial hearing, avoid delay, maintain order, and assure that a record of the proceeding is made. (b) The ALJ has the authority to: (1) Set and change the date, time, and place of the hearing upon reasonable notice to the parties; (2) Continue or recess the hearing in whole or in part for a reasonable period of time; (3) Hold conferences to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding; (4) Administer oaths and affirmations; (5) Issue subpoenas requiring the attendance of witnesses and the production of documents at depositions or at hearings; (6) Rule on motions and other procedural matters; (7) Regulate the scope and timing of discovery; (8) Regulate the course of the hearing and the conduct of representatives and parties; (9) Examine witnesses; (10) Receive, rule on, exclude, or limit evidence; (11) Upon motion of a party, take official notice of facts, decide cases, in whole or in part, by summary judgment where there is no disputed issue of material fact; (12) Conduct any conference, argument, or hearing on motions in person or by telephone; and (13) Exercise such other authority as is necessary to carry out the responsibilities of the ALJ under this subpart. (c) The ALJ does not have the authority to make any determinations regarding the validity of federal statutes or regulations or of directives, rules, resolutions, policies, orders or other such general pronouncements issued by the Corporation. § 308.518 Prehearing conferences. (a) The ALJ may schedule prehearing conferences as appropriate. (b) Upon the motion of any party, the ALJ will schedule at least one prehearing conference at a reasonable time in advance of the hearing. (c) The ALJ may use prehearing conferences to discuss the following: (1) Simplification of the issues; (2) The necessity or desirability of amendments to the pleading, including the need for a more definite statement; (3) Stipulations and admissions of fact as to the contents and authenticity of documents; (4) Whether the parties can agree to submission of the case on a stipulated record; (5) Whether a party chooses (subject to the objection of other parties) to waive appearance at an oral hearing and to submit only documentary evidence and written argument; (6) Limitation of the number of witnesses; (7) Scheduling dates for the exchange of witness lists and of proposed exhibits; (8) Discovery; (9) The time, date, and place for the hearing; and (10) Such other matters as may tend to expedite the fair and just disposition of the proceedings. (d) The ALJ may issue an order containing all matters agreed upon by the parties or ordered by the ALJ at a prehearing conference. § 308.519 Disclosure of documents. (a) Upon written request to the reviewing official, the defendant may review any relevant and material documents, transcripts, records, and other materials that relate to the allegations set out in the complaint and upon which the findings and conclusions of the investigating official under § 308.503(b) of this subpart are based, unless such documents are subject to a privilege under federal law. Upon payment of fees for duplication, the defendant may obtain copies of such documents. (b) Upon written request to the reviewing official, the defendant also may obtain a copy of all exculpatory information in the possession of the reviewing official or investigating official relating to the allegations in the complaint, even if it is contained in a document that would otherwise be privileged. If the document would otherwise be privileged, only that portion containing exculpatory information must be disclosed. (c) The notice sent to the Attorney General from the reviewing official as described in § 308.504 of this subpart is not discoverable under any circumstances. (d) The defendant may file a motion to compel disclosure of the documents subject to the provisions of this section. Such a motion may only be filed with the ALJ following the filing of an answer pursuant to § 308.508 of this subpart. § 308.520 Discovery. (a) The following types of discovery are authorized: (1) Requests for production of documents for inspection and copying; (2) Requests for admission of the authenticity of any relevant document or of the truth of any relevant fact; (3) Written interrogatories; and (4) Depositions. (b) For the purpose of this section and §§ 308.521 and 308.522 of this subpart, the term documents (c) Unless mutually agreed to by the parties, discovery is available only as ordered by the ALJ. The ALJ will regulate the timing of discovery. (d) Motions for discovery. (2) Within 10 days of service, a party may file an opposition to the motion and/or a motion for protective order as provided in § 308.523 of this subpart. (3) The ALJ may grant a motion for discovery only if he or she finds that the discovery sought: (i) Is necessary for the expeditious, fair, and reasonable consideration of the issues; (ii) Is not unduly costly or burdensome; (iii) Will not unduly delay the proceeding; and (iv) Does not seek privileged information. (4) The burden of showing that discovery should be allowed is on the party seeking discovery. (5) The ALJ may grant discovery subject to a protective order under § 308.523 of this subpart. (e) Dispositions. (2) The party seeking to depose must serve the subpoena in the manner prescribed in § 308.507 of this subpart. (3) The deponent may file with the ALJ a motion to quash the subpoena or a motion for a protective order within 10 days of service. (4) The party seeking to depose must provide for the taking of a verbatim transcript of the deposition, and must make the transcript available to all other parties for inspection and copying. (f) Each party must bear its own costs of discovery. § 308.521 Exchange of witness lists, statements, and exhibits. (a) At least 15 days before the hearing or at such other time as may be ordered by the ALJ, the parties must exchange witness lists, copies of prior statements of proposed witnesses, and copies of proposed hearing exhibits, including copies of any written statements that the party intends to offer in lieu of live testimony in accordance with § 308.532(b) of this subpart. At the time such documents are exchanged, any party that intends to rely on the transcript of deposition testimony in lieu of live testimony at the hearing, if permitted by the ALJ, must provide each party with a copy of the specific pages of the transcript it intends to introduce into evidence. (b) If a party objects, the ALJ will not admit into evidence the testimony of any witness whose name does not appear on the witness list or any exhibit not provided to the opposing party as provided in paragraph (a) of this section unless the ALJ finds good cause for the failure or that there is no prejudice to the objecting party. (c) Unless another party objects within the time set by the ALJ, documents exchanged in accordance with paragraph (a) of this section will be deemed to be authentic for the purpose of admissibility at the hearing. § 308.522 Subpoenas for attendance at hearing. (a) A party wishing to procure the appearance and testimony of any individual at the hearing may request that the ALJ issue a subpoena. (b) A subpoena requiring the attendance and testimony of an individual may also require the individual to produce documents at the hearing. (c) A party seeking a subpoena must file a written request not less than 15 days before the date fixed for the hearing unless otherwise allowed by the ALJ for good cause shown. Such request must specify any documents to be produced and must designate the witnesses and describe the address and location thereof with sufficient particularity to permit such witnesses to be found. (d) The subpoena must specify the time, date, and place at which the witness is to appear and any documents the witness is to produce. (e) The party seeking the subpoena must serve it in the manner prescribed in § 308.507 of this subpart. A subpoena on a party or upon an individual under the control of a party may be served by first class mail. (f) A party or the individual to whom the subpoena is directed may file with the ALJ a motion to quash the subpoena within 10 days after service or on or before the time specified in the subpoena for compliance if it is less than 10 days after service. § 308.523 Protective order. (a) A party or a prospective witness or deponent may file a motion for a protective order with respect to discovery sought by an opposing party or with respect to the hearing, seeking to limit the availability or disclosure of evidence. (b) In issuing a protective order, the ALJ may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) That the discovery will not be conducted; (2) That the discovery will be conducted only on specified terms and conditions, including a designation of the time or place; (3) That the discovery will be conducted only through a method of discovery other than that requested; (4) That certain matters not be inquired into, or that the scope of discovery be limited to certain matters; (5) That discovery be conducted with no one present except persons designated by the ALJ; (6) That the contents of discovery or evidence be sealed or otherwise kept confidential; (7) That a deposition after being sealed be opened only by order of the ALJ; (8) That a trade secret or other confidential research, development, commercial information, or facts pertaining to any criminal investigation, proceeding, or other administrative investigation not be disclosed or be disclosed only in a designated way; or (9) That the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the ALJ. § 308.524 Witness fees. The party requesting a subpoena must pay the cost of the fees and mileage of any witness subpoenaed in the amounts that would be payable to a witness in a proceeding in United States District Court. A check for witness fees and mileage must accompany the subpoena when served, except that when a subpoena is issued on behalf of the FDIC, a check for witness fees and mileage need not accompany the subpoena. § 308.525 Form, filing, and service of papers. (a) Form. (2) Every pleading and paper filed in the proceeding must contain a caption setting forth the title of the action, the case number assigned by the ALJ, and a designation of the paper (e.g., motion to quash subpoena). (3) Every pleading and paper must be signed by, and must contain the address and telephone number of the party or the person on whose behalf the paper was filed, or his or her representative. (4) Papers are considered filed when they are mailed by certified or registered mail. Date of mailing may be established by a certificate from the party or its representative or by proof that the document was sent by certified or registered mail. (b) Service. (c) Proof of service. § 308.526 Computation of time. (a) In computing any period of time under this subpart or in an order issued thereunder, the time begins with the day following the act, event, or default, and includes the last day of the period, unless it is a Saturday, Sunday, or legal holiday observed by the federal government, in which event it includes the next business day. (b) When the period of time allowed is less than 7 days, intermediate Saturdays, Sundays, and legal holidays observed by the federal government will be excluded from the computation. (c) Where a document has been served or issued by placing it in the mail, an additional 5 days will be added to the time permitted for any response. § 308.527 Motions. (a) Any application to the ALJ for an order or ruling must be by motion. Motions must state the relief sought, the authority relied upon, and the facts alleged, and must be filed with the ALJ and served on all other parties. Motions may include, without limitation, motions for summary judgment. (b) Except for motions made during a prehearing conference or at the hearing, all motions must be in writing. The ALJ may require that oral motions be reduced to writing. (c) Within 15 days after a written motion is served, or any other time as may be fixed by the ALJ, any party may file a response to such motion. (d) The ALJ may not grant a written motion before the time for filing responses thereto has expired, except upon consent of the parties or following a hearing on the motion, but may overrule or deny such motion without awaiting a response. (e) The ALJ will make a reasonable effort to dispose of all outstanding motions prior to the beginning of the hearing. § 308.528 Sanctions. (a) The ALJ may sanction a person, including any party or representative for: (1) Failing to comply with an order, rule, or procedure governing the proceeding; (2) Failing to prosecute or defend an action; or (3) Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing. (b) Any such sanction, including but not limited to, those listed in paragraphs (c), (d), and (e) of this section, must reasonably relate to the severity and nature of the failure or misconduct. (c) When a party fails to comply with an order, including an order for taking a deposition, the production of evidence within the party's control, or a request for admission, the ALJ may: (1) Draw an inference in favor of the requesting party with regard to the information sought; (2) In the case of requests for admission, deem each matter of which an admission is requested to be admitted; (3) Prohibit the party failing to comply with such order from introducing evidence concerning, or otherwise relying upon, testimony relating to the information sought; and (4) Strike any part of the related pleading or other submissions of the party failing to comply with such request. (d) If a party fails to prosecute or defend an action under this subpart commenced by service of a notice of hearing, the ALJ may dismiss the action or may issue an initial decision imposing penalties and assessments. (e) The ALJ may refuse to consider any motion, request, response, brief, or other document which is not filed in a timely fashion. § 308.529 The hearing and burden of proof. (a) The ALJ will conduct a hearing on the record in order to determine whether the defendant is liable for a civil penalty or assessment under § 308.502 of this subpart, and, if so, the appropriate amount of any such civil penalty or assessment considering any aggravating or mitigating factors. (b) The FDIC must prove defendant's liability and any aggravating factors by a preponderance of the evidence. (c) The defendant must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence. (d) The hearing will be open to the public unless otherwise ordered by the ALJ for good cause shown. § 308.530 Determining the amount of penalties and assessments. (a) In determining an appropriate amount of civil penalties and assessments, the ALJ and the Board, upon appeal, should evaluate any circumstances that mitigate or aggravate the violation and should articulate in their opinions the reasons that support the penalties and assessments they impose. Because of the intangible costs of fraud, the expense of investigating such conduct, and the need to deter others who might be similarly tempted, ordinarily double damages and a significant civil penalty should be imposed. (b) Although not exhaustive, the following factors are among those that may influence the ALJ and the Board in determining the amount of penalties and assessments to impose with respect to the misconduct ( i.e., (1) The number of false, fictitious, or fraudulent claims or statements; (2) The time period over which such claims or statements were made; (3) The degree of the defendant's culpability with respect to the misconduct; (4) The amount of money or the value of the property, services, or benefit falsely claimed; (5) The value of the government's actual loss as a result of the misconduct, including foreseeable consequential damages and the costs of investigation; (6) The relationship of the amount imposed as civil penalties to the amount of the government's loss; (7) The potential or actual impact of the misconduct upon national defense, public health or safety, or public confidence in the management of government programs and operations, including particularly the impact on the intended beneficiaries of such programs; (8) Whether the defendant has engaged in a pattern of the same or similar misconduct; (9) Whether the defendant attempted to conceal the misconduct; (10) The degree to which the defendant has involved others in the misconduct or in concealing it; (11) Where the misconduct of employees or agents is imputed to the defendant, the extent to which the defendant's practices fostered or attempted to preclude such misconduct; (12) Whether the defendant cooperated in or obstructed an investigation of the misconduct; (13) Whether the defendant assisted in identifying and prosecuting other wrongdoers; (14) The complexity of the program or transaction, and the degree of the defendant's sophistication with respect to it, including the extent of the defendant's prior participation in the program or in a similar transaction; (15) Whether the defendant has been found, in any criminal, civil, or administrative proceeding to have engaged in similar misconduct or to have dealt dishonestly with the Government of the United States or of a state, directly or indirectly; and (16) The need to deter the defendant and others from engaging in the same or similar misconduct. (c) Nothing in this section will be construed to limit the ALJ or the Board from considering any other factors that in any given case may mitigate or aggravate the offense for which penalties and assessments are imposed. (d) Civil money penalties that are assessed under this subpart are subject to annual adjustments to account for inflation as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74, sec. 701, 129 Stat. 584) ( see also [66 FR 9189, Feb. 7, 2001, as amended at 83 FR 61115, Nov. 28, 2018] § 308.531 Location of hearing. (a) The hearing may be held: (1) In any judicial district of the United States in which the defendant resides or transacts business; (2) In any judicial district of the United States in which the claim or statement at issue was made; or (3) In such other place as may be agreed upon by the defendant and the ALJ. (b) Each party will have the opportunity to present argument with respect to the location of the hearing. (c) The hearing will be held at the place and at the time ordered by the ALJ. § 308.532 Witnesses. (a) Except as provided in paragraph (b) of this section, testimony at the hearing will be given orally by witnesses under oath or affirmation. (b) At the discretion of the ALJ, testimony may be admitted in the form of a written statement or deposition. The party offering a written statement must provide all other parties with a copy of the written statement along with the last known address of the witness. Sufficient time must be allowed for other parties to subpoena the witness for cross-examination at the hearing. Prior written statements and deposition transcripts of witnesses identified to testify at the hearing must be exchanged as provided in § 308.521(a) of this subpart. (c) The ALJ will exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to: (1) Make the interrogation and presentation effective for the ascertainment of the truth; (2) Avoid needless consumption of time; and (3) Protect witnesses from harassment or undue embarrassment. (d) The ALJ will permit the parties to conduct such cross-examination as may be required for a full and true disclosure of the facts. (e) At the discretion of the ALJ, a witness may be cross-examined on matters relevant to the proceeding without regard to the scope of his or her direct examination. To the extent permitted by the ALJ, cross-examination on matters outside the scope of direct examination will be conducted in the manner of direct examination and may proceed by leading questions only if the witness is a hostile witness, an adverse party, or a witness identified with an adverse party. (f) Upon motion of any party, the ALJ will order witnesses excluded so that they cannot hear the testimony of other witnesses. This rule does not authorize exclusion of: (1) A party who is an individual; (2) In the case of a party that is not an individual, an officer or employee of the party appearing for the entity pro se or designated by the party's representative; or (3) An individual whose presence is shown by a party to be essential to the presentation of its case, including an individual employed by the Corporation engaged in assisting the representative for the Corporation. § 308.533 Evidence. (a) The ALJ will determine the admissibility of evidence. (b) Except as provided in this subpart, the ALJ will not be bound by the Federal Rules of Evidence (28 U.S.C. App.). However, the ALJ may apply the Federal Rules of Evidence where appropriate, e.g., to exclude unreliable evidence. (c) The ALJ will exclude irrelevant and immaterial evidence. (d) Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative evidence. (e) Although relevant, evidence may be excluded if it is privileged under federal law. (f) Evidence concerning offers of compromise or settlement will be inadmissible to the extent provided in rule 408 of the Federal Rules of Evidence. (g) The ALJ will permit the parties to introduce rebuttal witnesses and evidence. (h) All documents and other evidence offered or taken for the record must be open to examination by all parties, unless otherwise ordered by the ALJ pursuant to § 308.523 of this subpart. § 308.534 The record. (a) The hearing will be recorded by audio or videotape and transcribed. Transcripts may be obtained following the hearing from the ALJ at a cost not to exceed the actual cost of duplication. (b) The transcript of testimony, exhibits, and other evidence admitted at the hearing, and all papers and requests filed in the proceeding constitute the record for the decision by the ALJ and the Board. (c) The record may be inspected and copied (upon payment of a reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant to § 308.523 of this subpart. § 308.535 Post-hearing briefs. The ALJ may require the parties to file post-hearing briefs. In any event, any party may file a post-hearing brief. The ALJ will fix the time for filing such briefs, not to exceed 60 days from the date the parties receive the transcript of the hearing or, if applicable, the stipulated record. Such briefs may be accompanied by proposed findings of fact and conclusions of law. The ALJ may permit the parties to file reply briefs. § 308.536 Initial decision. (a) The ALJ will issue an initial decision based only on the record, which will contain findings of fact, conclusions of law, and the amount of any penalties and assessments imposed. (b) The findings of fact will include a finding on each of the following issues: (1) Whether the claims or statements identified in the complaint, or any portions of such claims or statements, violate § 308.502 of this subpart; and (2) If the person is liable for penalties or assessments, the appropriate amount of any such penalties or assessments considering any mitigating or aggravating factors that he or she finds in the case, such as those described in § 308.530 of this subpart. (c) The ALJ will promptly serve the initial decision on all parties within 90 days after the time for submission of post-hearing briefs and reply briefs (if permitted) has expired. The ALJ will at the same time serve all parties with a statement describing the right of any defendant determined to be liable for a civil penalty or assessment to file a motion for reconsideration with the ALJ or a notice of appeal with the Board. If the ALJ fails to meet the deadline contained in this paragraph, he or she will notify the parties of the reason for the delay and will set a new deadline. (d) Unless the initial decision of the ALJ is timely appealed to the Board, or a motion for reconsideration of the initial decision is timely filed, the initial decision will constitute the final decision of the Board and will be final and binding on the parties 30 days after it is issued by the ALJ. § 308.537 Reconsideration of initial decision. (a) Except as provided in paragraph (d) of this section, any party may file a motion for reconsideration of the initial decision within 20 days of receipt of the initial decision. If service is made by mail, receipt will be presumed to be 5 days from the date of mailing in the absence of proof to the contrary. (b) Every motion for reconsideration must set forth the matters claimed to have been erroneously decided and the nature of the alleged errors. The motion must be accompanied by a supporting brief. (c) Responses to the motions will be allowed only upon order of the ALJ. (d) No party may file a motion for reconsideration of an initial decision that has been revised in response to a previous motion for reconsideration. (e) The ALJ may dispose of a motion for reconsideration by denying it or by issuing a revised initial decision. (f) If the ALJ denies a motion for reconsideration, the initial decision will constitute the final decision of the FDIC and will be final and binding on all parties 30 days after the ALJ denies the motion, unless the final decision is timely appealed to the Board in accordance with § 308.538 of this subpart. (g) If the ALJ issues a revised initial decision, that decision will constitute the final decision of the FDIC and will be final and binding on the parties 30 days after it is issued, unless it is timely appealed to the Board in accordance with § 308.538 of this subpart. § 308.538 Appeal to the Board of Directors. (a) Any defendant who has filed a timely answer and who is determined in an initial decision to be liable for a civil penalty or assessment may appeal such decision to the Board by filing a notice of appeal with the Board in accordance with this section. (b)(1) No notice of appeal may be filed until the time period for filing a motion for reconsideration under § 308.537 of this subpart has expired. (2) If a motion for reconsideration is timely filed, a notice of appeal must be filed within 30 days after the ALJ denies the motion or issues a revised initial decision, whichever applies. (3) If no motion for reconsideration is timely filed, a notice of appeal must be filed within 30 days after the ALJ issues the initial decision. (4) The Board may extend the initial 30-day period for an additional 30 days if the defendant files with the Board a request for an extension within the initial 30-day period and shows good cause. (c) If the defendant files a timely notice of appeal with the Board, the ALJ will forward the record of the proceeding to the Board. (d) A notice of appeal will be accompanied by a written brief specifying exceptions to the initial decision and reasons supporting the exceptions. (e) The representative for the Corporation may file a brief in opposition to exceptions within 30 days of receiving the notice of appeal and accompanying brief. (f) There is no right to appear personally before the Board. (g) There is no right to appeal any interlocutory ruling by the ALJ. (h) In reviewing the initial decision, the Board will not consider any objection that was not raised before the ALJ unless a demonstration is made of extraordinary circumstances causing the failure to raise the objection. (i) If any party demonstrates to the satisfaction of the Board that additional evidence not presented at such hearing is material and that there were reasonable grounds for the failure to present such evidence at such hearing, the Board will remand the matter to the ALJ for consideration of such additional evidence. (j) The Board may affirm, reduce, reverse, compromise, remand, or settle any penalty or assessment determined by the ALJ in any initial decision. (k) The Board will promptly serve each party to the appeal with a copy of the decision of the Board and a statement describing the right of any person determined to be liable for a penalty or an assessment to seek judicial review. (l) Unless a petition for review is filed as provided in 31 U.S.C. 3805 after a defendant has exhausted all administrative remedies under this subpart and within 60 days after the date on which the Board serves the defendant with a copy of the Board's decision, a determination that a defendant is liable under § 308.502 of this subpart is final and is not subject to judicial review. § 308.539 Stays ordered by the Department of Justice. If at any time the Attorney General or an Assistant Attorney General designated by the Attorney General transmits to the Board a written finding that continuation of the administrative process described in this subpart with respect to a claim or statement may adversely affect any pending or potential criminal or civil action related to such claim or statement, the Board will stay the process immediately. The Board may order the process resumed only upon receipt of the written authorization of the Attorney General. § 308.540 Stay pending appeal. (a) An initial decision is stayed automatically pending disposition of a motion for reconsideration or of an appeal to the Board. (b) No administrative stay is available following a final decision of the Board. § 308.541 Judicial review. Section 3805 of title 31, United States Code, authorizes judicial review by an appropriate United States District Court of a final decision of the Board imposing penalties or assessments under this subpart and specifies the procedures for such review. § 308.542 Collection of civil penalties and assessments. Sections 3806 and 3808(b) of title 31, United States Code, authorize actions for collection of civil penalties and assessments imposed under this subpart and specify the procedures for such actions. § 308.543 Right to administrative offset. The amount of any penalty or assessment which has become final, or for which a judgment has been entered under § 308.541 or § 308.542 of this subpart, or any amount agreed upon in a compromise or settlement under § 308.545 of this subpart, may be collected by administrative offset under 31 U.S.C. 3716, except that an administrative offset may not be made under this section against a refund of an overpayment of federal taxes, then or later owing by the United States to the defendant. § 308.544 Deposit in Treasury of United States. All amounts collected pursuant to this subpart will be deposited as miscellaneous receipts in the Treasury of the United States, except as provided in 31 U.S.C. 3806(g). § 308.545 Compromise or settlement. (a) Parties may make offers of compromise or settlement at any time. (b) The reviewing official has the exclusive authority to compromise or settle a case under this subpart at any time after the date on which the reviewing official is permitted to issue a complaint and before the date on which the ALJ issues an initial decision. (c) The Board has exclusive authority to compromise or settle a case under this subpart any time after the date on which the ALJ issues an initial decision, except during the pendency of any review under § 308.541 of this subpart or during the pendency of any action to collect penalties and assessments under § 308.542 of this subpart. (d) The Attorney General has exclusive authority to compromise or settle a case under this subpart during the pendency of any review under § 308.541 of this subpart or of any action to recover penalties and assessments under 31 U.S.C. 3806. (e) The investigating official may recommend settlement terms to the reviewing official, the Board, or the Attorney General, as appropriate. The reviewing official may recommend settlement terms to the Board, or the Attorney General, as appropriate. (f) Any compromise or settlement must be in writing. § 308.546 Limitations. (a) The notice of hearing with respect to a claim or statement will be served in the manner specified in § 308.507 of this subpart within 6 years after the date on which such claim or statement is made. (b) If the defendant fails to file a timely answer, service of notice under § 308.509(b) of this subpart will be deemed a notice of a hearing for purposes of this section. (c) The statute of limitations may be extended by agreement of the parties. Subpart U—Removal, Suspension, and Debarment of Accountants From Performing Audit Services Source: 68 FR 48270, Aug. 13, 2003, unless otherwise noted. § 308.600 Scope. This subpart, which implements section 36(g)(4) of the FDIA (12 U.S.C. 1831m(g)(4)), provides rules and procedures for the removal, suspension, or debarment of independent public accountants and accounting firms from performing independent audit and attestation services required by section 36 of the FDIA (12 U.S.C. 1831m) for insured depository institutions for which the FDIC is the appropriate Federal banking agency. § 308.601 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) Independent public accountant § 308.602 Removal, suspension, or debarment. (a) Good cause for removal, suspension, or debarment Individuals. (i) Lacks the requisite qualifications to perform audit services; (ii) Has knowingly or recklessly engaged in conduct that results in a violation of applicable professional standards, including those standards and conflicts of interest provisions applicable to accountants through the Sarbanes-Oxley Act of 2002 (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 FDIC or any officer or employee of the FDIC; (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 § 308.603, on grounds relevant to the provision of audit services; or (vii) Is suspended or debarred for cause from practice as an accountant by any duly constituted licensing authority of any state, possession, commonwealth, or the District of Columbia. (2) Accounting firms. (i) The gravity, scope, or repetition of the act or failure to act that constitutes good cause for the removal, suspension, or debarment; (ii) The adequacy of, and adherence to, applicable policies, practices, or procedures for the accounting firm's conduct of its business and the performance of audit services; (iii) The selection, training, supervision, and conduct of members or employees of the accounting firm involved in the performance of audit services; (iv) The extent to which managing partners or senior officers of the accounting firm have participated, directly, or indirectly through oversight or review, in the act or failure to act; and (v) The extent to which the accounting firm has, since the occurrence of the act or failure to act, implemented corrective internal controls to prevent its recurrence. (3) Limited scope orders. (4) Remedies not exclusive. (b) Proceedings to remove, suspend or debar Initiation of formal removal, suspension, or debarment proceedings. (2) Hearings under paragraph (b) of this section. (c) Immediate suspension from performing audit services In general. (i) Has a reasonable basis to believe that the accountant or accounting firm has engaged in conduct (specified in the notice served upon the accountant or accounting firm under paragraph (b)(1) 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. [68 FR 48270, Aug. 13, 2003, as amended at 86 FR 2251, Jan. 12, 2021] § 308.603 Automatic removal, suspension, and debarment. (a) An independent public accountant or accounting firm may not perform audit services for insured depository institutions for which the FDIC is the appropriate Federal banking agency if the accountant or firm: (1) Is subject to a final order of removal, suspension, or debarment (other than a limited scope order) issued by the Board of Governors of the Federal Reserve System, the 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 (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 FDIC, for good cause shown, may grant written permission to such accountant or firm to perform audit services for insured depository institutions for which the FDIC is the appropriate Federal banking agency. The written request must comply with the requirements of § 303.3 of this chapter. § 308.604 Notice of removal, suspension, or debarment. (a) Notice to the public. (b) Notice to the FDIC by accountants and firms. (1) any currently effective order or other action described in §§ 308.602(a)(1)(vi) through (a)(1)(vii) or §§ 308.603(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 (15 U.S.C. 7215(c)(4)(C) or (G)). (c) Timing and place of notice. [68 FR 48270, Aug. 13, 2003, as amended at 74 FR 32245, July 7, 2009; 74 FR 35745, July 20, 2009] § 308.605 Application for reinstatement. (a) Form of petition. (b) Procedure. Appendix A to Part 308—Rules of Practice and Procedure Note: This appendix is effective for all adjudicatory proceedings initiated prior to April 1, 2024. Cross-references to 12 CFR part 308 (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. § 308.1 Scope. This subpart prescribes rules of practice and procedure applicable to adjudicatory proceedings as to which hearings on the record are provided for by the following statutory provisions: (a) Cease-and-desist proceedings under section 8(b) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(b)); (b) Removal and prohibition proceedings under section 8(e) of the FDIA (12 U.S.C. 1818(e)); (c) Change-in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit Insurance Corporation (“FDIC”), should issue an order to approve or disapprove a person's proposed acquisition of an institution and/or institution 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 FDIC is the appropriate regulatory agency; (e) Assessment of civil money penalties by the FDIC against institutions, institution-affiliated parties, and certain other persons for which it is the appropriate regulatory agency for any violation of: (1) Sections 22(h) and 23 of the Federal Reserve Act (FRA), or any regulation issued thereunder, and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1828(j) or 12 U.S.C. 1468; (2) Section 106(b) of the Bank Holding Company Act Amendments of 1970 (“BHCA Amendments of 1970”), and certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1972(2)(F); (3) Any provision of the Change in Bank Control Act of 1978, as amended (the “CBCA”), 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); (4) Section 7(a)(1) of the FDIA, pursuant to 12 U.S.C. 1817(a)(1); (5) Any provision of the International Lending Supervision Act of 1983 (“ILSA”), or any rule, regulation or order issued thereunder, pursuant to 12 U.S.C. 3909; (6) Any provision of the International Banking Act of 1978 (“IBA”), or any rule, regulation or order issued thereunder, pursuant to 12 U.S.C. 3108; (7) Certain provisions of the Exchange Act, pursuant to section 21B of the Exchange Act (15 U.S.C. 78u-2); (8) Section 1120 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) (12 U.S.C. 3349), or any order or regulation issued thereunder; (9) The terms of any final or temporary order issued under section 8 of the FDIA or of any written agreement executed by the FDIC or the former Office of Thrift Supervision (OTS), the terms of any condition imposed in writing by the FDIC in connection with the grant of an application or request, certain unsafe or unsound practices or breaches of fiduciary duty, or any law or regulation not otherwise provided herein pursuant to 12 U.S.C. 1818(i)(2); (10) Any provision of law referenced in section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued thereunder; and (11) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued thereunder; (12) Certain provisions of Section 5 of the Home Owners' Loan Act (HOLA) or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d)(1), (5)-(8), (s), and (v); (13) Section 9 of the HOLA or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1467(d); (14) Section 10 of HOLA, pursuant to 12 U.S.C. 1467a(a)(2)(D), (g), (i)(2)-(4) and (r); and (f) Remedial action under section 102(g) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(g)); (g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) to impose penalties for violations of the post-employment restrictions under that subsection; and (h) This subpart also applies to all other adjudications required by statute to be determined on the record after opportunity for an agency hearing, unless otherwise specifically provided for in the Local Rules. § 308.2 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. § 308.3 Definitions. For purposes of this subpart, unless explicitly stated to the contrary: Administrative law judge Administrative Officer Adjudicatory proceeding Assistant Administrative Officer Board of Directors Board Decisional employee Designee Enforcement Counsel FDIC Final order 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 BHCA (12 U.S.C. 1841 et seq. (3) Any savings association as that term is defined in section 3(b) of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company or any subsidiary thereof (other than a bank) as those terms are defined in section 10(a) of the HOLA (12 U.S.C. 1467a(a)); (4) Any organization operating under section 25 of the FRA (12 U.S.C. 601 et seq. (5) Any foreign bank or company to which section 8 of the IBA (12 U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; and (6) Any federal agency as that term is defined in section 1(b) of the IBA (12 U.S.C. 3101(5)). Investigation Local Rules Office of Financial Institution Adjudication Party Person Respondent Uniform Rules Violation § 308.4 Authority of Board of Directors. The Board of Directors 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. § 308.5 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 § 308.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Board of Directors 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 of Directors 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. § 308.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the FDIC or an administrative law judge By attorneys. (2) By non-attorneys. (3) Notice of appearance. pro se (b) Sanctions. § 308.7 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. § 308.8 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. § 308.9 Ex parte communications. (a) Definition Ex parte communication (i) An interested person outside the FDIC (including such person's counsel); and (ii) The administrative law judge handling that proceeding, the Board of Directors, or a decisional employee. (2) Exception. (b) Prohibition of ex parte communications. (1) No interested person outside the FDIC shall make or knowingly cause to be made an ex parte communication to any member of the Board of Directors, the administrative law judge, or a decisional employee; and (2) No member of the Board of Directors, no administrative law judge, or decisional employee shall make or knowingly cause to be made to any interested person outside the FDIC any ex parte communication. (c) Procedure upon occurrence of ex parte communication. (d) Sanctions. (e) Separation of functions. § 308.10 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 of Directors 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. (2) Signature. (3) Caption. (4) Number of copies. § 308.11 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 § 308.10(c). (c) By the Board of Directors. (2) If a party has not appeared in the proceeding in accordance with § 308.6, the Board of Directors 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 party'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) In such other manner as is reasonably calculated to give actual notice. (e) Area of service. § 308.12 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 of Directors 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 of Directors or the administrative law judge in the case of filing, or by agreement among the parties in the case of service. § 308.13 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 of Directors pursuant to § 308.38, the Board of Directors may grant extensions of the time limits for good cause shown. Extensions may be granted at the motion of a party or of the Board of Directors after notice and opportunity to respond is afforded all non-moving parties, or on the administrative law judge's own motion. § 308.14 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 FDIC is the party requesting the subpoena. The FDIC shall not be required to pay any fees to, or expenses of, any witness not subpoenaed by the FDIC. § 308.15 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 FDIC 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. § 308.16 FDIC's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the FDIC to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the FDIC to conduct or continue any form of investigation authorized by law. § 308.17 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. § 308.18 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. (iii) The notice must be filed with the OFIA. (2) Change-in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the FDIC. (b) Contents of notice. (1) The legal authority for the proceeding and for the FDIC's jurisdiction over the proceeding; (2) A statement of the matters of fact or law showing that the FDIC 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. § 308.19 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. § 308.21 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 of Directors a recommended decision containing the findings and the relief sought in the notice. § 308.22 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. § 308.23 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. § 308.24 Scope of document discovery. (a) Limits on discovery. (2) Discovery by use of deposition is governed by subpart I of this part. (3) Discovery by use of interrogatories is not permitted. (b) Relevance. (c) Privileged matter. (d) Time limits. § 308.25 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. § 308.26 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 § 308.24(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 § 308.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 308.27 Deposition of witness unavailable for hearing. (a) General rules. (i) The witness will be unable to attend or may be prevented from attending the hearing because of age, sickness or infirmity, or will otherwise be unavailable; (ii) The witness' unavailability was not procured or caused by the subpoenaing party; (iii) The testimony is reasonably expected to be material; and (iv) Taking the deposition will not result in any undue burden to any other party and will not cause undue delay of the proceeding. (2) The application must contain a proposed deposition subpoena and a brief statement of the reasons for the issuance of the subpoena. The subpoena must name the witness whose deposition is to be taken and specify the time and place for taking the deposition. A deposition subpoena may require the witness to be deposed at any place within the country in which that witness resides or has a regular place of employment or such other convenient place as the administrative law judge shall fix. (3) Any requested subpoena that sets forth a valid basis for its issuance must be promptly issued, unless the administrative law judge on his or her own motion, requires a written response or requires attendance at a conference concerning whether the requested subpoena should be issued. (4) The party obtaining a deposition subpoena is responsible for serving it on the witness and for serving copies on all parties. Unless the administrative law judge orders otherwise, no deposition under this section shall be taken on fewer than ten days' notice to the witness and all parties. Deposition subpoenas may be served in any state, territory, possession of the United States, or the District of Columbia, on any person or company doing business in any state, territory, possession of the United States, or the District of Columbia, or as otherwise permitted by law. (b) Objections to deposition subpoenas. (2) A statement of the basis for the motion to quash or modify a subpoena issued under this section must accompany the motion. The motion must be served on all parties. (c) Procedure upon deposition. (2) Any party may move before the administrative law judge for an order compelling the witness to answer any questions the witness has refused to answer or submit any evidence the witness has refused to submit during the deposition. (3) The deposition must be subscribed by the witness, unless the parties and the witness, by stipulation, have waived the signing, or the witness is ill, cannot be found, or has refused to sign. If the deposition is not subscribed by the witness, the court reporter taking the deposition shall certify that the transcript is a true and complete transcript of the deposition. (d) Enforcing subpoenas. § 308.28 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. § 308.29 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. § 308.30 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. § 308.31 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. § 308.32 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. § 308.33 Public hearings. (a) General rule. (b) Filing document under seal. § 308.34 Hearing subpoenas. (a) Issuance. duces tecum (2) A party may apply for a hearing subpoena at any time before the commencement of a hearing. During a hearing, a party may make an application for a subpoena orally on the record before the administrative law judge. (3) The administrative law judge shall promptly issue any hearing subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she may refuse to issue the subpoena or may issue it in a modified form upon any conditions consistent with this subpart. Upon issuance by the administrative law judge, the party making the application shall serve the subpoena on the person named in the subpoena and on each party. (b) Motion to quash or modify. (2) Any motion to quash or modify a hearing subpoena must be filed prior to the time specified in the subpoena for compliance, but not more than ten days after the date of service of the subpoena upon the movant. (c) Enforcing subpoenas. § 308.35 Conduct of hearings. (a) General rules. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. § 308.36 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 of Directors 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 institution 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 of Directors. (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. § 308.37 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. § 308.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 308.39 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 of Directors 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. § 308.40 Review by Board of Directors. (a) Notice of submission to Board of Directors. (b) Oral argument before the Board of Directors. (c) Final decision. (2) The Board of Directors 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 of Directors 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 of Directors shall be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Board of Directors or required by statute, upon any appropriate state or Federal supervisory authority. § 308.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the FDIC may not, unless specifically ordered by the Board of Directors or a reviewing court, operate as a stay of any order issued by the FDIC. The Board of Directors 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—General Rules of Procedure § 308.101 Scope of Local Rules. (a) Subparts B and C of the Local Rules prescribe rules of practice and procedure to be followed in the administrative enforcement proceedings initiated by the FDIC as set forth in § 308.1 of the Uniform Rules. (b) Except as otherwise specifically provided, the Uniform Rules and subpart B of the Local Rules shall not apply to subparts D through T of the Local Rules. (c) Subpart C of the Local Rules shall apply to any administrative proceeding initiated by the FDIC. (d) Subparts A, B, and C of this part prescribe the rules of practice and procedure to applicable to adjudicatory proceedings as to which hearings on the record are provided for by the assessment of civil money penalties by the FDIC against institutions, institution-affiliated parties, and certain other persons for which it is the appropriate regulatory agency for any violation of section 15(c)(4) of the Exchange Act (15 U.S.C. 78o(c)(4)). § 308.102 Authority of Board of Directors and Administrative Officer. (a) The Board of Directors. (2) Nothing contained in this part shall be construed to limit the power of the Board of Directors granted by applicable statutes or regulations. (b) The Administrative Officer. (2) Pursuant to authority delegated by the Board of Directors, the Administrative Officer and Assistant Administrative Officer, upon the advice and recommendation of the Deputy General Counsel for Litigation or, in his absence, the Assistant General Counsel for General Litigation, may issue rulings in proceedings under sections 7(j), 8, 18(j), 19, 32 and 38 of the FDIA (12 U.S.C. 1817(j), 1818, 1828(j), 1829, 1831i and 1831 o (i) Denials of requests for private hearing; (ii) Interlocutory appeals; (iii) Stays pending judicial review; (iv) Reopenings of the record and/or remands of the record to the ALJ; (v) Supplementation of the evidence in the record; (vi) All remands from the courts of appeals not involving substantive issues; (vii) Extensions of stays of orders terminating deposit insurance; and (viii) All matters, including final decisions, in proceedings under section 8(g) of the FDIA (12 U.S.C. 1818(g)). § 308.103 Appointment of administrative law judge. (a) Appointment. (b) Procedures. (2) OFIA shall advise the parties, in writing, that an administrative law judge has been appointed. § 308.104 Filings with the Board of Directors. (a) General rule. (b) Scope. § 308.105 Custodian of the record. The Administrative Officer is the official custodian of the record when no administrative law judge has jurisdiction over the proceeding. As the official custodian, the Administrative Officer shall maintain the official record of all papers filed in each proceeding. § 308.106 Written testimony in lieu of oral hearing. (a) General rule. (2) Any such order shall provide that each party shall, upon request, have the same right of oral cross-examination (or redirect examination) as would exist had the witness testified orally rather than through a written statement. Such order shall also provide that any party has a right to call any hostile witness or adverse party to testify orally. (b) Scheduling of submission of written testimony. (2) Absent good cause shown, written rebuttal, if any, shall be submitted and the oral portion of the hearing begun within 30 days of the date set for filing written direct testimony. (3) The administrative law judge shall direct, unless good cause requires otherwise, that— (i) All parties shall simultaneously file any exhibits and written direct testimony required under paragraph (b)(1) of this section; and (ii) All parties shall simultaneously file any exhibits and written rebuttal required under paragraph (b)(2) of this section. (c) Failure to comply with order to file written testimony. (2) Late filings of papers under this section may be allowed and accepted only upon good cause shown. § 308.107 Document discovery. (a) Parties to proceedings set forth at § 308.1 of the Uniform Rules and as provided in the Local Rules may obtain discovery only through the production of documents. No other form of discovery shall be allowed. (b) Any questioning at a deposition of a person producing documents pursuant to a document subpoena shall be strictly limited to the identification of documents produced by that person and a reasonable examination to determine whether the subpoenaed person made an adequate search for, and has produced, all subpoenaed documents. [88 FR 89949, Dec. 28, 2023]

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