[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 1998 Edition]
[From the U.S. Government Printing Office]
[[Page 1]]
12
Banks and Banking
PARTS 300 TO 499
Revised as of January 1, 1998
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
AS OF JANUARY 1, 1998
With Ancillaries
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
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U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1998
For sale by U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter III--Federal Deposit Insurance Corporation........ 3
Chapter IV--Export-Import Bank of the United States....... 397
Finding Aids:
Table of CFR Titles and Chapters.......................... 449
Alphabetical List of Agencies Appearing in the CFR........ 465
Redesignation Tables...................................... 475
List of CFR Sections Affected--Transferred Regulations
Formerly Appearing in Title 12 CFR, Chapter V......... 481
List of CFR Sections Affected............................. 483
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Cite this Code: CFR
To cite the regulations in this volume use title, part and
section number. Thus, 12 CFR 303.0 refers to title 12, part
303, section 0.
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EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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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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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
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appropriate numerical list of sections affected. For the period before
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CFR INDEXES AND TABULAR GUIDES
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[[Page vii]]
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January 1, 1998.
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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--Thrift Depositor Protection Oversight
Board, 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, 1998.
Redesignation tables appear in the volumes containing parts 1-199,
parts 300-499, parts 500-599, and part 600-end.
For this volume, Gregory R. Walton was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
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[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains parts 300 to 499)
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Part
chapter iii--Federal Deposit Insurance Corporation.......... 303
chapter iv--Export-Import Bank of the United States......... 400
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CHAPTER III--FEDERAL DEPOSIT INSURANCE CORPORATION
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SUBCHAPTER A--PROCEDURE AND RULES OF PRACTICE
Part Page
300-302
[Reserved]
303 Applications, requests, submittals,
delegations of authority, and notices
required to be filed by statute or
regulation.............................. 5
304 Forms, instructions, and reports............ 50
305-306
[Reserved]
307 Notification of changes of insured status... 54
308 Rules of practice and procedure............. 54
309 Disclosure of information................... 115
310 Privacy Act regulations..................... 127
311 Rules governing public observation of
meetings of the Corporation's Board of
Directors............................... 132
312 Assessment of fees upon entrance to or exit
from the Bank Insurance Fund or the
Savings Association Insurance Fund...... 137
SUBCHAPTER B--REGULATIONS AND STATEMENTS OF GENERAL POLICY
323 Appraisals.................................. 143
324 Agricultural loan loss amortization......... 147
325 Capital maintenance......................... 149
326 Minimum security devices and procedures and
Bank Secrecy Act compliance............. 194
327 Assessments................................. 196
328 Advertisement of membership................. 214
329 Interest on deposits........................ 218
330 Deposit insurance coverage.................. 221
331-332
[Reserved]
333 Extension of corporate powers............... 235
334
[Reserved]
335 Securities of nonmember insured banks....... 237
336 FDIC employees.............................. 243
337 Unsafe and unsound banking practices........ 247
338 Fair housing................................ 259
339 Loans in areas having special flood hazards. 263
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340
[Reserved]
341 Registration of securities transfer agents.. 267
342
[Reserved]
343 Insured State nonmember banks which are
municipal securities dealers............ 269
344 Recordkeeping and confirmation requirements
for securities transactions............. 271
345 Community reinvestment...................... 278
346 Foreign banks............................... 297
347 Foreign activities of insured State
nonmember banks......................... 308
348 Management official interlocks.............. 312
349 Reports and public disclosure of
indebtedness of executive officers and
principal shareholders to a State
nonmember bank and its correspondent
banks................................... 317
350 Disclosure of financial and other
information by FDIC-insured State
nonmember banks......................... 320
351 International operations.................... 322
352 Nondiscrimination on the basis of handicap.. 325
353 Suspicious activity reports................. 330
357 Determination of economically depressed
regions................................. 332
359 Golden parachute and indemnification
payments................................ 332
360 Resolution and receivership rules........... 340
361 Minority and Women Outreach Program--
Contracting............................. 344
362 Activities and Investments of Insured State
Banks................................... 346
363 Annual Independent Audits and Reporting
Requirements............................ 359
364 Standards for Safety and Soundness.......... 368
365 Real Estate Lending Standards............... 371
366 Contractor Conflicts of Interest............ 376
367 Suspension and Exclusion of Contractor and
Termination of Contracts................ 382
368 Government securities sales practices....... 391
369 Prohibition against use of interstate
branches primarily for deposit
production.............................. 394
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SUBCHAPTER A--PROCEDURE AND RULES OF PRACTICE
PARTS 300-302 [RESERVED]--Table of Contents
PART 303--APPLICATIONS, REQUESTS, SUBMITTALS, DELEGATIONS OF AUTHORITY, AND NOTICES REQUIRED TO BE FILED BY STATUTE OR REGULATION--Table of Contents
Sec.
303.0 Scope and definitions.
303.1 Application by nonmember bank, state savings association, and
Federal savings association for deposit insurance.
303.2 Applications by insured state nonmember bank to establish a
branch, move its main office or relocate a branch.
303.3 Application for conversion, merger, consolidation, assumption and
sale of asset transactions.
303.4 Change in bank control.
303.5 Applications concerning insurance fund conversions, prompt
corrective action, and other applications.
303.6 Application procedures.
303.7 Delegation of authority to the Director (DOS) and to the
associate directors, regional directors and deputy regional
directors to act on certain applications, requests, and
notices of acquisition of control.
303.8 Other delegations of authority.
303.9 Delegation of authority to act on certain enforcement matters.
303.10 Applications and enforcement matters where authority is not
delegated.
303.11 Confirmation, limitations, rescissions and special cases.
303.12 OMB control number assigned pursuant to the Paperwork Reduction
Act.
303.13 Applications and notices by savings associations.
303.14 Change in senior executive officer or board of directors.
303.15 Mutual-to-stock conversions of mutually owned state-chartered
savings banks.
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817(j), 1818, 1819
(Seventh and Tenth), 1828, 1831e, 1831o, 1831p-1; 15 U.S.C. 1607.
Sec. 303.0 Scope and definitions.
(a) Scope. This part prescribes:
(1) Where applications, requests, and notices required to be filed
by statute or regulation (hereinafter, collectively, applications)
should be filed;
(2) The contents of the application when the application is to be
made by letter;
(3) The location where forms and instructions may be obtained when
the application is to be made on a form. This part also prescribes
procedures to be followed by both the FDIC and applicants during the
process of consideration of an application; and
(4) Finally, this part sets forth delegations of authority by the
FDIC's Board of Directors to the Director of the Division of Supervision
and the Director of the Division of Compliance and Consumer Affairs, to
their associate directors, to the regional directors and deputy regional
directors of the Division of Supervision, and to the regional managers
of the Division of Compliance and Consumer Affairs to act on certain
applications and other matters pursuant to the conditions, where
applicable, that limit such delegations.
(b) Definitions. For purposes of this part:
(1) Corporation or FDIC. The terms Corporation or FDIC shall mean
the Federal Deposit Insurance Corporation.
(2) Division or DOS. The terms division or DOS shall mean the
Division of Supervision, or in the event the Division of Supervision is
reorganized, such successor division.
(3) DCA. The term DCA shall mean the Division of Compliance and
Consumer Affairs, or in the event the Division of Compliance and
Consumer Affairs is reorganized, such successor division.
(4) Director (DOS). The term Director (DOS) shall mean the Director
of the Division of Supervision, or in the event the title of Director of
the Division of Supervision becomes obsolete, any official of equivalent
or higher authority.
(5) Director (DCA). The term Director (DCA) shall mean the Director
of the Division of Compliance and Consumer Affairs, or in the event the
title of Director of the Division of Compliance and Consumer Affairs
becomes obsolete, any official of equivalent or higher authority.
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(6) Associate director. The term associate director shall mean any
associate director of the Division of Supervision or the Division of
Compliance and Consumer Affairs, as appropriate, or in the event the
title of associate director becomes obsolete, any official of equivalent
authority within the respective divisions.
(7) Regional director. The term regional director shall mean any
regional director of the Division of Supervision, or in the event the
title of regional director becomes obsolete, any official of equivalent
authority within the Division of Supervision.
(8) Deputy regional director. The term deputy regional director
shall mean any deputy regional director of the Division of Supervision,
or in those FDIC regions where there is no deputy regional director, an
assistant regional director. In the event the title of deputy regional
director or assistant regional director becomes obsolete, the term
deputy regional director shall mean any official of equivalent authority
within the same FDIC region of the Division of Supervision.
(9) Regional manager. The term regional manager shall mean any
regional manager in the Division of Compliance and Consumer Affairs, or
in the event the title of regional manager becomes obsolete, any
official of equivalent authority within the Division of Compliance and
Consumer Affairs.
(10) Associate General Counsel for Compliance and Enforcement. The
term Associate General Counsel for Compliance and Enforcement shall mean
the head of the Compliance and Enforcement Section of the Legal Division
of the FDIC, or in the event the title of Associate General Counsel for
Compliance and Enforcement becomes obsolete, any official of equivalent
authority within the Legal Division. The authority delegated to the
Associate General Counsel for Compliance and Enforcement may be
exercised by the Deputy General Counsel for Supervision and Legislation
or a counsel in the Compliance and Enforcement Section in the
Washington, DC office.
(11) Regional counsel. The term regional counsel shall mean a
regional counsel of the Legal Division, or in the event the title of
regional counsel becomes obsolete, any official of equivalent authority
within the Legal Division. The authority delegated to a regional counsel
may be exercised by a deputy regional counsel, a counsel, or any
official of equivalent or higher authority in the Compliance and
Enforcement Section of the Legal Division.
(12) Appropriate FDIC region, appropriate FDIC regional office,
appropriate regional director, appropriate deputy regional director, and
appropriate regional counsel shall refer to the FDIC region, and the
FDIC regional office, regional director, deputy regional director, and
regional counsel, of the FDIC region, which the FDIC designates as
follows:
(i) When an institution or proposed institution that is the subject
of an application, request, submittal, notice, or administrative action
is not or will not be part of a group of related institutions, the
appropriate region for the institution and any individual associated
with the institution is the FDIC region in which the institution or
proposed institution is or will be located; or
(ii) When an institution or proposed institution that is the subject
of an application, request, submittal, notice, or administrative action
is or will be part of a group of related institutions, the appropriate
region for the institution and any individual associated with the
institution is the FDIC region in which the group's major policy and
decision makers are located, or any other region the FDIC designates on
a case-by-case basis.
(13) Act. The term the Act shall mean the Federal Deposit Insurance
Act (12 U.S.C. 1811 et seq.).
(14) Institution-affiliated party. The term institution-affiliated
party shall have the same meaning as provided in section 3(u) of the Act
(12 U.S.C. 1813(u)).
(15) Notification to primary regulator. The term notification to
primary regulator shall mean a notice required under section 8(a)(2)(A)
of the Act (12 U.S.C. 1818(a)(2)(A)).
(16) Section 8(a) order. The term section 8(a) order shall mean an
order terminating the insured status of a depository institution under
section 8(a) of the Act (12 U.S.C. 1818(a)).
(17) Notice of charges. The term notice of charges shall mean a
notice of
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charges and of hearing setting forth the allegations of unsafe or
unsound practices and/or violations and fixing the time and place of the
hearing issued under section 8(b) of the Act (12 U.S.C. 1818(b)).
(18) Section 8(b) order and cease-and-desist order. The terms
section 8(b) order and cease-and-desist order shall mean a final order
to cease and desist issued under section 8(b) of the Act (12 U.S.C.
1818(b)).
(19) Section 8(c) order and temporary cease-and-desist order. The
terms section 8(c) order and temporary cease-and-desist order shall mean
a temporary order to cease and desist issued under section 8(c) of the
Act (12 U.S.C. 1818(c)).
(20) Section 8(e) order. The term section 8(e) order shall mean a
final order of removal or prohibition issued under section 8(e) of the
Act (12 U.S.C. 1818(e)).
(21) Section 8(e)(3) order and temporary order of suspension. The
terms section 8(e)(3) order and temporary order of suspension shall mean
a temporary order of suspension or prohibition issued under section
8(e)(3) of the Act (12 U.S.C. 1818(e)(3)).
(22) Section 8(g) order. The term section 8(g) order shall mean an
order of suspension or prohibition issued under section 8(g) of the Act
(12 U.S.C. 1818(g)).
(23) Remote service facility. The term remote service facility shall
mean an automated teller machine, cash dispensing machine, point-of-sale
terminal, or other remote electronic facility where deposits are
received, checks paid, or money lent.
(24) Notice of assessment of civil money penalties. The term notice
of assessment of civil money penalties shall mean a notice of assessment
of civil penalties, findings of fact and conclusions of law, and order
to pay issued pursuant to sections 7(a)(1), 7(j)(15), 8(i) or 18(j) of
the Act (12 U.S.C. 1817(a)(1), 1817(j)(15), 1818(i), or 1828(j)),
section 106(b) of the Bank Holding Company Act (12 U.S.C. 1972), section
910(d) of the International Lending Supervision Act of 1983 (12 U.S.C.
3909), or any other provision of law providing for the assessment of
civil money penalties by the FDIC.
(25) Amended order to pay. The term amended order to pay shall mean
an order to forfeit and pay civil money penalties, the amount of which
has been changed from that assessed in the original notice of assessment
of civil money penalties.
(26) Book capital. The term book capital shall mean total equity
capital which is comprised of perpetual preferred stock, common stock,
surplus, undivided profits and capital reserves, as those items are
defined in the instructions of the Federal Financial Institutions
Examination Council (FFIEC) for the preparation of Consolidated Reports
of Condition and Income for insured banks.
(27) Tier 1 capital. The term Tier 1 capital shall have the same
meaning as provided in Sec. 325.2(m) of this chapter (12 CFR 325.2(m)).
(28) Total assets. The term total assets shall have the same meaning
as provided in Sec. 325.2(n) of this chapter (12 CFR 325.2(n)).
(29) Adjusted Part 325 total assets. The term adjusted Part 325
total assets shall mean adjusted 12 CFR part 325 total assets as
calculated and reflected in the FDIC's Reports of Examination.
(30) Protest. The term protest shall include any comment from the
public which raises a negative issue relative to the Community
Reinvestment Act (12 U.S.C. 2901 et seq.), whether or not it is labeled
a protest and whether or not a hearing is requested; however, the term
protest shall not include any such comment which the appropriate
regional manager determines to be frivolous, or to have been filed for
competitive reasons by a financial institution, or to have been filed
primarily as a means of delaying action on the application, or any
comment which raises negative Community Reinvestment Act issues between
the commenter and the applicant that have been resolved.
(31) Standard conditions. The term standard conditions refers to
conditions that any delegate may include as a matter of routine in an
order approving an application, whether or not the applicant has agreed
to their inclusion. The following conditions, or variations thereof, are
standard conditions:
(i) That the applicant has obtained all necessary and final
approvals from the appropriate state authority or other applicable
authority;
[[Page 8]]
(ii) That if the transaction does not take effect within a specified
time limit, or unless, in the meantime, a request for an extension of
time has been approved, the consent granted shall expire at the end of
the said time period;
(iii) That until the conditional commitment of the FDIC becomes
effective, the FDIC retains the right to alter, suspend or withdraw its
commitment should any interim development be deemed to warrant such
action; and
(iv) In the case of a merger transaction (as defined in
Sec. 303.7(b)(1)), including a phantom merger or reorganization, that
the proposed transaction not be consummated before the thirtieth
calendar day after the date of the order approving the merger.
(c) Authority delegated to regional manager. For purposes of this
part, and where confirmed in writing, any authority delegated to the
regional manager may also be exercised by his or her principal
assistant.
(d) Construction. Any singular term includes the plural, and the
plural includes the singular, if such use would be appropriate. Any use
of the masculine, feminine, or neuter gender shall encompass all three,
if such use would be appropriate.
[59 FR 52660, Oct. 19, 1994, as amended at 60 FR 31384, June 15, 1995;
62 FR 16664, Apr. 8, 1997]
Sec. 303.1 Application by nonmember bank, state savings association, and Federal savings association for deposit insurance.
Application for deposit insurance by an existing or proposed
nonmember bank,\1\ state savings association or Federal savings
association should be filed with the appropriate regional director. The
relevant application forms and instructions may be obtained from the
appropriate FDIC regional office.
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\1\ A nonmember bank is a bank which is not a member of the Federal
Reserve System.
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[54 FR 53556, Dec. 29, 1989]
Sec. 303.2 Applications by insured state nonmember bank to establish a branch, move its main office or relocate a branch.
(a) Application by an insured state nonmember bank (except a
District bank) to establish and operate a new branch 2, to
move its main office, or relocate a branch should be filed with the
appropriate regional director. For purposes of this requirement, a
branch relocation is a move within the same immediate neighborhood that
does not substantially affect the nature of the business of the branch
or the customers of the branch. Under this paragraph, situations where
an insured state nonmember bank closes a branch in one location and
opens a branch in another location outside the immediate neighborhood of
the closed branch are considered the establishment of a new branch and
the closing of an existing branch. Applications filed under this
paragraph shall indicate whether they are to establish and operate a new
branch, move a main office, or relocate a branch office. The application
shall be mailed or delivered to the regional director on the date on
which the notice required in Sec. 303.6(f)(1) is published or not more
than 30 days subsequent to the first required publication of notice. The
application shall be in letter form and shall contain the following
information:
---------------------------------------------------------------------------
\2\ The term branch includes any domestic branch or foreign branch
as those terms are defined in section 3(o) of the Act, as amended (12
U.S.C. 1813(o)).
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(1) The exact location of the proposed site, including street
address (unless one has not been assigned to the location);
(2) Details concerning any involvement in the proposal by an insider
(a director, an officer, or a shareholder who directly or indirectly
controls 5 or more percent of any class of the applicant's outstanding
voting stock, or the associates and interests of any such person) of the
bank, including any financial arrangements relating to fees, the
acquisition of property, leasing of property, and construction
contracts;
(3) The impact of the proposal on the human environment,
specifically, information on compliance with local zoning laws and
regulations and the effect on traffic patterns;
(4) A statement as to whether or not the site is included in or is
eligible for inclusion in the National Register of Historic Places,
including evidence
[[Page 9]]
that clearance has been obtained from the State Historic Preservation
Officer;
(5) Comments on any changes in services to be offered, the community
to be served, or any other effect the proposal may have on the
applicant's compliance with the Community Reinvestment Act; and
(6) The name and address of and the date of publication in the
newspaper in which notice required by Sec. 303.6(f)(1) is published.
In cases in which additional information is necessary for evaluation of
the application, the applicant may be required to furnish specific
information on an individual basis. Procedures regarding applications to
establish or acquire a branch pursuant to section 38 of the Act, 12
U.S.C. 1831o, are set forth at Sec. 303.5(e) of this part.
(b) The appropriate regional director may delay processing,
including extending the comment period, for good cause.
(c) Special procedures for remote service facilities. (1) For
purposes of this section, establishing means owning or leasing a remote
service facility either individually or jointly.
(2) An insured state nonmember bank or an insured state-licensed
branch of a foreign bank whose most recent Community Reinvestment Act
rating is Satisfactory or better and who desires to establish and
operate or relocate a remote service facility (RSF) shall file a letter
with the appropriate regional director. The letter shall contain the
exact location of the proposed or relocated RSF, including street
address (unless one has not been assigned to the location), and either a
representation that the site of the proposed or relocated RSF is not
included in or eligible for inclusion in the National Register of
Historic Places or written verification that in the opinion of the
appropriate state historic preservation officer the establishment or
relocation of the RSF will have no adverse effect on a historic site.
Unless the institution is notified otherwise by the FDIC within seven
days of receipt of the letter, the institution may establish and operate
or relocate the RSF. In the event that the institution cannot represent
in good faith that the site of the proposed or relocated RSF is not
included in or eligible for inclusion in the National Register of
Historic Places or evidence that written verification has been obtained
from the appropriate state historic preservation officer, the
institution shall proceed pursuant to paragraph (c)(3) of this section.
(3) An insured state nonmember bank or an insured state-licensed
branch of a foreign bank whose most recent Community Reinvestment Act
rating is not Satisfactory or better and who desires to establish and
operate or relocate an RSF shall file the letter described in paragraph
(c)(2) of this section and comply with the notice provisions of
Sec. 303.6(f). Unless the institution is notified otherwise by the FDIC
within 15 days after completion of processing of the letter, the
institution may establish and operate or relocate the RSF; provided
however, that in the event that a protest is filed with the FDIC or
other objection is taken prior to completion of processing the letter,
the institution shall not establish and operate or relocate the RSF
until the FDIC provides written notice of its approval.
[54 FR 53556, Dec. 29, 1989, as amended at 58 FR 8216, Feb. 12, 1993; 59
FR 4250, Jan. 31, 1994; 59 FR 43282, Aug. 23, 1994]
Sec. 303.3 Application for conversion, merger, consolidation, assumption and sale of asset transactions.
(a) Merger, consolidation, asset acquisition or assumption
transaction between insured depository institutions. Application by an
insured depository institution for the consent of the Corporation to
merge or consolidate with, acquire the assets of, or assume the
liability to pay any deposits made in, another insured depository
institution--when the resulting or assuming depository institution is to
be an insured state nonmember bank (except a District bank or a savings
bank supervised by the Director of the Office of Thrift Supervision),
together with copies of all agreements or proposed agreements relating
thereto, including the charter or articles of incorporation of the
resulting or assuming depository institution, should be filed with the
appropriate regional director. Procedures regarding applications to
acquire an interest in
[[Page 10]]
any company or insured depository institution pursuant to section 38 of
the Act, 12 U.S.C. 1831o, are set forth at Sec. 303.5(e) of this part.
(b) Merger of Insured depository institution with noninsured bank or
institution. Application by an insured depository institution for the
consent of the Corporation to merge or consolidate with a noninsured
bank or institution, or to convert into a noninsured institution, or to
assume liability to pay any deposits made in, or similar liabilities of,
any noninsured bank or institution, or to transfer assets to any
noninsured bank or institution in consideration of the assumption of
liability for any portion of the deposits made in such insured
depository institution, together with copies of all agreements or
proposed agreements relating thereto, should be filed with the
appropriate regional director.
(c) Conversion with diminution of capital or surplus. Application
for the consent of the Corporation to convert into an insured state
nonmember bank (except a District bank), when the conversion will result
in the converted bank's having less capital stock or surplus than the
converted bank at the time of the shareholders' meeting approving such
conversion, together with copies of the charter and/or articles of
association of the converted bank, should be filed with the appropriate
regional director.
(d) Applications for approval of transactions under section 5(d)(3)
of the Federal Deposit Insurance Act (12 U.S.C. 1815(d)(3)). Application
by an insured state nonmember bank for consent of the Corporation to
enter into a transaction under section 5(d)(3) of the Federal Deposit
Insurance Act shall be made by submitting a letter accompanying the
merger application certifying:
(1) That the application for approval is for a transaction under
section 5(d)(3), and
(2) That the transaction will not result in the transfer of any
insured depository institution's Federal deposit insurance from one
federal deposit insurance fund to the other federal deposit insurance
fund.
(e) The appropriate application forms and instructions, as well as
instructions concerning notice to depositors, may be obtained upon
request from the office of said regional director.
[54 FR 53556, Dec. 29, 1989, as amended at 57 FR 5815, Feb. 18, 1992; 58
FR 8216, Feb. 12, 1993]
Sec. 303.4 Change in bank control.
(a) Acquisition of control.\3\ Under the Change in Bank Control Act
of 1978, acquisitions by a person \4\ or persons acting in concert with
the power to vote 25 percent or more of a class of voting securities of
an insured depository institution, unless exempted, require prior notice
to the Corporation. In addition, a purchase, assignment, transfer,
pledge, or other disposition of voting stock through which any person
will acquire ownership, control, or the power to vote ten percent or
more of a class of voting securities of an insured depository
institution will be presumed to be an acquisition by such person of the
power to direct that institution's management or policies if:
---------------------------------------------------------------------------
\3\ Control is defined in section 7(j)(8)(B) of the Act as ``the
power, directly or indirectly, to direct the management or policies of
an insured bank or to vote over 25 percent or more of any class of
voting securities of an insured bank.'' 12 U.S.C. 1817(j)(8)(B).
\4\ Person is defined in section 7(j)(8)(A) of the Act as ``an
individual or a corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated
organization, or any other form of entity not specifically listed
herein.'' 12 U.S.C. 1817(j)(8)(A).
---------------------------------------------------------------------------
(1) The institution has issued any class of securities subject to
the registration requirements of section 12 of the Securities Exchange
Act of 1944 (15 U.S.C. 781); or
(2) Immediately after the transaction, no other person will own a
greater proportion of that class of voting securities.
Other transactions resulting in a person's control of less than 25
percent of a class of voting shares of an insured depository institution
would not result in control for purposes of the Act. An acquiring person
may request an opportunity to contest any presumption established by
this paragraph (a) of this section with respect to a proposed
transaction. The Corporation will afford the person an opportunity to
[[Page 11]]
present views in writing, or, where appropriate, orally before its
designated representatives either at informal conference discussions or
at informal presentations of evidence.
(b) Notices. (1) Notice of a proposed acquisition of control should
be filed with the regional director of the FDIC region in which the
depository institution in which stock is being acquired is located. The
FDIC will not accept a notice unless the information provided is
responsive to every item specified in paragraph 6 of the Change in Bank
Control Act of 1978 (12 U.S.C. 1817(j)(6)) and every item prescribed in
the appropriate FDIC forms. With respect to personal financial
statements required by paragraph 6(b) of the Change in Bank Control Act
of 1978, an acquiring person may include a current statement of assets
and liabilities, as of a date not more than ninety days prior to the
date the notice is filed, a brief income summary, and a statement of
material changes since the date of the statement. The appropriate
regional director, the Director (DOS), or the Board of Directors may
require additional information with respect to personal financial
statements.
(2)(i) Except as otherwise provided in paragraph (b)(2)(ii) or
(b)(2)(iii) of this section, within ten days after receiving
confirmation that the appropriate FDIC regional office has accepted the
notice, the acquiring person(s) shall publish an announcement of such
acceptance in the business section of a newspaper having general
circulation in the community in which the home office of the depository
institution whose stock is sought to be acquired is located. Promptly
thereafter, the acquiring person(s) shall send a copy of the newspaper
announcement and the publisher's affidavit of publication to the
regional director of the FDIC region in which the subject depository
institution is located. The newspaper announcement shall contain the
name(s) of the proposed acquirer(s), the name of the depository
institution whose stock is sought to be acquired, and the date of
acceptance by the FDIC of the notice of acquisition of control. The
announcement shall also state that any person wishing to comment on the
proposed change in control may do so by submitting written comments to
the regional director of the FDIC at (give address of the regional
office) within twenty days following the required newspaper publication
or, if the FDIC has shortened the public comment period pursuant to
paragraph (b)(3) of this section, within such shorter period.
(ii) In a community in which there is no daily or weekly community
newspaper, the acquiring person(s) may satisfy the publication
requirement contained in paragraph (b)(2)(i) of this section by
publishing the required newspaper announcement in either a county-wide
newspaper (in the county in which the bank's home office is located) or,
if there is no county-wide newspaper, in a state-wide newspaper.
(iii) In the case of a notice filed in contemplation of a public
tender offer subject to the requirements of the Securities Exchange Act
of 1934 (15 U.S.C. 78m and 78n) and the FDIC's regulations governing
tender offers (12 CFR 335.501 through 335.530), the acquiring person(s)
shall publish the required newspaper announcement not later than the
earliest of:
(A) The commencement of the tender offer under Sec. 335.502 of the
FDIC's regulations (12 CFR 335.502);
(B) Other public announcement of the tender offer; or
(C) Thirty-four days after the FDIC's acceptance of the notice of
acquisition of control.
(3)(i) In acting upon a proposed change in control, the FDIC shall
consider all public comments received within twenty days following the
required newspaper publication. At the FDIC's option, comments received
after this twenty-day period may be, but need not be, considered.
(ii) If the FDIC determines in writing that the newspaper
publication or comment solicitation requirements of this paragraph would
seriously threaten the safety or soundness of the depository institution
to be acquired, including situations where the FDIC must act immediately
in order to prevent the probable failure of the bank to be acquired,
then the FDIC may:
(A) Waive the publication requirement;
[[Page 12]]
(B) Waive the public comment solicitation requirement; or
(C) Act on the proposed change in control prior to the expiration of
the public comment period.
(iii) In other circumstances, for good cause, the FDIC may shorten
the public comment period to a period of not less than ten days. Such
good cause will exist only if the FDIC determines that circumstances
beyond the control of the acquiring person or persons warrant a shorter
period.
(4) A notice of acquisition of control that is filed in
contemplation of a public tender offer subject to sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m and 78n) and
the FDIC's regulations governing tender offers (12 CFR 335.501 through
335.530) may be given confidential treatment for up to thirty-four days
after the notice is accepted if:
(i) The filing party requests confidential treatment under this rule
and represents that a public announcement of the tender offer and the
filing of appropriate forms with the FDIC will occur within thirty-four
days from the acceptance of the notice; and
(ii) The FDIC determines, in its discretion, that it is in the
public interest to grant confidential treatment. In its discretion, the
FDIC may grant confidential treatment under other circumstances when
consistent with the purposes of the Change in Bank Control Act of 1978.
(5) Nothing in this regulation shall affect any obligation which the
acquiring person(s) may have to comply with the Federal securities laws
or any other laws.
(6)(i) Whenever a notice of a proposed acquisition of control is not
filed in accordance with the Change in Bank Control Act of 1978 and
these regulations, the acquiring person(s) shall, within ten days of
being so directed by the FDIC, publish an announcement of the
acquisition of control in the business section of a newspaper having
general circulation in the community in which the home office of the
depository institution involved is located. In a community in which
there is no daily or weekly community newspaper, the required newspaper
announcement may be published in a county-wide newspaper (in the county
in which the depository institution's home office is located) or, if
there is no county-wide newspaper, in a statewide newspaper.
(ii) The newspaper announcement shall contain the name(s) of the
acquire(s), the name of the depository institution involved, and the
date of the acquisition of the stock. The announcement shall also
contain a statement indicating that the FDIC is currently reviewing the
acquisition of control. The announcement shall also state that any
person wishing to comment on the change in control may do so by
submitting written comments to the regional director of the FDIC at
(give address of the regional office) within twenty days following the
required newspaper publication.
(c) Exempt transactions. The following transactions are not subject
to the prior notice requirements of the Change in Bank Control Act of
1978:
(1) The acquisition of additional shares of an insured depository
institution by a person who continuously since March 9, 1979, held power
to vote 25 percent or more of the voting shares of that institution, or
by a person who has acquired and maintained control of that institution
after complying with the procedures of the Change in Bank Control Act;
(2) The acquisition of additional shares of an insured depository
institution by a person who under paragraph (a) of this section would be
presumed to have controlled that institution continuously since March 9,
1979, if:
(i) The transaction will not result in that person's direct or
indirect ownership or power to vote 25 percent or more of any class of
voting securities of the institution; or
(ii) In other cases, the Corporation determines that the person has
controlled the institution since March 9, 1979;
(3) The acquisition of shares in satisfaction of a debt previously
contracted in good faith or through testate or intestate succession or
bona fide gift; Provided, The acquirer advises the appropriate regional
director within thirty days after the acquisition and provides such of
the information specified in paragraph 6 of the Change in Bank
[[Page 13]]
Control Act as the regional director requests;
(4) A transaction subject to approval under section 3 of the Bank
Holding Company Act, section 18 of the Act or section 10 of the Home
Owners' Loan Act;
(5) A transaction described in sections 2(a)(5) or (3)(a)(5)(A) or
(B) of the Bank Holding Company Act, (12 U.S.C. 1841(a)(5) or 1842
(a)(5)) by a person there described;
(6) A customary one-time proxy solicitation and receipt of pro-rata
stock dividends; and
(7) The acquisition of shares in foreign banks which have an insured
branch or branches in the United States; Provided, however, That this
exemption does not extend to the reports and information required under
sections 7(j)(9), (10), and (12) of the Act.
[54 FR 53557, Dec. 29, 1989, as amended at 59 FR 52662, Oct. 19, 1994]
Sec. 303.5 Applications concerning insurance fund conversions, prompt corrective action, and other applications.
(a) Conversion involving transfer of deposits between the Savings
Association Insurance Fund (SAIF) and the Bank Insurance Fund (BIF).
Application by any depository institutions to participate in a
conversion transaction involving the transfer of deposits from the SAIF
Fund to the BIF Fund or vice versa should be filed with the appropriate
regional director. The application shall be in letter form, signed by
representatives of each institution participating in the transaction,
and shall contain the following information:
(1) A description of the transaction;
(2) A statement of condition of each institution as of the date of
application;
(3) A statement of condition of each institution as of May 1, 1989,
with a notation as to the amount of net interest credited to total
deposits during the period beginning May 1, 1989, and ending on the
expected date of transfer;
(4) The amount of deposits involved in the conversion transaction;
(5) A pro forma balance sheet and income statement for each
institution upon consummation of the transaction;
(6) A listing of any other conversion in which either institution
has participated since August 9, 1989, or any other conversion
transaction in process at the time of filing; and
(7) Any other information that the regional director may from time
to time require.
(b) Except as otherwise provided by rule or regulation, all
applications, requests, and submittals for which no form of application
has been prescribed by the Corporation should:
(1) Be in writing;
(2) (i) Be signed by the president, cashier, or managing officer of
the depository institution in the case of:
(A) An application by a depository institution whose insured status
has been terminated under section 8 of the Federal Deposit Insurance Act
(12 U.S.C. 1818) for permission to continue or resume its status as an
insured depository institution; or
(B) An application made by an insured depository institution under
part 328 of this title; or
(ii) Be signed by the applicant or a duly authorized agent in all
other cases;
(3) Contain a statement of the applicant's interest therein, a
complete and concise statement of the action requested, and the reasons
and facts relied upon as the basis for such requested action; and
(4) (i) Be addressed to the appropriate regional director in the
case of an application, request, or notice of acquisition of control
from or relating to a particular bank or institution; or
(ii) The Executive Secretary of the Corporation at the Corporation's
Washington, DC headquarters in all other cases.
The applicant shall furnish such other pertinent information as may be
required by the Corporation. Forms to be executed in conjunction with an
application for consent to exercise trust powers may be obtained from
the appropriate FDIC regional office.
(c) In addition to the foregoing, an application by a depository
institution whose insured status has been terminated under section 8 of
the Act for permission to continue or resume its status as an insured
depository institution should:
[[Page 14]]
(1) Be accompanied by a certified copy of the resolution of its
board of directors; and
(2) Contain a statement that the depository institution's insured
status has been terminated (including the date thereof and the basis
therefor) and that the insurance of its deposits has not ceased.
(d) Applications under Sec. 347.4 of this chapter to acquire or hold
stock or other evidence of ownership in a foreign bank or other
financial entity shall be submitted to the appropriate regional director
in letter form and, unless otherwise directed by the Corporation, shall
contain full information concerning the foreign bank or other financial
entity including (unless previously furnished):
(1) The cost, number, class of shares to be acquired, and the
proposed carrying value of such shares on the books of the insured state
nonmember bank;
(2) A recent balance sheet and income statement of the foreign bank
or other financial entity;
(3) A brief description of the foreign bank's or other financial
entity's business (including full information concerning any direct or
indirect business transacted in the United States);
(4) Lists of directors and principal officers (with address and
principal business affiliation of each) and of all shareholders known to
the issuing bank holding 10 percent or more of any class of the foreign
bank's or other financial entity's stock or other evidence of ownership,
and the amount held by each; and
(5) Information concerning the rights and privileges of the various
classes of shares outstanding.
(e) Applications pursuant to section 38 of the Act and subpart B of
part 325 of the FDIC's regulations (prompt corrective action). An
application by any insured depository institution pursuant to section 38
of the Act, 12 U.S.C. 1831o, and subpart B of part 325 of the FDIC's
regulations, 12 CFR part 325, should be filed with the DOS regional
director of the FDIC region in which the insured depository institution
is located. The application shall be in letter form, except as otherwise
provided in paragraphs (e)(1) through (5) of this section. Such letter
shall be signed by the president, senior officer or a duly authorized
agent of the insured depository institution and be accompanied by a
certified copy of a resolution adopted by the institution's board of
directors or trustees authorizing the application. Each application
shall contain the information specified in paragraphs (e)(1) through (5)
of this section and any other information requested by the Corporation.
(1) Capital distributions. An application to repurchase, redeem,
retire or otherwise acquire shares or ownership interests of the insured
depository institution shall describe the proposal, the shares or
obligations which are the subject thereof, and the additional shares or
obligations of the institution which will be issued in at least an
amount equivalent to the distribution. The application shall also
explain how the proposal will reduce the institution's financial
obligations or otherwise improve its financial condition. Where the
proposed action also requires an application pursuant to section 18(i)
of the Act (12 U.S.C. 1828 (i)), such application should be filed
concurrently with or made a part of the application pursuant to section
38 of the Act.
(2) Acquisitions, branching, and new lines of business. Applications
shall describe the proposal, state the date institution's capital
restoration plan was accepted by its primary Federal regulator, describe
the institution's status toward implementing the plan, and explain how
the proposed action is consistent with and will further the achievement
of the plan or otherwise further the purposes of section 38 of the FDI
Act. Where the FDIC is not the applicant's primary Federal regulator,
the application should also state whether approval has been requested
from the applicant's primary Federal regulator, the date of such request
and the disposition of the request, if any. Where the proposed action
also requires applications pursuant to section 18 (c) or (d) of the FDI
Act (12 U.S.C. 1828 (c) or (d) of the FDI Act (12 U.S.C. 1828 (c) or
(d)), such applications should be filed concurrently with, or made a
part of, the application filed pursuant to section 38 of the Act.
[[Page 15]]
(3) Bonuses and increased compensation for senior executive
officers. Applications shall list each proposed bonus or increase in
compensation, and for the latter shall identify compensation for each of
the twelve calendar months preceding the calendar month in which the
institution became undercapitalized. Applications shall also state the
date the institution's capital restoration plan was accepted by the
FDIC, and describe any progress made in implementing the plan.
(4) Payment of principal or interest on subordinated debt.
Applications shall describe the proposed payment and provide an
explanation of action taken under section 38(h)(3)(A)(ii) of the Act.
The application shall also explain how such payments would further the
purposes of section 38 of the Act. Existing approvals pursuant to
requests filed under 18(i)(1) shall not be deemed to be the permission
needed pursuant to section 38.
(5) Restricted activities of Critically Undercapitalized
Institutions. Applications to engage in any of the following activities
shall describe the proposed activity and explain how the activity would
further the purposes of section 38 of the Act:
(i) Enter into any material transaction other than in the usual
course of business including any action with respect to which the
institution is required to provide notice to the appropriate Federal
banking agency;
(ii) Extend credit for any highly leverage transaction;
(iii) Amend the institution's charter or bylaws, except to the
extent necessary to carry out any other requirement of any law,
regulation, or order;
(iv) Make any material change in accounting methods;
(v) Engage in any covered transaction (as defined in section 23A(b)
of the Federal Reserve Act (12 U.S.C. 371A(b))); or
(vi) Pay excessive compensation of bonuses.
[54 FR 53558, Dec. 29, 1989, as amended at 58 FR 8217, Feb. 12, 1993; 59
FR 52662, Oct. 19, 1994]
Sec. 303.6 Application procedures.
(a) Scope of section. Paragraphs (f) through (n) of this section
apply to:
(1) Applications for deposit insurance by proposed new depository
institutions or operating non-insured institutions;
(2) Applications by insured state nonmember banks to establish
branches, including applications to establish remote service facilities
by banks whose most recent Community Reinvestment Act rating is not
Satisfactory or better or who cannot represent compliance with the
National Historic Preservation Act;
(3) Applications by insured state nonmember banks to move their main
office or relocate their branch offices, including applications to
relocate remote service facilities by banks whose most recent Community
Reinvestment Act rating is not Satisfactory or better or who cannot
represent compliance with the National Historic Preservation Act;
(4) Applications to merge or to consolidate with, acquire the assets
of, or assume the liability to pay any deposits made in, a bank or
institution, when the resulting or assuming depository institution is to
be an insured state nonmember bank, and all other applications to merge
or to consolidate with, or to assume liabilities, which require the
Corporation's prior approval under the Bank Merger Act (12 U.S.C.
1828(c)); \6\ and
---------------------------------------------------------------------------
\5\ [Reserved]
\6\ Except as otherwise provided in paragraph (f)(1) of this
section, the provisions of this Sec. 303.6 shall not be applicable to
any proposed merger or assumption transaction which the Board of
Directors of the Corporation determines must be acted upon immediately
to prevent the probable default of one of the institutions involved or
must be handled with expeditious action due to an existing emergency
condition, as permitted by the Bank Merger Act (12 U.S.C. 1828(C)(6)).
---------------------------------------------------------------------------
(5) Any other applications, requests or submittals which the Board
of Directors of the FDIC in its sole discretion deems appropriate.
In the case of applications, requests, or submittals which come within
Sec. 303.6(a)(5), the applicant will be notified at the time its
application is accepted for filing that the procedures set forth in this
section shall be followed in connection therewith.
[[Page 16]]
(b) Investigations and examinations. With respect to all
applications, requests, or submittals, the Board of Directors, or the
Director (DOS) or the Director (DCA), or their associate directors, or
the appropriate regional director, or the appropriate deputy regional
director, or the appropriate regional manager acting under delegated
authority may require any investigation or examination, or both, to be
performed as deemed appropriate. Upon receipt of the report of any
investigation or examination and any recommendations based on the
report, the Board of Directors, or either director, or their associate
directors, or the regional director, or the deputy regional director, or
the regional manager acting within the scope of delegated authority will
take any action determined necessary or appropriate under the
circumstances.
(c) Opportunity to present views. With respect to any application,
the Corporation may afford the applicant or other properly interested
persons, including government agencies, an opportunity to present views
orally or in writing before or to its designated representative or
representatives, either at informal conference discussions or at
informal presentations of evidence.
(d) Notice of disposition of applications. Prompt notice will be
given of the grant or denial, in whole or in part, of any written
application, petition, or other request of any interested person made in
connection with any agency proceeding. In the case of a denial of an
application by a federal savings association for deposit insurance, such
notice will be sent to the Director of the Office of Thrift Supervision,
and will be accompanied by a written statement giving specific reasons
for the Corporation's determination with reference to the factors
described in paragraphs (1), (2), (3), (4) and (5) of section 6 of the
Act (12 U.S.C. 1816). In the case of any other denial, except in
affirming a prior denial, or where the same is self-explanatory, such
notice will be accompanied by a simple statement of the reasons
therefor.
(e) Opportunity to petition for reconsideration of a denied
application, petition, or other request. (1) Within 15 days of its
receipt of notice that its application, petition, or request has been
denied, any applicant may petition the FDIC for reconsideration of such
application, petition, or request (except an application, petition or
request already previously denied upon reconsideration). The petition
must be in writing and should:
(i) Specify reasons why the FDIC should reconsider its action
(ii) Set forth relevant, substantive information that for good cause
was not previously set forth in the application, petition, or request to
be reconsidered; and
(iii) A petition or request relating to a safety and soundness
matter should be filed with the appropriate regional director. A
petition or request relating to compliance with consumer protection,
fair lending, community reinvestment or civil rights laws should be
filed with the appropriate regional manager. If a particular insured
depository institution or insured branch of a foreign bank was not the
subject of the application, petition, or request on which
reconsideration is sought, the petition should be filed with the
Executive Secretary of the FDIC at the FDIC's Washington, DC office.
(2) (i) The Director (DOS) or the Director (DCA) or, where confirmed
in writing by the appropriate Director, an associate director, or the
appropriate regional director or deputy regional director, or the
appropriate regional manager, or, in the case of a petition for
reconsideration filed with the Executive Secretary, the General Counsel
or his or her designee, shall determine whether the petition for
reconsideration satisfies paragraphs (e)(1)(i) and (ii) of this section
and shall promptly notify the petitioner of such determination.
(ii) If, pursuant to paragraph (e)(2)(i) of this section, a petition
for reconsideration is determined not to satisfy paragraphs (e)(1)(i)
and (ii) of this section, an applicant may appeal such decision to the
appropriate Director, and where confirmed in writing by that Director,
to an associate director, or, in the case of a petition for
reconsideration filed with the Executive Secretary, to the Chairperson
of the FDIC or his or her designee. An applicant may not submit
additional information
[[Page 17]]
or evidence with the appeal and the determination by the appropriate
Director or associate director, or the Chairperson of the FDIC or his or
her designee whether the petition satisfies paragraphs (e)(1)(i) and
(ii) of this section is final, and not appealable to the Board of
Directors.
(iii) If a petition for reconsideration is determined to satisfy
paragraphs (e)(1)(i) and (ii) of this section, then the previously
denied application, petition, or request will be reconsidered:
(A) By the Board of Directors if originally denied by the Board of
Directors; or
(B) By the appropriate director, or where confirmed in writing by
the director, by an associate director, if originally denied by the
director, associate director, regional director, deputy regional
director, or regional manager.
(iv) Decisions by either director or their associate directors on
petitions for reconsideration are final and not appealable to the Board
of Directors.
(f) Notice of filing of application--(1) Notice by publication. (i)
In the case of applications in connection with a merger transaction (as
defined by the Bank Merger Act, 12 U.S.C. 1828(c)(3)), unless the
Corporation determines it must act immediately in order to prevent the
probable failure of one of the depository institutions involved, the
applicant must publish notice of the proposed transaction on at least
three occasions at approximately two week intervals in a newspaper of
general circulation in the community or communities where the main
offices of the banks or institutions involved are located, or if there
is no such newspaper in the community, then in the newspaper of general
circulation published nearest thereto. The last publication of the
notice shall appear on the 30th day or the newspaper's publication date
closest to 30 days after the first publication. The public shall have a
minimum of 30 days from the date of first publication to comment on the
application. Where the Corporation determines that an emergency exists
which requires expeditious action, then notice shall be published twice
during a 10 day period, first, as soon as possible after the Corporation
notifies the applicant that the merger will be processed as an emergency
requiring expeditious action and, second, on the 10th day or the
newspaper's publication date closest to 10 days after the date of first
publication. The public shall have a minimum of 10 days from the date of
first publication to comment on the application. The published notice
shall include the name and main office location of all banks or
institutions involved in the transactions and the subject matter of the
application. If it is contemplated that the continuing bank will operate
the offices of the other depository institution(s) as branches, the
following statement shall be added to the notice:
It is contemplated that all of the offices of the above named
institutions will continue to be operated (with the exception of
[identity and location of each office which will not be operated]).
(ii) In the case of all other applications described in paragraph
(a) of this section, on the date the deposit insurance application form
or the letter application required in Sec. 303.2 is mailed or delivered
to the regional director or not more than 30 days prior to that date,
the applicant shall publish notice or begin publication of notice if
more than one notice is required, of the proposed transaction. Provided
however, That no publication shall be required in connection with the
granting of insurance to a new depository institution established
pursuant to the resolution of a failed institution situation.
Publication of notice shall be made at least once each week on the same
day for two consecutive weeks for applications to move a main office or
relocate a remote service facility and once for other applications
described in paragraph (a) of this section and shall be in a newspaper
of general circulation in the communities referred to below:
(A) Applications to establish a branch, including a remote service
facility. In the communities in which the home office and the domestic
branch to be established are located; Foreign Branch: In the community
in which the home office is located.
(B) Applications to move a main office and relocate a branch
(including a remote service facility). In the communities in which the
home office, office to be
[[Page 18]]
closed, and office to be opened are located, provided that a foreign
bank having an insured branch need only publish such notice in the
communities in which the insured branch is located and is to be
relocated.
(C) Applications for deposit insurance. In the community in which
the home bank office is or will be located, provided that a foreign bank
making application for an insured branch need only publish such notice
in the community in which the insured branch is to be located.
The published notice required by (f)(1) of this section shall include
the name of the applicant, the subject matter of the application, and
the location or locations at which the applicant proposes to engage in
business.
(iii) In all instances, immediately after final publication, the
applicant shall advise the appropriate regional director that the
publication requirements have been met.
(2) Notice by posting. In the case of applications to move a main
office or relocate a branch, in addition to the notice by publication
described in paragraph (f)(1) of this section, notice of the publication
shall be posted in the public lobby of the office(s) to be moved or
relocated, if such public lobby exists, for at least 21 days beginning
with the date of the last published notice required by paragraph (f)(1)
of this section for applications to move a main office; and for at least
15 days beginning with the date of the publication notice required by
paragraph (f)(1) of this section for applications to relocate a branch.
(3) Comments. Anyone who wishes to comment on an application may do
so by filing comments in writing with the appropriate regional director
at any time before the Corporation has completed processing the
application. Processing will be completed, for applications other than
applications to move a main office, to relocate a remote service
facility and to merge, not less than 15 days after the publication of
the notice required by paragraph (f)(1) of this section or 15 days after
the Corporation's receipt of the application, whichever is later; for
applications to move a main office or relocate a remote service
facility, not less than 21 days after the last publication or 21 days
after the Corporation's receipt of the application, whichever is later;
for merger applications for which the Corporation has not determined it
must act immediately in order to prevent the probable failure of one of
the depository institutions involved, not less than 30 days after the
first publication or, if the Corporation has determined that an
emergency exists which requires expeditious action, not less than 10
days after the first publication. This time period may be extended by
the appropriate regional director for good cause. Such regional director
shall report the reasons for such action to the Board of Directors.
(4) Notice of right to comment. In order to fully apprise the public
of its rights under paragraph (f)(3) of this section, the notice
described in paragraph (f)(1) of this section shall include a statement
describing the right to comment upon, or protest the granting of, the
application. This notice shall consist of the following statement:
Any person wishing to comment on this application may file his or
her comments in writing with the regional director of the Federal
Deposit Insurance Corporation at its regional office (address of the
regional office) before processing of the application has been
completed. Processing will be completed no earlier than the (main office
moves and remote service facility relocations--21st; non-emergency
mergers--30th; emergency mergers--10th; other applications described in
paragraph (a) of this section--15th) day following (mergers--the first
required publication; all other applications described in paragraph (a)
of this section--either the date of the last required publication or the
date of receipt of the application by the FDIC, whichever is later). The
period may be extended by the regional director for good cause. The
nonconfidential portion of the application file is available for
inspection within one day following the request for such file. It may be
inspected in the Corporation's regional office during regular business
hours. Photocopies of information in the nonconfidential portion of the
application file will be made available upon request. A schedule of
charges for such copies can be obtained from the regional office.
(5) Solicitation of comments by regional director. Whenever he deems
it appropriate, the regional director may solicit comments from any
person or institution which, in his opinion, might
[[Page 19]]
have an interest in or be affected by the pending application.
(g) Public access to application file--(1) Inspection of application
file. Any person may inspect the nonconfidential portions of an
application file. For a period extending until 180 days after final
disposition of an application, the nonconfidential portions of the file
will be available for inspection in the regional office of the FDIC in
which an application has been filed. During this period, the
nonconfidential portion of the file will be produced for review not more
than one working day after receipt by the regional office of the request
(either written or oral) to see the file. Photocopies of the
nonconfidential portions of the file will be available, upon request, to
any person. A charge for making copies will be made in accordance with
the fee schedule contained in Sec. 309.5(b) of this chapter. No charge
will be imposed for the search for, and review of, the application file.
One hundred and eighty (180) days after the final disposition of an
application, the nonconfidential portions of an application file will be
made available in accordance with the provisions of Sec. 309.5 of this
chapter.
(2) Nonconfidential portions of application file. Subject to the
provisions of paragraph (g)(3) of this section, the following
information in an application file will be available for public
inspection:
(i) The application with supporting data and supplementary
information.
(ii) Data, comments, and other information submitted by interested
persons in favor of, or in opposition to, such application.
(iii) Those portions of the investigation report prepared by the
Corporation's field examiner in connection with the application which
cover the convenience and needs of the community to be served by the
applicant or applicants and either the future earnings prospects or the
future prospects of the applicant or applicants.
(iv) A summary assessment of the applicant or applicants, based on
their Community Reinvestment Act examination.
(v) Where a hearing has been held pursuant to paragraph (i) of this
section, any evidence submitted pursuant to paragraph (j)(3) of this
section and the hearing transcript described in paragraph (j)(5) of this
section.
(3) Withholding of confidential information. No material described
in paragraph (g)(2) of this section shall be available if it is
determined to be confidential under the provisions of 5 U.S.C. 552. The
following information generally is considered confidential:
(i) Personal information, the release of which would constitute a
clearly unwarranted invasion of privacy.
(ii) Commercial or financial information, the disclosure of which
would result in substantial competitive harm to the submitter.
(iii) Information the disclosure of which could seriously affect the
financial condition of any financial institution.
(h) Proceedings--(1) Requests for hearing or other proceeding.
Anyone who has made a formal comment within the period specified in
paragraph (f)(3) of this section may request a hearing or an oral
presentation at the time of making the formal comment. If a hearing or
an oral presentation is requested, the request must be accompanied by a
brief statement by the person requesting the hearing or presentation of
his or her interest in the application and of the matters which he or
she wishes to discuss. If the Corporation determines that a hearing or
other form of oral presentation should be allowed, the person making the
request will be advised of the date, time, and location of the hearing
or oral presentation.
(2) Form of proceeding. The Corporation may, at its discretion,
decide to hold a hearing on the application in accordance with paragraph
(i) of this section; it may decide to hold an informal proceeding in
accordance with paragraph (h)(3) of this section; or it may decide not
to hold a hearing or an informal proceeding in which case, where there
has been a request for an opportunity to be heard pursuant to paragraph
(h)(1) of this section, it will so advise the applicant and all persons
who requested an opportunity to be heard. A decision as to the form of
proceeding to be held will be made not more than 30 days after a request
for a hearing or oral presentation has been
[[Page 20]]
made pursuant to paragraph (h)(1) of this section.
(3) Informal proceedings. If the Corporation decides to hold an
informal proceeding, the regional director shall, not less than 10 days
prior thereto, notify the applicant and each person who requested a
hearing, or oral presentation in accordance with paragraph (h)(1) of
this section, of the date, time, and place of the proceeding. The
regional director may, if he deems it advisable, notify other persons
who have expressed an interest in the application and invite them to
attend. The proceeding may assume any form, including a meeting with
Corporation representatives, at which the participants will be asked to
present their views orally. The regional director shall also have the
discretion to hold separate meetings with each of the participants where
he deems it desirable.
(i) Hearings. Hearings of the kind provided for in this paragraph
will not generally be afforded the participants if they have had the
opportunity to participate in prior hearings before the appropriate
State authority which covered essentially the same issues or if the
regional director determines that less formal proceedings would be
adequate.
(1) Notice of hearing--(i) Contents. If the Corporation determines
that a hearing on the application is warranted, the regional director
shall, not less than 10 days prior thereto, give notice of the
scheduling of the hearing, and shall set forth in the notice the subject
matter of the application, the significant issues to be presented, and
the date, time, and place at which the hearing shall be held.
(ii) To whom sent. The above notice shall be sent by registered or
certified mail to the applicant and to each person who requested a
hearing in accordance with paragraph (h)(1) of this section. The
regional director may also notify other persons who have expressed an
interest in the application and invite them to participate in the
hearing.
(2) Attendance at hearing. Each interested person who wishes to
attend the hearing shall notify the regional director accordingly with 5
days after the date upon which he receives the above notice. Unless he
has already done so, he shall submit a brief written summary of the
matters which he wishes to cover at the hearing, together with the
number and names of witnesses he wishes to present. The applicant and
other interested persons attending the hearing may be represented by
counsel.
(3) Presiding officer. The presiding officer at the hearing shall be
the regional director, his designee, or such other person as may be
named by the Board of Directors or the Director (DOS). The presiding
officer shall have the authority to appoint a panel to assist him.
(j) Hearing rules--(1) Order of presentation. The following schedule
is intended to serve as a general guide to the conduct of the hearing.
It is not fixed and may be varied at the discretion of the presiding
officer. The presiding officer shall determine the order of opening and
closing statements and presentations to be followed by all participants
other than the applicant who in each instance shall have the opportunity
to speak first.
(i) Opening statements. The applicant and each other participant may
make opening statements which should concisely state what the
participant intends to show.
(ii) Applicant's presentation. Following the opening statement(s),
the applicant shall present its data and materials orally or in writing.
(iii) Requester's presentation. Following the applicant's
presentation, each person who requested the hearing shall present his
data and materials orally or in writing. Those who requested the hearing
may agree, with the approval of the presiding officer, to have one of
their number make their presentation.
(iv) Other interested persons. Following the evidence of the
applicant and the requesters, the presiding officer will recognize other
interested persons who may present their views with respect to the
application under consideration.
(v) Summary statement. After all the above presentations have been
concluded, the applicant and each other participant may make a short
concise rebuttal.
[[Page 21]]
(2) Witnesses. Each participant is responsible for providing his own
witnesses, including the payment of all expenses associated with their
appearance at the hearing. All witnesses will be present on their own
volition, but any person appearing as a witness may be subject to
questioning by any participant, by the presiding officer, or by any
member of the panel. The refusal of a witness to answer questions may be
considered by the Corporation in determining the weight to be accorded
the testimony of that witness. Witnesses shall not be sworn.
(3) Evidence. The presiding officer shall have the authority to
exclude data or materials which he deems to be improper, irrelevant, or
repetitive. Formal rules of evidence shall not be applicable to these
hearings. Documentary material submitted as evidence must be of a size
consistent with ease of handling, transportation, and filing. Three
copies of all such documentary material shall be furnished to the
regional director, and any participant who specifically requests the
same shall be furnished a copy at his own expense. While large exhibits
may be used during the hearing, copies of such exhibits must be provided
by the person in reduced size for submission as evidence.
(4) Procedural questions. The presiding officer, or any designated
member of the panel, shall determine all procedural questions not
governed by this section. The presiding officer shall have the authority
to limit the number of witnesses to be used by any person and to impose
reasonable time limitations.
(5) Transcript. A transcript of each hearing will be arranged for by
the Corporation. The person or persons who requested the hearing will be
expected to pay all the expenses of such service, including the
furnishing of one copy of the transcript to the regional director.
Provided, however, That the Corporation may, for good cause, waive this
requirement in individual cases. Where a hearing is held at the
Corporation's initiative, the Corporation shall bear the expense of such
service. Copies of the transcript will be furnished to any interested
person requesting the same at that person's expense.
(6) The hearing record--(i) Contents. The nonconfidential portions
of the application, as described in paragraph (c) of this section, shall
automatically be a part of the hearing record.
(ii) Closing the hearing record--additional statements. Any person
who participates in the hearing may request that the hearing record
remain open for 10 days following receipt of the transcript by the
regional director during which time the person may submit corrected
copies of the transcript, or additional written statements or materials
which he agreed to furnish at the hearing, to the regional director.
Such person shall simultaneously mail or have delivered copies of the
corrected transcript or additional statements or materials to all other
persons who participated in the hearing.
(k) Disposition and notice thereof. (1) The final disposition of any
application or other matter under this section need not be determined
exclusively by, or be limited to, the information contained in the
public file established by paragraph (g) of this section.
(2) The applicant, and any other person who so requests in writing,
shall be notified by the Board of Directors of the final disposition of
the application or other matter. The Board of Directors shall also
provide a statement of the reasons for the final disposition made.\7\
---------------------------------------------------------------------------
\7\ Where final authority to dispose of an application or other
matter has been delegated to the Director (DOS), an associate director,
the regional directors and the deputy regional directors pursuant to
Sec. 303.7, the delegate will provide the notice and statement described
in this paragraph (k)(2).
---------------------------------------------------------------------------
(l) Computation of time. Section 308.22 shall govern the computation
of any period of time prescribed or allowed by this section.
(m) Retained authority. In acting upon any particular application,
the Board of Directors may by resolution adopt procedures which differ
from this section when it deems it necessary and in the public interest
to do so. Such resolution shall be made available for public inspection
and copying in the Office
[[Page 22]]
of the Executive Secretary of the Corporation in accordance with the
requirements of 5 U.S.C. 552(a)(2).
[54 FR 53559, Dec. 29, 1989, as amended by 59 FR 4250, Jan. 31, 1994; 59
FR 43282, Aug. 23, 1994; 59 FR 52662, Oct. 19, 1994; 59 FR 66655, Dec.
28, 1994]
Sec. 303.7 Delegation of authority to the Director (DOS) and to the associate directors, regional directors and deputy regional directors to act on certain
applications, requests, and notices of acquisition of control.
The Board of Directors of the FDIC has delegated to officials in the
Division of Supervision and other employees of the FDIC the authority on
behalf of the Board of Directors to act (subject to the provisions of
Sec. 303.10 of this part) on the following applications, requests, and
notices of acquisition of control.
(a) Applications for branches (including remote service facilities,
courier services, foreign branches of domestic banks), relocations, and
for trust and other banking powers--(1) Branch and relocation
applications. (i) Authority is delegated to the Director (DOS), and
where confirmed in writing by the director, to an associate director, or
to the appropriate regional director or deputy regional director, to
approve applications for consent to establish branch facilities
(including remote service facilities, courier services and foreign
branches of domestic banks) or relocations where the applicant satisfies
the requisites listed in paragraph (a)(1)(iii) of this section and
agrees in writing to comply with any condition imposed by the delegate
other than those standard conditions listed in Sec. 303.0(b)(31).
(ii) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director:
(A) To deny applications for consent to establish branch facilities
(including remote service facilities, courier services and foreign
branches of domestic banks) or relocations; and
(B) To approve such applications where the applicant satisfies the
requisites listed in paragraph (a)(1)(iii) of this section but does not
agree in writing to comply with any condition imposed by the delegate.
(iii) The requisites which must be satisfied before the authority
delegated by paragraphs (a)(1)(i) and (ii)(B) of this section to approve
applications for consent to establish branch facilities or relocations
may be exercised are:
(A) The seven factors set forth in section 6 of the Act (12 U.S.C.
1816) have been considered and favorably resolved (except that this
requisite does not apply to applications to establish courier services);
(B) The applicant meets the capital requirements set forth in 12 CFR
part 325 and the FDIC's ``Statement of Policy on Capital'' or agrees in
writing to increase capital so as to be in compliance with the
requirements of 12 CFR part 325 before or at the consummation of the
transaction which is the subject of the application, except that this
requisite does not apply to applications to establish courier services,
remote service facilities, and relocations of branches or main offices;
(C) Any financial arrangements which have been made in connection
with the proposed branch or relocation and which involve the applicant's
directors, officers, major shareholders, or their interests, are fair
and reasonable in comparison to similar arrangements that could have
been made with independent third parties; and
(D) The requirements of the National Historic Preservation Act (16
U.S.C. 470), the National Environmental Policy Act (42 U.S.C. 4321), and
the Community Reinvestment Act of 1977 (12 U.S.C. 2901 through 2905) and
its applicable implementing regulation (12 CFR part 345) have been
considered and favorably resolved (except that this requisite does not
apply to applications to establish foreign branches): Provided, however,
That the authority to approve an application may not be subdelegated to
a regional director or deputy regional director where a protest (as that
term is defined in Sec. 303.0(b)(30)) under the Community Reinvestment
Act is filed.
(2) Applications for consent to exercise trust and other banking
powers. (i) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or deputy regional director, to
[[Page 23]]
approve applications for the FDIC's consent to exercise trust or other
banking powers where the applicant satisfies the requisites listed in
paragraph (a)(2)(iii) of this section and agrees in writing to comply
with any other conditions imposed by the delegate other than those
standard conditions listed in Sec. 303.0(b)(31).
(ii) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director:
(A) To deny applications for trust or other banking powers; and
(B) To approve such applications where the applicant satisfies the
requisites listed in paragraph (a)(2)(iii) of this section but does not
agree in writing to comply with any condition required by the delegate
other than those standard conditions listed in Sec. 303.0(b)(31).
(iii) The requisites which must be satisfied before the authority
delegated by paragraphs (a)(2)(i) and (ii)(B) of this section to approve
applications for trust or other banking powers may be exercised are:
(A) The seven factors set forth in section 6 of the Act (12 U.S.C.
1816) have been considered and favorably resolved;
(B) The proposed management of the trust or other banking business
is determined capable of satisfactorily handling the anticipated
business; and
(C) In regards to trust applications only, the applicant's board of
directors has formally adopted Form 114--
Statement of Principles of Trust Department Management.
(b) Merger transactions. (1) Except as provided in paragraphs (b)(4)
and (5) of this section and in Sec. 303.10(b) of this part, authority is
delegated to the Director (DOS), and where confirmed in writing by the
director, to an associate director, or the appropriate regional director
or deputy regional director, to approve any application for permission
to merge or consolidate with any other bank or institution or, either
directly or indirectly, to acquire the assets of, or assume the
liability to pay any deposits made in any other bank, institution, or
branch of a foreign bank (hereafter merger transaction) where the
applicant satisfies the requisites listed in paragraph (b)(7) of this
section and (subject to paragraph (b)(6) of this section) where:
(i) The resulting institution, upon consummation of the merger
transaction, would not have more than 15% of the individual, partnership
and corporate deposits held by commercial banks and/or thrift
institutions, as may be appropriate, in the relevant market(s); or
(ii) The resulting institution, upon consummation of the merger
transaction, would not have more than 25% of the individual, partnership
and corporate deposits held by commercial banks and/or thrift
institutions, as may be appropriate, in the relevant market(s), and the
Attorney General has determined that the proposed merger transaction
would not have a significantly adverse effect on competition.
(2) Except as provided in paragraph (b)(4) of this section,
authority is delegated to the Director (DOS), and where confirmed in
writing by the director, to an associate director, to approve
applications for merger transactions where the resulting institution,
upon consummation of the merger transaction, would not have more than
35% of the individual, partnership and corporate deposits held by
commercial banks and/or thrift institutions, as may be appropriate, in
the relevant market(s), and the Attorney General has determined that the
proposed merger transaction would not have a significantly adverse
effect on competition.
(3) In cases where applicable, the delegate will review any reports
on the competitive factors involved in the merger transaction that the
Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, the Director OTS and the Attorney General may have
provided in response to a request for such reports by the FDIC. In the
absence of a formal written opinion by the Attorney General, the
delegate may also request the FDIC's General Counsel or designee to
provide a formal written opinion on the question whether the merger
transaction may have a significantly adverse effect on competition.
However, the authority delegated under paragraphs (b)(1)(ii) and (2) of
this section
[[Page 24]]
may not be exercised in the absence of a formal written opinion by the
Attorney General where the resulting bank, upon consummation of the
merger transaction, would have more than 15% of the individual,
partnership, and corporate deposits held by commercial banks and/or
thrift institutions, as may be appropriate, in the relevant market(s).
(4) The delegations contained in paragraphs (b)(1) and (2) of this
section to approve applications for merger transactions do not extend to
such applications:
(i) Falling within the scope of the probable failure or emergency
provisions of 12 U.S.C. 1828(c)(6); or
(ii) Where the resulting institution, upon consummation of the
merger transaction, does not meet the capital requirements set forth in
12 CFR part 325 and the FDIC's ``Statement of Policy on Capital.'' (If
the applicant is a foreign bank, the delegated authority to approve does
not extend to instances where, upon consummation of the merger
transaction, the foreign bank's insured branch is not in compliance with
12 CFR part 346.)
(5) The authority to approve an application may not be subdelegated
to a regional director or deputy regional director where a protest (as
that term is defined in Sec. 303.0(b)(30)) under the Community
Reinvestment Act is filed.
(6) Where the merging institutions operate in different relevant
market areas, then the limitations relative to market share percentages
set forth in paragraphs (b)(1) and (2) of this section do not apply.
(7) The requisites which must be satisfied before the authority
delegated by paragraphs (b)(1) and (2) of this section to approve
applications for merger transactions may be exercised are:
(i) That the statutory factors contained in section 18(c)(5) (12
U.S.C. 1828(c)(5) of the Act have been considered and favorably
resolved; and
(ii) Compliance with the National Environmental Policy Act (42
U.S.C. 4321), the Community Reinvestment Act (12 U.S.C. 2901 through
2905) and the applicable implementing regulation (12 CFR part 345 or any
other applicable implementing regulation) have been considered and
favorably resolved.
(8) In approving an application for a merger transaction under this
section, a delegate may impose any of the standard conditions listed in
Sec. 303.0(b)(31), or any other condition to which the applicant has
agreed in writing.
(9) Notwithstanding any limitation or condition imposed by this
section, the Director (DOS), and where confirmed in writing by the
director, an associate director, or the appropriate regional director or
deputy regional director is authorized to approve any transaction
involving a merger facilitated by the Resolution Trust Corporation under
its authority to assist savings associations in default or in danger of
default, provided that the resulting entity from the merger is a state-
chartered insured non-member bank.
(c) Notices of acquisition of control. (1) Authority is delegated to
the Director (DOS), and where confirmed in writing by the director, to
an associate director, or to the appropriate regional director or deputy
regional director, to issue a written notice of the FDIC's intent not to
disapprove an acquisition of control of an insured depository
institution.
(2) The authority delegated by paragraph (c)(1) of this section
shall include the power:
(i) To act in situations where information is submitted on
acquisitions arising out of testate or intestate succession, bona fide
gifts, or foreclosure;
(ii) To extend notice periods;
(iii) To determine the informational adequacy of a notice;
(iv) To determine whether a notice should be filed under section
7(j) of the Act (12 U.S.C. 1817(j)) by a person acquiring less than 25
percent of any class of voting securities of an insured depository
institution; and
(v) To waive publication, waive or shorten the public comment
period, or act on a proposed acquisition of control prior to the
expiration of the public comment period, as provided in 12 CFR
303.4(b)(3).
(3) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, to
disapprove an acquisition of control of an insured state depository
institution.
[[Page 25]]
(d) Deposit insurance applications--(1) Proposed or newly organized
depository institutions. (i) Authority is delegated to the Director
(DOS), and where confirmed in writing by the director, to an associate
director, or subject to the limitations set forth in paragraph
(d)(1)(iii) of this section, to the appropriate regional director or
deputy regional director, to approve applications for deposit insurance
by proposed or newly organized depository institutions, where the
applicant satisfies the requisites listed in paragraph (d)(1)(ii) of
this section, and agrees in writing to comply with any condition imposed
by the delegate, other than those listed in paragraph (d)(4) of this
section. Provided however; That the requisites listed in paragraph
(d)(1)(ii) of this section do not apply to any transaction facilitated
by the Resolution Trust Corporation under its authority to assist
savings associations in default or in danger of default.
(ii) The requisites which must be satisfied before the authority
delegated by paragraph (d)(1)(i) of this section to approve applications
for deposit insurance by proposed or newly organized depository
institutions may be exercised are:
(A) (1) As to Federal savings associations, factors (1) through (5)
of the seven factors set forth in section 6 of the Act (12 U.S.C. 1816)
have each been considered and favorably resolved, and the FDIC has
received from the Director of the Office of Thrift Supervision the
certificate required under section 5 of the Act (12 U.S.C. 1815);
(2) As to all other depository institutions, each of the seven
factors set forth in section 6 of the Act (12 U.S.C. 1816) has been
considered and favorably resolved; and
(B) The requirements set forth below are met:
(1) Equity capital is not less than $1,000,000;
(2) Legal fees and other expenses incurred in connection with the
proposal are determined to be reasonable;
(3) No unresolved management interlocks, as prohibited by the
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et
seq.), part 348 of this chapter (12 CFR part 348) or any other
applicable implementing regulation, exist;
(4) The projected ratio of equity capital and reserves to assets,
including projected profits and losses, is at least 10 percent at the
end of the third year of operations;
(5) Profitable operations are projected at least for the third year
of operations;
(6) The proposed aggregate direct and indirect investment in fixed
assets is determined to be reasonable relative to the applicant's
proposed equity capitalization, projected earnings capacity, and other
pertinent bases of consideration;
(7) Any financial arrangements made or proposed in connection with
the proposed depository institution involving the applicant's directors,
officers, 5 percent shareholders or their interests are determined to be
fair and made on substantially the same terms as those prevailing at the
time for comparable transactions with noninsiders and do not involve
more than normal risk or present other unfavorable features. The
applicant also must have fully disclosed, or agreed to disclose fully,
any such arrangement to all of its proposed directors and shareholders
prior to the opening of the depository institution;
(8) Stock financing arrangements, fidelity coverage and accrual
accounting conform to the guidelines established in the FDIC's policy
statement on ``Applications for Deposit Insurance;'' and
(9) Compliance with the National Historic Preservation Act (16
U.S.C. 470), the National Environmental Policy Act (42 U.S.C. 4321), and
the Community Reinvestment Act of 1977 (12 U.S.C. 2901 through 2905) and
the applicable implementing regulation (12 CFR part 345 or any other
implementing regulation) is adequate and favorably resolved.
(iii) The authority to approve an application may not be
subdelegated to a regional director or deputy regional director where:
(A) A protest (as that term is defined in Sec. 303.0(b)(30)) under
the Community Reinvestment Act is filed; or
[[Page 26]]
(B) (1) There is direct or indirect financing, by proposed directors
and officers and 5 percent or more shareholders, of more than 75 percent
of the purchase price of the stock subscribed to by any one shareholder;
(2) There is aggregate financing of stock subscriptions in excess of
50 percent of the total capital offered, or
(3) Warehoused or trusteed stock exceeds 10 percent of initial
capital funds.
(2) Operating noninsured depository institutions and state or
privately insured institutions. (i) Authority is delegated to the
Director (DOS), and where confirmed in writing by the director, to an
associate director, or, for applicant institutions with total assets of
less than $250,000,000, to the appropriate regional director or deputy
regional director, to approve applications for deposit insurance by
operating noninsured depository institutions, or state-insured or
privately insured institutions where the applicant satisfies the
requisites listed in paragraph (d)(2)(ii) of this section and agrees in
writing to comply with any condition imposed by the delegate other than
those listed in paragraph (d)(4) of this section.
(ii) The requisites which must be satisfied before the authority
delegated by paragraph (d)(2)(i) of this section to approve applications
for deposit insurance by operating noninsured depository institutions
may be exercised are:
(A) The applicant is determined to be eligible for federal deposit
insurance for the class of institution to which the applicant belongs in
the state (as defined in 12 U.S.C. 1813(a)) in which the applicant is
located;
(B) The seven factors set forth in section 6 of the Act (12 U.S.C.
1816) have been considered and favorably resolved;
(C) The applicant meets the minimum capital requirements as set
forth in part 325 of this chapter (12 CFR part 325) and the FDIC's
``Statement of Policy on Capital'' or agrees in writing to increase
capital so as to be in compliance with the requirements of 12 CFR part
325 before or at the time deposit insurance becomes effective;
(D) All management interlocks as prohibited by part 348 of this
chapter (12 CFR part 348) or any other applicable implementing
regulation have been resolved; and
(E) The applicant has no fewer than five directors.
(3) Banks withdrawing from Federal Reserve System. Authority is
delegated to the Director (DOS), and where confirmed in writing by the
director, to an associate director, or to the appropriate regional
director and deputy regional director, to approve applications for
deposit insurance by state nonmember banks that have withdrawn from
membership in the Federal Reserve System where the applicant agrees in
writing to comply with any condition imposed by the delegate other than
those listed in paragraph (d)(4) of this section and satisfies the
following requisites;
(i) The seven factors set forth in section 6 of the Act (12 U.S.C.
1816) have been considered and favorably resolved; and
(ii) The bank has agreed to continue any corrective program imposed
by the Board of Governors of the Federal Reserve System or previously
agreed to by the bank where the bank is not in material compliance with
that corrective program.
(4) Conditions for exercise of delegated authority. The conditions
which may be imposed by a delegate in approving applications for deposit
insurance without affecting the authority granted under paragraphs
(d)(1), (2), and (3) of this section are:
(i) The applicant has provided a specific amount and a specific
allocation of beginning paid-in capital;
(ii) Any changes in proposed management or proposed ownership to the
extent of 5 or more percent of stock, including new acquisitions of or
subscriptions to 5 or more percent of stock shall be approved by the
FDIC prior to the opening of the depository institution;
(iii) The applicant adopts an accrual accounting system for
maintaining the books of the depository institution;
(iv) Where applicable, Federal deposit insurance will not become
effective until the applicant has been established as a state bank (not
a member of the Federal Reserve System), has authority to conduct a
banking business, and its establishment and operation as
[[Page 27]]
a bank have been fully approved by the state banking authority;
(v) Where applicable, federal deposit insurance will not become
effective until the applicant has been established as a state savings
association, has authority to conduct a savings association business,
and its establishment and operation as a savings association have been
fully approved by the appropriate state supervisory authority;
(vi) Where applicable, a registered or proposed bank holding
company, or a registered or proposed thrift holding company, has
obtained approval of the Board of Governors of the Federal Reserve
System to acquire voting stock control of the proposed bank prior to its
opening;
(vii) Where applicable, the applicant, has submitted any proposed
contracts, leases, or ageements relating to construction or rental of
permanent quarters to the appropriate regional director for review and
comment;
(viii) Where applicable, full disclosure has been made to all
proposed directors and stockholders of the facts concerning the interest
of any insider (one who is or stands to be a director, an officer, or an
incorporator of an applicant or shareholder who directly or indirectly
controls 5 or more percent of any class of the applicant's outstanding
voting stock, or the associates and interests of any such person) in any
transactions being effected or then contemplated, including the identity
of the parties to the transaction and the terms and costs involved;
(ix) The person(s) selected to serve as the principal operating
officer(s) shall be acceptable to the regional director;
(x) The applicant has obtained adequate blanket bond coverage;
(xi) That the depository institution obtain an audit of its
financial statements by an independent public accountant annually for at
least the first three years after deposit insurance is effective,
furnish a copy of any reports by the independent auditor (including any
management letters) to the appropriate FDIC regional office within 15
days after their receipt by the depository institution and notify the
appropriate FDIC regional office within 15 days when a change in its
independent auditor occurs; and
(xii) Any standard condition (as defined in Sec. 303.0(b)(31)).
(e) Applications pursuant to section 19 of the Act. (1) Authority is
delegated to the Director (DOS), or where confirmed in writing by the
director, to an associate director, or to the appropriate regional
director or deputy regional director, to approve applications made by
insured depository institutions pursuant to section 19 of the Act (12
U.S.C. 1829) for participation, directly or indirectly, in any manner in
the conduct of the affairs of an insured depository institution by any
person who has been convicted or is hereafter convicted of any criminal
offense involving dishonesty or a breach of trust; Provided however,
That authority may not be delegated to the regional director or deputy
regional director where the applicant depository institution's primary
supervisory authority interposes any objection to such application.
(2)(i) Authority is delegated to the Director (DOS), and where
confirmed by writing by the director, to an associate director, to deny
applications made by insured depository institutions pursuant to section
19 of the Act.
(ii) The authority delegated under paragraph (e)(2)(i) of this
section shall be exercised only upon the concurrent certification by the
Deputy General Counsel Supervision and Legislation, or the Associate
General Counsel for Compliance and Enforcement that the action taken is
not inconsistent with section 19 of the Act.
(iii) An applicant may still request a hearing following a denial of
the application under this paragraph in accordance with the provisions
of part 308 of this chapter (12 CFR part 308).
(3) The conditions which may be imposed by a delegate in approving
applications pursuant to section 19, without affecting the authority
granted under paragraph (e)(1) of this section are:
(i) That an employee shall be bonded to the same extent as others in
similar positions; and
(ii) That, when deemed necessary, the prior consent of the
appropriate regional director shall be required for
[[Page 28]]
any proposed significant changes in duties and/or responsibilities of
the individual occurring within 12 months subsequent to the approval of
the application.
(f) Insurance fund conversions, applications pursuant to section 38
of the Act (prompt corrective action), and other applications. (1)
Authority is delegated to the Director (DOS), and where confirmed in
writing by the director, to an associate director, or to the appropriate
regional director or deputy regional director, to approve or to deny the
following applications, requests or petitions:
(i) Applications to establish and operate any new teller's window,
drive-in facility, or any like office, as an adjunct to a main office or
a branch office (including offices not considered branches under state
law);
(ii) Applications to operate temporary banking facilities as a
public service for a period not to exceed ninety days during
conventions, state and local fairs, college registration periods, and
similar occasions, as well as during emergencies;
(iii) Applications filed pursuant to section 18(i)(1) of the Act to
reduce the amount or retire any part of common or preferred capital
stock, or retire any part of capital notes or debentures;
(iv) Requests for approval of any deviations from requirements
prescribed by prior delegated action (to be acted upon by the delegate
who acted previously in the matter);
(v) Except as provided in Sec. 303.10(b)(1)(iii) of this part,
applications for phantom mergers \8\ and other mergers which are
corporate reorganizations, i.e., transactions involving institutions
controlled by the same holding company or transactions involving
institutions and their subsidiaries which would have no effect on
competition or otherwise have significance under relevant statutory
standards as set forth in 12 U.S.C. 1828(c);
---------------------------------------------------------------------------
\8\ As used in this part 303, the term phantom merger applies to any
merger or other transaction involving an existing operating institution
and a newly chartered institution or corporation which is for the
purpose of corporate reorganization and which would have no effect on
competition or otherwise have significance under the relevant statutory
standards as set forth in 12 U.S.C. 1828(c).
---------------------------------------------------------------------------
(vi) Applications for deposit insurance filed by proposed state
nonmember banks or savings associations which are formed in connection
with a phantom merger;
(vii) Requests to establish management official interlocks pursuant
to 12 CFR 348.4(b) of this chapter or section 205(8) of the Depository
Institutions Management Interlocks Act (except that a regional director
or deputy regional director may deny such a request only if the request
was made pursuant to 12 CFR 348.4(b)(3)); and
(viii) Applications pursuant to section 29 of the Act (12 U.S.C.
1831) for waiver of the prohibition on the acceptance or renewal of
brokered deposits by troubled insured depository institutions.
(ix) Applications filed pursuant to section 38 of the Act (prompt
corrective action), including applications to make a capital
distribution; applications for acquisitions, branching, and new lines of
business (except that the delegation is limited to the authority as
delegated to approve or deny any concurrent application filed pursuant
to 18 (c) or (d)); applications to pay a bonus or increase compensation;
applications for an exception to pay principal or interest on
subordinated debt; and applications to engage in any restricted activity
listed in Sec. 303.5(e)(5).
(2) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director:
(i) To deny a request to establish a management official interlock
pursuant to any provision of either 12 CFR 348.4(b) of this chapter, or
section 205(8) of the Depository Institutions Management Interlocks Act;
and
(ii) To approve or to deny applications for the acquisition and
holding of stock or other evidences of ownership in a foreign bank or
other financial entity that results in less than 25 percent ownership
interest in such bank or entity.
(3)(i) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, to
approve an application
[[Page 29]]
made by an applicant pursuant to section 8(j) of the Act 12 U.S.C.
1818(j)) for the termination or modification of a removal or prohibition
order, which was issued by the Board after a hearing, on default, or by
consent.
(ii) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, to
consent to an application pursuant to section 8(j) of the Act (12 U.S.C.
1818(j)) to obtain the prior written approval of the FDIC to participate
in the conduct of the affairs of a bank filed by an individual subject
to a removal or prohibition order.
(iii) Authority is delegated to the Director (DOS), or where
confirmed in writing by the director, to an associate director, to deny
an application made by an applicant pursuant to section 8(j) of the Act.
(iv) The authority delegated under paragraphs (f)(3)(i), (ii), and
(iii) of this section shall be exercised only upon the concurrent
certification by the Deputy General Counsel for Supervision and
Legislation, or the Associate General Counsel for Compliance and
Enforcement that the action taken is not inconsistent with section 8(j)
of the Act.
(4)(i) Authority is delegated to the Director (DOS) and, where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or deputy regional director to approve
or deny conversions involving transfers of deposits between the SAIF and
BIF funds; Provided however, That where the basis for the conversion is
that the transaction affects an insubstantial portion of the deposits of
each institution, authority is not delegated to the regional director or
deputy regional director where the total deposits transferred to or from
either institution, accumulated with all other insurance fund transfers
involving that institution since August 9, 1989, exceeds the lesser of
35 percent of total deposits of either institution on May 1, 1989, plus
net interest credited to the expected date of transfer, or the amount
equal to total deposits of either institution on the expected date of
transfer.
(ii) The conditions that may be imposed in approving applications
for insurance fund conversions without affecting the authority granted
in Sec. 303.7(f)(4) of this section are:
(A) That, upon consummation, the deposits involved in the
transaction do not exceed 35%, on a cumulative basis with other deposits
transferred between the SAIF and BIF funds, for either of the
institutions involved, of the lesser of (1) total deposits as of May 1,
1989, plus net interest credited during the period from May 1, 1989, to
the date of transfer of the deposits, or (2) total deposits of the
institution as of the date of transfer of the deposits; and
(B) That applicable entrance and exit fees be paid pursuant to FDIC
regulations.
(5) Authority is delegated to the Director (DOS) and, where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or deputy regional director to:
(i) Determine whether applicants requesting approval under section
5(d)(3)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C.
1815(d)(3)(A)(i)) meet all minimum capital requirements contained in 12
CFR part 325;
(ii) Approve applications where the applicant satisfies the
requirements specified in paragraph (f)(5)(i) of this section and the
requirements of section 18(c) of the Federal Deposit Insurance Act (12
U.S.C. 1828(c)); and
(iii) Deny such applications if the requirements specified in
paragraph (f)(5)(i) of this section are not met.
(6) In approving an application, request or petition under any
provision of this paragraph, a delegate may impose any of the standard
conditions listed in Sec. 303.0(b)(31), or any other condition to which
the applicant has agreed in writing.
(g) Requests pursuant to section 18(k) of the Act. Authority is
delegated to the Director, and where confirmed in writing by the
Director, to an associate director, or to the appropriate regional
director or deputy regional director, to approve or deny requests
pursuant to section 18(k) of the Act to make:
(1) Excess nondiscriminatory severance plan payments as provided by
12 CFR 359.1(f)(2)(v); and
[[Page 30]]
(2) Golden parachute payments permitted by 12 CFR 359.4.
[54 FR 53562, Dec. 29, 1989, as amended at 57 FR 5815, Feb. 18, 1992; 58
FR 8217, Feb. 12, 1993; 59 FR 52663, Oct. 19, 1994; 61 FR 5930, Feb. 15,
1996]
Sec. 303.8 Other delegations of authority.
(a) Extensions of time. (1) Except as provided in paragraph (a)(2)
of this section, authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or deputy regional director, to
approve and to deny requests for extensions of time, not to exceed one
year on any one request relating to the same application, within which
to perform acts or conditions required by prior FDIC action on
depository institution applications.
(2) Notwithstanding the delegations in paragraph (a)(1) of this
section, no delegate shall have the authority to deny an extension of
time request unless that delegate had authority to deny the original
application upon which the extension of time is predicated.
(b) Disclosure laws and regulations. (1) Except as provided in
paragraph (b)(2) of this section, authority is delegated to the Director
(DOS), and where confirmed in writing by the director, to an associate
director, or to the appropriate regional director or deputy regional
director, to act on disclosure matters under and pursuant to sections
12, 13, 14, 17 and 17A of the Securities Exchange Act of 1934 (15 U.S.C.
78) or parts 335 and 341 of this chapter (12 CFR parts 335 and 341).
(2) Authority to act on disclosure matters is retained by the Board
of Directors when such matters involve:
(i) Exemption from disclosure requirements pursuant to section 12(h)
of the Securities Exchange Act of 1934 (15 U.S.C. 781(h));
(ii) Exemption from tender offer requirements pursuant to section
14(d)(8) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(d)(8));
or
(iii) Exemption from registration requirements pursuant to section
17A(c)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78q-
1(c)(1)).
(c) Security devices and procedures and bank service arrangements.
Authority is delegated to the Director (DOS) and where confirmed in
writing by the director, to an associate director, or to the appropriate
regional director or deputy regional director, to administer the
provisions of part 326 of this chapter (12 CFR part 326).
(d) In emergencies. For the purpose of assuring performance of, and
continuity in the management functions and activities of the FDIC, the
Board of Directors has delegated, to the extent deemed necessary,
authority with respect to the management of the FDIC's affairs, to
certain designated offices, such authority to be exercised only in the
event of an emergency involving an enemy attack on the continental
United States or other warlike occurrence which renders the Board of
Directors unable to perform the management functions and activities
normally performed by it.
(e) Competitive factor reports. Authority is delegated to the
Director (DOS), and where confirmed in writing by the director, to an
associate director, or to the regional director or deputy regional
director in the appropriate FDIC region in which the applicant
depository institution \9\ is located, to furnish required reports to
the Board of Governors of the Federal Reserve System, or the Comptroller
of the Currency on the competitive factors involved in any merger
required to be approved by one of those agencies, if the delegate is of
the view that the proposed merger would not have a substantially adverse
effect on competition.
---------------------------------------------------------------------------
\9\ As used in paragraph (e) of this section, the term applicant
depository institution means the institution which is applying for
merger approval to the Board of Governors of the Federal Reserve System
the Comptroller of the Currency, or the Director of OTS, whichever is
appliable.
---------------------------------------------------------------------------
(f) Agreements for pledge of assets by foreign banks. (1) Authority
is delegated to the Director (DOS), and where confirmed in writing by
the director, to an associate director, or to the appropriate regional
director or deputy regional director, to enter into pledge agreements
with foreign banks and depositories in connection with the pledge of
asset requirements pursuant
[[Page 31]]
to 12 CFR 346.19. This authority shall also extend to the power to
revoke such approval and require the dismissal of the depository.
(2) Authority is delegated to the General Counsel or designee to
modify the terms of the model deposit agreement used for such deposit
agreements.
(g) National Historic Preservation Act. (1) Authority is delegated
to the Director (DOS), and where confirmed in writing by the director,
to an associate director, or to the appropriate regional director or
deputy regional director, to enter into memoranda of agreement pursuant
to regulations of the Advisory Council of Historic Preservation which
implement the National Historic Preservation Act (16 U.S.C. 470).
(2) The Director (DOS) may limit the delegation of authority to the
associate director, the regional director or deputy regional director to
applications wherein the applicant has agreed in writing to conditions
relating to the National Preservation Act which may be imposed by the
FDIC.
(h) Applications or notices for membership or resumption of
business. Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or deputy regional director, to
provide comments on applications or notices for membership or
commencement or resumption of business to the appropriate Federal
banking agency pursuant to section 4 of the Act (12 U.S.C. 1814). Such
comments, if provided, shall be provided within a reasonable time, not
to exceed 30 days from the time such application or notice is received
by the delegate. In the event that circumstances preclude comment within
30 days, the delegate shall so notify the appropriate Federal banking
agency within 30 days, giving an estimate of when comments may
reasonably be expected.
(i) Depository Institutions Disaster Relief Act of 1992 (DIDRA). (1)
Authority is delegated to the Director (DOS), and where confirmed in
writing by the director, to an associate director, or to the appropriate
regional director or deputy regional director, to accept requests and
issue orders permitting an insured depository institution to subtract
from total assets the qualifying amount attributable to insurance
proceeds for purposes of calculating compliance with the leverage limit
prescribed under section 38 of the Act.
(2) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, to act
on requests for reconsideration of an order of denial issued pursuant to
paragraph (i)(1) of this section.
(3) The requisites which must be satisfied before the authority
delegated in paragraphs (i)(1) and (i)(2) of this section may be
exercised, provide that the insured depository institution:
(i) Had its principal place of business within an area in which the
President, pursuant to section 401 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5170), has determined
that a major disaster exists;
(ii) Derives more than 60 percent of its total deposits from persons
who normally reside within, or whose principal place of business is
normally within, areas of intense devastation caused by the major
disaster;
(iii) Was adequately capitalized, pursuant to section 38 of the Act,
prior to the major disaster; and
(iv) Has an acceptable plan for managing the increase in its total
assets and total deposits.
(4) The authority delegated under paragraphs (i)(1) and (i)(2) of
this section shall be exercised only upon the concurrent certification
of the Associate General Counsel for Compliance and Enforcement, or in
cases where the regional director or deputy regional director issues the
order, by the appropriate regional counsel, that the order is not
inconsistent with section 38 of the Act.
[54 FR 53567, Dec. 29, 1989, as amended at 58 FR 8217, Feb. 12, 1993; 59
FR 52663, Oct. 19, 1994]
Sec. 303.9 Delegation of authority to act on certain enforcement matters.
(a) Actions pursuant to section 8(a) of the Act (12 U.S.C. 1818(a)).
(1) Authority is delegated to the Director (DOS), and where confirmed in
writing by the director, to an associate director, or to the appropriate
regional director or
[[Page 32]]
deputy regional director, to issue notifications to primary regulator
when the respondent bank's book capital is less than 2% of total assets;
Provided however, That authority may not be delegated to the regional
director or deputy regional director whenever the respondent bank has
issued any mandatory convertible debt or any form of Tier 2 capital
(such as limited life preferred stock/subordinated notes and
debentures).
(2) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, to issue
notifications to primary regulator when the respondent bank's adjusted
Tier 1 capital is less than 2% of adjusted part 325 total assets.
(3) The authority delegated under paragraphs (a)(1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement, or, in cases
where a regional director or deputy regional director issues
notifications to primary regulator, by the appropriate regional counsel,
that the allegations contained in the findings of unsafe or unsound
practices or conditions, if proven, constitute a basis for the issuance
of a notification to primary regulator pursuant to section 8(a) of the
Act (12 U.S.C. 1818(a)).
(b) Actions pursuant to section 8(b) of the Act (12 U.S.C. 1818(b)).
(1) Authority is delegated to the Director (DOS), to the Director (DCA),
and where confirmed in writing by either director, to an associate
director, or to the appropriate regional director, deputy regional
director or regional manager to issue:
(i) Notices of charges; and
(ii) Cease-and-desist orders (with or without a prior notice of
charges) where the respondent bank or individual respondent consents to
the issuance of the cease-and-desist order prior to the filing by an
administrative law judge of proposed findings of fact, conclusions of
law and recommended decision with the Executive Secretary of the FDIC.
(2) The Director (DOS) and the Director (DCA) may issue a joint
notice of charges or cease-and-desist order under paragraph (b)(1) of
this section, where such notice or order addresses both safety and
soundness and consumer compliance matters. A joint notice or order will
require the signatures of both directors or, alternatively, the
signatures of the appropriate regional director or deputy regional
director and regional manager.
(3) The authority delegated under paragraphs (b)(1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement or, in cases
where a regional director, deputy regional director or regional manager
issues the notice of charges or the stipulated cease-and-desist order,
by the appropriate regional counsel, that the allegations contained in
the notice of charges, if proven, constitute a basis for the issuance of
a section 8(b) order, or that the stipulated cease-and-desist order is
authorized under section 8(b) of the Act, and, upon its effective date,
shall be a cease-and-desist order which has become final for purposes of
enforcement pursuant to the Act.
(c) Actions pursuant to section 8(c) of the Act (12 U.S.C. 1818(c)).
(1) Authority is delegated to the Director (DOS), to the Director (DCA),
and where confirmed in writing by either director, to an associate
director, to issue temporary cease-and-desist orders.
(2) The Director (DOS) and the Director (DCA) may issue a joint
temporary cease-and-desist order where such order addresses both safety
and soundness and consumer compliance matters. A joint notice or order
will require the signatures of both directors or, alternatively, the
signatures of the appropriate regional director or deputy regional
director and regional manager.
(3) The authority delegated under paragraphs (c)(1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the action
is not inconsistent with section 8(c) of the Act (12 U.S.C. 1818(c)) and
the temporary cease-and-desist order is enforceable in a United States
District Court.
(d) Actions pursuant to section 8(e) of the Act (12 U.S.C. 1818(e)).
(1) Authority is delegated to the Director (DOS) or
[[Page 33]]
the Director (DCA), and where confirmed in writing by the director, to
an associate director, to issue:
(i) Notices of intention to remove an institution-affiliated party
from office or to prohibit an institution-affiliated party from further
participation in the conduct of the affairs of an insured depository
institution pursuant to sections 8(e)(1) and (2) of the Act (12 U.S.C.
1818(e)(1) and (2)), and temporary orders of suspension pursuant to
section 8(e)(3) of the Act (12 U.S.C. 1818(e)(3)); and
(ii) Orders of removal, suspension or prohibition from participation
in the conduct of the affairs of an insured depository institution where
the institution-affiliated party consents to the issuance of such orders
prior to the filing by an administrative law judge of proposed findings
of fact, conclusions of law and a recommended decision with the
Executive Secretary of the FDIC.
(2) The Director (DOS) and the Director (DCA) may issue joint
notices and orders pursuant to paragraph (d)(1) of this section where
such notice or order addresses both safety and soundness and consumer
compliance matters. A joint notice or order will require the signatures
of both directors or their associate directors.
(3) The authority delegated under paragraphs (d)(1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the
allegations contained in the notice of intent, if proven, constitute a
basis for the issuance of a notice of intent pursuant to section 8(e) of
the Act, or that the stipulated section 8(e) order is not inconsistent
with section 8(e) of the Act, and, upon issuance, shall be an order
which has become final for purposes of enforcement pursuant to the Act.
(e) Actions pursuant to section 8(g) of the Act (12 U.S.C. 1818(g)).
(1) Authority is delegated to the Director (DOS), to the Director (DCA),
and where confirmed in writing by either director, to an associate
director, to issue orders of suspension or prohibition to an
institution-affiliated party who is charged in any information,
indictment, or complaint as set forth in section 8(g) of the Act when
such institution-affiliated party consents to the suspension or
prohibition.
(2) The Director (DOS) and the Director (DCA) may issue joint orders
pursuant to paragraph (e)(1) of this section where such order addresses
both safety and soundness and consumer compliance matters. A joint order
will require the signatures of both directors or their associate
directors.
(3) The authority delegated under paragraphs (e)(1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the action
taken is not inconsistent with section 8(g) of the Act (12 U.S.C.
1818(g)) and the order is enforceable in a United States District Court
pursuant to sections 8(i) and 8(j) of the Act (12 U.S.C. 1818 (i) and
(j)).
(f) Actions pursuant to section 8(p) of the Act (12 U.S.C. 1818(p)).
(1) Authority is delegated to the Executive Secretary to issue consent
orders terminating the insured status of insured depository institutions
that have ceased to engage in the business of receiving deposits other
than trust funds pursuant to section 8(p) of the Act (12 U.S.C.
1818(p)).
(2) The authority delegated under paragraph (f)(1) of this section
shall be exercised only upon the recommendation and concurrence of the
Director (DOS) or associate director and the Associate General Counsel
for Compliance and Enforcement that the action taken is not inconsistent
with section 8(p) of the Act.
(g) Civil money penalties. (1)(i) Except as provided for in
paragraph (g)(3) of this section, authority is delegated to the Director
(DOS), to the Director (DCA), and where confirmed in writing by either
director, to an associate director, to issue notices of assessment of
civil money penalties.
(ii) The authority delegated under paragraph (g)(1)((i) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the
allegations contained in the notice of assessment, if proven, constitute
a basis for assessment of civil money penalties.
[[Page 34]]
(2) The Director (DOS) and the Director (DCA) may issue joint
notices pursuant to paragraph (g)(1) of this section where such notice
addresses both safety and soundness and consumer compliance matters. A
joint notice will require the signatures of both directors or their
associate directors.
(3) Authority is delegated to the General Counsel or designee for
the levying and enforcement of civil money penalties under section
7(a)(1) of the Act (12 U.S.C. 1817(a)(1)) for the late, inaccurate,
false or misleading filing of Reports of Condition and Report of Income,
and such other reports as the Board of Directors may require under the
authority of that section. In the exercise of the delegated authority,
the General Counsel or designee shall consult with the appropriate
Director or associate director before imposing any penalty.
(h) Directives and capital plans under section 38 of the Act (prompt
corrective action) and part 325 of this chapter. (1) Authority is
delegated to the Director (DOS), and where confirmed in writing by the
director, to an associate director, or to the appropriate regional
director or deputy regional director, to accept, to reject, to require
new or revised capital restoration plans or to make any other
determinations with respect to the implementation of capital restoration
plans and, in accordance with subpart Q of part 308 of this chapter, to
issue:
(i) Notices of intent to issue capital directives;
(ii) Directives to insured state nonmember banks that fail to
maintain capital in accordance with the requirements contained in part
325 of this chapter;
(iii) Notices of intent to issue prompt corrective action
directives, except directives issued pursuant to section 38(f)(2)(F)(ii)
of the Act (12 U.S.C. 1831o(f)(2)(F)(ii));
(iv) Directives to insured depository institutions pursuant to
section 38 of the Act (12 U.S.C. 1831o), with or without the consent of
the respondent bank to the issuance of the directive, except directives
issued pursuant to section 38(f)(2)(F)(ii) of the Act (12 U.S.C.
1831o(f)(2)(F)(ii));
(v) Directives to insured depository institutions requiring
immediate action or imposing proscriptions pursuant to section 38 of the
Act (12 U.S.C. 1831o) and part 325 of this chapter, and in accordance
with the requirements contained in Sec. 308.201(a)(2) of this chapter;
(vi) Notices of intent to reclassify insured banks pursuant to
Secs. 325.103(d) and 308.202 of this chapter;
(vii) Directives to reclassify insured banks pursuant to
Secs. 325.103(d) and 308.202 of this chapter with the consent of the
respondent bank to the issuance of the directive; and
(viii) Orders on request for informal hearings to reconsider
reclassifications and designate the presiding officer at the hearing
pursuant to Sec. 308.202 of this chapter.
(2) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an Associate Director, to:
(i) Issue notices of intent to issue a prompt corrective action
directive ordering the dismissal from office of a director or senior
executive officer pursuant to section 38(f)(2)(F)(ii) of the Act, (12
U.S.C. 1831o(f)(2)(F)(ii)), and in accordance with the requirements
contained in Sec. 308.203 of this chapter;
(ii) Issue directives ordering the dismissal from office of a
director or senior executive officer pursuant to section 38(f)(2)(F)(ii)
of the Act, (12 U.S.C. 1831o(f)(2)(F)(ii));
(iii) Issue orders of dismissal from office of a director or senior
executive officer pursuant to section 38(f)(2)(F)(ii) of the Act, 12
U.S.C. 1831o(f)(2)(F)(ii) where the individual consents to the issuance
of such order prior to the filing of a recommendation by the presiding
officer with the FDIC;
(iv) Act on recommended decisions of presiding officers pursuant to
a request for reconsideration of a reclassification in accordance with
the requirements contained in Sec. 308.202 of this chapter;
(v) Act on requests for rescission of a reclassification; and
(vi) Act on appeals from immediately effective directives issued
pursuant to section 38 of the Act, (12 U.S.C. 1831o) and Sec. 308.201 of
this chapter.
(3) Authority is delegated to the Executive Secretary of the FDIC to
issue
[[Page 35]]
orders for informal hearings and designate presiding officers on
directives issued pursuant to section 38(f)(2)(F)(ii) of the Act, 12
U.S.C. 1831o(f)(2)(F)(ii).
(4) The authority delegated under paragraphs (h)(1)(i) and (ii) of
this section shall be exercised only upon the concurrent certification
by the Associate General Counsel for Compliance and Enforcement, or in
cases where a regional director or deputy regional director issues the
notice of intent to issue a capital directive or capital directives, by
the appropriate regional counsel, that the action taken is not
inconsistent with the Act and part 325 of this chapter.
(5) The authority delegated under paragraphs (h)(1) (iii), (iv),
(v), (vi) and (vii) of this section shall be exercised only upon the
concurrent certification by the Associate General Counsel for Compliance
and Enforcement, or in cases where a regional director or deputy
regional director issues the notice of intent to issue a prompt
corrective action directive or prompt corrective action directives, or
the notice of intent to reclassify or reclassification directive, by the
appropriate regional counsel, that the allegations contained in the
notice of intent, if proven, constitute a basis for the issuance of a
final directive pursuant to section 38 of the Act, or that the issuance
of a final directive is not inconsistent with section 38 of the Act.
(6) The authority delegated under paragraph (h)(2) of this section
shall be exercised only upon the concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the
allegations contained in the notice of intent, if proven, constitute a
basis for the issuance of a final directive pursuant to section 38 of
the Act or that the issuance of a final directive is not inconsistent
with section 38 of the Act or that the stipulated section 38 order is
not inconsistent with section 38 and is an order which has become final
for purposes of enforcement pursuant to the Act.
(i) Investigations pursuant to section 10(c) of the Act (12 U.S.C.
1820(c)). (1) Authority is delegated to the Director (DOS), to the
Director (DCA), to the Director of the Division of Depositor and Asset
Services, and where confirmed in writing by the director, to an
associate director, or to the appropriate regional director, deputy
regional director or regional manager, to issue an order of
investigation pursuant to section 10(c) of the Act (12 U.S.C. 1820(c))
and subpart K of Part 308 (12 CFR 308.144 through 308.150).
(2) Authority is delegated to the General Counsel, and where
confirmed in writing by the General Counsel, to his designee, to issue
an order of investigation pursuant to section 10(c) of the Act (12
U.S.C. 1820(c)) and subpart K of Part 308 (12 CFR 308.144 through
308.150).
(3) In issuing an order of investigation that pertains to an open
insured depository institution or an institution making application to
become an insured depository institution, the authority delegated under
paragraphs (i)(1) and (2) of this section shall be exercised only upon
the concurrent execution of the order of investigation by the Director
(DOS) or the Director (DCA), or their associate directors, or the
appropriate regional director, deputy regional director or regional
manager, and the General Counsel or designee. In the case of a joint
order of investigation, such authority shall be exercised only upon the
concurrent execution of the order of investigation by both directors, or
their associate directors, or the appropriate regional director, deputy
regional director and regional manager, and the General Counsel or
designee.
(j) Truth in Lending Act. (1) Authority is delegated to the Director
(DCA), and where confirmed in writing by the director, to the associate
director, or to the appropriate regional manager, to deny requests for
relief from the requirements for reimbursement under section 608(a)(2)
of the Truth in Lending Simplification and Reform Act (15 U.S.C.
1607(e)(2)); Provided however, that a regional manager is not authorized
to deny any request where the estimated amount of reimbursement is
greater than $25,000.
(2) Authority is delegated to the Director (DCA), and where
confirmed in writing by the director, to an associate director:
(i) To grant request for relief from the requirements for
reimbursement
[[Page 36]]
under section 608(a)(2) of the Truth in Lending Simplification and
Reform Act (15 U.S.C. 1670(a)(2)); and
(ii) To act on applications for reconsideration of any action taken
under paragraphs (j) (1) and (2) of this section.
(3) The authority delegated under paragraphs (j) (1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement, or, in cases
where a regional manager denies requests for relief, by the appropriate
regional counsel, that the action taken is not inconsistent with the
Truth in Lending Simplification and Reform Act.
(k) Unilateral settlement offers. (1) Authority is delegated to the
Director (DOS), to the Director (DCA), and where confirmed in writing by
either director, to an associate director, to accept, deny or enter into
negotiations for unilateral settlement offers with insured depository
institutions, or with an institution-affiliated party, pertaining to a
proceeding under 12 CFR part 308. In cases where a proceeding under 12
CFR part 308 was issued jointly by DOS and DCA, both directors, or their
associate directors, must agree to accept, deny or enter into
negotiations for unilateral settlement offers with insured depository
institutions or with an institution-affiliated party.
(2) The authority delegated under paragraph (k)(1) of this section
shall be exercised only upon concurrent certification by the Associate
General Counsel for Compliance and Enforcement that the action taken is
not inconsistent with the Act.
(l) Acceptance of written agreements. (1) Authority is delegated to
the Director (DOS), and where confirmed in writing by the director, to
an associate director, to accept or enter into any written agreements
with insured depository institutions, or any institution-affiliated
party pertaining to any matter which may be addressed by the FDIC
pursuant to section 8(a) of the Act (12 U.S.C. 1818(a)).
(2) Authority is delegated to the Director (DOS), to the Director
(DCA), and where confirmed in writing by either director, to an
associate director, to accept or enter into any written agreements with
insured depository institutions, or any institution-affiliated party
pertaining to any safety and soundness or consumer compliance matter
which may be addressed by the FDIC pursuant to section 8(b) of the Act
(12 U.S.C. 1818(b)) or any other provision of the Act which addresses
safety and soundness or consumer compliance matters. In cases which
would address both safety and soundness and consumer compliance matters,
the Directors, or their designees, may accept or enter into joint
written agreements with insured depository institutions or institution-
affiliated parties.
(3) The authority delegated under paragraphs (l) (1) and (2) of this
section shall be exercised only upon concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the action
taken is not inconsistent with sections 8 (a) and (b) of the Act.
(m) Modifications and terminations of enforcement actions--(1)
Sections 8(a), 8(b) and 8(c) (12 U.S.C. 1818 (a), (b) and (c)) actions
upon failure or merger of a depository institution. (i) Authority is
delegated to the Director (DOS), and where confirmed in writing by the
director, to an associate director, or to the appropriate regional
director or deputy regional director, to terminate outstanding section
8(a) orders and agreements and to terminate actions and agreements which
are pending pursuant to section 8(a) of the Act when the depository
institution is closed by a Federal or state authority or merges into
another institution.
(ii) Authority is delegated to the Director (DOS), to the Director
(DCA), and where confirmed in writing by either director, to an
associate director, or to the appropriate regional director, deputy
regional director or regional manager, to terminate outstanding section
8(b) and section 8(c) orders and agreements and to terminate actions and
agreements which are pending pursuant to sections 8(b) and 8(c) of the
Act when the depository institution is closed by a Federal or state
authority or merges into another institution. In cases where a joint
order was issued by DOS and DCA, both directors, or their associate
directors, or the appropriate
[[Page 37]]
regional director or deputy regional director and regional manager, must
agree prior to the termination of outstanding 8(b) and 8(c) orders.
(2) Section 8(a) (12 U.S.C. 1818(a)) actions issued by the Board of
Directors. (i) Authority is delegated to the Director (DOS), and where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or deputy regional director, to modify
or terminate notifications to primary regulator issued by the Board of
Directors pursuant to section 8(a) of the Act where the respondent
depository institution is in material compliance with such notification
or for good cause shown.
(ii) In cases where the Board of Directors has issued a notice of
intent to terminate insured status pursuant to section 8(a) of the Act,
authority is delegated to the Director (DOS), and where confirmed in
writing by the director, to an associate director, or to the appropriate
regional director or deputy regional director, to terminate the actions
pending pursuant to such notice of intent to terminate insured status
where the respondent depository institution is in material compliance
with the applicable notification to primary regulator or for good cause
shown.
(3) Section 8(b) (12 U.S.C. 1818(b)) orders issued by the Board of
Directors. Authority is delegated to the Director (DOS) or the Director
(DCA), and where confirmed in writing by the director, to an associate
director, or to the appropriate regional director, deputy regional
director or regional manager, to terminate outstanding section 8(b)
orders issued by the Board of Directors where either material compliance
with the section 8(b) order has been achieved by the respondent
depository institution or individual respondent or for good cause shown.
In cases where an order issued by the Board addresses both safety and
soundness and consumer compliance matters, both directors, or their
designees, must agree prior to the termination of outstanding 8(b)
orders.
(4) Section 8(g) orders issued by the Board of Directors. Authority
is delegated to the Director (DOS) or the Director (DCA), and where
confirmed in writing by the director, to an associate director, to
approve requests for modifications or terminations of section 8(g)
orders issued by the Board of Directors.
(5) Other matters not specifically addressed. For all other
outstanding orders or pending actions not specifically addressed in
paragraphs (m)(1), (m)(2), (m)(3) and (m)(4) of this section, the
delegations of authority contained in paragraphs (a)(1), (a)(2), (b)(1),
(c)(1), (d)(1), (e)(1), (g)(1), (g)(2), (h)(1), (h)(2), (l)(1), (l)(2),
and (n) of this section shall be construed to include the authority to
modify or terminate any outstanding notice, order, directive or
agreement, as may be appropriate, issued pursuant to delegated authority
and to terminate any pending action initiated pursuant to delegated
authority.
(6) Certification. Any modifications or terminations pursuant to
paragraphs (m)(1), (m)(2), (m)(3), (m)(4), and (m)(5) of this section
shall be exercised only upon concurrent certification by the Associate
General Counsel for Compliance and Enforcement, or in cases where a
regional director, deputy regional director or regional manager acts
under delegated authority, by the appropriate regional counsel, that the
action taken is not consistent with the Act.
(n) Enforcement of outstanding orders. After consultation with the
Director (DOS) or the Director (DCA), or an associate director, or the
appropriate regional director, deputy regional director or regional
manager, as may be appropriate, the General Counsel or designee is
authorized to initiate and prosecute any action to enforce any effective
and outstanding order or temporary order issued under 12 U.S.C. 1817,
1818, 1820, 1828, 1829, 1831l, 1831o, 1972, or 3909, or any provision
thereof, in the appropriate United States District Court.
(o) Compliance plans under section 39 of the Act (standards for
safety and soundness) and part 308 of this chapter. (1) Authority is
delegated to the Director, and where confirmed in writing by the
Director, to an associate director, or to the appropriate regional
director or deputy regional director, to accept, to reject, to require
new or revised compliance plans or to make any other
[[Page 38]]
determinations with respect to the implementation of compliance plans
pursuant to subpart R of part 308 of this chapter.
(2) Authority is delegated to the Director, and where confirmed in
writing by the Director, to an associate director, to:
(i) Issue notices of intent to issue an order requiring the bank to
correct a safety and soundness deficiency or to take or refrain from
taking other actions pursuant to section 39 of the Act (12 U.S.C. 1831p-
1) and in accordance with the requirements contained in
Sec. 308.304(a)(1) of this chapter;
(ii) Issue an order requiring the bank immediately to correct a
safety and soundness deficiency or to take or refrain from taking other
actions pursuant to section 39 of the Act (12 U.S.C. 1831p-1) and in
accordance with the requirements contained in Sec. 308.304(a)(2) of this
chapter; and
(iii) Act on requests for modification or rescission of an order.
(3) The authority delegated under paragraph (o)(1) of this section
shall be exercised only upon the concurrent certification by the
Associate General Counsel for Compliance and Enforcement, or in cases
where a regional director or deputy regional director accepts, rejects
or requires new or revised compliance plans or makes any other
determinations with respect to compliance plans, by the appropriate
regional counsel, that the action taken is not inconsistent with the
Act.
(4) The authority delegated under paragraph (o)(2) of this section
shall be exercised only upon the concurrent certification by the
Associate General Counsel for Compliance and Enforcement that the
allegations contained in the notice of intent, if proven, constitute a
basis for the issuance of a final order pursuant to section 39 of the
Act or that the issuance of a final order is not inconsistent with
section 39 of the Act or that the stipulated section 39 order is not
inconsistent with section 39 and is an order which has become final for
purposes of enforcement pursuant to the Act.
[59 FR 52663, Oct. 19, 1994, as amended at 60 FR 35683, July 10, 1995]
Sec. 303.10 Applications and enforcement matters where authority is not delegated.
(a) Authority not specifically delegated is retained by the Board of
Directors. (1) Except as otherwise provided in this part, or with
respect to matters which generally involve conditions or circumstances
requiring prompt action in the field for the better protection of the
interests of the FDIC and to achieve flexibility and expedition in its
operations and in the exercise of its functions in connection with the
FDIC's litigation and liquidation matters and with the payment of claims
for insured deposits, the Board of Directors does not delegate its
authority and no delegations of final authority are made by the Board of
Directors. Any person having a proper and direct concern therein may
ascertain the scope of authority of any officer, agent or employee of
the FDIC by communicating with the Executive Secretary of the FDIC.
(2) In all cases where authority to act on applications, requests or
enforcement matters listed in this part is not delegated to a Director,
or to an associate director, or to a regional director, deputy regional
director or regional manager''; the authority to act on such
applications, requests, or enforcement matters remains vested in the
Board of Directors of the FDIC. In addition, the Board of Directors
retains the authority to act on any application, request or enforcement
matter upon which any member of the Board of Directors wishes to act
even if the authority to act on such application, request or enforcement
matter has been delegated.
(b) Applications and requests. Without limiting the Board of
Directors' authority, the Board of Directors has retained the authority
to act upon the following applications and requests:
(1) Except as provided in Sec. 303.7(b)(9) of this part to deny
applications for merger transactions, and to approve applications for
merger transactions where:
(i) The applicant does not agree in writing to comply with any
conditions imposed by the FDIC (other than the standard condition listed
in Sec. 303.0(b)(26) which may be imposed
[[Page 39]]
without the applicant's written agreement); or
(ii) The resulting bank, upon consummation of the merger
transaction, would have more than 35% of the individual, partnership and
corporate deposits held by commercial banks and/or thrift institutions,
as may be appropriate, in the relevant market(s); or
(iii) Irrespective of the resulting market share, the Attorney
General has determined that the proposed merger transaction may have a
significantly adverse effect on competition; or
(iv) The application (including an application for phantom bank
merger or reorganization) falls within the probable failure or emergency
provisions of section 18(c)(6) of the FDI Act, or the resultant bank
does not meet the minimum capital requirements of part 325.
(2) To deny applications for deposit insurance, and to approve
applications for deposit insurance where:
(i) The applicant does not agree in writing to comply with any
condition imposed by the FDIC (other than the standard conditions listed
in Secs. 303.0(b)(31), and 303.7(d)(4), which may be imposed without the
applicant's written agreement), or
(ii) The applicant depository institution is a United States branch
of a foreign bank; and
(3) To consider an application made by an insured depository
institution pursuant to section 19 of the Act (12 U.S.C. 1829) for
participation, directly or indirectly, in any manner in the conduct of
the affairs of an insured depository institution or any person who has
been convicted or is hereafter convicted of any criminal offense
involving dishonesty or a breach of trust following a hearing held in
accordance with the provisions of part 308 of this chapter (12 CFR part
308).
(c) Enforcement matters. Without limiting the Board of Directors'
authority, the Board of Directors has retained the authority to act upon
the following enforcement matters:
(1) To issue: (i) Notifications to primary regulator when the
respondent bank's book capital is at or above 2% of total assets and
adjusted Tier 1 capital is at or above 2% of adjusted part 325 total
assets;
(ii) Notices of intent to terminate insured status; and
(iii) Orders terminating insured status, pursuant to section 8(a) of
the Act (12 U.S.C. 1818(a));
(2) To issue cease-and-desist orders pursuant to section 8(b) of the
Act (12 U.S.C. 1818(b)) when the respondent depository institution or
individual does not consent to the issuance of such orders;
(3) To issue: (i) Temporary orders of suspension and prohibition
pursuant to section 8(e) of the Act (12 U.S.C. 1818(e)); and
(ii) Orders of removal, suspension or prohibition from participation
in the conduct of the affairs of an insured depository institution
pursuant to section 8(e) of the Act (12 U.S.C. 1818(e)) when the
individual does not consent to the issuance of such orders;
(4) To issue orders of suspension or prohibition to an indicted
director, officer or person participating in the conduct of the affairs
of an insured depository institution and orders of removal or
prohibition to a convicted director, officer or person participating in
the conduct of the affairs of an insured depository institution pursuant
to section 8(g) of the Act (12 U.S.C. 1818(g)) when such director,
officer or person does not consent to the suspension or removal;
(5) To issue final orders to pay civil money penalties where
respondents do not consent to the assessment of civil money penalties
and hearings have been held;
(6) To deny requests for modifications or terminations of orders
issued pursuant to section 8(g) of the Act (12 U.S.C. 1818(g)); and
(7) To grant or deny requests for reinstatement to office, whether
or not an informal hearing has been requested, pursuant to Sec. 308.203
of this chapter.
[54 FR 53570, Dec. 29, 1989, as amended at 56 FR 23011, May 20, 1991; 58
FR 8219, Feb. 12, 1993; 59 FR 52667, Oct. 19, 1994]
Sec. 303.11 Confirmation, limitations, rescissions and special cases.
(a) Written confirmation, limitations or subsequent rescission. (1)
The authority delegated in Secs. 303.7, 303.8 and 303.9 of this part by
the Board of Directors to the associate director, the appropriate
[[Page 40]]
regional director or deputy regional director is subject, as to each
associate director, regional director and deputy regional director, to
written confirmation, limitations, or subsequent rescission of any
confirmation, by the Director. Such written confirmation, limitations or
rescissions shall be filed with the Executive Secretary of the FDIC at
its offices in Washington, DC, and at the office of the regional
director or deputy regional director concerned, and shall be available
for public inspection by interested parties.
(2) The conditions set forth in this part to which the exercise of
delegated authority is subject are procedural in nature only, and shall
not be construed as standards or criteria which will be used in
determining the merits of a specific application, petition, request or
enforcement matter.
(b) Action under delegated authority not mandated. (1) The Director
(DOS) or the Director (DCA) may, in writing, rescind the authority of an
associate director, regional director, deputy regional director or
regional manager to act on an application, request, notice of
acquisition of control or enforcement matter, and may himself act on the
same.
(2)(i) An associate director, regional director, deputy regional
director or regional manager may, in writing, recommend that the
authority to act on an application, request, notice of acquisition of
control or enforcement matter not be exercised by him; in such cases,
the authority to act on such application, request, notice of acquisition
of control or enforcement matter may be exercised by the Director (DOS)
or the Director (DCA). The Director may, in writing, recommend that the
authority to act on an application, request, notice of acquisition of
control or enforcement matter may not be exercised by him; in such cases
the Board of Directors will act on the application, request, notice of
acquisition of control or enforcement matter.
(ii) A regional counsel may, in writing, recommend that the
authority to act on an application made by insured depository
institutions pursuant to section 19 of the Act (12 U.S.C. 1829) or an
enforcement matter not be exercised by him; in such cases the authority
to act in such enforcement matters may be exercised by the Associate
General Counsel for Compliance and Enforcement. The Associate General
Counsel for Compliance and Enforcement may, in writing, recommend that
the authority to act on an application pursuant to section 19 of the Act
or enforcement matter not be exercised by him; in such cases, the Board
of Directors will act on the application or enforcement matter.
(iii) Upon determining not to act upon the application, request,
notice of acquisition of control or enforcement matter under delegated
authority, the regional manager, deputy regional director, regional
director, associate director, or the Director (DOS) or the Director
(DCA), and/or the regional counsel, or the Associate General Counsel for
Compliance and Enforcement, as the case may be, shall forward the
application, request, notice of acquisition of control or enforcement
matter, together with his recommendations as to the disposition of such
application, request, notice of acquisition of control or enforcement
matter to the appropriate authority as determined by the rules set forth
in paragraphs (b)(2) (i) and/or (ii) of this section.
(c) Request for review. Any aggrieved party or person may request
the Board of Directors to review any action taken under authority
delegated in Secs. 303.7, 303.8 and 303.9 of this part.
[54 FR 53570, Dec. 29, 1989, as amended by 59 FR 52667, Oct. 19, 1994]
Sec. 303.12 OMB control number assigned pursuant to the Paperwork Reduction Act.
(a) Purpose. This section collects and displays the control numbers
assigned to information collection requirements of this part by the
Office of Management and Budget pursuant to the Paperwork Reduction Act
of 1980 (44 U.S.C. 3501 through 3520). The FDIC intends that this
section comply with section 3507(f) of the Paperwork Reduction Act (44
U.S.C. 3507(f)), which requires that agencies display a current control
number assigned by the Director of the Office of Management and Budget
for each agency information collection requirement.
(b) Display.
[[Page 41]]
------------------------------------------------------------------------
Section of 12 CFR part 303 where identified and Current OMB
described control No.
------------------------------------------------------------------------
303.1.................................................. 3064.0001
303.1.................................................. 3064.0069
303.2.................................................. 3064.0070
303.3.................................................. 3064.0016
303.4(b)............................................... 3064.0019
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[54 FR 53571, Dec. 29, 1989]
Sec. 303.13 Applications and notices by savings associations.
(a) Definitions. For the purposes of this section, the following
definitions apply:
(1) As used in paragraphs (b) and (c) of this section, the term
activity includes acquiring or retaining any investment other than an
equity investment.
(2) Control means the power to vote, directly or indirectly, 25 per
centum or more of any class of the voting stock of a company, the
ability to control in any manner the election of a majority of a
company's directors or trustees, or the ability to exercise a
controlling influence over the management and policies of a company.
(3) Corporate debt securities not of investment grade refers to any
corporate debt security that when acquired was not rated among the four
highest rating categories by at least one nationally recognized
statistical rating organization. The term shall not include any
obligation issued or guaranteed by a corporation that may be held by a
federal savings association without limitation as to percentage of
assets under subparagraphs (D), (E), or (F) of section 5(c)(1) of the
Home Owners' Loan Act (12 U.S.C. 1464(c)(1)).
(4) Equity investment means any equity security as defined herein;
any partnership interest; any equity interest in real estate as defined
herein; and any transaction which in substance falls into any of these
categories, even though it may be structured as some other form of
business transaction.
(5) Equity interest in real estate means any form of direct or
indirect ownership of any interest in real property (whether in the form
of an equity interest, partnership, joint venture or other form) which
is accounted for as an investment in real estate or real estate joint
ventures under generally accepted accounting principles or is otherwise
determined to be an investment in a real estate venture under Federal
Financial Institutions Examination Council instructions for the
preparation of reports of condition. The term equity interest in real
estate shall not include:
(i) An interest in real property that is primarily used or intended
to be used for future expansion by a savings association, its
subsidiaries, or its affiliates as offices or related facilities for the
conduct of its business;
(ii) An interest in real property that is acquired in satisfaction
of a debt previously contracted in good faith, acquired by way of deed
in lieu of foreclosure, or acquired in sales under judgments, decrees,
or mortgages held by a savings association, provided that the property
is not intended to be held for real estate investment purposes but is
expected to be disposed of in a timely fashion as permitted by
applicable law; and
(iii) Interests in real property that are primarily in the nature of
charitable contributions to community development.
(6) Equity security means any stock, (other than adjustable rate
preferred stock and money market (auction rate) preferred stock)
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, or voting-trust
certificate; any security immediately convertible at the option of the
holder without payment of substantial additional consideration into such
a security; any security carrying any warrant or right to subscribe to
or purchase any such security; and any certificate of interest or
participation in, temporary or interim certificate for, or receipt for
any of the foregoing. The term equity security does not include any of
the foregoing if it is acquired through foreclosure or settlement in
lieu of foreclosure.
(7) Qualified affiliate means, in the case of a stock savings
association, an affiliate other than a subsidiary or an insured
depository institution; and, in the case of a mutual savings
association, a subsidiary other than an insured depository institution,
so long as
[[Page 42]]
all of the savings association's investments in, and extensions of
credit to, the subsidiary are deducted from the savings association's
capital.
(8) The term service corporation means any corporation the capital
stock of which is available for purchase only by savings associations.
(9) A significant risk is understood to be present whenever there is
a high probability that any insurance fund administered by the FDIC may
suffer a loss.
(10) Subsidiary means any corporation, partnership, business trust,
association, joint venture, pool, syndicate or other similar business
organization directly or indirectly controlled by a savings association.
For the purposes of Sec. 303.13(f), the term does not include an insured
depository institution as that term is defined in section 3(c)(2) of the
Federal Deposit Insurance Act, (FDI Act, 12 U.S.C. 1813(c)(2)).
(b) Engaging other than as agent on behalf of customers in
activities not permissible for Federal savings associations--(1) After
January 1, 1990, no state savings association may directly engage, other
than as agent on behalf of its customers, in an activity that is not
expressly authorized for federal savings associations by the Home
Owners' Loan Act (12 U.S.C. 1461 et seq.) or any other statute,
regulations issued by the Office of Thrift Supervision (OTS), official
OTS Regulatory or Thrift Bulletins, or any order or interpretation
issued in writing by OTS unless the state savings association obtains
the approval of the FDIC. Any state savings association that wishes to
obtain approval to initiate or continue such an activity, as well as any
state savings association that wishes to make, or already has,
nonresidential real property loans in an amount exceeding that described
in section 5(c)(2)(B) of the HOLA (12 U.S.C. 1464(c)(2)(B)) must file a
letter application with the DOS regional director for the region in
which the state savings association's principal office is located. The
letter application should contain the following information:
(i) A brief description of the activity and the manner in which it
is (or will be) conducted;
(ii) A copy, if available, of any feasibility study, management
plan, financial projections, business plan, or similar document
concerning the conduct of the activity;
(iii) An estimate of the present or expected dollar volume of the
activity;
(iv) Resolutions by the board of directors (or the board of trustees
in a mutual association) of the savings association authorizing the
conduct of such activity and the filing of this submission;
(v) A current statement of the association's assets, liabilities,
and capital on both a consolidated and a non-consolidated basis,
respectively;
(vi) A discussion by management of its analysis regarding the impact
of the proposed activity on the association's earnings, capital
adequacy, and general condition;
(vii) A statement by the savings association of whether or not it is
in compliance with the fully phased-in capital standards prescribed
under section 5(t) of HOLA (12 U.S.C. 1464(t)), including a calculation
of the relevant capital ratio; and
(viii) A statement of the authority the savings association is
relying upon for the conduct of the activity in the amount set forth in
the letter application.
The regional director may request that the state savings association
provide such other information as the director deems appropriate.
Approval will not be granted if it is determined by the FDIC that
engaging in the activity poses a significant risk to the affected
deposit insurance fund. Furthermore, no savings association will be
granted approval unless it is in compliance with the fully phased-in
capital standards prescribed in section 5(t) of HOLA. Consequently, no
application to engage in an activity after January 1, 1990 should be
filed if a state association is not in compliance with the fully phased-
in capital requirements.
(2) Paragraph (b)(1) of this section shall not be read to require
the divestiture by a state savings association of any asset (including a
nonresidential real estate loan) it had on its books prior to August 9,
1989 despite the fact that such asset may be held in connection with the
conduct of an activity for
[[Page 43]]
which the state savings association must obtain the FDIC's approval
under Sec. 303.13(b)(1). A notice describing the activities and those
assets is nevertheless required by this section.
(c) Engaging other than as agent on behalf of customers in
activities authorized for Federal savings associations but to an extent
not so authorized--(1) Activities conducted as of December 29, 1989. (i)
Any state savings association which as of December 29, 1989 is directly
engaging, other than as agent on behalf of its customers, in an activity
expressly authorized to all federal savings associations by statute or
regulation adoped by OTS, or an official OTS Regulatory or Thrift
Bulletin interpreting such statutes or regulations, in an amount in
excess of that permitted to federal savings associations and intends to
continue to do so after January 1, 1990, must file a notice, return
receipt requested, with the DOS regional director for the region in
which the state savings association's principal office is located. The
notice must contain the same information that is required to be included
in a letter application filed pursuant to Sec. 303.13(b)(1). The
regional director may request such other information as the regional
director deems appropriate. The notice must be received by the regional
director no later than January 29, 1990.
(ii) A state savings association which is, and continues to be, in
compliance with the fully phased-in capital standards prescribed under
section 5(t) of HOLA and which has filed notice with the FDIC pursuant
to paragraph (c)(1)(i) of this section may continue the activities that
are the subject of the 30-day notice in the amount set forth in the
notice unless the FDIC notifies the state savings association to the
contrary. No state savings association will be permitted to continue the
activities at the level described in a notice filed pursuant to this
section if it is determined that to do so poses a significant risk to
the affected deposit insurance fund. A state savings association which
is not in compliance with the fully phased-in capital standards as of
December 29, 1989 must decrease the level of the activity to that
allowed to a federal savings association in order for continuation of
the activity to be permissible.
(iii) Paragraph (c)(1) of this section shall not be read to require
the divestiture by a state savings association of any asset it had on
its books before August 9, 1989. A notice describing those assets is
nevertheless required by this section if the assets are held in
connection with the conduct of an activity in an amount that triggers
notice under Sec. 303.13(c)(1)(i).
(2) Initiation of activities after December 29, 1989. Any state
savings association that intends to initiate activities of a type and in
an amount described in paragraph (c)(1)(i) of this section must file a
notice, return receipt requested, with the (DOS) regional director for
the region in which the state savings association's principal office is
located at least 60 days prior to the initiation of the level of the
activity described in the notice. The notice must contain the same
information required by Sec. 303.13(b)(1). The regional director may
request such other information as the regional director deems
appropriate. A state savings association that files a 60-day notice may
initiate the level of activity as described in its notice 60 days after
the FDIC accepts the notice as complete, or 60 days after the FDIC
accepts as complete the additional information, if any, that has been
requested provided that the association is in compliance with the fully
phased-in capital standards prescribed in section 5(t) of HOLA and
provided that the FDIC does not, prior to that date, pose an objection
to the association doing so. A state savings association may inititate
the level of activity described in its notice prior to the expiration of
the 60-day period if so notified. The continued conduct of the
activities as described in the notice is conditioned upon the
association's continued compliance with the fully phased-in capital
standards and the FDIC's continued non-objection to those activities.
The 60-day period may be extended upon notice to the state savings
association if the notice as received is incomplete or the notice raises
issues that require additional information or time for analysis. If the
60-day period
[[Page 44]]
is extended, the state savings association may begin the conduct of the
activities only upon receipt of written notification to that effect. No
state savings association will be permitted to initiate activities
subject to this paragraph if it is determined that to do so would pose a
significant risk to the affected deposit insurance fund.
(d) Equity investments--(1) General. No state savings association
may directly acquire or retain any equity investment after August 9,
1989 of a type or in an amount that is not expressly authorized for
federal savings associations by HOLA, regulations issued by OTS,
official OTS Regulatory or Thrift Bulletins, or any order or
interpretation issued in writing by OTS. Any state savings association
which, as of August 9, 1989, had one or more such equity investments
must file an application, return receipt requested, with the DOS
regional director for the region in which the state savings
association's principal office is located no later than 30 days from
December 29, 1989. The application shall:
(i) Describe the obligor, type, amount, and book and market values
of the equity investment;
(ii) Set forth the association's plans to comply with the
requirements of section 28(c) of the FDI Act to divest the investment as
quickly as prudently possible, but in any event not later than July 1,
1994;
(iii) Describe the anticipated gain or loss (anticipated or
realized) from the sale of the investment and the impact thereof on the
association's capital (including capital ratios before and after their
sale);
(iv) Include a copy of a resolution by the board of directors, or
board of trustees in the case of a mutual association, authorizing the
filing of this submission; and
(v) Request the FDIC's permission to accomplish divestiture in
accordance with said plans.
The regional director may request such additional information as the
regional director deems appropriate. Upon review of the application and
such additional information as requested, and at any time during the
divestiture period thereafter, the FDIC may impose such conditions and
requirements as it deems appropriate in its sole discretion with regard
to the divestiture of the equity investment, including requiring
completion of divestiture in advance of July 1, 1994.
(2) Service corporations--(i) General. Section 303.13(d)(1)
notwithstanding, a state savings association may acquire or retain an
equity investment in a service corporation, provided that the service
corporation's activities are limited solely to those expressly
authorized by HOLA or any other statute, regulations issued by OTS,
official OTS Regulatory or Thrift Bulletins, or any order or
interpretation issued in writing by OTS for all service corporations
owned by federal savings associations and provided that the investment
in such service corporation does not exceed that permissible for a
federal savings association pursuant to statute or regulation of OTS. If
either of these two conditions does not exist, the state association
must file a letter application under paragraph (d)(2)(ii) of this
section with the DOS regional director for the region in which the state
savings association's principal office is located requesting permission
to acquire or retain the equity investment in the service corporation in
question.
(ii) Content and filing of application. An application requesting
permission to retain an equity investment in a service corporation in
which a federal association could not invest that was held as of August
9, 1989 must be filed with the regional office no later than January 29,
1990. Approval of the acquisition or retention of an equity investment
in a service corporation in which a federal association could not invest
will not be granted if the state association is not in compliance with
the fully phased-in capital standards prescribed by section 5(t) of
HOLA. Consequently, no application to acquire or retain an equity
investment in such a service corporation should be filed if a state
association is not in compliance with these capital requirements. In
addition, approval of the retention or acquisition of such investments
will not be granted if the acquisition or retention is determined to
pose a significant risk to the affected deposit insurance
[[Page 45]]
fund. If an application to retain an investment is denied, the state
association must file a divestiture plan with the regional director
requesting the FDIC's permission to accomplish divestiture in accordance
with said plan.
The letter application required hereby should contain the information
required by Sec. 303.13(b)(1), as it relates both to the service
corporation and to its parent state savings association. In addition,
the application should contain: A listing of the officers (contemplated
officers) of the service corporation, a listing of any other
shareholders of the service corporation (existing or prospective) and
their respective holdings, and a listing of the locations (expected
locations) of all of the offices of the service corporation. The
regional director may request such other information as the regional
director deems appropriate.
(e) Corporate debt securities not of investment grade.
Notwithstanding anything to the contrary in Sec. 303.13, no state or
federal savings association may, directly or through a subsidiary (other
than a subsidiary that is a qualified affiliate), acquire or retain
after August 9, 1989 any corporate debt security that is not of
investment grade. Any state or federal savings association which, as of
August 9, 1989, held corporate debt securities not of investment grade
must divest those securities as quickly as can prudently be done, but in
no event later than July 1, 1994. Any state or federal savings
association that must divest corporate debt securities shall file an
application with the DOS regional director for the region in which the
state or Federal savings association's principal office is located not
later than 30 days from December 29, 1990. The application shall:
(1) Describe the obligor, type, amount, and book and market values
of the corporate debt securities;
(2) Set forth the state or federal association's plans to comply
with the requirements of section 28(d) of the FDI Act to divest the
securities as quickly as prudently possible, but in any event not later
than July 1, 1994;
(3) Describe the gain or loss (anticipated or realized) from the
sale of the securities and the impact thereof on the association's
capital (including capital ratios before and after the sale);
(4) Include a copy of the resolution by the board of directors, or
the board of trustees in the case of a mutual association, authorizing
the filing of this submission; and
(5) Request the FDIC's permission to accomplish divestiture in
accordance with said plans.
The regional director may request such additional information as the
regional director deems appropriate. Upon review of the application and
such additional information as requested, and at any time during the
divestiture period thereafter, the FDIC may impose such conditions and
requirements as it deems appropriate in its sole discretion with regard
to the divestiture of the debt securities, including requiring
completion of divestiture in advance of July 1, 1994.
(f) Notice of acquisition or establishment of a subsidiary or the
conduct of new activities through a subsidiary. (1) No insured savings
association may establish or acquire a subsidiary, or conduct any new
activity through a subsidiary, without providing the DOS regional
director for the region in which the insured savings association's
principal office is located prior notice of the association's intent to
do so. Notice must be sent return receipt requested and be received by
the regional director at least 30 days prior to the establishment or
acquisition of the subsidiary or the commencement of the new activity.
The notice shall contain the same information required to be in a letter
application filed pursuant to Sec. 303.13(b)(1) plus the following:
(i) A description of how the activities of the subsidiary will be
funded;
(ii) The amount of the insured savings association's investment in
the subsidiary and the form of the investment;
(iii) The percentage ownership the insured savings association will
have in the subsidiary;
(iv) A listing of the other owners of the subsidiary if any; and
(v) In the case of the acquisition of an existing concern, the terms
and conditions of the acquisition including an appraisal, assessment of
value, or other substantiation of the purchase price
[[Page 46]]
and operating statements for the previous three years (if applicable).
If the insured savings association's filing with the OTS under section
18(m)(1) of the FDI Act contains all of the information required, that
filing may be submitted to the FDIC in satisfaction of this provision.
In any case, the regional director may request such additional
information as the regional director deems appropriate. In all such
cases, the 30-day period will not begin to run until the response to the
request for additional information is complete.
(2) Any Federal savings bank that was chartered prior to October 15,
1982 as a savings bank under state law, and any savings association that
acquired its principal assets from such an institution, is not required
to file prior notice in accordance with paragraph (f)(1) of this
section.
(3) Any insured savings association that had one or more
subsidiaries prior to August 9, 1989 must file a notice with the DOS
regional director for the region in which the insured savings
association's principal office is located within 30 days from December
29, 1989. The notice should set forth the name, location, and type of
activity conducted by the subsidiary and the amount of the insured
savings association's investment in the subsidiary.
(4) Section 303.13(f)(1) notwithstanding, an insured savings
assocaition may establish or acquire one or more subsidiaries whose sole
purpose is to hold interests in real property acquired by the savings
association that fit the description in Sec. 303.13(a)(5)(ii) provided
that the savings association files a written notice, return receipt
requested, with the DOS regional director for the region in which the
savings association's principal office is located indicating that the
association intends to establish or acquire one or more subsidiaries
that will be engaged solely in the disposition of such property. Notice
must be received by the regional director at least 30 days prior to the
establishment or acquisition of any such subsidiary. An association that
has filed a notice pursuant to this paragraph may thereafter establish
or acquire additional such subsidiaries provided that each time within
14 days after doing so the association notifies the regional director in
writing. The notice shall identify the savings association, give the
date of the initial notice, identify the new subsidiary, and state the
value of the property at the time it was transferred to the subsidiary.
(g) Notice by Federal savings associations conducting grandfathered
activities. Any federal savings association authorized by section
5(i)(4) of HOLA (12 U.S.C. 1464(i)(4)) to make any investment or engage
in any activity not otherwise generally authorized to federal savings
association by section 5 of HOLA must file a notice with the DOS
regional director for the region in which the federal savings
association's principal office is located within 30 days after December
29, 1989 or within 30 days after the date the federal savings
association is first able to rely upon section 5(i)(4) of HOLA as a
result of the acquisition of an association that is covered by such
section. The notice should briefly describe the activity or investment.
(h) Delegations. The authority to act on applications and notices
filed pursuant to Sec. 303.13, and to make any and all determinations
called for in regard to the same, is delegated to the Director (DOS),
and where confirmed in writing by the director, to an associate
director, or to the regional director or deputy regional director.
(Approved by the Office of Management and Budget under control number
3064-0104)
[54 FR 53548, Dec. 29, 1989, as amended at 55 FR 38042, Sept. 17, 1990;
58 FR 64458, Dec. 8, 1993; 59 FR 52667, Oct. 19, 1994]
Sec. 303.14 Change in senior executive officer or board of directors.
(a) Definitions. For the purposes of this section:
(1) The term individual means any natural person, as well as any
other entity and/or its employees substituted for such natural person.
(2) The term insured nonmember bank means any bank, including any
foreign bank having an insured branch the deposits of which are insured
in accordance with the provisions of the Federal Deposit Insurance Act,
which is not a
[[Page 47]]
member of the Federal Reserve System. The term does not include any
institution chartered by the Comptroller of the Currency, any branch
licensed by the Comptroller of the Currency, any District bank, or any
federal savings bank.
(3) The term senior executive officer means any individual who
exercises significant influence over, or participates in, major
policymaking decisions of an insured nonmember bank, without regard to
title, salary, or compensation. The term includes, but is not limited
to, the following positions: president, chief executive officer, chief
managing official (in an insured state branch of a foreign bank), chief
operating officer, chief financial officer, chief lending officer, or
chief investment officer. The term also includes employees of entities
retained by an insured nonmember bank to perform such functions in the
insured nonmember bank, when such firm is hired in lieu of directly
hiring the individuals.
(4) The term troubled condition means any insured nonmember bank
that:
(i) Has been assigned a composite rating by the FDIC of 4 or 5 under
the Uniform Financial Institutions Rating System, or, in the case of an
insured state-licensed branch of a foreign bank (State branch), an
equivalent rating;
(ii) Is subject to a proceeding initiated by the FDIC for
termination or suspension of deposit insurance;
(iii) Is subject to a written agreement which requires action to
improve or maintain the safety and soundness of the institution and
which is issued by either the FDIC or by the appropriate state banking
authority, a cease and desist order issued by either the FDIC or the
appropriate state banking authority, a cease and desist order or
proceeding initiated by either the FDIC or the appropriate state banking
authority, or a capital directive issued by either the FDIC or the
appropriate state banking authority; or
(iv) Is informed in writing by the DOS regional director of the
region in which the institution is located (appropriate regional
director) or his or her designee, based on a visitation, examination, or
report of condition, that it has been designated a troubled institution
for the purposes of Sec. 303.14.
(b) Prior Notice Requirement. An insured nonmember bank shall give
the FDIC written notice at least 30 days prior to the effective date of
any addition or replacement of a member of the board of directors (or a
member of the board of trustees in an insured nonmember bank held in a
mutual form of ownership) or the employment or change in
responsibilities of any individual to a position as a senior executive
officer if:
(1) The bank has been chartered or the insured state branch has been
licensed less than two years;
(2) Within the two years preceding the proposed addition or
employment;
(i) The insured nonmember bank or any of its parents has undergone a
change in control which required a notice under section 7(j) of the
Federal Deposit Insurance Act or regulations issued pursuant to that
statute; or
(ii) The insured nonmember bank has undergone a transaction subject
to section 3 of the Bank Holding Company Act or section 10 of the Home
Owners Loan Act or regulations issued pursuant to either of those
statutes;
(3) The insured nonmember bank is not in compliance with the minimum
capital requirements applicable to it and which are imposed by 12 CFR
part 325 or by other regulatory action of the FDIC or the appropriate
state banking authority; or
(4) The insured nonmember bank is otherwise in a troubled condition.
In the case of the addition of a member of the board of directors or a
change in senior executive officer in a foreign bank having an insured
State branch, the notice requirement shall not apply to such additions
and changes in the foreign bank parent, but only to changes in senior
executive officers in the State branch. The notice requirement also does
not apply in the case of an advisory director who is not elected by the
shareholders of the bank or any of its parents, who is not authorized to
vote on matters before the board of directors, and who provides solely
general policy advice to the board of directors.
(c) Procedures for notice of proposed change in Director or Senior
Executive Officer--(1) Filing and acceptance. Notices shall be filed
with the appropriate
[[Page 48]]
regional director and shall contain information pertaining to the
competence, experience, character, or integrity of the individual with
respect to whom the notice is submitted, as prescribed in the designated
FDIC form, subject to the authority of the regional director or his or
her designee to require additional information. Each individual on whose
behalf the notice is filed must attest to the validity of the
information filed which pertains to that individual. At the option of
the individual, the information may be forwarded to the regional
director by the individual; however, in such cases, the insured
nonmember bank must file a notice to that effect. The 30-day notice
period will begin to run on the date all required information is
received by the appropriate regional director. The bank submitting the
notice shall be notified of the date on which all such required
information is received and the notice is accepted for processing.
(2) Waiver of prior notice requirement--(i) Procedure for obtaining.
Parties may petition the appropriate regional director for a waiver of
the prior notice required under this section. Waiver may be granted if
it is found that delay could harm the bank or the public interest. Any
waiver shall not affect the authority of the FDIC to issue a notice of
disapproval within 30 days of the waiver.
(ii) Election of directors. In the case of the election of a new
member of the board of directors at a meeting of the shareholders of an
insured nonmember bank, such waiver is hereby granted, but a completed
notice must be filed with the appropriate regional director within 48
hours of the election.
(3) Notice of intent not to disapprove. A proposed director or
senior executive officer may begin service before the expiration of the
30-day period if the FDIC notifies the bank and the individual in
writing of the FDIC's intention not to disapprove the proposed addition
or employment.
(4) Commencement of service. A proposed senior executive officer or
director may begin service upon the expiration of the 30-day period
following acceptance of a complete notice, unless the FDIC issues a
notice of disapproval before the end of the 30-day period.
(d) Notice of disapproval. The FDIC may disapprove the individual's
serving as a director or senior executive officer if it finds that the
competence, experience, character, or integrity of the individual with
respect to whom a notice under this section is submitted indicates that
it would not be in the best interests of the depositors of the bank or
in the best interests of the public to permit the individual to be
employed by, or associated with, the bank. The notice of disapproval
will advise the parties of their rights of appeal.
(e) Delegations. The authority to issue notices of disapproval or
notices of intent not to disapprove under this section; to grant waivers
of the prior notice requirement; to determine the informational adequacy
of a notice; to designate an insured nonmember bank as a troubled
institution; and to determine when the 30-day period begins to run is
delegated to the Director (DOS), and where confirmed in writing by the
director, to an associate director, or to the regional director or
deputy regional director.
[54 FR 53042, Dec. 27, 1989 as amended by 59 FR 52667, Oct. 19, 1994]
Sec. 303.15 Mutual-to-stock conversions of mutually owned state-chartered savings banks.
(a) Prior notice requirement. In addition to complying with the
substantive requirements in Sec. 333.4 of this chapter, an insured
state-chartered mutually owned savings bank that proposes to convert
from mutual to stock form shall file with the FDIC a notice of intent to
convert to stock form and copies of all documents filed with state and
federal banking and/or securities regulators in connection with the
proposed conversion. An institution that is in the process of converting
to stock form that has filed a proposed stock conversion application
with the applicable state and federal regulators (or otherwise has
initiated a stock conversion) prior to the effective date of this
section shall file the required materials with the FDIC as soon as
practicable. An insured mutual savings bank chartered by a state that
does not
[[Page 49]]
require the filing of application materials to convert from mutual to
stock form that proposes to convert to the stock form shall notify the
FDIC of the proposed conversion and provide the materials requested by
the FDIC.
(b) Content and filing of notice--(1) Content of notice. The notice
required to be filed under paragraph (a) of this section shall provide a
description of the proposed conversion and include a copy of all notices
or applications concerning the proposed conversion, including all
attachments or appendices thereto, that have been filed with any state
and federal banking and/or securities regulators. Copies of all
agreements entered into as part of the mutual-to-stock conversion
between the institution, its officers, directors/trustees and any other
institution and/or its successors also must be provided.
(2) Filing of notice. Notices shall be filed with the regional
director (DOS) in the region in which the institution seeking to convert
is headquartered at the same time as the conversion application
materials are filed with the institution's primary state regulator.
(c) Review by FDIC. (1) The FDIC shall review the materials
submitted by the institution seeking to convert from mutual to stock
form. The FDIC, in its discretion, may request any additional
information it deems necessary to evaluate the proposed conversion and
the institution shall provide such information to the FDIC
expeditiously. Among the factors to be reviewed by the FDIC are:
(i) The use of the proceeds from the sale of stock, as prescribed in
the business plan;
(ii) The adequacy of the disclosure materials;
(iii) The participation of depositors in approving the transaction;
(iv) The form of the proxy statement required for the vote of the
depositors/members on the conversion;
(v) Any increased compensation and other remuneration (including
stock grants, stock option rights and other similar benefits) to be
obtained by officers and directors/trustees of the bank in connection
with the conversion;
(vi) The adequacy and independence of the appraisal of the value of
the mutual savings bank for purposes of determining the price of the
shares of stock to be sold;
(vii) The process by which the bank's trustees approved the
appraisal, the pricing of the stock and the compensation arrangements
for insiders;
(viii) The nature and apportionment of stock subscription rights;
and
(ix) The bank's plans to fulfill its commitment to serving the
convenience and needs of its community.
(2) In reviewing the materials required to be submitted under this
section, the FDIC will take into account the extent to which the
proposed conversion conforms with the various provisions of the mutual-
to-stock conversion regulations of the Office of Thrift Supervision (12
CFR Part 563b), as currently in effect at the time the FDIC reviews the
required materials related to the proposed conversion. Any non-
conformity with those provisions will be closely scrutinized. Conformity
with the OTS requirements, however, will not be sufficient for FDIC
regulatory purposes if the FDIC determines that the proposed conversion
would pose a risk to the institution's safety and soundness, violate any
law or regulation or present a breach of fiduciary duty.
(d) Notification of completed filing of materials. The FDIC shall
notify the institution when all the required materials related to the
proposed conversion have been filed with the FDIC and the notice is
thereby complete for purposes of computing the time periods designated
in paragraphs (e) and (g) of this section.
(e) Notice of intent not to object. If the FDIC determines, in its
discretion, that the proposed conversion would not pose a risk to the
institution's safety and soundness, violate any law or regulation or
present a breach of fiduciary duty, then the FDIC shall issue to the
bank seeking to convert, within 60 days of receipt of a complete notice
of proposed conversion or within 20 days after the last applicable state
or other federal regulator has acted on the proposed conversion,
whichever is later, a notice of intent not to object to the proposed
conversion. The FDIC may, in its discretion, extend by written notice to
the institution the initial 60-day period by an additional 60 days.
[[Page 50]]
(f) Letter of objection. If the FDIC determines, in its discretion,
that the proposed conversion poses a risk to the institution's safety
and soundness, violates any law or regulation or presents a breach of
fiduciary duty, then the FDIC shall issue a letter to the institution
stating its objection(s) to the proposed conversion and advising the
institution that the conversion shall not be consummated until such
letter is rescinded. A copy of the letter of objection shall be
furnished to the institution's primary state regulator and any other
state or federal banking and/or securities regulator involved in the
conversion. The letter of objection shall advise the institution of its
right to petition the FDIC for reconsideration under Sec. 303.6(e). Such
action shall not, in any way, prohibit the FDIC from taking any other
action(s) that it may deem necessary.
(g) Consummation of the conversion. An institution may consummate
the proposed conversion upon either:
(1) The receipt of a notice of intent not to object; or
(2) The expiration of the 60-day period following acceptance of a
complete notice by the FDIC or the 20-day period after the last
applicable state or other federal regulator has acted on the proposed
conversion, whichever is later, unless the FDIC issues a notice of
objection before the end of that period and, in which case, the
conversion shall not be consummated until such letter is rescinded. The
FDIC may, in its discretion, extend by written notice to the institution
the initial 60-day period by an additional 60 days.
[59 FR 61245, Nov. 30, 1994]
PART 304--FORMS, INSTRUCTIONS AND REPORTS--Table of Contents
Sec.
304.1 Purpose and scope.
304.2 Forms and instructions--general.
304.3 Certified statements.
304.4 Reports of condition and income.
304.5 Other forms.
304.6 [Reserved]
304.7 Display of control numbers.
Appendix A to Part 304--List of Forms
Authority: 5 U.S.C. 552; 12 U.S.C. 1817, 1818, 1819, 1820; Public
Law 102-242, 105 Stat. 2251 (12 U.S.C. 1817 note).
Source: 51 FR 36684, Oct. 15, 1986, unless otherwise noted.
Sec. 304.1 Purpose and scope.
This part is issued under section 552 of title 5 of the United
States Code (5 U.S.C. 552), which requires that each agency shall make
available to the public information pertaining to the description of
forms available or the places at which forms may be obtained, and
instructions as to the scope and content of reports and other
submittals. The forms mentioned in this part are limited to those which
are not already mentioned elsewhere within the rules and regulations of
the Federal Deposit Insurance Corporation. However, appendix A to this
part lists forms required by the FDIC and identifies the sections of
FDIC's regulations where the forms are referenced.
[51 FR 36684, Oct. 15, 1986, as amended at 62 FR 4896, Feb. 3, 1997]
Sec. 304.2 Forms and instructions--general.
Necessary forms with their related instructions to be used in
connection with applications, reports, and other submittals can be
obtained from FDIC regional offices--Division of Supervision. The FDIC
regional offices are listed in the directory of the FDIC Law,
Regulations and Related Acts looseleaf service, published by the FDIC. A
listing of FDIC forms can also be obtained by writing to the FDIC,
Division of Supervision, 550 17th Street, NW, Washington, D.C. 20429.
The forms are also available in the FDIC Public Information Center at
801 17th Street, NW, Washington, D.C. 20429.
[62 FR 4896, Feb. 3, 1997]
Sec. 304.3 Certified statements.
The certified statements required to be filed by insured
institutions under the provisions of section 7 of the Federal Deposit
Insurance Act (12 U.S.C. 1817), as amended, shall be filed in accordance
with part 327 of this chapter. The applicable forms are Form 6420/07A--
Form 6420/07H which show the computation of the semiannual assessment
due to the Corporation from an insured depository institution. As
provided for in part 327 of this chapter, the
[[Page 51]]
forms will be furnished to insured depository institutions by the
Corporation twice each calendar year and the completed statement must be
returned to the Corporation by each institution.
[62 FR 4896, Feb. 3, 1997]
Sec. 304.4 Reports of condition and income.
(a) Description. Forms FFIEC 031, 032, 033, and 034, Consolidated
Reports of Condition and Income, are quarterly reports for insured state
nonmember banks (except District banks) of different asset sizes or with
foreign offices, as appropriate, that are required to be prepared as of
the close of business on the following report dates: March 31, June 30,
September 30, and December 31. These reports are also known as the
``Call Report.'' The Call Report includes a balance sheet, an income
statement, and a statement of changes in equity capital of the reporting
bank. Supporting schedules request additional detail with respect to
charge-offs and recoveries, income from international operations,
specific asset and liability accounts, off-balance sheet items, past due
and nonaccrual assets, information for assessment purposes, and
regulatory capital. All assets and liabilities, including contingent
assets and liabilities, must be reported in, or otherwise taken into
account in the preparation of, the Call Report. Reporting banks must
also submit annually such information on small business and small farm
lending as the FDIC may need to assess the availability of credit to
these sectors of the economy. Call Reports must be prepared in
accordance with the appropriate instructions contained in the Federal
Financial Institutions Examination Council booklet entitled
``Instructions--Consolidated Reports of Condition and Income''. The
report forms, the instructions for completing the reports, and the
accompanying materials will be furnished to all insured state nonmember
banks (except District banks) by, or may be obtained upon request from,
the Call Reports Analysis Unit, Division of Supervision, FDIC,
Washington, D.C. 20429.
(b) Submission of reports. All insured state nonmember banks (except
District banks) shall file their completed reports by the method and
with the appropriate collection agent for the FDIC as designated in the
materials accompanying the report forms each quarter. Completed reports
must be received no more than 30 calendar days after the report date,
subject to the timely filing provisions set forth in the
``Instructions--Consolidated Reports of Condition and Income'' and in
the materials accompanying the report forms each quarter. Any bank which
has or has had more than one foreign office, other than a shell branch
or an International Banking Facility, may take an additional 15 calendar
days to submit its Call Reports. A bank using any of these additional 15
calendar days to complete its reports is required to submit its reports
electronically.
[62 FR 4896, Feb. 3, 1997]
Sec. 304.5 Other forms.
The forms described in this section have been prepared for the use
of banks.
(a) Form 8020/05: Summary of Deposits. Form 8020/05 is a report on
the amount of deposits for each authorized office of an insured bank
with branches; unit banks do not report. Reports as of June 30 of each
year must be submitted no later than the immediately succeeding July 31.
The report is filed with the appropriate collection agent for the FDIC
as designated in the materials accompanying the survey forms each year.
The report forms and the instructions for completing the reports will be
furnished to all such banks by, or may be obtained upon request from the
Trust and Survey Group, Division of Supervision, FDIC, 550 17th Street,
NW, Washington, D.C. 20429.
(b) Form 6120/06: Notification of Performance of Bank Services. Form
6120/06 may be used to satisfy the notice requirement for bank service
arrangements that is contained in section 7 of the Bank Service
Corporation Act (12 U.S.C. 1867), as amended. In lieu of the form, a
bank may satisfy the requirement by submitting a letter stating: The
name of the servicer; the address at which the service is performed; the
service being performed; and the date the service commenced. Either the
form or the letter containing the notice information must be submitted
to
[[Page 52]]
the regional director--Division of Supervision of the region in which
the bank's main office is located within 30 days of the making of the
bank service contract or the performance of the bank service, whichever
occurs first.
(c) Form FFIEC 001: Annual Report of Trust Assets. This report must
be filed by all insured state nonmember commercial and savings banks
operating trust departments or banks granted consent by the Corporation
to exercise trust powers, and their trust subsidiaries. The report must
be filed no later than February 15th of each year. When circumstances
necessitate, additional information may be required about certain
operations of the trust department. The report must be prepared and
submitted in accordance with the appropriate instructions. The report is
filed with the appropriate collection agent for the FDIC as designated
in the report form and instructions. The report forms and instructions
for completing the report will be furnished automatically to all such
banks by, or may be obtained upon request from the Trust and Survey
Group, Division of Supervision, FDIC, 550 17th Street, NW, Washington,
D.C. 20429.
(d) Form FFIEC 002: Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks. Form FFIEC 002 is a report in
the form of a statement of the assets and liabilities of U.S. branches
and agencies of foreign banks together with supporting schedules that
request additional detail with respect to selected assets and
liabilities, off-balance sheet items, and, in the case of insured
branches, information for assessment purposes. All assets and
liabilities, including contingent assets and liabilities, must be
reported in, or otherwise taken into account in the preparation of, this
report. Insured branches must also submit annually such information on
small business and small farm lending as the FDIC may need to assess the
availability of credit to these sectors of the economy. The report must
be prepared in accordance with the instructions contained in the
instruction booklet for the report, copies of which are furnished to all
U.S. branches and agencies of foreign banks by the Federal Reserve
System. The Board of Governors of the Federal Reserve System collects
and processes the report on behalf of FDIC-supervised branches. The
report is submitted quarterly to the appropriate Federal Reserve
district bank.
(e) Form FFIEC 004: Report on Indebtedness of Executive Officers and
Principal Shareholders and their Related Interests to Correspondent
Banks. Form FFIEC 004 is a recommended form that may be used by the
executive officers and principal shareholders of an insured state
nonmember bank to report to the board of directors of their bank on
their indebtedness (and that of their related interests) to
correspondent banks, as required by part 349 of this chapter. The
reports or any form containing identical information must be submitted
to the bank's board of directors by January 31 of each year and cover
indebtedness to correspondent banks during the preceding calendar year.
Form FFIEC 004 is mailed annually by the FDIC to each insured state
nonmember bank.
[62 FR 4897, Feb. 3, 1997]
Sec. 304.6 [Reserved]
Sec. 304.7 Display of control numbers.
The following sections of this part of FDIC's regulations containing
collection of information requirements are listed with the control
numbers assigned by the Office of Management and Budget:
------------------------------------------------------------------------
Currently
Section of 12 CFR Part 304 Assigned OMB
Control No.
------------------------------------------------------------------------
304.3................................................... 3064-0057
304.4(a)................................................ 3064-0052
304.4(b)................................................ 3064-0054
304.5(a)................................................ 3064-0061
304.5(b)................................................ 3064-0029
304.5(c)................................................ 3064-0024
304.5(d)................................................ 7100-0032
304.5(e)................................................ 3064-0023
------------------------------------------------------------------------
Appendix A to Part 304-- List of Forms
Note: See footnotes at end of table.
[[Page 53]]
----------------------------------------------------------------------------------------------------------------
Section of FDICs
regulations (12 CFR
Form Title chapter III) where the OMB No.
form is referenced
----------------------------------------------------------------------------------------------------------------
FDIC 6112/01.......................... Initial Statement of 335.413................. 3064-0030
Beneficial Ownership of
Equity Securities (Form F-7).
FDIC 6112/02.......................... Statement of Changes in 335.414................. 3064-0030
Beneficial Ownership of
Equity Securities (Form F-8).
FDIC 6120/06.......................... Notification of Bank Services. 304.5(b)................ 3064-0029
FDIC 6200/05.......................... Application for Federal 303.1................... 3064-0001
Deposit Insurance (Commercial
Banks).
FDIC 6200/06.......................... Financial Report.............. (\1\)................... 3064-0006
FDIC 6200/07.......................... Application for Federal 303.1................... 3064-0069
Deposit Insurance for
Operating Noninsured
Institutions.
FDIC 6200/09.......................... Application for Consent to (\2\)................... 3064-0025
Exercise Trust Powers.
FDIC 6220/01.......................... Application for a Merger or 303.3................... 3064-0016
Other Transaction Pursuant to
Section 19(c) of the Federal
Deposit Insurance Act.
FDIC 6220/07.......................... Application for a Merger or 303.7(b)(1) and 303.3... 3064-0015
Other Transaction Pursuant to
Section 18(c) of the Federal
Deposit Insurance Act
(Phantom or Corporate
Reorganization).
FDIC 6342/12.......................... Request for Deregistration 341.5................... 3064-0027
Registered Transfer Agent.
FDIC 6420/07.......................... Certified Statement........... 304.3(a)................ 3064-0057
FDIC 6440/12.......................... Loan/Application Register..... 338.8(\3\).............. 7100-0247
FDIC 6710/06.......................... Suspicious Activity Report.... 353.1................... 3064-0077
FDIC 6710/07.......................... Application Pursuant to (\4\)................... 3064-0018
Section 19 of the Federal
Deposit Insurance Act.
FDIC 6810/01.......................... Notification of Addition of a 333.2................... 3064-0097
Director or Employment of a
Senior Executive Officer.
FDIC 6822/01.......................... Notice of Acquisition of 303.4(b)................ 3064-0019
Control.
FDIC 8020/05.......................... Summary of Deposits........... 304.5(a)................ 3064-0061
FFIEC 001............................. Annual Report of Trust Assets. 304.5(c)................ 3064-0024
FFIEC 002............................. Report of Assets and 304.5(d)................ 7100-0032
Liabilities of U.S. Branches
and Agencies of Foreign Banks.
FFIEC 004............................. Report on Indebtedness of 304.5(e)................ 3064-0023
Executive Officers and
Principal Shareholders and
their Related Interests to
Correspondent Banks.
FFIEC 009............................. Country Exposure Report....... 351.3(b)................ 3064-0017
FFIEC 009a............................ Country Exposure Information 351.3................... 3064-0017
Report.
FFIEC 019............................. Country Exposure Report for (\5\)................... 3064-0017
U.S. Branches and Agencies of
Foreign Banks.
FFIEC 030............................. Foreign Branch Report of 347.6(b)................ 3064-0011
Condition.
FFIEC 031............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic and
Foreign Offices.
FFIEC 032............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic Offices
Only and Total Assets of $300
Million or More.
FFIEC 033............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic Offices
Only and Total Assets of $100
Million or More But Less Than
$300 Million.
FFIEC 034............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic Offices
Only and Total Assets of Less
than $100 Million.
FFIEC 035............................. Monthly Consolidated Foreign (\6\)................... 1557-0156
Currency Report of Banks in
the United States.
GFIN.................................. Notice of Government (\7\)................... 1535-0089
Securities Broker or
Government Securities Dealer
Activities to be Filed by a
Financial Institution Under
Section 15C(a)(1)(B).
GFIN-W................................ Notice by Financial (\7\)................... 7100-0224
Institutions of Termination
of Activities as a Government
Securities Broker or
Government Securities Dealer.
GFIN-4................................ Disclosure Form for Person (\7\)................... 1535-0089
Associated With a Financial
Institution Government
Securities Broker or Dealer.
GFIN-5................................ Uniform Termination Notice for (\7\)................... 1535-0089
Person Associated With a
Financial Institution
Government Securities Broker
or Dealer.
MSD 4................................. Uniform Application for 343.3................... 3064-0022
Municipal Securities
Principal or Municipal
Securities Representative
Associated With a Bank
Municipal Securities Dealer.
MSD 5................................. Uniform Termination for 343.3................... 3064-0022
Municipal Securities
Principal or Municipal
Securities Representative
Associated With a Bank
Municipal Securities Dealer.
[[Page 54]]
TA-1.................................. Transfer Agent Registration 341.6................... 3064-0026
and Amendment Form.
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Not referenced in 12 CFR chapter III. The report form is submitted by each individual director or officer of
a proposed or operating bank applying to the FDIC for federal deposit insurance as a state nonmember bank, or
by a person proposing to acquire ownership or control of an insured state nonmember bank.
\2\ The report form can be obtained from the HMDA Assistance line by telephoning (202) 452-2016.
\3\ Not referenced in 12 CFR chapter III. The application form is submitted by insured state nonmember banks
applying for FDIC consent to exercise trust powers.
\4\ Not referenced in 12 CFR chapter III. The application form is submitted by FDIC-insured banks applying for
FDIC consent to employ persons who have been convicted of crimes involving dishonesty or breach of trust.
\5\ Not referenced in 12 CFR chapter III. The report form is submitted by state chartered and federally-licensed
branches and agencies of foreign banks in the U.S. with $30 million or more in total direct claims on foreign
residents. The Federal Reserve Board collects and processes the report on behalf of FDIC-supervised branches.
The report is submitted quarterly to the appropriate Federal Reserve district bank.
\6\ Not referenced in 12 CFR chapter III. The report form is submitted by banks (other than savings banks) and
bank holding companies with a dollar equivalent of $100 million or more in assets, liabilities, foreign
exchange contracts bought and foreign exchange contracts sold in any six specific foreign currencies as of the
end of a month. The Office of the Comptroller of the Currency collects and processes this monthly report on
behalf of insured state nonmember banks.
\7\ Not referenced in 12 CFR chapter III. The report form is submitted by banks or persons associated with banks
required to file under section 15C of the Securities and Exchange Act of 1934.
[62 FR 4897, Feb. 3, 1997]
PARTS 305-306 [RESERVED]--Table of Contents
PART 307--NOTIFICATION OF CHANGES OF INSURED STATUS--Table of Contents
Authority: Sec. 2, Pub. L. 797, 64 Stat. 879, 880 as amended by
secs. 202, 204, Pub. L. 89-694, 80 Stat. 1046, 1054, and sec. 6(c)(14),
Pub. L. 95-369, 92 Stat. 618 (12 U.S.C. 1818(a), 1818(o)); sec. 304,
Pub. L. 95-630, 92 Stat. 3676 (12 U.S.C. 1818(q); sec. 9, Pub. L. 797,
64 Stat. 881 (12 U.S.C. 1819).
Sec. 307.1 Certification of assumption of deposit liabilities.
Whenever the deposit liabilities of an insured bank or insured
branch of a foreign bank are assumed by another insured bank (whether by
merger, consolidation, or other statutory assumption, or by contract),
the assuming or resulting bank shall certify to the FDIC that it has
agreed to assume the deposit liabilities of the bank whose deposits were
assumed. The certification shall be made within 30 days after the
assumption takes effect and shall state the date the assumption took
effect. This certification shall be considered satisfactory evidence of
the assumption.
[48 FR 24031, May 31, 1983]
Sec. 307.2 Notice to be given when deposit liabilities are not assumed.
Any insured bank or insured branch of a foreign bank whose insured
status is voluntarily terminated, but whose deposit liabilities are not
assumed shall give notice to each of its depositors of the date of the
termination of its insured status under the Federal Deposit Insurance
Act. The notice to depositors shall be given in a form, in a manner and
at a time approved by the appropriate FDIC Regional Director. The FDIC
may require the bank to take other steps that it considers necessary for
the protection of depositors.
[48 FR 24031, May 31, 1983]
PART 308--RULES OF PRACTICE AND PROCEDURE--Table of Contents
Subpart A--Uniform Rules of Practice and Procedure
Sec.
308.1 Scope.
308.2 Rules of construction.
308.3 Definitions.
308.4 Authority of Board of Directors.
308.5 Authority of the administrative law judge.
308.6 Appearance and practice in adjudicatory proceedings.
308.7 Good faith certification.
308.8 Conflicts of interest.
308.9 Ex parte communications.
308.10 Filing of papers.
308.11 Service of papers.
308.12 Construction of time limits.
308.13 Change of time limits.
308.14 Witness fees and expenses.
308.15 Opportunity for informal settlement.
308.16 FDIC's right to conduct examination.
308.17 Collateral attacks on adjudicatory proceeding.
[[Page 55]]
308.18 Commencement of proceeding and contents of notice.
308.19 Answer.
308.20 Amended pleadings.
308.21 Failure to appear.
308.22 Consolidation and severance of actions.
308.23 Motions.
308.24 Scope of document discovery.
308.25 Request for document discovery from parties.
308.26 Document subpoenas to nonparties.
308.27 Deposition of witness unavailable for hearing.
308.28 Interlocutory review.
308.29 Summary disposition.
308.30 Partial summary disposition.
308.31 Scheduling and prehearing conferences.
308.32 Prehearing submissions.
308.33 Public hearings.
308.34 Hearing subpoenas.
308.35 Conduct of hearings.
308.36 Evidence.
308.37 Post-hearing filings.
308.38 Recommended decision and filing of record.
308.39 Exceptions to recommended decision.
308.40 Review by Board of Directors.
308.41 Stays pending judicial review.
Subpart B--General Rules of Procedure
308.101 Scope of Local Rules.
308.102 Authority of Board of Directors and Executive Secretary.
308.103 Appointment of administrative law judge.
308.104 Filings with the Board of Directors.
308.105 Custodian of the record.
308.106 Written testimony in lieu of oral hearing.
308.107 Document discovery.
Subpart C--Rules of Practice Before the FDIC and Standards of Conduct
308.108 Sanctions.
308.109 Suspension and disbarment.
Subpart D--Rules and Procedures Applicable to Proceedings Relating to
Disapproval of Acquisition of Control
308.110 Scope.
308.111 Grounds for disapproval.
308.112 Notice of disapproval.
308.113 Answer to notice of disapproval.
308.114 Burden of proof.
Subpart E--Rules and Procedures Applicable to Proceedings Relating to
Assessment of Civil Penalties for Willful Violations of the Change in
Bank Control Act
308.115 Scope.
308.116 Assessment of penalties.
308.117 Effective date of, and payment under, an order to pay.
308.118 Collection of penalties.
Subpart F--Rules and Procedures Applicable to Proceedings for
Involuntary Termination of Insured Status
308.119 Scope.
308.120 Grounds for termination of insurance.
308.121 Notification to primary regulator.
308.122 Notice of intent to terminate.
308.123 Notice to depositors.
308.124 Involuntary termination of insured status for failure to
receive deposits.
308.125 Temporary suspension of deposit insurance.
308.126 Special supervisory associations.
Subpart G--Rules and Procedures Applicable to Proceedings Relating to
Cease-and-Desist Orders
308.127 Scope.
308.128 Grounds for cease-and-desist orders.
308.129 Notice to state supervisory authority.
308.130 Effective date of order and service on bank.
308.131 Temporary cease-and-desist order.
Subpart H--Rules and Procedures Applicable to Proceedings Relating to
Assessment and Collection of Civil Money Penalties for Violation of
Cease-and-Desist Orders and of Certain Federal Statutes, Including Call
Report Penalties
308.132 Assessment of penalties.
308.133 Effective date of, and payment under, an order to pay.
Subpart I--Rules and Procedures for Imposition of Sanctions Upon
Municipal Securities Dealers or Persons Associated With Them and
Clearing Agencies or Transfer Agents
308.134 Scope.
308.135 Grounds for imposition of sanctions.
308.136 Notice to and consultation with the Securities and Exchange
Commission.
308.137 Effective date of order imposing sanctions.
Subpart J--Rules and Procedures Relating to Exemption Proceedings Under
Section 12(h) of the Securities Exchange Act of 1934
308.138 Scope.
308.139 Application for exemption.
308.140 Newspaper notice.
[[Page 56]]
308.141 Notice of hearing.
308.142 Hearing.
308.143 Decision of Board of Directors.
Subpart K--Procedures Applicable to Investigations Pursuant to Section
10(c) of the FDIA
308.144 Scope.
308.145 Conduct of investigation.
308.146 Powers of person conducting investigation.
308.147 Investigations confidential.
308.148 Rights of witnesses.
308.149 Service of subpoena.
308.150 Transcripts.
Subpart L--Procedures and Standards Applicable to a Notice of Change in
Senior Executive Officer or Director Pursuant to Section 32 of the FDIA
308.151 Scope.
308.152 Grounds for disapproval of notice.
308.153 Procedures where notice of disapproval issues pursuant to
Sec. 303.14 of this chapter.
308.154 Decision on review.
308.155 Hearing.
Subpart M--Procedures and Standards Applicable to an Application
Pursuant to Section 19 of the FDIA
308.156 Scope.
308.157 Relevant considerations.
308.158 Filing papers and effective date.
308.159 Denial of applications.
308.160 Hearings.
Subpart N--Rules and Procedures Applicable to Proceedings Relating to
Suspension, Removal, and Prohibition Where a Felony Is Charged
308.161 Scope.
308.162 Relevant considerations.
308.163 Notice of suspension, and orders of removal or prohibition.
308.164 Hearings.
Subpart O--Liability of Commonly Controlled Depository Institutions
308.165 Scope.
308.166 Grounds for assessment of liability.
308.167 Notice of assessment of liability.
308.168 Effective date of and payment under an order to pay.
Subpart P--Rules and Procedures Relating to the Recovery of Attorney
Fees and Other Expenses
308.169 Scope.
308.170 Filing, content, and service of documents.
308.171 Responses to application.
308.172 Eligibility of applicants.
308.173 Prevailing party.
308.174 Standards for awards.
308.175 Measure of awards.
308.176 Application for awards.
308.177 Statement of net worth.
308.178 Statement of fees and expenses.
308.179 Settlement negotiations.
308.180 Further proceedings.
308.181 Recommended decision.
308.182 Board of Directors action.
308.183 Payment of awards.
Subpart Q--Issuance and Review of Orders Pursuant to the Prompt
Corrective Action Provisions of the Federal Deposit Insurance Act
308.200 Scope.
308.201 Directives to take prompt corrective action.
308.202 Procedures for reclassifying a bank based on criteria other
than capital.
308.203 Order to dismiss a director or senior executive officer.
308.204 Enforcement of directives.
Subpart R--Submission and Review of Safety and Soundness Compliance
Plans and Issuance of Orders To Correct Safety and Soundness
Deficiencies
308.300 Scope.
308.301 Purpose.
308.302 Determination and notification of failure to meet a safety and
soundness standard and request for compliance plan.
308.303 Filing of safety and soundness compliance plan.
308.304 Issuance of orders to correct deficiencies and to take or
refrain from taking other actions.
308.305 Enforcement of orders.
Subpart S--Applications for a Stay or Review of Actions of Bank Clearing
Agencies
308.400 Scope.
308.401 Applications for stays of disciplinary sanctions or summary
suspensions by a bank clearing agency.
308.402 Applications for review of final disciplinary sanctions,
denials of participation, or prohibitions or limitations of
access to services imposed by bank clearing agencies.
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 1817,
1818, 1820, 1828, 1829, 1829b, 1831o, 1832(c), 1884(b), 1972, 3102,
3108(a), 3349, 3909, 4717; 15 U.S.C. 78 (h) and (i), 78o-4(c), 78o-5,
78q-1, 78s, 78u, 78u-2, 78u-3, and 78w; 28 U.S.C. 2461 note; 31 U.S.C.
330, 5321; 42 U.S.C.
[[Page 57]]
4012a; sec. 31001(s), Pub. L. 104-134, 110 Stat. 1321-358.
Source: 56 FR 37975, Aug. 9, 1991, unless otherwise noted.
Subpart A--Uniform Rules of Practice and Procedure
Sec. 308.1 Scope.
This subpart prescribes rules of practice and procedure applicable
to adjudicatory proceedings as to which hearings on the record are
provided for by the following statutory provisions:
(a) Cease-and-desist proceedings under section 8(b) of the Federal
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the
FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit
Insurance Corporation (``FDIC''), should issue an order to approve or
disapprove a person's proposed acquisition of an institution and/or
institution holding company;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions
upon any government securities broker or dealer or upon any person
associated or seeking to become associated with a government securities
broker or dealer for which the FDIC is the appropriate regulatory
agency;
(e) Assessment of civil money penalties by the FDIC against
institutions, institution-affiliated parties, and certain other persons
for which it is the appropriate regulatory agency for any violation of:
(1) Sections 22(h) and 23 of the Federal Reserve Act (``FRA''), or
any regulation issued thereunder, and certain unsafe or unsound
practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1828(j);
(2) Section 106(b) of the Bank Holding Company Act Amendments of
1970 (``BHCA Amendments of 1970''), and certain unsafe or unsound
practices or breaches of fiduciary duty, pursuant to 12 U.S.C.
1972(2)(F);
(3) Any provision of the Change in Bank Control Act of 1978, as
amended (the ``CBCA''), or any regulation or order issued thereunder,
and certain unsafe or unsound practices, or breaches of fiduciary duty,
pursuant to 12 U.S.C. 1817(j)(16);
(4) Section 7(a)(1) of the FDIA, pursuant to 12 U.S.C. 1817(a)(1);
(5) Any provision of the International Lending Supervision Act of
1983 (``ILSA''), or any rule, regulation or order issued thereunder,
pursuant to 12 U.S.C. 3909;
(6) Any provision of the International Banking Act of 1978
(``IBA''), or any rule, regulation or order issued thereunder, pursuant
to 12 U.S.C. 3108;
(7) Certain provisions of the Exchange Act, pursuant to section 21B
of the Exchange Act (15 U.S.C. 78u-2);
(8) Section 1120 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order or
regulation issued thereunder;
(9) The terms of any final or temporary order issued under section 8
of the FDIA or of any written agreement executed by the FDIC, the terms
of any condition imposed in writing by the FDIC in connection with the
grant of an application or request, certain unsafe or unsound practices
or breaches of fiduciary duty, or any law or regulation not otherwise
provided herein pursuant to 12 U.S.C. 1818(i)(2);
(10) Any provision of law referenced in section 102(f) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder; and
(11) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(f) Remedial action under section 102(g) 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 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.2 Rules of construction.
For purposes of this subpart:
(a) Any term in the singular includes the plural, and the plural
includes the
[[Page 58]]
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. 308.3 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.
(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) Board of Directors or Board means the Board of Directors of the
Federal Deposit Insurance Corporation or its designee.
(d) Decisional employee means any member of the Federal Deposit
Insurance Corporation'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 Board of Directors or the administrative law judge,
respectively, in preparing orders, recommended decisions, decisions, and
other documents under the Uniform Rules.
(e) Designee of the Board of Directors means officers or officials
of the Federal Deposit Insurance Corporation acting pursuant to
authority delegated by the Board of Directors as provided in 12 CFR part
303 of this chapter or by specific resolution of the Board of Directors.
(f) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the FDIC in an adjudicatory
proceeding.
(g) Executive Secretary means the Executive Secretary of the Federal
Deposit Insurance Corporation or his or her designee.
(h) FDIC means the Federal Deposit Insurance Corporation.
(i) Final order means an order issued by the FDIC 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.
(j) Institution includes:
(1) Any bank as that term is defined in section 3(a) of the FDIA (12
U.S.C. 1813(a));
(2) Any bank holding company or any subsidiary (other than a bank)
of a bank holding company as those terms are defined in the BHCA (12
U.S.C. 1841 et seq.);
(3) Any savings association as that term is defined in section 3(b)
of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company or
any subsidiary thereof (other than a bank) as those terms are defined in
section 10(a) of the HOLA (12 U.S.C. 1467(a));
(4) Any organization operating under section 25 of the FRA (12
U.S.C. 601 et seq.);
(5) Any foreign bank or company to which section 8 of the IBA (12
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; and
(6) Any federal agency as that term is defined in section 1(b) of
the IBA (12 U.S.C. 3101(5)).
(k) 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)).
(l) Local Rules means those rules promulgated by the FDIC in those
subparts of this part other than subpart A.
(m) Office of Financial Institution Adjudication (``OFIA'') means
the executive body charged with overseeing the administration of
administrative enforcement proceedings of the Office of the Comptroller
of the Currency (``OCC''), the Board of Governors of the Federal Reserve
Board (``FRB''), the FDIC, the Office of Thrift Supervision (``OTS'')
and the National Credit Union Administration (``NCUA'').
(n) Party means the FDIC and any person named as a party in any
notice.
(o) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency or other entity or organization, including
[[Page 59]]
an institution as defined in paragraph (j) of this section.
(p) Respondent means any party other than the FDIC.
(q) Uniform Rules means those rules in subpart A of this part that
pertain to the types of formal administrative enforcement actions set
forth at Sec. 308.01 and as specified in subparts B through P of this
part.
(r) 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. 308.4 Authority of Board of Directors.
The Board of Directors may, at any time during the pendency of a
proceeding, perform, direct the performance of, or waive performance of,
any act which could be done or ordered by the administrative law judge.
Sec. 308.5 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;
(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. 308.31;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the Board
of Directors shall have the power to grant any motion to dismiss the
proceeding or to decide any other motion that results in a final
determination of the merits of the proceeding;
(8) To prepare and present to the Board of Directors a recommended
decision as provided herein;
(9) To recuse himself or herself by motion made by a party or on his
or her own motion;
(10) To establish time, place and manner limitations on the
attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 308.6 Appearance and practice in adjudicatory proceedings.
(a) Appearance before the FDIC 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 FDIC
if such attorney is not currently suspended or debarred from practice
before the FDIC.
(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 FDIC.
(3) Notice of appearance. Any individual acting as counsel on behalf
of a party, including the FDIC, 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
[[Page 60]]
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 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.7 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 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. 308.8 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. 308.6(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 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
[[Page 61]]
Sec. 308.9 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 FDIC (including such person's
counsel); and
(ii) The administrative law judge handling that proceeding, the
Board of Directors, or a decisional employee.
(2) Exception. 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 FDIC until the date that the Board of Directors issues
its final decision pursuant to Sec. 308.40(c):
(1) No interested person outside the FDIC shall make or knowingly
cause to be made an ex parte communication to any member of the Board of
Directors, the administrative law judge, or a decisional employee; and
(2) No member of the Board of Directors, no administrative law
judge, or decisional employee shall make or knowingly cause to be made
to any interested person outside the FDIC any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the administrative law judge, any
member of the Board of Directors 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 that they believe to be appropriate under the
circumstances. The administrative law judge or the Board of Directors
shall then determine whether any action should be taken concerning the
ex parte communication in accordance with paragraph (d) of this section.
(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 Board of Directors 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 FDIC 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. 308.40 except as witness or counsel in public
proceedings.
[56 FR 37975, Aug. 9, 1991, as amended at 60 FR 24762, May 10, 1995]
Sec. 308.10 Filing of papers.
(a) Filing. Any papers required to be filed, excluding documents
produced in response to a discovery request pursuant to Secs. 308.25 and
308.26, shall be filed with the OFIA, except as otherwise provided.
(b) Manner of filing. Unless otherwise specified by the Board of
Directors 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 Board of Directors or the
administrative law judge. All papers filed by electronic media shall
also concurrently be filed in accordance with paragraph (c) of this
section.
[[Page 62]]
(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. 308.7.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name of the FDIC 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 Board of
Directors, 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. 308.11 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. 308.10(c).
(c) By the Board of Directors. (1) All papers required to be served
by the Board of Directors or the administrative law judge upon a party
who has appeared in the proceeding in accordance with Sec. 308.6, shall
be served by any means specified in paragraph (b) of this section.
(2) If a party has not appeared in the proceeding in accordance with
Sec. 308.6, the Board of Directors or the administrative law judge shall
make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
(iv) By registered or certified mail addressed to the party's last
known address; or
(v) By any other method reasonably calculated to give actual notice.
(d) Subpoenas. 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) In such other manner as is 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
[[Page 63]]
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 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.12 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;
(iii) In the case of transmission by electronic media, as specified
by the authority receiving the filing, in the case of filing, and as
agreed among the parties, in the case of service.
(2) The effective filing and service dates specified in paragraph
(b) (1) of this section may be modified by the Board of Directors or
administrative law judge in the case of filing or by agreement of the
parties in the case of service.
(c) Calculation of time for service and filing of responsive papers.
Whenever a time limit is measured by a prescribed 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 Board of Directors or the administrative law judge in the case of
filing, or by agreement among the parties in the case of service.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.13 Change of time limits.
Except as otherwise provided by law, the administrative law judge
may, for good cause shown, extend the time limits prescribed by the
Uniform Rules or by any notice or order issued in the proceedings. After
the referral of the case to the Board of Directors pursuant to
Sec. 308.38, the Board of Directors may grant extensions of the time
limits for good cause shown. Extensions may be granted at the motion of
a party or of the Board of Directors after notice and opportunity to
respond is afforded all non-moving parties, or on the administrative law
judge's own motion.
Sec. 308.14 Witness fees and expenses.
Witnesses subpoenaed for testimony or depositions shall be paid the
same fees for attendance and mileage as are paid in the United States
district courts in proceedings in which the United States is a party,
provided that, in the case of a discovery subpoena addressed to a party,
no witness fees or mileage need be paid. Fees for witnesses shall be
tendered in advance by the party requesting the subpoena, except that
fees and mileage need not be tendered in advance where the FDIC is the
party requesting the subpoena. The FDIC shall not be required to pay any
fees to, or expenses of, any witness not subpoenaed by the FDIC.
[[Page 64]]
Sec. 308.15 Opportunity for informal settlement.
Any respondent may, at any time in the proceeding, unilaterally
submit to Enforcement Counsel written offers or proposals for settlement
of a proceeding, without prejudice to the rights of any of the parties.
No such offer or proposal shall be made to any FDIC representative other
than Enforcement Counsel. Submission of a written settlement offer does
not provide a basis for adjourning or otherwise delaying all or any
portion of a proceeding under this part. No settlement offer or
proposal, or any subsequent negotiation or resolution, is admissible as
evidence in any proceeding.
Sec. 308.16 FDIC's right to conduct examination.
Nothing contained in this subpart limits in any manner the right of
the FDIC to conduct any examination, inspection, or visitation of any
institution or institution-affiliated party, or the right of the FDIC to
conduct or continue any form of investigation authorized by law.
Sec. 308.17 Collateral attacks on adjudicatory proceeding.
If an interlocutory appeal or collateral attack is brought in any
court concerning all or any part of an adjudicatory proceeding, the
challenged adjudicatory proceeding shall continue without regard to the
pendency of that court proceeding. No default or other failure to act as
directed in the adjudicatory proceeding within the times prescribed in
this subpart shall be excused based on the pendency before any court of
any interlocutory appeal or collateral attack.
Sec. 308.18 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 FDIC.
(ii) The notice must be served by the Executive Secretary upon the
respondent and given to any other appropriate financial institution
supervisory authority where required by law.
(iii) The notice must be filed with the OFIA.
(2) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the
FDIC.
(b) Contents of notice. The notice must set forth:
(1) The legal authority for the proceeding and for the FDIC's
jurisdiction over the proceeding;
(2) A statement of the matters of fact or law showing that the FDIC
is entitled to relief;
(3) A proposed order or prayer for an order granting the requested
relief;
(4) The time, place, and nature of the hearing as required by law or
regulation;
(5) The time within which to file an answer as required by law or
regulation;
(6) The time within which to request a hearing as required by law or
regulation; and
(7) That the answer and/or request for a hearing shall be filed with
OFIA.
Sec. 308.19 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.
[[Page 65]]
(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 Board of
Directors a recommended decision containing the findings and the relief
sought in the notice. Any final order issued by the Board of Directors
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.
Sec. 308.20 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 Board of Directors 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 continuance to
enable the objecting party to meet such evidence.
[61 FR 20348, May 6, 1996]
Sec. 308.21 Failure to appear.
Failure of a respondent to appear in person at the hearing or by a
duly authorized counsel constitutes a waiver of respondent's right to a
hearing and is deemed an admission of the facts as alleged and consent
to the relief sought in the notice. Without further proceedings or
notice to the respondent, the administrative law judge shall file with
the Board of Directors a recommended decision containing the findings
and the relief sought in the notice.
Sec. 308.22 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. 308.23 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.
[[Page 66]]
(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, except that following the filing of the recommended decision,
motions must be filed with the Executive Secretary for disposition by
the Board of Directors.
(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
Executive Secretary, 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. 308.29 and 308.30.
Sec. 308.24 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
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 subpart I 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. 308.25.
(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. 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 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
[[Page 67]]
Sec. 308.25 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 by 12 CFR part 310 implementing 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. 308.23
to strike 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 this
paragraph and Sec. 308.23 are waived.
(2) The party who served the request that is the subject of a motion
to strike or limit may file a written response within five days of
service of the motion. No other party may file a response.
(e) Privilege. 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. 308.23 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
[[Page 68]]
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 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.26 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. 308.24(d). The party obtaining the document
subpoena is responsible for serving it on the subpoenaed person and for
serving copies on all parties. Document subpoenas may be served in any
state, territory, or possession of the United States, the District of
Columbia, or as otherwise provided by law.
(3) The administrative law judge shall promptly issue any document
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon such conditions as may be consistent with the Uniform Rules.
(b) Motion to quash or modify. (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. 308.25(d), 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.
[[Page 69]]
Sec. 308.27 Deposition of witness unavailable for hearing.
(a) General rules. (1) If a witness will not be available for the
hearing, a party desiring to preserve that witness' testimony for the
record 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
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
[[Page 70]]
under paragraph (b) or (c)(3) 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. 308.28 Interlocutory review.
(a) General rule. The Board of Directors may review a ruling of the
administrative law judge prior to the certification of the record to the
Board of Directors only in accordance with the procedures set forth in
this section and Sec. 308.23.
(b) Scope of review. The Board of Directors may exercise
interlocutory review of a ruling of, the administrative law judge if the
Board of Directors 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. 308.23. Any party may
file a response to a request for interlocutory review in accordance with
Sec. 308.23(d). Upon the expiration of the time for filing all
responses, the administrative law judge shall refer the matter to the
Board of Directors for final disposition.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Board of Directors
under this section suspends or stays the proceeding unless otherwise
ordered by the administrative law judge or the Board of Directors.
Sec. 308.29 Summary disposition.
(a) In general. The administrative law judge shall recommend that
the Board of Directors 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) Filing 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
[[Page 71]]
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 Board of Directors. 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. 308.30 Partial summary disposition.
If the administrative law judge determines that a party is entitled
to summary disposition as to certain claims only, he or she shall defer
submitting a recommended decision as to those claims. A hearing on the
remaining issues must be ordered. Those claims for which the
administrative law judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 308.31 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 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 his or her
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.
Sec. 308.32 Prehearing submissions.
(a) Within the time set by the administrative law judge, but in no
case later than 14 days before the start of the hearing, each party
shall serve on every other party, his or her:
(1) Prehearing statement;
(2) Final list of witnesses to be called to testify at the hearing,
including name and address of each witness and a short summary of the
expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with
a copy of each exhibit; and
[[Page 72]]
(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. 308.33 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the FDIC, in its 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 Executive
Secretary 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 Executive
Secretary. The form of, and procedure for, these requests and replies
are governed by Sec. 308.23. 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 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.34 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 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
[[Page 73]]
enforcement of the subpoena pursuant to Sec. 308.26(c).
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.35 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 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 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.36 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
Administrative Procedure Act 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 be deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant,
material, reliable and not unduly repetitive.
(b) Official notice. (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 Board of Directors shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Documents. (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 an appropriate Federal financial
institution regulatory agency or state regulatory agency, is admissible
either with or without a sponsoring witness.
[[Page 74]]
(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 Board of Directors.
(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.
Sec. 308.37 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 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.38 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
[[Page 75]]
briefs under Sec. 308.37(b), the administrative law judge shall file
with and certify to the Executive Secretary, 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 Executive Secretary for final
determination the record of the proceeding, the administrative law judge
shall furnish to the Executive Secretary 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 20350, May 6, 1996]
Sec. 308.39 Exceptions to recommended decision.
(a) Filing exceptions. Within 30 days after service of the
recommended decision, findings, conclusions, and proposed order under
Sec. 308.38, a party may file with the Executive Secretary 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 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 Board of Directors if the
party taking exception had an opportunity to raise the same objection,
issue, or argument before the administrative law judge and failed to do
so.
(c) Contents. (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. 308.40 Review by Board of Directors.
(a) Notice of submission to Board of Directors. When the Executive
Secretary determines that the record in the proceeding is complete, the
Executive Secretary shall serve notice upon the parties that the
proceeding has been submitted to the Board of Directors for final
decision.
(b) Oral argument before the Board of Directors. Upon the initiative
of the Board of Directors or on the written request of any party filed
with the Executive Secretary within the time for filing exceptions, the
Board of Directors 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 Board of Directors' final decision. Oral argument before the
[[Page 76]]
Board of Directors must be on the record.
(c) Final decision. (1) Decisional employees may advise and assist
the Board of Directors in the consideration and disposition of the case.
The final decision of the Board of Directors will be based upon review
of the entire record of the proceeding, except that the Board of
Directors 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 Board of Directors shall render a final decision within 90
days after notification of the parties that the case has been submitted
for final decision, or 90 days after oral argument, whichever is later,
unless the Board of Directors orders that the action or any aspect
thereof be remanded to the administrative law judge for further
proceedings. Copies of the final decision and order of the Board of
Directors shall be served upon each party to the proceeding, upon other
persons required by statute, and, if directed by the Board of Directors
or required by statute, upon any appropriate state or Federal
supervisory authority.
Sec. 308.41 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision and order of the FDIC may not, unless specifically ordered by
the Board of Directors or a reviewing court, operate as a stay of any
order issued by the FDIC. The Board of Directors may, in its discretion,
and on such terms as it finds just, stay the effectiveness of all or any
part of its order pending a final decision on a petition for review of
that order.
Subpart B--General Rules of Procedure
Sec. 308.101 Scope of Local Rules.
(a) Subparts B and C of the Local Rules prescribe rules of practice
and procedure to be followed in the administrative enforcement
proceedings initiated by the FDIC as set forth in Sec. 308.01 of the
Uniform Rules.
(b) Except as otherwise specifically provided, the Uniform Rules and
subpart B of the Local Rules shall not apply to subparts D through P of
the Local Rules.
(c) Subpart C of the Local Rules shall apply to any administrative
proceeding initiated by the FDIC.
Sec. 308.102 Authority of Board of Directors and Executive Secretary.
(a) The Board of Directors. (1) The Board of Directors may, at any
time during the pendency of a proceeding, perform, direct the
performance of, or waive performance of, any act which could be done or
ordered by the Executive Secretary.
(2) Nothing contained in this part 308 shall be construed to limit
the power of the Board of Directors granted by applicable statutes or
regulations.
(b) The Executive Secretary. When no administrative law judge has
jurisdiction over a proceeding, the Executive Secretary may act in place
of, and with the same authority as, an administrative law judge, except
that the Executive Secretary may not hear a case on the merits or make a
recommended decision on the merits to the Board of Directors.
Sec. 308.103 Appointment of administrative law judge.
(a) Appointment. Unless otherwise directed by the Board of Directors
or as otherwise provided in the Local Rules, a hearing within the scope
of this part 308 shall be held before an administrative law judge of the
Office of Financial Institution Adjudication (``OFIA'').
(b) Procedures. (1) The Executive Secretary shall promptly after
issuance of the notice refer the matter to the OFIA which shall secure
the appointment of an administrative law judge to hear the proceeding.
(2) OFIA shall advise the parties, in writing, that an
administrative law judge has been appointed.
Sec. 308.104 Filings with the Board of Directors.
(a) General rule. All materials required to be filed with or
referred to the Board of Directors in any proceedings under this part
308 shall be filed with the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
[[Page 77]]
(b) Scope. Filings to be made with the Executive Secretary include
pleadings and motions filed during the proceeding; the record filed by
the administrative law judge after the issuance of a recommended
decision; the recommended decision filed by the administrative law judge
following a motion for summary disposition; referrals by the
administrative law judge of motions for interlocutory review; motions
and responses to motions filed by the parties after the record has been
certified to the Board of Directors; exceptions and requests for oral
argument; and any other papers required to be filed with the Board of
Directors under this part 308.
Sec. 308.105 Custodian of the record.
The Executive Secretary is the official custodian of the record when
no administrative law judge has jurisdiction over the proceeding. As the
official custodian, the Executive Secretary shall maintain the official
record of all papers filed in each proceeding.
Sec. 308.106 Written testimony in lieu of oral hearing.
(a) General rule. (1) At any time more than fifteen days before the
hearing is to commence, on the motion of any party or on his or her own
motion, the administrative law judge may order that the parties present
part or all of their case-in-chief and, if ordered, their rebuttal, in
the form of exhibits and written statements sworn to by the witness
offering such statements as evidence, provided that if any party
objects, the administrative law judge shall not require such a format if
that format would violate the objecting party's right under the
Administrative Procedure Act, or other applicable law, or would
otherwise unfairly prejudice that party.
(2) Any such order shall provide that each party shall, upon
request, have the same right of oral cross-examination (or redirect
examination) as would exist had the witness testified orally rather than
through a written statement. Such order shall also provide that any
party has a right to call any hostile witness or adverse party to
testify orally.
(b) Scheduling of submission of written testimony. (1) If written
direct testimony and exhibits are ordered under paragraph (a) of this
section, the administrative law judge shall require that it be filed
within the time period for commencement of the hearing, and the hearing
shall be deemed to have commenced on the day such testimony is due.
(2) Absent good cause shown, written rebuttal, if any, shall be
submitted and the oral portion of the hearing begun within 30 days of
the date set for filing written direct testimony.
(3) The administrative law judge shall direct, unless good cause
requires otherwise, that--
(i) All parties shall simultaneously file any exhibits and written
direct testimony required under paragraph (b)(1) of this section; and
(ii) All parties shall simultaneously file any exhibits and written
rebuttal required under paragraph (b)(2) of this section.
(c) Failure to comply with order to file written testimony. (1) The
failure of any party to comply with an order to file written testimony
or exhibits at the time and in the manner required under this section
shall be deemed a waiver of that party's right to present any evidence,
except testimony of a previously identified adverse party or hostile
witness. Failure to file written testimony or exhibits is, however, not
a waiver of that party's right of cross-examination or a waiver of the
right to present rebuttal evidence that was not required to be submitted
in written form.
(2) Late filings of papers under this section may be allowed and
accepted only upon good cause shown.
Sec. 308.107 Document discovery.
(a) Parties to proceedings set forth at Sec. 308.01 of the Uniform
Rules and as provided in the Local Rules may obtain discovery only
through the production of documents. No other form of discovery shall be
allowed.
(b) Any questioning at a deposition of a person producing documents
pursuant to a document subpoena shall be strictly limited to the
identification of documents produced by that person and a reasonable
examination to determine whether the subpoenaed person
[[Page 78]]
made an adequate search for, and has produced, all subpoenaed documents.
Subpart C--Rules of Practice Before the FDIC and Standards of Conduct
Sec. 308.108 Sanctions.
(a) General rule. Appropriate sanctions may be imposed when any
counsel or party has acted, or failed to act, in a manner required by
applicable statute, regulations, or order, and that act or failure to
act:
(1) Constitutes contemptuous conduct;
(2) Has in a material way injured or prejudiced some other party in
terms of substantive injury, incurring additional expenses including
attorney's fees, prejudicial delay, or otherwise;
(3) Is a clear and unexcused violation of an applicable statute,
regulation, or order; or
(4) Has unduly delayed the proceeding.
(b) Sanctions. Sanctions which may be imposed include any one or
more of the following:
(1) Issuing an order against the party;
(2) Rejecting or striking any testimony or documentary evidence
offered, or other papers filed, by the party;
(3) Precluding the party from contesting specific issues or
findings;
(4) Precluding the party from offering certain evidence or from
challenging or contesting certain evidence offered by another party;
(5) Precluding the party from making a late filing or conditioning a
late filing on any terms that are just; and
(6) Assessing reasonable expenses, including attorney's fees,
incurred by any other party as a result of the improper action or
failure to act.
(c) Limits on dismissal as a sanction. No recommendation of
dismissal shall be made by the administrative law judge or granted by
the Board of Directors based on the failure to hold a hearing within the
time period called for in this part 308, or on the failure of an
administrative law judge to render a recommended decision within the
time period called for in this part 308, absent a finding:
(1) That the delay resulted solely or principally from the conduct
of the FDIC enforcement counsel;
(2) That the conduct of the FDIC enforcement counsel is unexcused;
(3) That the moving respondent took all reasonable steps to oppose
and prevent the subject delay;
(4) That the moving respondent has been materially prejudiced or
injured; and
(5) That no lesser or different sanction is adequate.
(d) Procedure for imposition of sanctions. (1) The administrative
law judge, upon the request of any party, or on his or her own motion,
may impose sanctions in accordance with this section, provided that the
administrative law judge may only recommend to the Board of Directors
the sanction of entering a final order determining the case on the
merits.
(2) No sanction, other than refusing to accept late papers,
authorized by this section shall be imposed without prior notice to all
parties and an opportunity for any counsel or party against whom
sanctions would be imposed to be heard. Such opportunity to be heard may
be on such notice, and the response may be in such form, as the
administrative law judge directs. The opportunity to be heard may be
limited to an opportunity to respond orally immediately after the act or
inaction covered by this section is noted by the administrative law
judge.
(3) Requests for the imposition of sanctions by any party, and the
imposition of sanctions, shall be treated for interlocutory review
purposes in the same manner as any other ruling by the administrative
law judge.
(4) Section not exclusive. Nothing in this section shall be read as
precluding the administrative law judge or the Board of Directors from
taking any other action, or imposing any restriction or sanction,
authorized by applicable statute or regulation.
Sec. 308.109 Suspension and disbarment.
(a) Discretionary suspension and disbarment. (1) The Board of
Directors may suspend or revoke the privilege of any counsel to appear
or practice before the FDIC if, after notice of and opportunity for
hearing in the matter,
[[Page 79]]
that counsel is found by the Board of Directors:
(i) Not to possess the requisite qualifications to represent others;
(ii) To be seriously lacking in character or integrity or to have
engaged in material unethical or improper professional conduct;
(iii) To have engaged in, or aided and abetted, a material and
knowing violation of the FDIA; or
(iv) To have engaged in contemptuous conduct before the FDIC.
Suspension or revocation on the grounds set forth in paragraphs (a)(1)
(ii), (iii), and (iv) of this section shall only be ordered upon a
further finding that the counsel's conduct or character was sufficiently
egregious as to justify suspension or revocation.
(2) Unless otherwise ordered by the Board of Directors, an
application for reinstatement by a person suspended or disbarred under
paragraph (a)(1) of this section may be made in writing at any time more
than three years after the effective date of the suspension or
disbarment and, thereafter, at any time more than one year after the
person's most recent application for reinstatement. The suspension or
disbarment shall continue until the applicant has been reinstated by the
Board of Directors for good cause shown or until, in the case of a
suspension, the suspension period has expired. An applicant for
reinstatement under this provision may, in the Board of Directors' sole
discretion, be afforded a hearing.
(b) Mandatory suspension and disbarment. (1) Any counsel who has
been and remains suspended or disbarred by a court of the United States
or of any state, territory, district, commonwealth, or possession; or
any person who has been and remains suspended or barred from practice
before the OCC, Board of Governors, the OTS, the NCUA, the Securities
and Exchange Commission, or the Commodity Futures Trading Commission; or
any person who has been convicted of a felony, or of a misdemeanor
involving moral turpitude, within the last ten years, shall be suspended
automatically from appearing or practicing before the FDIC. A
disbarment, suspension, or conviction within the meaning of this
paragraph (b) shall be deemed to have occurred when the disbarring,
suspending, or convicting agency or tribunal enters its judgment or
order, regardless of whether an appeal is pending or could be taken, and
includes a judgment or an order on a plea of nolo contendere or on
consent, regardless of whether a violation is admitted in the consent.
(2) Any person appearing or practicing before the FDIC who is the
subject of an order, judgment, decree, or finding of the types set forth
in paragraph (b)(1) of this section shall promptly file with the
Executive Secretary a copy thereof, together with any related opinion or
statement of the agency or tribunal involved. Failure to file any such
paper shall not impair the operation of any other provision of this
section.
(3) A suspension or disbarment under paragraph (b)(1) of this
section from practice before the FDIC shall continue until the applicant
has been reinstated by the Board of Directors for good cause shown,
provided that any person suspended or disbarred under paragraph (b)(1)
of this section shall be automatically reinstated by the Executive
Secretary, upon appropriate application, if all the grounds for
suspension or disbarment under paragraph (b)(1) of this section are
subsequently removed by a reversal of the conviction (or the passage of
time since the conviction) or termination of the underlying suspension
or disbarment. An application for reinstatement on any other grounds by
any person suspended or disbarred under paragraph (b)(1) of this section
may be filed at any time not less than one year after the applicant's
most recent application. An applicant for reinstatement under this
provision may, in the Board of Directors' sole discretion, be afforded a
hearing.
(c) Hearings under this section. Hearings conducted under this
section shall be conducted in substantially the same manner as other
hearings under the Uniform Rules, provided that in proceedings to
terminate an existing FDIC suspension or disbarment order, the person
seeking the termination of the order shall bear the burden of going
forward with an application and with proof, and that the Board of
Directors may, in its sole discretion, direct that
[[Page 80]]
any proceeding to terminate an existing suspension or disbarment by the
FDIC be limited to written submissions.
(d) Summary suspension for contemptuous conduct. A finding by the
administrative law judge of contemptuous conduct during the course of
any proceeding shall be grounds for summary suspension by the
administrative law judge of a counsel or other representative from any
further participation in that proceeding for the duration of that
proceeding.
(e) Practice defined. Unless the Board of Directors orders
otherwise, for the purposes of this section, practicing before the FDIC
includes, but is not limited to, transacting any business with the FDIC
as counsel or agent for any other person and the preparation of any
statement, opinion, or other paper by a counsel, which statement,
opinion, or paper is filed with the FDIC in any registration statement,
notification, application, report, or other document, with the consent
of such counsel.
Subpart D--Rules and Procedures Applicable to Proceedings Relating to
Disapproval of Acquisition of Control
Sec. 308.110 Scope.
Except as specifically indicated in this subpart, the rules and
procedures in this subpart, subpart B of the Local Rules, and the
Uniform Rules shall apply to proceedings in connection with the
disapproval by the Board of Directors or its designee of a proposed
acquisition of control of an insured nonmember bank.
Sec. 308.111 Grounds for disapproval.
The following are grounds for disapproval of a proposed acquisition
of control of an insured nonmember bank:
(a) The proposed acquisition of control would result in a monopoly
or would be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the banking business in any part of
the United States;
(b) The effect of the proposed acquisition of control in any section
of the United States may be to substantially lessen competition or to
tend to create a monopoly or would in any other manner be in restraint
of trade, and the anticompetitive effects of the proposed acquisition of
control are not clearly outweighed in the public interest by the
probable effect of the transaction in meeting the convenience and needs
of the community to be served;
(c) The financial condition of any acquiring person might jeopardize
the financial stability of the bank or prejudice the interests of the
depositors of the bank;
(d) The competence, experience, or integrity of any acquiring person
or of any of the proposed management personnel indicates that it would
not be in the interest of the depositors of the bank, or in the interest
of the public, to permit such person to control the bank;
(e) Any acquiring person neglects, fails, or refuses to furnish to
the FDIC all the information required by the FDIC; or
(f) The FDIC determines that the proposed acquisition would result
in an adverse effect on the Bank Insurance Fund or the Savings
Association Insurance Fund.
Sec. 308.112 Notice of disapproval.
(a) General rule. (1) Within three days of the decision by the Board
of Directors or its designee to disapprove a proposed acquisition of
control of an insured nonmember bank, a written notice of disapproval
shall be mailed by first class mail to, or otherwise served upon, the
party seeking acquire control.
(2) The notice of disapproval shall:
(i) Contain a statement of the basis for the disapproval; and
(ii) Indicate that a hearing may be requested by filing a written
request with the Executive Secretary within ten days after service of
the notice of disapproval; and if a hearing is requested, that an answer
to the notice of disapproval, as required by Sec. 308.113, must be filed
within 20 days after service of the notice of disapproval.
(b) Waiver of hearing. Failure to request a hearing pursuant to this
section shall constitute a waiver of the
[[Page 81]]
opportunity for a hearing and the notice of disapproval shall constitute
a final and unappealable order.
(c) Section 308.18(b) of the Uniform Rules shall not apply to the
content of the Notice of Disapproval.
Sec. 308.113 Answer to notice of disapproval.
(a) Contents. (1) An answer to the notice of disapproval of a
proposed acquisition of control shall be filed within 20 days after
service of the notice of disapproval and shall specifically deny those
portions of the notice of disapproval which are disputed. Those portions
of the notice of disapproval which are not specifically denied are
deemed admitted by the applicant.
(2) Any hearing under this subpart shall be limited to those parts
of the notice of disapproval that are specifically denied.
(b) Failure to answer. 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
of disapproval. 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 a recommended decision containing
the findings and relief sought in the notice. A final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
Sec. 308.114 Burden of proof.
The ultimate burden of proof shall be upon the person proposing to
acquire a depository institution. The burden of going forward with a
prima facie case shall be upon the FDIC.
Subpart E--Rules and Procedures Applicable to Proceedings Relating to
Assessment of Civil Penalties for Willful Violations of the Change in
Bank Control Act
Sec. 308.115 Scope.
The rules and procedures of this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings to assess civil
penalties against any person for willful violation of the Change in Bank
Control Act of 1978 (12 U.S.C. 1817(j)), or any regulation or order
issued pursuant thereto, in connection with the affairs of an insured
nonmember bank.
Sec. 308.116 Assessment of penalties.
(a) In general. The civil money penalty shall be assessed upon the
service of a Notice of Assessment which shall become final and
unappealable unless the respondent requests a hearing pursuant to
Sec. 308.19(c)(2).
(b) Amount. (1) Any person who violates any provision of the Change
in Bank Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto, shall forfeit and pay a civil money penalty of not
more than $5,000 for each day the violation continues.
(2) Any person who violates any provision of the Change in Bank
Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto; or recklessly engages in any unsafe or unsound
practice in conducting the affairs of a depository institution; or
breaches any fiduciary duty; which violation, practice or breach is part
of a pattern of misconduct; or causes or is likely to cause more than a
minimal loss to such institution; or results in pecuniary gain or other
benefit to such person, shall forfeit and pay a civil money penalty of
not more than $25,000 for each day such violation, practice or breach
continues.
(3) Any person who knowingly violates any provision of the Change in
[[Page 82]]
Bank Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto; or engages in any unsafe or unsound practice in
conducting the affairs of a depository institution; or breaches any
fiduciary duty; and knowingly or recklessly causes a substantial loss to
such institution or a substantial pecuniary gain or other benefit to
such institution or a substantial pecuniary gain or other benefit to
such person by reason of such violation, practice or breach, shall
forfeit and pay a civil money penalty not to exceed:
(i) In the case of a person other than a depository institution--
$1,000,000 per day for each day the violation, practice or breach
continues; or
(ii) In the case of a depository institution--an amount not to
exceed the lesser of $1,000,000 or one percent of the total assets of
such institution for each day the violation, practice or breach
continues.
(4) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Improvement Act.
After November 12, 1996:
(i) Any person who engages in a violation as set forth in paragraph
(b)(1) of this section shall forfeit and pay a civil money penalty of
not more than $5,500 for each day the violation continues.
(ii) Any person who engages in a violation, unsafe or unsound
practice or breach of fiduciary duty, as set forth in paragraph (b)(2)
of this section, shall forfeit and pay a civil money penalty of not more
than $27,500 for each day such violation, practice or breach continues.
(iii) Any person who knowingly engages in a violation, unsafe or
unsound practice or breach of fiduciary duty, as set forth in paragraph
(b)(3) of this section, shall forfeit and pay a civil money penalty not
to exceed:
(A) In the case of a person other than a depository institution--
$1,100,000 per day for each day the violation, practice or breach
continues; or
(B) In the case of a depository institution--an amount not to exceed
the lesser of $1,100,000 or one percent of the total assets of such
institution for each day the violation, practice or breach continues.
(c) Mitigating factors. In assessing the amount of the penalty, the
Board of Directors or its designee shall consider the gravity of the
violation, the history of previous violations, respondent's financial
resources, good faith, and any other matters as justice may require.
(d) 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
of disapproval. 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 a recommended decision containing
the findings and relief sought in the notice. A final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57990, Nov. 12, 1996]
Sec. 308.117 Effective date of, and payment under, an order to pay.
If the respondent both requests a hearing and serves an answer,
civil penalties assessed pursuant to this subpart are due and payable 60
days after an order to pay, issued after the hearing or upon default, is
served upon the respondent, unless the order provides for a different
period of payment. Civil penalties assessed pursuant to an order to pay
issued upon consent are due and payable within the time specified
therein.
Sec. 308.118 Collection of penalties.
The FDIC may collect any civil penalty assessed pursuant to this
subpart by agreement with the respondent, or the FDIC may bring an
action against the respondent to recover the penalty amount in the
appropriate United States district court. All penalties collected under
this section shall be paid over to the Treasury of the United States.
[[Page 83]]
Subpart F--Rules and Procedures Applicable to Proceedings for
Involuntary Termination of Insured Status
Sec. 308.119 Scope.
(a) Involuntary termination of insurance pursuant to section 8(a) of
the FDIA. The rules and procedures in this subpart, subpart B of the
Local Rules and the Uniform Rules shall apply to proceedings in
connection with the involuntary termination of the insured status of an
insured bank depository institution or an insured branch of a foreign
bank pursuant to section 8(a) of the FDIA (12 U.S.C. 1818(a)), except
that the Uniform Rules and subpart B of the Local Rules shall not apply
to the temporary suspension of insurance pursuant to section 8(a)(8) of
the FDIA (12 U.S.C. 1818(a)(8)).
(b) Involuntary termination of insurance pursuant to section 8(p) of
the Act. The rules and procedures in Sec. 308.124 of this subpart F
shall apply to proceedings in connection with the involuntary
termination of the insured status of an insured depository institution
or an insured branch of a foreign bank pursuant to section 8(p) of the
FDIA (12 U.S.C. 1818(p)). The Uniform Rules shall not apply to
proceedings under section 8(p) of the FDIA.
Sec. 308.120 Grounds for termination of insurance.
(a) General rule. The following are grounds for involuntary
termination of insurance pursuant to section 8(a) of the FDIA:
(1) An insured depository institution or its directors or trustees
have engaged or are engaging in unsafe or unsound practices in
conducting the business of such depository institution;
(2) An insured depository institution is in an unsafe or unsound
condition such that it should not continue operations as an insured
depository institution; or
(3) An insured depository institution or its directors or trustees
have violated an applicable law, rule, regulation, order, condition
imposed in writing by the FDIC in connection with the granting of any
application or other request by the insured depository institution or
have violated any written agreement entered into between the insured
depository institution and the FDIC.
(b) Extraterritorial acts of foreign banks. An act or practice
committed outside the United States by a foreign bank or its directors
or trustees which would otherwise be a ground for termination of insured
status under this section shall be a ground for termination if the Board
of Directors finds:
(1) The act or practice has been, is, or is likely to be a cause of,
or carried on in connection with or in furtherance of, an act or
practice committed within any state, territory, or possession of the
United States or the District of Columbia that, in and of itself, would
be an appropriate basis for action by the FDIC; or
(2) The act or practice committed outside the United States, if
proven, would adversely affect the insurance risk of the FDIC.
(c) Failure of foreign bank to secure removal of personnel. The
failure of a foreign bank to comply with any order of removal or
prohibition issued by the Board of Directors or the failure of any
person associated with a foreign bank to appear promptly as a party to a
proceeding pursuant to section 8(e) of the FDIA (12 U.S.C. 1818(e)),
shall be a ground for termination of insurance of deposits in any branch
of the bank.
Sec. 308.121 Notification to primary regulator.
(a) Service of notification. (1) Upon a determination by the Board
of Directors or its designee pursuant to Sec. 308.120 of an unsafe or
unsound practice or condition or of a violation, a notification shall be
served upon the appropriate Federal banking agency of the insured
depository institution, or the State banking supervisor if the FDIC is
the appropriate Federal banking agency.
The notification shall be served not less than 30 days before the Notice
of Intent to Terminate Insured Status required by section 8(a)(2)(B) of
the FDIA (12 U.S.C. 1818(a)(2)(B)), and Sec. 308.122, except that this
period for notification may be reduced or eliminated with the agreement
of the appropriate Federal banking agency.
[[Page 84]]
(2) Appropriate Federal banking agency shall have the meaning given
that term in section 3(q) of the FDIA (12 U.S.C. 1813(q)), and shall be
the OCC in the case of a national bank, a District bank or an insured
Federal branch of a foreign bank; the FDIC in the case of an insured
nonmember bank, including an insured State branch of a foreign bank; the
Board of Governors in the case of a state member bank; or the OTS in the
case of an insured Federal or state savings association.
(3) In the case of a state nonmember bank, insured Federal branch of
a foreign bank, or state member bank, in addition to service of the
notification upon the appropriate Federal banking agency, a copy of the
notification shall be sent to the appropriate State banking supervisor.
(4) In instances in which a Temporary Order Suspending Insurance is
issued pursuant to section 8(a)(8) of the FDIA (12 U.S.C. 1818(a)(8)),
the notification may be served concurrently with such order.
(b) Contents of notification. The notification shall contain the
FDIC's determination, and the facts and circumstances upon which such
determination is based, for the purpose of securing correction of such
practice, condition, or violation.
Sec. 308.122 Notice of intent to terminate.
(a) If, after serving the notification under Sec. 308.121, the Board
of Directors determines that any unsafe or unsound practices, condition,
or violation, specified in the notification, requires the termination of
the insured status of the insured depository institution, the Board of
Directors or its designee, if it determines to proceed further, shall
cause to be served upon the insured depository institution a notice of
its intention to terminate insured status not less than 30 days after
service of the notification, unless a shorter time period has been
agreed upon by the appropriate Federal banking agency.
(b) The Board of Directors or its designee shall cause a copy of the
notice to be sent to the appropriate Federal banking agency and to the
appropriate state banking supervisor, if any.
Sec. 308.123 Notice to depositors.
If the Board of Directors enters an order terminating the insured
status of an insured depository institution or branch, the insured
depository institution shall, on the day that order becomes final, or on
such other day as that order prescribes, mail a notification of
termination of insured status to each depositor at the depositor's last
address of record on the books of the insured depository institution or
branch. The insured depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)__________.
1. The status of the __________, as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will terminate as of the close of business on the
________ day of____________, 19____.
2. Any deposits made by you after that date, either new deposits or
additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on the
________ day of____________, 19____, will continue to be insured, as
provided by Federal Deposit Insurance Act, for 2 years after the close
of business on the ________ day of ____________, 19____. Provided,
however, that any withdrawals after the close of business on the
________ day of ____________, 19____, will reduce the insurance coverage
by the amount of such withdrawals.
_______________________________________________________________________
(Name of (depository institution or branch)
_______________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.124 Involuntary termination of insured status for failure to receive deposits.
(a) Notice to show cause. When the Board of Directors or its
designee has evidence that an insured depository institution is not
engaged in the business
[[Page 85]]
of receiving deposits, other than trust funds, the Board of Directors or
its designee shall give written notice of this evidence to the
depository institution and shall direct the depository institution to
show cause why its insured status should not be terminated under the
provisions of section 8(p) of the FDIA (12 U.S.C. 1818(p)). The insured
depository institution shall have 30 days after receipt of the notice,
or such longer period as is prescribed in the notice, to submit
affidavits, other written proof, and any legal arguments that it is
engaged in the business of receiving deposits other than trust funds.
(b) Notice of termination date. If, upon consideration of the
affidavits, other written proof, and legal arguments, the Board of
Directors determines that the depository institution is not engaged in
the business of receiving deposits, other than trust funds, the finding
shall be conclusive and the Board of Directors shall notify the
depository institution that its insured status will terminate at the
expiration of the first full semiannual assessment period following
issuance of that notification.
(c) Notification to depositors of termination of insured status.
Within the time specified by the Board of Directors and prior to the
date of termination of its insured status, the depository institution
shall mail a notification of termination of insured status to each
depositor at the depositor's last address of record on the books of the
depository institution. The depository institution shall also publish
the notification in two issues of a local newspaper of general
circulation and shall furnish the FDIC with proof of such publications.
The notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)__________.
The status of the __________, as an (insured depository institution)
(insured branch) under the Federal Deposit Insurance Act, will terminate
on the ________ day of____________, 19____, and its deposits will
thereupon cease to be insured.
_______________________________________________________________________
(Name of depository institution or branch)
_______________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.125 Temporary suspension of deposit insurance.
(a) If, while an action is pending under section 8(a)(2) of the FDIA
(12 U.S.C. 1818(a)(2)), the Board of Directors, after consultation with
the appropriate Federal banking agency, finds that an insured depository
institution (other than a special supervisory association to which
Sec. 308.126 of this subpart applies) has no tangible capital under the
capital guidelines or regulations of the appropriate Federal banking
agency, the Board of Directors may issue a Temporary Order Suspending
Deposit Insurance, pending completion of the proceedings under section
8(a)(2) of the FDIA (12 U.S.C. 1818(a)(2)).
(b) The temporary order shall be served upon the insured institution
and a copy sent to the appropriate Federal banking agency and to the
appropriate State banking supervisor.
(c) The temporary order shall become effective ten days from the
date of service upon the insured depository institution. Unless set
aside, limited, or suspended in proceedings under section 8(a)(8)(D) of
the FDIA (12 U.S.C. 1818 (a)(8)(D)), the temporary order shall remain
effective and enforceable until an order terminating the insured status
of the institution is entered by the Board of Directors and becomes
final, or the Board of Directors dismisses the proceedings.
(d) Notification to depositors of suspension of insured status.
Within the time specified by the Board of Directors and prior to the
suspension of insured status, the depository institution shall mail a
notification of suspension of insured status to each depositor at the
depositor's last address of record on the books of the depository
institution. The depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with
[[Page 86]]
proof of such publications. The notification to depositors shall include
information provided in substantially the following form:
Notice
(Date)____________.
1. The status of the __________, as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will be suspended as of the close of business on
the ________ day of ____________, 19____, pending the completion of
administrative proceedings under section 8(a) of the Federal Deposit
Insurance Act.
2. Any deposits made by you after that date, either new deposits or
additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on the
________ day of ____________, 19____, will continue to be insured for
____________ after the close of business on the__________ day of
__________, 19____. Provided, however, that any withdrawals after the
close of business on the ________ day of____________, 19____, will
reduce the insurance coverage by the amount of such withdrawals.
_______________________________________________________________________
(Name of depository institution or branch)
_______________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.126 Special supervisory associations.
If the Board of Directors finds that a savings association is a
special supervisory association under the provisions of section
8(a)(8)(B) of the FDIA (12 U.S.C. 1818(a)(8)(B)) for purposes of
temporary suspension of insured status, the Board of Directors shall
serve upon the association its findings with regard to the determination
that the capital of the association, as computed using applicable
accounting standards, has suffered a material decline; that such
association or its directors or officers, is engaging in an unsafe or
unsound practice in conducting the business of the association; that
such association is in an unsafe or unsound condition to continue
operating as an insured association; or that such association or its
directors or officers, has violated any law, rule, regulation, order,
condition imposed in writing by any Federal banking agency, or any
written agreement, or that the association failed to enter into a
capital improvement plan acceptable to the Corporation prior to January,
1990.
Subpart G--Rules and Procedures Applicable to Proceedings Relating to
Cease-and-Desist Orders
Sec. 308.127 Scope.
(a) Cease-and-desist proceedings under section 8 of the FDIA. The
rules and procedures of this subpart, subpart B of the Local Rules and
the Uniform Rules shall apply to proceedings to order an insured
nonmember bank or an institution-affiliated party to cease and desist
from practices and violations described in section 8(b) of the FDIA, 12
U.S.C. 1818(b); provided that the provisions of the Uniform Rules and
subpart B of the Local Rules shall not apply to the issuance of
temporary cease-and-desist orders pursuant to section 8(c) of the FDIA
(12 U.S.C. 1818(c)).
(b) Proceedings under the Securities Exchange Act of 1934. (1) The
rules and procedures of this subpart, subpart B of the Local Rules and
the Uniform Rules shall apply to proceedings by the Board of Directors
to order a municipal securities dealer to cease and desist from any
violation of law or regulation specified in section 15B(c)(5) of the
Securities Exchange Act, as amended (15 U.S.C. 78o-4(c)(5)) where the
municipal securities dealer is an insured nonmember bank or a subsidiary
thereof.
(2) The rules and procedures of this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings by the Board of
Directors to order a clearing agency or transfer agent to cease and
desist from failure to comply with the applicable provisions of section
17, 17A and 19 of the Securities Exchange Act of 1934, as amended (15
U.S.C. 78q, 78q-l, 78s), and the applicable rules and regulations
thereunder, where the clearing agency or transfer agent is an insured
nonmember bank or a subsidiary thereof.
[[Page 87]]
Sec. 308.128 Grounds for cease-and-desist orders.
(a) General rule. The Board of Directors or its designee may issue
and have served upon any insured nonmember bank or an institution-
affiliated party a notice, as set forth in Sec. 308.18 of the Uniform
Rules for practices and violations as described in Sec. 308.127.
(b) Extraterritorial acts of foreign banks. An act, violation or
practice committed outside the United States by a foreign bank or an
institution-affiliated party that would otherwise be a ground for
issuing a cease-and-desist order under paragraph (a) of this section or
a temporary cease-and-desist order under Sec. 308.131 of this subpart,
shall be a ground for an order if the Board of Directors or its designee
finds that:
(1) The act, violation or practice has been, is, or is likely to be
a cause of, or carried on in connection with or in furtherance of, an
act, violation or practice committed within any state, territory, or
possession of the United States or the District of Columbia which act,
violation or practice, in and of itself, would be an appropriate basis
for action by the FDIC; or
(2) The act, violation or practice, if proven, would adversely
affect the insurance risk of the FDIC.
Sec. 308.129 Notice to state supervisory authority.
The Board of Directors or its designee shall give the appropriate
state supervisory authority notification of its intent to institute a
proceeding pursuant to subpart G of this part, and the grounds thereof.
Any proceedings shall be conducted according to subpart G of this part,
unless, within the time period specified in such notification, the state
supervisory authority has effected satisfactory corrective action. No
insured institution or other party who is the subject of any notice or
order issued by the FDIC under this section shall have standing to raise
the requirements of this subpart as grounds for attacking the validity
of any such notice or order.
Sec. 308.130 Effective date of order and service on bank.
(a) Effective date. A cease-and-desist order issued by the Board of
Directors after a hearing, and a cease-and-desist order issued based
upon a default, shall become effective at the expiration of 30 days
after the service of the order upon the bank or its official. A cease-
and-desist order issued upon consent shall become effective at the time
specified therein. All cease-and-desist orders shall remain effective
and enforceable, except to the extent they are stayed, modified,
terminated, or set aside by the Board of Directors or its designee or by
a reviewing court.
(b) Service on banks. In cases where the bank is not the respondent,
the cease-and-desist order shall also be served upon the bank.
Sec. 308.131 Temporary cease-and-desist order.
(a) Issuance. (1) When the Board of Directors or its designee
determines that the violation, or the unsafe or unsound practice, as
specified in the notice, or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the bank,
or is likely to weaken the condition of the bank or otherwise prejudice
the interests of its depositors prior to the completion of the
proceedings under section 8(b) of the FDIA (12 U.S.C. 1818(b)) and
Sec. 308.128 of this subpart, the Board of Directors or its designee may
issue a temporary order requiring the bank or an institution-affiliated
party to immediately cease and desist from any such violation, practice
or to take affirmative action to prevent such insolvency, dissipation,
condition or prejudice pending completion of the proceedings under
section 8(b) of the FDIA (12 U.S.C. 1818(b)).
(2) When the Board of Directors or its designee issues a Notice of
charges pursuant to 12 U.S.C. 1818(b)(1) which specifies on the basis of
particular facts and circumstances that a bank's books and records are
so incomplete or inaccurate that the FDIC is unable, through the normal
supervisory process, to determine the financial condition of the bank or
the details or purpose of any transaction or transactions that may have
a material effect on the
[[Page 88]]
financial condition of the bank, then the Board of Directors or its
designee may issue a temporary order requiring:
(i) The cessation of any activity or practice which gave rise,
whether in whole or in part, to the incomplete or inaccurate state of
the books or records; or
(ii) Affirmative action to restore such books or records to a
complete and accurate state, until the completion of the proceedings
under section 8(b) of the FDIA (12 U.S.C. 1818(b)).
(3) The temporary order shall be served upon the bank or the
institution-affiliated party named therein and shall also be served upon
the bank in the case where the temporary order applies only to an
institution-affiliated party.
(b) Effective date. A temporary order shall become effective when
served upon the bank or the institution-affiliated party. Unless the
temporary order is set aside, limited, or suspended by a court in
proceedings authorized under section 8(c)(2) of the FDIA (12 U.S.C.
1818(c)(2)), the temporary order shall remain effective and enforceable
pending completion of administrative proceedings pursuant to section
8(b) of the FDIA (12 U.S.C. 1818(b)) and entry of an order which has
become final, or with respect to paragraph (a)(2) of this section the
FDIC determines by examination or otherwise that the bank's books and
records are accurate and reflect the financial condition of the bank.
(c) Uniform Rules do not apply. The Uniform Rules and subpart B of
the Local Rules shall not apply to the issuance of temporary orders
under this section.
Subpart H--Rules and Procedures Applicable to Proceedings Relating to
Assessment and Collection of Civil Money Penalties for Violation of
Cease-and-Desist Orders and of Certain Federal Statutes, Including Call
Report Penalties
Sec. 308.132 Assessment of penalties.
(a) Scope. The rules and procedures of this subpart, subpart B of
the Local Rules, and the Uniform Rules shall apply to proceedings to
assess and collect civil money penalties, including civil money
penalties for violation of section 7(a) of the FDIA (12 U.S.C. 1817(a)).
(b) Relevant considerations. In determining the amount of the civil
penalty to be assessed, the Board of Directors or its designee shall
consider the financial resources and good faith of the bank or official,
the gravity of the violation, the history of previous violations, and
any such other matters as justice may require.
(c) Amount. (1) The Board of Directors or its designee may assess
civil money penalties pursuant to section 8(i) of the FDIA (12 U.S.C.
1818(i)), and Sec. 308.01(e)(1) of the Uniform Rules.
(2) The Board of Directors or its designee may assess civil money
penalties pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) as
follows:
(i) Late filing--Tier One penalties. In cases in which a bank fails
to make or publish its Report of Condition and Income (Call Report)
within the appropriate time periods, a civil money penalty of not more
than $2,000 per day may be assessed where the bank maintains procedures
in place reasonably adapted to avoid inadvertent error and the late
filing occurred unintentionally and as a result of such error; or the
bank inadvertently transmitted a Call Report which is minimally late.
(A) First offense. Generally, in such cases, the amount assessed
shall be $300 per day for each of the first 15 days for which the
failure continues, and $600 per day for each subsequent day the failure
continues, beginning on the sixteenth day. For banks with less than
$25,000,000 in assets, the amount assessed shall be the greater of $100
per day or \1/1000\th of the bank's total assets (\1/10\th of a basis
point) for each of the first 15 days for which the failure continues,
and $200 or \1/500\th of the bank's total assets, \1/5\ of a basis
point) for each subsequent day the failure continues, beginning on the
sixteenth day.
(B) Second offense. Where the bank has been delinquent in making or
publishing its Call Report within the preceding five quarters, the
amount assessed for the most current failure shall generally be $500 per
day for each of the first 15 days for which the failure continues, and
$1,000 per day for each
[[Page 89]]
subsequent day the failure continues, beginning on the sixteenth day.
For banks with less than $25,000,000 in assets, those amounts,
respectively, shall be \1/500\th of the bank's total assets and \1/
250\th of the bank's total assets.
(C) Mitigating factors. The amounts set forth in paragraph
(c)(2)(i)(A) of this section may be reduced based upon the factors set
forth in paragraph (b) of this section.
(D) Lengthy or repeated violations. The amounts set forth in this
paragraph (c)(2)(i) will be assessed on a case-by-case basis where the
amount of time of the bank's delinquency is lengthy or the bank has been
delinquent repeatedly in making or publishing its Call Reports.
(E) Waiver. Absent extraordinary circumstances outside the control
of the bank, penalties assessed for late filing shall not be waived.
(ii) Late filing--Tier Two penalties. Where a bank fails to make or
publish its Call Report within the appropriate time period, the Board of
Directors or its designee may assess a civil money penalty of not more
than $20,000 per day for each day the failure continues. Pursuant to the
Debt Collection Improvement Act of 1996, for violations which occur
after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the failure continues.
(iii) False or misleading reports or information--(A) Tier One
penalties. In cases in which a bank submits or publishes any false or
misleading Call Report or information, the Board of Directors or its
designee may assess a civil money penalty of not more than $2,000 per
day for each day the information is not corrected, where the bank
maintains procedures in place reasonably adapted to avoid inadvertent
error and the violation occurred unintentionally and as a result of such
error; or the bank inadvertently transmits a Call Report or information
which is false or misleading.
(B) Tier Two penalties. Where a bank submits or publishes any false
or misleading Call Report or other information, the Board of Directors
or its designee may assess a civil money penalty of not more than
$20,000 per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the information is not
corrected.
(C) Tier Three penalties. Where a bank knowingly or with reckless
disregard for the accuracy of any Call Report or information submits or
publishes any false or misleading Call Report or other information, the
Board of Directors or its designee may assess a civil money penalty of
not more than the lesser of $1,000,000 or 1 percent of the bank's total
assets per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Three penalty amount
will increase to the lesser of $1,100,000 per day or 1 percent of the
bank's total assets per day for each day the information is not
corrected.
(D) Mitigating factors. The amounts set forth in this paragraph
(c)(2) may be reduced based upon the factors set forth in paragraph (b)
of this section.
(3) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Act. Pursuant to
section 31001(s) of the Debt Collection Act, for violations which occur
after November 12, 1996, the Board of Directors or its designee may
assess civil money penalties in the maximum amounts as follows:
(i) Civil money penalties assessed pursuant to section 8(i)(2) of
the FDIA. Tier One civil money penalties may be assessed pursuant to
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount
not to exceed $5,500 for each day during which the violation continues.
Tier Two civil money penalties may be assessed pursuant to section
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to
exceed $27,500 for each day during which the violation, practice or
breach continues. Tier Three civil money penalties may be assessed
pursuant to section 8(i)(2)(C)(12 U.S.C. 1818(i)(2)(C)) in an amount not
to exceed, in the case of any person other than an insured depository
institution $1,100,000 or, in the
[[Page 90]]
case of any insured depository institution, an amount not to exceed the
lesser of $1,100,000 or 1 percent of the total assets of such
institution for each day during which the violation, practice, or breach
continues.
(A) Civil money penalties may be assessed pursuant to section
8(i)(2) of the FDIA in the amounts set forth in this paragraph (c)(3)(i)
for violations of various consumer laws, including, the Home Mortgage
Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited
Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings
Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act
(12 U.S.C. 2601 et seq. and 12 CFR part 3500), the Truth in Lending Act
(15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681
et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) the
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and the Fair
Housing Act (42 U.S.C. 3601 et seq.) in the amounts set forth in
paragraphs (c)(3)(i) through (c)(3)(iii) of this section.
(ii) Civil money penalties assessed pursuant to section 7(c) of the
FDIA for late filing or the submission false or misleading certified
statements. Tier One civil money penalties may be assessed pursuant to
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount
not to exceed $2,000 for each day during which the failure to file
continues or the false or misleading information is not corrected. Tier
Two civil money penalties may be assessed pursuant to section 7(c)(4)(B)
of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to exceed $22,000
for each day during which the failure to file continues or the false or
misleading information is not corrected. Tier Three civil money
penalties may be assessed pursuant to section 7(c)(4)(C) in an amount
not to exceed the lesser of $1,100,000 or 1 percent of the total assets
of the institution for each day during which the failure to file
continues or the false or misleading information is not corrected.
(iii) Civil money penalties assessed pursuant to section 10(e)(4) of
the FDIA for refusal to allow examination or to provide required
information during an examination. Pursuant to section 10(e)(4) of the
FDIA (12 U.S.C. 1820(e)(4)), civil money penalties may be assessed
against any affiliate of an insured depository institution which refuses
to permit a duly-appointed examiner to conduct an examination or to
provide information during the course of an examination as set forth in
section 20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount not to
exceed $5,500 for each day the refusal continues.
(iv) Civil money penalties assessed pursuant to section 18(a)(3) of
the FDIA for incorrect display of insurance logo. Pursuant to section
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may
be assessed against an insured depository institution which fails to
correctly display its insurance logo pursuant to that section, in an
amount not to exceed $110 for each day the violation continues.
(v) Civil money penalties assessed pursuant to section 18(h) of the
FDIA for failure to file a certified statement or to pay assessment.
Pursuant to section 18(h) of the FDIA (12 U.S.C. 1828(h)), a civil money
penalty may be assessed against an insured depository institution which
wilfully fails or refuses to file a certified statement or pay any
assessment required under the FDIA in an amount not to exceed $110 for
each day the violation continues.
(vi) Civil money penalties assessed pursuant to section 19b(j) of
the FDIA for recordkeeping violations. Pursuant to section 19b(j) of the
FDIA (12 U.S.C. 1829b(j)), civil money penalties may be assessed against
an insured depository institution and any director, officer or employee
thereof who wilfully or through gross negligence violates or causes a
violation of the recordkeeping requirements of that section or its
implementing regulations in an amount not to exceed $11,000 per
violation.
(vii) Civil fine pursuant to 12 U.S.C. 1832(c) for violation of
provisions forbidding interest-bearing demand deposit accounts. Pursuant
to 12 U.S.C. 1832(c), any depository institution which violates the
prohibition on deposit or withdrawal from interest-bearing accounts via
negotiable or transferable instruments payable to third parties shall be
subject to a fine of $1,100 per violation.
[[Page 91]]
(viii) Civil penalties for violations of security measure
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an
institution which violates a rule establishing minimum security
requirements as set forth in 12 U.S.C. 1882, shall be subject to a civil
penalty not to exceed $110 for each day of the violation.
(ix) Civil money penalties assessed pursuant to the Bank Holding
Company Act of 1970 for prohibited tying arrangements. Pursuant to the
Bank Holding Company Act of 1970, Tier One civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed
$5,500 for each day during which the violation continues. Tier Two civil
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(ii) in
an amount not to exceed $27,500 for each day during which the violation,
practice or breach continues. Tier Three civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) in an amount not to
exceed, in the case of any person other than an insured depository
institution $1,100,000 for each day during which the violation,
practice, or breach continues or, in the case of any insured depository
institution, an amount not to exceed the lesser of $1,100,000 or 1
percent of the total assets of such institution for each day during
which the violation, practice, or breach continues.
(x) Civil money penalties assessed pursuant to the International
Banking Act of 1978. Pursuant to the International Banking Act of 1978
(IBA) (12 U.S.C. 3108(b)), civil money penalties may be assessed for
failure to comply with the requirements of the IBA pursuant to section
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in
paragraph (c)(3)(i) of this section.
(xi) Civil money penalties assessed for appraisal violations.
Pursuant to 12 U.S.C. 3349(b), where a financial institution seeks,
obtains, or gives any other thing of value in exchange for the
performance of an appraisal by a person that the institution knows is
not a state certified or licensed appraiser in connection with a
federally related transaction, a civil money penalty may be assessed
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the
amounts set forth in paragraph (c)(3)(i) of this section.
(xii) Civil money penalties assessed pursuant to International
Lending Supervision Act. Pursuant to the International Lending
Supervision Act (ILSA) (12 U.S.C. 3909(d)), the CMP that may be assessed
against any banking institution or any officer, director, employee,
agent or other person participating in the conduct of the affairs of
such banking institution is amount not to exceed $1,100 for each day a
violation of the ILSA or any rule, regulation or order issued pursuant
to ILSA continues.
(xiii) Civil money penalties assessed for violations of the
Community Development Banking and Financial Institution Act. Pursuant to
the Community Development Banking and Financial Institution Act
(Community Development Banking Act) (12 U.S.C. 4717(b)) a civil money
penalty may be assessed for violations of the Community Development
Banking Act pursuant to section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)), in the amounts set forth in paragraph (c)(3)(i) of this
section.
(xiv) Civil money penalties assessed for violations of the
Securities Exchange Act of 1934. Pursuant to section 21B of the
Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78u-2), civil
money penalties may be assessed for violations of certain provisions of
the Exchange Act, where such penalties are in the public interest. Tier
One civil money penalties may be assessed pursuant to 15 U.S.C. 78u-
2(b)(1) in an amount not to exceed $5,500 for a natural person or
$55,000 for any other person for violations set forth in 15 U.S.C. 78u-
2(a). Tier Two civil money penalties may be assessed pursuant to 15
U.S.C. 78u-2(b)(2) in an amount not to exceed--for each violation set
forth in 15 U.S.C. 78u-2(a)--$55,000 for a natural person or $275,000
for any other person if the act or omission involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a regulatory
requirement. Tier Three civil money penalties may be assessed pursuant
to 15 U.S.C. 78u-2(b)(3) for each violation set forth in 15 U.S.C. 78u-
2(a), in an amount not to exceed $110,000 for a natural person or
$550,000 for any other person, if the act or omission involved
[[Page 92]]
fraud, deceit, manipulation, or deliberate or reckless disregard of a
regulatory requirement; and such act or omission directly or indirectly
resulted in substantial losses, or created a significant risk of
substantial losses to other persons or resulted in substantial pecuniary
gain to the person who committed the act or omission.
(xv) Civil money penalties assessed for false claims and statements
pursuant to the Program Fraud Civil Remedies Act. Pursuant to the
Program Fraud Civil Remedies Act (31 U.S.C. 3802), civil money penalties
of not more than $5,500 per day may be assessed for violations involving
false claims and statements.
(xvi) Civil money penalties assessed for violations of the Flood
Disaster Protection Act. Pursuant to the Flood Disaster Protection Act
(FDPA)(42 U.S.C. 4012a(f)), civil money penalties may be assessed
against any regulated lending institution that engages in a pattern or
practice of violations of the FDPA in an amount not to exceed $350 per
violation, and not to exceed a total of $105,000 annually.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57991, Nov. 12, 1996]
Sec. 308.133 Effective date of, and payment under, an order to pay.
(a) Effective date. (1) Unless otherwise provided in the Notice,
except in situations covered by paragraph (a)(2) of this section, civil
penalties assessed pursuant to this subpart are due and payable 60 days
after the Notice is served upon the respondent.
(2) If the respondent both requests a hearing and serves an answer,
civil penalties assessed pursuant to this subpart are due and payable 60
days after an order to pay, issued after the hearing or upon default, is
served upon the respondent, unless the order provides for a different
period of payment. Civil penalties assessed pursuant to an order to pay
issued upon consent are due and payable within the time specified
therein.
(b) Payment. All penalties collected under this section shall be
paid over to the Treasury of the United States.
Subpart I--Rules and Procedures for Imposition of Sanctions Upon
Municipal Securities Dealers or Persons Associated With Them and
Clearing Agencies or Transfer Agents
Sec. 308.134 Scope.
The rules and procedures in this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings by the Board of
Directors or its designee:
(a) To censure, limit the activities of, suspend, or revoke the
registration of, any municipal securities dealer for which the FDIC is
the appropriate regulatory agency;
(b) To censure, suspend, or bar from being associated with such a
municipal securities dealer, any person associated with such a municipal
securities dealer; and
(c) To deny registration, to censure limit the activities of,
suspend, or revoke the registration of, any transfer agent or clearing
agency for which the FDIC is the appropriate regulatory agency. This
subpart and the Uniform Rules shall not apply to proceedings to postpone
or suspend registration of a transfer agent or clearing agency pending
final determination of denial or revocation of registration.
Sec. 308.135 Grounds for imposition of sanctions.
(a) Action under section 15(b)(4) of the Exchange Act. The Board of
Directors or its designee may issue and have served upon any municipal
securities dealer for which the FDIC is the appropriate regulatory
agency, or any person associated or seeking to become associated with a
municipal securities dealer for which the FDIC is the appropriate
regulatory agency, a written notice of its intention to censure, limit
the activities or functions or operations of, suspend, or revoke the
registration of, such municipal securities dealer, or to censure,
suspend, or bar the person from being associated with the municipal
securities dealer, when the Board of Directors or its designee
determines:
(1) That such municipal securities dealer or such person
[[Page 93]]
(i) Has committed any prohibited act or omitted any required act
specified in subparagraph (A), (D), or (E) of section 15(b)(4) of the
Exchange Act, as amended (15 U.S.C. 78o);
(ii) Has been convicted of any offense specified in section
15(b)(4)(B) of the Exchange Act within ten years of commencement of
proceedings under this subpart; or
(iii) Is enjoined from any act, conduct, or practice specified in
section 15(b)(4)(C) of the Exchange Act; and
(2) That it is in the public interest to impose any of the sanctions
set forth in paragraph (a) of this section.
(b) Action under sections 17 and 17A of the Exchange Act. The Board
of Directors or its designee may issue, and have served upon any
transfer agent or clearing agency for which the FDIC is the appropriate
regulatory agency, a written Notice of its intention to deny
registration to, censure, place limitations on the activities or
function or operations of, suspend, or revoke the registration of, the
transfer agent or clearing agency, when the Board of Directors or its
designee determines:
(1) That the transfer agent or clearing agency has willfully
violated, or is unable to comply with, any applicable provision of
section 17 or 17A of the Exchange Act, as amended, or any applicable
rule or regulation issued pursuant thereto; and
(2) That it is in the public interest to impose any of the sanctions
set forth in paragraph (b) of this section.
Sec. 308.136 Notice to and consultation with the Securities and Exchange Commission.
Before initiating any proceedings under Sec. 308.135, the FDIC
shall:
(a) Notify the Securities and Exchange Commission of the identity of
the municipal securities dealer or associated person against whom
proceedings are to be initiated, and the nature of and basis for the
proposed action; and
(b) Consult with the Commission concerning the effect of the
proposed action on the protection of investors and the possibility of
coordinating the action with any proceeding by the Commission against
the municipal securities dealer or associated person.
Sec. 308.137 Effective date of order imposing sanctions.
An order issued by the Board of Directors after a hearing or an
order issued upon default shall become effective at the expiration of 30
days after the service of the order, except that an order of censure,
denial, or revocation of registration is effective when served. An order
issued upon consent shall become effective at the time specified
therein. All orders shall remain effective and enforceable except to the
extent they are stayed, modified, terminated, or set aside by the Board
of Directors, its designee, or a reviewing court, provided that orders
of suspension shall continue in effect no longer than 12 months.
Subpart J--Rules and Procedures Relating to Exemption Proceedings Under
Section 12(h) of the Securities Exchange Act of 1934
Sec. 308.138 Scope.
The rules and procedures of this subpart J shall apply to
proceedings by the Board of Directors or its designee to exempt, in
whole or in part, an issuer of securities from the provisions of
sections 12(g), 13, 14(a), 14(c), 14(d), or 14(f) of the Exchange Act,
as amended (15 U.S.C. 781, 78m, 78n (a), (c) (d) or (f)), or to exempt
an officer or a director or beneficial owner of securities of such an
issuer from the provisions of section 16 of the Exchange Act (15 U.S.C.
78p).
Sec. 308.139 Application for exemption.
Any interested person may file a written application for an
exemption under this subpart with the Executive Secretary, Federal
Deposit Insurance Corporation, 550 17th Street NW., Washington, DC
20429. The application shall specify the exemption sought and the reason
therefor, and shall include a statement indicating why the exemption
would be consistent with the public interest or the protection of
investors.
[[Page 94]]
Sec. 308.140 Newspaper notice.
(a) General rule. If the Board of Directors or its designee, in its
sole discretion, decides to further consider an application for
exemption, there shall be served upon the applicant instructions to
publish one notification in a newspaper of general circulation in the
community where the main office of the issuer is located. The applicant
shall furnish proof of such publication to the Executive Secretary or
such other person as may be directed in the instructions.
(b) Contents. The notification shall contain the name and address of
the issuer and the name and title of the applicant, the exemption
sought, a statement that a hearing will be held, and a statement that
within 30 days of publication of the newspaper notice, interested
persons may submit to the FDIC written comments on the application for
exemption and a written request for an opportunity to be heard. The
address of the FDIC must appear in the notice.
Sec. 308.141 Notice of hearing.
Within ten days after expiration of the period for receipt of
comments pursuant to Sec. 308.140, the Executive Secretary shall serve
upon the applicant and any person who has requested an opportunity to be
heard written notification indicating the place and time of the hearing.
The hearing shall be held not later than 30 days after service of the
notification of hearing. The notification shall contain the name and
address of the presiding officer designated by the Executive Secretary
and a statement of the matters to be considered.
Sec. 308.142 Hearing.
(a) Proceedings are informal. Formal rules of evidence, the
adjudicative procedures of the APA (5 U.S.C. 554-557), the Uniform Rules
and Sec. 308.108 of subpart B of the Local Rules shall not apply to
hearings under this subpart.
(b) Hearing Procedure. (1) Parties to the hearing may appear
personally or through counsel and shall have the right to introduce
relevant and material documents and to make an oral statement.
(2) There shall be no discovery in proceeding under this subpart J.
(3) The presiding officer shall have discretion to permit
presentation of witnesses within specified time limits, provided that a
list of witnesses is furnished to the presiding officer prior to the
hearing. Witnesses shall be sworn, unless otherwise directed by the
presiding officer. The presiding officer may ask questions of any
witness and each party may cross-examine any witness presented by an
opposing party.
(4) The proceedings shall be on the record and the transcript shall
be promptly submitted to the Board of Directors. The presiding officer
shall make recommendations to the Board of Directors, unless the Board
of Directors, in its sole discretion, directs otherwise.
Sec. 308.143 Decision of Board of Directors.
Following submission of the hearing transcript to the Board of
Directors, the Board of Directors may grant the exemption where it
determines, by reason of the number of public investors, the amount of
trading interest in the securities, the nature and extent of the
issuer's activities, the issuer's income or assets, or otherwise, that
the exemption is consistent with the public interest or the protection
of investors. Any exemption shall be set forth in an order specifying
the terms of the exemption, the person to whom it is granted, and the
period for which it is granted. A copy of the order shall be served upon
each party to the proceeding.
Subpart K--Procedures Applicable to Investigations Pursuant to Section
10(c) of the FDIA
Sec. 308.144 Scope.
The procedures of this subpart shall be followed when an
investigation is instituted and conducted in connection with any open or
failed insured depository institution, any institutions making
application to become insured depository institutions, and affiliates
thereof, or with other types of investigations to determine compliance
with applicable law and regulations, pursuant to section 10(c) of the
FDIA (12 U.S.C. 1820(c)). The Uniform Rules
[[Page 95]]
and subpart B of the Local Rules shall not apply to investigations under
this subpart.
Sec. 308.145 Conduct of investigation.
An investigation conducted pursuant to section 10(c) of the FDIA
shall be initiated only upon issuance of an order by the Board of
Directors; or by the General Counsel, the Director of the Division of
Supervision, the Director of the Division of Depositor and Asset
Services, or their respective designees as set forth at Sec. 303.9 of
this chapter. The order shall indicate the purpose of the investigation
and designate FDIC's representative(s) to direct the conduct of the
investigation. Upon application and for good cause shown, the persons
who issue the order of investigation may limit, quash, modify, or
withdraw it. Upon the conclusion of the investigation, an order of
termination of the investigation shall be issued by the persons issuing
the order of investigation.
[56 FR 37975, Aug. 9, 1991, as amended at 60 FR 31384, June 15, 1995]
Sec. 308.146 Powers of person conducting investigation.
The person designated to conduct a section 10(c) investigation shall
have the power, among other things, to administer oaths and
affirmations, to take and preserve testimony under oath, to issue
subpoenas and subpoenas duces tecum and to apply for their enforcement
to the United States District Court for the judicial district or the
United States court in any territory in which the main office of the
bank, institution, or affiliate is located or in which the witness
resides or conducts business. The person conducting the investigation
may obtain the assistance of counsel or others from both within and
outside the FDIC. The persons who issue the order of investigation may
limit, quash, or modify any subpoena or subpoena duces tecum, upon
application and for good cause shown. The person conducting an
investigation may report to the Board of Directors any instance where
any attorney has been guilty of contemptuous conduct. The Board of
Directors, upon motion of the person conducting the investigation, or on
its own motion, may make a finding of contempt and may then summarily
suspend, without a hearing, any attorney representing a witness from
further participation in the investigation.
Sec. 308.147 Investigations confidential.
lnvestigations conducted pursuant to section 10(c) shall be
confidential. Information and documents obtained by the FDIC in the
course of such investigations shall not be disclosed, except as provided
in part 309 of this chapter and as otherwise required by law.
Sec. 308.148 Rights of witnesses.
In an investigation pursuant to section 10(c):
(a) Any person compelled or requested to furnish testimony,
documentary evidence, or other information, shall upon request be shown
and provided with a copy of the order initiating the proceeding;
(b) Any person compelled or requested to provide testimony as a
witness or to furnish documentary evidence may be represented by a
counsel who meets the requirements of Sec. 308.06 of the Uniform Rules.
That counsel may be present and may:
(1) Advise the witness before, during, and after such testimony;
(2) Briefly question the witness at the conclusion of such testimony
for clarification purposes; and
(3) Make summary notes during such testimony solely for the use and
benefit of the witness;
(c) All persons testifying shall be sequestered. Such persons and
their counsel shall not be present during the testimony of any other
person, unless permitted in the discretion of the person conducting the
investigation;
(d) In cases of a perceived or actual conflict of interest arising
out of an attorney's or law firm's representation of multiple witnesses,
the person conducting the investigation may require the attorney to
comply with the provisions of Sec. 308.08 of the Uniform Rules; and
(e) Witness fees shall be paid in accordance with Sec. 308.14 of the
Uniform Rules.
[[Page 96]]
Sec. 308.149 Service of subpoena.
Service of a subpoena shall be accomplished in accordance with
Sec. 308.11 of the Uniform Rules.
Sec. 308.150 Transcripts.
(a) General rule. Transcripts of testimony, if any, in an
investigation pursuant to section 10(c) shall be recorded by an official
reporter, or by any other person or means designated by the person
conducting the investigation. A witness may, solely for the use and
benefit of the witness, obtain a copy of the transcript of his or her
testimony at the conclusion of the investigation or, at the discretion
of the person conducting the investigation, at an earlier time, provided
the transcript is available. The witness requesting a copy of his or her
testimony shall bear the cost thereof.
(b) Subscription by witness. The transcript of testimony shall be
subscribed by the witness, unless the person conducting the
investigation and the witness, by stipulation, have waived the signing,
or the witness is ill, cannot be found, or has refused to sign. If the
transcript of the testimony is not subscribed by the witness, the
official reporter taking the testimony shall certify that the transcript
is a true and complete transcript of the testimony.
Subpart L--Procedures and Standards Applicable to a Notice of Change in
Senior Executive Officer or Director Pursuant to Section 32 of the FDIA
Sec. 308.151 Scope.
The rules and procedures set forth in this subpart shall apply to
the notice filed by a state nonmember bank pursuant to section 32 of the
FDIA (12 U.S.C. 1831i) for the consent of the FDIC to add to or replace
an individual on the Board of Directors, or to employ any individual as
a senior executive officer, or change the responsibilities of any
individual to a position of senior executive officer where the bank:
(a) Has been chartered and operating as an insured nonmember bank
for less than two years or the insured state branch has been licensed
and operating as an insured branch for less than two years;
(b) Has undergone a change in control within the preceding two
years; or
(c) Is not in compliance with the minimum capital requirement
applicable to it or is otherwise in a troubled condition as determined
by the FDIC on the basis of such institution's most recent report of
condition or report of examination or inspection.
Sec. 308.152 Grounds for disapproval of notice.
The Board of Directors or its designee may issue a notice of
disapproval with respect to a notice submitted by a state nonmember bank
pursuant to section 32 of the FDIA (12 U.S.C. 1831i) where:
(a) The competence, experience, character, or integrity of the
individual with respect to whom such notice submitted indicates that it
would not be in the best interests of the depositors of the state
nonmember bank to permit the individual to be employed by or associated
with such bank; or
(b) The competence, experience, character, or integrity of the
individual with respect to whom such notice is submitted indicated that
it would not be in the best interests of the public to permit the
individual to be employed by, or associated with, the state nonmember
bank.
Sec. 308.153 Procedures where notice of disapproval issues pursuant to Sec. 303.14 of this chapter.
(a) The Notice of Disapproval shall be served upon the insured state
nonmember bank and the candidate for director or senior executive
officer. The Notice of Disapproval shall:
(1) Summarize or cite the relevant considerations specified in
Sec. 308.152;
(2) Inform the individual and the bank that a request for review of
the disapproval may be filed within fifteen days of receipt of the
Notice of Disapproval; and
(3) Specify that additional information, if any, must be contained
in the request for review.
(b) The request for review must be filed at the appropriate regional
office.
(c) The request for review must be in writing and should:
[[Page 97]]
(1) Specify the reasons why the FDIC should reconsider its
disapproval; and
(2) Set forth relevant, substantive and material documents, if any,
that for good cause were not previously set forth in the notice required
to be filed pursuant to section 32 of the FDIA (12 U.S.C. 1831i).
Sec. 308.154 Decision on review.
(a) Within 30 days of receipt of the request for review, the Board
of Directors or its designee, shall notify the bank and/or the
individual filing the reconsideration (hereafter ``petitioner'') of the
FDIC's decision on review.
(b) If the decision is to grant the review and approve the notice,
the bank and the individual involved shall be so notified.
(c) A denial of the request for review pursuant to section 32 of the
FDIA shall:
(1) Inform the petitioner that a written request for a hearing,
stating the relief desired and the grounds therefore, may be filed with
the Executive Secretary within 15 days after the receipt of the denial;
and
(2) Summarize or cite the relevant considerations specified in
Sec. 308.152.
(d) If a decision is not rendered within 30 days, the petitioner may
file a request for a hearing within fifteen days from the date of
expiration.
Sec. 308.155 Hearing.
(a) Hearing dates. The Executive Secretary shall order a hearing to
be commenced within 30 days after receipt of a request for a hearing
filed pursuant to Sec. 308.154. Upon request of the petitioner or the
FDIC, the presiding officer or the Executive Secretary may order a later
hearing date.
(b) Burden of proof. The ultimate burden of proof shall be upon the
candidate for director or senior executive officer. The burden of going
forward with a prima facie case shall be upon the FDIC.
(c) Hearing procedure. (1) The hearing shall be held in Washington,
DC or at another designated place, before a presiding officer designated
by the Executive Secretary.
(2) The provisions of Secs. 308.06 through 308.12, 308.16, and
308.21 of the Uniform Rules and Secs. 308.101 through 308.102, and
308.104 through 308.106 of subpart B of the Local Rules shall apply to
hearings held pursuant to this subpart.
(3) The petitioner may appear at the hearing and shall have the
right to introduce relevant and material documents and make an oral
presentation. Members of the FDIC enforcement staff may attend the
hearing and participate as representatives of the FDIC enforcement
staff.
(4) There shall be no discovery in proceedings under this subpart.
(5) At the discretion of the presiding officer, witnesses may be
presented within specified time limits, provided that a list of
witnesses is furnished to the presiding officer and to all other parties
prior to the hearing. Witnesses shall be sworn, unless otherwise
directed by the presiding officer. The presiding officer may ask
questions of any witness. Each party shall have the opportunity to
cross-examine any witness presented by an opposing party. The transcript
of the proceedings shall be furnished, upon request and payment of the
cost thereof, to the petitioner afforded the hearing.
(6) In the course of or in connection with any hearing under
paragraph (c) of this section the presiding officer shall have the power
to administer oaths and affirmations, to take or cause to be taken
depositions of unavailable witnesses, and to issue, revoke, quash, or
modify subpoenas and subpoenas duces tecum. Where the presentation of
witnesses is permitted, the presiding officer may require the attendance
of witnesses from any state, territory, or other place subject to the
jurisdiction of the United States at any location where the proceeding
is being conducted. Witness fees shall be paid in accordance with
Sec. 308.14 of the Uniform Rules.
(7) Upon the request of the applicant afforded the hearing, or the
members of the FDIC enforcement staff, the record shall remain open for
five business days following the hearing for the parties to make
additional submissions to the record.
(8) The presiding officer shall make recommendations to the Board of
Directors or its designee, where possible, within fifteen days after the
last day
[[Page 98]]
for the parties to submit additions to the record.
(9) The presiding officer shall forward his or her recommendation to
the Executive Secretary who shall promptly certify the entire record,
including the recommendation to the Board of Directors or its designee.
The Executive Secretary's certification shall close the record.
(d) Written submissions in lieu of hearing. The petitioner may in
writing waive a hearing and elect to have the matter determined on the
basis of written submissions.
(e) Failure to request or appear at hearing. Failure to request a
hearing shall constitute a waiver of the opportunity for a hearing.
Failure to appear at a hearing in person or through an authorized
representative shall constitute a waiver of hearing. If a hearing is
waived, the order shall be final and unappealable, and shall remain in
full force and effect.
(f) Decision by Board of Directors or its designee. Within 45 days
following the Executive Secretary's certification of the record to the
Board of Directors or its designee, the Board of Directors or its
designee shall notify the affected individual whether the denial of the
notice will be continued, terminated, or otherwise modified. The
notification shall state the basis for any decision of the Board of
Directors or its designee that is adverse to the petitioner. The Board
of Directors or its designee shall promptly rescind or modify the denial
where the decision is favorable to the petitioner.
Subpart M--Procedures and Standards Applicable to an Application
Pursuant to Section 19 of the FDIA
Sec. 308.156 Scope.
The rules and procedures set forth in this subpart shall apply to an
application filed pursuant to section 19 of the FDIA (12 U.S.C. 1829) by
an insured depository institution and a person, who has been convicted
of any criminal offense involving dishonesty or a breach of trust or who
has agreed to enter into a pretrial diversion or similar program in
connection with the prosecution of such offense, to seek the prior
written consent of the FDIC to become or continue as an institution-
affiliated party with respect to an insured depository institution; to
own or control directly or indirectly an insured depository institution;
or to participate directly or indirectly in any manner in the conduct of
the affairs of an insured depository institution.
Sec. 308.157 Relevant considerations.
(a) In proceedings under Sec. 308.156 on an application to become or
continue as an institution-affiliated party with respect to an insured
depository institution; to own or control directly or indirectly an
insured depository institution; or to participate directly or indirectly
in any manner in the conduct of the affairs of an insured depository
institution, the following shall be considered:
(1) Whether the conviction or entry into a pretrial diversion or
similar program is for a criminal offense involving dishonesty or breach
of trust;
(2) Whether participation directly or indirectly by the person in
any manner in the conduct of the affairs of the insured depository
institution constitutes a threat to the safety or soundness of the
insured depository institution or the interests of its depositors, or
threatens to impair public confidence in the insured depository
institution;
(3) Evidence of the applicant's rehabilitation;
(4) The position to be held by the applicant;
(5) The amount of influence and control the applicant will be able
to exercise over the affairs and operations of the insured depository
institution;
(6) The ability of the management at the insured depository
institution to supervise and control the activities of the applicant;
(7) The level of ownership which the applicant will have at the
insured depository institution;
(8) Applicable fidelity bond coverage for the applicant; and
(9) Additional factors in the specific case that appear relevant.
(b) The question of whether a person, who was convicted of a crime
or who agreed to enter a pretrial diversion or similar program, was
guilty of that
[[Page 99]]
crime shall not be at issue in a proceeding under this subpart.
Sec. 308.158 Filing papers and effective date.
(a) Filing with the regional office. Applications pursuant to
section 19 shall be filed in the appropriate regional office.
(b) Effective date. An application pursuant to section 19 may be
made in writing at any time more than one year after the issuance of a
decision denying an application pursuant to section 19. The removal and/
or prohibition pursuant to section 19 shall continue until the applicant
has been reinstated by the Board of Directors or its designee for good
cause shown.
Sec. 308.159 Denial of applications.
A denial of an application pursuant to section 19 shall:
(a) Inform the applicant that a written request for a hearing,
stating the relief desired and the grounds therefor and any supporting
evidence, may be filed with the Executive Secretary within 60 days after
the denial; and
(b) Summarize or cite the relevant considerations specified in
Sec. 308.157 of this subpart.
Sec. 308.160 Hearings.
(a) Hearing dates. The Executive Secretary shall order a hearing to
be commenced within 60 days after receipt of a request for hearing on an
application filed pursuant to Sec. 308.159. Upon the request of the
applicant or FDIC enforcement counsel, the presiding officer or the
Executive Secretary may order a later hearing date.
(b) Burden of proof. The ultimate burden of proof shall be upon the
person proposing to become or continue as an institution-affiliated
party with respect to an insured depository institution; to own or
control directly or indirectly an insured depository institution; or to
participate directly or indirectly in any manner in the conduct of the
affairs of an insured depository institution. The burden of going
forward with a prima facie case shall be upon the FDIC.
(c) Hearing procedure. (1) The hearing shall be held in Washington,
DC, or at another designated place, before a presiding officer
designated by the Executive Secretary.
(2) The provisions of Secs. 308.06 through 308.12, 308.16, and
308.21 of the Uniform Rules and Secs. 308.101 through 308.102 and
308.104 through 308.106 of subpart B of the Local Rules shall apply to
hearings held pursuant to this subpart.
(3) The applicant may appear at the hearing and shall have the right
to introduce relevant and material documents and oral argument. Members
of the FDIC enforcement staff may attend the hearing and participate as
a party.
(4) There shall be no discovery in proceedings under this subpart.
(5) At the discretion of the presiding officer, witnesses may be
presented within specified time limits, provided that a list of
witnesses is furnished to the presiding officer and to all other parties
prior to the hearing. Witnesses shall be sworn, unless otherwise
directed by the presiding officer. The presiding officer may ask
questions of any witness. Each party shall have the opportunity to
cross-examine any witness presented by an opposing party. The transcript
of the proceedings shall be furnished, upon request and payment of the
cost thereof, to the applicant afforded the hearing.
(6) In the course of or in connection with any hearing under this
subsection, the presiding officer shall have the power to administer
oaths and affirmations, to take or cause to be taken depositions of
unavailable witnesses, and to issue, revoke, quash, or modify subpoenas
and subpoenas duces tecum. Where the presentation of witnesses is
permitted, the presiding officer may require the attendance of witnesses
from any state, territory, or other place subject to the jurisdiction of
the United States at any location where the proceeding is being
conducted. Witness fees shall be paid in accordance with Sec. 308.14 of
the Uniform Rules.
(7) Upon the request of the applicant afforded the hearing, or FDIC
enforcement staff, the record shall remain open for five business days
following the hearing for the parties to make additional submissions to
the record.
(8) The presiding officer shall make recommendations to the Board of
Directors, where possible, within 20 days
[[Page 100]]
after the last day for the parties to submit additions to the record.
(9) The presiding officer shall forward his or her recommendation to
the Executive Secretary who shall promptly certify the entire record,
including the recommendation to the Board of Directors or its designee.
The Executive Secretary's certification shall close the record.
(d) Written submissions in lieu of hearing. The applicant or the
bank may in writing waive a hearing and elect to have the matter
determined on the basis of written submissions.
(e) Failure to request or appear at hearing. Failure to request a
hearing shall constitute a waiver of the opportunity for a hearing.
Failure to appear at a hearing in person or through an authorized
representative shall constitute a waiver of hearing. If a hearing is
waived, the person shall remain barred under section 19.
(f) Decision by Board of Directors or its designee. Within 60 days
following the Executive Secretary's certification of the record to the
Board of Directors or its designee, the Board of Directors or its
designee shall notify the affected person whether the person shall
remain barred under section 19. The notification shall state the basis
for any decision of the Board of Directors or its designee that is
adverse to the applicant.
Subpart N--Rules and Procedures Applicable to Proceedings Relating to
Suspension, Removal, and Prohibition Where a Felony ls Charged
Sec. 308.161 Scope.
The rules and procedures set forth in this subpart shall apply to
the following proceedings:
(a) To suspend an institution-affiliated party of an insured state
nonmember bank, or to prohibit such party from further participation in
the conduct of the affairs of the bank, where the individual is charged
in any state, Federal, or territorial information or indictment, or
complaint, with the commission of, or participation in, a crime
involving dishonesty or breach of trust punishable by imprisonment
exceeding one year under state or Federal law; or
(b) To remove from office or to prohibit an institution-affiliated
party from further participation in the conduct of the affairs of the
bank, except with the consent of the Board of Directors or its designee,
if continued service or participation by such party poses a threat to
the interests of the bank's depositors or threatens to impair public
confidence in the depository institution, where a judgment of conviction
or an agreement to enter a pre-trial diversion or other similar program
is entered against such party, not subject to further appellate review,
has been entered against the individual for the commission of, or
participation in, a crime involving dishonesty or breach of trust
punishable by imprisonment exceeding one year under state or Federal
law.
Sec. 308.162 Relevant considerations.
(a)(1) In proceedings under Sec. 308.161 (a) and (b) for a
suspension, removal or prohibition order, the following shall be
considered:
(i) Whether the alleged offense is a crime which is punishable by
imprisonment for a term exceeding one year under state or Federal law,
and which involves dishonesty or breach of trust; and
(ii) Whether continued service or participation by the institution-
affiliated party may pose a threat to the interest of the bank's
depositors, or threatens to impair public confidence in the bank.
(2) Additional factors in the specific case that appear relevant to
its decision to continue in effect, rescind, terminate, or modify a
suspension, removal or prohibition order may be considered.
(b) The question of whether an institution-affiliated party charged
with a crime is guilty of the crime charged shall not be tried or
considered in a proceeding under this subpart.
Sec. 308.163 Notice of suspension, and orders of removal or prohibition.
(a) Notice of suspension or prohibition. (1) The Board of Directors
or its designee may suspend or prohibit from further participation in
the conduct of
[[Page 101]]
the affairs of the bank an institution-affiliated party by written
notice of suspension or prohibition upon a determination by the Board of
Directors or its designee that the grounds for such suspension or
prohibition exist. The written notice of suspension or prohibition shall
be served upon the institution-affiliated party and the bank.
(2) The written notice of suspension shall:
(i) Inform the institution-affiliated party that a written request
for a hearing, stating the relief desired and grounds therefore, and any
supporting evidence, may be filed with the Executive Secretary within 30
days after receipt of the written notice; and
(ii) Summarize or cite to the relevant considerations specified in
Sec. 308.162 of this subpart.
(3) The suspension or prohibition shall be effective immediately
upon service on the institution-affiliated party, and shall remain in
effect until final disposition of the information, indictment,
complaint, or until it is terminated by the Board of Directors or its
designee under the provisions of Sec. 308.164 or otherwise.
(b) Order of removal or prohibition. (1) The Board of Directors or
its designee may issue an order removing or prohibiting from further
participation in the conduct of the affairs of the bank an institution-
affiliated party, when:
(i) A final judgment of conviction not subject to further appellate
review is entered against the individual for a crime referred to in
Sec. 308.161(b); and
(ii) The Board of Directors or its designee determines that
continued service or participation of the institution-affiliated party
may threaten the interests of the bank's depositors or may threaten to
impair public confidence in the bank.
(2) The order shall be served upon the institution-affiliated party
and the bank.
(3) The order shall:
(i) Inform the institution-affiliated party that a written request
for a hearing, stating the relief desired and grounds therefor, and any
supporting evidence, may be filed with the Executive Secretary within 30
days after receipt of the order; and
(ii) Summarize or cite the relevant considerations specified in
Sec. 308.162 of this subpart.
(4) The order shall be effective immediately upon service on the
institution-affiliated party, and shall remain in effect until it is
terminated by the Board of Directors or its designee under the
provisions of Sec. 308.164 or otherwise.
Sec. 308.164 Hearings.
(a) Hearing dates. The Executive Secretary shall order a hearing to
be commenced within 30 days after receipt of a request for hearing on an
application filed pursuant to Sec. 308.163. Upon the request of the
applicant, the presiding officer or the Executive Secretary may order a
later hearing date.
(b) Hearing procedure. (1) The hearing shall be held in Washington,
DC, or at another designated place, before a presiding officer
designated by the Executive Secretary.
(2) The provisions of Secs. 308.06 through 308.12, 308.16, and
308.21 of the Uniform Rules and Secs. 308.101 through 308.102 and
308.104 through 308.106 of subpart B of the Local Rules shall apply to
hearings held pursuant to this subpart.
(3) The applicant may appear at the hearing and shall have the right
to introduce relevant and material documents and oral argument. Members
of the FDIC enforcement staff may attend the hearing and participate as
representatives of the FDIC enforcement staff.
(4) There shall be no discovery in proceedings under this subpart.
(5) At the discretion of the presiding officer, witnesses may be
presented within specified time limits, provided that a list of
witnesses is furnished to the presiding officer and to all other parties
prior to the hearing. Witnesses shall be sworn, unless otherwise
directed by the presiding officer. The presiding officer may ask
questions of any witness. Each party shall have the opportunity to
cross-examine any witness presented by an opposing party. The transcript
of the proceedings shall be furnished, upon request and payment of the
cost thereof, to the applicant afforded the hearing.
(6) In the course of or in connection with any hearing under
paragraph (b) of this section, the presiding officer
[[Page 102]]
shall have the power to administer oaths and affirmations, to take or
cause to be taken depositions of unavailable witnesses, and to issue,
revoke, quash, or modify subpoenas and subpoenas duces tecum. Where the
presentation of witnesses is permitted, the presiding officer may
require the attendance of witnesses from any state, territory, or other
place subject to the jurisdiction of the United States at any location
where the proceeding is being conducted. Witness fees shall be paid in
accordance with Sec. 308.14 of the Uniform Rules.
(7) Upon the request of the applicant afforded the hearing, or the
members of the FDIC enforcement staff, the record shall remain open for
five business days following the hearing for the parties to make
additional submissions to the record.
(8) The presiding officer shall make recommendations to the Board of
Directors, where possible, within ten days after the last day for the
parties to submit additions to the record.
(9) The presiding officer shall forward his or her recommendation to
the Executive Secretary who shall promptly certify the entire record,
including the recommendation to the Board of Directors. The Executive
Secretary's certification shall close the record.
(c) Written submissions in lieu of hearing. The applicant or the
bank may in writing waive a hearing and elect to have the matter
determined on the basis of written submissions.
(d) Failure to request or appear at hearing. Failure to request a
hearing shall constitute a waiver of the opportunity for a hearing.
Failure to appear at a hearing in person or through an authorized
representative shall constitute a waiver of hearing. If a hearing is
waived, the order shall be final and unappealable, and shall remain in
full force and effect pursuant to Sec. 308.163.
(e) Decision by Board of Directors or its designee. Within 60 days
following the Executive Secretary's certification of the record to the
Board of Directors or its designee, the Board of Directors or its
designee shall notify the affected individual whether the order of
removal or prohibition will be continued, terminated, or otherwise
modified. The notification shall state the basis for any decision of the
Board of Directors or its designee that is adverse to the applicant. The
Board of Directors or its designee shall promptly rescind or modify an
order of removal or prohibition where the decision is favorable to the
applicant.
Subpart O--Liability of Commonly Controlled Depository Institutions
Sec. 308.165 Scope.
The rules and procedures in this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings in connection
with the assessment of cross-guaranty liability against commonly
controlled depository institutions.
Sec. 308.166 Grounds for assessment of liability.
Any insured depository institution shall be liable for any loss
incurred or reasonably anticipated to be incurred by the corporation,
subsequent to August 9, 1989, in connection with the default of a
commonly controlled insured depository institution, or any loss incurred
or reasonably anticipated to be incurred in connection with any
assistance provided by the Corporation to any commonly controlled
depository institution in danger of default.
Sec. 308.167 Notice of assessment of liability.
(a) The amount of liability shall be assessed upon service of a
Notice of Assessment of Liability upon the liable depository
institution, within two years of the date the Corporation incurred the
loss.
(b) Contents of Notice. (1) The Notice of Assessment of Liability
shall set forth:
(i) The basis for the FDIC's jurisdiction over the proceeding;
(ii) A statement of the Corporation's good faith estimate of the
amount of loss it has incurred or anticipates incurring;
(iii) A statement of the method by which the estimated loss was
calculated;
(iv) A proposed order directing payment by the liable institution of
the FDIC's estimated amount of loss, and
[[Page 103]]
the schedule under which the payment will be due;
(v) In cases involving more than one liable institution, the
estimated amount of each institution's share of the liability.
(2) The Notice of Assessment of Liability shall advise the liable
institution(s):
(i) That an answer must be filed within 20 days after service of the
Notice;
(ii) That, if a hearing is requested, a request for a hearing must
be filed within 20 days after service of the Notice;
(iii) That if a hearing is requested, such hearing will be held
within the judicial district in which the liable institution is found,
or, in cases involving more than one liable institution, within a
judicial district in which at least one liable institution is found;
(iv) That, unless the administrative law judge sets a different
date, the hearing will commence 120 days after service of the Notice of
Assessment of Liability; and
(v) That failure to request a hearing shall render the Notice of
Assessment a final and unappealable order.
Sec. 308.168 Effective date of and payment under an order to pay.
(a) Unless otherwise provided in the Notice of Assessment of
Liability, payment of the assessment shall be due on or before the 21st
day after service of the Assessment of Liability, under the terms of the
schedule for payment set forth therein.
(b) All payments collected shall be paid to the Corporation.
(c) Failure to request a hearing as prescribed herein shall render
the order to pay final and unappealable.
Subpart P--Rules and Procedures Relating to the Recovery of Attorney
Fees and Other Expenses
Sec. 308.169 Scope.
This subpart, and the Equal Access to Justice Act (5 U.S.C. 504),
which it implements, apply to adversary adjudications before the FDIC.
The types of adjudication covered by this subpart are those listed in
Sec. 308.01 of the Uniform Rules. The Uniform Rules and subpart B of the
Local Rules apply to any proceedings to recover fees and expenses under
this subpart.
Sec. 308.170 Filing, content, and service of documents.
(a) Time to file. An application and any other pleading or document
related to the application may be filed with the Executive Secretary
whenever the applicant has prevailed in the proceeding or in a discrete
significant substantive portion of the proceeding within 30 days after
service of the final order of the Board of Directors in disposition of
the proceeding.
(b) Content. The application and related documents shall conform to
the requirements of Sec. 308.10 of the Uniform Rules.
(c) Service. The application and related documents shall be served
on all parties to the adversary adjudication in accordance with
Sec. 308.11 of the Uniform Rules, except that statements of net worth
shall be served only on counsel for the FDIC.
(d) Upon receipt of an application, the Executive Secretary shall
refer the matter to the administrative law judge who heard the
underlying adversary proceeding, provided that if the original
administrative law judge is unavailable, or the Executive Secretary
determines, in his or her sole discretion, that there is cause to refer
the matter to a different administrative law judge, the matter shall be
referred to a different administrative law judge.
Sec. 308.171 Responses to application.
(a) By FDIC. (1) Within 20 days after service of an application,
counsel for the FDIC may file with the Executive Secretary and serve on
all parties an answer to the application. Unless counsel for the FDIC
requests and is granted an extension of time for filing or files a
statement of intent to negotiate under Sec. 308.179 of this subpart,
failure to file an answer within the 20-day period will be treated as a
consent to the award requested.
(2) The answer shall explain in detail any objections to the award
requested and identify the facts relied on in support of the FDIC's
position. If the answer is based on any alleged facts not
[[Page 104]]
already in the record of the proceeding, the answer shall include either
supporting affidavits or a request for further proceedings under
Sec. 308.180.
(b) Reply to answer. The applicant may file a reply if the FDIC has
addressed in its answer any of the following issues: that the position
of the FDIC was substantially justified, that the applicant unduly
protracted the proceedings, or that special circumstances make an award
unjust. The reply shall be filed within 15 days after service of the
answer. If the reply is based on any alleged facts not already in the
record of the proceeding, the reply shall include either supporting
affidavits or a request for further proceedings under Sec. 308.180.
(c) By other parties. Any party to the adversary adjudication, other
than the applicant and the FDIC, may file comments on an application
within 20 days after service of the application. If the applicant is
entitled to file a reply to the FDIC's answer under paragraph (b) of
this section, another party may file comments on the answer within 15
days after service of the answer. A commenting party may not participate
in any further proceedings on the application unless the administrative
law judge determines that the public interest requires such
participation in order to permit additional exploration of matters
raised in the comments.
(d) Additional response. Additional filings in the nature of
pleadings may be submitted only by leave of the administrative law
judge.
Sec. 308.172 Eligibility of applicants.
(a) Genera1 rule. To be eligible for an award under this subpart, an
applicant must have been named or admitted as a party to the proceeding.
In addition, the applicant must show that it meets all other conditions
of eligibility set out in paragraph (b) of this section.
(b) Types of eligible applicant. The types of eligible applicant
are:
(1) An individual with a net worth of not more than $2,000,000 at
the time the adversary adjudication was initiated; or
(2) Any owner of an unincorporated business, or any partnership,
corporation, associations, unit of local government or organization, the
net worth of which did not exceed $7,000,000 and which did not have more
than 500 employees at the time the adversary adjudication was initiated.
(c) Factors to be considered. In determining the types of eligible
applicants:
(1) An applicant who owns an unincorporated business shall be
considered as an individual rather than a sole owner of an
unincorporated business if the issues on which he or she prevails are
related to personal interests rather than to business interests.
(2) An applicant's net worth includes the value of any assets
disposed of for the purpose of meeting an eligibility standard and
excludes the value of any obligations incurred for this purpose.
Transfers of assets or obligations incurred for less than reasonably
equivalent value will be presumed to have been made for this purpose.
(3) The net worth of a bank shall be established by the net worth
information reported in conformity with applicable instructions and
guidelines on the bank's Consolidated Report of Condition and Income
filed for the last reporting date before the initiation of the adversary
adjudication.
(4) The employees of an applicant include all those persons who were
regularly providing services for remuneration for the applicant, under
its direction and control, on the date the adversary adjudication was
initiated. Part-time employees are included as though they were full-
time employees.
(5) The net worth and number of employees of the applicant and all
of its affiliates shall be aggregated to determine eligibility. The
aggregated net worth shall be adjusted if necessary to avoid counting
the net worth of any entity twice. As used in this subpart, affiliates
are individuals, corporations, and entities that directly or indirectly
or acting through one or more entities control a majority of the voting
shares of the applicant; and corporations and entities of which the
applicant directly or indirectly owns or controls a majority of the
voting shares. The Board of Directors may, however, on the
recommendation of the administrative law judge, or otherwise, determine
that such aggregation with regard to one or more of the applicant's
affiliates would be unjust and contrary to the purposes
[[Page 105]]
of this subpart in light of the actual relationship between the
affiliated entities. In such a case the net worth and employees of the
relevant affiliate or affiliates will not be aggregated with those of
the applicant. In addition, the Board of Directors may determine that
financial relationships of the applicant other than those described in
this paragraph constitute special circumstances that would make an award
unjust.
(6) An applicant that participates in a proceeding primarily on
behalf of one or more other persons or entities that would be ineligible
is not itself eligible for an award.
Sec. 308.173 Prevailing party.
(a) General rule. An eligible applicant who, following an adversary
adjudication has gained victory on the merits in the proceeding is a
``prevailing party''. An eligible applicant may be a ``prevailing
party'' if a settlement of the proceeding was effected on terms
favorable to it or if the proceeding against it has been dismissed. In
appropriate situations an applicant may also have prevailed if the
outcome of the proceeding has substantially vindicated the applicant's
position on the significant substantive matters at issue, even though
the applicant has not totally avoided adverse final action.
(b) Segregation of costs. When a proceeding has presented a number
of discrete substantive issues, an applicant may have prevailed even
though all the issues were not resolved in its favor. If such an
applicant is deemed to have prevailed, any award shall be based on the
fees and expenses incurred in connection with the discrete significant
substantive issue or issues on which the applicant's position has been
upheld. If such segregation of costs is not practicable, the award may
be based on a fair proration of those fees and expenses incurred in the
entire proceeding which would be recoverable under Sec. 308.175 if
proration were not performed, whether separate or prorated treatment is
appropriate, and the appropriate proration percentage, shall be
determined on the facts of the particular case. Attention shall be given
to the significance and nature of the respective issues and their
separability and interrelationship.
Sec. 308.174 Standards for awards.
A prevailing applicant may receive an award for fees and expenses
unless the position of the FDIC during the proceeding was substantially
justified or special circumstances make the award unjust. An award will
be reduced or denied if the applicant has unduly or unreasonably
protracted the proceedings. Awards for fees and expenses incurred before
the date on which the adversary adjudication was initiated are allowable
if their incurrence was necessary to prepare for the proceeding.
Sec. 308.175 Measure of awards.
(a) General rule. Awards will be based on rates customarily charged
by persons engaged in the business of acting as attorneys, agents, and
expert witnesses, even if the services were made available without
charge or at a reduced rate, provided that no award under this subpart
for the fee of an attorney or agent may exceed $75 per hour. No award to
compensate an expert witness may exceed the highest rate at which the
FDIC pays expert witnesses. An award may include the reasonable expenses
of the attorney, agent, or expert witness as a separate item, if the
attorney, agent, or expert witness ordinarily charges clients separately
for such expenses.
(b) Determination of reasonableness of fees. In determining the
reasonableness of the fee sought for an attorney, agent, or expert
witness, the administrative law judge shall consider the following:
(1) If the attorney, agent, or expert witness is in private
practice, his or her customary fee for like services, or, if he or she
is an employee of the applicant, the fully allocated cost of the
services;
(2) The prevailing rate for similar services in the community in
which the attorney, agent, or expert witness ordinarily performs
services;
(3) The time actually spent in the representation of the applicant;
(4) The time reasonably spent in light of the difficulty or
complexity of the issues in the proceeding; and
[[Page 106]]
(5) Such other factors as may bear on the value of the services
provided.
(c) Awards for studies. The reasonable cost of any study, analysis,
test, project, or similar matter prepared on behalf of an applicant may
be awarded to the extent that the charge for the service does not exceed
the prevailing rate payable for similar services, and the study or other
matter was necessary for preparation of the applicant's case and not
otherwise required by law or sound business or financial practice.
Sec. 308.176 Application for awards.
(a) Contents. An application for an award of fees and expenses under
this subpart shall contain:
(1) The name of the applicant and an identification of the
proceeding;
(2) A showing that the applicant has prevailed, and an
identification of each issue with regard to which the applicant believes
that the position of the FDIC in the proceeding was not substantially
justified;
(3) A statement of the amount of fees and expenses for which an
award is sought;
(4) If the applicant is not an individual, a statement of the number
of its employees on the date the proceeding was initiated;
(5) A description of any affiliated individuals or entities, as
defined in Sec. 308.172(c)(5), or a statement that none exist;
(6) A declaration that the applicant, together with any affiliates,
had a net worth not more than the ceiling established for it by
Sec. 308.172(b) as of the date the proceeding was initiated; and
(7) Any other matters that the applicant wishes the FDIC to consider
in determining whether and in what amount an award should be made.
(b) Verification. The application shall be signed by the applicant
or an authorized officer or attorney of the applicant. It shall also
contain or be accompanied by a written verification under oath or under
penalty of perjury that the information provided in the application and
supporting documents is true and correct.
Sec. 308.177 Statement of net worth.
(a) General rule. A statement of net worth must be filed with the
application for an award of fees. The statement shall reflect the net
worth of the applicant and all affiliates of the applicant.
(b) Contents. (1) The statement of net worth may be in any form
convenient to the applicant which fully discloses all the assets and
liabilities of the applicant and all the assets and liabilities of its
affiliates, as of the time of the initiation of the adversary
adjudication. Unaudited financial statements are acceptable unless the
administrative law judge or the Board of Directors otherwise requires.
Financial statements or reports to a Federal or state agency, prepared
before the initiation of the adversary adjudication for other purposes,
and accurate as of a date not more than three months prior to the
initiation of the proceeding, are acceptable in establishing net worth
as of the time of the initiation of the proceeding, unless the
administrative law judge or the Board of Directors otherwise requires.
(2) In the case of applicants or affiliates that are not banks, net
worth shall be considered for the purposes of this subpart to be the
excess of total assets over total liabilities, as of the date the
underlying proceeding was initiated, except as adjusted under
Sec. 308.172(c)(2). Assets and liabilities of individuals shall include
those beneficially owned within the meaning of the FDIC's rules and
regulations.
(3) If the applicant or any of its affiliates is a bank, the portion
of the statement of net worth which relates to the bank shall consist of
a copy of the bank's last Consolidated Report of Condition and Income
filed before the initiation of the adversary adjudication. In all cases
the administrative law judge or the Board of Directors may call for
additional information needed to establish the applicant's net worth as
of the initiation of the proceeding. Except as adjusted by additional
information that was called for under the preceding sentence, net worth
shall be considered for the purposes of this subpart to be the total
equity capital (or, in the case of mutual savings banks, the total
surplus accounts) as reported,
[[Page 107]]
in conformity with applicable instructions and guidelines, on the bank's
Consolidated Report of Condition and Income filed for the last reporting
date before the initiation of the proceeding.
(c) Statement confidential. Unless otherwise ordered by the Board of
Directors or required by law, the statement of net worth shall be for
the confidential use of counsel for the FDIC, the Board of Directors,
and the administrative law judge.
Sec. 308.178 Statement of fees and expenses.
The application shall be accompanied by a statement fully
documenting the fees and expenses for which an award is sought. A
separate itemized statement shall be submitted for each professional
firm or individual whose services are covered by the application,
showing the hours spent in work in connection with the proceeding by
each individual, a description of the specific services performed, the
rate at which each fee has been computed, any expenses for which
reimbursement is sought, the total amount claimed, and the total amount
paid or payable by the applicant or by any other person or entity for
the services performed. The administrative law judge or the Board of
Directors may require the applicant to provide vouchers, receipts, or
other substantiation for any expenses claimed.
Sec. 308.179 Settlement negotiations.
If counsel for the FDIC and the applicant believe that the issues in
a fee application can be settled, they may jointly file with the
Executive Secretary a statement of their intent to negotiate a
settlement. The filing of this statement shall extend the time for
filing an answer under Sec. 308.171 for an additional 20 days, and
further extensions may be granted by the administrative law judge upon
the joint request of counsel for the FDIC and the applicant.
Sec. 308.180 Further proceedings.
(a) General rule. Ordinarily, the determination of a recommended
award will be made by the administrative law judge on the basis of the
written record. However, on request of either the applicant or the FDIC,
or on his or her own initiative, the administrative law judge may order
further proceedings such as an informal conference, oral argument,
additional written submissions, or an evidentiary hearing. Such further
proceedings will be held only when necessary for full and fair
resolution of the issues arising from the application and will be
conducted promptly and expeditiously.
(b) Request for further proceedings. A request for further
proceedings under this section shall specifically identify the
information sought or the issues in dispute and shall explain why
additional proceedings are necessary.
(c) Hearing. Ordinarily, the administrative law judge shall hold an
oral evidentiary hearing only on disputed issues of material fact which
cannot be adequately resolved through written submissions.
Sec. 308.181 Recommended decision.
The administrative law judge shall file with the Executive Secretary
a recommended decision on the fee application not later than 90 days
after the filing of the application or 30 days after the conclusion of
the hearing, whichever is later. The recommended decision shall include
written proposed findings and conclusions on the applicant's eligibility
and its status as a prevailing party and an explanation of the reasons
for any difference between the amount requested and the amount of the
recommended award. The recommended decision shall also include, if at
issue, proposed findings on whether the FDIC's position was
substantially justified, whether the applicant unduly protracted the
proceedings, or whether special circumstances make an award unjust. The
administrative law judge shall file the record of the proceeding on the
fee application and, at the same time, serve upon each party a copy of
the recommended decision, findings, conclusions, and proposed order.
Sec. 308.182 Board of Directors action.
(a) Exceptions to recommended decision. Within 20 days after service
of the recommended decision, findings, conclusions, and proposed order,
the applicant or counsel for the FDIC may file
[[Page 108]]
with the Executive Secretary written exceptions thereto. A supporting
brief may also be filed.
(b) Decision of Board of Directors. The Board of Directors shall
render its decision within 60 days after the matter is submitted to it
by the Executive Secretary. The Executive Secretary shall furnish copies
of the decision and order of the Board of Directors to the parties.
Judicial review of the decision and order may be obtained as provided in
5 U.S.C. 504(c)(2).
Sec. 308.183 Payment of awards.
An applicant seeking payment of an award made by the Board of
Directors shall submit to the Executive Secretary a statement that the
applicant will not seek judicial review of the decision and order or
that the time for seeking further review has passed and no further
review has been sought. The FDIC will pay the amount awarded within 30
days after receiving the applicant's statement, unless judicial review
of the award or of the underlying decision of the adversary adjudication
has been sought by the applicant or any other party to the proceeding.
Subpart Q--Issuance and Review of Orders Pursuant to the Prompt
Corrective Action Provisions of the Federal Deposit Insurance Act
Source: 57 FR 44897, Sept. 29, 1992, unless otherwise noted.
Sec. 308.200 Scope.
The rules and procedures set forth in this subpart apply to banks,
insured branches of foreign banks and senior executive officers and
directors of banks that are subject to the provisions of section 38 of
the Federal Deposit Insurance Act (section 38) (12 U.S.C. 1831o) and
subpart B of part 325 of this chapter.
[57 FR 44897, Sept. 29, 1992; 57 FR 48426, Oct. 23, 1992]
Sec. 308.201 Directives to take prompt corrective action.
(a) Notice of intent to issue directive--(1) In general. The FDIC
shall provide an undercapitalized, significantly undercapitalized, or
critically undercapitalized bank prior written notice of the FDIC's
intention to issue a directive requiring such bank to take actions or to
follow proscriptions described in section 38 that are within the FDIC's
discretion to require or impose under section 38 of the FDI Act,
including sections 38 (e)(5), (f)(2), (f)(3), or (f)(5). The bank shall
have such time to respond to a proposed directive as provided by the
FDIC under paragraph (c) of this section.
(2) Immediate issuance of final directive. If the FDIC finds it
necessary in order to carry out the purposes of section 38 of the FDI
Act, the FDIC may, without providing the notice prescribed in paragraph
(a)(1) of this section, issue a directive requiring a bank immediately
to take actions or to follow proscriptions described in section 38 that
are within the FDIC's discretion to require or impose under section 38
of the FDI Act, including section 38 (e)(5), (f)(2), (f)(3), or (f)(5).
A bank that is subject to such an immediately effective directive may
submit a written appeal of the directive to the FDIC. Such an appeal
must be received by the FDIC within 14 calendar days of the issuance of
the directive, unless the FDIC permits a longer period. The FDIC shall
consider any such appeal, if filed in a timely matter, within 60 days of
receiving the appeal. During such period of review, the directive shall
remain in effect unless the FDIC, in its sole discretion, stays the
effectiveness of the directive.
(b) Contents of notice. A notice of intention to issue a directive
shall include:
(1) A statement of the bank's capital measures and capital levels;
(2) A description of the restrictions, prohibitions or affirmative
actions that the FDIC proposes to impose or require;
(3) The proposed date when such restrictions or prohibitions would
be effective or the proposed date for completion of such affirmative
actions; and
(4) The date by which the bank subject to the directive may file
with the FDIC a written response to the notice.
(c) Response to notice--(1) Time for response. A bank may file a
written response to a notice of intent to issue a
[[Page 109]]
directive within the time period set by the FDIC. The date shall be at
least 14 calendar days from the date of the notice unless the FDIC
determines that a shorter period is appropriate in light of the
financial condition of the bank or other relevant circumstances.
(2) Content of response. The response should include:
(i) An explanation why the action proposed by the FDIC is not an
appropriate exercise of discretion under section 38;
(ii) Any recommended modification of the proposed directive; and
(iii) Any other relevant information, mitigating circumstances,
documentation, or other evidence in support of the position of the bank
regarding the proposed directive.
(d) FDIC consideration of response. After considering the response,
the FDIC may:
(1) Issue the directive as proposed or in modified form;
(2) Determine not to issue the directive and so notify the bank; or
(3) Seek additional information or clarification of the response
from the bank or any other relevant source.
(e) Failure to file response. Failure by a bank to file with the
FDIC, within the specified time period, a written response to a proposed
directive shall constitute a waiver of the opportunity to respond and
shall constitute consent to the issuance of the directive.
(f) Request for modification or rescission of directive. Any bank
that is subject to a directive under this subpart may, upon a change in
circumstances, request in writing that the FDIC reconsider the terms of
the directive, and may propose that the directive be rescinded or
modified. Unless otherwise ordered by the FDIC, the directive shall
continue in place while such request is pending before the FDIC.
Sec. 308.202 Procedures for reclassifying a bank based on criteria other than capital.
(a) Reclassification based on unsafe or unsound condition or
practice--(1) Issuance of notice of proposed reclassification--(i)
Grounds for reclassification. (A) Pursuant to Sec. 325.103(d) of this
chapter, the FDIC may reclassify a well capitalized bank as adequately
capitalized or subject an adequately capitalized or undercapitalized
institution to the supervisory actions applicable to the next lower
capital category if:
(1) The FDIC determines that the bank is in unsafe or unsound
condition; or
(2) The FDIC, pursuant to section 8(b)(8) of the FDI Act (12 U.S.C.
1818(b)(8)), deems the bank to be engaged in an unsafe or unsound
practice and not to have corrected the deficiency.
(B) Any action pursuant to this paragraph (a)(1)(i) shall
hereinafter be referred to as reclassification.
(ii) Prior notice to institution. Prior to taking action pursuant to
Sec. 325.103(d) of this chapter, the FDIC shall issue and serve on the
bank a written notice of the FDIC's intention to reclassify the bank.
(2) Contents of notice. A notice of intention to reclassify a bank
based on unsafe or unsound condition shall include:
(i) A statement of the bank's capital measures and capital levels
and the category to which the bank would be reclassified;
(ii) The reasons for reclassification of the bank;
(iii) The date by which the bank subject to the notice of
reclassification may file with the FDIC a written appeal of the proposed
reclassification and a request for a hearing, which shall be at least 14
calendar days from the date of service of the notice unless the FDIC
determines that a shorter period is appropriate in light of the
financial condition of the bank or other relevant circumstances.
(3) Response to notice of proposed reclassification. A bank may file
a written response to a notice of proposed reclassification within the
time period set by the FDIC. The response should include:
(i) An explanation of why the bank is not in an unsafe or unsound
condition or otherwise should not be reclassified; and
(ii) Any other relevant information, mitigating circumstances,
documentation, or other evidence in support of the position of the bank
regarding the reclassification.
(4) Failure to file response. Failure by a bank to file, within the
specified
[[Page 110]]
time period, a written response with the FDIC to a notice of proposed
reclassification shall constitute a waiver of the opportunity to respond
and shall constitute consent to the reclassification.
(5) Request for hearing and presentation of oral testimony or
witnesses. The response may include a request for an informal hearing
before the FDIC under this section. If the bank desires to present oral
testimony or witnesses at the hearing, the bank shall include a request
to do so with the request for an informal hearing. A request to present
oral testimony or witnesses shall specify the names of the witnesses and
the general nature of their expected testimony. Failure to request a
hearing shall constitute a waiver of any right to a hearing, and failure
to request the opportunity to present oral testimony or witnesses shall
constitute a waiver of any right to present oral testimony or witnesses.
(6) Order for informal hearing. Upon receipt of a timely written
request that includes a request for a hearing, the FDIC shall issue an
order directing an informal hearing to commence no later than 30 days
after receipt of the request, unless the bank requests a later date. The
hearing shall be held in Washington, DC or at such other place as may be
designated by the FDIC, before a presiding officer(s) designated by the
FDIC to conduct the hearing.
(7) Hearing procedures. (i) The bank shall have the right to
introduce relevant written materials and to present oral argument at the
hearing. The bank may introduce oral testimony and present witnesses
only if expressly authorized by the FDIC or the presiding officer(s).
Neither the provisions of the Administrative Procedure Act (5 U.S.C.
554-557) governing adjudications required by statute to be determined on
the record nor the Uniform Rules of Practice and Procedure in this part
apply to an informal hearing under this section unless the FDIC orders
that such procedures shall apply.
(ii) The informal hearing shall be recorded, and a transcript shall
be furnished to the bank upon request and payment of the cost thereof.
Witnesses need not be sworn, unless specifically requested by a party or
the presiding officer(s). The presiding officer(s) may ask questions of
any witness.
(iii) The presiding officer(s) may order that the hearing be
continued for a reasonable period (normally five business days)
following completion of oral testimony or argument to allow additional
written submissions to the hearing record.
(8) Recommendation of presiding officers. Within 20 calendar days
following the date the hearing and the record on the proceeding are
closed, the presiding officer(s) shall make a recommendation to the FDIC
on the reclassification.
(9) Time for decision. Not later than 60 calendar days after the
date the record is closed or the date of the response in a case where no
hearing was requested, the FDIC will decide whether to reclassify the
bank and notify the bank of the FDIC's decision.
(b) Request for rescission of reclassification. Any bank that has
been reclassified under this section, may, upon a change in
circumstances, request in writing that the FDIC reconsider the
reclassification, and may propose that the reclassification be rescinded
and that any directives issued in connection with the reclassification
be modified, rescinded, or removed. Unless otherwise ordered by the
FDIC, the bank shall remain subject to the reclassification and to any
directives issued in connection with that reclassification while such
request is pending before the FDIC.
Sec. 308.203 Order to dismiss a director or senior executive officer.
(a) Service of notice. When the FDIC issues and serves a directive
on a bank pursuant to Sec. 308.201 of this part requiring the bank to
dismiss from office any director or senior executive officer under
Sec. 38(f)(2)(F)(ii) of the FDI Act, the FDIC shall also serve a copy of
the directive, or the relevant portions of the directive where
appropriate, upon the person to be dismissed.
(b) Response to directive--(1) Request for reinstatement. A director
or senior executive officer who has been served with a directive under
paragraph (a) of this section (Respondent) may file a written request
for reinstatement. The request for reinstatement shall be filed
[[Page 111]]
within 10 calendar days of the receipt of the directive by the
Respondent, unless further time is allowed by the FDIC at the request of
the Respondent.
(2) Contents of request; informal hearing. The request for
reinstatement shall include reasons why the Respondent should be
reinstated, and may include a request for an informal hearing before the
FDIC under this section. If the Respondent desires to present oral
testimony or witnesses at the hearing, the Respondent shall include a
request to do so with the request for an informal hearing. The request
to present oral testimony or witnesses shall specify the names of the
witnesses and the general nature of their expected testimony. Failure to
request a hearing shall constitute a waiver of any right to a hearing
and failure to request the opportunity to present oral testimony or
witnesses shall constitute a waiver of any right or opportunity to
present oral testimony or witnesses.
(3) Effective date. Unless otherwise ordered by the FDIC, the
dismissal shall remain in effect while a request for reinstatement is
pending.
(c) Order for informal hearing. Upon receipt of a timely written
request from a Respondent for an informal hearing on the portion of a
directive requiring a bank to dismiss from office any director or senior
executive officer, the FDIC shall issue an order directing an informal
hearing to commence no later than 30 days after receipt of the request,
unless the Respondent requests a later date. The hearing shall be held
in Washington, DC, or at such other place as may be designated by the
FDIC, before a presiding officer(s) designated by the FDIC to conduct
the hearing.
(d) Hearing procedures. (1) A Respondent may appear at the hearing
personally or through counsel. A Respondent shall have the right to
introduce relevant written materials and to present oral argument. A
Respondent may introduce oral testimony and present witnesses only if
expressly authorized by the FDIC or the presiding officer(s). Neither
the provisions of the Administrative Procedure Act governing
adjudications required by statute to be determined on the record nor the
Uniform Rules of Practice and Procedure in this part apply to an
informal hearing under this section unless the FDIC orders that such
procedures shall apply.
(2) The informal hearing shall be recorded, and a transcript shall
be furnished to the Respondent upon request and payment of the cost
thereof. Witnesses need not be sworn, unless specifically requested by a
party or the presiding officer(s). The presiding officer(s) may ask
questions of any witness.
(3) The presiding officer(s) may order that the hearing be continued
for a reasonable period (normally five business days) following
completion of oral testimony or argument to allow additional written
submissions to the hearing record.
(e) Standard for review. A Respondent shall bear the burden of
demonstrating that his or her continued employment by or service with
the bank would materially strengthen the bank's ability:
(1) To become adequately capitalized, to the extent that the
directive was issued as a result of the bank's capital level or failure
to submit or implement a capital restoration plan; and
(2) To correct the unsafe or unsound condition or unsafe or unsound
practice, to the extent that the directive was issued as a result of
classification of the bank based on supervisory criteria other than
capital, pursuant to section 38(g) of the FDI Act.
(f) Recommendation of presiding officers. Within 20 calendar days
following the date the hearing and the record on the proceeding are
closed, the presiding officer(s) shall make a recommendation to the FDIC
concerning the Respondent's request for reinstatement with the bank.
(g) Time for decision. Not later than 60 calendar days after the
date the record is closed or the date of the response in a case where no
hearing was requested, the FDIC shall grant or deny the request for
reinstatement and notify the Respondent of the FDIC's decision. If the
FDIC denies the request for reinstatement, the FDIC shall set forth in
the notification the reasons for the FDIC's action.
[[Page 112]]
Sec. 308.204 Enforcement of directives.
(a) Judicial remedies. Whenever a bank fails to comply with a
directive issued under section 38, the FDIC may seek enforcement of the
directive in the appropriate United States district court pursuant to
section 8(i)(1) of the FDI Act (12 U.S.C. 1818(i)(1)).
(b) Administrative remedies--(1) Failure to comply with directive.
Pursuant to section 8(i)(2)(A) of the FDI Act, the FDIC may assess a
civil money penalty against any bank that violates or otherwise fails to
comply with any final directive issued under section 38 and against any
institution-affiliated party who participates in such violation or
noncompliance.
(2) Failure to implement capital restoration plan. The failure of a
bank to implement a capital restoration plan required under section 38,
or subpart B of part 325 of this chapter, or the failure of a company
having control of a bank to fulfill a guarantee of a capital restoration
plan made pursuant to section 38(e)(2) of the FDI Act shall subject the
bank to the assessment of civil money penalties pursuant to section
8(i)(2)(A) of the FDI Act.
(c) Other enforcement action. In addition to the actions described
in paragraphs (a) and (b) of this section, the FDIC may seek enforcement
of the provisions of section 38 or subpart B of part 325 of this chapter
through any other judicial or administrative proceeding authorized by
law.
[57 FR 44897, Sept. 29, 1992; 57 FR 48426, Oct. 23, 1992]
Subpart R--Submission and Review of Safety and Soundness Compliance
Plans and Issuance of Orders To Correct Safety and Soundness
Deficiencies
Source: 60 FR 35684, July 10, 1995, unless otherwise noted.
Sec. 308.300 Scope.
The rules and procedures set forth in this subpart apply to insured
state nonmember banks and to state-licensed insured branches of foreign
banks, that are subject to the provisions of section 39 of the Federal
Deposit Insurance Act (section 39) (12 U.S.C. 1831p-1).
Sec. 308.301 Purpose.
Section 39 of the FDI Act requires the FDIC to establish safety and
soundness standards. Pursuant to section 39, a bank may be required to
submit a compliance plan if it is not in compliance with a safety and
soundness standard established by guideline under section 39(a) or (b).
An enforceable order under section 8 of the FDI Act may be issued if,
after being notified that it is in violation of a safety and soundness
standard established under section 39, the bank fails to submit an
acceptable compliance plan or fails in any material respect to implement
an accepted plan. This subpart establishes procedures for requiring
submission of a compliance plan and issuing an enforceable order
pursuant to section 39.
Sec. 308.302 Determination and notification of failure to meet a safety and soundness standard and request for compliance plan.
(a) Determination. The FDIC may, based upon an examination,
inspection, or any other information that becomes available to the FDIC,
determine that a bank has failed to satisfy the safety and soundness
standards set out in part 364 of this chapter and in the Interagency
Guidelines Establishing Standards for Safety and Soundness set forth in
appendix A to part 364 of this chapter.
(b) Request for compliance plan. If the FDIC determines that a bank
has failed a safety and soundness standard pursuant to paragraph (a) of
this section, the FDIC may request, by letter or through a report of
examination, the submission of a compliance plan and the bank shall be
deemed to have notice of the request three days after mailing of the
letter by the FDIC or delivery of the report of examination.
Sec. 308.303 Filing of safety and soundness compliance plan.
(a) Schedule for filing compliance plan--(1) In general. A bank
shall file a written safety and soundness compliance plan with the FDIC
within 30 days of receiving a request for a compliance
[[Page 113]]
plan pursuant to Sec. 308.302(b), unless the FDIC notifies the bank in
writing that the plan is to be filed within a different period.
(2) Other plans. If a bank is obligated to file, or is currently
operating under, a capital restoration plan submitted pursuant to
section 38 of the FDI Act (12 U.S.C. 1831o), a cease-and-desist order
entered into pursuant to section 8 of the FDI Act, a formal or informal
agreement, or a response to a report of examination or report of
inspection, it may, with the permission of the FDIC, submit a compliance
plan under this section as part of that plan, order, agreement, or
response, subject to the deadline provided in paragraph (a)(1) of this
section.
(b) Contents of plan. The compliance plan shall include a
description of the steps the bank will take to correct the deficiency
and the time within which those steps will be taken.
(c) Review of safety and soundness compliance plans. Within 30 days
after receiving a safety and soundness compliance plan under this
subpart, the FDIC shall provide written notice to the bank of whether
the plan has been approved or seek additional information from the bank
regarding the plan. The FDIC may extend the time within which notice
regarding approval of a plan will be provided.
(d) Failure to submit or implement a compliance plan--(1)
Supervisory actions. If a bank fails to submit an acceptable plan within
the time specified by the FDIC or fails in any material respect to
implement a compliance plan, then the FDIC shall, by order, require the
bank to correct the deficiency and may take further actions provided in
section 39(e)(2)(B). Pursuant to section 39(e)(3), the FDIC may be
required to take certain actions if the bank commenced operations or
experienced a change in control within the previous 24-month period, or
the bank experienced extraordinary growth during the previous 18-month
period.
(2) Extraordinary growth. For purposes of paragraph (d)(1) of this
section, extraordinary growth means an increase in assets of more than
7.5 percent during any quarter within the 18-month period preceding the
issuance of a request for submission of a compliance plan, by a bank
that is not well capitalized for purposes of section 38 of the FDI Act.
For purposes of calculating an increase in assets, assets acquired
through merger or acquisition approved pursuant to the Bank Merger Act
(12 U.S.C. 1828(c)) will be excluded.
(e) Amendment of compliance plan. A bank that has filed an approved
compliance plan may, after prior written notice to and approval by the
FDIC, amend the plan to reflect a change in circumstance. Until such
time as a proposed amendment has been approved, the bank shall implement
the compliance plan as previously approved.
Sec. 308.304 Issuance of orders to correct deficiencies and to take or refrain from taking other actions.
(a) Notice of intent to issue order--(1) In general. The FDIC shall
provide a bank prior written notice of the FDIC's intention to issue an
order requiring the bank to correct a safety and soundness deficiency or
to take or refrain from taking other actions pursuant to section 39 of
the FDI Act. The bank shall have such time to respond to a proposed
order as provided by the FDIC under paragraph (c) of this section.
(2) Immediate issuance of final order. If the FDIC finds it
necessary in order to carry out the purposes of section 39 of the FDI
Act, the FDIC may, without providing the notice prescribed in paragraph
(a)(1) of this section, issue an order requiring a bank immediately to
take actions to correct a safety and soundness deficiency or take or
refrain from taking other actions pursuant to section 39. A bank that is
subject to such an immediately effective order may submit a written
appeal of the order to the FDIC. Such an appeal must be received by the
FDIC within 14 calendar days of the issuance of the order, unless the
FDIC permits a longer period. The FDIC shall consider any such appeal,
if filed in a timely matter, within 60 days of receiving the appeal.
During such period of review, the order shall remain in effect unless
the FDIC, in its sole discretion, stays the effectiveness of the order.
(b) Contents of notice. A notice of intent to issue an order shall
include:
[[Page 114]]
(1) A statement of the safety and soundness deficiency or
deficiencies that have been identified at the bank;
(2) A description of any restrictions, prohibitions, or affirmative
actions that the FDIC proposes to impose or require;
(3) The proposed date when such restrictions or prohibitions would
be effective or the proposed date for completion of any required action;
and
(4) The date by which the bank subject to the order may file with
the FDIC a written response to the notice.
(c) Response to notice--(1) Time for response. A bank may file a
written response to a notice of intent to issue an order within the time
period set by the FDIC. Such a response must be received by the FDIC
within 14 calendar days from the date of the notice unless the FDIC
determines that a different period is appropriate in light of the safety
and soundness of the bank or other relevant circumstances.
(2) Contents of response. The response should include:
(i) An explanation why the action proposed by the FDIC is not an
appropriate exercise of discretion under section 39;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances,
documentation, or other evidence in support of the position of the bank
regarding the proposed order.
(d) Agency consideration of response. After considering the
response, the FDIC may:
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the bank; or
(3) Seek additional information or clarification of the response
from the bank, or any other relevant source.
(e) Failure to file response. Failure by a bank to file with the
FDIC, within the specified time period, a written response to a proposed
order shall constitute a waiver of the opportunity to respond and shall
constitute consent to the issuance of the order.
(f) Request for modification or rescission of order. Any bank that
is subject to an order under this subpart may, upon a change in
circumstances, request in writing that the FDIC reconsider the terms of
the order, and may propose that the order be rescinded or modified.
Unless otherwise ordered by the FDIC, the order shall continue in place
while such request is pending before the FDIC.
Sec. 308.305 Enforcement of orders.
(a) Judicial remedies. Whenever a bank fails to comply with an order
issued under section 39, the FDIC may seek enforcement of the order in
the appropriate United States district court pursuant to section 8(i)(1)
of the FDI Act.
(b) Failure to comply with order. Pursuant to section 8(i)(2)(A) of
the FDI Act, the FDIC may assess a civil money penalty against any bank
that violates or otherwise fails to comply with any final order issued
under section 39 and against any institution-affiliated party who
participates in such violation or noncompliance.
(c) Other enforcement action. In addition to the actions described
in paragraphs (a) and (b) of this section, the FDIC may seek enforcement
of the provisions of section 39 or this part through any other judicial
or administrative proceeding authorized by law.
Subpart S--Applications for a Stay or Review of Actions of Bank Clearing
Agencies
Source: 61 FR 48403, Sept. 11, 1996, unless otherwise noted.
Sec. 308.400 Scope.
This subpart is issued by the Corporation pursuant to sections
17A(b)(3)(g), 17A(b)(5)(C), 19 and 23 of the Securities Exchange Act of
1934 (Exchange Act), as amended (15 U.S.C. 78q-1 (b)(3)(g), (b)(5)(C),
78s, 78w). It applies to applications by banks insured by the
Corporation (other than members of the Federal Reserve System) for a
stay or review of certain actions by clearing agencies registered under
the Exchange Act, for which the Securities and Exchange Commission
(Commission) is not the appropriate regulatory agency under section
3(a)(34)(B) of the Exchange Act (bank clearing agencies).
[[Page 115]]
Sec. 308.401 Applications for stays of disciplinary sanctions or summary suspensions by a bank clearing agency.
Applications to the Corporation for a stay of disciplinary action
imposed by registered clearing agencies pursuant to section 17(b)(3)(G)
of the Exchange Act, or summary suspension or limitation or prohibition
of access under section 17(b)(5)(C) of the Exchange Act shall be made
according to the rules adopted by the Commission (17 CFR 240.19d-2).
References to the ``Commission'' in 17 CFR 240.19d-2 are deemed to refer
to the ``Corporation.''
Sec. 308.402 Applications for review of final disciplinary sanctions, denials of participation, or prohibitions or limitations of access to services imposed by
bank clearing agencies.
Proceedings on an application to the Corporation under section
19(d)(2) of the Exchange Act for review of any final disciplinary
sanctions, denials of participation, or prohibitions or limitations of
access to services imposed by bank clearing agencies shall be conducted
according to the procedures set forth in rules adopted by the Commission
(17 CFR 240.19d-3). References to the ``Commission'' in 17 CFR 240.19d-3
are deemed to refer to the ``Corporation.''
PART 309--DISCLOSURE OF INFORMATION--Table of Contents
Sec.
309.1 Purpose and scope.
309.2 Definitions.
309.3 Federal Register publication.
309.4 Publicly available records.
309.5 Procedures for requesting records.
309.6 Disclosure of exempt records.
309.7 Service of process.
Authority: 5 U.S.C. 552; 12 U.S.C. 1819 ``Seventh'' and ``Tenth.''
Source: 60 FR 61465, Nov. 30, 1995, unless otherwise noted.
Sec. 309.1 Purpose and scope.
This part sets forth the basic policies of the Federal Deposit
Insurance Corporation regarding information it maintains and the
procedures for obtaining access to such information.
Sec. 309.2 Definitions.
For purposes of this part:
(a) The term depository institution, as used in Sec. 309.6, includes
depository institutions that have applied to the Corporation for federal
deposit insurance, closed depository institutions, presently operating
federally insured depository institutions, foreign banks, branches of
foreign banks, and all affiliates of any of the foregoing.
(b) The terms Corporation or FDIC mean the Federal Deposit Insurance
Corporation.
(c) The words disclose or disclosure, as used in Sec. 309.6, mean to
give access to a record, whether by producing the written record or by
oral discussion of its contents. Where the Corporation employee
authorized to release Corporation documents makes a determination that
furnishing copies of the documents is necessary, the words disclose or
disclosure include the furnishing of copies of documents or records. In
addition, disclose or disclosure as used in Sec. 309.6 is synonymous
with the term transfer as used in the Right to Financial Privacy Act of
1978 (12 U.S.C. 3401 et seq.).
(d) The term examination includes, but is not limited to, formal and
informal investigations of irregularities involving suspected violations
of federal or state civil or criminal laws, or unsafe and unsound
practices as well as such other investigations as may be conducted
pursuant to law.
(e) The term record includes records, files, documents, reports,
correspondence, books, and accounts, or any portion thereof.
(f) The term report of examination includes, but is not limited to,
examination reports resulting from examinations of depository
institutions conducted jointly by Corporation examiners and state
banking authority examiners or other federal financial institution
examiners, as well as reports resulting from examinations conducted
solely by Corporation examiners. The term also includes compliance
examination reports.
(g) The term customer financial records, as used in Sec. 309.6,
means an original of, a copy of, or information known to have been
derived from, any record held by a depository institution
[[Page 116]]
pertaining to a customer's relationship with the depository institution
but does not include any record that contains information not identified
with or identifiable as being derived from the financial records of a
particular customer. The term customer as used in Sec. 309.6 refers to
individuals or partnerships of five or fewer persons.
(h) The term Director of the Division having primary authority
includes Deputies to the Chairman and directors of FDIC Divisions and
Offices that create, maintain custody, or otherwise have primary
responsibility for the handling of FDIC records or information.
Sec. 309.3 Federal Register publication.
The FDIC publishes the following information in the Federal Register
for the guidance of the public:
(a) Descriptions of its central and field organization and the
established places at which, the officers from whom, and the methods
whereby, the public may secure information, make submittals or requests,
or obtain decisions;
(b) Statements of the general course and method by which its
functions are channeled and determined, including the nature and
requirements of all formal and informal procedures available;
(c) Rules of procedure, descriptions of forms available or the
places at which forms may be obtained, and instructions as to the scope
and contents of all papers, reports or examinations;
(d) Substantive rules of general applicability adopted as authorized
by law, and statements of general policy or interpretations of general
applicability formulated and adopted by the FDIC;
(e) Every amendment, revision or repeal of the foregoing; and
(f) General notices of proposed rule-making.
Sec. 309.4 Publicly available records.
The following records are available upon request or, as noted,
available for public inspection during normal business hours, at the
listed offices. Certain records are also available on the Internet at
the following address: http://www.fdic.gov. To the extent permitted by
law, the FDIC may delete identifying details when it makes available or
publishes a final opinion, final order, statement of policy,
interpretation or staff manual or instruction. Fees for furnishing
records under this section are as set forth in Sec. 309.5(c).
(a) At the Office of Corporate Communications, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington, DC 20429,
(202) 898-6996:
(1) Documents, including press releases, financial institution
letters and proposed and adopted regulations, published by the FDIC and
pertaining to its operations and those of insured depository
institutions that it supervises.
(2) Reports on the competitive factors involved in merger
transactions and the bases for approval of merger transactions as
required by sections 18(c)(4) and 18(c)(9) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c) (4) and (9)).
(3) Community Reinvestment Act (CRA) Public Evaluations.
(4) Final decisions and orders concerning compliance, enforcement,
and other related administrative actions.
(5) At the FDIC's discretion, Summary of Deposits filed by insured
depository institutions, except that information on the size and number
of accounts filed before June, 1982 is not available.1
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\1\ Summary of Deposits reports are described at 12 CFR 304.5.
---------------------------------------------------------------------------
(6) Annual Report of Trust Assets for commercial banks and state
savings banks.2
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\2\ Annual Report of Trust Assets, FFIEC Form 001.
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(b) At the Office of the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington, DC 20429,
which information is available for public inspection:
(1) All final opinions (including concurring and dissenting
opinions) and all final orders made in the adjudication of
administrative cases.
(2) Statements of policy and interpretations which have been adopted
by the FDIC but have not been published in the Federal Register.
(3) A current index of matters covered by paragraphs (b)(1) and
(b)(2) of this section that were issued, adopted or promulgated after
July 4, 1967. Copies of the index will be provided at the
[[Page 117]]
direct cost of duplication as set forth in Sec. 309.5(b).
(c) At the Division of Supervision, Federal Deposit Insurance
Corporation, 550 17th Street, N.W., Washington, DC 20429:
(1) Filings and reports required under the provisions of 12 CFR Part
335 and the Securities and Exchange Act of 1934, as amended (15 U.S.C.
78a), by insured nonmember banks the securities of which are registered
with the FDIC pursuant to section 12 of that Act (15 U.S.C. 78l). These
filings and reports are available for public inspection as detailed in
12 CFR 335.702.
(2) Manual of Examination Policies.
(3) Manual of Trust Examination Policies.
(4) Federal Financial Institutions Examination Council (FFIEC)
Information Systems Examination Handbook.
(5) In the FDIC's discretion, the Consolidated Reports of Condition
and Income filed by insured nonmember banks (and certain nonfederally
insured depository institutions in the case of reports of condition),
except that select sensitive financial information may be
withheld.3
---------------------------------------------------------------------------
\3\ Reports of income and of condition are described at 12 CFR
304.4.
---------------------------------------------------------------------------
(d) At the regional office of the FDIC for the region in which the
applicant or subject depository institution is located (A list of FDIC's
regional offices is available from the Office of Corporate
Communications, Federal Deposit Insurance Corporation, 550 17th Street,
N.W., Washington, DC 20429, (202) 898-6996):
(1) In the FDIC's discretion, non-confidential portions of
application files as provided in 12 CFR 303.6(g), including applications
for deposit insurance, to establish branches, to relocate offices and to
merge.
(2)(i) After acceptance by the FDIC of a notice filed pursuant to
the Change in Bank Control Act of 1978 (12 U.S.C. 1817(j)) (other than a
notice filed in contemplation of a public tender offer subject to the
Securities Exchange Act of 1934 (15 U.S.C. 78m and 78n) and the FDIC's
tender offer regulations (12 CFR 335.501-335.530), the appropriate FDIC
regional office will make available, on request, the following
information: The name of the depository institution whose stock is to be
acquired; the date the notice was accepted; the identity of the
acquiring person(s); the number of shares to be acquired; and the number
of outstanding shares of stock in the depository institution. (The mere
filing of a notice does not automatically constitute ``acceptance'' by
the FDIC; a notice is ``accepted'' when the regional office determines
that the notice contains all the information required by 12 U.S.C.
1817(j)(6)).
(ii) In the case of a notice filed in contemplation of a public
tender offer that is subject to the Securities Exchange Act of 1934 (15
U.S.C. 78m and 78n) and the FDIC's tender offer regulations (12 CFR
335.501-335.530), when public disclosure is determined under
Sec. 303.4(b)(4) of the FDIC's regulations (12 CFR 303.4(b)(4)) to be
appropriate, the appropriate FDIC regional office will make available,
on request, the information described in paragraph (d)(2)(i) of this
section.
(iii) After a transaction subject to the Change in Bank Control Act
of 1978 has been consummated, the appropriate FDIC regional office will
make available, on request, the following information, in addition to
the information described in paragraph (d)(2)(i) of this section: The
date the shares were acquired; the names of the sellers (or
transferors); and the total number of shares owned by the purchasers (or
acquirors).
(e) At the Division of Depositor and Asset Services, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington, DC, 20429:
(1) Credit Manual;
(2) Agriculture Manual;
(3) Claims Manual;
(4) Operations Manual;
(5) Closing Manual;
(6) Environmental Guidelines Manual;
(7) Deposit Insurance Manual;
(8) Settlement Manual.
(f) At the Division of Compliance and Consumer Affairs, Federal
Deposit Insurance Corporation, 550 17th Street, N.W., Washington, DC
20429: Compliance Examination Manual.
[[Page 118]]
Sec. 309.5 Procedures for requesting records.
(a) Definitions. For purposes of this section:
(1) Commercial use request means a request from or on behalf of a
requester who seeks records for a use or purpose that furthers the
commercial, trade, or profit interests of the requester or the person on
whose behalf the request is made. In determining whether a request falls
within this category, the FDIC will determine the use to which a
requester will put the records requested and seek additional information
as it deems necessary.
(2) Direct costs means those expenditures the FDIC actually incurs
in searching for, duplicating, and, in the case of commercial
requesters, reviewing records in response to a request for records.
(3) Duplication means the process of making a copy of a record
necessary to respond to a request for records or for inspection of
original records that contain exempt material or that cannot otherwise
be directly inspected. Such copies can take the form of paper copy,
microfilm, audiovisual records, or machine readable records (e.g.,
magnetic tape or computer disk).
(4) Educational institution means a preschool, a public or private
elementary or secondary school, an institution of undergraduate or
graduate higher education, an institution of professional education, and
an institution of vocational education, which operates a program or
programs of scholarly research.
(5) Non-commercial scientific institution means an institution that
is not operated on a commercial basis as that term is defined in
paragraph (a)(1) of this section, and which is operated solely for the
purpose of conducting scientific research, the results of which are not
intended to promote any particular product or industry.
(6) Representative of the news media means any person actively
gathering news for, or a free-lance journalist who reasonably expects to
have his or her work product published or broadcast by, an entity that
is organized and operated to publish or broadcast news to the public.
The term news means information that is about current events or that
would be of current interest to the general public.
(7) Review means the process of examining records located in
response to a request for records to determine whether any portion of
any record is permitted to be withheld as exempt information. It
includes processing any record for disclosure, e.g., doing all that is
necessary to excise them or otherwise prepare them for release.
(8) Search includes all time spent looking for material that is
responsive to a request, including page-by-page or line-by-line
identification of material within records. Searches may be done manually
and/or by computer using existing programming.
(b) Initial request. (1) Except as provided in paragraphs (d) and
(h) of this section, the FDIC, upon request for any record in its
possession, will make the record available to any person who agrees to
pay the costs of searching, review and duplication as set forth in
paragraph (c) of this section. The request must be in writing, provide
information reasonably sufficient to enable the FDIC to identify the
requested records and specify a dollar limit which the requester is
willing to pay for the costs of searching, review and duplication,
unless the costs are believed to be less than the FDIC's cost of
processing the requester's remittance, which cost will be set forth in
the ``Notice of Federal Deposit Insurance Corporation Records Fees'' as
described in paragraph (c)(3) of this section. Requests under this
paragraph (b) should be addressed to the Office of the Executive
Secretary, FDIC, 550 17th Street, N.W., Washington, DC 20429.
(2) The FDIC will transmit notice to the requester within 10
business days after receipt of the initial request whether it is granted
or denied. Denials of requests will be based on the exemptions provided
for in paragraph (d) of this section.
(3) Notification of a denial of an initial request will be in
writing and will state:
(i) If the denial is in part or in whole;
(ii) The name and title of each person responsible for the denial
(when other than the person signing the notification);
[[Page 119]]
(iii) The exemptions relied on for the denial; and
(iv) The right of the requester to appeal the denial to the FDIC's
General Counsel within 30 business days following receipt of the
notification.
(c) Fees--(1) General rules. (i) Persons requesting records of the
FDIC shall be charged for the direct costs of search, duplication and
review as set forth in paragraphs (c)(2) and (c)(3) of this section,
unless such costs are less than the FDIC's cost of processing the
requester's remittance.
(ii) Requesters will be charged for search and review costs even if
responsive records are not located and, if located, are determined to be
exempt from disclosure.
(iii) Multiple requests seeking similar or related records from the
same requester or group of requesters will be aggregated for the
purposes of this section.
(iv) If the FDIC determines that the estimated costs of search,
duplication or review of requested records will exceed the dollar amount
specified in the request or if no dollar amount is specified, the FDIC
will advise the requester of the estimated costs (if greater than the
FDIC's cost of processing the requester's remittance). The requester
must agree in writing to pay the costs of search, duplication and review
prior to the FDIC initiating any records search.
(v) If the FDIC estimates that its search, duplication and review
costs will exceed $250.00, the requester must pay an amount equal to 20
percent of the estimated costs prior to the FDIC initiating any records
search.
(vi) The FDIC may require any requester who has previously failed to
pay the charges under this section within 30 days of mailing of the
invoice to pay in advance the total estimated costs of search,
duplication and review. The FDIC may also require a requester who has
any charges outstanding in excess of 30 days following mailing of the
invoice to pay the full amount due, or demonstrate that the fee has been
paid in full, prior to the FDIC initiating any additional records
search.
(vii) The FDIC may begin assessing interest charges on unpaid bills
on the 31st day following the day on which the notice was sent. Interest
will be at the rate prescribed in section 3717 of title 31 of the United
States Code and will accrue from the date of the invoice.
(viii) The time limit for FDIC to respond to a request will not
begin to run until the FDIC has received the requester's written
agreement under paragraph (c)(1)(iv) of this section, and advance
payment under paragraph (c)(1) (v) or (vi) of this section, or
outstanding charge under paragraph (c)(1)(vi) of this section.
(ix) As part of the initial request, a requester may ask that the
FDIC waive or reduce fees if disclosure of the records is in the public
interest because it is likely to contribute significantly to public
understanding of the operations or activities of the government and is
not primarily in the commercial interest of the requester.
Determinations as to a waiver or reduction of fees will be made by the
Executive Secretary (or designee) and the requester will be notified in
writing of his/her determination. A determination not to grant a request
for a waiver or reduction of fees under this paragraph may be appealed
to the FDIC's General Counsel (or designee) pursuant to the procedure
set forth in paragraph (e) of this section.
(2) Chargeable fees by category of requester. (i) Commercial use
requesters shall be charged search, duplication and review costs.
(ii) Educational institutions, non-commercial scientific
institutions and news media representatives shall be charged duplication
costs, except for the first 100 pages.
(iii) Requesters not within the scope of paragraph (c)(2) (i) or
(ii) of this section shall be charged the full reasonable direct cost of
search and duplication, except for the first two hours of search time
and first 100 pages of duplication.
(3) Fee schedule. The dollar amount of fees which the FDIC may
charge to records requesters will be established by the Chief Financial
Officer of the FDIC (or designee), and will be set forth in the ``Notice
of Federal Deposit Insurance Corporation Records Fees'' issued in
December of each year or in such ``Interim Notice of Federal Deposit
Insurance Corporation Records
[[Page 120]]
Fees'' as may be issued. Copies of such notices may be obtained at no
charge from the FDIC's Office of the Executive Secretary, FOIA Unit, 550
17th Street NW., Washington, DC 20429. The fees implemented in the
December or Interim Notice will be effective 30 days after issuance. The
FDIC may charge fees that recoup the full allowable direct costs it
incurs. The FDIC may contract with independent contractors to locate,
reproduce, and/or disseminate records; provided however, that the FDIC
has determined that the ultimate cost to the requester will be no
greater than it would be if the FDIC performed these tasks itself. In no
case will the FDIC contract out responsibilities which the Freedom of
Information Act (FOIA) (5 U.S.C. 552) provides that the FDIC alone may
discharge, such as determining the applicability of an exemption or
whether to waive or reduce fees. Fees are subject to change as costs
change.
(i) Manual searches for records. The FDIC will charge for manual
searches for records at the basic rate of pay of the employee making the
search plus 16 percent to cover employee benefit costs. Where a single
class of personnel (e.g., all clerical, all professional, or all
executive) is used exclusively, the FDIC, at its discretion, may
establish and charge an average rate for the range of grades typically
involved.
(ii) Computer searches for records. The fee for searches of
computerized records is the actual direct cost of the search, including
computer time, computer runs, and the operator's time apportionable to
the search. The fee for a computer printout is the actual cost. The fees
for computer supplies are the actual costs. The FDIC may, at its
discretion, establish and charge a fee for computer searches based upon
a reasonable FDIC-wide average rate for central processing unit
operating costs and the operator's basic rate of pay plus 16 percent to
cover employee benefit costs.
(iii) Duplication of records. (A) The per-page fee for paper copy
reproduction of documents is the average FDIC-wide cost based upon the
reasonable direct costs of making such copies.
(B) For other methods of reproduction or duplication, the FDIC will
charge the actual direct costs of reproducing or duplicating the
documents.
(iv) Review of records. The FDIC will charge commercial use
requesters for the review of records at the time of processing the
initial request to determine whether they are exempt from mandatory
disclosure at the basic rate of pay of the employee making the search
plus 16 percent to cover employee benefit costs. Where a single class of
personnel (e.g., all clerical, all professional, or all executive) is
used exclusively, the FDIC, at its discretion, may establish and charge
an average rate for the range of grades typically involved. The FDIC
will not charge at the administrative appeal level for review of an
exemption already applied. When records or portions of records are
withheld in full under an exemption which is subsequently determined not
to apply, the FDIC may charge for a subsequent review to determine the
applicability of other exemptions not previously considered.
(v) Other services. Complying with requests for special services is
at the FDIC's discretion. The FDIC may recover the full costs of
providing such services to the extent it elects to provide them.
(d) Exempt information. A request for records may be denied if the
requested record contains information which falls into one or more of
the following categories.4 If the requested record contains
both exempt and nonexempt information, the nonexempt portions which may
reasonably be segregated from the exempt portions will be released to
the requester.
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\4\ Classification of a record as exempt from disclosure under the
provisions of Sec. 309.5(d) shall not be construed as authority to
withhold the record if it is otherwise subject to disclosure under the
Privacy Act of 1974 (5 U.S.C. 552a) or other federal statute, any
applicable regulation of FDIC or any other federal agency having
jurisdiction thereof, or any directive or order of any court of
competent jurisdiction.
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(1) Records which are specifically authorized under criteria
established by an Executive Order to be kept secret in the interest of
national defense or foreign policy and are in fact properly classified
pursuant to such Executive Order;
[[Page 121]]
(2) Records related solely to the internal personnel rules and
practices of the FDIC;
(3) Records specifically exempted from disclosure by statute,
provided that such statute:
(i) Requires that the matters be withheld from the public in such a
manner as to leave no discretion on the issue; or
(ii) Establishes particular criteria for withholding or refers to
particular types of matters to be withheld;
(4) Trade secrets and commercial or financial information obtained
from a person that is privileged or confidential;
(5) Interagency or intra-agency memoranda or letters which would not
be available by law to a private party in litigation with the FDIC;
(6) Personnel, medical, and similar files (including financial
files) the disclosure of which would constitute a clearly unwarranted
invasion of personal privacy;
(7) Records compiled for law enforcement purposes, but only to the
extent that the production of such law enforcement records:
(i) Could reasonably be expected to interfere with enforcement
proceedings;
(ii) Would deprive a person of a right to a fair trial or an
impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted
invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a
confidential source, including a state, local, or foreign agency or
authority or any private institution which furnished records on a
confidential basis;
(v) Would disclose techniques and procedures for law enforcement
investigations or prosecutions, or would disclose guidelines for law
enforcement investigations or prosecutions if such disclosure could
reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical
safety of any individual;
(8) Records that are contained in or related to examination,
operating, or condition reports prepared by, on behalf of, or for the
use of the FDIC or any agency responsible for the regulation or
supervision of financial institutions; or
(9) geological and geophysical information and data, including maps,
concerning wells.
(e) Appeals. (1) A person whose initial request for records under
paragraph (a) of this section, or whose request for a waiver of fees
under paragraph (c)(1)(ix) of this section, has been denied, either in
part or in whole, has the right to appeal the denial to FDIC's General
Counsel (or designee) within 30 business days after receipt of
notification of the denial. Appeals of denials of initial requests or
for a waiver of fees must be in writing and include any additional
information relevant to consideration of the appeal. Appeals should be
addressed to the Office of the Executive Secretary, FDIC, 550 17th
Street, N.W., Washington, DC 20429.
(2) The FDIC will notify the appellant within 20 business days after
receipt of the appeal whether it is granted or denied. Denials of
appeals on initial requests for records will be based on the exemptions
provided for in paragraph (c) of this section.
(3) Notifications of a denial of an appeal will be in writing and
will state:
(i) Whether the denial is in part or in whole;
(ii) The name and title of each person responsible for the denial
(if other than the person signing the notification);
(iii) The exemptions relied upon for the denial in the case of
initial requests for records; and
(iv) The right to judicial review of the denial under the FOIA.
(f) Extension of time. (1) Under unusual circumstances the FDIC may
require additional time, up to a maximum of 10 business days, to
determine whether to grant or deny an initial request or to respond to
an appeal of an initial denial. These circumstances would arise in cases
where:
(i) The records are in facilities, such as field offices or storage
centers, that are not part of the FDIC's Washington office;
(ii) The records requested are voluminous and are not in close
proximity to one another; or
[[Page 122]]
(iii) There is a need to consult with another agency or among two or
more components of the FDIC having a substantial interest in the
determination.
(2) The FDIC will promptly give written notification to the person
making the request of the estimated date it will make its determination
and the reasons why additional time is required.
(g) FDIC procedures. (1) Initial requests for records will be
forwarded by the Executive Secretary to the head of the FDIC division or
office which has primary authority over such records. Where it is
determined that the requested records may be released, the appropriate
division or office head will grant access to the records. A request for
records may be denied only by the Executive Secretary (or designee),
except that a request for records not responded to within 10 business
days following its receipt by the Office of Executive Secretary--by
notice to the requester either granting the request, denying the
request, or extending the time for making a determination on the
request--shall, if the requester chooses to treat such delay in response
as a denial, be deemed to have been denied.
(2) Appeals from a denial of an initial request will be forwarded by
the Executive Secretary to the General Counsel (or designee) for a
determination whether the appeal will be granted or denied. The General
Counsel (or designee) may on his or her own motion refer an appeal to
the Board of Directors for a determination or the Board of Directors may
in its discretion consider such an appeal.
(h) Records of another agency. If a requested record is the property
of another federal agency or department, and that agency or department,
either in writing or by regulation, expressly retains ownership of such
record, upon receipt of a request for the record the FDIC will promptly
inform the requester of this ownership and immediately shall forward the
request to the proprietary agency or department either for processing in
accordance with the latter's regulations or for guidance with respect to
disposition.
Sec. 309.6 Disclosure of exempt records.
(a) Disclosure prohibited. Except as provided in paragraph (b) of
this section or by 12 CFR part 310 5, no person shall
disclose or permit the disclosure of any exempt records, or information
contained therein, to any persons other than those officers, directors,
employees, or agents of the Corporation who have a need for such records
in the performance of their official duties. In any instance in which
any person has possession, custody or control of FDIC exempt records or
information contained therein, all copies of such records shall remain
the property of the Corporation and under no circumstances shall any
person, entity or agency disclose or make public in any manner the
exempt records or information without written authorization from the
Director of the Corporation's Division having primary authority over the
records or information as provided in this section.
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\5\ The procedures for disclosing records under the Privacy Act are
separately set forth in 12 CFR part 310.
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(b) Disclosure authorized. Exempt records or information of the
Corporation may be disclosed only in accordance with the conditions and
requirements set forth in this paragraph (b). Requests for discretionary
disclosure of exempt records or information pursuant to this paragraph
(b) may be submitted directly to the Division having primary authority
over the exempt records or information or to the Office of Executive
Secretary for forwarding to the appropriate Division having primary
authority over the records sought. Such administrative request must
clearly state that it seeks discretionary disclosure of exempt records,
clearly identify the records sought, provide sufficient information for
the Corporation to evaluate whether there is good cause for disclosure,
and meet all other conditions set forth in paragraph (b)(1) through (10)
of this section. Information regarding the appropriate FDIC Division
having primary authority over a particular record or records may be
obtained from the Office of Executive Secretary. Authority to disclose
or authorize disclosure of exempt records of the Corporation is
delegated as follows:
[[Page 123]]
(1) Disclosure to depository institutions. The Director of the
Corporation's Division having primary authority over the exempt records,
or designee, may disclose to any director or authorized officer,
employee or agent of any depository institution, information contained
in, or copies of, exempt records pertaining to that depository
institution.
(2) Disclosure to state banking agencies. The Director of the
Corporation's Division having primary authority over the exempt records,
or designee, may in his or her discretion and for good cause, disclose
to any authorized officer or employee of any state banking or securities
department or agency, copies of any exempt records to the extent the
records pertain to a state-chartered depository institution supervised
by the agency or authority, or where the exempt records are requested in
writing for a legitimate depository institution supervisory or
regulatory purpose.
(3) Disclosure to federal financial institutions supervisory
agencies and certain other agencies. The Director of the Corporation's
Division having primary authority over the exempt records, or designee,
may in his or her discretion and for good cause, disclose to any
authorized officer or employee of any federal financial institution
supervisory agency including the Comptroller of the Currency, the Board
of Governors of the Federal Reserve System, the Office of Thrift
Supervision, the Securities and Exchange Commission, the National Credit
Union Administration, or any other agency included in section 1101(7) of
the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et. seq.)
(RFPA), any exempt records for a legitimate depository institution
supervisory or regulatory purpose. The Director, or designee, may in his
or her discretion and for good cause, disclose exempt records, including
customer financial records, to certain other federal agencies as
referenced in section 1113 of the RFPA for the purposes and to the
extent permitted therein, or to any foreign bank regulatory or
supervisory authority as provided, and to the extent permitted, by
section 206 of the Federal Deposit Insurance Corporation Improvement Act
of 1991 (12 U.S.C. 3109).
(4) Disclosure to prosecuting or investigatory agencies or
authorities. (i) Reports of Apparent Crime pertaining to suspected
violations of law, which may contain customer financial records, may be
disclosed to federal or state prosecuting or investigatory authorities
without giving notice to the customer, as permitted in the relevant
exceptions of the RFPA.
(ii) The Director of the Corporation's Division having primary
authority over the exempt records, or designee, may disclose to the
proper federal or state prosecuting or investigatory authorities, or to
any authorized officer or employee of such authority, copies of exempt
records pertaining to irregularities discovered in depository
institutions which are believed to constitute violations of any federal
or state civil or criminal law, or unsafe or unsound banking practices,
provided that customer financial records may be disclosed without giving
notice to the customer, only as permitted by the relevant exceptions of
the RFPA. Unless such disclosure is initiated by the FDIC, customer
financial records shall be disclosed only in response to a written
request which:
(A) Is signed by an authorized official of the agency making the
request;
(B) Identifies the record or records to which access is requested;
and
(C) Gives the reasons for the request.
(iii) When notice to the customer is required to be given under the
RFPA, the Director of the Corporation's Division having primary
authority over the exempt records, or designee, may disclose customer
financial records to any federal or state prosecuting or investigatory
agency or authority, provided, that:
(A) The General Counsel, or designee, has determined that disclosure
is authorized or required by law; or
(B) Disclosure is pursuant to a written request that indicates the
information is relevant to a legitimate law enforcement inquiry within
the jurisdiction of the requesting agency and:
(1) The Director of the Corporation's Division having primary
authority over the exempt records, or designee,
[[Page 124]]
certifies pursuant to section 1112(a) 6 of the RFPA that the
records are believed relevant to a legitimate law enforcement inquiry
within the jurisdiction of the receiving agency; and
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\6\ The form of certification generally is as follows. Additional
information may be added:
Pursuant to section 1112(a) of the Right to Financial Privacy Act of
1978 (12 U.S.C. 3412), I, ______ [name and appropriate title] hereby
certify that the financial records described below were transferred to
(agency or department) in the belief that they were relevant to a
legitimate law enforcement inquiry, within the jurisdiction of the
receiving agency.
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(2) A copy of such certification and the notice required by section
1112(b) 7 of the RFPA is sent within fourteen days of the
disclosure to the customer whose records are disclosed.8
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\7\ The form of notice generally is as follows. Additional
information may be added:
Dear Mr./Ms. ______
Copies of, or information contained in, your financial records
lawfully in the possession of the Federal Deposit Insurance Corporation
have been furnished to (agency or department) pursuant to the Right to
Financial Privacy Act of 1978 for the following purpose: ______. If you
believe that this transfer has not been made to further a legitimate law
enforcement inquiry, you may have legal rights under the Right to
Financial Privacy Act of 1978 or the Privacy Act of 1974.
\8\ Whenever the Corporation is subject to a court-ordered delay of
the customer notice, the notice shall be sent immediately upon the
expiration of the court-ordered delay.
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(5) Disclosure to servicers and serviced institutions. The Director
of the Corporation's Division having primary authority over the exempt
records, or designee, may disclose copies of any exempt record related
to a bank data center, a depository institution service corporation or
any other data center that provides data processing or related services
to an insured institution (hereinafter referred to as ``data center'')
to:
(i) The examined data center;
(ii) Any insured institution that receives data processing or
related services from the examined data center;
(iii) Any state agency or authority which exercises general
supervision over an institution serviced by the examined data center;
and
(iv) Any federal financial institution supervisory agency which
exercises general supervision over an institution serviced by the
examined data center. The federal supervisory agency may disclose any
such examination report received from the Corporation to an insured
institution over which it exercises general supervision and which is
serviced by the examined data center.
(6) Disclosure to third parties. (i) Except as otherwise provided in
paragraphs (c) (1) through (5) of this section, the Director of the
Corporation's Division having primary authority over the exempt records,
or designee, may in his or her discretion and for good cause, disclose
copies of any exempt records to any third party where requested to do so
in writing. Any such written request shall:
(A) Specify, with reasonable particularity, the record or records to
which access is requested; and
(B) Give the reasons for the request.
(ii) Either prior to or at the time of any disclosure, the Director
or designee shall require such terms and conditions as he deems
necessary to protect the confidential nature of the record, the
financial integrity of any depository institution to which the record
relates, and the legitimate privacy interests of any individual named in
such records.
(7) Authorization for disclosure by depository institutions or other
third parties. (i) The Director of the Corporation's Division having
primary authority over the exempt records, or designee, may, in his or
her discretion and for good cause, authorize any director, officer,
employee, or agent of a depository institution to disclose copies of any
exempt record in his custody to anyone who is not a director, officer or
employee of the depository institution. Such authorization must be in
response to a written request from the party seeking the record or from
management of the depository institution to which the report or record
pertains. Any such request shall specify, with reasonable particularity,
the record sought, the party's interest therein, and the party's
relationship to the depository institution to which the record relates.
[[Page 125]]
(ii) The Director of the Corporation's Division having primary
authority over the exempt records, or designee, may, in his or her
discretion and for good cause, authorize any third party, including a
federal or state agency, that has received a copy of a Corporation
exempt record, to disclose such exempt record to another party or
agency. Such authorization must be in response to a written request from
the party that has custody of the copy of the exempt record. Any such
request shall specify the record sought to be disclosed and the reasons
why disclosure is necessary.
(iii) Any subsidiary depository institution of a bank holding
company or a savings and loan holding company may reproduce and furnish
a copy of any report of examination of the subsidiary depository
institution to the parent holding company without prior approval of the
Director of the Division having primary authority over the exempt
records and any depository institution may reproduce and furnish a copy
of any report of examination of the disclosing depository institution to
a majority shareholder if the following conditions are met:
(A) The parent holding company or shareholder owns in excess of 50%
of the voting stock of the depository institution or subsidiary
depository institution;
(B) The board of directors of the depository institution or
subsidiary depository institution at least annually by resolution
authorizes the reproduction and furnishing of reports of examination
(the resolution shall specifically name the shareholder or parent
holding company, state the address to which the reports are to be sent,
and indicate that all reports furnished pursuant to the resolution
remain the property of the Federal Deposit Insurance Corporation and are
not to be disclosed or made public in any manner without the prior
written approval of the Director of the Corporation's Division having
primary authority over the exempt records as provided in paragraph (b)
of this section;
(C) A copy of the resolution authorizing disclosure of the reports
is sent to the shareholder or parent holding company; and
(D) The minutes of the board of directors of the depository
institution or subsidiary depository institution for the meeting
immediately following disclosure of a report state:
(1) That disclosure was made;
(2) The date of the report which was disclosed;
(3) To whom the report was sent; and
(4) The date the report was disclosed.
(iv) With respect to any disclosure that is authorized under this
paragraph (b)(7), the Director of the Corporation's Division having
primary authority over the exempt records, or designee, shall only
permit disclosure of records upon determining that good cause exists. If
the exempt record contains information derived from depository
institution customer financial records, disclosure is to be authorized
only upon the condition that the requesting party and the party
releasing the records comply with any applicable provision of the RFPA.
Before authorizing the disclosure, the Director (or designee) may
require that both the party having custody of a copy of a Corporation
exempt record and the party seeking access to the record agree to such
limitations as the Director (or designee) deems necessary to protect the
confidential nature of the record, the financial integrity of any
depository institution to which the record relates and the legitimate
privacy interests of any persons named in such record.
(8) Disclosure by General Counsel. (i) The Corporation's General
Counsel, or designee, may disclose or authorize the disclosure of any
exempt record in response to a valid judicial subpoena, court order, or
other legal process, and authorize any current or former officer,
director, employee, agent of the Corporation, or third party, to appear
and testify regarding an exempt record or any information obtained in
the performance of such person's official duties, at any administrative
or judicial hearing or proceeding where such person has been served with
a valid subpoena, court order, or other legal process requiring him or
her to testify. The General Counsel shall consider the relevancy of such
exempt records or testimony to the litigation, and the interests of
justice, in determining whether
[[Page 126]]
to disclose such records or testimony. Third parties seeking disclosure
of exempt records or testimony in litigation to which the FDIC is not a
party shall submit a request for discretionary disclosure directly to
the General Counsel.9 Such request shall specify the
information sought with reasonable particularity and shall be
accompanied by a statement with supporting documentation showing in
detail the relevance of such exempt information to the litigation,
justifying good cause for disclosure, and a commitment to be bound by a
protective order. Failure to exhaust such administrative request prior
to service of a subpoena or other legal process may, in the General
Counsel's discretion, serve as a basis for objection to such subpoena or
legal process. Customer financial records may not be disclosed to any
federal agency that is not a federal financial supervisory agency
pursuant to this paragraph unless notice to the customer and
certification as required by the RFPA have been given except where
disclosure is subject to the relevant exceptions set forth in the RFPA.
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\9\ This administrative requirement does not apply to subpoenas,
court orders or other legal process issued for records of depository
institutions held by the FDIC as Receiver or Conservator. Subpoenas,
court orders or other legal process issued for such records will be
processed in accordance with State and Federal law, regulations, rules
and privileges applicable to FDIC as Receiver or Conservator.
---------------------------------------------------------------------------
(ii) The General Counsel, or designee, may in his or her discretion
and for good cause, disclose or authorize disclosure of any exempt
record or testimony by a current or former officer, director, employee,
agent of the Corporation, or third party, sought in connection with any
civil or criminal hearing, proceeding or investigation without the
service of a judicial subpoena, or other legal process requiring such
disclosure or testimony, if he or she determines that the records or
testimony are relevant to the hearing, proceeding or investigation and
that disclosure is in the best interests of justice and not otherwise
prohibited by Federal statute. Customer financial records shall not be
disclosed to any federal agency pursuant to this paragraph that is not a
federal financial supervisory agency, unless the records are sought
under the Federal Rules of Civil Procedure (28 U.S.C. appendix) or the
Federal Rules of Criminal Procedure (18 U.S.C. appendix) or comparable
rules of other courts and in connection with litigation to which the
receiving federal agency, employee, officer, director, or agent, and the
customer are parties, or disclosure is otherwise subject to the relevant
exceptions in the RFPA. Where the General Counsel or designee authorizes
a current or former officer, director, employee or agent of the
Corporation to testify or disclose exempt records pursuant to this
paragraph (b)(8), he or she may, in his or her discretion, limit the
authorization to so much of the record or testimony as is relevant to
the issues at such hearing, proceeding or investigation, and he or she
shall give authorization only upon fulfillment of such conditions as he
or she deems necessary and practicable to protect the confidential
nature of such records or testimony.
(9) Authorization for disclosure by the Chairman of the
Corporation's Board of Directors. Except where expressly prohibited by
law, the Chairman of the Corporation's Board of Directors may in his or
her discretion, authorize the disclosure of any Corporation records.
Except where disclosure is required by law, the Chairman may direct any
current or former officer, director, employee or agent of the
Corporation to refuse to disclose any record or to give testimony if the
Chairman determines, in his or her discretion, that refusal to permit
such disclosure is in the public interest.
(10) Limitations on disclosure. All steps practicable shall be taken
to protect the confidentiality of exempt records and information. Any
disclosure permitted by paragraph (b) of this section is discretionary
and nothing in paragraph (b) of this section shall be construed as
requiring the disclosure of information. Further, nothing in paragraph
(b) of this section shall be construed as restricting, in any manner,
[[Page 127]]
the authority of the Board of Directors, the Chairman of the Board of
Directors, the Director of the Corporation's Division having primary
authority over the exempt records, the Corporation's General Counsel, or
their designees, or any other Corporation Division or Office head, in
their discretion and in light of the facts and circumstances attendant
in any given case, to require conditions upon and to limit the form,
manner, and extent of any disclosure permitted by this section. Wherever
practicable, disclosure of exempt records shall be made pursuant to a
protective order and redacted to exclude all irrelevant or non-
responsive exempt information.
Sec. 309.7 Service of process.
(a) Service. Any subpoena or other legal process to obtain
information maintained by the FDIC shall be duly issued by a court
having jurisdiction over the FDIC, and served upon either the Executive
Secretary (or designee), FDIC, 550 17th Street, N.W., Washington, DC
20429, or the Regional Director or Regional Manager of the FDIC region
where the legal action from which the subpoena or process was issued is
pending. A list of the FDIC's regional offices is available from the
Office of Corporate Communications, FDIC, 550 17th Street, N.W.,
Washington, DC 20429 (telephone 202-898-6996). Where the FDIC is named
as a party, service of process shall be made pursuant to the Federal
Rules of Civil Procedure, and upon the Executive Secretary (or
designee), FDIC, 550 17th Street N.W., Washington, DC 20429, or upon the
agent designated to receive service of process in the state, territory,
or jurisdiction in which any insured depository institution is located.
Identification of the designated agent in the state, territory, or
jurisdiction may be obtained from the Office of the Executive Secretary
or from the Office of the General Counsel, FDIC, 550 17th Street N.W.,
Washington, DC 20429. The Executive Secretary (or designee), Regional
Director or designated agent shall immediately forward any subpoena,
court order or legal process to the General Counsel. The Corporation may
require the payment of fees, in accordance with the fee schedule
referred to in Sec. 309.5(c)(3), prior to the release of any records
requested pursuant to any subpoena or other legal process.
(b) Notification by person served. If any current or former officer,
director, employee or agent of the Corporation, or any other person who
has custody of records belonging to the FDIC, is served with a subpoena,
court order, or other process requiring that person's attendance as a
witness concerning any matter related to official duties, or the
production of any exempt record of the Corporation, such person shall
promptly advise the Office of the Corporation's General Counsel of such
service, of the testimony and records described in the subpoena, and of
all relevant facts which may be of assistance to the General Counsel in
determining whether the individual in question should be authorized to
testify or the records should be produced. Such person should also
inform the court or tribunal which issued the process and the attorney
for the party upon whose application the process was issued, if known,
of the substance of this section.
(c) Appearance by person served. Absent the written authorization of
the Corporation's General Counsel, or designee, to disclose the
requested information, any current or former officer, director,
employee, or agent of the Corporation, and any other person having
custody of records of the Corporation, who is required to respond to a
subpoena or other legal process, shall attend at the time and place
therein specified and respectfully decline to produce any such record or
give any testimony with respect thereto, basing such refusal on this
section.
PART 310--PRIVACY ACT REGULATIONS--Table of Contents
Sec.
310.1 Purpose and scope.
310.2 Definitions.
310.3 Procedures for requests pertaining to individual records in a
system of records.
310.4 Times, places, and requirements for identification of individuals
making requests.
310.5 Disclosure of requested information to individuals.
310.6 Special procedures: Medical records.
310.7 Request for amendment of record.
[[Page 128]]
310.8 Agency review of request for amendment of record.
310.9 Appeal of adverse initial agency determination on access or
amendment.
310.10 Disclosure of record to person other than the individual to whom
it pertains.
310.11 Fees.
310.12 Penalties.
310.13 Exemptions.
Authority: 5 U.S.C. 552a.
Source: 40 FR 46274, Oct. 6, 1975, unless otherwise noted.
Sec. 310.1 Purpose and scope.
The purpose of this part is to establish regulations implementing
the Privacy Act of 1974, 5 U.S.C. 552a. These regulations delineate the
procedures that an individual must follow in exercising his or her
access or amendment rights under the Privacy Act to records maintained
by the Corporation in systems of records.
[61 FR 43419, Aug. 23, 1996]
Sec. 310.2 Definitions.
For purposes of this part:
(a) The term Corporation means the Federal Deposit Insurance
Corporation;
(b) The term individual means a natural person who is either a
citizen of the United States or an alien lawfully admitted for permanent
residence;
(c) The term maintain includes maintain, collect, use, disseminate,
or control;
(d) The term record means any item, collection or grouping of
information about an individual that contains his/her name, or the
identifying number, symbol, or other identifying particular assigned to
the individual;
(e) The term system of records means a group of any records under
the control of the Corporation from which information is retrieved by
the name of the individual or some identifying number, symbol or other
identifying particular assigned to the individual;
(f) The term designated system of records means a system of records
which has been listed and summarized in the Federal Register pursuant to
the requirements of 5 U.S.C. 552a(e);
(g) The term routine use means, with respect to disclosure of a
record, the use of such record for a purpose which is compatible with
the purpose for which it was created;
(h) The terms amend or amendment mean any correction, addition to or
deletion from a record; and
(i) The term system manager means the agency official responsible
for a designated system of records, as denominated in the Federal
Register publication of ``Systems of Records Maintained by the Federal
Deposit Insurance Corporation.''
[40 FR 46274, Oct. 6, 1975, as amended at 42 FR 6796, Feb. 4, 1977]
Sec. 310.3 Procedures for requests pertaining to individual records in a system of records.
(a) Any present or former employee of the Corporation seeking access
to, or amendment of, his/her official personnel records maintained by
the Corporation shall submit his/her request in such manner as is
prescribed by the United States Office of Personnel Management in part
297 of its rules and regulations (5 CFR part 297). For access to, or
amendment of, other government-wide records systems maintained by the
Corporation, the procedures prescribed in the respective Federal
Register Privacy Act system notice shall be followed.
(b) Requests by individuals for access to records pertaining to them
and maintained within one of the Corporation's designated systems of
records should be submitted in writing to the Office of the Executive
Secretary, FOIA/PA Unit, Federal Deposit Insurance Corporation,
Washington, DC 20429. Each such request should contain a reasonable
description of the records sought, the system or systems in which such
record may be contained, and any additional identifying information, as
specified in the Corporation's Federal Register ``Notice of Systems of
Records'' for that particular system, copies of which are available upon
request from the FOIA/PA Unit, Office of the Executive Secretary.
[40 FR 46274, Oct. 6, 1975, as amended at 42 FR 6796, Feb. 4, 1977; 61
FR 43419, Aug. 23, 1996]
Sec. 310.4 Times, places, and requirements for identification of individuals making requests.
(a) Individuals may request access to records pertaining to
themselves by
[[Page 129]]
submitting a written request as provided in Sec. 310.3 of these
regulations, or by appearing in person on weekdays, other than official
holidays, at the Office of the Executive Secretary, Records Unit,
Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington,
DC 20429, between the hours of 8:30 a.m. and 5 p.m.
(b) Individuals appearing in person at the Corporation seeking
access to or amendment of their records shall present two forms of
reasonable identification, such as employment identification cards,
driver's licenses, or other identification cards or documents typically
used for identification purposes.
(c) Except for records that must be publicly disclosed pursuant to
the Freedom of Information Act, 5 U.S.C. 552, where the Corporation
determines it to be necessary for the individual's protection, a
certification of a duly commissioned notary public, of any state or
territory, attesting to the requesting individual's identity, or an
unsworn declaration subscribed to as true under the penalty of perjury
under the laws of the United States of America, at the election of the
individual, may be required before a written request seeking access to
or amendment of a record will be honored. The Corporation may also
require that individuals provide minimal identifying data such as full
name, date and place of birth, or other personal information necessary
to ensure proper identity before processing requests for records.
[40 FR 46274, Oct. 6, 1975, as amended at 42 FR 6796, Feb. 4, 1977; 61
FR 43419, Aug. 23, 1996]
Sec. 310.5 Disclosure of requested information to individuals.
(a) Except to the extent that Corporation records pertaining to an
individual:
(1) Are exempt from disclosure under Secs. 310.6 and 310.13 of this
part, or
(2) Were compiled in reasonable anticipation of a civil action or
proceeding, the Corporation will make such records available upon
request for purposes of inspection and copying by the individual (after
proper identity verification as provided in Sec. 310.4) and, upon the
individual's request and written authorization, by another person of the
individual's own choosing.
(b) The Executive Secretary will notify, in writing, the individual
making a request, whenever practicable within ten business days
following receipt of the request, whether any specified designated
system of records maintained by the Corporation contains a record
pertaining to the individual. Where such a record does exist, the
Executive Secretary also will inform the individual of the system
manager's decision whether to grant or deny the request for access. In
the event existing records are determined not to be disclosable, the
notification will inform the individual of the reasons for which
disclosure will not be made and will provide a description of the
individual's right to appeal the denial, as more fully set forth in
Sec. 310.9. Where access is to be granted, the notification will specify
the procedures for verifying the individual's identity, as set forth in
Sec. 310.4.
(c) Individuals will be granted access to records disclosable under
this part 310 as soon as is practicable. The Executive Secretary will
give written notification of a reasonable period within which
individuals may inspect disclosable records pertaining to themselves at
the Office of the Executive Secretary during normal business hours.
Alternatively, individuals granted access to records under this part may
request that copies of such records be forwarded to them. Fees for
copying such records will be assessed as provided in Sec. 310.11.
[40 FR 46274, Oct. 6, 1975, as amended at 42 FR 6796, Feb. 4, 1977]
Sec. 310.6 Special procedures: Medical records.
Medical records shall be disclosed on request to the individuals to
whom they pertain, except, if in the judgment of the Corporation, the
transmission of the medical information directly to the requesting
individual could have an adverse effect upon such individual. In the
event medical information is withheld from a requesting individual due
to any possible adverse effect such information may have upon the
individual, the Corporation shall transmit such information to a medical
doctor
[[Page 130]]
named by the requesting individual for release of the patient.
[40 FR 46274, Oct. 6, 1975, as amended at 61 FR 43420, Aug. 23, 1996]
Sec. 310.7 Request for amendment of record.
The Corporation will maintain all records it uses in making any
determination about any individual with such accuracy, relevance,
timeliness and completeness as is reasonably necessary to assure
fairness to the individual in the determination. An individual may
request that the Corporation amend any portion of a record pertaining to
that individual which the Corporation maintains in a designated system
of records. Such a request should be submitted in writing to the Office
of the Executive Secretary, Records Unit, Federal Deposit Insurance
Corporation, Washington, DC 20429 and should contain the individual's
reason for requesting the amendment and a description of the record
(including the name of the appropriate designated system and category
thereof) sufficient to enable the Corporation to identify the particular
record or portion thereof with respect to which amendment is sought.
Sec. 310.8 Agency review of request for amendment of record.
(a) Requests by individuals for the amendment of records will be
acknowledged by the Executive Secretary of the Corporation, and referred
to the system manager of the system of records in which the record is
contained for determination, within ten business days following receipt
of such requests. Promptly thereafter, the Executive Secretary will
notify the individual of the system manager's decision to grant or deny
the request to amend.
(b) If the system manager denies a request to amend a record, the
notification of such denial shall contain the reason for the denial and
a description of the individual's right to appeal the denial as more
fully set forth in Sec. 310.9.
[40 FR 46274, Oct. 6, 1975, as amended at 42 FR 6796, Feb. 4, 1977]
Sec. 310.9 Appeal of adverse initial agency determination on access or amendment.
(a) A system manager's denial of an individual's request for access
to or amendment of a record pertaining to him/her may be appealed in
writing to the Corporation's General Counsel (or designee) within 30
business days following receipt of notification of the denial. Such an
appeal should be addressed to the Office of the Executive Secretary,
FDIC, 550 17th Street NW., Washington, DC 20429, and contain all the
information specified for requests for access in Sec. 310.3 or for
initial requests to amend in Sec. 310.7, as well as any other additional
information the individual deems relevant for the consideration by the
General Counsel (or designee) of the appeal.
(b) The General Counsel (or designee) will normally make a final
determination with respect to an appeal made under this part within 30
business days following receipt by the Office of the Executive Secretary
of the appeal. The General Counsel (or designee) may, however, extend
this 30-day time period for good cause. Where such an extension is
required, the individual making the appeal will be notified of the
reason for the extension and the expected date upon which a final
decision will be given.
(c) If the General Counsel (or designee) affirms the initial denial
of a request for access or to amend, he or she will inform the
individual affected of the decision, the reason therefor, and the right
of judicial review of the decision. In addition, as pertains to a
request for amendment, the individual may at that point submit to the
Corporation a concise statement setting forth his or her reasons for
disagreeing with the Corporation's refusal to amend.
(d) Any statement of disagreement with the Corporation's refusal to
amend, filed with the Corporation by an individual pursuant to
Sec. 310.9(c), will be included in the disclosure of any records under
the authority of Sec. 310.10(b). The Corporation may in its discretion
also include a copy of a concise statement of its reasons for not making
the requested amendment.
[[Page 131]]
(e) The General Counsel (or designee) may on his or her own motion
refer an appeal to the Board of Directors for a determination, and the
Board of Directors on its own motion may consider an appeal.
[52 FR 34290, Sept. 10, 1987, as amended at 61 FR 43420, Aug. 23, 1996]
Sec. 310.10 Disclosure of record to person other than the individual to whom it pertains.
(a) Except as provided in paragraph (b) of this section, the
Corporation will not disclose any record contained in a designated
system of records to any person or agency except with the prior written
consent of the individual to whom the record pertains.
(b) The restrictions on disclosure in paragraph (a) of this section
do not apply to any of the following disclosures:
(1) To those officers and employees of the Corporation who have a
need for the record in the performance of their duties;
(2) Which is required under the Freedom of Information Act (5 U.S.C.
552);
(3) For a routine use listed with respect to a designated system of
records;
(4) To the Bureau of the Census for purposes of planning or carrying
out a census or survey or related activity pursuant to the provisions of
title 13 U.S.C.;
(5) To a recipient who has provided the Corporation with advance
adequate written assurance that the record will be used solely as a
statistical research or reporting record, and the record is to be
transferred in a form that is not individually identifiable;
(6) To the National Archives and Records Administration as a record
which has sufficient historical or other value to warrant its continued
preservation by the United States Government, or for evaluation by the
Archivist of the United States or his or her designee to determine
whether the record has such value;
(7) To another agency or to an instrumentality of any governmental
jurisdiction within or under the control of the United States for a
civil or criminal law enforcement activity if the activity is authorized
by law, and if the head of the agency or instrumentality has made a
written request to the Corporation specifying the particular portion
desired and the law enforcement activity for which the record is sought;
(8) To a person pursuant to a showing of compelling circumstances
affecting the health or safety of an individual if, upon such
disclosure, notification is transmitted to the last known address of
such individual;
(9) To either House of Congress, or, to the extent of matter within
its jurisdiction, any committee or subcommittee thereof, any joint
committee of Congress or subcommittee of any such joint committee;
(10) To the Comptroller General, or any of his or her authorized
representatives, in the course of the performance of the duties of the
General Accounting Office;
(11) Pursuant to the order of a court of competent jurisdiction.
(12) To a consumer reporting agency in accordance with section
3711(f) of Title 31.
(c) The Corporation will adhere to the following procedures in the
case of disclosure of any record pursuant to the authority of paragraphs
(b)(3) through (b)(12) of this section.
(1) The Corporation will keep a record of the date, nature and
purpose of each such disclosure, as well as the name and address of the
person or agency to whom such disclosure is made; and
(2) The Corporation will retain and, with the exception of
disclosures made pursuant to paragraph (b)(7) of this section, make
available to the individual named in the record for the greater of five
years or the life of the record all material compiled under paragraph
(d)(1) of this section with respect to disclosure of such record.
(d) Whenever a record which has been disclosed by the Corporation
under authority of paragraph (b) of this section is, within a reasonable
amount of time after such disclosure, either amended by the Corporation
or the subject of a statement of disagreement, the Corporation will
transmit such additional information to any person or agency to whom the
record was disclosed, if such
[[Page 132]]
disclosure was subject to the accounting requirements of paragraph
(c)(1) of this section.
[40 FR 46274, Oct. 6, 1975, as amended at 61 FR 43420, Aug. 23, 1996]
Sec. 310.11 Fees.
The Corporation, upon a request for records disclosable pursuant to
the Privacy Act of 1974 (5 U.S.C. 552a), shall charge a fee of $0.10 per
page for duplicating, except as follows:
(a) If the Corporation determines that it can grant access to a
record only by providing a copy of the record, no fee will be charged
for providing the first copy of the record or any portion thereof;
(b) Whenever the aggregate fees computed under this section do not
exceed $10 for any one request, the fee will be deemed waived by the
Corporation; or
(c) Whenever the Corporation determines that a reduction or waiver
is warranted, it may reduce or waive any fees imposed for furnishing
requested information pursuant to this section.
[40 FR 46274, Oct. 6, 1975, as amended at 61 FR 43420, Aug. 23, 1996]
Sec. 310.12 Penalties.
Subsection (i)(3) of the Privacy Act of 1974 (5 U.S.C. 552a(i)(3))
imposes criminal penalties for obtaining Corporation records on
individuals under false pretenses. The subsection provides as follows:
Any person who knowingly and willfully requests or obtains any
record concerning an individual from an agency under false pretenses
shall be guilty of a misdemeanor and fined not more than $5,000.
Sec. 310.13 Exemptions.
The following systems of records are exempt from Secs. 310.3 through
310.9 and Sec. 310.10(c)(2) of these rules:
(a) Investigatory material compiled for law enforcement purposes in
the following systems of records is exempt from Secs. 310.3 through
310.9 and Sec. 310.10(c)(2) of these rules;
Provided, however, That if any individual is denied any right,
privilege, or benefit to which he/she would otherwise be entitled under
Federal law, or for which he/she would otherwise be eligible, as a
result of the maintenance of such material, such material shall be
disclosed to such individual, except to the extent that the disclosure
of such material would reveal the identity of a source who furnished
information to the Government under an express promise that the identity
of the source would be held in confidence, or, prior to September 27,
1975, under an implied promise that the identity of the source would be
held in confidence:
30-64-0002--Financial institutions investigative and enforcement
records system.
30-64-0010--Investigative files and records.
(b) Investigatory material compiled solely for the purpose of
determining suitability, eligibility, or qualifications for Corporation
employment to the extent that disclosure of such material would reveal
the identity of a source who furnished information to the Corporation
under an express promise that the identity of the source would be held
in confidence, or, prior to September 27, 1975, under an implied promise
that the identity of the source would be held in confidence, in the
following systems of records, is exempt from Secs. 310.3 through 310.9
and Sec. 310.10(c)(2) of these rules:
30-64-0001--Attorney-legal intern applicant system.
30-64-0010--Investigative files and records.
(c) Testing or examination material used solely to determine or
assess individual qualifications for appointment or promotion in the
Corporation's service, the disclosure of which would compromise the
objectivity or fairness of the testing, evaluation, or examination
process in the following system of records, is exempt from Secs. 310.3
through 310.9 and Sec. 310.10(c)(2) of these rules:
30-64-0009--Examiner training and education records.
[42 FR 6797, Feb. 4, 1977, as amended at 42 FR 33720, July 1, 1977; 54
FR 38507, Sept. 19, 1989; 61 FR 43420, Aug. 23, 1996]
PART 311--RULES GOVERNING PUBLIC OBSERVATION OF MEETINGS OF THE CORPORATION'S BOARD OF DIRECTORS--Table of Contents
Sec.
311.1 Purpose.
311.2 Definitions.
[[Page 133]]
311.3 Meetings.
311.4 Procedures for announcing meetings.
311.5 Regular procedure for closing meetings.
311.6 Expedited procedure for announcing and closing certain meetings.
311.7 General Counsel certification.
311.8 Transcripts and minutes of meetings.
Authority: 5 U.S.C. 552b and 12 U.S.C. 1819.
Source: 42 FR 14675, Mar. 16, 1977, unless otherwise noted.
Sec. 311.1 Purpose.
This part implements the policy of the ``Government in the Sunshine
Act'', section 552b of title 5 U.S.C., which is to provide the public
with as much information as possible regarding the decision making
process of certain Federal agencies, including the Federal Deposit
Insurance Corporation, while preserving the rights of individuals and
the ability of the agency to carry out its responsibilities.
Sec. 311.2 Definitions.
For purposes of this part:
(a) Board means Board of Directors of the Federal Deposit Insurance
Corporation and includes any subdivision of the Board authorized to act
on behalf of the Corporation.
(b) Meeting means the deliberations (including those conducted by
conference telephone call, or by any other method) of at least three
members where such deliberations determine or result in the joint
conduct or disposition of agency business but does not include:
(1) Deliberations to determine whether meetings will be open or
closed or whether information pertaining to closed meetings will be
withheld;
(2) Informal background discussions among Board members and staff
which clarify issues and expose varying views;
(3) Decision-making by circulating written material to individual
Board members;
(4) Sessions with individuals from outside the Corporation where
Board members listen to a presentation and may elicit additional
information.
(c) Member means a member of the Board.
(d) Open to public observation and open to the public mean that
individuals may witness the meeting, but not participate in the
deliberations. The meeting may be recorded, photographed, or otherwise
reproduced if the reproduction does not disturb the meeting.
(e) Public announcement and publicly announce mean making reasonable
effort under the particular circumstances of each case to fully inform
the public. This may include posting notice on the Corporation's public
notice bulletin board maintained in the lobby of its offices located at
550 17th Street, NW., Washington, DC 20429, issuing a press release and
employing other methods of notification that may be desirable in a
particular situation.
[42 FR 14675, Mar. 16, 1977, as amended at 42 FR 59494, Nov. 18, 1977;
54 FR 38965, Sept. 22, 1989; 61 FR 38357, July 24, 1996]
Sec. 311.3 Meetings.
(a) Open meetings. Except as provided in paragraph (b) of this
section, every portion of every meeting of the Corporation's Board will
be open to public observation. Board members will not jointly conduct or
dispose of Corporation business other than in accordance with this part.
(b) When meetings may be closed and announcements and disclosures
withheld. Except where the Board finds that the public interest requires
otherwise, a meeting or portion thereof may be closed, and announcements
and disclosure pertaining thereto may be withheld when the Board
determines that such meeting or portion of the meeting or the disclosure
of such information is likely to:
(1) Disclose matters that are: (i) Specifically authorized under
criteria established by an Executive order to be kept secret in the
interests of national defense or foreign policy and (ii) in fact
properly classified pursuant to such Executive order;
(2) Relate solely to the internal personnel rules and practices of
the Corporation;
(3) Disclose matters specifically exempted from disclosure by
statute (other than the Freedom of Information Act, 5 U.S.C. 552):
Provided, That such statute: (i) Requires that the matters be withheld
from the public in such a manner as to leave no discretion on the issue,
or (ii) establishes particular types of matters to be withheld;
[[Page 134]]
(4) Disclose trade secrets and commercial or financial information
obtained from a person and privileged or confidential;
(5) Involve accusing any person of a crime, or formally censuring
any person;
(6) Disclose information of a personal nature where disclosure would
constitute a clearly unwarranted invasion of personal privacy;
(7) Disclose investigatory records compiled for law enforcement
purposes, or information which if written would be contained in such
records, but only to the extent that the production of such records or
information would: (i) Interfere with enforcement proceedings, (ii)
deprive a person of a right to a fair trial or an impartial
adjudication, (iii) constitute an unwarranted invasion of personal
privacy, (iv) disclose the identity of a confidential source, (v)
disclose investigative techniques and procedures, or (vi) endanger the
life or physical safety of law enforcement personnel;
(8) Disclose information contained in or related to examination,
operating, or condition reports prepared by, on behalf of, or for the
use of the Corporation or any other agency responsible for the
supervision of financial institutions;
(9) Disclose information the premature disclosure of which would be
likely to:
(i)(A) Lead to significant financial speculation in currencies,
securities, or commodities, or
(B) Significantly endanger the stability of any financial
institution; or
(ii) Significantly frustrate implementation of a proposed
Corporation action, except that this paragraph (b)(9)(ii) shall not
apply in any instance where the Corporation has already disclosed to the
public the content or nature of its proposed action, or where the
Corporation is required by law to make such disclosure on its own
initiative prior to taking final action on such proposal; or
(10) Specifically concern the Corporation's issuance of a subpoena,
or the Corporation's participation in a civil action or proceeding, an
action in a foreign court or international tribunal, or an arbitration,
or the initiation, conduct, or disposition by the Corporation of a
particular case of formal agency adjudication pursuant to the procedures
in 5 U.S.C. 554 or otherwise involving a determination on the record
after opportunity for a hearing.
Sec. 311.4 Procedures for announcing meetings.
(a) Scope. Except to the extent that such announcements are exempt
from disclosure under Sec. 311.3(b), announcements relating to open
meetings, and meetings closed under the regular closing procedures of
Sec. 311.5, will be made in the manner set forth in this section.
(b) Time and content of announcement. The Corporation will make
public announcement at least seven days before the meeting of the time,
place, and subject matter of the meeting, whether it is to be open or
closed to the public, and the name and telephone number of the official
designated by the Corporation to respond to requests for information
about the meeting. This announcement will be made unless a majority of
the Board determines by a recorded vote that Corporation business
requires that a meeting be called on lesser notice. In such cases, the
Corporation will make public announcement of the time, place, and
subject matter of the meeting, and whether it is open or closed to the
public, at the earliest practicable time, which may be later than the
commencement of the meeting.
(c) Changing time or place of meeting. The time or place of a
meeting may be changed following the public announcement required by
paragraph (b) of this section only if the Corporation publicly announces
the change at the earliest practicable time, which may be later than the
commencement of the meeting.
(d) Changing subject matter or nature of meeting. The subject matter
of a meeting, or the determination to open or close a meeting or a
portion of a meeting, may be changed following the public announcement
only if:
(1) A majority of the entire Board determines by recorded vote that
agency business so requires and that no earlier announcement of the
change was possible; and,
[[Page 135]]
(2) The Corporation publicly announces the change and the vote of
each member upon such change at the earliest practicable time, which may
be later than the commencement of the meeting.
(e) Publication of announcements in Federal Register. Immediately
following each public announcement under this section, such announcement
will be submitted for publication in the Federal Register by the Office
of the Executive Secretary.
Sec. 311.5 Regular procedure for closing meetings.
(a) Scope. Unless Sec. 311.6 is applicable, the procedures for
closing meetings will be those set forth in this section.
(b) Procedure. (1) A decision to close a meeting or portion of a
meeting will be taken only when a majority of the entire Board votes to
take such action. In deciding whether to close a meeting or portion of a
meeting, the Board will consider whether the public interest requires an
open meeting. A separate vote of the Board will be taken with respect to
each meeting which is proposed to be closed in whole or in part to the
public. A single vote may be taken with respect to a series of meetings
which are proposed to be closed in whole or in part to the public, or
with respect to any information concerning such series of meetings, so
long as each meeting in the series involves the same particular matters
and is scheduled to be held no more than thirty days after the initial
meeting in the series. The vote of each Board member will be recorded
and no proxies will be allowed.
(2) Any individual whose interests may be directly affected may
request that the Corporation close any portion of a meeting for any of
the reasons referred to in paragraph (b) (5), (6), or (b)(7) of
Sec. 311.3. Requests should be directed to the Office of the Executive
Secretary, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429. After receiving notice that an individual desires
a portion of a meeting to be closed, the Board, upon request of any one
of its members, will vote by recorded vote whether to close the relevant
portion of the meeting. This procedure will apply even if the
individual's request is made subsequent to the announcement of a
decision to hold an open meeting.
(3) The Corporation's General Counsel will make the public
certification required by Sec. 311.7.
(4) Within 1 day after any vote taken pursuant to paragraphs (b)(1)
or (2) of this section, the Corporation will make publicly available a
written copy of the vote, reflecting the vote of each Board member.
Except to the extent that such information is exempt from disclosure, if
a meeting or portion of a meeting is to be closed to the public, the
Corporation will make publicly available within 1 day after the required
vote a full written explanation of its action, together with a list of
all persons expected to attend the meeting and their affiliation.
(5) The Corporation will publicly announce the time, place, and
subject matter of the meeting, with determinations as to open and closed
portions, in the manner and within the time limits prescribed in
Sec. 311.4.
[42 FR 14675, Mar. 16, 1977; 42 FR 16616, Mar. 29, 1977, as amended at
42 FR 59494, Nov. 18, 1977]
Sec. 311.6 Expedited procedure for announcing and closing certain meetings.
(a) Scope. Since a majority of its meetings may properly be closed
pursuant to paragraph (b)(4), (8), (9)(i), or (b)(10) of Sec. 311.3,
subsection (d)(4) of the Government in the Sunshine Act (5 U.S.C. 552b)
allows the Corporation to use expedited procedures in closing meetings
under these four subparagraphs. Absent a compelling public interest to
the contrary, meetings or portions of meetings that can be expected to
be closed using these procedures include, but are not limited to:
Administrative enforcement proceedings under section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818); appointment of the Corporation
as conservator of a depository institution, or as receiver, liquidator
or liquidating agent of a closed depository institution or a depository
institution in danger of closing; and certain management and liquidation
activities pursuant to such appointments; possible financial assistance
by the Corporation under section 13 of the Federal Deposit Insurance Act
[[Page 136]]
(12 U.S.C. 1823); certain depository institution applications including
applications to establish or move branches, applications to merge, and
applications for insurance; and investigatory activity under section
10(c) of the Federal Deposit Insurance Act (12 U.S.C. 1820(c)). In
announcing and closing meetings or portions of meetings under this
section, the following procedures will be observed.
(b) Announcement. Except to the extent that such information is
exempt from disclosure under the provisions of Sec. 311.3(b) the
Corporation will make public announcement of the time, place and subject
matter of the meeting and of each portion thereof at the earliest
practicable time. This announcement will be published in the Federal
Register if publication can be effected at least 1 day prior to the
scheduled date of the meeting.
(c) Procedure for closing. (1) The Corporation's General Counsel
will make the public certification required by Sec. 311.7.
(2) At the beginning of a meeting or portion of a meeting to be
closed under this section, a recorded vote of the Board will be taken.
The Board will determine by its vote whether to proceed with the
closing. If a majority of the entire Board votes to close, the meeting
will be closed to public observation. Even though a meeting or portion
thereof could properly be closed under this section, a majority of the
entire Board may find that the public interest requires an open session
and vote, reflecting the vote of each Board member, will be made
available to the public.
[42 FR 14675, Mar. 16, 1977; 42 FR 16616, Mar. 29, 1977, as amended at
54 FR 38965, Sept. 22, 1989]
Sec. 311.7 General Counsel certification.
For every meeting or portion thereof closed under Sec. 311.5 or
Sec. 311.6, the Corporation's General Counsel will publicly certify
that, in the opinion of such General Counsel, the meeting may be closed
to the public and will state each relevant exemptive provision. In the
absence of the General Counsel, the next ranking official in the Legal
Division may perform the certification. If the General Counsel and such
next ranking official in the Legal Division are both absent, the
official in the Legal Division who is then next in rank may provide the
required certification. A copy of this certification, together with a
statement from the presiding officer of the meeting setting forth the
time and place of the meeting, and the persons present, will be retained
in the Board's permanent files.
[42 FR 14675, Mar. 16, 1977, as amended at 61 FR 38357, July 24, 1996]
Sec. 311.8 Transcripts and minutes of meetings.
(a) When required. The Corporation will maintain a complete
transcript, identifying each speaker, to record fully the proceedings of
each meeting or portion of a meeting closed to the public, except that
in the case of a meeting or portions of a meeting closed to the public
pursuant to paragraph (b)(8), (9)(i), or (10) of Sec. 311.3, the
Corporation may, in lieu of a transcript, maintain a set of minutes.
(b) Content of minutes. If minutes are maintained, they will fully
and clearly describe all matters discussed and will provide a full and
accurate summary of any actions taken, and the reasons for taking such
action. Minutes will also include a description of each of the views
expressed by each person in attendance on any item and the record of any
roll call vote, reflecting the vote of each member. All documents
considered in connection with any action will be identified in the
minutes.
(c) Available material. The Corporation will maintain a complete
verbatim copy of the transcript or minutes of each meeting or portion of
a meeting closed to the public for a period of at least 2 years after
the meeting, or until 1 year after the conclusion of any proceeding with
respect to which the meeting or portion was held, whichever occurs
later. The Corporation will make promptly available to the public the
transcript, identifying each speaker, or minutes of items on the agenda
or testimony of any witness received at the closed meeting except that
in cases where the Privacy Act of 1974 (5 U.S.C. 552a) does not apply,
the Corporation may withhold information exempt from disclosure under
Sec. 311.3(b). For the convenience of members of the public
[[Page 137]]
who may be unable to attend open meetings of the Board, the Corporation
will maintain for at least 2 years a set of minutes of each meeting of
the Board or portion thereof open to public observation.
(d) Procedures for inspecting or copying available material. (1) An
individual may inspect materials made available under paragraph (c) of
this section at the Office of the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington, DC 20429,
during normal business hours. If the individual desires a copy of such
material, the Corporation will furnish copies at a cost of 10 cents per
page. Whenever the Corporation determines that in the public interest a
reduction or waiver is warranted, it may reduce or waive any fees
imposed under this section.
(2) An individual may also submit a written request for transcripts
or minutes, reasonably identifying the records sought, to the Office of
the Executive Secretary, Federal Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
(e) Procedures for obtaining documents identified in minutes. Copies
of documents identified in minutes or considered by the Board in
connection with any action identified in the minutes may be made
available to the public upon request, to the extent permitted by the
Freedom of Information Act, under the provisions of 12 CFR part 309,
Disclosure of Information.
[42 FR 14675, Mar. 16, 1977, as amended at 61 FR 38357, July 24, 1996]
PART 312--ASSESSMENT OF FEES UPON ENTRANCE TO OR EXIT FROM THE BANK INSURANCE FUND OR THE SAVINGS ASSOCIATION INSURANCE FUND--Table of Contents
Sec.
312.1 Definitions.
312.2 Bank Insurance Fund reserve ratio.
312.3 Savings Association Insurance Fund reserve ratio.
312.4 Entrance fees assessed in connection with conversion transactions
from the Savings Association Insurance Fund to the Bank
Insurance Fund.
312.5 Exit fees assessed in connection with conversion transactions
from the Savings Association Insurance Fund to the Bank
Insurance Fund.
312.6 Entrance fees assessed in connection with conversion transactions
from the Bank Insurance Fund to the Savings Association
Insurance Fund.
312.7 Exit fees assessed in connection with conversion transactions
from the Bank Insurance Fund to the Savings Association
Insurance Fund.
312.8 Entrance and exit fees assessed in connection with insured
deposit transfers from the Savings Association Insurance Fund
to the Bank Insurance Fund.
312.9 Entrance and exit fees assessed in connection with insured
deposit transfers from the Bank Insurance Fund to the Savings
Association Insurance Fund.
312.10 Payment of entrance and exit fees.
Authority: 12 U.S.C. 1815(d); 12 U.S.C. 1819.
Source: 54 FR 40380, Oct. 2, 1989, unless otherwise noted.
Sec. 312.1 Definitions.
For purposes of this part:
(a) The term Bank Insurance Fund shall mean the fund established by
section 11(a)(5) of the Federal Deposit Insurance Act, 12 U.S.C.
1821(a)(5). The term Savings Association Insurance Fund shall mean the
fund established by section 11(a)(6) of the Federal Deposit Insurance
Act, 12 U.S.C. 1821(a)(6).
(b) The terms Bank Insurance Fund member and Savings Association
Insurance Fund member shall have the meanings given them in sections
7(l) (4) and (5) of the Federal Deposit Insurance Act, 12 U.S.C. 1817(l)
(4), (5), respectively.
(c) The term Bank Insurance Fund reserve ratio shall mean the ratio
of the net worth of the Bank Insurance Fund to the value of the
aggregate total domestic deposits held in all Bank Insurance Fund
members. The term ``Savings Association Insurance Fund reserve ratio''
shall mean the ratio of the value of the net worth of the Savings
Association Insurance Fund to the value of the aggregate total domestic
deposits held in all Savings Association Insurance Fund members.
(d) The term conversion transaction shall have the meaning given it
in section 5(d)(2)(B) of the Federal Deposit Insurance Act, 12 U.S.C.
1815(d)(2)(B).
(e) The terms default and in danger of default shall have the
meanings given
[[Page 138]]
them in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C.
1813(x).
(f) The term deposit broker shall have the meaning given it in
section 29 of the Federal Deposit Insurance Act, 12 U.S.C. 1831f.
(g) The term entrance fee deposit base generally refers to those
deposits which the Federal Deposit Insurance Corporation, in its
discretion, estimates to have a high probability of remaining with the
acquiring or resulting depository institution for a reasonable period of
time following the acquisition, in excess of those deposits that would
have remained in the insurance fund of the depository institution in
default or in danger of default had such institution been resolved by
means of an insured deposit transfer. The estimated dollar amount of the
entrance fee deposit base shall be determined on a case-by-case basis by
the Federal Deposit Insurance Corporation at the time offers to acquire
an insured depository institution (or any part thereof) are solicited by
the Federal Deposit Insurance Corporation or the Resolution Trust
Corporation.
(h) The term insured deposit transfer shall mean a transaction
wherein the insured deposits of an insured depository institution in
default or in danger of default, are paid by means of a transferred
deposit pursuant to a written agreement between the Federal Deposit
Insurance Corporation or the Resolution Trust Corporation and an insured
depository institution. The term transferred deposit shall have the
meaning given it in section 3(n) of the Federal Deposit Insurance Act,
12 U.S.C. 1813 (n).
(i) The term premium shall mean the amount paid by an insured
depository institution in consideration for the right to enter into an
insured deposit transfer agreement. The premium shall not include the
amount of any transferred deposits, nor shall the premium include any
amount paid for the purchase of assets or the right to purchase assets
of a depository institution in default or in danger of default.
(j) The term retained deposit base shall mean the total deposits
transferred from a Savings Association Insurance Fund Member to a Bank
Insurance Fund Member, or from a Bank Insurance Fund member to a Savings
Association Insurance Fund member, less the following deposits:
(1) Any deposit acquired, directly or indirectly, by or through any
deposit broker; and
(2) Any portion of any deposit account exceeding $80,000.
[54 FR 40380, Oct. 2, 1989; 54 FR 43521, Oct. 25, 1989, as amended at 55
FR 10412, Mar. 21, 1990]
Sec. 312.2 Bank Insurance Fund reserve ratio.
The Bank Insurance Fund reserve ratio to be used in computing the
entrance fee under this part with respect to any particular conversion
transaction shall be the most recent Bank Insurance Fund reserve ratio
calculated quarterly by the Federal Deposit Insurance Corporation prior
to the date on which deposit liabilities are transferred from a Savings
Association Insurance Fund member to a Bank Insurance Fund member in
connection with that conversion transaction.
[56 FR 29895, July 1, 1991]
Sec. 312.3 Savings Association Insurance Fund reserve ratio.
The Savings Association Insurance Fund reserve ratio to be used in
computing the entrance fee under this part with respect to any
particular conversion transaction shall be the most recent Savings
Association Insurance Fund reserve ratio calculated quarterly by the
Federal Deposit Insurance Corporation prior to the date on which deposit
liabilities are transferred from a Bank Insurance Fund member to a
Savings Association Insurance Fund member in connection with that
conversion transaction.
[56 FR 29895, July 1, 1991]
Sec. 312.4 Entrance fees assessed in connection with conversion transactions from the Savings Association Insurance Fund to the Bank Insurance Fund.
(a) Each insured depository institution participating in a
conversion transaction as a result of which insured deposits are
transferred from a Savings Association Insurance Fund member to a Bank
Insurance Fund
[[Page 139]]
member shall pay an entrance fee to the Bank Insurance Fund.
(b) The entrance fee shall be the product derived by multiplying the
dollar amount of total deposits transferred from the Savings Association
Insurance Fund member to the Bank Insurance Fund member by the Bank
Insurance Fund reserve ratio.
(c) Notwithstanding paragraph (b) of this section, the entrance fee
to be assessed against an insured depository institution participating
in a conversion transaction:
(1) Occurring in connection with the acquisition of a Savings
Association Insurance Fund member in default or in danger of default, or
(2) Otherwise arranged by the Federal Deposit Insurance Corporation
in its capacity as exclusive manager of the Resolution Trust
Corporation, shall be the product derived by multiplying the dollar
amount of the entrance fee deposit base transferred from the Savings
Association Insurance Fund member to the Bank Insurance Fund member by
the Bank Insurance Fund ratio.
[55 FR 10413, Mar. 21, 1990]
Sec. 312.5 Exit fees assessed in connection with conversion transactions from the Savings Association Insurance Fund to the Bank Insurance Fund.
(a) Each insured depository institution participating in a
conversion transaction as a result of which insured deposits are
transferred from a Savings Association Insurance Fund member to a Bank
Insurance Fund member shall pay an exit fee.
(b) The exit fee shall be the product derived by multiplying the
dollar amount of total deposits transferred from the Savings Association
Insurance Fund member to the Bank Insurance Fund member by 0.90 percent
(0.0090).
(c) Notwithstanding paragraph (b) of this section, the exit fee to
be assessed against an insured depository institution participating in a
conversion transaction:
(1) Occurring in connection with the acquisition of a Savings
Association Insurance Fund member in default or in danger of default, or
(2) Otherwise arranged by the Federal Deposit Insurance Corporation
in its capacity as exclusive manager of the Resolution Trust
Corporation, shall be the product derived by multiplying the dollar
amount of the retained deposit base transferred from the Savings
Association Insurance Fund member to the Bank Insurance Fund member by
0.90 percent (0.0090).
(d) The exit fee required to be paid by this section shall be paid
to the Savings Association Insurance Fund or, if the Secretary of the
Treasury determines that the Financing Corporation has exhausted all
other sources of funding for interest payments on the obligations of the
Financing Corporation and orders that such exit fee be paid to the
Financing Corporation.
(e) Exit fees paid to the Savings Association Insurance Fund
pursuant to paragraph (d) of this section shall be held in a reserve
account until such time as the Federal Deposit Insurance Corporation and
the Secretary of the Treasury determine that it is not necessary to
reserve such funds for the payment of interest on the obligations of the
Financing Corporation.
(f) Before January 1, 1997, amendments to this section shall be
determined jointly by the Federal Deposit Insurance Corporation and the
Secretary of the Treasury.
[55 FR 10413, Mar. 21, 1990]
Sec. 312.6 Entrance fees assessed in connection with conversion transactions from the Bank Insurance Fund to the Savings Association Insurance Fund.
(a) Each insured depository institution participating in a
conversion transaction as a result of which insured deposits are
transferred from a Bank Insurance Fund member to a Savings Association
Insurance Fund member shall pay an entrance fee to the Savings
Association Insurance Fund.
(b) The entrance fee shall be the product derived by multiplying the
dollar amount of total deposits transferred from the Bank Insurance Fund
member to the Savings Association Insurance Fund member by the Savings
Association Insurance Fund reserve ratio, or by .01 percent (0.0001),
whichever is greater.
[[Page 140]]
(c) Notwithstanding paragraph (b) of this section, the entrance fee
to be assessed against an insured depository institution participating
in a conversion transaction occurring in connection with the acquisition
of a Bank Insurance Fund member in default or in danger of default shall
be the product derived by multiplying the dollar amount of the entrance
fee deposit base transferred from the Bank Insurance Fund member to the
Savings Association Insurance Fund member by the Savings Association
Insurance Fund reserve ratio, or by .01 percent (0.0001), whichever is
greater.
(d) Interim entrance fee until initial calculation of Savings
Association Insurance Fund reserve ratio. Notwithstanding paragraphs (b)
and (c) of this section, until such time as the Savings Association
Insurance Fund reserve ratio is initially calculated and made publicly
available, the entrance fee for all conversions from the Bank Insurance
Fund to the Savings Association Insurance Fund shall be the product
derived by multiplying the dollar amount of total deposits transferred
from the Bank Insurance Fund member to the Savings Association Insurance
Fund member by .01 percent (0.0001), unless the conversion transaction
is occurring in connection with the acquisition of a Bank Insurance Fund
member in default or in danger of default, where it shall be the product
derived by multiplying the dollar amount of the entrance fee deposit
base transferred from the Bank Insurance Fund member to the Savings
Association Insurance Fund member by 0.01 percent (0.0001).
[55 FR 10413, Mar. 21, 1990]
Sec. 312.7 Exit fees assessed in connection with conversion transactions from the Bank Insurance Fund to the Savings Association Insurance Fund.
(a) Each insured depository institution participating in a
conversion transaction as a result of which insured deposits are
transferred from a Bank Insurance Fund member to a Savings Association
Insurance Fund member shall pay an exit fee to the Bank Insurance Fund.
(b) The exit fee shall be the product derived by multiplying the
dollar amount of total deposits transferred from the Bank Insurance Fund
member to the Savings Association Insurance Fund member by .01 percent
(0.0001).
(c) Notwithstanding paragraph (b) of this section, the exit fee to
be assessed against an insured depository institution participating in a
conversion transaction occurring in connection with the acquisition of a
Bank Insurance Fund member in default or in danger of default shall be
the product derived by multiplying the dollar amount of the retained
deposit base transferred from the Bank Insurance Fund member to the
Savings Association Insurance Fund member by 0.01 percent (0.0001).
[55 FR 10413, Mar. 21, 1990]
Sec. 312.8 Entrance and exit fees assessed in connection with insured deposit transfers from the Savings Association Insurance Fund to the Bank Insurance Fund.
(a) Insured deposit transfers resulting in a transfer of insured
deposits from a Savings Association Insurance Fund member to a Bank
Insurance Fund member, shall be subject to an entrance fee and an exit
fee.
(b) The entrance fee shall be the product derived by multiplying the
dollar amount of the retained deposit base of the Savings Association
Insurance Fund member in default or in danger of default by the Bank
Insurance Fund ratio.
(c) The exit fee shall be the product derived by multiplying the
dollar amount of the retained deposit base of the Savings Association
Insurance Fund member in default or in danger of default by 0.90 percent
(0.0090).
(d) Notwithstanding paragraphs (a), (b), and (c) of this section,
the sum total of the entrance fee and the exit fee required by this
section shall in no event exceed the amount of the premium.
(e) The entrance and exit fees required by this section shall be
paid by the acquiring institution from the premium as follows. First,
the premium shall be allocated in payment of the exit fee to one-third
of the premium received. Second, the remaining premium shall be
allocated to the entrance fee. Third, if any premium remains, it shall
be applied to the remaining balance (if
[[Page 141]]
any) owing on the exit fee. Fourth, any amount remaining after
application pursuant to steps one through three shall be allocated to
the Resolution Trust Corporation.
(f) The entrance fee required by this section shall be paid to the
Bank Insurance Fund. The exit fee required by this section shall be paid
to the Savings Association Insurance Fund or, if the Secretary of the
Treasury determines that the Financing Corporaiton has exhausted all
other sources of funding for interest payments on the obligations of the
Financing Corporation and orders that such exit fee be paid to the
Financing Corporation.
(g) Exit fees paid to the Savings Association Insurance Fund
pursuant to paragraph (f) of this section shall be held in a reserve
account until such time as the Federal Deposit Insurance Corporation and
the Secretary of the Treasury determine that it is not necessary to
reserve such funds for the payment of interest on the obligations of the
Financing Corporation.
(h) Insured deposit transfers occurring before March 21, 1990 shall
not be subject to the assessment of entrance or exit fees.
(i) Before January 1, 1997, amendments to this section concerning
exit fees assessed in connection with insured deposit transfers from the
Savings Association Insurance Fund to the Bank Insurance Fund shall be
determined jointly by the Federal Deposit Insurance Corporation and the
Secretary of the Treasury.
[55 FR 10414, Mar. 21, 1990]
Sec. 312.9 Entrance and exit fees assessed in connection with insured deposit transfers from the Bank Insurance Fund to the Savings Association Insurance Fund.
(a) Insured deposit transfers resulting in a transfer of insured
deposits from a Bank Insurance Fund member to a Savings Association
Insurance Fund member, shall be subject to an entrance fee and in exit
fee.
(b) The entrance fee shall be the product derived by multiplying the
dollar amount of the retained deposit base of the Bank Insurance Fund
member in default or in danger of default by the Savings Association
Insurance Fund ratio or by .01 percent (0.0001), whichever is greater.
(c) The exit fee shall be the product derived by multiplying the
dollar amount of the retained deposit base of the Bank Insurance Fund
member by 0.01 percent (0.0001).
(d) Notwithstanding paragraphs (a), (b), and (c) of this section,
the sum total of the entrance fee and the exit fee required by this
section shall in no event exceed the amount of the premium.
(e) The entrance and exit fees required by this section shall be
paid by the acquiring institution from the premium as follows. First,
the premium shall be allocated in payment of the exit fee to one-third
of the premium received. Second, the remaining premium will be allocated
to the entrance fee. Third, if any premium remains, it shall be applied
to the remaining balance (if any) owing on the exit fee. Fourth, any
amount remaining after application pursuant to steps one through three
shall be allocated to the Federal Deposit Insurance Corporation.
(f) The entrance fee required by this section shall be paid to the
Savings Association Insurance Fund. The exit fee required by this
section shall be paid to the Bank Insurance Fund.
(g) Insured deposit transfers occurring before March 21, 1990 shall
not be subject to the assessment of entrance or exit fees.
[55 FR 10414, Mar. 21, 1990]
Sec. 312.10 Payment of entrance and exit fees.
(a) A resulting or acquiring depository institution shall be liable
for the payment of the entrance and exit fees required by this part.
(b) Notwithstanding paragraph (a) of this section, an acquiring
depository institution participating in an insured deposit transfer
pursuant to Sec. 312.8 or Sec. 312.9 of this part shall pay the entrance
and exit fees from the premium, and in any event, shall not be liable
for the payment of that portion of the entrance and exit fees that
exceeds the premium paid by such acquiring depository institution.
(c) The ``conversion transaction payment date'' shall be either
March 31st or September 30th, whichever occurs
[[Page 142]]
first following the expiration of 30 days from the date the deposits are
transferred.
(d) A resulting or acquiring depository institution shall pay the
entrance and exit fees required by this part on the conversion
transaction payment date.
(e) Notwithstanding paragraph (d) of this section, where the sum of
the entrance and exit fees required to be paid by an insured depository
institution pursuant to Secs. 312.4, 312.5, 312.6, or 312.7 of this part
exceeds $5,000, a resulting or acquiring depository institution may, at
its option, and upon notification to the Federal Deposit Insurance
Corporation, pay the entrance and exit fees in equal annual
installments, interest-free, over a period of not more than five years.
The first such installment shall be paid on the date described in
paragraph (c) of this section.
(f) Entrance and exit fees required to be paid by an insured
depository institution as the result of an insured deposit transfer
pursuant to Secs. 312.8 or 312.9 of this part shall be paid on the
conversion transaction payment date described in paragraph (c) of this
section.
[55 FR 10414, Mar. 21, 1990]
[[Page 143]]
SUBCHAPTER B--REGULATIONS AND STATEMENTS OF GENERAL POLICY