[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2001 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
12
Parts 500 to 599
Revised as of January 1, 2001
Banks and Banking
Containing a codification of documents of general
applicability and future effect
As of January 1, 2001
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
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U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2001
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Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter V--Office of Thrift Supervision, Department
of the Treasury 3
Finding Aids:
Table of CFR Titles and Chapters........................ 447
Alphabetical List of Agencies Appearing in the CFR...... 465
Redesignation Table..................................... 475
List of CFR Sections Affected........................... 499
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 12 CFR 500.1 refers
to title 12, part 500,
section 1.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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Federal agencies to display an OMB control number with their information
collection request.
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Many agencies have begun publishing numerous OMB control numbers as
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[[Page vii]]
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Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 2001.
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THIS TITLE
Title 12--Banks and Banking is composed of six volumes. The parts in
these volumes are arranged in the following order: parts 1-199, 200-219,
220-299, 300-499, 500-599, and part 600-end. The first volume containing
parts 1-199 is comprised of chapter I--Comptroller of the Currency,
Department of the Treasury. The second and third volumes containing
parts 200-299 are comprised of chapter II--Federal Reserve System. The
fourth volume containing parts 300-499 is comprised of chapter III--
Federal Deposit Insurance Corporation and chapter IV--Export-Import Bank
of the United States. The fifth volume containing parts 500-599 is
comprised of chapter V--Office of Thrift Supervision, Department of the
Treasury. The sixth volume containing part 600-end is comprised of
chapter VI--Farm Credit Administration, chapter VII--National Credit
Union Administration, chapter VIII--Federal Financing Bank, chapter IX--
Federal Housing Finance Board, chapter XI--Federal Financial
Institutions Examination Council, chapter XIV--Farm Credit System
Insurance Corporation, chapter XV--Department of the Treasury, chapter
XVII--Office of Federal Housing Enterprise Oversight, Department of
Housing and Urban Development and chapter XVIII--Community Development
Financial Institutions Fund, Department of the Treasury. The contents of
these volumes represent all of the current regulations codified under
this title of the CFR as of January 1, 2001.
Redesignation tables appear in the volumes containing parts 1-199,
parts 300-499, parts 500-599, and part 600-end.
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[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains parts 500 to 599)
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Part
chapter v--Office of Thrift Supervision, Department of the
Treasury.................................................. 500
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CHAPTER V--OFFICE OF THRIFT SUPERVISION, DEPARTMENT OF THE TREASURY
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Part Page
500 Organization and channelling of functions... 5
502 Assessments and fees........................ 6
503 Privacy Act................................. 10
505 Freedom of Information Act.................. 12
506 Information collection requirements under
the Paperwork Reduction Act............. 13
508 Removals, suspensions, and prohibitions
where a crime is charged or proven...... 14
509 Rules of practice and procedure in
adjudicatory proceedings................ 17
510 Miscellaneous organizational regulations.... 39
512 Rules for investigative proceedings and
formal examination proceedings.......... 45
513 Practice before the Office.................. 47
516 Application Processing Guidelines and
Procedures.............................. 51
517 The Minority, Women, and Individuals with
Disabilities Outreach Program:
Contracting for Goods and Services...... 58
528 Nondiscrimination requirements.............. 60
535 Prohibited consumer credit practices........ 65
536 Consumer protection in sales of insurance... 67
541 Definitions................................. 71
543 Incorporation, organization, and conversion
of Federal mutual associations.......... 73
544 Charter and bylaws.......................... 80
545 Operations.................................. 87
546 Merger, dissolution, reorganization, and
conversion.............................. 93
550 Fiduciary powers of savings associations.... 95
552 Incorporation, organization, and conversion
of Federal stock associations........... 104
555 Electronic operations....................... 122
556 Statements of policy........................ 124
557 Deposits.................................... 125
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558 Possession by conservators and receivers for
Federal and State savings associations.. 127
559 Subordinate organizations................... 127
560 Lending and investment...................... 138
561 Definitions................................. 160
562 Regulatory reporting standards.............. 166
563 Operations.................................. 168
563b Conversions from mutual to stock form....... 206
563c Accounting requirements..................... 258
563d Securities of savings associations.......... 267
563e Community reinvestment...................... 260
563f Management official interlocks.............. 289
563g Securities offerings........................ 293
564 Appraisals.................................. 303
565 Prompt corrective action.................... 308
566 Liquidity................................... 318
567 Capital..................................... 321
568 Security procedures......................... 349
569 Proxies..................................... 350
570 Submission and review of safety and
soundness compliance plans and issuance
of orders to correct safety and
soundness deficiencies.................. 351
572 Loans in areas having special flood hazards. 359
573 Privacy of consumer financial information... 364
574 Acquisition of control of savings
associations............................ 381
575 Mutual holding companies.................... 403
583 Definitions................................. 425
584 Regulated activities........................ 427
590 Preemption of State usury laws.............. 434
591 Preemption of State due-on-sale laws........ 439
592--599 [Reserved]
Editorial Note: Nomenclature changes to Chapter V appear at 59 FR
18475, Apr. 19, 1994, and at 60 FR 66715, Dec. 26, 1995.
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PART 500--ORGANIZATION AND CHANNELLING OF FUNCTIONS--Table of Contents
Subpart A--Functions and Responsibilities of the Director of the Office
of Thrift Supervision
Sec.
500.1 General statement and statutory authority.
500.2-500.5 [Reserved]
500.6 General statement concerning gender-related terminology.
Subpart B--General Organization
500.10 The OTS or The Office.
Subpart C--Procedures
500.30 General statement concerning procedures and forms.
Authority: 12 U.S.C. 1462a, 1463, 1464.
Source: 54 FR 49440, Nov. 30, 1989, unless otherwise noted.
Subpart A--Functions and Responsibilities of the Director of the Office
of Thrift Supervision
Sec. 500.1 General statement and statutory authority.
(a) The Director of the Office of Thrift Supervision (referred to in
this chapter as ``Director'' or ``Office'') is responsible for the
administration and enforcement of the Home Owners' Loan Act of 1933,
(``HOLA''), and applicable portions of the Federal Deposit Insurance Act
and with respect to savings associations subject to provisions of the
foregoing acts and title, the Bank Protection Act of 1968, the Truth in
Lending Act, and the Fair Credit Reporting Act.
(b) The Office is authorized under such rules and regulations as it
may prescribe to provide for the organization, incorporation,
examination, operation, and regulation of Federal savings associations.
Under this authority, the Office's functions include, but are not
limited to, regulation of the corporate structure of such associations,
regulation of the distribution of their earnings, regulation of their
lending and other investment powers, acting upon their applications for
facility offices (including branch offices, limited facilities, mobile
facilities and satellite offices), the regulation of mergers,
conversions, and dissolutions involving such associations, the
appointment of conservators and receivers for such associations, and the
enforcement of laws, regulations, or conditions against such
associations or the officers or directors thereof by proceedings under
section 5 of the Home Owners' Loan Act of 1933, as amended.
(c) The Office regulates and examines savings associations within
the authority conferred by the HOLA and the FDIA and is authorized to
enforce applicable laws, regulations, or conditions against savings
associations or the officers or directors thereof by proceedings under
section 5 of the HOLA and section 8 of the FDIA as amended. The Office
also regulates and supervises savings and loan holding companies
pursuant to the provisions of section 10 of the HOLA, as amended, and
section 8 of the FDIA.
(d) The Office exercises supervisory and regulatory authority over
all building and loan or savings and loan associations and similar
institutions of or doing business in or maintaining offices in the
District of Columbia.
[54 FR 49440, Nov. 30, 1989, as amended at 60 FR 66868, Dec. 27, 1995]
Sec. 500.2-500.5 [Reserved]
Sec. 500.6 General statement concerning gender-related terminology.
The statutes administered by the Office and the rules, regulations,
policies, practices, publications, directives, and guidelines
promulgated pursuant to such statutes that prescribe the course and
methods to be followed by the Office that inadvertently use or contain
gender-related terminology are to be interpreted as equally applicable
to either sex.
Subpart B--General Organization
Sec. 500.10 The OTS or The Office.
The Office of Thrift Supervision (referred to as ``OTS'' or
``Office'') is an office of the Department of the Treasury. Its
functions are to charter, supervise, regulate and examine Federal
savings associations and to supervise, regulate and examine all savings
associations. It is directed by a Director, who
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is appointed by the President and confirmed by the Senate to a five-year
term. The Director directs and carries out the mission of the OTS with
the assistance of offices reporting directly to him. One of these
offices oversees the direct examination and supervision of savings
associations by regulatory staff to ensure the safety and soundness of
the industry.
[57 FR 14335, Apr. 20, 1992, as amended at 60 FR 66869, Dec. 27, 1995]
Subpart C--Procedures
Sec. 500.30 General statement concerning procedures and forms.
(a) Rules and procedures of the Office are published in chapter V of
title 12 of the Code of Federal Regulations and in supplementary
material published in the Federal Register. The statutes administered by
the Office and the rules and regulations promulgated pursuant to such
statutes prescribe the course and method of the formal procedures to be
followed in proceedings of the Office. These are supplemented where
practicable by informal procedures designed to aid the public and
facilitate the execution of the Office's functions. The informal
procedures of the Office consist principally in the rendering of advice
and assistance to members of the public dealing with the Office.
Opinions expressed by members of the staff do not constitute an official
expression of the views of the Office, but do represent views of persons
working with the provisions of the statute or regulation involved. The
Director may, for good cause and to the extent permitted by statute,
waive the applicability of any provision of this chapter.
(b) Information with respect to procedures, forms, and instructions
of the Office is available to the public at the headquarters of the
Office. Forms of concern to the public consist principally of periodic
financial reports and of applications to the Office. The Office may from
time to time require the completion by individuals or savings
associations of miscellaneous forms, questionnaires, reports, or other
papers. In each instance, the individual or savings association is given
actual and timely notice of the scope and contents of the papers in
question.
[54 FR 49440, Nov. 30, 1989, as amended at 59 FR 53570, Oct. 25, 1994]
PART 502--ASSESSMENTS AND FEES--Table of Contents
Sec.
502.5 Who must pay assessments and fees?
Subpart A--Assessments
502.10 How does OTS calculate my assessment?
502.15 How does OTS determine my size component?
502.20 How does OTS determine my condition component?
502.25 How does OTS determine my complexity component?
502.30 When must I pay my assessment?
502.35 How must I pay my assessment?
502.40 Can I get a refund or proration of my assessment?
502.45 What if I do not pay my assessment on time?
Subpart B--Fees
502.50 What fees does OTS charge?
502.55 Where can I find OTS's fee schedule?
502.60 When will OTS adjust, add, waive, or eliminate a fee?
502.65 When is an application fee due?
502.70 How must I pay an application fee?
502.75 What if I do not pay my fees on time?
Authority: 12 U.S.C. 1462a, 1463, 1467, 1467a.
Source: 63 FR 65670, Nov. 30, 1998, unless otherwise noted.
Sec. 502.5 Who must pay assessments and fees?
(a) Authority. Section 9 of the HOLA, 12 U.S.C. 1467, authorizes the
Director to charge assessments to recover the costs of examining savings
associations and their affiliates, to charge fees to recover the costs
of processing applications and other filings, and to charge fees to
cover OTS ``s direct and indirect expenses in regulating savings
associations and their affiliates.
(b) Assessments. If you are a savings association that OTS regulates
on the last day of January or on the last day of July of each year, you
must pay a semi-annual assessment due on that day. Subpart A of this
part describes OTS's assessment procedures and requirements.
(c) Fees. Whether or not you are a savings association, if you make
any
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filings with OTS or use OTS services, the Director may require you to
pay a fee to cover the costs of processing your submission or providing
those services. The filings for which the Director may charge a fee
include notices, applications, and securities filings. Among the
services for which the Director may charge a fee are publications,
seminars, certifications for official copies of agency documents, and
records or services requested by other agencies. The Director also
assesses fees for examining and investigating savings associations that
administer trust assets of $1 billion or less, and affiliates of savings
associations. If you are a savings association and you or any of your
affiliates cause OTS to incur extraordinary expenses related to your
examination, investigation, regulation, or supervision, the Director may
charge you a fee to fund those expenses. Subpart B of this part
describes OTS's fee procedures and requirements.
Subpart A--Assessments
Sec. 502.10 How does OTS calculate my assessment?
OTS determines your semi-annual assessment by totaling three
components: your size, your condition, and the complexity of your
business. For the size and complexity components, OTS uses the September
30 Thrift Financial Report to determine amounts due at the January 31
assessment; and the March 31 Thrift Financial Report to determine
amounts due at the July 31 assessment. For purposes of this subpart,
total assets are your total assets as reported on Thrift Financial
Reports filed with OTS. For the condition component, OTS uses the most
recent composite rating, as defined in 12 CFR part 516, of which you
have been notified in writing before an assessment's due date.
Sec. 502.15 How does OTS determine my size component?
(a) General. (1) Unless you are a qualifying savings association
under paragraph (b) of this section, OTS uses the following chart to
calculate your size component:
----------------------------------------------------------------------------------------------------------------
If your total assets are: Your size component is:
----------------------------------------------------------------------------------------------------------------
This amount--
Over-- But not over-- Base assessment Plus-- Marginal Of assets over--
amount rate Class floor
----------------------------------------------------------------------------------------------------------------
Column A Column B......... Column C ColColumn E
0............................. $67 million...... C1 D1 0.
$67 million................... 215 million...... C2 D2 $67 million.
215 million................... 1 billion........ C3 D3 215 million.
1 billion..................... 6.03 billion..... C4 D4 1 billion.
6.03 billion.................. 18 billion....... C5 D5 6.03 billion.
18 billion.................... 35 billion....... C6 D6 18 billion.
35 billion.................... ................. C7 D7 35 billion.
(2) To calculate your size component, find the row in Columns A and
B that describes your total assets. Reading across in that same row,
find your base assessment amount in Column C, your marginal rate in
Column D, and your class floor in Column E. Calculate how much your
total assets exceed your Column E class floor. Multiply this number by
your Column D marginal rate. Add this number to your Column C base
assessment amount. The total is your size component. OTS will establish
the base assessment amounts and the marginal rates in columns C and D in
a Thrift Bulletin.
(b) Special size component calculation for qualifying savings
associations. If you meet all of the criteria set forth in paragraph
(b)(1) of this section, you are a qualifying savings association and OTS
will calculate your size component in accordance with paragraph (b)(2)
of this section.
(1) Criteria for qualifying savings association status. (i) You were
a savings association as of January 1, 1999.
[[Page 8]]
(ii) Your total assets have never exceeded $100 million at the end
of any quarter.
(2) Size component for qualifying savings associations. If you are a
qualifying savings association, your size component is the lesser of:
(i) Your size component calculated under paragraph (a) of this
section; or
(ii) Your assessment calculated using the general assessment table
at 12 CFR 502.1(c) as contained in the 12 CFR, parts 500 to 599, edition
revised as of January 1, 1998, as implemented in Thrift Bulletin 48-9,
dated December 21, 1992.
Sec. 502.20 How does OTS determine my condition component?
OTS uses the following chart to determine your condition component:
If your composite rating is: Then your condition component is:
1 or 2.............................. zero.
3................................... 25 percent of your size component.
4 or 5.............................. 50 percent of your size component.
Sec. 502.25 How does OTS determine my complexity component?
If your portfolio exceeds any of the thresholds in paragraph (a) of
this section, OTS will calculate your complexity component according to
paragraph (c) of this section. If your portfolio does not exceed any of
the thresholds in paragraph (a) of this section, your complexity
component is zero.
(a) Thresholds for complexity component. OTS uses three separate
thresholds in calculating your complexity component. You exceed a
threshold if you have more than $1 billion in any of the following:
(1) Trust assets you administer.
(2) The outstanding principal balance of assets covered, fully or
partially, by your recourse obligations or direct credit substitutes.
(3) The principal amount of loans that you service for others.
(b) Assessment rates. OTS will establish one or more assessment
rates for each of the types of activities listed in paragraph (a) of
this section. OTS will publish those assessment rates in a Thrift
Bulletin.
(c) Calculation of complexity component. OTS separately considers
each of the thresholds in paragraph (a) of this section in calculating
your complexity component. OTS first calculates the amount by which you
exceed any of those thresholds. OTS multiplies the amount by which you
exceed any threshold in paragraph (a) of this section by the applicable
assessment rate(s) under paragraph (b) of this section. OTS then totals
the results. This total is your complexity component.
Sec. 502.30 When must I pay my assessment?
OTS will bill you semiannually for your assessments. Assessments are
due January 31 and July 31 of each year. At least seven days before your
assessment is due, the Director will mail you a notice that indicates
the amount of your assessment, explains how OTS calculated the amount,
and specifies when payment is due.
Sec. 502.35 How must I pay my assessment?
(a) Debit at Federal Home Loan Banks. If you are a member of a
Federal Home Loan Bank, you must maintain a demand deposit account at
your Federal Home Loan Bank with sufficient funds to pay your assessment
when due. OTS will notify your Federal Home Loan Bank of the amount of
your assessment. OTS will debit your account for your assessments.
(b) Direct billing. If you are not a member of a Federal Home Loan
Bank, OTS will directly debit an account you must maintain at your
association.
Sec. 502.40 Can I get a refund or proration of my assessment?
OTS will not refund or prorate your assessment, even if you cease to
be a savings association. If you are a savings association for whom a
conservator or receiver has been appointed, you must continue to pay
assessments in accordance with this part. OTS will not increase or
decrease your assessment based on events that occur after the date of
the Thrift Financial Report upon which your assessment is based.
Sec. 502.45 What if I do not pay my assessment on time?
The Director will charge interest on delinquent assessments.
Interest will
[[Page 9]]
accrue at a rate (that OTS will determine quarterly) equal to 150
percent of the average of the bond-equivalent rates of 13-week Treasury
bills auctioned during the preceding calendar quarter. Assessments under
this subpart A are delinquent if you do not pay them when required by
Sec. 502.30.
Subpart B--Fees
Sec. 502.50 What fees does OTS charge?
(a) The Director assesses fees for examining or investigating
savings associations that administer trust assets of $1 billion or less,
and savings association affiliates. ``Affiliate'' has the meaning in 12
U.S.C. 1462(9), except that, for this part only, ``affiliate'' does not
include any entity that is consolidated with a savings association on
the Consolidated Statement of the Thrift Financial Report.
(b) The Director assesses fees for processing notices, applications,
securities filings, and requests, and for providing other services.
Sec. 502.55 Where can I find OTS's fee schedule?
OTS will periodically publish a schedule of its fees in a Thrift
Bulletin. OTS will publish these fees at least 30 days before they are
effective.
Sec. 502.60 When will OTS adjust, add, waive, or eliminate a fee?
Under unusual circumstances, the Director may deem it necessary or
appropriate to adjust, add, waive, or eliminate a fee. For example, the
Director may:
(a) Reduce any fee to adjust for any inequities, efficiencies, or
changed procedures that OTS projects will reduce its applications
processing costs but that OTS did not consider in determining its fees;
(b) Reduce or waive any fee if OTS determines that the fee would
unduly or unjustifiably discourage particular types of applications or
applications for particular categories of transactions;
(c) Add a fee for a new type of application;
(d) Increase a fee for an application that presents unusual or
particularly complex issues of law or policy or otherwise causes the
agency to incur unusually high processing costs; or
(e) Charge a fee to recover extraordinary expenses related to
examination, investigation, regulation, or supervision of savings
associations or their affiliates.
Sec. 502.65 When is an application fee due?
(a) You must pay the application fee when you file an application.
OTS will not process your application if you do not include the required
fee.
(b) If OTS cannot complete its review of your application because
the application is materially deficient and it refuses to accept your
application for processing, you must pay a new application fee upon
filing a revised application.
(c) If a transaction involves multiple applications, you must pay
the appropriate fee for each application, unless OTS specifies otherwise
by Thrift Bulletin.
Sec. 502.70 How must I pay an application fee?
You must pay an application fee to the Office of Thrift Supervision.
You must include a statement of the fee and how you calculated the fee.
Sec. 502.75 What if I do not pay my fees on time?
(a) Interest. An examination or investigation fee is delinquent if
OTS does not receive the fee within 30 days of the date specified in a
bill. The Director will charge interest on a delinquent examination or
investigation fee. Interest will accrue at a rate (that OTS will
determine quarterly) equal to 150 percent of the average of the bond-
equivalent rates of 13-week Treasury bills auctioned during the
preceding calendar quarter.
(b) Failure to pay. If your holding company, affiliate, or
subsidiary fails to pay any examination or investigation fee within 60
days of the date specified in a bill, the Director may assess that fee,
with interest, against you and collect it from you. If any such entity
is a holding company, affiliate, or subsidiary of more than one savings
association, the Director may assess the fee
[[Page 10]]
against and collect it from each savings association as the Director may
prescribe.
PART 503--PRIVACY ACT--Table of Contents
Sec.
503.1 Scope and procedures.
503.2 Exemptions of records containing investigatory material compiled
for law enforcement purposes.
Authority: 5 U.S.C. 552a; 12 U.S.C. 1462a, 1463, 1464.
Cross Reference: See 31 CFR part 1, subpart C.
Sec. 503.1 Scope and procedures.
(a) In general. The Privacy Act regulations of the Department of the
Treasury, 31 CFR part 1, subpart C, apply to the Office as a component
part of the Department of the Treasury. This part 503 sets forth, for
the Office, specific notification and access procedures with respect to
particular systems of records, and identifies the officials designated
to make the initial determinations with respect to notification and
access to records and accountings of disclosures of records. This part
503 also sets forth the specific procedures for requesting amendment of
records and identifies the officials designated to make the initial and
appellate determinations with respect to requests for amendment of
records. It identifies the officials designated to grant extensions of
time on appeal, the officials with whom ``Statements of Disagreement''
may be filed, the official designated to receive service of process and
the addresses for delivery of requests, appeals, and service of process.
In addition, it references the notice of systems of records and notices
of the routine uses of the information in the system required by 5
U.S.C. 552a(e) (4) and (11) and published annually by the Office of the
Federal Register in ``Privacy Act Issuances.''
(b) Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the Office, will be made by the head of the
organizational unit having immediate custody of the records requested or
an official designated by this official. This is indicated in the
appropriate system notice in ``Privacy Act Issuances'' published
annually by the Office of the Federal Register. Requests for information
and specific guidance on where to send requests for records may be
mailed or delivered personally to: Privacy Act Request, Manager,
Dissemination Branch, Information Management & Services Division, Office
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
(c) Requests for amendment of records. Initial determinations under
31 CFR 1.27(a) through (d), whether to grant requests to amend records
will be made by the head of the organizational unit having immediate
custody of the records or the delegate of such official. Requests for
amendment should be addressed to: Privacy Act Amendment Request,
Manager, Dissemination Branch, Information Management & Services
Division, Office of Thrift Supervision, 1700 G Street, NW., Washington,
DC 20552.
(d) Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal,
with respect to records of the Office will be made by the Director of
the Office of Thrift Supervision (``Director'') or Chief Counsel or the
delegate of the Director or Chief Counsel. Appeals made by mail should
be addressed to, or delivered personally to: Privacy Act Amendment
Appeal, Deputy Chief Counsel for General Law, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
(e) Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27(e)(4)(i) shall be filed with the Deputy Director for
Washington Operations at the address indicated in the letter of
notification within 35 days of the date of such notification and should
be limited to one page.
(f) Service of process. Service of process will be received by the
Chief Counsel's Office or the delegate of such official and shall be
delivered to the following location: Chief Counsel's Office, Office of
Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
[[Page 11]]
(g) Annual notice of systems of records. The annual notice of
systems of records is published by the Office of the Federal Register,
as specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy
Act Issuance.'' Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.
[54 FR 49443, Nov. 30, 1989, as amended at 59 FR 18475, Apr. 19, 1994;
64 FR 69184, Dec. 10, 1999]
Sec. 503.2 Exemptions of records containing investigatory material compiled for law enforcement purposes.
(a) Scope. The Office has established a system of records, entitled
the ``Confidential Individual Information System.'' The purpose of this
system is to assist the Office in the accomplishment of its statutory
and regulatory responsibilities in connection with supervision of
savings associations. This system will be exempt from certain provisions
of the Privacy Act of 1974 for the reasons set forth in paragraph (c) of
this section.
(b) Exemptions Under 5 U.S.C. 552a(k)(2). (1) Pursuant to 5 U.S.C.
552a(k)(2), the head of an agency may issue rules to exempt any system
of records within the agency from certain provisions of the Privacy Act
of 1974 if the system contains investigatory material compiled for law
enforcement purposes.
(2) Provisions of the Privacy Act of 1974 from which exemptions will
be made under 5 U.S.C. 552a(k)(2) are as follows:
(i) 5 U.S.C. 552a(c)(3);
(ii) 5 U.S.C. 552a(d)(1), (d)(2), (d)(3), and (d)(4);
(iii) 5 U.S.C. 552a(e)(1);
(iv) 5 U.S.C. 552a(e)(4)(G), (e)(4)(H), and (e)(4)(I); and
(v) 5 U.S.C. 552a(f).
(c) Reasons for exemptions under 5 U.S.C. 552a(k)(2). (1) 5 U.S.C.
552a(c)(3) requires that an agency make accountings of disclosures of
records available to individuals named in the records at their request.
These accountings must state the date, nature, and purpose of each
disclosure of a record and the name and address of the recipient. The
application of this provision would make known to subjects of an
investigation that an investigation is taking place and that they are
the subjects of it. Release of such information could result in the
alteration or destruction of documentary evidence, improper influencing
of witnesses, and reluctance of witnesses to offer information, and
could otherwise impede or compromise an investigation.
(2) 5 U.S.C. 552a(d)(1), (d)(2), (d)(3), and (d)(4), (e)(4)(G) and
(e)(4)(H), and (f), relate to an individual's right to be notified of
the existence of, and the right to examine, records pertaining to such
individual. Notifying an individual at the individual's request of the
existence of records and allowing the individual to examine an
investigative file pertaining to such individual, or granting access to
an investigative file, could:
(i) Interfere with investigations and enforcement proceedings;
(ii) Constitute an unwarranted invasion of the personal privacy of
others;
(iii) Disclose the identity of confidential sources and reveal
confidential information supplied by those sources; or
(iv) Disclose investigative techniques and procedures.
(3) 5 U.S.C. 552a(e)(4)(I) requires the publication of the
categories of sources of records in each system. Application of this
provision could disclose investigative techniques and procedures and
cause sources to refrain from giving such information because of fear of
reprisal, or fear of breach of promises of anonymity and
confidentiality, thus compromising the agency's ability to conduct
investigations and to identify, detect, and apprehend violators.
(4) 5 U.S.C. 552a(e)(1) requires each agency to maintain in its
records only information about an individual that is relevant and
necessary to accomplish a purpose of the agency required by statute or
Executive Order. Limiting the system as described would impede
enforcement activities because:
(i) It is not always possible to determine the relevance or
necessity of specific information in the early stages of an
investigation; and
(ii) In any investigation the Office may obtain information
concerning violations of laws other than those
[[Page 12]]
within the scope of its jurisdiction. In the interest of effective law
enforcement, the Office should retain this information to aid in
establishing patterns of criminal activity, and to provide leads for
those law enforcement agencies charged with enforcing criminal or civil
laws.
(d) Documents exempted. Exemptions will be applied only when
appropriate under 5 U.S.C. 552a(k).
[55 FR 31371, Aug. 2, 1990]
PART 505--FREEDOM OF INFORMATION ACT--Table of Contents
Sec.
505.1 Basis and scope.
505.2 Public reference room.
505.3 Requests for records.
505.4 Administrative appeal of initial determination to deny records.
505.5 Delivery of process.
Authority: 5 U.S.C. 552; 12 U.S.C. 1462a, 1463, 1464.
Cross Reference: See 31 CFR part 1, subpart A.
Sec. 505.1 Basis and scope.
(a) This part is issued by the Office of Thrift Supervision
(``OTS'') as a supplement to the Freedom of Information Act regulations
of the Department of the Treasury, 31 CFR part 1, subpart A, which apply
to the OTS as a component part of the Department of the Treasury.
(b) This part is issued by the OTS pursuant to the requirement of
section 552 of title 5 of the United States Code, which requires every
federal agency to publish in the Federal Register the established places
at which, the employees from whom, and the methods whereby, the public
may obtain information, make submittals on requests, or obtain
decisions, and the forms available or the places at which forms and
instructions as to the scope and contents of all papers, reports, or
examinations may be found. Information about the Public Reading Room is
set forth in Sec. 505.2 of this part. Procedures for requests for
information are set forth in Sec. 505.3 of this part. Information about
administrative appeals is set forth in Sec. 505.4 of this part.
Provisions relating to delivery of process upon the OTS are set forth in
Sec. 505.5 of this part.
[54 FR 49444, Nov. 30, 1989, as amended at 60 FR 66716, Dec. 26, 1995]
Sec. 505.2 Public reference room.
The OTS will make materials available for review on an ad hoc basis
when necessary. Contact the Dissemination Branch, Information Management
& Services Division, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552, or visit the Public Reference Room at 1700 G
Street, NW., Lower Level, from 9:00 a.m. to 4:00 p.m. on business days.
[60 FR 66716, Dec. 26, 1995, as amended at 64 FR 69184, Dec. 10, 1999]
Sec. 505.3 Requests for records.
Initial determinations under 31 CFR 1.5(g) as to whether to grant
requests for records of the OTS will be made by the Manager,
Dissemination Branch or by an official so designated. Requests may be
mailed to: Freedom of Information Act Request, Dissemination Branch,
Information Management & Services Division, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552, or marked
``FOIA'' and delivered in person to the Public Reference Room,
Dissemination Branch, Information Management & Services Division, 1700 G
Street, NW., Lower Level. Requests may also be sent by e-mail or
facsimile.
[60 FR 66716, Dec. 26, 1995, as amended at 64 FR 69184, Dec. 10, 1999]
Sec. 505.4 Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(h) with respect to records
of the OTS will be made by the Executive Director for Administration or
the Director, Records Management and Information Policy Division.
Appeals by mail should be addressed to: Deputy Chief Counsel for General
Law, 1700 G Street, NW., Washington, DC 20552. Appeals may be delivered
personally to the Dissemination Branch, Information Management &
Services Division, Office of Thrift Supervision, 1700 G
[[Page 13]]
Street, NW., Lower Level. Appeals may also be sent by e-mail or
facsimile.
[60 FR 66716, Dec. 26, 1995, as amended at 64 FR 69184, Dec. 10, 1999]
Sec. 505.5 Delivery of process.
Service of process will be received as set forth in Sec. 510.4 of
this chapter.
[54 FR 49444, Nov. 30, 1989]
PART 506--INFORMATION COLLECTION REQUIREMENTS UNDER THE PAPERWORK REDUCTION ACT--Table of Contents
Authority: 44 U.S.C. 3501 et seq.
Sec. 506.1 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
(a) Purpose. This part collects and displays the control numbers
assigned to information collection requirements contained in regulations
of the Office of Thrift Supervision by the Office of Management and
Budget (OMB) pursuant to the Paperwork Reduction Act of 1995, Pub. L.
104-13, 109 Stat. 163, and is adopted in compliance with the
requirements of 5 CFR 1320.8. Information collection requirements that
are not mandated by statute must be assigned control numbers by OMB in
order to be enforceable. Respondents/recordkeepers are not required to
comply with any collection of information unless it displays a currently
valid OMB control number.
(b) Display.
------------------------------------------------------------------------
12 CFR part or section where identified
and described Current OMB control No.
------------------------------------------------------------------------
502.70.................................... 1550-0053.
510....................................... 1550-0081.
Part 516.................................. 1550-0005, 1550-0006, 1550-
0016.
516.1(c).................................. 1550-0056.
Part 528.................................. 1550-0021.
536.40.................................... 1550-0106.
543.2..................................... 1550-0005.
543.3..................................... 1550-0005
543.9..................................... 1550-0007.
544.2..................................... 1550-0017.
544.5..................................... 1550-0018.
544.8..................................... 1550-0011.
545.74.................................... 1550-0013.
545.92.................................... 1550-0004.
545.95.................................... 1550-0006.
545.96(c)................................. 1550-0011.
546.2..................................... 1550-0016.
546.4..................................... 1550-0066.
Part 550.................................. 1550-0037.
552.2-1................................... 1550-0005.
552.2-6................................... 1550-0007.
552.4..................................... 1550-0017.
552.5..................................... 1550-0018.
552.6..................................... 1550-0025.
552.7..................................... 1550-0025.
552.11.................................... 1550-0011.
552.13.................................... 1550-0016, 1550-0025.
555.300................................... 1550-0095.
555.310................................... 1550-0095.
557.20.................................... 1550-0092.
559.3..................................... 1550-0077.
559.11.................................... 1550-0067.
559.12.................................... 1550-0013.
559.13.................................... 1550-0065.
560.1..................................... 1550-0078.
560.2..................................... 1550-0078.
560.32.................................... 1550-0078.
560.35.................................... 1550-0078.
560.93(f)................................. 1550-0078.
560.101................................... 1550-0078.
560.170(c)................................ 1550-0078.
560.172................................... 1550-0078.
560.210................................... 1550-0078.
562.1..................................... 1550-0011.
562.1(b).................................. 1550-0078.
562.4..................................... 1550-0011.
563.1..................................... 1550-0027.
563.1(b).................................. 1550-0011.
563.22.................................... 1550-0016.
563.41(e)................................. 1550-0078.
563.42(e)................................. 1550-0078.
563.43.................................... 1550-0075.
563.47(e)................................. 1550-0011.
563.74.................................... 1550-0050.
563.76(c)................................. 1550-0011.
563.80.................................... 1550-0030.
563.81.................................... 1550-0061.
563.143 through 563.146................... 1550-0059.
563.170................................... 1550-0078.
563.177................................... 1550-0041.
563.180................................... 1550-0084.
563.180(d)................................ 1550-0003.
563.180(e)................................ 1550-0079.
563.181................................... 1550-0032.
563.183................................... 1550-0032.
Part 563b................................. 1550-0014.
563b.4.................................... 1550-0032.
563b.20 through 563b.32................... 1550-0074.
Part 563d................................. 1550-0019.
Part 563e................................. 1550-0012.
Part 563f................................. 1550-0051.
Part 563g................................. 1550-0035.
Part 564.................................. 1550-0078.
566.4..................................... 1550-0011.
Part 568.................................. 1550-0062.
572.6..................................... 1550-0088.
572.7..................................... 1550-0088.
572.9..................................... 1550-0088.
572.10.................................... 1550-0088.
Part 573.................................. 1550-0103.
574.3(b).................................. 1550-0032.
574.4..................................... 1550-0032.
574.5..................................... 1550-0032.
574.6..................................... 1550-0015.
Part 575.................................. 1550-0072.
584.1(f).................................. 1550-0011.
584.2-1................................... 1550-0063.
584.2-2................................... 1550-0063.
584.9..................................... 1550-0063.
590.4(h).................................. 1550-0078.
------------------------------------------------------------------------
[[Page 14]]
[60 FR 66716, Dec. 26, 1995, as amended by 61 FR 65178, Dec. 11, 1996;
62 FR 54764, Oct. 22, 1997; 62 FR 66261, Dec. 18, 1997; 63 FR 71211,
Dec. 24, 1998; 65 FR 78901, Dec. 18, 2000]
PART 508--REMOVALS, SUSPENSIONS, AND PROHIBITIONS WHERE A CRIME IS CHARGED OR PROVEN--Table of Contents
Sec.
508.1 Scope.
508.2 Definitions.
508.3 Issuance of Notice or Order.
508.4 Contents and service of the Notice or Order.
508.5 Petition for hearing.
508.6 Initiation of hearing.
508.7 Conduct of hearings.
508.8 Default.
508.9 Rules of evidence.
508.10 Burden of persuasion.
508.11 Relevant considerations.
508.12 Proposed findings and conclusions and recommended decision.
508.13 Decision of the Office.
508.14 Miscellaneous.
Authority: 12 U.S.C. 1464, 1818.
Source: 54 FR 49444, Nov. 30, 1989, unless otherwise noted.
Sec. 508.1 Scope.
The rules in this part apply to hearings, which are exempt from the
adjudicative provisions of the Administrative Procedure Act, afforded to
any officer, director, or other person participating in the conduct of
the affairs of a savings association, affiliate service corporation,
savings and loan holding company, or subsidiary of such a holding
company, where such person has been suspended or removed from office or
prohibited from further participation in the conduct of the affairs of
one of the aforementioned entities by a Notice or Order served by the
Office upon the grounds set forth in section 8(g) of the Federal Deposit
Insurance Act, (12 U.S.C. 1818(g)).
Sec. 508.2 Definitions.
As used in this part--
(a) The term Office means the Office of Thrift Supervision.
(b) The term Secretary means the Secretary to the Office and any
Assistant or Acting Secretary to the Office.
(c) The term Notice means a Notice of Suspension or Notice of
Prohibition issued by the Office pursuant to section 8(g) of the Federal
Deposit Insurance Act.
(d) The term Order means an Order of Removal or Order of Prohibition
issued by the Office pursuant to section 8(g) of the Federal Deposit
Insurance Act.
(e) The term association means a savings association within the
meaning of section 2(4) of the Home Owners' Loan Act of 1933, as
amended, 12 U.S.C. 1462(4) (``HOLA''), an affiliate service corporation
within the meaning of section 8(b)(8) of the Federal Deposit Insurance
Act, as amended, 12 U.S.C. 1818(b)(8) (``FDIA''), a savings and loan
holding company within the meaning of section 10(a)(1)(D) of the HOLA,
12 U.S.C. 1467a(a)(1)(D) and a subsidiary of a savings and loan holding
company (other than a savings association) within the meaning of section
10(a)(1)(G) of the Home Owners' Loan Act of 1933.
(f) The term subject individual means a person served with a Notice
or Order.
(g) The term petitioner means a subject individual who has filed a
petition for informal hearing under this part.
Sec. 508.3 Issuance of Notice or Order.
(a) The Office may issue and serve a Notice upon an officer,
director, or other person participating in the conduct of the affairs of
an association, where the individual is charged in any information,
indictment, or complaint with the commission of or participation in a
crime involving dishonesty or breach of trust that is punishable by
imprisonment for a term exceeding one year under State or Federal law,
if the Office, upon due deliberation, determines that continued service
or participation by the individual may pose a threat to the interests of
the association's depositors or may threaten to impair public confidence
in the association. The Notice shall remain in effect until the
information, indictment, or complaint is finally disposed of or until
terminated by the Office.
(b) The Office may issue and serve an Order upon a subject
individual against whom a judgment of conviction, or an agreement to
enter a pretrial diversion
[[Page 15]]
or other similar program has been rendered, where such judgment is not
subject to further appellate review, and the Office, upon the
deliberation, has determined that continued service or participation by
the subject individual may pose a threat to the interests of the
association's depositors or may threaten to impair public confidence in
the association.
Sec. 508.4 Contents and service of the Notice or Order.
(a) The Notice or Order shall set forth the basis and facts in
support of the Office's issuance of such Notice or Order, and shall
inform the subject individual of his right to a hearing, in accordance
with this part, for the purpose of determining whether the Notice or
Order should be continued, terminated, or otherwise modified.
(b) The Secretary shall serve a copy of the Notice or Order upon the
subject individual and the related association in the manner set forth
in Sec. 509.11 of this chapter.
(c) Upon receipt of the Notice or Order, the subject individual
shall immediately comply with the requirements thereof.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
Sec. 508.5 Petition for hearing.
(a) To obtain a hearing, the subject individual must file two copies
of a petition with the Secretary within 30 days of being served with the
Notice or Order.
(b) The petition filed under this section shall admit or deny
specifically each allegation in the Notice or Order, unless the
petitioner is without knowledge or information, in which case the
petition shall so state and the statement shall have the effect of a
denial. Any allegation not denied shall be deemed to be admitted. When a
petitioner intends in good faith to deny only a part of or to qualify an
allegation, he shall specify so much of it as is true and shall deny
only the remainder.
(c) The petition shall state whether the petitioner is requesting
termination or modification of the Notice or Order, and shall state with
particularity how the petitioner intends to show that his continued
service to or participation in the conduct of the affairs of the
association would not, or is not likely to, pose a threat to the
interests of the association's depositors or to impair public confidence
in the association.
Sec. 508.6 Initiation of hearing.
(a) Within 10 days of the filing of a petition for hearing, the
Office shall notify the petitioner of the time and place fixed for
hearing, and it shall designate one or more Office employees to serve as
presiding officer.
(b) The hearing shall be scheduled to be held no later than 30 days
from the date the petition was filed, unless the time is extended at the
request of the petitioner.
(c) A petitioner may appear personally or through counsel, but if
represented by counsel, said counsel is required to comply with
Sec. 509.6 of this chapter.
(d) A representative(s) of the Office's Office of Enforcement also
may attend the hearing and participate therein as a party.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
Sec. 508.7 Conduct of hearings.
(a) Hearings provided by this section are not subject to the
adjudicative provisions of the Administrative Procedure Act (5 U.S.C.
554-557). The presiding officer is, however, authorized to exercise all
of the powers enumerated in Sec. 509.5 of this chapter.
(b) Witnesses may be presented, within time limits specified by the
presiding officer, provided that at least 10 days prior to the hearing
date, the party presenting the witnesses furnishes the presiding officer
and the opposing party with a list of such witnesses and a summary of
the proposed testimony. However, the requirement for furnishing such a
witness list and summary of testimony shall not apply to the
presentation of rebuttal witnesses. The presiding officer may ask
questions of any witness, and each party shall have an opportunity to
cross-examine any witness presented by an opposing party.
[[Page 16]]
(c) Upon the request of either the petitioner or a representative of
the Office of Enforcement, the record shall remain open for a period of
5 business days following the hearing, during which time the parties may
make any additional submissions for the record. Thereafter, the record
shall be closed.
(d) Following the introduction of all evidence, the petitioner and
the representative of the Office of Enforcement shall have an
opportunity for oral argument; however, the parties may jointly waive
the right to oral argument, and, in lieu thereof, elect to submit
written argument.
(e) All oral testimony and oral argument shall be recorded, and
transcripts made available to the petitioner upon payment of the cost
thereof. A copy of the transcript shall be sent directly to the
presiding officer, who shall have authority to correct the record sua
sponte or upon the motion of any party.
(f) The parties may, in writing, jointly waive an oral hearing and
instead elect a hearing upon a written record in which all evidence and
argument would be submitted to the presiding officer in documentary form
and statements of individuals would be made by affidavit.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
Sec. 508.8 Default.
If the subject individual fails to file a petition for a hearing, or
fails to appear at a hearing, either in person or by attorney, or fails
to submit a written argument where oral argument has been waived
pursuant to Sec. 508.7(d) or (f) of this part, the Notice shall remain
in effect until the information, indictment, or complaint is finally
disposed of and the Order shall remain in effect until terminated by the
Office.
Sec. 508.9 Rules of evidence.
(a) Formal rules of evidence shall not apply to a hearing, but the
presiding officer may limit the introduction of irrelevant, immaterial,
or unduly repetitious evidence.
(b) All matters officially noticed by the presiding officer shall
appear on the record.
Sec. 508.10 Burden of persuasion.
The petitioner has the burden of showing, by a preponderance of the
evidence, that his or her continued service to or participation in the
conduct of the affairs of the association does not, or is not likely to,
pose a threat to the interests of the association's depositors or
threaten to impair public confidence in the association.
Sec. 508.11 Relevant considerations.
(a) In determining whether the petitioner has shown that his or her
continued service to or participation in the conduct of the affairs of
the association would not, or is not likely to, pose a threat to the
interests of the association's depositors or threaten to impair public
confidence in the association, in order to decide whether the Notice or
Order should be continued, terminated, or otherwise modified, the Office
will consider:
(1) The nature and extent of the petitioner's participation in the
affairs of the association;
(2) The nature of the offense with which the petitioner has been
charged;
(3) The extent of the publicity accorded the indictment and trial;
and
(4) Such other relevant factors as may be entered on the record.
(b) When considering a request for the termination or modification
of a Notice, the Office will not consider the ultimate guilt or
innocence of the petitioner with respect to the criminal charge that is
outstanding.
(c) When considering a request for the termination or modification
of an Order which has been issued following a final judgment of
conviction against a subject individual, the Office will not
collaterally review such final judgment of conviction.
Sec. 508.12 Proposed findings and conclusions and recommended decision.
(a) Within 30 days after completion of oral argument or the
submission of written argument where oral argument has been waived, the
presiding officer shall file with the Secretary and certify to the
Office for decision the entire record of the hearing, which shall
include a recommended decision, the Notice or Order, and all other
documents filed in connection with the hearing.
[[Page 17]]
(b) The recommended decision shall contain:
(1) A statement of the issue(s) presented,
(2) A statement of findings and conclusions, and the reasons or
basis therefor, on all material issues of fact, law, or discretion
presented on the record, and
(3) An appropriate recommendation as to whether the suspension,
removal, or prohibition should be continued, modified, or terminated.
Sec. 508.13 Decision of the Office.
(a) Within 30 days after the recommended decision has been certified
to the Office, the Office shall issue a final decision.
(b) The Office's final decision shall contain a statement of the
basis therefor. The Office may satisfy this requirement where it adopts
the recommended decision of the presiding officer upon finding that the
recommended decision satisfies the requirements of Sec. 509.38 of this
chapter.
(c) The Secretary shall serve upon the petitioner and the
representative of the Office of Enforcement a copy of the Office's final
decision and the related recommended decision.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991;
59 FR 53570, Oct. 25, 1994]
Sec. 508.14 Miscellaneous.
The provisions of Secs. 509.10, 509.11, and 509.12 of this chapter
shall apply to proceedings under this part.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
PART 509--RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY PROCEEDINGS--Table of Contents
Subpart A--Uniform Rules of Practice and Procedure
Sec.
509.1 Scope.
509.2 Rules of construction.
509.3 Definitions.
509.4 Authority of Director.
509.5 Authority of the administrative law judge.
509.6 Appearance and practice in adjudicatory proceedings.
509.7 Good faith certification.
509.8 Conflicts of interest.
509.9 Ex parte communications.
509.10 Filing of papers.
509.11 Service of papers.
509.12 Construction of time limits.
509.13 Change of time limits.
509.14 Witness fees and expenses.
509.15 Opportunity for informal settlement.
509.16 Office's right to conduct examination.
509.17 Collateral attacks on adjudicatory proceeding.
509.18 Commencement of proceeding and contents of notice.
509.19 Answer.
509.20 Amended pleadings.
509.21 Failure to appear.
509.22 Consolidation and severance of actions.
509.23 Motions.
509.24 Scope of document discovery.
509.25 Request for document discovery from parties.
509.26 Document subpoenas to nonparties.
509.27 Deposition of witness unavailable for hearing.
509.28 Interlocutory review.
509.29 Summary disposition.
509.30 Partial summary disposition.
509.31 Scheduling and prehearing conferences.
509.32 Prehearing submissions.
509.33 Public hearings.
509.34 Hearing subpoenas.
509.35 Conduct of hearings.
509.36 Evidence.
509.37 Post-hearing filings.
509.38 Recommended decision and filing of record.
509.39 Exceptions to recommended decision.
509.40 Review by the Director.
509.41 Stays pending judicial review.
Subpart B--Local Rules
509.100 Scope.
509.101 Appointment of Office of Financial Institution Adjudication.
509.102 Discovery.
509.103 Civil money penalties.
509.104 Additional procedures.
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a, 1468,
1817(j), 1818, 3349, 4717; 15 U.S.C. 78(l), 78o-5, 78u-2; 28 U.S.C. 2461
note; 31 U.S.C. 5321; 42 U.S.C. 4012a.
Source: 56 FR 38306, Aug. 12, 1991, unless otherwise noted.
Subpart A--Uniform Rules of Practice and Procedure
Sec. 509.1 Scope.
This subpart prescribes Uniform Rules of practice and procedure
applicable to adjudicatory proceedings as to
[[Page 18]]
which hearings on the record are provided for by the following statutory
provisions:
(a) Cease-and-desist proceedings under section 8(b) of the Federal
Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the
FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) to determine whether the Office should issue an
order to approve or disapprove a person's proposed acquisition of an
institution and/or institution holding company;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange
Act of 1934 (Exchange Act) (15 U.S.C. 78o-5), to impose sanctions upon
any government securities broker or dealer or upon any person associated
or seeking to become associated with a government securities broker or
dealer for which the Office is the appropriate Office;
(e) Assessment of civil money penalties by the Office against
institutions, institution-affiliated parties, and certain other persons
for which it is the appropriate Office for any violation of:
(1) Section 5 of the Home Owners' Loan Act (HOLA) or any regulation
or order issued thereunder, pursuant to 12 U.S.C. 1464 (d), (s) and (v);
(2) Section 9 of the HOLA or any regulation or order issued
thereunder, pursuant to 12 U.S.C. 1467(d);
(3) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and (r);
(4) Any provisions of the Change in Bank Control Act, any regulation
or order issued thereunder or certain unsafe or unsound practices or
breaches of fiduciary duty, pursuant to 12 U.S.C. 1817(j)(16);
(5) Sections 22(h) and 23 of the Federal Reserve Act, or any
regulation issued thereunder or certain unsafe or unsound practices or
breaches of fiduciary duty, pursuant to 12 U.S.C. 1468;
(6) Certain provisions of the Exchange Act, pursuant to section 21B
of the Exchange Act (15 U.S.C. 78u-2);
(7) Section 1120 of Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation
issued thereunder;
(8) The terms of any final or temporary order issued or enforceable
pursuant to section 8 of the FDIA or of any written agreement executed
by the Office, the terms of any conditions imposed in writing by the
Office in connection with the grant of an application or request,
certain unsafe or unsound practices or breaches of fiduciary duty, or
any law or regulation not otherwise provided herein pursuant to 12
U.S.C. 1818(i)(2);
(9) Any provision of law referenced in section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder; and
(10) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(f) Remedial action under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g)); and
(g) This subpart also applies to all other adjudications required by
statute to be determined on the record after opportunity for an agency
hearing, unless otherwise specifically provided for in the Local Rules.
[56 FR 38306, Aug. 12, 1991, as amended at 56 FR 59866, Nov. 26, 1991;
61 FR 20353, May 6, 1996]
Sec. 509.2 Rules of construction.
For purposes of this subpart:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neuter gender encompasses
all three, if such use would be appropriate;
(c) The term counsel includes a non-attorney representative; and
(d) Unless the context requires otherwise, a party's counsel of
record, if any, may, on behalf of that party, take any action required
to be taken by the party.
Sec. 509.3 Definitions.
For purposes of this subpart, unless explicitly stated to the
contrary:
(a) Administrative law judge means one who presides at an
administrative hearing under authority set forth at 5 U.S.C. 556.
[[Page 19]]
(b) Adjudicatory proceeding means a proceeding conducted pursuant to
these rules and leading to the formulation of a final order other than a
regulation.
(c) Decisional employee means any member of the Office's or
administrative law judge's staff who has not engaged in an investigative
or prosecutorial role in a proceeding and who may assist the Office or
the administrative law judge, respectively, in preparing orders,
recommended decisions, decisions, and other documents under the Uniform
Rules.
(d) Director means the Director of the Office of Thrift Supervision
or his or her designee.
(e) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the Office in an adjudicatory
proceeding.
(f) Final order means an order issued by the Office with or without
the consent of the affected institution or the institution-affiliated
party, that has become final, without regard to the pendency of any
petition for reconsideration or review.
(g) Institution includes any savings association as that term is
defined in section 3(b) of the FDIA (12 U.S.C. 1813(b)), any savings and
loan holding company or any subsidiary thereof whether wholly or partly
owned (other than a bank) as those terms are defined in section 10(a) of
the HOLA (12 U.S.C. 1467(a)).
(h) Institution-affiliated party means any institution-affiliated
party as that term is defined in section 3(u) of the FDIA (12 U.S.C.
1813(u)).
(i) Local Rules means those rules found in subpart B of this part.
(j) Office means the Office of Thrift Supervision in the case of any
savings association or any savings and loan holding company, and
subsidiary (other than a bank or subsidiary of that bank) of a savings
and loan holding company, any service corporation of a savings
association, and any subsidiary of such service corporation, whether
wholly or partly owned.
(k) Office of Financial Institution Adjudication (OFIA) means the
executive body charged with overseeing the administration of
administrative enforcement proceedings for the Office of the Comptroller
of the Currency, the Board of Governors of the Federal Reserve Board,
the Federal Deposit Insurance Corporation, the National Credit Union
Administration and the Office.
(l) Party means the Office and any person named as a party in any
notice.
(m) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency or other entity or organization, including an
institution as defined in paragraph (g) of this section.
(n) Respondent means any party other than the Office.
(o) Uniform Rules means those rules in subpart A of this part.
(p) Violation includes any action (alone or with another or others)
for or toward causing, bringing about, participating in, counseling, or
aiding or abetting a violation.
Sec. 509.4 Authority of Director.
The Director may, at any time during the pendency of a proceeding
perform, direct the performance of, or waive performance of, any act
which could be done or ordered by the administrative law judge.
Sec. 509.5 Authority of the administrative law judge.
(a) General rule. All proceedings governed by this part shall be
conducted in accordance with the provisions of chapter 5 of title 5 of
the United States Code. The administrative law judge shall have all
powers necessary to conduct a proceeding in a fair and impartial manner
and to avoid unnecessary delay.
(b) Powers. The administrative law judge shall have all powers
necessary to conduct the proceeding in accordance with paragraph (a) of
this section, including the following powers:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, and protective
orders, as authorized by this part, and to quash or modify any such
subpoenas and orders;
(3) To receive relevant evidence and to rule upon the admission of
evidence and offers of proof;
[[Page 20]]
(4) To take or cause depositions to be taken as authorized by this
subpart;
(5) To regulate the course of the hearing and the conduct of the
parties and their counsel;
(6) To hold scheduling and/or pre-hearing conferences as set forth
in Sec. 509.31 of this subpart;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the
Director shall have the power to grant any motion to dismiss the
proceeding or to decide any other motion that results in a final
determination of the merits of the proceeding;
(8) To prepare and present to the Director a recommended decision as
provided herein;
(9) To recuse himself or herself by motion made by a party or on his
or her own motion;
(10) To establish time, place and manner limitations on the
attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 509.6 Appearance and practice in adjudicatory proceedings.
(a) Appearance before an Office or an administrative law judge--(1)
By attorneys. Any member in good standing of the bar of the highest
court of any state, commonwealth, possession, territory of the United
States, or the District of Columbia may represent others before the
Office if such attorney is not currently suspended or debarred from
practice before the Office.
(2) By non-attorneys. An individual may appear on his or her own
behalf; a member of a partnership may represent the partnership; a duly
authorized officer, director, or employee of any government unit,
agency, institution, corporation or authority may represent that unit,
agency, institution, corporation or authority if such officer, director,
or employee is not currently suspended or debarred from practice before
the Office.
(3) Notice of appearance. Any individual acting as counsel on behalf
of a party, including the Director, shall file a notice of appearance
with OFIA at or before the time that individual submits papers or
otherwise appears on behalf of a party in the adjudicatory proceeding.
The notice of appearance must include a written declaration that the
individual is currently qualified as provided in paragraph (a)(1) or
(a)(2) of this section and is authorized to represent the particular
party. By filing a notice of appearance on behalf of a party in an
adjudicatory proceeding, the counsel agrees and represents that he or
she is authorized to accept service on behalf of the represented party
and that, in the event of withdrawal from representation, he or she
will, if required by the administrative law judge, continue to accept
service until new counsel has filed a notice of appearance or until the
represented party indicates that he or she will proceed on a pro se
basis.
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or
contumacious conduct at any phase of any adjudicatory proceeding may be
grounds for exclusion or suspension of counsel from the proceeding.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.7 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice shall be signed by at least one
counsel of record in his or her individual name and shall state that
counsel's address and telephone number. A party who acts as his or her
own counsel shall sign his or her individual name and state his or her
address and telephone number on every filing or submission of record.
(b) Effect of signature. (1) The signature of counsel or a party
shall constitute a certification that: the counsel or party has read the
filing or submission of record; to the best of his or her knowledge,
information, and belief formed after reasonable inquiry, the filing or
submission of record is well-grounded in fact and is warranted by
existing law or a good faith argument for the extension, modification,
or reversal of existing law; and the filing or submission of record is
not made for any improper purpose, such as to harass or to cause
unnecessary delay or
[[Page 21]]
needless increase in the cost of litigation.
(2) If a filing or submission of record is not signed, the
administrative law judge shall strike the filing or submission of
record, unless it is signed promptly after the omission is called to the
attention of the pleader or movant.
(c) Effect of making oral motion or argument. The act of making any
oral motion or oral argument by any counsel or party constitutes a
certification that to the best of his or her knowledge, information, and
belief formed after reasonable inquiry, his or her statements are well-
grounded in fact and are warranted by existing law or a good faith
argument for the extension, modification, or reversal of existing law,
and are not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
Sec. 509.8 Conflicts of interest.
(a) Conflict of interest in representation. No person shall appear
as counsel for another person in an adjudicatory proceeding if it
reasonably appears that such representation may be materially limited by
that counsel's responsibilities to a third person or by the counsel's
own interests. The administrative law judge may take corrective measures
at any stage of a proceeding to cure a conflict of interest in
representation, including the issuance of an order limiting the scope of
representation or disqualifying an individual from appearing in a
representative capacity for the duration of the proceeding.
(b) Certification and waiver. If any person appearing as counsel
represents two or more parties to an adjudicatory proceeding or also
represents a non-party on a matter relevant to an issue in the
proceeding, counsel must certify in writing at the time of filing the
notice of appearance required by Sec. 509.6(a):
(1) That the counsel has personally and fully discussed the
possibility of conflicts of interest with each such party and non-party;
and
(2) That each such party and non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any non-material conflicts of interest during the course of the
proceeding.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.9 Ex parte communications.
(a) Definition--(1) Ex parte communication means any material oral
or written communication relevant to the merits of an adjudicatory
proceeding that was neither on the record nor on reasonable prior notice
to all parties that takes place between:
(i) An interested person outside the Office (including such person's
counsel); and
(ii) The administrative law judge handling that proceeding, the
Director, or a decisional employee.
(2) Exception. A request for status of the proceeding does not
constitute an ex parte communication.
(b) Prohibition of ex parte communications. From the time the notice
is issued by the Director until the date that the Director issues the
final decision pursuant to Sec. 509.40(c) of this subpart:
(1) No interested person outside the Office shall make or knowingly
cause to be made an ex parte communication to the Director, the
administrative law judge, or a decisional employee; and
(2) The Director, administrative law judge, or decisional employee
shall not make or knowingly cause to be made to any interested person
outside the Office any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the administrative law judge, the
Director or other person identified in paragraph (a) of this section,
that person shall cause all such written communications (or, if the
communication is oral, a memorandum stating the substance of the
communication) to be placed on the record of the proceeding and served
on all parties. All other parties to the proceeding shall have an
opportunity, within ten days of receipt of service of the ex parte
communication to file responses thereto and to recommend any sanctions,
in accordance with paragraph (d) of this section, that they believe to
be appropriate under the circumstances.
[[Page 22]]
(d) Sanctions. Any party or his or her counsel who makes a
prohibited ex parte communication, or who encourages or solicits another
to make any such communication, may be subject to any appropriate
sanction or sanctions imposed by the Director or the administrative law
judge including, but not limited to, exclusion from the proceedings and
an adverse ruling on the issue which is the subject of the prohibited
communication.
(e) Separation-of-functions. Except to the extent required for the
disposition of ex parte matters as authorized by law, the administrative
law judge may not consult a person or party on any matter relevant to
the merits of the adjudication, unless on notice and opportunity for all
parties to participate. An employee or agent engaged in the performance
of investigative or prosecuting functions for the Office in a case may
not, in that or a factually related case, participate or advise in the
decision, recommended decision, or agency review of the recommended
decision under Sec. 509.40 of this subpart, except as witness or counsel
in public proceedings.
[56 FR 38306, Aug. 12, 1991, as amended at 60 FR 28035, May 30, 1995]
Sec. 509.10 Filing of papers.
(a) Filing. Any papers required to be filed, excluding documents
produced in response to a discovery request pursuant to Secs. 509.25 and
509.26 of this subpart, shall be filed with the OFIA, except as
otherwise provided.
(b) Manner of filing. Unless otherwise specified by the Director or
the administrative law judge, filing may be accomplished by:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if expressly authorized,
and upon any conditions specified, by the Director or the administrative
law judge. All papers filed by electronic media shall also concurrently
be filed in accordance with paragraph (c) of this section as to form.
(c) Formal requirements as to papers filed--(1) Form. All papers
filed must set forth the name, address, and telephone number of the
counsel or party making the filing and must be accompanied by a
certification setting forth when and how service has been made on all
other parties. All papers filed must be double-spaced and printed or
typewritten on 8\1/2\ x 11 inch paper, and must be clear and legible.
(2) Signature. All papers must be dated and signed as provided in
Sec. 509.7 of this subpart.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name of the Office and of the filing party, the
title and docket number of the proceeding, and the subject of the
particular paper.
(4) Number of copies. Unless otherwise specified by the Director, or
the administrative law judge, an original and one copy of all documents
and papers shall be filed, except that only one copy of transcripts of
testimony and exhibits shall be filed.
Sec. 509.11 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers shall serve a copy upon the counsel of record for all other
parties to the proceeding so represented, and upon any party not so
represented.
(b) Method of service. Except as provided in paragraphs (c)(2) and
(d) of this section, a serving party shall use one or more of the
following methods of service:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if the parties mutually
agree. Any papers served by electronic media shall also concurrently be
served in accordance with the requirements of Sec. 509.10(c) of this
subpart as to form.
(c) By the Director or the administrative law judge. (1) All papers
required to be served by the Director or the administrative law judge
upon a party who has appeared in the proceeding through a counsel of
record, shall be served by
[[Page 23]]
any means specified in paragraph (b) of this section.
(2) If a party has not appeared in the proceeding in accordance with
Sec. 509.6 of this subpart, the Director or the administrative law judge
shall make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
(iv) By registered or certified mail addressed to the person's last
known address; or
(v) By any other method reasonably calculated to give actual notice.
(d) Subpoenas. Service of a subpoena may be made:
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(3) By delivery to an agent, which in the case of a corporation or
other association, is delivery to an officer, managing or general agent,
or to any other agent authorized by appointment or by law to receive
service and, if the agent is one authorized by statute to receive
service and the statute so requires, by also mailing a copy to the
party;
(4) By registered or certified mail addressed to the person's last
known address; or
(5) By any other method reasonably calculated to give actual notice.
(e) Area of service. Service in any state, territory, possession of
the United States, or the District of Columbia, on any person or company
doing business in any state, territory, possession of the United States,
or the District of Columbia, or on any person as otherwise provided by
law, is effective without regard to the place where the hearing is held,
provided that if service is made on a foreign bank in connection with an
action or proceeding involving one or more of its branches or agencies
located in any state, territory, possession of the United States, or the
District of Columbia, service shall be made on at least one branch or
agency so involved.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.12 Construction of time limits.
(a) General rule. In computing any period of time prescribed by this
subpart, the date of the act or event that commences the designated
period of time is not included. The last day so computed is included
unless it is a Saturday, Sunday, or Federal holiday. When the last day
is a Saturday, Sunday, or Federal holiday, the period runs until the end
of the next day that is not a Saturday, Sunday, or Federal holiday.
Intermediate Saturdays, Sundays, and Federal holidays are included in
the computation of time. However, when the time period within which an
act is to be performed is ten days or less, not including any additional
time allowed for in paragraph (c) of this section, intermediate
Saturdays, Sundays, and Federal holidays are not included.
(b) When papers are deemed to be filed or served. (1) Filing and
service are deemed to be effective:
(i) In the case of personal service or same day commercial courier
delivery, upon actual service;
(ii) In the case of overnight commercial delivery service, U.S.
Express mail delivery, or first class, registered, or certified mail,
upon deposit in or delivery to an appropriate point of collection; or
(iii) In the case of transmission by electronic media, as specified
by the authority receiving the filing, in the case of filing, and as
agreed among the parties, in the case of service.
(2) The effective filing and service dates specified in paragraph
(b)(1) of this section may be modified by the Director or administrative
law judge in the case of filing or by agreement of the parties in the
case of service.
(c) Calculation of time for service and filing of responsive papers.
Whenever a time limit is measured by a prescribed
[[Page 24]]
period from the service of any notice or paper, the applicable time
limits are calculated as follows:
(1) If service is made by first class, registered, or certified
mail, add three calendar days to the prescribed period;
(2) If service is made by express mail or overnight delivery
service, add one calendar day to the prescribed period; or
(3) If service is made by electronic media transmission, add one
calendar day to the prescribed period, unless otherwise determined by
the Director or the administrative law judge in the case of filing, or
by agreement among the parties in the case of service.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.13 Change of time limits.
Except as otherwise provided by law, the administrative law judge
may, for good cause shown, extend the time limits prescribed by the
Uniform Rules or any notice or order issued in the proceedings. After
the referral of the case to the Director pursuant to Sec. 509.38 of this
subpart, the Director may grant extensions of the time limits for good
cause shown. Extensions may be granted at the motion of a party or on
the Director's or the administrative law judge's own motion after notice
and opportunity to respond is afforded all non-moving parties.
Sec. 509.14 Witness fees and expenses.
Witnesses subpoenaed for testimony or deposition shall be paid the
same fees for attendance and mileage as are paid in the United States
district courts in proceedings in which the United States is a party,
provided that, in the case of a discovery subpoena addressed to a party,
no witness fees or mileage need be paid. Fees for witnesses shall be
tendered in advance by the party requesting the subpoena, except that
fees and mileage need not be tendered in advance where the Office is the
party requesting the subpoena. The Office shall not be required to pay
any fees to, or expenses of, any witness not subpoenaed by the Office.
Sec. 509.15 Opportunity for informal settlement.
Any respondent may, at any time in the proceeding, unilaterally
submit to Enforcement Counsel written offers or proposals for settlement
of a proceeding, without prejudice to the rights of any of the parties.
No such offer or proposal shall be made to any Office representative
other than Enforcement Counsel. Submission of a written settlement offer
does not provide a basis for adjourning or otherwise delaying all or any
portion of a proceeding under this part. No settlement offer or
proposal, or any subsequent negotiation or resolution, is admissible as
evidence in any proceeding.
Sec. 509.16 Office's right to conduct examination.
Nothing contained in this subpart limits in any manner the right of
the Office to conduct any examination, inspection, or visitation of any
institution or institution-affiliated party, or the right of the Office
to conduct or continue any form of investigation authorized by law.
Sec. 509.17 Collateral attacks on adjudicatory proceeding.
If an interlocutory appeal or collateral attack is brought in any
court concerning all or any part of an adjudicatory proceeding, the
challenged adjudicatory proceeding shall continue without regard to the
pendency of that court proceeding. No default or other failure to act as
directed in the adjudicatory proceeding within the times prescribed in
this subpart shall be excused based on the pendency before any court of
any interlocutory appeal or collateral attack.
Sec. 509.18 Commencement of proceeding and contents of notice.
(a) Commencement of proceeding. (1)(i) Except for change-in-control
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a
proceeding governed by this subpart is commenced by issuance of a notice
by the Director.
(ii) The notice must be served by the Director upon the respondent
and given to any other appropriate financial institution supervisory
authority where required by law.
[[Page 25]]
(iii) The notice must be filed with the OFIA.
(2) Change-in control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the
Director.
(b) Contents of notice. The notice must set forth:
(1) The legal authority for the proceeding and for the Office's
jurisdiction over the proceeding;
(2) A statement of the matters of fact or law showing that the
Office is entitled to relief;
(3) A proposed order or prayer for an order granting the requested
relief;
(4) The time, place, and nature of the hearing as required by law or
regulation;
(5) The time within which to file an answer as required by law or
regulation;
(6) The time within which to request a hearing as required by law or
regulation; and
(7) The answer and/or request for a hearing shall be filed with
OFIA.
Sec. 509.19 Answer.
(a) When. Within 20 days of service of the notice, respondent shall
file an answer as designated in the notice. In a civil money penalty
proceeding, respondent shall also file a request for a hearing within 20
days of service of the notice.
(b) Content of answer. An answer must specifically respond to each
paragraph or allegation of fact contained in the notice and must admit,
deny, or state that the party lacks sufficient information to admit or
deny each allegation of fact. A statement of lack of information has the
effect of a denial. Denials must fairly meet the substance of each
allegation of fact denied; general denials are not permitted. When a
respondent denies part of an allegation, that part must be denied and
the remainder specifically admitted. Any allegation of fact in the
notice which is not denied in the answer must be deemed admitted for
purposes of the proceeding. A respondent is not required to respond to
the portion of a notice that constitutes the prayer for relief or
proposed order. The answer must set forth affirmative defenses, if any,
asserted by the respondent.
(c) Default--(1) Effect of failure to answer. Failure of a
respondent to file an answer required by this section within the time
provided constitutes a waiver of his or her right to appear and contest
the allegations in the notice. If no timely answer is filed, Enforcement
Counsel may file a motion for entry of an order of default. Upon a
finding that no good cause has been shown for the failure to file a
timely answer, the administrative law judge shall file with the Director
a recommended decision containing the findings and the relief sought in
the notice. Any final order issued by the Director based upon a
respondent's failure to answer is deemed to be an order issued upon
consent.
(2) Effect of failure to request a hearing in civil money penalty
proceedings. If respondent fails to request a hearing as required by law
within the time provided, the notice of assessment constitutes a final
and unappealable order.
[56 FR 38306, Aug. 12, 1991, as amended at 65 FR 78901, Dec. 18, 2000]
Sec. 509.20 Amended pleadings.
(a) Amendments. The notice or answer may be amended or supplemented
at any stage of the proceeding. The respondent must answer an amended
notice within the time remaining for the respondent's answer to the
original notice, or within ten days after service of the amended notice,
whichever period is longer, unless the Director or administrative law
judge orders otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised in
the notice or answer are tried at the hearing by express or implied
consent of the parties, they will be treated in all respects as if they
had been raised in the notice or answer, and no formal amendments are
required. If evidence is objected to at the hearing on the ground that
it is not within the issues raised by the notice or answer, the
administrative law judge may admit the evidence when admission is likely
to assist in adjudicating the merits of the action and the objecting
party fails to satisfy the administrative law judge that the admission
of such evidence would unfairly prejudice that party's action or defense
upon the merits. The administrative law judge may grant a
[[Page 26]]
continuance to enable the objecting party to meet such evidence.
[61 FR 20354, May 6, 1996]
Sec. 509.21 Failure to appear.
Failure of a respondent to appear in person at the hearing or by a
duly authorized counsel constitutes a waiver of respondent's right to a
hearing and is deemed an admission of the facts as alleged and consent
to the relief sought in the notice. Without further proceedings or
notice to the respondent, the administrative law judge shall file with
the Director a recommended decision containing the findings and the
relief sought in the notice.
Sec. 509.22 Consolidation and severance of actions.
(a) Consolidation. (1) On the motion of any party, or on the
administrative law judge's own motion, the administrative law judge may
consolidate, for some or all purposes, any two or more proceedings, if
each such proceeding involves or arises out of the same transaction,
occurrence or series of transactions or occurrences, or involves at
least one common respondent or a material common question of law or
fact, unless such consolidation would cause unreasonable delay or
injustice.
(2) In the event of consolidation under paragraph (a)(1) of this
section, appropriate adjustment to the prehearing schedule must be made
to avoid unnecessary expense, inconvenience, or delay.
(b) Severance. The administrative law judge may, upon the motion of
any party, sever the proceeding for separate resolution of the matter as
to any respondent only if the administrative law judge finds that:
(1) Undue prejudice or injustice to the moving party would result
from not severing the proceeding; and
(2) Such undue prejudice or injustice would outweigh the interests
of judicial economy and expedition in the complete and final resolution
of the proceeding.
Sec. 509.23 Motions.
(a) In writing. (1) Except as otherwise provided herein, an
application or request for an order or ruling must be made by written
motion.
(2) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as
otherwise directed by the administrative law judge. Written memoranda,
briefs, affidavits or other relevant material or documents may be filed
in support of or in opposition to a motion.
(b) Oral motions. A motion may be made orally on the record unless
the administrative law judge directs that such motion be reduced to
writing.
(c) Filing of motions. Motions must be filed with the administrative
law judge, but upon the filing of the recommended decision, motions must
be filed with the Director.
(d) Responses. (1) Except as otherwise provided herein, within ten
days after service of any written motion, or within such other period of
time as may be established by the administrative law judge or the
Director, any party may file a written response to a motion. The
administrative law judge shall not rule on any oral or written motion
before each party has had an opportunity to file a response.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed a consent by that party to the entry
of an order substantially in the form of the order accompanying the
motion.
(e) Dilatory motions. Frivolous, dilatory or repetitive motions are
prohibited. The filing of such motions may form the basis for sanctions.
(f) Dispositive motions. Dispositive motions are governed by
Secs. 509.29 and 509.30 of this subpart.
Sec. 509.24 Scope of document discovery.
(a) Limits on discovery. (1) Subject to the limitations set out in
paragraphs (b), (c), and (d) of this section, a party to a proceeding
under this subpart may obtain document discovery by serving a written
request to produce documents. For purposes of a request to produce
documents, the term ``documents'' may be defined to include drawings,
graphs, charts, photographs, recordings, data stored in electronic form,
and other data compilations from which information can be obtained, or
[[Page 27]]
translated, if necessary, by the parties through detection devices into
reasonably usable form, as well as written material of all kinds.
(2) Discovery by use of deposition is governed by Sec. 509.102 of
this part.
(3) Discovery by use of interrogatories is not permitted.
(b) Relevance. A party may obtain document discovery regarding any
matter, not privileged, that has material relevance to the merits of the
pending action. Any request to produce documents that calls for
irrelevant material, 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, the time provided to respond in the request is inadequate,
or the request calls for copies of documents to be delivered to the
requesting party and fails to include the requestor's written agreement
to pay in advance for the copying, in accordance with Sec. 509.25 of
this subpart.
(c) Privileged matter. Privileged documents are not discoverable.
Privileges include the attorney-client privilege, work-product
privilege, any government's or government agency's deliberative-process
privilege, and any other privileges the Constitution, any applicable act
of Congress, or the principles of common law provide.
(d) Time limits. All discovery, including all responses to discovery
requests, shall be completed at least 20 days prior to the date
scheduled for the commencement of the hearing, except as provided in the
Local Rules. No exceptions to this time limit shall be permitted, unless
the administrative law judge finds on the record that good cause exists
for waiving the requirements of this paragraph.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.25 Request for document discovery from parties.
(a) General rule. Any party may serve on any other party a request
to produce for inspection any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. The request must identify the documents to be produced either by
individual item or by category, and must describe each item and category
with reasonable particularity. Documents must be produced as they are
kept in the usual course of business or must be organized to correspond
with the categories in the request.
(b) Production or copying. The request must specify a reasonable
time, place, and manner for production and performing any related acts.
In lieu of inspecting the documents, the requesting party may specify
that all or some of the responsive documents be copied and the copies
delivered to the requesting party. If copying of fewer than 250 pages is
requested, the party to whom the request is addressed shall bear the
cost of copying and shipping charges. If a party requests 250 pages or
more of copying, the requesting party shall pay for the copying and
shipping charges. Copying charges are the current per-page copying rate
imposed under 12 CFR 502.7 for requests under the Freedom of Information
Act (5 U.S.C. 552). The party to whom the request is addressed may
require payment in advance before producing the documents.
(c) Obligation to update responses. A party who has responded to a
discovery request with a response that was complete when made is not
required to supplement the response to include documents thereafter
acquired, unless the responding party learns that:
(1) The response was materially incorrect when made; or
(2) The response, though correct when made, is no longer true and a
failure to amend the response is, in substance, a knowing concealment.
(d) Motions to limit discovery. (1) Any party that objects to a
discovery request may, within ten days of being served with such
request, file a motion in accordance with the provisions of Sec. 509.23
of this subpart to revoke or otherwise limit the request. If an
objection is made to only a portion of an item or category in a request,
the portion objected to shall be specified. Any objections not made in
accordance with
[[Page 28]]
this paragraph and Sec. 509.23 of this subpart are waived.
(2) The party who served the request that is the subject of a motion
to revoke or limit may file a written response within five days of
service of the motion. No other party may file a response.
(e) Privilege. At the time other documents are produced, the
producing party must reasonably identify all documents withheld on the
grounds of privilege and must produce a statement of the basis for the
assertion of privilege. When similar documents that are protected by
deliberative process, attorney-work-product, or attorney-client
privilege are voluminous, these documents may be identified by category
instead of by individual document. The administrative law judge retains
discretion to determine when the identification by category is
insufficient.
(f) Motions to compel production. (1) If a party withholds any
documents as privileged or fails to comply fully with a discovery
request, the requesting party may, within ten days of the assertion of
privilege or of the time the failure to comply becomes known to the
requesting party, file a motion in accordance with the provisions of
Sec. 509.23 of this subpart for the issuance of a subpoena compelling
production.
(2) The party who asserted the privilege or failed to comply with
the request may file a written response to a motion to compel within
five days of service of the motion. No other party may file a response.
(g) Ruling on motions. After the time for filing responses pursuant
to this section has expired, the administrative law judge shall rule
promptly on all motions filed pursuant to this section. If the
administrative law judge determines that a discovery request, or any of
its terms, calls for irrelevant material, is unreasonable, oppressive,
excessive in scope, unduly burdensome, or repetitive of previous
requests, or seeks to obtain privileged documents, he or she may deny or
modify the request, and may issue appropriate protective orders, upon
such conditions as justice may require. The pendency of a motion to
strike or limit discovery or to compel production is not a basis for
staying or continuing the proceeding, unless otherwise ordered by the
administrative law judge. Notwithstanding any other provision in this
part, the administrative law judge may not release, or order a party to
produce, documents withheld on grounds of privilege if the party has
stated to the administrative law judge its intention to file a timely
motion for interlocutory review of the administrative law judge's order
to produce the documents, and until the motion for interlocutory review
has been decided.
(h) Enforcing discovery subpoenas. If the administrative law judge
issues a subpoena compelling production of documents by a party, the
subpoenaing party may, in the event of noncompliance and to the extent
authorized by applicable law, apply to any appropriate United States
district court for an order requiring compliance with the subpoena. A
party's right to seek court enforcement of a subpoena shall not in any
manner limit the sanctions that may be imposed by the administrative law
judge against a party who fails to produce subpoenaed documents.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20355, May 6, 1996]
Sec. 509.26 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the administrative law
judge for the issuance of a document discovery subpoena addressed to any
person who is not a party to the proceeding. The application must
contain a proposed document subpoena and a brief statement showing the
general relevance and reasonableness of the scope of documents sought.
The subpoenaing party shall specify a reasonable time, place, and manner
for making production in response to the document subpoena.
(2) A party shall only apply for a document subpoena under this
section within the time period during which such party could serve a
discovery request under Sec. 509.24(d) of this subpart. The party
obtaining the document subpoena is responsible for serving it on the
subpoenaed person and for serving copies on all parties. Document
subpoenas may be served in any state, territory, or possession of the
United
[[Page 29]]
States, the District of Columbia, or as otherwise provided by law.
(3) The administrative law judge shall promptly issue any document
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon such conditions as may be consistent with the Uniform Rules.
(b) Motion to quash or modify. (1) Any person to whom a document
subpoena is directed may file a motion to quash or modify such subpoena,
accompanied by a statement of the basis for quashing or modifying the
subpoena. The movant shall serve the motion on all parties, and any
party may respond to such motion within ten days of service of the
motion.
(2) Any motion to quash or modify a document subpoena must be filed
on the same basis, including the assertion of privilege, upon which a
party could object to a discovery request under Sec. 509.25(d) of this
subpart, and during the same time limits during which such an objection
could be filed.
(c) Enforcing document subpoenas. If a subpoenaed person fails to
comply with any subpoena issued pursuant to this section or any order of
the administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may, to the extent authorized by applicable law, apply
to an appropriate United States district court for an order requiring
compliance with so much of the document subpoena as the administrative
law judge has not quashed or modified. A party's right to seek court
enforcement of a document subpoena shall in no way limit the sanctions
that may be imposed by the administrative law judge on a party who
induces a failure to comply with subpoenas issued under this section.
Sec. 509.27 Deposition of witness unavailable for hearing.
(a) General rules. (1) If a witness will not be available for the
hearing, a party may apply in accordance with the procedures set forth
in paragraph (a)(2) of this section, to the administrative law judge for
the issuance of a subpoena, including a subpoena duces tecum, requiring
the attendance of the witness at a deposition. The administrative law
judge may issue a deposition subpoena under this section upon showing
that:
(i) The witness will be unable to attend or may be prevented from
attending the hearing because of age, sickness or infirmity, or will
otherwise be unavailable;
(ii) The witness' unavailability was not procured or caused by the
subpoenaing party;
(iii) The testimony is reasonably expected to be material; and
(iv) Taking the deposition will not result in any undue burden to
any other party and will not cause undue delay of the proceeding.
(2) The application must contain a proposed deposition subpoena and
a brief statement of the reasons for the issuance of the subpoena. The
subpoena must name the witness whose deposition is to be taken and
specify the time and place for taking the deposition. A deposition
subpoena may require the witness to be deposed at any place within the
country in which that witness resides or has a regular place of
employment or such other convenient place as the administrative law
judge shall fix.
(3) Any requested subpoena that sets forth a valid basis for its
issuance must be promptly issued, unless the administrative law judge on
his or her own motion, requires a written response or requires
attendance at a conference concerning whether the requested subpoena
should be issued.
(4) The party obtaining a deposition subpoena is responsible for
serving it on the witness and for serving copies on all parties. Unless
the administrative law judge orders otherwise, no deposition under this
section shall be taken on fewer than ten days' notice to the witness and
all parties. Deposition subpoenas may be served in any state, territory,
possession of the United States, or the District of Columbia, on any
person or company doing business in any state, territory, possession of
[[Page 30]]
the United States, or the District of Columbia, or as otherwise
permitted by law.
(b) Objections to deposition subpoenas. (1) The witness and any
party who has not had an opportunity to oppose a deposition subpoena
issued under this section may file a motion with the administrative law
judge to quash or modify the subpoena prior to the time for compliance
specified in the subpoena, but not more than ten days after service of
the subpoena.
(2) A statement of the basis for the motion to quash or modify a
subpoena issued under this section must accompany the motion. The motion
must be served on all parties.
(c) Procedure upon deposition. (1) Each witness testifying pursuant
to a deposition subpoena must be duly sworn, and each party shall have
the right to examine the witness. Objections to questions or documents
must be in short form, stating the grounds for the objection. Failure to
object to questions or documents is not deemed a waiver except where the
ground for the objection might have been avoided if the objection had
been timely presented. All questions, answers, and objections must be
recorded.
(2) Any party may move before the administrative law judge for an
order compelling the witness to answer any questions the witness has
refused to answer or submit any evidence the witness has refused to
submit during the deposition.
(3) The deposition must be subscribed by the witness, unless the
parties and the witness, by stipulation, have waived the signing, or the
witness is ill, cannot be found, or has refused to sign. If the
deposition is not subscribed by the witness, the court reporter taking
the deposition shall certify that the transcript is a true and complete
transcript of the deposition.
(d) Enforcing subpoenas. If a subpoenaed person fails to comply with
any order of the administrative law judge which directs compliance with
all or any portion of a deposition subpoena under paragraph (b) or
(c)(2) of this section, the subpoenaing party or other aggrieved party
may, to the extent authorized by applicable law, apply to an appropriate
United States district court for an order requiring compliance with the
portions of the subpoena that the administrative law judge has ordered
enforced. A party's right to seek court enforcement of a deposition
subpoena in no way limits the sanctions that may be imposed by the
administrative law judge on a party who fails to comply with or procures
a failure to comply with, a subpoena issued under this section.
Sec. 509.28 Interlocutory review.
(a) General rule. The Director may review a ruling of the
administrative law judge prior to the certification of the record to the
Director only in accordance with the procedures set forth in this
section and Sec. 509.23 of this subpart.
(b) Scope of review. The Director may exercise interlocutory review
of a ruling of the administrative law judge if the Director finds that:
(1) The ruling involves a controlling question of law or policy as
to which substantial grounds exist for a difference of opinion;
(2) Immediate review of the ruling may materially advance the
ultimate termination of the proceeding;
(3) Subsequent modification of the ruling at the conclusion of the
proceeding would be an inadequate remedy; or
(4) Subsequent modification of the ruling would cause unusual delay
or expense.
(c) Procedure. Any request for interlocutory review shall be filed
by a party with the administrative law judge within ten days of his or
her ruling and shall otherwise comply with Sec. 509.23 of this subpart.
Any party may file a response to a request for interlocutory review in
accordance with Sec. 509.23(d) of this subpart. Upon the expiration of
the time for filing all responses, the administrative law judge shall
refer the matter to the Director for final disposition.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Director under this
section suspends or stays the proceeding unless otherwise ordered by the
administrative law judge or the Director.
[[Page 31]]
Sec. 509.29 Summary disposition.
(a) In general. The administrative law judge shall recommend that
the Director issue a final order granting a motion for summary
disposition if the undisputed pleaded facts, admissions, affidavits,
stipulations, documentary evidence, matters as to which official notice
may be taken, and any other evidentiary materials properly submitted in
connection with a motion for summary disposition show that:
(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) Biling of motions and responses. (1) Any party who believes that
there is no genuine issue of material fact to be determined and that he
or she is entitled to a decision as a matter of law may move at any time
for summary disposition in its favor of all or any part of the
proceeding. Any party, within 20 days after service of such a motion, or
within such time period as allowed by the administrative law judge, may
file a response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, investigatory depositions, transcripts,
affidavits and any other evidentiary materials that the moving party
contends support his or her position. The motion must also be
accompanied by a brief containing the points and authorities in support
of the contention of the moving party. Any party opposing a motion for
summary disposition must file a statement setting forth those material
facts as to which he or she contends a genuine dispute exists. Such
opposition must be supported by evidence of the same type as that
submitted with the motion for summary disposition and a brief containing
the points and authorities in support of the contention that summary
disposition would be inappropriate.
(c) Hearing on motion. At the request of any party or on his or her
own motion, the administrative law judge may hear oral argument on the
motion for summary disposition.
(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the administrative law judge
shall determine whether the moving party is entitled to summary
disposition. If the administrative law judge determines that summary
disposition is warranted, the administrative law judge shall submit a
recommended decision to that effect to the Director. If the
administrative law judge finds that no party is entitled to summary
disposition, he or she shall make a ruling denying the motion.
Sec. 509.30 Partial summary disposition.
If the administrative law judge determines that a party is entitled
to summary disposition as to certain claims only, he or she shall defer
submitting a recommended decision as to those claims. A hearing on the
remaining issues must be ordered. Those claims for which the
administrative law judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 509.31 Scheduling and prehearing conferences.
(a) Scheduling conference. Within 30 days of service of the notice
or order commencing a proceeding or such other time as parties may
agree, the administrative law judge shall direct counsel for all parties
to meet with him or her in person at a specified time and place prior to
the hearing or to confer by telephone for the purpose of scheduling the
course and conduct of the proceeding. This meeting or telephone
conference is called a ``scheduling conference.'' The identification of
potential witnesses, the time for and manner of discovery, and the
exchange of any prehearing materials including witness lists, statements
of issues, stipulations, exhibits and any other materials may also be
determined at the scheduling conference.
(b) Prehearing conferences. The administrative law judge may, in
addition to the scheduling conference, on his or her own motion or at
the request of
[[Page 32]]
any party, direct counsel for the parties to meet with him or her (in
person or by telephone) at a prehearing conference to address any or all
of the following:
(1) Simplification and clarification of the issues;
(2) Stipulations, admissions of fact, and the contents, authenticity
and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes;
(7) Amendments to pleadings; and
(8) Such other matters as may aid in the orderly disposition of the
proceeding.
(c) Transcript. The administrative law judge, in his or her
discretion, may require that a scheduling or prehearing conference be
recorded by a court reporter. A transcript of the conference and any
materials filed, including orders, becomes part of the record of the
proceeding. A party may obtain a copy of the transcript at its expense.
(d) Scheduling or prehearing orders. At or within a reasonable time
following the conclusion of the scheduling conference or any prehearing
conference, the administrative law judge shall serve on each party an
order setting forth any agreements reached and any procedural
determinations made.
[56 FR 38306, Aug. 12, 1991, as amended at 65 FR 78901, Dec. 18, 2000]
Sec. 509.32 Prehearing submissions.
(a) Within the time set by the administrative law judge, but in no
case later than 14 days before the start of the hearing, each party
shall serve on every other party, his or her:
(1) Prehearing statement;
(2) Final list of witnesses to be called to testify at the hearing,
including name and address of each witness and a short summary of the
expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with
a copy of each exhibit; and
(4) Stipulations of fact, if any.
(b) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the prehearing submissions pursuant to paragraph (a) of
this section, except for good cause shown.
Sec. 509.33 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the Director, in the Director's discretion, determines that holding an
open hearing would be contrary to the public interest. Within 20 days of
service of the notice or, in the case of change-in-control proceedings
under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 days
from service of the hearing order, any respondent may file with the
Director a request for a private hearing, and any party may file a reply
to such a request. A party must serve on the administrative law judge a
copy of any request or reply the party files with the Director. The form
of, and procedure for, these requests and replies are governed by
Sec. 509.23 of this subpart. A party's failure to file a request or a
reply constitutes a waiver of any objections regarding whether the
hearing will be public or private.
(b) Filing document under seal. Enforcement Counsel, in his or her
discretion, may file any document or part of a document under seal if
disclosure of the document would be contrary to the public interest. The
administrative law judge shall take all appropriate steps to preserve
the confidentiality of such documents or parts thereof, including
closing portions of the hearing to the public.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20355, May 6, 1996]
Sec. 509.34 Hearing subpoenas.
(a) Issuance. (1) Upon application of a party showing general
relevance and reasonableness of scope of the testimony or other evidence
sought, the administrative law judge may issue a subpoena or a subpoena
duces tecum requiring the attendance of a witness at the hearing or the
production of documentary or physical evidence at the hearing. The
application for a hearing subpoena must also contain a proposed subpoena
specifying the attendance of
[[Page 33]]
a witness or the production of evidence from any state, territory, or
possession of the United States, the District of Columbia, or as
otherwise provided by law at any designated place where the hearing is
being conducted. The party making the application shall serve a copy of
the application and the proposed subpoena on every other party.
(2) A party may apply for a hearing subpoena at any time before the
commencement of a hearing. During a hearing, a party may make an
application for a subpoena orally on the record before the
administrative law judge.
(3) The administrative law judge shall promptly issue any hearing
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon any conditions consistent with this subpart. Upon issuance by
the administrative law judge, the party making the application shall
serve the subpoena on the person named in the subpoena and on each
party.
(b) Motion to quash or modify. (1) Any person to whom a hearing
subpoena is directed or any party may file a motion to quash or modify
the subpoena, accompanied by a statement of the basis for quashing or
modifying the subpoena. The movant must serve the motion on each party
and on the person named in the subpoena. Any party may respond to the
motion within ten days of service of the motion.
(2) Any motion to quash or modify a hearing subpoena must be filed
prior to the time specified in the subpoena for compliance, but not more
than ten days after the date of service of the subpoena upon the movant.
(c) Enforcing subpoenas. If a subpoenaed person fails to comply with
any subpoena issued pursuant to this section or any order of the
administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may seek enforcement of the subpoena pursuant to section
Sec. 509.26(c) of this subpart.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20355, May 6, 1996]
Sec. 509.35 Conduct of hearings.
(a) General rules. (1) Hearings shall be conducted so as to provide
a fair and expeditious presentation of the relevant disputed issues.
Each party has the right to present its case or defense by oral and
documentary evidence and to conduct such cross examination as may be
required for full disclosure of the facts.
(2) Order of hearing. Enforcement Counsel shall present its case-in-
chief first, unless otherwise ordered by the administrative law judge,
or unless otherwise expressly specified by law or regulation.
Enforcement Counsel shall be the first party to present an opening
statement and a closing statement, and may make a rebuttal statement
after the respondent's closing statement. If there are multiple
respondents, respondents may agree among themselves as to their order of
presentation of their cases, but if they do not agree the administrative
law judge shall fix the order.
(3) Examination of witnesses. Only one counsel for each party may
conduct an examination of a witness, except that in the case of
extensive direct examination, the administrative law judge may permit
more than one counsel for the party presenting the witness to conduct
the examination. A party may have one counsel conduct the direct
examination and another counsel conduct re-direct examination of a
witness, or may have one counsel conduct the cross examination of a
witness and another counsel conduct the re-cross examination of a
witness.
(4) Stipulations. Unless the administrative law judge directs
otherwise, all stipulations of fact and law previously agreed upon by
the parties, and all documents, the admissibility of which have been
previously stipulated, will be admitted into evidence upon commencement
of the hearing.
(b) Transcript. The hearing must be recorded and transcribed. The
reporter will make the transcript available to any party upon payment by
that party
[[Page 34]]
to the reporter of the cost of the transcript. The administrative law
judge may order the record corrected, either upon motion to correct,
upon stipulation of the parties, or following notice to the parties upon
the administrative law judge's own motion.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20356, May 6, 1996]
Sec. 509.36 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material, and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the APA and
other applicable law.
(2) Evidence that would be admissible under the Federal Rules of
Evidence is admissible in a proceeding conducted pursuant to this
subpart.
(3) Evidence that would be inadmissible under the Federal Rules of
Evidence may not deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant,
material, reliable and not unduly repetitive.
(b) Official notice. (1) Official notice may be taken of any
material fact which may be judicially noticed by a United States
district court and any material information in the official public
records of any Federal or state government agency.
(2) All matters officially noticed by the administrative law judge
or Director shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Documents. (1) A duplicate copy of a document is admissible to
the same extent as the original, unless a genuine issue is raised as to
whether the copy is in some material respect not a true and legible copy
of the original.
(2) Subject to the requirements of paragraph (a) of this section,
any document, including a report of examination, supervisory activity,
inspection or visitation, prepared by the appropriate Office or state
regulatory agency, is admissible either with or without a sponsoring
witness.
(3) Witnesses may use existing or newly created charts, exhibits,
calendars, calculations, outlines or other graphic material to
summarize, illustrate, or simplify the presentation of testimony. Such
materials may, subject to the administrative law judge's discretion, be
used with or without being admitted into evidence.
(d) Objections. (1) Objections to the admissibility of evidence must
be timely made and rulings on all objections must appear on the record.
(2) When an objection to a question or line of questioning
propounded to a witness is sustained, the examining counsel may make a
specific proffer on the record of what he or she expected to prove by
the expected testimony of the witness, either by representation of
counsel or by direct interrogation of the witness.
(3) The administrative law judge shall retain rejected exhibits,
adequately marked for identification, for the record, and transmit such
exhibits to the Director.
(4) Failure to object to admission of evidence or to any ruling
constitutes a waiver of the objection.
(e) Stipulations. The parties may stipulate as to any relevant
matters of fact or the authentication of any relevant documents. Such
stipulations must be received in evidence at a hearing, and are binding
on the parties with respect to the matters therein stipulated.
(f) Depositions of unavailable witnesses. (1) If a witness is
unavailable to testify at a hearing, and that witness has testified in a
deposition to which all parties in a proceeding had notice and an
opportunity to participate, a party may offer as evidence all or any
part of the transcript of the deposition, including deposition exhibits,
if any.
(2) Such deposition transcript is admissible to the same extent that
testimony would have been admissible had that person testified at the
hearing, provided that if a witness refused to answer proper questions
during the depositions, the administrative law judge may, on that basis,
limit the admissibility of the deposition in any manner that justice
requires.
(3) Only those portions of a deposition received in evidence at the
hearing constitute a part of the record.
[[Page 35]]
Sec. 509.37 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the administrative law
judge shall serve notice upon each party, that the certified transcript,
together with all hearing exhibits and exhibits introduced but not
admitted into evidence at the hearing, has been filed. Any party may
file with the administrative law judge proposed findings of fact,
proposed conclusions of law, and a proposed order within 30 days
following service of this notice by the administrative law judge or
within such longer period as may be ordered by the administrative law
judge.
(2) Proposed findings and conclusions must be supported by citation
to any relevant authorities and by page references to any relevant
portions of the record. A post-hearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document. Any party who fails to file timely with the
administrative law judge any proposed finding or conclusion is deemed to
have waived the right to raise in any subsequent filing or submission
any issue not addressed in such party's proposed finding or conclusion.
(b) Reply briefs. Reply briefs may be filed within 15 days after the
date on which the parties' proposed findings, conclusions, and order are
due. Reply briefs must be strictly limited to responding to new matters,
issues, or arguments raised in another party's papers. A party who has
not filed proposed findings of fact and conclusions of law or a post-
hearing brief may not file a reply brief.
(c) Simultaneous filing required. The administrative law judge shall
not order the filing by any party of any brief or reply brief in advance
of the other party's filing of its brief.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20356, May 6, 1996]
Sec. 509.38 Recommended decision and filing of record.
(a) Filing of recommended decision and record. Within 45 days after
expiration of the time allowed for filing reply briefs under
Sec. 509.37(b) of this subpart, the administrative law judge shall file
with and certify to the Director, for decision, the record of the
proceeding. The record must include the administrative law judge's
recommended decision, recommended findings of fact, recommended
conclusions of law, and proposed order; all prehearing and hearing
transcripts, exhibits, and rulings; and the motions, briefs, memoranda,
and other supporting papers filed in connection with the hearing. The
administrative law judge shall serve upon each party the recommended
decision, findings, conclusions, and proposed order.
(b) Filing of index. At the same time the administrative law judge
files with and certifies to the Director for final determination the
record of the proceeding, the administrative law judge shall furnish to
the Director a certified index of the entire record of the proceeding.
The certified index shall include, at a minimum, an entry for each
paper, document or motion filed with the administrative law judge in the
proceeding, the date of the filing, and the identity of the filer. The
certified index shall also include an exhibit index containing, at a
minimum, an entry consisting of exhibit number and title or description
for: Each exhibit introduced and admitted into evidence at the hearing;
each exhibit introduced but not admitted into evidence at the hearing;
each exhibit introduced and admitted into evidence after the completion
of the hearing; and each exhibit introduced but not admitted into
evidence after the completion of the hearing.
[61 FR 20356, May 6, 1996]
Sec. 509.39 Exceptions to recommended decision.
(a) Filing exceptions. Within 30 days after service of the
recommended decision, findings, conclusions, and proposed order under
Sec. 509.38 of this subpart, a party may file with the Director written
exceptions to the administrative law judge's recommended decision,
findings, conclusions or proposed order, to the admission or exclusion
of evidence, or to the failure of the administrative law judge to make a
ruling proposed by a party. A supporting
[[Page 36]]
brief may be filed at the time the exceptions are filed, either as part
of the same document or in a separate document.
(b) Effect of failure to file or raise exceptions. (1) Failure of a
party to file exceptions to those matters specified in paragraph (a) of
this section within the time prescribed is deemed a waiver of objection
thereto.
(2) No exception need be considered by the Director if the party
taking exception had an opportunity to raise the same objection, issue,
or argument before the administrative law judge and failed to do so.
(c) Contents. (1) All exceptions and briefs in support of such
exceptions must be confined to the particular matters in, or omissions
from, the administrative law judge's recommendations to which that party
takes exception.
(2) All exceptions and briefs in support of exceptions must set
forth page or paragraph references to the specific parts of the
administrative law judge's recommendations to which exception is taken,
the page or paragraph references to those portions of the record relied
upon to support each exception, and the legal authority relied upon to
support each exception.
Sec. 509.40 Review by the Director.
(a) Notice of submission to the Director. When the Director
determines that the record in the proceeding is complete, the Director
shall serve notice upon the parties that the proceeding has been
submitted to the Director for final decision.
(b) Oral argument before the Director. Upon the initiative of the
Director or on the written request of any party filed with the Director
within the time for filing exceptions, the Director may order and hear
oral argument on the recommended findings, conclusions, decision, and
order of the administrative law judge. A written request by a party must
show good cause for oral argument and state reasons why arguments cannot
be presented adequately in writing. A denial of a request for oral
argument may be set forth in the Director's final decision. Oral
argument before the Director must be on the record.
(c) Director's final decision. (1) Decisional employees may advise
and assist the Director in the consideration and disposition of the
case. The final decision of the Director will be based upon review of
the entire record of the proceeding, except that the director may limit
the issues to be reviewed to those findings and conclusions to which
opposing arguments or exceptions have been filed by the parties.
(2) The Director shall render a final decision within 90 days after
notification of the parties that the case has been submitted for final
decision, or 90 days after oral argument, whichever is later, unless the
Director orders that the action or any aspect thereof be remanded to the
administrative law judge for further proceedings. Copies of the final
decision and order of the Director shall be served upon each party to
the proceeding, upon other persons required by statute, and, if directed
by the Director or required by statute, upon any appropriate state or
Federal supervisory authority.
Sec. 509.41 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision and order of the Office may not, unless specifically ordered by
the Director or a reviewing court, operate as a stay of any order issued
by the Director. The Director may, in its discretion, and on such terms
as it finds just, stay the effectiveness of all or any part of its order
pending a final decision on a petition for review of the order.
Subpart B--Local Rules
Sec. 509.100 Scope.
The rules and procedures in this subpart B shall apply to those
proceedings covered by subpart A of this part. In addition, subpart A of
this part and this subpart shall apply to adjudicatory proceedings for
which hearings on the record are provided for by the following statutory
provisions:
(a) Proceedings under section 10(a)(2)(D) of the HOLA (12 U.S.C.
1467a(a)(2)(D)) to determine whether any person directly or indirectly
exercises a controlling influence over the management or policies of a
savings association or any other company;
[[Page 37]]
(b) Proceedings under section 10(g)(5)(A) of the HOLA (12 U.S.C.
1467a(g)(5)(A)) to determine whether to terminate certain activities by
savings and loan holding companies or to terminate ownership or control
of a non-insured savings and loan holding company subsidiary; and
(c) Proceedings under section 15(c)(4) of the Securities and
Exchange Act of 1934 (15 U.S.C. 78o(c)(4)) (Exchange Act) to determine
whether any association or person subject to the jurisdiction of the
Office pursuant to section 12(i) of the Exchange Act (15 U.S.C. 78l(i))
has failed to comply with the provisions of sections 12, 13, 14(a),
14(c), 14(d) or 14(f) of the Exchange Act.
Sec. 509.101 Appointment of Office of Financial Institution Adjudication.
Unless otherwise directed by the Office, all hearings under subpart
A of this part and this subpart shall be conducted by administrative law
judges under the direction of the Office of Financial Institution
Adjudication, 1700 G Street NW., Washington, DC 20552.
Sec. 509.102 Discovery.
(a) In general. A party may take the deposition of an expert, or of
a person, including another party, who has direct knowledge of matters
that are non-privileged, relevant and material to the proceeding and
where there is a need for the deposition. The deposition of experts
shall be limited to those experts who are expected to testify at the
hearing.
(b) Notice. A party desiring to take a deposition shall give
reasonable notice in writing to the deponent and to every other party to
the proceeding. The notice must state the time and place for taking the
deposition and the name and address of the person to be deposed.
(c) Time limits. A party may take depositions at any time after the
commencement of the proceeding, but no later than ten days before the
scheduled hearing date, except with permission of the administrative law
judge for good cause shown.
(d) Conduct of the deposition. The witness must be duly sworn, and
each party shall have the right to examine the witness with respect to
all non-privileged, relevant and material matters of which the witness
has factual, direct and personal knowledge. Objections to questions or
exhibits shall be in short form, stating the grounds for objection.
Failure to object to questions or exhibits is not a waiver except where
the grounds for the objection might have been avoided if the objection
had been timely presented. The court reporter shall transcribe or
otherwise record the witness's testimony, as agreed among the parties.
(e) Protective orders. At any time after notice of a deposition has
been given, a party may file a motion for the issuance of a protective
order. Such protective order may prohibit, terminate, or limit the scope
or manner of the taking of a deposition. The administrative law judge
shall grant such protective order upon a showing of sufficient grounds,
including that the deposition:
(1) Is unreasonable, oppressive, excessive in scope, or unduly
burdensome;
(2) Involves privileged, investigative, trial preparation,
irrelevant or immaterial matters; or
(3) Is being conducted in bad faith or in such manner as to
unreasonably annoy, embarrass, or oppress the deponent.
(f) Fees. Deposition witnesses, including expert witnesses, shall be
paid the same expenses in the same manner as are paid witnesses in the
district courts of the United States in proceedings in which the United
States Government is a party. Expenses in accordance with this paragraph
shall be paid by the party seeking to take the deposition.
(g) Deposition subpoenas--(1) Issuance. At the request of a party,
the administrative law judge shall issue a subpoena requiring the
attendance of a witness at a deposition. The attendance of a witness may
be required from any place in any state or territory that is subject to
the jurisdiction of the United States or as otherwise permitted by law.
(2) Service. The party requesting the subpoena must serve it on the
person named therein or upon that person's counsel, by any of the
methods identified in Sec. 509.11(d) of this part. The party serving the
subpoena must file proof of
[[Page 38]]
service with the administrative law judge.
(3) Motion to quash. A person named in the subpoena or a party may
file a motion to quash or modify the subpoena. A statement of the
reasons for the motion must accompany it and a copy of the motion must
be served on the party that requested the subpoena. The motion must be
made prior to the time for compliance specified in the subpoena and not
more than ten days after the date of service of the subpoena, or if the
subpoena is served within 15 days of the hearing, within five days after
the date of service.
(4) Enforcement of deposition subpoena. Enforcement of a deposition
subpoena shall be in accordance with the procedures of Sec. 509.27(d) of
this part.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20356, May 6, 1996]
Sec. 509.103 Civil money penalties.
(a) Assessment. In the event of consent, or if upon the record
developed at the hearing the Office finds that any of the grounds
specified in the notice issued pursuant to Sec. 509.18 of this part have
been established, the Office may serve an order of assessment of civil
money penalty upon the party concerned. The assessment order shall be
effective immediately upon service or upon such other date as may be
specified therein and shall remain effective and enforceable until it is
stayed, modified, terminated, or set aside by the Office or by a
reviewing court.
(b) Payment. (1) Civil penalties assessed pursuant to subpart A of
this part and this subpart B are payable and to be collected within 60
days after the issuance of the notice of assessment, unless the Office
fixes a different time for payment where it determines that the purpose
of the civil money penalty would be better served thereby; however, if a
party has made a timely request for a hearing to challenge the
assessment of the penalty, the party may not be required to pay such
penalty until the Office has issued a final order of assessment
following the hearing. In such instances, the penalty shall be paid
within 60 days of service of such order unless the Office fixes a
different time for payment. Notwithstanding the foregoing, the Office
may seek to attach the party's assets or to have a receiver appointed to
secure payment of the potential civil money penalty or other obligation
in advance of the hearing in accordance with section 8(i)(4) of the FDIA
(12 U.S.C. 1818(i)(4)).
(2) Checks in payment of civil penalties shall be made payable to
the Treasurer of the United States and sent to the Controller's Division
of the Office. Upon receipt, the Office shall forward the check to the
Treasury of the United States.
(c) Inflation adjustment. Under the Federal Civil Monetary Penalties
Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note), OTS must adjust
for inflation the civil monetary penalties in statutes that it
administers. The following chart displays the adjusted civil money
penalties. The amounts in this chart apply to violations that occur
after October 17, 2000:
------------------------------------------------------------------------
New maximum
U.S. Code citation CMP description amount
------------------------------------------------------------------------
12 U.S.C. 1464(v)(4)............... Reports of $2,200
Condition--1st
Tier.
12 U.S.C. 1464(v)(5)............... Reports of 22,000
Condition--2nd
Tier.
12 U.S.C. 1464(v)(6)............... Reports of 1,175,000
Condition--3rd
Tier.
12 U.S.C. 1467(d).................. Refusal to 5,500
Cooperate in Exam.
12 U.S.C. 1467a(i)(2).............. Holding Company 27,500
Act Violation.
12 U.S.C. 1467a(i)(3).............. Holding Company 27,500
Act Violation.
12 U.S.C. 1467a(r)(1).............. Late/Inaccurate 2,200
Reports--1st Tier.
12 U.S.C. 1467a(r)(2).............. Late/Inaccurate 22,000
Reports--2nd Tier.
12 U.S.C. 1467a(r)(3).............. Late/Inaccurate 1,175,000
Reports--3rd Tier.
12 U.S.C. 1817(j)(16)(A)........... Change in Control-- 5,500
1st Tier.
12 U.S.C. 1817(j)(16)(B)........... Change in Control-- 27,500
2nd Tier.
12 U.S.C. 1817(j)(16)(C)........... Change in Control-- 1,175,000
3rd Tier.
12 U.S.C. 1818(i)(2)(A)............ Violation of Law 5,500
or Unsafe or
Unsound Practice--
1st Tier.
12 U.S.C. 1818(i)(2)(B)............ Violation of Law 27,500
or Unsafe or
Unsound Practice--
2nd Tier.
12 U.S.C. 1818(i)(2)(C)............ Violation of Law 1,175,000
or Unsafe or
Unsound Practice--
3rd Tier.
12 U.S.C. 1884..................... Violation of 110
Security Rules.
12 U.S.C. 3349(b).................. Appraisals 5,500
Violation--1st
Tier.
12 U.S.C. 3349(b).................. Appraisals 27,500
Violation--2nd
Tier.
12 U.S.C. 3349(b).................. Appraisals 1,175,000
Violation--3rd
Tier.
[[Page 39]]
42 U.S.C. 4012a(f)................. Flood Insurance... 350/115,000
------------------------------------------------------------------------
[56 FR 38306, Aug. 12, 1991, as amended at 65 FR 61262, Oct. 17, 2000]
Sec. 509.104 Additional procedures.
(a) Replies to exceptions. Replies to written exceptions to the
administrative law judge's recommended decision, findings, conclusions
or proposed order pursuant to Sec. 509.39 of this part shall be filed
within 10 days of the date such written exceptions were required to be
filed.
(b) Motions. All motions shall be filed with the administrative law
judge and an additional copy shall be filed with the Secretary to the
Office, who receives adjudicatory filings, (``Secretary''); provided,
however, that once the administrative law judge has certified the record
to the Director pursuant to Sec. 509.38 of this part, all motions must
be filed with the Director, to the attention of the Secretary, within
the 10 day period following the filing of exceptions allowed for the
filing of replies to exceptions. Responses to such motions filed in a
timely manner with the Director, other than motions for oral argument
before the Director, shall be allowed pursuant to the procedures at
Sec. 509.23(d) of this part. No response is required for the Director to
make a determination on a motion for oral argument.
(c) Authority of administrative law judge. In addition to the powers
listed in Sec. 509.5 of this part, the administrative law judge shall
have the authority to deny any dispositive motion and shall follow the
procedures set forth for motions for summary disposition at Sec. 509.29
of this part and partial summary disposition at Sec. 509.30 of this part
in making determinations on such motions.
(d) Notification of submission of proceeding to the Director. Upon
the expiration of the time for filing any exceptions, any replies to
such exceptions or any motions and any ruling thereon, and after receipt
of certified record, the Office shall notify the parties within ten days
of the submission of the proceeding to the Director for final
determination.
(e) Extensions of time for final determination. The Director may,
sua sponte, extend the time for final determination by signing an order
of extension of time within the 90 day time period and notifying the
parties of such extension thereafter.
(f) Service upon the Office. Service of any document upon the Office
shall be made by filing with the Secretary, in addition to the
individuals and/or offices designated by the Office in its Notice issued
pursuant to Sec. 509.18 of this part, or such other means reasonably
suited to provide notice of the person and/or office designated to
receive filings.
(g) Filings with the Director. An additional copy of all materials
required or permitted to be filed with or referred to the administrative
law judge pursuant to subpart A and B of this part shall be filed with
the Secretary. This rule shall not apply to the transcript of testimony
and exhibits adduced at the hearing or to proposed exhibits submitted in
advance of the hearing pursuant to an order of the administrative law
judge under Sec. 509.32 of this part. Materials required or permitted to
be filed with or referred to the Director pursuant to subparts A and B
of this part shall be filed with the Director, to the attention of the
Secretary.
(h) Presence of cameras and other recording devices. The use of
cameras and other recording devices, other than those used by the court
reporter, shall be prohibited and excluded from the proceedings.
[56 FR 38306, Aug. 12, 1991, as amended at 58 FR 4311, Jan. 14, 1993; 61
FR 20356, May 6, 1996]
PART 510--MISCELLANEOUS ORGANIZATIONAL REGULATIONS--Table of Contents
Sec.
510.2 Provisions related to regulations of the Office.
510.4 Service of process.
[[Page 40]]
510.5 Release of unpublished OTS information.
Authority: 12 U.S.C. 1462a, 1463, 1464; Pub. L. 101-410, 104 Stat.
890; Pub. L. 104-134, 110 Stat. 1321-358.
Source: 54 FR 49456, Nov. 30, 1989, unless otherwise noted.
Sec. 510.2 Provisions related to regulations of the Office.
(a) Amendments. The Office expressly reserves the right to amend
(including the right to alter or repeal) the regulations set forth in
this chapter.
(b) Waiver or relaxation of regulatory provisions with respect to
disaster or emergency areas. Whenever the President of the United States
determines that a major disaster or emergency exists, or declares an
area a major disaster or emergency area, the Office may, to the extent
not inconsistent with law, by resolution waive or relax any limitations
pertaining to the operations of Federal savings associations and savings
associations in any area or areas affected by such disaster or emergency
so declared.
(c) Bar on participation in notice and comment rulemaking by
suspended or disbarred persons. No person who has been suspended or
debarred from practice before the Office in accordance with the
provisions of part 513 of this chapter may submit to the Office, either
directly or on behalf of an interested party, any written documents or
petitions otherwise permitted by the Administrative Procedures Act.
[54 FR 49456, Nov. 30, 1989, as amended at 60 FR 66716, Dec. 26, 1995]
Sec. 510.4 Service of process.
(a) Service of Process. Service of process may be made upon the
Office by delivering a copy of the summons and complaint to the U.S.
Attorney for the district in which the action is brought or to an
assistant U.S. Attorney or clerical employee designated by the U.S.
Attorney in a writing filed with the clerk of the court, and by sending
copies of the summons and of the complaint by registered or certified
mail to the Attorney General of the United States,Washington, DC, and to
the Secretary of the Office.
(b) Subpoenas. Any subpoena to obtain information maintained by
Office shall be duly issued and served upon the Secretary of the Office
of Thrift Supervision, 1700 G Street, NW., Washington, DC, 20552.
Sec. 510.5 Release of unpublished OTS information.
(a) Scope. (1) This section applies to requests by the public for
unpublished OTS information, such as requests for records or testimony
from parties to lawsuits in which the OTS is not a party.
(2) Unpublished OTS information includes records created or obtained
in connection with the OTS's performance of its responsibilities, such
as records concerning supervision, regulation, and examination of
savings associations, their holding companies, and affiliates, and
records compiled in connection with the OTS's enforcement
responsibilities. Unpublished OTS information also includes information
that current and former employees, officers, and agents obtained in
their official capacities. Examples of unpublished information include:
(i) Information in the memory of a current or former employee,
officer, or agent of the OTS (or the Federal Home Loan Bank Board, the
predecessor agency of the OTS), by testimony or informal interview, that
was acquired in the course of performing official duties or because of
the employee's, officer's or agent's official status;
(ii) Reports of examination, supervisory correspondence, internal
agency memoranda and investigatory files compiled in connection with an
investigation, whether such records are in the possession of the OTS or
some other individual or entity; and
(iii) Unpublished OTS records obtained by or in the possession of
third parties, including other government agencies.
(3) This section does not apply to:
(i) Requests for records or testimony in proceedings in which the
OTS is a party;
(ii) Requests for information by other government agencies, except
when specifically provided; and
(iii) Requests for records that are required to be disclosed under
the Freedom of Information Act, see 5 U.S.C. 552, and 31 CFR 1.1-1.6.
[[Page 41]]
(b) Purpose. The purposes of this section are:
(1) To afford an orderly mechanism for the OTS to expeditiously
process requests for unpublished OTS information and, where appropriate,
for the OTS to assert evidentiary privileges in litigation;
(2) To balance the need for confidentiality of unpublished OTS
information with the private party's interest in obtaining disclosure of
that information;
(3) To ensure that the time of OTS employees is utilized in the most
efficient manner consistent with the OTS's statutory mission;
(4) To prevent undue burdens on the OTS;
(5) To limit the expenditure of the OTS's funds for private
purposes; and
(6) To maintain the impartiality of the OTS among private litigants.
(c) Procedure--(1) Requests for records and testimony in general. A
request for unpublished OTS information must be in writing, furnish the
caption of the lawsuit if the request arises in the course of
litigation, and support the requester's claim that the information
sought is highly relevant to the purpose for which it is sought. In
demonstrating that the information is highly relevant, the requester
must explain in detail how the requested OTS information relates to the
issues in the case or the matter.
(i) For requests arising in lawsuits, the submission also must
include:
(A) A copy of the complaint or equivalent document in the case and
any other pleadings necessary to show relevance;
(B) A description of any prior decisions or pending motions in the
case that may bear on the asserted relevance of the information being
sought from the OTS; and
(C) The names, addresses and phone numbers of counsel to all other
parties in the case.
(ii) In all instances, in addition to demonstrating that the
information sought is highly relevant to the purpose for which it is
sought, the requester must:
(A) Demonstrate that the information sought is not available from
any other source; and
(B) Demonstrate that the need for the information clearly outweighs
the need to maintain the confidentiality of the OTS information and the
burden on the OTS to produce the information.
(iii) If a request seeks a response in fewer than 30 days, it must
include an explanation of why the requester was unable to submit the
request earlier and why expediting the request is required.
(2) Additional provisions relating to requests for records. In
addition to the requirements of paragraph (c)(1) of this section, the
provisions in paragraphs (c)(2)(i) and (c)(2)(ii) of this section apply
to requests for disclosure of records.
(i) A request for records must list the categories of records sought
and describe the specific information sought, including the relevant
time period.
(ii) When the OTS believes that another person has a claim of
privilege regarding the information in the records and the records are
in the possession or control of that person, such as reports prepared by
a savings association's attorneys that are shared with the OTS, the OTS
may respond to the request by authorizing that person to release the
records pursuant to an appropriate confidentiality order rather than by
the OTS releasing the records directly to the requesting party. This
will enable the person possessing or controlling the records to argue
any issues of privilege to the appropriate court.
(3) Additional provisions relating to requests for testimony from
OTS employees. In addition to the requirements of paragraph (c)(1) of
this section, the provisions in paragraphs (c)(3)(i) through (c)(3)(iv)
of this section apply to requests that current or former OTS employees
be authorized to give testimony.
(i) The request must specifically describe the substance of the
testimony sought and show a compelling need for the testimony. A showing
of compelling need should include a demonstration that the requested
information is not available from any other source, such as the books
and records of other persons or entities, OTS records that have been or
might be released, or the
[[Page 42]]
testimony of other non-OTS persons, including retained experts.
(ii) OTS employees will not be authorized to provide expert or
opinion testimony for private parties.
(iii) The OTS expects litigants to anticipate their need for OTS
testimony in sufficient time to request and obtain that testimony in
deposition form. A request for testimony at a trial or hearing may not
be granted unless the requester shows that properly developed deposition
testimony could not be used or would not be adequate at the trial or
hearing.
(iv) The OTS shall specify the scope of any authorized testimony and
may take steps to ensure that the scope of testimony taken adheres to
the scope authorized. Parties to the case who did not join in the
request and who wish to question the witness beyond the authorized scope
should request expanded authorization pursuant to this regulation. The
OTS will attempt to render decisions on such requests in an expedited
manner.
(4) Information available to savings associations, holding
companies, state and Federal agencies and requesters. (i) The regular
report of examination of a savings association, savings and loan holding
company, or other affiliate of a savings association is made available
by the appropriate Regional Office to the entity examined.
(ii) A subsidiary savings association of a savings and loan holding
company may reproduce and furnish a copy of its report of examination
and related supervisory correspondence of the savings association to its
parent holding company(ies) without prior approval of the OTS. A savings
and loan holding company may reproduce and furnish a copy of its report
of examination and related supervisory correspondence to another
affiliated savings and loan holding company that controls the same
savings association or its subsidiary savings association(s) without
prior approval of the OTS. This paragraph does not require such
disclosure by a parent savings and loan holding company or subsidiary
savings association.
(iii) Reports of examination and other information relating to
state-chartered savings associations and affiliates are made available,
upon request, by the OTS to the state governmental authority having
general supervision of such state-chartered savings associations.
(iv) Reports of examination and other information may be made
available by the OTS to other agencies of the United States, a state
agency, or to the Federal Home Loan Banks, for use where necessary in
the performance of their official duties.
(v) All reports or other information made available to savings
associations, holding companies, affiliates, other governmental agencies
or requesters shall remain the property of the OTS and, except as
permitted by this section or otherwise by the Director or his delegate,
no person, company, agency, or authority to whom the information is made
available, or any officer, director, employee or agent thereof, shall
disclose any such information except published statistical material that
would not disclose the identity of any individual or corporation.
(5) Where to submit requests. In all matters covered by this
section, notification of the issuance of subpoenas or compulsory process
and requests for records or testimony covered by this section must be
sent to the OTS at 1700 G Street NW., Washington, DC 20552, to the
attention of the Corporate Secretary, and should be labelled ``Request
for Release of Unpublished Information Under Section 510.5.'' Requesters
may furnish copies of the request or subpoenas simultaneously to the
appropriate OTS Regional Office, but the furnishing of such copies does
not constitute service on the OTS.
(d) Consideration of requests--(1) In general. The OTS will
generally process requests in the order in which they are received. The
OTS will endeavor to respond to requests within 30 days, but this may
vary depending on the scope and precision of the request. The OTS will
weigh requests for processing in less than 30 days against the burden to
the OTS of expedited processing and the unfairness to other parties
whose pending requests may be delayed.
(2) Consultation with requester. The OTS may consult with the
requester to:
[[Page 43]]
(i) Refine and limit the scope of the request so as to reduce the
burden and expense on the OTS; or
(ii) Obtain additional information necessary for the OTS to make an
informed determination on the request. To the extent necessary to reach
an informed determination on the request, the OTS may inquire into the
circumstances of the underlying matter and rely on sources of
information beyond the requester, including other interested parties.
(3) Final determinations. Final determinations on requests will be
made by the Director or his delegate. All such determinations are the
sole discretion of the Director or his delegate. Requesters will be
notified in writing of the disposition of the request.
(4) Denial of requests. (i) The OTS may deny requests for records or
testimony that seek information that the OTS deems to be:
(A) Not highly relevant;
(B) Privileged;
(C) Available from other sources; or
(D) Information that should not be disclosed for reasons that
warrant restriction of discovery under the Federal Rules of Civil
Procedure (28 U.S.C. appendix).
(ii) The OTS may also deny a records or testimony request when it
considers production of the information to be overly burdensome or
contrary to the public interest, or where OTS determines that the need
for the information does not clearly outweigh the need to maintain the
confidentiality of the information, or where the requester seeks
testimony and has not shown a compelling need for the testimony.
(5) Confidentiality Orders and Agreements. As is set forth in
paragraph (f) of this section, the OTS may condition release of
information on the entry by the relevant tribunal of an order
satisfactory to the OTS or, in a non-litigated matter, the execution of
a confidentiality agreement that limits access of third parties to the
unpublished OTS information. It shall be the duty of the requesting
party to obtain such an order or to execute a confidentiality agreement.
(e) Parties with access to OTS information; restriction on
dissemination--(1) Current and former employees. Except as authorized by
this section or as otherwise authorized by the Director or his delegate,
no current or former employee, officer or agent of the OTS or a
predecessor agency shall disclose or permit the disclosure of any
unpublished information of the OTS to anyone (other than an employee,
officer or agent of the OTS properly entitled to such information for
the performance of their official duties), whether by giving out or
furnishing such information or a copy thereof or by allowing any person
to inspect, examine, or copy such information or copy thereof, or
otherwise.
(2) Duty of person served. If any person, whether or not a current
or former employee, officer or agent of the OTS, has information of the
OTS that may not be disclosed under the regulations of the OTS or other
applicable law, and in connection therewith is served with a subpoena,
order, or other process requiring personal attendance as a witness or
production of records or information in any proceeding, that person
shall promptly advise the OTS of such service or request for
information. Upon such notice the OTS will take appropriate action to
advise the court or tribunal that issued the process and the attorney
for the party at whose instance the process was issued, if known, of the
substance of this section. Such notice to the OTS shall be made by
contacting the Litigation Division, Office of Chief Counsel, Office of
Thrift Supervision, 1700 G Street NW., Washington, DC 20552. As provided
in paragraph (e)(3) of this section, a person so served with process may
not disclose OTS information without OTS authorization. To obtain OTS
authorization, a request must be sent to the OTS in Washington, DC, in
accordance with paragraph (c) of this section.
(3) Appearance by person served. Except as the OTS has authorized
disclosure of the relevant information, or except as authorized by law,
any person who has information of the OTS that may not be disclosed
under this section and is required to respond to a subpoena or other
legal process shall attend at the time and place therein mentioned and
respectfully decline to produce such records or give any testimony with
respect thereto, basing such
[[Page 44]]
refusal on this part. If, notwithstanding, the court or other body
orders the disclosure of such records or the giving of such testimony,
the person having such information of the OTS shall continue
respectfully to decline to produce such information and shall promptly
advise the Litigation Division of the Chief Counsel's Office, Office of
Thrift Supervision. Upon such notice the OTS will take appropriate
action to advise the court or tribunal which issued the order, of the
substance of this section.
(4) Non-waiver of privilege. The possession by any entity or
individual described in paragraph (c)(4) of this section of OTS records
covered by this section shall not waive any privilege of the OTS or the
OTS's right to supervise the further dissemination of these records.
(f) Orders and agreements protecting the confidentiality of
unpublished OTS information--(1) Records. Unless otherwise permitted by
the OTS, release of records authorized pursuant to this section will be
conditioned by the OTS upon entry of an acceptable protective order by
the court or administrative tribunal presiding in the particular case,
or, in non-litigated matters, upon execution of an acceptable
confidentiality agreement. In cases where protective orders have already
been entered, the OTS reserves the right to condition approval for
release of information upon the inclusion of additional or amended
provisions.
(2) Testimony. The OTS may condition its authorization of deposition
testimony on an agreement of the parties that the transcript of the
testimony will be kept under seal, or will be made available only to the
parties, the court and the jury, except to the extent that the OTS may
allow use of the transcript in related litigation. The party who
requested the testimony shall, at its expense, furnish to the OTS a copy
of the transcript of testimony of the OTS employee or former employee.
(g) Limitation of burden on the OTS in connection with released
records--(1) Authentication for use as evidence. The OTS will
authenticate released records to facilitate their use as evidence.
Requesters who require authenticated records should request certified
copies at least 30 days prior to the date they will be needed. The
request should be sent to the OTS Public Disclosure Branch and shall
identify the records, giving the office or record depository where they
are located (if known) and include copies of the records and payment of
the certification fee.
(2) Responsibility of litigants to share released records. The party
who has sought and obtained OTS records has the responsibility of:
(i) Notifying other parties to the case of the release and, after
entry of a protective order, providing copies of the records to the
other parties who are subject to the protective order; and
(ii) Retrieving any records from the court's file as soon as the
records are no longer required by the court and returning them to the
OTS. Where a party may be involved in related litigation, the OTS may,
upon a request made to it pursuant to this section, authorize such party
to transfer the records for use in that related case.
(h) Fees--(1) Fees for records searches, copying and certifications.
Requesters shall be charged fees in accordance with Treasury Department
regulations, 31 CFR 1.7. With certain exceptions, the regulations in 31
CFR 1.7 provide for recovery of the full direct costs of searching,
reviewing, certifying and duplicating the records sought. An estimate of
the statement of charges will be sent to requesters, and fees shall be
remitted by check payable to the OTS prior to release of the requested
records. Where it deems appropriate, the OTS may contract with
commercial copying concerns to copy the records, with the cost billed to
the requester.
(2) Witness fees and allowances. (i) Litigants whose requests for
testimony of current OTS employees are approved shall, upon completion
of the testimonial appearance, promptly tender a check payable to the
OTS for witness fees and allowances in accordance with 28 U.S.C. 1821.
(ii) All litigants whose requests for testimony of former OTS
employees are approved, shall also promptly tender witness fees and
allowances to the
[[Page 45]]
witness in accordance with 28 U.S.C. 1821.
[54 FR 49456, Nov. 30, 1989, as amended at 60 FR 28031, May 30, 1995]
PART 512--RULES FOR INVESTIGATIVE PROCEEDINGS AND FORMAL EXAMINATION PROCEEDINGS--Table of Contents
Sec.
512.1 Scope of part.
512.2 Definitions.
512.3 Confidentiality of proceedings.
512.4 Transcripts.
512.5 Rights of witnesses.
512.6 Obstruction of the proceedings.
512.7 Subpoenas.
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467, 1467a, 1813; 15 U.S.C.
78 l.
Source: 54 FR 49457, Nov. 30, 1989, unless otherwise noted.
Sec. 512.1 Scope of part.
This part prescribes rules of practice and procedure applicable to
the conduct of investigative proceedings under section 10(g)(2) of the
Home Owners' Loan Act, as amended, 12 U.S.C. 1467a(g)(2) (``HOLA'') and
to the conduct of formal examination proceedings with respect to savings
associations and their affiliates under section 5(d)(1)(B) of the HOLA,
as amended, 12 U.S.C. 1464(d)(1)(B) or section 7(j)(15) of the Federal
Deposit Insurance Act, as amended, 12 U.S.C. 1817(j)(15) (``FDIA''),
section 8(n) of the FDIA, 12 U.S.C. 1818(n), or section 10(c) of the
FDIA, 12 U.S.C. 1820(c). This part does not apply to adjudicatory
proceedings as to which hearings are required by statute, the rules for
which are contained in part 509 of this chapter.
Sec. 512.2 Definitions.
As used in this part:
(a) Office means the Office of Thrift Supervision;
(b) Investigative proceeding means an investigation conducted under
section 10(g)(2) of the HOLA;
(c) Formal examination proceeding means the administration of oaths
and affirmations, taking and preserving of testimony, requiring the
production of books, papers, correspondence, memoranda, and all other
records, the issuance of subpoenas, and all related activities in
connection with examination of savings associations and their affiliates
conducted pursuant to section 5(d)(1)(B) of the HOLA, section 7(j)(15)
of the FDIA, section 8(n) of the FDIA or section 10(c) of the FDIA; and
(d) Designated representative means the person or persons empowered
by the Office to conduct an investigative proceeding or a formal
examination proceeding.
Sec. 512.3 Confidentiality of proceedings.
All formal examination proceedings shall be private and, unless
otherwise ordered by the Office, all investigative proceedings shall
also be private. Unless otherwise ordered or permitted by the Office, or
required by law, and except as provided in Secs. 512.4 and 512.5, the
entire record of any investigative proceeding or formal examination
proceeding, including the resolution of the Office or its delegate(s)
authorizing the proceeding, the transcript of such proceeding, and all
documents and information obtained by the designated representative(s)
during the course of said proceedings shall be confidential.
Sec. 512.4 Transcripts.
Transcripts or other recordings, if any, of investigative
proceedings or formal examination proceedings shall be prepared solely
by an official reporter or by any other person or means authorized by
the designated representative. A person who has submitted documentary
evidence or given testimony in an investigative proceeding or formal
examination proceeding may procure a copy of his own documentary
evidence or transcript of his own testimony upon payment of the cost
thereof; provided, that a person seeking a transcript of his own
testimony must file a written request with the Deputy Chief Counsel for
Enforcement or the appropriate Regional Counsel for Enforcement stating
the reason he desires to procure such transcript, and said persons may
for good cause deny such request. In any event, any witness (or his
counsel) shall have the right to inspect the transcript of the witness'
own testimony.
[54 FR 49457, Nov. 30, 1989, as amended at 60 FR 66717, Dec. 26, 1995]
[[Page 46]]
Sec. 512.5 Rights of witnesses.
(a) Any person who is compelled or requested to furnish documentary
evidence or give testimony at an investigative proceeding or formal
examination proceeding shall have the right to examine, upon request,
the Office resolution authorizing such proceeding. Copies of such
resolution shall be furnished, for their retention, to such persons only
with the written approval of the Deputy Chief Counsel for Enforcement or
the appropriate Regional Counsel for Enforcement.
(b) Any witness at an investigative proceeding or formal examination
proceeding may be accompanied and advised by an attorney personally
representing that witness.
(1) Such attorney shall be a member in good standing of the bar of
the highest court of any state, Commonwealth, possession, territory, or
the District of Columbia, who has not been suspended or debarred from
practice by the bar of any such political entity or before the Office in
accordance with the provisions of part 513 of this chapter and has not
been excluded from the particular investigative proceeding or formal
examination proceeding in accordance with paragraph (b)(3) of this
section.
(2) Such attorney may advise the witness before, during, and after
the taking of his testimony and may briefly question the witness, on the
record, at the conclusion of his testimony, for the sole purpose of
clarifying any of the answers the witness has given. During the taking
of the testimony of a witness, such attorney may make summary notes
solely for his use in representing his client. All witnesses shall be
sequestered, and, unless permitted in the discretion of the designated
representative, no witness or accompanying attorney may be permitted to
be present during the taking of testimony of any other witness called in
such proceeding. Neither attorney(s) for the association(s) that are the
subjects of the investigative proceedings or formal examination
proceedings, nor attorneys for any other interested persons, shall have
any right to be present during the testimony of any witness not
personally being represented by such attorney.
(3) The Office, for good cause, may exclude a particular attorney
from further participation in any investigation in which the Office has
found the attorney to have engaged in dilatory, obstructionist,
egregious, contemptuous or contumacious conduct. The person conducting
an investigation may report to the Office instances of apparently
dilatory, obstructionist, egregious, contemptuous or contumacious
conduct on the part of an attorney. After due notice to the attorney,
the Office may take such action as the circumstances warrant based upon
a written record evidencing the conduct of the attorney in that
investigation or such other or additional written or oral presentation
as the Office may permit or direct.
[54 FR 49457, Nov. 30, 1989, as amended at 60 FR 66717, Dec. 26, 1995]
Sec. 512.6 Obstruction of the proceedings.
The designated representative shall report to the Office any
instances where any witness or counsel has engaged in dilatory,
obstructionist, or contumacious conduct or has otherwise violated any
provision of this part during the course of an investigative proceeding
or formal examination proceeding; and the Office may take such action as
the circumstances warrant, including the exclusion of counsel from
further participation in such proceeding.
Sec. 512.7 Subpoenas.
(a) Service. Service of a subpoena in connection with any
investigative proceeding or formal examination proceeding shall be
effected in the following manner:
(1) Service upon a natural person. Service of a subpoena upon a
natural person may be effected by handing it to such person; by leaving
it at his office with the person in charge thereof, or, if there is no
one in charge, by leaving it in a conspicuous place therein; by leaving
it at his dwelling place or usual place of abode with some person of
suitable age and discretion then residing therein; by mailing it to him
by registered or certified mail or by an express delivery service at his
last known address; or by any method whereby actual notice is given to
him.
[[Page 47]]
(2) Service upon other persons. When the person to be served is not
a natural person, service of the subpoena may be effected by handing the
subpoena to a registered agent for service, or to any officer, director,
or agent in charge of any office of such person; by mailing it to any
such representative by registered or certified mail or by an express
delivery service at his last known address; or by any method whereby
actual notice is given to such person.
(b) Motions to quash. Any person to whom a subpoena is directed may,
prior to the time specified therein for compliance, but in no event more
than 10 days after the date of service of such subpoena, apply to the
Chief Counsel or his designee to quash or modify such subpoena,
accompanying such application with a statement of the reasons therefor.
The Chief Counsel or his designee, as appropriate, may:
(1) Deny the application;
(2) Quash or revoke the subpoena;
(3) Modify the subpoena; or
(4) Condition the granting of the application on such terms as the
Chief Counsel or his designee determines to be just, reasonable, and
proper.
(c) Attendance of witnesses. Subpoenas issued in connection with an
investigative proceeding or formal examination proceeding may require
the attendance and/or testimony of witnesses from any State or territory
of the United States and the production by such witnesses of documentary
or other tangible evidence at any designated place where the proceeding
is being (or is to be) conducted. Foreign nationals are subject to such
subpoenas if such service is made upon a duly authorized agent located
in the United States.
(d) Witness fees and mileage. Witnesses summoned in any proceeding
under this part shall be paid the same fees and mileage that are paid
witnesses in the district courts of the United States. Such fees and
mileage need not be tendered when the subpoena is issued on behalf of
the Office by any of its designated representatives.
[54 FR 49457, Nov. 30, 1989, as amended at 56 FR 38317, Aug. 12, 1991]
PART 513--PRACTICE BEFORE THE OFFICE--Table of Contents
Sec.
513.1 Scope of part.
513.2 Definitions.
513.3 Who may practice.
513.4 Suspension and debarment.
513.5 Reinstatement.
513.6 Duty to file information concerning adverse judicial or
administrative action.
513.7 Proceeding under this part.
Authority: Sec. 3, as added by sec. 301, 103 Stat. 278 (12 U.S.C.
1462a); sec. 4, as added by sec. 301, 103 Stat. 280 (12 U.S.C. 1463);
sec. 5, 48 Stat. 132, as amended (12 U.S.C. 1464); sec. 12, sec. 3, 64
Stat. 873, as amended by sec. 204, 103 Stat. 190 (12 U.S.C. 1813); 48
Stat. 892, as amended (15 U.S.C. 78 1).
Source: 54 FR 49459, Nov. 30, 1989, unless otherwise noted.
Sec. 513.1 Scope of part.
This part prescribes rules with regard to general practice before
the Office on one's own behalf or in a representative capacity and
prescribes rules describing the circumstances under which attorneys,
accountants, appraisers, or other persons may be suspended or debarred,
either temporarily or permanently, from practicing before the Office. In
connection with any particular matter, reference also should be made to
any special requirements of procedure and practice that may be contained
in the particular statute involved or the rules and forms adopted by the
Office thereunder, which special requirements are controlling. In
addition to any suspension hereunder, a person may be excluded from
further participation under this chapter from a rulemaking hearing in
accordance with Sec. 510.2, from an adjudicatory proceeding in
accordance with Sec. 509.6(a)(1), from a removal hearing in accordance
with Sec. 508.3, or from an investigatory proceeding in accordance with
Sec. 512.5(b)(2) of this chapter.
[54 FR 49459, Nov. 30, 1989, as amended at 56 FR 38317, Aug. 12, 1991]
Sec. 513.2 Definitions.
As used in this part:
(a) Office means the Office;
(b) The term Secretary means the Secretary and any Assistant or
Acting Secretary to the Office;
[[Page 48]]
(c) The term presiding officer includes the Office, his delegatee or
an administrative law judge appointed under section 3105 or detailed
pursuant to section 3344 of title 5 of the U.S. Code and, as used in
this part, the term shall be construed to refer to whichever of the
above-identified individuals presides at a hearing or other proceeding,
except as otherwise specified in the text;
(d) The term attorney means any person who is a member in good
standing of the bar of the highest court of any State, possession,
territory, Commonwealth or the District of Columbia; and
(e) The term practice means transacting any business with the
Office, including:
(1) The representation of another person at any adjudicatory,
investigatory, removal or rulemaking proceeding conducted before the
Office, a presiding officer or the Office's staff, including those
proceedings covered in parts 508, 509, 510, and 512 of this chapter;
(2) The preparation of any statement, opinion, financial statement,
appraisal report, audit report, or other document or report by any
attorney, accountant, appraiser or other licensed expert which is filed
with or submitted to the Office, with such expert's consent or knowledge
in connection with any application or other filing with the Office;
(3) A presentation to the Office, a presiding officer or the
Office's staff at a conference or meeting relating to an association's
or other person's rights, privileges or liabilities under the laws
administered by the Office and rules and regulations promulgated
thereunder;
(4) Any business correspondence or communication with the Office, a
presiding officer or the Office's staff; and
(5) The transaction of any other formal business with the Office on
behalf of another, in the capacity of an attorney, accountant, appraiser
or other licensed expert.
Sec. 513.3 Who may practice.
(a) By non-attorneys--(1) An individual may appear on his own behalf
(pro se); a member of a partnership may represent the partnership; a
bona fide and duly authorized officer of a corporation, trust or
association may represent the corporation, trust or association; and an
officer or employee of a commission, department or political subdivision
may represent that commission, department or political subdivision
before the Office.
(2) Any accountant, appraiser or other licensed expert may practice
before the Office in a professional capacity.
(b) By attorneys. Any association or other person may be represented
in any proceeding or other matter before the Office by an attorney.
(c) Any licensed expert or professional transacting business with
the Office in a representative capacity may be required to show his
authority to act in such capacity.
Sec. 513.4 Suspension and debarment.
(a) The Office may censure any person practicing before it or may
deny, temporarily or permanently, the privilege of any person to
practice before it if such person is found by the Office, after notice
of and opportunity for hearing in the matter,
(1) Not to possess the requisite qualifications to represent others,
(2) To be lacking in character or professional integrity,
(3) To have engaged in any dilatory, obstructionist, egregious,
contemptuous, contumacious or other unethical or improper professional
conduct before the Office, or
(4) To have willfully violated, or willfully aided and abetted the
violation of, any provision of the laws administered by the Office or
the rules and regulations promulgated thereunder.
(b) Automatic suspension. (1) Any person who, after being licensed
as a professional or expert by any competent authority, has been
convicted of a felony, or of a misdemeanor involving moral turpitude,
personal dishonesty or breach of trust, shall be suspended forthwith
from practicing before the Office.
(2) Any accountant, appraiser or other licensed expert whose license
to practice has been revoked in any State, possession, territory,
Commonwealth or the District of Co1umbia, shall be suspended forthwith
from practice before the Office.
[[Page 49]]
(3) Any attorney who has been suspended or disbarred by a court of
the United States or in any State, possession, territory, Commonwealth
or the District of Columbia, shall be suspended forthwith from
practicing before the Office.
(4) A conviction (including a judgment or order on a plea of nolo
contendere), revocation, suspension or disbarment under paragraphs
(b)(1), (b)(2) and (b)(3) of this section shall be deemed to have
occurred when the convicting, revoking, suspending or disbarring agency
or tribunal enters its judgment or order, regardless of whether an
appeal is pending or could be taken.
(5) For purposes of this section, it shall be irrelevant that any
attorney, accountant, appraiser or other licensed expert who has been
suspended, disbarred or otherwise disqualified from practice before a
court or in a jurisdiction continues in professional good standing
before other courts or in other jurisdictions.
(c) Temporary suspension. (1) The Office, with due regard to the
public interest and without preliminary hearing, by order, may
temporarily suspend any person from appearing or practicing before it
who, on or after June 20, 1984, by name, has been:
(i) Permanently enjoined (whether by consent, default or summary
judgment or after trial) by any court of competent jurisdiction or by
the Office itself in a final administrative order, by reason of his
misconduct in any action brought by the Office based upon violations of,
or aiding and abetting the violation of, the Home Owners, Loan Act of
1933, as amended, 12 U.S.C. 1461 et seq., the Federal Deposit Insurance
Act, as amended, 12 U.S.C. 1811 et seq. or any provision of the
Securities Exchange Act of 1934, as amended, 15 U.S.C. 78a, et seq.,
which is administered by the Office, or of any rule or regulation
promulgated thereunder; or
(ii) Found by any court of competent jurisdiction (whether by
consent, default, or summary judgment, or after trial) in any action
brought by the Office to which he is a party or found by the Office
(whether by consent, default, upon summary judgment or after hearing) in
any administrative proceeding in which the Office is a complainant and
he is a party, to have willfully committed, caused or aided or abetted a
violation of any provision of the Home Owners' Loan Act of 1933, as
amended, 12 U.S.C. 1461 et seq., the Federal Deposit Insurance Act, as
amended, 12 U.S.C. 1811 et seq. or any provision of the Securities
Exchange Act of 1934, as amended, 15 U.S.C. 78a, et seq., which is
administered by the Office, or of any rule or regulation promulgated
thereunder.
(2) An order of temporary suspension shall become effective when
served by certified or registered mail directed to the last known
business or residential address of the person involved. No order of
temporary suspension shall be entered by the Office pursuant to
paragraph (c)(1) of this section more than three months after the final
judgment or order entered in a judicial or administrative proceeding
described in paragraphs (c)(1)(i) or (c)(1)(ii) of this section has
become effective and all review or appeal procedures have been completed
or are no longer available.
(3) Any person temporarily suspended from appearing and practicing
before the Office in accordance with paragraph (c)(1) of this section
may, within 30 days after service upon him of the order of temporary
suspension, petition the Office to lift such suspension. If no petition
is received by the Office within those 30 days, the suspension shall
become permanent.
(4) Within 30 days after the filing of a petition in accordance with
paragraph (c)(3) of this section, the Office shall either lift the
temporary suspension or set the matter down for hearing at a time and
place to be designated by the Office, or both. After opportunity for
hearing, the Office may censure the petitioner or may suspend the
petitioner from appearing or practicing before the Office temporarily or
permanently. In every case in which the temporary suspension has not
been lifted, the hearing and any other action taken pursuant to this
paragraph (c)(4) shall be expedited by the Office in order to ensure the
petitioner's right to address the allegations against him.
(5) In any hearing held on a petition filed in accordance with
paragraph (c)(3) of this section, a showing that the petitioner has been
enjoined or has
[[Page 50]]
been found to have committed, caused or aided or abetted violations as
described in paragraph (c)(1) of this section, without more, may be a
basis for suspension or debarment; that showing having been made, the
burden shall then be on the petitioner to show why he should not be
censured or be temporarily or permanently suspended or debarred. A
petitioner will not be permitted to contest any findings against him or
any admissions made by him in the judicial or administrative proceedings
upon which the proposed censure, suspension or debarment is based. A
petitioner who has consented to the entry of a permanent injunction or
order as described in paragraph (c)(1)(i) of this section, without
admitting the facts set forth in the complaint, shall nevertheless be
presumed for all purposes under this section to have been enjoined or
ordered by reason of the misconduct alleged in the complaint.
Sec. 513.5 Reinstatement.
(a) Any person who is suspended from practicing before the Office
under paragraph (a) or (c) of Sec. 513.4 of this part may file an
application for reinstatement at any time. Denial of the privilege of
practicing before the Office shall continue unless and until the
applicant has been reinstated by order of the Office for good cause
shown.
(b) Any person suspended under paragraph (b) of Sec. 513.4 shall be
reinstated by the Office, upon appropriate application, if all of the
grounds for application of the provisions of paragraph (b) of Sec. 513.4
subsequently are removed by a reversal of the conviction or termination
of the suspension, disbarment or revocation. An application for
reinstatement on any other grounds by any person suspended under
paragraph (b) of Sec. 513.4 may be filed at any time. Such application
shall state with particularity the relief desired and the grounds
therefor and shall include supporting evidence, when available. The
applicant shall be accorded an opportunity for an informal hearing in
the matter, unless the applicant has waived a hearing in the application
and, instead, has elected to have the matter determined on the basis of
written submissions. Such hearing shall utilize the procedures
established in Sec. 508.3 and paragraph (a) of Sec. 508.7 of this
chapter. However, such suspension shall continue unless and until the
applicant has been reinstated by order of the Office for good cause
shown.
[54 FR 49459, Nov. 30, 1989, as amended at 56 FR 38318, Aug. 12, 1991]
Sec. 513.6 Duty to file information concerning adverse judicial or administrative action.
Any person appearing or practicing before the Office who has been or
is the subject of a conviction, suspension, debarment, license
revocation, injunction or other finding of the kind described in
Sec. 513.4 (b) or (c) of this part in an action not instituted by the
Office shall promptly file a copy of the relevant order, judgment or
decree with the Secretary to the Office together with any related
opinion or statement of the agency or tribunal involved. Any person who
fails to so file a copy of the order, judgment or decree within 30 days
after the later of June 15, 1984, the entry of the order, judgment or
decree, or the date such person initiates practice before the Office,
for that reason alone may be disqualified from practicing before the
Office until such time as the appropriate filing shall be made, but
neither the filing of these documents nor the failure of a person to
file them shall in any way impair the operation of any other provision
of this part.
Sec. 513.7 Proceeding under this part.
(a) All hearings required or permitted to be held under paragraphs
(a) and (c) of Sec. 513.4 of this part shall be held before a presiding
officer utilizing the procedures established in the rules of practice
and procedure in adjudicatory proceedings under part 509 of this
chapter.
(b) All hearings held under this part shall be closed to the public
unless the Office on its own motion or upon the request of a party
otherwise directs.
(c) Any proceeding brought under any section of this part 513 shall
not preclude a proceeding under any other section of this part or any
other part of the Office's regulations.
[[Page 51]]
PART 516--APPLICATION PROCESSING GUIDELINES AND PROCEDURES--Table of Contents
Subpart A--Application Processing Guidelines
Sec.
516.1 Offices of the Office of Thrift Supervision; information and
submittals.
516.2 Applications processing guidelines.
516.3 Definitions.
Subpart B--Publication Requirements
516.50 Who must publish a public notice of an application?
516.60 When must I publish the public notice?
516.70 Where must I publish the public notice?
516.80 What language must I use in my publication?
Subpart C--Comment Procedures
516.100 What does this subpart do?
516.110 Who may submit a written comment?
516.120 What information should I include in my comment?
516.130 Where do I file my comment?
516.140 When do I file my comment?
516.150 Will I have additional opportunities to discuss the
application?
Subpart D--Meeting Procedures
516.160 What does this subpart do?
516.170 What procedures govern informal meetings on applications?
516.180 What procedures govern formal meetings on applications?
516.190 Will a meeting affect application processing time frames?
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464, 2901 et
seq.
Source: 57 FR 14336, Apr. 20, 1992, unless otherwise noted.
Subpart A--Application Processing Guidelines
Sec. 516.1 Offices of the Office of Thrift Supervision; information and submittals.
(a) The headquarters of the OTS is located at 1700 G Street, NW.,
Washington, DC 20552. General information concerning the OTS may be
obtained in person at that location or by written request to the OTS at
the above address.
(b) The Regional Offices of the OTS and their regions are as
follows:
(1) Northeast Regional Office, 10 Exchange Place Centre, 18th Floor,
Jersey City, New Jersey 07302. (Region: Connecticut, Delaware, Maine,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode
Island, Vermont, West Virginia.)
(2) Southeast Regional Office, 1475 Peachtree Street, NE., Atlanta,
Georgia 30309. (Region: Alabama, District of Columbia, Florida, Georgia,
Maryland, North Carolina, Puerto Rico, South Carolina, the Virgin
Islands, Virginia.)
(3) Central Regional Office, 200 West Madison Street, Suite 1300,
Chicago, Illinois 60606. (Region: Illinois, Indiana, Kentucky, Michigan,
Ohio, Tennessee, Wisconsin.)
(4) Midwest Regional Office, 122 W. John Carpenter Freeway, suite
600, Irving, Texas 75039. (Region: Arkansas, Colorado, Iowa, Kansas,
Louisiana, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, North
Dakota, Oklahoma, South Dakota, Texas.)
(5) West Regional Office, 1 Montgomery Street, Suite 400, San
Francisco, California 94104. (Region: Alaska, Arizona, California, Guam,
Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, Wyoming.)
(c) Filings. Applications, notices or other filings, as provided for
in the OTS's regulations shall be submitted to the appropriate Regional
Office, unless specifically noted otherwise in the procedures for a
particular filing. The original and two conformed copies shall be filed
for each application or notice. All copies should be clearly captioned
as to the type of filing and should contain all exhibits and other
pertinent documents. Application forms, notice forms and instructions
are available from each Regional Office. Two additional conformed copies
shall be filed with the Applications Filing Room, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC, 20552 of any
application, notice or other filing that raises a significant issue of
law or policy, as defined by OTS order or other OTS guidance. Additional
copies, in addition to the three required for every application are
required for the following applications:
[[Page 52]]
(1) Merger or branch purchase applications filed pursuant to
Sec. 563.22 of this chapter or notices filed pursuant to Sec. 574.3(b)
of this chapter involving a merger (including a merger involving an
interim association) or applications filed on Form H-(e)3 require four
additional copies of the application. The copies should be labeled,
respectively, ``Department of Justice Copy,'' ``Comptroller Copy,''
``Federal Reserve Copy,'' and ``FDIC Copy''.
(2) Any acquiror filing a notice pursuant to Sec. 574.3(b) of this
chapter shall file three additional copies of the notice, and shall
label such copies ``FDIC Copy,'' ``Comptroller Copy,'' and ``Federal
Reserve Copy,'' respectively. In addition, any acquiror filing a notice
pursuant to Sec. 574.3(b) of this chapter with respect to acquisition of
a state-chartered association shall file an additional copy of the
notice with the OTS labeled ``State Supervisor Copy.''
(3) In the case of an application filed on Form H-(e)2 (other than
an application pursuant to Sec. 574.3(c)(1)(iv) of this chapter), the
applicant shall file one additional copy of the application with the OTS
and shall label such copy ``Department of Justice Copy.''
[57 FR 14336, Apr. 20, 1992, as amended at 58 FR 4312, Jan. 14, 1993; 60
FR 66717, Dec. 26, 1995]
Sec. 516.2 Applications processing guidelines.
(a) General. (1) To ensure the timely processing of applications and
notices, the OTS hereby sets forth guidelines for the processing of
completed applications and notices (hereinafter collectively referred to
as ``applications'') filed with the OTS. This section does not apply to
applications or requests related to transactions pursuant to section 13
(c) or (k) of the Federal Deposit Insurance Act, 12 U.S.C. 1823 (c),
(k); or requests submitted in connection with cease-and-desist orders,
temporary cease-and-desist orders, removal and/or prohibition orders,
temporary suspension orders, supervisory agreements or directives,
consent merger agreements, or documents negotiated in settlement of
litigation (including requests for termination or modification of, or
for approval pursuant to, such orders, agreements, or documents), or
similar litigation or enforcement matters. Requests submitted in
connection with cease-and-desist orders, removal and/or prohibition
orders, supervisory agreements or directives, consent merger agreements,
and other documents negotiated in settlement of litigation
(``enforcement documents'') are not covered by this section. However,
the fact that a regulation involving an application may be mentioned in
an enforcement document does not mean that this section does not apply
to that application. Requests to engage in activities that are
specifically restricted by enforcement documents and requests for
termination or modification of such documents are not covered by this
section. Applications submitted pursuant to a regulatory requirement
that the prior approval of the OTS be obtained before engaging in a
proposed activity, however, are covered, whether or not mentioned in an
enforcement document. If the application or request is unique to the
enforcement document, then it is not covered by this section.
(2) Requests for reconsideration, modification, or appeal of final
agency actions of the OTS are not covered by this section. In addition,
where other regulations of the OTS establish specific procedures for
processing of applications or set forth specific time periods for
automatic approval of applications unless such applications are
disapproved or objections are raised, the provisions of those
regulations are controlling with respect to the matters to which they
pertain. Where a regulation sets forth a procedure for processing an
application but does not contain a time period pursuant to which such
application is to be processed, the application will be processed under
the procedure established by the regulation, but will be subject to the
time periods contained in this section.
(b) Applications submitted for review. An application submitted to
the OTS for processing shall be submitted on the designated form and
shall comply with all applicable regulations and guidelines governing
the filing of such applications. The OTS is required to notify an
applicant in writing within 5 business days of receipt of an
application.
[[Page 53]]
(c) Accepting applications for processing. (1) Within 30 calendar
days of receipt of a properly submitted application for processing, the
OTS shall:
(i) Request in writing any additional information necessary to
complete the application;
(ii) Deem the application to be complete; or
(iii) Decline to further process the application if it is deemed by
the OTS to be materially deficient and/or substantially incomplete.
Failure by the OTS to act as described in paragraph (c)(1)(i),
(c)(1)(ii), or (c)(1)(iii) of this section within 30 calendar days of
receipt of an application for processing shall result in the filed
application's being deemed complete, thereby commencing the period for
review. If an application includes a request for a waiver of an
application requirement that certain information be supplied, the waiver
request shall be deemed granted, unless within 30 calendar days of
receipt of a properly submitted application for processing, the OTS
requests in writing additional information about the waiver request, or
denies the waiver request in writing.
(2) Failure by an applicant to respond fully to a written request by
the OTS for additional information within 30 calendar days of the date
of such request may be deemed to constitute withdrawal of the
application or may be treated as grounds for denial or disapproval of
the application. If an application is deemed withdrawn, the application
may be resubmitted for processing, but it will be deemed a new filing
under the applicable statute or regulation.
(3) An applicant may request in writing a brief extension of the 30-
day period for responding to a request for additional information
described in paragraph (c)(2) of this section prior to the expiration of
the 30-day time period. The OTS, at its option, may grant an applicant a
limited extension of time in writing. Failure by an applicant to respond
fully to a written request for additional information by the expiration
of the extended period permitted by the OTS may be deemed to constitute
withdrawal of the application or may be treated as grounds for denial or
disapproval of the application.
(4) The period for review by the OTS of an application will commence
on the date that the application is deemed complete. The OTS shall
notify an applicant in writing as to whether the application is deemed
complete within 15 calendar days after the timely filing of any
additional information furnished in response to any initial or
subsequent request by the OTS for additional information. If the OTS
fails to notify an applicant in writing within such time, the
application shall be deemed to be complete as of the expiration of such
15-day period. If additional information furnished in response to a
written request by the OTS for additional information includes a request
for a waiver of an application requirement that certain information be
supplied, the waiver request shall be deemed granted, unless within 15
calendar days after the timely filing of such additional information the
OTS:
(i) Request in writing additional information about the waiver
request; or
(ii) Denies the waiver request in writing.
(5) After additional information has been requested and supplied,
the OTS may request additional information only with respect to matters
derived from or prompted by information already furnished, or
information of a material nature that was not reasonably available from
the applicant at the time of the application, was concealed, or pertains
to developments subsequent to the time of the OTS's initial request for
additional information. With regard to information of a material nature
that was not reasonably available from the applicant, was concealed at
the time an application was deemed to be complete, or pertains to
developments subsequent to the time an application was deemed to be
complete, the OTS may request in writing such additional information as
it considers necessary and, at its option, may deem the application not
to be complete until such additional information is furnished. Upon
receipt of such additional information, the OTS shall:
(i) Request in writing further additional information to complete
the application;
[[Page 54]]
(ii) Deem the application to be complete and commence a new review
period of the completed application; or
(iii) Deem the application to be materially deficient and/or
substantially incomplete and return it to the applicant. In the case of
an application that raises a significant issue of policy or law, actions
taken by the Region shall not commence any of the periods for review of
a completed application described in paragraph (d) of this section.
(6) [Reserved]
(7) The OTS, at its discretion, may deem an application to be
materially deficient and/or substantially incomplete in the event that
the applicant or an affiliate of the applicant is or becomes subject to
an investigation, examination, administrative proceeding by a federal or
state or municipal court, department, agency or commission or other
governmental entity, or a self-regulatory trade or professional
organization, or intra-governmental inquiry, that is pertinent to the
standards applicable to the OTS's evaluation of the application or
relates to a determination the OTS is required to make in connection
with the application under the applicable statute or regulation.
(d) Failure by the OTS to approve or deny an application or to
disapprove a notice. (1) If, upon expiration of the applicable period
for review of any complete application to which this section applies, or
any extension of such period, the OTS has failed to approve or deny such
application (or, in the case of a notice, to disapprove such notice),
the application shall, without further action, be deemed to be approved,
or, in the case of a notice, not disapproved by the OTS. For purposes of
the previous sentence, the period for review of all applications shall
be 60 calendar days beginning from the application's deemed complete
date, including any application or notice submitted pursuant to
Sec. 575.3(b) or part 574 of this chapter.
(2) In the event that more than one application is being submitted
in connection with a proposed transaction or other action, the
applicable period for review of all such applications shall be the
review period for the application having the longest period for review,
subject to any applicable statutory periods.
(e) Extension of time for review. The period for review of an
application deemed to be complete may be extended by the OTS for 30 days
beyond the time period for review set forth in paragraph (d) of this
section. The OTS shall notify an applicant at least 10 days prior to the
expiration of the period for review of a complete application that such
review period is being extended for 30 days and shall state the general
reason(s) therefor.
(f) Extension of time for OTS's review of applications raising
significant issues of law or policy. In those situations in which an
application presents a significant issue of law or policy, the
applicable period for review of such application also may be extended by
the OTS beyond the time period for review set forth in paragraph (d) of
this section or any extension thereof pursuant to paragraph (e) of this
section until such time as the OTS acts upon the application. In such
cases, written notice shall be provided to an applicant not later than
the expiration of the time period set forth in paragraph (d) of this
section or any extension thereof pursuant to paragraph (e) of this
section that the period for review is being extended in accordance with
this paragraph (f), which notice shall also state the general reason(s)
therefor.
[57 FR 14336, Apr. 20, 1992, as amended at 58 FR 44114, Aug. 19, 1993;
62 FR 64143, Dec. 4, 1997]
Sec. 516.3 Definitions.
(a) Expedited treatment. (1) A savings association is eligible for
expedited treatment by the OTS if all of the following conditions exist:
(i) The savings association has a composite rating of 1 or 2;
(ii) The savings association has a Community Reinvestment Act (CRA)
rating of satisfactory or better;
(iii) The savings association has a Compliance rating of 1 or 2;
(iv) The savings association is meeting all of its capital
requirements under part 567 of this chapter; and
(v) The savings association has not been notified by supervisory
personnel that it is a problem association or an association in troubled
condition.
[[Page 55]]
(2) Where specified by regulation, a savings association that
qualifies for expedited treatment under paragraph (a)(1) of this section
may engage in activities upon filing a notice with the OTS together with
any necessary certifications. For these activities, a notice will be all
that is required and an association may engage in the activity unless
the OTS objects within 30 days. Such notices are deemed to be
applications for purposes of statutory and regulatory references to
``applications.''
(3) The OTS may require complete applications from savings
associations that otherwise qualify for expedited treatment in
situations raising supervisory concern or a significant issue of law or
policy and may request additional information from such associations
when necessary. In these circumstances, the OTS may determine that such
applications no longer qualify for expedited treatment.
(b) Standard treatment. (1) A savings association will receive
standard treatment if any of the following conditions exist:
(i) The savings association has a composite rating of 3, 4 or 5;
(ii) The savings association has a less than satisfactory CRA
rating;
(iii) The savings association has a Compliance rating of 3, 4, or 5;
(iv) The savings association has inadequate capital, including
failing any one of its capital requirements under part 567 of this
chapter; or
(v) The savings association has otherwise been notified by
supervisory personnel as being a problem association or an association
in troubled condition.
(2) Savings associations receiving standard treatment shall be
required to file complete applications under the applicable regulations
of this chapter with the OTS. Such applications will be denied unless
the association affirmatively demonstrates how the application will
clearly improve its financial and/or managerial condition or improve its
compliance with the CRA or other consumer-related statutes without
adversely affecting its financial or managerial resources.
(c) Composite rating. Composite rating means the composite numerical
rating assigned to the savings association by the OTS under the Uniform
Financial Institutions Rating System \1\ or an equivalent rating under a
comparable rating system adopted by the OTS, and refers to the most
recent rating (as determined either on-site or off-site by the most
recent examination) of which the savings association has been notified
in writing.
---------------------------------------------------------------------------
\1\ Copies are available at the address specified in Sec. 516.1 of
this part.
---------------------------------------------------------------------------
(d) CRA rating. Through June 30, 1989, savings associations received
one of five CRA ratings: Outstanding (1), Good (2), Satisfactory (3),
Needs Improvement (4), or Unsatisfactory (5). For examinations begun
between July 1, 1989 and June 30, 1990, savings associations received
numerical ratings of 1 through 5. During this period, ratings of 1 and 2
were considered satisfactory or better and 3, 4, and 5 were less than
satisfactory. Savings associations examined for CRA performance after
July 1, 1990 receive one of four ratings: Outstanding, Satisfactory,
Needs to Improve, or Substantial Noncompliance.
(e) Compliance rating. A savings association's Compliance rating is
determined pursuant to the OTS Compliance Rating System which measures
an association's compliance with civil rights, consumer protection, and
public interest regulations, including the Bank Secrecy Act, Bank
Protection Act, Equal Employment Opportunity, Economic Sanctions, and
Advertising.
[57 FR 14336, Apr. 20, 1992, as amended at 60 FR 66717, Dec. 26, 1995;
62 FR 3780, Jan. 27, 1997]
Subpart B--Publication Requirements
Source: 62 FR 64143, Dec. 4, 1997, unless otherwise noted.
Sec. 516.50 Who must publish a public notice of an application?
This subpart applies whenever an OTS regulation requires an
applicant (``you'') to follow the public notice procedures in this
subpart.
Sec. 516.60 When must I publish the public notice?
You must publish a public notice of the application no earlier than
seven
[[Page 56]]
days before and no later than the date of filing of the application.
Sec. 516.70 Where must I publish the public notice?
You must publish the notice in a newspaper having a general
circulation in the following communities:
(a) The community in which your home office(s) are located, or if
you are filing an application for permission to organize, the community
in which your home office will be located; and
(b) If you are filing a branch application, the community to be
served by the branch office.
Sec. 516.80 What language must I use in my publication?
(a) English. You must publish the notice in a newspaper printed in
the English language.
(b) Other than English. If the OTS determines that the primary
language of a significant number of adult residents of the community is
a language other than English, the OTS may require that you
simultaneously publish additional notice(s) in the community in the
appropriate language(s).
Subpart C--Comment Procedures
Source: 62 FR 64144, Dec. 4, 1997, unless otherwise noted.
Sec. 516.100 What does this subpart do?
This subpart contains the procedures governing the submission of
public comments on certain types of applications or notices
(``applications'') pending before the OTS. It applies whenever a
regulation incorporates the procedures in this subpart, or where
otherwise required by the OTS.
Sec. 516.110 Who may submit a written comment?
Any person (``you'') may submit a written comment supporting or
opposing an application.
Sec. 516.120 What information should I include in my comment?
(a) Your comment should recite relevant facts, including any
demographic, economic, or financial data, supporting your position. If
you file a comment opposing an application, your comment should also:
(1) Address at least one of the reasons a relevant regulation lists
as to why the OTS may deny an application;
(2) Recite any relevant facts and supporting data addressing these
reasons; and
(3) Address how the approval of the application could harm you or
any community.
(b) If you wish to request an informal meeting under Sec. 516.170,
you must file a request with your comment. You should describe the
nature of the issues or facts to be discussed and the reasons why
written submissions are insufficient to adequately address these facts
or issues.
Sec. 516.130 Where do I file my comment?
You must file your comment with the OTS office(s) set forth at
Sec. 516.1(c). If you request an informal meeting under Sec. 516.170,
you must simultaneously send a copy of the request to the applicant.
Sec. 516.140 When do I file my comment?
(a) General. Except as provided in paragraph (b) of this section,
you must file a written comment with the OTS within 25 days after the
application is filed with the OTS.
(b) Late-filed comments. The OTS will consider your late-filed
comment if:
(1) Within the comment period, you demonstrate to the OTS good cause
why you could not submit a timely comment; and
(2) The OTS concludes that your comment addresses a significant
regulatory concern and will assist in disposing of the application.
Sec. 516.150 Will I have additional opportunities to discuss the application?
The OTS may provide you with additional opportunities to discuss the
application in informal or formal meetings under subpart D of this part.
Subpart D--Meeting Procedures
Source: 62 FR 64144, Dec. 4, 1997, unless otherwise noted.
[[Page 57]]
Sec. 516.160 What does this subpart do?
This subpart contains informal and formal meeting procedures. It
applies whenever a regulation incorporates the procedures in this
subpart, or when otherwise required by the OTS.
Sec. 516.170 What procedures govern informal meetings on applications?
(a) When will the OTS arrange an informal meeting? The OTS may
arrange an informal meeting with the applicant, commenters, or any other
interested persons to clarify and narrow the issues and to facilitate
the resolution of the issues. If a commenter has filed a written request
for an informal meeting containing the information described at
Sec. 516.120(b), the OTS will arrange an informal meeting. The OTS also
may arrange an informal meeting on its own initiative.
(b) What action will the OTS take on an informal meeting request?
The OTS will inform the applicant and commenters requesting an informal
meeting of the OTS decision on a request for an informal meeting, or of
its decision to hold an informal meeting on its own initiative.
(c) How will the OTS inform the informal meeting participants of the
date, time, location and format for the informal meeting? The OTS will
invite the applicant and the commenter filing the request for the
informal meeting. The OTS may also invite any other interested persons
to attend. The OTS will inform the participants of the date, time,
location, and format for the informal meeting a reasonable time in
advance of the informal meeting.
(d) What procedures will govern the conduct of the informal meeting?
The OTS may hold informal meetings in any format, including a telephone
conference or face-to-face meeting.
(e) Will there be an additional opportunity to discuss the
application? Within three days after the informal meeting, any
participant in the informal meeting may request the OTS to hold a formal
meeting under Sec. 516.180. The participant should describe the nature
of the issues or facts to be presented and the reasons why a formal
meeting is necessary to make an adequate presentation of the facts or
issues. The participant must file the request with the OTS and send
copies of the request to other participants in the informal meeting.
Sec. 516.180 What procedures govern formal meetings on applications?
(a) When will the OTS hold a formal meeting? The OTS will not grant
a request for a formal meeting unless an informal meeting has been
conducted under Sec. 516.170. The OTS will grant all requests for a
formal meeting filed under Sec. 516.170(e). The OTS may also hold a
formal meeting on its own initiative, if it determines that written
submissions and informal meetings are insufficient to adequately present
issues or facts to the OTS, or that a formal meeting would otherwise
benefit the decisionmaking process. The OTS may limit the issues
considered at the formal meeting to issues that the OTS deems relevant
or material.
(b) How will the OTS announce the formal meeting? The OTS will issue
a Notice of Formal Meeting that will state the subject and date of the
filing, the time and place of the formal meeting and the issues to be
addressed. The OTS will send the Notice to the applicant and any person
requesting a formal meeting under Sec. 516.170(e). The OTS may also
invite other interested persons to participate in the formal meeting by
sending the Notice to such persons.
(c) Who may participate in the formal meeting? A person receiving a
Notice must notify the OTS of its intent to participate within ten days
after the OTS issues the Notice. At least five days before the formal
meeting, all participants in the formal meeting must provide the names
of their witnesses and copies of proposed exhibits to the OTS, the
applicant, and any other person designated by the OTS.
(d) Will the formal meeting be transcribed? The OTS will arrange for
a transcript. Each participant must bear the cost of any copies of the
transcript it requests for its use.
(e) What procedures govern the conduct of the formal meeting? (1)
The OTS will appoint a presiding officer to conduct the formal meeting.
The presiding officer is responsible for all procedural questions not
governed by this section. Subject to the rulings of the presiding
[[Page 58]]
officer, a participant may make opening statements and present
witnesses, material and data. If a participant presents documentary
material, it must furnish copies of the material to the OTS and to each
other participant. The OTS may keep the formal meeting record open for
additional information for up to 14 days following the receipt of the
transcript.
(2) The Administrative Procedure Act (5 U.S.C. 551 et seq.), the
Federal Rules of Evidence (28 U.S.C. Appendix), the Federal Rules of
Civil Procedure (28 U.S.C. Rule 1 et seq.) and the OTS Rules of Practice
and Procedure in Adjudicatory Proceedings (12 CFR part 509) do not apply
to formal meetings under this section.
Sec. 516.190 Will a meeting affect application processing time frames?
If the OTS has arranged a meeting, it will suspend applicable
application processing time frames, including the time frames for
deeming an application complete and the applicable approval time frames
specified in Sec. 516.2 or 516.3. The time period will resume when the
OTS determines that a record has been developed that sufficiently
supports a determination on the issues raised in the comments.
PART 517--THE MINORITY, WOMEN, AND INDIVIDUALS WITH DISABILITIES OUTREACH PROGRAM: CONTRACTING FOR GOODS AND SERVICES--Table of Contents
Sec.
517.1 Purpose and scope.
517.2 Definitions.
517.3 Policy.
517.4 Oversight and monitoring.
517.5 Outreach.
517.6 Certification.
517.7 Contract award guidelines.
Authority: 12 U.S.C. 1833(e); 42 U.S.C. 12101 et seq.
Source: 58 FR 33324, June 17, 1993, unless otherwise noted.
Sec. 517.1 Purpose and scope.
The purpose of the OTS Minority-, Women- and Individuals with
Disabilities-Owned Businesses Outreach Program (Outreach Program) is to
ensure that firms owned and operated by minorities, women and
individuals with disabilities are given the opportunity to participate
to the maximum extent possible in all contracts entered into by the OTS.
Sections 517.5 through 517.7 of this part apply to all contracting
activities, with the exception of contracting for legal services,
engaged in by OTS in any of its capacities, for all OTS functions
authorized by law. These contracts will typically pertain to services in
support of OTS's business operations, such as consulting, programming,
auditing, expert witnesses, customized training, relocation services,
information systems technology (computer systems, database management,
software and office automation), or micrographic services; or in support
of its day-to-day operations, such as facilities management, mail and
printing services, or procurement of office supplies, furniture and
office equipment.
Sec. 517.2 Definitions.
The definitions included in this part are derived from common usage
of these terms. A term in this part includes all those who are commonly
understood to be included within that term.
(a) Minority- and/or women-owned (small and large) businesses and
entities owned by minorities and women means firms at least fifty-one
(51) percent owned by individuals who are members of the minority group
or women and who are citizens of the United States. In the case of
publicly-owned companies, at least fifty-one (51) percent of each class
of voting stock must be owned by one or more members of the minority
group or by one or more women, who are citizens of the United States. In
the case of partnerships, at least fifty-one (51) percent of the
partnership interest must be owned by one or more members of the
minority group or by one or more women, who are citizens of the United
States. Additionally, the management and daily business operations of
the firm must be controlled by one or more such individuals.
(b) Minority means any Black/African-American; Native American
(American Indians, Eskimos, Aleuts
[[Page 59]]
and Native Hawaiians); Hispanic American; Asian-Pacific American; or
Subcontinent-Asian American.
(c) Small and large businesses and entities owned by individuals
with disabilities means firms at least fifty-one (51) percent owned by
individuals with disabilities who are citizens of the United States. In
the case of publicly-owned companies, at least fifty-one (51) percent of
each class of voting stock must be owned by individuals with
disabilities who are citizens of the United States. In the case of
partnerships, at least fifty-one (51) percent of the partnership
interest must be owned by individuals with disabilities who are citizens
of the United States. Additionally, the management and daily business
operations must be controlled by one or more such individuals.
(d) Disability, as used in this part, has the same meaning as the
term used in section 3 of the Americans With Disabilities Act of 1990,
Public Law 101-336, 104 Stat. 327 (42 U.S.C. 12101 et seq).
Sec. 517.3 Policy.
It is the policy of the OTS that minorities, women and individuals
with disabilities and entities owned by minorities, women and
individuals with disabilities are given the opportunity to participate
to the maximum extent possible in all contracts entered into by the OTS.
Sec. 517.4 Oversight and monitoring.
The Director of OTS shall appoint an Outreach Program Advocate, who
shall have primary responsibility for furthering the purposes of the
Outreach Program.
Sec. 517.5 Outreach.
(a) The outreach program advocate shall perform outreach activities
and act as liaison between the OTS and the public on outreach program
issues.
(b) Outreach activities include the identification and registration
of minority-, women-owned (small and large) businesses and entities
owned by individuals with disabilities who can provide goods and
services utilized by the OTS. This includes distributing information
concerning the Outreach Program and providing appropriate registration
materials for use by vendors and contractors. Identification will
primarily be accomplished by:
(1) Obtaining various lists and directories maintained by other
federal, state and local governmental agencies of Outreach Program
businesses;
(2) Participating in conventions, seminars and professional meetings
oriented towards Outreach Programs;
(3) Conducting seminars, meetings, workshops and various other
functions; and
(4) Monitoring proposed purchases and contracts to assure that OTS
contracting staff understand and actively promote the Outreach Program.
Sec. 517.6 Certification.
In order to qualify as an Outreach Program participant, each
business or contractor must either:
(a) Self-certify ownership status by filing with the OTS Outreach
Program Advocate a completed and signed Solicitation Mailing List
Application, Standard Form 129 (SF-129), as prescribed by the Federal
Acquisition Regulation (48 CFR part 53);
(b) Self-certify ownership status by filing with the OTS Outreach
Program Advocate a completed and signed ABELS Registration/Certification
Form, as prescribed by the U.S. Department of Commerce's Minority
Business Development Agency and available from the Outreach Program
Advocate at the headquarters address of the OTS as specified in 12 CFR
516.1(a); or
(c) Submit a valid Outreach Program certification received from a
Federal agency, or a designated state or authorized local agency.
Sec. 517.7 Contract award guidelines.
Contracts for goods or services shall be awarded in accordance with
OTS procurement rules and policies (48 CFR chapter 1 and FIRMR, 41 CFR
chapter 201). The OTS Outreach Program Advocate shall work to facilitate
the maximum participation of minority-, women-owned (small and large)
businesses and entities owned by individuals with disabilities in the
OTS procurement of goods or services.
[[Page 60]]
PART 528--NONDISCRIMINATION REQUIREMENTS--Table of Contents
Sec.
528.1 Definitions.
528.1a Supplementary guidelines.
528.2 Nondiscrimination in lending and other services.
528.2a Nondiscriminatory appraisal and underwriting.
528.3 Nondiscrimination in applications.
528.4 Nondiscriminatory advertising.
528.5 Equal Housing Lender Poster.
528.6 Loan application register.
528.7 Nondiscrimination in employment.
528.8 Complaints.
528.9 Guidelines relating to nondiscrimination in lending.
Authority: 12 U.S.C. 1464, 2810 et seq., 2901 et seq.; 15 U.S.C.
1691; 42 U.S.C. 1981, 1982, 3601-3619.
Source: 55 FR 1388, Jan. 16, 1990, unless otherwise noted.
Sec. 528.1 Definitions.
As used in this part 528--
(a) Application. For purposes of this part, an application for a
loan or other service is as defined in Regulation C, 12 CFR 203.2(b).
(b) Savings association. The term ``savings association'' means any
savings association as defined in Sec. 561.43 of this chapter other than
a State-chartered savings bank whose deposits are insured by the Bank
Insurance Fund.
(c) Dwelling. The term ``dwelling'' means a residential structure
(whether or not it is attached to real property) located in a state of
the United States of America, the District of Colombia, or the
Commonwealth of Puerto Rico. The term includes an individual condominium
unit, cooperative unit, or mobile or manufactured home.
[55 FR 1388, Jan. 16, 1990, as amended at 58 FR 4312, Jan. 14, 1993; 63
FR 71212, Dec. 24, 1998]
Sec. 528.1a Supplementary guidelines.
The Office's policy statement found at 12 CFR 528.9 supplements this
part and should be read together with this part. Refer also to the HUD
Fair Housing regulations at 24 CFR parts 100 et seq., Federal Reserve
Regulation B at 12 CFR part 202, and Federal Reserve Regulation C at 12
CFR part 203.
[63 FR 71212, Dec. 24, 1998]
Sec. 528.2 Nondiscrimination in lending and other services.
(a) No savings association may deny a loan or other service, or
discriminate in the purchase of loans or securities or discriminate in
fixing the amount, interest rate, duration, application procedures,
collection or enforcement procedures, or other terms or conditions of
such loan or other service on the basis of the age or location of the
dwelling, or on the basis of the race, color, religion, sex, handicap,
familial status (having one or more children under the age of 18),
marital status, age (provided the person has the capacity to contract)
or national origin of:
(1) An applicant or joint applicant;
(2) Any person associated with an applicant or joint applicant
regarding such loan or other service, or with the purposes of such loan
or other service;
(3) The present or prospective owners, lessees, tenants, or
occupants of the dwelling(s) for which such loan or other service is to
be made or given;
(4) The present or prospective owners, lessees, tenants, or
occupants of other dwellings in the vicinity of the dwelling(s) for
which such loan or other service is to be made or given.
(b) A savings association shall consider without prejudice the
combined income of joint applicants for a loan or other service.
(c) No savings association may discriminate against an applicant for
a loan or other service on any prohibited basis (as defined in 12 CFR
202.2(z) and 24 CFR part 100).
Note: See also, Sec. 528.9 (b) and (c).
[55 FR 1388, Jan. 16, 1990, as amended at 63 FR 71212, Dec. 24, 1998]
Sec. 528.2a Nondiscriminatory appraisal and underwriting.
(a) Appraisal. No savings association may use or rely upon an
appraisal of a dwelling which the savings association knows, or
reasonably should know, is discriminatory on the basis of the age or
location of the dwelling, or is discriminatory per se or in effect under
the Fair Housing Act of 1968 or the Equal Credit Opportunity Act.
(b) Underwriting. Each savings association shall have clearly
written, non-discriminatory loan underwriting
[[Page 61]]
standards, available to the public upon request, at each of its offices.
Each association shall, at least annually, review its standards, and
business practices implementing them, to ensure equal opportunity in
lending
Note: See also, Sec. 528.9(b), (c)(6), and (c)(7).
[55 FR 1388, Jan. 16, 1990, as amended at 63 FR 71212, Dec. 24, 1998]
Sec. 528.3 Nondiscrimination in applications.
(a) No savings association may discourage, or refuse to allow,
receive, or consider, any application, request, or inquiry regarding a
loan or other service, or discriminate in imposing conditions upon, or
in processing, any such application, request, or inquiry on the basis of
the age or location of the dwelling, or on the basis of the race, color,
religion, sex, handicap, familial status (having one or more children
under the age of 18), marital status, age (provided the person has the
capacity to contract), national origin, or other characteristics
prohibited from consideration in Sec. 528.2(c) of this part, of the
prospective borrower or other person, who:
(1) Makes application for any such loan or other service;
(2) Requests forms or papers to be used to make application for any
such loan or other service; or
(3) Inquires about the availability of such loan or other service.
(b) A savings association shall inform each inquirer of his or her
right to file a written loan application, and to receive a copy of the
association's underwriting standards.
Note: See also, Sec. 528.9(a) through (d).
[55 FR 1388, Jan. 16, 1990, as amended at 63 FR 71212, Dec. 24, 1998]
Sec. 528.4 Nondiscriminatory advertising.
No savings association may directly or indirectly engage in any form
of advertising which implies or suggests a policy of discrimination or
exclusion in violation of title VIII of the Civil Rights Acts of 1968,
the Equal Credit Opportunity Act, or this part 528. Advertisements,
other than for savings, shall include a facsimile of the following
logotype and legend:
[GRAPHIC] [TIFF OMITTED] TC07SE91.000
Sec. 528.5 Equal Housing Lender Poster.
(a) Each savings association shall post and maintain one or more
Equal Housing Lender Posters, the text of which is prescribed in
paragraph (b) of this section, in the lobby of each of its offices in a
prominent place or places readily apparent to all persons seeking loans.
The poster shall be at least 11 by 14 inches in size, and the text shall
be easily legible. It is recommended that savings associations post a
Spanish language version of the poster in offices serving areas with a
substantial Spanish-speaking population.
(b) The text of the Equal Housing Lender Poster shall be as follows:
[GRAPHIC] [TIFF OMITTED] TC07SE91.001
We Do Business In Accordance With Federal Fair Lending Laws.
UNDER THE FEDERAL FAIR HOUSING ACT, IT IS ILLEGAL, ON THE BASIS OF
RACE, COLOR, NATIONAL ORIGIN, RELIGION, SEX, HANDICAP, OR FAMILIAL
STATUS (HAVING CHILDREN UNDER THE AGE OF 18) TO:
[ ]Deny a loan for the purpose of purchasing, constructing,
improving, repairing or maintaining a dwelling or to deny any loan
secured by a dwelling; or
[ ]Discriminate in fixing the amount, interest rate, duration,
application procedures, or other terms or conditions of such a loan or
in appraising property.
[[Page 62]]
IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD:
SEND A COMPLAINT TO:
Assistant Secretary for Fair Housing and Equal Opportunity,
Department of Housing and Urban Development, Washington, DC 20410.
For processing under the Federal Fair Housing Act
AND TO:
Director, Consumer Affairs, Office of Thrift Supervision,
Washington, DC 20552.
For processing under Office of Thrift Supervision Regulations.
UNDER THE EQUAL CREDIT OPPORTUNITY ACT, IT IS ILLEGAL TO
DISCRIMINATE IN ANY CREDIT TRANSACTION:
[ ]On the basis of race, color, national origin, religion, sex,
marital status, or age;
[ ]Because income is from public assistance; or
[ ]Because a right has been exercised under the Consumer Credit
Protection Act.
IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD SEND
A COMPLAINT TO:
Director, Consumer Affairs, Office of Thrift Supervision,
Washington, DC 20552.
Sec. 528.6 Loan application register.
Savings associations and other lenders required to file Home
Mortgage Disclosure Act Loan Application Registers with the Office of
Thrift Supervision in accordance with 12 CFR part 203 must enter the
reason for denial, using the codes provided in 12 CFR part 203, with
respect to all loan denials.
[58 FR 4312, Jan. 14, 1993]
Sec. 528.7 Nondiscrimination in employment.
(a) No savings association shall, because of an individual's race,
color, religion, sex, or national origin:
(1) Fail or refuse to hire such individual;
(2) Discharge such individual;
(3) Otherwise discriminate against such individual with respect to
such individual's compensation, promotion, or the terms, conditions, or
privileges of such individual's employment; or
(4) Discriminate in admission to, or employment in, any program of
apprenticeship, training, or retraining, including on-the-job training.
(b) No savings association shall limit, segregate, or classify its
employees in any way which would deprive or tend to deprive any
individual of employment opportunities or otherwise adversely affect
such individual's status as an employee because of such individual's
race, color, religion, sex, or national origin.
(c) No savings association shall discriminate against any employee
or applicant for employment because such employee or applicant has
opposed any employment practice made unlawful by Federal, State, or
local law or regulation or because he has in good faith made a charge of
such practice or testified, assisted, or participated in any manner in
an investigation, proceeding, or hearing of such practice by any
lawfully constituted authority.
(d) No savings association shall print or publish or cause to be
printed or published any notice or advertisement relating to employment
by such savings association indicating any preference, limitation,
specification, or discrimination based on race, color, religion, sex, or
national origin.
(e) This regulation shall not apply in any case in which the Federal
Equal Employment Opportunities law is made inapplicable by the
provisions of section 2000e-1 or sections 2000e-2 (e) through (j) of
title 42, United States Code.
(f) Any violation of the following laws or regulations by a savings
association shall be deemed to be a violation of this part 528:
(1) The Equal Employment Opportunity Act, as amended, 42 U.S.C.
2000e-2000h-2, and Equal Employment Opportunity Commission (EEOC)
regulations at 29 CFR part 1600;
(2) The Age Discrimination in Employment Act, 29 U.S.C. 621-633, and
EEOC and Department of Labor regulations;
(3) Department of the Treasury regulations at 31 CFR part 12 and
Office of Federal Contract Compliance Programs (OFCCP) regulations at 41
CFR part 60;
(4) The Veterans Employment and Readjustment Act of 1972, 38 U.S.C.
2011-2012, and the Vietnam Era Veterans Readjustment Adjustment
Assistance Act of 1974, 38 U.S.C. 2021-2026;
(5) The Rehabilitation Act of 1973, 29 U.S.C. 701 et al.; and
[[Page 63]]
(6) The Immigration and Nationality Act, 8 U.S.C. 1324b, and INS
regulations at 8 CFR part 274a.
Sec. 528.8 Complaints.
Complaints regarding discrimination in lending by a savings
association shall be referred to the Assistant Secretary for Fair
Housing and Equal Opportunity, U.S. Department of Housing and Urban
Development, Washington, DC 20410 for processing under the Fair Housing
Act, and to the Director, Consumer Affairs, Office of Thrift
Supervision, Washington, DC 20552 for processing under Office
regulations. Complaints regarding discrimination in employment by a
savings association should be referred to the Equal Employment
Opportunity Commission, Washington, DC 20506 and a copy, for information
only, sent to the Director, Consumer Affairs, Office of Thrift
Supervision, Washington, DC 20552.
Sec. 528.9 Guidelines relating to nondiscrimination in lending.
(a) General. Fair housing and equal opportunity in home financing is
a policy of the United States established by Federal statutes and
Presidential orders and proclamations. In furtherance of the Federal
civil rights laws and the economical home financing purposes of the
statutes administered by the Office, the Office has adopted, in part 528
of this chapter, nondiscrimination regulations that, among other things,
prohibit arbitrary refusals to consider loan applications on the basis
of the age or location of a dwelling, and prohibit discrimination based
on race, color, religion, sex, handicap, familial status (having one or
more children under the age of 18), marital status, age (provided the
person has the capacity to contract), or national origin in fixing the
amount, interest rate, duration, application procedures, collection or
enforcement procedures, or other terms or conditions of housing related
loans. Such discrimination is also prohibited in the purchase of loans
and securities. This section provides supplementary guidelines to aid
savings associations in developing and implementing nondiscriminatory
lending policies. Each savings association should reexamine its
underwriting standards at least annually in order to ensure equal
opportunity.
(b) Loan underwriting standards. The basic purpose of the Office's
nondiscrimination regulations is to require that every applicant be
given an equal opportunity to obtain a loan. Each loan applicant's
creditworthiness should be evaluated on an individual basis without
reference to presumed characteristics of a group. The use of lending
standards which have no economic basis and which are discriminatory in
effect is a violation of law even in the absence of an actual intent to
discriminate. However, a standard which has a discriminatory effect is
not necessarily improper if its use achieves a genuine business need
which cannot be achieved by means which are not discriminatory in effect
or less discriminatory in effect.
(c) Discriminatory practices--(1) Discrimination on the basis of sex
or marital status. The Civil Rights Act of 1968 and the National Housing
Act prohibit discrimination in lending on the basis of sex. The Equal
Credit Opportunity Act, in addition to this prohibition, forbids
discrimination on the basis of marital status. Refusing to lend to,
requiring higher standards of creditworthiness of, or imposing different
requirements on, members of one sex or individuals of one marital
status, is discrimination based on sex or marital status. Loan
underwriting decisions must be based on an applicant's credit history
and present and reasonably foreseeable economic prospects, rather than
on the basis of assumptions regarding comparative differences in
creditworthiness between married and unmarried individuals, or between
men and women.
(2) Discrimination on the basis of language. Requiring fluency in
the English language as a prerequisite for obtaining a loan may be a
discriminatory practice based on national origin.
(3) Income of husbands and wives. A practice of discounting all or
part of either spouse's income where spouses apply jointly is a
violation of section 527 of the National Housing Act. As with other
income, when spouses apply jointly for a loan, the determination as to
whether a spouse's income qualifies for credit purposes should depend
upon
[[Page 64]]
a reasonable evaluation of his or her past, present, and reasonably
foreseeable economic circumstances. Information relating to child-
bearing intentions of a couple or an individual may not be requested.
(4) Supplementary income. Lending standards which consider as
effective only the non-overtime income of the primary wage-earner may
result in discrimination because they do not take account of variations
in employment patterns among individuals and families. The Office favors
loan underwriting which reasonably evaluates the credit worthiness of
each applicant based on a realistic appraisal of his or her own past,
present, and foreseeable economic circumstances. The determination as to
whether primary income or additional income qualifies as effective for
credit purposes should depend upon whether such income may reasonably be
expected to continue through the early period of the mortgage risk.
Automatically discounting other income from bonuses, overtime, or part-
time employment, will cause some applicants to be denied financing
without a realistic analysis of their credit worthiness. Since
statistics show that minority group members and low- and moderate-income
families rely more often on such supplemental income, the practice may
be racially discriminatory in effect, as well as artificially
restrictive of opportunities for home financing.
(5) Applicant's prior history. Loan decisions should be based upon a
realistic evaluation of all pertinent factors respecting an individual's
creditworthiness, without giving undue weight to any one factor. The
savings association should, among other things, take into consideration
that:
(i) In some instances, past credit difficulties may have resulted
from discriminatory practices;
(ii) A policy favoring applicants who previously owned homes may
perpetuate prior discrimination;
(iii) A current, stable earnings record may be the most reliable
indicator of credit-worthiness, and entitled to more weight than factors
such as educational level attained;
(iv) Job or residential changes may indicate upward mobility; and
(v) Preferring applicants who have done business with the lender can
perpetuate previous discriminatory policies.
(6) Income level or racial composition of area. Refusing to lend or
lending on less favorable terms in particular areas because of their
racial composition is unlawful. Refusing to lend, or offering less
favorable terms (such as interest rate, downpayment, or maturity) to
applicants because of the income level in an area can discriminate
against minority group persons.
(7) Age and location factors. Sections 528.2, 528.2a, and 528.3 of
this chapter prohibit loan denials based upon the age or location of a
dwelling. These restrictions are intended to prohibit use of unfounded
or unsubstantiated assumptions regarding the effect upon loan risk of
the age of a dwelling or the physical or economic characteristics of an
area. Loan decisions should be based on the present market value of the
property offered as security (including consideration of specific
improvements to be made by the borrower) and the likelihood that the
property will retain an adequate value over the term of the loan.
Specific factors which may negatively affect its short-range future
value (up to 3-5 years) should be clearly documented. Factors which in
some cases may cause the market value of a property to decline are
recent zoning changes or a significant number of abandoned homes in the
immediate vicinity of the property. However, not all zoning changes will
cause a decline in property values, and proximity to abandoned buildings
may not affect the market value of a property because of rehabilitation
programs or affirmative lending programs, or because the cause of
abandonment is unrelated to high risk. Proper underwriting
considerations include the condition and utility of the improvements,
and various physical factors such as street conditions, amenities such
as parks and recreation areas, availability of public utilities and
municipal services, and exposure to flooding and land faults. However,
arbitrary decisions based on age or location are prohibited, since many
older, soundly constructed homes provide housing opportunities which may
[[Page 65]]
be precluded by an arbitrary lending policy.
(8) Fair Housing Act (title VIII, Civil Rights Act of 1968, as
amended). Savings associations, must comply with all regulations
promulgated by the Department of Housing and Urban Development to
implement the Fair Housing Act, found at 24 CFR part 100 et seq., except
that they shall use the Equal Housing Lender logo and poster prescribed
by Office regulations at 12 CFR 528.4 and 528.5 rather than the Equal
Housing Opportunity logo and poster required by 24 CFR parts 109 and
110.
(d) Marketing practices. Savings associations should review their
advertising and marketing practices to ensure that their services are
available without discrimination to the community they serve.
Discrimination in lending is not limited to loan decisions and
underwriting standards; a savings association does not meet its
obligations to the community or implement its equal lending
responsibility if its marketing practices and business relationships
with developers and real estate brokers improperly restrict its
clientele to segments of the community. A review of marketing practices
could begin with an examination of an association's loan portfolio and
applications to ascertain whether, in view of the demographic
characteristics and credit demands of the community in which the
institution is located, it is adequately serving the community on a
nondiscriminatory basis. The Office will systematically review marketing
practices where evidence of discrimination in lending is discovered.
[54 FR 49666, Nov. 30, 1989, as amended at 60 FR 66870, Dec. 27, 1995.
Redesignated at 63 FR 71212, Dec. 24, 1998]
PART 535--PROHIBITED CONSUMER CREDIT PRACTICES--Table of Contents
Sec.
535.1 Definitions.
535.2 Unfair credit practices.
535.3 Unfair or deceptive cosigner practices.
535.4 Late charges.
535.5 State exemptions.
Authority: Sec. 18, as added by sec. 202, 88 Stat. 2193, as amended
(15 U.S.C. 57a).
Source: 54 FR 49479, Nov. 30, 1989, unless otherwise noted.
Sec. 535.1 Definitions.
(a) Act. For the purposes of this part, ``Act'' means the Federal
Trade Commission Act, 15 U.S.C. 41 et seq.
(b) Consumer. The term ``consumer'' means a natural person who seeks
or acquires goods, services, or money for personal, family, or household
purposes, and who applies for or is extended ``consumer credit'' as
defined in Sec. 561.12 of this chapter.
(c) Cosigner. The term ``cosigner'' means a natural person who
assumes liability for the obligation of a consumer without receiving
goods, services, or money in return for the obligation, or in the case
of an open-end credit obligation, without receiving the contractual
right to obtain extensions of credit under the account. The term shall
include any person whose signature is requested as a condition to
granting credit to a consumer, or as a condition for forbearance on
collection of a consumer's obligation that is in default. The term shall
not include a spouse or other person whose signature is required on a
credit obligation to perfect a security interest pursuant to state law.
A person is a cosigner within the meaning of this definition whether or
not he or she is designated as such on a credit obligation.
(d) Creditor. The term ``creditor'' means a savings association.
(e) Debt. The term ``debt'' means money that is due or alleged to be
due from one to another.
(f) Earnings. The term ``earnings'' means compensation paid or
payable to an individual or for his or her account for personal services
rendered or to be rendered by him or her, whether denominated as wages,
salary, commission, bonus, or otherwise, including periodic payments
pursuant to a pension, retirement, or disability program.
(g) Household goods. The term ``household goods'' means clothing,
furniture, appliances, linens, china, crockery, kitchenware, and
personal effects of the consumer and his or her dependents, provided
that the following are not included within the scope of the term
``household goods'':
(1) Works of art;
(2) Electronic entertainment equipment (except one television and
one radio);
[[Page 66]]
(3) Antiques, i.e., any item over one hundred years of age,
including such items that have been repaired or renovated without
changing their original form or character, and
(4) Jewelry (other than wedding rings).
(h) Savings association. For purposes of this part, the term
``savings association'' includes any savings association, and any
service corporation that is wholly owned by one or more savings
association, that engages in the business of providing credit to
consumers.
(i) Obligation. The term ``obligation'' means an agreement between a
consumer and a creditor.
(j) Person. The term ``person'' means an individual, corporation, or
other business organization.
Sec. 535.2 Unfair credit practices.
(a) In connection with the extension of credit to consumers after
January 1, 1986, it is an unfair act or practice within the meaning of
section 5 of the Act for a savings association directly or indirectly to
enter into a consumer credit obligation that constitutes or contains, or
to enforce in a consumer credit obligation purchased by a savings
association, any of the following provisions:
(1) A cognovit or confession of judgment (for purposes other than
executory process in the State of Louisiana), warrant of attorney, or
other waiver of the right to notice and the opportunity to be heard in
the event of suit or process thereon;
(2) An executory waiver or a limitation of exemption from
attachment, execution, or other process on real or personal property
held, owned by, or due to the consumer, unless the waiver applies solely
to property subject to a security interest executed in connection with
the obligation;
(3) An assignment of wages or other earnings, unless:
(i) The assignment by its terms is revocable at the will of the
debtor,
(ii) The assignment is a payroll deduction plan or preauthorized
payment plan, commencing at the time of the transaction, in which the
consumer authorizes a series of wage deductions as a method of making
each payment, or
(iii) The assignment applies only to wages or other earnings already
earned at the time of the assignment.
(4) A nonpossessory security interest in household goods other than
a purchase-money security interest.
Sec. 535.3 Unfair or deceptive cosigner practices.
(a) General. In connection with the extension of credit to consumers
after January 1, 1986, it is:
(1) A deceptive act or practice within the meaning of section 5 of
the Act for a savings association, directly or indirectly, to
misrepresent the nature or extent of cosigner liability to any person.
(2) An unfair act or practice within the meaning of section 5 of the
Act for a savings association, directly or indirectly, to obligate a
cosigner unless the cosigner is informed, prior to becoming obligated,
of the nature of his or her liability as cosigner.
(b) Disclosure requirement. (1) A clear and conspicuous document
that shall contain the following statement or one which is substantially
equivalent, shall be given to the consigner prior to becoming obligated
(which, in the case of open-end credit, shall mean prior to the time
that the cosigner becomes obligated for any fees or transaction on the
account):
Notice of Cosigner
You are being asked to guarantee this debt. Think carefully before
you do. If the borrower doesn't pay the debt, you will have to. Be sure
you can afford to pay if you have to, and that you want to accept this
responsibility.
You may have to pay up to the full amount of the debt if the
borrower does not pay. You may also have to pay late fees or collection
costs, which increase this amount.
The creditor can collect this debt from you without first trying to
collect from the borrower. The creditor can use the same collection
methods against you that can be used against the borrower, such as suing
you, garnishing your wages, etc. If this debt is ever in default, that
fact may become a part of your credit record.
(2) Compliance with the disclosure requirement under paragraph
(b)(1) of this section shall constitute compliance with the consumer
information requirement of paragraph (a)(2) of this section.
[[Page 67]]
(3) If the notice is a separate document, nothing other than the
following times may appear with the notice:
(i) The name and address of the savings association;
(ii) An identification of the debt to be cosigned (e.g., a loan
identification number);
(iii) The date; and
(iv) The statement, ``This notice is not the contract that makes you
liable for the debt.''
Sec. 535.4 Late charges.
(a) In connection with collecting a debt arising out of an extension
of credit to a consumer after January 1, 1986, it is an unfair act or
practice within the meaning of section 5 of the Act for a savings
association, directly or indirectly, to levy or collect any delinquency
charge on a payment, which payment is otherwise a full payment for the
applicable period and is paid on its due date or within an applicable
grace period, when the only delinquency is attributable to late fee(s)
or delinquency charge(s) assessed on earlier installment(s).
(b) For the purposes of this part, ``collecting a debt'' means any
activity, other than the use of judicial process, that is intended to
bring about or does bring about repayment of all or part of a consumer
debt.
Sec. 535.5 State exemptions.
(a) Upon application to the Office by an appropriate state agency,
the Office shall determine if:
(1) There is a state requirement or prohibition in effect that
applies to any transaction to which a provision of this rule applies;
and
(2) The state requirement or prohibition affords a level of
protection to consumers that is substantially equivalent to, or greater
than, the protection afforded by this rule.
(b) If the Office makes a determination as specified under paragraph
(a) of this section, then that provision of this section will not be in
effect in that state to the extent specified by the Office in its
determination, for as long as the state administers and enforces the
state requirement or prohibition effectively, as determined by the
Office.
(c) The Director of Consumer Affairs in consultation with the Chief
Counsel shall have delegated authority to make such determinations as
are required under this part 535.
PART 536--CONSUMER PROTECTION IN SALES OF INSURANCE--Table of Contents
Sec.
536.10 Purpose and scope.
536.20 Definitions.
536.30 Prohibited practices.
536.40 What you must disclose.
536.50 Where insurance activities may take place.
536.60 Qualification and licensing requirements for insurance sales
personnel.
Appendix A to Part 536--Consumer Grievance Process.
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, and 1831x.
Source: 65 FR 75845, Dec. 4, 2000, unless otherwise noted.
Effective Date Note: At 65 FR 75845, Dec. 4, 2000, part 536 was
added, effective April 1, 2001.
Sec. 536.10 Purpose and scope.
(a) General rule. This part establishes consumer protections in
connection with retail sales practices, solicitations, advertising, or
offers of any insurance product or annuity to a consumer by:
(1) Any savings association; or
(2) Any other person that is engaged in such activities at an office
of a savings association or on behalf of a savings association.
(b) Application to operating subsidiaries. For purposes of
Sec. 559.3(h) of this chapter, an operating subsidiary is subject to
this part only to the extent that it sells, solicits, advertises, or
offers insurance products or annuities at an office of a savings
association or on behalf of a savings association.
Sec. 536.20 Definitions.
As used in this part:
Affiliate means a company that controls, is controlled by, or is
under common control with another company.
Company means any corporation, partnership, business trust,
association or similar organization, or any other trust (unless by its
terms the trust must terminate within twenty-five
[[Page 68]]
years or not later than twenty-one years and ten months after the death
of individuals living on the effective date of the trust). It does not
include any corporation the majority of the shares of which are owned by
the United States or by any State, or a qualified family partnership, as
defined in section 2(o)(10) of the Bank Holding Company Act of 1956, as
amended (12 U.S.C. 1841(o)(10)).
Consumer means an individual who purchases, applies to purchase, or
is solicited to purchase from a covered person insurance products or
annuities primarily for personal, family, or household purposes.
Control of a company has the same meaning as in section 3(w)(5) of
the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(5)).
Domestic violence means the occurrence of one or more of the
following acts by a current or former family member, household member,
intimate partner, or caretaker:
(1) Attempting to cause or causing or threatening another person
physical harm, severe emotional distress, psychological trauma, rape, or
sexual assault;
(2) Engaging in a course of conduct or repeatedly committing acts
toward another person, including following the person without proper
authority, under circumstances that place the person in reasonable fear
of bodily injury or physical harm;
(3) Subjecting another person to false imprisonment; or
(4) Attempting to cause or causing damage to property so as to
intimidate or attempt to control the behavior of another person.
Electronic media includes any means for transmitting messages
electronically between a covered person and a consumer in a format that
allows visual text to be displayed on equipment, for example, a personal
computer monitor.
Office means the premises of a savings association where retail
deposits are accepted from the public.
Subsidiary has the same meaning as in section 3(w)(4) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(w)(4)).
You means:
(1) A savings association, as defined in Sec. 561.43 of this
chapter; or
(2) Any other person only when the person sells, solicits,
advertises, or offers an insurance product or annuity to a consumer at
an office of a savings association, or on behalf of a savings
association. For purposes of this definition, activities on behalf of a
savings association include activities where a person, whether at an
office of the savings association or at another location, sells,
solicits, advertises, or offers an insurance product or annuity and at
least one of the following applies:
(i) The person represents to a consumer that the sale, solicitation,
advertisement, or offer of any insurance product or annuity is by or on
behalf of the savings association;
(ii) The savings association refers a consumer to a seller of
insurance products and annuities and the savings association has a
contractual arrangement to receive commissions or fees derived from a
sale of an insurance product or annuity resulting from that referral; or
(iii) Documents evidencing the sale, solicitation, advertising, or
offer of an insurance product or annuity identify or refer to the
savings association.
Sec. 536.30 Prohibited practices.
(a) Anticoercion and antitying rules. You may not engage in any
practice that would lead a consumer to believe that an extension of
credit, in violation of section 5(q) of the Home Owners' Loan Act (12
U.S.C. 1464(q)), is conditional upon either:
(1) The purchase of an insurance product or annuity from a savings
association or any of its affiliates; or
(2) An agreement by the consumer not to obtain, or a prohibition on
the consumer from obtaining, an insurance product or annuity from an
unaffiliated entity.
(b) Prohibition on misrepresentations generally. You may not engage
in any practice or use any advertisement at any office of, or on behalf
of, a savings association or a subsidiary of a savings association that
could mislead any person or otherwise cause a reasonable person to reach
an erroneous belief with respect to:
[[Page 69]]
(1) The fact that an insurance product or annuity you or any
subsidiary of a savings association sell or offer for sale is not backed
by the Federal government or a savings association, or the fact that the
insurance product or annuity is not insured by the Federal Deposit
Insurance Corporation;
(2) In the case of an insurance product or annuity that involves
investment risk, the fact that there is an investment risk, including
the potential that principal may be lost and that the product may
decline in value; or
(3) In the case of a savings association or subsidiary of a savings
association at which insurance products or annuities are sold or offered
for sale, the fact that:
(i) The approval of an extension of credit to a consumer by the
savings association or subsidiary may not be conditioned on the purchase
of an insurance product or annuity by the consumer from the savings
association or a subsidiary of a savings association; and
(ii) The consumer is free to purchase the insurance product or
annuity from another source.
(c) Prohibition on domestic violence discrimination. You may not
sell or offer for sale, as principal, agent, or broker, any life or
health insurance product if the status of the applicant or insured as a
victim of domestic violence or as a provider of services to victims of
domestic violence is considered as a criterion in any decision with
regard to insurance underwriting, pricing, renewal, or scope of coverage
of such product, or with regard to the payment of insurance claims on
such product, except as required or expressly permitted under State law.
Sec. 536.40 What you must disclose.
(a) Insurance disclosures. In connection with the initial purchase
of an insurance product or annuity by a consumer from you, you must
disclose to the consumer, except to the extent the disclosure would not
be accurate, that:
(1) The insurance product or annuity is not a deposit or other
obligation of, or guaranteed by, a savings association or an affiliate
of a savings association;
(2) The insurance product or annuity is not insured by the Federal
Deposit Insurance Corporation (FDIC) or any other agency of the United
States, a savings association, or (if applicable) an affiliate of a
savings association; and
(3) In the case of an insurance product or annuity that involves an
investment risk, there is investment risk associated with the product,
including the possible loss of value.
(b) Credit disclosures. In the case of an application for credit in
connection with which an insurance product or annuity is solicited,
offered, or sold, you must disclose that a savings association may not
condition an extension of credit on either:
(1) The consumer's purchase of an insurance product or annuity from
the savings association or any of its affiliates; or
(2) The consumer's agreement not to obtain, or a prohibition on the
consumer from obtaining, an insurance product or annuity from an
unaffiliated entity.
(c) Timing and method of disclosures--(1) In general. The
disclosures required by paragraph (a) of this section must be provided
orally and in writing before the completion of the initial sale of an
insurance product or annuity to a consumer. The disclosure required by
paragraph (b) of this section must be made orally and in writing at the
time the consumer applies for an extension of credit in connection with
which an insurance product or annuity is solicited, offered, or sold.
(2) Exception for transactions by mail. If you conduct an insurance
product or annuity sale by mail, you are not required to make the oral
disclosures required by paragraph (a) of this section. If you take an
application for credit by mail, you are not required to make the oral
disclosure required by paragraph (b) of this section.
(3) Exception for transactions by telephone. If a sale of an
insurance product or annuity is conducted by telephone, you may provide
the written disclosures required by paragraph (a) of this section by
mail within 3 business days beginning on the first business day after
the sale, solicitation, or offer, excluding Sundays and the legal public
holidays specified in 5 U.S.C. 6103(a). If you take an application for
credit by
[[Page 70]]
telephone, you may provide the written disclosure required by paragraph
(b) of this section by mail, provided you mail it to the consumer within
three days beginning the first business day after the application is
taken, excluding Sundays and the legal public holidays specified in 5
U.S.C. 6103(a).
(4) Electronic form of disclosures. (i) Subject to the requirements
of section 101(c) of the Electronic Signatures in Global and National
Commerce Act (12 U.S.C. 7001(c)), you may provide the written
disclosures required by paragraph (a) and (b) of this section through
electronic media instead of on paper, if the consumer affirmatively
consents to receiving the disclosures electronically and if the
disclosures are provided in a format that the consumer may retain or
obtain later, for example, by printing or storing electronically (such
as by downloading).
(ii) You are not required to provide orally any disclosures required
by paragraphs (a) or (b) of this section that you provide by electronic
media.
(5) Disclosures must be readily understandable. The disclosures
provided shall be conspicuous, simple, direct, readily understandable,
and designed to call attention to the nature and significance of the
information provided. For instance, you may use the following
disclosures in visual media, such as television broadcasting, ATM
screens, billboards, signs, posters and written advertisements and
promotional materials, as appropriate and consistent with paragraphs (a)
and (b) of this section:
NOT A DEPOSIT
NOT FDIC-INSURED
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
NOT GUARANTEED BY THE SAVINGS ASSOCIATION
MAY GO DOWN IN VALUE
(6) Disclosures must be meaningful. (i) You must provide the
disclosures required by paragraphs (a) and (b) of this section in a
meaningful form. Examples of the types of methods that could call
attention to the nature and significance of the information provided
include:
(A) A plain-language heading to call attention to the disclosures;
(B) A typeface and type size that are easy to read;
(C) Wide margins and ample line spacing;
(D) Boldface or italics for key words; and
(E) Distinctive type size, style, and graphic devices, such as
shading or sidebars, when the disclosures are combined with other
information.
(ii) You have not provided the disclosures in a meaningful form if
you merely state to the consumer that the required disclosures are
available in printed material, but do not provide the printed material
when required and do not orally disclose the information to the consumer
when required.
(iii) With respect to those disclosures made through electronic
media for which paper or oral disclosures are not required, the
disclosures are not meaningfully provided if the consumer may bypass the
visual text of the disclosures before purchasing an insurance product or
annuity.
(7) Consumer acknowledgment. You must obtain from the consumer, at
the time a consumer receives the disclosures required under paragraphs
(a) or (b) of this section, or at the time of the initial purchase by
the consumer of an insurance product or annuity, a written
acknowledgment by the consumer that the consumer received the
disclosures. You may permit a consumer to acknowledge receipt of the
disclosures electronically or in paper form. If the disclosures required
under paragraphs (a) or (b) of this section are provided in connection
with a transaction that is conducted by telephone, you must:
(i) Obtain an oral acknowledgment of receipt of the disclosures and
maintain sufficient documentation to show that the acknowledgment was
given; and
(ii) Make reasonable efforts to obtain a written acknowledgment from
the consumer.
(d) Advertisements and other promotional material for insurance
products or annuities. The disclosures described in paragraph (a) of
this section are required in advertisements and promotional material for
insurance products or annuities unless the advertisements and
promotional material are of a general nature describing or listing
[[Page 71]]
the services or products offered by a savings association.
Sec. 536.50 Where insurance activities may take place.
(a) General rule. A savings association must, to the extent
practicable:
(1) Keep the area where the savings association conducts
transactions involving insurance products or annuities physically
segregated from areas where retail deposits are routinely accepted from
the general public;
(2) Identify the areas where insurance product or annuity sales
activities occur; and
(3) Clearly delineate and distinguish those areas from the areas
where the savings association's retail deposit-taking activities occur.
(b) Referrals. Any person who accepts deposits from the public in an
area where such transactions are routinely conducted in a savings
association may refer a consumer who seeks to purchase an insurance
product or annuity to a qualified person who sells that product only if
the person making the referral receives no more than a one-time, nominal
fee of a fixed dollar amount for each referral that does not depend on
whether the referral results in a transaction.
Sec. 536.60 Qualification and licensing requirements for insurance sales personnel.
A savings association may not permit any person to sell or offer for
sale any insurance product or annuity in any part of the savings
association's office or on its behalf, unless the person is at all times
appropriately qualified and licensed under applicable State insurance
licensing standards with regard to the specific products being sold or
recommended.
Appendix A to Part 536--Consumer Grievance Process
Any consumer who believes that any savings association or any other
person selling, soliciting, advertising, or offering insurance products
or annuities to the consumer at an office of the savings association or
on behalf of the savings association has violated the requirements of
this part should contact the Director, Consumer Programs, Office of
Thrift Supervision, at the following address: 1700 G Street, NW.,
Washington, DC 20552, or telephone 202-906-6237 or 800-842-6929, or e-
mail consumer.complaint@ots.treas.gov.
PART 541--DEFINITIONS--Table of Contents
Sec.
541.1 General.
541.2 Act.
541.5 Commercial paper.
541.7 Corporate debt security.
541.8 Debit card.
541.10 Dwelling unit.
541.11 Federal savings association.
541.14 Home.
541.15 Improved nonresidential real estate.
541.16 Improved residential real estate.
541.18 Interim Federal savings association.
541.19 Interim state savings association.
541.20 Loans.
541.21 Nonresidential real estate.
541.22 [Reserved]
541.23 Residential real estate.
541.25 Single-family dwelling.
541.26 Surplus.
541.27 Unimproved real estate.
541.28 Withdrawal value of a savings account.
Authority: 12 U.S.C. 1462a, 1463, 1464.
Source: 54 FR 49480, Nov. 30, 1989, unless otherwise noted.
Sec. 541.1 General.
Unless another definition is provided in this chapter, definitions
in part 561 of this chapter apply.
Sec. 541.2 Act.
The term Act means the Home Owners' Loan Act of 1933, as amended.
Sec. 541.5 Commercial paper.
The term commercial paper means any note, draft, or bill of exchange
which arises out of a current transaction or the proceeds of which have
been or are to be used for current transactions, and which has a
maturity at the time of issuance of not exceeding nine months, exclusive
of days of grace, or any renewal thereof the maturity of which is
likewise limited.
Sec. 541.7 Corporate debt security.
The term corporate debt security means a marketable obligation,
evidencing the indebtedness of any corporation in the form of a bond,
note and/or debenture which is commonly regarded as a debt security and
is not predominantly speculative in nature. A security is marketable if
it may be sold
[[Page 72]]
with reasonable promptness at a price which corresponds reasonably to
its fair value.
Sec. 541.8 Debit card.
The term debit card means a card that enables an accountholder to
obtain access to a savings account for the purpose of making withdrawals
or of transferring funds to a third party by non-transferable order or
authorization.
Sec. 541.10 Dwelling unit.
The term dwelling unit means the unified combination of rooms
designed for residential use by one family, other than a single-family
dwelling.
Sec. 541.11 Federal savings association.
The term Federal savings association means a Federal savings
association or Federal savings bank chartered under section 5(o) of the
Act.
Sec. 541.14 Home.
The term home means real estate comprising a single-family
dwelling(s) or a dwelling unit(s) for four or fewer families in the
aggregate.
Sec. 541.15 Improved nonresidential real estate.
The term improved nonresidential real estate means nonresidential
real estate:
(a) Containing a permanent structure(s) constituting at least 25
percent of its value; or
(b) Containing improvements which make it usable by a business or
industrial enterprise; or
(c) Used, or to be used within a reasonable time, for commercial
farming, excluding hobby and vacation property.
Sec. 541.16 Improved residential real estate.
The term improved residential real estate means residential real
estate containing offsite or other improvements sufficient to make the
property ready for primarily residential construction, and real estate
in the process of being improved by a building or buildings to be
constructed or in the process of construction for primarily residential
use.
Sec. 541.18 Interim Federal savings association.
The term interim Federal savings association means a Federal savings
association chartered by the Office under section 5 of the Act to
facilitate the acquisition of 100 percent of the voting shares of an
existing Federal stock savings association or other insured stock
savings association by a newly formed company or an existing savings and
loan holding company or to facilitate any other transaction the Office
may approve.
Sec. 541.19 Interim state savings association.
The term interim state savings association means a savings
association, other than a Federal savings association, the accounts of
which are insured by the FDIC to facilitate the acquisition of 100
percent of the voting shares of an existing Federal stock savings
association or other insured stock savings association by a newly formed
company or an existing savings and loan holding company or to facilitate
any other transaction the Office may approve.
Sec. 541.20 Loans.
The term loans means obligations and extensions or advances of
credit; and any reference to a loan or investment includes an interest
in such a loan or investment.
Sec. 541.21 Nonresidential real estate.
The terms nonresidential real estate or nonresidential real property
mean real estate that is not residential real estate, as that term is
defined in Sec. 541.23 of this part.
Sec. 541.22 [Reserved]
Sec. 541.23 Residential real estate.
The terms residential real estate or residential real property mean:
(a) Homes (including a dwelling unit in a multi-family residential
property such as a condominium or a cooperative);
(b) Combinations of homes and business property (i.e., a home used
in part for business);
(c) Other real estate used for primarily residential purposes other
than a home (but which may include homes);
[[Page 73]]
(d) Combinations of such real estate and business property involving
only minor business use (i.e., where no more than 20 percent of the
total appraised value of the real estate is attributable to the business
use);
(e) Farm residences and combinations of farm residences and
commercial farm real estate;
(f) Property to be improved by the construction of such structures;
or
(g) Leasehold interests in the above real estate.
[64 FR 46564, Aug. 26, 1999]
Sec. 541.25 Single-family dwelling.
A structure designed for residential use by one family, or a unit so
designed, whose owner owns, directly or through a non-profit cooperative
housing organization, an undivided interest in the underling real
estate, including property owned in common with others which contributes
to the use and enjoyment of the structure or unit.
Sec. 541.26 Surplus.
The term surplus means undistributed earnings held as unallocated
reserves for general corporate use.
Sec. 541.27 Unimproved real estate.
The term unimproved real estate means real estate that will be
improved, as defined in Sec. 541.15 or Sec. 541.16 of this part.
Sec. 541.28 Withdrawal value of a savings account.
The term withdrawal value of a savings account means the amount
invested in a savings account plus earnings credited thereto, less
lawful deductions therefrom.
PART 543--INCORPORATION, ORGANIZATION, AND CONVERSION OF FEDERAL MUTUAL ASSOCIATIONS--Table of Contents
Sec.
543.1 Corporate title.
Organization
543.2 Application for permission to organize.
543.3 ``De novo'' applications for a Federal savings association
charter.
543.5 Issuance of charter.
543.6 Completion of organization.
543.7 Limitations on transaction of business.
543.7-1 Federal savings association created in connection with an
association in default or in danger of default.
Conversion
543.8 Conversion of depository institutions to Federal mutual charter.
543.9 Application for conversion to Federal mutual charter.
543.10 Organization after conversion.
543.11 Organization plan for governance during first years after
issuance of Federal mutual savings bank charter.
543.11-1 Grandfathered authority.
543.14 Continuity of existence.
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901 et seq.
Source: 54 FR 49482, Nov. 30, 1989, unless otherwise noted.
Sec. 543.1 Corporate title.
(a) General. A Federal savings association shall not adopt a title
that misrepresents the nature of the institution or the services it
offers.
(b) Title change. Prior to changing its corporate title, an
association must file with the OTS a written notice indicating the
intended change. The OTS, shall provide to the association a timely
written acknowledgment stating when the notice was received. If, within
30 days of receipt of notice, the OTS does not notify the association of
its objection on the grounds set forth in paragraph (a) of this section,
the association may change its title by amending its charter in
accordance with Sec. 544.2(b) or Sec. 552.4 and the amendment provisions
of its charter, except that an association chartered as a Federal
Savings and Loan Association may change its title to indicate that it is
a Federal Savings Bank, and an association chartered as a Federal
Savings Bank may change its title to indicate that it is a Federal
Savings and Loan Association.
[54 FR 49482, Nov. 30, 1989, as amended at 57 FR 14338, Apr. 20, 1992;
58 FR 4312, Jan. 14, 1993; 61 FR 64015, Dec. 3, 1996]
[[Page 74]]
Organization
Sec. 543.2 Application for permission to organize.
(a) General. Recommendations by employees of the OTS regarding
applications for permission to organize a Federal savings association
are privileged, confidential, and subject to Sec. 510.5 (b) and (c) of
this chapter.
(b)-(c) [Reserved]
(d) Public notice and inspection. (1) The applicant must publish a
public notice of the application to organize in accordance with the
procedures specified in subpart B of part 516 of this chapter.
(2) Promptly after publication, the applicant(s) shall transmit
copies of each notice and publisher's affidavit of publication in the
same manner as the original filing.
(3) The OTS shall give notice of the application to the State
official who supervises savings associations in the State in which the
new association is to be located.
(4) Any person may inspect the application and all related
communications at the Regional Office during regular business hours,
unless such information is exempt from public disclosure.
(e) Submission of comments. Commenters may submit comments on the
application in accordance with the procedures specified in subpart C of
part 516 of this chapter.
(f) Meetings. The OTS may arrange informal or formal meetings in
accordance with the procedures specified in subpart D of part 516 of
this chapter.
(g) Approval. (1) Factors that will be considered are:
(i) Whether the applicants are persons of good character and
responsibility;
(ii) Whether a necessity exists for such association in the
community to be served;
(iii) Whether there is a reasonable probability of the association's
usefulness and success;
(iv) Whether the association can be established without undue injury
to properly conducted existing local thrift and home financing
institutions;
(v) Whether the association will perform a role of providing credit
for housing consistent with safe and sound operation of a Federal
savings association; and
(vi) Whether the factors set forth in Sec. 543.3 are met, in the
case of an application that would result in the formation of a de novo
association, as defined in Sec. 543.3(a).
(2) Approvals of applications will be conditioned on the following:
(i) Receipt by the Office of written confirmation from the Federal
Deposit Insurance Corporation that the accounts of the Federal savings
association will be insured by the Federal Deposit Insurance
Corporation;
(ii) A minimum amount of capital to be paid into the association's
accounts prior to commencing business;
(iii) The submission of a statement that--
(A) The applicants have complied in all respects with the Act and
these rules and regulations regarding organization of a Federal savings
association;
(B) The applicants have incurred no expense in forming the
association which is chargeable to it, and no such expense will be
incurred;
(C) No funds have been collected on account of the association
before the Office's approval;
(D) An organization committee has been created (naming the committee
and its officers);
(E) The committee will organize the association and serve as
temporary officers of the association until officers are elected by the
association's board of directors under Sec. 543.6 of this part; and
(F) No funds will be accepted for deposit by the association until
organization has been completed; and
(iv) The satisfaction of any other requirement the Director, or his
or her designee, may impose.
(h) Alternative procedures for interim Federal savings associations.
(1) Applications for permission to organize an interim Federal savings
association are not subject to paragraphs (d), (e), (f) or (g)(2) of
this section.
(2) Approval of an application for permission to organize an interim
Federal savings association shall be conditioned on approval by the
Office of an
[[Page 75]]
application to merge the interim Federal savings association and an
existing insured stock association or on approval by the Office of such
other transaction which the interim was chartered to facilitate. In
evaluating the application, the Director or his or her designee will
consider the purpose for which the association will be organized, the
form of any proposed transactions involving the organizing association,
the effect of the transactions on existing associations involved in the
transactions, and the factors specified in section Sec. 543.2(g)(1) to
the extent relevant.
[54 FR 49482, Nov. 30, 1989, as amended at 55 FR 13510, Apr. 11, 1990;
57 FR 14338, Apr. 20, 1992; 62 FR 27180, May 19, 1997; 62 FR 64145, Dec.
4, 1997]
Sec. 543.3 ``De novo'' applications for a Federal savings association charter.
(a) Definitions. For purposes of this section, the term ``de novo
association'' means any Federal savings association chartered by the
Office, the business of which has not been conducted previously under
any charter or conducted in the previous three years in substantially
the same form as is proposed by the de novo association. A ``de novo
applicant'' means any person or persons who apply to establish a de novo
association.
(b) Minimum initial capitalization. (1) A de novo association must
have at least two million dollars in initial capital stock (stock
institutions) or initial pledged savings or cash (mutual institutions),
except as provided in paragraph (b)(2) of this section. The minimum
initial capitalization is the amount of proceeds net of all incurred and
anticipated securities issuance expenses, organization expenses, pre-
opening expenses, or any expenses paid (or funds advanced) by organizers
that are to be reimbursed from the proceeds of a securities offering. In
securities offerings for a de novo association, all securities of a
particular class in the initial offering shall be sold at the same
price.
(2) On a case by case basis, the Director may, for good cause,
approve a de novo association that has less than two million dollars in
initial capital or may require a de novo association to have more than
two million dollars in initial capital.
(c) Business and investment plans of de novo associations. (1) To
assist the Office in making the determinations required under section
5(e) of the Home Owners' Loan Act, a de novo applicant shall submit a
business plan describing, for the first three years of operation of the
de novo association, the major areas of operation, including:
(i) Lending, leasing and investment activity, including plans for
meeting Qualified Thrift Lender requirements;
(ii) Deposit, savings and borrowing activity;
(iii) Interest-rate risk management;
(iv) Internal controls and procedures;
(v) Plans for meeting the credit needs of the proposed de novo
association's community (including low- and moderate-income
neighborhoods);
(vi) Projected statements of condition;
(vii) Projected statements of operations; and
(viii) Any other information requested by the Office.
(2) The business plan shall:
(i) Provide for the continuation or succession of competent
management subject to the approval of the Regional Director;
(ii) Provide that any material change in, or deviation from, the
business plan must receive the prior approval of the Regional Director;
(iii) Demonstrate the de novo association's ability to maintain
required minimum regulatory capital under 12 CFR parts 565 and 567 for
the duration of the plan.
(d) Composition of the board of directors. (1) A majority of a de
novo association's board of directors must be representative of the
state in which the savings association is located. The Office generally
will consider a director to be representative of the state if the
director resides, works or maintains a place of business in the state in
which the savings association is located. If the association is located
in a Metropolitan Statistical Area (MSA), Primary Metropolitan
Statistical Area (PMSA) or Consolidated Metropolitan Statistical Area
(CMSA) that incorporates portions of more than one
[[Page 76]]
state, a director will be considered representative of the association's
state if he or she resides, works or maintains a place of business in
the MSA, PMSA or CMSA in which the association is located.
(2) The de novo association's board of directors must be diversified
and composed of individuals with varied business and professional
experience. In addition, except in the case of a de novo association
that is wholly-owned by a holding company, no more than one-third of a
board of directors may be in closely related businesses. The background
of each director must reflect a history of responsibility and personal
integrity, and must show a level of competence and experience sufficient
to demonstrate that such individual has the ability to direct the
policies of the association in a safe and sound manner. Where a de novo
association is owned by a holding company that does not have substantial
independent economic substance, the foregoing standards will be applied
to the board of directors of the holding company.
(e) Management Officials. Proposed stockholders of ten percent or
more of the stock of a de novo association will be considered management
officials of the association for the purpose of the Office's evaluation
of the character and qualifications of the management of the
association. In connection with the Office's consideration of an
application for permission to organize and subsequent to issuance of a
Federal savings association charter to the association by the Office,
any individual or group of individuals acting in concert under 12 CFR
part 574, who owns or proposes to acquire, directly or indirectly, ten
percent or more of the stock of an association subject to this section,
shall submit a Biographical and Financial Report, on forms prescribed by
the Office, to the Regional Director.
(f) Supervisory transactions. This section does not apply to any
application for a Federal savings association charter submitted in
connection with a transfer or an acquisition of the business or accounts
of a savings association if the Office determines that such transfer or
acquisition is instituted for supervisory purposes, or in connection
with applications for Federal charters for interim de novo associations
chartered for the purpose of facilitating mergers, holding company
reorganizations, or similar transactions.
[62 FR 27180, May 19, 1997; 62 FR 28983, May 29, 1997]
Sec. 543.5 Issuance of charter.
Approval by the Office of the organization of a Federal savings
association or the conversion of an insured association to Federal
savings association form shall constitute issuance of a charter and
shall be final, provided that the association complies with the
procedures set out at Sec. 544.2(a) of this chapter. The charter shall
conform with the requirements of Sec. 544.1 of this chapter, the
permissible provisions of Sec. 544.2, or other provisions specifically
approved by the Office.
Sec. 543.6 Completion of organization.
(a)(1) Temporary officers. When the Office approves an application
for permission to organize a Federal savings association, the applicants
shall constitute the organization committee and elect a chairperson,
vice-chairperson, and a secretary, who shall act as the temporary
officers of the association until their successors are duly elected and
qualified. The temporary officers may effect compliance with any
conditions prescribed by the Office.
(2) Organization meeting. Promptly upon receipt of a charter, the
temporary officers shall call a meeting of the association's capital
subscribers; notice of such meeting shall be mailed to each subscriber
at least 5 days before the meeting day. Subscribers who have subscribed
for a majority of the association's capital, present in person or by
proxy, shall constitute a quorum. At such meeting, directors of the
association shall be elected according to the association's charter and
bylaws, and any other action permitted by such charter and bylaws may be
taken; any such action shall be considered an acceptance by the
association of such charter and of such bylaws, which shall be in the
form provided in parts 544 and 552 of this chapter.
(b) First meeting of directors. Upon election, the association's
board of directors shall hold a meeting to elect officers of the
association as provided by
[[Page 77]]
its charter and bylaws and to take any other action necessary to permit
operation of the association in accordance with law, the association's
charter and bylaws, and these rules and regulations. When such officers
have been bonded under Sec. 563.190 of this chapter, they shall
immediately collect the sums due on subscriptions to the association's
capital.
(c) Membership in Federal Home Loan Bank and insurance of accounts.
When a Federal savings association's charter is issued it must promptly
qualify as a member of a Federal Home Loan Bank and meet all
requirements necessary to obtain insurance of its accounts by the
Federal Deposit Insurance Corporation.
(d) Failure to complete. Organization of a Federal savings
association is completed when the organization meeting and the first
meeting of its directors have been held, permanent officers have been
bonded, the association holds the cash required to be paid on
subscriptions to its capital, if required, Federal Home Loan Bank
membership has been obtained and Federal Deposit Insurance Corporation
insurance of accounts has been confirmed and any conditions imposed by
the Office in connection with approval of the application have been met.
If organization is not so completed within six months after issuance of
a charter, or within such additional period as the Director or his or
her designee may for good cause grant, and in the case of an interim
Federal savings association, if a merger, or other transaction
facilitated by the existence of an interim association, has not been
approved, the charter shall become void and all cash collected on
subscriptions shall thereupon be returned.
Sec. 543.7 Limitations on transaction of business.
No person may organize a Federal savings association, collect money
from others for such purpose, or represent himself or herself as
authorized to do so, and no Federal savings association shall transact
any business prior to completion of its organization, except as provided
in this part.
Sec. 543.7-1 Federal savings association created in connection with an association in default or in danger of default.
The preceding sections of this part do not apply to a Federal
savings association which is proposed by the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation under section 11(c) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(c)) or section 21A of
the Federal Home Loan Bank Act (12 U.S.C. 1441A), or is otherwise
chartered by the Office in connection with an association in default or
in danger of default. Incorporation and organization of such
associations are complete when the Director or his or her designee so
determines.
Conversion
Sec. 543.8 Conversion of depository institutions to Federal mutual charter.
(a) With the approval of the OTS, any depository institution, as
defined in Sec. 552.13 of this chapter, that is in mutual form, may
convert into a Federal mutual savings association, provided that:
(1) The depository institution, upon conversion, will have its
deposits insured by the Federal Deposit Insurance Corporation;
(2) The depository institution, in accomplishing the conversion,
complies with all applicable state and federal statutes and regulations,
and OTS policies, and obtains all necessary regulatory and member
approvals; and
(3) The resulting Federal mutual association conforms, within the
time prescribed by the OTS, to the requirements of section 5(c) of the
Home Owners' Loan Act.
(b) Recommendations regarding applications for issuance of Federal
charters are privileged, confidential and subject to Sec. 510.5 (b) and
(c) of this chapter.
[54 FR 49482, Nov. 30, 1989, as amended at 57 FR 14339, Apr. 20, 1992;
60 FR 66717, Dec. 26, 1995; 62 FR 45309, Aug. 27, 1997]
Sec. 543.9 Application for conversion to Federal mutual charter.
(a) Filing. Any depository institution that proposes to convert to a
Federal mutual association as provided in
[[Page 78]]
Sec. 543.8 shall, after approval by its board of directors, file in
accordance with Sec. 516.1 of this chapter an application on forms
obtained from the OTS. The applicant shall submit any financial
statements or other information the OTS may require.
(b) Plan of conversion. The applicant shall submit with its
application a plan of conversion specifying the location of the home
office and any branch offices to be maintained by the Federal savings
association, and providing for:
(1) Appropriate reserves and surplus for the Federal savings
association;
(2) Satisfaction in full or assumption by the Federal savings
association of all creditor obligations of the applicant;
(3) Issuance by the Federal savings association of savings accounts
to current holders of withdrawable accounts in an amount equalling the
value of such accounts; and
(4) If applicable, issuance of additional savings accounts to
current holders of nonwithdrawable capital stock of the applicant in an
amount equalling the value of their nonwithdrawable capital stock,
including the present value of any preference to which such holders are
entitled.
(c) Action on application. The OTS will consider such application
and any information submitted with the application, and may approve the
application in accordance with section 5(e) of the Home Owners' Loan Act
and Sec. 543.2(g)(1). Converting depository institutions that have been
in existence less than three years will be subject to all approval
criteria and other requirements applicable to de novo Federal
associations. Approval of an application and issuance by the OTS of a
charter will be subject to:
(1) Compliance by the applicant with all conditions prescribed in
the approval;
(2) Receipt by the applicant of approval of the plan of conversion
by such vote as may be required by the laws of the applicant's
jurisdiction to consider such action;
(3) In the case of a converting association the accounts of which
are not insured by the Federal Deposit Insurance Corporation, receipt by
the OTS of written confirmation from the Federal Deposit Insurance
Corporation that the accounts of the converting association will be
insured by the Federal Deposit Insurance Corporation; and
(4) Receipt by the OTS of written confirmation from the appropriate
Federal Home Loan Bank of approval of the converting institution's
application for Federal Home Loan Bank membership, if the institution is
not a member.
[54 FR 49482, Nov. 30, 1989, as amended at 55 FR 13510, Apr. 11, 1990;
57 FR 14339, Apr. 20, 1992; 62 FR 45309, Aug. 27, 1997]
Sec. 543.10 Organization after conversion.
Except as provided in Sec. 543.11, after a Federal charter is issued
under Sec. 543.9 the association's members shall, after due notice, or
upon a valid adjournment of a previous legal meeting, hold a meeting to
elect directors and take all other action necessary fully to effect the
conversion and operate the association in accordance with law and these
rules and regulations. Immediately thereafter the board of directors
shall meet, elect officers, and transact any other appropriate business.
Sec. 543.11 Organization plan for governance during first years after issuance of Federal mutual savings bank charter.
(a) Organizational meeting. Except as provided in paragraph (c)(1)
of this section, promptly upon receipt of a charter, the officers of a
Federal mutual savings bank which, immediately prior to conversion, was
a state chartered mutual savings bank, shall call a meeting of the
members. Notice for, and conduct of, such meeting shall be in accordance
with the bank's Federal charter and bylaws. Business to be conducted at
the organizational meeting shall include the election of trustees (who
may also be known as a board of directors) and any other matters
permitted by the charter and bylaws. Any action taken at such meeting
shall be deemed an acceptance of the charter and bylaws approved by the
Office pursuant to Sec. 544.1 of this chapter.
(b) First meeting of trustees. Upon election or appointment, the
board of trustees shall hold a meeting to elect the officers of the bank
in accordance
[[Page 79]]
with its Federal charter and bylaws, and to take other action necessary
to permit the operation of the bank in accordance with the Home Owners'
Loan Act of 1933, as amended, the bank's charter and bylaws, these rules
and regulations, and orders of the Office.
(c) Plan for governance of association during first six years after
issuance of Federal charter. (1)(i) An applicant for a Federal mutual
savings bank charter may submit a plan which provides that each member
of its governing board, i.e., board of trustees, managers, or directors,
may continue to serve, provided that within two years of the issuance of
a Federal charter at least one-fifth of the members of such board shall
have been elected by vote, either in person or by proxy, of the bank's
membership as provided in its Federal charter, that within three years
of the issuance of its Federal charter at least two-fifths of the
members of such board shall have been elected by such a membership vote,
that within four years of the issuance of its Federal charter at least
three-fifths of the members of such board shall have been elected by
such a membership vote, that within five years of the issuance of its
Federal charter at least four-fifths of the members of such board shall
have been elected by such a membership vote, and that within six years
of the issuance of its Federal charter all of the members of such board
shall have been elected by such a membership vote.
(ii) The plan:
(A) Shall set forth the names of those persons who are being
proposed for service on the applicant's governing board after conversion
to a Federal charter,
(B) Shall show how trustees not elected by the converted bank's
membership will be appointed or otherwise selected, and
(C) Shall provide that no trustees may be appointed or elected to
terms of more than three years.
(iii) The plan may provide that
(A) After receipt of its Federal charter the bank will be organized
by its existing governing board,
(B) Within the first two years following receipt of its Federal
charter, the bank's charter may be amended without a membership vote,
provided any such amendment is first approved by a two-thirds vote of
its board of trustees and is thereafter approved by the Office, and
(C) The bank's first annua1 membership meeting need not take place
until two years after receipt of its Federal charter.
(2) Except to the extent that the Office approves a plan under this
paragraph (c) which is inconsistent with other provisions of this
section, a Federal mutual savings bank shall in all respects comply with
those other provisions.
[54 FR 49482, Nov. 30, 1989, as amended at 60 FR 66717, Dec. 26, 1995]
Sec. 543.11-1 Grandfathered authority.
(a) A Federal savings bank formerly chartered or designated as a
mutual savings bank under state law may exercise any authority it was
authorized to exercise as a mutual savings bank under state law at the
time of its conversion from a state mutual savings bank to a Federal or
other state charter. Except to the extent such authority may be
exercised by Federal savings associations not enjoying grandfathered
rights hereunder, such authority may be exercised only to the degree
authorized under state law at the time of such conversion. Unless
otherwise determined by the Director, an association, in the exercise of
grandfathered authority, may continue to follow applicable state laws
and regulations in effect at the time of such conversion.
(b) A Federal savings association that acquires, or has acquired, a
Federal savings bank by merger or consolidation may itself exercise any
grandfathered rights enjoyed by the disappearing institution, whether
such rights were obtained directly through conversion or through merger
or consolidation. The extent of the grandfathered rights of a Federal
savings association that disappeared prior to the effective date of this
section shall be determined exclusively pursuant to this section.
(c) This section shall not be construed to prevent the exercise by a
Federal savings association enjoying
[[Page 80]]
grandfathered rights hereunder of authority that is available under the
applicable state law only upon the occurrence of specific preconditions,
such as the attainment of a particular future date or specified level of
regulatory capital, which have not occurred at the time of conversion
from a state mutual savings bank, provided they occur thereafter.
(d) This section shall not be construed to permit the exercise of
any particular authority on a more liberal basis than is allowable under
the most liberal construction of either state or Federal law or
regulation.
Sec. 543.14 Continuity of existence.
The corporate existence of an association converting under this part
shall continue in its successor. Each savings or demand accountholder
shall receive a savings account or accounts in the converted association
equal in amount to the value of accounts held in the former association.
[54 FR 49482, Nov. 30, 1989, as amended at 61 FR 64015, Dec. 3, 1996]
PART 544--CHARTER AND BYLAWS--Table of Contents
Charter
Sec.
544.1 Federal mutual charter.
544.2 Charter amendments.
544.4 Issuance of charter.
Bylaws
544.5 Federal mutual savings association bylaws.
544.6 Effect of subsequent charter or bylaw change.
Availability
544.7 In association offices.
544.8 Communication between members of a Federal mutual savings
association.
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901 et seq.
Source: 54 FR 49486, Nov. 30, 1989, unless otherwise noted.
Charter
Sec. 544.1 Federal mutual charter.
A Federal mutual savings association shall have a charter in the
following form, which may include any of the additional provisions set
forth in Sec. 544.2 of this Part, if such provisions are specifically
requested. A charter for a Federal mutual savings bank shall substitute
the term ``savings bank'' for ``association.'' The term ``trustee'' may
be substituted for the term ``director.'' Associations adopting this
charter with existing borrower members must grandfather those borrower
members who were members as of the date of issuance of the new charter
by the Office. Such borrowers shall have one vote for the period of time
such borrowings are in existence.
Federal Mutual Charter
Section 1. Corporate title. The full corporate title of the Federal
savings association is ______.
Section 2. Office. The home office shall be located in ______ [city,
state].
Section 3. Duration. The duration of the association is perpetual.
Section 4. Purpose and powers. The purpose of the association is to
pursue any or all of the lawful objectives of a Federal mutual savings
association chartered under section 5 of the Home Owners' Loan Act and
to exercise all the express, implied, and incidental powers conferred
thereby and by all acts amendatory thereof and supplemental thereto,
subject to the Constitution and laws of the United States as they are
now in effect, or as they may hereafter be amended, and subject to all
lawful and applicable rules, regulations, and orders of the Office of
Thrift Supervision (``Office'').
Section 5. Capital. The association may raise capital by accepting
payments on savings and demand accounts and by any other means
authorized by the Office.
Section 6. Members. All holders of the association's savings,
demand, or other authorized accounts are members of the association. In
the consideration of all questions requiring action by the members of
the association, each holder of an account shall be permitted to cast
one vote for each $100, or fraction thereof, of the withdrawal value of
the member's account. No member, however, shall cast more than 1000
votes. All accounts shall be nonassessable.
Section 7. Directors. The association shall be under the direction
of a board of directors. The authorized number of directors shall not be
fewer than five nor more than fifteen persons, as fixed in the
association's bylaws, except that the number of directors may be
decreased to a number less than five or increased to a number greater
than fifteen with the prior approval of the Director of the Office or
his or her delegate.
Section 8. Capital, surplus, and distribution of earnings. The
association shall maintain for the purpose of meeting losses the amount
[[Page 81]]
of capital required by section 5 of the Home Owners' Loan Act and by
regulations of the Office. The association shall distribute net earnings
on its accounts on such basis and in accordance with such terms and
conditions as may from time to time be authorized by the Director of the
Office: Provided, That the association may establish minimum-balance
requirements for accounts to be eligible for distribution of earnings.
All holders of accounts of the association shall be entitled to
equal distribution of assets, pro rata to the value of their accounts,
in the event of voluntary or involuntary liquidation, dissolution, or
winding up of the association. Moreover, in any such event, or in any
other situation in which the priority of such accounts is in
controversy, all such accounts shall, to the extent of their withdrawal
value, be debts of the association having the same priority as the
claims of general creditors of the association not having priority
(other than any priority arising or resulting from consensual
subordination) over other general creditors of the association.
Section 9. Amendment of charter. Adoption of any preapproved charter
amendment shall be effective after such preapproved amendment has been
approved by the members at a legal meeting. Any other amendment,
addition, change, or repeal of this charter must be approved by the
Office prior to approval by the members at a legal meeting, and shall be
effective upon filing with the Office in accordance with regulatory
procedures.
Attest:_________________________________________________________________
Secretary of the Association
By:_____________________________________________________________________
President or Chief Executive Officer of the Association
Attest:_________________________________________________________________
Secretary of the Office of Thrift Supervision
By:_____________________________________________________________________
Director of the Office of Thrift Supervision
Effective Date:_________________________________________________________
[54 FR 49486, Nov. 30, 1989, as amended at 61 FR 64015, Dec. 3, 1996]
Sec. 544.2 Charter amendments.
(a) General. In order to adopt a charter amendment, a Federal mutual
savings association must comply with the following requirements:
(1) Board of directors approval. The board of directors of the
association must adopt a resolution proposing the charter amendment that
states the text of such amendment;
(2) Form of filing--(i) Application requirement. If the proposed
charter amendment would: render more difficult or discourage a merger,
proxy contest, the assumption of control by a mutual account holder of
the association, or the removal of incumbent management; or involve a
significant issue of law or policy; then, the association shall file the
proposed amendment and obtain the prior approval of the OTS.
(ii) Notice requirement. If the proposed charter amendment does not
involve a provision that would be covered by paragraph (a)(2)(i) of this
section and is permissible under all applicable laws, rules and
regulations, then the association shall submit the proposed amendment to
the OTS, at least 30 days prior to the effective date of the proposed
charter amendment.
(b) Approval. Any charter amendment filed pursuant to paragraph
(a)(2)(ii) of this section shall automatically be approved 30 days from
the date of filing of such amendment, provided that the association
follows the requirements of its charter in adopting such amendment. This
automatic approval does not apply if, prior to the expiration of such
30-day period, the OTS notifies the association that such amendment is
rejected or that such amendment is deemed to be filed under the
provisions of paragraph (a)(2)(i) of this section. In addition,
notwithstanding anything in paragraph (a) of this section to the
contrary, the following charter amendments, including the adoption of
the Federal mutual charter as set forth in Sec. 544.1 of this part,
shall be effective and deemed approved at the time of adoption, if
adopted without change and filed with OTS, within 30 days after
adoption, provided the association follows the requirements of its
charter in adopting such amendments:
(1) Purpose and powers. Add a second paragraph to section 4, as
follows:
Section 4. Purpose and powers. * * * The association shall have the
express power: (i) To act as fiscal agent of the United States when
designated for that purpose by the Secretary of the Treasury, under such
regulations as the Secretary may prescribe, to perform all such
reasonable duties as fiscal agent of the United States as may be
required, and to act as agent for any other instrumentality of the
United States when designated for that purpose by any such
instrumentality; (ii) To sue and be sued, complain and defend in any
[[Page 82]]
court of law or equity; (iii) To have a corporate seal, affixed by
imprint, facsimile or otherwise; (iv) To appoint officers and agents as
its business shall require and allow them suitable compensation; (v) To
adopt bylaws not inconsistent with the Constitution or laws of the
United States and rules and regulations adopted thereunder and under
this Charter; (vi) To raise capital, which shall be unlimited, by
accepting payments on savings, demand, or other accounts, as are
authorized by rules and regulations made by the Office, and the holders
of all such accounts or other accounts as shall, to such extent as may
be provided by such rules and regulations, be members of the association
and shall have such voting rights and such other rights as are thereby
provided; (vii) To issue notes, bonds, debentures, or other obligations,
or securities, provided by or under any provision of Federal statute as
from time to time is in effect; (viii) To provide for redemption of
insured accounts; (ix) To borrow money without limitation and pledge and
otherwise encumber any of its assets to secure its debts; (x) To lend
and otherwise invest its funds as authorized by statute and the rules
and regulations of the Office; (xi) To wind up and dissolve, merge,
consolidate, convert, or reorganize; (xii) To purchase, hold, and convey
real estate and personalty consistent with its objects, purposes, and
powers; (xiii) To mortgage or lease any real estate and personalty and
take such property by gift, devise, or bequest; and (xiv) To exercise
all powers conferred by law. In addition to the foregoing powers
expressly enumerated, this association shall have power to do all things
reasonably incident to the accomplishment of its express objects and the
performance of its express powers.
(2) Title change. A Federal mutual savings association that has
complied with Sec. 543.1(b) of this chapter may amend its charter by
substituting a new corporate title in section 1.
(3) Home office. A Federal mutual savings association that has
complied with Sec. 545.95 of this chapter may amend its charter by
substituting a new home office in section 2.
(4) Maximum number of votes. A Federal mutual savings association
may amend its charter by substituting ______ votes per member in section
6. [Fill in a number from 1 to 1000.]
(c) Reissuance of charter. A Federal mutual savings association that
has amended its charter may apply to have its charter, including the
amendments, reissued by the Office. Such request for reissuance should
be filed in accordance with Sec. 516.1(c) of this chapter and, contain
signatures required under Sec. 544.1 of this part, together with such
supporting documents as may be needed to demonstrate that the amendments
were properly adopted.
[54 FR 49486, Nov. 30, 1989, as amended at 55 FR 13510, Apr. 11, 1990;
57 FR 14339, Apr. 20, 1992; 61 FR 64016, Dec. 3, 1996; 63 FR 46160, Aug.
31, 1998]
Sec. 544.4 Issuance of charter.
Issuance by the Office of a charter to a Federal mutual savings
association within the meaning of Sec. 543.5 of this chapter constitutes
the incorporation of that association by the Office.
Bylaws
Sec. 544.5 Federal mutual savings association bylaws.
(a) General. A Federal mutual savings association shall operate
under bylaws that contain provisions that comply with all requirements
specified by the OTS in this section and that are not otherwise
inconsistent with the provisions of this section, the association's
charter, and all other applicable laws, rules, and regulations provided
that, a bylaw provision inconsistent with the provisions of this section
may be adopted with the approval of the OTS. Bylaws may be adopted,
amended or repealed by a majority of the votes cast by the members at a
legal meeting or a majority of the association's board of directors. The
bylaws for a Federal mutual savings bank shall substitute the term
``savings bank'' for ``association''. The term ``trustee'' may be
substituted for the term ``director''.
(b) The following requirements are applicable to Federal mutual
savings associations:
(1) Annual meetings of members. An association shall provide for and
conduct an annual meeting of its members for the election of directors
and at which any other business of the association may be conducted.
Such meeting shall be held, as designated by its board of directors, at
a location within the state that constitutes the principal place of
business of the association, or at any other convenient place the board
of directors may designate, and at a date and time within 150 days after
the end of the association's fiscal year.
[[Page 83]]
At each annual meeting, the officers shall make a full report of the
financial condition of the association and of its progress for the
preceding year and shall outline a program for the succeeding year.
(2) Special meetings of members. Procedures for calling any special
meeting of the members and for conducting such a meeting shall be set
forth in the bylaws. The subject matter of such special meeting must be
established in the notice for such meeting. The board of directors of
the association or the holders of 10 percent or more of the voting
capital shall be entitled to call a special meeting. For purposes of
this section, ``voting capital'' means FDIC-insured deposits as of the
voting record date.
(3) Notice of meeting of members. Notice specifying the date, time,
and place of the annual or any special meeting and adequately describing
any business to be conducted shall be published for two successive weeks
immediately prior to the week in which such meeting shall convene in a
newspaper of general circulation in the city or county in which the
principal place of business of the association is located, or mailed
postage prepaid at least 15 days and not more than 45 days prior to the
date on which such meeting shall convene to each of its members of
record at the last address appearing on the books of the association. A
similar notice shall be posted in a conspicuous place in each of the
offices of the association during the 14 days immediately preceding the
date on which such meeting shall convene. The bylaws may permit a member
to waive in writing any right to receive personal delivery of the
notice. When any meeting is adjourned for 30 days or more, notice of the
adjournment and reconvening of the meeting shall be given as in the case
of the original meeting.
(4) Fixing of record date. For the purpose of determining members
entitled to notice of or to vote at any meeting of members or any
adjournment thereof, or in order to make a determination of members for
any other proper purpose, the bylaws shall provide for the fixing of a
record date and a method for determining from the books of the
association the members entitled to vote. Such date shall be not more
than 60 days nor fewer than 10 days prior to the date on which the
action, requiring such determination of members, is to be taken. The
same determination shall apply to any adjourned meeting.
(5) Member quorum. Any number of members present and voting,
represented in person or by proxy, at a regular or special meeting of
the members shall constitute a quorum. A majority of all votes cast at
any meeting of the members shall determine any question, unless
otherwise required by regulation. At any adjourned meeting, any business
may be transacted that might have been transacted at the meeting as
originally called. Members present at a duly constituted meeting may
continue to transact business until adjournment.
(6) Voting by proxy. Procedures shall be established for voting at
any annual or special meeting of the members by proxy pursuant to the
rules and regulations of the Office, including the placing of such
proxies on file with the secretary of the association, for verification,
prior to the convening of such meeting. Proxies may be given
telephonically or electronically as long as the holder uses a procedure
for verifying the identity of the member. All proxies with a term
greater than eleven months or solicited at the expense of the
association must run to the board of directors as a whole, or to a
committee appointed by a majority of such board.
(7) Communications between members. Provisions relating to
communications between members shall be consistent with Sec. 544.8 of
this part. No member, however, shall have the right to inspect or copy
any portion of any books or records of a Federal mutual savings
association containing:
(i) A list of depositors in or borrowers from such association;
(ii) Their addresses;
(iii) Individual deposit or loan balances or records; or
(iv) Any data from which such information could be reasonably
constructed.
(8) Number of directors, membership. The bylaws shall set forth a
specific number of directors, not a range. The number of directors shall
be not fewer
[[Page 84]]
than five nor more than fifteen, unless a higher or lower number has
been authorized by the Director of the Office or his or her designee.
Each director of the association shall be a member of the association.
Directors may be elected for periods of one to three years and until
their successors are elected and qualified, but if a staggered board is
chosen, provision shall be made for the election of approximately one-
third or one-half of the board each year, as appropriate. State-
chartered savings banks converting to Federal savings banks may include
alternative provisions for the election and term of office of directors
so long as such provisions are authorized by the Office, and provide for
compliance with the standard provisions of this section no later than
six years after the conversion to a Federal savings association.
(9) Meetings of the board. The board of directors shall determine
the place, frequency, time, procedure for notice, which shall be at
least 24 hours unless waived by the directors, and waiver of notice for
all regular and special meetings. The meetings shall be under the
direction of a chairman, appointed annually by the board; or in the
absence of the chairman, the meetings shall be under the direction of
the president. The board also may permit telephonic participation at
meetings. The bylaws may provide for action to be taken without a
meeting if unanimous written consent is obtained for such action. A
majority of the authorized directors shall constitute a quorum for the
transaction of business. The act of a majority of the directors present
at any meeting at which there is a quorum shall be the act of the board.
(10) Officers, employees. and agents. (i) The bylaws shall contain
provisions regarding the officers of the association, their functions,
duties, and powers. The officers of the association shall consist of a
president, one or more vice presidents, a secretary, and a treasurer or
comptroller, each of whom shall be elected annually by the board of
directors. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the board of
directors or chosen in such other manner as may be prescribed in the
bylaws. Any two or more offices may be held by the same person, except
the offices of president and secretary.
(ii) All officers and agents of the association, as between
themselves and the association, shall have such authority and perform
such duties in the management of the association as may be provided in
the bylaws, or as may be determined by resolution of the board of
directors not inconsistent with the bylaws. In the absence of any such
provision, officers shall have such powers and duties as generally
pertain to their respective offices. Any officer may be removed by the
board of directors with or without cause, but such removal, other than
for cause, shall be without prejudice to the contractual rights, if any,
of the person so removed.
(iii) Any indemnification provision must provide that any
indemnification is subject to applicable Federal law, rules, and
regulations.
(11) Vacancies, resignation or removal of directors. Members of the
association shall elect directors by ballot: Provided, that in the event
of a vacancy on the board, the board of directors may, by their
affirmative vote, fill such vacancy, even if the remaining directors
constitute less than a quorum. A director elected to fill a vacancy
shall be elected to serve only until the next election of directors by
the members. The bylaws shall set out the procedure for the resignation
of a director, which shall be by written notice or by any other
procedure established in the bylaws. Directors may be removed only for
cause as defined in Sec. 563.39 of this chapter, by a vote of the
holders of a majority of the shares then entitled to vote at an election
of directors.
(12) Powers of the board. The board of directors shall have the
power:
(i) By resolution, to appoint from among its members and remove an
executive committee and one or more other committees, which committee[s]
shall have and may exercise all the powers of the board between the
meetings or the board; but no such committee shall have the authority of
the board to amend the charter or bylaws, adopt a plan of merger,
consolidation, dissolution, or provide for the disposition of all or
substantially all the property and assets of the association. Such
[[Page 85]]
committee shall not operate to relieve the board, or any member thereof,
of any responsibility imposed by law;
(ii) To fix the compensation of directors, officers, and employees;
and to remove any officer or employee at any time with or without cause;
(iii) To exercise any and all of the powers of the association not
expressly reserved by the charter to the members.
(13) Nominations for directors. The bylaws shall provide that
nominations for directors may be made at the annual meeting by any
member and shall be voted upon, except, however, the bylaws may require
that nominations by a member must be submitted to the secretary and then
prominently posted in the principal place of business, at least 10 days
prior to the date of the annual meeting. However, if such provision is
made for prior submission of nominations by a member, then the bylaws
must provide for a nominating committee, which, except in the case of a
nominee substituted as a result of death or other incapacity, must
submit nominations to the secretary and have such nominations similarly
posted at least 15 days prior to the date of the annual meeting.
(14) New business. The bylaws shall provide procedures for the
introduction of new business at the annual meeting. Those provisions may
require that such new business be stated in writing and filed with the
secretary prior to the annual meeting at least 30 days prior to the date
of the annual meeting.
(15) Amendment. Bylaws may include any provision for their amendment
that would be consistent with applicable law, rules, and regulations and
adequately addresses its subject and purpose.
(i) Amendments shall be effective:
(A) After approval by a majority vote of the authorized board, or by
a majority of the vote cast by the members of the association at a legal
meeting; and
(B) After receipt of any applicable regulatory approval.
(ii) When an association fails to meet its quorum requirement,
solely due to vacancies on the board, the bylaws may be amended by an
affirmative vote of a majority of the sitting board.
(16) Miscellaneous. The bylaws may also address the subject of age
limitations for directors or officers as long as they are consistent
with applicable Federal law, rules or regulations, and any other
subjects necessary or appropriate for effective operation of the
association.
(c) Form of filing--(1) Application requirement. (i) Any bylaw
amendment shall be submitted to the OTS if it would:
(A) Render more difficult or discourage a merger, proxy contest, the
assumption of control by a mutual account holder of the association, or
the removal of incumbent management;
(B) Involve a significant issue of law or policy, including
indemnification, conflicts of interest, and limitations on director or
officer liability; or
(C) Be inconsistent with the requirements of this section or with
applicable laws, rules, regulations, or the association's charter.
(ii) Applications submitted under paragraph (c)(1)(i) of this
section shall be subject to the applications processing procedures set
forth at Sec. 516.2 of this chapter.
(iii) For purposes of this paragraph (c), bylaw provisions that
adopt the language of the model bylaws set forth in OTS's Application
Processing Handbook, if adopted without change, and filed within 30 days
after adoption, are effective upon adoption.
(2) Filing requirement. If the proposed bylaw amendment does not
involve a provision that would be covered by paragraph (c)(1) or (c)(3)
of this section, then the association shall submit the amendment to the
OTS at least 30 days prior to the date the bylaw amendment is to be
adopted by the association.
(3) Corporate governance procedures. A Federal mutual association
may elect to follow the corporate governance procedures of the laws of
the state where the main office of the institution is located, provided
that such procedures may be elected only to the extent not inconsistent
with applicable Federal statutes, regulations, and safety and soundness,
and such procedures are not of the type described in paragraph (c)(1) of
this section. If this election is selected, a Federal mutual association
[[Page 86]]
shall designate in its bylaws the provision or provisions from the body
of law selected for its corporate governance procedures, and shall file
a copy of such bylaws, which are effective upon adoption, within 30 days
after adoption. The submission shall indicate, where not obvious, why
the bylaw provisions meet the requirements stated in paragraph (c)(1) of
this section.
(d) Effectiveness. Any bylaw amendment filed pursuant to paragraph
(c)(2) of this section shall automatically be effective 30 days from the
date of filing of such amendment, provided that the association follows
the requirements of its charter and bylaws in adopting such amendment.
This automatic effective date does not apply if, prior to the expiration
of such 30-day period, the OTS notifies the association that such
amendment is rejected or that such amendment requires an application to
be filed pursuant to paragraph (c)(1) of this section.
[54 FR 49486, Nov. 30, 1989, as amended at 55 FR 13511, Apr. 11, 1990;
57 FR 14339, Apr. 20, 1992; 61 FR 64016, Dec. 3, 1996; 62 FR 66262, Dec.
18, 1997]
Sec. 544.6 Effect of subsequent charter or bylaw change.
Notwithstanding any subsequent change to its charter or bylaws, the
authority of a Federal mutual savings association to engage in any
transaction shall be determined only by the association's charter or
bylaws then in effect.
Availability
Sec. 544.7 In association offices.
A Federal mutual savings association shall make available to its
members at all times in its offices a true copy of its charter and
bylaws, including any amendments, and shall deliver such a copy to any
member on request.
Sec. 544.8 Communication between members of a Federal mutual savings association.
(a) Right of communication with other members. A member of a Federal
mutual savings association has the right to communicate, as prescribed
in paragraph (b) of this section, with other members of the Federal
savings association regarding any matter related to the Federal savings
association's affairs, except for ``improper'' communications, as
defined in paragraph (c) of this section. The association may not defeat
that right by redeeming a savings member's savings account in the
Federal mutual savings association.
(b) Member communication procedures. If a member of a Federal mutual
savings association desires to communicate with other members, the
following procedures shall be followed:
(1) The member shall give the Federal mutual savings association a
written request to communicate;
(2) If the proposed communication is in connection with a meeting of
the Federal savings association's members, the request shall be given at
least thirty days before the annual meeting or 10 days before a special
meeting;
(3) The request shall contain--
(i) The member's full name and address;
(ii) The nature and extent of the member's interest in the Federal
savings association at the time the information is given;
(iii) A copy of the proposed communication; and
(iv) If the communication is in connection with a meeting of the
members, the date of the meeting;
(4) The Federal savings association shall reply to the request
within either--
(i) Fourteen days;
(ii) Ten days, if the communication is in connection with the annual
meeting; or
(iii) Three days, if the communication is in connection with a
special meeting;
(5) The reply shall provide either--
(i) The number of the Federal savings association's members and the
estimated reasonable cost to the Federal savings association of mailing
to them the proposed communication; or
(ii) Notification that the Federal savings association has
determined not to mail the communication because it is ``improper'', as
defined in paragraph (c) of this section;
(6) After receiving the amount of the estimated costs of mailing and
sufficient copies of the communication, the Federal savings association
shall mail
[[Page 87]]
the communication to all members, by a class of mail specified by the
requesting member, either--
(i) Within fourteen days;
(ii) Within seven days, if the communication is in connection with
the annual meeting;
(iii) As soon as practicable before the meeting, if the
communication is in connection with a special meeting; or
(iv) On a later date specified by the member;
(7) If the Federal savings association refuses to mail the proposed
communication, it shall return the requesting member's materials
together with a written statement of the specific reasons for refusal,
and shall simultaneously send to the Regional Director two copies each
of the requesting member's materials, the Federal savings association's
written statement, and any other relevant material. The materials shall
be sent within:
(i) Fourteen days,
(ii) Ten days if the communication is in connection with the annual
meeting, or
(iii) Three days, if the communication is in connection with a
special meeting,
after the Federal savings association receives the request for
communication.
(c) Improper communication. A communication is an ``improper
communication'' if it contains material which:
(1) At the time and in the light of the circumstances under which it
is made:
(i) Is false or misleading with respect to any material fact; or
(ii) Omits a material fact necessary to make the statements therein
not false or misleading, or necessary to correct a statement in an
earlier communication on the same subject which has become false or
misleading;
(2) Relates to a personal claim or a personal grievance, or is
solicitous of personal gain or business advantage by or on behalf of any
party;
(3) Relates to any matter, including a general economic, political,
racial, religious, social, or similar cause, that is not significantly
related to the business of the Federal savings association or is not
within the control of the Federal savings association; or
(4) Directly or indirectly and without expressed factual foundation:
(i) Impugns character, integrity, or personal reputation,
(ii) Makes charges concerning improper, illegal, or immoral conduct,
or
(iii) Makes statements impugning the stability and soundness of the
Federal savings association.
[54 FR 49492, Nov. 30, 1989, as amended at 60 FR 66717, Dec. 26, 1995.
Redesignated at 61 FR 64018, Dec. 3, 1996.]