Rule2022-02863
Rules of Practice for Adjudication Proceedings
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 22, 2022
Effective
February 22, 2022
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (Bureau) is issuing this procedural rule to update its Rules of Practice for Adjudication Proceedings (Rules of Practice). This rule expands the opportunities for parties in adjudication proceedings to conduct depositions. It also contains various amendments regarding timing and deadlines, the content of answers, the scheduling conference, bifurcation of proceedings, the process for deciding dispositive motions, and requirements for issue exhaustion, as well as other technical changes. Overall, the amendments will provide the parties with earlier access to relevant information and also foster greater procedural flexibility, which should ultimately contribute to more effective and efficient proceedings. The Bureau welcomes comments on this rule, and the Bureau may make further amendments if it receives comments warranting changes.
Full Text
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<title>Federal Register, Volume 87 Issue 35 (Tuesday, February 22, 2022)</title>
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[Federal Register Volume 87, Number 35 (Tuesday, February 22, 2022)]
[Rules and Regulations]
[Pages 10028-10056]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-02863]
[[Page 10027]]
Vol. 87
Tuesday,
No. 35
February 22, 2022
Part VI
Bureau of Consumer Financial Protection
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12 CFR Part 1081
Rules of Practice for Adjudication Proceedings; Final Rule
Federal Register / Vol. 87, No. 35 / Tuesday, February 22, 2022 /
Rules and Regulations
[[Page 10028]]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1081
[Docket No. CFPB-2022-0009]
RIN 3170-AB08
Rules of Practice for Adjudication Proceedings
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Procedural rule; request for public comment.
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SUMMARY: The Consumer Financial Protection Bureau (Bureau) is issuing
this procedural rule to update its Rules of Practice for Adjudication
Proceedings (Rules of Practice). This rule expands the opportunities
for parties in adjudication proceedings to conduct depositions. It also
contains various amendments regarding timing and deadlines, the content
of answers, the scheduling conference, bifurcation of proceedings, the
process for deciding dispositive motions, and requirements for issue
exhaustion, as well as other technical changes. Overall, the amendments
will provide the parties with earlier access to relevant information
and also foster greater procedural flexibility, which should ultimately
contribute to more effective and efficient proceedings. The Bureau
welcomes comments on this rule, and the Bureau may make further
amendments if it receives comments warranting changes.
DATES: This procedural rule is effective on February 22, 2022. Comments
must be received on or before April 8, 2022.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2022-
0009 or RIN 3170-AB08, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#5a686a686877082f363f2977353c770a283b392e33393f1a393c2a38743d352c"><span class="__cf_email__" data-cfemail="c2f0f2f0f0ef90b7aea7b1efada4ef92b0a3a1b6aba1a782a1a4b2a0eca5adb4">[email protected]</span></a>. Include Docket No.
CFPB-2022-0009 or RIN 3170-AB08 in the subject line of the message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake--Rules of
Practice for Adjudication Proceedings, Consumer Financial Protection
Bureau, 1700 G Street NW, Washington, DC 20552.
Instructions: The Bureau encourages the early submission of
comments. All submissions should include the agency name and docket
number or Regulatory Information Number (RIN) for this rulemaking.
Because paper mail in the Washington, DC area and at the Bureau is
subject to delay, and in light of difficulties associated with mail and
hand deliveries during the COVID-19 pandemic, commenters are encouraged
to submit comments electronically. In general, all comments received
will be posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In
addition, once the Bureau's headquarters reopens, comments will be
available for public inspection and copying at 1700 G Street NW,
Washington, DC 20552, on official business days between the hours of 10
a.m. and 5 p.m. Eastern Time. At that time, you can make an appointment
to inspect the documents by telephoning 202-435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Proprietary information or sensitive personal information, such as
account numbers or Social Security numbers, or names of other
individuals, should not be included. Comments will not be edited to
remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Kevin E. Friedl or Christopher
Shelton, Senior Counsels, Legal Division, at 202-435-7700. If you
require this document in an alternative electronic format, please
contact <a href="/cdn-cgi/l/email-protection#d89b9e889a8799bbbbbdababb1bab1b4b1aca198bbbea8baf6bfb7ae"><span class="__cf_email__" data-cfemail="6e2d283e2c312f0d0d0b1d1d070c0702071a172e0d081e0c40090118">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
The Consumer Financial Protection Act of 2010 (CFPA) establishes
the Bureau as an independent bureau in the Federal Reserve System and
assigns the Bureau a range of rulemaking, enforcement, supervision, and
other authorities.\1\ The Bureau's enforcement powers under the CFPA
include section 1053, which authorizes the Bureau to conduct
adjudication proceedings.\2\ The Bureau finalized the original version
of the Rules of Practice, which govern adjudication proceedings, in
2012 (2012 Rule).\3\ The Bureau later finalized certain amendments,
which addressed the issuance of temporary cease-and-desist orders, in
2014 (2014 Rule).\4\
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\1\ Title X of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111-203, 124 Stat. 1376, 1955-2113
(2010).
\2\ 12 U.S.C. 5563; see also section 1052(b), 12 U.S.C. 5562(b)
(addressing subpoenas).
\3\ 77 FR 39057 (June 29, 2012); see also 76 FR 45337 (July 28,
2011) (interim final rule).
\4\ 79 FR 34622 (June 18, 2014); see also 78 FR 59163 (Sept. 26,
2013) (interim final rule).
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II. Legal Authority
Section 1053(e) of the CFPA provides that the Bureau ``shall
prescribe rules establishing such procedures as may be necessary to
carry out'' section 1053.\5\ Additionally, section 1022(b)(1) provides,
in relevant part, that the Bureau's Director ``may prescribe rules . .
. as may be necessary or appropriate to enable the Bureau to administer
and carry out the purposes and objectives of the Federal consumer
financial laws, and to prevent evasions thereof.'' \6\ The Bureau
issues this rule based on its authority under section 1053(e) and
section 1022(b)(1).
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\5\ 12 U.S.C. 5563(e). As courts have recognized, the term
``necessary'' is ``a `chameleon-like' word'' whose meaning can vary
based on context; in the context of section 1053(e), the Bureau
interprets `` `necessary' to mean `useful,' `convenient' or
`appropriate' rather than `required' or `indispensable.' ''
Prometheus Radio Project v. FCC, 373 F.3d 372, 391-94 (3d Cir.
2004). Section 1053 sets out the fundamental features of Bureau
adjudications, but it leaves many details open that can only be
addressed through more specific Bureau procedures. In turn, those
Bureau procedures could not be effective, or fair to the parties, if
they were limited to only the most rudimentary steps that would be
indispensable to holding a skeletal proceeding. Instead, the Bureau
believes that Congress gave the Bureau room to adopt procedures that
are useful in carrying out section 1053.
\6\ 12 U.S.C. 5512(b)(1).
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III. Section-by-Section Analysis
Overview
The Bureau is republishing the entire Rules of Practice in the Code
of Federal Regulations. The changes that the Bureau is making in this
rule, compared to the previous version of the Rules of Practice, are
summarized in the section-by-section analysis below. Also, the Bureau
will include an unofficial, informal redline of the changes in the
docket for this rule on <a href="https://www.regulations.gov">https://www.regulations.gov</a> in order to assist
stakeholders' review.\7\
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\7\ In the event of a conflict between the redline and the
version in the Federal Register, the latter controls.
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1081.114(a) Construction of Time Limits
The Bureau is amending 12 CFR 1081.114(a) (Rule 114(a)) to simplify
and clarify the provisions describing how deadlines are computed. It
governs the computation of any time limit in this part, by order of the
Director or the hearing officer, or by any applicable statute. These
amendments are based on similar amendments made to Federal Rule of
Civil Procedure 6(a) in 2009.
Under the previous Rule 114(a), a period of ten days or less was
computed differently than a longer period. Intermediate Saturdays,
Sundays, and Federal holidays were included in computing longer
periods, but excluded in computing shorter periods. The previous Rule
114(a) thus made computing deadlines unnecessarily complicated and led
to counterintuitive
[[Page 10029]]
results. For example, a 10-day period and a 14-day period that started
on the same day usually ended on the same day--and the 10-day period
not infrequently ended later than the 14-day period.
Under the amended Rule 114(a), all deadlines stated in days are
computed in the same way. The day of the event that triggers the
deadline is not counted. All other days--including intermediate
Saturdays, Sundays, and Federal holidays--are counted, with one
exception: If the period ends on a Saturday, Sunday, or Federal holiday
as set forth in 5 U.S.C. 6103(a), then the deadline falls on the next
day that is not a Saturday, Sunday, or Federal holiday.
Periods previously expressed as ten days or less will be shortened
as a practical matter by the decision to count intermediate Saturdays,
Sundays, and legal holidays in computing all periods. The Bureau is
lengthening many of those periods to compensate for the change.\8\
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\8\ See, e.g., amended 12 CFR 1081.105(c)(2), 1081.200(c),
1081.202(a).
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The Bureau is also adjusting most of the 10-day periods in the
Rules of Practice to account for the change in computation method, by
setting 14 days as the new period. A 14-day period corresponds to the
most frequent result of a 10-day period under the previous computation
method--two Saturdays and two Sundays were excluded, giving 14 days in
all. A 14-day period has an additional advantage. The final day falls
on the same day of the week as the event that triggered the period--the
14th day after a Monday, for example, is a Monday. This advantage of
using week-long periods also led in many cases to adopting 7-day
periods to replace many of the periods with periods using 7-day
increments.
1081.115(b) Considerations in Determining Whether To Extend Time Limits
or Grant Postponements, Adjournments and Extensions
Previously, 12 CFR 1081.115(b) (Rule 115(b)) stated that the
Director or the hearing officer should adhere to a policy of strongly
disfavoring granting motions for extensions of time, except in
circumstances where the moving party makes a strong showing that the
denial of the motion would substantially prejudice its case. It then
listed factors that the Director or hearing officer will consider. The
Bureau is simplifying this provision to state only that such motions
are generally disfavored, while retaining the same list of factors that
the Director or hearing officer will consider. The Bureau continues to
believe that extensions of time should generally be disfavored, but it
believes that relatively more flexibility than the previous language
provided may be appropriate.
1081.201(b) Content of Answer
The previous 12 CFR 1081.201(b) (Rule 201(b)) required a respondent
to file an answer containing, among other things, any affirmative
defense. The Bureau is amending Rule 201(b) to make clear that this
includes any avoidance, including those that may not be considered
``affirmative defenses.'' As the Securities and Exchange Commission
(SEC) explained when it adopted a similar amendment to its rules of
practice, timely assertion of such theories should help focus the use
of prehearing discovery, foster early identification of key issues and,
as a result, make the discovery process more effective and
efficient.\9\
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\9\ 81 FR 50211, 50219-20 (July 29, 2016).
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1081.203 Scheduling Conference
The provision at 12 CFR 1081.203 (Rule 203) requires a scheduling
conference with all parties and the hearing officer for the purpose of
scheduling the course and conduct of the proceeding. Before that
scheduling conference, Rule 203 requires the parties to meet to discuss
the nature and basis of their claims and defenses, the possibilities
for settlement, as well as the matters that will be discussed with the
hearing officer at the scheduling conference. The Bureau is making
certain changes to Rule 203, including renumbering of provisions. This
discussion cites the provisions as renumbered.
First, the Bureau is amending Rule 203(b) to require that the
parties exchange a scheduling conference disclosure after that initial
meeting, but before the scheduling conference. That disclosure must
include a factual summary of the case, a summary of all factual and
legal issues in dispute, and a summary of all factual and legal bases
supporting each defense. The disclosure must also include information
about the evidence that the party may present at the hearing, other
than solely for impeachment, including (i) the contact information for
anticipated witnesses, as well as a summary of the witness's
anticipated testimony; and (ii) the identification of documents or
other exhibits.
The Bureau is also adopting certain amendments to Rules 203(c),
(d), and (e). Amended Rule 203(c) provides that a party must supplement
or correct the scheduling conference disclosure in a timely manner if
the party acquires other information that it intends to rely upon at a
hearing. Amended Rule 203(d) provides a harmless-error rule for
failures to disclose in scheduling conference disclosures. Finally, the
Bureau is adopting certain minor clarifications to Rule 203(e), which
governs the scheduling conference itself.
These amendments to Rule 203 are intended to foster early
identification of key issues and, as a result, make the adjudication
process, including any discovery process, more effective and efficient.
They are also intended to, early in the process, determine whether the
parties intend to seek the issuance of subpoenas or file dispositive
motions so that, with input from the parties, the hearing officer can
set an appropriate hearing date, taking into account the time necessary
to complete the discovery or decide the anticipated dispositive
motions.
The Bureau recognizes that, in most cases, the deadline for making
the scheduling conference disclosure will also be the date the Office
of Enforcement must commence making documents available to the
respondent under 12 CFR 1081.206 (Rule 206). As the Bureau explained in
the preamble to the 2012 Rule, it is the Bureau's expectation that the
Office of Enforcement will make the material available as soon as
possible in every case.\10\ And even in cases where the Office of
Enforcement cannot make those documents available within that time, a
respondent may request a later hearing date and can move the hearing
officer to alter the dates for either the scheduling conference or the
scheduling conference disclosure.
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\10\ 77 FR 39057, 39072 (June 29, 2012).
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1081.204(c) Bifurcation
The Bureau is adding a new 12 CFR 1081.204(c) (Rule 204(c)) to
address bifurcation of proceedings. It provides that the Director may
order that the proceeding be divided into two or more stages, if the
Director determines that it would promote efficiency in the proceeding
or for other good cause. For example, the Director may order that the
proceeding have two stages, so that at the conclusion of the first
stage the Director issues a decision on whether there have been
violations of law and at the conclusion of the second stage the
Director issues a final decision and order, including with respect to
any remedies. The Director may make an order under Rule 204(c) either
on the motion of a party or on the Director's own motion after inviting
submissions by the parties. The Director may
[[Page 10030]]
include, in that order or in later orders, modifications to the
procedures in the Rules of Practice in order to effectuate an efficient
division into stages, or the Director may assign such authority to the
hearing officer.\11\
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\11\ The new provision also clarifies that only the decision and
order of the Director after the final stage, and not a decision of
the Director after an earlier stage, will be a final decision and
order for purposes of specified provisions of the Rules of Practice
and section 1053(b) of the CFPA.
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Bifurcation is a standard case-management tool available to Federal
district courts. The new Rule 204(c) will provide the Bureau with the
flexibility to use bifurcation in adjudication proceedings, if
warranted by particular cases, and to tailor its procedures to the
circumstances of those bifurcated cases.
1081.206 Availability of Documents for Inspection and Copying
Rule 206 provides that the Bureau's Office of Enforcement will make
certain documents available for inspection and copying. The Bureau is
amending Rule 206 to clarify certain categories of documents that may
be withheld or information that may be redacted, as well as to make
clear that the Office of Enforcement may produce those documents in an
electronic format rather than making the documents available for
physical inspection and copying.
The clarifying amendments regarding documents that may be withheld
or information that may be redacted are based on amendments the SEC
recently made to its rules of practice. Amended Rule 206(b)(1)(iv)
makes clear that the Office of Enforcement need not produce a document
that reflects only settlement negotiations between the Office of
Enforcement and a person or entity who is not a current respondent in
the proceeding. As the SEC explained when it amended its rules of
practice, this amendment is consistent with the important public policy
interest in candid settlement negotiations, will help to preserve the
confidentiality of settlement discussions, and help safeguard the
privacy of potential respondents with whom the Office of Enforcement
has negotiated.\12\ Amended Rule 206 also permits the Office of
Enforcement to redact from the documents it produces information it is
not obligated to produce (Rule 206(b)(2)(i)) and sensitive personal
information about persons other than the respondent (Rule
206(b)(2)(ii)). These amendments also track the SEC's recent amendments
to its rules of practice and are designed to provide further
protections for sensitive personal information and to permit the
redaction of information that is not required to be produced in the
first place.
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\12\ 81 FR 50211, 50222 (July 29, 2016).
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The Bureau is also amending Rule 206(d) to change the date by which
the Office of Enforcement must commence making documents available to
the respondent, changing that date from seven days after service of the
notice of charges to fourteen. This clarification harmonizes these
timing provisions with 12 CFR 1081.119 (Rule 119), which protects the
rights of third parties who have produced documents under a claim of
confidentiality. The previous Rule 119 required a party to give a third
party notice at least ten days prior to the disclosure of information
obtained from that third party subject to a claim of confidentiality.
Under the previous Rules of Practice, that meant that the Office of
Enforcement had to provide notice to third parties before it commenced
the adjudication proceeding because the Office of Enforcement had to
give those third parties at least ten days' notice before producing the
documents and the Office of Enforcement had to commence making
documents available seven days after filing. Rule 119 is amended to
require parties to notify the third parties at least seven days prior
to the disclosure of information the third party produced under a claim
of confidentiality. Together, Rules 119 and 206 now require the Office
of Enforcement to commence making documents available fourteen days
after service of the notice of charges and to notify third parties who
produced documents subject to that disclosure requirement under a claim
of confidentiality at least seven days before producing those
documents.
The previous Rule 206(e) provided that the Office of Enforcement
must make the documents available for inspection and copying at the
Bureau's office where they are ordinarily maintained. As the preamble
to the 2012 Rule explained, the Bureau anticipated providing electronic
copies of documents to respondents in most cases.\13\ The Bureau is
amending Rule 206(e) to recognize this practice and expressly provide
that the Office of Enforcement may produce those documents in an
electronic format rather than making the documents available for
inspection and copying. Under the amended Rule 206(e), the Office of
Enforcement retains the discretion to make documents available for
inspection and copying.
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\13\ 77 FR 39057, 39070 (June 29, 2012).
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1081.208 Subpoenas and 1081.209 Depositions
The Bureau is making certain interrelated changes to 12 CFR
1081.208 and 1081.209 (Rules 208 and 209).
Rule 209 previously permitted parties to take depositions only if
the witness was unable to attend or testify at a hearing. As the Bureau
noted in the preamble to the 2012 Rule, the Bureau's Rules of Practice
were modeled in part on the approach that the SEC took in its rules of
practice.\14\ Since that time, the SEC has amended its rules of
practice to permit depositions.\15\
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\14\ 77 FR 39057, 39058 (June 29, 2012).
\15\ 81 FR 50211 (July 29, 2016).
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The Bureau is now amending Rule 209 to permit discovery depositions
in addition to depositions of unavailable witnesses. The amendments to
Rule 209 allow respondents and the Office of Enforcement to take
depositions by oral examination pursuant to subpoena. The amended Rule
209 also permits parties to take a deposition by written questions upon
motion and pursuant to a subpoena. If a proceeding involves a single
respondent, the amendment allows the respondent and the Office of
Enforcement to each depose up to three persons (i.e., up to three
depositions per side). If a proceeding involves multiple respondents,
the amendment allows respondents to collectively depose up to five
persons and the Office of Enforcement to depose up to five persons
(i.e., up to five depositions per side). This approach is consistent
with the approach the SEC adopted when it amended its rules of practice
to allow depositions.\16\ A party may also move to take additional
depositions, though that motion must be filed no later than 28 days
prior to the hearing date. Amended Rule 209 also sets forth the
procedure for requesting to taking additional depositions.
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\16\ Id. at 50216.
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The above amendments to Rule 209 are intended to provide parties
with further opportunities to develop arguments and defenses through
deposition discovery, which may narrow the facts and issues to be
explored during the hearing. Allowing depositions should facilitate the
development of the case during the prehearing stage, which may result
in more focused prehearing preparations, with issues distilled for the
hearing and post-hearing briefing.
Under amendments to Rules 208 and 209, a party must request that
the hearing officer issue a subpoena for the deposition. If the
subpoena is issued, the party must also serve written notice of the
deposition. The amendments to
[[Page 10031]]
Rule 208, governing the issuance of subpoenas, correspond with the new
provisions on depositions in Rule 209 by defining the standards for
issuing a subpoena requiring the deposition of a witness. The amendment
adds a new Rule 208(e) governing the standard for issuance of subpoenas
seeking depositions upon oral examination. Under the amendment, the
hearing officer will promptly issue any subpoena requiring the
attendance and testimony of witnesses at a deposition only if the
subpoena complies with Rule 209 and if the proposed deponent: (i) Is a
witness identified in the other party's scheduling conference
disclosure now required under revised Rule 203(b); (ii) a fact witness;
\17\ (iii) is a designated expert witness under 12 CFR 1081.210(b)
(Rule 210(b)); or (iv) a document custodian.\18\ Fact witnesses, expert
witnesses, and document custodians, whose knowledge of relevant facts
does not arise from the Bureau's investigation, the Bureau's
examination, or the proceeding, are the individuals most likely to have
information relevant to the issues to be decided. Because the Bureau
will also disclose to respondents the documents described in Rule 206
as well as witness statements upon request under 12 CFR 1081.207 (Rule
207), deposing Bureau staff whose only knowledge of relevant facts
arose from the investigation, examination, or proceeding is unlikely to
shed light on the events underlying the proceeding and will likely lead
to impermissible inquiries into the mental processes and strategies of
Bureau attorneys or staff under their direction. Not only does this
implicate privileges or the work-product doctrine, but deposition of
Bureau staff in this manner can be burdensome and disruptive because it
embroils the parties in controversies over the scope of those
protections.
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\17\ Under amended Rule 209, this type of proposed deponent must
have witnessed or participated in any event, transaction,
occurrence, act, or omission that forms the basis for any claim
asserted by the Office of Enforcement, any defense, or anything else
required to be included in an answer pursuant to Rule 201(b), by any
respondent in the proceeding (this excludes a proposed deponent
whose only knowledge of these matters arises from the Bureau's
investigation, the Bureau's examination, or the proceeding).
\18\ This excludes Bureau officers or personnel who have custody
of documents or data that was produced from the Office of
Enforcement to the respondent. In most circumstances, the Bureau
officers or personnel were not the original custodian of the
documents. Where the Bureau was the original custodian of the
document--for example, a report of examination under 12 CFR
1081.303(d)(2) (Rule 303(d)(2))--there is no need to depose a
document custodian as that report is admissible without a sponsoring
witness.
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The amendments to Rule 208 also provide a process for the hearing
officer to request more information about the relevance or scope of the
testimony sought and to refuse to issue the subpoena or issue it only
upon conditions. This provision is intended to foster use of
depositions where appropriate and encourage meaningful discovery,
within the limits of the number of depositions provided per side. This
provision should encourage parties to focus any requested depositions
on those persons most likely to yield relevant information and thereby
make efficient use of time during the prehearing stage.
Rule 208 previously permitted parties to request issuance of
subpoenas requiring the attendance and testimony of witnesses at the
designated time and place of the hearing, for the production of
documentary or other tangible evidence, or for the deposition of a
witness who will be unavailable for the hearing. The Rules of Practice
also permitted the deposition of expert witnesses under Rule 210. The
amendments keep those provisions, making conforming amendments to
account for the new provision permitting discovery depositions. A
subpoena seeking the deposition of a witness who will be unavailable
for the hearing does not count against the number of depositions
permitted under Rule 209(a).
These new and amended provisions expand the available legitimate
mechanisms respondents may use to conduct discovery, providing
respondents a clearer understanding of the bases of the Bureau's
factual contentions while reducing the costs and burdens of hearings on
all parties. Additionally, the grounds for a hearing officer denying a
request to issue a subpoena under Rule 208--that it is ``unreasonable,
oppressive, excessive in scope, or unduly burdensome''--are consistent
with well-established judicial standards, and hearing officers will, in
their consideration of requests for subpoenas, act diligently and in
good faith to implement the standards for refusing or modifying
deposition subpoenas set forth under the amended rule. These combined
changes are overall less burdensome yet are equally effective in the
resolution of the case on the merits.
Amended Rule 209 also adds procedures governing the taking of
depositions, including depositions by written question. In general,
once a subpoena for a deposition is issued, the party seeking the
deposition must serve written notice of the deposition. That notice
must include several things, including the time and place of the
deposition, the identity of the deponent, and the method for recording
the deposition. These and other procedural provisions track the SEC's
recent amendments to its rules of practice.\19\ They govern the process
for seeking depositions by written questions and the taking of all
depositions, including setting forth the deposition officer's duties,
the process for stating objections, motions to terminate or limit the
deposition, and the process for finalizing a transcript.
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\19\ 81 FR 50211, 50215-17 (July 29, 2016).
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Finally, the Bureau is adding Rule 208(l), which addresses the
relationship of subpoenas to the scheduling of the hearing. In the 2012
Rule, one reason why the Bureau did not--as a general matter--permit
discovery depositions was because the additional time required for
depositions before the hearing could be in tension with the statutory
timetable for hearings under section 1053(b) of the CFPA.\20\ As the
preamble to the 2012 Rule noted, prehearing depositions would present
extreme scheduling difficulties in those cases in which respondents did
not request hearing dates outside the default timeframe under section
1053(b), which provides for the hearing to be held 30 to 60 days after
service of the notice of charges, unless an earlier or a later date is
set by the Bureau, at the request of any party so served.\21\ The new
Rule 208(l) addresses this scheduling obstacle to depositions and other
discovery, by specifying that a respondent's request for issuance of a
subpoena constitutes a request that the hearing not be held until after
a reasonable period, determined by the hearing officer, for the
completion of discovery.\22\ This is because a request for discovery
reasonably entails a delay for the discovery process to be completed.
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\20\ 12 U.S.C. 5563(b).
\21\ 77 FR 39057, 39076 (June 29, 2012).
\22\ Rule 208(l) goes on to specify that the hearing officer
will decide whether to grant such a request. If the request is
granted, the hearing officer will set a deadline for the completion
of discovery and schedule the specific date of the hearing, in
consultation with the parties. Rule 208(l) does not apply to a
subpoena for the attendance and testimony of a witness at the
hearing or a subpoena to depose a witness unavailable for the
hearing.
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Given this resolution of the 2012 Rule's scheduling concern, the
Bureau believes that the benefits of discovery depositions under the
amended Rule 209, as described earlier, outweigh other concerns
expressed in the preamble to the 2012 Rule about the time, expense,
[[Page 10032]]
and risk of collateral disputes arising from depositions.\23\
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\23\ 77 FR 39057, 39076 (June 29, 2012).
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1081.211 Interlocutory Review
The provision at 12 CFR 1081.211 (Rule 211) governs interlocutory
review. Rule 211(e) previously included language that stated that
interlocutory review is disfavored, and that the Director will grant a
petition to review a hearing officer's ruling or order prior to the
Director's consideration of a recommended decision only in
extraordinary circumstances. The Bureau is simplifying this language to
state only that interlocutory review is generally disfavored. This is
because, although interlocutory review remains disfavored, the Bureau
believes that there can be situations where interlocutory review can
contribute to the efficiency of proceedings short of extraordinary
circumstances.
1081.212 Dispositive Motions
The Bureau is relocating the previous 12 CFR 1081.212(g) and (h)
(Rule 212(g) and (h)), which addressed oral argument and decisions on
dispositive motions, respectively, to form part of 12 CFR 1081.213
(Rule 213). Rule 213 is discussed in the next section of this section-
by-section analysis.
Additionally, the Bureau is adopting a new Rule 212(g) to address
the relationship of dispositive motions to the scheduling of the
hearing, which is codified as Rule 212(g) but unrelated to the previous
Rule 212(g). It is analogous to Rule 208(l), discussed above. It
specifies that a respondent's filing of a dispositive motion
constitutes a request that the hearing not be held until after the
motion is resolved.\24\ This is because the filing of a dispositive
motion, whose purpose is to avoid or limit the need for a hearing,
reasonably entails a delay of that hearing so that the motion can be
resolved.
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\24\ Rule 212(g) goes on to state that the hearing officer will
decide whether to grant such a request. If the request is granted,
the hearing officer will schedule the specific date of the hearing,
in consultation with the parties.
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1081.213 Rulings on Dispositive Motions
The Bureau is amending Rule 213 to adopt a new procedure for
rulings on dispositive motions, based on a procedure used by the
Federal Trade Commission (FTC). The Bureau is also making related
technical changes for clarity.
Under the Bureau's existing Rules of Practice, the Director ``may,
at any time, direct that any matter be submitted to him or her for
review.'' \25\ However, there was previously no specific procedure for
the Director to exercise this discretion in the context of dispositive
motions.
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\25\ 12 CFR 1081.211(a).
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The new Rule 213(a) provides that the Director will either rule on
a dispositive motion, refer the motion to the hearing officer, or rule
on the motion in part and refer it in part. This is based on a similar
process under the FTC's rules of practice.\26\ The Bureau agrees with
the reasoning of the FTC when it adopted this process a decade ago. The
FTC explained that the head of the agency has authority and expertise
to rule initially on dispositive motions, and doing so can improve the
quality of decision-making and expedite the proceeding.\27\ As the FTC
further noted, an erroneous decision by an administrative law judge on
a dispositive motion may lead to unnecessary briefing, hearing, and
reversal, resulting in substantial costs and delay to the
litigants.\28\ Adopting this process will give the Director the
flexibility to decide whether a given dispositive motion would be most
efficiently addressed by the hearing officer, with ultimate review by
the Director, or simply by the Director.
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\26\ 16 CFR 3.22(a). This FTC provision does not specifically
discuss a situation where the agency head rules on the motion in
part and refers it in part. The Bureau has included language in Rule
213(a) to specifically discuss this situation.
\27\ 74 FR 1803, 1809-10 (Jan. 13, 2009).
\28\ Id. at 1809-10.
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The new Rule 213(b) provides that, if the Director rules on the
motion, the Director must do so within 42 days following the expiration
of the time for filing all responses and replies, unless there is good
cause to extend the deadline. If the Director refers the motion to the
hearing officer, the Director may set a deadline for the hearing
officer to rule. This is based on the parallel timing requirements
under the FTC's rules of practice.\29\ Previously, Rule 212(h) provided
a 30-day timeframe for the hearing officer to decide dispositive
motions, subject to extension.\30\ But the Bureau believes that the
FTC's somewhat more flexible approach to timing is warranted, given
that the Director must first decide whether or not to refer the motion
to the hearing officer and also has other responsibilities as the head
of the agency. The Bureau believes that the overall efficiency gains to
adjudication proceedings from the new process, as discussed above,
should generally compensate for any delays associated with a more
flexible deadline.
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\29\ 16 CFR 3.22(a). This FTC provision includes an interval of
45 days, but as discussed elsewhere in this section-by-section
analysis the Bureau is generally adopting time intervals in
increments of seven days.
\30\ See 12 CFR 1081.115 (change of time limits).
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The new Rule 213(c) provides that, at the request of any party or
on the Director or hearing officer's own motion, the Director or
hearing officer (as applicable) may hear oral argument on a dispositive
motion. Rule 213(c) is identical to the previous Rule 212(g), except
that it is updated to reflect the fact that the Director would be the
appropriate official to hear oral argument, if any, to the extent the
Director is deciding the motion.
Finally, the new Rule 213(d) describes the types of rulings that
the Director or hearing officer may make on a dispositive motion. It
consolidates language from the previous Rules 212(h) and 213, with
updates to reflect the fact that the Director may be the official who
decides the motion, as well as other technical changes for clarity.
1081.400(a) Time Period for Filing Preliminary Findings and Conclusions
Under the previous 12 CFR 1081.400(a) (Rule 400(a)), subject to
possible extensions, the hearing officer was required to file a
recommended decision no later than 90 days after the deadline for
filing post-hearing responsive briefs pursuant to 12 CFR 1081.305(b)
(Rule 305(b)) and in no event later than 300 days after filing of the
notice of charges. The Bureau is amending the latter, 300-day interval
to 360 days, in light of the amendments to Rule 209 that expand the
opportunities for depositions. Additionally, as explained later in this
section-by-section analysis, the Bureau is changing terminology from
``recommended decision'' to ``preliminary findings and conclusions''
throughout the Rules of Practice.
1081.408 Issue Exhaustion
The Bureau is adding a new 12 CFR 1081.408 (Rule 408) to address
issue exhaustion.
As the Supreme Court has explained: ``Administrative review schemes
commonly require parties to give the agency an opportunity to address
an issue before seeking judicial review of that question.'' \31\ These
requirements can be ``creatures of statute or regulation'' or else are
``judicially created.'' \32\ It is ``common for an agency's regulations
to require issue exhaustion in administrative appeals. And when
regulations do so, courts reviewing agency action regularly
[[Page 10033]]
ensure against the bypassing of that requirement by refusing to
consider unexhausted issues.'' \33\ Consistent with the Court's case
law, the Administrative Conference of the United States has recommended
that agencies address issue exhaustion requirements in their
regulations.\34\
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\31\ Carr v. Saul, 141 S. Ct. 1352, 1358 (2021).
\32\ Id.
\33\ Sims v. Apfel, 530 U.S. 103, 108 (2000) (internal citation
omitted).
\34\ 86 FR 6612, 6619 (Jan. 22, 2021) (recommendation 2.k).
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The Bureau is now adopting an express regulation on issue
exhaustion. Section 1053 of the CFPA contemplates that the Bureau will
conduct a proceeding to decide whether to issue a final order, and then
parties may petition courts to review the Bureau's decision, based on
the record that was before the Bureau.\35\ But if parties do not
adequately present their arguments to the Bureau, it frustrates this
statutory scheme. Accordingly, the Bureau believes that having
procedures to address issue exhaustion in adjudication proceedings is
important to carry out section 1053.\36\ The Bureau also notes that
having express procedures on this subject should benefit both the
Bureau and the parties, by avoiding any potential confusion about how
parties must raise arguments in adjudication proceedings.
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\35\ See generally section 1053(b), 12 U.S.C. 5563(b).
\36\ Section 1053(e), 12 U.S.C. 5563(e). The issue exhaustion
provision is also independently authorized by section 1022(b)(1), 12
U.S.C. 5512(b)(1), based on either of two grounds. First,
establishing orderly rules for issue exhaustion is appropriate to
enable the Bureau to ``administer and carry out the purposes and
objectives of'' section 1053, for the reasons discussed above and
below. Id. Second, these issue-exhaustion rules ``prevent evasions''
of section 1053 and the Rules of Practice by some parties, who
otherwise may not adequately present their arguments to the Bureau.
Id.; see Woodford v. Ngo, 548 U.S. 81, 90 (2006) (explaining that
``exhaustion requirements are designed to deal with parties who do
not want to exhaust'').
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Rule 408(a) defines the new Rule 408's scope. It applies to any
argument to support a party's case or defense, including any argument
that could be a basis for setting aside Bureau action under 5 U.S.C.
706 or any other source of law. This broad scope ensures that the
Bureau has the opportunity to consider any issue affecting its
proceedings.
Rule 408(b) provides, first, that a party must raise an argument
before the hearing officer, or else it is not preserved for later
consideration by the Director. Second, a party must raise an argument
before the Director, or else it is not preserved for later
consideration by a court. This is consistent with the roles of the
hearing officer and Director.\37\
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\37\ The Bureau notes that in cases where Rule 408(b) interacts
with the Bureau's revisions to Rule 213, it yields a common-sense
result. If the Director rules on a dispositive motion under Rule 213
rather than referring it to the hearing officer, then the first
sentence of Rule 408(b)--which normally requires parties to raise
arguments before the hearing officer in the first instance--would be
inapplicable to the Director's consideration of the motion. This is
because the Director's ruling on the motion would not be ``later''
consideration by the Director after the hearing officer. On the
other hand, the second sentence of Rule 408(b) would be applicable,
and arguments not properly raised before the Director in briefing on
the motion would not be preserved for later consideration by a
court.
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Rule 408(c) provides that an argument must be raised in a manner
that complies with the Rules of Practice and that provides a fair
opportunity to consider the argument.
Finally, Rule 408(d) clarifies that the Director has discretion to
consider an unpreserved argument, including by considering it in the
alternative. It also clarifies that, if the Director considers an
unpreserved argument in the alternative, the argument remains
unpreserved. Because issue exhaustion requirements serve to protect the
agency's processes, it is appropriate for the head of the agency to
retain discretion to waive those issue exhaustion requirements in
appropriate cases.\38\ If a party believes that there is good cause for
the issue exhaustion requirements to not be applied in a particular
context, the proper course is to timely request that the Director
exercise this discretion. The Director may also do so on the Director's
own initiative. On the other hand, if the Director merely considers an
unpreserved argument in the alternative, that should not be construed
as a waiver by the Director of the party's failure to appropriately
raise the argument.
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\38\ See, e.g., Am. Farm Lines v. Black Ball Freight Serv., 397
U.S. 532, 539 (1970) (It ``is always within the discretion of . . .
an administrative agency to relax or modify its procedural rules
adopted for the orderly transaction of business before it when in a
given case the ends of justice require it.'').
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Global Technical Amendments
In addition to the specific changes outlined above, the Bureau is
making certain technical amendments throughout the Rules of Practice.
First, the Bureau is retitling the hearing officer's ``recommended
decision'' as ``preliminary findings and conclusions.'' The Bureau
believes that this title is more descriptive of this component of an
adjudication proceeding. This is a terminological change, and
preliminary findings and conclusions remain a recommended decision for
purposes of the Administrative Procedure Act.
Second, the Bureau is making changes to ensure that the language of
the Rules of Practice is gender inclusive. Third, consistent with the
current Federal Rules of Civil Procedure, the Bureau is replacing use
of the term ``shall'' with the terms ``must,'' ``may,'' ``will,'' or
``should,'' depending on the context, because the term ``shall'' can
sometimes be ambiguous.\39\ Fourth, the amendments replace certain uses
of the term ``the Bureau'' with either ``the Director,'' ``the Office
of Administrative Adjudication,'' or ``the Office of Enforcement,'' in
order to avoid ambiguity about which Bureau organ is being referenced.
Fifth, as also discussed in the section-by-section analysis for Rule
114(a), the Bureau is adjusting various time periods in the Rules of
Practice. Finally, the Bureau is making technical changes to
requirements in 12 CFR 1081.111(a), 1081.113(d)(2), and 1081.405(e)
(Rules 111(a), 113(d)(2), and 405(e)) regarding filing of certain
papers by the hearing officer and Director and service of those papers
by the Office of Administrative Adjudication.
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\39\ Fed. R. Civ. P. 1, advisory committee's notes to 2007
amendment.
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IV. Section 1022(b)(2) Analysis
In developing this rule, the Bureau has considered the rule's
benefits, costs, and impacts in accordance with section 1022(b)(2)(A)
of the CFPA.\40\ In addition, the Bureau has consulted or offered to
consult with the prudential regulators and the FTC, including regarding
consistency of this rule with any prudential, market, or systemic
objectives administered by those agencies, in accordance with section
1022(b)(2)(B) of the CFPA.\41\
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\40\ 12 U.S.C. 5512(b)(2)(A).
\41\ 12 U.S.C. 5512(b)(2)(B). Whether section 1022(b)(2)(A) and
section 1022(b)(2)(A)(B) are applicable to this rule is unclear, but
in order to inform the rulemaking more fully the Bureau performed
the described analysis and consultations.
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As with the 2012 Rule, this rule neither imposes obligations on
consumers, nor is it expected to affect their access to consumer
financial products or services. For purposes of this 1022(b)(2)
analysis, the Bureau compares the effect of the rule against the
baseline of the Rules of Practice as they currently exist, as
established by the 2012 Rule and amended by the 2014 Rule.
The Rules of Practice amended by this rule are intended to provide
an expeditious decision-making process. An expeditious decision-making
process may benefit both consumers and
[[Page 10034]]
covered persons to the extent that it is used in lieu of proceedings
initiated in federal district court. A clear and efficient process for
the conduct of adjudication proceedings benefits consumers by providing
a systematic process for protecting them from unlawful behavior. At the
same time, a more efficient process affords covered persons with a
cost-effective way to have their cases heard. The 2012 Rule adopted an
affirmative disclosure approach to fact discovery, pursuant to which
the Bureau makes available to respondents the information obtained by
the Office of Enforcement from persons not employed by the Bureau prior
to the institution of proceedings, in connection with the investigation
leading to the institution of proceedings that is not otherwise
privileged or protected from disclosure. This affirmative disclosure
obligation was intended to substitute for the traditional civil
discovery process, which can be both time-consuming and expensive. By
changing this process to allow for a limited number of depositions by
both the Office of Enforcement and respondents, the rule will increase
the cost of the process in both time and money, relative to the
baseline. At the same time, to the extent that a limited number of
depositions makes hearings proceed more efficiently, the rule may
reduce costs. In addition, since promulgating the 2012 Rule, the Bureau
has only brought two cases through the administrative adjudication
process from start to finish. As such, the Bureau expects there to be
few cases in the future that would have benefited from the more limited
deposition procedure in the 2012 Rule. The Bureau expects the amended
procedure to still be faster and less expensive than discovery through
a Federal district court. To the extent that adding additional
discovery enables more cases that would otherwise be initiated in
Federal court to instead be initiated through the administrative
adjudication process, both consumers and covered persons will benefit.
In addition, in the 1022(b)(2) analysis for the 2012 Rule, the
Bureau stated that a benefit of the Rule was its similarity to existing
rules of the prudential regulators, the FTC, and the SEC. The SEC has
since amended its rules, and many of the changes in these amendments
will align the Bureau's rules with the new SEC rules and those of other
agencies. The Rule's similarity to other agencies' rules should further
reduce the expense of administrative adjudication for covered persons.
Further, these amendments have no unique impact on insured
depository institutions or insured credit unions with less than $10
billion in assets described in section 1026(a) of the CFPA. Finally,
the amendments do not have a unique impact on rural consumers.
V. Regulatory Requirements
As a rule of agency organization, procedure, or practice, this rule
is exempt from the notice-and-comment rulemaking requirements of the
Administrative Procedure Act.\42\ However, the Bureau is accepting
comments on the rule. If, based on the comments, the Bureau decides to
make further amendments, the Bureau requests comment on whether those
amendments should apply to any adjudication proceedings that may be
pending at that time.
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\42\ 5 U.S.C. 553(b).
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Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\43\ Moreover, the Bureau's Director
certifies that this rule will not have a significant economic impact on
a substantial number of small entities. Therefore, an analysis is also
not required for that reason.\44\ The rule imposes compliance burdens
only on the handful of entities that are respondents in adjudication
proceedings or third-party recipients of discovery requests. Some of
the handful of affected entities may be small entities under the
Regulatory Flexibility Act, but they would represent an extremely small
fraction of small entities in consumer financial services markets.
Accordingly, the number of small entities affected is not substantial.
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\43\ 5 U.S.C. 603, 604.
\44\ 5 U.S.C. 605(b).
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The Bureau has also determined that this rule does not impose any
new or revise any existing recordkeeping, reporting, or disclosure
requirements on covered entities or members of the public that would be
collections of information requiring approval by the Office of
Management and Budget under the Paperwork Reduction Act.\45\
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\45\ 44 U.S.C. 3501-3521.
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List of Subjects in 12 CFR Part 1081
Administrative practice and procedure, Banks, Banking, Consumer
protection, Credit unions, Law enforcement, National banks, Savings
associations, Trade practices.
Authority and Issuance
0
For the reasons set forth above, the Bureau revises 12 CFR part 1081 to
read as follows:
PART 1081--RULES OF PRACTICE FOR ADJUDICATION PROCEEDINGS
Subpart A--General Rules
Sec.
1081.100 Scope of the rules of practice.
1081.101 Expedition and fairness of proceedings.
1081.102 Rules of construction.
1081.103 Definitions.
1081.104 Authority of the hearing officer.
1081.105 Assignment, substitution, performance, disqualification of
hearing officer.
1081.106 Deadlines.
1081.107 Appearance and practice in adjudication proceedings.
1081.108 Good faith certification.
1081.109 Conflict of interest.
1081.110 Ex parte communication.
1081.111 Filing of papers.
1081.112 Formal requirements as to papers filed.
1081.113 Service of papers.
1081.114 Construction of time limits.
1081.115 Change of time limits.
1081.116 Witness fees and expenses.
1081.117 Bureau's right to conduct examination, collect information.
1081.118 Collateral attacks on adjudication proceedings.
1081.119 Confidential information; protective orders.
1081.120 Settlement.
1081.121 Cooperation with other agencies.
Subpart B--Initiation of Proceedings and Prehearing Rules
1081.200 Commencement of proceeding and contents of notice of
charges.
1081.201 Answer and disclosure statement and notification of
financial interest.
1081.202 Amended pleadings.
1081.203 Scheduling conference.
1081.204 Consolidation, severance, or bifurcation of proceedings.
1081.205 Non-dispositive motions.
1081.206 Availability of documents for inspection and copying.
1081.207 Production of witness statements.
1081.208 Subpoenas.
1081.209 Depositions.
1081.210 Expert discovery.
1081.211 Interlocutory review.
1081.212 Dispositive motions.
1081.213 Rulings on dispositive motions.
1081.214 Prehearing conferences.
1081.215 Prehearing submissions.
1081.216 Amicus participation.
Subpart C--Hearings
1081.300 Public hearings.
1081.301 Failure to appear.
1081.302 Conduct of hearings.
1081.303 Evidence.
1081.304 Record of the hearing.
1081.305 Post-hearing filings.
1081.306 Record in proceedings before hearing officer; retention of
documents; copies.
Subpart D--Decision and Appeals
1081.400 Preliminary findings and conclusions of the hearing
officer.
1081.401 Transmission of documents to Director; record index;
certification.
[[Page 10035]]
1081.402 Notice of appeal; review by the Director.
1081.403 Briefs filed with the Director.
1081.404 Oral argument before the Director.
1081.405 Decision of the Director.
1081.406 Reconsideration.
1081.407 Effective date; stays pending judicial review.
1081.408 Issue exhaustion.
Subpart E--Temporary Cease-and-Desist Proceedings
1081.500 Scope.
1081.501 Basis for issuance, form, and service.
1081.502 Judicial review, duration.
Authority: 12 U.S.C. 5512(b)(1), 5563(e).
Subpart A--General Rules
Sec. 1081.100 Scope of the rules of practice.
This part prescribes rules of practice and procedure applicable to
adjudication proceedings authorized by section 1053 of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5563). The rules of
practice in this part do not govern the conduct of Bureau
investigations, investigational hearings or other proceedings that do
not arise from proceedings after a notice of charges.
Sec. 1081.101 Expedition and fairness of proceedings.
To the extent practicable, consistent with requirements of law, the
Bureau's policy is to conduct such adjudication proceedings fairly and
expeditiously. In the conduct of such proceedings, the hearing officer
and counsel for all parties must make every effort at each stage of a
proceeding to avoid delay. With the consent of the parties, the
Director, at any time, or the hearing officer at any time prior to the
filing of the hearing officer's preliminary findings and conclusions,
may change any time limit prescribed by this part.
Sec. 1081.102 Rules of construction.
For the purposes of this part:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neutral gender encompasses
all three, if such use would be appropriate;
(c) Unless 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; and
(d) To the extent this part uses terms defined by section 1002 of
the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481), such
terms have the same meaning as set forth therein, unless defined
differently by Sec. 1081.103.
Sec. 1081.103 Definitions.
For the purposes of this part, unless explicitly stated to the
contrary:
Adjudication proceeding means a proceeding conducted pursuant to
section 1053 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5563) and intended to lead to the formulation of a final order
other than a temporary order to cease and desist issued pursuant to
section 1053(c) of that Act (12 U.S.C. 5563(c)).
Bureau means the Consumer Financial Protection Bureau.
Chief hearing officer means the hearing officer charged with
assigning hearing officers to specific proceedings, in the event there
is more than one hearing officer available to the Bureau.
Counsel means any person representing a party pursuant to Sec.
1081.107.
Decisional employee means any employee of the Bureau who has not
engaged in an investigative or prosecutorial role in a proceeding and
who may assist the Director or the hearing officer, respectively, in
preparing orders, preliminary findings and conclusions, decisions, and
other documents under this part.
Director means the Director of the Bureau or a person authorized to
perform the functions of the Director in accordance with the law.
Enforcement counsel means any individual who files a notice of
appearance as counsel on behalf of the Office of Enforcement in an
adjudication proceeding.
Final order means an order issued by the Bureau with or without the
consent of the respondent, which has become final, without regard to
the pendency of any petition for reconsideration or review.
General Counsel means the General Counsel of the Bureau or any
Bureau employee to whom the General Counsel has delegated authority to
act under this part.
Hearing officer means an administrative law judge or any other
person duly authorized to preside at a hearing.
Notice of charges means the pleading that commences an adjudication
proceeding, as described in Sec. 1081.200, except that it does not
include a stipulation and consent order under Sec. 1081.200(d).
Office of Administrative Adjudication means the office of the
Bureau responsible for conducting adjudication proceedings.
Office of Enforcement means the office of the Bureau responsible
for enforcement of Federal consumer financial law or other laws
enforceable by the Bureau.
Party means the Office of Enforcement, any person named as a party
in any notice of charges issued pursuant to this part, and, to the
extent applicable, any person who intervenes in the proceeding pursuant
to Sec. 1081.119(a) to seek a protective order.
Person means an individual, partnership, company, corporation,
association (incorporated or unincorporated), trust, estate,
cooperative organization, or other entity.
Person employed by the Bureau means Bureau employees, contractors,
agents, and others acting for or on behalf of the Bureau, or at its
direction, including consulting experts.
Respondent means the party named in the notice of charges.
State means any State, territory, or possession of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or
the United States Virgin Islands or any federally recognized Indian
tribe, as defined by the Secretary of the Interior under section 104(a)
of the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C.
479a-1(a).
Sec. 1081.104 Authority of the hearing officer.
(a) General rule. The hearing officer will have all powers
necessary to conduct a proceeding in a fair and impartial manner and to
avoid unnecessary delay. No provision of this part may be construed to
limit the powers of the hearing officers provided by the Administrative
Procedure Act, 5 U.S.C. 556, 557.
(b) Powers. The powers of the hearing officer include but are not
limited to the power:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, and protective
orders, as authorized by this part, and to quash or modify any such
subpoenas or orders;
(3) To take depositions or cause depositions to be taken;
(4) To receive relevant evidence and to rule upon the admission of
evidence and offers of proof;
(5) To regulate the course of a proceeding and the conduct of
parties and their counsel;
(6) To reject written submissions that materially fail to comply
with the requirements of this part, and to deny confidential status to
documents and testimony without prejudice until a party complies with
all relevant rules of this chapter;
[[Page 10036]]
(7) To hold conferences for settlement, simplification of the
issues, or any other proper purpose and require the attendance at any
such conference of at least one representative of each party who has
authority to negotiate concerning the resolution of issues in
controversy;
(8) To inform the parties as to the availability of one or more
alternative means of dispute resolution, and to encourage the use of
such methods;
(9) To certify questions to the Director for the Director's
determination in accordance with the rules of this part;
(10) To consider and rule upon, as justice may require, all
procedural and other motions appropriate in adjudication proceedings;
(11) To issue and file preliminary findings and conclusions;
(12) To recuse oneself by motion made by a party or on the hearing
officer's own motion;
(13) To issue such sanctions against parties or their counsel as
may be necessary to deter repetition of sanctionable conduct or
comparable conduct by others similarly situated, as provided for in
this part or as otherwise necessary to the appropriate conduct of
hearings and related proceedings, provided that no sanction will be
imposed before providing the sanctioned person an opportunity to show
cause why no such sanction should issue; and
(14) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 1081.105 Assignment, substitution, performance, disqualification
of hearing officer.
(a) How assigned. In the event that more than one hearing officer
is available to the Bureau for the conduct of proceedings under this
part, the presiding hearing officer will be designated by the chief
hearing officer, who will notify the parties of the hearing officer
designated.
(b) Interference. Hearing officers will not be subject to the
supervision or direction of, or responsible to, any officer, employee,
or agent engaged in the performance of investigative or prosecuting
functions for the Bureau, and all direction by the Bureau to the
hearing officer concerning any adjudication proceedings must appear in
and be made part of the record.
(c) Disqualification of hearing officers. (1) When a hearing
officer deems the hearing officer disqualified to preside in a
particular proceeding, the hearing officer must issue a notice stating
that the hearing officer is withdrawing from the matter and setting
forth the reasons therefore.
(2) Any party who has a reasonable, good faith basis to believe
that a hearing officer has a personal bias, or is otherwise
disqualified from hearing a case, may make a motion to the hearing
officer that the hearing officer withdraw. The motion must be
accompanied by an affidavit setting forth the facts alleged to
constitute grounds for disqualification. Such motion must be filed at
the earliest practicable time after the party learns, or could
reasonably have learned, of the alleged grounds for disqualification.
If the hearing officer does not disqualify the hearing officer within
14 days, the hearing officer must certify the motion to the Director
pursuant to Sec. 1081.211, together with any statement the hearing
officer may wish to have considered by the Director. The Director must
promptly determine the validity of the grounds alleged, either directly
or on the report of another hearing officer appointed to conduct a
hearing for that purpose, and will either direct the reassignment of
the matter or confirm the hearing officer's continued role in the
matter.
(d) Unavailability of hearing officer. If the hearing officer
withdraws or is otherwise unable to perform the duties of the hearing
officer, the chief hearing officer or the Director will designate
another hearing officer to serve.
Sec. 1081.106 Deadlines
The deadlines for action by the hearing officer established by
Sec. Sec. 1081.203, 1081.205, 1081.211, 1081.212, and 1081.400, or
elsewhere in this part, confer no substantive rights on respondents.
Sec. 1081.107 Appearance and practice in adjudication proceedings.
(a) Appearance before the Bureau or a hearing officer--(1) By
attorneys. Any member in good standing of the bar of the highest court
of any State may represent others before the Bureau if such attorney is
not currently suspended or debarred from practice before the Bureau or
by a court of the United States or of any State.
(2) By non-attorneys. So long as such individual is not currently
suspended or debarred from practice before the Bureau:
(i) An individual may appear on the individual's own behalf;
(ii) A member of a partnership may represent the partnership;
(iii) A duly authorized officer of a corporation, trust, or
association may represent the corporation, trust, or association; and
(iv) A duly authorized officer or employee of any government unit,
agency, or authority may represent that unit, agency, or authority.
(3) Notice of appearance. Any individual acting as counsel on
behalf of a party, including Enforcement counsel, must file a notice of
appearance at or before the time that the individual submits papers or
otherwise appears on behalf of a party in the adjudication proceeding.
The notice of appearance must include a written declaration that the
individual is currently qualified as provided in paragraph (a)(1) or
(2) of this section and is authorized to represent the particular
party, and if applicable, must include the attorney's jurisdiction of
admission or qualification, attorney identification number, and a
statement by the appearing attorney attesting to the attorney's good
standing within the legal profession. By filing a notice of appearance
on behalf of a party in an adjudication proceeding, the counsel agrees
and represents that counsel is authorized to accept service on behalf
of the represented party and that, in the event of withdrawal from
representation, counsel will, if required by the hearing officer,
continue to accept service until a new counsel has filed a notice of
appearance or until the represented party indicates that the party will
proceed on a pro se basis. The notice of appearance must provide the
representative's email address, telephone number, and business address
and, if different from the representative's addresses, electronic or
other address at which the represented party may be served.
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous,
or contumacious conduct at any phase of any adjudication proceeding may
be grounds for exclusion or suspension of counsel from the proceeding.
An order imposing a sanction must describe the sanctioned conduct and
explain the basis for the sanction.
(c) Standards of conduct; disbarment. (1) All attorneys practicing
before the Bureau must conform to the standards of ethical conduct
required by the bars of which the attorneys are members.
(2) If for good cause shown, the Director believes that any
attorney is not conforming to such standards, or that an attorney or
counsel to a party has otherwise engaged in conduct warranting
disciplinary action, the Director may issue an order requiring such
person to show cause why the attorney should not be suspended or
disbarred from practice before the Bureau. The alleged offender will be
granted due opportunity to be heard in
[[Page 10037]]
the alleged offender's own defense and may be represented by counsel.
Thereafter, if warranted by the facts, the Director may issue against
the attorney or counsel an order of reprimand, suspension, or
disbarment.
Sec. 1081.108 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice of charges must be signed by at
least one counsel of record in counsel's individual name and must state
counsel's address, email address, and telephone number. A party who
acts as the party's own counsel must sign the party's individual name
and state the party's address, email address, and telephone number on
every filing or submission of record. Papers filed by electronic
transmission may be signed with an ``/s/'' notation, which will be
deemed the signature of the party or representative whose name appears
below the signature line.
(b) Effect of signature. (1) The signature of counsel or a party
constitutes a certification that: The counsel or party has read the
filing or submission of record; to the best of one's knowledge,
information, and belief formed after reasonable inquiry, the filing or
submission of record is well-grounded in fact and is warranted by
existing law or a good faith argument for the extension, modification,
or reversal of existing law; and the filing or submission of record is
not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
(2) If a filing or submission of record is not signed, the hearing
officer must strike the filing or submission of record, unless it is
signed promptly after the omission is called to the attention of the
filer.
(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 one's knowledge, information, and
belief formed after reasonable inquiry, one's 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.
(d) Sanctions. Counsel or a party that fails to abide by the
requirements of this section may be subject to sanctions pursuant to
Sec. 1081.104(b)(13).
Sec. 1081.109 Conflict of interest.
(a) Conflict of interest in representation. No person may appear as
counsel for another person in an adjudication 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 hearing officer 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 adjudication 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. 1081.107(a)(3):
(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/or non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any conflicts of interest during the course of the proceeding.
Sec. 1081.110 Ex parte communication.
(a) Definitions. (1) For purposes of this section, ex parte
communication means any material oral or written communication relevant
to the merits of an adjudication proceeding that was neither on the
record nor on reasonable prior notice to all parties that takes place
between:
(i) An interested person not employed by the Bureau (including such
person's counsel); and
(ii) The hearing officer handling the proceeding, the Director, or
a decisional employee.
(2) A request for status of the proceeding does not constitute an
ex parte communication.
(3) Pendency of an adjudication proceeding means the time from when
the Bureau issues a notice of charges, unless the person responsible
for the communication has knowledge that a notice of charges will be
issued, in which case the pendency of an adjudication will commence at
the time of that person's acquisition of such knowledge, or from when
an order by a court of competent jurisdiction remanding a Bureau
decision and order for further proceedings becomes effective, until the
time the Director enters a final decision and order in the proceeding
and the time permitted to seek reconsideration of that decision and
order has elapsed. For purposes of this section, an order of remand by
a court of competent jurisdiction is deemed to become effective when
the Bureau's right to petition for review or for a writ of certiorari
has lapsed without a petition having been filed, or when such a
petition has been denied. If a petition for reconsideration of a Bureau
decision is filed pursuant to Sec. 1081.406, the matter will be
considered to be a pending adjudication proceeding until the time the
Bureau enters an order disposing of the petition.
(b) Prohibited ex parte communications. During the pendency of an
adjudication proceeding, except to the extent required for the
disposition of ex parte matters as authorized by law or as otherwise
authorized by this part:
(1) No interested person not employed by the Bureau will make or
knowingly cause to be made to the Director, or to the hearing officer,
or to any decisional employee, an ex parte communication; and
(2) The Director, the hearing officer, or any decisional employee
will not make or knowingly cause to be made to any interested person
not employed by the Bureau any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication prohibited by paragraph (b) of this section is
received by the hearing officer, the Director, or any decisional
employee, that person must 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 will have an
opportunity, within 14 days of receipt of service of the ex parte
communication, to file responses thereto and to recommend any
sanctions, in accordance with paragraph (d) of this section, that they
believe to be appropriate under the circumstances.
(d) Sanctions--(1) Adverse action on claim. Upon receipt of an ex
parte communication knowingly made or knowingly caused to be made by a
party and prohibited by paragraph (b) of this section, the Director or
hearing officer, as appropriate, may, to the extent consistent with the
interests of justice and the policy of the underlying statutes, require
the party to show cause why the party's claim or interest in the
proceeding should not be dismissed, denied, disregarded, or otherwise
adversely affected on account of such violation.
[[Page 10038]]
(2) Discipline of persons practicing before the Bureau. The
Director may, to the extent not prohibited by law, censure, suspend, or
revoke the privilege to practice before the Bureau of any person who
makes, or solicits the making of, an unauthorized ex parte
communication.
(e) Separation of functions. Except to the extent required for the
disposition of ex parte matters as authorized by law, the hearing
officer may not consult a person or party on any matter relevant to the
merits of the adjudication, unless upon notice and opportunity for all
parties to participate. An employee or agent engaged in the performance
of investigative or prosecuting functions for the Bureau in a case,
other than the Director, may not, in that or a factually related case,
participate or advise in the decision, preliminary findings and
conclusions, or agency review of the preliminary findings and
conclusions, except as witness or counsel in public proceedings.
Sec. 1081.111 Filing of papers.
(a) Filing. The following papers must be filed by parties in an
adjudication proceeding: The notice of charges, proof of service of the
notice of charges, notices of appearance, answer, the disclosure
statement required under Sec. 1081.201(e), motion, brief, request for
issuance or enforcement of a subpoena, response, opposition, reply,
notice of appeal, or petition for reconsideration. The hearing officer
or Director (as applicable) will file all written orders, rulings,
notices, or requests. Any papers required to be filed must be filed
with the Office of Administrative Adjudication, except as otherwise
provided in this section.
(b) Manner of filing. Unless otherwise specified by the Director or
the hearing officer, filing may be accomplished by:
(1) Electronic transmission in accordance with guidance issued by
the Office of Administrative Adjudication; or
(2) Any of the following methods if respondent demonstrates, in
accordance with guidance issued by the Office of Administrative
Adjudication, that electronic filing is not practicable:
(i) Personal delivery;
(ii) Delivery to a reliable commercial courier service or overnight
delivery service; or
(iii) Mailing the papers through the U.S. Postal Service by First
Class Mail, Registered Mail, Certified Mail or Express Mail.
(c) Papers filed in an adjudication proceeding are presumed to be
public. Unless otherwise ordered by the Director or the hearing
officer, all papers filed in connection with an adjudication proceeding
are presumed to be open to the public. The Bureau may provide public
access to and publish any papers filed in an adjudication proceeding
except if there is a pending motion for a protective order filed
pursuant to Sec. 1081.119, or if there is an order from the Director,
hearing officer, or a Federal court authorizing the confidential
treatment of the papers filed.
Sec. 1081.112 Formal requirements as to papers filed.
(a) Form. All papers filed by parties must:
(1) Set forth the name, address, telephone number, and email
address of the counsel or party making the filing;
(2) Be double-spaced (except for single-spaced footnotes and
single-spaced indented quotations) and printed or typewritten on 8\1/2\
x 11 inch paper in 12-point or larger font;
(3) Include at the head of the paper, or on a title page, a caption
setting forth the title of the case, the docket number of the
proceeding, and a brief descriptive title indicating the purpose of the
paper;
(4) Be paginated with margins at least one inch wide; and
(5) If filed by other than electronic means, be stapled, clipped,
or otherwise fastened in a manner that lies flat when opened.
(b) Signature. All papers must be dated and signed as provided in
Sec. 1081.108.
(c) Number of copies. Unless otherwise specified by the Director or
the hearing officer, one copy of all documents and papers must be filed
if filing is by electronic transmission. If filing is accomplished by
any other means, an original and one copy of all documents and papers
must be filed, except that only one copy of transcripts of testimony
and exhibits must be filed.
(d) Authority to reject document for filing. The Office of
Administrative Adjudication or the hearing officer may reject a
document for filing that materially fails to comply with this part.
(e) Sensitive personal information. Sensitive personal information
means an individual's Social Security number, taxpayer identification
number, financial account number, credit card or debit card number,
driver's license number, State-issued identification number, passport
number, date of birth (other than year), and any sensitive health
information identifiable by individual, such as an individual's medical
records. Sensitive personal information must not be included in, and
must be redacted or omitted from, filings unless the person filing the
paper determines that such information is relevant or otherwise
necessary for the conduct of the proceeding. If the person filing a
paper determines the sensitive personal information contained in the
paper is relevant or necessary to the proceeding, the person must file
the paper in accordance with paragraph (f) of this section, including
filing an expurgated copy of the paper with the sensitive personal
information redacted.
(f) Confidential treatment of information in certain filings. A
party seeking confidential treatment of information contained in a
filing must contemporaneously file either a motion requesting such
treatment in accordance with Sec. 1081.119 or a copy of the order from
the Director, hearing officer, or Federal court authorizing such
confidential treatment. The filing must comply with any applicable
order of the Director or hearing officer and must be accompanied by:
(1) A complete, sealed copy of the documents containing the
materials as to which confidential treatment is sought, with the
allegedly confidential material clearly marked as such, and with the
first page of the document labeled ``Under Seal.'' If the movant seeks
or has obtained a protective order against disclosure to other parties
as well as the public, copies of the documents will not be served on
other parties; and
(2) An expurgated copy of the materials as to which confidential
treatment is sought, with the allegedly confidential materials
redacted. The redacted version must indicate any omissions with
brackets or ellipses, and its pagination and depiction of text on each
page must be identical to that of the sealed version.
(g) Certificate of service. Any papers filed in an adjudication
proceeding must contain proof of service on all other parties or their
counsel in the form of a statement of the date and manner of service
and of the names of the persons served, certified by the person who
made service. The certificate of service must be affixed to the papers
filed and signed in accordance with Sec. 1081.108.
Sec. 1081.113 Service of papers.
(a) When required. In every adjudication proceeding, each paper
required to be filed by Sec. 1081.111 must be served upon each party
in the proceeding in accordance with the provisions of this section;
provided, however, that absent an order to the contrary, no service is
required for motions which are to be heard ex parte.
(b) Upon a person represented by counsel. Whenever service is
required to
[[Page 10039]]
be made upon a person represented by counsel who has filed a notice of
appearance pursuant to Sec. 1081.107(a)(3), service shall be made
pursuant to paragraph (c) of this section upon counsel, unless service
upon the person represented is ordered by the Director or the hearing
officer, as appropriate.
(c) Method of service. Except as provided in paragraph (d) of this
section or as otherwise ordered by the hearing officer or the Director,
service must be made by delivering a copy of the filing by one of the
following methods:
(1) Transmitting the papers by electronic transmission where the
persons so serving each other have consented to service by specified
electronic transmission and provided the Bureau and the parties with
notice of the means for service by electronic transmission (e.g., email
address or facsimile number);
(2) Handing a copy to the person required to be served; or leaving
a copy at the person's office with a clerk or other person in charge
thereof, or, if there is no one in charge, leaving it in a conspicuous
place therein; or, if the office is closed or the person to be served
has no office, leaving it at the person's dwelling or usual place of
abode with some person of suitable age and discretion then residing
therein;
(3) Mailing the papers through the U.S. Postal Service by First
Cass Mail, Registered Mail, Certified Mail or Express Mail delivery
addressed to the person; or
(4) Sending the papers through a third-party commercial courier
service or express delivery service.
(d) Service of certain papers by the Office of Enforcement or the
Office of Administrative Adjudication--(1) Service of a notice of
charges by the Office of Enforcement--(i) To individuals. Notice of a
proceeding shall be made to an individual by delivering a copy of the
notice of charges to the individual or to an agent authorized by
appointment or by law to receive such notice. Delivery, for purposes of
this paragraph (d)(1)(i), means handing a copy of the notice to the
individual; or leaving a copy at the individual's office with a clerk
or other person in charge thereof; or leaving a copy at the
individual's dwelling house or usual place of abode with some person of
suitable age and discretion then residing therein; or sending a copy of
the notice addressed to the individual through the U.S. Postal Service
by Registered Mail, Certified Mail or Express Mail delivery, or by
third-party commercial carrier, for overnight delivery and obtaining a
confirmation of receipt.
(ii) To corporations or entities. Notice of a proceeding must be
made to a person other than a natural person by delivering a copy of
the notice of charges to an officer, managing or general agent, or any
other agent authorized by appointment or law to receive such notice, by
any method specified in paragraph (d)(1)(i) of this section.
(iii) Upon persons registered with the Bureau. In addition to any
other method of service specified in paragraph (d)(1)(i) or (ii) of
this section, notice may be made to a person currently registered with
the Bureau by sending a copy of the notice of charges addressed to the
most recent business address shown on the person's registration form by
U.S. Postal Service certified, registered, or Express Mail and
obtaining a confirmation of receipt or attempted delivery.
(iv) Upon persons in a foreign country. Notice of a proceeding to a
person in a foreign country may be made by any method specified in
paragraph (d)(1) of this section, or by any other method reasonably
calculated to give notice, provided that the method of service used is
not prohibited by the law of the foreign country.
(v) Record of service. The Office of Enforcement will maintain and
file a record of service of the notice of charges on parties,
identifying the party given notice, the method of service, the date of
service, the address to which service was made, and the person who made
service. If service is made in person, the certificate of service must
state, if available, the name of the individual to whom the notice of
charges was given. If service is made by U.S. Postal Service Registered
Mail, Certified Mail, or Express Mail, the Office of Enforcement will
maintain the confirmation of receipt or attempted delivery. If service
is made to an agent authorized by appointment to receive service, the
certificate of service must be accompanied by evidence of the
appointment.
(vi) Waiver of service. In lieu of service as set forth in
paragraph (d)(1)(i) or (ii) of this section, the party may be provided
a copy of the notice of charges by First Class Mail or other reliable
means if a waiver of service is obtained from the party and placed in
the record.
(2) Service of papers by the Office of Administrative Adjudication.
Unless otherwise ordered by the hearing officer or Director, the Office
of Administrative Adjudication must serve papers filed by the hearing
officer or Director promptly on each party pursuant to any method of
service authorized under paragraph (c) or (d)(1) of this section.
Unless otherwise ordered by the hearing officer or Director, if a party
is represented by counsel who has filed a notice of appearance pursuant
to Sec. 1081.107(a)(3), the Office of Administrative Adjudication
serves that party by serving its counsel.
Sec. 1081.114 Construction of time limits.
(a) General rule. In computing any time period prescribed by this
part, by order of the Director or a hearing officer, or by any
applicable statute, exclude the day of the event that triggers the
period, count every day, including intermediate Saturdays, Sundays, and
Federal holidays, and include the last day of the period unless it is a
Saturday, Sunday, or Federal holiday as set forth in 5 U.S.C. 6103(a).
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.
(b) When papers are deemed to be filed or served. Filing and
service are deemed to be effective:
(1) In the case of personal service or same day commercial courier
delivery, upon actual receipt by person served;
(2) In the case of overnight commercial delivery service, Express
Mail delivery, First Class Mail, Registered Mail, or Certified Mail,
upon deposit in or delivery to an appropriate point of collection; or
(3) In the case of electronic transmission, upon transmission.
(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 Mail, Registered Mail, 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 transmission, add one calendar
day to the prescribed period.
Sec. 1081.115 Change of time limits.
(a) Generally. Except as otherwise provided by law, the hearing
officer may, in any proceeding before him or her, for good cause shown,
extend the time limits prescribed by this part or by any notice or
order issued in the proceedings. After appeal to the Director pursuant
to Sec. 1081.402, the Director may grant extensions of the time limits
for good cause shown. Extensions may be granted on the motion of a
party after notice and opportunity to respond is afforded all non-
moving parties or on
[[Page 10040]]
the Director's or the hearing officer's own motion, as appropriate.
(b) Considerations in determining whether to extend time limits or
grant postponements, adjournments and extensions. Motions for
extensions of time filed pursuant to paragraph (a) of this section are
generally disfavored. In determining whether to grant any motions, the
Director or hearing officer, as appropriate, will consider, in addition
to any other relevant factors:
(1) The length of the proceeding to date;
(2) The number of postponements, adjournments or extensions already
granted;
(3) The stage of the proceedings at the time of the motion;
(4) The impact of the motion on the hearing officer's ability to
complete the proceeding in the time specified by Sec. 1081.400(a); and
(5) Any other matters as justice may require.
(c) Time limit. Postponements, adjournments, or extensions of time
for filing papers may not exceed 21 days unless the Director or the
hearing officer, as appropriate, states on the record or sets forth in
a written order the reasons why a longer period of time is necessary.
(d) No effect on deadline for preliminary findings and conclusions.
The granting of any extension of time pursuant to this section does not
affect any deadlines set pursuant to Sec. 1081.400(a).
Sec. 1081.116 Witness fees and expenses.
Respondents must pay to witnesses subpoenaed for testimony or
depositions on their behalf 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
deposition subpoena addressed to a party, no witness fees or mileage
need be paid. Fees for witnesses must be tendered in advance by any
respondent requesting the issuance of a subpoena, except that fees and
mileage need not be tendered in advance where the Office of Enforcement
is the party requesting the subpoena. The Bureau must pay to witnesses
subpoenaed for testimony or depositions on behalf of the Office of
Enforcement 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, but the Bureau need not tender such fees in advance.
Sec. 1081.117 Bureau's right to conduct examination, collect
information.
Nothing contained in this part limits in any manner the right of
the Bureau to conduct any examination, inspection, or visitation of any
person, to conduct or continue any form of investigation authorized by
law, to collect information in order to monitor the market for risks to
consumers in the offering or provision of consumer financial products
or services, or to otherwise gather information in accordance with law.
Sec. 1081.118 Collateral attacks on adjudication proceedings.
Unless a court of competent jurisdiction, or the Director for good
cause, so directs, if an interlocutory appeal or collateral attack is
brought in any court concerning all or any part of an adjudication
proceeding, the challenged adjudication proceeding will continue
without regard to the pendency of that court proceeding. No default or
other failure to act as directed in the adjudication proceeding within
the times prescribed in this part will be excused based on the pendency
before any court of any interlocutory appeal or collateral attack.
Sec. 1081.119 Confidential information; protective orders.
(a) Rights of third parties. Any party that intends to disclose
information obtained from a third party that is subject to a claim of
confidentiality must provide notice to the third party at least seven
days prior to the proposed disclosure of such information. In response
to such notice, the third party may consent to the disclosure of such
information, which may be conditioned on the entry of an appropriate
protective order, or may intervene in the proceeding for the limited
purpose of moving for a protective order pursuant to this section. Any
written filing by a party that contains such confidential information
must be accompanied by a certification that proper notice was provided.
The act of making any oral motion or oral argument by any counsel or
party which contains such confidential information constitutes a
certification that proper notice was provided. A third party wishing to
intervene for purposes of protecting its confidential information may
file a single motion, in conformity with all applicable rules, setting
forth the basis of both the third party's right to intervene and the
basis for the protective order, in conformity with paragraph (b) of
this section.
(b) Procedure. In any adjudication proceeding, a party, including a
third party who has intervened pursuant to paragraph (a) of this
section, may file a motion requesting a protective order to limit from
disclosure to other parties or to the public documents or testimony
that contain confidential information. The motion should include a
general summary or extract of the documents or testimony without
revealing confidential details, and a copy of the proposed protective
order. A motion for confidential treatment of documents should be filed
in accordance with Sec. 1081.112(f), and all other applicable rules of
this chapter.
(c) Basis for issuance. Documents and testimony introduced in a
public hearing, or filed in connection with an adjudication proceeding,
are presumed to be public. A motion for a protective order will be
granted:
(1) Upon a finding that public disclosure will likely result in a
clearly defined, serious injury to the party or third party requesting
confidential treatment;
(2) After finding that the material constitutes sensitive personal
information, as defined in Sec. 1081.112(e);
(3) If all parties, including third parties to the extent their
information is at issue, stipulate to the entry of a protective order;
or
(4) Where public disclosure is prohibited by law.
(d) Requests for additional information supporting confidentiality.
The hearing officer may require a movant under paragraph (b) of this
section to furnish in writing additional information with respect to
the grounds for confidentiality. Failure to supply the information so
requested within seven days from the date of receipt by the movant of a
notice of the information required will be deemed a waiver of the
objection to public disclosure of that portion of the documents to
which the additional information relates, unless the hearing officer
otherwise orders for good cause shown at or before the expiration of
such seven-day period.
(e) Confidentiality of documents pending decision. Pending a
determination of a motion under this section, the documents as to which
confidential treatment is sought and any other documents that would
reveal the confidential information in those documents will be
maintained under seal and may be disclosed only in accordance with
orders of the hearing officer. Any order issued in connection with a
motion under this section will be public unless the order would
disclose information as to which a protective order has been granted,
in which case that portion of the order that would reveal the protected
information will be nonpublic.
[[Page 10041]]
Sec. 1081.120 Settlement.
(a) Availability. Any respondent in an adjudication proceeding
instituted under this part, may, at any time, propose in writing an
offer of settlement.
(b) Procedure. An offer of settlement must state that it is made
pursuant to this section; must recite or incorporate as a part of the
offer the provisions of paragraphs (c)(3) and (4) of this section; must
be signed by the person making the offer, not by counsel; and must be
submitted to enforcement counsel.
(c) Consideration of offers of settlement. (1) Offers of settlement
will be considered when time, the nature of the proceedings, and the
public interest permit.
(2) Any settlement offer will be presented to the Director with a
recommendation, except that, if the recommendation is unfavorable, the
offer will not be presented to the Director unless the person making
the offer so requests.
(3) By submitting an offer of settlement, the person making the
offer waives, subject to acceptance of the offer:
(i) All hearings pursuant to the statutory provisions under which
the proceeding has been instituted;
(ii) The filing of proposed findings of fact and conclusions of
law;
(iii) Proceedings before, and preliminary findings and conclusions
by, a hearing officer;
(iv) All post-hearing procedures;
(v) Judicial review by any court; and
(vi) Any objection to the jurisdiction of the Bureau under section
1053 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5563).
(4) By submitting an offer of settlement the person further waives:
(i) Such provisions of this part or other requirements of law as
may be construed to prevent any Bureau employee from participating in
the preparation of, or advising the Director as to, any order, opinion,
finding of fact, or conclusion of law to be entered pursuant to the
offer; and
(ii) Any right to claim bias or prejudgment by the Director based
on the consideration of or discussions concerning settlement of all or
any part of the proceeding.
(5) If the Director rejects the offer of settlement, the person
making the offer will be notified of the Director's action and the
offer of settlement will be deemed withdrawn. The rejected offer will
not constitute a part of the record in any proceeding against the
person making the offer, provided, however, that rejection of an offer
of settlement does not affect the continued validity of waivers
pursuant to paragraph (c)(4) of this section with respect to any
discussions concerning the rejected offer of settlement.
(d) Consent orders. If the Director accepts the offer of
settlement, all terms and conditions of a settlement entered into under
this section will be recorded in a written stipulation signed by each
settling respondent, and a consent order concluding the proceeding as
to the settling respondents. The stipulation and consent order must be
filed pursuant to Sec. 1081.111, and must recite or incorporate as a
part of the stipulation the provisions of paragraphs (c)(3) and (4) of
this section. The Director will then issue a consent order, which will
be a final order concluding the proceeding as to the settling
respondents.
Sec. 1081.121 Cooperation with other agencies.
It is the policy of the Bureau to cooperate with other governmental
agencies to avoid unnecessary overlap or duplication of regulatory
functions.
Subpart B--Initiation of Proceedings and Prehearing Rules
Sec. 1081.200 Commencement of proceeding and contents of notice of
charges.
(a) Commencement of proceeding. A proceeding governed by subparts A
through D of this part is commenced when the Bureau, through the Office
of Enforcement, files a notice of charges in accordance with Sec.
1081.111. The notice of charges must be served by the Office of
Enforcement upon the respondent in accordance with Sec.
1081.113(d)(1).
(b) Contents of a notice of charges. The notice of charges must set
forth:
(1) The legal authority for the proceeding and for the Bureau's
jurisdiction over the proceeding;
(2) A statement of the matters of fact and law showing that the
Bureau is entitled to relief;
(3) A proposed order or request for an order granting the relief
sought;
(4) The time and place 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) That the answer must be filed and served in accordance with
subpart A of this part; and
(7) The docket number for the adjudication proceeding.
(c) Publication of notice of charges. Unless otherwise ordered by
the Director, the notice of charges will be given general circulation
by release to the public, by publication on the Bureau's website and,
where directed by the hearing officer or the Director, by publication
in the Federal Register. The Bureau may publish any notice of charges
after 14 days from the date of service except if there is a pending
motion for a protective order filed pursuant to Sec. 1081.119.
(d) Commencement of proceeding through a consent order.
Notwithstanding paragraph (a) of this section, where the parties agree
to settlement before the filing of a notice of charges, a proceeding
may be commenced by filing a stipulation and consent order. The
stipulation and consent order must be filed pursuant to Sec. 1081.111.
The stipulation must contain the information required under Sec.
1081.120(d), and the consent order must contain the information
required under paragraphs (b)(1) and (2) of this section. The
proceeding will be concluded upon issuance of the consent order by the
Director.
(e) Voluntary dismissal--(1) Without an order. The Office of
Enforcement may voluntarily dismiss an adjudication proceeding without
an order entered by a hearing officer by filing either:
(i) A notice of dismissal before the respondent(s) serves an
answer; or
(ii) A stipulation of dismissal signed by all parties who have
appeared.
(2) Effect. Unless the notice or stipulation states otherwise, the
dismissal is without prejudice, and does not operate as an adjudication
on the merits.
Sec. 1081.201 Answer and disclosure statement and notification of
financial interest.
(a) Time to file answer. Within 14 days of service of the notice of
charges, respondent must file an answer as designated in the notice of
charges.
(b) Content of answer. An answer must specifically respond to each
paragraph or allegation of fact contained in the notice of charges 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 of charges which is not denied in the answer is
deemed admitted for purposes of the proceeding. A respondent is not
required to respond to the portion of a notice of charges that
constitutes the request for relief or proposed order. A respondent must
affirmatively state in the answer any avoidance or affirmative defense,
[[Page 10042]]
including but not limited to res judicata and statute of limitations.
Failure to do so will be deemed a waiver.
(c) If the allegations of the notice of charges are admitted. If
the respondent elects not to contest the allegations of fact set forth
in the notice of charges, the answer will consist of a statement that
the respondent admits all the material allegations to be true. Such an
answer constitutes a waiver of hearings as to the facts alleged in the
notice of charges, and together with the notice of charges will provide
a record basis on which the hearing officer will issue preliminary
findings and conclusions, containing appropriate findings and
conclusions and a proposed order disposing of the proceeding. In such
an answer, the respondent may, however, reserve the right to submit
proposed findings of fact and conclusions of law under Sec. 1081.305.
(d) Default. (1) Failure of a respondent to file an answer within
the time provided will be deemed to constitute a waiver of the
respondent's right to appear and contest the allegations of the notice
of charges and to authorize the hearing officer, without further notice
to the respondent, to find the facts to be as alleged in the notice of
charges and to enter preliminary findings and conclusions containing
appropriate findings and conclusions. In such cases, respondent will
have no right to appeal pursuant to Sec. 1081.402, but must instead
proceed pursuant to paragraph (d)(2) of this section.
(2) A motion to set aside a default must be made within a
reasonable time, state the reasons for the failure to appear or defend,
and specify the nature of the proposed defense in the proceeding. In
order to prevent injustice and on such conditions as may be
appropriate, the hearing officer, at any time prior to the filing of
the preliminary findings and conclusions, or the Director, at any time,
may for good cause shown set aside a default.
(e) Disclosure statement and notification of financial interest--
(1) Who must file; contents. A respondent, nongovernmental intervenor,
or nongovernmental amicus must file a disclosure statement and
notification of financial interest that:
(i) Identifies any parent corporation, any publicly owned
corporation owning ten percent or more of its stock, and any publicly
owned corporation not a party to the proceeding that has a financial
interest in the outcome of the proceeding and the nature of that
interest; or
(ii) States that there are no such corporations.
(2) Time for filing; supplemental filing. A respondent,
nongovernmental intervenor, or nongovernmental amicus must:
(i) File the disclosure statement with its first appearance,
pleading, motion, response, or other request addressed to the hearing
officer or the Bureau; and
(ii) Promptly file a supplemental statement if any required
information changes.
Sec. 1081.202 Amended pleadings.
(a) Amendments before the hearing. The notice of charges, answer,
or any other pleading may be amended or supplemented only with the
opposing party's written consent or leave of the hearing officer. The
respondent must answer an amended notice of charges within the time
remaining for the respondent's answer to the original notice of
charges, or within 14 days after service of the amended notice of
charges, whichever is later, unless the hearing officer orders
otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised
in the notice of charges 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 of charges 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 of charges or answer, the hearing officer may admit the evidence
when admission is likely to assist in adjudicating the merits of the
action and the objecting party fails to satisfy the hearing officer
that the admission of such evidence would unfairly prejudice that
party's action or defense upon the merits. The hearing officer may
grant a continuance to enable the objecting party to meet such
evidence.
Sec. 1081.203 Scheduling conference.
(a) Meeting of the parties before scheduling conference. As early
as practicable before the scheduling conference described in paragraph
(e) of this section, counsel for the parties must meet to discuss the
nature and basis of their claims and defenses and the possibilities for
a prompt settlement or resolution of the case. The parties must also
discuss and agree, if possible, on the matters set forth in paragraph
(e) of this section.
(b) Scheduling conference disclosure. After the meeting required in
paragraph (a) of this section and at least seven days prior to the
scheduling conference described in paragraph (e) of this section, the
parties must exchange a scheduling conference disclosure, which must be
signed by the party or by the party's attorney if one has appeared on
behalf of the party. The scheduling conference disclosure must include:
(1) A factual summary of the case, a summary of all factual and
legal issues in dispute, and a summary of all factual and legal bases
supporting each defense; and
(2) The following information about the evidence that the party may
present at the hearing other than solely for impeachment:
(i) The name, address, and telephone number of each witness,
together with a summary of the witness's anticipated testimony; and
(ii) An identification of each document or other exhibit, including
summaries of other evidence, along with a copy of each document or
exhibit identified unless the document or exhibit has already been
produced to the other party.
(c) Duty to supplement. A party must supplement or correct the
scheduling conference disclosure in a timely manner if the party
acquires other information that it intends to rely upon at a hearing.
(d) Failure to disclose--harmless error. In the event that
information required to be disclosed in the scheduling conference
disclosure is not disclosed, no rehearing or redecision of a proceeding
already heard or decided will be required unless the other party
establishes that the failure to disclose was not harmless error.
(e) Scheduling conference. Within 21 days of service of the notice
of charges or such other time as the parties and hearing officer may
agree, counsel for all parties must appear before the hearing officer
in person at a specified time and place or by electronic means for the
purpose of scheduling the course and conduct of the proceeding. This
meeting is called a scheduling conference. At the scheduling
conference, counsel for the parties must be prepared to address:
(1) Determination of the dates and location of the hearing,
including, in proceedings under section 1053(b) of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5563(b)), whether the
hearing should commence later than 60 days after service of the notice
of charges, considering, among other factors, whether the respondent
intends to file a dispositive motion or to seek the issuance of
subpoenas;
(2) Simplification and clarification of the issues;
(3) Amendments to pleadings;
(4) Settlement of any or all issues;
(5) Production of documents as set forth in Sec. 1081.206 and of
witness
[[Page 10043]]
statements as set forth in Sec. 1081.207, and prehearing production of
documents in response to subpoenas duces tecum as set forth in Sec.
1081.208;
(6) Whether the parties intend to file dispositive motions;
(7) Whether the parties intend to seek the issuance of subpoenas,
the identity of any anticipated deponents or subpoena recipients, and a
schedule for completing that discovery;
(8) A schedule for the exchange of expert reports and the taking of
expert depositions, if any; and
(9) Such other matters as may aid in the orderly disposition of the
proceeding.
(f) Transcript. The hearing officer may require that a scheduling
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 that party's expense.
(g) Scheduling order. At or within seven days following the
conclusion of the scheduling conference, the hearing officer will serve
on each party an order setting forth the date and location of the
hearing and any agreements reached and any procedural determinations
made.
(h) Failure to appear, default. Any person who is named in a notice
of charges as a person against whom findings may be made or sanctions
imposed and who fails to appear, in person or through counsel, at a
scheduling conference of which the person has been duly notified may be
deemed in default pursuant to Sec. 1081.201(d)(1). A party may make a
motion to set aside a default pursuant to Sec. 1081.201(d)(2).
(i) Public access. The scheduling conference will be public unless
the hearing officer determines, based on the standard set forth in
Sec. 1081.119(c), that the conference (or any part thereof) should be
closed to the public.
Sec. 1081.204 Consolidation, severance, or bifurcation of
proceedings.
(a) Consolidation. (1) On the motion of any party, or on the
hearing officer's own motion, the hearing officer 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 may be made
to avoid unnecessary expense, inconvenience, or delay.
(b) Severance. The hearing officer may, upon the motion of any
party, sever the proceeding for separate resolution of the matter as to
any respondent only if the hearing officer 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.
(c) Bifurcation. The Director may order that the proceeding be
divided into two or more stages, if the Director determines that it
would promote efficiency in the proceeding or for other good cause. For
example, the Director may order that the proceeding have two stages, so
that at the conclusion of the first stage the Director issues a
decision on whether there have been violations of law and at the
conclusion of the second stage the Director issues a final decision and
order, including with respect to any remedies. The Director may make an
order under this paragraph (c) either on the motion of a party or on
the Director's own motion after inviting submissions by the parties.
The Director may include, in that order or in later orders,
modifications to the procedures in this part in order to effectuate an
efficient division into stages, or the Director may assign such
authority to the hearing officer. Only the decision and order of the
Director after the final stage, and not a decision of the Director
after an earlier stage, will be a final decision and order for purposes
of Sec. Sec. 1081.110, 1081.405(d) and (e), 1081.407, and 1081.502 and
section 1053(b) of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5563(b)).
Sec. 1081.205 Non-dispositive motions.
(a) Scope. This section applies to all motions except motions to
dismiss and motions for summary disposition. A non-dispositive motion
filed pursuant to another section of this part must comply with any
specific requirements of that section and this section to the extent
the requirements in this section are not inconsistent.
(b) In writing. (1) Unless made during a hearing or conference, 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 hearing officer. Written memoranda, briefs,
affidavits or other relevant material or documents may be filed in
support of or in opposition to a motion.
(c) Oral motions. The Director or the hearing officer, as
appropriate, may order that an oral motion be submitted in writing.
(d) Responses and replies. (1) Except as otherwise provided in this
section, within 14 days after service of any written motion, or within
such other period of time as may be established by the hearing officer
or the Director, as appropriate, any party may file a written response
to a motion. The hearing officer will not rule on any oral or written
motion before each party has had an opportunity to file a response.
(2) Reply briefs, if any, may be filed within seven days after
service of the response.
(3) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed consent by that party to the entry
of an order substantially in the form of the order accompanying the
motion.
(e) Length limitations. No motion subject to this section (together
with the brief in support of the motion) or brief in response to the
motion may exceed 15 pages in length, exclusive of pages containing the
table of contents, table of authorities, and any addendum that consists
solely of copies of applicable cases, pertinent legislative provisions
or rules, and exhibits. No reply brief may exceed six pages in length,
exclusive of pages containing the table of contents, table of
authorities, and any addendum that consists solely of copies of
applicable cases, pertinent legislative provisions or rules, and
exhibits. Motions for leave to file motions and briefs in excess of
these limitations are disfavored.
(f) Meet and confer requirements. Each motion filed under this
section must be accompanied by a signed statement representing that
counsel for the moving party has conferred or made a good faith effort
to confer with opposing counsel in a good faith effort to resolve by
agreement the issues raised by the motion and has been unable to reach
such an agreement. If some of the matters in controversy have been
resolved by agreement, the statement must specify the matters so
resolved and the matters remaining unresolved.
(g) Ruling on non-dispositive motions. Unless otherwise provided by
a relevant section of this part, a hearing officer will
[[Page 10044]]
rule on non-dispositive motions. Such ruling must be issued within 14
days after the expiration of the time period allowed for the filing of
all motion papers authorized by this section. The Director, for good
cause, may extend the time allowed for a ruling.
(h) Proceedings not stayed. A motion under consideration by the
Director or the hearing officer does not stay proceedings before the
hearing officer unless the Director or the hearing officer, as
appropriate, so orders.
(i) Dilatory motions. Frivolous, dilatory, or repetitive motions
are prohibited. The filing of such motions may form the basis for
sanctions.
Sec. 1081.206 Availability of documents for inspection and copying.
For purposes of this section, the term documents includes any book,
document, record, report, memorandum, paper, communication, tabulation,
chart, logs, electronic files, or other data or data compilations
stored in any medium.
(a) Documents to be available for inspection and copying. (1)
Unless otherwise provided by this section, or by order of the hearing
officer, the Office of Enforcement will make available for inspection
and copying by any respondent documents obtained by the Office of
Enforcement prior to the institution of proceedings, from persons not
employed by the Bureau, in connection with the investigation leading to
the institution of proceedings. Such documents will include:
(i) Any documents turned over in response to civil investigative
demands or other written requests to provide documents or to be
interviewed issued by the Office of Enforcement;
(ii) All transcripts and transcript exhibits; and
(iii) Any other documents obtained from persons not employed by the
Bureau.
(2) In addition, the Office of Enforcement will make available for
inspection and copying by any respondent:
(i) Each civil investigative demand or other written request to
provide documents or to be interviewed issued by the Office of
Enforcement in connection with the investigation leading to the
institution of proceedings; and
(ii) Any final examination or inspection reports prepared by any
other Office of the Bureau if the Office of Enforcement either intends
to introduce any such report into evidence or to use any such report to
refresh the recollection of, or impeach, any witness.
(3) Nothing in paragraph (a) of this section limits the right of
the Office of Enforcement to make available any other document, or
limits the right of a party to seek access to or production pursuant to
subpoena of any other document, or limits the authority of the hearing
officer to order the production of any document pursuant to subpoena.
(4) Nothing in paragraph (a) of this section requires the Office of
Enforcement to produce a final examination or inspection report
prepared by any other Office of the Bureau or any other government
agency to a respondent who is not the subject of that report.
(b) Documents that may be withheld. (1) The Office of Enforcement
may withhold a document if:
(i) The document is privileged;
(ii) The document is an internal memorandum, note, or writing
prepared by a person employed by the Bureau or another Government
agency, other than an examination or supervision report as specified in
paragraph (a)(2)(ii) of this section, or would otherwise be subject to
the work product doctrine and will not be offered in evidence;
(iii) The document was obtained from a domestic or foreign
governmental entity and is either not relevant to the resolution of the
proceeding or was provided on condition that the information not be
disclosed;
(iv) The document would disclose the identity of a confidential
source;
(v) Applicable law prohibits the disclosure of the document;
(vi) The document reflects only settlement negotiations between the
Office of Enforcement and a person or entity who is not a current
respondent in the proceeding; or
(vii) The hearing officer grants leave to withhold a document or
category of documents as not relevant to the subject matter of the
proceeding or otherwise, for good cause shown.
(2) Nothing in paragraph (b)(1) of this section authorizes the
Office of Enforcement in connection with an adjudication proceeding to
withhold material exculpatory evidence in the possession of the Office
that would otherwise be required to be produced pursuant to paragraph
(a) of this section.
(c) Withheld document list. The hearing officer may require the
Office of Enforcement to produce a list of documents or categories of
documents withheld pursuant to paragraphs (b)(1)(i) through (vi) of
this section or to submit to the hearing officer any document withheld,
except for any documents that are being withheld pursuant to paragraph
(b)(1)(iii) of this section, in which case the Office of Enforcement
must inform the other parties of the fact that such documents are being
withheld, but no further disclosures regarding those documents will be
required. The hearing officer may determine whether any withheld
document should be made available for inspection and copying. When
similar documents are withheld pursuant to paragraphs (b)(1)(i) through
(vi) of this section, those documents may be identified by category
instead of by individual document. The hearing officer retains
discretion to determine when an identification by category is
insufficient.
(d) Timing of inspection and copying. Unless otherwise ordered by
the hearing officer, the Office of Enforcement must commence making
documents available to a respondent for inspection and copying pursuant
to this section no later than 14 days after service of the notice of
charges.
(e) Place of inspection and copying. Documents subject to
inspection and copying pursuant to this section will be made available
to the respondent for inspection and copying at the Bureau office where
they are ordinarily maintained, or at such other place as the parties,
in writing, may agree. A respondent will not be given custody of the
documents or leave to remove the documents from the Bureau's offices
pursuant to the requirements of this section other than by written
agreement of the Office of Enforcement. Such agreement must specify the
documents subject to the agreement, the date they must be returned, and
such other terms or conditions as are appropriate to provide for the
safekeeping of the documents. If the Office of Enforcement determines
that production of some or all the documents required to be produced
under this section can be produced in an electronic format, the Office
of Enforcement may instead produce the documents in an electronic
format.
(f) Copying costs and procedures. The respondent may obtain a
photocopy of any documents made available for inspection or, at the
discretion of the Office of Enforcement, electronic copies of such
documents. The respondent is responsible for the cost of photocopying.
Unless otherwise ordered, charges for copies made by the Office of
Enforcement at the request of the respondent will be at the rate
charged pursuant to part 1070 of this chapter. The respondent will be
given access to the documents at the Bureau's offices or such other
place as the parties may agree during normal business hours for copying
of documents at the respondent's expense.
[[Page 10045]]
(g) Duty to supplement. If the Office of Enforcement acquires
information that it intends to rely upon at a hearing after making its
disclosures under paragraph (a)(1) of this section, the Office of
Enforcement must supplement its disclosures to include such
information.
(h) Failure to make documents available--harmless error. In the
event that a document required to be made available to a respondent
pursuant to this section is not made available by the Office of
Enforcement, no rehearing or redecision of a proceeding already heard
or decided will be required unless the respondent establishes that the
failure to make the document available was not harmless error.
(i) Disclosure of privileged or protected information or
communications; scope of waiver; obligations of receiving party. (1)
The disclosure of privileged or protected information or communications
by any party during an adjudication proceeding does not operate as a
waiver if:
(i) The disclosure was inadvertent;
(ii) The holder of the privilege or protection took reasonable
steps to prevent disclosure; and
(iii) The holder promptly took reasonable steps to rectify the
error, including notifying any party that received the information or
communication of the claim and the basis for it.
(2) After being notified, the receiving party must promptly return,
sequester, or destroy the specified information and any copies it has;
must not use or disclose the information until the claim is resolved;
must take reasonable steps to retrieve the information if the party
disclosed it before being notified; and may promptly present the
information to the hearing officer under seal for a determination of
the claim. The producing party must preserve the information until the
claim is resolved.
(3) The disclosure of privileged or protected information or
communications by any party during an adjudication proceeding will
waive the privilege or protection, with respect to other parties to the
proceeding, as to undisclosed information or communications only if:
(i) The waiver is intentional;
(ii) The disclosed and undisclosed information or communications
concern the same subject matter; and
(iii) They ought in fairness to be considered together.
Sec. 1081.207 Production of witness statements.
(a) Availability. Any respondent may move that the Office of
Enforcement produce for inspection and copying any statement of any
person called or to be called as a witness by the Office of Enforcement
that pertains, or is expected to pertain, to the witness's direct
testimony and that would be required to be produced pursuant to the
Jencks Act, 18 U.S.C. 3500, if the adjudication proceeding were a
criminal proceeding. For purposes of this section, the term
``statement'' has the meaning set forth in 18 U.S.C. 3500(e). Such
production will be made at a time and place fixed by the hearing
officer and will be made available to any party, provided, however,
that the production must be made under conditions intended to preserve
the items to be inspected or copied.
(b) Failure to produce--harmless error. In the event that a
statement required to be made available to a respondent pursuant to
this section is not made available by the Office of Enforcement, no
rehearing or redecision of a proceeding already heard or decided will
be required unless the respondent establishes that the failure to make
the statement available was not harmless error.
Sec. 1081.208 Subpoenas.
(a) Availability. In connection with any hearing ordered by the
hearing officer or any deposition permitted under Sec. 1081.209, a
party may request the issuance of subpoenas requiring the attendance
and testimony of witnesses at such depositions or at the designated
time and place of the hearing, or the production of documentary or
other tangible evidence returnable at any designated time or place.
(b) Procedure. Unless made on the record at a hearing, requests for
issuance of a subpoena must be made in writing, and filed and served on
each party pursuant to subpart A of this part. The request must contain
a proposed subpoena and a brief statement showing the general relevance
and reasonableness of the scope of testimony or documents sought.
(c) Signing may be delegated. A hearing officer may authorize
issuance of a subpoena, and may delegate the manual signing of the
subpoena to any other person.
(d) Standards for issuance of subpoenas requiring the attendance
and testimony of witnesses at the hearing or the production of
documentary or other tangible evidence. The hearing officer will
promptly issue any subpoena requiring the attendance and testimony of
witnesses at the designated time and place of the hearing or the
production of documentary or other tangible evidence. Where it appears
to the hearing officer that the subpoena sought may be unreasonable,
oppressive, excessive in scope, or unduly burdensome, the hearing
officer may, as a condition precedent to the issuance of the subpoena,
require the person seeking the subpoena to show further the general
relevance and reasonable scope of the testimony or other evidence
sought. If after consideration of all the circumstances, the hearing
officer determines that the subpoena or any of its terms is
unreasonable, oppressive, excessive in scope, or unduly burdensome, the
hearing officer may refuse to issue the subpoena, or issue it only upon
such conditions as fairness requires. In making the foregoing
determination, the hearing officer may inquire of the other parties
whether they will stipulate to the facts sought to be proved.
(e) Standards for issuance of subpoenas requiring the deposition of
a witness pursuant to Sec. 1081.209. (1) The hearing officer will
promptly issue any subpoena requiring the attendance and testimony of
witnesses at a deposition only if the subpoena complies with Sec.
1081.209 and if:
(i) The proposed deponent is a witness identified in the other
party's scheduling conference disclosure under Sec. 1081.203(b);
(ii) The proposed deponent was a witness of or participant in any
event, transaction, occurrence, act, or omission that forms the basis
for any claim asserted by the Office of Enforcement, any defense, or
anything else required to be included in an answer pursuant to Sec.
1081.201(b), by any respondent in the proceeding (this excludes a
proposed deponent whose only knowledge of these matters arises from the
Bureau's investigation, the Bureau's examination, or the proceeding);
(iii) The proposed deponent is designated as an ``expert witness''
under Sec. 1081.210(b); provided, however, that the deposition of an
expert who is required to submit a written report under Sec.
1081.210(b) may only occur after such report is served;
(iv) The proposed deponent has custody of documents or electronic
data relevant to the claims or defenses of any party (this excludes
officers or personnel of the Bureau who have custody of documents or
data that was produced by the Office of Enforcement to the respondent);
or
(v) The proposed deponent is unavailable for the hearing as set
forth in Sec. 1081.209(c).
(2) Where it appears to the hearing officer that the subpoena
sought may be unreasonable, oppressive, excessive in scope, or unduly
burdensome, the
[[Page 10046]]
hearing officer may, as a condition precedent to the issuance of the
subpoena, require the person seeking the subpoena to show further the
general relevance and reasonable scope of the testimony or other
evidence sought. If after consideration of all the circumstances, the
hearing officer determines that the subpoena or any of its terms is
unreasonable, oppressive, excessive in scope, or unduly burdensome, the
hearing officer may refuse to issue the subpoena, or issue it only upon
such conditions as fairness requires. In making the foregoing
determination, the hearing officer may inquire of the other parties
whether they will stipulate to the facts sought to be proved.
(f) Service. Upon issuance by the hearing officer, the party making
the request will serve the subpoena on the person named in the subpoena
and on each party in accordance with Sec. 1081.113(c). 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.
(g) Tender of fees required. When a subpoena compelling the
attendance of a person at a hearing or a deposition is issued at the
request of anyone other than an officer or agency of the United States,
service is valid only if the subpoena is accompanied by a tender to the
subpoenaed person of the fees for one day's attendance and mileage
specified by Sec. 1081.116.
(h) Place of compliance. A subpoena for a deposition may command a
person to attend a deposition only as follows:
(1) Within 100 miles of where the person resides, is employed, or
regularly transacts business in person;
(2) Within the State where the person resides, is employed, or
regularly transacts business in person, if the person is a party or a
party's officer;
(3) At such other location that the parties and proposed deponent
stipulate; or
(4) At such other location that the hearing officer determines is
appropriate.
(i) Production of documentary material. Production of documentary
material in response to a subpoena must be made under a sworn
certificate, in such form as the subpoena designates, by the person to
whom the subpoena is directed or, if not a natural person, by any
person having knowledge of the facts and circumstances relating to such
production, to the effect that all of the documentary material required
by the subpoena and in the possession, custody, or control of the
person to whom the subpoena is directed has been produced and made
available to the custodian.
(j) Motion to quash or modify--(1) Procedure. Any person to whom a
subpoena is directed, or who is an owner, creator, or the subject of
the documents that are to be produced pursuant to a subpoena, or any
party may, prior to the time specified therein for compliance, but in
no event more than seven days after the date of service of such
subpoena, move that the subpoena be quashed or modified. Such motion
must be filed and served on all parties pursuant to subpart A of this
part. Notwithstanding Sec. 1081.205, the party on whose behalf the
subpoena was issued or enforcement counsel may, within seven days of
service of the motion, file a response to the motion. Reply briefs are
not permitted unless requested by the hearing officer. Filing a motion
to modify a subpoena does not stay the movant's obligation to comply
with those portions of the subpoena that the person has not sought to
modify.
(2) Standards governing motion to quash or modify. If compliance
with the subpoena would be unreasonable, oppressive, or unduly
burdensome, the hearing officer must quash or modify the subpoena, or
may order return of the subpoena only upon specified conditions. These
conditions may include but are not limited to a requirement that the
party on whose behalf the subpoena was issued make reasonable
compensation to the person to whom the subpoena was addressed for the
cost of copying or transporting evidence to the place for return of the
subpoena.
(k) Enforcing subpoenas. If a subpoenaed person fails to comply
with any subpoena issued pursuant to this part or any order of the
hearing officer which directs compliance with all or any portion of a
subpoena, the Bureau's General Counsel may, on its own motion or at the
request of the party on whose behalf the subpoena was issued, apply to
an appropriate United States district court, in the name of the Bureau
but on relation of such party, for an order requiring compliance with
so much of the subpoena as the hearing officer has not quashed or
modified, unless, in the judgment of the General Counsel, the
enforcement of such subpoena would be inconsistent with law and the
policies of the Consumer Financial Protection Act of 2010. Failure to
request that the Bureau's General Counsel seek enforcement of a
subpoena constitutes a waiver of any claim of prejudice predicated upon
the unavailability of the testimony or evidence sought.
(l) Relationship to scheduling of hearing. The parties must
disclose at the scheduling conference required under Sec. 1081.203(e)
whether they intend to request the issuance of subpoenas under Sec.
1081.209. A respondent's request for issuance of a subpoena constitutes
a request that the hearing not be held until after a reasonable period,
determined by the hearing officer, for the completion of discovery. The
hearing officer will decide whether to grant such a request. If the
request is granted, the hearing officer will set a deadline for the
completion of discovery and schedule the specific date of the hearing,
in consultation with the parties. This paragraph (l) does not apply to
a subpoena for the attendance and testimony of a witness at the hearing
or a subpoena to depose a witness unavailable for the hearing.
Sec. 1081.209 Depositions.
(a) Depositions by oral examination or by written questions.
Depositions by oral examination or by written questions may be taken as
set forth in this section and must be taken pursuant to subpoena issued
under Sec. 1081.208. Any deposition permitted under this section may
be taken and submitted on written questions upon motion of any party,
for good cause shown, or as stipulated by the parties. No other
depositions will be permitted except as provided in paragraph (c) of
this section.
(1) If the proceeding involves a single respondent, the respondent
may depose no more than three persons, and the Office of Enforcement
may depose no more than three persons.
(2) If the proceeding involves multiple respondents, the
respondents collectively may depose no more than five persons, and the
Office of Enforcement may depose no more than five persons. The
depositions taken under this paragraph (a)(2) cannot exceed a total of
five depositions for the Office of Enforcement, and five depositions
for all respondents collectively.
(3) Any side may file a motion with the hearing officer seeking
leave to take up to two additional depositions beyond those permitted
pursuant to paragraphs (a)(1) and (2) of this section.
(i) Procedure. (A) A motion for additional depositions must be
filed no later than 28 days prior to the hearing date. If the moving
side proposes to take the additional deposition(s) by written
questions, the motion must so state and include the proposed questions.
Any party opposing the motion may submit an opposition within seven
days after
[[Page 10047]]
service of the motion. No reply will be permitted. The motion and any
oppositions each must not exceed seven pages in length.
(B) Upon consideration of the motion and any opposing papers, the
hearing officer will issue an order either granting or denying the
motion. The hearing officer will consider the motion on an expedited
basis.
(ii) Grounds and standards for motion. A motion under paragraph
(a)(3) of this section will not be granted unless the additional
depositions satisfy Sec. 1081.208(d) and the moving side demonstrates
a compelling need for the additional depositions by:
(A) Identifying all witnesses the moving side plans to depose under
this section;
(B) Describing the role of all witnesses;
(C) Describing the matters concerning which all witnesses are
expected to be questioned, and why the deposition of all witnesses is
necessary for the moving side's arguments, claims, or defenses; and
(D) Showing that the additional deposition(s) requested will not be
unreasonably cumulative or duplicative.
(b) Additional procedure for depositions by written questions. (1)
Any motion or stipulation seeking a deposition of a witness by written
questions must include the written questions the party seeking the
deposition will ask the witness. Within seven days after service of the
motion and written questions, any party may file objections to such
written questions and any party may file cross-questions. When a
deposition is taken by written questions, no persons other than the
witness, counsel to the witness, the deposition officer, and, if the
deposition officer does not act as reporter, a reporter, may be present
at the examination of the witness. No party may be present or
represented unless otherwise permitted by order. The deposition officer
will propound the questions and cross-questions to the witness in the
order submitted.
(2) The order for deposition, filing of the deposition, form of the
deposition, and use of the deposition in the record will be governed by
paragraphs (d) through (l) of this section, except that no cross-
examination will be made.
(c) Depositions when witness is unavailable. In addition to
depositions permitted under paragraph (a) of this section, the hearing
officer may grant a party's request for issuance of a subpoena if the
requesting party shows that the prospective witness will likely give
testimony material to the proceeding; that it is likely the prospective
witness, who is then within the United States, will be unable to attend
or testify at the hearing because of age, sickness, infirmity,
imprisonment, other disability, or absence from the United States,
unless it appears that the absence of the witness was procured by the
party requesting the deposition; and that the taking of a deposition
will serve the interests of justice.
(d) Service and contents of notice. Upon issuance of a subpoena for
a deposition, the party taking the deposition must serve a notice on
each party pursuant to Sec. 1081.113. A notice of deposition must
state that the deposition will be taken before a deposition officer
authorized to administer oaths by the laws of the United States or of
the place where the deposition is to be held. A notice of deposition
also must state:
(1) The name and address of the witness whose deposition is to be
taken;
(2) The time and place of the deposition; and
(3) The manner of recording and preserving the deposition.
(e) Method of recording--(1) Method stated in the notice. The party
who notices the deposition must state in the notice the method for
recording the testimony. Unless the hearing officer orders otherwise,
testimony may be recorded by audio, audiovisual, or stenographic means.
The noticing party bears the recording costs. Any party may arrange to
transcribe a deposition, at that party's expense. Each party will bear
its own costs for obtaining copies of any transcripts or audio or
audiovisual recordings.
(2) Additional method. With prior notice to the deponent and other
parties, any party may designate another method for recording the
testimony in addition to that specified in the original notice. That
party bears the expense of the additional record or transcript unless
the hearing officer orders otherwise.
(f) By remote means. The parties and the deponent may stipulate--or
the hearing officer may on motion order--that a deposition be taken by
telephone or other electronic means. For the purpose of this section,
the deposition takes place where the deponent answers the questions.
(g) Deposition officer's duties--(1) Before the deposition. The
deposition officer must begin the deposition with an on-the-record
statement that includes:
(i) The deposition officer's name and business address;
(ii) The date, time, and place of the deposition;
(iii) The deponent's name;
(iv) The deposition officer's administration of the oath or
affirmation to the deponent; and
(v) The identity of all persons present.
(2) Conducting the deposition; avoiding distortion. If the
deposition is recorded non-stenographically, the deposition officer
must repeat the items in paragraphs (g)(1)(i) through (iii) of this
section at the beginning of each unit of the recording medium. The
deponent's and attorneys' appearance or demeanor must not be distorted
through recording techniques.
(3) After the deposition. At the end of a deposition, the
deposition officer must state on the record that the deposition is
complete and must set out any stipulations made by the attorneys about
custody of the transcript or recording and of the exhibits, or about
any other pertinent matters.
(h) Order and record of the examination--(1) Order of examination.
The examination and cross-examination of a deponent will proceed as
they would at the hearing. After putting the deponent under oath or
affirmation, the deposition officer must record the testimony by the
method designated under paragraph (e) of this section. The testimony
must be recorded by the deposition officer personally or by a person
acting in the presence and under the direction of the deposition
officer. The witness being deposed may have counsel present during the
deposition.
(2) Form of objections stated during the deposition. An objection
at the time of the examination--whether to evidence, to a party's
conduct, to the deposition officer's qualifications, to the manner of
taking the deposition, or to any other aspect of the deposition--must
be noted on the record, but the examination may still proceed and the
testimony may be taken subject to any objection. An objection must be
stated concisely in a nonargumentative and nonsuggestive manner. A
person may instruct a deponent not to answer only when necessary to
preserve a privilege, to enforce a limitation ordered by the hearing
officer, or to present a motion to the hearing officer for a limitation
on the questioning in the deposition.
(i) Waiver of objections--(1) To the notice. An objection to an
error or irregularity in a deposition notice is waived unless promptly
served in writing on the party giving the notice.
(2) To the deposition officer's qualification. An objection based
on disqualification of the deposition officer before whom a deposition
is to be taken is waived if not made:
(i) Before the deposition begins; or
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(ii) Promptly after the basis for disqualification becomes known
or, with reasonable diligence, could have been known.
(3) To the taking of the deposition--(i) Objection to competence,
relevance, or materiality. An objection to a deponent's competence--or
to the competence, relevance, or materiality of testimony--is not
waived by a failure to make the objection before or during the
deposition, unless the ground for it might have been corrected at that
time.
(ii) Objection to an error or irregularity. An objection to an
error or irregularity at an oral examination is waived if:
(A) It relates to the manner of taking the deposition, the form of
a question or answer, the oath or affirmation, a party's conduct, or
other matters that might have been corrected at that time; and
(B) It is not timely made during the deposition.
(4) To completing and returning the deposition. An objection to how
the deposition officer transcribed the testimony--or prepared, signed,
certified, sealed, endorsed, sent, or otherwise dealt with the
deposition--is waived unless a motion to suppress is made promptly
after the error or irregularity becomes known or, with reasonable
diligence, could have been known.
(j) Duration; cross-examination; motion to terminate or limit--(1)
Duration. Unless otherwise stipulated or ordered by the hearing
officer, a deposition is limited to one day of seven hours, including
cross-examination as provided in this paragraph (j)(1). In a deposition
conducted by or for a respondent, the Office of Enforcement will be
allowed a reasonable amount of time for cross-examination of the
deponent. In a deposition conducted by the Office, the respondents
collectively will be allowed a reasonable amount of time for cross-
examination of the deponent. The hearing officer may allow additional
time if needed to fairly examine the deponent or if the deponent,
another person, or any other circumstance impedes or delays the
examination.
(2) Motion to terminate or limit--(i) Grounds. At any time during a
deposition, the deponent or a party may move to terminate or limit it
on the ground that it is being conducted in bad faith or in a manner
that unreasonably annoys, embarrasses, or oppresses the deponent or
party. If the objecting deponent or party so demands, the deposition
must be suspended for the time necessary to present the motion to the
hearing officer.
(ii) Order. Upon a motion under paragraph (j)(2)(i) of this
section, the hearing officer may order that the deposition be
terminated or may limit its scope. If terminated, the deposition may be
resumed only by order of the hearing officer.
(k) Review by the witness; changes--(1) Review; statement of
changes. On request by the deponent or a party before the deposition is
completed, and unless otherwise ordered by the hearing officer, the
deponent must be allowed 14 days after being notified by the deposition
officer that the transcript or recording is available, unless a longer
time is agreed to by the parties or permitted by the hearing officer,
in which:
(i) To review the transcript or recording; and
(ii) If there are changes in form or substance, to sign a statement
listing the changes and the reasons for making them.
(2) Changes indicated in the deposition officer's certificate. The
deposition officer must note in the certificate prescribed by paragraph
(l)(1) of this section whether a review was requested and, if so, must
attach any changes the deponent makes during the 14-day period.
(l) Certification and delivery; exhibits; copies of the transcript
or recording--(1) Certification and delivery. The deposition officer
must certify in writing that the witness was duly sworn and that the
deposition accurately records the witness's testimony. The certificate
must accompany the record of the deposition. Unless the hearing officer
orders otherwise, the deposition officer must seal the deposition in an
envelope or package bearing the title of the action and marked
``Deposition of [witness's name]'' and must promptly send it to the
attorney or party who arranged for the transcript or recording. The
attorney or party must store it under conditions that will protect it
against loss, destruction, tampering, or deterioration.
(2) Documents and tangible things--(i) Originals and copies.
Documents and tangible things produced for inspection during a
deposition must, on a party's request, be marked for identification and
attached to the deposition. Any party may inspect and copy them. But if
the person who produced them wants to keep the originals, the person
may:
(A) Offer copies to be marked, attached to the deposition, and then
used as originals--after giving all parties a fair opportunity to
verify the copies by comparing them with the originals; or
(B) Give all parties a fair opportunity to inspect and copy the
originals after they are marked--in which event the originals may be
used as if attached to the deposition.
(ii) Order regarding the originals. Any party may move for an order
that the originals be attached to the deposition pending final
disposition of the case.
(3) Copies of the transcript or recording. Unless otherwise
stipulated or ordered by the hearing officer, the deposition officer
must retain the stenographic notes of a deposition taken
stenographically or a copy of the recording of a deposition taken by
another method. When paid reasonable charges, the deposition officer
must furnish a copy of the transcript or recording to any party or the
deponent, as directed by the party or person paying such charges.
(m) Presentation of objections or disputes. Any party or deponent
seeking relief with respect to disputes over the conduct of a
deposition may file a motion with the hearing officer to obtain relief
as permitted by this part.
Sec. 1081.210 Expert discovery.
(a) At a date set by the hearing officer at the scheduling
conference, each party must serve the other with a report prepared by
each of its expert witnesses. Each party must serve the other parties
with a list of any rebuttal expert witnesses and a rebuttal report
prepared by each such witness not later than 28 days after the deadline
for service of expert reports, unless another date is set by the
hearing officer. A rebuttal report must be limited to rebuttal of
matters set forth in the expert report for which it is offered in
rebuttal. If material outside the scope of fair rebuttal is presented,
a party may file a motion not later than seven days after the deadline
for service of rebuttal reports, seeking appropriate relief with the
hearing officer, including striking all or part of the report, leave to
submit a surrebuttal report by the party's own experts, or leave to
call a surrebuttal witness and to submit a surrebuttal report by that
witness.
(b) No party may call an expert witness at the hearing unless the
expert witness has been listed and has provided reports as required by
this section, unless otherwise directed by the hearing officer at a
scheduling conference. Each side will be limited to calling at the
hearing five expert witnesses, including any rebuttal or surrebuttal
expert witnesses. A party may file a motion seeking leave to call
additional expert witnesses due to extraordinary circumstances.
(c) Each report must be signed by the expert and contain a complete
statement of all opinions to be expressed and the basis and reasons
therefore; the data,
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materials, or other information considered by the witness in forming
the opinions; any exhibits to be used as a summary of or support for
the opinions; the qualifications of the witness, including a list of
all publications authored or co-authored by the witness within the
preceding ten years; the compensation to be paid for the study and
testimony; and a listing of any other cases in which the witness has
testified or sought to testify as an expert at trial or hearing, or by
deposition within the preceding four years. A rebuttal or surrebuttal
report need not include any information already included in the initial
report of the witness.
(d) A party may depose any person who has been identified as an
expert whose opinions may be presented at trial upon subpoena issued
under Sec. 1081.208. Unless otherwise ordered by the hearing officer,
a deposition of any expert witness will be conducted after the
disclosure of a report prepared by the witness in accordance with
paragraph (a) of this section, and at least seven days prior to the
deadline for submission of rebuttal expert reports. A deposition of an
expert witness must be completed no later than 14 days before the
hearing unless otherwise ordered by the hearing officer. No expert
deposition will exceed seven hours on the record, absent agreement of
the parties or an order of the hearing officer for good cause shown.
Expert depositions will be conducted pursuant to the procedures set
forth in Sec. 1081.209(d) through (l).
(e) A party may not discover facts known or opinions held by an
expert who has been retained or specifically employed by another party
in anticipation of litigation or preparation for the hearing and who is
not listed as a witness for the hearing. A party may not discover
drafts of any report required by this section, regardless of the form
in which the draft is recorded, or any communications between another
party's attorney and any of that other party's experts, regardless of
the form of the communications, except to the extent that the
communications:
(1) Relate to compensation for the testifying expert's study or
testimony;
(2) Identify facts or data that the other party's attorney provided
and that the testifying expert considered in forming the opinions to be
expressed; or
(3) Identify assumptions that the other party's attorney provided
and that the testifying expert relied on in forming the opinions to be
expressed.
(f) The hearing officer has the discretion to dispense with the
requirement of expert discovery in appropriate cases.
Sec. 1081.211 Interlocutory review.
(a) Availability. The Director may, at any time, direct that any
matter be submitted to the Director for review. Subject to paragraph
(c) of this section, the hearing officer may, upon the hearing
officer's motion or upon the motion of any party, certify any matter
for interlocutory review by the Director. This section is the exclusive
remedy for review of a hearing officer's ruling or order prior to the
Director's consideration of the entire proceeding.
(b) Procedure. Any party's motion for certification of a ruling or
order for interlocutory review must be filed with the hearing officer
within seven days of service of the ruling or order, must specify the
ruling or order or parts thereof for which interlocutory review is
sought, must attach any other portions of the record on which the
moving party relies, and must otherwise comply with Sec. 1081.205.
Notwithstanding Sec. 1081.205, any response to such a motion must be
filed within seven days of service of the motion. The hearing officer
must issue a ruling on the motion within seven days of the deadline for
filing a response.
(c) Certification process. Unless the Director directs otherwise, a
ruling or order may not be submitted to the Director for interlocutory
review unless the hearing officer, upon the hearing officer's motion or
upon the motion of a party, certifies the ruling or order in writing.
The hearing officer will not certify a ruling or order unless:
(1) The ruling or order would compel testimony of Bureau officers
or employees, or those from another governmental agency, or the
production of documentary evidence in the custody of the Bureau or
another governmental agency;
(2) The ruling or order involves a motion for disqualification of
the hearing officer pursuant to Sec. 1081.105(c)(2);
(3) The ruling or order suspended or barred an individual from
appearing before the Bureau pursuant to Sec. 1081.107(c); or
(4) Upon motion by a party, the hearing officer is of the opinion
that:
(i) The ruling or order involves a controlling question of law as
to which there is substantial ground for difference of opinion; and
(ii) An immediate review of the ruling or order is likely to
materially advance the completion of the proceeding or subsequent
review will be an inadequate remedy.
(d) Interlocutory review. A party whose motion for certification
has been denied by the hearing officer may petition the Director for
interlocutory review.
(e) Director review. The Director will determine whether or not to
review a ruling or order certified under this section or the subject of
a petition for interlocutory review. Interlocutory review is generally
disfavored. The Director may decline to review a ruling or order
certified by a hearing officer pursuant to paragraph (c) of this
section or the petition of a party who has been denied certification if
the Director determines that interlocutory review is not warranted or
appropriate under the circumstances, in which case the Director may
summarily deny the petition. If the Director determines to grant the
review, the Director will review the matter and issue a ruling and
order in an expeditious fashion, consistent with the Bureau's other
responsibilities.
(f) Proceedings not stayed. The filing of a motion requesting that
the hearing officer certify any of the hearing officer's prior rulings
or orders for interlocutory review or a petition for interlocutory
review filed with the Director, and the grant of any such review, will
not stay proceedings before the hearing officer unless the hearing
officer, or the Director, so orders. The Director will not consider a
motion for a stay unless the motion was first been made to the hearing
officer.
Sec. 1081.212 Dispositive motions.
(a) Dispositive motions. This section governs the filing of motions
to dismiss and motions for summary disposition. The filing of any such
motion does not obviate a party's obligation to file an answer or take
any other action required by this part or by an order of the hearing
officer, unless expressly so provided by the hearing officer.
(b) Motions to dismiss. A respondent may file a motion to dismiss
asserting that, even assuming the truth of the facts alleged in the
notice of charges, it is entitled to dismissal as a matter of law.
(c) Motion for summary disposition. A party may make a motion for
summary disposition asserting that 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 the moving
party's favor as a matter of law.
(d) Filing of motions for summary disposition and responses. (1)
After a
[[Page 10050]]
respondent's answer has been filed and documents have been made
available to the respondent for inspection and copying pursuant to
Sec. 1081.206, any party may move for summary disposition in its favor
of all or any part of the proceeding.
(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 the moving party's position. The motion must also be
accompanied by a brief containing the points and authorities in support
of the contention of the moving party. Any party opposing a motion for
summary disposition must file a statement setting forth those material
facts as to which the opposing party contends a genuine dispute exists.
Such opposition must be supported by evidence of the same type as may
be submitted in support of a motion for summary disposition and a brief
containing the points and authorities in support of the contention that
summary disposition would be inappropriate.
(3) Any affidavit or declaration submitted in support of or in
opposition to a motion for summary disposition must set forth such
facts as would be admissible in evidence, must show affirmatively that
the affiant is competent to testify to the matters stated therein, and
must be signed under oath and penalty of perjury.
(e) Page limitations for dispositive motions. A motion to dismiss
or for summary disposition, together with any brief in support of the
motion (exclusive of any declarations, affidavits, or attachments) may
not exceed 35 pages in length. Motions for extensions of this length
limitation are disfavored.
(f) Opposition and reply response time and page limitation. Any
party, within 21 days after service of a dispositive motion, or within
such period as allowed by the hearing officer, may file a response to
such motion. The length limitations set forth in paragraph (e) of this
section also apply to such responses. Any reply brief filed in response
to an opposition to a dispositive motion must be filed within seven
days after service of the opposition. Reply briefs may not exceed ten
pages.
(g) Relationship to scheduling of hearing. A respondent's filing of
a dispositive motion constitutes a request that the hearing not be held
until after the motion is resolved. The hearing officer will decide
whether to grant such a request. If the request is granted, the hearing
officer will schedule the specific date of the hearing, in consultation
with the parties.
Sec. 1081.213 Rulings on dispositive motions.
(a) Ruling by Director or hearing officer. The Director will rule
on a dispositive motion, refer the motion to the hearing officer, or
rule on the motion in part and refer it in part.
(b) Timing of ruling. If the Director rules on the motion, the
Director must do so within 42 days following the expiration of the time
for filing all responses and replies, unless there is good cause to
extend the deadline. If the Director refers the motion to the hearing
officer, the Director may set a deadline for the hearing officer to
rule.
(c) Oral argument. At the request of any party or on the Director
or hearing officer's own motion, the Director or hearing officer (as
applicable) may hear oral argument on a dispositive motion.
(d) Types of rulings--(1) Granting motion as to all claims and
relief. If the Director or hearing officer (as applicable) determines
that dismissal or summary disposition is warranted as to all claims and
relief, then (as applicable) the Director will issue a final decision
and order or the hearing officer will issue preliminary findings and
conclusions.
(2) Granting motion as to some claims or relief. If the Director or
hearing officer (as applicable) determines that dismissal or summary
disposition is warranted as to some issues, but not all claims and
relief, the Director or hearing officer will issue an order that
directs further proceedings. Where the dispositive motion is a motion
for summary disposition, the order will specify the facts that appear
without substantial controversy. The facts so specified are be deemed
established.
(3) Denial of motion. If the Director or hearing officer (as
applicable) determines that dismissal or summary disposition is not
warranted, the Director or hearing officer may make a ruling denying
the motion. If it appears that a party, for good cause shown, cannot
present by affidavit, prior to hearing, facts essential to justify
opposition to a motion for summary disposition, the Director or hearing
officer must deny or defer the motion, or do so in relevant part.
Sec. 1081.214 Prehearing conferences.
(a) Prehearing conferences. The hearing officer may, in addition to
the scheduling conference, upon the hearing officer's motion or at the
request of any party, direct counsel for the parties to meet with the
hearing officer (in person or by electronic means) at a prehearing
conference for further discussion of the issues outlined in Sec.
1081.203, or for discussion of any additional matters that in the view
of the hearing officer will aid in an orderly disposition of the
proceeding, including but not limited to:
(1) Identification of potential witnesses and limitation on the
number of witnesses;
(2) The exchange of any prehearing materials including witness
lists, statements of issues, exhibits, and any other materials;
(3) Stipulations, admissions of fact, and the contents,
authenticity, and admissibility into evidence of documents;
(4) Matters of which official notice may be taken; and
(5) Whether the parties intend to introduce prior sworn statements
of witnesses as set forth in Sec. 1081.303(h).
(b) Transcript. The hearing officer has discretion to require that
a 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 that party's expense.
(c) Public access. Any prehearing conferences will be public unless
the hearing officer determines, based on the standard set forth in
Sec. 1081.119(c), that the conference (or any part thereof) should be
closed to the public.
Sec. 1081.215 Prehearing submissions.
(a) Generally. Within the time set by the hearing officer, but in
no case later than 14 days before the start of the hearing, each party
must serve on every other party:
(1) A prehearing statement, which must include an outline or
narrative summary of the party's case or defense, and the legal
theories upon which the party will rely;
(2) A final list of witnesses to be called to testify at the
hearing, including the name and address of each witness and a short
summary of the expected testimony of each witness;
(3) Any prior sworn statements that a party intends to admit into
evidence pursuant to Sec. 1081.303(h);
(4) A list of the exhibits to be introduced at the hearing along
with a copy of each exhibit; and
(5) Any stipulations of fact or liability.
(b) Expert witnesses. Each party who intends to call an expert
witness must also serve, in addition to the information required by
paragraph (a)(2)
[[Page 10051]]
of this section, a statement of the expert's qualifications, a listing
of other proceedings in which the expert has given or sought to give
expert testimony at trial or hearing or by deposition within the
preceding four years, and a list of publications authored or co-
authored by the expert within the preceding ten years, to the extent
such information has not already been provided pursuant to Sec.
1081.210.
(c) 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. 1081.216 Amicus participation.
(a) Availability. An amicus brief may be filed only if:
(1) A motion for leave to file the brief has been granted;
(2) The brief is accompanied by written consent of all parties;
(3) The brief is filed at the request of the Director or the
hearing officer, as appropriate; or
(4) The brief is presented by the United States or an officer or
agency thereof, or by a State or a political subdivision thereof.
(b) Procedure. An amicus brief may be filed conditionally with the
motion for leave. The motion for leave must identify the interest of
the movant and state the reasons why a brief of an amicus curiae is
desirable. Except as all parties otherwise consent, any amicus curiae
must file its brief within the time allowed the party whose position
the amicus will support, unless the Director or hearing officer, as
appropriate, for good cause shown, grants leave for a later filing. If
a later filing is allowed, the order granting leave to file must
specify when an opposing party may reply to the brief.
(c) Motions. A motion for leave to file an amicus brief is subject
to Sec. 1081.205.
(d) Formal requirements as to amicus briefs. Amicus briefs must be
filed pursuant to Sec. 1081.111, comply with the requirements of Sec.
1081.112, and are be subject to the length limitation in Sec.
1081.212(e).
(e) Oral argument. An amicus curiae may move to present oral
argument at any hearing before the hearing officer, but such motions
will be granted only for extraordinary reasons.
Subpart C--Hearings
Sec. 1081.300 Public hearings.
All hearings in adjudication proceedings will be public unless a
confidentiality order is entered by the hearing officer pursuant to
Sec. 1081.119 or unless otherwise ordered by the Director on the
grounds that holding an open hearing would be contrary to the public
interest.
Sec. 1081.301 Failure to appear.
Failure of a respondent to appear in person or by a duly authorized
counsel at the hearing constitutes a waiver of respondent's right to a
hearing and may be deemed an admission of the facts as alleged and
consent to the relief sought in the notice of charges. Without further
proceedings or notice to the respondent, the hearing officer will file
preliminary findings and conclusions containing findings of fact and
addressing the relief sought in the notice of charges.
Sec. 1081.302 Conduct of hearings.
All hearings will be conducted in a fair, impartial, expeditious,
and orderly manner. Enforcement counsel will present its case-in-chief
first, unless otherwise ordered by the hearing officer, or unless
otherwise expressly specified by law or regulation. Enforcement counsel
will 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 hearing officer will fix the
order.
Sec. 1081.303 Evidence.
(a) Burden of proof. Enforcement counsel will have the burden of
proof of the ultimate issue(s) of the Bureau's claims at the hearing.
(b) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material, and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the
Administrative Procedure Act and other applicable law. Irrelevant,
immaterial, and unreliable evidence will be excluded.
(2) Evidence, even if relevant, may be excluded if its probative
value is substantially outweighed by the danger of unfair prejudice or
confusion of the issues; if the evidence would be misleading; or based
on considerations of undue delay, waste of time, or needless
presentation of cumulative evidence.
(3) Evidence that constitutes hearsay may be admitted if it is
relevant, material, and bears satisfactory indicia of reliability so
that its use is fair. Hearsay is a statement, other than one made by
the declarant while testifying at the hearing, offered in evidence to
prove the truth of the matter asserted. If otherwise meeting the
standards for admissibility described in this section, transcripts of
depositions, investigational hearings, prior testimony in Bureau or
other proceedings, and any other form of hearsay will be admissible and
may not be excluded solely on the ground that they are or contain
hearsay.
(4) Evidence that would be admissible under the Federal Rules of
Evidence is admissible in a proceeding conducted pursuant to this part.
Evidence that would be inadmissible under the Federal Rules of Evidence
may not be deemed or ruled to be inadmissible in a proceeding conducted
pursuant to this part solely on that basis.
(c) Official notice. Official notice may be taken of any material
fact that is not subject to reasonable dispute in that it is either
generally known or capable of accurate and ready determination by
resort to sources whose accuracy cannot reasonably be questioned. If
official notice is requested or is taken of a material fact not
appearing in the evidence in the record, the parties, upon timely
request, will be afforded an opportunity to disprove such noticed fact.
(d) 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 (b) of this section,
any document, including a report of examination, supervisory activity,
inspection or visitation, prepared by the Bureau, a prudential
regulator, as that term is defined in section 1002(24) of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5481(24)), or by a State
regulatory agency, is presumptively 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 hearing officer's discretion, be used
with or without being admitted into evidence.
(4) As respondents are in the best position to determine the nature
of documents generated by such respondents and which come from their
own files, the burden of proof is on the respondent to introduce
evidence to rebut a presumption that such documents are authentic and
kept in the regular course of business.
(e) Objections. (1) Objections to the admissibility of evidence
must be timely
[[Page 10052]]
made and rulings on all objections must appear on the record.
(2) Whenever evidence is excluded from the record, the party
offering such evidence may make an offer of proof, which will be
included in the record. Rejected exhibits, adequately marked for
identification, must be retained pursuant to Sec. 1081.306(b) so as to
be available for consideration by any reviewing authority.
(3) Failure to object to admission of evidence or to any ruling
constitutes a waiver of the objection.
(f) Stipulations. (1) The parties may, at any stage of the
proceeding, 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.
(2) Unless the hearing officer 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.
(g) Presentation of evidence. (1) A witness at a hearing for the
purpose of taking evidence must testify under oath or affirmation.
(2) A party is entitled to present its case or defense by sworn
oral testimony and documentary evidence, to submit rebuttal evidence,
and to conduct such cross-examination as, in the discretion of the
hearing officer, may be required for a full and true disclosure of the
facts.
(3) An adverse party, or an officer, agent, or employee thereof,
and any witness who appears to be hostile, unwilling, or evasive, may
be interrogated by leading questions and may also be contradicted and
impeached by the party calling him or her.
(4) The hearing officer will exercise reasonable control over the
mode and order of interrogating witnesses and presenting evidence so as
to:
(i) Make the interrogation and presentation effective for the
ascertainment of the truth;
(ii) Avoid needless consumption of time; and
(iii) Protect witnesses from harassment or undue embarrassment.
(5) The hearing officer may permit a witness to appear at a hearing
via electronic means for good cause shown.
(h) Introducing prior sworn statements of witnesses into the
record. At a hearing, any party wishing to introduce a prior, sworn
statement of a witness, not a party, otherwise admissible in the
proceeding, may make a motion setting forth the reasons therefore. If
only part of a statement is offered in evidence, the hearing officer
may require that all relevant portions of the statement be introduced.
If all of a statement is offered in evidence, the hearing officer may
require that portions not relevant to the proceeding be excluded. A
motion to introduce a prior sworn statement may be granted if:
(1) The witness is dead;
(2) The witness is out of the United States, unless it appears that
the absence of the witness was procured by the party offering the prior
sworn statement;
(3) The witness is unable to attend or testify because of age,
sickness, infirmity, imprisonment, or other disability;
(4) The party offering the prior sworn statement has been unable to
procure the attendance of the witness by subpoena; or
(5) In the discretion of the hearing officer, it would be
desirable, in the interests of justice, to allow the prior sworn
statement to be used. In making this determination, due regard will be
given to the presumption that witnesses will testify orally in an open
hearing. If the parties have stipulated to accept a prior sworn
statement in lieu of live testimony, consideration should also be given
to the convenience of the parties in avoiding unnecessary expense.
Sec. 1081.304 Record of the hearing.
(a) Reporting and transcription. Hearings will be stenographically
reported and transcribed under the supervision of the hearing officer,
and the original transcript will be a part of the record and the sole
official transcript. The live oral testimony of each witness may be
video recorded digitally, in which case the video recording and the
written transcript of the testimony will be made part of the record.
Copies of transcripts will be available from the reporter at prescribed
rates.
(b) Corrections. Corrections of the official transcript may be made
only when they involve errors affecting substance and then only in the
manner provided in this paragraph (b). Corrections ordered by the
hearing officer or agreed to in a written stipulation signed by all
counsel and parties not represented by counsel, and approved by the
hearing officer, will be included in the record, and such stipulations,
except to the extent they are capricious or without substance, must be
approved by the hearing officer. Corrections will not be ordered by the
hearing officer except upon notice and opportunity for the hearing of
objections. Such corrections must be made by the official reporter by
furnishing substitute type pages, under the usual certificate of the
reporter, for insertion in the official record. The original
uncorrected pages will be retained in the files of the Bureau.
(c) Closing of the hearing record. Upon completion of the hearing,
the hearing officer will issue an order closing the hearing record
after giving the parties seven days to determine if the record is
complete or needs to be supplemented. The hearing officer retains the
discretion to permit or order correction of the record as provided in
paragraph (b) of this section.
Sec. 1081.305 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the hearing officer
will 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 promptly after
that filing. Any party may file with the hearing officer proposed
findings of fact, proposed conclusions of law, and a proposed order
within 28 days following service of this notice by the hearing officer
or within such longer period as may be ordered by the hearing officer.
(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.
(b) Responsive briefs. Responsive briefs may be filed within 14
days after the date on which the parties' proposed findings,
conclusions, and order are due. Responsive briefs must be strictly
limited to responding to 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
responsive brief. Unless directed by the hearing officer, reply briefs
are not permitted.
(c) Order of filing. The hearing officer may not order the filing
by any party of any post-hearing brief or responsive brief in advance
of the other party's filing of its post-hearing brief or responsive
brief.
Sec. 1081.306 Record in proceedings before hearing officer; retention
of documents; copies.
(a) Contents of the record. The record of the proceeding consists
of:
[[Page 10053]]
(1) The notice of charges, the answer, and any amendments thereto;
(2) Each motion, submission, or other paper filed in the
proceedings, and any amendments and exceptions to or regarding them;
(3) Each stipulation, transcript of testimony, and any document or
other item admitted into evidence;
(4) Any transcript of a conference or hearing before the hearing
officer;
(5) Any amicus briefs filed pursuant to Sec. 1081.216;
(6) With respect to a request to disqualify a hearing officer or to
allow the hearing officer's withdrawal under Sec. 1081.105(c), each
affidavit or transcript of testimony taken and the decision made in
connection with the request;
(7) All motions, briefs, and other papers filed on interlocutory
appeal;
(8) All proposed findings and conclusions;
(9) Each written order issued by the hearing officer or Director;
and
(10) Any other document or item accepted into the record by the
hearing officer.
(b) Retention of documents not admitted. Any document offered into
evidence but excluded will not be considered part of the record. The
Office of Administrative Adjudication will retain any such document
until the later of the date upon which an order by the Director ending
the proceeding becomes final and not appealable, or upon the conclusion
of any judicial review of the Director's order.
(c) Substitution of copies. A true copy of a document may be
substituted for any document in the record or any document retained
pursuant to paragraph (b) of this section.
Subpart D--Decision and Appeals
Sec. 1081.400 Preliminary findings and conclusions of the hearing
officer.
(a) Time period for filing preliminary findings and conclusions.
Subject to paragraph (b) of this section, the hearing officer must file
preliminary findings and conclusions no later than 90 days after the
deadline for filing post-hearing responsive briefs pursuant to Sec.
1081.305(b) and in no event later than 360 days after filing of the
notice of charges.
(b) Extension of deadlines. In the event the hearing officer
presiding over the proceeding determines that it will not be possible
to issue preliminary findings and conclusions within the time periods
specified in paragraph (a) of this section, the hearing officer will
submit a written request to the Director for an extension of the time
period for filing the preliminary findings and conclusions. This
request must be filed no later than 28 days prior to the expiration of
the time for issuance of preliminary findings and conclusions. The
request will be served on all parties in the proceeding, who may file
with the Director briefs in support of or in opposition to the request.
Any such briefs must be filed within seven days of service of the
hearing officer's request and may not exceed five pages. If the
Director determines that additional time is necessary or appropriate in
the public interest, the Director will issue an order extending the
time period for filing preliminary findings and conclusions.
(c) Content. (1) Preliminary findings and conclusions must be based
on a consideration of the whole record relevant to the issues decided,
and be supported by reliable, probative, and substantial evidence.
Preliminary findings and conclusions must include a statement of
findings of fact (with specific page references to principal supporting
items of evidence in the record) and conclusions of law, as well as the
reasons or basis therefore, as to all the material issues of fact, law,
or discretion presented on the record and the appropriate order,
sanction, relief or denial thereof. Preliminary findings and
conclusions must also state that a notice of appeal may be filed within
14 days after service of the preliminary findings and conclusions and
include a statement that, unless a party timely files and perfects a
notice of appeal of the preliminary findings and conclusions, the
Director may adopt the preliminary findings and conclusions as the
final decision and order of the Bureau without further opportunity for
briefing or argument.
(2) Consistent with paragraph (a) of this section, when more than
one claim for relief is presented in an adjudication proceeding, or
when multiple parties are involved, the hearing officer may direct the
entry of preliminary findings and conclusions as to one or more but
fewer than all of the claims or parties only upon an express
determination that there is no just reason for delay and upon an
express direction for the entry of preliminary findings and
conclusions.
(d) By whom made. Preliminary findings and conclusions must be made
and filed by the hearing officer who presided over the hearings, except
when that hearing officer has become unavailable to the Bureau.
(e) Reopening of proceeding by hearing officer; termination of
jurisdiction. (1) At any time from the close of the hearing record
pursuant to Sec. 1081.304(c) until the filing of the hearing officer's
preliminary findings and conclusions, a hearing officer may reopen the
proceeding for the receipt of further evidence for good cause shown.
(2) Except for the correction of clerical errors or pursuant to an
order of remand from the Director, the jurisdiction of the hearing
officer is terminated upon the filing of the hearing officer's
preliminary findings and conclusions with respect to those issues
decided pursuant to paragraph (c) of this section.
(f) Filing, service, and publication. Upon filing by the hearing
officer of preliminary findings and conclusions, the Office of
Administrative Adjudication will promptly transmit the preliminary
findings and conclusions to the Director and serve them upon the
parties.
Sec. 1081.401 Transmission of documents to Director; record index;
certification.
(a) Filing of index. At the same time the Office of Administrative
Adjudication transmits preliminary findings and conclusions to the
Di
[…truncated; see source link]Indexed from Federal Register on February 22, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.