12 CFR Part 747 — Administrative Actions, Adjudicative Hearings, Rules of Practice and Procedure, and Investigations

PART 747—ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF PRACTICE AND PROCEDURE, AND INVESTIGATIONS Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 104-134; Pub. L. 109-351; Pub. L. 114-74. Source: 56 FR 37767, Aug. 8, 1991, unless otherwise noted. Editorial Note: Nomenclature changes to part 747 appear at 84 FR 1609, Feb. 5, 2019. § 747.0 Scope of this part. (a) This part describes the various formal and informal adjudicative actions and non-adjudicative proceedings available to the National Credit Union Administration Board (NCUA Board), the grounds for those actions and proceedings, and the procedures used in formal and informal hearings related to each available action. As mandated by section 916 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1818 note) (FIRREA), this part incorporates uniform rules of practice and procedure (Uniform Rules), which govern formal adjudications generally, as well as proceedings involving cease-and-desist actions, assessment of civil money penalties, and removal, prohibition and suspension actions. In addition, the Uniform Rules are incorporated in other subparts of this part that provide for formal adjudications. The administrative actions and proceedings described in this section, as well as the grounds and hearing procedures for each, are controlled by sections 120(b) (except where the Federal credit union is closed due to insolvency), 202(a)(3), and 206 of the Federal Credit Union Act (the Act), 12 U.S.C. 1766(b), 1782(a)(3), and 1786. Should any provision of this part be inconsistent with these or any other provisions of the Act, as amended, the Act shall control. Judicial enforcement of any action or order described in this part, as well as judicial review thereof, shall be as prescribed under the Act (12 U.S.C. 1751 et seq. et seq. (b) As used in this part, the term “insured credit union” means any Federal credit union or any State-chartered credit union insured under subchapter II of the Act, unless the context indicates otherwise. (c) The Uniform Rules in subpart A 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 in 12 CFR part 747, subpart A. [88 FR 89962, Dec. 28, 2023] Subpart A—Uniform Rules of Practice and Procedure Source: 88 FR 89962, Dec. 28, 2023, unless otherwise noted. § 747.1 Scope. This subpart prescribes uniform rules of practice and procedure applicable to adjudicatory proceedings required to be conducted on the record after opportunity for a hearing under the following statutory provisions: (a) Cease-and-desist proceedings under section 206(e) of the Act (12 U.S.C. 1786(e)); (b) Removal and prohibition proceedings under section 206(g) of the Act (12 U.S.C. 1786(g)); (c) Assessment of civil money penalties by the NCUA Board against institutions and institution-affiliated parties for any violation of: (1) Section 202 of the Act (12 U.S.C. 1782); (2) Section 1120 of FIRREA (12 U.S.C. 3349), or any order or regulation issued thereunder; (3) The terms of any final or temporary order issued under section 206 of the Act or any written agreement executed by the National Credit Union Administration (“NCUA”), any condition imposed in writing by the NCUA in connection with any action on any application, notice, or other request by the credit union or institution-affiliated party, certain unsafe or unsound practices or breaches of fiduciary duty, or any law or regulation not otherwise provided in this section, pursuant to 12 U.S.C. 1786(k); (4) Any provision of law referenced in section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued thereunder; (d) Remedial action under section 102(g) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(g)); and (e) This subpart also applies to all other adjudications required by statute to be determined on the record after opportunity for an agency hearing, unless otherwise specifically provided for in subparts B through J of this part. § 747.2 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. § 747.3 Definitions. For purposes of this part, unless explicitly stated to the contrary: (a) Administrative Law Judge (ALJ) (b) Adjudicatory proceeding (c) Decisional employee (d) Electronic signature (e) Enforcement Counsel (f) Final order (g) Institution (1) Any Federal credit union as that term is defined in section 101(1) of the Act (12 U.S.C. 1752(1)); and (2) Any insured State-chartered credit union as that term is defined in section 101(7) of the FCUA (12 U.S.C. 1752(7)). (h) Institution-affiliated party (i) Local Rules (j) NCUA (k) NCUA Board (l) OFIA (m) Party (n) Person (o) Respondent (p) Uniform Rules (q) Violation § 747.4 Authority of the NCUA Board. The NCUA Board may, at any time during the pendency of a proceeding, perform, direct the performance of, or waive performance of, any act which could be done or ordered by the ALJ. § 747.5 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 § 747.31; (7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the NCUA Board has the power to grant any motion to dismiss the proceeding or to decide any other motion that results in a final determination of the merits of the proceeding; (8) To prepare and present to the NCUA Board 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. § 747.6 Appearance and practice in adjudicatory proceedings. (a) Appearance before the NCUA 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 this part 747. (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. § 747.7 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. § 747.8 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. § 747.9 Ex parte communications. (a) Definition Ex parte communications. Ex parte communication (i) An interested person outside the NCUA (including such person's counsel); and (ii) The ALJ handling that proceeding, the NCUA Board, or a decisional employee. (2) Exception. ex parte (b) Prohibition of ex parte communications. (1) An interested person outside the NCUA must not make or knowingly cause to be made an ex parte (2) The NCUA Board, ALJ, or decisional employee may not make or knowingly cause to be made to any interested person outside the NCUA 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 NCUA. (2) Decision process. § 747.10 Filing of papers. (a) Filing. (b) Manner of filing. (1) Electronic mail or other electronic means designated by the NCUA Board or the ALJ; (2) Personal service; (3) Delivering the papers to a same day courier service or overnight delivery service; or (4) Mailing the papers by first class, registered, or certified mail. (c) Formal requirements as to papers filed Form. 1/2 (2) Signature. (3) Caption. § 747.11 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 NCUA Board or the ALJ. (2) If a respondent has not appeared in the proceeding in accordance with § 747.6, the NCUA Board or the ALJ will serve the respondent by any of the following methods: (i) By personal service; (ii) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works; (iii) If the person to be served is a corporation or other association, by delivery to an officer, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the respondent; (iv) By registered or certified mail, delivery by a same day courier service, or by an overnight delivery service to the respondent's last known mailing address; or (v) By any other method reasonably calculated to give actual notice. (d) Subpoenas. (1) By personal service; (2) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works; (3) If the person to be served is a corporation or other association, by delivery to an officer, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the party; (4) By registered or certified mail, delivery by a same day courier service, or by an overnight delivery service to the person's last known mailing address; or (5) By any other method reasonably calculated to give actual notice. (e) Area of service. § 747.12 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 NCUA Board or ALJ in the case of filing or by agreement of the parties in the case of service. (c) Calculation of time for service and filing of responsive papers. (1) If service is made by electronic mail or other electronic means or by same day courier delivery, add one calendar day to the prescribed period; (2) If service is made by overnight delivery service, add two calendar days to the prescribed period; or (3) If service is made by first class, registered, or certified mail, add three calendar days to the prescribed period. § 747.13 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 NCUA Board pursuant to § 747.38, the NCUA Board may grant extensions of the time limits for good cause shown. Extensions may be granted at the motion of a party after notice and opportunity to respond is afforded all non-moving parties or on the NCUA Board's or the ALJ's own motion. § 747.14 Witness fees and expenses. (a) In general. (b) Exception for testimony by a party. (c) Timing of payment. § 747.15 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. § 747.16 The NCUA's right to conduct examination. Nothing contained in this subpart limits in any manner the right of the NCUA to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the NCUA to conduct or continue any form of investigation authorized by law. § 747.17 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. § 747.18 Commencement of proceeding and contents of notice. (a) Commencement of proceeding. (2) 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. (3) Enforcement Counsel must file the notice with OFIA. (b) Contents of notice. (1) The legal authority for the proceeding and for the NCUA's jurisdiction over the proceeding; (2) Matters of fact or law showing that the NCUA 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. § 747.19 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. § 747.20 Amended pleadings (a) Amendments. (b) Amendments to conform to the evidence. § 747.21 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 NCUA Board a recommended decision containing the findings and the relief sought in the notice. § 747.22 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. § 747.23 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. § 747.24 Scope of document discovery. (a) Limits on discovery. documents (2) Discovery by use of deposition is governed by § 747.100. (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. § 747.25 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. § 747.26 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 § 747.24(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 § 747.25(d), and during the same time limits during which such an objection could be filed. (c) Enforcing document subpoenas. § 747.27 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. § 747.28 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. § 747.29 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. § 747.30 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. § 747.31 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. § 747.32 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. § 747.33 Public hearings. (a) General rule. (b) Filing document under seal. § 747.34 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. § 747.35 Conduct of hearings. (a) General rules. Conduct of hearings. (2) Order of hearing. (3) Examination of witnesses. (4) Stipulations. (b) Transcript. (c) Electronic presentation. § 747.36 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 NCUA Board must appear on the record. (3) If official notice is requested or taken of any material fact, the parties, upon timely request, must be afforded an opportunity to object. (c) Documents. (2) Subject to the requirements of paragraph (a) of this section, any document, including a report of examination, supervisory activity, inspection, or visitation, prepared by an appropriate Federal financial institutions regulatory agency or by a State regulatory agency, is admissible either with or without a sponsoring witness. (3) Witnesses may use existing or newly created charts, exhibits, calendars, calculations, outlines, or other graphic material to summarize, illustrate, or simplify the presentation of testimony. Such materials may, subject to the ALJ's discretion, be used with or without being admitted into evidence. (d) Objections. (2) When an objection to a question or line of questioning propounded to a witness is sustained, the examining counsel may make a specific proffer on the record of what the examining counsel expected to prove by the expected testimony of the witness either by representation of counsel or by direct questioning of the witness. (3) The ALJ will retain rejected exhibits, adequately marked for identification, for the record, and transmit such exhibits to the NCUA Board. (4) Failure to object to admission of evidence or to any ruling constitutes a waiver of the objection. (e) Stipulations. (f) Depositions of unavailable witnesses. (2) Such deposition transcript is admissible to the same extent that testimony would have been admissible had that person testified at the hearing, provided that if a witness refused to answer proper questions during the depositions, the ALJ may, on that basis, limit the admissibility of the deposition in any manner that justice requires. (3) Only those portions of a deposition received in evidence at the hearing constitute a part of the record. § 747.37 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 ails 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. § 747.38 Recommended decision and filing of record. (a) Filing of recommended decision and record. (b) Filing of index. § 747.39 Exceptions to recommended decision. (a) Filing exceptions. (b) Effect of failure to file or raise exceptions. (2) No exception need be considered by the NCUA Board if the party taking exception had an opportunity to raise the same objection, issue, or argument before the ALJ and failed to do so. (c) Contents. (2) All exceptions and briefs in support of exceptions must set forth page or paragraph references to the specific parts of the ALJ's recommendations to which exception is taken, the page or paragraph references to those portions of the record relied upon to support each exception, and the legal authority relied upon to support each exception. § 747.40 Review by the NCUA Board. (a) Notice of submission to the NCUA Board. (b) Oral argument before the NCUA Board. (c) The NCUA Board's final decision. (2) The NCUA Board will render a final decision within 90 days after notification of the parties that the case has been submitted for final decision, or 90 days after oral argument, whichever is later, unless the NCUA Board orders that the action or any aspect thereof be remanded to the ALJ for further proceedings. Copies of the final decision and order of the NCUA Board will be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the NCUA Board or required by statute, upon any appropriate State or Federal supervisory authority. § 747.41 Stays pending judicial review. The commencement of proceedings for judicial review of a final decision and order of the NCUA Board may not, unless specifically ordered by the NCUA Board or a reviewing court, operate as a stay of any order issued by the NCUA Board. The NCUA Board may, in the NCUA Board's discretion, and on such terms as the NCUA Board finds just, stay the effectiveness of all or any part of an order pending a final decision on a petition for review of that order. Subpart B—Local Rules of Practice and Procedure § 747.100 Discovery limitations. (a) Parties to a proceeding set forth either at § 747.1 of subpart A or in subpart C, E or G of this part may obtain discovery only through the production of documents. No other form of discovery shall be allowed. (b) In the event that a person producing documents pursuant to a document subpoena is permitted to be deposed, all questioning 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. Subpart C—Local Rules and Procedures Applicable to Proceedings for the Involuntary Termination of Insured Status § 747.201 Scope. Under the authority of section 206(b) of the Act (12 U.S.C. 1786(b)), the NCUA Board may terminate the insured status of an insured credit union upon the grounds set forth therein and enumerated in § 747.202. The procedure for terminating the insured status of an insured credit union as therein prescribed will be followed and hearings required thereunder will be conducted in accordance with the rules and procedures set forth in this subpart and subpart A of this part. To the extent any rule or procedure of subpart A is inconsistent with a rule or procedure prescribed in this subpart C, subpart C shall control. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] § 747.202 Grounds for termination of insurance. The NCUA Board may institute proceedings to terminate the insured status of an insured credit union whenever it determines that an insured credit union is: (a) Engaging or has engaged in unsafe or unsound practices in conducting its business; (b) In unsafe or unsound condition to continue as an insured credit union; or (c) Violating or has violated any applicable law, rule, regulation, order, written condition imposed by the NCUA Board in response to any action on any application, notice, or other request by the credit union or institution-affiliated party, or any written agreement entered into with the NCUA Board. [56 FR 37767, Aug. 8, 1991, as amended at 71 FR 67440, Nov. 22, 2006] § 747.203 Notice of charges. (a) Whenever the NCUA Board determines that grounds for termination of insured status exists, it will, for the purpose of securing correction of errant or illegal conditions, serve a Notice of Charges upon the concerned credit union. This notice will contain a statement describing the unsafe or unsound practices, condition or the relevant violations. (b) In the case of an insured State-chartered credit union, the NCUA Board shall send a copy of the Notice of Charges to the appropriate State authority, if any, having supervision over the credit union. [56 FR 37767, Aug. 8, 1991, as amended at 75 FR 34622, June 18, 2010] § 747.204 Notice of intention to terminate insured status. Unless correction of the practices, condition, or violations set forth in the Notice of Charges is made within 120 days after service of such statement, or within a shorter period of not less than 20 days after such service as the NCUA Board may require in any case where it determines that the insurance risk with respect to such credit union could be unduly jeopardized by further delay or as the appropriate State supervisory authority shall require in the case of an insured State-chartered credit union, the Board, if it determines to proceed further, shall give to the credit union not less than 30 days written notice of its intent to terminate the status of the credit union as an insured credit union. The notice shall contain a statement of the facts constituting the alleged unsafe or unsound practices or conditions or violations on which a hearing will be held. Such hearing shall commence not earlier than 30 days nor later than 60 days after the date of service of such notice upon the credit union, unless an earlier or later date is set by the NCUA Board at the request of the credit union. § 747.205 Order terminating insured status. If, upon the record of the hearing held pursuant to § 747.204, the NCUA Board finds that any unsafe or unsound practice or condition or violation specified in the notice has been established and has not been corrected within the time prescribed under § 747.204, the NCUA Board may issue and serve upon the credit union an order terminating its status as an insured credit union on a date subsequent to the date of such finding and subsequent to the expiration of the time specified in the Notice. § 747.206 Consent to termination of insured status. Unless the credit union appears at the hearing designated in the notice of hearing by a duly authorized representative, it will be deemed to have consented to the termination of its status as an insured credit union. In the event the credit union fails to so appear at such hearing, the administrative law judge shall forthwith report the matter to the NCUA Board and the NCUA Board may thereupon issue an order terminating the credit union's insured status. § 747.207 Notice of termination of insured status. Prior to the effective date of the termination of the insured status of an insured credit union under section 206(b) of the Act (12 U.S.C. 1786(b)) and at such time as the Board shall specify, the credit union shall mail to each member at his or her last address of record on the books of the credit union, and publish in not less than two issues of a local newspaper of general circulation, notices of the termination of its insured status, and the credit union shall furnish the NCUA Board with proof of publication of such notice. The notice shall be as follows: NOTICE (Date) 1. The status of the ______ as an insured credit union under the provisions of the Federal Credit Union Act, will terminate as of the close of business on the ____ day of ____; 2. Any deposits made by you after that date, either new deposits or additions to existing accounts, will not be insured by the National Credit Union Administration; 3. Accounts in the credit union on the ____ day of ____, ____ up to a maximum of $250,000 for each member, will continue to be insured, as provided by the Federal Credit Union Act, for one (1) year after the close of business on the ____ day of ____, ____: Provided, however, (Name of Credit Union) (Address) [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992, as amended at 75 FR 34622, June 18, 2010; 85 FR 62213, Oct. 2, 2020] § 747.208 Duties after termination. (a) After the termination of the insured status of any credit union under section 206(b) of the Act (12 U.S.C. 1786(b)), insurance of its member accounts to the extent they were insured on the effective date of such termination, less any amounts thereafter withdrawn which reduce the accounts below the amount covered by insurance on the effective date of such termination, shall continue for a period of one year, but no shares issued by the credit union or deposits made after the date of such termination shall be insured by the NCUA Board. (b) The credit union shall continue to pay premiums to the NCUA Board during such period and the Board shall have the right to examine the credit union from time to time during the period. The credit union shall, in all other respects, be subject to the duties and obligations of an insured credit union during the one year period. If the credit union is closed for liquidation within this period, the Board shall have the same powers and rights with respect to such credit union as in the case of an insured credit union. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] Subpart D—Local Rules and Procedures Applicable to Suspensions and Prohibitions Where Felony Charged § 747.301 Scope. The rules and procedures set forth in this subpart are applicable to informal proceedings conducted by the NCUA Board, or a Presiding Officer designated by the Board, pursuant to section 206(i) of the Act (12 U.S.C. 1786(i)), to suspend, remove and/or prohibit from office or from further participation any institution-affiliated party of an insured credit union who: (a) Is charged in a state, Federal or territorial information or indictment or complaint with committing or participating in a crime involving dishonesty or breach of trust, which crime is punishable by imprisonment for a term exceeding one year under state or Federal law; or (b) Enters a pretrial diversion or other similar program as result of being charged in such information or indictment or complaint with participating or committing such crime; or (c) Is convicted of such crime. Subpart A of this part does not apply to proceedings under this subpart. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] § 747.302 Rules of practice; remainder of board of directors. Except as otherwise specifically provided in this subpart, the following provisions shall apply to proceedings conducted under this subpart: (a)(1) Power of attorney and notice of appearance. (2) Summary suspension. (b)(1) Notice of hearing. (2) Party. (c)(1) Computation of time. (2) Service by mail. (d) Nonpublication of submissions. (e) Remainder of board of directors. (2) In the event all of the directors of an insured credit union are suspended pursuant to this subpart, the NCUA Board shall appoint persons to serve temporarily as directors in their place pending the termination of such suspensions, or until such time as those who have been suspended cease to be directors of the credit union and their respective successors have been elected by the members at an annual or special meeting and have taken office. (3) Directors appointed temporarily by the NCUA Board pursuant to paragraph (e)(2) of this section, shall, within 30 days following their appointment, call a special meeting for the election of new directors, unless during such 30-day period— (i) The regular annual meeting is convened; or (ii) The suspensions giving rise to the appointment of temporary directors are terminated. [56 FR 37767, Aug. 8, 1991, as amended at 75 FR 34622, June 18, 2010] § 747.303 Notice of suspension or prohibition. Whenever an institution-affiliated party of an insured credit union is charged in any state, Federal or territorial information or indictment or complaint with the commission of or participation in a crime involving dishonesty or breach of trust, which crime is punishable by imprisonment for a term exceeding one year under state or Federal law, the NCUA Board may, if continued service or participation by the concerned party may pose a threat to the interests of any credit union's members or may threaten to impair public confidence in any credit union, by written notice served upon such party, suspend him or her from office, or prohibit him or her from further participation in any manner in the affairs of any credit union, or both. A copy of the notice of suspension or prohibition shall also be served upon the credit union of which the subject of the order is, or most recently was, an institution-affiliated party. [71 FR 67440, Nov. 22, 2006] § 747.304 Removal or permanent prohibition. (a) In the event that a judgment of conviction or an agreement to enter a pretrial diversion or other similar program is entered against the institution-affiliated party, and at such time as the judgment, if any, is not subject to further appellate review, the NCUA Board may, if continued service or participation by such party may pose a threat to the interests of any credit union's members or may threaten to impair public confidence in any credit union, issue and serve upon the individual an order removing him or her from office or prohibiting him or her from further participation in any manner in the conduct of the affairs of any credit union except with the consent of the NCUA Board. A copy of such order will also be served upon the credit union of which the subject of the order is, or most recently was, an institution-affiliated party. (b) The NCUA Board may issue such order with respect to an individual who is an institution-affiliated party at a credit union at the time of the offense without regard to whether such individual is an institution-affiliated party at any credit union at the time the order is considered or issued by the Board or whether the credit union at which the individual was an institution-affiliated party at the time of the offense remains in existence at the time the order is considered or issued by the board. (c) A finding of not guilty or other disposition of the charge will not preclude the Board from thereafter instituting proceedings, pursuant to the provisions of section 206(g) of the Act (12 U.S.C. 1786(g)) and subpart A of this part, to remove such director, committee member, officer, or other person from office or to prohibit his or her further participation in the affairs of the credit union. [71 FR 67441, Nov. 22, 2006] § 747.305 Effectiveness of suspension or removal until completion of hearing. Any notice of suspension or prohibition issued under § 747.303 and any order of removal or prohibition issued under § 747.304 will be effective upon service on the concerned party and will remain effective and outstanding until the completion of any hearing or appeal authorized under section 206(i) of the Act (12 U.S.C. 1786(i)) and this subpart, unless such notice of suspension or order of removal is terminated by the NCUA Board. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] § 747.306 Notice of opportunity for hearing. (a) Any notice of suspension or prohibition issued pursuant to § 747.303, and any order of removal or prohibition issued pursuant to § 747.304, shall be accompanied by a further notice to the concerned individual that he or she may, within 30 days of service of such notice, request in writing an informal hearing at which he or she may present evidence and argument that his or her continued service to or participation in the conduct of the affairs of the credit union does not, or is not likely to, pose a threat to the interests of the credit union's members or threaten to impair confidence in the credit union. Any notice of the opportunity for such a hearing shall be accompanied by a description of the hearing procedure and the criteria to be considered. (b) A request for a hearing filed pursuant to paragraph (a) of this section shall state with particularity the relief desired, the grounds thereof, and shall include, when available, supporting evidence. The request and supporting evidence shall be filed in writing with the Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992, as amended at 59 FR 36041, July 15, 1994; 75 FR 34622, June 18, 2010; 85 FR 62213, Oct. 2, 2020] § 747.307 Hearing. (a) Upon receipt of a request for a hearing which complies with § 747.306, the NCUA Board will order an informal hearing to commence within the following 30 days in the Washington, DC metropolitan area or at such other place as the NCUA Board designates before a Presiding Officer designated by the NCUA Board to conduct the hearing. At the request of the concerned party, the NCUA Board may order the hearing to commence at a time more than 30 days after the receipt of the request for such hearing. (b) The notice of hearing shall be served by the NCUA Board upon the party or parties afforded the hearing and shall set forth the time and place of the hearing and the name and address of the Presiding Officer. (c) The subject individual may appear at the hearing personally, through counsel, or personally with counsel. The individual shall have the right to introduce relevant and material written materials (or, at the discretion of the NCUA Board, oral testimony), and to present an oral argument before the Presiding Officer. A member of the enforcement staff of the Office of General Counsel of the NCUA may attend the hearing and may participate as a party. Neither the formal rules of evidence nor the adjudicative procedures of the Administrative Procedure Act (5 U.S.C. 554-557), nor subpart A of this part shall apply to the hearing. The proceedings shall be recorded and a transcript furnished to the individual upon request and after the payment of the cost thereof. The NCUA Board shall have the discretion to permit the presentation of witnesses, within specified time limits, so long as a list of such witnesses is furnished to the Presiding Officer at least ten days prior to the hearing. Witnesses shall not be sworn, unless specifically requested by either party or directed by the Presiding Officer. The Presiding Officer may examine any witnesses and each party shall have the opportunity to cross-examine any witness presented by an opposing party. Upon the request of either the subject individual or the representative of the Office of General Counsel, the record shall remain open for a period of five business days following the hearing, during which time the parties may make any additional submissions to the record. Thereafter, the record shall be closed. (d) In the course of or in connection with any proceeding under this subpart, the NCUA Board and the Presiding Officer will have the power to administer oaths and affirmations, to take or cause depositions to be taken, and to issue, revoke, quash, or modify subpoenas and subpoenas duces tecum. If the NCUA Board permits the presentation of witnesses, the NCUA Board or the Presiding Officer may require the attendance of witnesses from any place in any state or in any territory or other place subject to the jurisdiction of the United States at any designated place where such proceeding is being conducted. Witnesses subpoenaed shall be paid the same fees and mileage as are paid witnesses in the District Courts of the United States. The NCUA Board or the Presiding Officer may require the production of documents from any place in any such state, territory, or other place. (e) The Presiding Officer will make his or her recommendations to the Board, where possible, within ten business days following the close of the record. [56 FR 37767, Aug. 8, 1991, as amended at 59 FR 36042, July 15, 1994] § 747.308 Waiver of hearing; failure to request hearing or review based on written submissions; failure to appear. (a) The subject individual may, in writing, waive an oral hearing and instead elect to have the matter determined by the NCUA Board on the basis of written submissions alone. (b) Should any concerned party fail to request in writing an oral hearing or consideration based on written submissions alone within 30 days of service of the notice described in § 747.306, he or she will be deemed to have consented to the NCUA Board's action. (c) Unless the concerned party appears at the hearing personally or by duly appointed representative, he or she will be deemed to have consented to the NCUA Board's action. § 747.309 Decision of the NCUA Board. Within 60 days following the hearing, or receipt of the subject individual's written submissions where hearing has been waived pursuant to § 747.308, the NCUA Board shall notify the institution-affiliated party whether the suspension or prohibition will be continued, terminated, or otherwise modified, or whether the order of removal or prohibition will be rescinded or otherwise modified. Such notification shall contain a statement of the basis for the decision of the NCUA Board, if that decision is adverse to the respondent party. In the case of a decision favorable to the respondent on the subject of a prior order of removal or prohibition, the NCUA Board shall take prompt action to rescind or otherwise modify the order of removal or prohibition. § 747.310 Reconsideration by the NCUA Board. (a) The subject individual shall have ten business days following receipt of the decision of the NCUA Board in which to petition the NCUA Board for initial reconsideration. (b) The subject individual also shall be entitled to petition the NCUA Board for reconsideration of its decision any time after the expiration of a 12-month period from the date of the NCUA Board's decision, but no petition for reconsideration may be made within 12 months of a previous petition. (c) Any petition shall state with particularity the basis for reconsideration, the relief sought, and any exceptions the individual has to the NCUA Board's findings. An individual's petition may be accompanied by a memorandum of points and authorities in support of his or her petition and any supporting documentation the individual may wish to have considered. (d) No hearing need be granted on such petition for reconsideration. Promptly following receipt of the petition, the Board shall render its decision. § 747.311 Relevant considerations. In deciding the question of suspension, prohibition, or removal under this subpart, the NCUA Board will consider the following: (a) 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; (b) Whether the continued presence of the subject individual in his or her position may pose a threat to the interests of the credit union's members because of the nature and extent of the individual's participation in the affairs of the insured credit union and/or the nature of the offense with the commission of or participation in which the individual has been charged; (c) Whether there is cause to believe that there may be an erosion of public confidence in the integrity, safety, or soundness of a particular credit union (either generally or in the particular locality in which the credit union is situated) if the subject individual is permitted to remain in his or her position in an insured credit union; (d) Whether the individual is covered by the credit union's fidelity bond and, if so, whether the bond is likely to be revoked, or whether coverage under the bond will be affected adversely as a result of the information, indictment, complaint, judgment of conviction or entry into a pretrial diversion or other similar program; and (e) The NCUA Board may consider any other factors which, in the specific case, appear relevant to the decision to continue in effect, rescind, terminate, or modify a suspension, prohibition, or removal order, except that it shall not consider the ultimate question of the guilt or innocence of the subject individual with regard to the crime with which he or she has been charged. Subpart E—Local Rules and Procedures Applicable to Proceedings Relating to the Suspension or Revocation of Charters and to Involuntary Liquidations Under Title I § 747.401 Scope. The rules and procedures set forth in this subpart and subpart A of this part are applicable to proceedings by the NCUA Board pursuant to section 120(b)(1) of the Act (12 U.S.C. 1766(b)(1)) to suspend or revoke the charter of a solvent Federal credit union, and to place a solvent Federal credit union into involuntary liquidation. To the extent a rule or procedure set forth in subpart A of this part is inconsistent with a rule or procedure set forth in this subpart E, subpart E shall control. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] § 747.402 Grounds for suspension or revocation of charter and for involuntary liquidation. (a) Grounds in general. (b) Immediate suspension. [56 FR 37767, Aug. 8, 1991, as amended at 85 FR 62214, Oct. 2, 2020] § 747.403 Notice of intent to suspend or revoke charter; notice of suspension. (a) Upon its determination that one or more of the grounds listed in § 747.402(a) exists, or that because of conditions described in § 747.402(b) immediate suspension of charter is necessary, the NCUA Board shall cause to be served upon that credit union a notice of intent to suspend or revoke charter and of intent to place into involuntary liquidation, or a notice of suspension. Such notice shall contain a statement of the facts which constitute the grounds for this action, a recitation of the options available to the credit union under paragraph (b) of this section, and an explanation of the results that will occur if the credit union fails to exercise said options. (b) Not later than 40 days after the receipt of the notice provided for in paragraph (a) of this section, the Federal credit union may file with the NCUA Board a statement in writing setting forth the grounds and reasons why its charter should not be suspended or revoked and why it should not be placed into involuntary liquidation; or in lieu of a written statement, request an oral hearing which shall be conducted in accordance with the procedures set forth in this subpart. This statement or request shall be accompanied by a certified copy of a resolution of the board of directors of the Federal credit union concerned authorizing such statement or request, such certification to be made by the president and secretary of the board of directors. (c) If the Federal credit union concerned does not exercise either alternative available in paragraph (b) of this section within the time required, it shall be deemed to have admitted the facts alleged in the notice and may be deemed to have consented to the relief sought. § 747.404 Notice of hearing. (a) Upon receipt of a request for hearing which complies with § 747.403(b), the NCUA Board shall transmit the request to the Office of Financial Institution Adjudication (“OFIA”). Such hearing shall commence no earlier than 30 days nor later than 60 days after the date the OFIA receives the request for a hearing, unless an earlier or later date is requested by the Federal credit union concerned and is granted by the NCUA Board in its discretion. (b) Except as provided in § 747.405(b), the procedures of the Administrative Procedure Act (5 U.S.C. 554-557) and subpart A of this part will apply to the hearing. (c) Unless the Federal credit union shall appear at such hearing by a duly authorized representative it shall be deemed to have consented to the suspension or revocation of its charter and to the placing of said credit union into involuntary liquidation. § 747.405 Issuance of order. (a) In the event of such consent as referred to in § 747.403(c) or § 747.404(c), or if upon the record made at any such hearing as referred to in § 747.403(b), the NCUA Board finds that the charter of the Federal credit union concerned should be suspended or revoked and the credit union closed and placed into involuntary liquidation, it shall cause to be served on such credit union an order directing the suspension or revocation of its charter and directing that it be closed and placed into involuntary liquidation. Such order shall contain a statement of the findings upon which the order is based. Additionally, the NCUA Board shall appoint a liquidating agent or agents. (b) The NCUA Board shall render its decision and cause such order to be served not later than 45 days after receipt of consent, or written submissions as the case may be, or in the case of a formal hearing after service or the notice of submission referred to in § 747.40(a). (c) Upon the receipt of a copy of the order which provides that the Federal credit union concerned be placed into involuntary liquidation, the officers and directors of that Federal credit union shall immediately deliver to the agent for the liquidating agent possession and control of all books, records, assets, and property of every description of the Federal credit union, and the agent for the liquidating agent shall proceed to convert said assets to cash, collect all debts due to said Federal credit union and to wind up its affairs in accordance with the provisions of the Act. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] § 747.406 Cancellation of charter. Upon the completion of the liquidation and certification by the agent for the liquidating agent that the distribution of the assets of the Federal credit union has been completed, the NCUA Board shall cancel the charter of the Federal credit union concerned. Subpart F—Local Rules and Procedures Applicable to Proceedings Relating to the Termination of Membership in the Central Liquidity Facility [Reserved] Subpart G—Local Rules and Procedures Applicable to Recovery of Attorneys Fees and Other Expenses Under the Equal Access to Justice Act in NCUA Board Adjudications § 747.601 Purpose and scope. This subpart contains the regulations of the NCUA implementing the Equal Access to Justice Act (5 U.S.C. 504), as amended (“EAJA”). The EAJA provides for the award of attorneys fees and other expenses to eligible individuals and entities who are parties to proceedings conducted under this part. An eligible party may receive an award when it prevails over NCUA in a proceeding, or in a significant and discrete substantive portion of the proceeding, unless the position of the NCUA was substantially justified or special circumstances make an award unjust. The rules in this subpart describe the parties eligible for fee awards, explain how to apply for awards and the procedures and standards that NCUA will use to make them. To the extent a rule or procedure set forth in subpart A of this part is inconsistent with a rule or procedure set forth in this subpart G, subpart G will control. § 747.602 Eligibility of applicants. (a) To be eligible for an award of attorneys fees and expenses, an applicant must be a prevailing party in the proceeding for which it seeks an award and must be: (1) An individual with a net worth of not more than $2 million; (2) The sole owner of an unincorporated business who has a net worth of not more than $7 million, including both personal and business interests and not more than 500 employees at the time the proceeding was commenced (an applicant who owns an unincorporated business will be considered as an “individual” rather than a “sole owner of an unincorporated business” if the issues on which the applicant prevails are related primarily to personal interests rather than to business interests); (3) A charitable or other tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) with not more than 500 employees; (4) A cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 employees; or (5) Any other partnership, corporation, association, or public or private organization with a net worth of not more than $7 million and not more than 500 employees. (b) For the purpose of determining eligibility, the net worth of an applicant and the number of employees of an applicant shall be determined as of the date the proceeding was initiated. (c) The applicant's net worth includes the value of any assets disposed of for the purpose of meeting an eligibility standard and excludes 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. (d) The employees of an applicant include all persons who regularly perform services for remuneration for the applicant, under the applicant's direction and control; part-time employees shall be included on a proportional basis. (e) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. Any individual, corporation or other entity that directly or indirectly controls or owns a majority of the voting shares or other interest of the applicant, or any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interest, will be considered an affiliate for purposes of this subpart, unless the NCUA Board determines that such treatment would be unjust and contrary to the purposes of the EAJA in light of the actual relationship between the affiliated entities. In addition, the NCUA Board may determine that financial relationships of the applicant other than those described in this paragraph constitute special circumstances that would make an award unjust. (f) 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 37767, Aug. 8, 1991, as amended at 75 FR 34622, June 18, 2010] § 747.603 Prevailing party. An eligible applicant may be a “prevailing party” if the applicant wins an action after a full hearing or trial on the merits, if a settlement of the proceeding was effected on terms favorable to it, or if the proceeding against it has been dismissed. In appropriate situations an applicant may also have prevailed if the outcome of the proceeding has substantially vindicated the applicant's position on the significant substantive matters at issue, even though the applicant has not totally avoided adverse final action. § 747.604 Standards for award. (a) A prevailing party may receive an award for fees and expenses incurred in connection with a proceeding, or in a significant and discrete substantive portion of the proceeding, by or against NCUA unless the position of NCUA during the proceeding was substantially justified. The burden of proving that an award should not be made is on counsel for NCUA. To avoid an award, counsel for NCUA must show that its position was reasonable in law and in fact. (b) An award will be reduced or denied if the applicant has unduly or unreasonably protracted the proceeding or if special circumstances make the award sought unjust. (c) Where an applicant has prevailed on one or more discrete substantive issues in a proceeding, even though all the issues were not resolved in its favor, any award shall be based on the fees and expenses incurred in connection with the discrete significant substantive issue or issues on which the applicant's position has been upheld. If such segregation of costs is not practicable, the award may be based on a fair proration of those fees and expenses incurred in the entire proceeding which would be recoverable under this section if proration were not performed. (d) Whether separate or prorated treatment under the preceding paragraph, including the applicable proration percentage, is appropriate shall be determined on the facts of the particular case. Attention shall be given to the significance and nature of the respective issues and their separability and interrelationship. § 747.605 Allowable fees and expenses. (a) Except as provided by § 747.604(b), awards will be based on rates customarily charged by persons engaged in the business of acting as attorneys, agents and expert witnesses, even if the services were made available without charge or at a reduced rate. (b) No award under this subpart for the fee of an attorney or agent may exceed $75.00 per hour. No award to compensate an expert witness may exceed the highest rate at which NCUA is permitted to pay expert witnesses. However, an award may also include the reasonable expenses of the attorney, agent or witness as a separate item, if the attorney, agent or witness ordinarily charges clients separately for such expenses. (c) In determining the reasonableness of the fee sought for an attorney, agent, or expert witness, the NCUA Board shall consider the following: (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; and (4) Such other factors as may bear on the value of the services provided. (d) The reasonable cost of any study, analysis, report, test, project, or similar matter prepared on behalf of the party may be awarded to the extent that the charge for the service does not exceed the prevailing rate for similar services, and the study or other matter was necessary for preparation of the applicant's case. [56 FR 37767, Aug. 8, 1991, as amended at 75 FR 34622, June 18, 2010] § 747.606 Contents of application. (a) A prevailing eligible party, as defined in §§ 747.602, 747.603, and 747.604, seeking an award under this section, must file an application for an award of fees and expenses with the Secretary of the NCUA Board. The application shall include the following information: (1) The identity of the applicant and the proceeding for which an award is sought; (2) A showing that the applicant has prevailed and an identification of the issues in the proceeding on which the applicant believes that the position of NCUA was not substantially justified; (3) A statement, with supporting documentation, that the applicant is an eligible party, as defined by § 747.602. If the applicant is an individual, he or she must state that his or her net worth does not exceed $2 million. If the applicant is not an individual, it shall state the number of its employees and that its net worth does not exceed $7 million as of the date the proceeding was initiated. However, an applicant may omit a statement of net worth if: (i) It attaches a copy of a ruling by the Internal Revenue Service that it qualifies as an organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a tax-exempt organization not required to obtain a ruling from the Internal Revenue Service on its exempt status, a statement that describes the basis for the applicant's belief that it qualifies under such section; or (ii) It states that it is a cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)). (4) A Statement of the amount of fees and expenses for which an award is sought; and (5) Any other matters that the applicant believes may assist or wishes the NCUA Board to consider in determining whether and in what amount an award should be made. (b) The application shall be signed by the applicant or an authorized officer or attorney of the applicant. It shall also contain or be accompanied by a written verification under oath or under penalty of perjury that the information provided in the application is true and correct. (c) The application and documentation requirements of this subpart are required by law as a prerequisite to obtaining a benefit under the EAJA and this subpart. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992, as amended at 75 FR 34622, June 18, 2010] § 747.607 Statement of net worth. (a) Each applicant (other than a qualified tax-exempt organization or cooperative association) must provide a detailed statement showing the net worth of the applicant and any affiliates, as defined in § 747.602(a), when the proceeding was initiated. The exhibit may be in any form convenient to the applicant that provides full disclosure of the applicant's and its affiliates' assets and liabilities and is sufficient to determine whether the applicant is an eligible party. The administrative law judge or the NCUA Board may require additional information from the applicant to determine eligibility. Unless otherwise ordered by the Board or required by law, the statement shall be kept confidential and used by the NCUA Board only in making its determination of an award. (b) If the applicant or any of its affiliates is a Federal credit union, the portion of the statement of net worth which relates to the Federal credit union shall consist of a copy of the Federal credit union's last Statement of Financial Condition filed before the initiation of the underlying proceeding. (c) All statements of net worth shall describe any transfers of assets from or obligations incurred by the applicant or any affiliate, occurring in the six-month period prior to the date on which the proceeding was initiated, which reduced the net worth of the applicant and its affiliates below the applicable net-worth ceiling. If there were none, the applicant shall so state. [56 FR 37767, Aug. 8, 1991, as amended at 75 FR 34622, June 18, 2010] § 747.608 Documentation of fees and expenses. The application shall be accompanied by full documentation of the fees and expenses, including the cost of any study, analysis, audit, test, project or similar matter, 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 hours spent in connection with the proceeding by each individual, a description of the specific services performed, the rate at which each fee has been computed, any expenses for which reimbursement is sought, the total amount claimed, and the total amount paid or payable by the applicant or by any other person or entity for the services provided. The administrative law judge or the NCUA Board may require the applicant to provide vouchers, receipts, or other substantiation for any expenses claimed. § 747.609 Filing and service of applications. (a) An application may be filed whenever the applicant has prevailed in the proceeding or in a significant and discrete substantive portion of the proceeding, but in no case later than 30 days after the Board's final disposition of the proceeding. (b) If review or reconsideration is sought or taken of a decision on which an applicant believes it has prevailed, proceedings for the award of fees shall be stayed pending final disposition of the underlying controversy. (c) As used in this subpart, final disposition means the issuance of a final order or any other final resolution of a proceeding, such as a settlement or voluntary dismissal. (d) Any application for an award of fees and expenses shall be filed with the Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. Any application for an award and any other pleading or document related to an application, shall be filed and served on all parties to the proceeding in the same manner as other pleadings in the proceeding, except as provided in § 747.607(a) for statements of net worth. [56 FR 37767, Aug. 8, 1991, as amended at 59 FR 36041, July 15, 1994] § 747.610 Answer to application. (a) Within 30 days after service of an application, counsel for NCUA may file an answer to the application. Unless counsel for NCUA requests and is granted an extension of time for filing or files a statement of intent to negotiate under paragraph (b) of this section, failure to file an answer within the 30-day period will be treated as a consent to the award requested. (b) If counsel for NCUA and the applicant believe that the issues in the fee application can be settled, they may jointly file a statement of their intent to negotiate a settlement. The filing of this statement shall extend the time for filing an answer for an additional 30 days, and further extensions may be granted by the NCUA Board upon the joint request of counsel for NCUA and the applicant. (c) The answer shall explain in detail any objections to the award requested and identify the facts relied on in support of counsel's position. If the answer is based on any alleged facts not already in the record of the proceeding, counsel shall include with the answer a request for further proceedings under § 747.613. (d)(1) The applicant may file a reply if counsel for NCUA has addressed in his or her answer any of the following issues: (i) That the position of NCUA in the proceeding was substantially justified; (ii) That the applicant unduly protracted the proceedings; or (iii) That special circumstances make an award unjust. (2) The reply shall be filed within 15 days after service of the answer. If the reply is based on any alleged facts not already in the record of the proceeding, the applicant shall include with the reply a request for further proceedings under § 747.613. § 747.611 Comments by other parties. Any party to a proceeding other than the applicant and counsel for NCUA may file comments on an application within 30 days after service of the application or on an answer within 15 days after service of the answer. A commenting party may not participate further in proceedings on the application unless the administrative law judge or the NCUA Board determines that the public interest requires such participation in order to permit full exploration of matters raised in the comments. [56 FR 37767, Aug. 8, 1991, as amended at 75 FR 34622, June 18, 2010] § 747.612 Settlement. The applicant and counsel for NCUA may agree on a proposed settlement of the award before final action on the application, either in connection with a settlement of the underlying proceeding, or after the underlying proceeding has been concluded, in accordance with NCUA's standard settlement procedure. If a prevailing party and counsel for NCUA agree on a proposed settlement of an award before an application has been filed, the application shall be filed with the proposed settlement. § 747.613 Further proceedings. (a) After the expiration of the time allowed for the filing of all documents necessary for the determination of a recommended fee award, the NCUA Board shall transmit the entire record to the administrative law judge who presided at the underlying proceeding. Ordinarily, the determination of an award will be made on the basis of the written record. However, on request of either the applicant or counsel for NCUA, or on its own initiative, the administrative law judge or the NCUA Board may order further proceedings, such as an informal conference, oral argument, additional written submissions or an evidentiary hearing. Such further proceedings shall be held only when necessary for full and fair resolution of the issues arising from the application, and shall be conducted as promptly as possible. (b) A request that the administrative law judge or the NCUA Board order further proceedings under this section shall specifically identify the information sought or the disputed issues and shall explain why the additional proceedings are necessary to resolve the issues. § 747.614 Recommended decision. The administrative law judge shall file a recommended decision on the application with the NCUA Board within 60 days after completion of the proceedings on the application. The recommended decision shall include written findings and conclusions on the applicant's eligibility and status as a prevailing party, and an explanation of the reasons for any difference between the amount requested and the amount awarded. The recommended decision shall also include, if at issue, findings on whether NCUA's position was substantially justified, whether the applicant unduly protracted the proceedings, or whether special circumstances make an award unjust. If the applicant has sought an award against more than one agency, the recommended decision shall allocate responsibility for payment of any award made among the agencies, and shall explain the reasons for the allocation made. The administrative law judge shall file with and certify to the NCUA Board the record of the proceeding on the fee application, the recommended decision and proposed order. Promptly upon such filing, the NCUA Board shall serve upon each party to the proceeding a copy of the administrative law judge's recommended decision, findings, conclusions and proposed order. The provisions of this section and § 747.613 shall not apply, however, in any case where the hearing was held before the NCUA Board. § 747.615 Decision of the NCUA Board. Within 15 days after service of the recommended decision, findings, conclusions, and proposed order, the applicant or counsel for NCUA may file with the NCUA Board written exceptions thereto. A supporting brief may also be filed. The NCUA Board shall render its decision within 60 days after the matter is submitted to it. The NCUA Board shall furnish copies of its decision and order to the parties. Judicial review of the NCUA Board's final decision and order may be obtained as provided in 5 U.S.C. 504(c)(2). § 747.616 Payment of award. An applicant seeking payment of an award granted by the NCUA Board shall submit to the NCUA's Office of Chief Financial Officer a copy of the NCUA Board's Final Decision and Order granting the award, accompanied by a statement that it will not seek review of the decision and order in the United States court. All submissions shall be addressed to the Office of Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. The NCUA will pay the amount awarded within 60 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. [56 FR 37767, Aug. 8, 1991, as amended at 59 FR 36041, July 15, 1994; 75 FR 34622, June 18, 2010] Subpart H—Local Rules and Procedures Applicable to Investigations § 747.701 Applicability. The rules in this subpart apply only to informal and formal investigations conducted by the NCUA Board itself or its delegates. They do not apply to adjudicative or rulemaking proceedings or to routine, periodic or special examinations conducted by the NCUA Board's staff. § 747.702 Information obtained in investigations. Information and documents obtained by the Board in the course of any investigation, unless made a matter of public record by the NCUA Board, shall be deemed non-public, but the NCUA Board approves the practice whereby the General Counsel may engage in, and may authorize any person acting on his or her behalf or at his or her direction to engage in, discussions with representatives of domestic or foreign governmental authorities, self-regulatory organizations, and with receivers, trustees, masters and special counsels or special agents appointed by and subject to the supervision of the courts of the United States, concerning information obtained in individual investigations, including investigations conducted pursuant to any order entered by the NCUA Board or its General Counsel pursuant to delegated authority. § 747.703 Authority to conduct investigations. (a) The General Counsel and persons acting on his or her behalf and at his or her direction may conduct such investigations into the affairs of any insured credit union or institution-affiliated parties as deemed appropriate to determine whether such credit union or party has violated, is violating or is about to violate any provision of the Act, the NCUA Board's regulations or other relevant statutes or regulations that may bear on a party's fitness to participate in the affairs of a credit union. The General Counsel and persons acting on his or her behalf may investigate whether any party is unfit to participate in the affairs of a credit union, whether formal enforcement proceedings are warranted, or such other matters as the General Counsel or his or her designee, in his or her discretion, shall deem appropriate. Such investigations may be conducted either informally or formally. (b) Formal investigations involve the exercise of the NCUA Board's subpoena power and are referred to here as formal investigative proceedings. In formal investigative proceedings, the General Counsel and those to whom he or she delegates authority to act on his or her behalf and at his or her direction have augmented investigatory powers and need not rely on the powers available to them in informal investigations, and they may gather evidence through the issuance of subpoenas compelling the production of documents or testimony as well. In informal investigations evidence may be gathered ordinarily through the use of investigatory procedures or credit union examinations and through voluntary statements and submissions. (c) The NCUA Board has delegated authority to the General Counsel, or designee thereof, to institute formal investigative proceedings by the entry of an order indicating the purpose of the investigation and the designation of persons to conduct that investigation on his or her behalf and at his or her direction. This delegation also extends to the NCUA Board's role as liquidator and conservator of insured credit unions. The power to issue a subpoena may not be delegated outside the agency. The General Counsel may amend such order as he deems appropriate. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992] Subpart I—Local Rules Applicable to Formal Investigative Proceedings § 747.801 Applicability. The rules in this subpart are applicable to a witness who is sworn in a formal investigative proceeding. Formal investigative proceedings may be held before the NCUA Board, before one or more of its members, or before any officer designated by the NCUA Board or its General Counsel, as described in subpart H of this part, and with or without the assistance of such other counsel as the NCUA Board deems appropriate, for the purpose of taking testimony of witnesses, conducting an investigation and receiving other evidence. The term “officer conducting the investigation” shall mean any of the foregoing. § 747.802 Non-public formal investigative proceedings. Unless otherwise ordered by the NCUA Board, all formal investigative proceedings shall be non-public. § 747.803 Subpoenas. (a) Issuance. (b) Service. (1) Service upon a natural party. (i) Handing it to the person; (ii) Leaving it at his or her office with the person in charge thereof or, if there is no one in charge, by leaving it at a conspicuous place there; (iii) Leaving it at his or her dwelling place or usual place of abode with some person of suitable age and discretion who is found there; or (iv) Mailing it by registered or certified mail to him or her at his or her last known address. In the event that personal service as described in this paragraph is impracticable, any other method whereby actual notice is given to the respondent may be employed. (2) Service upon other persons. (i) Handing it to a registered agent for service, or to any officer, director, or agent in charge of any office of such person; (ii) Mailing it by registered or certified mail to any such representative at his or her last known address; or (iii) Any other method whereby actual notice is given to any such representative. (c) Witness fees and mileage. (d) Enforcement. [56 FR 37767, Aug. 8, 1991; 57 FR 523, Jan. 7, 1992; June 18, 2010] § 747.804 Oath; false statements. At the discretion of the officer conducting the investigation, testimony of a witness may be taken under oath and administered by the officer. Any person making false statements under oath during the course of a formal investigative proceeding is subject to the criminal penalties for perjury in 18 U.S.C. 1621. Any person who knowingly and willfully makes false and fraudulent statements, whether under oath or otherwise, or who falsifies, conceals or covers up any material fact, or submits any false, fictitious or fraudulent information in connection with such a proceeding, is subject to the criminal penalties set forth in 18 U.S.C. 1001. § 747.805 Self-incrimination; immunity. (a) Self-incrimination. (b) Immunity. (2) If the NCUA Board believes that the testimony or other information sought to be obtained from any party may be necessary to the public interest and that party has refused or is likely to refuse to testify or provide other information on the basis of his or her privilege against self-incrimination, the NCUA Board, with the approval of the Attorney General, may issue an order requiring the party to give testimony or provide other information that he or she has previously refused to provide on the basis of self-incrimination. (3) Whenever a witness refuses, on the basis of his privilege against self-incrimination, to testify or provide other information in a formal investigative proceeding, and the officer conducting the investigation communicates to that person an order of the NCUA Board requiring him or her to testify or provide other information, the witness may not refuse to comply with the order on the basis of his or her privilege against self-incrimination; but no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order. § 747.806 Transcripts. Transcripts, if any, of formal investigative proceedings shall be recorded solely by the official reporter, or by any other person or means designated by the officer conducting the investigation. A party who has submitted documentary evidence or testimony in a formal investigative proceeding shall be entitled, upon written request, to procure a copy of his or her documentary evidence or a transcript of his or her testimony on payment of the appropriate fees; provided, however, that in a non-public formal investigative proceeding the NCUA Board may for good cause deny such request or the NCUA Board may place reasonable limitations upon the use of the documentary evidence and transcript. In any event, any witness, upon proper identification, shall have the right to inspect the official transcript of the witness's own testimony. § 747.807 Rights of witnesses. (a) In the event that a formal investigative proceeding is conducted pursuant to a specific order entered by the NCUA Board or by its General Counsel, then any party who is compelled or requested to provide documentary evidence or testimony as part of such proceeding shall, upon request, be shown a copy of the NCUA Board's or its delegate's order. Copies of such orders shall not be provided for their retention to such persons requesting same except in the sole discretion of the General Counsel or his designee. (b) Any party compelled to appear, or who appears by request or permission of the officer conducting the investigation, in person at a formal investigative proceeding may be accompanied, represented and advised by counsel who is a member of the bar of the highest court of any state; provided however, that all witnesses in such proceeding shall be sequestered, and unless permitted in the discretion of the officer conducting the investigation, no witness or the counsel accompanying any such witness shall be permitted to be present during the examination of any other witness called in such proceeding. (c)(1) The right of a witness to be accompanied, represented and advised by counsel shall mean the right to have an attorney present during any formal investigative proceeding and to have the attorney— (i) Advise such person before, during and after such testimony; (ii) Question such person briefly at the conclusion of his testimony to clarify any answers such person has given; and (iii) Make summary notes during such testimony solely for the use of such person. (2) From time to time, in the discretion of the officer, it shall be necessary for persons other than the witness and his or her counsel to attend non-public investigative proceedings. For example, the officer may deem it appropriate that outside counsel to the NCUA Board attend and advise him or her concerning the proceeding including the examination of a particular witness. In these circumstances, outside counsel would not be an officer as that term is used. In other circumstances, it may be appropriate that a technical expert (such as an accountant) accompany the witness and his or her counsel in order to assist counsel in understanding technical issues. These latter circumstances should be rare, are left to the discretion of the officer conducting the investigation, and shall not in any event be allowed to serve as a ruse to coordinate testimony between witnesses, to oversee or supervise the testimony of any witnesses, or otherwise defeat the beneficial effects of the witness sequestration rule. (d) The officer conducting the investigation may report to the NCUA Board any instances where any witness or counsel has been guilty of dilatory, obstructionist or contumacious conduct during the course of a formal investigative proceeding or any other instance of violations of these rules. The NCUA Board will thereupon take such further action as the circumstance may warrant including barring the offending person from further participation in the particular formal investigative proceeding or even from further practice before the Board. Subpart J [Reserved] Subpart K—Inflation Adjustment of Civil Monetary Penalties § 747.1001 Adjustment of civil monetary penalties by the rate of inflation. (a) The NCUA is required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note)), to adjust the maximum amount of each civil monetary penalty (CMP) within its jurisdiction by the rate of inflation. The following chart displays those adjusted amounts, as calculated pursuant to the statute: U.S. Code citation CMP description New maximum amount (1) 12 U.S.C. 1782(a)(3) Inadvertent failure to submit a report or the inadvertent submission of a false or misleading report $5,026. (2) 12 U.S.C. 1782(a)(3) Non-inadvertent failure to submit a report or the non-inadvertent submission of a false or misleading report $50,265. (3) 12 U.S.C. 1782(a)(3) Failure to submit a report or the submission of a false or misleading report done knowingly or with reckless disregard $2,513,215 or 1% of the total assets of the credit union, whichever is less. (4) 12 U.S.C. 1782(d)(2)(A) Tier 1 CMP for inadvertent failure to submit certified statement of insured shares and charges due to the National Credit Union Share Insurance Fund (NCUSIF), or inadvertent submission of false or misleading statement $4,596. (5) 12 U.S.C. 1782(d)(2)(B) Tier 2 CMP for non-inadvertent failure to submit certified statement or submission of false or misleading statement $45,946. (6) 12 U.S.C. 1782(d)(2)(C) Tier 3 CMP for failure to submit a certified statement or the submission of a false or misleading statement done knowingly or with reckless disregard $2,297,385 or 1% of the total assets of the credit union, whichever is less. (7) 12 U.S.C. 1785(a)(3) Non-compliance with insurance logo requirements $157. (8) 12 U.S.C. 1785(e)(3) Non-compliance with NCUA security requirements $365. (9) 12 U.S.C. 1786(k)(2)(A) Tier 1 CMP for violations of law, regulation, and other orders or agreements $12,567. (10) 12 U.S.C. 1786(k)(2)(B) Tier 2 CMP for violations of law, regulation, and other orders or agreements and for recklessly engaging in unsafe or unsound practices or breaches of fiduciary duty $62,829. (11) 12 U.S.C. 1786(k)(2)(C) Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (natural person) $2,513,215. (12) 12 U.S.C. 1786(k)(2)(C) Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (insured credit union) $2,513,215 or 1% of the total assets of the credit union, whichever is less. (13) 12 U.S.C. 1786(w)(5)(A)(ii) Non-compliance with senior examiner post-employment restrictions $413,388. (14) 15 U.S.C. 1639e(k) Non-compliance with appraisal independence requirements First violation: $14,435 (15) 42 U.S.C. 4012a(f)(5) Non-compliance with flood insurance requirements $2,730. (b) The adjusted amounts displayed in paragraph (a) of this section apply to civil monetary penalties that are assessed after the date the increase takes effect, including those whose associated violation or violations pre-dated the increase and occurred on or after November 2, 2015. [90 FR 3621, Jan. 15, 2025] Subpart L—Issuance, Review and Enforcement of Orders Imposing Prompt Corrective Action Source: 65 FR 8594, Feb. 18, 2000, unless otherwise noted. § 747.2001 Scope. (a) Independent review process. (b) Notice to State officials. [65 FR 8594, Feb. 18, 2000, as amended at 80 FR 66723, Oct. 29, 2015] § 747.2002 Review of orders imposing discretionary supervisory action. (a) Notice of intent to issue directive Generally. (2) Immediate issuance of directive without notice. (b) Contents of notice. (1) The credit union's net worth ratio and net worth category classification; (2) The specific restrictions or requirements that the NCUA Board intends to impose, and the reasons therefor; (3) The proposed date when the discretionary supervisory action would take effect and the proposed date for completing the required action or terminating the action; and (4) That a credit union must file a written response to a notice within 14 calendar days from the date of the notice, or within such shorter period as the NCUA Board determines is appropriate in light of the financial condition of the credit union or other relevant circumstances. (c) Contents of response to notice. (1) Explain why it contends that the proposed discretionary supervisory action is not an appropriate exercise of discretion under this part; (2) Request the NCUA Board to modify or to not issue the proposed directive; (3) Include other relevant information, mitigating circumstances, documentation, or other evidence in support of the credit union's position regarding the proposed directive; and (4) If desired, request the recommendation of NCUA's ombudsman pursuant to paragraph (g) of this section. (d) NCUA Board consideration of response. (1) Issue the directive as originally proposed or as modified; (2) Determine not to issue the directive and to so notify the credit union; or (3) Seek additional information or clarification from the credit union or any other relevant source. (e) Failure to file response. (f) Request to modify or rescind directive. (g) Ombudsman. [65 FR 8594, Feb. 18, 2000, as amended at 80 FR 66723, Oct. 29, 2015] § 747.2003 Review of order reclassifying a credit union on safety and soundness criteria. (a) Notice of proposed reclassification based on unsafe or unsound condition or practice. (b) Contents of notice. (1) The credit union's net worth ratio, current net worth category classification, and the net worth category to which the credit union would be reclassified; (2) The unsafe or unsound practice(s) and/or condition(s) justifying reasons for reclassification of the credit union; (3) The date by which the credit union must file a written response to the notice (including a request for a hearing), which date shall be no less than 14 calendar days from the date of service of the notice unless the NCUA Board determines that a shorter period is appropriate in light of the financial condition of the credit union or other relevant circumstances; and (4) That a credit union which fails to— (i) File a written response to the notice of reclassification, within the specified time period, shall be deemed to have waived the opportunity to respond, and to have consented to reclassification; (ii) Request a hearing shall be deemed to have waived any right to a hearing; and (iii) Request the opportunity to present witness testimony shall be deemed to have waived any right to present such testimony. (c) Contents of response to notice. (1) Explain why it contends that the credit union should not be reclassified; (2) Include any relevant information, mitigating circumstances, documentation, or other evidence in support of the credit union's position; (3) If desired, request an informal hearing before the NCUA Board under this section; and (4) If a hearing is requested, identify any witness whose testimony the credit union wishes to present and the general nature of each witness's expected testimony. (d) Order to hold informal hearing. (e) Procedures for informal hearing. (2) The informal hearing shall be recorded, and a transcript shall be furnished to the credit union upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or by the presiding officer. The presiding officer may ask questions of any witness. (3) The presiding officer may order that the hearing be continued for a reasonable period following completion of witness testimony or oral argument to allow additional written submissions to the hearing record. (4) Within 20 calendar days following the closing of the hearing and the record, the presiding officer shall make a recommendation to the NCUA Board on the proposed reclassification. (f) Time for final decision. (g) Request to rescind reclassification. (h) Non-delegation. [65 FR 8594, Feb. 18, 2000, as amended at 75 FR 34623, June 18, 2010; 80 FR 66723, Oct. 29, 2015] § 747.2004 Review of order to dismiss a director or senior executive officer. (a) Service of directive to dismiss and notice. (b) Contents of notice of right to seek reinstatement. (1) That a request for reinstatement (including a request for a hearing) shall be filed with the NCUA Board within 14 calendar days after the Respondent receives the directive and notice under paragraph (a) of this section, unless the NCUA Board grants the Respondent's request for further time; (2) The reasons for dismissal of the Respondent; and (3) That the Respondent's failure to— (i) Request reinstatement shall be deemed a waiver of any right to seek reinstatement; (ii) Request a hearing shall be deemed a waiver of any right to a hearing; and (iii) Request the opportunity to present witness testimony shall be deemed a waiver of the right to present such testimony. (c) Contents of request for reinstatement. (1) Explain why the Respondent should be reinstated; (2) Include any relevant information, mitigating circumstances, documentation, or other evidence in support of the Respondent's position; (3) If desired, request an informal hearing before the NCUA Board under this section; and (4) If a hearing is requested, identify any witness whose testimony the Respondent wishes to present and the general nature of each witness's expected testimony. (d) Order to hold informal hearing. (e) Procedures for informal hearing. (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. The presiding officer may ask questions of any witness. (3) The presiding officer may order that the hearing be continued for a reasonable period following completion of witness testimony or oral argument to allow additional written submissions to the hearing record. (4) A Respondent shall bear the burden of demonstrating that his or her continued employment by or service with the credit union would materially strengthen the credit union's ability to— (i) Become “adequately capitalized,” to the extent that the directive was issued as a result of the credit union's net worth category classification or its failure to submit or implement a net worth restoration plan or revised business plan; and (ii) Correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the directive was issued as a result of reclassification of the credit union pursuant to §§ 702.102(b) and 702.302(d) of this chapter. (5) Within 20 calendar days following the date of closing of the hearing and the record, the presiding officer shall make a recommendation to the NCUA Board concerning the Respondent's request for reinstatement with the credit union. (f) Time for final decision. (g) Effective date. § 747.2005 Enforcement of orders. (a) Judicial remedies. (b) Administrative remedies Failure to comply with directive. (2) Failure to implement plan. (c) Other enforcement action. [65 FR 8594, Feb. 18, 2000, as amended at 67 FR 71094, Nov. 29, 2002] Subpart M—Issuance, Review and Enforcement of Orders Imposing Prompt Corrective Action on Corporate Credit Unions Source: 75 FR 64860, Oct. 20, 2010, unless otherwise noted. § 747.3001 Scope. (a) Independent review process. (b) Notice to State officials. § 747.3002 Review of orders imposing discretionary supervisory action. (a) Notice of intent to issue directive Generally. (2) Immediate issuance of directive without notice. (b) Contents of notice. (1) The corporate credit union's capital measures and capital category classification; (2) The specific restrictions or requirements that the Board intends to impose, and the reasons therefore; (3) The proposed date when the discretionary supervisory action would take effect and the proposed date for completing the required action or terminating the action; and (4) That a corporate credit union must file a written response to a notice within 14 calendar days from the date of the notice, or within such shorter period as the Board determines is appropriate in light of the financial condition of the corporate credit union or other relevant circumstances. (c) Contents of response to notice. (1) Explain why it contends that the proposed discretionary supervisory action is not an appropriate exercise of discretion under this section; (2) Request the Board to modify or to not issue the proposed directive; and (3) Include other relevant information, mitigating circumstances, documentation, or other evidence in support of the corporate credit union's position regarding the proposed directive. (d) NCUA Board consideration of response. (1) Issue the directive as originally proposed or as modified; (2) Determine not to issue the directive and to so notify the corporate credit union; or (3) Seek additional information or clarification from the corporate credit union or any other relevant source. (e) Failure to file response. (f) Request to modify or rescind directive. § 747.3003 Review of order reclassifying a corporate credit union on safety and soundness criteria. (a) Notice of proposed reclassification based on unsafe or unsound condition or practice. (b) Contents of notice. (1) The corporate credit union's current capital ratios and the capital category to which the corporate credit union would be reclassified; (2) The unsafe or unsound practice(s) and/or condition(s) justifying reasons for reclassification of the corporate credit union; (3) The date by which the corporate credit union must file a written response to the notice (including a request for a hearing), which date will be no less than 14 calendar days from the date of service of the notice unless the Board determines that a shorter period is appropriate in light of the financial condition of the corporate credit union or other relevant circumstances; and (4) That a corporate credit union which fails to — (i) File a written response to the notice of reclassification, within the specified time period, will be deemed to have waived the opportunity to respond, and to have consented to reclassification; (ii) Request a hearing will be deemed to have waived any right to a hearing; and (iii) Request the opportunity to present witness testimony will be deemed to have waived any right to present such testimony. (c) Contents of response to notice. (1) Explain why it contends that the corporate credit union should not be reclassified; (2) Include any relevant information, mitigating circumstances, documentation, or other evidence in support of the corporate credit union's position; (3) If desired, request an informal hearing before the Board under this section; and (4) If a hearing is requested, identify any witness whose testimony the corporate credit union wishes to present and the general nature of each witness's expected testimony. (d) Order to hold informal hearing. (e) Procedures for informal hearing. (2) The informal hearing will be recorded, and a transcript will be furnished to the corporate credit union upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or by the presiding officer. The presiding officer may ask questions of any witness. (3) The presiding officer may order that the hearing be continued for a reasonable period following completion of witness testimony or oral argument to allow additional written submissions to the hearing record. (4) Within 20 calendar days following the closing of the hearing and the record, the presiding officer will make a recommendation to the Board on the proposed reclassification. (f) Time for final decision. (g) Request to rescind reclassification. § 747.3004 Review of order to dismiss a director or senior executive officer. (a) Service of directive to dismiss and notice. (b) Contents of notice of right to seek reinstatement. (1) That a request for reinstatement (including a request for a hearing) must be filed with the Board within 14 calendar days after the Respondent receives the directive and notice under paragraph (a) of this section, unless the Board grants the Respondent's request for further time; (2) The reasons for dismissal of the Respondent; and (3) That the Respondent's failure to— (i) Request reinstatement will be deemed a waiver of any right to seek reinstatement; (ii) Request a hearing will be deemed a waiver of any right to a hearing; and (iii) Request the opportunity to present witness testimony will be deemed a waiver of the right to present such testimony. (c) Contents of request for reinstatement. (1) Explain why the Respondent should be reinstated; (2) Include any relevant information, mitigating circumstances, documentation, or other evidence in support of the Respondent's position; (3) If desired, request an informal hearing before the Board under this section; and (4) If a hearing is requested, identify any witness whose testimony the Respondent wishes to present and the general nature of each witness's expected testimony. (d) Order to hold informal hearing. (e) Procedures for informal hearing. (2) The informal hearing will be recorded, and a transcript will 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. The presiding officer may ask questions of any witness. (3) The presiding officer may order that the hearing be continued for a reasonable period following completion of witness testimony or oral argument to allow additional written submissions to the hearing record. (4) A Respondent will bear the burden of demonstrating that his or her continued employment by or service with the corporate credit union would materially strengthen the corporate credit union's ability to — (i) Become “adequately capitalized,” to the extent that the directive was issued as a result of the corporate credit union's capital classification category or its failure to submit or implement a capital restoration plan; and (ii) Correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the directive was issued as a result of reclassification of the corporate credit union pursuant to § 704.4(d)(3) of this chapter. (5) Within 20 calendar days following the date of closing of the hearing and the record, the presiding officer will make a recommendation to the Board concerning the Respondent's request for reinstatement with the corporate credit union. (f) Time for final decision. (g) Effective date. § 747.3005 Enforcement of directives. (a) Judicial remedies. (b) Administrative remedies Failure to comply with directive. (2) Failure to implement plan. (c) Other enforcement action. § 747.3006 Conservatorship or liquidation of critically undercapitalized corporate credit union. Notwithstanding any other provision of this title, the NCUA may, without any administrative due process, immediately place into conservatorship or liquidation any corporate credit union that has been categorized as critically undercapitalized.

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