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Rule2023-25646

Rules of Practice and Procedure

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Published

December 28, 2023

Effective

April 1, 2024

Issuing agencies

Treasury DepartmentComptroller of the CurrencyFederal Reserve SystemFederal Deposit Insurance CorporationNational Credit Union Administration

Abstract

The Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA) (collectively, the Agencies) are adopting final changes to the Uniform Rules of Practice and Procedure (Uniform Rules) to recognize the use of electronic communications in all aspects of administrative hearings and to otherwise increase the efficiency and fairness of administrative adjudications. The OCC, Board, and FDIC are also modifying their agency-specific rules of administrative practice and procedure (Local Rules). The OCC also is integrating its Uniform Rules and Local Rules so that one set of rules applies to both national banks and Federal savings associations and amending its rules on organization and functions to address service of process.

Full Text

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<title>Federal Register, Volume 88 Issue 248 (Thursday, December 28, 2023)</title>
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[Federal Register Volume 88, Number 248 (Thursday, December 28, 2023)]
[Rules and Regulations]
[Pages 89820-89973]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-25646]

[[Page 89819]]

Vol. 88

Thursday,

No. 248

December 28, 2023

Part II

Department of the Treasury

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Office of the Comptroller of the Currency

Federal Reserve System

Federal Deposit Insurance Corporation

National Credit Union Administration

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12 CFR Parts 3, 4, 6, et al.

Rules of Practice and Procedure; Final Rule

Federal Register / Vol. 88 , No. 248 / Thursday, December 28, 2023 /
Rules and Regulations

[[Page 89820]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3, 4, 6, 19, 108, 109, 112, 150, and 165

[Docket ID OCC-2021-0007]
RIN 1557-AE33

FEDERAL RESERVE SYSTEM

12 CFR Parts 238 and 263

[Docket No. R-1766]
RIN 7100-AG26

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AF10

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 747

[NCUA 2021-0079]
RIN 3133-AF37

Rules of Practice and Procedure

AGENCY: Office of the Comptroller of the Currency, Treasury; Board of
Governors of the Federal Reserve System; Federal Deposit Insurance
Corporation; National Credit Union Administration.

ACTION: Final rule.

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SUMMARY: The Comptroller of the Currency (OCC), Board of Governors of
the Federal Reserve System (Board), Federal Deposit Insurance
Corporation (FDIC), and the National Credit Union Administration (NCUA)
(collectively, the Agencies) are adopting final changes to the Uniform
Rules of Practice and Procedure (Uniform Rules) to recognize the use of
electronic communications in all aspects of administrative hearings and
to otherwise increase the efficiency and fairness of administrative
adjudications. The OCC, Board, and FDIC are also modifying their
agency-specific rules of administrative practice and procedure (Local
Rules). The OCC also is integrating its Uniform Rules and Local Rules
so that one set of rules applies to both national banks and Federal
savings associations and amending its rules on organization and
functions to address service of process.

DATES: The rule is effective on April 1, 2024.

FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, and Heidi
Thomas, Senior Counsel, Chief Counsel's Office, (202) 649-5490. If you
are deaf, hard of hearing, or have a speech disability, please dial 7-
1-1 to access telecommunications relay services. Board: David Williams,
Associate General Counsel, <a href="/cdn-cgi/l/email-protection#95f1f4e3fcf1bbe2fcf9f9fcf4f8e6d5f3e7f7bbf2fae3">[email&#160;protected]</a>, (202) 452-3973, and
H[eacute]ctor G. Bladuell, Senior Counsel, Legal Division,
<a href="/cdn-cgi/l/email-protection#365e5355425944185118545a575243535a5a7650445418515940">[email&#160;protected]</a>, (202) 452-2491. FDIC: Heather M. Walters,
Counsel, Legal Division, <a href="/cdn-cgi/l/email-protection#c3aba6b4a2afb7a6b1b083a5a7aaa0eda4acb5">[email&#160;protected]</a> (202) 898-6729; and Michael
P. Farrell, Counsel, Legal Division, <a href="/cdn-cgi/l/email-protection#bad7dcdbc8c8dfd6d6fadcded3d994ddd5cc">[email&#160;protected]</a>, (703) 340-9201.
NCUA: Damon P. Frank, Senior Trial Attorney, and John H. Brolin, Senior
Staff Attorney, Office of General Counsel, at (703) 518-6540.

SUPPLEMENTARY INFORMATION:

I. Background

Section 916 of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, Public Law 101-73, 103 Stat. 183 (1989),
required the Agencies, together with the Office of Thrift Supervision
(OTS), to develop uniform rules and procedures for administrative
hearings. In August 1991, the Agencies and OTS each adopted final
Uniform Rules as well as Local Rules specific to each agency.\1\ Based
on the experience gained in administrative hearings, the Agencies,
together with OTS, modified the Uniform Rules and Local Rules in
1996.\2\
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\1\ The Agencies, together with the OTS, issued a joint notice
of proposed rulemaking on June 17, 1991 (56 FR 27790). Each agency
issued a final rule on the following dates: OCC on August 9, 1991
(56 FR 38024); Board on August 9, 1991 (56 FR 38052); FDIC on August
9, 1991 (56 FR 37968); and NCUA on August 8, 1991 (56 FR 37767). The
OTS, whose rules and procedures were transferred to the OCC, the
Board, and the FDIC in 2011, published its rules on August 12, 1991
(56 FR 38317). The Agencies' rules are codified at 12 CFR part 19,
subpart A (OCC); 12 CFR part 263, subpart A (Board); 12 CFR part
308, subpart A (FDIC); and 12 CFR part 747, subpart A (NCUA).
\2\ 61 FR 20330, May 6, 1996.
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The Uniform Rules and Local Rules have remained largely unchanged
since the 1996 amendments, while the practice of administrative
hearings has changed fundamentally with the introduction of electronic
communication and transmission. The current Uniform Rules were
promulgated at a time when the Agencies accepted only paper pleadings.
However, beginning in 2005, the Office of Financial Institution
Adjudication (OFIA) established a dedicated electronic mailbox to
accept electronic pleadings and service and, by 2006, paper pleadings
were virtually eliminated in administrative hearings. Without rules in
place to address electronic pleadings, the Administrative Law Judges
(ALJs) opted to dictate procedures pertaining to electronic filing and
other items on an ad hoc basis in their scheduling orders.
The Agencies issued a proposed rule on April 13, 2022, to update
and modernize the Uniform Rules as well as the Local Rules of the OCC,
FDIC, NCUA, and the Board. The Agencies did not receive any substantive
comments on the Uniform Rules or the Agencies' Local Rules. Therefore,
for the reasons stated in the preamble to the proposed rule, the
Agencies are publishing the Uniform and Local Rules without substantive
change.\3\
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\3\ Although the proposed rule provided common rule text for the
Uniform Rules and line amendments to the Local Rules, this final
rule publishes each agency's rule as amended in full.
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In this final rule,
<bullet> The Agencies are amending the Uniform Rules to recognize
electronic pleadings and communications in administrative hearings and
to reflect the experience of the Agencies in administrative litigation.
<bullet> The OCC and the NCUA are also removing from the Uniform
Rules the remaining references to the OTS, which was abolished in
2011.\4\
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\4\ The FDIC removed references to the OTS and updated its rules
to include State savings associations by Final Rule on January 30,
2015 (80 FR 5009). The Board similarly removed references to the OTS
from its definitions and updated its rules to include savings and
loan holding companies on September 13, 2011 (76 FR 56603).
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<bullet> The OCC, Board, and FDIC are each amending certain
sections of their Local Rules that they believe should be updated,
improved, or clarified.
<bullet> The OCC is consolidating its Uniform and Local Rules by
applying part 19 to both national bank- and Federal savings
association-related proceedings and investigations; removing its
separate enforcement-related rules for Federal savings associations, 12
CFR parts 108, 109, 112, and 165; and making corresponding technical
changes to parts 3, 6, and 150.
<bullet> The OCC is amending 12 CFR part 4, subpart A, Organization
and Functions, to add a new Sec. 4.8 that addresses service of
process.

II. Applicability Date

As indicated in the proposed rule, the amendments made by this
final rule to the Uniform Rules as well as to certain provisions of the
Agencies' Local Rules will apply to adjudicatory proceedings initiated
on or after the effective date of this final rule, April 1, 2024. The
Agencies' rules that were in effect prior to April 1, 2024, will
continue to apply to adjudicatory proceedings initiated before April 1,
2024. This timing

[[Page 89821]]

ensures that parties to Agency adjudicatory proceedings have adequate
notice of the rules governing those proceedings.
For the OCC, Sec. 19.0 provides that the rules of practice and
procedure set forth in subparts A through D and H, I, J, L, M, N, P,
and Q apply to adjudicatory proceedings initiated on or after the
effective date of this final rule, April 1, 2024. Rules applicable to
national banks, Federal savings associations, or Federal branches and
agencies that were in effect prior to April 1, 2024, continue to apply
to adjudicatory proceedings initiated before April 1, 2024, unless
otherwise stipulated by the parties.
The OCC has made a few technical changes to its proposed transition
provision. First, the OCC has moved this provision from proposed
subpart R in part 19 to new Sec. 19.0 so that information about
applicability of the revised rules for practice and procedure is more
prominently placed. Second, the OCC has changed the title of the
provision from ``effective date'' to ``applicability date'' for
accuracy. Third, the OCC has made some minor wording changes for
internal consistency. Fourth, the OCC has included the text of part 19
as in effect the day before the final rule's effective date, April 1,
2024, as appendix A to part 19 so that parties may reference the rules
that apply to proceedings initiated before April 1, 2024. Lastly, the
OCC has amended the transition provision to permit parties to
proceedings initiated before April 1, 2024, to stipulate that the
revised rules apply to such proceedings so that they are able to take
advantage of the updated provisions.
For the Board, the revised Uniform Rules and Local Rules in subpart
B of part 263 apply only to adjudicatory proceedings initiated on or
after the effective date of this final rule, April 1, 2024. The
previous version of these rules, which are included in appendix A to
part 263 of this final rule, are applicable to all adjudicatory
proceedings initiated before April 1, 2024.
The FDIC included a new Sec. 308.0 as a technical change to
clarify the applicability date of the revised Uniform Rules set forth
in subpart A. The newly revised Uniform Rules only apply to
adjudicatory proceedings initiated on or after the effective date of
this final rule, April 1, 2024. Any adjudicatory proceedings initiated
before April 1, 2024, continue to be governed by the previous version
of the Uniform Rules, which are included in appendix A to part 308 of
this final rule.
The NCUA has added to its existing Sec. 747.0, as a technical
change, to make clear that the revised Uniform Rules apply to
adjudicatory proceedings initiated on or after the effective date of
this final rule, April 1, 2024.

III. Section-by-Section Discussion of Amendments to the Uniform Rules

Although the discussion of these amendments is arranged as for a
common rule, the Agencies are adopting the amendments individually. The
Agencies have codified the Uniform Rules as follows: 12 CFR part 19,
subpart A (OCC); 12 CFR part 263, subpart A (Board); 12 CFR part 308,
subpart A (FDIC); and 12 CFR part 747, subpart A (NCUA).

General Comments

The final rule replaces gender references such as ``him or her,''
``his or her,'' and ``himself or herself'' with gender-neutral
terminology, where appropriate. Consistent with Federal Register
drafting guidelines,\5\ the Agencies have replaced the word ``shall''
throughout the final rule with the terms ``must,'' ``will,'' or other
appropriate language. Finally, the Agencies have replaced the term
``administrative law judge'' with the abbreviation ``ALJ'' for
``administrative law judge,'' as this abbreviation is commonly used and
understood. These changes appear throughout the Uniform Rules and will
not be discussed further in the individual sections.
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\5\ National Archives, Federal Register Writing Resources for
Federal Agencies: Drafting Legal Documents, <a href="https://www.archives.gov/federal-register/write/legal-docs/clear-writing.html">https://www.archives.gov/federal-register/write/legal-docs/clear-writing.html</a>.
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Section __.1 Scope

Section __.1 lists the types of adjudicatory proceeding to which
the Uniform Rules apply. The final rule updates the list of civil money
penalty proceedings covered by the Uniform Rules described in Sec.
__.1(e) to include section 5, section 9, and section 10 of the Home
Owners' Loan Act (HOLA).\6\ These sections of the HOLA are applicable
to Federal savings associations now supervised by the OCC, State-
chartered savings associations now supervised by the FDIC, and savings
and loan holding companies supervised by the Board. The final rule also
adds a reference to ``the former Office of Thrift Supervision'' in the
OCC's Sec. 19.1(e)(10) to clarify that the Uniform Rules will apply to
civil money proceedings for violations of orders issued, written
agreements executed, and conditions imposed in writing by OTS.
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\6\ The Board made these updates on September 13, 2011 (76 FR
56603).
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Section __.2 Rules of Construction

Section __.2 of the Uniform Rules sets forth the rules of
construction for the Uniform Rules. The final rule amends this section
to eliminate Sec. __.2(b), which provides that any use of masculine,
feminine, or neuter gender encompasses all three, if such use would be
appropriate. The final rule replaces all gender references such as
``him or her,'' ``his or her,'' and ``himself or herself'' with gender-
neutral terminology; thus, this provision is no longer necessary.

Section __.3 Definitions

Section __.3 of the Uniform Rules includes definitions applicable
to the Uniform Rules and, unless otherwise specified, the Local Rules.
The final rule now defines the term ``electronic signature'' because
Sec. __.7 of the final rule provides that electronic signatures may be
used to satisfy the good faith certification requirement. In their
respective final rules, the Agencies have replaced the definition of
violation in Sec. __.3 with a cross-reference to the identical
definition in section 3(v) of the Federal Deposit Insurance Act (FDIA),
12 U.S.C. 1813(v).\7\ The final rule also eliminates legacy references
to the Office of Thrift Supervision in the definition of ``OFIA'' and
the definition of ``Uniform Rules.''
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\7\ The NCUA included this updated definition of violation in
the proposed rule and is adopting the same wording in the final
rule. The discussion in the preamble to the proposed rule
inadvertently omitted reference to the NCUA making this change along
with the OCC, Board, and FDIC.
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The definition of ``institution'' in the OCC's final rule now
includes the term ``Federal savings association'' in order to make the
Uniform Rules and the OCC's Local Rules in part 19 of title 12
applicable to Federal savings associations, which have been regulated
by the OCC since 2011.\8\
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\8\ As described elsewhere in this Supplementary Information,
the OCC is removing its Uniform Rules and Local Rules applicable to
Federal savings associations, parts 108, 109, 112, and 165 of title
12.
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The Board's final rule adds ``nonbank financial companies'' and
``financial market utilities'' designated by the Financial Stability
Oversight Council to its definition of ``institution'' to clarify that
the Uniform Rules are applicable to these entities, which are
supervised by the Board pursuant to the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act).\9\ In addition, the
Board's final rule clarifies that organizations operating under section
25A of the Federal Reserve Act, Federal and State ``branches,'' as well
as

[[Page 89822]]

``agencies'' as defined in section 1(b) of the International Banking
Act, and ``any other entity subject to the supervision of the Board,''
are included in its definition of ``institution.'' Finally, the Board's
final rule replaces the word ``savings association'' with ``depository
institution'' in 12 CFR 263(f)(6) to conform this language to the
language in 12 U.S.C. 1818(b)(3).
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\9\ Public Law 111-203, 124 Stat. 1376 (2010).
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Section __.5 Authority of the Administrative Law Ludge (ALJ)

Section __.5 of the Uniform Rules addresses the authority of the
ALJ. The final rule amends Sec. __.5(b)(2) to add the term ``other
orders'' to the list of specific orders an ALJ is authorized to issue,
quash, or modify. This change clarifies that the authority of the ALJ
to issue orders is not limited to subpoenas, subpoenas duces tecum, and
protective orders and may include other types of orders that are not
enumerated in this section. The final rule also amends Sec.
__.5(b)(11) to change the term ``presiding officer'' to ``ALJ'' to
avoid confusion and clarify that the ALJ has the powers necessary and
appropriate to discharge the duties of this role.

Section __.6 Appearance and Practice in Adjudicatory Proceedings

Section __.6 of the Uniform Rules addresses appearance and practice
in adjudicatory proceedings. The final rule amends Sec. __.6(a)(2) to
state simply that an individual may appear on their own behalf. This
change eliminates language that is duplicative and unnecessary to the
meaning of the provision. The final rule also amends Sec. __.6(a)(3)
to include a requirement that a notice of appearance include a written
acknowledgment that the individual has reviewed and will comply with
the Uniform Rules and Local Rules. This requirement ensures that
representatives appearing in the proceeding are informed of the rules
that govern the proceedings.

Section __.7 Good Faith Certification

Section __.7 of the Uniform Rules addresses the requirement for
good faith certification for every filing or submission of record
following the issuance of a notice. The final rule amends Sec. __.7(a)
to require that the counsel of record, including an individual who acts
as their own counsel, include a mailing address, an electronic mail
address, and a telephone number with every certification. The final
rule also amends this section to permit electronic signatures to
satisfy the signature requirements of the certification. These changes
conform the rules to the current practice of electronic filing.

Section __.9 Ex Parte Communications

Section __.9 of the Uniform Rules addresses ex parte communications
in administrative proceedings. The final rule amends Sec. __.9(c) to
clarify that upon the occurrence of ex parte communication, the ALJ or
the Agency Head must determine whether any action in the form of
sanctions should be taken concerning the ex parte communication. The
final rule amends Sec. _.9(e)(1) to better align it with section 5 of
the Administrative Procedure Act, 5 U.S.C. 554(d). Specifically, the
final rule adds language stating that the ALJ may not consult with a
person or party on a fact in issue without giving all parties notice
and an opportunity to participate and may not be responsible to or
subject to the supervision or direction of an employee agent engaged in
the performance of investigative or prosecuting functions for any of
the Agencies. Finally, the final rule amends Sec. __.9(e)(2) to refer
to administrative or judicial proceedings rather than public
proceedings to better describe the type of proceedings subject to the
rule.

Section __.10 Filing of Papers

Section __.10 of the Uniform Rules addresses the requirements for
the filing of papers. The final rule amends and renumbers Sec.
__.10(b) to remove an outdated section on rules governing transmission
by electronic media and replace it with a section stating that filing
may be accomplished by electronic mail or other electronic means
designated by the Agency Head or the ALJ. The final rule amends
Sec. _.10(b) to eliminate references to specific carriers and names of
mail delivery services and instead refer generally to same day courier
services and overnight delivery services. The final rule amends Sec.
__.10(c), which addresses the formal requirements as to papers filed,
to require papers to include the mailing address, electronic mail
address, and telephone number of the counsel or party making the
filing. Finally, the final rule eliminates Sec. __.10(c)(4), which
required the filing of an original and one copy of each filing and is
no longer necessary, given that the vast majority of papers are filed
electronically, consistent with current adjudicatory practice. The
final rule retains the existing methods of filing by paper, such as
personal service, same day courier, overnight delivery, and mail, with
appropriate modifications of the descriptions of those methods to
conform to current terminology and standards for delivery.

Section __.11 Service of Papers

Section __.11 of the Uniform Rules addresses the requirements for
service of papers. The modifications to Sec. __.11 provide for
electronic filing, where appropriate, and simplify and update the
descriptions for other, non-electronic, means of filing. The final rule
amends Sec. __.11(b) to add service by electronic mail or other
electronic means as a method for serving papers, consistent with
current practice. The final rule retains the existing methods of
service by paper, such as personal service, same day courier, overnight
delivery, and mail, and replaces references to specific carriers and
delivery services with general references to same day courier service
and overnight delivery service. The final rule also amends Sec.
__.11(c)(1) to require that all papers required to be served by the
Agency Head or the ALJ upon a party that has appeared in the proceeding
will be served by electronic mail or other electronic means designated
by the Agency Head or the ALJ. For parties that have not appeared in
the proceeding in accordance with Sec. __.6, the final rule preserves
the option for non-electronic methods of service and modifies the
descriptions of some of those methods to conform to current terminology
and standards for delivery. Finally, in Sec. __.11(d), the final rule
generally retains the existing methods for the service of subpoenas
with appropriate modifications to the descriptions of the methods to
conform to current terminology and standards for delivery.

Section __.12 Construction of Time Limits

Section __.12 of the Uniform Rules addresses the construction of
time limits. The final rule amends Sec. __.12(b), which addresses when
papers are deemed to be filed or served, to provide that in the case of
transmission by electronic mail or other electronic means, filing and
service are deemed to be effective upon transmittal by the serving
party. The final rule retains the existing times for non-electronic
methods of filing and service and updates the descriptions of these
methods to make them consistent with the updated descriptions in
Sec. Sec. __.10 and __.11. The final rule amends Sec. __.12(c), which
addresses the calculation of time for service and filing of responsive
papers, to provide that in the case of service by electronic mail or
other electronic means, the time limits are calculated by adding one
calendar

[[Page 89823]]

day to the prescribed period. Finally, the final rule provides for the
addition of two calendar days, rather than one, in the case of service
by overnight delivery service and retains the language providing for
the addition of three calendar days for service made by mail.

Section __.14 Witness Fees and Expenses

Section __.14 of the Uniform Rules addresses witness fees and
expenses in administrative proceedings. The final rule amends Sec.
__.14 to clarify the general rule, in Sec. __.14(a), that all
witnesses, including an expert witness who testifies at a deposition or
hearing, will be paid the same fees for attendance and mileage as are
paid in the United States district courts in proceedings in which the
United States is a party. The final rule also adds language in Sec.
__.14(b) to clarify that the Agencies are not required to pay witness
fees and mileage for testimony by a party. The final rule retains the
current language governing the timing of witness payments in a new
Sec. __.14(c).

Section __.15 Opportunity for Informal Settlement

Section __.15 of the Uniform Rules addresses the rules and process
for informal settlement once a proceeding has been initiated. The final
rule revises this section to more plainly express the existing rule
that an offer or proposal for informal settlement may only be made to
Enforcement Counsel.

Section __.18 Commencement of Proceeding and Contents of Notice

Section __.18(a) of the Uniform Rules governs the commencement of
administrative proceedings. The final rule amends Sec. __.18(a)(1)(ii)
to provide that Enforcement Counsel serves the notice upon the
respondent to begin proceedings.\10\ The final rule also amends this
section to provide that Enforcement Counsel may serve the notice upon
counsel for the respondent, rather than the respondent, provided that
counsel for the respondent has confirmed that counsel represents the
respondent in the matter and will accept service of the notice on
behalf of the respondent. By requiring counsel to confirm
representation of a respondent, the Agencies hope to clarify when it is
appropriate to serve notice on an individual who purports to represent
the respondent. Finally, the final rule amends Sec. __.18(a)(1)(iii)
to make it clear that Enforcement Counsel files the notice with
OFIA.\11\
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\10\ The FDIC has already made this change in its version of the
Uniform Rules in connection with amendments that became effective on
January 12, 2021.
\11\ The NCUA is deleting from part 747 the reference to change-
in-control proceedings under 12 U.S.C. 1817(j), which does not apply
to credit unions or the NCUA. The NCUA is making the same deletion
in Sec. __.33.
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Section __.18(b) of the Uniform Rules addresses the contents of the
notice in administrative proceedings. The final rule amends Sec.
__.18(b) to provide that notice pleading applies in administrative
proceedings, meaning that a notice need only provide a short and plain
statement of the claim(s) showing that the agency is entitled to
relief. The final rule also makes a technical change to Sec.
__.18(b)(2) to change the description from ``a statement of the matters
of fact or law showing the [Agency] is entitled to relief'' to simply
``matters of fact or law showing that the [Agency] is entitled to
relief.'' The Agencies believe the reference to ``a statement'' in this
section has no substantive meaning and, thus, have removed it.

Section __.19 Answer

Section __.19 of the Uniform Rules sets out the requirements for an
answer in an administrative proceeding. The final rule amends Sec.
__.19(c)(2) to provide that if a respondent fails to request a hearing
as required by law within the applicable time frame, the notice of
assessment constitutes a final and unappealable order, in accordance
with 12 U.S.C. 1818(i)(2)(E)(ii) and 12 U.S.C. 1786(k)(2)(E)(ii),
without further action by the ALJ. In the past, there has been
confusion about whether any additional action on the part of the ALJ is
required in this situation, and this language clarifies that no further
action is necessary.

Section __.24 Scope of Document Discovery

Section __.24 of the Uniform Rules addresses the scope of discovery
in an administrative proceeding and Sec. __.24(a) addresses
limitations on discovery. The final rule updates the definition of the
term ``documents'' in Sec. __.24(a)(1) to include not only writings,
drawings, graphs, charts, photographs, and recordings, but
electronically stored information and data or data compilations stored
in any medium from which information can be obtained. This expanded
definition of the term ``document'' is necessary to account for the
range of digital information now available. The final rule amends Sec.
__.24(a)(3) to clarify that discovery by the use of either
interrogatories or requests for admission is not permitted. The final
rule moves the paragraph on relevance currently in Sec. __.24(b) to a
new Sec. __.24(a)(4) because that provision functions as a limitation
on discovery. The final rule amends Sec. __.24(c) to clarify the list
of privileges applicable to otherwise discoverable documents. In
addition to the attorney-client privilege and the work-product
doctrine, the proposed language would also specifically identify the
bank examination privilege and the law enforcement privilege and
exclude those privileged documents from discovery. Finally, the final
rule adds language to Sec. __.24(d) to provide that document
discovery, including all responses to discovery requests, must be
completed by the date set by the ALJ and no later than 30 days prior to
the date scheduled for the commencement of the hearing. This language
recognizes the role of the ALJ in establishing a schedule for discovery
while also providing for discovery to be completed earlier in the
hearing process.

Section __.25 Request for Document Discovery From Parties

Section __.25 of the Uniform Rules addresses requests for document
discovery from parties in administrative proceedings. The final rule
replaces the heading ``General rule'' with ``Document requests'' in
Sec. __.25(a) to better identify the subject matter of the section.
The final rule amends Sec. __.25(a) to add a paragraph (a)(1) stating
that a party may serve on another party a request not only to produce
discoverable documents but to permit the requesting party or its
representative to inspect or copy discoverable documents that are in
the possession, custody, or control of the party upon whom the request
is served. It has been the practice of parties in administrative
proceedings to permit the inspection and copying of discoverable
documents, and this language formalizes that practice. The final rule
includes language to provide that a party responding to a request for
inspection may produce copies of documents or electronically stored
information instead of permitting inspection. In many cases, providing
documents or electronically stored information directly is more
efficient than permitting inspection, and this amendment preserves the
right of a responding party to make that choice. The final rule
includes a new paragraph (a)(2) to simplify the language that
previously appeared in Sec. __.25(b) regarding the identification of
documents to be produced and require that any request describe with
reasonable particularity each item or category of items to be inspected
and

[[Page 89824]]

specify a reasonable time, place, and manner for the inspection or
production.
The final rule amends the rules governing production or copying, as
set out in a new Sec. __.25(b)(1), to require that, unless a
particular form is specified by the ALJ or agreed upon by the parties,
the producing party must produce copies of documents as they are kept
in the usual course of business or organized to correspond to the
categories of the request, and produce electronically stored
information in a form in which it is ordinarily maintained or in a
reasonably usable form. The Agencies recognize that the ways in which
electronically stored information may be stored and transmitted may
change over time and are adopting the reasonably usable standard for
electronically stored information to provide flexibility.
The final rule simplifies the rules associated with the costs of
document production in a new Sec. __.25(b)(2), which requires the
producing party to pay its own costs to respond to a discovery request
unless otherwise agreed by the parties. This language eliminates the
earlier requirement that a requesting party prepay the producing party
for certain costs while also allowing the parties to agree to share
costs, as appropriate in a particular case.
The final rule modifies the time limits for motions to limit
discovery in Sec. __.25(d). In Sec. __.25(d)(1), the final rule
extends the time limit for a party to object to a discovery request
from within ten to within 20 days of being served with such a request.
In Sec. __.25(d)(2), the final rule extends the time limit for a party
to file a written response from within five to within ten days of
service of the motion. Additional time allows the parties to digest
such requests and engage with each other to narrow the scope of the
request before having to file a motion with the ALJ. The Agencies
believe that parties making motions to limit discovery and responding
to motions to limit discovery will benefit from additional time to
review and respond to such requests.
Finally, the final rule amends Sec. __.25(e) to specify the
available privileges that may be asserted in connection with a request
for production. The section now includes attorney-client privilege,
attorney work-product doctrine, bank examination privilege, law
enforcement privilege, any government deliberative process privilege,
other privileges of the Constitution, any applicable act of Congress,
and other principles of common law as grounds for withholding
documents.

Section __.26 Document Subpoenas to Nonparties

Section __.26 of the Uniform Rules addresses document subpoenas to
third parties in administrative proceedings. The final rule amends
Sec. __.26(b)(1) to provide that a person to whom a document subpoena
is directed may file a motion to quash or modify such subpoena with the
ALJ. This amendment clarifies to whom the motion to quash should be
directed.

Section __.27 Deposition of Witness Unavailable for Hearing

Section __.27 of the Uniform Rules addresses the deposition of
witnesses unavailable for an administrative hearing. The final rule
amends Sec. __.27(a)(2) to require that the application for a subpoena
state the manner in which the deposition is to be taken, in addition to
the time and place, and provide explicitly that a deposition may be
taken by remote means. These changes modernize the rules and conform
the rules to existing practice. The final rule simplifies Sec.
__.27(a)(4) by eliminating unnecessary language related to where
subpoenas may be served. In order to further provide for remote
depositions, the final rule amends Sec. __. 27(c)(1) to provide that a
court reporter or other person authorized to administer an oath may
administer the oath remotely without being in the physical presence of
the deponent, by stipulation of the parties or order by the ALJ. The
final rule amends Sec. __.27(d) to clarify that if a subpoenaed person
fails to comply with any subpoena issued pursuant to this section the
aggrieved party may apply to the appropriate United States district
court for an order requiring compliance with the portions of the
subpoena with which the subpoenaed party has not complied. Finally, the
final rule replaces an inaccurate cross-reference to paragraph (c)(3)
with a correct reference to paragraph (c)(2).

Section __.29 Summary Disposition

Section __.29 of the Uniform Rules addresses summary disposition.
The final rule modifies Sec. __.29(c) to provide that a request for a
hearing on a motion must be made in writing. The new language
formalizes the process of requesting a hearing and increases the
clarity of the process.

Section __.31 Scheduling and Prehearing Conferences

Section __.31 of the Uniform Rules addresses scheduling and
prehearing conferences. The final rule amends Sec. __.31(a) to clarify
that the prehearing conference must be set within 30 days of service of
the notice or an order commencing a proceeding and eliminate the option
in the current rule for the parties to agree on another time. The final
rule also adds language to clarify that it is a schedule for discovery,
and not actual discovery, that the parties may determine at the
scheduling conference. Finally, the final rule eliminates references to
``telephone'' conferences in order to make the provision more
technologically neutral.

Section __.32 Prehearing Submissions

Section __.32 of the Uniform Rules addresses prehearing
submissions. The final rule amends Sec. __.32(a) to extend the time
for a party to file prehearing submissions with the ALJ from 14 days to
20 days before the start of the hearing. This change will give the
parties more flexibility in completing their filings. The final rule
further amends Sec. __.32 to update the required prehearing
submissions and Sec. __.32(a)(1) to require the submission of a
prehearing statement that states the party's position with respect to
the legal issues presented, the statutory and case law upon which the
party relies, and the facts the party expects to prove at the hearing.
The final rule amends Sec. __.32(a)(2) to require that the final list
of witnesses include the name, mailing address, and electronic mail
address for each witness and to clarify that the list of witnesses need
not identify the exhibits to be relied upon by each witness at the
hearing and that the list of exhibits should be a list of exhibits
expected to be introduced at the hearing.

Section __.35 Conduct of Hearings

Section __.35 of the Uniform Rules addresses the conduct of
administrative hearings. The final rule adds a new Sec. __.35(c) to
provide rules governing electronic presentations in a hearing. The new
language provides that the ALJ may direct the use of, or any party may
use, an electronic presentation during the hearing. If an ALJ requires
an electronic presentation, each party will be responsible for their
own presentation or related costs unless the parties agree to another
manner in which to allocate responsibilities and costs. This new
language accounts for electronic presentations that are not addressed
in the existing rules but are used routinely in hearings.

[[Page 89825]]

Section __.36 Evidence

Section __.36 of the Uniform Rules sets forth the rules governing
evidence in an adjudicatory proceeding. The final rule amends Sec.
__.36(d)(2) to refer to ``direct questioning'' rather than ``direct
interrogation'' of witnesses in order to clarify, in plain language,
the meaning of this section.

IV. Section-by-Section Discussion of Amendments to the Local Rules of
Each Agency

A. Amendments to OCC Local Rules

Part 19, subparts B through P, address local rules of practice and
procedure specific to OCC investigations, hearings before the OCC, and
other OCC-related proceedings involving national banks. The
corresponding rules for Federal savings association-related proceedings
and investigations, transferred from the former OTS to the OCC by the
Dodd-Frank Act, are set forth at 12 CFR parts 108, 109, 112, and 165.
Many of the national bank and Federal savings association-related
provisions are similar, but in some cases no corresponding rule exists
or one set of rules provides more specificity than the other. The final
rule consolidates these rules by applying part 19 to both national
bank- and Federal savings association-related proceedings and
investigations and removes parts 108, 109, 112, and 165. The final rule
also amends the Local Rules to add certain provisions of the Federal
savings association rules that are not currently included in part 19
but that the OCC believes should apply to both Federal savings
associations and national banks. In addition, the final rule
reorganizes certain rules in part 19, including subparts D, E, F, and G
relating to actions under the Federal securities laws; adds new
provisions addressing the Equal Access to Justice Act (EAJA); and adds
a new subpart Q addressing the forfeiture of a national bank, Federal
savings association, or Federal branch and agency charter or franchise
for certain money laundering or cash transaction offenses.
The amendments to the OCC's Local Rules are discussed below.
Subpart B--Procedural Rules for OCC Adjudications
19.100 Filing Documents
Current Sec. Sec. 19.100 and 109.104(g) require that all filings
with or referred to the Comptroller or ALJ in any proceeding under
parts 19 or 109, respectively, be filed with the OCC Hearing Clerk. The
two provisions are substantively the same except that Sec. 19.100
provides a more detailed description of the types of filings to which
the regulation applies. As a result of the final rule's application of
part 19 to Federal savings associations and removal of part 109, Sec.
19.100 applies to filings in Federal savings association-related
proceedings as of the final rule's effective date, April 1, 2024.
Furthermore, the final rule amends Sec. 19.100 to remove the OCC
filing street address and to require the filing to be made in a manner
prescribed by Sec. 19.10(b) and (c). Sections 19.10(b) and (c)
prescribe the permissible filing methods and list form and content
requirements for filing papers with the OCC. As amended by this final
rule, filings are permitted by electronic mail or other electronic
means designated by the Comptroller or the ALJ as of the final rule's
effective date, April 1, 2024. Lastly, the final rule amends the
current provision to clarify that the materials filed include any
attachments or exhibits to the listed documents.
19.101 Delegation to OFIA
Both current Sec. Sec. 19.101 and 109.101 provide that an ALJ at
the Office of Financial Institution Adjudication (OFIA) will conduct
actions brought under the respective subpart A rules. As a result of
the final rule's application of part 19 to Federal savings
associations, Sec. 19.101 applies to adjudicatory actions brought
against either national banks or Federal savings associations as of the
final rule's effective date, April 1, 2024. The final rule makes one
stylistic revision to Sec. 19.101 to remove the passive sentence
structure.
19.102 Civil Money Penalties
The final rule adds a new Sec. 19.102 that incorporates parts of
Sec. 109.103(b), which provides rules for the payment of civil money
penalties. The national bank rules currently do not address this topic
with specificity, and the OCC has determined that these provisions,
which clarify when parties must pay civil money payments, should apply
to both national banks and Federal savings associations. As a result of
this amendment, respondents are required to pay civil money penalties
assessed pursuant to subpart A of part 19 within 60 days after the
issuance of the notice of assessment, unless the OCC requires a
different time for payment. If a respondent has made a timely request
for a hearing to challenge the assessment of the penalty, the
respondent is not required to pay the penalty until the OCC has issued
a final order of assessment. In such instances, the respondent is
required to pay the penalty within 60 days of service of the final
order unless the OCC requires a different time for payment.
Subpart C--Removals, Suspensions, and Prohibitions When a Crime Is
Charged or a Conviction Is Obtained
Current subpart C of part 19 includes the rules applicable in
hearings brought against any institution-affiliated party \12\ who the
OCC has suspended or removed from office or prohibited from further
participation in the affairs of a depository institution pursuant to
section 8(g) of the FDIA (12 U.S.C. 1818(g)). Part 108 applies similar
rules to officers, directors, or other persons participating in the
conduct of the affairs of a Federal savings association, Federal
savings association subsidiary, or affiliate service corporation,
although part 108 differs slightly on certain procedural issues. As
described below, the final rule amends subpart C to incorporate certain
provisions of part 108 that are helpful to the OCC in these
adjudicatory actions, specifically to apply amended subpart C to both
national banks and Federal savings associations and remove part 108.
Although part 108 does not use the term ``institution-affiliated
party,'' the OCC believes that the scope of part 108 is similar in
substance to this term as defined in Sec. 19.3 by reference to the
FDIA.
---------------------------------------------------------------------------

\12\ ``Institution-affiliated party,'' as defined in current
Sec. 19.3 and in this final rule by reference to section 3(u) of
the FDIA (12 U.S.C. 1813(u)), means: (1) any director, officer,
employee, or controlling stockholder (other than a bank holding
company or savings and loan holding company) of, or agent for, an
insured depository institution; (2) any other person who has filed
or is required to file a change-in-control notice with the
appropriate Federal banking agency under 12 U.S.C. 1817(j); (3) any
shareholder (other than a bank holding company or savings and loan
holding company), consultant, joint venture partner, and any other
person as determined by the appropriate Federal banking agency who
participates in the conduct of the affairs of an insured depository
institution; and (4) any independent contractor (including any
attorney, appraiser, or accountant) who knowingly or recklessly
participates in any violation of any law or regulation, any breach
of fiduciary duty, or any unsafe or unsound practice which caused or
is likely to cause more than a minimal financial loss to, or a
significant adverse effect on, the insured depository institution.
---------------------------------------------------------------------------

19.110 Scope
The final rule amends Sec. 19.110 to include a definitions section
for subpart C similar to the one for Federal savings associations in
Sec. 108.2 to enhance the understanding and application of the
regulation and simplify the regulatory text. New Sec. 19.110(b)
defines ``petitioner'' to mean an individual who has filed a petition
for informal hearing under subpart C; ``depository institution'' to
mean any national bank, Federal savings association, or Federal

[[Page 89826]]

branch of a foreign bank; and ``OCC Supervisory Office'' to mean the
Senior Deputy Comptroller or Deputy Comptroller of the OCC department
or office responsible for supervision of the depository institution,
or, in the case of an individual no longer affiliated with a particular
depository institution, the Deputy Comptroller for Special Supervision.
Furthermore, the final rule labels the existing paragraph in Sec.
19.110 as Sec. 19.110(a), Scope, and retitles the section heading to
account for the addition of definitions.
19.111 Suspension, Removal, or Prohibition
The final rule reorganizes Sec. 19.111 into paragraphs; retitles
the section heading, as well as the subpart, to clarify that it applies
to institution-affiliated parties; and removes passive sentence
structure. In newly designated Sec. 19.111(a), the final rule corrects
an omission in current Sec. 19.111, which provides that the
Comptroller may serve a notice of suspension or order of removal or
prohibition pursuant to 12 U.S.C. 1818(g) on an institution-affiliated
party and must serve a copy of this notice or order on the appropriate
depository institution. Because 12 U.S.C. 1818(g) also provides for a
notice of prohibition, the final rule adds a reference to this notice
of prohibition to this paragraph. In addition, as in Sec. 108.4, newly
designated Sec. 19.111(a) specifies the manner of service by the
Comptroller, providing that the Comptroller serve the notice or order
in the manner set forth in Sec. 19.11, Service of papers. The final
rule also moves the information regarding a request for a hearing by
the institution-affiliated party to a separate Sec. 19.111(b); adds
the ability to send the hearing request by same day courier service or
overnight delivery service, in addition to by certified mail or by
personal service with a signed receipt as provided under the current
rule; and adds the caveat that this submission rule applies unless
instructed otherwise by the Comptroller. This revision also utilizes
the newly defined term ``OCC Supervisory Office.''
In addition, the final rule includes in Sec. 19.111(b)(2) a
provision similar to Sec. 108.5(b) that requires an institution-
affiliated party in a request for a hearing to admit or deny each
allegation, or state that they lack sufficient information to admit or
deny each allegation, which has the effect of a denial. Section
19.111(b)(2) also provides that denials must fairly meet the substance
of each allegation denied and that general denials are not permitted;
when the institution-affiliated party denies part of an allegation,
that part must be denied and the remainder specifically admitted; and
any allegation in the notice or order which is not denied is deemed
admitted for purposes of the proceeding. Furthermore, similar to Sec.
108.5(c), Sec. 19.111(b)(2) provides that the request must state with
particularity how the institution-affiliated party intends to show that
its continued service to or participation in the affairs of the
institution would not pose a threat to the interests of the
institution's depositors or impair public confidence in any
institution. The OCC believes that adopting these provisions from the
Federal savings association regulation will help narrow the issues to
be contested and make Sec. 19.111 more consistent with the
adjudicatory rule in Sec. 19.19.
Furthermore, the final rule adds the default provision included in
Sec. 108.8 to Sec. 19.111, as new paragraph (c). Under this new
paragraph, if the institution-affiliated party fails to timely file a
petition for a hearing pursuant to Sec. 19.111(b), fails to appear at
a hearing either in person or by attorney, or fails to submit a written
argument where oral argument has been waived pursuant to Sec.
19.112(c), the notice of suspension or prohibition will remain in
effect until the information, indictment, or complaint is finally
disposed of and the order of removal or prohibition will remain in
effect until terminated by the OCC. The OCC believes the application of
this provision to national banks will clarify that there are
consequences if a petitioner fails to appear or fails to answer.
19.112 Informal Hearing
The final rule makes a number of changes to Sec. 19.112, which
provides the procedures for informal suspension or removal hearings
before the OCC involving an institution-affiliated party. In Sec.
19.112(a), the final rule updates the name of the OCC's Enforcement and
Compliance Division to OCC Enforcement. The final rule also removes the
requirement in this paragraph that the OCC Supervisory Office notify
the appropriate OCC District Counsel of the hearing, as this is an
unnecessary step.
In Sec. 19.112(c)(2), the final rule adds language to clarify
that, when responding to a petitioner's submissions, the OCC serves
other parties in the manner set forth in Sec. 19.11(c).
In Sec. 19.112(d), the final rule amends paragraph (d)(2), which
provides that the informal hearing is not governed by formal rules of
evidence, to clarify that these inapplicable formal rules of evidence
include the Federal Rules of Evidence, as provided in Sec. 19.36. The
final rule also clarifies paragraph (d)(3)(i) by breaking up the first
sentence into two sentences. As revised, paragraph (d)(3)(ii) provides
that the presiding officer may require, instead of permit as in the
current paragraph, a shorter time period in which the parties may
request oral testimony or witnesses at a hearing, which is the more
accurate action for a presiding officer. As in Sec. 19.27(c), the
final rule also amends Sec. 19.112(d)(3)(ii) to provide that, by
stipulation of the parties or by order of the presiding officer, a
court reporter or other authorized person may administer the required
oath to a witness remotely without being in the physical presence of
the witness. This amendment updates the current oath requirement for
witnesses to account for remote proceedings and conforms this provision
to Sec. 19.112(d)(4), which permits electronic presentations at the
hearing. In Sec. 19.112(d)(3)(iii), the final rule makes technical
changes to the different actions a presiding officer may take related
to a suspension or prohibition based on an indictment, information, or
complaint and a removal or prohibition with respect to a conviction or
pre-trial diversion program to better reflect 12 U.S.C. 1818(g).
Throughout paragraph (d) the final rule makes technical corrections by
replacing ``appointed OCC attorney'' with ``OCC.''
The final rule also adds a new paragraph (d)(4) to Sec. 19.112 to
provide rules governing electronic presentations in the course of a
hearing. As in Sec. 19.35(c), this provision provides that, based on
the circumstances of each hearing, the presiding officer may direct the
use of, or any party may elect to use, an electronic presentation
during the hearing. If the presiding officer requires an electronic
presentation, each party will be responsible for its own presentation
or related costs unless the parties agree to allocate presentation
responsibilities and costs differently. This new language is necessary
to account for the routine use of electronic presentations in hearings
that existing rules do not address.
Throughout Sec. 19.112, the final rule utilizes the newly defined
term ``OCC Supervisory Office'' and removes passive sentence structure.
19.113 Recommended and Final Decisions
The final rule makes a number of changes to Sec. 19.113, which
provides the procedures for decisions by the presiding officer and the
OCC. The final rule updates Sec. 19.113(c) to permit the Comptroller
to notify the petitioner of a

[[Page 89827]]

decision by electronic mail or other electronic means, if the
petitioner consents, instead of by registered mail. The final rule also
makes technical changes to paragraph (c) by replacing ``when'' with
``if'' in describing whether the petitioner has waived an oral hearing,
replacing the ``must'' with ``will'' in describing the Comptroller's
notification of the decision, and replacing the ``and'' with ``or'' in
describing the actions that the Comptroller may affirm, terminate, or
modify in its final decision. In Sec. 19.113(d), the final rule
clarifies that there could be more than one charge against an
institution-affiliated party. In Sec. 19.113(f), the final rule
removes the passive sentence structure. Lastly, the final rule adds
headings to each paragraph.
Subparts D Through G--Actions Under the Federal Securities Laws
Subparts D, E, F, and G of current part 19 set forth the procedures
applicable to actions taken by the OCC with respect to banks pursuant
to various provisions of the Federal securities laws, including the
Securities Exchange Act of 1934 (Exchange Act). Specifically, subpart D
addresses exemption hearings under section 12(h) of the Exchange Act,
subpart E addresses disciplinary proceedings, subpart F addresses civil
money penalties, and subpart G addresses cease and desist authority.
Although these Federal securities laws also apply to Federal savings
associations, there are no comparable provisions in OCC regulations for
Federal savings associations. Instead, the former OTS relied on the
authority granted under the Exchange Act for these actions rather than
incorporating the authority into its rules and specified in Sec.
109.100(c) that the Uniform Rules of Practice and Procedure in subpart
A of part 109 applied to proceedings under the Exchange Act.
In the final rule, the OCC streamlines the regulation by combining
subparts D, E, F, and G into one subpart D entitled ``Actions under the
Federal Securities Laws'' and reserves subparts E, F, and G. The OCC
also applies this revised subpart D to Federal savings associations,
removes Sec. 109.100(c), and makes other changes as described below.
19.120 Exemption Hearings Under Section 12(h) of the Securities
Exchange Act of 1934
The final rule moves the provisions in current subpart D of part 19
to a new Sec. 19.120. Current subpart D governs informal hearings by
the Comptroller to determine, pursuant to authority in sections 12(h)
and (i) of the Exchange Act (15 U.S.C. 78l(h) and (i)), whether to
exempt an issuer or a class of issuers from the provisions of sections
12(g), 13, or 14 of the Exchange Act (15 U.S.C. 78l(g), 78m, or 78n) or
whether to exempt any officer, director, or beneficial owner of
securities of an issuer from section 16 of the Exchange Act (15 U.S.C.
78p). This subpart currently covers issuers that are banks whose
securities are registered pursuant to section 12(g) of the Exchange Act
(15 U.S.C. 78l(g)). In addition to applying this provision to issuers
that are Federal savings associations, the OCC is making a number of
other changes:
Specifically, the final rule clarifies that Sec. 19.120(a) applies
to national bank and Federal savings association issued securities that
may be subject to registration in addition to those securities already
registered. This change permits a national bank or Federal savings
association to obtain an exemption from the OCC in advance of
registering.
The final rule also provides that when an applicant provides a copy
of its newspaper notice of an exemption hearing to its shareholders
pursuant to Sec. 19.120(c) it must do so in the same manner as is
customary for shareholder communications, which could be through
electronic means. This change will make it easier and less burdensome
to comply with this notice requirement.
In addition, as in Sec. Sec. 19.35(c) and 19.112(d)(4), the final
rule adds Sec. 19.120(d)(8), governing electronic presentations in the
course of an Exchange Act-related hearing. This provision provides
that, based on the circumstances of each hearing, the presiding officer
may direct the use of, or any party may elect to use, an electronic
presentation during the hearing. If the presiding officer requires an
electronic presentation during the hearing, each party will be
responsible for its own presentation and related costs unless the
parties agree to another manner by which to allocate presentation
responsibilities and costs. As indicated above, this new language is
necessary to account for the routine use of electronic presentations in
hearings that the existing rule does not currently address. The final
rule makes a conforming change in Sec. 19.120(d)(6) to allow, by
stipulation of the parties or by order of the presiding officer, a
court reporter or other authorized person to administer the required
oath to a witness remotely without being in the physical presence of
the witness. Furthermore, the final rule clarifies in Sec.
19.120(d)(9) that a transcript of the hearing may be provided by
electronic means.
Lastly, the OCC is making technical changes to Sec. 19.120. The
final rule makes minor, non-substantive changes in provisions
redesignated as paragraphs (b) and (c); removes passive sentence
structure in text redesignated as paragraph (d)(9); allows for more
than one applicant in provisions redesignated as paragraphs (d)(4) and
(5) and (e); and changes references in this section to the ``Securities
and Corporate Practices Division'' to ``Bank Advisory'' to reflect the
reorganization of the OCC's Law Department.
19.121 Disciplinary Proceedings Involving the Federal Securities Laws
The final rule moves the provisions in current subpart E of part 19
to a new Sec. 19.121. Current subpart E governs proceedings by the
Comptroller to determine whether to take disciplinary actions against
banks that are transfer agents, municipal securities dealers,
government securities brokers, government securities dealers, or
persons associated with or seeking to become associated with these
institutions.\13\ The final rule applies this section to Federal
savings associations by defining ``bank'' to mean a national bank or
Federal savings association, and, when referring to a government
securities broker or government securities dealer, a Federal branch or
agency of a foreign bank. In addition, the final rule defines
``transfer agent,'' ``municipal securities dealer,'' ``government
securities broker,'' ``government securities dealer,'' and person
associated with a person engaged in these activities or with a bank
engaged in these activities by cross-referencing to definitions in the
Exchange Act. The final rule also makes technical changes to terms used
in this section to correlate them more closely with terms used in the
Exchange Act, including the addition to the scope of Sec. 19.121 of
any person seeking to become associated with a government securities
broker or government securities dealer.
---------------------------------------------------------------------------

\13\ Pursuant to sections 3(a)(34)(G)(i) and 15C(c)(2)(A) of the
Exchange Act (15 U.S.C. 78c(a)(34)(G)(i) and 78o-5(c)(2)(A)), the
OCC also may take disciplinary actions against Federal branches and
agencies of foreign banks that are government securities brokers or
government securities dealers or persons associated with or seeking
to become associated with these entities.
---------------------------------------------------------------------------

Furthermore, the final rule removes the reference to the
Comptroller's delegate in redesignated paragraph (a)(2). The definition
of ``Comptroller'' in Sec. 19.3, which applies to Sec. 19.121,
includes a person delegated to perform

[[Page 89828]]

the functions of the Comptroller of the Currency. Therefore, this
reference is unnecessary.
Lastly, the final rule replaces the term ``party'' with the more
accurate term ``respondent'' in redesignated paragraphs (b)(1) and
(c)(2).
19.122 Civil Money Penalty Authority Under Federal Securities Laws
The final rule moves the provisions in current subpart F of part 19
to a new Sec. 19.122. Current subpart F governs proceedings by the
Comptroller to determine whether to impose a civil money penalty
against banks that are transfer agents, municipal securities dealers,
government securities brokers, government securities dealers, or
persons associated with or seeking to become associated with these
institutions.\14\ The final rule applies this provision to Federal
savings associations by defining ``bank'' to mean a national bank or
Federal savings association and, when referring to a government
securities broker or government securities dealer, a Federal branch or
agency of a foreign bank. The final rule also defines ``transfer
agent,'' ``municipal securities dealer,'' ``government securities
broker,'' ``government securities dealer,'' and person engaged in these
activities or person associated with a bank engaged in these activities
by cross-referencing to definitions in the Exchange Act. Lastly, as
with Sec. 19.121, the final rule makes other technical changes to
terms used in this section to correlate them more closely with terms
used in the Exchange Act, including the addition of persons seeking to
become associated with a government securities broker or government
securities dealer to the scope of this section.
---------------------------------------------------------------------------

\14\ Id.
---------------------------------------------------------------------------

19.123 Cease and Desist Authority
The final rule moves the provisions in current subpart G of part 19
to a new Sec. 19.123 and applies these provisions to both national
banks and Federal savings associations. Current subpart G governs
proceedings by the Comptroller to determine whether to initiate cease-
and-desist proceedings against a national bank for violations of
sections 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of the Exchange Act
(15 U.S.C. 78l, 78m, 78n(a), 78n(c), 78n(d), 78n(f), and 78p) or
implementing regulations. The final rule also updates these provisions
by adding violations enacted by, or rules or regulations enacted
thereunder, the Sarbanes-Oxley Act in 2002, as amended,\15\
specifically, sections 301 \16\ (audit committees), 302 (corporate
responsibility for financial reports), 303 (improper influence on
conduct of audits), 304 (forfeiture of certain bonuses and profits),
306 (insider trades during pension fund blackout periods), 401(b)
(accuracy of financial reports), 404 (management assessment of internal
controls), 406 (code of ethics for senior financial officers), and 407
(disclosure of audit committee financial expert) \17\ (15 U.S.C. 78j-
1(m), 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265).
---------------------------------------------------------------------------

\15\ Public Law 107-204, 116 Stat. 745 (2002).
\16\ Adding section 10A(m) to the Exchange Act.
\17\ 15 U.S.C. 78j-1(m), 7241, 7242, 7243, 7244, 7261, 7262,
7264, and 7265.
---------------------------------------------------------------------------

Subpart H--Change in Bank Control
The Change in Bank Control Act (CBCA), which added section 7(j) to
the FDIA (12 U.S.C. 1817(j)) and which the OCC has implemented at 12
CFR 5.50, provides that no person may acquire control of an insured
depository institution unless the appropriate Federal bank regulatory
agency has been given prior written notice of the proposed acquisition.
If, after investigating and soliciting comment on the proposed
acquisition, the agency disapproves the acquisition, the agency must
mail a written notification to the filer within three days of the
decision. The filer may then request an agency hearing on the proposed
acquisition within 10 days of receipt of the disapproval notice. The
Uniform Rules in part 19, subpart A, and part 109, subpart A, apply to
hearings for filers whose proposed acquisition of a national bank or
Federal savings association, respectively, under the CBCA has been
disapproved by the OCC. Current subpart H of part 19 provides
additional hearing procedures for insured national banks. Section 5.50,
which applies to both national banks and Federal savings associations,
directs filers who wish to pursue a hearing for a disapproval decision
to part 19, subpart H. However, subpart H refers only to national
banks.
Because 12 CFR 5.50 applies to both national banks and Federal
savings associations, the final rule amends subpart H by adding
language that makes the subpart specifically applicable to Federal
savings associations in addition to national banks. Furthermore,
because 12 CFR 5.50 applies to both insured and uninsured institutions
and refers all filers who have been disapproved under Sec. 5.50 to the
part 19 procedures, the final rule amends subpart H to make it also
applicable to uninsured institutions. In addition, the final rule
streamlines subpart H by removing a description of the CBCA disapproval
process and instead cross-referencing to 12 CFR 5.50 in the scope of
Sec. 19.160 and removing current paragraph (a) in Sec. 19.161, which
contains provisions relating to disapproval notification that are
duplicative of 12 CFR 5.50(f). The final rule also adds section
headings to Sec. 19.160 and revises the section heading in Sec.
19.161.
Subpart I--Discovery Depositions and Subpoenas
Current subpart I of part 19 and Sec. 109.102 address the rules
applicable to discovery depositions and subpoenas relating to national
banks and Federal savings associations, respectively. These provisions
are substantively similar but have slightly different wording. The
final rule applies part 19, subpart I, to Federal savings associations
and removes Sec. 109.102. The final rule also revises the phrase
``direct knowledge of matters that are non-privileged, relevant, and
material to the proceeding'' to ``direct knowledge of matters that are
non-privileged and of material relevance to the proceeding.'' This
change clarifies that persons being deposed have information of
material relevance to the proceeding and is consistent with the
requirements for document discovery in current and revised Sec.
19.24(b). Furthermore, the final rule amends paragraph (a) to specify
that a party also may take a deposition of a hybrid fact-expert witness
in addition to an expert and a person, including another party, who has
direct knowledge of matters that meet the standards of the paragraph,
labeled as a ``fact witness'' by this amendment. This amendment defines
a hybrid fact-expert witness as a fact witness who also will provide
relevant expert opinion testimony based on the witness' training and
experience.
The final rule also adds paragraph (a)(1) to Sec. 19.170 to
require a party to produce an expert report for any testifying expert
or hybrid fact-expert witness before the witness' deposition and that,
unless otherwise provided by the ALJ, the party must produce such
report at least 20 days prior to the deposition. This new provision
ensures that a deposing party has the benefit of the expert report
prior to the deposition of an expert or hybrid fact-expert witness and
that the deposing party has sufficient time to review the report prior
to the deposition. Furthermore, paragraph (a)(2) of Sec. 19.170
provides that respondents, collectively, are limited to a combined
total of five depositions from all fact witnesses and

[[Page 89829]]

hybrid fact-expert witnesses. This paragraph also provides that
Enforcement Counsel has the same deposition limit. This limit in the
number of depositions adds efficiencies to the discovery process and
prevents deposition requests from delaying the completion of the
proceeding. Lastly, Sec. 19.170(a)(2) provides that a party is
entitled to take a deposition of each expert witness designated by an
opposing party, codifying the right of a party to depose the opposing
party's designated expert witness.
The final rule amends Sec. 19.170(b) to require that a deposition
notice provide the manner for taking the deposition in addition to the
time and place. The final rule also adds language to Sec. 19.170(b) to
indicate that a deposition notice may require the witness to be deposed
at any place within a State, territory, or possession of the United
States or the District of Columbia in which that witness resides or has
a regular place of employment or such other convenient place as agreed
by the noticing party and the witness. Paragraph (b) also permits the
parties to stipulate, or the ALJ to order, that a deposition be taken
by telephone or other remote means. The OCC believes these changes make
it easier and perhaps less costly for parties to obtain, and witnesses
to provide, depositions, thereby improving the fact-finding process.
In Sec. 19.170(c), the final rule provides that a party may take
depositions no later than 20 days before the scheduled hearing date,
instead of 10 days as in the current rule, except with permission of
the ALJ for good cause shown. Increasing this time before a hearing
will allow all parties more time to prepare for the hearing.
As elsewhere in this rulemaking, the final rule amends Sec.
19.170(d), Conduct of a deposition, to provide that, by stipulation of
the parties or by order of the ALJ, a court reporter or other
authorized person may administer the required oath to a deponent
remotely without being in the physical presence of the deponent. This
amendment updates the current oath requirement for witnesses to account
for remote proceedings and conform this provision to Sec.
19.170(b)(2), which allows depositions to be taken by telephone or
other remote means.
The final rule updates Sec. 19.170(e)(1)(i) to allow for the
witness' testimony to be recorded by electronic means such as by a
video recording device. The current rule only allows for recording by a
stenotype machine and electronic sound recording device. This change
reflects new technology and adds flexibility to the testimony process.
Lastly, the final rule makes a non-substantive change to the
heading in paragraph Sec. 19.170(a) and changes the heading of
paragraph (g) from ``Fees'' to ``Expenses'' to describe more accurately
the subject of the paragraph.
With respect to Sec. 19.171, the final rule amends paragraph (a)
to correct a cross-reference and conform the reference to a place
located in the United States to that used elsewhere in part 19. The
final rule also amends paragraph (b)(2), which requires the party
serving a subpoena to file proof of service with the ALJ, to provide
that this proof of service is not required if so ordered by the ALJ.
The OCC is making this change because, in some OCC proceedings, the ALJ
has indicated they did not wish to receive this proof of service.
Finally, the final rule amends paragraph (c) to provide that any party,
in addition to a person named in a subpoena, may file a motion to quash
or modify the subpoena. This amendment ensures that a party has the
right to seek to quash or modify a third-party deposition subpoena.
Subpart J--Formal Investigations
Current subpart J of part 19 and part 112 address formal
investigations against national banks and Federal savings associations,
respectively. The final rule amends subpart J to make it applicable to
both national banks and Federal savings associations and removes part
112. Unlike the Federal savings association rule at Sec. 112.7(b),
subpart J does not include a provision specifically providing for
motions to quash subpoenas. The OCC has determined that it is neither
necessary nor appropriate to include this provision in subpart J
because the recipient may challenge investigative subpoenas in Federal
court. However, the final rule adds a new paragraph (c) to Sec. 19.184
of subpart J that is similar to the Federal savings association rule at
Sec. 112.7(c). This new paragraph permits subpoenas that require the
attendance and testimony of witnesses or the production of documents,
including electronically stored information, to be served on any person
or entity within any State, territory, or possession of the United
States or the District of Columbia or as otherwise provided by law.
This provision also subjects foreign nationals to subpoenas if service
is made upon a duly authorized agent located in the United States or in
accordance with international requirements for service of subpoenas.
The existing rule for national banks is not clear on service of foreign
nationals, and the adoption of specific language from the Federal
savings association rule will eliminate the disputes that previously
have arisen on this issue. Furthermore, the addition of language
regarding international subpoena requirements codifies existing OCC
practice.
The final rule makes further changes to subpart J. First, the final
rule amends Sec. 19.181, Confidentiality of formal investigations.
Currently, this provision provides that information or documents
obtained in the course of a formal investigation are confidential and
may be disclosed only in accordance with the provisions of 12 CFR part
4. The final rule describes in more detail the information or documents
that are confidential to better ensure the confidentiality of formal
investigations. Specifically, amended Sec. 19.181 states that the
entire record of any formal investigative proceeding, including the
resolution or order of the Comptroller authorizing or terminating the
proceeding; all subpoenas issued by the OCC during the investigation;
and all information, documents, and transcripts obtained by the OCC in
the course of a formal investigation, are confidential and may be
disclosed only in accordance with the provisions of part 4. The final
rule also adds that this information may be disclosed pursuant to the
OCC discovery obligations under subpart A of part 19.
Second, the final rule amends Sec. 19.182, Order to conduct a
formal investigation, to clarify the list of actions persons authorized
to conduct an investigation may take. Currently, this section provides
that these persons may, among other things, issue subpoenas duces
tecum, administer oaths, and receive affirmations as to any matter
under investigation by the Comptroller. The final rule adds that these
authorized persons also may take or cause to be taken testimony under
oath, issue subpoenas other than subpoenas duces tecum, and modify
subpoenas. This amendment makes Sec. 19.182 more consistent with the
powers enumerated in the relevant underlying statutes, including 12
U.S.C. 1818(n) and 1820(c). The final rule also makes a technical
correction to indicate that authorized persons may administer
affirmations rather than receive affirmations. Section 19.182 also
currently provides that, upon application and for good cause, the
Comptroller may limit, modify, or withdraw the order at any stage of
the proceedings. The final rule clarifies that the Comptroller may also
terminate the order. Finally, the final rule amends Sec. 19.182 to
specifically indicate that the persons conducting the investigation are
empowered by the Comptroller to do so.

[[Page 89830]]

Third, the final rule amends Sec. 19.183, Rights of witnesses.
Current paragraph (a) provides that any person who is compelled or
requested to furnish testimony, documentary evidence, or other
information with respect to any matter under formal investigation must,
on request, be shown the order initiating the investigation. The final
rule amends this provision to provide that such persons may not retain
copies of the order without first receiving written approval of the
OCC. This amendment ensures the confidentiality of the order.
Current Sec. 19.183(b) provides that a person testifying in a
formal investigation may be accompanied, represented, and advised by
counsel, and indicates that this right to counsel means that the
attorney may be present at all times while the person is testifying and
that the attorney may, among other things, question the person briefly
at the conclusion of the testimony to clarify answers and make summary
notes during the testimony solely for use of the person testifying. The
final rule amends this description of permissible attorney activities
to provide that the attorney's questioning of the person may be on the
record. This ensures a more complete formal record of the proceeding.
In addition, the final rule provides that the notes taken by the
attorney during testimony may be used solely in representing the
person. This change allows the attorney to use these notes and not
restrict use of the notes to the person testifying, thereby enabling
the attorney to better represent their client.
Section 19.183(c) provides that any person who has given or will
give testimony and counsel representing the person may be excluded from
the proceedings during the taking of testimony of any other witness.
The final rule amends this provision to specify that such person and
counsel may be excluded during the testimony of any other person at the
discretion of the OCC or the OCC's designated representative.
Furthermore, the final rule provides that neither attorney(s) for the
institution(s) affiliated with the testifying person nor attorneys for
any other interested persons have any right to be present during the
testimony of any person not personally represented by such attorney.
These changes ensure the confidentiality and integrity of the
proceeding by mitigating conflicts of interest and clarify that it is
the OCC or OCC's designated representative who makes the decision on
exclusion.
Current Sec. 19.183(d) provides that any person who is compelled
to give testimony is entitled to inspect any transcript that has been
made of the testimony but may not obtain a copy if the Comptroller's
representatives conducting the proceedings have cause to believe that
the contents should not be disclosed pending completion of the
investigation. The final rule removes the burden of proving ``cause''
included in this provision, as the OCC finds this unnecessary. The
final rule also eliminates the language that limits the release of the
transcript pending completion of the investigation because the reasons
for not disclosing the transcript may persist beyond the conclusion of
any pending investigation.
Current Sec. 19.183(e) provides that any designated representative
conducting an investigative proceeding must report to the Comptroller
any instances where a person has been guilty of dilatory,
obstructionist, or insubordinate conduct during the course of the
proceeding or any other instance involving a violation of this part. As
this paragraph does not pertain to rights of witnesses, and to make
clear that this provision applies to all formal investigations covered
by subpart J, the final rule redesignates this paragraph as a new Sec.
19.185. The final rule also replaces the phrase ``has been guilty of''
with ``has engaged in'' in the redesignated paragraph because the
phrase ``has been guilty of'' is unclear in the context of this
provision. Furthermore, the OCC does not believe it is appropriate for
a person to be found guilty of this behavior before the designated
representative reports this person to the OCC. With this change, the
OCC may investigate or take other action with respect to this
individual to ensure the fairness and accuracy of the proceeding in a
more timely manner. This change also conforms the scope of this
provision with the scope of a similar provision, Sec. 19.197, which
involves the reporting of certain conduct of an individual practicing
before the OCC.
Fourth, the final rule amends Sec. 19.184, Service of subpoena and
payment of witness expenses, by removing the specific language in
paragraph (b) regarding the payment of witnesses and instead cross-
referencing to the more detailed rule for witness payments contained in
revised Sec. 19.14, discussed previously.
Lastly, the final rule makes a number of technical changes to
subpart J. Specifically, the final rule replaces references to ``the
Comptroller'' with ``the OCC'' in Sec. 19.183(b) and (d) and in
redesignated Sec. 19.185 and replaces the term ``representatives''
with ``designated representatives'' in Sec. 19.183(d)'' to align the
provisions more closely with the statute. The final rule also removes
the references to the ``Comptroller's delegate'' in Sec. Sec. 19.180
and 19.182 as the definition of ``Comptroller'' in Sec. 19.3, which
applies to subpart J, includes a person delegated to perform the
functions of the Comptroller of the Currency. In addition, the final
rule adds a reference to Federal branches and agencies in Sec. 19.180
to more completely describe those entities that are subject to the
OCC's examination authority. Finally, the final rule adds section
headings to Sec. 19.183.
Subpart K--Parties and Representational Practice Before the OCC;
Standards of Conduct
Current subpart K of part 19 contains rules relating to parties and
representational practice before the OCC. The final rule makes mostly
technical changes to this subpart.
First, in Sec. 19.190, Scope, the final rule makes a confirming
change to a cross-reference to reflect this rulemaking's amendments to
subpart D.
Second, the final rule amends the definition of ``practice before
the OCC'' in Sec. 19.191, Definitions. Currently, the OCC defines the
term to include any matters connected with presentations to the OCC or
any of its officers or employees relating to a client's rights,
privileges, or liabilities under laws or regulations administered by
the OCC. The final rule clarifies this statement so that it applies to
both written and oral presentations. Section 19.191 also provides that
the term ``practice before the OCC'' does not include work prepared for
a bank solely at its request for use in the ordinary course of its
business. The final rule amends this statement so that it also includes
work prepared for a Federal savings association and a Federal branch or
agency of a foreign bank, and changes ``bank'' to ``national bank.''
These changes are part of the OCC's application of part 19 to Federal
savings associations and the OCC's specific inclusion of Federal
branches and agencies in part 19 to clarify the application of part 19
to all entities supervised by the OCC.
Third, the final rule amends Sec. 19.194, Eligibility of attorneys
and accountants to practice, by removing the phrase ``who is qualified
to practice as an attorney'' in paragraph (a) and the phrase ``who is
qualified to practice as a certified public accountant or public
accountant'' in paragraph (b). Section 19.191 defines the terms
``attorney'' and ``accountant'' and these definitions reference
qualification requirements. Therefore, these phrases are superfluous.

[[Page 89831]]

Fourth, the final rule amends Sec. 19.196, Disreputable conduct,
which provides a nonexclusive list of disreputable conduct for which an
individual may be censured, debarred, or suspended from practice before
the OCC. Paragraph (d) of this section includes on this list disbarment
or suspension from practice as an attorney or as a certified public
accountant or public accountant by any duly constituted authority of
any State, possession, or commonwealth of the United States or the
District of Columbia for the conviction of a felony or misdemeanor
involving moral turpitude in matters relating to the supervisory
responsibilities of the OCC, where the conviction has not been reversed
on appeal. The final rule deletes the phrase ``in matters relating to
the supervisory responsibilities of the OCC'' so as not to limit the
felony or misdemeanor conviction to only OCC-related matters. The OCC
believes that an individual engaged in any of the conduct listed in
this section, whether or not related to OCC supervisory matters, should
not practice before the OCC.
Fifth, the final rule replaces the reference to the OTS in Sec.
19.196(g) with ``the former OTS,'' as the OTS no longer exists.
Sixth, the final rule amends Sec. 19.197, which provides the
standards and rules for initiating disciplinary proceedings. Paragraph
(a) of this section provides that an individual, including any employee
of the OCC, who has reason to believe that an individual practicing
before the OCC in a representative capacity has engaged in any conduct
that would serve as a basis for censure, suspension, or debarment under
Sec. 19.192 (such as contemptuous conduct, materially injuring or
prejudicing another party, violating a law or order, or unduly delaying
proceedings) may report this conduct to the OCC or a person delegated
to receive this information by the Comptroller. The final rule broadens
the application of this paragraph to conduct under all of subpart K,
which includes incompetence (Sec. 19.195) and disreputable conduct
(Sec. 19.196), instead of conduct only under Sec. 19.192. The OCC
believes that an individual found to be incompetent or to have engaged
in disreputable conduct also should be subject to a disciplinary
proceeding under this section.
Seventh, the final rule amends Sec. 19.198, Conferences, to add
the terms ``censure'' in paragraph (a) and ``debarment'' in paragraph
(b) to correct missing references. The final rule also changes the
heading on Sec. 19.198(b) from ``Resignation or voluntary suspension''
to ``Voluntary suspension or debarment'' so that it more accurately
reflects the subject of the paragraph.
Eighth, the final rule amends Sec. 19.200(a), which provides that
if the final order against the respondent is for debarment the
individual may not practice before the OCC unless otherwise permitted
to do so by the Comptroller, by clarifying that the Comptroller's
permission to permit such practice is pursuant to Sec. 19.201. Section
19.201 provides that the Comptroller may entertain a petition for
reinstatement after the expiration of the time period designated in the
order of debarment and that the Comptroller may grant reinstatement
only if satisfied that the petitioner is likely to act in accordance
with part 19 and if granting reinstatement would not be contrary to the
public interest. Section 19.201 further provides that any request for
reinstatement is limited to written submissions unless the Comptroller,
in their discretion, affords the petitioner a hearing. The amendment
merely confirms that a debarred respondent only may be reinstated
pursuant to the process set forth in Sec. 19.201. It makes no
substantive change. The final rule also revises the heading of Sec.
19.200 to reflect the order of topics covered by the section.
Ninth, the final rule removes the references to the ``Comptroller's
delegate'' in Sec. Sec. 19.197(b) and (c), 19.199, and 19.200(d) as
the definition of ``Comptroller'' in Sec. 19.3, which applies to
subpart K, includes a person delegated to perform the functions of the
Comptroller of the Currency.
Finally, the final rule makes several minor, nonsubstantive wording
changes throughout subpart K. In Sec. 19.192(c), the NPR instruction
stated that the OCC would replace the phrase ``administrative law
judge'' with ``ALJ'' in one instance. The final rule replaces that
phrase each time it appears in that section.
Subpart L--Equal Access to Justice Act
In general, EAJA,\18\ codified at 5 U.S.C. 504, authorizes the
payment of attorney's fees and other expenses to eligible parties who
prevail over the United States in certain adversary adjudications,
absent a showing by the government that its position was substantially
justified or that special circumstances make an EAJA award unjust. EAJA
requires each agency to issue rules that establish uniform procedures
for the submission and consideration of applications for an EAJA
award.\19\ The OCC currently meets this requirement in subpart L of
part 19, which provides that EAJA implementing regulations promulgated
by the U.S. Department of the Treasury (Treasury), set forth at 31 CFR
part 6, are applicable to formal adjudicatory proceedings under part
19. The final rule deletes the cross-reference to the Treasury
regulation and amends subpart L to set forth EAJA regulations
specifically applicable to certain OCC adversary adjudications
conducted under part 19.
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\18\ Public Law 96-481, title II, sec. 203(a)(1), (c) (1980),
revived and amended Public Law 99-80, sec. 1, 6 (1985).
\19\ 5 U.S.C. 504(c)(1). EAJA also requires that each agency
issue its EAJA rule after consultation with the Chairman of ACUS. 5
U.S.C. 504(c)(1). Pursuant to instructions provided by ACUS in the
preamble to the ACUS Model Rule, see 84 FR 38934, the OCC notified
the Office of the Chairman of ACUS of the proposed rule. ACUS did
not suggest any changes to the OCC's proposal.
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The OCC has based subpart L on the revised model rule implementing
EAJA published in 2019 by the Administrative Conference of the United
States (ACUS) (ACUS Model Rule).\20\ As discussed below, the OCC has
customized subpart L in certain places to reflect the OCC's procedures
in adversary adjudications, reorganized a few provisions included in
the ACUS Model Rule, made other changes based on the Treasury EAJA rule
as well as the EAJA rules of the Board and FDIC,\21\ and made non-
substantive grammatical or stylistic changes. Although the Treasury,
Board, and FDIC EAJA rules are based on earlier versions of the ACUS
Model Rule, the OCC believes that these provisions remain useful and
clarify the application of EAJA to OCC adversary proceedings.
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\20\ 84 FR 38934 (Aug. 18, 2019). ACUS originally issued an EAJA
model rule in 1981 (46 FR 32900 (June 25, 1981)) and previously
revised its model rule in 1986 (51 FR 16659 (May 6, 1986)
(previously codified at 1 CFR part 315)). ACUS issued its model rule
to assist agencies when adopting their EAJA rules and encourages
agencies to set out and implement this model rule as part of their
own EAJA rules. Id. The Treasury EAJA rule is based on the 1981 EAJA
model rule.
\21\ 12 CFR part 263, subpart G (Board) and 12 CFR part 308,
subpart P (FDIC). Both the Board and FDIC EAJA rules are based on
the earlier versions of the ACUS model rule.
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Authority and Scope; Waiver
Section 19.205 describes the general purpose and scope of EAJA.
Specifically, an eligible party may receive an award of attorney fees
and other expenses when it prevails over an agency in certain
administrative proceedings (adversary adjudications) unless the
agency's position was substantially justified or special circumstances
make an award unjust. Furthermore, as provided in the Treasury
regulations, and as determined

[[Page 89832]]

by EAJA caselaw, this provision provides that no presumption under this
subpart arises that the agency's position was not substantially
justified because the agency did not prevail.\22\
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\22\ See 31 CFR 6.5. See also, e.g., Pierce v. Underwood, 487
U.S. 552 (1988); Miles v. Bowen, 632 F. Supp. 282 (M.D. Ala. 1986).
---------------------------------------------------------------------------

The final rule does not contain the provision in the ACUS Model
Rule that permits an eligible party, even if not a prevailing party, to
receive an award under EAJA when it successfully defends against an
excessive demand made by the agency. Although EAJA permits excessive
demand awards, EAJA specifically provides that excessive demand awards
be paid ``only as a consequence of appropriations provided in
advance.'' \23\ Because the OCC is not an appropriated agency and
instead receives its funding through assessments on the institutions it
regulates, the OCC believes that this EAJA excessive demand provision
does not apply to the OCC. Consequently, the final rule does not
include provisions in the ACUS Model Rule specifically related to
excessive demand awards.
---------------------------------------------------------------------------

\23\ 5 U.S.C. 504(a)(4).
---------------------------------------------------------------------------

As provided in Sec. 19.205(b), the OCC has determined that
proceedings listed in Sec. Sec. 19.1, 19.110, 19.120, 19.190, 19.230,
and 19.241 meet EAJA's definition of ``adjudicatory adjudications'' and
are covered by subpart L.
Section 19.205(c) provides that after reasonable notice to the
parties, the presiding officer or the OCC may waive, for good cause
shown, any provision contained in subpart L as long as the waiver is
consistent with the terms and purpose of EAJA. Although this provision
is not included in the ACUS Model Rule, the OCC finds that this
provision provides useful discretion to the presiding officer and the
OCC, as relevant, during the EAJA process and provides for the smoother
conduct of EAJA proceedings should Congress subsequently amend EAJA and
the OCC has not yet updated its corresponding EAJA implementing
regulations.
Definitions
Section 19.206 sets forth definitions of terms used in this
subpart. Unless otherwise noted, these definitions are substantively
identical to the definitions in the ACUS Model Rule and based on the
definitions in EAJA.
Section 19.206(a) defines ``adversary adjudication'' to mean an
adjudication under 5 U.S.C. 554 in which the position of the OCC is
represented by Enforcement Counsel.\24\ With certain exceptions,
section 554 applies to adjudications required by statute to be
determined on the record after opportunity for an agency hearing.\25\
Unlike EAJA and the ACUS Model Rule, the final rule does not
specifically exclude from this definition adjudications related to
setting rates, licensing decisions, contract appeals, and the Religious
Freedom Restoration Act of 1993.\26\ These categories of adjudications
are not covered by part 19 and therefore a specific exclusion in the
OCC rule is not necessary.
---------------------------------------------------------------------------

\24\ See 5 U.S.C. 504(b)(1)(C) and Sec. 2.01(b) of the ACUS
Model Rule.
\25\ Section 554 of title 5 does not apply to: (1) a matter
subject to a subsequent trial of the law and the facts de novo in a
court; (2) the selection or tenure of an employee, except a [sic]
administrative law judge appointed under section 3105 of this title;
(3) proceedings in which decisions rest solely on inspections,
tests, or elections; (4) the conduct of military or foreign affairs
functions; (5) cases in which an agency is acting as an agent for a
court; or (6) the certification of worker representatives. 5 U.S.C.
554(a).
\26\ EAJA and the ACUS Model Rule specifically exclude: (1) an
adjudication for the purpose of establishing or fixing a rate or for
the purpose of granting or renewing a license; (2) any appeal of a
decision made pursuant to section 7103 of title 41 before an agency
board of contract appeals as provided in section 7105 of title 41;
(3) any hearing conducted under chapter 38 of title 31; and (4) the
Religious Freedom Restoration Act of 1993.
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Section 19.206(b) defines ``final disposition'' as the date on
which a decision or order disposing of the merits of the proceeding, or
any other complete resolution of the proceeding such as a settlement or
voluntary dismissal becomes final and unappealable, both within the OCC
and to the courts.\27\
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\27\ See Sec. 2.01(e) of the ACUS Model Rule.
---------------------------------------------------------------------------

Section 19.206(c) defines ``party'' to mean a party, defined in 5
U.S.C. 551(3),\28\ that is (1) an individual whose net worth did not
exceed $2,000,000 at the time that the adversary adjudication was
initiated; or (2) any owner of an unincorporated businesses, or any
partnership, corporation, unit of local government or organization with
a net worth not exceeding $7,000,000 and no more than 500 employees at
the time that the adversary adjudication was initiated, except that the
net worth limitation does not apply to certain tax-exempt organizations
described in section 501(c)(3) of the Internal Revenue Code of 1986 or
a cooperative association as defined in section 15(a) of the
Agricultural Marketing Act.\29\ This definition also provides that the
net worth and number of employees of the applicant and, where
appropriate, any of its affiliates must be aggregated when determining
the applicability of this definition. The OCC is including this
aggregation provision, which is not included in the ACUS Model Rule,
because, as discussed below, the final rule requires information on
affiliates for certain parties.
---------------------------------------------------------------------------

\28\ Section 551(3) defines ``party'' to include a person or
agency named or admitted as a party, or properly seeking and
entitled as of right to be admitted as a party, in an agency
proceeding, and a person or agency admitted by an agency as a party
for limited purposes.
\29\ See 5 U.S.C. 504(b)(1)(B) and Sec. 2.01(f) of the ACUS
Model Rule.
---------------------------------------------------------------------------

Section 19.206(d) defines ``position of the OCC'' to mean the OCC's
position in an adversary adjudication as well as the action or failure
to act by the OCC upon which the adversary adjudication is based. This
paragraph also provides that fees and other expenses may not be awarded
to a party for any portion of the adversary adjudication if the party
has unreasonably drawn out the proceeding.\30\
---------------------------------------------------------------------------

\30\ See 5 U.S.C. 504(b)(1)(E) and Sec. 2.01(g) of the ACUS
Model Rule.
---------------------------------------------------------------------------

Section 19.206(e) defines ``presiding officer'' as an official,
whether an ALJ or otherwise, that presided over the adversary
adjudication or the official presiding over an EAJA proceeding.\31\ As
noted below in Sec. 19.207, upon receipt of an EAJA application, the
OCC will, to the extent feasible, refer the matter to the official who
heard the underlying adversary adjudication.
---------------------------------------------------------------------------

\31\ See the definition of ``adjudicative officer'' in 5 U.S.C.
504(b)(1)(D) and Sec. 2.01(a) of the ACUS Model Rule. The OCC has
chosen to use the term ``presiding officer'' instead of
``adjudicative officer'' as that is the term used elsewhere in part
19.
---------------------------------------------------------------------------

Application Requirements
Section 19.207 sets out application requirements for a party
seeking an award under EAJA. This section requires a party to file an
application with the OCC within 30 days after the OCC's final
disposition of the adversary adjudication. It also requires the
application to include (1) the identity of the applicant and the
adjudicatory proceeding for which an award is sought; (2) a showing
that the applicant has prevailed and identification of the OCC position
that the applicant alleges was not substantially justified; (3) the
basis for the applicant's belief that the position was not
substantially justified; (4) unless the applicant is an individual, the
number of employees of the applicant and a brief description of the
type and purpose of the organization or business; (5) a showing of how
the applicant meets the definition of ``party'' under Sec. 19.206(c),
including documentation of net worth pursuant to Sec. 19.208; (6)
documentation of the fees and expenses sought per Sec. 19.209; (7)
signature by the applicant or the applicant's authorized officer or
attorney; (8) any other matter the applicant wishes the OCC to consider
in determining whether and in what

[[Page 89833]]

amount an award should be made; and (9) written verification under
penalty of perjury that the information contained in the information
provided is true and correct. These application requirements are based
on Sec. 3.01 of the ACUS Model Rule,\32\ except for the provision,
taken from the Treasury rule,\33\ providing that the applicant may
include other matters for the OCC to consider. The OCC believes that
this further information could assist the presiding officer when
reviewing the EAJA claim and, by including this information at the
application stage, may make the EAJA process more efficient.
---------------------------------------------------------------------------

\32\ See also 5 U.S.C. 504(a)(2).
\33\ 31 CFR 6.8(d).
---------------------------------------------------------------------------

Although not included in EAJA or the ACUS Model Rule, Sec.
19.207(c) provides that, upon receipt of an EAJA application, the OCC
will to the extent feasible refer the matter to the official who heard
the underlying adversary adjudication. The OCC believes that the
official presiding over the adversary proceeding subject to the EAJA
application is in the best position to review the EAJA application.
Net Worth Exhibit
Section 19.208 requires specific net worth documentation to
accompany certain EAJA applications. This documentation is necessary to
determine whether the applicant meets the definition of ``party'' under
Sec. 19.206(c) and therefore may be eligible for an EAJA award.
Paragraph (a) requires an applicant, other than an applicant that is a
non-profit or a cooperative association, to provide with its EAJA
application a detailed exhibit of the applicant's, and where
applicable, any of its affiliates', net worth at the time the adversary
adjudication was initiated. Unless otherwise required, this paragraph
permits this exhibit to be in any form convenient to the applicant that
provides full disclosure of the applicant's and affiliates' assets and
liabilities sufficient to determine whether the applicant qualifies
under the standards of this subpart. Furthermore, this paragraph
permits a presiding officer to require an applicant to file additional
information to determine its eligibility for an award. These net worth
exhibit requirements are taken from Sec. 3.02 of the ACUS Model Rule,
except that the final rule requires the net worth information from
affiliates, where appropriate. Because of the structure and
interrelatedness of many financial institutions, the OCC believes that
affiliate net worth will often prove relevant when determining
eligibility for an EAJA award. The OCC notes that the EAJA rules issued
by Treasury, the Board, and the FDIC require net worth information from
affiliates to determine eligibility under EAJA.\34\
---------------------------------------------------------------------------

\34\ See 31 CFR 6.4(f) (Treasury); 12 CFR 263.105 (Board); and
12 CFR 308.177 (FDIC).
---------------------------------------------------------------------------

Section 19.208 also includes further provisions included in the
Board's and the FDIC's EAJA regulations but not included in the ACUS
Model Rule.\35\ These provisions provide more detailed information as
to what the OCC will accept in satisfaction of the net worth exhibit
requirement or pertain specifically to national banks and Federal
savings associations. Specifically, paragraph (a)(1) permits the use of
unaudited financial statements for individual applicants as well as
certain financial statements or reports submitted to a Federal or State
agency for determining individual net worth, unless the presiding
officer or the OCC otherwise requires. For applicants or affiliates
that are not banks or savings associations, paragraph (a)(2) provides
that net worth will be considered to be the excess of total assets over
total liabilities as of the date the underlying proceeding was
initiated. For banks and savings associations, paragraph (a)(3)
requires the submission of a Consolidated Report of Condition and
Income (Call Report) and provides that net worth is the total equity
capital as reported in the Call Report filed for the last reporting
date before the initiation of the proceeding.
---------------------------------------------------------------------------

\35\ Id.
---------------------------------------------------------------------------

Similar to Sec. 3.02 of the ACUS Model Rule, paragraph (b)
provides that the net worth exhibit will be included in the public
record of the proceeding unless an applicant believes that there are
legal grounds for withholding it from disclosure and requests that the
documents be filed under seal or otherwise treated as confidential.
Documentation of Fees and Expenses
As provided in Sec. 3.03 of the ACUS Model Rule, Sec. 19.209
requires applications to be accompanied by adequate documentation of
the fees and other expenses incurred after initiation of the adversary
adjudication. This information is necessary to determine any EAJA
award. Specifically, this section requires a separate itemized
statement for each professional firm or individual whose services are
covered by the application showing the hours spent in connection with
the proceeding by each individual, a description of the specific
services provided, the rate at which each fee has been computed, any
expenses for which reimbursement is sought, the total amount claimed,
and the total amount paid or payable by the applicant or by any other
person or entity for the services provided. This section also
authorizes a presiding officer to require an applicant to provide
vouchers, receipts, or other substantiation for any fees or expenses
claimed.
Unlike the ACUS Model Rule, this provision also provides that an
application seeking an increase in fees to account for inflation
pursuant to Sec. 19.215(d)(1)(i), discussed below, also must include
adequate documentation of the change in the consumer price index for
the attorney or agent's locality.
Filing and Service of Documents
As in Sec. 4.01 of the ACUS Model Rule, Sec. 19.210 requires
applications for an award, or any accompanying documentation related to
an application, to be filed and served on all parties to the proceeding
in accordance with Sec. 19.11, Service of papers, except for
confidential information pursuant to Sec. 19.208(b).
Answer to Application
As provided in Sec. 4.02 of the ACUS Model Rule, Sec. 19.211
provides that Enforcement Counsel may file an answer to an EAJA
application within 30 days after service of the application except in
cases involving settlement negotiations under Sec. 19.213. This
section provides that failure to file an answer within 30 days may be
treated as consent to the award requested unless Enforcement Counsel
requests an extension of time for filing or files a statement of intent
to negotiate a settlement under Sec. 19.213. This section requires the
answer to explain in detail any objections to the award requested and
identify the facts supporting Enforcement Counsel's position. For any
facts not already in the record of the proceeding, this section
requires Enforcement Counsel to provide supporting affidavits or a
request for further proceedings under Sec. 19.214 with the answer.
Unlike the ACUS Model Rule, Sec. 19.211 does not include information
related to settlement negotiations and instead cross-references to
Sec. 19.213, which discusses settlement of an EAJA award. The OCC
believes that, for ease of use, all settlement provisions should be
included in the same section of the regulation.
Reply
As in Sec. 4.03 of the ACUS Model Rule, Sec. 19.212 permits an
applicant to reply within 15 days after service of an answer. For facts
not already in the

[[Page 89834]]

record, the applicant is required to provide supporting affidavits or a
request for further proceedings pursuant to Sec. 19.214 with the
answer.
Settlement
As in Sec. 4.04 of the ACUS Model Rule, Sec. 19.213 provides that
the applicant and Enforcement Counsel may agree to a proposed
settlement before final action on the application, either in connection
with a settlement of the underlying proceeding or after conclusion of
an underlying proceeding, in accordance with the OCC's standard
settlement procedure pursuant to Sec. 19.15, Opportunity for informal
settlement. In a case where a prevailing party and Enforcement Counsel
agree on a proposed settlement of an award before an EAJA application
has been filed, this section requires the application to be filed with
the proposed settlement. Section 19.213 also clarifies that, if a
proposed settlement of an underlying proceeding provides for each side
to pay its own expenses and the settlement is accepted, no application
under this subpart may be filed. However, this section differs from
Sec. 4.04 of the ACUS Model Rule by including a provision the ACUS
Model Rule includes in its section relating to an answer to an
application, Sec. 4.02. Specifically, Sec. 19.213 specifies that, if
after an application is submitted, Enforcement Counsel and the
applicant believe that they can reach a settlement, they may file a
joint statement of their intent to negotiate a settlement. Filing this
statement will extend the time for filing an answer under Sec. 19.211
for an additional 30 days. Further extensions could be granted by the
presiding officer at the joint request of the applicant and Enforcement
Counsel. As with Sec. 19.211, the OCC believes that this provision is
better placed in Sec. 19.213 so that all settlement information is
included in the same section of the regulation.
Further Proceedings
Ordinarily, the determination of an EAJA award would be made on the
basis of the written record. However, Sec. 19.214(a) permits an
applicant or Enforcement Counsel to request the filing of additional
written submissions, an informal conference, oral argument, discovery,
or an evidentiary hearing with respect to issues other than whether the
OCC's position was substantially justified, such as issues involving
the applicant's eligibility or substantiation of fees or expenses. The
presiding officer may permit these further proceedings if necessary for
a full and fair decision on the application. The presiding officer also
may order these additional proceedings on its own initiative. In
addition, paragraph (a) requires that further proceedings be held as
promptly as possible so as not to delay resolution of the EAJA
application. The final rule lists applicant eligibility or
substantiation of fees and expenses as examples of permissible issues
for further proceedings. Paragraph (a) is based on Sec. 4.05 of the
ACUS Model Rule. However, Sec. 19.214 does not contain the ACUS Model
Rule's statement regarding the basis for a decision on whether the
OCC's position was substantially justified. The OCC believes it is more
appropriate to include this statement in Sec. 19.215, Decision. In
addition, to compile a more complete list of all available further
proceedings, the final rule also permits the applicant or Enforcement
Counsel to request an informal conference, which is not listed in the
ACUS Model Rule.
As in Sec. 4.05 of the ACUS Model Rule, Sec. 19.214(b) requires
that any request for further proceedings specifically identify the
information sought or any disputed issues and explain why additional
proceedings are necessary to resolve the issues.
Decision
The final rule's section on EAJA decisions, Sec. 19.215, is based
on 5 U.S.C. 504(a)(3) and in part on Sec. 4.06 of the ACUS Model Rule.
Section 19.215(a) provides that a presiding officer must base its
decision on whether the position of the OCC was substantially justified
on the administrative record as a whole of the adversary adjudication
for which fees and other expenses are sought. The ACUS Model Rule
includes this provision in its section on further proceedings, Sec.
19.214. However, the OCC believes this requirement better belongs in
the section of the regulation outlining EAJA decisions because it
provides parameters for the presiding officer's decision.
As in Sec. 4.06 of the ACUS Model Rule, Sec. 19.215(b) mandates
the timing of the presiding officer's decision. It requires the
presiding officer to issue a recommended decision in writing on an EAJA
application within 90 days after the time for filing a reply or within
90 days of the completion of further proceedings held pursuant to Sec.
19.214.\36\
---------------------------------------------------------------------------

\36\ The ACUS Model Rule provides that an agency may determine
the specific time period for this section.
---------------------------------------------------------------------------

Also, as in Sec. 4.06 of the ACUS Model Rule, paragraph (c) of
Sec. 19.215 provides that a decision must include written findings and
conclusions on an applicant's eligibility and status as a prevailing
party. The decision also must include, if applicable, an explanation of
the reasons for any difference between the amount requested and the
amount awarded, findings on whether the Enforcement Counsel's or OCC's
position was substantially justified, whether the applicant unduly and
unreasonably protracted the proceedings, or whether special
circumstances make an award unjust. Paragraph (c) differs from Sec.
4.06 of the ACUS Model Rule in that it includes language taken from
Sec. 4.05 of the ACUS Model Rule. Specifically, paragraph (c) provides
that the presiding officer must determine whether or not the position
of the OCC was substantially justified on the basis of the
administrative record as a whole of the adversary adjudication for
which fees and other expenses are sought. The OCC believes this
provision is a better fit in the section of the regulation outlining
EAJA decisions.
Section 19.215(d) provides the requirements for EAJA decisions.
Paragraphs (d)(1), (2) and (3) of Sec. 19.215 are not included in the
ACUS Model Rule but are based on the EAJA statute, provisions included
in the FDIC and Board EAJA rules,\37\ and provisions included in the
prior ACUS Model Rule that ACUS determined were largely substantive
matters beyond the Conference's statutory charge.\38\ The OCC believes
that these provisions provide important details on the basis for EAJA
award amounts that should apply to all EAJA applications and be
included in its EAJA regulation.
---------------------------------------------------------------------------

\37\ 12 CFR 263.106, 308.175.
\38\ See 84 FR 38934.
---------------------------------------------------------------------------

Specifically, Sec. 19.215(d)(1) provides that EAJA awards may
include the reasonable expenses of expert witnesses; the reasonable
cost of any study, analysis, report, test, or project; and reasonable
attorney or agent fees incurred after initiation of the adversary
adjudication subject to the EAJA application. This paragraph also
provides that the presiding officer will base awards on prevailing
market rates for the kind and quality of the services furnished, even
if the services were provided without charge or at reduced rate to the
applicant. However, no award for the fee of an attorney or agent under
this subpart may exceed the hourly rate specified in EAJA (5 U.S.C.
504(b)(1)(A)) except, as permitted by EAJA, to account for inflation as
requested by the applicant and documented in the EAJA application or if
a special factor, such as the limited availability of qualified
attorneys or agents for the proceedings involved,

[[Page 89835]]

justifies a higher fee.\39\ Pursuant to EAJA, this paragraph also
prohibits an award for expert witness fees that exceed the highest rate
paid for expert witnesses by the OCC.\40\
---------------------------------------------------------------------------

\39\ 5 U.S.C. 504(b)(1)(A).
\40\ Id.
---------------------------------------------------------------------------

Section 19.215(d)(2) provides factors the presiding officer should
consider in determining the reasonableness of the attorney, agent, or
expert witness fees. These factors are: (1) if in private practice, the
attorney's, agent's, or witness' customary fee for similar services;
(2) if an employee of the applicant, the fully allocated cost of the
attorney's, agent's, or witness' services; (3) the prevailing rate for
similar services in the community in which the attorney, agent, or
witness ordinarily perform services; (4) the time actually spent in the
representation of the applicant; (5) the time reasonably spent in light
of the difficulty or complexity of the issues in the proceeding; and
(6) any other factors as may bear on the value of the services
provided.
Section 19.215(d)(3) provides parameters for the award of costs for
any study, analysis, report, test, project, or similar matter.
Specifically, the presiding officer may award the reasonable cost of
these services prepared on behalf of the applicant to the extent that
the charge for the service does not exceed the prevailing rate for
similar services and the presiding officer finds that the service was
necessary for preparation of the applicant's case.
As in Sec. 4.06 of the ACUS Model Rule, Sec. 19.215(d)(4) permits
a presiding officer to reduce the amount to be awarded or deny an award
to the extent that the party during the proceedings engaged in conduct
that unduly and unreasonably protracted final resolution of the matter
in controversy. Unlike Sec. 4.06 of the ACUS Model Rule, paragraph
(d)(4) also permits the presiding officer to reduce or deny the award
if special circumstances make the award sought unjust. This provision
is included in 5 U.S.C. 504(a)(1) and in the Treasury rule \41\ and is
noted in the authority and scope section of subpart L, Sec. 19.205(a).
The OCC believes it is helpful to include it in Sec. 19.215 as this
section is specifically related to the decision making of the presiding
officer.
---------------------------------------------------------------------------

\41\ See 31 CFR 6.14.
---------------------------------------------------------------------------

Finally, Sec. 19.215(e) provides that the Comptroller will issue a
final decision on the EAJA application or remand the application to the
presiding officer for further proceedings in accordance with Sec.
19.40, Review by the Comptroller. This provision is not included in the
ACUS Model Rule. However, the OCC believes that for clarity and
completeness its EAJA rule should specify the final agency action on
the EAJA application, as delineated in part 19.
Agency Review
As in Sec. 4.07 of the ACUS Model Rule, Sec. 19.216 allows an
applicant or Enforcement Counsel to seek review of the presiding
officer's decision on the EAJA application, in accordance with Sec.
19.39, Exceptions to recommended decision. However, Sec. 19.216 does
not include the provision in the ACUS Model Rule that permits the
agency to review the decision on its own initiative. The OCC does not
believe that this provision is necessary because the regulation
includes a separate provision in Sec. 19.215(e), not included in the
Model rule, that provides for a final decision on the EAJA application
by the Comptroller or the Comptroller's remand of the application to
the presiding officer for further proceedings.
Judicial Review
As provided by 5 U.S.C. 504(c)(2) and in Sec. 4.08 of the ACUS
Model Rule, Sec. 19.217 provides for judicial review of final OCC
decisions on awards in accordance with 5 U.S.C. 504(c)(2).
Stay of Decision Concerning Award
As in Sec. 4.09 of the ACUS Model Rule, Sec. 19.218 provides for
an automatic stay of an EAJA proceeding until the OCC's final
disposition of the decision on which the application is based and
either the time period for judicial review has expired, or if judicial
review is sought, final disposition is made by a court and no further
judicial review is available.
Payment of Award
As in Sec. 4.10 of the ACUS Model Rule, Sec. 19.219 provides that
an applicant seeking payment of an award must submit to the OCC's
Litigation Group a copy of the final decision granting the award
accompanied by a certification that the applicant will not seek review
of the decision in the United States courts. This section also provides
that the OCC pay any amount owed to an applicant within 90 days.
Subpart M--Procedures for Reclassifying an Insured Depository
Institution Based on Criteria Other Than Capital
Current subpart M of part 19 and 12 CFR 165.8 set out procedures
for reclassifying a national bank or Federal savings association,
respectively, to a lower capital category based on criteria other than
capital, pursuant to section 38 of the FDIA (12 U.S.C. 1831o) and the
prompt corrective action rule, 12 CFR part 6. These procedures are
substantively the same, and the final rule amends subpart M to include
Federal savings associations in addition to national banks and removes
Sec. 165.8. As this subpart currently also applies to insured Federal
branches of foreign banks, the final rule specifically includes insured
Federal branches in the scope section.
Specifically, the final rule replaces the term ``bank'' each time
it appears in subpart M with the term ``insured depository
institution,'' and defines this term to mean an insured national bank,
an insured Federal savings association, an insured Federal savings
bank, or an insured Federal branch of a foreign bank. The final rule
also replaces the incorrect reference to subpart M with a reference to
part 6 in Sec. 19.220. In addition, the final rule makes a conforming
change to Sec. 19.221(b)(3) to replace the phrase ``a written appeal
of the proposed classification'' with ``a written response to the
proposed reclassification,'' which is the terminology used elsewhere in
this section. Furthermore, as in Sec. Sec. 19.35, 19.112, and 19.120,
the final rule adds paragraph (g)(3) to Sec. 19.221 to provide rules
governing electronic presentations in the course of a hearing.
Specifically, this provision provides that, based on the circumstances
of each hearing, the presiding officer may direct the use of, or any
party may elect to use, an electronic presentation during the hearing.
If required by the presiding officer, each party will be responsible
for its own presentation and related costs unless the parties agree
otherwise. As indicated previously, this new language is necessary to
account for the routine use of electronic presentations that current
part 19 does not address. The final rule also makes a conforming change
in paragraph (g)(2) that allows, by stipulation of the parties or by
order of the presiding officer, a court reporter or other authorized
person to administer the required oath to a witness remotely without
being in the physical presence of the witness. Additionally, the final
rule revises the heading to subpart M to include insured depository
institutions and to describe the subject of the subpart more
accurately. Lastly, the final rule makes technical changes to 12 CFR
6.3, 6.4, 6.5, and 6.6 to remove the separate references to Sec. 165.8
with respect to savings associations.

[[Page 89836]]

Subpart N--Order To Dismiss a Director or Senior Executive Officer
Current subpart N of part 19 and 12 CFR 165.9 set out procedures
associated with an order to dismiss a director or senior executive
officer of a national bank or Federal savings association,
respectively, pursuant to an order issued under section 38 of the FDIA
(12 U.S.C. 1831o) and, with respect to national banks, the prompt
corrective action rule, 12 CFR part 6. Subpart N and Sec. 165.9 are
substantively the same, and the final rule applies subpart N to Federal
savings associations in addition to national banks and removes Sec.
165.9. The final rule also replaces the term ``bank'' each time it
appears in Sec. 19.230 with the term ``insured depository
institution'' and defines the term based on section 3 of the FDIA (12
U.S.C. 1813(c)(2)) to mean an insured national bank, an insured Federal
savings association, an insured Federal savings bank, or an insured
Federal branch of a foreign bank.
The final rule also amends Sec. 19.231(b). This paragraph
currently provides that a director or senior executive officer who has
been served with a directive for dismissal has 10 calendar days to file
a written request for reinstatement, unless the OCC allows further time
as requested of the Respondent. The final rule provides that failure by
the Respondent to file this request within the specified time period
will constitute a waiver of the opportunity to respond and consent to
the dismissal. The OCC is adding this statement to the regulation to
clarify the result of a failure to request reinstatement. The final
rule also makes a stylistic revision to Sec. 19.231(b) to remove
passive sentence structure.
In addition, the final rule amends Sec. 19.231(c), which currently
requires that the OCC issue an order directing an informal hearing to
commence no later than 30 days after receipt of the request for a
hearing unless the respondent requests a later date. The final rule
amends this provision to provide that a later hearing date may occur
only if permitted by the OCC, and, therefore, the request for an
extension will not be automatically approved. This change allows the
OCC some discretion as to how far into the future a hearing may take
place.
The final rule amends Sec. 19.231(d) to provide rules governing
electronic presentations in the course of a hearing. Specifically, the
amendment provides that, based on the circumstances of each hearing,
the presiding officer may direct the use of, or any party may elect to
use, an electronic presentation during the hearing. If required by the
presiding officer, each party will be responsible for its own
presentation and related costs unless the parties agree otherwise. This
new language is necessary to account for the routine use of electronic
presentations that current part 19 does not address. The final rule
also makes a conforming change in Sec. 19.231(d)(5) to allow, by
stipulation of the parties or by order of the presiding officer, a
court reporter or other authorized person to administer the required
oath to a witness remotely without being in the physical presence of
the witness. The final rule also makes a clarifying change in paragraph
(d)(1), Hearing procedures. Among other things, this paragraph
currently provides that a Respondent has the right to introduce
relevant written materials and to present oral argument. The final rule
clarifies that these written materials and oral arguments may be made
at the hearing. This clarification ensures that the Respondent is aware
that this right is provided during the hearing and not outside of the
hearing context. The final rule also moves the sentence regarding oral
testimony and witnesses in paragraph (d)(1) to paragraph (d)(5) to
better organize paragraph (d) and adds paragraph headings.
Furthermore, the final rule revises the heading of subpart N to
describe the subject of the subpart more accurately.
Lastly, the final rule makes technical changes to 12 CFR 6.6 to
remove the separate reference to Sec. 165.9 with respect to Federal
savings associations. Because Sec. Sec. 165.8 and 165.9 are the only
sections in current part 165, the final rule removes part 165 in its
entirety.
Subpart O--Civil Money Penalty Inflation Adjustments
Current part 19, subpart O, and Sec. 109.103 provide the
statutorily required formula to calculate inflation adjustments for
civil money penalties assessed against national banks and Federal
savings associations, respectively. These sections also indicate that
the OCC will publish, on or before January 15 of each calendar year, an
annual notice in the Federal Register of the maximum penalties the OCC
may assess. The final rule retains subpart O and removes Sec. 109.103.
No amendments are necessary to apply subpart O to Federal savings
associations. The final rule amends the section heading to be more
descriptive and makes a stylistic revision in paragraph (a) to remove
passive sentence structure.
Subpart Q--Forfeiture of Franchise for Money Laundering or Cash
Transaction Reporting Offenses
Twelve U.S.C. 93(d)(1) provides that the Comptroller will, after
receiving notification from the U.S. Attorney General of a conviction
of a criminal offense under section 1956 or 1957 of title 18 (18 U.S.C.
1956, 1957) or may, after receiving notification for the U.S. Attorney
General of a conviction of a criminal offense under section 5322 or
5324 of title 31 (31 U.S.C. 5322, 5324), issue to the convicted
national bank or Federal branch or agency of foreign bank a notice of
the Comptroller's intent to terminate all rights, privileges and
franchises of the bank or Federal branch or agency and to schedule a
pretermination hearing. The offenses include financial crimes,
including money laundering (18 U.S.C. 1956), engaging in monetary
transactions in criminally derived property (18 U.S.C. 1957), and
structuring transactions to evade reporting requirements (31 U.S.C.
5324). Twelve U.S.C. 1464(w) imposes the same requirement with respect
to convicted Federal savings associations.
Part 19 currently does not include specific procedures for a
charter pretermination hearing. The final rule adds a new subpart Q
that sets forth Administrative Procedure Act (APA) compliant procedures
for pretermination hearings, which will be conducted before a presiding
officer appointed by the Comptroller. These procedures are largely
analogous to the deposit insurance termination hearing procedures
instituted by the FDIC and NCUA for insured State depository
institutions and federally insured credit unions, respectively, that
are convicted of the same offenses.
Specifically, Sec. 19.250 makes subpart A applicable, except as
provided in new subpart Q, to proceedings by the Comptroller to
determine whether, pursuant to 12 U.S.C. 93(d) or 12 U.S.C. 1464(w), as
applicable, to terminate all rights, privileges, and franchises of a
national bank, Federal savings association, or Federal branch or agency
convicted of a criminal offense under 18 U.S.C. 1956 or 1957 or 31
U.S.C. 5322 or 5324.
Section 19.251(a) provides that, after receiving written
notification from the U.S. Attorney General of a conviction of a
criminal offense under sections 18 U.S.C. 1956 or 1957 or 31 U.S.C.
5322 or 5324, the Comptroller will issue a written notice of intent to
terminate all rights, privileges and franchises to the convicted
national bank, Federal savings association, or Federal branch or agency
and schedule a pretermination

[[Page 89837]]

hearing. Section 19.251(b) details the requisite contents of the notice
and Sec. 19.251(c) provides that failure to answer the notice will be
deemed consent to the termination and that the Comptroller may order
the termination. This notice of intent to terminate is similar to the
notice in Sec. 19.18 except that the subpart Q notice of intent lists
the basis of termination pursuant to factors listed in Sec. 19.253
instead of the statement of matters of fact or law; the time within
which to file an answer in response to the notice of intent will be
established by the presiding officer instead of by law or regulation;
and the answer must be filed with the OCC instead of with OFIA. Section
19.251(d) provides that the OCC will serve the notice upon the national
bank, Federal savings association, or Federal branch or agency in the
manner set forth in Sec. 19.11(c).
Section 19.252 provides that the Comptroller will designate a
presiding officer to conduct the pretermination hearing. The presiding
officer has the same powers set forth in Sec. 19.5, including the
discretion necessary to conduct the pretermination hearing in a manner
that avoids unnecessary delay. Section 19.252 also provides that the
presiding officer may limit the use of discovery and limit
opportunities to file written memoranda, briefs, affidavits, or other
materials or documents to avoid relitigating facts already stipulated
to by the parties, conceded to by the institution, or otherwise already
firmly established by the underlying criminal conviction.
Section 19.253 provides the factors the Comptroller will take into
account when determining whether or not to terminate a franchise as set
forth in 12 U.S.C. 93(d) and 1464(w). The factors are: (1) the extent
to which directors or senior executive officials knew of or were
involved in the criminal offense, (2) the extent to which the offense
occurred despite the existence of policies and procedures within the
institution designed to prevent the occurrence of the offense, (3) the
extent to which the institution fully cooperated with law enforcement
authorities regarding the investigation of the offense, (4) the extent
to which the institution has implemented additional internal controls
since the commission of the offense to prevent a reoccurrence, and (5)
the extent to which the interest of the local community in having
adequate deposit and credit services available would be threatened by
the forfeiture of the franchise.
Lastly, Sec. 19.254 delineates the right of judicial review under
12 U.S.C. 1818(h) of a termination order as required by 12 U.S.C.
93(d)(1)(C) and 1464(w)(1)(C).
Technical Changes
In addition to the technical changes discussed elsewhere in this
SUPPLEMENTARY INFORMATION, the final rule makes technical changes
throughout parts B through P by: (1) replacing the word ``shall'' with
``must,'' ``will,'' or other appropriate language, which is the more
current rule writing convention for imposing an obligation and is the
recommended drafting style of the Federal Register; (2) conforming
citation styles and providing more detailed references to the cited
statutes; (3) conforming abbreviations, including replacing the use of
the term ``administrative law judge'' with ``ALJ; (4) replacing gender
references such as ``him,'' ``his'' or ``her'' with gender-neutral
terminology; and (5) making other non-substantive grammatical,
clarifying, organizational, and stylistic changes. The final rule also
makes a technical change to 12 CFR 3.405, which references cease and
desist proceedings with respect to minimum capital ratios, to remove
the reference to part 109 for savings associations and replace it with
part 19 because this final rule removes part 109 and applies part 19 to
Federal savings associations. Similarly, this final rule makes a new
technical change to Sec. 150.570, which sets forth the rules governing
the conduct of a hearing required under 12 U.S.C. 1464(n)(10)(B) for
revocation of fiduciary powers, to replace the reference to part 109
with a reference to part 19.

B. Amendments to the Board's Local Rules--Final Rules

The Board is adopting a final rule to amend subpart B of part 263--
the Board Local Rules Supplementing the Uniform Rules--and to create a
new subpart K (Sec. Sec. 263.450 through 263.457) establishing new
rules governing all Board formal investigations. The new subpart K
replaces subpart L of Regulation LL (12 CFR part 238), which is
eliminated. The Board did not receive any comments on its proposed
changes to the Local Rules and is adopting the proposed amendments.
The revised Local Rules in subpart B apply only to adjudicatory
proceedings initiated on or after the effective date of this final
rule, April 1, 2024. The previous version of the Local Rules in subpart
B, which are included in appendix A to part 263 of this final rule, are
applicable to all adjudicatory proceedings initiated before, April 1,
2024.
The Board revised its Local Rules to conform them to the changes in
the Uniform Rules and to facilitate the use of electronic
communications and technology in Board proceedings. In addition, to
promote transparency and fairness, the Board added the new subpart K
establishing rules governing all Board formal investigations and a new
section in subpart B (Sec. 263.57) establishing rules for the
imposition of sanctions in administrative proceedings. Because these
new sections are modeled on the rules already adopted by other banking
regulators, they promote uniformity in the rules of banking regulators.
Subparts C through J of part 263 have not been amended and remain in
effect.
Subpart B--Board Local Rules Supplementing the Uniform Rules
Section 263.52 Address for Filing
Section 263.52 provides an electronic mail address for papers to be
filed electronically with the Secretary of the Board.
Section 263.53 Discovery Depositions
Section 263.53 requires parties to state in the application for a
discovery deposition the manner (e.g., remote means, in person) of the
deposition, to note that the ALJ can consider the manner of the
deposition in determining whether to grant or modify it, and to clarify
that depositions can be conducted by remote means and witnesses can be
sworn remotely.
Section 263.55 Board as Presiding Officer
Section 263.55 clarifies that when the Board designates itself, one
of its members, or an authorized officer, to serve as presiding officer
in a formal hearing, the authority of the Board or its designee will
include all the authority provided to an ALJ under the rules governing
formal hearings.
Section 263.57 Sanctions Related to Conduct in Adjudicatory Proceedings
Section 263.57 is a new section that establishes the rules
governing the imposition of sanctions against parties or persons
participating in administrative adjudicatory proceedings. The new
section: (a) explicitly authorizes the ALJ to impose sanctions against
parties or persons; (b) describes the sanctions the ALJ may impose; (c)
describes procedures for imposing sanctions; and (d) establishes that
the ALJ or the Board may impose other sanctions authorized by
applicable statute or regulation.

[[Page 89838]]

Subpart K--Formal Investigative Proceedings
Subpart K is a new subpart that establishes a single set of rules
governing formal investigations for all Board-regulated organizations
and any other entity or individual that the Board has authority to
investigate or bring an enforcement action against. Subpart K, which is
modeled on the investigative procedures of other Federal financial
industry enforcement agencies, defines a formal investigative
proceeding by the Board and its scope; delineates some of the powers of
the Board's designated representatives conducting formal investigative
proceedings; requires the confidentiality of formal investigative
proceedings; provides for certain rights of witnesses in formal
investigative proceedings; and establishes investigative subpoena
procedures. Subpart K governs only the conduct of formal
investigations; administrative adjudicatory proceedings continue to be
governed by the Board's Uniform Rules and Local Rules (12 CFR part 263,
subparts A and B).

C. Amendments to the FDIC's Local Rules--Final Rules

The FDIC is adopting a final rule to amend its Local Rules set
forth at 12 CFR part 308, subpart B, General Rules of Procedure, which
supplement the Uniform Rules set forth in 12 CFR part 308, subpart A.
The FDIC did not receive any comments to the Local Rules and for the
reasons stated herein and in the proposed rule, the FDIC is adopting
the amendments as proposed.
The FDIC included a new Sec. 308.100 as a technical change to
clarify the applicability date of the revised Local Rules set forth in
subpart B of this part. The newly revised rules only apply to
adjudicatory proceedings initiated on or after the effective date of
this final rule, April 1, 2024. Any adjudicatory proceedings initiated
before April 1, 2024, continue to be governed by the previous version
of the Local Rules included in appendix A in part 308 of this final
rule.
The FDIC revised its Local Rules to reflect the current processes
and procedures routinely ordered by the administrative law judges
(ALJs) that mirror procedures followed in the Federal court system. The
FDIC also added new provisions regarding modern discovery practices,
depositions, and disclosure of expert witness testimony to promote
cooperation, fairness, and transparency. Similar to the changes in the
Uniform Rules, the FDIC updated the language throughout its Local Rules
to reflect the modernized language used in rulemaking.
Section 308.100 Applicability Date
Section 308.100 was a technical change created to explain the
applicability date of its revised Local Rules.
Section 308.102 Authority of Board of Directors and Administrative
Officer
Section 308.102 was updated to reflect the current internal
organization of the FDIC.
Section 308.103 Assignment to Administrative Law Judge (ALJ)
Section 308.103 was renamed to better reflect additional changes to
how matters are assigned to an ALJ.
Section 308.104 Filings With the Board of Directors
Section 308.104 provides an electronic mail address for the FDIC's
Administrative Officer, who is the official custodian of the record for
administrative proceedings, and with whom all parties must file an
electronic copy of all pleadings.
Section 308.107 Supplemental Discovery Rules
Section 308.107 was renamed to reflect the updates to the FDIC's
discovery processes to include modern discovery practices and
procedural orders issued by the ALJs and to allow for limited
depositions.
Section 308.107(a) Scope of Discovery
Section 308.107(a) describes the permitted scope of discovery. The
FDIC adopted the concept of ``proportionality'' in discovery production
and set forth limits on electronically-stored information (ESI).
Section 308.107(b) Joint Discovery Plan
Section 308.107(b) adds a Joint Discovery Plan to the discovery
process.
Section 308.107(c) Document and Electronically Stored Information (ESI)
Discovery
Section 308.107(c) integrates the Local Rules with the Uniform
Rules.
Section 308.107(d) Expert Witness Disclosures
Section 308.107(d) describes the required disclosures for expert
witness testimony. Section 308.107(d)(2)(i) applies to professional
experts who generally do not work for a party but are specifically
engaged for the purpose of providing expert testimony. Section
308.107(d)(2)(ii) applies to those individuals whose expertise comes
from the person's regular course of business such as, a commissioned
bank examiner or bank personnel, who will be offered as an expert
witness at the hearing.
Section 308.107(e) Depositions
Section 308.107(e) allows parties to pursue limited discovery
depositions of individuals with direct knowledge of facts relevant to
the proceeding and individuals designated as expert witnesses. Section
308.107(e)(1) authorizes deposition discovery only to the extent that
it is proportional to the needs of the case and the information sought
from the depositions cannot be obtained from another source that is
more convenient, less burdensome, or less expensive. In the absence of
extraordinary circumstances, depositions are limited to individuals
expected to testify at the hearing.
Section 308.107(f) Discovery Motions
Section 308.107(f) clarifies certain matters related to discovery
motions. Section 308.107(f)(1) clarifies that the ALJ must limit
inappropriate discovery either on motion, or on their own initiative.
Section 308.107(f)(2) provides that parties may move to terminate
depositions that are being conducted in bad faith or an inappropriate
manner. Section 308.107(f)(3) clarifies that the provisions of Sec.
308.25(f), governing motions to compel document discovery, apply
equally to all motions to compel discovery.

V. Discussion of OCC Changes to Part 4, Service of Process

The final rule amends subpart A of 12 CFR part 4, Organization and
Functions, to add a new Sec. 4.8 that addresses service of process.
This new provision puts private parties on notice of the established
process they should use in serving the OCC, Comptroller, or officers or
employees of the OCC in a private action. The OCC is codifying this
process in the final rule to help avoid possible confusion as to where
and how private parties serve the OCC, Comptroller, or officers or
employees of the OCC and to ensure that the OCC has adequate notice to
respond to a complaint or other filing. The final rule provides that
``officers'' are officials who are not employees of the OCC, such as an
ALJ.
Specifically, Sec. 4.8(a) provides that Sec. 4.8(b), (c), and (d)
apply to service of process upon the OCC, the Comptroller acting in
their official capacity, officers or employees of the OCC who are sued
in their official capacity, and officers or employees of the OCC who
are sued in an individual capacity for an act or omission occurring in
connection with

[[Page 89839]]

duties performed on the behalf of the OCC. Section 4.8(b) provides that
service of process for actions in Federal courts should be made upon
the OCC, the Comptroller, or officers or employees of the OCC by
serving the United States under the procedures set forth in the Federal
Rules of Civil Procedure governing the service of process upon the
United States and its agencies, corporations, officers, or
employees.\42\ Section 4.8(c) provides that service of process for
actions brought in State courts should be made upon the OCC, the
Comptroller, or officers or employees of the OCC by sending copies of
the summons and complaint by registered or certified mail to the Chief
Counsel, Office of the Comptroller of the Currency, Washington, DC
20219. Section 4.8(c) also encourages parties to provide copies of the
summons and complaint to the appropriate United States Attorney in
accordance with the procedures set forth in the Federal Rules of Civil
Procedure governing the service of process upon the United States and
its agencies, corporations, officers, or employees.\43\ Section 4.8(d)
provides that only the Washington, DC headquarters office of the OCC is
authorized to accept service of a summons or complaint and that the
OCC, the Comptroller, or officers or employees of the OCC should be
served with a copy of the summons or complaint at the Washington, DC
headquarters office in accordance with Sec. 4.8(b) or (c). This
provision clarifies that a summons or complaint should not be sent to
another office of the OCC.
---------------------------------------------------------------------------

\42\ See Rule 4(i) of the Federal Rules of Civil Procedure.
\43\ Id.
---------------------------------------------------------------------------

Finally, Sec. 4.8(e) provides that the OCC is not an agent for
service of process upon a national bank, Federal savings association,
or Federal branch or agency of a foreign bank. Instead, it directs
parties to serve a summons or complaint upon the institution in
accordance with the laws and procedures for the court in which the
action has been filed. The OCC intends this provision to prevent
further instances of parties attempting to serve a national bank
through the OCC.
As indicated above, the OCC did not receive any comments on the
proposed amendments to part 4 and is adopting them as proposed with one
technical correction. The proposed rule set forth the incorrect
authority section for part 4. The final rule includes the correct
authority section, which is unchanged from the current rule.

VI. Regulatory Analysis

A. Regulatory Flexibility Act

OCC: The Regulatory Flexibility Act (RFA) \44\ requires an agency,
in connection with a rule, to prepare a Final Regulatory Flexibility
Analysis (FRFA) describing the impact of the rule on small entities
(defined by the Small Business Administration (SBA) for purposes of the
RFA to include commercial banks and savings institutions with total
assets of $850 million or less and trust companies with total assets of
$47 million or less) \45\ or to certify that the final rule would not
have a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------

\44\ 5 U.S.C. 601 et seq.
\45\ See the SBA's size thresholds for commercial banks and
savings institutions, and trust companies, 13 CFR 121.201.
---------------------------------------------------------------------------

The OCC currently supervises approximately 1,070 institutions
(commercial banks, trust companies, Federal savings associations, and
branches or agencies of foreign banks, collectively banks), of which
661 are small entities.\46\ The final rule could impact any OCC-
supervised institution, including any of these small entities. However,
it is unlikely that the rule would impact more than a de minimis number
of OCC-supervised institutions in any given year.\47\ Furthermore, the
rule would facilitate the orderly determination of administrative
proceedings and its proposed changes are primarily updates and
clarifications of administrative procedure and in general reflect
current practices. Therefore, the OCC concludes that the final rule
would not impose more than minimal costs on institutions that may be
impacted. Because the OCC estimates that expenditures, if any,
associated with the final rule would be de minimis, the OCC certifies
that the final rule does not have a significant economic impact on a
substantial number of small entities supervised by the OCC.
Accordingly, an FRFA is not required.
---------------------------------------------------------------------------

\46\ Consistent with the General Principles of Affiliation 13
CFR 121.103(a), the OCC counts the assets of affiliated financial
institutions when determining if it should classify an institution
as a small entity. The OCC used December 31, 2022, to determine size
because a ``financial institution's assets are determined by
averaging the assets reported on its four quarterly financial
statements for the preceding year.'' See footnote 8 of the SBA's
Table of Size Standards.
\47\ Based on activity during the past five years, approximately
23 banks (an average of less than 5 per year) would be impacted by
the proposed changes to part 19, subparts A, B, C, I, L, and M.
Furthermore, during the past five years the OCC has not received any
Equal Access to Justice Act (EAJA) applications from a bank for the
payment of attorney's fees.
---------------------------------------------------------------------------

Board: In accordance with the Regulatory Flexibility Act (RFA),\48\
the Board published an initial regulatory flexibility analysis in the
notice of proposed rulemaking. The Board did not receive any comments
on its initial regulatory flexibility analysis. The RFA also requires
an agency to prepare a final regulatory flexibility analysis generally
describing the impact of the rule on small entities, unless the agency
certifies that the rule will not, if promulgated, have a significant
economic impact on a substantial number of small entities.\49\ Under
regulations issued by the Small Business Administration, a small entity
includes a bank, bank holding company, or savings and loan holding
company with assets of $850 million or less and trust companies with
annual receipts of $47 million or less.\50\
---------------------------------------------------------------------------

\48\ 5 U.S.C. 601 et seq.
\49\ 5 U.S.C. 604; 605(b).
\50\ 13 CFR 121.201.
---------------------------------------------------------------------------

Consistent with the analysis included in the initial regulatory
flexibility analysis, the Board certifies that the final rule will not
have a significant economic impact on a substantial number of small
entities. As explained above, the Agencies are amending the Uniform
Rules and their local rules to recognize the use of electronic
communications in all aspects of administrative hearings and to
otherwise increase the efficiency and fairness of administrative
adjudications. In addition, the Board is establishing a single set of
rules governing all formal investigations. These rules only establish
procedures governing Board formal investigations and adjudicatory
proceedings. The rules do not impose any requirement on regulated
entities, and regulated entities would not need to take any action in
response to the proposed rules. The rules will only apply to regulated
entities if they become parties to administrative adjudications or are
subject to formal investigations, which is unusual. Therefore, the
rules will not have a significant economic impact on a substantial
number of small entities.
FDIC: The RFA requires that, in connection with a final rule, an
agency prepare and make available for public comment a final regulatory
flexibility analysis that describes the impact of the final rule on
small entities.\51\ However, a regulatory flexibility analysis is not
required if the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities,
and publishes its certification and a short explanatory

[[Page 89840]]

statement in the Federal Register together with the rule. The SBA has
defined ``small entities'' to include banking organizations with total
assets of less than or equal to $850 million.\52\ Generally, the FDIC
considers a significant effect to be a quantified effect in excess of 5
percent of total annual salaries and benefits per institution, or 2.5
percent of total noninterest expenses. The FDIC believes that effects
in excess of one or more of these thresholds typically represent
significant effects for FDIC-supervised institutions.
---------------------------------------------------------------------------

\51\ 5 U.S.C. 601 et seq.
\52\ The SBA defines a small banking organization as having $850
million or less in assets, where ``a financial institution's assets
are determined by averaging the assets reported on its four
quarterly financial statements for the preceding year.'' See 13 CFR
121.201 (as amended by 87 FR 69118, effective December 19, 2022).
``SBA counts the receipts, employees, or other measure of size of
the concern whose size is at issue and all of its domestic and
foreign affiliates.'' See 13 CFR 121.103. Following these
regulations, the FDIC uses a covered entity's affiliated and
acquired assets, averaged over the preceding four quarters, to
determine whether the FDIC-supervised institution is ``small'' for
the purposes of RFA.
---------------------------------------------------------------------------

As of the quarter ending December 30, 2022, the FDIC supervised
3,038 depository institutions,\53\ of which 2,325 were considered small
for the purposes of the RFA.\54\
---------------------------------------------------------------------------

\53\ FDIC-supervised institutions are set forth in 12 U.S.C.
1813(q)(2).
\54\ FDIC Call Report data, December 31, 2022.
---------------------------------------------------------------------------

As previously discussed, the Agencies are amending the Uniform
Rules to recognize the use of electronic communications in all aspects
of administrative hearings and to otherwise increase the efficiency and
fairness of administrative adjudications. The FDIC is also modifying
the Local Rules of administrative practice and procedure. The
amendments apply to administrative proceedings held by the FDIC and
impose no significant additional burdens on small entities. Further,
the FDIC typically brings less than five formal administrative
proceedings annually. Therefore, the FDIC concludes that the final rule
will not have a significant impact on a substantial number of small
entities. For the reasons described above and pursuant to 5 U.S.C.
605(b), the FDIC certifies that the final rule will not have a
significant economic impact on a substantial number of small entities.
NCUA: The RFA generally requires that, in connection with a
rulemaking, an agency prepare and make available for public comment
regulatory flexibility analysis that describes the impact of a proposed
rule on small entities. A regulatory flexibility analysis is not
required, however, if the agency certifies that the rule will not have
a significant economic impact on a substantial number of small entities
(defined for purposes of the RFA to include federally insured credit
unions with assets less than $100 million) and publishes its
certification and a short, explanatory statement in the Federal
Register together with the rule. The final rule amends the Uniform
Rules to recognize the use of electronic communications in all aspects
of administrative hearings and to otherwise increase the efficiency and
fairness of administrative adjudications. The changes consist of
updates and clarifications of administrative procedure and impose no
significant new burdens on credit unions, parties to administrative
actions, or counsel. Also, only a small number of federally insured
credit unions and institution-affiliated parties are subject to actions
that the final rule will govern, as the NCUA currently has only one
pending proceeding and generally files a small number of cases.
Accordingly, the NCUA certifies that the final rule will not have a
significant economic impact on a substantial number of small credit
unions.

B. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 \55\ (PRA) states that no
agency may conduct or sponsor, nor is the respondent required to
respond to, an information collection unless it displays a currently
valid Office of Management and Budget (OMB) control number. The
Agencies have reviewed this final rule and determined that it does not
create any information collection or revise any existing collection of
information. Accordingly, no PRA submissions will be made to the OMB
with respect to this final rule. The Board reviewed the rule under the
authority delegated to the Board by the OMB.
---------------------------------------------------------------------------

\55\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

C. OCC Unfunded Mandates Reform Act of 1995

The OCC analyzed the rule under the factors set forth in the
Unfunded Mandates Reform Act of 1995 (UMRA).\56\ Under this analysis,
the OCC considered whether the final rule includes a Federal mandate
that may result in the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year ($182 million as adjusted for
inflation). The UMRA does not apply to regulations that incorporate
requirements specifically set forth in law.
---------------------------------------------------------------------------

\56\ 2 U.S.C. 1532.
---------------------------------------------------------------------------

As discussed above, the OCC estimates that expenditures, if any,
associated with the final rule would be de minimis. Therefore, the OCC
concludes that the proposed rule would not result in an expenditure of
$182 million or more annually by State, local, and Tribal governments,
or by the private sector. Because the final rule does not trigger the
UMRA cost threshold, the OCC has not prepared the written statement
described in section 202 of the UMRA.

D. Riegle Community Development and Regulatory Improvement Act

Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (RCDRIA),\57\ in determining the effective
date and administrative compliance requirements for new regulations
that impose additional reporting, disclosure, or other requirements on
insured depository institutions (IDIs), the OCC, Board, and FDIC \58\
must consider, consistent with principles of safety and soundness and
the public interest: (1) any administrative burdens that such
regulations would place on depository institutions, including small
depository institutions, and customers of depository institutions; and
(2) the benefits of such regulations. In addition, section 302(b) of
RCDRIA requires new regulations and amendments to regulations that
impose additional reporting, disclosures, or other new requirements on
IDIs generally to take effect on the first day of a calendar quarter
that begins on or after the date on which the regulations are published
in final form.\59\
---------------------------------------------------------------------------

\57\ 12 U.S.C. 4802(a).
\58\ RCDRIA does not apply to the NCUA.
\59\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

With respect to administrative compliance requirements, the OCC,
Board, and FDIC have considered the administrative burdens and the
benefits of this final rule and believes that any burdens are necessary
for proper OCC, Board, and FDIC supervision and also to update and
conform the OCC's, Board's and FDIC's rules to current practices. As
examples, the final rule allows for electronic filing of documents and
expands the definition of the term ``document'' in discovery to account
for the range of digital information now available. The final rule's
benefits include clarifying existing requirements, codifying existing
practice, removing unnecessary provisions, and updating and modernizing
certain provisions. Further discussion of the consideration

[[Page 89841]]

by the OCC, Board, and FDIC of these administrative compliance
requirements is found in other sections of the final rule's
SUPPLEMENTARY INFORMATION section.
Because this final rule is published on December 28, 2023, the
April 1, 2024, effective date complies with the RCDRIA requirement that
a rule take effect on the first day of a calendar quarter that begins
on or after the date on which the regulations are published in final
form.

E. Plain Language

Section 722 of the Gramm-Leach-Bliley Act \60\ requires the OCC,
Board, and FDIC \61\ to use plain language in all proposed and final
rules published after January 1, 2000. The Agencies have sought to
present the final rule in a simple and straightforward manner. The
Agencies received no comments on the use of plain language in the
proposed rule.
---------------------------------------------------------------------------

\60\ Public Law 106-102, section 722, 113 Stat. 1338, 1471
(1999), 12 U.S.C. 4809.
\61\ This requirement does not apply to the NCUA.
---------------------------------------------------------------------------

F. NCUA Executive Order 13132

Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on State and local interests. In
adherence to fundamental federalism principles, the NCUA, an
independent regulatory agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the principles of the Executive Order. This
rulemaking will not have a substantial direct effect on the states, on
the connection between the National Government and the states, or on
the distribution of power and responsibilities among the various levels
of government. The final rule amends the Uniform Rules to recognize the
use of electronic communications in all aspects of administrative
hearings and to otherwise increase the efficiency and fairness of
administrative adjudications. The NCUA does not believe these changes
will affect or alter the NCUA's relationship with State agencies or
bodies that supervise federally insured, State-chartered credit unions
or the division of supervisory responsibilities between the NCUA and
these agencies or bodies. For example, the final rule does not affect
the NCUA's requirement to provide notice to the commission, board, or
authority having supervision of a State-chartered credit union of the
NCUA's intent to institute certain enforcement actions and the grounds
for them.\62\ The NCUA has determined that this final rule does not
constitute a policy that has federalism implications for purposes of
the Executive Order.
---------------------------------------------------------------------------

\62\ See, e.g., 12 U.S.C. 1786(o).
---------------------------------------------------------------------------

G. NCUA Assessment of Federal Regulations and Policies on Families

The NCUA has determined that this final rule will not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999.\63\ As discussed in the
preceding regulatory procedure paragraphs, the final rule makes changes
to procedural rules that apply to federally insured credit unions and
institution-affiliated parties. These rules have no direct connection
to families and their well-being, and the NCUA historically has brought
only a small number of cases under these rules.
---------------------------------------------------------------------------

\63\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------

H. The Congressional Review Act

For purposes of the Congressional Review Act,\64\ the Office of
Management and Budget (OMB) makes a determination as to whether a final
rule constitutes a ``major'' rule. If a rule is deemed a ``major rule''
by the OMB, the Congressional Review Act generally provides that the
rule may not take effect until at least 60 days following its
publication.\65\ The Congressional Review Act defines a ``major rule''
as any rule that the Administrator of the Office of Information and
Regulatory Affairs of the OMB finds has resulted in or is likely to
result in (1) an annual effect on the economy of $100,000,000 or more;
(2) a major increase in costs or prices for consumers, individual
industries, Federal, State, or local government agencies or geographic
regions; or (3) a significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
United States-based enterprises to compete with foreign based
enterprises in domestic and export markets.\66\ OMB has determined that
this final rule is not a major rule under the Congressional Review Act.
As required by the Congressional Review Act, the Agencies will submit
the final rule and other appropriate reports to Congress and the
Government Accountability Office for review.
---------------------------------------------------------------------------

\64\ 5 U.S.C. 801 et seq.
\65\ 5 U.S.C. 801(a)(3).
\66\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

I. Effective Date

The Administrative Procedure Act \67\ requires that a substantive
rule must be published not less than 30 days before its effective date,
except for: (1) substantive rules which grant or recognize an exemption
or relieve a restriction; (2) interpretative rules and statements of
policy; or (3) as otherwise provided by the agency for good cause.\68\
As stated above, section 302(b) of RCDRIA requires that regulations or
amendments issued by the OCC, Board, and FDIC that impose additional
reporting, disclosure, or other requirements on IDIs generally take
effect on the first day of a calendar quarter that begins on or after
the date of publication of the final rule, unless, among other things,
the agency determines for good cause that the regulations should become
effective before such time.\69\ The final rule is effective April 1,
2024, which is more than 30 days after its publication date of December
28, 2023 and on the first date of a calendar quarter following
publication.
---------------------------------------------------------------------------

\67\ Codified at 5 U.S.C. 551 et seq.
\68\ 5 U.S.C. 553(d).
\69\ 12 U.S.C. 4802(b).
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 3

Administrative practice and procedure, Banks, Banking, Federal
Reserve System, Investments, National banks, Reporting and
recordkeeping requirements, Savings associations.

12 CFR Part 4

Administrative practice and procedure, Freedom of information,
Individuals with disabilities, Minority businesses, Organization and
functions (Government agencies), Reporting and recordkeeping
requirements, Service of process, Women.

12 CFR Part 6

Federal Reserve System, Federal savings associations, National
banks, Penalties.

12 CFR Part 19

Administrative practice and procedure, Crime, Equal access to
justice, Federal savings associations, Investigations, National banks,
Penalties, Securities.

12 CFR Part 108

Administrative practice and procedure, Crime, Savings associations.

12 CFR Part 109

Administrative practice and procedure, Penalties.

12 CFR Part 112

Administrative practice and procedure.

12 CFR Part 150

Administrative practice and procedure, Reporting and recordkeeping

[[Page 89842]]

requirements, Savings associations, Trusts and trustees.

12 CFR Part 165

Administrative practice and procedure, Savings associations.

12 CFR Part 238

Administrative practice and procedure, Banks, Banking, Federal
Reserve System, Holding companies, Investigations, Reporting and
recordkeeping requirements, Savings and loan holding companies,
Securities.

12 CFR Part 263

Administrative practice and procedure, Federal Reserve System,
Investigations.

12 CFR Part 308

Administrative practice and procedure, Bank deposit insurance,
Banks, Banking, Claims, Crime, Equal access to justice, Fraud,
Investigations, Lawyers, Penalties, Savings associations.

12 CFR Part 747

Administrative practice and procedure, Claims, Credit unions,
Crime, Equal access to justice, Investigations, Lawyers, Penalties,
Share insurance.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

For the reasons set out in the preamble, and under the authority of
12 U.S.C. 93a, the OCC amends 12 CFR chapter I as follows:

PART 3--CAPITAL ADEQUACY STANDARDS

0
1. The authority citation for part 3 continues to read as follows:

Authority: 12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818,
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and
Pub. L. 116-136, 134 Stat. 281.

Sec. 3.405 [Amended]

0
2. Section 3.405 is amended by removing the phrase ``(12 CFR 19.0
through 19.21 for national banks and 12 CFR part 109 for Federal
savings associations)'' and adding in its place the phrase ``(12 CFR
part 19)''.

PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF
INFORMATION, CONTRACTING OUTREACH PROGRAM, POST-EMPLOYMENT
RESTRICTIONS FOR SENIOR EXAMINERS

0
3. The authority citation for part 4 continues to read as follows:

Authority: 5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161, 481, 482,
484(a), 1442, 1462a, 1463, 1464, 1817(a), 1818, 1820, 1821, 1831m,
1831p-1, 1831o, 1833e, 1867, 1951 et seq., 2601 et seq., 2801 et
seq., 2901 et seq., 3101 et seq., 3401 et seq., 5321, 5412, 5414; 15
U.S.C. 77uu(b), 78q(c)(3); 18 U.S.C. 641, 1905, 1906; 29 U.S.C.
1204; 31 U.S.C. 5318(g)(2), 9701; 42 U.S.C. 3601; 44 U.S.C. 3506,
3510; E.O. 12600 (3 CFR, 1987 Comp., p. 235).

0
4. Add Sec. 4.8 to subpart A to read as follows:

Sec. 4.8 Service of process upon the OCC or the Comptroller.

(a) Scope. Paragraphs (b) through (d) of this section apply to
service of process upon the OCC, the Comptroller acting in their
official capacity, officers (officials who are not employees of the
OCC, such as an administrative law judge (ALJ) or employees of the OCC
who are sued in their official capacity), and officers or employees of
the OCC who are sued in an individual capacity for an act or omission
occurring in connection with duties performed on the behalf of the OCC.
(b) Actions in Federal courts. Service of process for actions in
Federal courts should be made upon the OCC, the Comptroller, or
officers or employees of the OCC under the procedures set forth in the
Federal Rules of Civil Procedure governing the service of process upon
the United States and its agencies, corporations, officers, or
employees.
(c) Actions in State courts. Service of process for actions in
State courts should be made upon the OCC, the Comptroller, or officers
or employees of the OCC by sending copies of the summons and complaint
by registered or certified mail, same day courier service, or overnight
delivery service to the Chief Counsel, Office of the Comptroller of the
Currency, Washington, DC 20219. In these actions, parties also are
encouraged to provide copies of the summons and complaint to the
appropriate United States Attorney in accordance with the procedures
set forth in Rule 4(i) of the Federal Rules of Civil Procedure.
(d) Receipt of summons or complaint. Only the Washington, DC
headquarters office of the OCC is authorized to accept service of a
summons or complaint. The OCC, the Comptroller, and officers or
employees of the OCC must be served with a copy of the summons or
complaint at the Washington, DC headquarters office in accordance with
paragraphs (b) or (c) of this section.
(e) Service of process upon a national bank, Federal savings
association, or Federal branch or agency of a foreign bank. The OCC is
not an agent for service of process upon a national bank, Federal
savings association, or Federal branch or agency of a foreign bank.
Parties seeking to serve a national bank, Federal savings association,
or Federal branch or agency of a foreign bank must serve the summons or
complaint upon the institution in accordance with the laws and
procedures for the court in which the action has been filed.

PART 6--PROMPT CORRECTIVE ACTION

0
5. The authority citation for part 6 continues to read as follows:

Authority: 12 U.S.C. 93a, 1831o, 5412(b)(2)(B).

Sec. 6.3 [Amended]

0
6. In Sec. 6.3 amend paragraph (b)(3) by removing the phrase ``and
with respect to national banks, subpart M of part 19 of this chapter,
and with respect to Federal savings associations Sec. 165.8 of this
chapter'' and adding in its place the phrase ``and subpart M of part 19
of this chapter''.

Sec. 6.4 [Amended]

0
7. In Sec. 6.4 amend paragraphs (d)(1) and (2) by removing the phrase
``with respect to national banks and Sec. 165.8 of this chapter with
respect to Federal savings associations'' each time it appears.

Sec. 6.5 [Amended]

0
8. Section 6.5 is amended by:
0
a. In paragraphs (a)(1) and (b), removing the phrase ``with respect to
national banks, and Sec. Sec. 6.4 and 165.8 of this chapter with
respect to Federal savings associations,'' each time it appears.
0
b. In paragraph (a)(2), removing the phrase ``with respect to national
banks and Sec. Sec. 6.4 and 165.8 of this chapter with respect to
Federal savings associations,''.

Sec. 6.6 [Amended]

0
9. Section 6.6 is amended in paragraph (b) by removing the phrase
``with respect to national banks and subpart B of this part and Sec.
165.9 of this chapter with respect to Federal savings associations''.

[[Page 89843]]

0
10. Part 19 is revised to read as follows:

PART 19--RULES OF PRACTICE AND PROCEDURE

Sec.
19.0 Applicability date.
Subpart A--Uniform Rules of Practice and Procedure
19.1 Scope.
19.2 Rules of construction.
19.3 Definitions.
19.4 Authority of the Comptroller.
19.5 Authority of the administrative law judge (ALJ).
19.6 Appearance and practice in adjudicatory proceedings.
19.7 Good faith certification.
19.8 Conflicts of interest.
19.9 Ex parte communications.
19.10 Filing of papers.
19.11 Service of papers.
19.12 Construction of time limits.
19.13 Change of time limits.
19.14 Witness fees and expenses.
19.15 Opportunity for informal settlement.
19.16 OCC's right to conduct examination.
19.17 Collateral attacks on adjudicatory proceeding.
19.18 Commencement of proceeding and contents of notice.
19.19 Answer.
19.20 Amended pleadings.
19.21 Failure to appear.
19.22 Consolidation and severance of actions.
19.23 Motions.
19.24 Scope of document discovery.
19.25 Request for document discovery from parties.
19.26 Document subpoenas to nonparties.
19.27 Deposition of witness unavailable for hearing.
19.28 Interlocutory review.
19.29 Summary disposition.
19.30 Partial summary disposition.
19.31 Scheduling and prehearing conferences.
19.32 Prehearing submissions.
19.33 Public hearings.
19.34 Hearing subpoenas.
19.35 Conduct of hearings.
19.36 Evidence.
19.37 Post-hearing filings.
19.38 Recommended decision and filing of record.
19.39 Exceptions to recommended decision.
19.40 Review by the Comptroller.
19.41 Stays pending judicial review.
Subpart B--Procedural Rules for OCC Adjudications
19.100 Filing documents.
19.101 Delegation to OFIA.
19.102 Civil money penalties.
Subpart C--Removals, Suspensions, and Prohibitions of an Institution-
Affiliated Party When a Crime Is Charged or a Conviction Is Obtained
19.110 Scope and definitions.
19.111 Suspension, removal, or prohibition of institution-affiliated
party.
19.112 Informal hearing.
19.113 Recommended and final decisions.
Subpart D--Actions Under the Federal Securities Laws
19.120 Exemption hearings under section 12(h) of the Securities
Exchange Act of 1934.
19.121 Disciplinary proceedings.
19.122 Civil money penalty authority under Federal securities laws.
19.123 Cease-and-desist authority.
Subpart E Through G--Reserved
Subpart H--Change in Bank Control
19.160 Scope.
19.161 Hearing process.
Subpart I--Discovery Depositions and Subpoenas
19.170 Discovery depositions.
19.171 Deposition subpoenas.
Subpart J--Formal Investigations
19.180 Scope.
19.181 Confidentiality of formal investigations.
19.182 Order to conduct a formal investigation.
19.183 Rights of witnesses.
19.184 Service of subpoena and payment of witness expenses.
19.185 Dilatory, obstructionist, or insubordinate conduct.
Subpart K--Parties and Representational Practice Before the OCC;
Standards of Conduct
19.190 Scope.
19.191 Definitions.
19.192 Sanctions relating to conduct in an adjudicatory proceeding.
19.193 Censure, suspension, or debarment.
19.194 Eligibility of attorneys and accountants to practice.
19.195 Incompetence.
19.196 Disreputable conduct.
19.197 Initiation of disciplinary proceeding.
19.198 Conferences.
19.199 Proceedings under this subpart.
19.200 Effect of debarment, suspension, or censure.
19.201 Petition for reinstatement.
Subpart L--Equal Access to Justice Act
19.205 Authority and scope; waiver.
19.206 Definitions.
19.207 Application requirements.
19.208 Net worth exhibit.
19.209 Documentation of fees and expenses.
19.210 Filing and service of documents.
19.211 Answer to application.
19.212 Reply.
19.213 Settlement.
19.214 Further proceedings.
19.215 Decision.
19.216 Agency review.
19.217 Judicial review.
19.218 Stay of decision concerning award.
19.219 Payment of award.
Subpart M--Procedures for Reclassifying an Insured Depository
Institution Based on Criteria Other Than Capital Under Prompt
Corrective Action
19.220 Scope.
19.221 Reclassification of an insured depository institution based
on unsafe or unsound condition or practice.
19.222 Request for rescission of reclassification.
Subpart N--Order To Dismiss a Director or Senior Executive Officer
Under Prompt Corrective Action
19.230 Scope.
19.231 Order to dismiss a director or senior executive officer.
Subpart O--Civil Money Penalty Inflation Adjustments
19.240 Inflation adjustments.
Subpart P--Removal, Suspension, and Debarment of Accountants From
Performing Audit Services
19.241 Scope.
19.242 Definitions.
19.243 Removal, suspension, or debarment.
19.244 Automatic removal, suspension, or debarment.
19.245 Notice of removal, suspension, or debarment.
19.246 Petition for reinstatement.
Subpart Q--Forfeiture of Franchise for Money Laundering or Cash
Transaction Reporting Offenses
19.250 Scope.
19.251 Notice and hearing.
19.252 Presiding officer.
19.253 Grounds for termination.
19.254 Judicial review.
Appendix A to Part 19--Rules of Practice and Procedure

Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93, 93a, 161, 164,
481, 504, 1462a, 1463(a), 1464; 1467(d), 1467a(r), 1817(j), 1818,
1820, 1831m, 1831o, 1832, 1884, 1972, 3102, 3108, 3110, 3349, 3909,
4717, and 5412(b)(2)(B); 15 U.S.C. 78l, 78o-4, 78o-5, 78q-1, 78s,
78u, 78u-2, 78u-3, 78w, and 1639e; 28 U.S.C. 2461; 31 U.S.C. 330 and
5321; and 42 U.S.C. 4012a.

Sec. 19.0 Applicability date.

Subparts A through D and H, I, J, L, M, N, P, and Q of this part
apply to adjudicatory proceedings initiated on or after April 1, 2024.
The Rules of Practice and Procedure for national banks, Federal savings
associations, and Federal branches and agencies that were in effect
prior to April 1, 2024, set forth in appendix A to this part, continue
to apply to adjudicatory proceedings initiated before April 1, 2024,
unless the parties otherwise stipulate that the rules in this part,
effective April 1, 2024, apply.

Subpart A--Uniform Rules of Practice and Procedure

Sec. 19.1 Scope.

This subpart prescribes Uniform Rules of practice and procedure
applicable to adjudicatory proceedings required to be conducted on the
record

[[Page 89844]]

after opportunity for a hearing under the following statutory
provisions:
(a) Cease-and-desist proceedings under section 8(b) of the Federal
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the
FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) to determine whether the Office of the
Comptroller of the Currency (``OCC'') should issue an order to approve
or disapprove a person's proposed acquisition of an institution;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions
upon any government securities broker or dealer or upon any person
associated or seeking to become associated with a government securities
broker or dealer for which the OCC is the appropriate agency;
(e) Assessment of civil money penalties by the OCC against
institutions, institution-affiliated parties, and certain other persons
for which it is the appropriate agency for any violation of:
(1) Any provision of law referenced in 12 U.S.C. 93, or any
regulation issued thereunder, and certain unsafe or unsound practices
and breaches of fiduciary duty, pursuant to 12 U.S.C. 93;
(2) Sections 22 and 23 of the Federal Reserve Act (``FRA''), or any
regulation issued thereunder, and certain unsafe or unsound practices
and breaches of fiduciary duty, pursuant to 12 U.S.C. 504 and 505;
(3) Section 106(b) of the Bank Holding Company Amendments of 1970,
pursuant to 12 U.S.C. 1972(2)(F);
(4) Any provision of the Change in Bank Control Act of 1978 or any
regulation or order issued thereunder, and certain unsafe or unsound
practices and breaches of fiduciary duty, pursuant to 12 U.S.C.
1817(j)(16);
(5) Any provision of the International Lending Supervision Act of
1983 (``ILSA''), or any rule, regulation or order issued thereunder,
pursuant to 12 U.S.C. 3909;
(6) Any provision of the International Banking Act of 1978
(``IBA''), or any rule, regulation or order issued thereunder, pursuant
to 12 U.S.C. 3108;
(7) Section 5211 of the Revised Statutes (12 U.S.C. 161), pursuant
to 12 U.S.C. 164;
(8) Certain provisions of the Exchange Act, pursuant to section 21B
of the Exchange Act (15 U.S.C. 78u-2);
(9) Section 1120 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order
or regulation issued thereunder;
(10) The terms of any final or temporary order issued under section
8 of the FDIA or any written agreement executed by the OCC or the
former Office of Thrift Supervision (OTS), the terms of any condition
imposed in writing by the OCC or the former OTS in connection with the
grant of an application or request, certain unsafe or unsound
practices, breaches of fiduciary duty, or any law or regulation not
otherwise provided in this section, pursuant to 12 U.S.C. 1818(i)(2);
(11) Any provision of law referenced in section 102(f) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder;
(12) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(13) Section 5 of the Home Owners' Loan Act (HOLA) or any
regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d),
(s), and (v);
(14) Section 9 of the HOLA or any regulation or order issued
thereunder, pursuant to 12 U.S.C. 1467(d); and
(15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a(r);
(f) Remedial action under section 102(g) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g));
(g) Removal, prohibition, and civil monetary penalty proceedings
under section 10(k) of the FDIA (12 U.S.C. 1820(k)) for violations of
the post-employment restrictions imposed by section 10(k); and
(h) This subpart also applies to all other adjudications required
by statute to be determined on the record after opportunity for an
agency hearing, unless otherwise specifically provided for in the Local
Rules (see Sec. 19.3(j)).

Sec. 19.2 Rules of construction.

For purposes of this part:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) The term counsel includes a non-attorney representative; and
(c) Unless the context requires otherwise, a party's counsel of
record, if any, may, on behalf of that party, take any action required
to be taken by the party.

Sec. 19.3 Definitions.

For purposes of this part, unless explicitly stated to the
contrary:
(a) Administrative law judge (ALJ) means one who presides at an
administrative hearing under authority set forth at 5 U.S.C. 556.
(b) Adjudicatory proceeding means a proceeding conducted pursuant
to these rules and leading to the formulation of a final order other
than a regulation.
(c) Comptroller means the Comptroller of the Currency or a person
delegated to perform the functions of the Comptroller of the Currency.
(d) Decisional employee means any member of the Comptroller's or
ALJ's staff who has not engaged in an investigative or prosecutorial
role in a proceeding and who may assist the Comptroller or the ALJ,
respectively, in preparing orders, recommended decisions, decisions,
and other documents under the Uniform Rules.
(e) Electronic signature means electronically affixing the
equivalent of a signature to an electronic document filed or
transmitted electronically.
(f) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the OCC in an adjudicatory
proceeding.
(g) Final order means an order issued by the Comptroller with or
without the consent of the affected institution or the institution-
affiliated party, that has become final, without regard to the pendency
of any petition for reconsideration or review.
(h) Institution includes any national bank, Federal savings
association, or Federal branch or agency of a foreign bank.
(i) Institution-affiliated party means any institution-affiliated
party as that term is defined in section 3(u) of the FDIA (12 U.S.C.
1813(u)).
(j) Local Rules means those rules promulgated by the OCC in the
subparts of this part excluding this subpart.
(k) OCC means the Office of the Comptroller of the Currency.
(l) OFIA means the Office of Financial Institution Adjudication,
the executive body charged with overseeing the administration of
administrative enforcement proceedings for the OCC, the Board of
Governors of the Federal Reserve System (``Board of Governors''), the
Federal Deposit Insurance Corporation (``FDIC''), and the National
Credit Union Administration (``NCUA'').
(m) Party means the OCC and any person named as a party in any
notice.
(n) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency, or other entity or organization, including an
institution as defined in paragraph (h) this section.
(o) Respondent means any party other than the OCC.
(p) Uniform Rules means those rules in this subpart that are common
to the

[[Page 89845]]

OCC, the Board of Governors, the FDIC, and the NCUA.
(q) Violation means any violation as that term is defined in
section 3(v) of the FDIA (12 U.S.C. 1813(v)).

Sec. 19.4 Authority of the Comptroller.

The Comptroller may, at any time during the pendency of a
proceeding, perform, direct the performance of, or waive performance
of, any act which could be done or ordered by the ALJ.

Sec. 19.5 Authority of the administrative law judge (ALJ).

(a) General rule. All proceedings governed by this part must be
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The
ALJ has all powers necessary to conduct a proceeding in a fair and
impartial manner and to avoid unnecessary delay.
(b) Powers. The ALJ has all powers necessary to conduct the
proceeding in accordance with paragraph (a) of this section, including
the following powers:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, protective orders,
and other orders, as authorized by this part, and to quash or modify
any such subpoenas and orders;
(3) To receive relevant evidence and to rule upon the admission of
evidence and offers of proof;
(4) To take or cause depositions to be taken as authorized by this
subpart;
(5) To regulate the course of the hearing and the conduct of the
parties and their counsel;
(6) To hold scheduling and/or pre-hearing conferences as set forth
in Sec. 19.31;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the
Comptroller has the power to grant any motion to dismiss the proceeding
or to decide any other motion that results in a final determination of
the merits of the proceeding;
(8) To prepare and present to the Comptroller a recommended
decision as provided in this part;
(9) To recuse oneself by motion made by a party or on the ALJ's own
motion;
(10) To establish time, place and manner limitations on the
attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge
the duties of an ALJ.

Sec. 19.6 Appearance and practice in adjudicatory proceedings.

(a) Appearance before the OCC or an ALJ--(1) By attorneys. Any
member in good standing of the bar of the highest court of any state,
commonwealth, possession, territory of the United States, or the
District of Columbia may represent others before the OCC if such
attorney is not currently suspended or debarred from practice before
the OCC.
(2) By non-attorneys. An individual may appear on the individual's
own behalf.
(3) Notice of appearance.--(i) Any individual acting on the
individual's own behalf or as counsel on behalf of a party, including
the OCC, must file a notice of appearance with OFIA at or before the
time that the individual submits papers or otherwise appears on behalf
of a party in the adjudicatory proceeding. The notice of appearance
must include:
(A) A written declaration that the individual is currently
qualified as provided in paragraphs (a)(1) or (2) of this section and
is authorized to represent the particular party; and
(B) A written acknowledgement that the individual has reviewed and
will comply with the Uniform Rules and Local Rules in subpart B of this
part.
(ii) By filing a notice of appearance on behalf of a party in an
adjudicatory proceeding, the counsel agrees and represents that the
counsel is authorized to accept service on behalf of the represented
party and that, in the event of withdrawal from representation, the
counsel will, if required by the ALJ, continue to accept service until
new counsel has filed a notice of appearance or until the represented
party indicates that the party will proceed on a pro se basis.
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous,
or contumacious conduct at any phase of any adjudicatory proceeding may
be grounds for exclusion or suspension of counsel from the proceeding.

Sec. 19.7 Good faith certification.

(a) General requirement. Every filing or submission of record
following the issuance of a notice must be signed by at least one
counsel of record in the counsel's individual name and must state that
counsel's mailing address, electronic mail address, and telephone
number. A party who acts as the party's own counsel must sign that
person's individual name and state that person's mailing address,
electronic mail address, and telephone number on every filing or
submission of record. Electronic signatures may be used to satisfy the
signature requirements of this section.
(b) Effect of signature.--(1) The signature of counsel or a party
will constitute a certification that: the counsel or party has read the
filing or submission of record; to the best of the counsel's or party'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

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