[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2008 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
12
Parts 500 to 599
Revised as of January 1, 2008
Banks and Banking
________________________
Containing a codification of documents of general
applicability and future effect
As of January 1, 2008
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
U.S. GOVERNMENT OFFICIAL EDITION NOTICE
Legal Status and Use of Seals and Logos
The seal of the National Archives and Records Administration
(NARA) authenticates the Code of Federal Regulations (CFR) as
the official codification of Federal regulations established
under the Federal Register Act. Under the provisions of 44
U.S.C. 1507, the contents of the CFR, a special edition of the
Federal Register, shall be judicially noticed. The CFR is
prima facie evidence of the original documents published in
the Federal Register (44 U.S.C. 1510).
It is prohibited to use NARA's official seal and the stylized Code
of Federal Regulations logo on any republication of this
material without the express, written permission of the
Archivist of the United States or the Archivist's designee.
Any person using NARA's official seals and logos in a manner
inconsistent with the provisions of 36 CFR part 1200 is
subject to the penalties specified in 18 U.S.C. 506, 701, and
1017.
Use of ISBN Prefix
This is the Official U.S. Government edition of this publication
and is herein identified to certify its authenticity. Use of
the 0-16 ISBN prefix is for U.S. Government Printing Office
Official Editions only. The Superintendent of Documents of the
U.S. Government Printing Office requests that any reprinted
edition clearly be labeled as a copy of the authentic work
with a new ISBN.
U . S . G O V E R N M E N T P R I N T I N G O F F I C E
------------------------------------------------------------------
U.S. Superintendent of Documents Washington, DC
20402-0001
http://bookstore.gpo.gov
Phone: toll-free (866) 512-1800; DC area (202) 512-1800
[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter V--Office of Thrift Supervision, Department
of the Treasury 3
Finding Aids:
Table of CFR Titles and Chapters........................ 457
Alphabetical List of Agencies Appearing in the CFR...... 565
List of CFR Sections Affected........................... 575
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 12 CFR 500.1 refers
to title 12, part 500,
section 1.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
regulation. Each title is divided into chapters which usually bear the
name of the issuing agency. Each chapter is further subdivided into
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
volume.
LEGAL STATUS
The contents of the Federal Register are required to be judicially
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie
evidence of the text of the original documents (44 U.S.C. 1510).
HOW TO USE THE CODE OF FEDERAL REGULATIONS
The Code of Federal Regulations is kept up to date by the individual
issues of the Federal Register. These two publications must be used
together to determine the latest version of any given rule.
To determine whether a Code volume has been amended since its
revision date (in this case, January 1, 2008), consult the ``List of CFR
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative
List of Parts Affected,'' which appears in the Reader Aids section of
the daily Federal Register. These two lists will identify the Federal
Register page number of the latest amendment of any given rule.
EFFECTIVE AND EXPIRATION DATES
Each volume of the Code contains amendments published in the Federal
Register since the last revision of that volume of the Code. Source
citations for the regulations are referred to by volume number and page
number of the Federal Register and date of publication. Publication
dates and effective dates are usually not the same and care must be
exercised by the user in determining the actual effective date. In
instances where the effective date is beyond the cut-off date for the
Code a note has been inserted to reflect the future effective date. In
those instances where a regulation published in the Federal Register
states a date certain for expiration, an appropriate note will be
inserted following the text.
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
amendments to existing regulations in the CFR. These OMB numbers are
placed as close as possible to the applicable recordkeeping or reporting
requirements.
OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
the cover of each volume are not carried. Code users may find the text
of provisions in effect on a given date in the past by using the
appropriate numerical list of sections affected. For the period before
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For
the period beginning January 1, 1986, a ``List of CFR Sections
Affected'' is published at the end of each CFR volume.
INCORPORATION BY REFERENCE
What is incorporation by reference? Incorporation by reference was
established by statute and allows Federal agencies to meet the
requirement to publish regulations in the Federal Register by referring
to materials already published elsewhere. For an incorporation to be
valid, the Director of the Federal Register must approve it. The legal
effect of incorporation by reference is that the material is treated as
if it were published in full in the Federal Register (5 U.S.C. 552(a)).
This material, like any other properly issued regulation, has the force
of law.
What is a proper incorporation by reference? The Director of the
Federal Register will approve an incorporation by reference only when
the requirements of 1 CFR part 51 are met. Some of the elements on which
approval is based are:
(a) The incorporation will substantially reduce the volume of
material published in the Federal Register.
(b) The matter incorporated is in fact available to the extent
necessary to afford fairness and uniformity in the administrative
process.
(c) The incorporating document is drafted and submitted for
publication in accordance with 1 CFR part 51.
Properly approved incorporations by reference in this volume are
listed in the Finding Aids at the end of this volume.
What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed in
the Finding Aids of this volume as an approved incorporation by
reference, please contact the agency that issued the regulation
containing that incorporation. If, after contacting the agency, you find
the material is not available, please notify the Director of the Federal
Register, National Archives and Records Administration, Washington DC
20408, or call 202-741-6010.
CFR INDEXES AND TABULAR GUIDES
A subject index to the Code of Federal Regulations is contained in a
separate volume, revised annually as of January 1, entitled CFR Index
and Finding Aids. This volume contains the Parallel Table of Statutory
Authorities and Agency Rules (Table I). A list of CFR titles, chapters,
and parts and an alphabetical list of agencies publishing in the CFR are
also included in this volume.
An index to the text of ``Title 3--The President'' is carried within
that volume.
The Federal Register Index is issued monthly in cumulative form.
This index is based on a consolidation of the ``Contents'' entries in
the daily Federal Register.
A List of CFR Sections Affected (LSA) is published monthly, keyed to
the revision dates of the 50 CFR titles.
[[Page vii]]
REPUBLICATION OF MATERIAL
There are no restrictions on the republication of material appearing
in the Code of Federal Regulations.
INQUIRIES
For a legal interpretation or explanation of any regulation in this
volume, contact the issuing agency. The issuing agency's name appears at
the top of odd-numbered pages.
For inquiries concerning CFR reference assistance, call 202-741-6000
or write to the Director, Office of the Federal Register, National
Archives and Records Administration, Washington, DC 20408 or e-mail
[email protected].
SALES
The Government Printing Office (GPO) processes all sales and
distribution of the CFR. For payment by credit card, call toll-free,
866-512-1800, or DC area, 202-512-1800, M-F 8 a.m. to 4 p.m. e.s.t. or
fax your order to 202-512-2250, 24 hours a day. For payment by check,
write to: US Government Printing Office - New Orders, P.O. Box 979050,
St. Louis, MO 63197-9000. For GPO Customer Service call 202-512-1803.
ELECTRONIC SERVICES
The full text of the Code of Federal Regulations, the LSA (List of
CFR Sections Affected), The United States Government Manual, the Federal
Register, Public Laws, Public Papers, Weekly Compilation of Presidential
Documents and the Privacy Act Compilation are available in electronic
format at www.gpoaccess.gov/nara (``GPO Access''). For more information,
contact Electronic Information Dissemination Services, U.S. Government
Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-free). E-
mail, [email protected].
The Office of the Federal Register also offers a free service on the
National Archives and Records Administration's (NARA) World Wide Web
site for public law numbers, Federal Register finding aids, and related
information. Connect to NARA's web site at www.archives.gov/federal-
register. The NARA site also contains links to GPO Access.
Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 2008.
[[Page ix]]
THIS TITLE
Title 12--Banks and Banking is composed of seven volumes. The parts
in these volumes are arranged in the following order: parts 1-199, 200-
219, 220-299, 300-499, 500-599, part 600-899, and 900-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 parts 600-899 is
comprised of chapter VI--Farm Credit Administration, chapter VII--
National Credit Union Administration, chapter VIII--Federal Financing
Bank. The seventh volume containing part 900-end is comprised of chapter
IX--Federal Housing Finance Board, chapter XI--Federal Financial
Institutions Examination Council, chapter XIV--Farm Credit System
Insurance Corporation, chapter XV--Department of the Treasury, chapter
XVII--Office of Federal Housing Enterprise Oversight, Department of
Housing and Urban Development and chapter XVIII--Community Development
Financial Institutions Fund, Department of the Treasury. The contents of
these volumes represent all of the current regulations codified under
this title of the CFR as of January 1, 2008.
For this volume, Bonnie Fritts was Chief Editor. The Code of Federal
Regulations publication program is under the direction of Michael L.
White, assisted by Ann Worley.
[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains parts 500 to 599)
--------------------------------------------------------------------
Part
chapter v--Office of Thrift Supervision, Department of the
Treasury.................................................. 500
[[Page 3]]
CHAPTER V--OFFICE OF THRIFT SUPERVISION, DEPARTMENT OF THE TREASURY
--------------------------------------------------------------------
Editorial Note: Nomenclature changes to chapter V appear at 59 FR
18475, Apr. 19, 1994, and 60 FR 66715, Dec. 26, 1995.
Part Page
500 Agency organization and functions........... 5
502 Assessments and fees........................ 6
503 Privacy Act................................. 12
505 Freedom of Information Act.................. 14
506 Information collection requirements under
the Paperwork Reduction Act............. 15
507 Restrictions on post-employment activities
of senior examiners..................... 16
508 Removals, suspensions, and prohibitions
where a crime is charged or proven...... 17
509 Rules of practice and procedure in
adjudicatory proceedings................ 21
510 Miscellaneous organizational regulations.... 46
512 Rules for investigative proceedings and
formal examination proceedings.......... 51
513 Practice before the Office.................. 53
516 Application processing procedures........... 60
517 Contracting outreach programs............... 70
528 Nondiscrimination requirements.............. 72
533 Disclosure and reporting of CRA-related
agreements.............................. 78
535 Prohibited consumer credit practices........ 90
536 Consumer protection in sales of insurance... 92
541 Definitions for regulations affecting
federal savings associations............ 96
543 Federal mutual savings associations--
Incorporation, organization, and
conversion.............................. 98
544 Federal mutual savings associations--Charter
and bylaws.............................. 105
545 Federal savings associations--Operations.... 113
546 Federal mutual savings associations--Merger,
dissolution, reorganization, and
conversion.............................. 118
550 Fiduciary powers of savings associations.... 120
[[Page 4]]
551 Recordkeeping and confirmation requirements
for securities transactions............. 131
552 Federal stock associations--Incorporation,
organization, and conversion............ 139
555 Electronic operations....................... 157
557 Deposits.................................... 158
558 Possession by conservators and receivers for
Federal and State savings associations.. 160
559 Subordinate organizations................... 161
560 Lending and investment...................... 170
561 Definitions for regulations affecting all
savings associations.................... 193
562 Regulatory reporting standards.............. 199
563 Savings associations--Operations............ 201
563b Conversions from mutual to stock form....... 230
563c Accounting requirements..................... 256
563d Securities of savings associations.......... 265
563e Community reinvestment...................... 268
563f Management official interlocks.............. 289
563g Securities offerings........................ 294
564 Appraisals.................................. 303
565 Prompt corrective action.................... 308
567 Capital..................................... 318
568 Security procedures......................... 413
569 Proxies..................................... 414
570 Safety and soundness guidelines and
compliance procedures................... 415
571 Fair Credit Reporting....................... 427
572 Loans in areas having special flood hazards. 456
573 Privacy of consumer financial information... 460
574 Acquisition of control of savings
associations............................ 478
575 Mutual holding companies.................... 499
583 Definitions for regulations affecting
savings and loan holding companies...... 520
584 Savings and loan holding companies.......... 523
585 Prohibited service at savings and loan
holding companies....................... 531
590 Preemption of State usury laws.............. 534
591 Preemption of State due-on-sale laws........ 539
592-599
[Reserved]
[[Page 5]]
PART 500_AGENCY ORGANIZATION AND FUNCTIONS--Table of Contents
Subpart A_Functions and Responsibilities of the Director of the Office
of Thrift Supervision
Sec.
500.1 General statement and statutory authority.
500.2-500.5 [Reserved]
500.6 General statement concerning gender-related terminology.
Subpart B_General Organization
500.10 The OTS or The Office.
Subpart C_Procedures
500.30 General statement concerning procedures and forms.
Authority: 12 U.S.C. 1462a, 1463, 1464.
Source: 54 FR 49440, Nov. 30, 1989, unless otherwise noted.
Subpart A_Functions and Responsibilities of the Director of the Office
of Thrift Supervision
Sec. 500.1 General statement and statutory authority.
(a) The Director of the Office of Thrift Supervision (referred to in
this chapter as ``Director'' or ``Office'') is responsible for the
administration and enforcement of the Home Owners' Loan Act of 1933,
(``HOLA''), and applicable portions of the Federal Deposit Insurance Act
and with respect to savings associations subject to provisions of the
foregoing acts and title, the Bank Protection Act of 1968, the Truth in
Lending Act, and the Fair Credit Reporting Act.
(b) The Office is authorized under such rules and regulations as it
may prescribe to provide for the organization, incorporation,
examination, operation, and regulation of Federal savings associations.
Under this authority, the Office's functions include, but are not
limited to, regulation of the corporate structure of such associations,
regulation of the distribution of their earnings, regulation of their
lending and other investment powers, acting upon their applications for
facility offices (including branch offices, limited facilities, mobile
facilities and satellite offices), the regulation of mergers,
conversions, and dissolutions involving such associations, the
appointment of conservators and receivers for such associations, and the
enforcement of laws, regulations, or conditions against such
associations or the officers or directors thereof by proceedings under
section 5 of the Home Owners' Loan Act of 1933, as amended.
(c) The Office regulates and examines savings associations within
the authority conferred by the HOLA and the FDIA and is authorized to
enforce applicable laws, regulations, or conditions against savings
associations or the officers or directors thereof by proceedings under
section 5 of the HOLA and section 8 of the FDIA as amended. The Office
also regulates and supervises savings and loan holding companies
pursuant to the provisions of section 10 of the HOLA, as amended, and
section 8 of the FDIA.
(d) The Office exercises supervisory and regulatory authority over
all building and loan or savings and loan associations and similar
institutions of or doing business in or maintaining offices in the
District of Columbia.
[54 FR 49440, Nov. 30, 1989, as amended at 60 FR 66868, Dec. 27, 1995]
Sec. 500.2-500.5 [Reserved]
Sec. 500.6 General statement concerning gender-related terminology.
The statutes administered by the Office and the rules, regulations,
policies, practices, publications, directives, and guidelines
promulgated pursuant to such statutes that prescribe the course and
methods to be followed by the Office that inadvertently use or contain
gender-related terminology are to be interpreted as equally applicable
to either sex.
Subpart B_General Organization
Sec. 500.10 The OTS or The Office.
The Office of Thrift Supervision (referred to as ``OTS'' or
``Office'') is an
[[Page 6]]
office of the Department of the Treasury. Its functions are to charter,
supervise, regulate and examine Federal savings associations and to
supervise, regulate and examine all savings associations. It is directed
by a Director, who is appointed by the President and confirmed by the
Senate to a five-year term. The Director directs and carries out the
mission of the OTS with the assistance of offices reporting directly to
him. One of these offices oversees the direct examination and
supervision of savings associations by regulatory staff to ensure the
safety and soundness of the industry.
[57 FR 14335, Apr. 20, 1992, as amended at 60 FR 66869, Dec. 27, 1995]
Subpart C_Procedures
Sec. 500.30 General statement concerning procedures and forms.
(a) Rules and procedures of the Office are published in chapter V of
title 12 of the Code of Federal Regulations and in supplementary
material published in the Federal Register. The statutes administered by
the Office and the rules and regulations promulgated pursuant to such
statutes prescribe the course and method of the formal procedures to be
followed in proceedings of the Office. These are supplemented where
practicable by informal procedures designed to aid the public and
facilitate the execution of the Office's functions. The informal
procedures of the Office consist principally in the rendering of advice
and assistance to members of the public dealing with the Office.
Opinions expressed by members of the staff do not constitute an official
expression of the views of the Office, but do represent views of persons
working with the provisions of the statute or regulation involved. The
Director may, for good cause and to the extent permitted by statute,
waive the applicability of any provision of this chapter.
(b) Information with respect to procedures, forms, and instructions
of the Office is available to the public at the headquarters of the
Office. Forms of concern to the public consist principally of periodic
financial reports and of applications to the Office. The Office may from
time to time require the completion by individuals or savings
associations of miscellaneous forms, questionnaires, reports, or other
papers. In each instance, the individual or savings association is given
actual and timely notice of the scope and contents of the papers in
question.
[54 FR 49440, Nov. 30, 1989, as amended at 59 FR 53570, Oct. 25, 1994]
PART 502_ASSESSMENTS AND FEES--Table of Contents
Sec.
502.5 Who must pay assessments and fees?
Subpart A_Assessments
Saving Associations--Calculation of Assessments
502.10 How does OTS calculate the semi-annual assessment for savings
associations?
502.15 How does OTS determine my size component?
502.20 How does OTS determine my condition component?
502.25 How does OTS determine my complexity component?
Savings and Loan Holding Companies--Calculation of Assessments
502.26 How does OTS calculate the semi-annual assessment for savings and
loan holding companies?
502.27 How does OTS determine the risk/complexity component for a
savings and loan holding company?
502.28 How does OTS determine the organizational form component for a
savings and loan holding company?
502.29 How does OTS determine the condition component for a savings and
loan holding company?
Payment of Assessments
502.30 When must I pay my assessment?
502.35 How do I pay my assessment?
502.40 Will OTS refund or prorate my assessment?
502.45 What will happen if I do not pay my assessment on time?
Subpart B_Fees
502.50 What fees does OTS charge?
502.55 Where can I find OTS's fee schedule?
502.60 When will OTS adjust, add, waive, or eliminate a fee?
502.65 When is an application fee due?
502.70 How must I pay an application fee?
502.75 What if I do not pay my fees on time?
Authority: 12 U.S.C. 1462a, 1463, 1467, 1467a.
Source: 63 FR 65670, Nov. 30, 1998, unless otherwise noted.
[[Page 7]]
Sec. 502.5 Who must pay assessments and fees?
(a) Authority. Section 9 of the HOLA, 12 U.S.C. 1467, authorizes the
Director to charge assessments to recover the costs of examining savings
associations and their affiliates, to charge fees to recover the costs
of processing applications and other filings, and to charge fees to
cover OTS's direct and indirect expenses in regulating savings
associations and their affiliates.
(b) Assessments. If you are a savings association or a responsible
savings and loan holding company, and OTS regulates you on the last day
of January or on the last day of July of each year, you must pay a semi-
annual assessment due on that day. Subpart A of this part describes
OTS's assessment procedures and requirements.
(c) Fees. If you make a filing with OTS or use OTS services, the
Director may require you to pay a fee to cover the costs of processing
your submission or providing those services. The Director may charge a
fee for any filing including notices, applications, and securities
filings. The Director may charge a fee for any service including
publications, seminars, certifications for official copies of agency
documents, and records or services requested by other agencies. The
Director also assesses fees for examining and investigating savings
associations that administer trust assets of $1 billion or less, and
savings association affiliates. If OTS incurs extraordinary expenses
related to examination, investigation, regulation, or supervision of a
savings association or its affiliate, the Director may charge the
savings association or the affiliate a fee to fund those expenses.
Subpart B of this part describes OTS's fee procedures and requirements.
[63 FR 65670, Nov. 30, 1998, as amended at 67 FR 78151, Dec. 23, 2002;
69 FR 30568, May 28, 2004]
Subpart A_Assessments
Source: 69 FR 30568, May 28, 2004, unless otherwise noted.
Savings Associations--Calculation of Assessments
Sec. 502.10 How does OTS calculate the semi-annual assessment for savings associations?
(a) If you are a savings association, OTS determines your semi-
annual assessment by totaling three components: your size, your
condition, and the complexity of your business. OTS determines the
amounts of each component under Sec. Sec. 502.15 through 502.25 of this
part.
(b) OTS uses the September 30 Thrift Financial Report to determine
amounts due at the January 31 assessment; and the March 31 Thrift
Financial Report to determine amounts due at the July 31 assessment. For
purposes of Sec. Sec. 502.10 through 502.25 of this part, total assets
are your total assets as reported on Thrift Financial Reports filed with
OTS.
Sec. 502.15 How does OTS determine my size component?
(a) Chart. If you are a savings association, OTS uses the following
chart to calculate your size component:
----------------------------------------------------------------------------------------------------------------
If your total assets are: . . . Your size component is:
----------------------------------------------------------------------------------------------------------------
Over--* But not over-- This amount-- Plus--Marginal Of assets over--Class
----------------------------------------------------------- Base rate floor
assessment ---------------------------------------
amount
Column A Column B -------------- Column D Column E
Column C
----------------------------------------------------------------------------------------------------------------
0................................. $67 million........... C1 D1 0.
$67 million....................... 215 million........... C2 D2 $67 million.
215 million....................... 1 billion............. C3 D3 215 million.
1 billion......................... 6.03 billion.......... C4 D4 1 billion.
6.03 billion...................... 18 billion............ C5 D5 6.03 billion.
18 billion........................ 35 billion............ C6 D6 18 billion.
35 billion........................ ...................... C7 D7 35 billion.
----------------------------------------------------------------------------------------------------------------
[[Page 8]]
(b) Calculation. To calculate your size component, find the row in
Columns A and B that describes your total assets. Reading across in that
same row, find your base assessment amount in Column C, your marginal
rate in Column D, and your class floor in Column E. Calculate how much
your total assets exceed your Column E class floor. Multiply this number
by your Column D marginal rate. Add this number to your Column C base
assessment amount. The total is your size component. OTS will establish
the base assessment amounts and the marginal rates in columns C and D in
a Thrift Bulletin.
Sec. 502.20 How does OTS determine my condition component?
(a) If you are a savings association, OTS uses the following chart
to determine your condition component:
------------------------------------------------------------------------
Then your condition component
If your composite rating is: is:
------------------------------------------------------------------------
1 or 2................................. Zero.
3...................................... 50 percent of your size
component.
4 or 5................................. 100 percent of your size
component.
------------------------------------------------------------------------
(b) For the purposes of this section, OTS uses the most recent
composite rating, as defined in 12 CFR part 516, of which you have been
notified in writing before an assessment's due date.
Sec. 502.25 How does OTS determine my complexity component?
If you are a savings association and your portfolio exceeds any of
the thresholds in paragraph (a) of this section, OTS will calculate your
complexity component according to paragraph (c) of this section. If your
portfolio does not exceed any of the thresholds in paragraph (a) of this
section, your complexity component is zero.
(a) Thresholds for complexity component. OTS uses three separate
thresholds in calculating your complexity component. You exceed a
threshold if you have more than $1 billion in any of the following:
(1) Trust assets that you administer.
(2) The outstanding principal balances of assets that are covered,
fully or partially, by your recourse obligations or direct credit
substitutes.
(3) The principal amount of loans that you service for others.
(b) Assessment rates. OTS will establish one or more assessment
rates for each of the types of activities listed in paragraph (a) of
this section. OTS will publish those assessment rates in a Thrift
Bulletin.
(c) Calculation of complexity component. OTS separately considers
each of the thresholds in paragraph (a) of this section in calculating
your complexity component. OTS first calculates the amount by which you
exceed any of those thresholds. OTS multiplies the amount by which you
exceed any thresholds in paragraph (a) of this section by the applicable
assessment rate(s) under paragraph (b) of this section. OTS then totals
the results. This total is your complexity component.
Savings and Loan Holding Companies--Calculation of Assessments
Sec. 502.26 How does OTS calculate the semi-annual assessment for savings and loan holding companies?
(a) OTS calculates the semi-annual assessment savings and loan
holding companies as follows:
(1) OTS will assess a base assessment amount of $3,000 on
responsible savings and loan holding companies. The base assessment
amount reflects OTS's estimate of the base costs of conducting on- and
off-site supervision of a noncomplex, low risk savings and loan holding
company structure. OTS will periodically revise this amount to reflect
changes in inflation based on a readily available index. OTS will
establish the revised amount of the base assessment in a Thrift
Bulletin.
(2) OTS will add three components to the base assessment amount to
compute the amount of the semi-annual assessment for responsible savings
and loan holding companies: a component based on the risk or complexity
of the savings and loan holding company's business, a component based on
its organizational form, and a component based on its condition. OTS
determines the amount of each component under Sec. Sec. 502.27 through
502.29 of this part.
(b) For purposes of the semi-annual assessment of savings and loan
holding companies:
(1) The responsible holding company is the registered holding
company at the highest level of ownership in a holding
[[Page 9]]
company structure, unless OTS designates another savings and loan
holding company in the holding company structure. OTS may designate an
intermediate-tier holding company if the assessment of this entity would
more accurately reflect OTS costs of supervising the holding company
structure and:
(i) There are multiple top-tier holding companies in the holding
company structure;
(ii) The top-tier holding company is organized outside of the United
States, and is subject to the consolidated review of a foreign
regulator; or
(iii) Other circumstances indicate that the assessment of the top-
tier holding company is inappropriate.
(2) Total consolidated holding company assets are the total assets
as reported on the Thrift Financial Report, Schedule HC. If Schedule HC
is unavailable, OTS will use total assets reported on report H-(b)11.
OTS uses information contained in the September 30 Schedule HC or report
H-(b)11 to determine amounts due at the January 31 assessment; and the
March 31 Schedule HC or report H-(b)11 to determine amounts due at the
July 31 assessment.
Sec. 502.27 How does OTS determine the risk/complexity component for a savings and loan holding company?
(a) OTS computes the risk/complexity component for responsible
savings and loan holding companies using schedules that set out charges
based on OTS holding company risk/complexity classifications and total
consolidated holding company assets. OTS will establish these schedules
in a Thrift Bulletin.
(b) For the purposes of this section, the holding company risk/
complexity classification is the most recent risk/complexity
classification of which OTS notified the savings and loan holding
company in writing before an assessment's due date.
(1) OTS classifies holding companies as Category I (low risk,
noncomplex holding company); Category II (complex or high risk holding
company); or Category III (conglomerate).
(2) The OTS holding company risk/complexity classifications reflect
OTS's assessment of a holding company's financial condition, financial
independence of the savings association and other affiliates that are
regulated financial entities, operational independence of the savings
association and other affiliates that are regulated financial entities,
reputational risks raised by affiliation with the holding company, and
management experience of the holding company, savings association, and
affiliates. The OTS holding company risk/complexity classification
system is more fully described in the OTS Holding Company Handbook.
(3) A conglomerate is a holding company that: (i) is one of the most
complex or highest risk holding companies under the holding company
risk/complexity classification system; (ii) is made up of a number of
different companies or legal enterprises that offer products from more
than one financial sector (e.g., insurance, securities, and banking) or
operate in diversified fields; and (iii) generally manages these
companies and enterprises along functional lines, rather than as
separate legal entities.
(c) OTS uses the following chart to compute the risk/complexity
component under this section. OTS will establish the amounts in column C
and D in the Thrift Bulletin for each holding company risk/complexity
classification. The amounts established for column C and D that are
applicable to conglomerates will be three times the amounts established
for column C and D for complex or higher risk holding company
enterprises of the same asset size.
----------------------------------------------------------------------------------------------------------------
If your total consolidated assets are . . . Your risk/complexity component is . . .
----------------------------------------------------------------------------------------------------------------
Over . . . But not over . . . This amount Plus--this Of assets over . . .
------------------------------------------------------------- . . . marginal -----------------------
-------------- rate . . .
Column A Column B -------------- Column E
Column C Column D
----------------------------------------------------------------------------------------------------------------
$0................................. $150 Million........... C1 D1 $0
150 Million........................ 250 Million............ C2 D2 150 Million
[[Page 10]]
250 Million........................ 500 Million............ C3 D3 250 Million
500 Million........................ 1 Billion.............. C4 D4 500 Million
1 Billion.......................... 5 Billion.............. C5 D5 1 Billion
5 Billion.......................... 50 Billion............. C6 D6 5 Billion
50 Billion......................... 100 Billion............ C7 D7 50 Billion
100 Billion........................ 300 Billion............ C8 D8 100 Billion
Over 300 Billion............................................ C9 D9 300 Billion
----------------------------------------------------------------------------------------------------------------
(d) To compute your risk/complexity component, find the row in the
appropriate schedule that describes your total consolidated assets by
referring to the amounts in Columns A and B. In that row, calculate how
much your total consolidated assets exceed the class floor (Column E);
multiply this number by your marginal rate (Column D); and add the
product to the amount in Column C. The total is your risk/complexity
component.
Sec. 502.28 How does OTS determine the organizational form component for a savings and loan holding company?
OTS will include an organizational form component if you are a
responsible savings and loan holding company that OTS regulates under
section 10(l) of the HOLA. OTS will compute your organizational form
component by adding the base assessment to your risk/complexity
component, and multiplying this amount by 25 percent.
Sec. 502.29 How does OTS determine the condition component for a savings and loan holding company?
(a) If the most recent examination rating assigned to the
responsible savings and loan holding company (or the most recent
examination rating assigned to any savings and loan holding company in
the holding company structure) is ``unsatisfactory,'' OTS will assess a
charge under the condition component. The amount of the condition
component is equal to 100 percent of the sum of the base assessment
amount, the risk/complexity component, and any organizational form
component.
(b) For the purposes of this section, examination ratings are the
ratings that OTS assigns under the OTS holding company rating system.
OTS uses the most recent rating of which the savings and loan holding
company has been notified in writing before an assessment's due date.
Payment of Assessments
Sec. 502.30 When must I pay my assessment?
OTS will bill you semi-annually for your assessments. Assessments
are due January 31 and July 31 of each year, unless that date is a
Saturday, Sunday, or Federal holiday. If the due date is a Saturday,
Sunday or Federal holiday, your assessment is due on the first day
preceding the due date that is not a Saturday, Sunday or Federal
holiday. At least seven days before your assessment is due, the Director
will mail you a notice that indicates the amount of your assessment,
explains how OTS calculated the amount, and specifies when payment is
due.
Sec. 502.35 How do I pay my assessment?
(a) Savings associations. (1) If you are a member of a Federal Home
Loan Bank that offers demand deposit accounts which permit direct
debits, you must maintain a demand deposit account at your Federal Home
Loan Bank with sufficient funds to pay your assessment when due. OTS
will notify your Federal Home Loan Bank of the amount of your
assessment. OTS will debit your account for your assessments.
(2) If paragraph (a)(1) of this section does not apply to you, OTS
will directly debit an account you must maintain at your association.
(b) Savings and loan holding companies. You may establish an account
at
[[Page 11]]
an insured depository institution and authorize OTS to debit the account
for your semi-annual assessment. If you do not establish an account and
maintain funds in the account sufficient to pay the semi-annual
assessment when due, OTS may charge you a fee to cover its
administrative costs of collecting and billing your assessment. This fee
is in addition to interest on delinquent assessments charged under Sec.
502.45 of this part. OTS will establish the amount of the administrative
fee and publish the amount of the fee in a Thrift Bulletin.
Sec. 502.40 Will OTS refund or prorate my assessment?
(a) OTS will not refund or prorate your assessment, even if you
cease to be a savings association or a savings and loan holding company.
(b) If a conservator or receiver has been appointed, you must
continue to pay assessments in accordance with this part. OTS will not
increase or decrease your assessment based on events that occur after
the date of the Thrift Financial Report or H-(b)11 Annual/Current Report
upon which your assessment is based.
Sec. 502.45 What will happen if I do not pay my assessment on time?
(a) Your assessment is delinquent if you do not pay it on the date
it is due under Sec. 502.30 of this part. The Director will charge
interest on delinquent assessments. Interest will accrue at a rate (that
OTS will determine quarterly) equal to 150 percent of the average of the
bond-equivalent rates of 13-week Treasury bills auctioned during the
calendar quarter preceding the assessment.
(b) If a savings and loan holding company fails to pay an assessment
within 60 days of the date it is due under Sec. 502.30 of this part,
the Director may assess and collect the assessment with interest from a
subsidiary savings association. If a savings and loan holding company
controls more than one savings association, the Director may assess and
collect the assessment from each savings association as the Director may
prescribe.
Subpart B_Fees
Sec. 502.50 What fees does OTS charge?
(a) The Director assesses fees for examining or investigating
savings associations that administer trust assets of $1 billion or less,
and saving association affiliates. Because OTS recovers the ordinary
costs of examining and investigating savings and loan holding companies
through the semi-annual assessment under Sec. Sec. 502.25 through
502.29 of this part, the Director will not generally charge an
examination fee to a savings and loan holding company. ``Affiliate'' has
the meaning in 12 U.S.C. 1462(9), except that, for this part only,
``affiliate'' does not include any entity that is consolidated with a
savings association on the Consolidated Statement of Condition of the
Thrift Financial Report.
(b) The Director assesses fees for processing notices, applications,
securities filings, and requests, and for providing other services.
[69 FR 30571, May 28, 2004]
Sec. 502.55 Where can I find OTS's fee schedule?
OTS will periodically publish a schedule of its fees in a Thrift
Bulletin. OTS will publish these fees at least 30 days before they are
effective.
Sec. 502.60 When will OTS adjust, add, waive, or eliminate a fee?
Under unusual circumstances, the Director may deem it necessary or
appropriate to adjust, add, waive, or eliminate a fee. For example, the
Director may:
(a) Reduce any fee to adjust for any inequities, efficiencies, or
changed procedures that OTS projects will reduce its applications
processing costs but that OTS did not consider in determining its fees;
(b) Reduce or waive any fee if OTS determines that the fee would
unduly or unjustifiably discourage particular types of applications or
applications for particular categories of transactions;
(c) Add a fee for a new type of application;
(d) Increase a fee for an application that presents unusual or
particularly
[[Page 12]]
complex issues of law or policy or otherwise causes the agency to incur
unusually high processing costs; or
(e) Charge a fee to recover extraordinary expenses related to
examination, investigation, regulation, or supervision of savings
associations or their affiliates.
Sec. 502.65 When is an application fee due?
(a) You must pay the application fee when you file an application.
OTS will not process your application if you do not include the required
fee.
(b) If OTS cannot complete its review of your application because
the application is materially deficient and it refuses to accept your
application for processing, you must pay a new application fee upon
filing a revised application.
(c) If a transaction involves multiple applications, you must pay
the appropriate fee for each application, unless OTS specifies otherwise
by Thrift Bulletin.
Sec. 502.70 How must I pay an application fee?
You must pay an application fee to the Office of Thrift Supervision.
You must include a statement of the fee and how you calculated the fee.
Sec. 502.75 What if I do not pay my fees on time?
(a) Interest. An examination or investigation fee is delinquent if
OTS does not receive the fee within 30 days of the date specified in a
bill. The Director will charge interest on a delinquent examination or
investigation fee. Interest will accrue at a rate (that OTS will
determine quarterly) equal to 150 percent of the average of the bond-
equivalent rates of 13-week Treasury bills auctioned during the
preceding calendar quarter.
(b) Failure to pay. If you are a savings association and your
holding company, affiliate, or subsidiary fails to pay any fee within 60
days of the date specified in a bill, the Director may assess and
collect that fee, with interest, from you. If the holding company,
affiliate, or subsidiary is related to more than one savings
association, the Director may assess the fee against and collect it from
each savings association as the Director may prescribe.
[63 FR 65670, Nov. 30, 1998, as amended at 69 FR 30571, May 28 1, 2004]
PART 503_PRIVACY ACT--Table of Contents
Sec.
503.1 Scope and procedures.
503.2 Exemptions of records containing investigatory material compiled
for law enforcement purposes.
Authority: 5 U.S.C. 552a; 12 U.S.C. 1462a, 1463, 1464.
Cross Reference: See 31 CFR part 1, subpart C.
Sec. 503.1 Scope and procedures.
(a) In general. The Privacy Act regulations of the Department of the
Treasury, 31 CFR part 1, subpart C, apply to the Office as a component
part of the Department of the Treasury. This part 503 sets forth, for
the Office, specific notification and access procedures with respect to
particular systems of records, and identifies the officials designated
to make the initial determinations with respect to notification and
access to records and accountings of disclosures of records. This part
503 also sets forth the specific procedures for requesting amendment of
records and identifies the officials designated to make the initial and
appellate determinations with respect to requests for amendment of
records. It identifies the officials designated to grant extensions of
time on appeal, the officials with whom ``Statements of Disagreement''
may be filed, the official designated to receive service of process and
the addresses for delivery of requests, appeals, and service of process.
In addition, it references the notice of systems of records and notices
of the routine uses of the information in the system required by 5
U.S.C. 552a(e) (4) and (11) and published annually by the Office of the
Federal Register in ``Privacy Act Issuances.''
(b) Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the Office,
[[Page 13]]
will be made by the head of the organizational unit having immediate
custody of the records requested or an official designated by this
official. This is indicated in the appropriate system notice in
``Privacy Act Issuances'' published annually by the Office of the
Federal Register. Requests for information and specific guidance on
where to send requests for records may be mailed or delivered personally
to: Privacy Act Request, Manager, Dissemination Branch, Information
Management & Services Division, Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
(c) Requests for amendment of records. Initial determinations under
31 CFR 1.27(a) through (d), whether to grant requests to amend records
will be made by the head of the organizational unit having immediate
custody of the records or the delegate of such official. Requests for
amendment should be addressed to: Privacy Act Amendment Request,
Manager, Dissemination Branch, Information Management & Services
Division, Office of Thrift Supervision, 1700 G Street, NW., Washington,
DC 20552.
(d) Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal,
with respect to records of the Office will be made by the Director of
the Office of Thrift Supervision (``Director'') or Chief Counsel or the
delegate of the Director or Chief Counsel. Appeals made by mail should
be addressed to, or delivered personally to: Privacy Act Amendment
Appeal, Deputy Chief Counsel for General Law, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
(e) Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27(e)(4)(i) shall be filed with the Deputy Director for
Washington Operations at the address indicated in the letter of
notification within 35 days of the date of such notification and should
be limited to one page.
(f) Service of process. Service of process will be received by the
Chief Counsel's Office or the delegate of such official and shall be
delivered to the following location: Chief Counsel's Office, Office of
Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
(g) Annual notice of systems of records. The annual notice of
systems of records is published by the Office of the Federal Register,
as specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy
Act Issuance.'' Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.
[54 FR 49443, Nov. 30, 1989, as amended at 59 FR 18475, Apr. 19, 1994;
64 FR 69184, Dec. 10, 1999]
Sec. 503.2 Exemptions of records containing investigatory material compiled for law enforcement purposes.
(a) Scope. The Office has established a system of records, entitled
the ``Confidential Individual Information System.'' The purpose of this
system is to assist the Office in the accomplishment of its statutory
and regulatory responsibilities in connection with supervision of
savings associations. This system will be exempt from certain provisions
of the Privacy Act of 1974 for the reasons set forth in paragraph (c) of
this section.
(b) Exemptions Under 5 U.S.C. 552a(k)(2). (1) Pursuant to 5 U.S.C.
552a(k)(2), the head of an agency may issue rules to exempt any system
of records within the agency from certain provisions of the Privacy Act
of 1974 if the system contains investigatory material compiled for law
enforcement purposes.
(2) Provisions of the Privacy Act of 1974 from which exemptions will
be made under 5 U.S.C. 552a(k)(2) are as follows:
(i) 5 U.S.C. 552a(c)(3);
(ii) 5 U.S.C. 552a(d)(1), (d)(2), (d)(3), and (d)(4);
(iii) 5 U.S.C. 552a(e)(1);
(iv) 5 U.S.C. 552a(e)(4)(G), (e)(4)(H), and (e)(4)(I); and
(v) 5 U.S.C. 552a(f).
(c) Reasons for exemptions under 5 U.S.C. 552a(k)(2). (1) 5 U.S.C.
552a(c)(3) requires that an agency make accountings of disclosures of
records available to individuals named in the records at their request.
These accountings must state the date, nature, and purpose of
[[Page 14]]
each disclosure of a record and the name and address of the recipient.
The application of this provision would make known to subjects of an
investigation that an investigation is taking place and that they are
the subjects of it. Release of such information could result in the
alteration or destruction of documentary evidence, improper influencing
of witnesses, and reluctance of witnesses to offer information, and
could otherwise impede or compromise an investigation.
(2) 5 U.S.C. 552a(d)(1), (d)(2), (d)(3), and (d)(4), (e)(4)(G) and
(e)(4)(H), and (f), relate to an individual's right to be notified of
the existence of, and the right to examine, records pertaining to such
individual. Notifying an individual at the individual's request of the
existence of records and allowing the individual to examine an
investigative file pertaining to such individual, or granting access to
an investigative file, could:
(i) Interfere with investigations and enforcement proceedings;
(ii) Constitute an unwarranted invasion of the personal privacy of
others;
(iii) Disclose the identity of confidential sources and reveal
confidential information supplied by those sources; or
(iv) Disclose investigative techniques and procedures.
(3) 5 U.S.C. 552a(e)(4)(I) requires the publication of the
categories of sources of records in each system. Application of this
provision could disclose investigative techniques and procedures and
cause sources to refrain from giving such information because of fear of
reprisal, or fear of breach of promises of anonymity and
confidentiality, thus compromising the agency's ability to conduct
investigations and to identify, detect, and apprehend violators.
(4) 5 U.S.C. 552a(e)(1) requires each agency to maintain in its
records only information about an individual that is relevant and
necessary to accomplish a purpose of the agency required by statute or
Executive Order. Limiting the system as described would impede
enforcement activities because:
(i) It is not always possible to determine the relevance or
necessity of specific information in the early stages of an
investigation; and
(ii) In any investigation the Office may obtain information
concerning violations of laws other than those within the scope of its
jurisdiction. In the interest of effective law enforcement, the Office
should retain this information to aid in establishing patterns of
criminal activity, and to provide leads for those law enforcement
agencies charged with enforcing criminal or civil laws.
(d) Documents exempted. Exemptions will be applied only when
appropriate under 5 U.S.C. 552a(k).
[55 FR 31371, Aug. 2, 1990]
PART 505_FREEDOM OF INFORMATION ACT--Table of Contents
Sec.
505.1 Basis and scope.
505.2 Public Reading Room.
505.3 Requests for records.
505.4 Administrative appeal of initial determination to deny records.
505.5 Delivery of process.
Authority: 5 U.S.C. 552; 12 U.S.C. 1462a, 1463, 1464.
Cross Reference: See 31 CFR part 1, subpart A.
Sec. 505.1 Basis and scope.
(a) This part is issued by the Office of Thrift Supervision
(``OTS'') as a supplement to the Freedom of Information Act regulations
of the Department of the Treasury, 31 CFR part 1, subpart A, which apply
to the OTS as a component part of the Department of the Treasury.
(b) This part is issued by the OTS pursuant to the requirement of
section 552 of title 5 of the United States Code, which requires every
federal agency to publish in the Federal Register the established places
at which, the employees from whom, and the methods whereby, the public
may obtain information, make submittals on requests, or obtain
decisions, and the forms available or the places at which forms and
instructions as to the scope and contents of all papers, reports, or
examinations may be found. Information about the Public Reading Room is
set forth in Sec. 505.2 of this part. Procedures for requests for
records are set forth in Sec. 505.3 of this part. Information about
administrative appeals is set forth in
[[Page 15]]
Sec. 505.4 of this part. Provisions relating to delivery of process
upon the OTS are set forth in Sec. 505.5 of this part.
[54 FR 49444, Nov. 30, 1989, as amended at 60 FR 66716, Dec. 26, 1995;
66 FR 65819, Dec. 21, 2001]
Sec. 505.2 Public Reading Room.
OTS will make materials available for review on an ad hoc basis when
necessary. Contact the FOIA Office, Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552, or you may visit the Public Reading
Room at 1700 G Street, NW., by appointment only. (Please identify the
materials you would like to inspect, to assist us in serving you.) We
schedule appointments on business days between 10 a.m. and 4 p.m. In
most cases, appointments will be available the next business day
following the date we receive your request.
[66 FR 65819, Dec. 21, 2001, as amended at 67 FR 78151, Dec. 23, 2002]
Sec. 505.3 Requests for records.
A designated official will make the initial determination under 31
CFR 1.5(g) whether to grant a request for OTS records. Requests may be
mailed to: Freedom of Information Act Request, FOIA Office, Office of
Thrift Supervision, 1700 G Street, NW., Washington, DC 20552, or marked
``FOIA'' and delivered in person to the FOIA Office, 1700 G Street, NW.,
Washington, DC 20552. Requests may also be sent by e-mail or facsimile
to the e-mail address and facsimile number in Sec. 505.2 of this part.
[67 FR 78151, Dec. 23, 2002]
Sec. 505.4 Administrative appeal of initial determination to deny records.
A designated official will make appellate determinations under 31
CFR 1.5(h) with respect to OTS records. Appeals by mail should be
addressed to: FOIA Appeals, 1700 G Street, NW., Washington, DC 20552.
Appeals may be delivered personally to FOIA Appeals, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552. Appeals may also
be sent by e-mail or facsimile to the e-mail address and facsimile
number in Sec. 505.2 of this part.
[67 FR 78151, Dec. 23, 2002]
Sec. 505.5 Delivery of process.
Service of process will be received as set forth in Sec. 510.4 of
this chapter.
[54 FR 49444, Nov. 30, 1989]
PART 506_INFORMATION COLLECTION REQUIREMENTS UNDER THE PAPERWORK REDUCTION ACT--Table of Contents
Authority: 44 U.S.C. 3501 et seq.
Sec. 506.1 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
(a) Purpose. This part collects and displays the control numbers
assigned to information collection requirements contained in regulations
of the Office of Thrift Supervision by the Office of Management and
Budget (OMB) pursuant to the Paperwork Reduction Act of 1995, Pub. L.
104-13, 109 Stat. 163, and is adopted in compliance with the
requirements of 5 CFR 1320.8. Information collection requirements that
are not mandated by statute must be assigned control numbers by OMB in
order to be enforceable. Respondents/recordkeepers are not required to
comply with any collection of information unless it displays a currently
valid OMB control number.
(b) Display.
------------------------------------------------------------------------
12 CFR part or section where identified
and described Current OMB control No.
------------------------------------------------------------------------
502.70.................................... 1550-0053.
510....................................... 1550-0081.
Part 516.................................. 1550-0056.
Part 528.................................. 1550-0021.
533.4..................................... 1550-0105.
533.6..................................... 1550-0105.
533.7..................................... 1550-0105.
536.40.................................... 1550-0106.
543.2..................................... 1550-0005.
543.3..................................... 1550-0005
543.9..................................... 1550-0007.
544.2..................................... 1550-0018.
544.5..................................... 1550-0018.
544.8..................................... 1550-0011.
545.93 and 545.95......................... 1500-0006.
545.96(c)................................. 1550-0011.
546.2..................................... 1550-0016.
546.4..................................... 1550-0066.
Part 550.................................. 1550-0037.
Part 551.................................. 1550-0109.
551.50.................................... 1550-0109.
551.70 through 551.100.................... 1550-0109.
551.140................................... 1550-0109.
551.150................................... 1550-0109.
552.2-1................................... 1550-0005.
552.2-6................................... 1550-0007.
552.4..................................... 1550-0017.
552.5..................................... 1550-0018.
[[Page 16]]
552.11.................................... 1550-0011.
552.13.................................... 1550-0016, 1550-0025.
555.300................................... 1550-0095.
555.310................................... 1550-0095.
557.20.................................... 1550-0092.
559.3..................................... 1550-0077.
559.11.................................... 1550-0077.
559.12.................................... 1550-0013.
559.13.................................... 1550-0065.
560.1..................................... 1550-0078.
560.2..................................... 1550-0078.
560.32.................................... 1550-0078.
560.35.................................... 1550-0078.
560.93(f)................................. 1550-0078.
560.101................................... 1550-0078.
560.170(c)................................ 1550-0078.
560.172................................... 1550-0078.
560.210................................... 1550-0078.
562.1..................................... 1550-0011.
562.1(b).................................. 1550-0078.
562.4..................................... 1550-0011.
563.1(b).................................. 1550-0011.
563.3..................................... 1550-0027.
563.22.................................... 1550-0016, 1550-0025.
563.41(c)(3) and (4)...................... 1550-0078
563.43.................................... 1550-0075.
563.47(e)................................. 1550-0011.
563.74.................................... 1550-0050.
563.76(c)................................. 1550-0011.
563.81.................................... 1550-0030.
563.143 through 563.146................... 1550-0059.
563.170................................... 1550-0078.
563.177................................... 1550-0041.
563.180................................... 1550-0084.
563.180(d)................................ 1550-0003.
563.180(e)................................ 1550-0079.
Part 563b................................. 1550-0014.
Part 563d................................. 1550-0019.
Part 563e................................. 1550-0012.
Part 563f................................. 1550-0051.
Part 563g................................. 1550-0035.
Part 564.................................. 1550-0078.
Part 568.................................. 1550-0062.
572.6..................................... 1550-0088.
572.7..................................... 1550-0088.
572.9..................................... 1550-0088.
572.10.................................... 1550-0088.
Part 573.................................. 1550-0103.
574.3(b).................................. 1550-0032.
574.4..................................... 1550-0032.
574.5..................................... 1550-0032.
574.6..................................... 1550-0015.
Part 575.................................. 1550-0072.
584.1(f).................................. 1550-0011.
584.2-1................................... 1550-0063.
584.2-2................................... 1550-0063.
584.9..................................... 1550-0063.
590.4(h).................................. 1550-0078.
------------------------------------------------------------------------
[60 FR 66716, Dec. 26, 1995, as amended by 61 FR 65178, Dec. 11, 1996;
62 FR 54764, Oct. 22, 1997; 62 FR 66261, Dec. 18, 1997; 63 FR 71211,
Dec. 24, 1998; 65 FR 78901, Dec. 18, 2000; 66 FR 15017, Mar. 15, 2001;
66 FR 65819, Dec. 21, 2001; 67 FR 76298, Dec. 12, 2002; 67 FR 77916,
Dec. 20, 2002; 67 FR 78151, Dec. 23, 2002; 68 FR 75109, Dec. 30, 2003;
69 FR 68246, Nov. 24, 2004; 69 FR 76602, Dec. 22, 2004]
PART 507_RESTRICTIONS ON POST-EMPLOYMENT ACTIVITIES OF SENIOR EXAMINERS--Table of Contents
Sec.
507.1 What does this part do?
507.2 Who is a senior examiner?
507.3 What post-employment restrictions apply to senior examiners?
507.4 When will OTS waive the post-employment restrictions?
507.5 What are the penalties for violating the post-employment
restrictions?
Authority: 12 U.S.C. 1462a, 1463 and 1820(k).
Source: 70 FR 69640, Nov. 17, 2005, unless otherwise noted.
Sec. 507.1 What does this part do?
This part implements section 10(k) of the Federal Deposit Insurance
Act (FDIA), which prohibits senior examiners from accepting compensation
from certain companies following the termination of their employment.
See 12 U.S.C. 1820(k). Except where otherwise provided, the terms used
in this part have the meanings given in section 3 of the FDIA (12 U.S.C.
1813).
Sec. 507.2 Who is a senior examiner?
An individual is a senior examiner for a particular savings
association or savings and loan holding company if--
(a) The individual is an officer or employee of OTS (including a
special government employee) who has been authorized by OTS to conduct
examinations or inspections of savings associations or savings and loan
holding companies;
(b) The individual has been assigned continuing, broad and lead
responsibility for the examination or inspection of that savings
association or savings and loan holding company; and
(c) The individual's responsibilities for examining, inspecting, or
supervising that savings association or savings and loan holding
company:
(1) Represent a substantial portion of the individual's assigned
responsibilities at OTS; and
(2) Require the individual to interact on a routine basis with
officers and employees of the savings association, savings and loan
holding company, or its affiliates.
[[Page 17]]
Sec. 507.3 What post-employment restrictions apply to senior examiners?
(a) Prohibition. (1) Senior examiner of savings association. An
individual who serves as a senior examiner of a savings association for
two or more of the last 12 months of his or her employment with OTS may
not, within one year after the termination date of his or her employment
with OTS, knowingly accept compensation as an employee, officer,
director, or consultant from--
(i) The savings association; or
(ii) A savings and loan holding company, bank holding company, or
any other company that controls the savings association.
(2) Senior examiner of a savings and loan holding company. An
individual who serves as a senior examiner of a savings and loan holding
company for two or more of the last 12 months of his or her employment
with OTS may not, within one year after the termination date of his or
her employment with OTS, knowingly accept compensation as an employee,
officer, director, or consultant from--
(i) The savings and loan holding company; or
(ii) Any depository institution that is controlled by the savings
and loan holding company.
(b) Effective date. The post-employment restrictions in paragraph
(a) of this section do not apply to any senior examiner who terminated
his employment at OTS before December 17, 2005.
(c) Definitions. For the purposes of this section--
(1) Consultant. An individual acts as a consultant for a savings
association or other company only if he or she directly works on matters
for, or on behalf of, the savings association or company.
(2) Control. Control has the same meaning given in part 574 of this
chapter.
Sec. 507.4 When will OTS waive the post-employment restrictions?
The post-employment restriction in Sec. 507.3 of this part will not
apply to a senior examiner if the Director certifies in writing and on a
case-by-case basis that a waiver of the restriction will not affect the
integrity of OTS's supervisory program.
Sec. 507.5 What are the penalties for violating the post-employment restrictions?
(a) Penalties. A senior examiner who violates Sec. 507.3 shall, in
accordance with 12 U.S.C. 1820(k)(6), be subject to one or both of the
following penalties:
(1) An order--
(i) Removing the person from office or prohibiting the person from
further participating in the conduct of the affairs of the relevant
depository institution, savings and loan holding company, bank holding
company or other company for up to five years, and
(ii) Prohibiting the person from participating in the affairs of any
insured depository institution for up to five years.
(2) A civil money penalty not to exceed $250,000.
(b) Scope of prohibition orders. Any senior examiner who is subject
to an order issued under paragraph (a)(1) of this section shall be
subject to 12 U.S. C. 1818(e)(6) and (7) in the same manner and to the
same extent as a person subject to an order issued under 12 U.S.C.
1818(e).
(c) Procedures. 12 U.S.C. 1820(k) describes the procedures that are
applicable to actions under paragraph (a) of this section and the
appropriate Federal banking agency authorized to take the action, which
may be an agency other than OTS. Where OTS is the appropriate Federal
banking agency, it will conduct administrative proceedings under 12 CFR
part 509.
(d) Other penalties. The penalties under this section are not
exclusive. A senior examiner who violates the restriction in Sec. 507.3
may also be subject to other administrative, civil, or criminal remedy
or penalty as provided by law.
PART 508_REMOVALS, SUSPENSIONS, AND PROHIBITIONS WHERE A CRIME IS CHARGED OR PROVEN--Table of Contents
Sec.
508.1 Scope.
508.2 Definitions.
508.3 Issuance of Notice or Order.
508.4 Contents and service of the Notice or Order.
508.5 Petition for hearing.
[[Page 18]]
508.6 Initiation of hearing.
508.7 Conduct of hearings.
508.8 Default.
508.9 Rules of evidence.
508.10 Burden of persuasion.
508.11 Relevant considerations.
508.12 Proposed findings and conclusions and recommended decision.
508.13 Decision of the Office.
508.14 Miscellaneous.
Authority: 12 U.S.C. 1464, 1818.
Source: 54 FR 49444, Nov. 30, 1989, unless otherwise noted.
Sec. 508.1 Scope.
The rules in this part apply to hearings, which are exempt from the
adjudicative provisions of the Administrative Procedure Act, afforded to
any officer, director, or other person participating in the conduct of
the affairs of a savings association, affiliate service corporation,
savings and loan holding company, or subsidiary of such a holding
company, where such person has been suspended or removed from office or
prohibited from further participation in the conduct of the affairs of
one of the aforementioned entities by a Notice or Order served by the
Office upon the grounds set forth in section 8(g) of the Federal Deposit
Insurance Act, (12 U.S.C. 1818(g)).
Sec. 508.2 Definitions.
As used in this part--
(a) The term Office means the Office of Thrift Supervision.
(b) The term Secretary means the Secretary to the Office and any
Assistant or Acting Secretary to the Office.
(c) The term Notice means a Notice of Suspension or Notice of
Prohibition issued by the Office pursuant to section 8(g) of the Federal
Deposit Insurance Act.
(d) The term Order means an Order of Removal or Order of Prohibition
issued by the Office pursuant to section 8(g) of the Federal Deposit
Insurance Act.
(e) The term association means a savings association within the
meaning of section 2(4) of the Home Owners' Loan Act of 1933, as
amended, 12 U.S.C. 1462(4) (``HOLA''), an affiliate service corporation
within the meaning of section 8(b)(8) of the Federal Deposit Insurance
Act, as amended, 12 U.S.C. 1818(b)(8) (``FDIA''), a savings and loan
holding company within the meaning of section 10(a)(1)(D) of the HOLA,
12 U.S.C. 1467a(a)(1)(D) and a subsidiary of a savings and loan holding
company (other than a savings association) within the meaning of section
10(a)(1)(G) of the Home Owners' Loan Act of 1933.
(f) The term subject individual means a person served with a Notice
or Order.
(g) The term petitioner means a subject individual who has filed a
petition for informal hearing under this part.
Sec. 508.3 Issuance of Notice or Order.
(a) The Office may issue and serve a Notice upon an officer,
director, or other person participating in the conduct of the affairs of
an association, where the individual is charged in any information,
indictment, or complaint with the commission of or participation in a
crime involving dishonesty or breach of trust that is punishable by
imprisonment for a term exceeding one year under State or Federal law,
if the Office, upon due deliberation, determines that continued service
or participation by the individual may pose a threat to the interests of
the association's depositors or may threaten to impair public confidence
in the association. The Notice shall remain in effect until the
information, indictment, or complaint is finally disposed of or until
terminated by the Office.
(b) The Office may issue and serve an Order upon a subject
individual against whom a judgment of conviction, or an agreement to
enter a pretrial diversion or other similar program has been rendered,
where such judgment is not subject to further appellate review, and the
Office, upon the deliberation, has determined that continued service or
participation by the subject individual may pose a threat to the
interests of the association's depositors or may threaten to impair
public confidence in the association.
Sec. 508.4 Contents and service of the Notice or Order.
(a) The Notice or Order shall set forth the basis and facts in
support of the Office's issuance of such Notice or Order, and shall
inform the subject individual of his right to a hearing, in accordance
with this part, for the purpose of determining whether the Notice
[[Page 19]]
or Order should be continued, terminated, or otherwise modified.
(b) The Secretary shall serve a copy of the Notice or Order upon the
subject individual and the related association in the manner set forth
in Sec. 509.11 of this chapter.
(c) Upon receipt of the Notice or Order, the subject individual
shall immediately comply with the requirements thereof.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
Sec. 508.5 Petition for hearing.
(a) To obtain a hearing, the subject individual must file two copies
of a petition with the Secretary within 30 days of being served with the
Notice or Order.
(b) The petition filed under this section shall admit or deny
specifically each allegation in the Notice or Order, unless the
petitioner is without knowledge or information, in which case the
petition shall so state and the statement shall have the effect of a
denial. Any allegation not denied shall be deemed to be admitted. When a
petitioner intends in good faith to deny only a part of or to qualify an
allegation, he shall specify so much of it as is true and shall deny
only the remainder.
(c) The petition shall state whether the petitioner is requesting
termination or modification of the Notice or Order, and shall state with
particularity how the petitioner intends to show that his continued
service to or participation in the conduct of the affairs of the
association would not, or is not likely to, pose a threat to the
interests of the association's depositors or to impair public confidence
in the association.
Sec. 508.6 Initiation of hearing.
(a) Within 10 days of the filing of a petition for hearing, the
Office shall notify the petitioner of the time and place fixed for
hearing, and it shall designate one or more Office employees to serve as
presiding officer.
(b) The hearing shall be scheduled to be held no later than 30 days
from the date the petition was filed, unless the time is extended at the
request of the petitioner.
(c) A petitioner may appear personally or through counsel, but if
represented by counsel, said counsel is required to comply with Sec.
509.6 of this chapter.
(d) A representative(s) of the Office's Office of Enforcement also
may attend the hearing and participate therein as a party.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
Sec. 508.7 Conduct of hearings.
(a) Hearings provided by this section are not subject to the
adjudicative provisions of the Administrative Procedure Act (5 U.S.C.
554-557). The presiding officer is, however, authorized to exercise all
of the powers enumerated in Sec. 509.5 of this chapter.
(b) Witnesses may be presented, within time limits specified by the
presiding officer, provided that at least 10 days prior to the hearing
date, the party presenting the witnesses furnishes the presiding officer
and the opposing party with a list of such witnesses and a summary of
the proposed testimony. However, the requirement for furnishing such a
witness list and summary of testimony shall not apply to the
presentation of rebuttal witnesses. The presiding officer may ask
questions of any witness, and each party shall have an opportunity to
cross-examine any witness presented by an opposing party.
(c) Upon the request of either the petitioner or a representative of
the Office of Enforcement, the record shall remain open for a period of
5 business days following the hearing, during which time the parties may
make any additional submissions for the record. Thereafter, the record
shall be closed.
(d) Following the introduction of all evidence, the petitioner and
the representative of the Office of Enforcement shall have an
opportunity for oral argument; however, the parties may jointly waive
the right to oral argument, and, in lieu thereof, elect to submit
written argument.
(e) All oral testimony and oral argument shall be recorded, and
transcripts made available to the petitioner upon payment of the cost
thereof. A copy of the transcript shall be sent directly to the
presiding officer, who shall have
[[Page 20]]
authority to correct the record sua sponte or upon the motion of any
party.
(f) The parties may, in writing, jointly waive an oral hearing and
instead elect a hearing upon a written record in which all evidence and
argument would be submitted to the presiding officer in documentary form
and statements of individuals would be made by affidavit.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
Sec. 508.8 Default.
If the subject individual fails to file a petition for a hearing, or
fails to appear at a hearing, either in person or by attorney, or fails
to submit a written argument where oral argument has been waived
pursuant to Sec. 508.7(d) or (f) of this part, the Notice shall remain
in effect until the information, indictment, or complaint is finally
disposed of and the Order shall remain in effect until terminated by the
Office.
Sec. 508.9 Rules of evidence.
(a) Formal rules of evidence shall not apply to a hearing, but the
presiding officer may limit the introduction of irrelevant, immaterial,
or unduly repetitious evidence.
(b) All matters officially noticed by the presiding officer shall
appear on the record.
Sec. 508.10 Burden of persuasion.
The petitioner has the burden of showing, by a preponderance of the
evidence, that his or her continued service to or participation in the
conduct of the affairs of the association does not, or is not likely to,
pose a threat to the interests of the association's depositors or
threaten to impair public confidence in the association.
Sec. 508.11 Relevant considerations.
(a) In determining whether the petitioner has shown that his or her
continued service to or participation in the conduct of the affairs of
the association would not, or is not likely to, pose a threat to the
interests of the association's depositors or threaten to impair public
confidence in the association, in order to decide whether the Notice or
Order should be continued, terminated, or otherwise modified, the Office
will consider:
(1) The nature and extent of the petitioner's participation in the
affairs of the association;
(2) The nature of the offense with which the petitioner has been
charged;
(3) The extent of the publicity accorded the indictment and trial;
and
(4) Such other relevant factors as may be entered on the record.
(b) When considering a request for the termination or modification
of a Notice, the Office will not consider the ultimate guilt or
innocence of the petitioner with respect to the criminal charge that is
outstanding.
(c) When considering a request for the termination or modification
of an Order which has been issued following a final judgment of
conviction against a subject individual, the Office will not
collaterally review such final judgment of conviction.
Sec. 508.12 Proposed findings and conclusions and recommended decision.
(a) Within 30 days after completion of oral argument or the
submission of written argument where oral argument has been waived, the
presiding officer shall file with the Secretary and certify to the
Office for decision the entire record of the hearing, which shall
include a recommended decision, the Notice or Order, and all other
documents filed in connection with the hearing.
(b) The recommended decision shall contain:
(1) A statement of the issue(s) presented,
(2) A statement of findings and conclusions, and the reasons or
basis therefor, on all material issues of fact, law, or discretion
presented on the record, and
(3) An appropriate recommendation as to whether the suspension,
removal, or prohibition should be continued, modified, or terminated.
Sec. 508.13 Decision of the Office.
(a) Within 30 days after the recommended decision has been certified
to the Office, the Office shall issue a final decision.
[[Page 21]]
(b) The Office's final decision shall contain a statement of the
basis therefor. The Office may satisfy this requirement where it adopts
the recommended decision of the presiding officer upon finding that the
recommended decision satisfies the requirements of Sec. 509.38 of this
chapter.
(c) The Secretary shall serve upon the petitioner and the
representative of the Office of Enforcement a copy of the Office's final
decision and the related recommended decision.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991;
59 FR 53570, Oct. 25, 1994]
Sec. 508.14 Miscellaneous.
The provisions of Sec. Sec. 509.10, 509.11, and 509.12 of this
chapter shall apply to proceedings under this part.
[54 FR 49444, Nov. 30, 1989, as amended at 56 FR 38306, Aug. 12, 1991]
PART 509_RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY PROCEEDINGS--Table of Contents
Subpart A_Uniform Rules of Practice and Procedure
Sec.
509.1 Scope.
509.2 Rules of construction.
509.3 Definitions.
509.4 Authority of Director.
509.5 Authority of the administrative law judge.
509.6 Appearance and practice in adjudicatory proceedings.
509.7 Good faith certification.
509.8 Conflicts of interest.
509.9 Ex parte communications.
509.10 Filing of papers.
509.11 Service of papers.
509.12 Construction of time limits.
509.13 Change of time limits.
509.14 Witness fees and expenses.
509.15 Opportunity for informal settlement.
509.16 Office's right to conduct examination.
509.17 Collateral attacks on adjudicatory proceeding.
509.18 Commencement of proceeding and contents of notice.
509.19 Answer.
509.20 Amended pleadings.
509.21 Failure to appear.
509.22 Consolidation and severance of actions.
509.23 Motions.
509.24 Scope of document discovery.
509.25 Request for document discovery from parties.
509.26 Document subpoenas to nonparties.
509.27 Deposition of witness unavailable for hearing.
509.28 Interlocutory review.
509.29 Summary disposition.
509.30 Partial summary disposition.
509.31 Scheduling and prehearing conferences.
509.32 Prehearing submissions.
509.33 Public hearings.
509.34 Hearing subpoenas.
509.35 Conduct of hearings.
509.36 Evidence.
509.37 Post-hearing filings.
509.38 Recommended decision and filing of record.
509.39 Exceptions to recommended decision.
509.40 Review by the Director.
509.41 Stays pending judicial review.
Subpart B_Local Rules
509.100 Scope.
509.101 Appointment of Office of Financial Institution Adjudication.
509.102 Discovery.
509.103 Civil money penalties.
509.104 Additional procedures.
Subpart C_Special Rules
509.200 Scope.
509.201 Definitions.
509.202 Commencement of proceedings and contents of notice.
509.203 Answer, consequences of failure to answer, and consent.
509.204 Hearing Procedure.
Subpart D_Exemptions under Section 19(e) of the FDIA
509.300 Scope.
509.301 Hearing procedures.
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a, 1468,
1817(j), 1818, 1820(k), 1829(e), 3349, 4717; 15 U.S.C. 78(l), 78o-5,
78u-2; 28 U.S.C. 2461 note; 31 U.S.C. 5321; 42 U.S.C. 4012a.
Source: 56 FR 38306, Aug. 12, 1991, unless otherwise noted.
Subpart A_Uniform Rules of Practice and Procedure
Sec. 509.1 Scope.
This subpart prescribes Uniform Rules of practice and procedure
applicable to adjudicatory proceedings as to which hearings on the
record are provided for by the following statutory provisions:
[[Page 22]]
(a) Cease-and-desist proceedings under section 8(b) of the Federal
Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the
FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) to determine whether the Office should issue an
order to approve or disapprove a person's proposed acquisition of an
institution and/or institution holding company;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange
Act of 1934 (Exchange Act) (15 U.S.C. 78o-5), to impose sanctions upon
any government securities broker or dealer or upon any person associated
or seeking to become associated with a government securities broker or
dealer for which the Office is the appropriate Office;
(e) Assessment of civil money penalties by the Office against
institutions, institution-affiliated parties, and certain other persons
for which it is the appropriate Office for any violation of:
(1) Section 5 of the Home Owners' Loan Act (HOLA) or any regulation
or order issued thereunder, pursuant to 12 U.S.C. 1464 (d), (s) and (v);
(2) Section 9 of the HOLA or any regulation or order issued
thereunder, pursuant to 12 U.S.C. 1467(d);
(3) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and (r);
(4) Any provisions of the Change in Bank Control Act, any regulation
or order issued thereunder or certain unsafe or unsound practices or
breaches of fiduciary duty, pursuant to 12 U.S.C. 1817(j)(16);
(5) Sections 22(h) and 23 of the Federal Reserve Act, or any
regulation issued thereunder or certain unsafe or unsound practices or
breaches of fiduciary duty, pursuant to 12 U.S.C. 1468;
(6) Certain provisions of the Exchange Act, pursuant to section 21B
of the Exchange Act (15 U.S.C. 78u-2);
(7) Section 1120 of Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation
issued thereunder;
(8) The terms of any final or temporary order issued or enforceable
pursuant to section 8 of the FDIA or of any written agreement executed
by the Office, the terms of any conditions imposed in writing by the
Office in connection with the grant of an application or request,
certain unsafe or unsound practices or breaches of fiduciary duty, or
any law or regulation not otherwise provided herein pursuant to 12
U.S.C. 1818(i)(2);
(9) Any provision of law referenced in section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder; and
(10) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(f) Remedial action under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g));
(g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k))
to impose penalties on senior examiners for violation of post-employment
prohibitions; and
(h) This subpart also applies to all other adjudications required by
statute to be determined on the record after opportunity for an agency
hearing, unless otherwise specifically provided for in the Local Rules.
(i) Subpart D of this part governs hearings on denials of
applications for case-by-case exemptions under 12 CFR part 585, which
implements section 19(e) of the FDIA.
[56 FR 38306, Aug. 12, 1991, as amended at 56 FR 59866, Nov. 26, 1991;
61 FR 20353, May 6, 1996; 70 FR 69641, Nov. 17, 2005; 72 FR 25955, May
8, 2007]
Sec. 509.2 Rules of construction.
For purposes of this subpart:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neuter gender encompasses
all three, if such use would be appropriate;
(c) The term counsel includes a non-attorney representative; and
(d) Unless the context requires otherwise, a party's counsel of
record, if any, may, on behalf of that party, take any action required
to be taken by the party.
[[Page 23]]
Sec. 509.3 Definitions.
For purposes of this subpart, unless explicitly stated to the
contrary:
(a) Administrative law judge means one who presides at an
administrative hearing under authority set forth at 5 U.S.C. 556.
(b) Adjudicatory proceeding means a proceeding conducted pursuant to
these rules and leading to the formulation of a final order other than a
regulation.
(c) Decisional employee means any member of the Office's or
administrative law judge's staff who has not engaged in an investigative
or prosecutorial role in a proceeding and who may assist the Office or
the administrative law judge, respectively, in preparing orders,
recommended decisions, decisions, and other documents under the Uniform
Rules.
(d) Director means the Director of the Office of Thrift Supervision
or his or her designee.
(e) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the Office in an adjudicatory
proceeding.
(f) Final order means an order issued by the Office with or without
the consent of the affected institution or the institution-affiliated
party, that has become final, without regard to the pendency of any
petition for reconsideration or review.
(g) Institution includes any savings association as that term is
defined in section 3(b) of the FDIA (12 U.S.C. 1813(b)), any savings and
loan holding company or any subsidiary thereof whether wholly or partly
owned (other than a bank) as those terms are defined in section 10(a) of
the HOLA (12 U.S.C. 1467(a)).
(h) Institution-affiliated party means any institution-affiliated
party as that term is defined in section 3(u) of the FDIA (12 U.S.C.
1813(u)).
(i) Local Rules means those rules found in subpart B of this part.
(j) Office means the Office of Thrift Supervision in the case of any
savings association or any savings and loan holding company, and
subsidiary (other than a bank or subsidiary of that bank) of a savings
and loan holding company, any service corporation of a savings
association, and any subsidiary of such service corporation, whether
wholly or partly owned.
(k) Office of Financial Institution Adjudication (OFIA) means the
executive body charged with overseeing the administration of
administrative enforcement proceedings for the Office of the Comptroller
of the Currency, the Board of Governors of the Federal Reserve Board,
the Federal Deposit Insurance Corporation, the National Credit Union
Administration and the Office.
(l) Party means the Office and any person named as a party in any
notice.
(m) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency or other entity or organization, including an
institution as defined in paragraph (g) of this section.
(n) Respondent means any party other than the Office.
(o) Uniform Rules means those rules in subpart A of this part.
(p) Violation includes any action (alone or with another or others)
for or toward causing, bringing about, participating in, counseling, or
aiding or abetting a violation.
Sec. 509.4 Authority of Director.
The Director may, at any time during the pendency of a proceeding
perform, direct the performance of, or waive performance of, any act
which could be done or ordered by the administrative law judge.
Sec. 509.5 Authority of the administrative law judge.
(a) General rule. All proceedings governed by this part shall be
conducted in accordance with the provisions of chapter 5 of title 5 of
the United States Code. The administrative law judge shall have all
powers necessary to conduct a proceeding in a fair and impartial manner
and to avoid unnecessary delay.
(b) Powers. The administrative law judge shall have all powers
necessary to conduct the proceeding in accordance with paragraph (a) of
this section, including the following powers:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, and protective
orders, as
[[Page 24]]
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. 509.31 of this subpart;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the
Director shall have the power to grant any motion to dismiss the
proceeding or to decide any other motion that results in a final
determination of the merits of the proceeding;
(8) To prepare and present to the Director a recommended decision as
provided herein;
(9) To recuse himself or herself by motion made by a party or on his
or her own motion;
(10) To establish time, place and manner limitations on the
attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 509.6 Appearance and practice in adjudicatory proceedings.
(a) Appearance before an Office or an administrative law judge--(1)
By attorneys. Any member in good standing of the bar of the highest
court of any state, commonwealth, possession, territory of the United
States, or the District of Columbia may represent others before the
Office if such attorney is not currently suspended or debarred from
practice before the Office.
(2) By non-attorneys. An individual may appear on his or her own
behalf; a member of a partnership may represent the partnership; a duly
authorized officer, director, or employee of any government unit,
agency, institution, corporation or authority may represent that unit,
agency, institution, corporation or authority if such officer, director,
or employee is not currently suspended or debarred from practice before
the Office.
(3) Notice of appearance. Any individual acting as counsel on behalf
of a party, including the Director, shall file a notice of appearance
with OFIA at or before the time that individual submits papers or
otherwise appears on behalf of a party in the adjudicatory proceeding.
The notice of appearance must include a written declaration that the
individual is currently qualified as provided in paragraph (a)(1) or
(a)(2) of this section and is authorized to represent the particular
party. By filing a notice of appearance on behalf of a party in an
adjudicatory proceeding, the counsel agrees and represents that he or
she is authorized to accept service on behalf of the represented party
and that, in the event of withdrawal from representation, he or she
will, if required by the administrative law judge, continue to accept
service until new counsel has filed a notice of appearance or until the
represented party indicates that he or she will proceed on a pro se
basis.
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or
contumacious conduct at any phase of any adjudicatory proceeding may be
grounds for exclusion or suspension of counsel from the proceeding.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.7 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice shall be signed by at least one
counsel of record in his or her individual name and shall state that
counsel's address and telephone number. A party who acts as his or her
own counsel shall sign his or her individual name and state his or her
address and telephone number on every filing or submission of record.
(b) Effect of signature. (1) The signature of counsel or a party
shall constitute a certification that: the counsel or party has read the
filing or submission of record; to the best of his or her knowledge,
information, and belief formed after reasonable inquiry, the filing or
submission of record is well-grounded in fact and is warranted by
existing law or a good faith argument
[[Page 25]]
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. 509.8 Conflicts of interest.
(a) Conflict of interest in representation. No person shall appear
as counsel for another person in an adjudicatory proceeding if it
reasonably appears that such representation may be materially limited by
that counsel's responsibilities to a third person or by the counsel's
own interests. The administrative law judge may take corrective measures
at any stage of a proceeding to cure a conflict of interest in
representation, including the issuance of an order limiting the scope of
representation or disqualifying an individual from appearing in a
representative capacity for the duration of the proceeding.
(b) Certification and waiver. If any person appearing as counsel
represents two or more parties to an adjudicatory proceeding or also
represents a non-party on a matter relevant to an issue in the
proceeding, counsel must certify in writing at the time of filing the
notice of appearance required by Sec. 509.6(a):
(1) That the counsel has personally and fully discussed the
possibility of conflicts of interest with each such party and non-party;
and
(2) That each such party and non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any non-material conflicts of interest during the course of the
proceeding.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.9 Ex parte communications.
(a) Definition--(1) Ex parte communication means any material oral
or written communication relevant to the merits of an adjudicatory
proceeding that was neither on the record nor on reasonable prior notice
to all parties that takes place between:
(i) An interested person outside the Office (including such person's
counsel); and
(ii) The administrative law judge handling that proceeding, the
Director, or a decisional employee.
(2) Exception. A request for status of the proceeding does not
constitute an ex parte communication.
(b) Prohibition of ex parte communications. From the time the notice
is issued by the Director until the date that the Director issues the
final decision pursuant to Sec. 509.40(c) of this subpart:
(1) No interested person outside the Office shall make or knowingly
cause to be made an ex parte communication to the Director, the
administrative law judge, or a decisional employee; and
(2) The Director, administrative law judge, or decisional employee
shall not make or knowingly cause to be made to any interested person
outside the Office any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the administrative law judge, the
Director or other person identified in paragraph (a) of this section,
that person shall cause all such written communications (or, if the
communication is oral, a memorandum stating the substance of the
communication) to be placed on the record of the proceeding and served
on all parties. All other parties to the proceeding shall have an
opportunity, within ten days of receipt of service of
[[Page 26]]
the ex parte communication to file responses thereto and to recommend
any sanctions, in accordance with paragraph (d) of this section, that
they believe to be appropriate under the circumstances.
(d) Sanctions. Any party or his or her counsel who makes a
prohibited ex parte communication, or who encourages or solicits another
to make any such communication, may be subject to any appropriate
sanction or sanctions imposed by the Director or the administrative law
judge including, but not limited to, exclusion from the proceedings and
an adverse ruling on the issue which is the subject of the prohibited
communication.
(e) Separation-of-functions. Except to the extent required for the
disposition of ex parte matters as authorized by law, the administrative
law judge may not consult a person or party on any matter relevant to
the merits of the adjudication, unless on notice and opportunity for all
parties to participate. An employee or agent engaged in the performance
of investigative or prosecuting functions for the Office in a case may
not, in that or a factually related case, participate or advise in the
decision, recommended decision, or agency review of the recommended
decision under Sec. 509.40 of this subpart, except as witness or
counsel in public proceedings.
[56 FR 38306, Aug. 12, 1991, as amended at 60 FR 28035, May 30, 1995]
Sec. 509.10 Filing of papers.
(a) Filing. Any papers required to be filed, excluding documents
produced in response to a discovery request pursuant to Sec. Sec.
509.25 and 509.26 of this subpart, shall be filed with the OFIA, except
as otherwise provided.
(b) Manner of filing. Unless otherwise specified by the Director or
the administrative law judge, filing may be accomplished by:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if expressly authorized,
and upon any conditions specified, by the Director or the administrative
law judge. All papers filed by electronic media shall also concurrently
be filed in accordance with paragraph (c) of this section as to form.
(c) Formal requirements as to papers filed--(1) Form. All papers
filed must set forth the name, address, and telephone number of the
counsel or party making the filing and must be accompanied by a
certification setting forth when and how service has been made on all
other parties. All papers filed must be double-spaced and printed or
typewritten on 8\1/2\x11 inch paper, and must be clear and legible.
(2) Signature. All papers must be dated and signed as provided in
Sec. 509.7 of this subpart.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name of the Office and of the filing party, the
title and docket number of the proceeding, and the subject of the
particular paper.
(4) Number of copies. Unless otherwise specified by the Director, or
the administrative law judge, an original and one copy of all documents
and papers shall be filed, except that only one copy of transcripts of
testimony and exhibits shall be filed.
Sec. 509.11 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers shall serve a copy upon the counsel of record for all other
parties to the proceeding so represented, and upon any party not so
represented.
(b) Method of service. Except as provided in paragraphs (c)(2) and
(d) of this section, a serving party shall use one or more of the
following methods of service:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if the parties mutually
agree. Any papers served by electronic media shall also concurrently be
served in accordance with the requirements of Sec. 509.10(c) of this
subpart as to form.
[[Page 27]]
(c) By the Director or the administrative law judge. (1) All papers
required to be served by the Director or the administrative law judge
upon a party who has appeared in the proceeding through a counsel of
record, shall be served by any means specified in paragraph (b) of this
section.
(2) If a party has not appeared in the proceeding in accordance with
Sec. 509.6 of this subpart, the Director or the administrative law
judge shall make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
(iv) By registered or certified mail addressed to the person's last
known address; or
(v) By any other method reasonably calculated to give actual notice.
(d) Subpoenas. Service of a subpoena may be made:
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(3) By delivery to an agent, which in the case of a corporation or
other association, is delivery to an officer, managing or general agent,
or to any other agent authorized by appointment or by law to receive
service and, if the agent is one authorized by statute to receive
service and the statute so requires, by also mailing a copy to the
party;
(4) By registered or certified mail addressed to the person's last
known address; or
(5) By any other method reasonably calculated to give actual notice.
(e) Area of service. Service in any state, territory, possession of
the United States, or the District of Columbia, on any person or company
doing business in any state, territory, possession of the United States,
or the District of Columbia, or on any person as otherwise provided by
law, is effective without regard to the place where the hearing is held,
provided that if service is made on a foreign bank in connection with an
action or proceeding involving one or more of its branches or agencies
located in any state, territory, possession of the United States, or the
District of Columbia, service shall be made on at least one branch or
agency so involved.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.12 Construction of time limits.
(a) General rule. In computing any period of time prescribed by this
subpart, the date of the act or event that commences the designated
period of time is not included. The last day so computed is included
unless it is a Saturday, Sunday, or Federal holiday. When the last day
is a Saturday, Sunday, or Federal holiday, the period runs until the end
of the next day that is not a Saturday, Sunday, or Federal holiday.
Intermediate Saturdays, Sundays, and Federal holidays are included in
the computation of time. However, when the time period within which an
act is to be performed is ten days or less, not including any additional
time allowed for in paragraph (c) of this section, intermediate
Saturdays, Sundays, and Federal holidays are not included.
(b) When papers are deemed to be filed or served. (1) Filing and
service are deemed to be effective:
(i) In the case of personal service or same day commercial courier
delivery, upon actual service;
(ii) In the case of overnight commercial delivery service, U.S.
Express mail delivery, or first class, registered, or certified mail,
upon deposit in or delivery to an appropriate point of collection; or
(iii) In the case of transmission by electronic media, as specified
by the authority receiving the filing, in the case of filing, and as
agreed among the parties, in the case of service.
(2) The effective filing and service dates specified in paragraph
(b)(1) of
[[Page 28]]
this section may be modified by the Director or administrative law judge
in the case of filing or by agreement of the parties in the case of
service.
(c) Calculation of time for service and filing of responsive papers.
Whenever a time limit is measured by a prescribed period from the
service of any notice or paper, the applicable time limits are
calculated as follows:
(1) If service is made by first class, registered, or certified
mail, add three calendar days to the prescribed period;
(2) If service is made by express mail or overnight delivery
service, add one calendar day to the prescribed period; or
(3) If service is made by electronic media transmission, add one
calendar day to the prescribed period, unless otherwise determined by
the Director or the administrative law judge in the case of filing, or
by agreement among the parties in the case of service.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.13 Change of time limits.
Except as otherwise provided by law, the administrative law judge
may, for good cause shown, extend the time limits prescribed by the
Uniform Rules or any notice or order issued in the proceedings. After
the referral of the case to the Director pursuant to Sec. 509.38 of
this subpart, the Director may grant extensions of the time limits for
good cause shown. Extensions may be granted at the motion of a party or
on the Director's or the administrative law judge's own motion after
notice and opportunity to respond is afforded all non-moving parties.
Sec. 509.14 Witness fees and expenses.
Witnesses subpoenaed for testimony or deposition shall be paid the
same fees for attendance and mileage as are paid in the United States
district courts in proceedings in which the United States is a party,
provided that, in the case of a discovery subpoena addressed to a party,
no witness fees or mileage need be paid. Fees for witnesses shall be
tendered in advance by the party requesting the subpoena, except that
fees and mileage need not be tendered in advance where the Office is the
party requesting the subpoena. The Office shall not be required to pay
any fees to, or expenses of, any witness not subpoenaed by the Office.
Sec. 509.15 Opportunity for informal settlement.
Any respondent may, at any time in the proceeding, unilaterally
submit to Enforcement Counsel written offers or proposals for settlement
of a proceeding, without prejudice to the rights of any of the parties.
No such offer or proposal shall be made to any Office representative
other than Enforcement Counsel. Submission of a written settlement offer
does not provide a basis for adjourning or otherwise delaying all or any
portion of a proceeding under this part. No settlement offer or
proposal, or any subsequent negotiation or resolution, is admissible as
evidence in any proceeding.
Sec. 509.16 Office's right to conduct examination.
Nothing contained in this subpart limits in any manner the right of
the Office to conduct any examination, inspection, or visitation of any
institution or institution-affiliated party, or the right of the Office
to conduct or continue any form of investigation authorized by law.
Sec. 509.17 Collateral attacks on adjudicatory proceeding.
If an interlocutory appeal or collateral attack is brought in any
court concerning all or any part of an adjudicatory proceeding, the
challenged adjudicatory proceeding shall continue without regard to the
pendency of that court proceeding. No default or other failure to act as
directed in the adjudicatory proceeding within the times prescribed in
this subpart shall be excused based on the pendency before any court of
any interlocutory appeal or collateral attack.
Sec. 509.18 Commencement of proceeding and contents of notice.
(a) Commencement of proceeding. (1)(i) Except for change-in-control
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a
proceeding governed by this subpart is commenced by issuance of a notice
by the Director.
[[Page 29]]
(ii) The notice must be served by the Director upon the respondent
and given to any other appropriate financial institution supervisory
authority where required by law.
(iii) The notice must be filed with the OFIA.
(2) Change-in control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the
Director.
(b) Contents of notice. The notice must set forth:
(1) The legal authority for the proceeding and for the Office's
jurisdiction over the proceeding;
(2) A statement of the matters of fact or law showing that the
Office is entitled to relief;
(3) A proposed order or prayer for an order granting the requested
relief;
(4) The time, place, and nature of the hearing as required by law or
regulation;
(5) The time within which to file an answer as required by law or
regulation;
(6) The time within which to request a hearing as required by law or
regulation; and
(7) The answer and/or request for a hearing shall be filed with
OFIA.
Sec. 509.19 Answer.
(a) When. Within 20 days of service of the notice, respondent shall
file an answer as designated in the notice. In a civil money penalty
proceeding, respondent shall also file a request for a hearing within 20
days of service of the notice.
(b) Content of answer. An answer must specifically respond to each
paragraph or allegation of fact contained in the notice and must admit,
deny, or state that the party lacks sufficient information to admit or
deny each allegation of fact. A statement of lack of information has the
effect of a denial. Denials must fairly meet the substance of each
allegation of fact denied; general denials are not permitted. When a
respondent denies part of an allegation, that part must be denied and
the remainder specifically admitted. Any allegation of fact in the
notice which is not denied in the answer must be deemed admitted for
purposes of the proceeding. A respondent is not required to respond to
the portion of a notice that constitutes the prayer for relief or
proposed order. The answer must set forth affirmative defenses, if any,
asserted by the respondent.
(c) Default--(1) Effect of failure to answer. Failure of a
respondent to file an answer required by this section within the time
provided constitutes a waiver of his or her right to appear and contest
the allegations in the notice. If no timely answer is filed, Enforcement
Counsel may file a motion for entry of an order of default. Upon a
finding that no good cause has been shown for the failure to file a
timely answer, the administrative law judge shall file with the Director
a recommended decision containing the findings and the relief sought in
the notice. Any final order issued by the Director based upon a
respondent's failure to answer is deemed to be an order issued upon
consent.
(2) Effect of failure to request a hearing in civil money penalty
proceedings. If respondent fails to request a hearing as required by law
within the time provided, the notice of assessment constitutes a final
and unappealable order.
[56 FR 38306, Aug. 12, 1991, as amended at 65 FR 78901, Dec. 18, 2000]
Sec. 509.20 Amended pleadings.
(a) Amendments. The notice or answer may be amended or supplemented
at any stage of the proceeding. The respondent must answer an amended
notice within the time remaining for the respondent's answer to the
original notice, or within ten days after service of the amended notice,
whichever period is longer, unless the Director or administrative law
judge orders otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised in
the notice or answer are tried at the hearing by express or implied
consent of the parties, they will be treated in all respects as if they
had been raised in the notice or answer, and no formal amendments are
required. If evidence is objected to at the hearing on the ground that
it is not within the issues raised by the notice or answer, the
administrative law judge may admit the evidence when admission is likely
to assist in adjudicating the merits of the action and the objecting
party fails to
[[Page 30]]
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 20354, May 6, 1996]
Sec. 509.21 Failure to appear.
Failure of a respondent to appear in person at the hearing or by a
duly authorized counsel constitutes a waiver of respondent's right to a
hearing and is deemed an admission of the facts as alleged and consent
to the relief sought in the notice. Without further proceedings or
notice to the respondent, the administrative law judge shall file with
the Director a recommended decision containing the findings and the
relief sought in the notice.
Sec. 509.22 Consolidation and severance of actions.
(a) Consolidation. (1) On the motion of any party, or on the
administrative law judge's own motion, the administrative law judge may
consolidate, for some or all purposes, any two or more proceedings, if
each such proceeding involves or arises out of the same transaction,
occurrence or series of transactions or occurrences, or involves at
least one common respondent or a material common question of law or
fact, unless such consolidation would cause unreasonable delay or
injustice.
(2) In the event of consolidation under paragraph (a)(1) of this
section, appropriate adjustment to the prehearing schedule must be made
to avoid unnecessary expense, inconvenience, or delay.
(b) Severance. The administrative law judge may, upon the motion of
any party, sever the proceeding for separate resolution of the matter as
to any respondent only if the administrative law judge finds that:
(1) Undue prejudice or injustice to the moving party would result
from not severing the proceeding; and
(2) Such undue prejudice or injustice would outweigh the interests
of judicial economy and expedition in the complete and final resolution
of the proceeding.
Sec. 509.23 Motions.
(a) In writing. (1) Except as otherwise provided herein, an
application or request for an order or ruling must be made by written
motion.
(2) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as
otherwise directed by the administrative law judge. Written memoranda,
briefs, affidavits or other relevant material or documents may be filed
in support of or in opposition to a motion.
(b) Oral motions. A motion may be made orally on the record unless
the administrative law judge directs that such motion be reduced to
writing.
(c) Filing of motions. Motions must be filed with the administrative
law judge, but upon the filing of the recommended decision, motions must
be filed with the Director.
(d) Responses. (1) Except as otherwise provided herein, within ten
days after service of any written motion, or within such other period of
time as may be established by the administrative law judge or the
Director, any party may file a written response to a motion. The
administrative law judge shall not rule on any oral or written motion
before each party has had an opportunity to file a response.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed a consent by that party to the entry
of an order substantially in the form of the order accompanying the
motion.
(e) Dilatory motions. Frivolous, dilatory or repetitive motions are
prohibited. The filing of such motions may form the basis for sanctions.
(f) Dispositive motions. Dispositive motions are governed by
Sec. Sec. 509.29 and 509.30 of this subpart.
Sec. 509.24 Scope of document discovery.
(a) Limits on discovery. (1) Subject to the limitations set out in
paragraphs (b), (c), and (d) of this section, a party to a proceeding
under this subpart may obtain document discovery by serving a written
request to produce documents. For purposes of a request to
[[Page 31]]
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 Sec. 509.102 of
this part.
(3) Discovery by use of interrogatories is not permitted.
(b) Relevance. A party may obtain document discovery regarding any
matter, not privileged, that has material relevance to the merits of the
pending action. Any request to produce documents that calls for
irrelevant material, that is unreasonable, oppressive, excessive in
scope, unduly burdensome, or repetitive of previous requests, or that
seeks to obtain privileged documents will be denied or modified. A
request is unreasonable, oppressive, excessive in scope or unduly
burdensome if, among other things, it fails to include justifiable
limitations on the time period covered and the geographic locations to
be searched, the time provided to respond in the request is inadequate,
or the request calls for copies of documents to be delivered to the
requesting party and fails to include the requestor's written agreement
to pay in advance for the copying, in accordance with Sec. 509.25 of
this subpart.
(c) Privileged matter. Privileged documents are not discoverable.
Privileges include the attorney-client privilege, work-product
privilege, any government's or government agency's deliberative-process
privilege, and any other privileges the Constitution, any applicable act
of Congress, or the principles of common law provide.
(d) Time limits. All discovery, including all responses to discovery
requests, shall be completed at least 20 days prior to the date
scheduled for the commencement of the hearing, except as provided in the
Local Rules. No exceptions to this time limit shall be permitted, unless
the administrative law judge finds on the record that good cause exists
for waiving the requirements of this paragraph.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20354, May 6, 1996]
Sec. 509.25 Request for document discovery from parties.
(a) General rule. Any party may serve on any other party a request
to produce for inspection any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. The request must identify the documents to be produced either by
individual item or by category, and must describe each item and category
with reasonable particularity. Documents must be produced as they are
kept in the usual course of business or must be organized to correspond
with the categories in the request.
(b) Production or copying. The request must specify a reasonable
time, place, and manner for production and performing any related acts.
In lieu of inspecting the documents, the requesting party may specify
that all or some of the responsive documents be copied and the copies
delivered to the requesting party. If copying of fewer than 250 pages is
requested, the party to whom the request is addressed shall bear the
cost of copying and shipping charges. If a party requests 250 pages or
more of copying, the requesting party shall pay for the copying and
shipping charges. Copying charges are the current per-page copying rate
imposed under 12 CFR 502.7 for requests under the Freedom of Information
Act (5 U.S.C. 552). The party to whom the request is addressed may
require payment in advance before producing the documents.
(c) Obligation to update responses. A party who has responded to a
discovery request with a response that was complete when made is not
required to supplement the response to include documents thereafter
acquired, unless the responding party learns that:
(1) The response was materially incorrect when made; or
(2) The response, though correct when made, is no longer true and a
failure to amend the response is, in substance, a knowing concealment.
[[Page 32]]
(d) Motions to limit discovery. (1) Any party that objects to a
discovery request may, within ten days of being served with such
request, file a motion in accordance with the provisions of Sec. 509.23
of this subpart to revoke or otherwise limit the request. If an
objection is made to only a portion of an item or category in a request,
the portion objected to shall be specified. Any objections not made in
accordance with this paragraph and Sec. 509.23 of this subpart are
waived.
(2) The party who served the request that is the subject of a motion
to revoke or limit may file a written response within five days of
service of the motion. No other party may file a response.
(e) Privilege. At the time other documents are produced, the
producing party must reasonably identify all documents withheld on the
grounds of privilege and must produce a statement of the basis for the
assertion of privilege. When similar documents that are protected by
deliberative process, attorney-work-product, or attorney-client
privilege are voluminous, these documents may be identified by category
instead of by individual document. The administrative law judge retains
discretion to determine when the identification by category is
insufficient.
(f) Motions to compel production. (1) If a party withholds any
documents as privileged or fails to comply fully with a discovery
request, the requesting party may, within ten days of the assertion of
privilege or of the time the failure to comply becomes known to the
requesting party, file a motion in accordance with the provisions of
Sec. 509.23 of this subpart for the issuance of a subpoena compelling
production.
(2) The party who asserted the privilege or failed to comply with
the request may file a written response to a motion to compel within
five days of service of the motion. No other party may file a response.
(g) Ruling on motions. After the time for filing responses pursuant
to this section has expired, the administrative law judge shall rule
promptly on all motions filed pursuant to this section. If the
administrative law judge determines that a discovery request, or any of
its terms, calls for irrelevant material, is unreasonable, oppressive,
excessive in scope, unduly burdensome, or repetitive of previous
requests, or seeks to obtain privileged documents, he or she may deny or
modify the request, and may issue appropriate protective orders, upon
such conditions as justice may require. The pendency of a motion to
strike or limit discovery or to compel production is not a basis for
staying or continuing the proceeding, unless otherwise ordered by the
administrative law judge. Notwithstanding any other provision in this
part, the administrative law judge may not release, or order a party to
produce, documents withheld on grounds of privilege if the party has
stated to the administrative law judge its intention to file a timely
motion for interlocutory review of the administrative law judge's order
to produce the documents, and until the motion for interlocutory review
has been decided.
(h) Enforcing discovery subpoenas. If the administrative law judge
issues a subpoena compelling production of documents by a party, the
subpoenaing party may, in the event of noncompliance and to the extent
authorized by applicable law, apply to any appropriate United States
district court for an order requiring compliance with the subpoena. A
party's right to seek court enforcement of a subpoena shall not in any
manner limit the sanctions that may be imposed by the administrative law
judge against a party who fails to produce subpoenaed documents.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20355, May 6, 1996]
Sec. 509.26 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the administrative law
judge for the issuance of a document discovery subpoena addressed to any
person who is not a party to the proceeding. The application must
contain a proposed document subpoena and a brief statement showing the
general relevance and reasonableness of the scope of documents sought.
The subpoenaing party shall specify a reasonable time, place, and manner
for making production in response to the document subpoena.
[[Page 33]]
(2) A party shall only apply for a document subpoena under this
section within the time period during which such party could serve a
discovery request under Sec. 509.24(d) of this subpart. The party
obtaining the document subpoena is responsible for serving it on the
subpoenaed person and for serving copies on all parties. Document
subpoenas may be served in any state, territory, or possession of the
United States, the District of Columbia, or as otherwise provided by
law.
(3) The administrative law judge shall promptly issue any document
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon such conditions as may be consistent with the Uniform Rules.
(b) Motion to quash or modify. (1) Any person to whom a document
subpoena is directed may file a motion to quash or modify such subpoena,
accompanied by a statement of the basis for quashing or modifying the
subpoena. The movant shall serve the motion on all parties, and any
party may respond to such motion within ten days of service of the
motion.
(2) Any motion to quash or modify a document subpoena must be filed
on the same basis, including the assertion of privilege, upon which a
party could object to a discovery request under Sec. 509.25(d) of this
subpart, and during the same time limits during which such an objection
could be filed.
(c) Enforcing document subpoenas. If a subpoenaed person fails to
comply with any subpoena issued pursuant to this section or any order of
the administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may, to the extent authorized by applicable law, apply
to an appropriate United States district court for an order requiring
compliance with so much of the document subpoena as the administrative
law judge has not quashed or modified. A party's right to seek court
enforcement of a document subpoena shall in no way limit the sanctions
that may be imposed by the administrative law judge on a party who
induces a failure to comply with subpoenas issued under this section.
Sec. 509.27 Deposition of witness unavailable for hearing.
(a) General rules. (1) If a witness will not be available for the
hearing, a party may apply in accordance with the procedures set forth
in paragraph (a)(2) of this section, to the administrative law judge for
the issuance of a subpoena, including a subpoena duces tecum, requiring
the attendance of the witness at a deposition. The administrative law
judge may issue a deposition subpoena under this section upon showing
that:
(i) The witness will be unable to attend or may be prevented from
attending the hearing because of age, sickness or infirmity, or will
otherwise be unavailable;
(ii) The witness' unavailability was not procured or caused by the
subpoenaing party;
(iii) The testimony is reasonably expected to be material; and
(iv) Taking the deposition will not result in any undue burden to
any other party and will not cause undue delay of the proceeding.
(2) The application must contain a proposed deposition subpoena and
a brief statement of the reasons for the issuance of the subpoena. The
subpoena must name the witness whose deposition is to be taken and
specify the time and place for taking the deposition. A deposition
subpoena may require the witness to be deposed at any place within the
country in which that witness resides or has a regular place of
employment or such other convenient place as the administrative law
judge shall fix.
(3) Any requested subpoena that sets forth a valid basis for its
issuance must be promptly issued, unless the administrative law judge on
his or her own motion, requires a written response or requires
attendance at a conference concerning whether the requested subpoena
should be issued.
(4) The party obtaining a deposition subpoena is responsible for
serving it
[[Page 34]]
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 under paragraph (b) or
(c)(2) of this section, the subpoenaing party or other aggrieved party
may, to the extent authorized by applicable law, apply to an appropriate
United States district court for an order requiring compliance with the
portions of the subpoena that the administrative law judge has ordered
enforced. A party's right to seek court enforcement of a deposition
subpoena in no way limits the sanctions that may be imposed by the
administrative law judge on a party who fails to comply with or procures
a failure to comply with, a subpoena issued under this section.
Sec. 509.28 Interlocutory review.
(a) General rule. The Director may review a ruling of the
administrative law judge prior to the certification of the record to the
Director only in accordance with the procedures set forth in this
section and Sec. 509.23 of this subpart.
(b) Scope of review. The Director may exercise interlocutory review
of a ruling of the administrative law judge if the Director finds that:
(1) The ruling involves a controlling question of law or policy as
to which substantial grounds exist for a difference of opinion;
(2) Immediate review of the ruling may materially advance the
ultimate termination of the proceeding;
(3) Subsequent modification of the ruling at the conclusion of the
proceeding would be an inadequate remedy; or
(4) Subsequent modification of the ruling would cause unusual delay
or expense.
(c) Procedure. Any request for interlocutory review shall be filed
by a party with the administrative law judge within ten days of his or
her ruling and shall otherwise comply with Sec. 509.23 of this subpart.
Any party may file a response to a request for interlocutory review in
accordance with
[[Page 35]]
Sec. 509.23(d) of this subpart. Upon the expiration of the time for
filing all responses, the administrative law judge shall refer the
matter to the Director for final disposition.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Director under this
section suspends or stays the proceeding unless otherwise ordered by the
administrative law judge or the Director.
Sec. 509.29 Summary disposition.
(a) In general. The administrative law judge shall recommend that
the Director issue a final order granting a motion for summary
disposition if the undisputed pleaded facts, admissions, affidavits,
stipulations, documentary evidence, matters as to which official notice
may be taken, and any other evidentiary materials properly submitted in
connection with a motion for summary disposition show that:
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a
matter of law.
(b) 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 contention that summary
disposition would be inappropriate.
(c) Hearing on motion. At the request of any party or on his or her
own motion, the administrative law judge may hear oral argument on the
motion for summary disposition.
(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the administrative law judge
shall determine whether the moving party is entitled to summary
disposition. If the administrative law judge determines that summary
disposition is warranted, the administrative law judge shall submit a
recommended decision to that effect to the Director. If the
administrative law judge finds that no party is entitled to summary
disposition, he or she shall make a ruling denying the motion.
Sec. 509.30 Partial summary disposition.
If the administrative law judge determines that a party is entitled
to summary disposition as to certain claims only, he or she shall defer
submitting a recommended decision as to those claims. A hearing on the
remaining issues must be ordered. Those claims for which the
administrative law judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 509.31 Scheduling and prehearing conferences.
(a) Scheduling conference. Within 30 days of service of the notice
or order commencing a proceeding or such other time as parties may
agree, the administrative law judge shall direct counsel for all parties
to meet with him or her in person at a specified time and place prior to
the hearing or to confer by telephone for the purpose of scheduling the
course and conduct of the proceeding. This meeting or telephone
[[Page 36]]
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 its expense.
(d) Scheduling or prehearing orders. At or within a reasonable time
following the conclusion of the scheduling conference or any prehearing
conference, the administrative law judge shall serve on each party an
order setting forth any agreements reached and any procedural
determinations made.
[56 FR 38306, Aug. 12, 1991, as amended at 65 FR 78901, Dec. 18, 2000]
Sec. 509.32 Prehearing submissions.
(a) Within the time set by the administrative law judge, but in no
case later than 14 days before the start of the hearing, each party
shall serve on every other party, his or her:
(1) Prehearing statement;
(2) Final list of witnesses to be called to testify at the hearing,
including name and address of each witness and a short summary of the
expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with
a copy of each exhibit; and
(4) Stipulations of fact, if any.
(b) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the prehearing submissions pursuant to paragraph (a) of
this section, except for good cause shown.
Sec. 509.33 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the Director, in the Director's discretion, determines that holding an
open hearing would be contrary to the public interest. Within 20 days of
service of the notice or, in the case of change-in-control proceedings
under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 days
from service of the hearing order, any respondent may file with the
Director a request for a private hearing, and any party may file a reply
to such a request. A party must serve on the administrative law judge a
copy of any request or reply the party files with the Director. The form
of, and procedure for, these requests and replies are governed by Sec.
509.23 of this subpart. A party's failure to file a request or a reply
constitutes a waiver of any objections regarding whether the hearing
will be public or private.
(b) Filing document under seal. Enforcement Counsel, in his or her
discretion, may file any document or part of a document under seal if
disclosure of the document would be contrary to the public interest. The
administrative law judge shall take all appropriate steps to preserve
the confidentiality of such documents or parts thereof, including
closing portions of the hearing to the public.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20355, May 6, 1996]
[[Page 37]]
Sec. 509.34 Hearing subpoenas.
(a) Issuance. (1) Upon application of a party showing general
relevance and reasonableness of scope of the testimony or other evidence
sought, the administrative law judge may issue a subpoena or a subpoena
duces tecum requiring the attendance of a witness at the hearing or the
production of documentary or physical evidence at the hearing. The
application for a hearing subpoena must also contain a proposed subpoena
specifying the attendance of a witness or the production of evidence
from any state, territory, or possession of the United States, the
District of Columbia, or as otherwise provided by law at any designated
place where the hearing is being conducted. The party making the
application shall serve a copy of the application and the proposed
subpoena on every other party.
(2) A party may apply for a hearing subpoena at any time before the
commencement of a hearing. During a hearing, a party may make an
application for a subpoena orally on the record before the
administrative law judge.
(3) The administrative law judge shall promptly issue any hearing
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon any conditions consistent with this subpart. Upon issuance by
the administrative law judge, the party making the application shall
serve the subpoena on the person named in the subpoena and on each
party.
(b) Motion to quash or modify. (1) Any person to whom a hearing
subpoena is directed or any party may file a motion to quash or modify
the subpoena, accompanied by a statement of the basis for quashing or
modifying the subpoena. The movant must serve the motion on each party
and on the person named in the subpoena. Any party may respond to the
motion within ten days of service of the motion.
(2) Any motion to quash or modify a hearing subpoena must be filed
prior to the time specified in the subpoena for compliance, but not more
than ten days after the date of service of the subpoena upon the movant.
(c) Enforcing subpoenas. If a subpoenaed person fails to comply with
any subpoena issued pursuant to this section or any order of the
administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may seek enforcement of the subpoena pursuant to section
Sec. 509.26(c) of this subpart.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20355, May 6, 1996]
Sec. 509.35 Conduct of hearings.
(a) General rules. (1) Hearings shall be conducted so as to provide
a fair and expeditious presentation of the relevant disputed issues.
Each party has the right to present its case or defense by oral and
documentary evidence and to conduct such cross examination as may be
required for full disclosure of the facts.
(2) Order of hearing. Enforcement Counsel shall present its case-in-
chief first, unless otherwise ordered by the administrative law judge,
or unless otherwise expressly specified by law or regulation.
Enforcement Counsel shall be the first party to present an opening
statement and a closing statement, and may make a rebuttal statement
after the respondent's closing statement. If there are multiple
respondents, respondents may agree among themselves as to their order of
presentation of their cases, but if they do not agree the administrative
law judge shall fix the order.
(3) Examination of witnesses. Only one counsel for each party may
conduct an examination of a witness, except that in the case of
extensive direct examination, the administrative law judge may permit
more than one counsel for the party presenting the witness to conduct
the examination. A party may have one counsel conduct the direct
examination and another counsel conduct re-direct examination of a
witness, or may have one counsel conduct the
[[Page 38]]
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 38306, Aug. 12, 1991, as amended at 61 FR 20356, May 6, 1996]
Sec. 509.36 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material, and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the APA and
other applicable law.
(2) Evidence that would be admissible under the Federal Rules of
Evidence is admissible in a proceeding conducted pursuant to this
subpart.
(3) Evidence that would be inadmissible under the Federal Rules of
Evidence may not deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant,
material, reliable and not unduly repetitive.
(b) Official notice. (1) Official notice may be taken of any
material fact which may be judicially noticed by a United States
district court and any material information in the official public
records of any Federal or state government agency.
(2) All matters officially noticed by the administrative law judge
or Director shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Documents. (1) A duplicate copy of a document is admissible to
the same extent as the original, unless a genuine issue is raised as to
whether the copy is in some material respect not a true and legible copy
of the original.
(2) Subject to the requirements of paragraph (a) of this section,
any document, including a report of examination, supervisory activity,
inspection or visitation, prepared by the appropriate Office or state
regulatory agency, is admissible either with or without a sponsoring
witness.
(3) Witnesses may use existing or newly created charts, exhibits,
calendars, calculations, outlines or other graphic material to
summarize, illustrate, or simplify the presentation of testimony. Such
materials may, subject to the administrative law judge's discretion, be
used with or without being admitted into evidence.
(d) Objections. (1) Objections to the admissibility of evidence must
be timely made and rulings on all objections must appear on the record.
(2) When an objection to a question or line of questioning
propounded to a witness is sustained, the examining counsel may make a
specific proffer on the record of what he or she expected to prove by
the expected testimony of the witness, either by representation of
counsel or by direct interrogation of the witness.
(3) The administrative law judge shall retain rejected exhibits,
adequately marked for identification, for the record, and transmit such
exhibits to the Director.
(4) Failure to object to admission of evidence or to any ruling
constitutes a waiver of the objection.
(e) Stipulations. The parties may stipulate as to any relevant
matters of fact or the authentication of any relevant documents. Such
stipulations must be received in evidence at a hearing, and are binding
on the parties with respect to the matters therein stipulated.
(f) Depositions of unavailable witnesses. (1) If a witness is
unavailable to testify at a hearing, and that witness has testified in a
deposition to which all parties in a proceeding had notice and an
opportunity to participate, a party may offer as evidence all or any
part of the transcript of the deposition, including deposition exhibits,
if any.
[[Page 39]]
(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. 509.37 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the administrative law
judge shall serve notice upon each party, that the certified transcript,
together with all hearing exhibits and exhibits introduced but not
admitted into evidence at the hearing, has been filed. Any party may
file with the administrative law judge proposed findings of fact,
proposed conclusions of law, and a proposed order within 30 days
following service of this notice by the administrative law judge or
within such longer period as may be ordered by the administrative law
judge.
(2) Proposed findings and conclusions must be supported by citation
to any relevant authorities and by page references to any relevant
portions of the record. A post-hearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document. Any party who fails to file timely with the
administrative law judge any proposed finding or conclusion is deemed to
have waived the right to raise in any subsequent filing or submission
any issue not addressed in such party's proposed finding or conclusion.
(b) Reply briefs. Reply briefs may be filed within 15 days after the
date on which the parties' proposed findings, conclusions, and order are
due. Reply briefs must be strictly limited to responding to new matters,
issues, or arguments raised in another party's papers. A party who has
not filed proposed findings of fact and conclusions of law or a post-
hearing brief may not file a reply brief.
(c) Simultaneous filing required. The administrative law judge shall
not order the filing by any party of any brief or reply brief in advance
of the other party's filing of its brief.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20356, May 6, 1996]
Sec. 509.38 Recommended decision and filing of record.
(a) Filing of recommended decision and record. Within 45 days after
expiration of the time allowed for filing reply briefs under Sec.
509.37(b) of this subpart, the administrative law judge shall file with
and certify to the Director, for decision, the record of the proceeding.
The record must include the administrative law judge's recommended
decision, recommended findings of fact, recommended conclusions of law,
and proposed order; all prehearing and hearing transcripts, exhibits,
and rulings; and the motions, briefs, memoranda, and other supporting
papers filed in connection with the hearing. The administrative law
judge shall serve upon each party the recommended decision, findings,
conclusions, and proposed order.
(b) Filing of index. At the same time the administrative law judge
files with and certifies to the Director for final determination the
record of the proceeding, the administrative law judge shall furnish to
the Director a certified index of the entire record of the proceeding.
The certified index shall include, at a minimum, an entry for each
paper, document or motion filed with the administrative law judge in the
proceeding, the date of the filing, and the identity of the filer. The
certified index shall also include an exhibit index containing, at a
minimum, an entry consisting of exhibit number and title or description
for: Each exhibit introduced and admitted into evidence at the hearing;
each exhibit introduced but not admitted into evidence at the hearing;
each exhibit introduced and admitted into evidence after the completion
of the hearing; and each exhibit introduced but not admitted into
evidence after the completion of the hearing.
[61 FR 20356, May 6, 1996]
[[Page 40]]
Sec. 509.39 Exceptions to recommended decision.
(a) Filing exceptions. Within 30 days after service of the
recommended decision, findings, conclusions, and proposed order under
Sec. 509.38 of this subpart, a party may file with the Director written
exceptions to the administrative law judge's recommended decision,
findings, conclusions or proposed order, to the admission or exclusion
of evidence, or to the failure of the administrative law judge to make a
ruling proposed by a party. A supporting brief may be filed at the time
the exceptions are filed, either as part of the same document or in a
separate document.
(b) Effect of failure to file or raise exceptions. (1) Failure of a
party to file exceptions to those matters specified in paragraph (a) of
this section within the time prescribed is deemed a waiver of objection
thereto.
(2) No exception need be considered by the Director if the party
taking exception had an opportunity to raise the same objection, issue,
or argument before the administrative law judge and failed to do so.
(c) Contents. (1) All exceptions and briefs in support of such
exceptions must be confined to the particular matters in, or omissions
from, the administrative law judge's recommendations to which that party
takes exception.
(2) All exceptions and briefs in support of exceptions must set
forth page or paragraph references to the specific parts of the
administrative law judge's recommendations to which exception is taken,
the page or paragraph references to those portions of the record relied
upon to support each exception, and the legal authority relied upon to
support each exception.
Sec. 509.40 Review by the Director.
(a) Notice of submission to the Director. When the Director
determines that the record in the proceeding is complete, the Director
shall serve notice upon the parties that the proceeding has been
submitted to the Director for final decision.
(b) Oral argument before the Director. Upon the initiative of the
Director or on the written request of any party filed with the Director
within the time for filing exceptions, the Director may order and hear
oral argument on the recommended findings, conclusions, decision, and
order of the administrative law judge. A written request by a party must
show good cause for oral argument and state reasons why arguments cannot
be presented adequately in writing. A denial of a request for oral
argument may be set forth in the Director's final decision. Oral
argument before the Director must be on the record.
(c) Director's final decision. (1) Decisional employees may advise
and assist the Director in the consideration and disposition of the
case. The final decision of the Director will be based upon review of
the entire record of the proceeding, except that the director may limit
the issues to be reviewed to those findings and conclusions to which
opposing arguments or exceptions have been filed by the parties.
(2) The Director shall render a final decision within 90 days after
notification of the parties that the case has been submitted for final
decision, or 90 days after oral argument, whichever is later, unless the
Director orders that the action or any aspect thereof be remanded to the
administrative law judge for further proceedings. Copies of the final
decision and order of the Director shall be served upon each party to
the proceeding, upon other persons required by statute, and, if directed
by the Director or required by statute, upon any appropriate state or
Federal supervisory authority.
Sec. 509.41 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision and order of the Office may not, unless specifically ordered by
the Director or a reviewing court, operate as a stay of any order issued
by the Director. The Director may, in its discretion, and on such terms
as it finds just, stay the effectiveness of all or any part of its order
pending a final decision on a petition for review of the order.
[[Page 41]]
Subpart B_Local Rules
Sec. 509.100 Scope.
The rules and procedures in this subpart B shall apply to those
proceedings covered by subpart A of this part. In addition, subpart A of
this part and this subpart shall apply to adjudicatory proceedings for
which hearings on the record are provided for by the following statutory
provisions:
(a) Proceedings under section 10(a)(2)(D) of the HOLA (12 U.S.C.
1467a(a)(2)(D)) to determine whether any person directly or indirectly
exercises a controlling influence over the management or policies of a
savings association or any other company, except to the extent the
Director exercises his or her discretion to commence a proceeding of the
kind identified in subpart C of this part;
(b) Proceedings under section 10(g)(5)(A) of the HOLA (12 U.S.C.
1467a(g)(5)(A)) to determine whether to terminate certain activities by
savings and loan holding companies or to terminate ownership or control
of a non-insured savings and loan holding company subsidiary; and
(c) Proceedings under section 15(c)(4) of the Securities and
Exchange Act of 1934 (15 U.S.C. 78o(c)(4)) (Exchange Act) to determine
whether any association or person subject to the jurisdiction of the
Office pursuant to section 12(i) of the Exchange Act (15 U.S.C. 78l(i))
has failed to comply with the provisions of sections 12, 13, 14(a),
14(c), 14(d) or 14(f) of the Exchange Act.
[56 FR 38306, Aug. 12, 1991, as amended at 70 FR 10023, Mar. 2, 2005]
Sec. 509.101 Appointment of Office of Financial Institution Adjudication.
Unless otherwise directed by the Office, all hearings under subpart
A of this part and this subpart shall be conducted by administrative law
judges under the direction of the Office of Financial Institution
Adjudication, 1700 G Street NW., Washington, DC 20552.
Sec. 509.102 Discovery.
(a) In general. A party may take the deposition of an expert, or of
a person, including another party, who has direct knowledge of matters
that are non-privileged, relevant and material to the proceeding and
where there is a need for the deposition. The deposition of experts
shall be limited to those experts who are expected to testify at the
hearing.
(b) Notice. A party desiring to take a deposition shall give
reasonable notice in writing to the deponent and to every other party to
the proceeding. The notice must state the time and place for taking the
deposition and the name and address of the person to be deposed.
(c) Time limits. A party may take depositions at any time after the
commencement of the proceeding, but no later than ten days before the
scheduled hearing date, except with permission of the administrative law
judge for good cause shown.
(d) Conduct of the deposition. The witness must be duly sworn, and
each party shall have the right to examine the witness with respect to
all non-privileged, relevant and material matters of which the witness
has factual, direct and personal knowledge. Objections to questions or
exhibits shall be in short form, stating the grounds for objection.
Failure to object to questions or exhibits is not a waiver except where
the grounds for the objection might have been avoided if the objection
had been timely presented. The court reporter shall transcribe or
otherwise record the witness's testimony, as agreed among the parties.
(e) Protective orders. At any time after notice of a deposition has
been given, a party may file a motion for the issuance of a protective
order. Such protective order may prohibit, terminate, or limit the scope
or manner of the taking of a deposition. The administrative law judge
shall grant such protective order upon a showing of sufficient grounds,
including that the deposition:
(1) Is unreasonable, oppressive, excessive in scope, or unduly
burdensome;
(2) Involves privileged, investigative, trial preparation,
irrelevant or immaterial matters; or
(3) Is being conducted in bad faith or in such manner as to
unreasonably annoy, embarrass, or oppress the deponent.
[[Page 42]]
(f) Fees. Deposition witnesses, including expert witnesses, shall be
paid the same expenses in the same manner as are paid witnesses in the
district courts of the United States in proceedings in which the United
States Government is a party. Expenses in accordance with this paragraph
shall be paid by the party seeking to take the deposition.
(g) Deposition subpoenas--(1) Issuance. At the request of a party,
the administrative law judge shall issue a subpoena requiring the
attendance of a witness at a deposition. The attendance of a witness may
be required from any place in any state or territory that is subject to
the jurisdiction of the United States or as otherwise permitted by law.
(2) Service. The party requesting the subpoena must serve it on the
person named therein or upon that person's counsel, by any of the
methods identified in Sec. 509.11(d) of this part. The party serving
the subpoena must file proof of service with the administrative law
judge.
(3) Motion to quash. A person named in the subpoena or a party may
file a motion to quash or modify the subpoena. A statement of the
reasons for the motion must accompany it and a copy of the motion must
be served on the party that requested the subpoena. The motion must be
made prior to the time for compliance specified in the subpoena and not
more than ten days after the date of service of the subpoena, or if the
subpoena is served within 15 days of the hearing, within five days after
the date of service.
(4) Enforcement of deposition subpoena. Enforcement of a deposition
subpoena shall be in accordance with the procedures of Sec. 509.27(d)
of this part.
[56 FR 38306, Aug. 12, 1991, as amended at 61 FR 20356, May 6, 1996]
Sec. 509.103 Civil money penalties.
(a) Assessment. In the event of consent, or if upon the record
developed at the hearing the Office finds that any of the grounds
specified in the notice issued pursuant to Sec. 509.18 of this part
have been established, the Office may serve an order of assessment of
civil money penalty upon the party concerned. The assessment order shall
be effective immediately upon service or upon such other date as may be
specified therein and shall remain effective and enforceable until it is
stayed, modified, terminated, or set aside by the Office or by a
reviewing court.
(b) Payment. (1) Civil penalties assessed pursuant to subpart A of
this part and this subpart B are payable and to be collected within 60
days after the issuance of the notice of assessment, unless the Office
fixes a different time for payment where it determines that the purpose
of the civil money penalty would be better served thereby; however, if a
party has made a timely request for a hearing to challenge the
assessment of the penalty, the party may not be required to pay such
penalty until the Office has issued a final order of assessment
following the hearing. In such instances, the penalty shall be paid
within 60 days of service of such order unless the Office fixes a
different time for payment. Notwithstanding the foregoing, the Office
may seek to attach the party's assets or to have a receiver appointed to
secure payment of the potential civil money penalty or other obligation
in advance of the hearing in accordance with section 8(i)(4) of the FDIA
(12 U.S.C. 1818(i)(4)).
(2) Checks in payment of civil penalties shall be made payable to
the Treasurer of the United States and sent to the Controller's Division
of the Office. Upon receipt, the Office shall forward the check to the
Treasury of the United States.
(c) Inflation adjustment. Under the Federal Civil Penalties
Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note), OTS must adjust
for inflation the civil monetary penalties in statutes that it
administers. The following chart displays the adjusted civil money
penalties. The amounts in this chart apply to violations that occur
after November 4, 2004:
----------------------------------------------------------------------------------------------------------------
U.S. code citation CMP description New maximum amount
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 1464(v)(4).......................... Reports of Condition--1st Tier... $2,200.
12 U.S.C. 1464(v)(5).......................... Reports of Condition--2nd Tier... $27,500.
[[Page 43]]
12 U.S.C. 1464(v)(6).......................... Reports of Condition--3rd Tier... $1,250,000.
12 U.S.C. 1467(d)............................. Refusal to Cooperate in Exam..... $6,500.
12 U.S.C. 1467a(i)(2)......................... Holding Company Act Violation.... $27,500.
12 U.S.C. 1467a(i)(3)......................... Holding Company Act Violation.... $27,500.
12 U.S.C. 1467a(r)(1)......................... Late/Inaccurate Reports--1st Tier $2,200.
12 U.S.C. 1467a(r)(2)......................... Late/Inaccurate Reports--2nd Tier $27,500.
12 U.S.C. 1467a(r)(3)......................... Late/Inaccurate Reports--3rd Tier $1,250,000.
12 U.S.C. 1817(j)(16)(A)...................... Change in Control--1st Tier...... $6,500.
12 U.S.C. 1817(j)(16)(B)...................... Change in Control--2nd Tier...... $32,500.
12 U.S.C. 1817(j)(16)(C)...................... Change in Control--3rd Tier...... $1,250,000.
12 U.S.C. 1818(i)(2)(A)....................... Violation of Law or Unsafe or $6,500.
Unsound Practice--1st Tier.
12 U.S.C. 1818(i)(2)(B)....................... Violation of Law or Unsafe or $32,500.
Unsound Practice--2nd Tier.
12 U.S.C. 1818(i)(2)(C)....................... Violation of Law or Unsafe or $1,250,000.
Unsound Practice--3rd Tier.
12 U.S.C. 1884................................ Violation of Security Rules...... $110.
12 U.S.C. 3349(b)............................. Appraisals Violation--1st Tier... $6,500.
12 U.S.C. 3349(b)............................. Appraisals Violation--2nd Tier... $32,500.
12 U.S.C. 3349(b)............................. Appraisals Violation--3rd Tier... $1,250,000.
42 U.S.C. 4012a(f)............................ Flood Insurance.................. $385 (per 4012a(f)
violation).
$125,000 (per calendar year).
----------------------------------------------------------------------------------------------------------------
[56 FR 38306, Aug. 12, 1991, as amended at 65 FR 61262, Oct. 17, 2000;
69 FR 64251, Nov. 4, 2004]
Sec. 509.104 Additional procedures.
(a) Replies to exceptions. Replies to written exceptions to the
administrative law judge's recommended decision, findings, conclusions
or proposed order pursuant to Sec. 509.39 of this part shall be filed
within 10 days of the date such written exceptions were required to be
filed.
(b) Motions. All motions shall be filed with the administrative law
judge and an additional copy shall be filed with the Secretary to the
Office, who receives adjudicatory filings, (``Secretary''); provided,
however, that once the administrative law judge has certified the record
to the Director pursuant to Sec. 509.38 of this part, all motions must
be filed with the Director, to the attention of the Secretary, within
the 10 day period following the filing of exceptions allowed for the
filing of replies to exceptions. Responses to such motions filed in a
timely manner with the Director, other than motions for oral argument
before the Director, shall be allowed pursuant to the procedures at
Sec. 509.23(d) of this part. No response is required for the Director
to make a determination on a motion for oral argument.
(c) Authority of administrative law judge. In addition to the powers
listed in Sec. 509.5 of this part, the administrative law judge shall
have the authority to deny any dispositive motion and shall follow the
procedures set forth for motions for summary disposition at Sec. 509.29
of this part and partial summary disposition at Sec. 509.30 of this
part in making determinations on such motions.
(d) Notification of submission of proceeding to the Director. Upon
the expiration of the time for filing any exceptions, any replies to
such exceptions or any motions and any ruling thereon, and after receipt
of certified record, the Office shall notify the parties within ten days
of the submission of the proceeding to the Director for final
determination.
(e) Extensions of time for final determination. The Director may,
sua sponte, extend the time for final determination by signing an order
of extension of time within the 90 day time period and notifying the
parties of such extension thereafter.
(f) Service upon the Office. Service of any document upon the Office
shall be made by filing with the Secretary, in addition to the
individuals and/or offices designated by the Office in its Notice issued
pursuant to Sec. 509.18 of this part, or such other means reasonably
suited to provide notice of the person and/or office designated to
receive filings.
(g) Filings with the Director. An additional copy of all materials
required or permitted to be filed with or referred
[[Page 44]]
to the administrative law judge pursuant to subpart A and B of this part
shall be filed with the Secretary. This rule shall not apply to the
transcript of testimony and exhibits adduced at the hearing or to
proposed exhibits submitted in advance of the hearing pursuant to an
order of the administrative law judge under Sec. 509.32 of this part.
Materials required or permitted to be filed with or referred to the
Director pursuant to subparts A and B of this part shall be filed with
the Director, to the attention of the Secretary.
(h) Presence of cameras and other recording devices. The use of
cameras and other recording devices, other than those used by the court
reporter, shall be prohibited and excluded from the proceedings.
[56 FR 38306, Aug. 12, 1991, as amended at 58 FR 4311, Jan. 14, 1993; 61
FR 20356, May 6, 1996]
Subpart C_Special Rules
Source: 70 FR 10023, Mar. 2, 2005, unless otherwise noted.
Sec. 509.200 Scope.
The rules and procedures in subpart C of this part and those rules
and procedures in subparts A and B of this part that are identified in
subpart C of this part shall apply to any proceedings under section
10(a)(2)(D) of the HOLA (12 U.S.C. 1467a(a)(2)(D)) to determine for
purposes of section 10 of the HOLA, other than subsections (c), (d),
(f), (h)(2), (m), (n), (q) and (s), whether any company that owns at
least one percent but no more than 10 percent of the outstanding shares
of a savings association or savings and loan holding company directly or
indirectly exercises a controlling influence over the management or
policies of such savings association or savings and loan holding
company.
Sec. 509.201 Definitions.
The definitions contained in Sec. 509.3 of this part shall apply to
this subpart.
Sec. 509.202 Commencement of proceedings and contents of notice.
(a) Commencement of proceedings. The Director commences a proceeding
by issuing a notice and having it served on the respondent in the manner
provided for service by the Director in Sec. 509.11 of this part;
(b) Contents of notice. The notice must set forth: (1) The legal
authority for the proceeding and for the Office's jurisdiction over the
proceeding;
(2) A statement of the matters of fact or law showing the Office is
entitled to issue an Order finding, for purposes of section 10 of the
HOLA, other than subsections (c), (d), (f), (h)(2), (m), (n), (q) and
(s), the respondent to be directly or indirectly exercising a
controlling influence over the management or policies of a savings
association or savings and loan holding company;
(3) A proposed Order;
(4) A statement that the respondent must file an answer and, if it
so desires, request a hearing within 20 days of service of the notice;
and
(5) The time and place of the hearing if one is properly requested
by the respondent.
Sec. 509.203 Answer, consequences of failure to answer, and consent.
(a) Content of answer. (1) 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 a prayer for relief
or proposed Order.
(2) If a respondent does not contest the allegations in a notice,
the respondent may file an answer that contains only a statement that
the respondent consents to the entry of the proposed Order. At any time
thereafter, the proposed Order may be issued as a final Order.
[[Page 45]]
(b) Default. Failure of a respondent to file an answer within the
time provided constitutes a waiver of its right to appear and contest
the allegations in the notice. If a timely answer is not filed, a
default Order may be entered. A respondent that believes that there was
good cause for it to not file an answer within the time allowed may
request that the Office exercise its discretion to vacate such a default
Order. A default Order based upon a respondent's failure to answer is
deemed to be a final Order issued upon consent.
Sec. 509.204 Hearing Procedure.
(a) (1) The Director shall preside at the hearing and enter the
final decision of the agency, provided that no party seeks discovery or
proffers any oral testimony;
(2) Respondents shall provide two copies of any pleadings and other
filings to the Office of the Chief Counsel, Business Transactions
Division. The Office of the Chief Counsel, Business Transactions
Division shall serve in the manner provided in Sec. 509.11 of this
part, each respondent separately represented with a copy of any pleading
or other filing made by the Office.
(b) If any party seeks discovery or proffers any oral testimony, the
procedures in subparts A and B of this part shall apply from that time
until the conclusion of the proceeding.
Subpart D_Exemptions under Section 19(e) of the FDIA
Source: 72 FR 25955, May 8, 2007, unless otherwise noted.
Sec. 509.300 Scope.
The procedures in this subpart D govern hearings on denials of
applications for case-by-case exemptions under 12 CFR part 585. Part 585
implements section 19(e) of the FDIA, which prohibits persons who have
been convicted of certain criminal offenses or who have agreed to enter
into a pre-trial diversion or similar program in connection with a
prosecution for such criminal offenses from occupying various positions
with a savings and loan holding company.
Sec. 509.301 Hearing procedures.
(a) Hearings. The following procedures apply to hearings under 12
CFR part 585.
(1) The hearing shall be held in Washington, DC, or at another
designated place, before a presiding officer designated by the Director.
(2) An applicant may elect in writing to have the matter determined
on the basis of written submissions, rather than an oral hearing.
(3) The parties to the hearing are OTS Enforcement counsel and the
applicant.
(4) 12 CFR 509.2, 509.4, 509.6 through 509.12, and 509.16 apply to
the hearing.
(5) Discovery is not permitted.
(6) A party may introduce relevant and material documents and make
oral argument at the hearing.
(7) 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
before to the hearing. Witnesses must be sworn, unless otherwise
directed by the presiding officer. The presiding officer may ask
questions of any witness. Each party may cross-examine any witness
presented by the opposing party. OTS will furnish a transcript of the
proceedings upon an applicant's request and upon the payment of the
costs of the transcript.
(8) The presiding officer has 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. If 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 are paid in accordance with 12 CFR 509.14.
(9) Upon the request of a party, the record will remain open for
five business days following the hearing for additional submissions to
the record.
(10) OTS Enforcement Counsel has the burden of proving a prima facie
case that a person is prohibited from a position under section 19(e) of
the FDIA.
[[Page 46]]
The applicant has the burden of proof on all other matters.
(11) The presiding officer must make recommendations to the
Director, where possible, within 20 days after the last day for the
parties to submit additions to the record.
(12) The presiding officer must forward his or her recommendation to
the Director who shall promptly certify the entire record, including the
presiding officer's recommendations. The Director's certification will
close the record.
(b) Decision. After the certification of the record, the Director
will notify the parties of his or her decision by issuing an order
approving or denying the application.
(1) An approval order will require fidelity bond coverage for the
position to the same extent as similar positions with the savings and
loan holding company. The approval order may include such other
conditions as may be appropriate.
(2) A denial order will include a summary of the relevant factors
under 12 CFR 585.120(b).
PART 510_MISCELLANEOUS ORGANIZATIONAL REGULATIONS--Table of Contents
Sec.
510.2 Provisions related to regulations of the Office.
510.4 Service of process.
510.5 Release of unpublished OTS information.
Authority: 12 U.S.C. 1462a, 1463, 1464; Pub. L. 101-410, 104 Stat.
890; Pub. L. 104-134, 110 Stat. 1321-358.
Source: 54 FR 49456, Nov. 30, 1989, unless otherwise noted.
Sec. 510.2 Provisions related to regulations of the Office.
(a) Amendments. The Office expressly reserves the right to amend
(including the right to alter or repeal) the regulations set forth in
this chapter.
(b) Waiver or relaxation of regulatory provisions with respect to
disaster or emergency areas. Whenever the President of the United States
determines that a major disaster or emergency exists, or declares an
area a major disaster or emergency area, the Office may, to the extent
not inconsistent with law, by order waive or relax any limitations
pertaining to the operations of Federal savings associations and savings
associations in any area or areas affected by such disaster or emergency
so declared.
(c) Bar on participation in notice and comment rulemaking by
suspended or disbarred persons. No person who has been suspended or
debarred from practice before the Office in accordance with the
provisions of part 513 of this chapter may submit to the Office, either
directly or on behalf of an interested party, any written documents or
petitions otherwise permitted by the Administrative Procedures Act.
[54 FR 49456, Nov. 30, 1989, as amended at 60 FR 66716, Dec. 26, 1995;
70 FR 76675, Dec. 28, 2005]
Sec. 510.4 Service of process.
(a) Service of Process. Service of process may be made upon the
Office by delivering a copy of the summons and complaint to the U.S.
Attorney for the district in which the action is brought or to an
assistant U.S. Attorney or clerical employee designated by the U.S.
Attorney in a writing filed with the clerk of the court, and by sending
copies of the summons and of the complaint by registered or certified
mail to the Attorney General of the United States, Washington, DC, and
to the Secretary of the Office.
(b) Subpoenas. Any subpoena to obtain information maintained by
Office shall be duly issued and served upon the Secretary of the Office
of Thrift Supervision, 1700 G Street, NW., Washington, DC, 20552.
Sec. 510.5 Release of unpublished OTS information.
(a) Scope. (1) This section applies to requests by the public for
unpublished OTS information, such as requests for records or testimony
from parties to lawsuits in which the OTS is not a party.
(2) Unpublished OTS information includes records created or obtained
in connection with the OTS's performance of its responsibilities, such
as records concerning supervision, regulation, and examination of
savings associations, their holding companies, and affiliates, and
records compiled in connection
[[Page 47]]
with the OTS's enforcement responsibilities. Unpublished OTS information
also includes information that current and former employees, officers,
and agents obtained in their official capacities. Examples of
unpublished information include:
(i) Information in the memory of a current or former employee,
officer, or agent of the OTS (or the Federal Home Loan Bank Board, the
predecessor agency of the OTS), by testimony or informal interview, that
was acquired in the course of performing official duties or because of
the employee's, officer's or agent's official status;
(ii) Reports of examination, supervisory correspondence, internal
agency memoranda and investigatory files compiled in connection with an
investigation, whether such records are in the possession of the OTS or
some other individual or entity; and
(iii) Unpublished OTS records obtained by or in the possession of
third parties, including other government agencies.
(3) This section does not apply to:
(i) Requests for records or testimony in proceedings in which the
OTS is a party;
(ii) Requests for information by other government agencies, except
when specifically provided; and
(iii) Requests for records that are required to be disclosed under
the Freedom of Information Act, see 5 U.S.C. 552, and 31 CFR 1.1-1.6.
(b) Purpose. The purposes of this section are:
(1) To afford an orderly mechanism for the OTS to expeditiously
process requests for unpublished OTS information and, where appropriate,
for the OTS to assert evidentiary privileges in litigation;
(2) To balance the need for confidentiality of unpublished OTS
information with the private party's interest in obtaining disclosure of
that information;
(3) To ensure that the time of OTS employees is utilized in the most
efficient manner consistent with the OTS's statutory mission;
(4) To prevent undue burdens on the OTS;
(5) To limit the expenditure of the OTS's funds for private
purposes; and
(6) To maintain the impartiality of the OTS among private litigants.
(c) Procedure--(1) Requests for records and testimony in general. A
request for unpublished OTS information must be in writing, furnish the
caption of the lawsuit if the request arises in the course of
litigation, and support the requester's claim that the information
sought is highly relevant to the purpose for which it is sought. In
demonstrating that the information is highly relevant, the requester
must explain in detail how the requested OTS information relates to the
issues in the case or the matter.
(i) For requests arising in lawsuits, the submission also must
include:
(A) A copy of the complaint or equivalent document in the case and
any other pleadings necessary to show relevance;
(B) A description of any prior decisions or pending motions in the
case that may bear on the asserted relevance of the information being
sought from the OTS; and
(C) The names, addresses and phone numbers of counsel to all other
parties in the case.
(ii) In all instances, in addition to demonstrating that the
information sought is highly relevant to the purpose for which it is
sought, the requester must:
(A) Demonstrate that the information sought is not available from
any other source; and
(B) Demonstrate that the need for the information clearly outweighs
the need to maintain the confidentiality of the OTS information and the
burden on the OTS to produce the information.
(iii) If a request seeks a response in fewer than 30 days, it must
include an explanation of why the requester was unable to submit the
request earlier and why expediting the request is required.
(2) Additional provisions relating to requests for records. In
addition to the requirements of paragraph (c)(1) of this section, the
provisions in paragraphs (c)(2)(i) and (c)(2)(ii) of this section apply
to requests for disclosure of records.
[[Page 48]]
(i) A request for records must list the categories of records sought
and describe the specific information sought, including the relevant
time period.
(ii) When the OTS believes that another person has a claim of
privilege regarding the information in the records and the records are
in the possession or control of that person, such as reports prepared by
a savings association's attorneys that are shared with the OTS, the OTS
may respond to the request by authorizing that person to release the
records pursuant to an appropriate confidentiality order rather than by
the OTS releasing the records directly to the requesting party. This
will enable the person possessing or controlling the records to argue
any issues of privilege to the appropriate court.
(3) Additional provisions relating to requests for testimony from
OTS employees. In addition to the requirements of paragraph (c)(1) of
this section, the provisions in paragraphs (c)(3)(i) through (c)(3)(iv)
of this section apply to requests that current or former OTS employees
be authorized to give testimony.
(i) The request must specifically describe the substance of the
testimony sought and show a compelling need for the testimony. A showing
of compelling need should include a demonstration that the requested
information is not available from any other source, such as the books
and records of other persons or entities, OTS records that have been or
might be released, or the testimony of other non-OTS persons, including
retained experts.
(ii) OTS employees will not be authorized to provide expert or
opinion testimony for private parties.
(iii) The OTS expects litigants to anticipate their need for OTS
testimony in sufficient time to request and obtain that testimony in
deposition form. A request for testimony at a trial or hearing may not
be granted unless the requester shows that properly developed deposition
testimony could not be used or would not be adequate at the trial or
hearing.
(iv) The OTS shall specify the scope of any authorized testimony and
may take steps to ensure that the scope of testimony taken adheres to
the scope authorized. Parties to the case who did not join in the
request and who wish to question the witness beyond the authorized scope
should request expanded authorization pursuant to this regulation. The
OTS will attempt to render decisions on such requests in an expedited
manner.
(4) Information available to savings associations, holding
companies, state and Federal agencies and requesters. (i) The regular
report of examination of a savings association, savings and loan holding
company, or other affiliate of a savings association is made available
by the appropriate Regional Office to the entity examined.
(ii) A subsidiary savings association of a savings and loan holding
company may reproduce and furnish a copy of its report of examination
and related supervisory correspondence of the savings association to its
parent holding company(ies) without prior approval of the OTS. A savings
and loan holding company may reproduce and furnish a copy of its report
of examination and related supervisory correspondence to another
affiliated savings and loan holding company that controls the same
savings association or its subsidiary savings association(s) without
prior approval of the OTS. This paragraph does not require such
disclosure by a parent savings and loan holding company or subsidiary
savings association.
(iii) Reports of examination and other information relating to
state-chartered savings associations and affiliates are made available,
upon request, by the OTS to the state governmental authority having
general supervision of such state-chartered savings associations.
(iv) Reports of examination and other information may be made
available by the OTS to other agencies of the United States, a state
agency, or to the Federal Home Loan Banks, for use where necessary in
the performance of their official duties.
(v) All reports or other information made available to savings
associations, holding companies, affiliates, other governmental agencies
or requesters shall remain the property of the OTS and, except as
permitted by this section or otherwise by the Director or his
[[Page 49]]
delegate, no person, company, agency, or authority to whom the
information is made available, or any officer, director, employee or
agent thereof, shall disclose any such information except published
statistical material that would not disclose the identity of any
individual or corporation.
(5) Where to submit requests. In all matters covered by this
section, notification of the issuance of subpoenas or compulsory process
and requests for records or testimony covered by this section must be
sent to the OTS at 1700 G Street NW., Washington, DC 20552, to the
attention of the Corporate Secretary, and should be labelled ``Request
for Release of Unpublished Information Under Section 510.5.'' Requesters
may furnish copies of the request or subpoenas simultaneously to the
appropriate OTS Regional Office, but the furnishing of such copies does
not constitute service on the OTS.
(d) Consideration of requests--(1) In general. The OTS will
generally process requests in the order in which they are received. The
OTS will endeavor to respond to requests within 30 days, but this may
vary depending on the scope and precision of the request. The OTS will
weigh requests for processing in less than 30 days against the burden to
the OTS of expedited processing and the unfairness to other parties
whose pending requests may be delayed.
(2) Consultation with requester. The OTS may consult with the
requester to:
(i) Refine and limit the scope of the request so as to reduce the
burden and expense on the OTS; or
(ii) Obtain additional information necessary for the OTS to make an
informed determination on the request. To the extent necessary to reach
an informed determination on the request, the OTS may inquire into the
circumstances of the underlying matter and rely on sources of
information beyond the requester, including other interested parties.
(3) Final determinations. Final determinations on requests will be
made by the Director or his delegate. All such determinations are the
sole discretion of the Director or his delegate. Requesters will be
notified in writing of the disposition of the request.
(4) Denial of requests. (i) The OTS may deny requests for records or
testimony that seek information that the OTS deems to be:
(A) Not highly relevant;
(B) Privileged;
(C) Available from other sources; or
(D) Information that should not be disclosed for reasons that
warrant restriction of discovery under the Federal Rules of Civil
Procedure (28 U.S.C. appendix).
(ii) The OTS may also deny a records or testimony request when it
considers production of the information to be overly burdensome or
contrary to the public interest, or where OTS determines that the need
for the information does not clearly outweigh the need to maintain the
confidentiality of the information, or where the requester seeks
testimony and has not shown a compelling need for the testimony.
(5) Confidentiality Orders and Agreements. As is set forth in
paragraph (f) of this section, the OTS may condition release of
information on the entry by the relevant tribunal of an order
satisfactory to the OTS or, in a non-litigated matter, the execution of
a confidentiality agreement that limits access of third parties to the
unpublished OTS information. It shall be the duty of the requesting
party to obtain such an order or to execute a confidentiality agreement.
(e) Parties with access to OTS information; restriction on
dissemination--(1) Current and former employees. Except as authorized by
this section or as otherwise authorized by the Director or his delegate,
no current or former employee, officer or agent of the OTS or a
predecessor agency shall disclose or permit the disclosure of any
unpublished information of the OTS to anyone (other than an employee,
officer or agent of the OTS properly entitled to such information for
the performance of their official duties), whether by giving out or
furnishing such information or a copy thereof or by allowing any person
to inspect, examine, or copy such information or copy thereof, or
otherwise.
(2) Duty of person served. If any person, whether or not a current
or former employee, officer or agent of the OTS, has information of the
OTS that may
[[Page 50]]
not be disclosed under the regulations of the OTS or other applicable
law, and in connection therewith is served with a subpoena, order, or
other process requiring personal attendance as a witness or production
of records or information in any proceeding, that person shall promptly
advise the OTS of such service or request for information. Upon such
notice the OTS will take appropriate action to advise the court or
tribunal that issued the process and the attorney for the party at whose
instance the process was issued, if known, of the substance of this
section. Such notice to the OTS shall be made by contacting the
Litigation Division, Office of Chief Counsel, Office of Thrift
Supervision, 1700 G Street NW., Washington, DC 20552. As provided in
paragraph (e)(3) of this section, a person so served with process may
not disclose OTS information without OTS authorization. To obtain OTS
authorization, a request must be sent to the OTS in Washington, DC, in
accordance with paragraph (c) of this section.
(3) Appearance by person served. Except as the OTS has authorized
disclosure of the relevant information, or except as authorized by law,
any person who has information of the OTS that may not be disclosed
under this section and is required to respond to a subpoena or other
legal process shall attend at the time and place therein mentioned and
respectfully decline to produce such records or give any testimony with
respect thereto, basing such refusal on this part. If, notwithstanding,
the court or other body orders the disclosure of such records or the
giving of such testimony, the person having such information of the OTS
shall continue respectfully to decline to produce such information and
shall promptly advise the Litigation Division of the Chief Counsel's
Office, Office of Thrift Supervision. Upon such notice the OTS will take
appropriate action to advise the court or tribunal which issued the
order, of the substance of this section.
(4) Non-waiver of privilege. The possession by any entity or
individual described in paragraph (c)(4) of this section of OTS records
covered by this section shall not waive any privilege of the OTS or the
OTS's right to supervise the further dissemination of these records.
(f) Orders and agreements protecting the confidentiality of
unpublished OTS information--(1) Records. Unless otherwise permitted by
the OTS, release of records authorized pursuant to this section will be
conditioned by the OTS upon entry of an acceptable protective order by
the court or administrative tribunal presiding in the particular case,
or, in non-litigated matters, upon execution of an acceptable
confidentiality agreement. In cases where protective orders have already
been entered, the OTS reserves the right to condition approval for
release of information upon the inclusion of additional or amended
provisions.
(2) Testimony. The OTS may condition its authorization of deposition
testimony on an agreement of the parties that the transcript of the
testimony will be kept under seal, or will be made available only to the
parties, the court and the jury, except to the extent that the OTS may
allow use of the transcript in related litigation. The party who
requested the testimony shall, at its expense, furnish to the OTS a copy
of the transcript of testimony of the OTS employee or former employee.
(g) Limitation of burden on the OTS in connection with released
records--(1) Authentication for use as evidence. The OTS will
authenticate released records to facilitate their use as evidence.
Requesters who require authenticated records should request certified
copies at least 30 days prior to the date they will be needed. The
request should be sent to the OTS Public Disclosure Branch and shall
identify the records, giving the office or record depository where they
are located (if known) and include copies of the records and payment of
the certification fee.
(2) Responsibility of litigants to share released records. The party
who has sought and obtained OTS records has the responsibility of:
(i) Notifying other parties to the case of the release and, after
entry of a protective order, providing copies of the records to the
other parties who are subject to the protective order; and
(ii) Retrieving any records from the court's file as soon as the
records are
[[Page 51]]
no longer required by the court and returning them to the OTS. Where a
party may be involved in related litigation, the OTS may, upon a request
made to it pursuant to this section, authorize such party to transfer
the records for use in that related case.
(h) Fees--(1) Fees for records searches, copying and certifications.
Requesters shall be charged fees in accordance with Treasury Department
regulations, 31 CFR 1.7. With certain exceptions, the regulations in 31
CFR 1.7 provide for recovery of the full direct costs of searching,
reviewing, certifying and duplicating the records sought. An estimate of
the statement of charges will be sent to requesters, and fees shall be
remitted by check payable to the OTS prior to release of the requested
records. Where it deems appropriate, the OTS may contract with
commercial copying concerns to copy the records, with the cost billed to
the requester.
(2) Witness fees and allowances. (i) Litigants whose requests for
testimony of current OTS employees are approved shall, upon completion
of the testimonial appearance, promptly tender a check payable to the
OTS for witness fees and allowances in accordance with 28 U.S.C. 1821.
(ii) All litigants whose requests for testimony of former OTS
employees are approved, shall also promptly tender witness fees and
allowances to the witness in accordance with 28 U.S.C. 1821.
[54 FR 49456, Nov. 30, 1989, as amended at 60 FR 28031, May 30, 1995]
PART 512_RULES FOR INVESTIGATIVE PROCEEDINGS AND FORMAL EXAMINATION PROCEEDINGS--Table of Contents
Sec.
512.1 Scope of part.
512.2 Definitions.
512.3 Confidentiality of proceedings.
512.4 Transcripts.
512.5 Rights of witnesses.
512.6 Obstruction of the proceedings.
512.7 Subpoenas.
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467, 1467a, 1813; 15 U.S.C.
78 l.
Source: 54 FR 49457, Nov. 30, 1989, unless otherwise noted.
Sec. 512.1 Scope of part.
This part prescribes rules of practice and procedure applicable to
the conduct of investigative proceedings under section 10(g)(2) of the
Home Owners' Loan Act, as amended, 12 U.S.C. 1467a(g)(2) (``HOLA'') and
to the conduct of formal examination proceedings with respect to savings
associations and their affiliates under section 5(d)(1)(B) of the HOLA,
as amended, 12 U.S.C. 1464(d)(1)(B) or section 7(j)(15) of the Federal
Deposit Insurance Act, as amended, 12 U.S.C. 1817(j)(15) (``FDIA''),
section 8(n) of the FDIA, 12 U.S.C. 1818(n), or section 10(c) of the
FDIA, 12 U.S.C. 1820(c). This part does not apply to adjudicatory
proceedings as to which hearings are required by statute, the rules for
which are contained in part 509 of this chapter.
Sec. 512.2 Definitions.
As used in this part:
(a) Office means the Office of Thrift Supervision;
(b) Investigative proceeding means an investigation conducted under
section 10(g)(2) of the HOLA;
(c) Formal examination proceeding means the administration of oaths
and affirmations, taking and preserving of testimony, requiring the
production of books, papers, correspondence, memoranda, and all other
records, the issuance of subpoenas, and all related activities in
connection with examination of savings associations and their affiliates
conducted pursuant to section 5(d)(1)(B) of the HOLA, section 7(j)(15)
of the FDIA, section 8(n) of the FDIA or section 10(c) of the FDIA; and
(d) Designated representative means the person or persons empowered
by the Office to conduct an investigative proceeding or a formal
examination proceeding.
Sec. 512.3 Confidentiality of proceedings.
All formal examination proceedings shall be private and, unless
otherwise ordered by the Office, all investigative proceedings shall
also be private. Unless otherwise ordered or permitted by the Office, or
required by law, and except as provided in Sec. Sec. 512.4 and 512.5,
the
[[Page 52]]
entire record of any investigative proceeding or formal examination
proceeding, including the resolution of the Office or its delegate(s)
authorizing the proceeding, the transcript of such proceeding, and all
documents and information obtained by the designated representative(s)
during the course of said proceedings shall be confidential.
Sec. 512.4 Transcripts.
Transcripts or other recordings, if any, of investigative
proceedings or formal examination proceedings shall be prepared solely
by an official reporter or by any other person or means authorized by
the designated representative. A person who has submitted documentary
evidence or given testimony in an investigative proceeding or formal
examination proceeding may procure a copy of his own documentary
evidence or transcript of his own testimony upon payment of the cost
thereof; provided, that a person seeking a transcript of his own
testimony must file a written request with the Deputy Chief Counsel for
Enforcement or the appropriate Regional Counsel for Enforcement stating
the reason he desires to procure such transcript, and said persons may
for good cause deny such request. In any event, any witness (or his
counsel) shall have the right to inspect the transcript of the witness'
own testimony.
[54 FR 49457, Nov. 30, 1989, as amended at 60 FR 66717, Dec. 26, 1995]
Sec. 512.5 Rights of witnesses.
(a) Any person who is compelled or requested to furnish documentary
evidence or give testimony at an investigative proceeding or formal
examination proceeding shall have the right to examine, upon request,
the Office resolution authorizing such proceeding. Copies of such
resolution shall be furnished, for their retention, to such persons only
with the written approval of the Deputy Chief Counsel for Enforcement or
the appropriate Regional Counsel for Enforcement.
(b) Any witness at an investigative proceeding or formal examination
proceeding may be accompanied and advised by an attorney personally
representing that witness.
(1) Such attorney shall be a member in good standing of the bar of
the highest court of any state, Commonwealth, possession, territory, or
the District of Columbia, who has not been suspended or debarred from
practice by the bar of any such political entity or before the Office in
accordance with the provisions of part 513 of this chapter and has not
been excluded from the particular investigative proceeding or formal
examination proceeding in accordance with paragraph (b)(3) of this
section.
(2) Such attorney may advise the witness before, during, and after
the taking of his testimony and may briefly question the witness, on the
record, at the conclusion of his testimony, for the sole purpose of
clarifying any of the answers the witness has given. During the taking
of the testimony of a witness, such attorney may make summary notes
solely for his use in representing his client. All witnesses shall be
sequestered, and, unless permitted in the discretion of the designated
representative, no witness or accompanying attorney may be permitted to
be present during the taking of testimony of any other witness called in
such proceeding. Neither attorney(s) for the association(s) that are the
subjects of the investigative proceedings or formal examination
proceedings, nor attorneys for any other interested persons, shall have
any right to be present during the testimony of any witness not
personally being represented by such attorney.
(3) The Office, for good cause, may exclude a particular attorney
from further participation in any investigation in which the Office has
found the attorney to have engaged in dilatory, obstructionist,
egregious, contemptuous or contumacious conduct. The person conducting
an investigation may report to the Office instances of apparently
dilatory, obstructionist, egregious, contemptuous or contumacious
conduct on the part of an attorney. After due notice to the attorney,
the Office may take such action as the circumstances warrant based upon
a written record evidencing the conduct of the attorney in that
investigation or such other or additional written or oral
[[Page 53]]
presentation as the Office may permit or direct.
[54 FR 49457, Nov. 30, 1989, as amended at 60 FR 66717, Dec. 26, 1995]
Sec. 512.6 Obstruction of the proceedings.
The designated representative shall report to the Office any
instances where any witness or counsel has engaged in dilatory,
obstructionist, or contumacious conduct or has otherwise violated any
provision of this part during the course of an investigative proceeding
or formal examination proceeding; and the Office may take such action as
the circumstances warrant, including the exclusion of counsel from
further participation in such proceeding.
Sec. 512.7 Subpoenas.
(a) Service. Service of a subpoena in connection with any
investigative proceeding or formal examination proceeding shall be
effected in the following manner:
(1) Service upon a natural person. Service of a subpoena upon a
natural person may be effected by handing it to such person; by leaving
it at his office with the person in charge thereof, or, if there is no
one in charge, by leaving it in a conspicuous place therein; by leaving
it at his dwelling place or usual place of abode with some person of
suitable age and discretion then residing therein; by mailing it to him
by registered or certified mail or by an express delivery service at his
last known address; or by any method whereby actual notice is given to
him.
(2) Service upon other persons. When the person to be served is not
a natural person, service of the subpoena may be effected by handing the
subpoena to a registered agent for service, or to any officer, director,
or agent in charge of any office of such person; by mailing it to any
such representative by registered or certified mail or by an express
delivery service at his last known address; or by any method whereby
actual notice is given to such person.
(b) Motions to quash. Any person to whom a subpoena is directed may,
prior to the time specified therein for compliance, but in no event more
than 10 days after the date of service of such subpoena, apply to the
Chief Counsel or his designee to quash or modify such subpoena,
accompanying such application with a statement of the reasons therefor.
The Chief Counsel or his designee, as appropriate, may:
(1) Deny the application;
(2) Quash or revoke the subpoena;
(3) Modify the subpoena; or
(4) Condition the granting of the application on such terms as the
Chief Counsel or his designee determines to be just, reasonable, and
proper.
(c) Attendance of witnesses. Subpoenas issued in connection with an
investigative proceeding or formal examination proceeding may require
the attendance and/or testimony of witnesses from any State or territory
of the United States and the production by such witnesses of documentary
or other tangible evidence at any designated place where the proceeding
is being (or is to be) conducted. Foreign nationals are subject to such
subpoenas if such service is made upon a duly authorized agent located
in the United States.
(d) Witness fees and mileage. Witnesses summoned in any proceeding
under this part shall be paid the same fees and mileage that are paid
witnesses in the district courts of the United States. Such fees and
mileage need not be tendered when the subpoena is issued on behalf of
the Office by any of its designated representatives.
[54 FR 49457, Nov. 30, 1989, as amended at 56 FR 38317, Aug. 12, 1991]
PART 513_PRACTICE BEFORE THE OFFICE--Table of Contents
Sec.
513.1 Scope of part.
513.2 Definitions.
513.3 Who may practice.
513.4 Suspension and debarment.
513.5 Reinstatement.
513.6 Duty to file information concerning adverse judicial or
administrative action.
513.7 Proceeding under this part.
513.8 Removal, suspension, or debarment of independent public
accountants and accounting firms performing audit services.
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 1813, 1831m, and 15
U.S.C. 78.
Source: 54 FR 49459, Nov. 30, 1989, unless otherwise noted.
[[Page 54]]
Sec. 513.1 Scope of part.
This part prescribes rules with regard to general practice before
the Office on one's own behalf or in a representative capacity and
prescribes rules describing the circumstances under which attorneys,
accountants, appraisers, or other persons may be suspended or debarred,
either temporarily or permanently, from practicing before the Office. In
connection with any particular matter, reference also should be made to
any special requirements of procedure and practice that may be contained
in the particular statute involved or the rules and forms adopted by the
Office thereunder, which special requirements are controlling. In
addition to any suspension hereunder, a person may be excluded from
further participation under this chapter from a rulemaking hearing in
accordance with Sec. 510.2, from an adjudicatory proceeding in
accordance with Sec. 509.6(a)(1), from a removal hearing in accordance
with Sec. 508.3, or from an investigatory proceeding in accordance with
Sec. 512.5(b)(2) of this chapter.
[54 FR 49459, Nov. 30, 1989, as amended at 56 FR 38317, Aug. 12, 1991]
Sec. 513.2 Definitions.
As used in this part:
(a) Office means the Office;
(b) The term Secretary means the Secretary and any Assistant or
Acting Secretary to the Office;
(c) The term presiding officer includes the Office, his delegatee or
an administrative law judge appointed under section 3105 or detailed
pursuant to section 3344 of title 5 of the U.S. Code and, as used in
this part, the term shall be construed to refer to whichever of the
above-identified individuals presides at a hearing or other proceeding,
except as otherwise specified in the text;
(d) The term attorney means any person who is a member in good
standing of the bar of the highest court of any State, possession,
territory, Commonwealth or the District of Columbia; and
(e) The term practice means transacting any business with the
Office, including:
(1) The representation of another person at any adjudicatory,
investigatory, removal or rulemaking proceeding conducted before the
Office, a presiding officer or the Office's staff, including those
proceedings covered in parts 508, 509, 510, and 512 of this chapter;
(2) The preparation of any statement, opinion, financial statement,
appraisal report, audit report, or other document or report by any
attorney, accountant, appraiser or other licensed expert which is filed
with or submitted to the Office, with such expert's consent or knowledge
in connection with any application or other filing with the Office;
(3) A presentation to the Office, a presiding officer or the
Office's staff at a conference or meeting relating to an association's
or other person's rights, privileges or liabilities under the laws
administered by the Office and rules and regulations promulgated
thereunder;
(4) Any business correspondence or communication with the Office, a
presiding officer or the Office's staff; and
(5) The transaction of any other formal business with the Office on
behalf of another, in the capacity of an attorney, accountant, appraiser
or other licensed expert.
Sec. 513.3 Who may practice.
(a) By non-attorneys. (1) An individual may appear on his own behalf
(pro se); a member of a partnership may represent the partnership; a
bona fide and duly authorized officer of a corporation, trust or
association may represent the corporation, trust or association; and an
officer or employee of a commission, department or political subdivision
may represent that commission, department or political subdivision
before the Office.
(2) Any accountant, appraiser or other licensed expert may practice
before the Office in a professional capacity.
(b) By attorneys. Any association or other person may be represented
in any proceeding or other matter before the Office by an attorney.
(c) Any licensed expert or professional transacting business with
the Office in a representative capacity may be required to show his
authority to act in such capacity.
[[Page 55]]
Sec. 513.4 Suspension and debarment.
(a) The Office may censure any person practicing before it or may
deny, temporarily or permanently, the privilege of any person to
practice before it if such person is found by the Office, after notice
of and opportunity for hearing in the matter,
(1) Not to possess the requisite qualifications to represent others,
(2) To be lacking in character or professional integrity,
(3) To have engaged in any dilatory, obstructionist, egregious,
contemptuous, contumacious or other unethical or improper professional
conduct before the Office, or
(4) To have willfully violated, or willfully aided and abetted the
violation of, any provision of the laws administered by the Office or
the rules and regulations promulgated thereunder.
(b) Automatic suspension. (1) Any person who, after being licensed
as a professional or expert by any competent authority, has been
convicted of a felony, or of a misdemeanor involving moral turpitude,
personal dishonesty or breach of trust, shall be suspended forthwith
from practicing before the Office.
(2) Any accountant, appraiser or other licensed expert whose license
to practice has been revoked in any State, possession, territory,
Commonwealth or the District of Co1umbia, shall be suspended forthwith
from practice before the Office.
(3) Any attorney who has been suspended or disbarred by a court of
the United States or in any State, possession, territory, Commonwealth
or the District of Columbia, shall be suspended forthwith from
practicing before the Office.
(4) A conviction (including a judgment or order on a plea of nolo
contendere), revocation, suspension or disbarment under paragraphs
(b)(1), (b)(2) and (b)(3) of this section shall be deemed to have
occurred when the convicting, revoking, suspending or disbarring agency
or tribunal enters its judgment or order, regardless of whether an
appeal is pending or could be taken.
(5) For purposes of this section, it shall be irrelevant that any
attorney, accountant, appraiser or other licensed expert who has been
suspended, disbarred or otherwise disqualified from practice before a
court or in a jurisdiction continues in professional good standing
before other courts or in other jurisdictions.
(c) Temporary suspension. (1) The Office, with due regard to the
public interest and without preliminary hearing, by order, may
temporarily suspend any person from appearing or practicing before it
who, on or after June 20, 1984, by name, has been:
(i) Permanently enjoined (whether by consent, default or summary
judgment or after trial) by any court of competent jurisdiction or by
the Office itself in a final administrative order, by reason of his
misconduct in any action brought by the Office based upon violations of,
or aiding and abetting the violation of, the Home Owners, Loan Act of
1933, as amended, 12 U.S.C. 1461 et seq., the Federal Deposit Insurance
Act, as amended, 12 U.S.C. 1811 et seq. or any provision of the
Securities Exchange Act of 1934, as amended, 15 U.S.C. 78a, et seq.,
which is administered by the Office, or of any rule or regulation
promulgated thereunder; or
(ii) Found by any court of competent jurisdiction (whether by
consent, default, or summary judgment, or after trial) in any action
brought by the Office to which he is a party or found by the Office
(whether by consent, default, upon summary judgment or after hearing) in
any administrative proceeding in which the Office is a complainant and
he is a party, to have willfully committed, caused or aided or abetted a
violation of any provision of the Home Owners' Loan Act of 1933, as
amended, 12 U.S.C. 1461 et seq., the Federal Deposit Insurance Act, as
amended, 12 U.S.C. 1811 et seq. or any provision of the Securities
Exchange Act of 1934, as amended, 15 U.S.C. 78a, et seq., which is
administered by the Office, or of any rule or regulation promulgated
thereunder.
(2) An order of temporary suspension shall become effective when
served by certified or registered mail directed to the last known
business or residential address of the person involved. No order of
temporary suspension shall be entered by the Office pursuant to
paragraph (c)(1) of this section more than three months after the final
judgment
[[Page 56]]
or order entered in a judicial or administrative proceeding described in
paragraphs (c)(1)(i) or (c)(1)(ii) of this section has become effective
and all review or appeal procedures have been completed or are no longer
available.
(3) Any person temporarily suspended from appearing and practicing
before the Office in accordance with paragraph (c)(1) of this section
may, within 30 days after service upon him of the order of temporary
suspension, petition the Office to lift such suspension. If no petition
is received by the Office within those 30 days, the suspension shall
become permanent.
(4) Within 30 days after the filing of a petition in accordance with
paragraph (c)(3) of this section, the Office shall either lift the
temporary suspension or set the matter down for hearing at a time and
place to be designated by the Office, or both. After opportunity for
hearing, the Office may censure the petitioner or may suspend the
petitioner from appearing or practicing before the Office temporarily or
permanently. In every case in which the temporary suspension has not
been lifted, the hearing and any other action taken pursuant to this
paragraph (c)(4) shall be expedited by the Office in order to ensure the
petitioner's right to address the allegations against him.
(5) In any hearing held on a petition filed in accordance with
paragraph (c)(3) of this section, a showing that the petitioner has been
enjoined or has been found to have committed, caused or aided or abetted
violations as described in paragraph (c)(1) of this section, without
more, may be a basis for suspension or debarment; that showing having
been made, the burden shall then be on the petitioner to show why he
should not be censured or be temporarily or permanently suspended or
debarred. A petitioner will not be permitted to contest any findings
against him or any admissions made by him in the judicial or
administrative proceedings upon which the proposed censure, suspension
or debarment is based. A petitioner who has consented to the entry of a
permanent injunction or order as described in paragraph (c)(1)(i) of
this section, without admitting the facts set forth in the complaint,
shall nevertheless be presumed for all purposes under this section to
have been enjoined or ordered by reason of the misconduct alleged in the
complaint.
Sec. 513.5 Reinstatement.
(a) Any person who is suspended from practicing before the Office
under paragraph (a) or (c) of Sec. 513.4 of this part may file an
application for reinstatement at any time. Denial of the privilege of
practicing before the Office shall continue unless and until the
applicant has been reinstated by order of the Office for good cause
shown.
(b) Any person suspended under paragraph (b) of Sec. 513.4 shall be
reinstated by the Office, upon appropriate application, if all of the
grounds for application of the provisions of paragraph (b) of Sec.
513.4 subsequently are removed by a reversal of the conviction or
termination of the suspension, disbarment or revocation. An application
for reinstatement on any other grounds by any person suspended under
paragraph (b) of Sec. 513.4 may be filed at any time. Such application
shall state with particularity the relief desired and the grounds
therefor and shall include supporting evidence, when available. The
applicant shall be accorded an opportunity for an informal hearing in
the matter, unless the applicant has waived a hearing in the application
and, instead, has elected to have the matter determined on the basis of
written submissions. Such hearing shall utilize the procedures
established in Sec. 508.3 and paragraph (a) of Sec. 508.7 of this
chapter. However, such suspension shall continue unless and until the
applicant has been reinstated by order of the Office for good cause
shown.
[54 FR 49459, Nov. 30, 1989, as amended at 56 FR 38318, Aug. 12, 1991]
Sec. 513.6 Duty to file information concerning adverse judicial or administrative action.
Any person appearing or practicing before the Office who has been or
is the subject of a conviction, suspension, debarment, license
revocation, injunction or other finding of the kind described in Sec.
513.4 (b) or (c) of this part in an action not instituted by the Office
shall promptly file a copy of the relevant order, judgment or decree
with the Secretary to the Office together with any
[[Page 57]]
related opinion or statement of the agency or tribunal involved. Any
person who fails to so file a copy of the order, judgment or decree
within 30 days after the later of June 15, 1984, the entry of the order,
judgment or decree, or the date such person initiates practice before
the Office, for that reason alone may be disqualified from practicing
before the Office until such time as the appropriate filing shall be
made, but neither the filing of these documents nor the failure of a
person to file them shall in any way impair the operation of any other
provision of this part.
Sec. 513.7 Proceeding under this part.
(a) All hearings required or permitted to be held under paragraphs
(a) and (c) of Sec. 513.4 of this part shall be held before a presiding
officer utilizing the procedures established in the rules of practice
and procedure in adjudicatory proceedings under part 509 of this
chapter.
(b) All hearings held under this part shall be closed to the public
unless the Office on its own motion or upon the request of a party
otherwise directs.
(c) Any proceeding brought under any section of this part 513 shall
not preclude a proceeding under any other section of this part or any
other part of the Office's regulations.
Sec. 513.8 Removal, suspension, or debarment of independent public accountants and accounting firms performing audit services.
(a) Scope. This subpart, which implements section 36(g)(4) of the
Federal Deposit Insurance Act (FDIA) (12 U.S.C. 1831m(g)(4)), provides
rules and procedures for the removal, suspension, or debarment of
independent public accountants and their accounting firms from
performing independent audit and attestation services required by
section 36 of the FDIA (12 U.S.C. 1831m) for insured savings
associations and savings and loan holding companies.
(b) Definitions. As used in this section, the following terms have
the meaning given below unless the context requires otherwise:
(1) Accounting firm. The term accounting firm means a corporation,
proprietorship, partnership, or other business firm providing audit
services.
(2) Audit services. The term audit services means any service
required to be performed by an independent public accountant by section
36 of the FDIA Act and 12 CFR part 363, including attestation services.
Audit services include any service performed with respect to a savings
and loan holding company of a savings association that is used to
satisfy requirements imposed by section 36 or part 363 on that savings
association.
(3) Independent public accountant. The term independent public
accountant means any individual who performs or participates in
providing audit services.
(c) Removal, suspension, or debarment of independent public
accountants. The Office may remove, suspend, or debar an independent
public accountant from performing audit services for savings
associations that are subject to section 36 of the FDIA if, after
service of a notice of intention and opportunity for hearing in the
matter, the Office finds that the independent public accountant:
(1) Lacks the requisite qualifications to perform audit services;
(2) Has knowingly or recklessly engaged in conduct that results in a
violation of applicable professional standards, including those
standards and conflicts of interest provisions applicable to independent
public accountants through the Sarbanes-Oxley Act of 2002, Pub. L. 107-
204, 116 Stat. 745 (2002) (Sarbanes-Oxley Act), and developed by the
Public Company Accounting Oversight Board and the Securities and
Exchange Commission;
(3) Has engaged in negligent conduct in the form of: (i) A single
instance of highly unreasonable conduct that results in a violation of
applicable professional standards in circumstances in which an
independent public accountant knows, or should know, that heightened
scrutiny is warranted; or
(ii) Repeated instances of unreasonable conduct, each resulting in a
violation of applicable professional standards, that indicate a lack of
competence to perform audit services;
(4) Has knowingly or recklessly given false or misleading
information or
[[Page 58]]
knowingly or recklessly participated in any way in the giving of false
or misleading information to the Office or any officer or employee of
the Office;
(5) Has engaged in, or aided and abetted, a material and knowing or
reckless violation of any provision of the Federal banking or securities
laws or the rules and regulations thereunder, or any other law;
(6) Has been removed, suspended, or debarred from practice before
any federal or state agency regulating the banking, insurance, or
securities industries, other than by action listed in paragraph (j) of
this section, on grounds relevant to the provision of audit services; or
(7) Is suspended or debarred for cause from practice as an
accountant by any duly constituted licensing authority of any state,
possession, commonwealth, or the District of Columbia.
(d) Removal, suspension or debarment of an accounting firm. If the
Office determines that there is good cause for the removal, suspension,
or debarment of a member or employee of an accounting firm under
paragraph (c) of this section, the Office also may remove, suspend, or
debar such firm or one or more offices of such firm. In considering
whether to remove, suspend, or debar an accounting firm or office
thereof, and the term of any sanction against an accounting firm under
this section, the Office may consider, for example:
(1) The gravity, scope, or repetition of the act or failure to act
that constitutes good cause for the removal, suspension, or debarment;
(2) The adequacy of, and adherence to, applicable policies,
practices, or procedures for the accounting firm's conduct of its
business and the performance of audit services;
(3) The selection, training, supervision, and conduct of members or
employees of the accounting firm involved in the performance of audit
services;
(4) The extent to which managing partners or senior officers of the
accounting firm have participated, directly or indirectly through
oversight or review, in the act or failure to act; and
(5) The extent to which the accounting firm has, since the
occurrence of the act or failure to act, implemented corrective internal
controls to prevent its recurrence.
(e) Remedies. The remedies provided in this section are in addition
to any other remedies the Office may have under any other applicable
provisions of law, rule, or regulation.
(f) Proceedings to remove, suspend, or debar. (1) The Office may
initiate a proceeding to remove, suspend, or debar an independent public
accountant or accounting firm from performing audit services by issuing
a written notice of intention to take such action that names the
individual or firm as a respondent and describes the nature of the
conduct that constitutes good cause for such action.
(2) An independent public accountant or accounting firm named as a
respondent in the notice issued under paragraph (f)(1) of this section
may request a hearing on the allegations in the notice. Hearings
conducted under this paragraph shall be conducted in the same manner as
other hearings under the Uniform Rules of Practice and Procedure (12 CFR
part 509).
(g) Immediate suspension from performing audit services. (1) If the
Office serves written notice of intention to remove, suspend, or debar
an independent public accountant or accounting firm from performing
audit services, the Office may, with due regard for the public interest
and without preliminary hearing, immediately suspend an independent
public accountant or accounting firm from performing audit services for
savings associations, if the Office:
(i) Has a reasonable basis to believe that the independent public
accountant or accounting firm engaged in conduct (specified in the
notice served upon the independent public accountant or accounting firm
under paragraph (f) of this section) that would constitute grounds for
removal, suspension, or debarment under paragraph (c) or (d) of this
section;
(ii) Determines that immediate suspension is necessary to avoid
immediate harm to an insured depository institution or its depositors or
to the depository system as a whole; and
(iii) Serves such independent public accountant or accounting firm
with
[[Page 59]]
written notice of the immediate suspension.
(2) An immediate suspension notice issued under this paragraph will
become effective upon service. Such suspension will remain in effect
until the date the Office dismisses the charges contained in the notice
of intention, or the effective date of a final order of removal,
suspension, or debarment issued by the Office to the independent public
accountant or accounting firm.
(h) Petition to stay. (1) Any independent public accountant or
accounting firm immediately suspended from performing audit services in
accordance with paragraph (g) of this section may, within 10 calendar
days after service of the notice of immediate suspension, file a
petition with the Office for a stay of such suspension. If no petition
is filed within 10 calendar days, the immediate suspension shall remain
in effect.
(2) Upon receipt of a stay petition, the Office will designate a
presiding officer who shall fix a place and time (not more than 10
calendar days after receipt of such petition, unless extended at the
request of the petitioner), at which the immediately suspended party may
appear, personally or through counsel, to submit written materials and
oral argument. Any OTS employee engaged in investigative or prosecuting
functions for the OTS in a case may not, in that or a factually related
case, serve as a presiding officer or participate or advise in the
decision of the presiding officer or of the OTS, except as witness or
counsel in the proceeding. In the sole discretion of the presiding
officer, upon a specific showing of compelling need, oral testimony of
witnesses may also be presented. In hearings held pursuant to this
paragraph, there will be no discovery and the provisions of Sec. Sec.
509.6 through 509.12, 509.16, and 509.21 of the Uniform Rules will
apply.
(3) Within 30 calendar days after the hearing, the presiding officer
shall issue a decision. The presiding officer will grant a stay upon a
demonstration that a substantial likelihood exists of the respondent's
success on the issues raised by the notice of intention and that, absent
such relief, the respondent will suffer immediate and irreparable
injury, loss, or damage. In the absence of such a demonstration, the
presiding officer will notify the parties that the immediate suspension
will be continued pending the completion of the administrative
proceedings pursuant to the notice.
(4) The parties may seek review of the presiding officer's decision
by filing a petition for review with the presiding officer within 10
calendar days after service of the decision. Replies must be filed
within 10 calendar days after the petition filing date. Upon receipt of
a petition for review and any reply, the presiding officer must promptly
certify the entire record to the Director. Within 60 calendar days of
the presiding officer's certification, the Director shall issue an order
notifying the affected party whether or not the immediate suspension
should be continued or reinstated. The order shall state the basis of
the Director's decision.
(i) Scope of any order of removal, suspension, or debarment. (1)
Except as provided in paragraph (i)(2), any independent public
accountant or accounting firm that has been removed, suspended
(including an immediate suspension), or debarred from performing audit
services by the Office may not, while such order is in effect, perform
audit services for any savings association.
(2) An order of removal, suspension (including an immediate
suspension), or debarment may, at the discretion of the Office, be made
applicable to a limited number of savings associations or savings and
loan holding companies (limited scope order).
(j) Automatic removal, suspension, and debarment. (1) An independent
public accountant or accounting firm may not perform audit services for
a savings association if the independent public accountant or accounting
firm:
(i) Is subject to a final order of removal, suspension, or debarment
(other than a limited scope order) issued by the Board of Governors of
the Federal Reserve System, the Federal Deposit Insurance Corporation,
or the Office of the Comptroller of the Currency under section 36 of the
FDIA;
(ii) Is subject to a temporary suspension or permanent revocation of
registration or a temporary or permanent
[[Page 60]]
suspension or bar from further association with any registered public
accounting firm issued by the Public Company Accounting Oversight Board
or the Securities and Exchange Commission under sections 105(c)(4)(A) or
(B) of the Sarbanes-Oxley Act (15 U.S.C. 7215(c)(4)(A) or (B)); or
(iii) Is subject to an order of suspension or denial of the
privilege of appearing or practicing before the Securities and Exchange
Commission.
(2) Upon written request, the Office, for good cause shown, may
grant written permission to an independent public accountant or
accounting firm to perform audit services for savings associations. The
request must contain a concise statement of action requested. The Office
may require the applicant to submit additional information.
(k) Notice of removal, suspension, or debarment. (1) Upon issuance
of a final order for removal, suspension, or debarment of an independent
public accountant or accounting firm from providing audit services, the
Office shall make the order publicly available and provide notice of the
order to the other Federal banking agencies.
(2) An independent public accountant or accounting firm that
provides audit services to a savings association must provide the Office
with written notice of:
(i) Any currently effective order or other action described in
paragraphs (c)(6) through (c)(7) or paragraphs (j)(1)(ii) through
(j)(1)(iii) of this section; and
(ii) Any currently effective action by the Public Company Accounting
Oversight Board under sections 105(c)(4)(C) or (G) of the Sarbanes-Oxley
Act (15 U.S.C. 7215(c)(4)(C) or (G)).
(3) Written notice required by this paragraph shall be given no
later than 15 calendar days following the effective date of an order or
action or 15 calendar days before an independent public accountant or
accounting firm accepts an engagement to provide audit services,
whichever date is earlier.
(l) Application for reinstatement. (1) Unless otherwise ordered by
the Office, an independent public accountant, accounting firm, or office
of a firm that was removed, suspended or debarred under this section may
apply for reinstatement in writing at any time. The request shall
contain a concise statement of action requested. The Office may require
the applicant to submit additional information.
(2) An applicant for reinstatement under paragraph (l)(1) of this
section may, in the Office's sole discretion, be afforded a hearing. The
independent public accountant or accounting firm shall bear the burden
of going forward with an application and the burden of proving the
grounds supporting the application. The Office may, in its sole
discretion, direct that any reinstatement proceeding be limited to
written submissions. The removal, suspension, or debarment shall
continue until the Office, for good cause shown, has reinstated the
applicant or until, in the case of a suspension, the suspension period
has expired. The filing of a petition for reinstatement shall not stay
the effectiveness of the removal, suspension, or debarment of an
independent public accountant or accounting firm.
[68 FR 48272, Aug. 13, 2003]
PART 516_APPLICATION PROCESSING PROCEDURES--Table of Contents
Sec.
516.1 What does this part do?
516.5 Do the same procedures apply to all applications under this part?
516.10 How does OTS compute time periods under this part?
Subpart A_Pre-Filing and Filing Procedures
Pre-Filing Procedures
516.15 Must I meet with OTS before I file my application?
516.20 What information must I include in my draft business plan?
Filing Procedures
516.25 What type of application must I file?
516.30 What information must I provide with my application?
516.35 May I keep portions of my application confidential?
516.40 Where do I file my application?
516.45 What is the filing date of my application?
516.47 How do I amend or supplement my application?
[[Page 61]]
Subpart B_Publication Requirements
516.50 Who must publish a public notice of an application?
516.55 What information must I include in my public notice?
516.60 When must I publish the public notice?
516.70 Where must I publish the public notice?
516.80 What language must I use in my publication?
Subpart C_Comment Procedures
516.100 What does this subpart do?
516.110 Who may submit a written comment?
516.120 What information should a comment include?
516.130 Where are comments filed?
516.140 How long is the comment period?
Subpart D_Meeting Procedures
516.160 What does this subpart do?
516.170 When will OTS conduct a meeting on an application?
516.180 What procedures govern the conduct of the meeting?
516.185 Will OTS approve or disapprove an application at a meeting?
516.190 Will a meeting affect application processing time frames?
Subpart E_OTS Review
Expedited Treatment
516.200 If I file a notice under expedited treatment, when may I engage
in the proposed activities?
Standard Treatment
516.210 What will OTS do after I file my application?
516.220 If OTS requests additional information to complete my
application, how will it process my application?
516.230 Will OTS conduct an eligibility examination?
516.240 What may OTS require me to do after my application is deemed
complete?
516.250 Will OTS require me to publish a new public notice?
516.260 May OTS suspend processing of my application?
516.270 How long is the OTS review period?
516.280 How will I know if my application has been approved?
516.290 What will happen if OTS does not approve or disapprove my
application within two calendar years after the filing date?
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464, 2901 et
seq.
Source: 57 FR 14336, Apr. 20, 1992, unless otherwise noted.
Sec. 516.1 What does this part do?
(a) This part explains OTS procedures for processing applications,
notices, or filings (applications). Except as provided in paragraph (b)
of this section, subparts A and E of this part apply whenever an OTS
regulation requires any person (you) to file an application with OTS.
Subparts B, C, and D, however, only apply when an OTS regulation
incorporates the procedures in the subpart or where otherwise required
by OTS.
(b) This part does not apply to any of the following:
(1) An application related to a transaction under section 13(c) or
(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1823(c) or (k).
(2) A request for reconsideration, modification, or appeal of a
final OTS action.
(3) A request related to litigation, an enforcement proceeding, a
supervisory directive or supervisory agreement. Such requests include a
request seeking approval under, modification of, or termination of an
order issued under part 508 or 509 of this chapter, a supervisory
agreement, a supervisory directive, a consent merger agreement or a
document negotiated in settlement of an enforcement matter or other
litigation, unless an applicable OTS regulation specifically requires an
application under this part.
(4) An application filed under an OTS regulation that prescribes
other application processing procedures and time frames for the approval
of applications.
(c) If an OTS regulation for a specific type of application
prescribes some application processing procedures, or time frames, OTS
will apply this part to the extent necessary to process the application.
For example, if an OTS regulation for a specific type of application
does not identify time periods for the processing of an application, the
time periods in this part apply.
[66 FR 13000, Mar. 2, 2001]
[[Page 62]]
Sec. 516.5 Do the same procedures apply to all applications under this part?
OTS processes applications under this part using two procedures,
expedited treatment and standard treatment. To determine which treatment
applies, you may use the following chart:
------------------------------------------------------------------------
Then OTS will process your
If * * * application under * * *
------------------------------------------------------------------------
(a) The applicable regulation does not Standard treatment.
specifically state that expedited
treatment is available.
(b) You are not a savings association..... Standard treatment.
(c) Your composite rating is 3, 4, or 5. Standard treatment.
The composite rating is the composite
numeric rating that OTS or the other
federal banking regulator assigned to you
under the Uniform Financial Institutions
Rating System \1\ or under a comparable
rating system. The composite rating
refers to the rating assigned and
provided to you, in writing, as a result
of the most recent examination.
(d) Your Community Reinvestment Act (CRA) Standard treatment.
rating is Needs to Improve or Substantial
Noncompliance. The CRA rating is the
Community Reinvestment Act performance
rating that OTS or the other federal
banking regulator assigned and provided
to you, in writing, as a result of the
most recent compliance examination. See,
for example, Sec. 563e.28 of this
chapter.
(e) Your compliance rating is 3, 4, or 5. Standard treatment.
The compliance rating is the numeric
rating that OTS or the other federal
banking regulator assigned to you under
OTS compliance rating system, or a
comparable rating system used by the
other federal banking regulator. The
compliance rating refers to the rating
assigned and provided to you, in writing,
as a result of the most recent compliance
examination.
(f) You fail any one of your capital Standard treatment.
requirements under part 567 of this
chapter.
(g) OTS has notified you that you are an Standard treatment.
association in troubled condition.
(h) Neither OTS nor any other federal Standard treatment.
banking regulator has assigned you a
composite rating, a CRA rating or a
compliance rating.
(i) You do not meet any of the criteria Expedited treatment.
listed in paragraphs (a) through (h) of
this section.
------------------------------------------------------------------------
\1\ A savings association may obtain a copy of its composite rating from
the appropriate Regional Office.
[66 FR 13000, Mar. 2, 2001]
Sec. 516.10 How does OTS compute time periods under this part?
In computing time periods under this part, OTS does not include the
day of the act or event that commences the time period. When the last
day of a time period is a Saturday, Sunday, or Federal holiday, the time
period runs until the end of the next day that is not a Saturday,
Sunday, or Federal holiday.
[66 FR 13000, Mar. 2, 2001]
Subpart A_Pre-Filing and Filing Procedures
Source: 66 FR 13000, Mar. 2, 2001, unless otherwise noted.
Pre-Filing Procedures
Sec. 516.15 Must I meet with OTS before I file my application?
(a) Chart. To determine whether you must attend a pre-filing meeting
before you file an application, please consult the following chart:
------------------------------------------------------------------------
If you file * * * Then * * *
------------------------------------------------------------------------
(1) An application for permission to You must meet with OTS before
organize a de novo federal savings filing your application. You
association. must submit a draft business
plan before this meeting.
(2) An application to convert an You must meet with OTS before
existing insured depository filing your application. OTS
institution (other than a state- may require you to submit a
chartered savings association or a draft business plan or other
state-chartered savings bank) or a relevant information before
credit union to a federal savings this meeting.
association.
(3) An application to acquire control OTS may require you to meet
of a savings association. with OTS before filing your
application and may require
you to submit a draft business
plan or other relevant
information before this
meeting.
------------------------------------------------------------------------
(b) Contacting the Regional Office. (1) You must contact the
appropriate Regional Office a reasonable time before you file an
application described in paragraph (a) of this section. Unless paragraph
(a) already requires a pre-filing meeting or a draft business plan, the
Regional Office will determine whether it will require a pre-filing
meeting, and whether you must submit
[[Page 63]]
a business plan or other relevant information before the meeting. The
Regional Office will also establish a schedule for any meeting and the
submission of any information.
(2) All other applicants are encouraged to contact the appropriate
Regional Office to determine whether a pre-filing meeting or the
submission of a draft business plan or other relevant information would
expedite the application review process.
Sec. 516.20 What information must I include in my draft business plan?
If you must submit a draft business plan under Sec. 516.15, your
plan must:
(a) Clearly and completely describe the savings association's
projected operations and activities;
(b) Describe the risks associated with the transaction and the
impact of this transaction on any existing activities and operations of
the savings association, including financial projections for a minimum
of three years;
(c) Identify the majority of the proposed board of directors and the
key senior executive officers (as defined in Sec. 563.555 of this
chapter) of the savings association and demonstrate that these
individuals have the expertise to prudently manage the activities and
operations described in the savings association's draft business plan;
and
(d) Demonstrate how applicable requirements regarding serving the
credit and lending needs in the market areas served by the savings
association will be met.
Filing Procedures
Sec. 516.25 What type of application must I file?
(a) Expedited treatment. If you are eligible for expedited treatment
under Sec. 516.5, you may file your application in the form of a notice
that includes all information required by the applicable substantive
regulation. If OTS has designated a form for your notice, you must file
that form. Your notice is an application for the purposes of all
statutory and regulatory references to ``applications.''
(b) Standard treatment. If you are subject to standard treatment
under Sec. 516.5, you must file your application following all
applicable substantive regulations and guidelines governing the filing
of applications. If OTS has a designated form for your application, you
must file that form.
(c) Waiver requests. If you want OTS to waive a requirement that you
provide certain information with the notice or application, you must
include a written waiver request:
(1) Describing the requirement to be waived and
(2) Explaining why the information is not needed to enable OTS to
evaluate your notice or application under applicable standards.
Sec. 516.30 What information must I provide with my application?
(a) Required information. You may obtain information about required
certifications, other regulations and guidelines affecting particular
notices and applications, appropriate forms, and instructions from any
OTS Regional Office. You may also obtain forms and instructions on OTS's
web page at www.ots.treas.gov.
(b) Captions and exhibits. You must caption the original application
and required copies with the type of filing, and must include all
exhibits and other pertinent documents with the original application and
all required copies. You are not required to include original signatures
on copies if you include a copy of the signed signature page or the copy
otherwise indicates that the original was signed.
Sec. 516.35 May I keep portions of my application confidential?
(a) Confidentiality. OTS makes submissions under this part available
to the public, but may keep portions of your application confidential
based on the rules in this section.
(b) Confidentiality request. (1) You may request OTS to keep
portions of your application confidential. You must submit your request
in writing with your application and must explain in detail how your
request is consistent with the standards under the Freedom of
Information Act (5 U.S.C. 552) and part 505 of this chapter. For
example, you should explain how you will be
[[Page 64]]
substantially harmed by pubic disclosure of the information. You must
separately bind and mark the portions of the application you consider
confidential and the portions you consider non-confidential.
(2) OTS will not treat as confidential the portion of your
application describing how you plan to meet your Community Reinvestment
Act (CRA) objectives. OTS will make information in your CRA plan,
including any information incorporated by reference from other parts of
your application, available to the public upon request.
(c) OTS determination on confidentiality. OTS will determine whether
information that you designate as confidential may be withheld from the
public under the Freedom of Information Act (5 U.S.C. 552) and part 505
of this chapter. OTS will advise you before it makes information you
designate as confidential available to the public.
Sec. 516.40 Where do I file my application?
(a) Regional Office. (1) You must file the original application and
the number of copies indicated on the applicable form with the
applications filing division of the appropriate OTS Regional Office. You
should address the filings to ``Attn: Applications Filing Room'' at the
Regional address listed in paragraph (a)(2) of this section. If the form
does not indicate the number of copies you must file or if OTS has not
prescribed a form for your application, you must file the original
application and two copies.
(2) The addresses of each Regional Office and the states covered by
each office are:
------------------------------------------------------------------------
Region Office address States served
------------------------------------------------------------------------
Northeast........... Office of Thrift Connecticut, Delaware,
Supervision, Harborside Maine, Massachusetts,
Financial Center Plaza New Hampshire, New
Five, Suite 1600, Jersey, New York, Ohio,
Jersey City, New Jersey Pennsylvania, Rhode
07311. Island, Vermont, West
Virginia
Southeast........... Office of Thrift Alabama, District of
Supervision, 1475 Columbia, Florida,
Peachtree Street, N.E., Georgia, Illinois,
Atlanta, Georgia 30309 Indiana, Kentucky,
(Mail to: P.O. Box Maryland, Michigan,
105217, Atlanta, North Carolina, Puerto
Georgia 30348-5217). Rico, South Carolina,
Virginia, the Virgin
Islands.
Midwest............. Office of Thrift Arkansas, Iowa, Kansas,
Supervision, 225 E. Louisiana, Mississippi,
John Carpenter Freeway, Missouri, Nebraska,
Suite 500, Irving, Oklahoma, Tennessee,
Texas 75062-2326 (Mail Texas, Wisconsin.
to: P.O. Box 619027,
Dallas/Ft. Worth, Texas
75261-9027).
West................ Office of Thrift Alaska, Arizona,
Supervision, Pacific California, Colorado,
Plaza, 2001 Junipero Guam, Hawaii, Idaho,
Serra Boulevard, Suite Montana, Nevada, New
650, Daly City, Mexico, North Dakota,
California 94014-1976 Northern Mariana
(Mail to: P.O. Box Islands, Oregon, South
7165, San Francisco, Dakota, Utah,
California 94120-7165). Washington, Wyoming.
------------------------------------------------------------------------
(b) Additional filings with OTS Headquarters. (1) In addition to
filing in the Regional Office, if your application involves a
significant issue of law or policy or if an applicable regulation or
form directs you to file with OTS Headquarters, you must also file
copies of your application with the Applications Filing Room at OTS
headquarters, 1700 G Street, NW., Washington, DC 20552. You must file
the number of copies indicated on the applicable form. If the form does
not indicate the number of copies you must file or if OTS has not
prescribed a form for your application, you must file three copies.
(2)(i) You may obtain a list of applications involving significant
issues of law or policy at the OTS website at www.ots.treas.gov or by
contacting a Regional Office.
(ii) OTS reserves the right to identify significant issues of law or
policy in a particular application. OTS will advise you, in writing, if
it makes this determination.
[66 FR 13000, Mar. 2, 2001, as amended at 66 FR 65820, Dec. 21, 2001; 67
FR 78152, Dec. 23, 2002; 69 FR 76602, Dec. 22, 2004]
Sec. 516.45 What is the filing date of my application?
(a) Your application's filing date is the date that you complete all
of the following requirements.
[[Page 65]]
(1) You attend a pre-filing meeting and submit a draft business plan
or relevant information, if OTS requires you to do so under Sec.
516.15.
(2) You file your application and all required copies with OTS, as
described under Sec. 516.40.
(i) If you are required to file with a Regional Office and with OTS
Headquarters, you have not filed with OTS until you file with both
offices.
(ii) You have not filed with a Regional Office or OTS Headquarters
until you file the application and the required number of copies with
that office.
(iii) If you file after the close of business established by a
Regional Office or OTS Headquarters, you have filed with that office on
the next business day.
(3) You pay the applicable fee. You have not paid the fee until you
submit the fee to the appropriate Regional Office, or OTS waives the
fee. You may pay by check, money order, cashier's check or wire transfer
payable to OTS.
(b) OTS may notify you that it has adjusted your application filing
date if you fail to meet any applicable publication requirements.
(c) If, after you properly file your application with the Regional
Office, OTS determines that a significant issue of law or policy exists
under Sec. 516.40(b)(2)(ii), the filing date of your application is the
day you filed with the Regional Office. The 30-day review period under
Sec. Sec. 516.200 or 516.210 of this part will restart in its entirety
when the Regional Office forwards the appropriate number of copies of
your application to OTS Headquarters.
Sec. 516.47 How do I amend or supplement my application?
To amend or supplement your application, you must file the amendment
or supplemental information at the appropriate OTS office(s) along with
the number of copies required under Sec. 516.40. Your amendment or
supplemental information also must meet the caption and exhibit
requirements at Sec. 516.30(b).
Subpart B_Publication Requirements
Source: 62 FR 64143, Dec. 4, 1997, unless otherwise noted.
Sec. 516.50 Who must publish a public notice of an application?
This subpart applies whenever an OTS regulation requires an
applicant (``you'') to follow the public notice procedures in this
subpart.
Sec. 516.55 What information must I include in my public notice?
Your public notice must include the following:
(a) Your name and address.
(b) The type of application.
(c) The name of the depository institution(s) that is the subject
matter of the application.
(d) A statement indicating that the public may submit comments to
the appropriate OTS office(s).
(e) The address of the appropriate OTS offices where the public may
submit comments.
(f) The date that the comment period closes.
(g) A statement indicating that the nonconfidential portions of the
application are on file in the Regional Office, and are available for
public inspection during regular business hours.
(h) Any other information that OTS requires you to publish. You may
find the format for various publication notices in the appendix to OTS
application processing handbook.
[66 FR 13002, Mar. 2, 2001]
Sec. 516.60 When must I publish the public notice?
You must publish a public notice of the application no earlier than
seven days before and no later than the date of filing of the
application.
Sec. 516.70 Where must I publish the public notice?
You must publish the notice in a newspaper having a general
circulation in the communities indicated in the following chart:
[[Page 66]]
------------------------------------------------------------------------
You must publish in the
If you file . . . following communities . .
.
------------------------------------------------------------------------
(a) An application for permission to The community in which
organize under Sec. 543.2 of this your home office is
chapter, a Bank Merger Act application located.
under 563.22(a) of this chapter, an
application to convert to is a federal
charter under Sec. 543.8 or Sec. 552.2-
6 of this chapter, or an application for a
mutual to stock conversion under part 563b
of this chapter . . .
(b) An application to establish a branch The community to be served
office under Sec. 545.95 of this chapter by the branch office.
. . .
(c) An application for the change of The community in which the
permanent location of a home or branch existing office is
office under Sec. 545.95 of this chapter located and the community
. . . to be served by the new
office.
(d) A holding company application or a The community in which the
change of control notice under part 574 of home office of the
this chapter . . . savings association whose
stock is to be acquired
is located and, if
applicable, the community
in which the home office
of the acquiror's largest
subsidiary savings
association is located.
------------------------------------------------------------------------
[69 FR 68246, Nov. 24, 2004]
Sec. 516.80 What language must I use in my publication?
(a) English. You must publish the notice in a newspaper printed in
the English language.
(b) Other than English. If the OTS determines that the primary
language of a significant number of adult residents of the community is
a language other than English, the OTS may require that you
simultaneously publish additional notice(s) in the community in the
appropriate language(s).
Subpart C_Comment Procedures
Source: 62 FR 64144, Dec. 4, 1997, unless otherwise noted.
Sec. 516.100 What does this subpart do?
This subpart contains the procedures governing the submission of
public comments on certain types of applications or notices
(``applications'') pending before the OTS. It applies whenever a
regulation incorporates the procedures in this subpart, or where
otherwise required by the OTS.
Sec. 516.110 Who may submit a written comment?
Any person may submit a written comment supporting or opposing an
application.
[62 FR 64144, Dec. 4, 1997, as amended at 66 FR 13003, Mar. 2, 2001]
Sec. 516.120 What information should a comment include?
(a) A comment should recite relevant facts, including any
demographic, economic, or financial data, supporting the commenter's
position. A comment opposing an application should also:
(1) Address at least one of the reasons why OTS may deny the
application under the relevant statute or regulation;
(2) Recite any relevant facts and supporting data addressing these
reasons; and;
(3) Address how the approval of the application could harm the
commenter or any community.
(b) A commenter must include any request for a meeting under Sec.
516.170 in its comment. The commenter must describe the nature of the
issues or facts to be discussed and the reasons why written submissions
are insufficient to adequately address these facts or issues.
[66 FR 13003, Mar. 2, 2001, as amended at 69 FR 68247, Nov. 24, 2004]
Sec. 516.130 Where are comments filed?
A commenter must file with the appropriate OTS Regional Office (See
table at Sec. 516.40(a)(2)). The commenter must simultaneously send a
copy of the comment to the applicant.
[66 FR 13003, Mar. 2, 2001]
Sec. 516.140 How long is the comment period?
(a) General. Except as provided in paragraph (b) of this section, a
commenter must file a written comment with OTS within 30 calendar days
after the date of publication of the initial public notice.
[[Page 67]]
(b) Late-filed comments. OTS may consider late-filed comments if OTS
determines that the comment will assist in the disposition of the
application.
[69 FR 68247, Nov. 24, 2004]
Subpart D_Meeting Procedures
Source: 69 FR 68247, Nov. 24, 2004, unless otherwise noted.
Sec. 516.160 What does this subpart do?
This subpart contains meeting procedures. It applies whenever a
regulation incorporates the procedures in this subpart, or when
otherwise required by OTS.
Sec. 516.170 When will OTS conduct a meeting on an application?
(a) OTS will grant a meeting request or conduct a meeting on its own
initiative, if it finds that written submissions are insufficient to
address facts or issues raised in an application, or otherwise
determines that a meeting will benefit the decision-making process. OTS
may limit the issues considered at the meeting to issues that OTS
decides are relevant or material.
(b) OTS will inform the applicant and all commenters requesting a
meeting of its decision to grant or deny a meeting request, or of its
decision to conduct a meeting on its own initiative.
(c) If OTS decides to conduct a meeting, OTS will invite the
applicant and any commenters requesting a meeting and raising an issue
that OTS intends to consider at the meeting. OTS may also invite other
interested persons to attend. OTS will inform the participants of the
date, time, location, issues to be considered, and format for the
meeting a reasonable time before the meeting.
Sec. 516.180 What procedures govern the conduct of the meeting?
(a) OTS may conduct meetings in any format including, but not
limited to, a telephone conference, a face-to-face meeting, or a more
formal meeting.
(b) The Administrative Procedure Act (5 U.S.C. 551 et seq.), the
Federal Rules of Evidence (28 U.S.C. Appendix), the Federal Rules of
Civil Procedure (28 U.S.C. Rule 1 et seq.) and the OTS Rules of Practice
and Procedure in Adjudicatory Proceedings (12 CFR part 509) do not apply
to meetings under this section.
Sec. 516.185 Will OTS approve or disapprove an application at a meeting?
OTS will not approve or deny an application at a meeting under this
subpart.
Sec. 516.190 Will a meeting affect application processing time frames?
If OTS decides to conduct a meeting, it may suspend applicable
application processing time frames, including the time frames for
deeming an application complete and the applicable approval time frames
in subpart E of this part. If OTS suspends applicable application
processing time frames, the time period will resume when OTS determines
that a record has been developed that sufficiently supports a
determination on the issues considered at the meeting.
Subpart E_OTS Review
Source: 66 FR 13003, Mar. 2, 2001, unless otherwise noted.
Expedited Treatment
Sec. 516.200 If I file a notice under expedited treatment, when may I engage in the proposed activities?
If you are eligible for expedited treatment and you have
appropriately filed your notice with OTS, you may engage in the proposed
activities upon the expiration of 30 days after the filing date of your
notice, unless OTS takes one of the following actions before the
expiration of that time period:
(a) OTS notifies you in writing that you must file additional
information supplementing your notice. If you are required to file
additional information, you may engage in the proposed activities upon
the expiration of 30 calendar days after the date you file the
additional information, unless OTS takes one of the actions described in
paragraphs (b) through (d) of this section before the expiration of that
time period;
[[Page 68]]
(b) OTS notifies you in writing that your notice is subject to
standard treatment under this subpart. OTS will subject your notice to
standard treatment if it raises a supervisory concern, raises a
significant issue of law or policy, or requires significant additional
information;
(c) OTS notifies you in writing that it is suspending the applicable
time frames under Sec. 516.190; or
(d) OTS notifies you that it disapproves your notice.
Standard Treatment
Sec. 516.210 What will OTS do after I file my application?
(a) OTS action. Within 30 calendar days after the filing date of
your application, OTS will take one of the following actions:
------------------------------------------------------------------------
If OTS * * * Then * * *
------------------------------------------------------------------------
(1) Notifies you, in writing, that your The applicable review period
application is complete * * *. will begin on the date that
OTS deems your application
complete.
(2) Notifies you, in writing, that you You must submit the required
must submit addition information to additional information under
complete your application * * *. Sec. 516.220.
(3) Notifies you, in writing, that your OTS will not process your
application is materially deficient * application.
* *.
(4) Takes no action * * *.............. Your application is deemed
complete. The applicable
review period will begin on
the day the 30-day time period
expires.
------------------------------------------------------------------------
(b) Waiver requests. If your application includes a request for
waiver of an information requirement under Sec. 516.25(b), and OTS has
not notified you that you must submit additional information under
paragraph (a)(2) of this section, your request for waiver is granted.
Sec. 516.220 If OTS requests additional information to complete my application, how will it process my application?
(a) You may use the following chart to determine the procedure that
applies to your submission of additional information under Sec.
516.210(a)(1):
------------------------------------------------------------------------
If, within 30 calendar days
after the date of OTS's request Then, OTS may * * And * * *.
for additional information * * * *.
------------------------------------------------------------------------
(1) You file a response to all (i) Notify you in The applicable
information requests * * *. writing within 15 review period
days after the will begin on the
filing date of date tha t OTS
your response deems your
that your application
application is complete.
complete * * *
applicable to all
response that
your application
is complete * * *.
(ii) Notify you in You must respond
writing within 15 to the additional
calendar days information
after the filing request within
date of your the time period
response that you required by OTS.
must submit OTS will review
additional your response
information under the
regarding matters procedures
derived from or described in this
prompted by section.
information
already furnished
or any additional
information
information
necessary to
resolve the
issues presented
in your
application * * *.
(iii) Notify you OTS will not
in writing within process your
15 calendar days application.
after the filing
date of your
response that
your application
is materially
deficient * * *.
(iv) Take no Your application
action within 15 is deemed
calendar days complete. The
after the filing applicable review
date of your period will begin
response * * *. on the day that
the 15-day time
period expires.
(2) You request an extension of (i) Grant an You must fully
time to file additional extension, in respond within
information * * *. writing, the extended time
specifying the period specified
number of days by OTS. OTS will
for the extension review your
* * *. response under
the procedures
described under
this section.
(ii) Notify you in OTS will not
writing that your process your
extension request application
is disapproved * further. You may
* *. resubmit the
application for
processing as a
new filing under
the applicable
regulation.
[[Page 69]]
(3) You fail to respond (i) Notify you in OTS will not
completely * * *. writing that your process your
application is application
deemed withdrawn further. You may
* * *. resubmit the
application for
processing as a
new filing under
the applicable
regulation.
(ii) Notify you, You must fully
in writing, that respond within
your response is the extended time
incomplete and period specified
extend the by OTS. OTS will
response period, review your
specifying the response under
number of days the procedures
for the respond described under
extension * * *. this section.
------------------------------------------------------------------------
(b) OTS may extend the 15-day period referenced in paragraph (a)(1)
of this section by up to 15 calendar days, if OTS requires the
additional time to review your response. OTS will notify you that it has
extended the period before the end of the initial 15-day period and will
briefly explain why the extension is necessary.
(c) If your response filed under paragraph (a)(1) of this section
includes a request for a waiver of an informational requirement, your
request for a waiver is granted if OTS fails to act on it within 15
calendar days after the filing of your response, unless OTS extends the
review period under paragraph (b). If OTS extends the review period
under paragraph (b), your request is granted if OTS fails to act on it
by the end of the extended review period.
[66 FR 13003, Mar. 2, 2001; 67 FR 3264, Jan. 23, 2002]
Sec. 516.230 Will OTS conduct an eligibility examination?
(a) Eligibility examination. OTS may notify you at any time before
it deems your application complete that it will conduct an eligibility
examination. If OTS decides to conduct an eligibility examination, it
will not deem your application complete until it concludes the
examination.
(b) Additional information. OTS may, as a result of the eligibility
examination, notify you that you must submit additional information to
complete your application. If so, you must respond to the additional
information request within the time period required by OTS. OTS will
review your response under the procedures described in Sec. 516.220.
Sec. 516.240 What may OTS require me to do after my application is deemed complete?
After your application is deemed complete, but before the end of the
applicable review period,
(a) OTS may require you to provide additional information if the
information is necessary to resolve or clarify the issues presented by
your application.
(b) OTS may determine that a major issue of law or a change in
circumstances arose after you filed your application, and that the issue
or changed circumstances will substantially effect your application. If
OTS identifies such an issue or changed circumstances, it may:
(1) Notify you, in writing, that your application is now incomplete
and require you to submit additional information to complete the
application under the procedures described at Sec. 516.220; and
(2) Require you to publish a new public notice of your application
under Sec. 516.250.
Sec. 516.250 Will OTS require me to publish a new public notice?
(a) If your application was subject to a publication requirement,
OTS may require you to publish a new public notice of your application
if:
(1) You submitted a revision to the application, you submitted new
or additional information, or a major issue of law or a change in
circumstances arose after the filing of your application; and
(2) OTS determines that additional comment on these matters is
appropriate because of the significance of the new information or
circumstances.
[[Page 70]]
(b) OTS will notify you in writing if you must publish a new public
notice of your revised application.
(c) If you are required to publish a new public notice of your
revised application, you must notify OTS after you publish the new
public notice.
Sec. 516.260 May OTS suspend processing of my application?
(a) Suspension. OTS may, at any time, indefinitely suspend
processing of your application if:
(1) OTS, another governmental entity, or a self-regulatory trade or
professional organization initiates an investigation, examination, or
administrative proceeding that is relevant to OTS's evaluation of your
application;
(2) You request the suspension or there are other extraordinary
circumstances that have a significant impact on the processing of your
application.
(b) Notice. OTS will promptly notify you, in writing, if it suspends
your application.
Sec. 516.270 How long is the OTS review period?
(a) General. The applicable OTS review period is 60 calendar days
after the date that your application is deemed complete, unless an
applicable OTS regulation specifies a different review period.
(b) Multiple applications. If you submit more than one application
in connection with a proposed action or if two or more applicants submit
related applications, the applicable review period for all applications
is the review period for the application with the longest review period,
subject to statutory review periods.
(c) Extensions. (1) OTS may extend the review period for up to 30
calendar days beyond the period described in paragraph (a) or (b) of
this section. OTS must notify you in writing of the extension and the
duration of the extension. OTS must issue the written extension before
the end of the review period.
(2) OTS may also extend the review period as needed until it acts on
the application, if the application presents a significant issue of law
or policy that requires additional time to resolve. OTS must notify you
in writing of the extension and the general reasons for the extension.
OTS must issue the written extension before the end of the review
period, including any extension of that period under paragraph (c)(1) of
this section. This section applies to applications and notices filed
under Sec. 575.3(b) and part 574 of this chapter.
Sec. 516.280 How will I know if my application has been approved?
(a) OTS approval or denial. (1) OTS will approve or deny your
application before the expiration of the applicable review period,
including any extensions of the review period.
(2) OTS will promptly notify you in writing of its decision to
approve or deny your application.
(b) No OTS action. If OTS fails to act under paragraph (a)(1) of
this section, your application is approved.
Sec. 516.290 What will happen if OTS does not approve or disapprove my application within two calendar years after the filing date?
(a) Withdrawal. If OTS has not approved or denied your pending
application within two calendar years after the filing date under Sec.
516.45, OTS will notify you, in writing, that your application is deemed
withdrawn unless OTS determines that you are actively pursuing a final
OTS determination on your application. You are not actively pursuing a
final OTS determination if you have failed to timely take an action
required under this part, including filing required additional
information, or OTS has suspended processing of your application under
Sec. 516.260 based on circumstances that are, in whole or in part,
within your control and you have failed to take reasonable steps to
resolve these circumstances.
(b) Effective date. This section is effective July 1, 2001.
PART 517_CONTRACTING OUTREACH PROGRAMS--Table of Contents
Sec.
517.1 Purpose and scope.
517.2 Definitions.
517.3 Policy.
517.4 Oversight and monitoring.
517.5 Outreach.
517.6 Certification.
[[Page 71]]
517.7 Contract award guidelines.
Authority: 12 U.S.C. 1833(e); 42 U.S.C. 12101 et seq.
Source: 58 FR 33324, June 17, 1993, unless otherwise noted.
Sec. 517.1 Purpose and scope.
The purpose of the OTS Minority-, Women- and Individuals with
Disabilities-Owned Businesses Outreach Program (Outreach Program) is to
ensure that firms owned and operated by minorities, women and
individuals with disabilities are given the opportunity to participate
to the maximum extent possible in all contracts entered into by the OTS.
Sections 517.5 through 517.7 of this part apply to all contracting
activities, with the exception of contracting for legal services,
engaged in by OTS in any of its capacities, for all OTS functions
authorized by law. These contracts will typically pertain to services in
support of OTS's business operations, such as consulting, programming,
auditing, expert witnesses, customized training, relocation services,
information systems technology (computer systems, database management,
software and office automation), or micrographic services; or in support
of its day-to-day operations, such as facilities management, mail and
printing services, or procurement of office supplies, furniture and
office equipment.
Sec. 517.2 Definitions.
The definitions included in this part are derived from common usage
of these terms. A term in this part includes all those who are commonly
understood to be included within that term.
(a) Minority- and/or women-owned (small and large) businesses and
entities owned by minorities and women means firms at least fifty-one
(51) percent owned by individuals who are members of the minority group
or women and who are citizens of the United States. In the case of
publicly-owned companies, at least fifty-one (51) percent of each class
of voting stock must be owned by one or more members of the minority
group or by one or more women, who are citizens of the United States. In
the case of partnerships, at least fifty-one (51) percent of the
partnership interest must be owned by one or more members of the
minority group or by one or more women, who are citizens of the United
States. Additionally, the management and daily business operations of
the firm must be controlled by one or more such individuals.
(b) Minority means any Black/African-American; Native American
(American Indians, Eskimos, Aleuts and Native Hawaiians); Hispanic
American; Asian-Pacific American; or Subcontinent-Asian American.
(c) Small and large businesses and entities owned by individuals
with disabilities means firms at least fifty-one (51) percent owned by
individuals with disabilities who are citizens of the United States. In
the case of publicly-owned companies, at least fifty-one (51) percent of
each class of voting stock must be owned by individuals with
disabilities who are citizens of the United States. In the case of
partnerships, at least fifty-one (51) percent of the partnership
interest must be owned by individuals with disabilities who are citizens
of the United States. Additionally, the management and daily business
operations must be controlled by one or more such individuals.
(d) Disability, as used in this part, has the same meaning as the
term used in section 3 of the Americans With Disabilities Act of 1990,
Public Law 101-336, 104 Stat. 327 (42 U.S.C. 12101 et seq).
Sec. 517.3 Policy.
It is the policy of the OTS that minorities, women and individuals
with disabilities and entities owned by minorities, women and
individuals with disabilities are given the opportunity to participate
to the maximum extent possible in all contracts entered into by the OTS.
Sec. 517.4 Oversight and monitoring.
The Director of OTS shall appoint an Outreach Program Advocate, who
shall have primary responsibility for furthering the purposes of the
Outreach Program.
Sec. 517.5 Outreach.
(a) The outreach program advocate shall perform outreach activities
and
[[Page 72]]
act as liaison between the OTS and the public on outreach program
issues.
(b) Outreach activities include the identification and registration
of minority-, women-owned (small and large) businesses and entities
owned by individuals with disabilities who can provide goods and
services utilized by the OTS. This includes distributing information
concerning the Outreach Program and providing appropriate registration
materials for use by vendors and contractors. Identification will
primarily be accomplished by:
(1) Obtaining various lists and directories maintained by other
federal, state and local governmental agencies of Outreach Program
businesses;
(2) Participating in conventions, seminars and professional meetings
oriented towards Outreach Programs;
(3) Conducting seminars, meetings, workshops and various other
functions; and
(4) Monitoring proposed purchases and contracts to assure that OTS
contracting staff understand and actively promote the Outreach Program.
Sec. 517.6 Certification.
In order to qualify as an Outreach Program participant, each
business or contractor must either:
(a) Self-certify ownership status by filing with the OTS Outreach
Program Advocate a completed and signed Solicitation Mailing List
Application, Standard Form 129 (SF-129), as prescribed by the Federal
Acquisition Regulation (48 CFR part 53);
(b) Self-certify ownership status by filing with the OTS Outreach
Program Advocate a completed and signed ABELS Registration/Certification
Form, as prescribed by the U.S. Department of Commerce's Minority
Business Development Agency and available from the Outreach Program
Advocate at the headquarters address of the OTS listed in Sec.
516.40(b) of this chapter.
(c) Submit a valid Outreach Program certification received from a
Federal agency, or a designated state or authorized local agency.
[58 FR 33324, June 17, 1993, as amended at 66 FR 13005, Mar. 2, 2001]
Sec. 517.7 Contract award guidelines.
Contracts for goods or services shall be awarded in accordance with
OTS procurement rules and policies (48 CFR chapter 1 and FIRMR, 41 CFR
chapter 201). The OTS Outreach Program Advocate shall work to facilitate
the maximum participation of minority-, women-owned (small and large)
businesses and entities owned by individuals with disabilities in the
OTS procurement of goods or services.
PART 528_NONDISCRIMINATION REQUIREMENTS--Table of Contents
Sec.
528.1 Definitions.
528.1a Supplementary guidelines.
528.2 Nondiscrimination in lending and other services.
528.2a Nondiscriminatory appraisal and underwriting.
528.3 Nondiscrimination in applications.
528.4 Nondiscriminatory advertising.
528.5 Equal Housing Lender Poster.
528.6 Loan application register.
528.7 Nondiscrimination in employment.
528.8 Complaints.
528.9 Guidelines relating to nondiscrimination in lending.
Authority: 12 U.S.C. 1464, 2810 et seq., 2901 et seq.; 15 U.S.C.
1691; 42 U.S.C. 1981, 1982, 3601-3619.
Source: 55 FR 1388, Jan. 16, 1990, unless otherwise noted.
Sec. 528.1 Definitions.
As used in this part 528--
(a) Application. For purposes of this part, an application for a
loan or other service is as defined in Regulation C, 12 CFR 203.2(b).
(b) Savings association. The term ``savings association'' means any
savings association as defined in 12 U.S.C. 1813(b).
(c) Dwelling. The term ``dwelling'' means a residential structure
(whether or not it is attached to real property) located in a state of
the United States of America, the District of Colombia, or the
Commonwealth of Puerto Rico. The term includes an individual condominium
unit, cooperative unit, or mobile or manufactured home.
[55 FR 1388, Jan. 16, 1990, as amended at 58 FR 4312, Jan. 14, 1993; 63
FR 71212, Dec. 24, 1998; 71 FR 19811, Apr. 18, 2006]
[[Page 73]]
Sec. 528.1a Supplementary guidelines.
The Office's policy statement found at 12 CFR 528.9 supplements this
part and should be read together with this part. Refer also to the HUD
Fair Housing regulations at 24 CFR parts 100 et seq., Federal Reserve
Regulation B at 12 CFR part 202, and Federal Reserve Regulation C at 12
CFR part 203.
[63 FR 71212, Dec. 24, 1998]
Sec. 528.2 Nondiscrimination in lending and other services.
(a) No savings association may deny a loan or other service, or
discriminate in the purchase of loans or securities or discriminate in
fixing the amount, interest rate, duration, application procedures,
collection or enforcement procedures, or other terms or conditions of
such loan or other service on the basis of the age or location of the
dwelling, or on the basis of the race, color, religion, sex, handicap,
familial status (having one or more children under the age of 18),
marital status, age (provided the person has the capacity to contract)
or national origin of:
(1) An applicant or joint applicant;
(2) Any person associated with an applicant or joint applicant
regarding such loan or other service, or with the purposes of such loan
or other service;
(3) The present or prospective owners, lessees, tenants, or
occupants of the dwelling(s) for which such loan or other service is to
be made or given;
(4) The present or prospective owners, lessees, tenants, or
occupants of other dwellings in the vicinity of the dwelling(s) for
which such loan or other service is to be made or given.
(b) A savings association shall consider without prejudice the
combined income of joint applicants for a loan or other service.
(c) No savings association may discriminate against an applicant for
a loan or other service on any prohibited basis (as defined in 12 CFR
202.2(z) and 24 CFR part 100).
Note: See also, Sec. 528.9 (b) and (c).
[55 FR 1388, Jan. 16, 1990, as amended at 63 FR 71212, Dec. 24, 1998]
Sec. 528.2a Nondiscriminatory appraisal and underwriting.
(a) Appraisal. No savings association may use or rely upon an
appraisal of a dwelling which the savings association knows, or
reasonably should know, is discriminatory on the basis of the age or
location of the dwelling, or is discriminatory per se or in effect under
the Fair Housing Act of 1968 or the Equal Credit Opportunity Act.
(b) Underwriting. Each savings association shall have clearly
written, non-discriminatory loan underwriting standards, available to
the public upon request, at each of its offices. Each association shall,
at least annually, review its standards, and business practices
implementing them, to ensure equal opportunity in lending
Note: See also, Sec. 528.9(b), (c)(6), and (c)(7).
[55 FR 1388, Jan. 16, 1990, as amended at 63 FR 71212, Dec. 24, 1998]
Sec. 528.3 Nondiscrimination in applications.
(a) No savings association may discourage, or refuse to allow,
receive, or consider, any application, request, or inquiry regarding a
loan or other service, or discriminate in imposing conditions upon, or
in processing, any such application, request, or inquiry on the basis of
the age or location of the dwelling, or on the basis of the race, color,
religion, sex, handicap, familial status (having one or more children
under the age of 18), marital status, age (provided the person has the
capacity to contract), national origin, or other characteristics
prohibited from consideration in Sec. 528.2(c) of this part, of the
prospective borrower or other person, who:
(1) Makes application for any such loan or other service;
(2) Requests forms or papers to be used to make application for any
such loan or other service; or
(3) Inquires about the availability of such loan or other service.
(b) A savings association shall inform each inquirer of his or her
right to file a written loan application, and to receive a copy of the
association's underwriting standards.
[[Page 74]]
Note: See also, Sec. 528.9(a) through (d).
[55 FR 1388, Jan. 16, 1990, as amended at 63 FR 71212, Dec. 24, 1998]
Sec. 528.4 Nondiscriminatory advertising.
No savings association may directly or indirectly engage in any form
of advertising that implies or suggests a policy of discrimination or
exclusion in violation of title VIII of the Civil Rights Acts of 1968,
the Equal Credit Opportunity Act, or this part 528. Advertisements for
any loan for the purpose of purchasing, constructing, improving,
repairing, or maintaining a dwelling or any loan secured by a dwelling
shall include a facsimile of the following logotype and legend:
[GRAPHIC] [TIFF OMITTED] TC07SE91.000
[55 FR 1388, Jan. 16, 1990, as amended at 69 FR 68247, Nov. 24, 2004]
Sec. 528.5 Equal Housing Lender Poster.
(a) Each savings association shall post and maintain one or more
Equal Housing Lender Posters, the text of which is prescribed in
paragraph (b) of this section, in the lobby of each of its offices in a
prominent place or places readily apparent to all persons seeking loans.
The poster shall be at least 11 by 14 inches in size, and the text shall
be easily legible. It is recommended that savings associations post a
Spanish language version of the poster in offices serving areas with a
substantial Spanish-speaking population.
(b) The text of the Equal Housing Lender Poster shall be as follows:
[GRAPHIC] [TIFF OMITTED] TC07SE91.001
We Do Business In Accordance With Federal Fair Lending Laws.
UNDER THE FEDERAL FAIR HOUSING ACT, IT IS ILLEGAL, ON THE BASIS OF
RACE, COLOR, NATIONAL ORIGIN, RELIGION, SEX, HANDICAP, OR FAMILIAL
STATUS (HAVING CHILDREN UNDER THE AGE OF 18) TO:
[ ]Deny a loan for the purpose of purchasing, constructing,
improving, repairing or maintaining a dwelling or to deny any loan
secured by a dwelling; or
[ ]Discriminate in fixing the amount, interest rate, duration,
application procedures, or other terms or conditions of such a loan or
in appraising property.
IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD:
SEND A COMPLAINT TO:
Assistant Secretary for Fair Housing and Equal Opportunity,
Department of Housing and Urban Development, Washington, DC 20410.
For processing under the Federal Fair Housing Act
AND TO:
Director, Consumer Affairs, Office of Thrift Supervision,
Washington, DC 20552.
For processing under Office of Thrift Supervision Regulations.
UNDER THE EQUAL CREDIT OPPORTUNITY ACT, IT IS ILLEGAL TO
DISCRIMINATE IN ANY CREDIT TRANSACTION:
[ ]On the basis of race, color, national origin, religion, sex,
marital status, or age;
[ ]Because income is from public assistance; or
[ ]Because a right has been exercised under the Consumer Credit
Protection Act.
IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD SEND
A COMPLAINT TO:
Director, Consumer Affairs, Office of Thrift Supervision,
Washington, DC 20552.
Sec. 528.6 Loan application register.
Savings associations and other lenders required to file Home
Mortgage
[[Page 75]]
Disclosure Act Loan Application Registers with the Office of Thrift
Supervision in accordance with 12 CFR part 203 must enter the reason for
denial, using the codes provided in 12 CFR part 203, with respect to all
loan denials.
[58 FR 4312, Jan. 14, 1993]
Sec. 528.7 Nondiscrimination in employment.
(a) No savings association shall, because of an individual's race,
color, religion, sex, or national origin:
(1) Fail or refuse to hire such individual;
(2) Discharge such individual;
(3) Otherwise discriminate against such individual with respect to
such individual's compensation, promotion, or the terms, conditions, or
privileges of such individual's employment; or
(4) Discriminate in admission to, or employment in, any program of
apprenticeship, training, or retraining, including on-the-job training.
(b) No savings association shall limit, segregate, or classify its
employees in any way which would deprive or tend to deprive any
individual of employment opportunities or otherwise adversely affect
such individual's status as an employee because of such individual's
race, color, religion, sex, or national origin.
(c) No savings association shall discriminate against any employee
or applicant for employment because such employee or applicant has
opposed any employment practice made unlawful by Federal, State, or
local law or regulation or because he has in good faith made a charge of
such practice or testified, assisted, or participated in any manner in
an investigation, proceeding, or hearing of such practice by any
lawfully constituted authority.
(d) No savings association shall print or publish or cause to be
printed or published any notice or advertisement relating to employment
by such savings association indicating any preference, limitation,
specification, or discrimination based on race, color, religion, sex, or
national origin.
(e) This regulation shall not apply in any case in which the Federal
Equal Employment Opportunities law is made inapplicable by the
provisions of section 2000e-1 or sections 2000e-2 (e) through (j) of
title 42, United States Code.
(f) Any violation of the following laws or regulations by a savings
association shall be deemed to be a violation of this part 528:
(1) The Equal Employment Opportunity Act, as amended, 42 U.S.C.
2000e-2000h-2, and Equal Employment Opportunity Commission (EEOC)
regulations at 29 CFR part 1600;
(2) The Age Discrimination in Employment Act, 29 U.S.C. 621-633, and
EEOC and Department of Labor regulations;
(3) Department of the Treasury regulations at 31 CFR part 12 and
Office of Federal Contract Compliance Programs (OFCCP) regulations at 41
CFR part 60;
(4) The Veterans Employment and Readjustment Act of 1972, 38 U.S.C.
2011-2012, and the Vietnam Era Veterans Readjustment Adjustment
Assistance Act of 1974, 38 U.S.C. 2021-2026;
(5) The Rehabilitation Act of 1973, 29 U.S.C. 701 et al.; and
(6) The Immigration and Nationality Act, 8 U.S.C. 1324b, and INS
regulations at 8 CFR part 274a.
Sec. 528.8 Complaints.
Complaints regarding discrimination in lending by a savings
association shall be referred to the Assistant Secretary for Fair
Housing and Equal Opportunity, U.S. Department of Housing and Urban
Development, Washington, DC 20410 for processing under the Fair Housing
Act, and to the Director, Consumer Affairs, Office of Thrift
Supervision, Washington, DC 20552 for processing under Office
regulations. Complaints regarding discrimination in employment by a
savings association should be referred to the Equal Employment
Opportunity Commission, Washington, DC 20506 and a copy, for information
only, sent to the Director, Consumer Affairs, Office of Thrift
Supervision, Washington, DC 20552.
Sec. 528.9 Guidelines relating to nondiscrimination in lending.
(a) General. Fair housing and equal opportunity in home financing is
a policy of the United States established by Federal statutes and
Presidential orders and proclamations. In furtherance
[[Page 76]]
of the Federal civil rights laws and the economical home financing
purposes of the statutes administered by the Office, the Office has
adopted, in part 528 of this chapter, nondiscrimination regulations
that, among other things, prohibit arbitrary refusals to consider loan
applications on the basis of the age or location of a dwelling, and
prohibit discrimination based on race, color, religion, sex, handicap,
familial status (having one or more children under the age of 18),
marital status, age (provided the person has the capacity to contract),
or national origin in fixing the amount, interest rate, duration,
application procedures, collection or enforcement procedures, or other
terms or conditions of housing related loans. Such discrimination is
also prohibited in the purchase of loans and securities. This section
provides supplementary guidelines to aid savings associations in
developing and implementing nondiscriminatory lending policies. Each
savings association should reexamine its underwriting standards at least
annually in order to ensure equal opportunity.
(b) Loan underwriting standards. The basic purpose of the Office's
nondiscrimination regulations is to require that every applicant be
given an equal opportunity to obtain a loan. Each loan applicant's
creditworthiness should be evaluated on an individual basis without
reference to presumed characteristics of a group. The use of lending
standards which have no economic basis and which are discriminatory in
effect is a violation of law even in the absence of an actual intent to
discriminate. However, a standard which has a discriminatory effect is
not necessarily improper if its use achieves a genuine business need
which cannot be achieved by means which are not discriminatory in effect
or less discriminatory in effect.
(c) Discriminatory practices--(1) Discrimination on the basis of sex
or marital status. The Civil Rights Act of 1968 and the National Housing
Act prohibit discrimination in lending on the basis of sex. The Equal
Credit Opportunity Act, in addition to this prohibition, forbids
discrimination on the basis of marital status. Refusing to lend to,
requiring higher standards of creditworthiness of, or imposing different
requirements on, members of one sex or individuals of one marital
status, is discrimination based on sex or marital status. Loan
underwriting decisions must be based on an applicant's credit history
and present and reasonably foreseeable economic prospects, rather than
on the basis of assumptions regarding comparative differences in
creditworthiness between married and unmarried individuals, or between
men and women.
(2) Discrimination on the basis of language. Requiring fluency in
the English language as a prerequisite for obtaining a loan may be a
discriminatory practice based on national origin.
(3) Income of husbands and wives. A practice of discounting all or
part of either spouse's income where spouses apply jointly is a
violation of section 527 of the National Housing Act. As with other
income, when spouses apply jointly for a loan, the determination as to
whether a spouse's income qualifies for credit purposes should depend
upon a reasonable evaluation of his or her past, present, and reasonably
foreseeable economic circumstances. Information relating to child-
bearing intentions of a couple or an individual may not be requested.
(4) Supplementary income. Lending standards which consider as
effective only the non-overtime income of the primary wage-earner may
result in discrimination because they do not take account of variations
in employment patterns among individuals and families. The Office favors
loan underwriting which reasonably evaluates the credit worthiness of
each applicant based on a realistic appraisal of his or her own past,
present, and foreseeable economic circumstances. The determination as to
whether primary income or additional income qualifies as effective for
credit purposes should depend upon whether such income may reasonably be
expected to continue through the early period of the mortgage risk.
Automatically discounting other income from bonuses, overtime, or part-
time employment, will cause some applicants to be denied financing
without a realistic analysis of their credit worthiness. Since
statistics show that minority group members and
[[Page 77]]
low- and moderate-income families rely more often on such supplemental
income, the practice may be racially discriminatory in effect, as well
as artificially restrictive of opportunities for home financing.
(5) Applicant's prior history. Loan decisions should be based upon a
realistic evaluation of all pertinent factors respecting an individual's
creditworthiness, without giving undue weight to any one factor. The
savings association should, among other things, take into consideration
that:
(i) In some instances, past credit difficulties may have resulted
from discriminatory practices;
(ii) A policy favoring applicants who previously owned homes may
perpetuate prior discrimination;
(iii) A current, stable earnings record may be the most reliable
indicator of credit-worthiness, and entitled to more weight than factors
such as educational level attained;
(iv) Job or residential changes may indicate upward mobility; and
(v) Preferring applicants who have done business with the lender can
perpetuate previous discriminatory policies.
(6) Income level or racial composition of area. Refusing to lend or
lending on less favorable terms in particular areas because of their
racial composition is unlawful. Refusing to lend, or offering less
favorable terms (such as interest rate, downpayment, or maturity) to
applicants because of the income level in an area can discriminate
against minority group persons.
(7) Age and location factors. Sections 528.2, 528.2a, and 528.3 of
this chapter prohibit loan denials based upon the age or location of a
dwelling. These restrictions are intended to prohibit use of unfounded
or unsubstantiated assumptions regarding the effect upon loan risk of
the age of a dwelling or the physical or economic characteristics of an
area. Loan decisions should be based on the present market value of the
property offered as security (including consideration of specific
improvements to be made by the borrower) and the likelihood that the
property will retain an adequate value over the term of the loan.
Specific factors which may negatively affect its short-range future
value (up to 3-5 years) should be clearly documented. Factors which in
some cases may cause the market value of a property to decline are
recent zoning changes or a significant number of abandoned homes in the
immediate vicinity of the property. However, not all zoning changes will
cause a decline in property values, and proximity to abandoned buildings
may not affect the market value of a property because of rehabilitation
programs or affirmative lending programs, or because the cause of
abandonment is unrelated to high risk. Proper underwriting
considerations include the condition and utility of the improvements,
and various physical factors such as street conditions, amenities such
as parks and recreation areas, availability of public utilities and
municipal services, and exposure to flooding and land faults. However,
arbitrary decisions based on age or location are prohibited, since many
older, soundly constructed homes provide housing opportunities which may
be precluded by an arbitrary lending policy.
(8) Fair Housing Act (title VIII, Civil Rights Act of 1968, as
amended). Savings associations, must comply with all regulations
promulgated by the Department of Housing and Urban Development to
implement the Fair Housing Act, found at 24 CFR part 100 et seq., except
that they shall use the Equal Housing Lender logo and poster prescribed
by Office regulations at 12 CFR 528.4 and 528.5 rather than the Equal
Housing Opportunity logo and poster required by 24 CFR parts 109 and
110.
(d) Marketing practices. Savings associations should review their
advertising and marketing practices to ensure that their services are
available without discrimination to the community they serve.
Discrimination in lending is not limited to loan decisions and
underwriting standards; a savings association does not meet its
obligations to the community or implement its equal lending
responsibility if its marketing practices and business relationships
with developers and real estate brokers improperly restrict its
clientele to segments of the community. A review of marketing practices
could
[[Page 78]]
begin with an examination of an association's loan portfolio and
applications to ascertain whether, in view of the demographic
characteristics and credit demands of the community in which the
institution is located, it is adequately serving the community on a
nondiscriminatory basis. The Office will systematically review marketing
practices where evidence of discrimination in lending is discovered.
[54 FR 49666, Nov. 30, 1989, as amended at 60 FR 66870, Dec. 27, 1995.
Redesignated at 63 FR 71212, Dec. 24, 1998]
PART 533_DISCLOSURE AND REPORTING OF CRA-RELATED AGREEMENTS--Table of Contents
Sec.
533.1 Purpose and scope of this part.
533.2 Definition of covered agreement.
533.3 CRA communications.
533.4 Fulfillment of the CRA.
533.5 Related agreements considered a single agreement.
533.6 Disclosure of covered agreements.
533.7 Annual reports.
533.8 Release of information under FOIA.
533.9 Compliance provisions.
533.10 Transition provisions.
533.11 Other definitions and rules of construction used in this part.
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, and 1831y.
Source: 66 FR 2106, Jan. 10, 2001, unless otherwise noted.
Sec. 533.1 Purpose and scope of this part.
(a) General. This part implements section 711 of the Gramm-Leach-
Bliley Act (12 U.S.C. 1831y). That section requires any nongovernmental
entity or person (NGEP), insured depository institution, or affiliate of
an insured depository institution that enters into a covered agreement
to--
(1) Make the covered agreement available to the public and the
appropriate Federal banking agency; and
(2) File an annual report with the appropriate Federal banking
agency concerning the covered agreement.
(b) Scope of this part. The provisions of this part apply to--
(1) Savings associations and their subsidiaries;
(2) Savings and loan holding companies;
(3) Affiliates of savings associations and savings and loan holding
companies, other than bank holding companies, banks, and subsidiaries of
bank holding companies and banks; and
(4) NGEPs that enter into covered agreements with any company listed
in paragraphs (b)(1) through (b)(3) of this section.
(c) Relation to Community Reinvestment Act. This part does not
affect in any way the Community Reinvestment Act of 1977 (CRA) (12
U.S.C. 2901 et seq.), OTS's Community Reinvestment rule (12 CFR Part
563e), or OTS's interpretations or administration of the CRA or
Community Reinvestment rule.
(d) Examples. (1) The examples in this part are not exclusive.
Compliance with an example, to the extent applicable, constitutes
compliance with this part.
(2) Examples in a paragraph illustrate only the issue described in
the paragraph and do not illustrate any other issues that may arise in
this part.
Sec. 533.2 Definition of covered agreement.
(a) General definition of covered agreement. A covered agreement is
any contract, arrangement, or understanding that meets all of the
following criteria--
(1) The agreement is in writing.
(2) The parties to the agreement include--
(i) One or more insured depository institutions or affiliates of an
insured depository institution; and
(ii) One or more NGEPs.
(3) The agreement provides for the insured depository institution or
any affiliate to--
(i) Provide to one or more individuals or entities (whether or not
parties to the agreement) cash payments, grants, or other consideration
(except loans) that have an aggregate value of more than $10,000 in any
calendar year; or
(ii) Make to one or more individuals or entities (whether or not
parties to the agreement) loans that have an aggregate principal amount
of more than $50,000 in any calendar year.
[[Page 79]]
(4) The agreement is made pursuant to, or in connection with, the
fulfillment of the CRA, as defined in Sec. 533.4 of this part.
(5) The agreement is with a NGEP that has had a CRA communication as
described in Sec. 533.3 of this part prior to entering into the
agreement.
(b) Examples concerning written arrangements or understandings--(1)
Example 1. A NGEP meets with an insured depository institution and
states that the institution needs to make more community development
investments in the NGEP's community. The NGEP and insured depository
institution do not reach an agreement concerning the community
development investments the institution should make in the community,
and the parties do not reach any mutual arrangement or understanding.
Two weeks later, the institution unilaterally issues a press release
announcing that it has established a general goal of making $100 million
of community development grants in low- and moderate-income
neighborhoods served by the insured depository institution over the next
5 years. The NGEP is not identified in the press release. The press
release is not a written arrangement or understanding.
(2) Example 2. A NGEP meets with an insured depository institution
and states that the institution needs to offer new loan programs in the
NGEP's community. The NGEP and the insured depository institution reach
a mutual arrangement or understanding that the institution will provide
additional loans in the NGEP's community. The institution tells the NGEP
that it will issue a press release announcing the program. Later, the
insured depository institution issues a press release announcing the
loan program. The press release incorporates the key terms of the
understanding reached between the NGEP and the insured depository
institution. The written press release reflects the mutual arrangement
or understanding of the NGEP and the insured depository institution and
is, therefore, a written arrangement or understanding.
(3) Example 3. An NGEP sends a letter to an insured depository
institution requesting that the institution provide a $15,000 grant to
the NGEP. The insured depository institution responds in writing and
agrees to provide the grant in connection with its annual grant program.
The exchange of letters constitutes a written arrangement or
understanding.
(c) Loan agreements that are not covered agreements. A covered
agreement does not include--
(1) Any individual loan that is secured by real estate; or
(2) Any specific contract or commitment for a loan or extension of
credit to an individual, business, farm, or other entity, or group of
such individuals or entities, if--
(i) The funds are loaned at rates that are not substantially below
market rates; and
(ii) The loan application or other loan documentation does not
indicate that the borrower intends or is authorized to use the borrowed
funds to make a loan or extension of credit to one or more third
parties.
(d) Examples concerning loan agreements--(1) Example 1. An insured
depository institution provides an organization with a $1 million loan
that is documented in writing and is secured by real estate owned or to-
be-acquired by the organization. The agreement is an individual mortgage
loan and is exempt from coverage under paragraph (c)(1) of this section,
regardless of the interest rate on the loan or whether the organization
intends or is authorized to re-loan the funds to a third party.
(2) Example 2. An insured depository institution commits to provide
a $500,000 line of credit to a small business that is documented by a
written agreement. The loan is made at rates that are within the range
of rates offered by the institution to similarly situated small
businesses in the market and the loan documentation does not indicate
that the small business intends or is authorized to re-lend the borrowed
funds. The agreement is exempt from coverage under paragraph (c)(2) of
this section.
(3) Example 3. An insured depository institution offers small
business loans that are guaranteed by the Small Business Administration
(SBA). A small
[[Page 80]]
business obtains a $75,000 loan, documented in writing, from the
institution under the institution's SBA loan program. The loan
documentation does not indicate that the borrower intends or is
authorized to re-lend the funds. Although the rate charged on the loan
is well below that charged by the institution on commercial loans, the
rate is within the range of rates that the institution would charge a
similarly situated small business for a similar loan under the SBA loan
program. Accordingly, the loan is not made at substantially below market
rates and is exempt from coverage under paragraph (c)(2) of this
section.
(4) Example 4. A bank holding company enters into a written
agreement with a community development organization that provides that
insured depository institutions owned by the bank holding company will
make $250 million in small business loans in the community over the next
5 years. The written agreement is not a specific contract or commitment
for a loan or an extension of credit and, thus, is not exempt from
coverage under paragraph (c)(2) of this section. Each small business
loan made by the insured depository institution pursuant to this general
commitment would, however, be exempt from coverage if the loan is made
at rates that are not substantially below market rates and the loan
documentation does not indicate that the borrower intended or was
authorized to re-lend the funds.
(e) Agreements that include exempt loan agreements. If an agreement
includes a loan, extension of credit or loan commitment that, if
documented separately, would be exempt under paragraph (c) of this
section, the exempt loan, extension of credit or loan commitment may be
excluded for purposes of determining whether the agreement is a covered
agreement.
(f) Determining annual value of agreements that lack schedule of
disbursements. For purposes of paragraph (a)(3) of this section, a
multi-year agreement that does not include a schedule for the
disbursement of payments, grants, loans or other consideration by the
insured depository institution or affiliate, is considered to have a
value in the first year of the agreement equal to all payments, grants,
loans and other consideration to be provided at any time under the
agreement.
Sec. 533.3 CRA communications.
(a) Definition of CRA communication. A CRA communication is any of
the following--
(1) Any written or oral comment or testimony provided to a Federal
banking agency concerning the adequacy of the performance under the CRA
of the insured depository institution, any affiliated insured depository
institution, or any CRA affiliate.
(2) Any written comment submitted to the insured depository
institution that discusses the adequacy of the performance under the CRA
of the institution and must be included in the institution's CRA public
file.
(3) Any discussion or other contact with the insured depository
institution or any affiliate about--
(i) Providing (or refraining from providing) written or oral
comments or testimony to any Federal banking agency concerning the
adequacy of the performance under the CRA of the insured depository
institution, any affiliated insured depository institution, or any CRA
affiliate;
(ii) Providing (or refraining from providing) written comments to
the insured depository institution that concern the adequacy of the
institution's performance under the CRA and must be included in the
institution's CRA public file; or
(iii) The adequacy of the performance under the CRA of the insured
depository institution, any affiliated insured depository institution,
or any CRA affiliate.
(b) Discussions or contacts that are not CRA communications--(1)
Timing of contacts with a Federal banking agency. An oral or written
communication with a Federal banking agency is not a CRA communication
if it occurred more than 3 years before the parties entered into the
agreement.
(2) Timing of contacts with insured depository institutions and
affiliates. A communication with an insured depository institution or
affiliate is not a CRA communication if the communication occurred--
[[Page 81]]
(i) More than 3 years before the parties entered into the agreement,
in the case of any written communication;
(ii) More than 3 years before the parties entered into the
agreement, in the case of any oral communication in which the NGEP
discusses providing (or refraining from providing) comments or testimony
to a Federal banking agency or written comments that must be included in
the institution's CRA public file in connection with a request to, or
agreement by, the institution or affiliate to take (or refrain from
taking) any action that is in fulfillment of the CRA; or
(iii) More than 1 year before the parties entered into the
agreement, in the case of any other oral communication not described in
paragraph (b)(2)(ii).
(3) Knowledge of communication by insured depository institution or
affiliate. (i) A communication is only a CRA communication under
paragraph (a) of this section if the insured depository institution or
its affiliate has knowledge of the communication under paragraph
(b)(3)(ii) or (b)(3)(iii) of this section.
(ii) Communication with insured depository institution or affiliate.
An insured depository institution or affiliate has knowledge of a
communication by the NGEP to the institution or its affiliate under this
paragraph only if one of the following representatives of the insured
depository institution or any affiliate has knowledge of the
communication--
(A) An employee who approves, directs, authorizes, or negotiates the
agreement with the NGEP; or
(B) An employee designated with responsibility for compliance with
the CRA or executive officer if the employee or executive officer knows
that the institution or affiliate is negotiating, intends to negotiate,
or has been informed by the NGEP that it expects to request that the
institution or affiliate negotiate an agreement with the NGEP.
(iii) Other communications. An insured depository institution or
affiliate is deemed to have knowledge of--
(A) Any testimony provided to a Federal banking agency at a public
meeting or hearing;
(B) Any comment submitted to a Federal banking agency that is
conveyed in writing by the agency to the insured depository institution
or affiliate; and
(C) Any written comment submitted to the insured depository
institution that must be and is included in the institution's CRA public
file.
(4) Communication where NGEP has knowledge. A NGEP has a CRA
communication with an insured depository institution or affiliate only
if any of the following individuals has knowledge of the communication--
(i) A director, employee, or member of the NGEP who approves,
directs, authorizes, or negotiates the agreement with the insured
depository institution or affiliate;
(ii) A person who functions as an executive officer of the NGEP and
who knows that the NGEP is negotiating or intends to negotiate an
agreement with the insured depository institution or affiliate; or
(iii) Where the NGEP is an individual, the NGEP.
(c) Examples of CRA communications--(1) Examples of actions that are
CRA communications. The following are examples of CRA communications.
These examples are not exclusive and assume that the communication
occurs within the relevant time period as described in paragraph (b)(1)
or (b)(2) of this section and the appropriate representatives have
knowledge of the communication as specified in paragraphs (b)(3) and
(b)(4) of this section.
(i) Example 1. A NGEP files a written comment with a Federal banking
agency that states than an insured depository institution successfully
addresses the credit needs of its community. The written comment is in
response to a general request from the agency for comments on an
application of the insured depository institution to open a new branch
and a copy of the comment is provided to the institution.
(ii) Example 2. A NGEP meets with an executive officer of an insured
depository institution and states that the institution must improve its
CRA performance.
(iii) Example 3. A NGEP meets with an executive officer of an
insured depository institution and states that the
[[Page 82]]
institution needs to make more mortgage loans in low- and moderate-
income neighborhoods in its community.
(iv) Example 4. A bank holding company files an application with a
Federal banking agency to acquire an insured depository institution. Two
weeks later, the NGEP meets with an executive officer of the bank
holding company to discuss the adequacy of the performance under the CRA
of the target insured depository institution. The insured depository
institution was an affiliate of the bank holding company at the time the
NGEP met with the target institution. (See Sec. 533.11(a) of this
part.) Accordingly, the NGEP had a CRA communication with an affiliate
of the bank holding company.
(2) Examples of actions that are not CRA communications. The
following are examples of actions that are not by themselves CRA
communications. These examples are not exclusive.
(i) Example 1. A NGEP provides to a Federal banking agency comments
or testimony concerning an insured depository institution or affiliate
in response to a direct request by the agency for comments or testimony
from that NGEP. Direct requests for comments or testimony do not include
a general invitation by a Federal banking agency for comments or
testimony from the public in connection with a CRA performance
evaluation of, or application for a deposit facility (as defined in
section 803 of the CRA (12 U.S.C. 2902(3)) by, an insured depository
institution or an application by a company to acquire an insured
depository institution.
(ii) Example 2. A NGEP makes a statement concerning an insured
depository institution or affiliate at a widely attended conference or
seminar regarding a general topic. A public or private meeting, public
hearing, or other meeting regarding one or more specific institutions,
affiliates or transactions involving an application for a deposit
facility is not considered a widely attended conference or seminar.
(iii) Example 3. A NGEP, such as a civil rights group, community
group providing housing and other services in low- and moderate-income
neighborhoods, veterans organization, community theater group, or youth
organization, sends a fundraising letter to insured depository
institutions and to other businesses in its community. The letter
encourages all businesses in the community to meet their obligation to
assist in making the local community a better place to live and work by
supporting the fundraising efforts of the NGEP.
(iv) Example 4. A NGEP discusses with an insured depository
institution or affiliate whether particular loans, services,
investments, community development activities, or other activities are
generally eligible for consideration by a Federal banking agency under
the CRA. The NGEP and insured depository institution or affiliate do not
discuss the adequacy of the CRA performance of the insured depository
institution or affiliate.
(v) Example 5. A NGEP engaged in the sale or purchase of loans in
the secondary market sends a general offering circular to financial
institutions offering to sell or purchase a portfolio of loans. An
insured depository institution that receives the offering circular
discusses with the NGEP the types of loans included in the loan pool,
whether such loans are generally eligible for consideration under the
CRA, and which loans are made to borrowers in the institution's local
community. The NGEP and insured depository institution do not discuss
the adequacy of the institution's CRA performance.
(d) Multiparty covered agreements. (1) A NGEP that is a party to a
covered agreement that involves multiple NGEPs is not required to comply
with the requirements of this part if--
(i) The NGEP has not had a CRA communication; and
(ii) No representative of the NGEP identified in paragraph (b)(4) of
this section has knowledge at the time of the agreement that another
NGEP that is a party to the agreement has had a CRA communication.
(2) An insured depository institution or affiliate that is a party
to a covered agreement that involves multiple insured depository
institutions or affiliates is not required to comply with the
requirements in Sec. Sec. 533.6 and 533.7 if--
[[Page 83]]
(i) No NGEP that is a party to the agreement has had a CRA
communication concerning the insured depository institution or any
affiliate; and
(ii) No representative of the insured depository institution or any
affiliate identified in paragraph (b)(3) of this section has knowledge
at the time of the agreement that an NGEP that is a party to the
agreement has had a CRA communication concerning any other insured
depository institution or affiliate that is a party to the agreement.
Sec. 533.4 Fulfillment of the CRA
(a) List of factors that are in fulfillment of the CRA. Fulfillment
of the CRA, for purposes of this part, means the following list of
factors--
(1) Comments to a Federal banking agency or included in CRA public
file. Providing or refraining from providing written or oral comments or
testimony to any Federal banking agency concerning the performance under
the CRA of an insured depository institution or CRA affiliate that is a
party to the agreement or an affiliate of a party to the agreement or
written comments that are required to be included in the CRA public file
of any such insured depository institution; or
(2) Activities given favorable CRA consideration. Performing any of
the following activities if the activity is of the type that is likely
to receive favorable consideration by a Federal banking agency in
evaluating the performance under the CRA of the insured depository
institution that is a party to the agreement or an affiliate of a party
to the agreement--
(i) Home-purchase, home-improvement, small business, small farm,
community development, and consumer lending, as described in Sec.
563e.22 of this chapter, including loan purchases, loan commitments, and
letters of credit;
(ii) Making investments, deposits, or grants, or acquiring
membership shares, that have as their primary purpose community
development, as described in Sec. 563e.23 of this chapter;
(iii) Delivering retail banking services, as described in Sec.
563.24(d) of this chapter;
(iv) Providing community development services, as described in Sec.
563e.24(e) of this chapter;
(v) In the case of a wholesale or limited-purpose insured depository
institution, community development lending, including originating and
purchasing loans and making loan commitments and letters of credit,
making qualified investments, or providing community development
services, as described in Sec. 563e.25(c) of this chapter;
(vi) In the case of a small insured depository institution, any
lending or other activity described in Sec. 563e.26(a) of this chapter;
or
(vii) In the case of an insured depository institution that is
evaluated on the basis of a strategic plan, any element of the strategic
plan, as described in Sec. 563e.27(f) of this chapter.
(b) Agreements relating to activities of CRA affiliates. An insured
depository institution or affiliate that is a party to a covered
agreement that concerns any activity described in paragraph (a) of this
section of a CRA affiliate must, prior to the time the agreement is
entered into, notify each NGEP that is a party to the agreement that the
agreement concerns a CRA affiliate.
Sec. 533.5 Related agreements considered a single agreement.
The following rules must be applied in determining whether an
agreement is a covered agreement under Sec. 533.2 of this part.
(a) Agreements entered into by same parties. All written agreements
to which an insured depository institution or an affiliate of the
insured depository institution is a party shall be considered to be a
single agreement if the agreements--
(1) Are entered into with the same NGEP;
(2) Were entered into within the same 12-month period; and
(3) Are each in fulfillment of the CRA.
(b) Substantively related contracts. All written contracts to which
an insured depository institution or an affiliate of the insured
depository institution is a party shall be considered to be a single
agreement, without regard to whether the other parties to the contracts
are the same or whether each such contract is in fulfillment of the CRA,
if
[[Page 84]]
the contracts were negotiated in a coordinated fashion and a NGEP is a
party to each contract.
Sec. 533.6 Disclosure of covered agreements.
(a) Applicability date. This section applies only to covered
agreements entered into after November 12, 1999.
(b) Disclosure of covered agreements to the public--(1) Disclosure
required. Each NGEP and each insured depository institution or affiliate
that enters into a covered agreement must make a copy of the covered
agreement available to any individual or entity upon request.
(2) Nondisclosure of confidential and proprietary information
permitted. In responding to a request for a covered agreement from any
individual or entity under paragraph (b)(1) of this section, a NGEP,
insured depository institution, or affiliate may withhold from public
disclosure confidential or proprietary information that the party
believes the relevant supervisory agency could withhold from disclosure
under the Freedom of Information Act (5 U.S.C. 552 et seq.) (FOIA).
(3) Information that must be disclosed. Notwithstanding paragraph
(b)(2) of this section, a party must disclose any of the following
information that is contained in a covered agreement--
(i) The names and addresses of the parties to the agreement;
(ii) The amount of any payments, fees, loans, or other consideration
to be made or provided by any party to the agreement;
(iii) Any description of how the funds or other resources provided
under the agreement are to be used;
(iv) The term of the agreement (if the agreement establishes a
term); and
(v) Any other information that the relevant supervisory agency
determines is not properly exempt from public disclosure.
(4) Request for review of withheld information. Any individual or
entity may request that the relevant supervisory agency review whether
any information in a covered agreement withheld by a party must be
disclosed. Any requests for agency review of withheld information must
be filed, and will be processed in accordance with, the relevant
supervisory agency's rules concerning the availability of information
(see part 505 of this chapter and the Department of Treasury's rules (31
CFR part 1)).
(5) Duration of obligation. The obligation to disclose a covered
agreement to the public terminates 12 months after the end of the term
of the agreement.
(6) Reasonable copy and mailing fees. Each NGEP and each insured
depository institution or affiliate may charge an individual or entity
that requests a copy of a covered agreement a reasonable fee not to
exceed the cost of copying and mailing the agreement.
(7) Use of CRA public file by insured depository institution or
affiliate. An insured depository institution and any affiliate of an
insured depository institution may fulfill its obligation under this
paragraph (b) by placing a copy of the covered agreement in the insured
depository institution's CRA public file if the institution makes the
agreement available in accordance with the procedures set forth in Sec.
563e.43 of this chapter.
(c) Disclosure by NGEPs of covered agreements to the relevant
supervisory agency. (1) Each NGEP that is a party to a covered agreement
must provide the following within 30 days of receiving a request from
the relevant supervisory agency--
(i) A complete copy of the agreement; and
(ii) In the event the NGEP proposes the withholding of any
information contained in the agreement in accordance with paragraph
(b)(2) of this section, a public version of the agreement that excludes
such information and an explanation justifying the exclusions. Any
public version must include the information described in paragraph
(b)(3) of this section.
(2) The obligation to provide a covered agreement to the relevant
supervisory agency terminates 12 months after the end of the term of the
covered agreement.
(d) Disclosure by insured depository institution or affiliate of
covered agreements to the relevant supervisory agency--(1) In general.
Within 60 days of the end of each calendar quarter, each insured
depository institution and affiliate must provide each relevant
supervisory agency with--
[[Page 85]]
(i)(A) A complete copy of each covered agreement entered into by the
insured depository institution or affiliate during the calendar quarter;
and
(B) In the event the institution or affiliate proposes the
withholding of any information contained in the agreement in accordance
with paragraph (b)(2) of this section, a public version of the agreement
that excludes such information (other than any information described in
paragraph (b)(3) of this section) and an explanation justifying the
exclusions; or
(ii) A list of all covered agreements entered into by the insured
depository institution or affiliate during the calendar quarter that
contains--
(A) The name and address of each insured depository institution or
affiliate that is a party to the agreement;
(B) The name and address of each NGEP that is a party to the
agreement;
(C) The date the agreement was entered into;
(D) The estimated total value of all payments, fees, loans and other
consideration to be provided by the institution or any affiliate of the
institution under the agreement; and
(E) The date the agreement terminates.
(2) Prompt filing of covered agreements contained in list required.
(i) If an insured depository institution or affiliate files a list of
the covered agreements entered into by the institution or affiliate
pursuant to paragraph (d)(1)(ii) of this section, the institution or
affiliate must provide any relevant supervisory agency a complete copy
and public version of any covered agreement referenced in the list
within 7 calendar days of receiving a request from the agency for a copy
of the agreement.
(ii) The obligation of an insured depository institution or
affiliate to provide a covered agreement to the relevant supervisory
agency under this paragraph (d)(2) terminates 36 months after the end of
the term of the covered agreement.
(3) Joint filings. In the event that 2 or more insured depository
institutions or affiliates are parties to a covered agreement, the
insured depository institution(s) and affiliate(s) may jointly file the
documents required by this paragraph (d) of this section. Any joint
filing must identify the insured depository institution(s) and
affiliate(s) for whom the filings are being made.
Sec. 533.7 Annual reports.
(a) Applicability date. This section applies only to covered
agreements entered into on or after May 12, 2000.
(b) Annual report required. Each NGEP and each insured depository
institution or affiliate that is a party to a covered agreement must
file an annual report with each relevant supervisory agency concerning
the disbursement, receipt, and uses of funds or other resources under
the covered agreement.
(c) Duration of reporting requirement--(1) NGEPs. A NGEP must file
an annual report for a covered agreement for any fiscal year in which
the NGEP receives or uses funds or other resources under the agreement.
(2) Insured depository institutions and affiliates. An insured
depository institution or affiliate must file an annual report for a
covered agreement for any fiscal year in which the institution or
affiliate--
(i) Provides or receives any payments, fees, or loans under the
covered agreement that must be reported under paragraphs (e)(1)(iii) and
(e)(1)(iv) of this section; or
(ii) Has data to report on loans, investments, and services provided
by a party to the covered agreement under the covered agreement under
paragraph (e)(1)(vi) of this section.
(d) Annual reports filed by NGEP--(1) Contents of report. The annual
report filed by a NGEP under this section must include the following--
(i) The name and mailing address of the NGEP filing the report;
(ii) Information sufficient to identify the covered agreement for
which the annual report is being filed, such as by providing the names
of the parties to the agreement and the date the agreement was entered
into or by providing a copy of the agreement;
(iii) The amount of funds or resources received under the covered
agreement during the fiscal year; and
(iv) A detailed, itemized list of how the funds or resources
received by the NGEP under the covered agreement
[[Page 86]]
were used during the fiscal year, including the total amount used for--
(A) Compensation of officers, directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and professional fees; and
(F) Other expenses and uses (specify expense or use).
(2) More detailed reporting of uses of funds or resources
permitted--(i) In general. If a NGEP allocated and used funds received
under a covered agreement for a specific purpose, the NGEP may fulfill
the requirements of paragraph (d)(1)(iv) of this section with respect to
such funds by providing--
(A) A brief description of each specific purpose for which the funds
or other resources were used; and
(B) The amount of funds or resources used during the fiscal year for
each specific purpose.
(ii) Specific purpose defined. A NGEP allocates and uses funds for a
specific purpose if the NGEP receives and uses the funds for a purpose
that is more specific and limited than the categories listed in
paragraph (d)(1)(iv) of this section.
(3) Use of other reports. The annual report filed by a NGEP may
consist of or incorporate a report prepared for any other purpose, such
as the Internal Revenue Service Return of Organization Exempt From
Income Tax on Form 990, or any other Internal Revenue Service form,
state tax form, report to members or shareholders, audited or unaudited
financial statements, audit report, or other report, so long as the
annual report filed by the NGEP contains all of the information required
by this paragraph (d).
(4) Consolidated reports permitted. A NGEP that is a party to 2 or
more covered agreements may file with each relevant supervisory agency a
single consolidated annual report covering all the covered agreements.
Any consolidated report must contain all the information required by
this paragraph (d). The information reported under paragraphs (d)(1)(iv)
and (d)(2) of this section may be reported on an aggregate basis for all
covered agreements.
(5) Examples of annual report requirements for NGEPs--(i) Example 1.
A NGEP receives an unrestricted grant of $15,000 under a covered
agreement, includes the funds in its general operating budget and uses
the funds during its fiscal year. The NGEP's annual report for the
fiscal year must provide the name and mailing address of the NGEP,
information sufficient to identify the covered agreement, and state that
the NGEP received $15,000 during the fiscal year. The report must also
indicate the total expenditures made by the NGEP during the fiscal year
for compensation, administrative expenses, travel expenses,
entertainment expenses, consulting and professional fees, and other
expenses and uses. The NGEP's annual report may provide this information
by submitting an Internal Revenue Service Form 990 that includes the
required information. If the Internal Revenue Service Form does not
include information for all of the required categories listed in this
part, the NGEP must report the total expenditures in the remaining
categories either by providing that information directly or by providing
another form or report that includes the required information.
(ii) Example 2. An organization receives $15,000 from an insured
depository institution under a covered agreement and allocates and uses
the $15,000 during the fiscal year to purchase computer equipment to
support its functions. The organization's annual report must include the
name and address of the organization, information sufficient to identify
the agreement, and a statement that the organization received $15,000
during the year. In addition, since the organization allocated and used
the funds for a specific purpose that is more narrow and limited than
the categories of expenses included in the detailed, itemized list of
expenses, the organization would have the option of providing either the
total amount it used during the year for each category of expenses
included in paragraph (d)(1)(iv) of this section, or a statement that it
used the $15,000 to purchase computer equipment and a brief description
of the equipment purchased.
[[Page 87]]
(iii) Example 3. A community group receives $50,000 from an insured
depository institution under a covered agreement. During its fiscal
year, the community group specifically allocates and uses $5,000 of the
funds to pay for a particular business trip and uses the remaining
$45,000 for general operating expenses. The group's annual report for
the fiscal year must include the name and address of the group,
information sufficient to identify the agreement, and a statement that
the group received $50,000. Because the group did not allocate and use
all of the funds for a specific purpose, the group's annual report must
provide the total amount of funds it used during the year for each
category of expenses included in paragraph (d)(1)(iv) of this section.
The group's annual report also could state that it used $5,000 for a
particular business trip and include a brief description of the trip.
(iv) Example 4. A community development organization is a party to
two separate covered agreements with two unaffiliated insured depository
institutions. Under each agreement, the organization receives $15,000
during its fiscal year and uses the funds to support its activities
during that year. If the organization elects to file a consolidated
annual report, the consolidated report must identify the organization
and the two covered agreements, state that the organization received
$15,000 during the fiscal year under each agreement, and provide the
total amount that the organization used during the year for each
category of expenses included in paragraph (d)(1)(iv) of this section.
(e) Annual report filed by insured depository institution or
affiliate--(1) General. The annual report filed by an insured depository
institution or affiliate must include the following--
(i) The name and principal place of business of the insured
depository institution or affiliate filing the report;
(ii) Information sufficient to identify the covered agreement for
which the annual report is being filed, such as by providing the names
of the parties to the agreement and the date the agreement was entered
into or by providing a copy of the agreement;
(iii) The aggregate amount of payments, aggregate amount of fees,
and aggregate amount of loans provided by the insured depository
institution or affiliate under the covered agreement to any other party
to the agreement during the fiscal year;
(iv) The aggregate amount of payments, aggregate amount of fees, and
aggregate amount of loans received by the insured depository institution
or affiliate under the covered agreement from any other party to the
agreement during the fiscal year;
(v) A general description of the terms and conditions of any
payments, fees, or loans reported under paragraphs (e)(1)(iii) and
(e)(1)(iv) of this section, or, in the event such terms and conditions
are set forth--
(A) In the covered agreement, a statement identifying the covered
agreement and the date the agreement (or a list identifying the
agreement) was filed with the relevant supervisory agency; or
(B) In a previous annual report filed by the insured depository
institution or affiliate, a statement identifying the date the report
was filed with the relevant supervisory agency; and
(vi) The aggregate amount and number of loans, aggregate amount and
number of investments, and aggregate amount of services provided under
the covered agreement to any individual or entity not a party to the
agreement--
(A) By the insured depository institution or affiliate during its
fiscal year; and
(B) By any other party to the agreement, unless such information is
not known to the insured depository institution or affiliate filing the
report or such information is or will be contained in the annual report
filed by another party under this section.
(2) Consolidated reports permitted--(i) Party to multiple
agreements. An insured depository institution or affiliate that is a
party to 2 or more covered agreements may file a single consolidated
annual report with each relevant supervisory agency concerning all the
covered agreements.
(ii) Affiliated entities party to the same agreement. An insured
depository institution and its affiliates that are parties to the same
covered agreement
[[Page 88]]
may file a single consolidated annual report relating to the agreement
with each relevant supervisory agency for the covered agreement.
(iii) Content of report. Any consolidated annual report must contain
all the information required by this paragraph (e). The amounts and data
required to be reported under paragraphs (e)(1)(iv) and (e)(1)(vi) of
this section may be reported on an aggregate basis for all covered
agreements.
(f) Time and place of filing--(1) General. Each party must file its
annual report with each relevant supervisory agency for the covered
agreement no later than six months following the end of the fiscal year
covered by the report.
(2) Alternative method of fulfilling annual reporting requirement
for a NGEP. (i) A NGEP may fulfill the filing requirements of this
section by providing the following materials to an insured depository
institution or affiliate that is a party to the agreement no later than
six months following the end of the NGEP's fiscal year--
(A) A copy of the NGEP's annual report required under paragraph (d)
of this section for the fiscal year; and
(B) Written instructions that the insured depository institution or
affiliate promptly forward the annual report to the relevant supervisory
agency or agencies on behalf of the NGEP.
(ii) An insured depository institution or affiliate that receives an
annual report from a NGEP pursuant to paragraph (f)(2)(i) of this
section must file the report with the relevant supervisory agency or
agencies on behalf of the NGEP within 30 days.
Sec. 533.8 Release of information under FOIA.
OTS will make covered agreements and annual reports available to the
public in accordance with the Freedom of Information Act (5 U.S.C. 552
et seq.), OTS's rules (part 505 of this chapter), and the Department of
Treasury's rules (31 CFR part 1). A party to a covered agreement may
request confidential treatment of proprietary and confidential
information in a covered agreement or an annual report under those
procedures.
Sec. 533.9 Compliance provisions.
(a) Willful failure to comply with disclosure and reporting
obligations. (1) If OTS determines that a NGEP has willfully failed to
comply in a material way with Sec. Sec. 533.6 or 533.7 of this part,
OTS will notify the NGEP in writing of that determination and provide
the NGEP a period of 90 days (or such longer period as OTS finds to be
reasonable under the circumstances) to comply.
(2) If the NGEP does not comply within the time period established
by OTS, the agreement shall thereafter be unenforceable by that NGEP by
operation of section 48 of the Federal Deposit Insurance Act (12 U.S.C.
1831y).
(3) OTS may assist any insured depository institution or affiliate
that is a party to a covered agreement that is unenforceable by a NGEP
by operation of section 48 of the Federal Deposit Insurance Act (12
U.S.C. 1831y) in identifying a successor to assume the NGEP's
responsibilities under the agreement.
(b) Diversion of funds. If a court or other body of competent
jurisdiction determines that funds or resources received under a covered
agreement have been diverted contrary to the purposes of the covered
agreement for an individual's personal financial gain, OTS may take
either or both of the following actions--
(1) Order the individual to disgorge the diverted funds or resources
received under the agreement;
(2) Prohibit the individual from being a party to any covered
agreement for a period not to exceed 10 years.
(c) Notice and opportunity to respond. Before making a determination
under paragraph (a)(1) of this section, or taking any action under
paragraph (b) of this section, OTS will provide written notice and an
opportunity to present information to OTS concerning any relevant facts
or circumstances relating to the matter.
(d) Inadvertent or de minimis errors. Inadvertent or de minimis
errors in annual reports or other documents filed with OTS under
Sec. Sec. 533.6 or 533.7 of this part will not subject the reporting
party to any penalty.
(e) Enforcement of provisions in covered agreements. No provision of
this part shall be construed as authorizing OTS
[[Page 89]]
to enforce the provisions of any covered agreement.
Sec. 533.10 Transition provisions.
(a) Disclosure of covered agreements entered into before the
effective date of this part. The following disclosure requirements apply
to covered agreements that were entered into after November 12, 1999,
and that terminated before April 1, 2001.
(1) Disclosure to the public. Each NGEP and each insured depository
institution or affiliate that was a party to the agreement must make the
agreement available to the public under Sec. 533.6 of this part until
at least April 1, 2002.
(2) Disclosure to the relevant supervisory agency. (i) Each NGEP
that was a party to the agreement must make the agreement available to
the relevant supervisory agency under Sec. 533.6 of this part until at
least April 1, 2002.
(ii) Each insured depository institution or affiliate that was a
party to the agreement must, by June 30, 2001, provide each relevant
supervisory agency either--
(A) A copy of the agreement under Sec. 533.6(d)(1)(i) of this part;
or
(B) The information described in Sec. 533.6(d)(1)(ii) of this part
for each agreement.
(b) Filing of annual reports that relate to fiscal years ending on
or before December 31, 2000. In the event that a NGEP, insured
depository institution or affiliate has any information to report under
Sec. 533.7 of this part for a fiscal that ends on or before December
31, 2000, and that concerns a covered agreement entered into between May
12, 2000, and December 31, 2000, the annual report for that fiscal year
must be provided, no later than June 30, 2001, to--
(1) Each relevant supervisory agency; or
(2) In the case of a NGEP, to an insured depository institution or
affiliate that is a party to the agreement in accordance with Sec.
533.7(f)(2) of this part.
Sec. 533.11 Other definitions and rules of construction used in this part.
(a) Affiliate. Affiliate means--
(1) Any company that controls, is controlled by, or is under common
control with another company; and
(2) For the purpose of determining whether an agreement is a covered
agreement under Sec. 533.2, an affiliate includes any company that
would be under common control or merged with another company on
consummation of any transaction pending before a Federal banking agency
at the time--
(i) The parties enter into the agreement; and
(ii) The NGEP that is a party to the agreement makes a CRA
communication, as described in Sec. 533.3 of this part.
(b) Control. Control is defined in section 2(a) of the Bank Holding
Company Act (12 U.S.C. 1841(a)).
(c) CRA affiliate. A CRA affiliate of an insured depository
institution is any company that is an affiliate of an insured depository
institution to the extent, and only to the extent, that the activities
of the affiliate were considered by the appropriate Federal banking
agency when evaluating the CRA performance of the institution at its
most recent CRA examination prior to the agreement. An insured
depository institution or affiliate also may designate any company as a
CRA affiliate at any time prior to the time a covered agreement is
entered into by informing the NGEP that is a party to the agreement of
such designation.
(d) CRA public file. CRA public file means the public file
maintained by an insured depository institution and described in Sec.
563.43 of this chapter.
(e) Executive officer. The term executive officer has the same
meaning as in Sec. 215.2(e)(1) of the Board of Governors of the Federal
Reserve's Regulation O (12 CFR 215.2(e)(1)). In applying this definition
under this part, the term savings association shall be used in place of
the term bank.
(f) Federal banking agency; appropriate Federal banking agency. The
terms Federal banking agency and appropriate Federal banking agency have
the same meanings as in section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813).
(g) Fiscal year. (1) The fiscal year for a NGEP that does not have a
fiscal year shall be the calendar year.
(2) Any NGEP, insured depository institution, or affiliate that has
a fiscal
[[Page 90]]
year may elect to have the calendar year be its fiscal year for purposes
of this part.
(h) Insured depository institution. Insured depository institution
has the same meaning as in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813).
(i) Nongovernmental entity or person or NGEP--(1) General. A
nongovernmental entity or person or NGEP is any partnership,
association, trust, joint venture, joint stock company, corporation,
limited liability corporation, company, firm, society, other
organization, or individual.
(2) Exclusions. A nongovernmental entity or person does not
include--
(i) The United States government, a state government, a unit of
local government (including a county, city, town, township, parish,
village, or other general-purpose subdivision of a state) or an Indian
tribe or tribal organization established under Federal, state or Indian
tribal law (including the Department of Hawaiian Home Lands), or a
department, agency, or instrumentality of any such entity;
(ii) A federally-chartered public corporation that receives Federal
funds appropriated specifically for that corporation;
(iii) An insured depository institution or affiliate of an insured
depository institution; or
(iv) An officer, director, employee, or representative (acting in
his or her capacity as an officer, director, employee, or
representative) of an entity listed in paragraphs (i)(2)(i), (i)(2)(ii),
or (i)(2)(iii) of this section.
(j) Party. The term party with respect to a covered agreement means
each NGEP and each insured depository institution or affiliate that
entered into the agreement.
(k) Relevant supervisory agency. The relevant supervisory agency for
a covered agreement means the appropriate Federal banking agency for--
(1) Each insured depository institution (or subsidiary thereof) that
is a party to the covered agreement;
(2) Each insured depository institution (or subsidiary thereof) or
CRA affiliate that makes payments or loans or provides services that are
subject to the covered agreement; and
(3) Any company (other than an insured depository institution or
subsidiary thereof) that is a party to the covered agreement.
(l) Term of agreement. An agreement that does not have a fixed
termination date is considered to terminate on the last date on which
any party to the agreement makes any payment or provides any loan or
other resources under the agreement, unless the relevant supervisory
agency for the agreement otherwise notifies each party in writing.
PART 535_PROHIBITED CONSUMER CREDIT PRACTICES--Table of Contents
Sec.
535.1 Definitions.
535.2 Unfair credit practices.
535.3 Unfair or deceptive cosigner practices.
535.4 Late charges.
535.5 State exemptions.
Authority: Sec. 18, as added by sec. 202, 88 Stat. 2193, as amended
(15 U.S.C. 57a).
Source: 54 FR 49479, Nov. 30, 1989, unless otherwise noted.
Sec. 535.1 Definitions.
(a) Act. For the purposes of this part, ``Act'' means the Federal
Trade Commission Act, 15 U.S.C. 41 et seq.
(b) Consumer. The term ``consumer'' means a natural person who seeks
or acquires goods, services, or money for personal, family, or household
purposes, and who applies for or is extended ``consumer credit'' as
defined in Sec. 561.12 of this chapter.
(c) Cosigner. The term ``cosigner'' means a natural person who
assumes liability for the obligation of a consumer without receiving
goods, services, or money in return for the obligation, or in the case
of an open-end credit obligation, without receiving the contractual
right to obtain extensions of credit under the account. The term shall
include any person whose signature is requested as a condition to
granting credit to a consumer, or as a condition for forbearance on
collection of a consumer's obligation that is in default. The term shall
not include a spouse or other person whose signature is required on a
credit obligation to perfect a security interest pursuant to state law.
A person is a cosigner within
[[Page 91]]
the meaning of this definition whether or not he or she is designated as
such on a credit obligation.
(d) Creditor. The term ``creditor'' means a savings association.
(e) Debt. The term ``debt'' means money that is due or alleged to be
due from one to another.
(f) Earnings. The term ``earnings'' means compensation paid or
payable to an individual or for his or her account for personal services
rendered or to be rendered by him or her, whether denominated as wages,
salary, commission, bonus, or otherwise, including periodic payments
pursuant to a pension, retirement, or disability program.
(g) Household goods. The term ``household goods'' means clothing,
furniture, appliances, linens, china, crockery, kitchenware, and
personal effects of the consumer and his or her dependents, provided
that the following are not included within the scope of the term
``household goods'':
(1) Works of art;
(2) Electronic entertainment equipment (except one television and
one radio);
(3) Antiques, i.e., any item over one hundred years of age,
including such items that have been repaired or renovated without
changing their original form or character, and
(4) Jewelry (other than wedding rings).
(h) Savings association. For purposes of this part, the term
``savings association'' includes any savings association, and any
service corporation that is wholly owned by one or more savings
association, that engages in the business of providing credit to
consumers.
(i) Obligation. The term ``obligation'' means an agreement between a
consumer and a creditor.
(j) Person. The term ``person'' means an individual, corporation, or
other business organization.
Sec. 535.2 Unfair credit practices.
(a) In connection with the extension of credit to consumers after
January 1, 1986, it is an unfair act or practice within the meaning of
section 5 of the Act for a savings association directly or indirectly to
enter into a consumer credit obligation that constitutes or contains, or
to enforce in a consumer credit obligation purchased by a savings
association, any of the following provisions:
(1) A cognovit or confession of judgment (for purposes other than
executory process in the State of Louisiana), warrant of attorney, or
other waiver of the right to notice and the opportunity to be heard in
the event of suit or process thereon;
(2) An executory waiver or a limitation of exemption from
attachment, execution, or other process on real or personal property
held, owned by, or due to the consumer, unless the waiver applies solely
to property subject to a security interest executed in connection with
the obligation;
(3) An assignment of wages or other earnings, unless:
(i) The assignment by its terms is revocable at the will of the
debtor,
(ii) The assignment is a payroll deduction plan or preauthorized
payment plan, commencing at the time of the transaction, in which the
consumer authorizes a series of wage deductions as a method of making
each payment, or
(iii) The assignment applies only to wages or other earnings already
earned at the time of the assignment.
(4) A nonpossessory security interest in household goods other than
a purchase-money security interest.
Sec. 535.3 Unfair or deceptive cosigner practices.
(a) General. In connection with the extension of credit to consumers
after January 1, 1986, it is:
(1) A deceptive act or practice within the meaning of section 5 of
the Act for a savings association, directly or indirectly, to
misrepresent the nature or extent of cosigner liability to any person.
(2) An unfair act or practice within the meaning of section 5 of the
Act for a savings association, directly or indirectly, to obligate a
cosigner unless the cosigner is informed, prior to becoming obligated,
of the nature of his or her liability as cosigner.
(b) Disclosure requirement. (1) A clear and conspicuous document
that shall contain the following statement or one which is substantially
equivalent, shall be given to the consigner prior to becoming obligated
(which, in the case of
[[Page 92]]
open-end credit, shall mean prior to the time that the cosigner becomes
obligated for any fees or transaction on the account):
Notice of Cosigner
You are being asked to guarantee this debt. Think carefully before
you do. If the borrower doesn't pay the debt, you will have to. Be sure
you can afford to pay if you have to, and that you want to accept this
responsibility.
You may have to pay up to the full amount of the debt if the
borrower does not pay. You may also have to pay late fees or collection
costs, which increase this amount.
The creditor can collect this debt from you without first trying to
collect from the borrower. The creditor can use the same collection
methods against you that can be used against the borrower, such as suing
you, garnishing your wages, etc. If this debt is ever in default, that
fact may become a part of your credit record.
(2) Compliance with the disclosure requirement under paragraph
(b)(1) of this section shall constitute compliance with the consumer
information requirement of paragraph (a)(2) of this section.
(3) If the notice is a separate document, nothing other than the
following times may appear with the notice:
(i) The name and address of the savings association;
(ii) An identification of the debt to be cosigned (e.g., a loan
identification number);
(iii) The date; and
(iv) The statement, ``This notice is not the contract that makes you
liable for the debt.''
Sec. 535.4 Late charges.
(a) In connection with collecting a debt arising out of an extension
of credit to a consumer after January 1, 1986, it is an unfair act or
practice within the meaning of section 5 of the Act for a savings
association, directly or indirectly, to levy or collect any delinquency
charge on a payment, which payment is otherwise a full payment for the
applicable period and is paid on its due date or within an applicable
grace period, when the only delinquency is attributable to late fee(s)
or delinquency charge(s) assessed on earlier installment(s).
(b) For the purposes of this part, ``collecting a debt'' means any
activity, other than the use of judicial process, that is intended to
bring about or does bring about repayment of all or part of a consumer
debt.
Sec. 535.5 State exemptions.
(a) Upon application to the Office by an appropriate state agency,
the Office shall determine if:
(1) There is a state requirement or prohibition in effect that
applies to any transaction to which a provision of this rule applies;
and
(2) The state requirement or prohibition affords a level of
protection to consumers that is substantially equivalent to, or greater
than, the protection afforded by this rule.
(b) If the Office makes a determination as specified under paragraph
(a) of this section, then that provision of this section will not be in
effect in that state to the extent specified by the Office in its
determination, for as long as the state administers and enforces the
state requirement or prohibition effectively, as determined by the
Office.
(c) The Director of Consumer Affairs in consultation with the Chief
Counsel shall have delegated authority to make such determinations as
are required under this part 535.
PART 536_CONSUMER PROTECTION IN SALES OF INSURANCE--Table of Contents
Sec.
536.10 Purpose and scope.
536.20 Definitions.
536.30 Prohibited practices.
536.40 What you must disclose.
536.50 Where insurance activities may take place.
536.60 Qualification and licensing requirements for insurance sales
personnel.
Appendix A to Part 536--Consumer Grievance Process.
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, and 1831x.
Source: 65 FR 75845, Dec. 4, 2000, unless otherwise noted.
Sec. 536.10 Purpose and scope.
(a) General rule. This part establishes consumer protections in
connection with retail sales practices, solicitations, advertising, or
offers of any insurance product or annuity to a consumer by:
[[Page 93]]
(1) Any savings association; or
(2) Any other person that is engaged in such activities at an office
of a savings association or on behalf of a savings association.
(b) Application to operating subsidiaries. For purposes of Sec.
559.3(h) of this chapter, an operating subsidiary is subject to this
part only to the extent that it sells, solicits, advertises, or offers
insurance products or annuities at an office of a savings association or
on behalf of a savings association.
Sec. 536.20 Definitions.
As used in this part:
Affiliate means a company that controls, is controlled by, or is
under common control with another company.
Company means any corporation, partnership, business trust,
association or similar organization, or any other trust (unless by its
terms the trust must terminate within twenty-five years or not later
than twenty-one years and ten months after the death of individuals
living on the effective date of the trust). It does not include any
corporation the majority of the shares of which are owned by the United
States or by any State, or a qualified family partnership, as defined in
section 2(o)(10) of the Bank Holding Company Act of 1956, as amended (12
U.S.C. 1841(o)(10)).
Consumer means an individual who purchases, applies to purchase, or
is solicited to purchase from a covered person insurance products or
annuities primarily for personal, family, or household purposes.
Control of a company has the same meaning as in section 3(w)(5) of
the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(5)).
Domestic violence means the occurrence of one or more of the
following acts by a current or former family member, household member,
intimate partner, or caretaker:
(1) Attempting to cause or causing or threatening another person
physical harm, severe emotional distress, psychological trauma, rape, or
sexual assault;
(2) Engaging in a course of conduct or repeatedly committing acts
toward another person, including following the person without proper
authority, under circumstances that place the person in reasonable fear
of bodily injury or physical harm;
(3) Subjecting another person to false imprisonment; or
(4) Attempting to cause or causing damage to property so as to
intimidate or attempt to control the behavior of another person.
Electronic media includes any means for transmitting messages
electronically between a covered person and a consumer in a format that
allows visual text to be displayed on equipment, for example, a personal
computer monitor.
Office means the premises of a savings association where retail
deposits are accepted from the public.
Subsidiary has the same meaning as in section 3(w)(4) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(w)(4)).
You means:
(1) A savings association, as defined in Sec. 561.43 of this
chapter; or
(2) Any other person only when the person sells, solicits,
advertises, or offers an insurance product or annuity to a consumer at
an office of a savings association, or on behalf of a savings
association. For purposes of this definition, activities on behalf of a
savings association include activities where a person, whether at an
office of the savings association or at another location, sells,
solicits, advertises, or offers an insurance product or annuity and at
least one of the following applies:
(i) The person represents to a consumer that the sale, solicitation,
advertisement, or offer of any insurance product or annuity is by or on
behalf of the savings association;
(ii) The savings association refers a consumer to a seller of
insurance products and annuities and the savings association has a
contractual arrangement to receive commissions or fees derived from a
sale of an insurance product or annuity resulting from that referral; or
(iii) Documents evidencing the sale, solicitation, advertising, or
offer of an insurance product or annuity identify or refer to the
savings association.
[[Page 94]]