Rule2025-19687
Rules of Practice for Adjudication Proceedings
Primary source
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Published
October 29, 2025
Effective
October 29, 2025
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Rules of Practice for Adjudication Proceedings (Rules of Practice) govern adjudication proceedings conducted by the Consumer Financial Protection Bureau (CFPB). The CFPB issued a proposal to rescind amendments it adopted to the Rules of Practice on February 22, 2022, and March 29, 2023 (2022 and 2023 amendments). The 2022 and 2023 amendments that the Bureau proposed to rescind included a new deposition process, amendments concerning timing and deadlines, bifurcation of proceedings, the process for deciding dispositive motions, and requirements for issue exhaustion, as well as other technical changes. After considering the comments on the proposal, the CFPB has decided to rescind the amendments as proposed, except as related to narrow clarificatory and procedural changes.
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[Federal Register Volume 90, Number 207 (Wednesday, October 29, 2025)]
[Rules and Regulations]
[Pages 48737-48760]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19687]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 90, No. 207 / Wednesday, October 29, 2025 /
Rules and Regulations
[[Page 48737]]
CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1081
[Docket No. CFPB-2025-0012]
RIN 3170-AB33
Rules of Practice for Adjudication Proceedings
AGENCY: Consumer Financial Protection Bureau.
ACTION: Final rule.
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SUMMARY: The Rules of Practice for Adjudication Proceedings (Rules of
Practice) govern adjudication proceedings conducted by the Consumer
Financial Protection Bureau (CFPB). The CFPB issued a proposal to
rescind amendments it adopted to the Rules of Practice on February 22,
2022, and March 29, 2023 (2022 and 2023 amendments). The 2022 and 2023
amendments that the Bureau proposed to rescind included a new
deposition process, amendments concerning timing and deadlines,
bifurcation of proceedings, the process for deciding dispositive
motions, and requirements for issue exhaustion, as well as other
technical changes. After considering the comments on the proposal, the
CFPB has decided to rescind the amendments as proposed, except as
related to narrow clarificatory and procedural changes.
DATES: This rule is effective on October 29, 2025.
FOR FURTHER INFORMATION CONTACT: Dave Gettler, Paralegal Specialist,
Office of Regulations, at 202-435-7700 or at: <a href="https://reginquiries.consumerfinance.gov/">https://reginquiries.consumerfinance.gov/</a>. If you require this document in an
alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#44070214061b0527272137372d262d282d303d04272234266a232b32"><span class="__cf_email__" data-cfemail="b7f4f1e7f5e8f6d4d4d2c4c4ded5dedbdec3cef7d4d1c7d599d0d8c1">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Background and Regulatory History
The Consumer Financial Protection Act of 2010 (CFPA) establishes
the CFPB as an independent bureau in the Federal Reserve System and
assigns the CFPB a range of rulemaking, enforcement, supervision, and
other authorities.\1\ The CFPB's enforcement powers under the CFPA
include section 1053, which authorizes it to conduct adjudication
proceedings.\2\ The CFPB finalized the original version of the Rules of
Practice, which govern adjudication proceedings, in 2012 (2012
Rule).\3\ The CFPB later finalized certain amendments, which addressed
the issuance of temporary cease-and-desist orders, in 2014 (2014
Rule).\4\
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\1\ Title X of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111-203, 124 Stat. 1376, 1955-2113
(2010).
\2\ 12 U.S.C. 5563; see also section 1052(b), 12 U.S.C. 5562(b)
(addressing subpoenas).
\3\ 77 FR 39057 (June 29, 2012); see also 76 FR 45337 (July 28,
2011) (interim final rule).
\4\ 79 FR 34622 (June 18, 2014); see also 78 FR 59163 (Sept. 26,
2013) (interim final rule).
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The CFPB subsequently made further changes to the Rules of
Practice, which were adopted on February 22, 2022, at 87 FR 10028, and
on March 29, 2023, at 88 FR 18382 (2022 and 2023 amendments). These
changes expanded parties' opportunities to conduct depositions in
adjudication proceedings and made amendments concerning timing and
deadlines, the content of answers, the scheduling conference,
bifurcation of proceedings, the process for deciding dispositive
motions, and requirements for issue exhaustion, as well as other
technical changes.
B. Summary of the Rulemaking Process
Summary of the Proposed Rule To Rescind 2022 and 2023 Amendments
In May 2025, the CFPB issued its proposal to rescind the 2022 and
2023 amendments.\5\ The CFPB noted concerns about the provisions of the
2022 and 2023 amendments that transferred authority to decide
dispositive motions from the hearing officer who is presiding over the
proceeding, normally an administrative law judge (ALJ), to the
Director. This approach is atypical in the Executive Branch, where the
norm is for hearing officers to decide dispositive motions, and
industry commenters criticized it for concentrating authority in the
Director at the expense of the hearing officer. With respect to other
changes made by the amendments, the CFPB's preliminary view, subject to
considering comments, was that they were largely unnecessary.
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\5\ 90 FR 20241 (May 13, 2025).
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Although the CFPB's Rules of Practice are procedural rules exempt
from the notice-and-comment requirements of the Administrative
Procedure Act as rules of agency organization, procedure, and practice,
the CFPB issued a proposal because it believes commenter feedback prior
to promulgation is important to better understand the potential
benefits or harms of changes to the Rules of Practice.
Summary of Comments
The CFPB received six unique comments. These comments came from a
trade association, a coalition of trade groups, a public policy think
tank, and three individual commenters. Three comment letters, namely
from the trade association, the coalition of trade groups, and the
public policy think tank, supported the rescission of the amendments.
These commenters were concerned that the amendments concentrated
greater power in the Director, particularly by allowing the Director to
rule on dispositive motions. Two individual commenters opposed
rescinding the amendments, including by noting that the amendments
enhanced procedural fairness and provided more clarity about deadlines.
Finally, one individual commenter expressed comments supporting the
rescission in part.
After carefully considering these comments, the CFPB has decided to
rescind the vast majority of the 2022 and 2023 amendments. However, the
CFPB has decided to retain certain narrow amendments related to
procedure and nomenclature. The CFPB addresses these changes and
comments in more detail below.
Interagency Consultation
Consistent with section 1022(b)(2)(B) of the CFPA, the CFPB has
consulted with the prudential regulators and the Federal Trade
Commission, including regarding consistency with any prudential,
market, or systemic
[[Page 48738]]
objectives administered by these agencies.\6\
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\6\ Whether sections 1022(b)(2)(A) and 1022(b)(2)(B) are
applicable to this rule is unclear, but in order to inform the
rulemaking more fully the Bureau performed the described analysis
and consultations.
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II. Legal Authority
Section 1053(e) of the CFPA provides that the CFPB ``shall
prescribe rules establishing such procedures as may be necessary to
carry out'' section 1053.\7\ Additionally, section 1022(b)(1) provides,
in relevant part, that the CFPB's Director ``may prescribe rules . . .
as may be necessary or appropriate to enable the Bureau to administer
and carry out the purposes and objectives of the Federal consumer
financial laws, and to prevent evasions thereof.''
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\7\ 12 U.S.C. 5563(e).
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III. Final Rule Analysis
A. Rescission of Amended Sections Describing Dispositive Motions
1081.212 Dispositive Motions and 1081.213 Rulings on Dispositive
Motions
The 2022 and 2023 amendments changed Sec. Sec. 1081.212 (Rule 212)
and 1018.213 (Rule 213) to adopt a new procedure for rulings on
dispositive motions, and made other minor conforming amendments.
Specifically, the 2022 and 2023 amendments created a new process that
allowed the Director to rule on a dispositive motion, refer the motion
to the hearing officer, or rule on the motion in part and refer it in
part. A dispositive motion includes a motion to dismiss or a motion for
summary disposition.
In its May 2025 proposal to rescind, the CFPB noted particular
concerns that these amendments concentrated authority in the Director
at the expense of the hearing officer. The CFPB also noted that this
process was atypical in the Executive Branch, where the norm is for
hearing officers to decide dispositive motions.
One coalition of trade groups, one trade association, and one
public policy think tank supported rescinding these amendments,
particularly noting the concerns in the proposal about the harms
related to concentration of authority in the Director. One commenter
pointed out that the Director's new authority to rule on dispositive
motions relinquished the authority of the administrative law judge.
This commenter stated that this concentration of power was particularly
concerning given that the Director is the same individual who initially
authorizes the public enforcement actions.
The coalition of trade associations also pointed out that
concentrating authority in the Director could result in legal
uncertainty and instability given that the Director often changes with
new administrations. This commenter further noted that the amendments
could risk depriving defendants of due process because the Director is
not sufficiently impartial. The commenter pointed out that the Director
personally approves the filing of the enforcement action and,
therefore, has a vested interest in the success of that enforcement
action. As a result, this commenter asserted that the amendments
increase the risk that administrative proceedings before the CFPB will
not provide the necessary impartiality and, therefore, the required
procedural due process protections to defendant companies. Another
commenter expressed a similar concern that this concentration of
authority in the Director combines the distinct functions of
investigator, prosecutor, and adjudicator, thus potentially undermining
the fairness of the CFPB's adjudications. One commenter also stated
that the new adjudicative process denied defendants meaningful access
to Article III courts and noted that rescission of the amendments would
enhance the fairness of the process and access to those courts.
The coalition of trade associations also pointed out that recent
Supreme Court legal precedent supports the proposal to rescind the
amendments. Specifically, this commenter noted that the proposed
rescission of the amendments was consistent with the Supreme Court's
ruling in Securities and Exchange Commission v. Jarkesy, because
although the commenter stated that the Jarkesy case was not directly on
point, it affirmed the constitutional rights of defendants subject to
administrative hearings, and as such was consistent with the proposed
rescission, which restored greater rights of access to Federal courts
to regulated entities.\8\
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\8\ Sec. & Exch. Comm'n v. Jarkesy, 603 U.S. 109 (2024) (holding
that when the Securities and Exchange Commission seeks civil
penalties against a defendant for securities fraud, the Seventh
Amendment entitles the defendant to a jury trial).
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Three individual commenters opposed the rescission of the
amendments related to dispositive motions. One commenter stated that
existing checks and balances on the Director's authority were
sufficient and that a repeal of the amendments would be harmful because
it would centralize power in a ``single official,'' the ALJ. Another
commenter stated that allowing the Director to decide dispositive
motions serves as a check on potential bias or inconsistency from
hearing officers and that rescinding this amendment would centralize
too much discretion in a single official without procedural safeguards.
Another individual commenter noted that the amendments generally
could hamper future leadership. Two commenters generally stated that
the proposal lacked evidence that the amendments were unnecessary or
that the amendments resulted in any harm created by concentrating power
in the Director.
For the reasons set forth, herein, the CFPB is finalizing the
rescission of amendments to Rule 212 and Rule 213, as proposed.
As industry commenters noted, the CFPB agrees that these amendments
concentrated power in the Director and relinquished power from the ALJ
as hearing officer. This was a concern noted in industry comments to
the 2022 and 2023 amendments, and the CFPB believes that the concern
was incorrectly downplayed at that time. The Director has substantial
power in adjudication proceedings, and the CFPB does not believe that
it is necessary to increase that power further, in a manner atypical in
the Executive Branch. Further, the CFPB disagrees with commenters who
argued that a rescission of the amendment could be harmful because it
would result in a concentration of power in the ALJ. The CFPB finds
this argument unpersuasive because the Director retains the ultimate
ability to issue a decision and order on the matter. Further, the
Bureau believes that the Director's ability to rule on dispositive
motions could add greater risk of bias or inconsistency within and
across proceedings.
The CFPB also appreciates the concern raised by commenters that
this concentration of power in the Director may present procedural due
process concerns and may undermine fairness, particularly because, as a
commenter noted, the Director reviewed and approved earlier enforcement
actions related to the defendant and so may not be able to act as an
impartial arbiter when ruling on dispositive motions. The CFPB also
believes it is important that its adjudication proceedings align with
constitutional requirements and agrees with the comment noting that the
principles articulated in the recent Supreme Court precedent in
Securities and Exchange Commission v. Jarkesy resonate with the notion
that adjudication by Federal agencies can risk denying a constitutional
right to
[[Page 48739]]
Article III courts.\9\ As that commenter pointed out, it highlights the
potential harms of adjudication proceedings if they concentrate greater
power in the Director while failing to provide appropriate protections.
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\9\ Jarkesy, 603 U.S. at 109.
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Accordingly, the CFPB is rescinding amendments to Sec. Sec.
1081.212 and 1081.213 related to dispositive motions and making other
conforming changes consistent with this rescission.
B. Other Rescissions
The CFPB also proposed to rescind other amendments because they
further concentrated power in the Director or because they were
unnecessary. In this section, the CFPB discusses the following
amendments: Sec. 1081.203 amendments related to scheduling
conferences; Sec. 1081.204(c) amendments related to bifurcation of
proceedings; Sec. Sec. 1081.208 and 1081.209 amendments related to
subpoenas and depositions; and Sec. 1081.408 amendments related to
issue exhaustion.
First, the 2022 and 2023 amendments made changes to Sec. 1081.203
related to scheduling conferences by adding new requirements for a
scheduling conference disclosure, as well as a process to correct and
update that disclosure, if necessary.
Second, the 2022 and 2023 amendments added a new Sec. 1081.204(c)
(Rule 204(c)) to address bifurcation of proceedings. Rule 204(c)
provided that the Director may order that the proceeding be divided
into two or more stages, if the Director determines that it would
promote efficiency in the proceeding or for other good cause.
Third, the 2022 and 2023 amendments made certain interrelated
changes to sections related to subpoenas and depositions, Sec. Sec.
1081.208 and 1081.209 (Rules 208 and 209). Specifically, the 2022 and
2023 amendments to the Rules of Practice amended Rule 209 to permit
discovery depositions--either by oral examination or written
questions--in addition to depositions of unavailable witnesses. In
addition, under amended Rules 208 and 209, among other changes, a party
must request that the hearing officer issue a subpoena for the
deposition.
Fourth, the 2022 and 2023 amendments to the Rules of Practice added
a new Sec. 1081.408 (Rule 408), related to issue exhaustion, including
that under the amended rule, a party must raise an argument before the
hearing officer, or else it is not preserved for later consideration by
the Director. In addition, a party must raise an argument before the
Director, or else it is not preserved for later consideration by a
court.
As discussed above, three commenters from a trade association, a
coalition of trade groups, and a public policy think tank generally
supported the proposal to rescind the amendments. One commenter argued
that rescinding the amendments would better ensure that the CFPB's
process provided more meaningful access to Article III courts. This
commenter specifically argued that rescinding the amendment related to
issue exhaustion would make it easier for regulated entities to
preserve claims for appeals, thus reducing the risk of unfair
proceedings in the CFPB's administrative forum.
In contrast, three individual commenters opposed the rescission of
the amendments. Commenters generally noted that the rescission was
unsupported by evidence and that the amendments enhanced transparency
and fairness. These commenters also specifically opposed the rescission
of amendments related to the deposition process. One commenter stated
that depositions could enhance the discovery process and, therefore,
could help expose facts. Another commenter supported these changes as
procedural enhancements that helped ensure fair, transparent, and
efficient adjudications by allowing parties to present thorough
evidence and preventing undue delays. This commenter noted that the
amendments generally would strengthen due process and improve case
resolution. Two commenters also specifically noted opposition to
rescinding the amendment related to bifurcation with one commenter
stating that the bifurcation of the proceedings would help streamline
cases.
After careful consideration of the comments, the CFPB agrees with
the commenters who supported rescission of the amendments under Sec.
1081.203(c), (d), and (e) related to disclosures required for
scheduling conferences; amendments under Sec. 1081.204(c) related to
bifurcation of proceedings; amendments under Sec. Sec. 1081.208 and
1081.209 related to subpoenas and depositions; and amendments under
Sec. 1081.408 related to issue exhaustion.
The CFPB concludes that a power to bifurcate proceedings into
multiple stages deciding different issues is not necessary because it
is normally most efficient to decide all issues together. Moreover, as
noted in the proposal, the CFPB is concerned that the amendments
concentrated power in the Director. The amendments related to
bifurcation, for example, provided that the Director may order that the
proceeding be divided into two or more stages. This amendment gives
even greater decision making power to the Director in the adjudication
proceeding, which may further undermine the fairness of the
proceedings, particularly given that the Director will have an ultimate
ability to later review the proceedings. As a result, this early
intervention by the Director as to whether to bifurcate proceedings
risks potential bias and inconsistency between different adjudication
proceedings. Further, although the 2023 Rule on Adjudicatory
Proceedings stated with little reasoning that providing another
mechanism for the Director to exercise power by enabling the Director
to rule on bifurcation was not problematic, the CFPB believes that this
additional mechanism to exercise authority serves to further
concentrate power, thereby further undermining the procedural fairness.
The CFPB considers the issue exhaustion provision unnecessary
because it is duplicative of general principles of administrative law
that courts apply. The CFPB also believes that the amendments related
to issue exhaustion provided an express avenue for the Director to
retain discretion to consider an unpreserved argument in a manner that
further concentrated power.
Finally, the CFPB believes amendments related to depositions were
unnecessary and potentially could add burden and cost to the
adjudicatory process because of the cost and time associated with
scheduling and handling subpoenas and depositions. The CFPB also
believes that the amendments under Sec. 1081.203 related to new
requirements related to disclosures for scheduling conferences were
unnecessary.
Therefore, having taken into consideration the comments on these
amendments, the CFPB has decided to finalize the rescission of
amendments under Sec. 1081.203(c), (d), and (e) related to disclosures
for scheduling conferences; amendments under Sec. 1081.204(c) related
to bifurcation, the amendments to Sec. Sec. 1081.208 and 1081.209
related to depositions and subpoenas, and Sec. 1081.408 related to
issue exhaustion.
C. Rescissions of Unnecessary Technical Amendments
Consistent with the May 2025 proposal to rescind unnecessary
amendments, the CFPB also intends to rescind several unnecessary
technical changes made as part of the 2022 and 2023 amendments. First,
the CFPB is rescinding amendments that retitled the hearing officer's
``recommended
[[Page 48740]]
decision'' as ``preliminary findings and conclusions.'' Second, the
CFPB is also rescinding unnecessary amendments that replaced gender
pronouns with more direct references to the subject of the sentence.
For example, instead of using ``his or her,'' the 2022 and 2023
amendments refer to the relevant person, e.g., ``the Director'' or the
``Hearing Officer.'' Third, the CFPB is rescinding various unnecessary
verb changes from the term ``shall'' with the terms ``must,'' ``may,''
``will,'' or ``should.'' The CFPB did not receive any specific comments
on these technical changes and believes it is appropriate to rescind
all of them as unnecessary.
D. Retentions
1081.114(a) Construction of Time Limits
The CFPB's 2022 and 2023 amendments to the Rules of Practice
changed Rule 114 to simplify and clarify the provisions describing how
deadlines are computed and adjusted most of the 10-day periods in the
Rules of Practice to account for the change in computation method by
setting 14 days as the new period. The CFPB implemented these changes
because it determined that the prior method of computing deadlines was
unnecessarily complicated and led to counterintuitive results. The
changed method of calculation was also based on similar amendments made
to Fed. R. Civ. P. 6(a) in 2009.\10\
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\10\ 87 FR 10028, 10029 (Feb. 22, 2022).
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Commenters noted that the 2022 and 2023 amendments clarify[ied]
deadlines, and asserted that the provisions ``adjusting rules on timing
[and] deadlines'' among others, ``are essential for . . . efficient
adjudications.''
Upon further consideration, the CFPB agrees with commenters that
the changed computation method in the 2022 and 2023 amendments were
clarifying, and reverting to the prior deadlines and calculation
methods would generate confusion. Accordingly, the CFPB will retain the
portions of Rule 114 that simplify and clarify the method for computing
deadlines, as well as those conforming adjustments that change the 10-
day periods throughout the Rules of Practice to 14-day periods.
1081.206 Availability of Documents for Inspection and Copying
The CFPB's 2022 and 2023 amendments to the Rules of Practice
changed Rule 206 to permit the CFPB to provide electronic copies of
documents to respondents in most cases, rather than requiring the CFPB
to make the documents available for inspection and copying at the
CFPB's office where they are ordinarily maintained.
Upon further consideration, the CFPB believes that it should
preserve its ability to provide electronic copies of documents to
respondents, as this will benefit parties in adjudication by reducing
time and cost burdens associated with traveling to inspect and copy
physical records.
Accordingly, the CFPB will retain the portions of Rule 206 that
permit it to provide electronic copies of documents to respondents.
Retention of Certain Global Technical Nomenclature Amendments
In addition to the portions of the 2022 and 2023 amendments to the
Rules of Practice retained above, the CFPB is retaining certain
technical amendments made in the 2022 and 2023 amendments to avoid
ambiguity and confusion. The amendments replaced certain uses of the
term ``the Bureau'' with either ``the Director,'' ``the Office of
Administrative Adjudication,'' or ``the Office of Enforcement,'' in
order to avoid ambiguity about which CFPB organ is being
referenced.\11\ The CFPB is retaining those changes where reverting
would create ambiguity and confusion.
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\11\ 87 FR 10228 at 10033.
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IV. CFPA Section 1022(b) Analysis
In developing this rule, the CFPB has considered the rule's
benefits, costs, and impacts in accordance with section 1022(b)(2)(A)
of the CFPA. The CFPB discussed the hypothetical benefits and costs of
a more- or less-cost-effective process for adjudication proceedings in
the February 2022 rule. In practice, no administrative proceedings have
been conducted under the Rules of Practice since the 2022 and 2023
amendments, and only two cases have been brought through the
administrative adjudication process from start to finish since the
process was established in 2012. As such, any benefits, costs, or
impacts to consumers or covered persons are likely to be minimal.
V. Executive Order 12866
The Office of Information and Regulatory Affairs within the Office
of Management and Budget (OMB) has determined that this action is not a
``significant regulatory action'' under Executive Order 12866, as
amended.
VI. Other Regulatory Requirements
The Rules of Practice for Adjudication Proceedings is a rule of
agency organization, procedure, or practice, and, therefore, exempt
from the notice-and-comment rulemaking requirements of the
Administrative Procedure Act.\12\ However, the Bureau accepted comments
on the rule and is issuing this rule after considering those comments.
Because no notice of proposed rulemaking was required, the Regulatory
Flexibility Act does not require an initial or final regulatory
flexibility analysis for this rule.
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\12\ 5 U.S.C. 553(b).
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Moreover, the Bureau's Acting Director certifies that this rule
will not have a significant economic impact on a substantial number of
small entities. Therefore, an analysis is also not required for that
reason.
The rule imposes compliance burdens only on the handful of entities
that are respondents in adjudication proceedings or third-party
recipients of discovery requests. Some of the handful of affected
entities may be small entities under the Regulatory Flexibility Act,
but they would represent an extremely small fraction of small entities
in consumer financial services markets. Accordingly, the number of
small entities affected is not substantial.
The Bureau has also determined that this rule does not impose any
new or revise any existing recordkeeping, reporting, or disclosure
requirements on covered entities or members of the public that would be
collections of information requiring approval by the Office of
Management and Budget under the Paperwork Reduction Act.\13\
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\13\ 44 U.S.C. 3501-3521.
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VII. Severability
If any provision of this rule, or any application of a provision,
is stayed or determined to be invalid, the remaining provisions or
applications are severable and shall continue in effect.
List of Subjects in 12 CFR Part 1081
Administrative practice and procedure, Banks, Banking, Consumer
protection, Credit unions, Law enforcement, National banks, Savings
associations, Trade practices.
Authority and Issuance
For the reasons set forth above, the Bureau revises 12 CFR part
1081 to read as follows:
PART 1081--RULES OF PRACTICE FOR ADJUDICATION PROCEEDINGS
Subpart A--General Rules
Sec.
1081.100 Scope of the rules of practice.
1081.101 Expedition and fairness of proceedings.
1081.102 Rules of construction.
[[Page 48741]]
1081.103 Definitions.
1081.104 Authority of the hearing officer.
1081.105 Assignment, substitution, performance, disqualification of
hearing officer.
1081.106 Deadlines.
1081.107 Appearance and practice in adjudication proceedings.
1081.108 Good faith certification.
1081.109 Conflict of interest.
1081.110 Ex parte communication.
1081.111 Filing of papers.
1081.112 Formal requirements as to papers filed.
1081.113 Service of papers.
1081.114 Construction of time limits.
1081.115 Change of time limits.
1081.116 Witness fees and expenses.
1081.117 Bureau's right to conduct examination, collect information.
1081.118 Collateral attacks on adjudication proceedings.
1081.119 Confidential information; protective orders.
1081.120 Settlement.
1081.121 Cooperation with other agencies.
Subpart B--Initiation of Proceedings and Prehearing Rules
1081.200 Commencement of proceeding and contents of notice of
charges.
1081.201 Answer and disclosure statement and notification of
financial interest.
1081.202 Amended pleadings.
1081.203 Scheduling conference.
1081.204 Consolidation and severance of actions.
1081.205 Non-dispositive motions.
1081.206 Availability of documents for inspection and copying.
1081.207 Production of witness statements.
1081.208 Subpoenas.
1081.209 Deposition of witness unavailable for hearing.
1081.210 Expert discovery.
1081.211 Interlocutory review.
1081.212 Dispositive motions.
1081.213 Partial summary disposition.
1081.214 Prehearing conferences.
1081.215 Prehearing submissions.
1081.216 Amicus participation.
Subpart C--Hearings
1081.300 Public hearings.
1081.301 Failure to appear.
1081.302 Conduct of hearings.
1081.303 Evidence.
1081.304 Record of the hearing.
1081.305 Post-hearing filings.
1081.306 Record in proceedings before hearing officer; retention of
documents; copies.
Subpart D--Decision and Appeals
1081.400 Recommended decision of the hearing officer.
1081.401 Transmission of documents to Director; record index;
certification.
1081.402 Notice of appeal; review by the Director.
1081.403 Briefs filed with the Director.
1081.404 Oral argument before the Director.
1081.405 Decision of the Director.
1081.406 Reconsideration.
1081.407 Effective date; stays pending judicial review.
Subpart E--Temporary Cease-and-Desist Proceedings
1081.500 Scope.
1081.501 Basis for issuance, form, and service.
1081.502 Judicial review, duration.
Authority: 12 U.S.C. 5512(b)(1), 5563(e).
Subpart A--General Rules
Sec. 1081.100 Scope of the rules of practice.
This part prescribes rules of practice and procedure applicable to
adjudication proceedings authorized by section 1053 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)
to ensure or enforce compliance with the provisions of title X of the
Dodd-Frank Act, rules prescribed by the Bureau under title X of the
Dodd-Frank Act, and any other Federal law or regulation that the Bureau
is authorized to enforce. These rules of practice do not govern the
conduct of Bureau investigations, investigational hearings or other
proceedings that do not arise from proceedings after a notice of
charges.
Sec. 1081.101 Expedition and fairness of proceedings.
To the extent practicable, consistent with requirements of law, the
Bureau's policy is to conduct such adjudication proceedings fairly and
expeditiously. In the conduct of such proceedings, the hearing officer
and counsel for all parties shall make every effort at each stage of a
proceeding to avoid delay. With the consent of the parties, the
Director, at any time, or the hearing officer at any time prior to the
filing of his or her recommended decision, may shorten any time limit
prescribed by this part.
Sec. 1081.102 Rules of construction.
For the purposes of this part:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neutral gender encompasses
all three, if such use would be appropriate;
(c) Unless context requires otherwise, a party's counsel of record,
if any, may, on behalf of that party, take any action required to be
taken by the party; and
(d) To the extent this part uses terms defined by section 1002 of
the Dodd-Frank Act, such terms shall have the same meaning as set forth
therein, unless defined differently by Sec. 1081.103.
Sec. 1081.103 Definitions.
For the purposes of this part, unless explicitly stated to the
contrary:
Dodd-Frank Act means the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, Public Law 111-203 (July 21, 2010).
Adjudication proceeding means a proceeding conducted pursuant to
section 1053 of the Dodd-Frank Act and intended to lead to the
formulation of a final order other than a temporary order to cease and
desist issued pursuant to section 1053(c) of the Dodd-Frank Act.
Bureau means the Bureau of Consumer Financial Protection.
Chief hearing officer means the hearing officer charged with
assigning hearing officers to specific proceedings, in the event there
is more than one hearing officer available to the Bureau.
Counsel means any person representing a party pursuant to Sec.
1081.107.
Decisional employee means any employee of the Bureau who has not
engaged in an investigative or prosecutorial role in a proceeding and
who may assist the Director or the hearing officer, respectively, in
preparing orders, recommended decisions, decisions, and other documents
under this part.
Director means the Director of the Bureau or a person authorized to
perform the functions of the Director in accordance with the law.
Enforcement counsel means any individual who files a notice of
appearance as counsel on behalf of the Office of Enforcement in an
adjudication proceeding.
Final order means an order issued by the Bureau with or without the
consent of the respondent, which has become final, without regard to
the pendency of any petition for reconsideration or review.
General Counsel means the General Counsel of the Bureau or any
Bureau employee to whom the General Counsel has delegated authority to
act under this part.
Hearing officer means an administrative law judge or any other
person duly authorized to preside at a hearing.
Notice of charges means the pleading that commences an adjudication
proceeding, as described in Sec. 1081.200, except that it does not
include a stipulation and consent order under Sec. 1081.200(d).
Office of Administrative Adjudication means the office of the
Bureau responsible for conducting adjudication proceedings.
Office of Enforcement means the office of the Bureau responsible
for enforcement of Federal consumer financial law.
Party means the Office of Enforcement, any person named as a party
in any notice of charges issued
[[Page 48742]]
pursuant to this part, and, to the extent applicable, any person who
intervenes in the proceeding pursuant to Sec. 1081.119(a) to seek a
protective order.
Person means an individual, partnership, company, corporation,
association (incorporated or unincorporated), trust, estate,
cooperative organization, or other entity.
Person employed by the Bureau means Bureau employees, contractors,
agents, and others acting for or on behalf of the Bureau, or at its
direction, including consulting experts.
Respondent means the party named in the notice of charges.
State means any State, territory, or possession of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or
the United States Virgin Islands or any federally recognized Indian
tribe, as defined by the Secretary of the Interior under section 104(a)
of the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C.
479a-1(a).
Sec. 1081.104 Authority of the hearing officer.
(a) General rule. The hearing officer shall have all powers
necessary to conduct a proceeding in a fair and impartial manner and to
avoid unnecessary delay. No provision of this part shall be construed
to limit the powers of the hearing officers provided by the
Administrative Procedure Act, 5 U.S.C. 556, 557.
(b) Powers. The powers of the hearing officer include but are not
limited to the power:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, and protective
orders, as authorized by this part, and to quash or modify any such
subpoenas or orders;
(3) To take depositions or cause depositions to be taken;
(4) To receive relevant evidence and to rule upon the admission of
evidence and offers of proof;
(5) To regulate the course of a proceeding and the conduct of
parties and their counsel;
(6) To reject written submissions that materially fail to comply
with the requirements of this part, and to deny confidential status to
documents and testimony without prejudice until a party complies with
all relevant rules of this chapter;
(7) To hold conferences for settlement, simplification of the
issues, or any other proper purpose and require the attendance at any
such conference of at least one representative of each party who has
authority to negotiate concerning the resolution of issues in
controversy;
(8) To inform the parties as to the availability of one or more
alternative means of dispute resolution, and to encourage the use of
such methods;
(9) To certify questions to the Director for his or her
determination in accordance with the rules of this part;
(10) To consider and rule upon, as justice may require, all
procedural and other motions appropriate in adjudication proceedings;
(11) To issue and file recommended decisions;
(12) To recuse himself or herself by motion made by a party or on
his or her own motion;
(13) To issue such sanctions against parties or their counsel as
may be necessary to deter repetition of sanctionable conduct or
comparable conduct by others similarly situated, as provided for in
this part or as otherwise necessary to the appropriate conduct of
hearings and related proceedings, provided that no sanction shall be
imposed before providing the sanctioned person an opportunity to show
cause why no such sanction should issue; and
(14) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 1081.105 Assignment, substitution, performance, disqualification
of hearing officer.
(a) How assigned. In the event that more than one hearing officer
is available to the Bureau for the conduct of proceedings under this
part, the presiding hearing officer shall be designated by the chief
hearing officer, who shall notify the parties of the hearing officer
designated.
(b) Interference. Hearing officers shall not be subject to the
supervision or direction of, or responsible to, any officer, employee,
or agent engaged in the performance of investigative or prosecuting
functions for the Bureau, and all direction by the Bureau to the
hearing officer concerning any adjudication proceedings shall appear in
and be made part of the record.
(c) Disqualification of hearing officers. (1) When a hearing
officer deems himself or herself disqualified to preside in a
particular proceeding, he or she shall issue a notice stating that he
or she is withdrawing from the matter and setting forth the reasons
therefore.
(2) Any party who has a reasonable, good faith basis to believe
that a hearing officer has a personal bias, or is otherwise
disqualified from hearing a case, may make a motion to the hearing
officer that the hearing officer withdraw. The motion shall be
accompanied by an affidavit setting forth the facts alleged to
constitute grounds for disqualification. Such motion shall be filed at
the earliest practicable time after the party learns, or could
reasonably have learned, of the alleged grounds for disqualification.
If the hearing officer does not disqualify himself or herself within 14
days, he or she shall certify the motion to the Director pursuant to
Sec. 1081.211, together with any statement he or she may wish to have
considered by the Director. The Director shall promptly determine the
validity of the grounds alleged, either directly or on the report of
another hearing officer appointed to conduct a hearing for that
purpose, and shall either direct the reassignment of the matter or
confirm the hearing officer's continued role in the matter.
(d) Unavailability of hearing officer. In the event that the
hearing officer withdraws or is otherwise unable to perform the duties
of the hearing officer, the chief hearing officer or the Director shall
designate another hearing officer to serve.
Sec. 1081.106 Deadlines.
The deadlines for action by the hearing officer established by
Sec. Sec. 1081.203, 1081.205, 1081.211, 1081.212, and 1081.400, or
elsewhere in this part, confer no substantive rights on respondents.
Sec. 1081.107 Appearance and practice in adjudication proceedings.
(a) Appearance before the Bureau or a hearing officer. (1) By
attorneys. Any member in good standing of the bar of the highest court
of any State may represent others before the Bureau if such attorney is
not currently suspended or debarred from practice before the Bureau or
by a court of the United States or of any State.
(2) By non-attorneys. So long as such individual is not currently
suspended or debarred from practice before the Bureau:
(i) An individual may appear on his or her own behalf;
(ii) A member of a partnership may represent the partnership;
(iii) A duly authorized officer of a corporation, trust, or
association may represent the corporation, trust or association; and
(iv) A duly authorized officer or employee of any government unit,
agency, or authority may represent that unit, agency, or authority.
(3) Notice of appearance. Any individual acting as counsel on
behalf of a party, including Enforcement counsel, shall file a notice
of appearance at or
[[Page 48743]]
before the time that the individual submits papers or otherwise appears
on behalf of a party in the adjudication proceeding. The notice of
appearance must include a written declaration that the individual is
currently qualified as provided in paragraph (a)(1) or (2) of this
section and is authorized to represent the particular party, and if
applicable, must include the attorney's jurisdiction of admission or
qualification, attorney identification number, and a statement by the
appearing attorney attesting to his or her good standing within the
legal profession. By filing a notice of appearance on behalf of a party
in an adjudication proceeding, the counsel agrees and represents that
he or she is authorized to accept service on behalf of the represented
party and that, in the event of withdrawal from representation, he or
she will, if required by the hearing officer, continue to accept
service until a new counsel has filed a notice of appearance or until
the represented party indicates that he or she will proceed on a pro se
basis. The notice of appearance shall provide the representative's
email address, telephone number, and business address and, if different
from the representative's addresses, electronic or other address at
which the represented party may be served.
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous,
or contumacious conduct at any phase of any adjudication proceeding may
be grounds for exclusion or suspension of counsel from the proceeding.
An order imposing a sanction must describe the sanctioned conduct and
explain the basis for the sanction.
(c) Standards of conduct; disbarment. (1) All attorneys practicing
before the Bureau shall conform to the standards of ethical conduct
required by the bars of which the attorneys are members.
(2) If for good cause shown, the Director believes that any
attorney is not conforming to such standards, or that an attorney or
counsel to a party has otherwise engaged in conduct warranting
disciplinary action, the Director may issue an order requiring such
person to show cause why he should not be suspended or disbarred from
practice before the Bureau. The alleged offender shall be granted due
opportunity to be heard in his or her own defense and may be
represented by counsel. Thereafter, if warranted by the facts, the
Director may issue against the attorney or counsel an order of
reprimand, suspension, or disbarment.
Sec. 1081.108 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice of charges shall be signed by at
least one counsel of record in his or her individual name and shall
state counsel's address, email address, and telephone number. A party
who acts as his or her own counsel shall sign his or her individual
name and state his or her address, email address, and telephone number
on every filing or submission of record. Papers filed by electronic
transmission may be signed with an ``/s/'' notation, which shall be
deemed the signature of the party or representative whose name appears
below the signature line.
(b) Effect of signature. (1) The signature of counsel or a party
shall constitute a certification that: the counsel or party has read
the filing or submission of record; to the best of his or her
knowledge, information, and belief formed after reasonable inquiry, the
filing or submission of record is well-grounded in fact and is
warranted by existing law or a good faith argument for the extension,
modification, or reversal of existing law; and the filing or submission
of record is not made for any improper purpose, such as to harass or to
cause unnecessary delay or needless increase in the cost of litigation.
(2) If a filing or submission of record is not signed, the hearing
officer shall strike the filing or submission of record, unless it is
signed promptly after the omission is called to the attention of the
filer.
(c) Effect of making oral motion or argument. The act of making any
oral motion or oral argument by any counsel or party constitutes a
certification that to the best of his or her knowledge, information,
and belief formed after reasonable inquiry, his or her statements are
well-grounded in fact and are warranted by existing law or a good faith
argument for the extension, modification, or reversal of existing law,
and are not made for any improper purpose, such as to harass or to
cause unnecessary delay or needless increase in the cost of litigation.
(d) Sanctions. Counsel or a party that fails to abide by the
requirements of this section may be subject to sanctions pursuant to
Sec. 1081.104(b)(13).
Sec. 1081.109 Conflict of interest.
(a) Conflict of interest in representation. No person shall appear
as counsel for another person in an adjudication proceeding if it
reasonably appears that such representation may be materially limited
by that counsel's responsibilities to a third person or by the
counsel's own interests. The hearing officer may take corrective
measures at any stage of a proceeding to cure a conflict of interest in
representation, including the issuance of an order limiting the scope
of representation or disqualifying an individual from appearing in a
representative capacity for the duration of the proceeding.
(b) Certification and waiver. If any person appearing as counsel
represents two or more parties to an adjudication proceeding or also
represents a non-party on a matter relevant to an issue in the
proceeding, counsel must certify in writing at the time of filing the
notice of appearance required by Sec. 1081.107(a)(3):
(1) That the counsel has personally and fully discussed the
possibility of conflicts of interest with each such party and non-
party; and
(2) That each such party and/or non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any conflicts of interest during the course of the proceeding.
Sec. 1081.110 Ex parte communication.
(a) Definitions. (1) For purposes of this section, ex parte
communication means any material oral or written communication relevant
to the merits of an adjudication proceeding that was neither on the
record nor on reasonable prior notice to all parties that takes place
between:
(i) An interested person not employed by the Bureau (including such
person's counsel); and
(ii) The hearing officer handling the proceeding, the Director, or
a decisional employee.
(2) Exception. A request for status of the proceeding does not
constitute an ex parte communication.
(3) Pendency of an adjudication proceeding means the time from when
the Bureau issues a notice of charges, unless the person responsible
for the communication has knowledge that a notice of charges will be
issued, in which case the pendency of an adjudication shall commence at
the time of his or her acquisition of such knowledge, or from when an
order by a court of competent jurisdiction remanding a Bureau decision
and order for further proceedings becomes effective, until the time the
Director enters his or her final decision and order in the proceeding
and the time permitted to seek reconsideration of that decision and
order has elapsed. For purposes of this section, an order of remand by
a court of competent jurisdiction shall be deemed to become effective
when the Bureau's right to
[[Page 48744]]
petition for review or for a writ of certiorari has lapsed without a
petition having been filed, or when such a petition has been denied. If
a petition for reconsideration of a Bureau decision is filed pursuant
to Sec. 1081.406, the matter shall be considered to be a pending
adjudication proceeding until the time the Bureau enters an order
disposing of the petition.
(b) Prohibited ex parte communications. During the pendency of an
adjudication proceeding, except to the extent required for the
disposition of ex parte matters as authorized by law or as otherwise
authorized by this part:
(1) No interested person not employed by the Bureau shall make or
knowingly cause to be made to the Director, or to the hearing officer,
or to any decisional employee, an ex parte communication; and
(2) The Director, the hearing officer, or any decisional employee
shall not make or knowingly cause to be made to any interested person
not employed by the Bureau any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication prohibited by paragraph (b) of this section is
received by the hearing officer, the Director, or any decisional
employee, that person shall cause all such written communications (or,
if the communication is oral, a memorandum stating the substance of the
communication) to be placed on the record of the proceeding and served
on all parties. All other parties to the proceeding shall have an
opportunity, within 14 days of receipt of service of the ex parte
communication, to file responses thereto and to recommend any
sanctions, in accordance with paragraph (d) of this section, that they
believe to be appropriate under the circumstances.
(d) Sanctions--(1) Adverse action on claim. Upon receipt of an ex
parte communication knowingly made or knowingly caused to be made by a
party and prohibited by paragraph (b) of this section, the Director or
hearing officer, as appropriate, may, to the extent consistent with the
interests of justice and the policy of the underlying statutes, require
the party to show cause why his claim or interest in the proceeding
should not be dismissed, denied, disregarded, or otherwise adversely
affected on account of such violation.
(2) Discipline of persons practicing before the Bureau. The
Director may, to the extent not prohibited by law, censure, suspend, or
revoke the privilege to practice before the Bureau of any person who
makes, or solicits the making of, an unauthorized ex parte
communication.
(e) Separation of functions. Except to the extent required for the
disposition of ex parte matters as authorized by law, the hearing
officer may not consult a person or party on any matter relevant to the
merits of the adjudication, unless upon notice and opportunity for all
parties to participate. An employee or agent engaged in the performance
of investigative or prosecuting functions for the Bureau in a case,
other than the Director, may not, in that or a factually related case,
participate or advise in the decision, recommended decision, or agency
review of the recommended decision, except as witness or counsel in
public proceedings.
Sec. 1081.111 Filing of papers.
(a) Filing. The following papers must be filed by parties in an
adjudication proceeding: the notice of charges, proof of service of the
notice of charges, notices of appearance, answer, the disclosure
statement required under Sec. 1081.201(e), motion, brief, request for
issuance or enforcement of a subpoena, response, opposition, reply,
notice of appeal, or petition for reconsideration. The hearing officer
shall file all written orders, rulings, notices, or requests. Any
papers required to be filed shall be filed with the Office of
Administrative Adjudication, except as otherwise provided in this
section.
(b) Manner of filing. Unless otherwise specified by the Director or
the hearing officer, filing may be accomplished by:
(1) Electronic transmission in accordance with guidance issued by
the Office of Administrative Adjudication; or
(2) Any of the following methods if respondent demonstrates, in
accordance with guidance issued by the Office of Administrative
Adjudication, that electronic filing is not practicable:
(i) Personal delivery;
(ii) Delivery to a reliable commercial courier service or overnight
delivery service; or
(iii) Mailing the papers through the U.S. Postal Service by First
Class Mail, Registered Mail, Certified Mail or Express Mail.
(c) Papers filed in an adjudication proceeding are presumed to be
public. Unless otherwise ordered by the Director or the hearing
officer, all papers filed in connection with an adjudication proceeding
are presumed to be open to the public. The Bureau may provide public
access to and publish any papers filed in an adjudication proceeding
except if there is a pending motion for a protective order filed
pursuant to Sec. 1081.119, or if there is an order from the Director,
hearing officer, or a Federal court authorizing the confidential
treatment of the papers filed.
Sec. 1081.112 Formal requirements as to papers filed.
(a) Form. All papers filed by parties must:
(1) Set forth the name, address, telephone number, and email
address of the counsel or party making the filing;
(2) Be double-spaced (except for single-spaced footnotes and
single-spaced indented quotations) and printed or typewritten on 8\1/2\
x 11 inch paper in 12-point or larger font;
(3) Include at the head of the paper, or on a title page, a caption
setting forth the title of the case, the docket number of the
proceeding, and a brief descriptive title indicating the purpose of the
paper;
(4) Be paginated with margins at least one inch wide; and
(5) If filed by other than electronic means, be stapled, clipped,
or otherwise fastened in a manner that lies flat when opened.
(b) Signature. All papers must be dated and signed as provided in
Sec. 1081.108.
(c) Number of copies. Unless otherwise specified by the Director or
the hearing officer, one copy of all documents and papers shall be
filed if filing is by electronic transmission. If filing is
accomplished by any other means, an original and one copy of all
documents and papers shall be filed, except that only one copy of
transcripts of testimony and exhibits must be filed.
(d) Authority to reject document for filing. The Office of
Administrative Adjudication or the hearing officer may reject a
document for filing that materially fails to comply with this part.
(e) Sensitive personal information. Sensitive personal information
means an individual's Social Security number, taxpayer identification
number, financial account number, credit card or debit card number,
driver's license number, State-issued identification number, passport
number, date of birth (other than year), and any sensitive health
information identifiable by individual, such as an individual's medical
records. Sensitive personal information shall not be included in, and
must be redacted or omitted from, filings unless the person filing the
paper determines that such information is relevant or otherwise
necessary for the conduct of the proceeding. If the person filing a
paper determines the sensitive personal information contained in the
paper is relevant or necessary to the proceeding, the person shall file
the paper in accordance with paragraph (f)
[[Page 48745]]
of this section, including filing an expurgated copy of the paper with
the sensitive personal information redacted.
(f) Confidential treatment of information in certain filings. A
party seeking confidential treatment of information contained in a
filing must contemporaneously file either a motion requesting such
treatment in accordance with Sec. 1081.119 or a copy of the order from
the Director, hearing officer, or Federal court authorizing such
confidential treatment. The filing must comply with any applicable
order of the Director or hearing officer and must be accompanied by:
(1) A complete, sealed copy of the documents containing the
materials as to which confidential treatment is sought, with the
allegedly confidential material clearly marked as such, and with the
first page of the document labeled ``Under Seal.'' If the movant seeks
or has obtained a protective order against disclosure to other parties
as well as the public, copies of the documents shall not be served on
other parties; and
(2) An expurgated copy of the materials as to which confidential
treatment is sought, with the allegedly confidential materials
redacted. The redacted version shall indicate any omissions with
brackets or ellipses, and its pagination and depiction of text on each
page shall be identical to that of the sealed version.
(g) Certificate of service. Any papers filed in an adjudication
proceeding shall contain proof of service on all other parties or their
counsel in the form of a statement of the date and manner of service
and of the names of the persons served, certified by the person who
made service. The certificate of service must be affixed to the papers
filed and signed in accordance with Sec. 1081.108.
Sec. 1081.113 Service of papers.
(a) When required. In every adjudication proceeding, each paper
required to be filed by Sec. 1081.111 shall be served upon each party
in the proceeding in accordance with the provisions of this section;
provided, however, that absent an order to the contrary, no service
shall be required for motions which are to be heard ex parte.
(b) Upon a person represented by counsel. Whenever service is
required to be made upon a person represented by counsel who has filed
a notice of appearance pursuant to Sec. 1081.107(a)(3), service shall
be made pursuant to paragraph (c) of this section upon counsel, unless
service upon the person represented is ordered by the Director or the
hearing officer, as appropriate.
(c) Method of service. Except as provided in paragraph (d) of this
section or as otherwise ordered by the hearing officer or the Director,
service shall be made by delivering a copy of the filing by one of the
following methods:
(1) Transmitting the papers by electronic transmission where the
persons so serving each other have consented to service by specified
electronic transmission and provided the Bureau and the parties with
notice of the means for service by electronic transmission (e.g., email
address or facsimile number);
(2) Handing a copy to the person required to be served; or leaving
a copy at the person's office with a clerk or other person in charge
thereof, or, if there is no one in charge, leaving it in a conspicuous
place therein; or, if the office is closed or the person to be served
has no office, leaving it at the person's dwelling or usual place of
abode with some person of suitable age and discretion then residing
therein;
(3) Mailing the papers through the U.S. Postal Service by First
Cass Mail, Registered Mail, Certified Mail, or Express Mail delivery
addressed to the person; or
(4) Sending the papers through a third-party commercial courier
service or express delivery service.
(d) Service of certain papers by the Office of Enforcement or the
Office of Administrative Adjudication--(1) Service of a notice of
charges by the Office of Enforcement. (i) To individuals. Notice of a
proceeding shall be made to an individual by delivering a copy of the
notice of charges to the individual or to an agent authorized by
appointment or by law to receive such notice. Delivery, for purposes of
this paragraph (d)(1)(i), means handing a copy of the notice to the
individual; or leaving a copy at the individual's office with a clerk
or other person in charge thereof; or leaving a copy at the
individual's dwelling house or usual place of abode with some person of
suitable age and discretion then residing therein; or sending a copy of
the notice addressed to the individual through the U.S. Postal Service
by Registered Mail, Certified Mail or Express Mail delivery, or by
third-party commercial carrier, for overnight delivery and obtaining a
confirmation of receipt.
(ii) To corporations or entities. Notice of a proceeding shall be
made to a person other than a natural person by delivering a copy of
the notice of charges to an officer, managing or general agent, or any
other agent authorized by appointment or law to receive such notice, by
any method specified in paragraph (d)(1)(i) of this section.
(iii) Upon persons registered with the Bureau. In addition to any
other method of service specified in paragraph (d)(1)(i) or (ii) of
this section, notice may be made to a person currently registered with
the Bureau by sending a copy of the notice of charges addressed to the
most recent business address shown on the person's registration form by
U.S. Postal Service certified, registered, or Express Mail and
obtaining a confirmation of receipt or attempted delivery.
(iv) Upon persons in a foreign country. Notice of a proceeding to a
person in a foreign country may be made by any method specified in
paragraph (d)(1) of this section, or by any other method reasonably
calculated to give notice, provided that the method of service used is
not prohibited by the law of the foreign country.
(v) Record of service. The Office of Enforcement will maintain and
file a record of service of the notice of charges on parties,
identifying the party given notice, the method of service, the date of
service, the address to which service was made, and the person who made
service. If service is made in person, the certificate of service shall
state, if available, the name of the individual to whom the notice of
charges was given. If service is made by U.S. Postal Service Registered
Mail, Certified Mail, or Express Mail, the Office of Enforcement will
maintain the confirmation of receipt or attempted delivery. If service
is made to an agent authorized by appointment to receive service, the
certificate of service shall be accompanied by evidence of the
appointment.
(vi) Waiver of service. In lieu of service as set forth in
paragraph (d)(1)(i) or (ii) of this section, the party may be provided
a copy of the notice of charges by First Class Mail or other reliable
means if a waiver of service is obtained from the party and placed in
the record.
(2) Service of recommended decisions and final orders. Recommended
decisions issued by the hearing officer and final orders issued by the
Bureau shall be served promptly on each party pursuant to any method of
service authorized under paragraph (d)(1) of this section. Such
decisions and orders may also be served by electronic transmission if
the party to be served has agreed to accept such service in writing,
signed by the party or its counsel, and has provided the Bureau with
information concerning the manner of electronic transmission.
[[Page 48746]]
Sec. 1081.114 Construction of time limits.
(a) General rule. In computing any time period prescribed by this
part, by order of the Director or a hearing officer, or by any
applicable statute, exclude the day of the event that triggers the
period, count every day, including intermediate Saturdays, Sundays, and
Federal holidays, and include the last day of the period unless it is a
Saturday, Sunday, or Federal holiday as set forth in 5 U.S.C. 6103(a).
When the last day is a Saturday, Sunday, or Federal holiday, the period
runs until the end of the next day that is not a Saturday, Sunday, or
Federal holiday.
(b) When papers are deemed to be filed or served. Filing and
service are deemed to be effective:
(1) In the case of personal service or same day commercial courier
delivery, upon actual receipt by person served;
(2) In the case of overnight commercial delivery service, Express
Mail delivery, First Class Mail, Registered Mail, or Certified Mail,
upon deposit in or delivery to an appropriate point of collection; or
(3) In the case of electronic transmission, upon transmission.
(c) Calculation of time for service and filing of responsive
papers. Whenever a time limit is measured by a prescribed period from
the service of any notice or paper, the applicable time limits are
calculated as follows:
(1) If service is made by First Class Mail, Registered Mail, or
Certified Mail, add three calendar days to the prescribed period;
(2) If service is made by Express Mail or overnight delivery
service, add one calendar day to the prescribed period; or
(3) If service is made by electronic transmission, add one calendar
day to the prescribed period.
Sec. 1081.115 Change of time limits.
(a) Except as otherwise provided by law, the hearing officer may,
in any proceeding before him or her, for good cause shown, extend the
time limits prescribed by this part or by any notice or order issued in
the proceedings. After appeal to the Director pursuant to Sec.
1081.402, the Director may grant extensions of the time limits for good
cause shown. Extensions may be granted on the motion of a party after
notice and opportunity to respond is afforded all non-moving parties or
on the Director's or the hearing officer's own motion, as appropriate.
(b) Considerations in determining whether to extend time limits or
grant postponements, adjournments and extensions. Motions for
extensions of time filed pursuant to paragraph (a) of this section are
generally disfavored. In determining whether to grant any motions, the
Director or hearing officer, as appropriate, shall consider, in
addition to any other relevant factors:
(1) The length of the proceeding to date;
(2) The number of postponements, adjournments or extensions already
granted;
(3) The stage of the proceedings at the time of the motion;
(4) The impact of the motion on the hearing officer's ability to
complete the proceeding in the time specified by Sec. 1081.400(a); and
(5) Any other matters as justice may require.
(c) Time limit. Postponements, adjournments, or extensions of time
for filing papers shall not exceed 21 days unless the Director or the
hearing officer, as appropriate, states on the record or sets forth in
a written order the reasons why a longer period of time is necessary.
(d) No effect on deadline for recommended decision. The granting of
any extension of time pursuant to this section shall not affect any
deadlines set pursuant to Sec. 1081.400(a).
Sec. 1081.116 Witness fees and expenses.
Respondents shall pay to witnesses subpoenaed for testimony or
depositions on their behalf the same fees for attendance and mileage as
are paid in the United States district courts in proceedings in which
the United States is a party, provided that, in the case of a
deposition subpoena addressed to a party, no witness fees or mileage
need be paid. Fees for witnesses shall be tendered in advance by any
respondent requesting the issuance of a subpoena, except that fees and
mileage need not be tendered in advance where the Office of Enforcement
is the party requesting the subpoena. The Bureau shall pay to witnesses
subpoenaed for testimony or depositions on behalf of the Office of
Enforcement the same fees for attendance and mileage as are paid in the
United States district courts in proceedings in which the United States
is a party, but the Bureau need not tender such fees in advance.
Sec. 1081.117 Bureau's right to conduct examination, collect
information.
Nothing contained in this part limits in any manner the right of
the Bureau to conduct any examination, inspection, or visitation of any
person, to conduct or continue any form of investigation authorized by
law, to collect information in order to monitor the market for risks to
consumers in the offering or provision of consumer financial products
or services, or to otherwise gather information in accordance with law.
Sec. 1081.118 Collateral attacks on adjudication proceedings.
Unless a court of competent jurisdiction, or the Director for good
cause, so directs, if an interlocutory appeal or collateral attack is
brought in any court concerning all or any part of an adjudication
proceeding, the challenged adjudication proceeding shall continue
without regard to the pendency of that court proceeding. No default or
other failure to act as directed in the adjudication proceeding within
the times prescribed in this part shall be excused based on the
pendency before any court of any interlocutory appeal or collateral
attack.
Sec. 1081.119 Confidential information; protective orders.
(a) Rights of third parties. Any party that intends to disclose
information obtained from a third party that is subject to a claim of
confidentiality must provide notice to the third party at least seven
days prior to the proposed disclosure of such information. In response
to such notice, the third party may consent to the disclosure of such
information, which may be conditioned on the entry of an appropriate
protective order, or may intervene in the proceeding for the limited
purpose of moving for a protective order pursuant to this section. Any
written filing by a party that contains such confidential information
must be accompanied by a certification that proper notice was provided.
The act of making any oral motion or oral argument by any counsel or
party which contains such confidential information constitutes a
certification that proper notice was provided. A third party wishing to
intervene for purposes of protecting its confidential information may
file a single motion, in conformity with all applicable rules, setting
forth the basis of both the third party's right to intervene and the
basis for the protective order, in conformity with paragraph (b) of
this section.
(b) Procedure. In any adjudication proceeding, a party, including a
third party who has intervened pursuant to paragraph (a) of this
section, may file a motion requesting a protective order to limit from
disclosure to other parties or to the public documents or testimony
that contain confidential information. The motion should include a
general summary or extract of the documents or testimony without
revealing confidential details, and a copy of the proposed protective
order. A motion for confidential treatment of documents
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should be filed in accordance with Sec. 1081.112(f), and all other
applicable rules.
(c) Basis for issuance. Documents and testimony introduced in a
public hearing, or filed in connection with an adjudication proceeding,
are presumed to be public. A motion for a protective order shall be
granted:
(1) Upon a finding that public disclosure will likely result in a
clearly defined, serious injury to the party or third party requesting
confidential treatment;
(2) After finding that the material constitutes sensitive personal
information, as defined in Sec. 1081.112(e);
(3) If all parties, including third parties to the extent their
information is at issue, stipulate to the entry of a protective order;
or
(4) Where public disclosure is prohibited by law.
(d) Requests for additional information supporting confidentiality.
The hearing officer may require a movant under paragraph (b) of this
section to furnish in writing additional information with respect to
the grounds for confidentiality. Failure to supply the information so
requested within seven days from the date of receipt by the movant of a
notice of the information required shall be deemed a waiver of the
objection to public disclosure of that portion of the documents to
which the additional information relates, unless the hearing officer
shall otherwise order for good cause shown at or before the expiration
of such seven-day period.
(e) Confidentiality of documents pending decision. Pending a
determination of a motion under this section, the documents as to which
confidential treatment is sought and any other documents that would
reveal the confidential information in those documents shall be
maintained under seal and shall be disclosed only in accordance with
orders of the hearing officer. Any order issued in connection with a
motion under this section shall be public unless the order would
disclose information as to which a protective order has been granted,
in which case that portion of the order that would reveal the protected
information shall be nonpublic.
Sec. 1081.120 Settlement.
(a) Availability. Any respondent in an adjudication proceeding
instituted under this part, may, at any time, propose in writing an
offer of settlement.
(b) Procedure. An offer of settlement shall state that it is made
pursuant to this section; shall recite or incorporate as a part of the
offer the provisions of paragraphs (c)(3) and (4) of this section;
shall be signed by the person making the offer, not by counsel; and
shall be submitted to enforcement counsel.
(c) Consideration of offers of settlement. (1) Offers of settlement
shall be considered when time, the nature of the proceedings, and the
public interest permit.
(2) Any settlement offer shall be presented to the Director with a
recommendation, except that, if the recommendation is unfavorable, the
offer shall not be presented to the Director unless the person making
the offer so requests.
(3) By submitting an offer of settlement, the person making the
offer waives, subject to acceptance of the offer:
(i) All hearings pursuant to the statutory provisions under which
the proceeding has been instituted;
(ii) The filing of proposed findings of fact and conclusions of
law;
(iii) Proceedings before, and a recommended decision by, a hearing
officer;
(iv) All post-hearing procedures;
(v) Judicial review by any court; and
(vi) Any objection to the jurisdiction of the Bureau under section
1053 of the Dodd-Frank Act.
(4) By submitting an offer of settlement the person further waives:
(i) Such provisions of this part or other requirements of law as
may be construed to prevent any Bureau employee from participating in
the preparation of, or advising the Director as to, any order, opinion,
finding of fact, or conclusion of law to be entered pursuant to the
offer; and
(ii) Any right to claim bias or prejudgment by the Director based
on the consideration of or discussions concerning settlement of all or
any part of the proceeding.
(5) If the Director rejects the offer of settlement, the person
making the offer shall be notified of the Director's action and the
offer of settlement shall be deemed withdrawn. The rejected offer shall
not constitute a part of the record in any proceeding against the
person making the offer, provided, however, that rejection of an offer
of settlement does not affect the continued validity of waivers
pursuant to paragraph (c)(4) of this section with respect to any
discussions concerning the rejected offer of settlement.
(d) Consent orders. If the Director accepts the offer of
settlement, all terms and conditions of a settlement entered into under
this section shall be recorded in a written stipulation signed by all
settling parties, and a consent order concluding the proceeding. The
stipulation and consent order shall be filed pursuant to Sec.
1081.111, and shall recite or incorporate as a part of the stipulation
the provisions of paragraphs (c)(3) and (4) of this section. The
Director will then issue a consent order, which shall be a final order
concluding the proceeding.
Sec. 1081.121 Cooperation with other agencies.
It is the policy of the Bureau to cooperate with other governmental
agencies to avoid unnecessary overlap or duplication of regulatory
functions.
Subpart B--Initiation of Proceedings and Prehearing Rules
Sec. 1081.200 Commencement of proceeding and contents of notice of
charges.
(a) Commencement of proceeding. A proceeding governed by subparts A
through D of this part is commenced when the Bureau, through the Office
of Enforcement, files a notice of charges in accordance with Sec.
1081.111. The notice of charges must be served by the Office of
Enforcement upon the respondent in accordance with Sec.
1081.113(d)(1).
(b) Contents of a notice of charges. The notice of charges must set
forth:
(1) The legal authority for the proceeding and for the Bureau's
jurisdiction over the proceeding;
(2) A statement of the matters of fact and law showing that the
Bureau is entitled to relief;
(3) A proposed order or prayer for an order granting the requested
relief;
(4) The time and place of the hearing as required by law or
regulation;
(5) The time within which to file an answer as required by law or
regulation;
(6) That the answer shall be filed and served in accordance with
subpart A of this part; and
(7) The docket number for the adjudication proceeding.
(c) Publication of notice of charges. Unless otherwise ordered by
the Director, the notice of charges shall be given general circulation
by release to the public, by publication on the Bureau's website and,
where directed by the hearing officer or the Director, by publication
in the Federal Register. The Bureau may publish any notice of charges
after 14 days from the date of service except if there is a pending
motion for a protective order filed pursuant to Sec. 1081.119.
(d) Commencement of proceeding through a consent order.
Notwithstanding paragraph (a) of this section, where the parties agree
to settlement before the filing of a notice of charges, a proceeding
may be commenced by filing a stipulation and
[[Page 48748]]
consent order. The stipulation and consent order shall be filed
pursuant to Sec. 1081.111. The stipulation shall contain the
information required under Sec. 1081.120(d), and the consent order
shall contain the information required under paragraphs (b)(1) and (2)
of this section. The proceeding shall be concluded upon issuance of the
consent order by the Director.
(e) Voluntary dismissal--(1) Without an order. The Office of
Enforcement may voluntarily dismiss an adjudication proceeding without
an order entered by a hearing officer by filing either:
(i) A notice of dismissal before the respondent(s) serves an
answer; or
(ii) A stipulation of dismissal signed by all parties who have
appeared.
(2) Effect. Unless the notice or stipulation states otherwise, the
dismissal is without prejudice, and does not operate as an adjudication
on the merits.
Sec. 1081.201 Answer and disclosure statement and notification of
financial interest.
(a) Time to file answer. Within 14 days of service of the notice of
charges, respondent shall file an answer as designated in the notice of
charges.
(b) Content of answer. An answer must specifically respond to each
paragraph or allegation of fact contained in the notice of charges and
must admit, deny, or state that the party lacks sufficient information
to admit or deny each allegation of fact. A statement of lack of
information has the effect of a denial. Denials must fairly meet the
substance of each allegation of fact denied; general denials are not
permitted. When a respondent denies part of an allegation, that part
must be denied and the remainder specifically admitted. Any allegation
of fact in the notice of charges which is not denied in the answer
shall be deemed admitted for purposes of the proceeding. A respondent
is not required to respond to the portion of a notice of charges that
constitutes the prayer for relief or proposed order. The answer must
set forth affirmative defenses, if any, asserted by the respondent.
(c) If the allegations of the complaint are admitted. If the
respondent elects not to contest the allegations of fact set forth in
the notice of charges, the answer shall consist of a statement that the
respondent admits all of the material allegations to be true. Such an
answer shall constitute a waiver of hearings as to the facts alleged in
the notice of charges, and together with the notice of charges will
provide a record basis on which the hearing officer shall issue a
recommended decision containing appropriate findings and conclusions
and a proposed order disposing of the proceeding. In such an answer,
the respondent may, however, reserve the right to submit proposed
findings of fact and conclusions of law under Sec. 1081.305.
(d) Default. (1) Failure of a respondent to file an answer within
the time provided shall be deemed to constitute a waiver of the
respondent's right to appear and contest the allegations of the notice
of charges and to authorize the hearing officer, without further notice
to the respondent, to find the facts to be as alleged in the notice of
charges and to enter a recommended decision containing appropriate
findings and conclusions. In such cases, respondent shall have no right
to appeal pursuant to Sec. 1081.402, but must instead proceed pursuant
to paragraph (d)(2) of this section.
(2) A motion to set aside a default shall be made within a
reasonable time, state the reasons for the failure to appear or defend,
and specify the nature of the proposed defense in the proceeding. In
order to prevent injustice and on such conditions as may be
appropriate, the hearing officer, at any time prior to the filing of
the recommended decision, or the Director, at any time, may for good
cause shown set aside a default.
(e) Disclosure statement and notification of financial interest--
(1) Who must file; contents. A respondent, nongovernmental intervenor,
or nongovernmental amicus must file a disclosure statement and
notification of financial interest that:
(i) Identifies any parent corporation, any publicly owned
corporation owning ten percent or more of its stock, and any publicly
owned corporation not a party to the proceeding that has a financial
interest in the outcome of the proceeding and the nature of that
interest; or
(ii) States that there are no such corporations.
(2) Time for filing; supplemental filing. A respondent,
nongovernmental intervenor, or nongovernmental amicus must:
(i) File the disclosure statement with its first appearance,
pleading, motion, response, or other request addressed to the hearing
officer or the Bureau; and
(ii) Promptly file a supplemental statement if any required
information changes.
Sec. 1081.202 Amended pleadings.
(a) Amendments before the hearing. The notice of charges, answer,
or any other pleading may be amended or supplemented only with the
opposing party's written consent or leave of the hearing officer. The
respondent must answer an amended notice of charges within the time
remaining for the respondent's answer to the original notice of
charges, or within 14 days after service of the amended notice of
charges, whichever is later, unless the hearing officer orders
otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised
in the notice of charges or answer are tried at the hearing by express
or implied consent of the parties, they will be treated in all respects
as if they had been raised in the notice of charges or answer, and no
formal amendments are required. If evidence is objected to at the
hearing on the ground that it is not within the issues raised by the
notice of charges or answer, the hearing officer may admit the evidence
when admission is likely to assist in adjudicating the merits of the
action and the objecting party fails to satisfy the hearing officer
that the admission of such evidence would unfairly prejudice that
party's action or defense upon the merits. The hearing officer may
grant a continuance to enable the objecting party to meet such
evidence.
Sec. 1081.203 Scheduling conference.
(a) Meeting of the parties before scheduling conference. As early
as practicable before the scheduling conference described in paragraph
(b) of this section, counsel for the parties shall meet to discuss the
nature and basis of their claims and defenses and the possibilities for
a prompt settlement or resolution of the case. The parties shall also
discuss and agree, if possible, on the matters set forth in paragraph
(b) of this section.
(b) Scheduling conference. Within 21 days of service of the notice
of charges or such other time as the parties and hearing officer may
agree, counsel for all parties shall appear before the hearing officer
in person at a specified time and place or by telephone for the purpose
of scheduling the course and conduct of the proceeding. This meeting or
telephone conference is called a scheduling conference. At the
scheduling conference, counsel for the parties shall be prepared to
address:
(1) Determination of the dates and location of the hearing,
including, in proceedings under section 1053(b) of the Dodd-Frank Act,
whether the hearing should commence later than 60 days after service of
the notice of charges;
(2) Simplification and clarification of the issues;
(3) Amendments to pleadings;
(4) Settlement of any or all issues;
[[Page 48749]]
(5) Production of documents as set forth in Sec. 1081.206 and of
witness statements as set forth in Sec. 1081.207, and prehearing
production of documents in response to subpoenas duces tecum as set
forth in Sec. 1081.208;
(6) Whether or not the parties intend to move for summary
disposition of any or all issues;
(7) Whether the parties intend to seek the deposition of witnesses
pursuant to Sec. 1081.209;
(8) A schedule for the exchange of expert reports and the taking of
expert depositions, if any; and
(9) Such other matters as may aid in the orderly disposition of the
proceeding.
(c) Transcript. The hearing officer, in his or her discretion, may
require that a scheduling conference be recorded by a court reporter. A
transcript of the conference and any materials filed, including orders,
becomes part of the record of the proceeding. A party may obtain a copy
of the transcript at his or her expense.
(d) Scheduling order. At or within seven days following the
conclusion of the scheduling conference, the hearing officer shall
serve on each party an order setting forth the date and location of the
hearing and any agreements reached and any procedural determinations
made.
(e) Failure to appear, default. Any person who is named in a notice
of charges as a person against whom findings may be made or sanctions
imposed and who fails to appear, in person or through counsel, at a
scheduling conference of which he or she has been duly notified may be
deemed in default pursuant to Sec. 1081.201(d)(1). A party may make a
motion to set aside a default pursuant to Sec. 1081.201(d)(2).
(f) Public access. The scheduling conference shall be public unless
the hearing officer determines, based on the standard set forth in
Sec. 1081.119(c), that the conference (or any part thereof) shall be
closed to the public.
Sec. 1081.204 Consolidation and severance of actions.
(a) Consolidation. (1) On the motion of any party, or on the
hearing officer's own motion, the hearing officer may consolidate, for
some or all purposes, any two or more proceedings, if each such
proceeding involves or arises out of the same transaction, occurrence
or series of transactions or occurrences, or involves at least one
common respondent or a material common question of law or fact, unless
such consolidation would cause unreasonable delay or injustice.
(2) In the event of consolidation under paragraph (a)(1) of this
section, appropriate adjustment to the prehearing schedule may be made
to avoid unnecessary expense, inconvenience, or delay.
(b) Severance. The hearing officer may, upon the motion of any
party, sever the proceeding for separate resolution of the matter as to
any respondent only if the hearing officer finds that:
(1) Undue prejudice or injustice to the moving party would result
from not severing the proceeding; and
(2) Such undue prejudice or injustice would outweigh the interests
of judicial economy and expedition in the complete and final resolution
of the proceeding.
Sec. 1081.205 Non-dispositive motions.
(a) Scope. This section applies to all motions except motions to
dismiss and motions for summary disposition. A non-dispositive motion
filed pursuant to another section of this part shall comply with any
specific requirements of that section and this section to the extent
these requirements are not inconsistent.
(b) In writing. (1) Unless made during a hearing or conference, an
application or request for an order or ruling must be made by written
motion.
(2) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as
otherwise directed by the hearing officer. Written memoranda, briefs,
affidavits or other relevant material or documents may be filed in
support of or in opposition to a motion.
(c) Oral motions. The Director or the hearing officer, as
appropriate, may order that an oral motion be submitted in writing.
(d) Responses and replies. (1) Except as otherwise provided in this
section, within 14 days after service of any written motion, or within
such other period of time as may be established by the hearing officer
or the Director, as appropriate, any party may file a written response
to a motion. The hearing officer shall not rule on any oral or written
motion before each party has had an opportunity to file a response.
(2) Reply briefs, if any, may be filed within seven days after
service of the response.
(3) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed consent by that party to the entry
of an order substantially in the form of the order accompanying the
motion.
(e) Length limitations. No motion subject to this section (together
with the brief in support of the motion) or brief in response to the
motion shall exceed 15 pages in length, exclusive of pages containing
the table of contents, table of authorities, and any addendum that
consists solely of copies of applicable cases, pertinent legislative
provisions or rules, and exhibits. No reply brief shall exceed six
pages in length, exclusive of pages containing the table of contents,
table of authorities, and any addendum that consists solely of copies
of applicable cases, pertinent legislative provisions or rules, and
exhibits. Motions for leave to file motions and briefs in excess of
these limitations are disfavored.
(f) Meet and confer requirements. Each motion filed under this
section shall be accompanied by a signed statement representing that
counsel for the moving party has conferred or made a good faith effort
to confer with opposing counsel in a good faith effort to resolve by
agreement the issues raised by the motion and has been unable to reach
such an agreement. If some of the matters in controversy have been
resolved by agreement, the statement shall specify the matters so
resolved and the matters remaining unresolved.
(g) Ruling on non-dispositive motions. Unless otherwise provided by
a relevant section of this part, a hearing officer shall rule on non-
dispositive motions. Such ruling shall be issued within 14 days after
the expiration of the time period allowed for the filing of all motion
papers authorized by this section. The Director, for good cause, may
extend the time allowed for a ruling.
(h) Proceedings not stayed. A motion under consideration by the
Director or the hearing officer shall not stay proceedings before the
hearing officer unless the Director or the hearing officer, as
appropriate, so orders.
(i) Dilatory motions. Frivolous, dilatory, or repetitive motions
are prohibited. The filing of such motions may form the basis for
sanctions.
Sec. 1081.206 Availability of documents for inspection and copying.
For purposes of this section, the term documents shall include any
book, document, record, report, memorandum, paper, communication,
tabulation, chart, logs, electronic files, or other data or data
compilations stored in any medium.
(a) Documents to be available for inspection and copying. (1)
Unless otherwise provided by this section, or by order of the hearing
officer, the Office of Enforcement shall make
[[Page 48750]]
available for inspection and copying by any respondent documents
obtained by the Office of Enforcement prior to the institution of
proceedings, from persons not employed by the Bureau, in connection
with the investigation leading to the institution of proceedings. Such
documents shall include:
(i) Any documents turned over in response to civil investigative
demands or other written requests to provide documents or to be
interviewed issued by the Office of Enforcement;
(ii) All transcripts and transcript exhibits; and
(iii) Any other documents obtained from persons not employed by the
Bureau.
(2) In addition, the Office of Enforcement shall make available for
inspection and copying by any respondent:
(i) Each civil investigative demand or other written request to
provide documents or to be interviewed issued by the Office of
Enforcement in connection with the investigation leading to the
institution of proceedings; and
(ii) Any final examination or inspection reports prepared by any
other Office of the Bureau if the Office of Enforcement either intends
to introduce any such report into evidence or to use any such report to
refresh the recollection of, or impeach, any witness.
(3) Nothing in paragraph (a) of this section shall limit the right
of the Office of Enforcement to make available any other document, or
shall limit the right of a respondent to seek access to or production
pursuant to subpoena of any other document, or shall limit the
authority of the hearing officer to order the production of any
document pursuant to subpoena.
(4) Nothing in paragraph (a) of this section shall require the
Office of Enforcement to produce a final examination or inspection
report prepared by any other Office of the Bureau or any other
government agency to a respondent who is not the subject of that
report.
(b) Documents that may be withheld. (1) The Office of Enforcement
may withhold a document if:
(i) The document is privileged;
(ii) The document is an internal memorandum, note or writing
prepared by a person employed by the Bureau or another government
agency, other than an examination or supervision report as specified in
paragraph (a)(2)(ii) of this section, or would otherwise be subject to
the work product doctrine and will not be offered in evidence;
(iii) The document was obtained from a domestic or foreign
governmental entity and is either not relevant to the resolution of the
proceeding or was provided on condition that the information not be
disclosed;
(iv) The document would disclose the identity of a confidential
source;
(v) Applicable law prohibits the disclosure of the document; or
(vi) The hearing officer grants leave to withhold a document or
category of documents as not relevant to the subject matter of the
proceeding or otherwise, for good cause shown.
(2) Nothing in paragraph (b)(1) of this section authorizes the
Office of Enforcement in connection with an adjudication proceeding to
withhold material exculpatory evidence in the possession of the Office
that would otherwise be required to be produced pursuant to paragraph
(a) of this section.
(c) Withheld document list. The hearing officer may require the
Office of Enforcement to produce a list of documents or categories of
documents withheld pursuant to paragraphs (b)(1)(i) through (v) of this
section or to submit to the hearing officer any document withheld,
except for any documents that are being withheld pursuant to paragraph
(b)(1)(iii) of this section, in which case the Office of Enforcement
shall inform the other parties of the fact that such documents are
being withheld, but no further disclosures regarding those documents
shall be required. The hearing officer may determine whether any
withheld document should be made available for inspection and copying.
When similar documents are withheld pursuant to paragraphs (b)(1)(i)
through (v) of this section, those documents may be identified by
category instead of by individual document. The hearing officer retains
discretion to determine when an identification by category is
insufficient.
(d) Timing of inspection and copying. Unless otherwise ordered by
the hearing officer, the Office of Enforcement shall commence making
documents available to a respondent for inspection and copying pursuant
to this section no later than 14 days after service of the notice of
charges.
(e) Place of inspection and copying. Documents subject to
inspection and copying pursuant to this section shall be made available
to the respondent for inspection and copying at the Bureau office where
they are ordinarily maintained, or at such other place as the parties,
in writing, may agree. A respondent shall not be given custody of the
documents or leave to remove the documents from the Bureau's offices
pursuant to the requirements of this section other than by written
agreement of the Office of Enforcement. Such agreement shall specify
the documents subject to the agreement, the date they shall be
returned, and such other terms or conditions as are appropriate to
provide for the safekeeping of the documents. If the Office of
Enforcement determines that production of some or all the documents
required to be produced under this section can be produced in an
electronic format, the Office of Enforcement may instead produce the
documents in an electronic format.
(f) Copying costs and procedures. The respondent may obtain a
photocopy of any documents made available for inspection or, at the
discretion of the Office of Enforcement, electronic copies of such
documents. The respondent shall be responsible for the cost of
photocopying. Unless otherwise ordered, charges for copies made by the
Office of Enforcement at the request of the respondent will be at the
rate charged pursuant to part 1070. The respondent shall be given
access to the documents at the Bureau's offices or such other place as
the parties may agree during normal business hours for copying of
documents at the respondent's expense.
(g) Duty to supplement. If the Office of Enforcement acquires
information that it intends to rely upon at a hearing after making its
disclosures under paragraph (a)(1) of this section, the Office of
Enforcement shall supplement its disclosures to include such
information.
(h) Failure to make documents available--harmless error. In the
event that a document required to be made available to a respondent
pursuant to this section is not made available by the Office of
Enforcement, no rehearing or redecision of a proceeding already heard
or decided shall be required unless the respondent establishes that the
failure to make the document available was not harmless error.
(i) Disclosure of privileged or protected information or
communications; scope of waiver; obligations of receiving party. (1)
The disclosure of privileged or protected information or communications
by any party during an adjudication proceeding shall not operate as a
waiver if:
(i) The disclosure was inadvertent;
(ii) The holder of the privilege or protection took reasonable
steps to prevent disclosure; and
(iii) The holder promptly took reasonable steps to rectify the
error, including notifying any party that received the information or
communication of the claim and the basis for it.
[[Page 48751]]
(2) After being notified, the receiving party must promptly return,
sequester, or destroy the specified information and any copies it has;
must not use or disclose the information until the claim is resolved;
must take reasonable steps to retrieve the information if the party
disclosed it before being notified; and may promptly present the
information to the hearing officer under seal for a determination of
the claim. The producing party must preserve the information until the
claim is resolved.
(3) The disclosure of privileged or protected information or
communications by any party during an adjudication proceeding shall
waive the privilege or protection, with respect to other parties to the
proceeding, as to undisclosed information or communications only if:
(i) The waiver is intentional;
(ii) The disclosed and undisclosed information or communications
concern the same subject matter; and
(iii) They ought in fairness to be considered together.
Sec. 1081.207 Production of witness statements.
(a) Availability. Any respondent may move that the Office of
Enforcement produce for inspection and copying any statement of any
person called or to be called as a witness by the Office of Enforcement
that pertains, or is expected to pertain, to his or her direct
testimony and that would be required to be produced pursuant to the
Jencks Act, 18 U.S.C. 3500, if the adjudication proceeding were a
criminal proceeding. For purposes of this section, the term
``statement'' shall have the meaning set forth in 18 U.S.C. 3500(e).
Such production shall be made at a time and place fixed by the hearing
officer and shall be made available to any party, provided, however,
that the production must be made under conditions intended to preserve
the items to be inspected or copied.
(b) Failure to produce--harmless error. In the event that a
statement required to be made available to a respondent pursuant to
this section is not made available by the Office of Enforcement, no
rehearing or redecision of a proceeding already heard or decided shall
be required unless the respondent establishes that the failure to make
the statement available was not harmless error.
Sec. 1081.208 Subpoenas.
(a) Availability. In connection with any hearing ordered by the
hearing officer, a party may request the issuance of one or more
subpoenas requiring the attendance and testimony of witnesses at the
designated time and place of the hearing, or the production of
documentary or other tangible evidence returnable at any designated
time or place.
(b) Procedure. Unless made on the record at a hearing, requests for
issuance of a subpoena shall be made in writing, and filed and served
on each party pursuant to subpart A of this part. The request must
contain a proposed subpoena and a brief statement showing the general
relevance and reasonableness of the scope of testimony or documents
sought.
(c) Signing may be delegated. A hearing officer may authorize
issuance of a subpoena, and may delegate the manual signing of the
subpoena to any other person.
(d) Standards for issuance. The hearing officer shall promptly
issue any subpoena requested pursuant to this section. However, where
it appears to the hearing officer that the subpoena sought may be
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may, in his or her discretion, as a condition precedent to the
issuance of the subpoena, require the person seeking the subpoena to
show further the general relevance and reasonable scope of the
testimony or other evidence sought. If after consideration of all the
circumstances, the hearing officer determines that the subpoena or any
of its terms is unreasonable, oppressive, excessive in scope, or unduly
burdensome, he or she may refuse to issue the subpoena, or issue it
only upon such conditions as fairness requires. In making the foregoing
determination, the hearing officer may inquire of the other
participants whether they will stipulate to the facts sought to be
proved.
(e) Service. Upon issuance by the hearing officer, the party making
the request shall serve the subpoena on the person named in the
subpoena and on each party in accordance with Sec. 1081.113(c).
Subpoenas may be served in any State, territory, possession of the
United States, or the District of Columbia, on any person or company
doing business in any State, territory, possession of the United
States, or the District of Columbia, or as otherwise permitted by law.
(f) Tender of fees required. When a subpoena compelling the
attendance of a person at a hearing is issued at the request of anyone
other than an officer or agency of the United States, service is valid
only if the subpoena is accompanied by a tender to the subpoenaed
person of the fees for one day's attendance and mileage specified by
Sec. 1081.116.
(g) Production of documentary material. Production of documentary
material in response to a subpoena shall be made under a sworn
certificate, in such form as the subpoena designates, by the person to
whom the subpoena is directed or, if not a natural person, by any
person having knowledge of the facts and circumstances relating to such
production, to the effect that all of the documentary material required
by the subpoena and in the possession, custody, or control of the
person to whom the subpoena is directed has been produced and made
available to the custodian.
(h) Motion to quash or modify. (1) Procedure. Any person to whom a
subpoena is directed, or who is an owner, creator, or the subject of
the documents that are to be produced pursuant to a subpoena, or any
party may, prior to the time specified therein for compliance, but in
no event more than seven days after the date of service of such
subpoena, move that the subpoena be quashed or modified. Such motion
shall be filed and served on all parties pursuant to subpart A of this
part. Notwithstanding Sec. 1081.205, the party on whose behalf the
subpoena was issued or enforcement counsel may, within seven days of
service of the motion, file a response to the motion. Reply briefs are
not permitted unless requested by the hearing officer. Filing a motion
to modify a subpoena does not stay the movant's obligation to comply
with those portions of the subpoena that the person has not sought to
modify.
(2) Standards governing motion to quash or modify. If compliance
with the subpoena would be unreasonable, oppressive, or unduly
burdensome, the hearing officer shall quash or modify the subpoena, or
may order return of the subpoena only upon specified conditions. These
conditions may include but are not limited to a requirement that the
party on whose behalf the subpoena was issued shall make reasonable
compensation to the person to whom the subpoena was addressed for the
cost of copying or transporting evidence to the place for return of the
subpoena.
(i) Enforcing subpoenas. If a subpoenaed person fails to comply
with any subpoena issued pursuant to this section or any order of the
hearing officer which directs compliance with all or any portion of a
subpoena, the Bureau's General Counsel may, on its own motion or at the
request of the party on whose behalf the subpoena was issued, apply to
an appropriate United States district court, in the name of the
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Bureau but on relation of such party, for an order requiring compliance
with so much of the subpoena as the hearing officer has not quashed or
modified, unless, in the judgment of the General Counsel, the
enforcement of such subpoena would be inconsistent with law and the
policies of title X of the Dodd-Frank Act. Failure to request that the
Bureau's General Counsel seek enforcement of a subpoena constitutes a
waiver of any claim of prejudice predicated upon the unavailability of
the testimony or evidence sought.
Sec. 1081.209 Deposition of witness unavailable for hearing.
(a) General rules. (1) If a witness will not be available for the
hearing, a party desiring to preserve that witness's testimony for the
record may request in accordance with the procedures set forth in this
section that the hearing officer issue a subpoena, including a subpoena
duces tecum, requiring the attendance of the witness at a deposition.
The hearing officer may issue a deposition subpoena under this section
upon a showing that:
(i) The witness will be unable to attend or may be prevented from
attending the hearing because of age, sickness, or infirmity, or will
otherwise be unavailable;
(ii) The witness's unavailability was not procured or caused by the
subpoenaing party;
(iii) The testimony is reasonably expected to be material; and
(iv) Taking the deposition will not result in any undue burden to
any other party and will not cause undue delay of the proceeding.
(2) In addition to making a showing as required by paragraph (a)(1)
of this section, the request for a deposition subpoena must contain a
proposed deposition subpoena and a brief statement showing the general
relevance and reasonableness of the scope of testimony and documents
sought, and the time and place for taking the deposition. Any request
to record the deposition by audio-visual means must be made in the
request for a deposition subpoena.
(3) Any requested deposition subpoena that sets forth a valid basis
for its issuance must be promptly issued, unless the hearing officer on
his or her own motion requires a written response or requires
attendance at a conference concerning whether the requested subpoena
should be issued. However, where it appears to the hearing officer that
the deposition subpoena sought may be unreasonable, oppressive,
excessive in scope, or unduly burdensome, he or she may, in his or her
discretion, as a condition precedent to the issuance of the deposition
subpoena, require the person seeking the deposition subpoena to show
further the general relevance and reasonable scope of the testimony or
other evidence sought. If after consideration of all the circumstances,
the hearing officer determines that the deposition subpoena or any of
its terms is unreasonable, oppressive, excessive in scope, or unduly
burdensome, he or she may refuse to issue the deposition subpoena, or
issue it only upon such conditions as fairness requires. In making the
foregoing determination, the hearing officer may inquire of the other
participants whether they will stipulate to the facts sought to be
proved.
(4) Unless the hearing officer orders otherwise, no deposition
under this section shall be taken on fewer than 14 days' notice to the
witness and all parties.
(b) Procedure. Unless made on the record at a hearing, requests for
issuance of a deposition subpoena shall be made in writing, and filed
and served on each party pursuant to subpart A of this part.
(c) Signing may be delegated. A hearing officer may authorize
issuance of a deposition subpoena, and may delegate the manual signing
of the deposition subpoena to any other person.
(d) Service. Upon issuance by the hearing officer, the party making
the request shall serve the subpoena on the person named in the
subpoena and on each party in accordance with Sec. 1081.113(c).
Deposition subpoenas may be served in any State, territory, possession
of the United States, or the District of Columbia, on any person or
company doing business in any State, territory, possession of the
United States, or the District of Columbia, or as otherwise permitted
by law.
(e) Tender of fees required. When a subpoena compelling the
attendance of a person at a deposition is issued at the request of
anyone other than an officer or agency of the United States, service is
valid only if the subpoena is accompanied by a tender to the subpoenaed
person of the fees for one day's attendance and mileage specified by
Sec. 1081.116.
(f) Motion to quash or modify. (1) Procedure. Any person to whom a
deposition subpoena is directed, or who is an owner, creator, or the
subject of the documents that are to be produced pursuant to a
deposition subpoena, or any party may, prior to the time specified
therein for compliance, but in no event more than ten days after the
date of service of such subpoena, move that the deposition subpoena be
quashed or modified. Such motion must include a statement of the basis
for the motion to quash or modify the deposition subpoena, and shall be
filed and served on all parties pursuant to subpart A of this part.
Notwithstanding Sec. 1081.205, the party on whose behalf the
deposition subpoena was issued or enforcement counsel may, within five
days of service of the motion, file a response to the motion. Reply
briefs are not permitted unless requested by the hearing officer.
(2) Standards governing motion to quash or modify. If compliance
with the deposition subpoena would be unreasonable, oppressive or
unduly burdensome, or the deposition subpoena does not meet the
requirements set forth in paragraph (a)(1) of this section, the hearing
officer shall quash or modify the deposition subpoena, or may order
return of the deposition subpoena only upon specified conditions. These
conditions may include but are not limited to a requirement that the
party on whose behalf the deposition subpoena was issued shall make
reasonable compensation to the person to whom the deposition subpoena
was addressed for the cost of copying or transporting evidence to the
place for return of the deposition subpoena.
(g) Procedure upon deposition. (1) Depositions shall be taken
before any person before whom a deposition may be taken pursuant to the
Federal Rules of Civil Procedure (the ``deposition officer'').
(2) The witness being deposed may have an attorney present during
the deposition.
(3) Each witness testifying pursuant to a deposition subpoena must
be duly sworn, and each party shall have the right to examine the
witness. Objections to questions or documents must be in short form,
stating the grounds for the objection. Objections to questions of
evidence shall be noted by the deposition officer upon the deposition,
but a deposition officer other than the hearing officer shall not have
the power to decide on the competency, materiality, or relevance of
evidence. Failure to object to questions or documents is not deemed a
waiver except where the ground for the objection might have been
avoided if the objection had been timely presented. All questions,
answers, and objections must be recorded.
(4) The deposition must be subscribed by the witness, unless the
parties and the witness, by stipulation, have waived the signing, or
the witness is ill, cannot be found, or has refused to sign. If the
deposition is not subscribed by the
[[Page 48753]]
witness, the court reporter taking the deposition shall certify that
the transcript is a true and complete transcript of the deposition.
(5) The original deposition transcript and exhibits shall be filed
with the Office of Administrative Adjudication. The cost of the
transcript shall be paid by the party requesting the deposition. A copy
of the deposition shall be available to the deponent and each party for
purchase at prescribed rates.
(h) Enforcing subpoenas. Any party may move before the hearing
officer for an order compelling the witness to answer any questions the
witness has refused to answer or submit any evidence the witness has
refused to submit during the deposition. If a subpoenaed person fails
to comply with any order of the hearing officer which directs
compliance with all or any portion of a deposition subpoena under this
section, the Bureau's General Counsel may, on its own motion or at the
request of the party on whose behalf the subpoena was issued, apply to
an appropriate United States district court, in the name of the Bureau
but on relation of such party, for an order requiring compliance with
so much of the subpoena as the hearing officer has not quashed or
modified, unless, in the judgment of the General Counsel, the
enforcement of such subpoena would be inconsistent with law and the
policies of title X of the Dodd-Frank Act. Failure to request that the
Bureau seek enforcement of a subpoena constitutes a waiver of any claim
of prejudice predicated upon the unavailability of the testimony or
evidence sought.
Sec. 1081.210 Expert discovery.
(a) At a date set by the hearing officer at the scheduling
conference, each party shall serve the other with a report prepared by
each of its expert witnesses. Each party shall serve the other parties
with a list of any rebuttal expert witnesses and a rebuttal report
prepared by each such witness not later than 28 days after the deadline
for service of expert reports, unless another date is set by the
hearing officer. A rebuttal report shall be limited to rebuttal of
matters set forth in the expert report for which it is offered in
rebuttal. If material outside the scope of fair rebuttal is presented,
a party may file a motion not later than seven days after the deadline
for service of rebuttal reports, seeking appropriate relief with the
hearing officer, including striking all or part of the report, leave to
submit a surrebuttal report by the party's own experts, or leave to
call a surrebuttal witness and to submit a surrebuttal report by that
witness.
(b) No party may call an expert witness at the hearing unless he or
she has been listed and has provided reports as required by this
section, unless otherwise directed by the hearing officer at a
scheduling conference. Each side will be limited to calling at the
hearing five expert witnesses, including any rebuttal or surrebuttal
expert witnesses. A party may file a motion seeking leave to call
additional expert witnesses due to extraordinary circumstances.
(c) Each report shall be signed by the expert and contain a
complete statement of all opinions to be expressed and the basis and
reasons therefore; the data, materials, or other information considered
by the witness in forming the opinions; any exhibits to be used as a
summary of or support for the opinions; the qualifications of the
witness, including a list of all publications authored or co-authored
by the witness within the preceding ten years; the compensation to be
paid for the study and testimony; and a listing of any other cases in
which the witness has testified or sought to testify as an expert at
trial or hearing, or by deposition within the preceding four years. A
rebuttal or surrebuttal report need not include any information already
included in the initial report of the witness.
(d) A party may depose any person who has been identified as an
expert whose opinions may be presented at trial. Unless otherwise
ordered by the hearing officer, a deposition of any expert witness
shall be conducted after the disclosure of a report prepared by the
witness in accordance with paragraph (a) of this section, and at least
seven days prior to the deadline for submission of rebuttal expert
reports. A deposition of an expert witness shall be completed no later
than 14 days before the hearing unless otherwise ordered by the hearing
officer. No expert deposition shall exceed eight hours on the record,
absent agreement of the parties or an order of the hearing officer for
good cause shown. Expert depositions shall be conducted pursuant to the
procedures set forth in Sec. 1081.209(g).
(e) A party may not discover facts known or opinions held by an
expert who has been retained or specifically employed by another party
in anticipation of litigation or preparation for the hearing and who is
not listed as a witness for the hearing. A party may not discover
drafts of any report required by this section, regardless of the form
in which the draft is recorded, or any communications between another
party's attorney and any of that other party's experts, regardless of
the form of the communications, except to the extent that the
communications:
(1) Relate to compensation for the testifying expert's study or
testimony;
(2) Identify facts or data that the other party's attorney provided
and that the testifying expert considered in forming the opinions to be
expressed; or
(3) Identify assumptions that the other party's attorney provided
and that the testifying expert relied on in forming the opinions to be
expressed.
(f) The hearing officer shall have the discretion to dispense with
the requirement of expert discovery in appropriate cases.
Sec. 1081.211 Interlocutory review.
(a) Availability. The Director may, at any time, direct that any
matter be submitted to him or her for review. Subject to paragraph (c)
of this section, the hearing officer may, on his or her own motion or
on the motion of any party, certify any matter for interlocutory review
by the Director. This section is the exclusive remedy for review of a
hearing officer's ruling or order prior to the Director's consideration
of the entire proceeding.
(b) Procedure. Any party's motion for certification of a ruling or
order for interlocutory review shall be filed with the hearing officer
within seven days of service of the ruling or order, shall specify the
ruling or order or parts thereof for which interlocutory review is
sought, shall attach any other portions of the record on which the
moving party relies, and shall otherwise comply with Sec. 1081.205.
Notwithstanding Sec. 1081.205, any response to such a motion must be
filed within seven days of service of the motion. The hearing officer
shall issue a ruling on the motion within seven days of the deadline
for filing a response.
(c) Certification process. Unless the Director directs otherwise, a
ruling or order may not be submitted to the Director for interlocutory
review unless the hearing officer, upon the hearing officer's motion or
upon the motion of a party, certifies the ruling or order in writing.
The hearing officer shall not certify a ruling or order unless:
(1) The ruling or order would compel testimony of Bureau officers
or employees, or those from another governmental agency, or the
production of documentary evidence in the custody of the Bureau or
another governmental agency;
(2) The ruling or order involves a motion for disqualification of
the hearing officer pursuant to Sec. 1081.105(c)(2);
(3) The ruling or order suspended or barred an individual from
appearing
[[Page 48754]]
before the Bureau pursuant to Sec. 1081.107(c); or
(4) Upon motion by a party, the hearing officer is of the opinion
that:
(i) The ruling or order involves a controlling question of law as
to which there is substantial ground for difference of opinion; and
(ii) An immediate review of the ruling or order is likely to
materially advance the completion of the proceeding or subsequent
review will be an inadequate remedy.
(d) Interlocutory review. A party whose motion for certification
has been denied by the hearing officer may petition the Director for
interlocutory review.
(e) Director review. The Director shall determine whether or not to
review a ruling or order certified under this section or the subject of
a petition for interlocutory review. Interlocutory review is
disfavored, and the Director will grant a petition to review a hearing
officer's ruling or order prior to his or her consideration of a
recommended decision only in extraordinary circumstances. The Director
may decline to review a ruling or order certified by a hearing officer
pursuant to paragraph (c) of this section or the petition of a party
who has been denied certification if he or she determines that
interlocutory review is not warranted or appropriate under the
circumstances, in which case he or she may summarily deny the petition.
If the Director determines to grant the review, he or she will review
the matter and issue his or her ruling and order in an expeditious
fashion, consistent with the Bureau's other responsibilities.
(f) Proceedings not stayed. The filing of a motion requesting that
the hearing officer certify any of his or her prior rulings or orders
for interlocutory review or a petition for interlocutory review filed
with the Director, and the grant of any such review, shall not stay
proceedings before the hearing officer unless he or she, or the
Director, shall so order. The Director will not consider a motion for a
stay unless the motion shall have first been made to the hearing
officer.
Sec. 1081.212 Dispositive motions.
(a) Dispositive motions. This section governs the filing of motions
to dismiss and motions for summary disposition. The filing of any such
motion does not obviate a party's obligation to file an answer or take
any other action required by this part or by an order of the hearing
officer, unless expressly so provided by the hearing officer.
(b) Motions to dismiss. A respondent may file a motion to dismiss
asserting that, even assuming the truth of the facts alleged in the
notice of charges, it is entitled to dismissal as a matter of law.
(c) Motion for summary disposition. A party may make a motion for
summary disposition asserting that the undisputed pleaded facts,
admissions, affidavits, stipulations, documentary evidence, matters as
to which official notice may be taken, and any other evidentiary
materials properly submitted in connection with a motion for summary
disposition show that:
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a
matter of law.
(d) Filing of motions for summary disposition and responses. (1)
After a respondent's answer has been filed and documents have been made
available to the respondent for inspection and copying pursuant to
Sec. 1081.206, any party may move for summary disposition in its favor
of all or any part of the proceeding.
(2) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, investigatory depositions, transcripts,
affidavits and any other evidentiary materials that the moving party
contends support his or her position. The motion must also be
accompanied by a brief containing the points and authorities in support
of the contention of the moving party. Any party opposing a motion for
summary disposition must file a statement setting forth those material
facts as to which he or she contends a genuine dispute exists. Such
opposition must be supported by evidence of the same type as may be
submitted in support of a motion for summary disposition and a brief
containing the points and authorities in support of the contention that
summary disposition would be inappropriate.
(3) Any affidavit or declaration submitted in support of or in
opposition to a motion for summary disposition shall set forth such
facts as would be admissible in evidence, shall show affirmatively that
the affiant is competent to testify to the matters stated therein, and
must be signed under oath and penalty of perjury.
(e) Page limitations for dispositive motions. A motion to dismiss
or for summary disposition, together with any brief in support of the
motion (exclusive of any declarations, affidavits, or attachments)
shall not exceed 35 pages in length. Motions for extensions of this
length limitation are disfavored.
(f) Opposition and reply response time and page limitation. Any
party, within 21 days after service of a dispositive motion, or within
such time period as allowed by the hearing officer, may file a response
to such motion. The length limitations set forth in paragraph (e) of
this section shall also apply to such responses. Any reply brief filed
in response to an opposition to a dispositive motion shall be filed
within seven days after service of the opposition. Reply briefs shall
not exceed ten pages.
(g) Oral argument. At the request of any party or on his or her own
motion, the hearing officer may hear oral argument on a dispositive
motion.
(h) Decision on motion. Within 30 days following the expiration of
the time for filing all responses and replies to any dispositive
motion, the hearing officer shall determine whether the motion shall be
granted. If the hearing officer determines that dismissal or summary
disposition is warranted, he or she shall issue a recommended decision
granting the motion. If the hearing officer finds that no party is
entitled to dismissal or summary disposition, he or she shall make a
ruling denying the motion. If it appears that a party, for good cause
shown, cannot present by affidavit, prior to hearing, facts essential
to justify opposition to the motion, the hearing officer shall deny or
defer the motion.
Sec. 1081.213 Partial summary disposition.
If on a motion for summary disposition under Sec. 1081.212 a
decision is not rendered upon the whole case or for all the relief
asked and a hearing is necessary, the hearing officer shall issue an
order specifying the facts that appear without substantial controversy
and directing further proceedings in the action. The facts so specified
shall be deemed established.
Sec. 1081.214 Prehearing conferences.
(a) Prehearing conferences. The hearing officer may, in addition to
the scheduling conference, on his or her own motion or at the request
of any party, direct counsel for the parties to meet with him or her
(in person or by telephone) at a prehearing conference for further
discussion of the issues outlined in Sec. 1081.203, or for discussion
of any additional matters that in the view of the hearing officer will
aid in an orderly disposition of the proceeding, including but not
limited to:
(1) Identification of potential witnesses and limitation on the
number of witnesses;
[[Page 48755]]
(2) The exchange of any prehearing materials including witness
lists, statements of issues, exhibits, and any other materials;
(3) Stipulations, admissions of fact, and the contents,
authenticity, and admissibility into evidence of documents;
(4) Matters of which official notice may be taken; and
(5) Whether the parties intend to introduce prior sworn statements
of witnesses as set forth in Sec. 1081.303(h).
(b) Transcript. The hearing officer, in his or her discretion, may
require that a prehearing conference be recorded by a court reporter. A
transcript of the conference and any materials filed, including orders,
becomes part of the record of the proceeding. A party may obtain a copy
of the transcript at his or her expense.
(c) Public access. Any prehearing conferences shall be public
unless the hearing officer determines, based on the standard set forth
in Sec. 1081.119(c), that the conference (or any part thereof) shall
be closed to the public.
Sec. 1081.215 Prehearing submissions.
(a) Generally. Within the time set by the hearing officer, but in
no case later than 14 days before the start of the hearing, each party
shall serve on every other party:
(1) A prehearing statement, which shall include an outline or
narrative summary of its case or defense, and the legal theories upon
which it will rely;
(2) A final list of witnesses to be called to testify at the
hearing, including the name and address of each witness and a short
summary of the expected testimony of each witness;
(3) Any prior sworn statements that a party intends to admit into
evidence pursuant to Sec. 1081.303(h);
(4) A list of the exhibits to be introduced at the hearing along
with a copy of each exhibit; and
(5) Any stipulations of fact or liability.
(b) Expert witnesses. Each party who intends to call an expert
witness shall also serve, in addition to the information required by
paragraph (a)(2) of this section, a statement of the expert's
qualifications, a listing of other proceedings in which the expert has
given or sought to give expert testimony at trial or hearing or by
deposition within the preceding four years, and a list of publications
authored or co-authored by the expert within the preceding ten years,
to the extent such information has not already been provided pursuant
to Sec. 1081.210.
(c) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the prehearing submissions pursuant to paragraph (a) of
this section, except for good cause shown.
Sec. 1081.216 Amicus participation.
(a) Availability. An amicus brief may be filed only if:
(1) A motion for leave to file the brief has been granted;
(2) The brief is accompanied by written consent of all parties;
(3) The brief is filed at the request of the Director or the
hearing officer, as appropriate; or
(4) The brief is presented by the United States or an officer or
agency thereof, or by a State or a political subdivision thereof.
(b) Procedure. An amicus brief may be filed conditionally with the
motion for leave. The motion for leave shall identify the interest of
the movant and shall state the reasons why a brief of an amicus curiae
is desirable. Except as all parties otherwise consent, any amicus
curiae shall file its brief within the time allowed the party whose
position the amicus will support, unless the Director or hearing
officer, as appropriate, for good cause shown, grants leave for a later
filing. In the event that a later filing is allowed, the order granting
leave to file shall specify when an opposing party may reply to the
brief.
(c) Motions. A motion for leave to file an amicus brief shall be
subject to Sec. 1081.205.
(d) Formal requirements as to amicus briefs. Amicus briefs shall be
filed pursuant to Sec. 1081.111 and shall comply with the requirements
of Sec. 1081.112 and shall be subject to the length limitation set
forth in Sec. 1081.212(e).
(e) Oral argument. An amicus curiae may move to present oral
argument at any hearing before the hearing officer, but such motions
will be granted only for extraordinary reasons.
Subpart C--Hearings
Sec. 1081.300 Public hearings.
All hearings in adjudication proceedings shall be public unless a
confidentiality order is entered by the hearing officer pursuant to
Sec. 1081.119 or unless otherwise ordered by the Director on the
grounds that holding an open hearing would be contrary to the public
interest.
Sec. 1081.301 Failure to appear.
Failure of a respondent to appear in person or by a duly authorized
counsel at the hearing constitutes a waiver of respondent's right to a
hearing and may be deemed an admission of the facts as alleged and
consent to the relief sought in the notice of charges. Without further
proceedings or notice to the respondent, the hearing officer shall file
a recommended decision containing findings of fact and addressing the
relief sought in the notice of charges.
Sec. 1081.302 Conduct of hearings.
All hearings shall be conducted in a fair, impartial, expeditious,
and orderly manner. Enforcement counsel shall present its case-in-chief
first, unless otherwise ordered by the hearing officer, or unless
otherwise expressly specified by law or regulation. Enforcement counsel
shall be the first party to present an opening statement and a closing
statement, and may make a rebuttal statement after the respondent's
closing statement. If there are multiple respondents, respondents may
agree among themselves as to their order of presentation of their
cases, but if they do not agree, the hearing officer shall fix the
order.
Sec. 1081.303 Evidence.
(a) Burden of proof. Enforcement counsel shall have the burden of
proof of the ultimate issue(s) of the Bureau's claims at the hearing.
(b) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material, and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the
Administrative Procedure Act and other applicable law. Irrelevant,
immaterial, and unreliable evidence shall be excluded.
(2) Evidence, even if relevant, may be excluded if its probative
value is substantially outweighed by the danger of unfair prejudice or
confusion of the issues; if the evidence would be misleading; or based
on considerations of undue delay, waste of time, or needless
presentation of cumulative evidence.
(3) Evidence that constitutes hearsay may be admitted if it is
relevant, material, and bears satisfactory indicia of reliability so
that its use is fair. Hearsay is a statement, other than one made by
the declarant while testifying at the hearing, offered in evidence to
prove the truth of the matter asserted. If otherwise meeting the
standards for admissibility described in this section, transcripts of
depositions, investigational hearings, prior testimony in Bureau or
other proceedings, and any other form of hearsay shall be admissible
and shall not be excluded solely on the ground that they are or contain
hearsay.
(4) Evidence that would be admissible under the Federal Rules of
Evidence is admissible in a proceeding conducted
[[Page 48756]]
pursuant to this part. Evidence that would be inadmissible under the
Federal Rules of Evidence may not be deemed or ruled to be inadmissible
in a proceeding conducted pursuant to this part solely on that basis.
(c) Official notice. Official notice may be taken of any material
fact that is not subject to reasonable dispute in that it is either
generally known or capable of accurate and ready determination by
resort to sources whose accuracy cannot reasonably be questioned. If
official notice is requested or is taken of a material fact not
appearing in the evidence in the record, the parties, upon timely
request, shall be afforded an opportunity to disprove such noticed
fact.
(d) Documents. (1) A duplicate copy of a document is admissible to
the same extent as the original, unless a genuine issue is raised as to
whether the copy is in some material respect not a true and legible
copy of the original.
(2) Subject to the requirements of paragraph (b) of this section,
any document, including a report of examination, supervisory activity,
inspection or visitation, prepared by the Bureau, a prudential
regulator, as that term is defined in section 1002(24) of the Dodd-
Frank Act, or by a State regulatory agency, is presumptively admissible
either with or without a sponsoring witness.
(3) Witnesses may use existing or newly created charts, exhibits,
calendars, calculations, outlines, or other graphic material to
summarize, illustrate, or simplify the presentation of testimony. Such
materials may, subject to the hearing officer's discretion, be used
with or without being admitted into evidence.
(4) As respondents are in the best position to determine the nature
of documents generated by such respondents and which come from their
own files, the burden of proof is on the respondent to introduce
evidence to rebut a presumption that such documents are authentic and
kept in the regular course of business.
(e) Objections. (1) Objections to the admissibility of evidence
must be timely made and rulings on all objections must appear on the
record.
(2) Whenever evidence is excluded from the record, the party
offering such evidence may make an offer of proof, which shall be
included in the record. Rejected exhibits, adequately marked for
identification, shall be retained pursuant to Sec. 1081.306(b) so as
to be available for consideration by any reviewing authority.
(3) Failure to object to admission of evidence or to any ruling
constitutes a waiver of the objection.
(f) Stipulations. (1) The parties may, at any stage of the
proceeding, stipulate as to any relevant matters of fact or the
authentication of any relevant documents. Such stipulations must be
received in evidence at a hearing and are binding on the parties with
respect to the matters therein stipulated.
(2) Unless the hearing officer directs otherwise, all stipulations
of fact and law previously agreed upon by the parties, and all
documents, the admissibility of which have been previously stipulated,
will be admitted into evidence upon commencement of the hearing.
(g) Presentation of evidence. (1) A witness at a hearing for the
purpose of taking evidence shall testify under oath or affirmation.
(2) A party is entitled to present its case or defense by sworn
oral testimony and documentary evidence, to submit rebuttal evidence,
and to conduct such cross-examination as, in the discretion of the
hearing officer, may be required for a full and true disclosure of the
facts.
(3) An adverse party, or an officer, agent, or employee thereof,
and any witness who appears to be hostile, unwilling, or evasive, may
be interrogated by leading questions and may also be contradicted and
impeached by the party calling him or her.
(4) The hearing officer shall exercise reasonable control over the
mode and order of interrogating witnesses and presenting evidence so as
to:
(i) Make the interrogation and presentation effective for the
ascertainment of the truth;
(ii) Avoid needless consumption of time; and
(iii) Protect witnesses from harassment or undue embarrassment.
(5) The hearing officer may permit a witness to appear at a hearing
via video conference or telephone for good cause shown.
(h) Introducing prior sworn statements of witnesses into the
record. At a hearing, any party wishing to introduce a prior, sworn
statement of a witness, not a party, otherwise admissible in the
proceeding, may make a motion setting forth the reasons therefore. If
only part of a statement is offered in evidence, the hearing officer
may require that all relevant portions of the statement be introduced.
If all of a statement is offered in evidence, the hearing officer may
require that portions not relevant to the proceeding be excluded. A
motion to introduce a prior sworn statement may be granted if:
(1) The witness is dead;
(2) The witness is out of the United States, unless it appears that
the absence of the witness was procured by the party offering the prior
sworn statement;
(3) The witness is unable to attend or testify because of age,
sickness, infirmity, imprisonment, or other disability;
(4) The party offering the prior sworn statement has been unable to
procure the attendance of the witness by subpoena; or
(5) In the discretion of the hearing officer, it would be
desirable, in the interests of justice, to allow the prior sworn
statement to be used. In making this determination, due regard shall be
given to the presumption that witnesses will testify orally in an open
hearing. If the parties have stipulated to accept a prior sworn
statement in lieu of live testimony, consideration shall also be given
to the convenience of the parties in avoiding unnecessary expense.
Sec. 1081.304 Record of the hearing.
(a) Reporting and transcription. Hearings shall be stenographically
reported and transcribed under the supervision of the hearing officer,
and the original transcript shall be a part of the record and the sole
official transcript. The live oral testimony of each witness may be
video recorded digitally, in which case the video recording and the
written transcript of the testimony shall be made part of the record.
Copies of transcripts shall be available from the reporter at
prescribed rates.
(b) Corrections. Corrections of the official transcript may be made
only when they involve errors affecting substance and then only in the
manner herein provided. Corrections ordered by the hearing officer or
agreed to in a written stipulation signed by all counsel and parties
not represented by counsel, and approved by the hearing officer, shall
be included in the record, and such stipulations, except to the extent
they are capricious or without substance, shall be approved by the
hearing officer. Corrections shall not be ordered by the hearing
officer except upon notice and opportunity for the hearing of
objections. Such corrections shall be made by the official reporter by
furnishing substitute type pages, under the usual certificate of the
reporter, for insertion in the official record. The original
uncorrected pages shall be retained in the files of the Bureau.
(c) Closing of the hearing record. Upon completion of the hearing,
the hearing officer shall issue an order closing the hearing record
after giving the parties seven days to determine if
[[Page 48757]]
the record is complete or needs to be supplemented. The hearing officer
shall retain the discretion to permit or order correction of the record
as provided in paragraph (b) of this section.
Sec. 1081.305 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the hearing officer
shall serve notice upon each party that the certified transcript,
together with all hearing exhibits and exhibits introduced but not
admitted into evidence at the hearing, has been filed promptly after
that filing. Any party may file with the hearing officer proposed
findings of fact, proposed conclusions of law, and a proposed order
within 28 days following service of this notice by the hearing officer
or within such longer period as may be ordered by the hearing officer.
(2) Proposed findings and conclusions must be supported by citation
to any relevant authorities and by page references to any relevant
portions of the record. A post-hearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document.
(b) Responsive briefs. Responsive briefs may be filed within 14
days after the date on which the parties' proposed findings,
conclusions, and order are due. Responsive briefs must be strictly
limited to responding to matters, issues, or arguments raised in
another party's papers. A party who has not filed proposed findings of
fact and conclusions of law or a post-hearing brief may not file a
responsive brief. Unless directed by the hearing officer, reply briefs
are not permitted.
(c) Order of filing. The hearing officer shall not order the filing
by any party of any post-hearing brief or responsive brief in advance
of the other party's filing of its post-hearing brief or responsive
brief.
Sec. 1081.306 Record in proceedings before hearing officer; retention
of documents; copies.
(a) Contents of the record. The record of the proceeding shall
consist of:
(1) The notice of charges, the answer, and any amendments thereto;
(2) Each motion, submission, or other paper filed in the
proceedings, and any amendments and exceptions to or regarding them;
(3) Each stipulation, transcript of testimony, and any document or
other item admitted into evidence;
(4) Any transcript of a conference or hearing before the hearing
officer;
(5) Any amicus briefs filed pursuant to Sec. 1081.216;
(6) With respect to a request to disqualify a hearing officer or to
allow the hearing officer's withdrawal under Sec. 1081.105(c), each
affidavit or transcript of testimony taken and the decision made in
connection with the request;
(7) All motions, briefs, and other papers filed on interlocutory
appeal;
(8) All proposed findings and conclusions;
(9) Each written order issued by the hearing officer or Director;
and
(10) Any other document or item accepted into the record by the
hearing officer.
(b) Retention of documents not admitted. Any document offered into
evidence but excluded shall not be considered part of the record. The
Office of Administrative Adjudication shall retain any such document
until the later of the date upon which an order by the Director ending
the proceeding becomes final and not appealable, or upon the conclusion
of any judicial review of the Director's order.
(c) Substitution of copies. A true copy of a document may be
substituted for any document in the record or any document retained
pursuant to paragraph (b) of this section.
Subpart D--Decision and Appeals
Sec. 1081.400 Recommended decision of the hearing officer.
(a) Time period for filing recommended decision. Subject to
paragraph (b) of this section, the hearing officer shall file a
recommended decision no later than 90 days after the deadline for
filing post-hearing responsive briefs pursuant to Sec. 1081.305(b) and
in no event later than 360 days after filing of the notice of charges.
(b) Extension of deadlines. In the event the hearing officer
presiding over the proceeding determines that it will not be possible
to issue the recommended decision within the time periods specified in
paragraph (a) of this section, the hearing officer shall submit a
written request to the Director for an extension of the time period for
filing the recommended decision. This request must be filed no later
than 28 days prior to the expiration of the time for issuance of a
recommended decision. The request will be served on all parties in the
proceeding, who may file with the Director briefs in support of or in
opposition to the request. Any such briefs must be filed within seven
days of service of the hearing officer's request and shall not exceed
five pages. If the Director determines that additional time is
necessary or appropriate in the public interest, the Director shall
issue an order extending the time period for filing the recommended
decision.
(c) Content. (1) A recommended decision shall be based on a
consideration of the whole record relevant to the issues decided, and
shall be supported by reliable, probative, and substantial evidence.
The recommended decision shall include a statement of findings of fact
(with specific page references to principal supporting items of
evidence in the record) and conclusions of law, as well as the reasons
or basis therefore, as to all the material issues of fact, law, or
discretion presented on the record and the appropriate order, sanction,
relief or denial thereof. The recommended decision shall also state
that a notice of appeal may be filed within 14 days after service of
the recommended decision and include a statement that, unless a party
timely files and perfects a notice of appeal of the recommended
decision, the Director may adopt the recommended decision as the final
decision and order of the Bureau without further opportunity for
briefing or argument.
(2) Consistent with paragraph (a) of this section, when more than
one claim for relief is presented in an adjudication proceeding, or
when multiple parties are involved, the hearing officer may direct the
entry of a recommended decision as to one or more but fewer than all of
the claims or parties only upon an express determination that there is
no just reason for delay and upon an express direction for the entry of
a recommended decision.
(d) By whom made. The recommended decision shall be made and filed
by the hearing officer who presided over the hearings, except when he
or she shall have become unavailable to the Bureau.
(e) Reopening of proceeding by hearing officer; termination of
jurisdiction. (1) At any time from the close of the hearing record
pursuant to Sec. 1081.304(c) until the filing of his or her
recommended decision, a hearing officer may reopen the proceeding for
the receipt of further evidence for good cause shown.
(2) Except for the correction of clerical errors or pursuant to an
order of remand from the Director, the jurisdiction of the hearing
officer is terminated upon the filing of his or her recommended
decision with respect to those issues decided pursuant to paragraph (c)
of this section.
(f) Filing, service, and publication. Upon filing by the hearing
officer of the
[[Page 48758]]
recommended decision, the Office of Administrative Adjudication shall
promptly transmit the recommended decision to the Director and serve
the recommended decision upon the parties.
Sec. 1081.401 Transmission of documents to Director; record index;
certification.
(a) Filing of index. At the same time the Office of Administrative
Adjudication transmits the recommended decision to the Director, the
hearing officer shall furnish to the Director a certified index of the
entire record of the proceedings. The certified index shall include, at
a minimum, an entry for each paper, document or motion filed in the
proceeding, the date of the filing, and the identity of the filer. The
certified index shall also include an exhibit index containing, at a
minimum, an entry consisting of exhibit number and title or description
for each exhibit introduced and admitted into evidence and each exhibit
introduced but not admitted into evidence.
(b) Retention of record items by the Office of Administrative
Adjudication. After the close of the hearing, the Office of
Administrative Adjudication shall retain originals of any motions,
exhibits or any other documents filed with, or accepted into evidence
by, the hearing officer, or any other portions of the record that have
not already been filed with the Office of Administrative Adjudication.
Sec. 1081.402 Notice of appeal; review by the Director.
(a) Notice of appeal. (1) Filing. Any party may file exceptions to
the recommended decision of the hearing officer by filing a notice of
appeal with the Office of Administrative Adjudication within 14 days
after service of the recommended decision. The notice shall specify the
party or parties against whom the appeal is taken and shall designate
the recommended decision or part thereof appealed from. If a timely
notice of appeal is filed by a party, any other party may thereafter
file a notice of appeal within seven days after service of the first
notice, or within 14 days after service of the recommended decision,
whichever period expires last.
(2) Perfecting a notice of appeal. Any party filing a notice of
appeal must perfect its appeal by filing its opening appeal brief
within 28 days of service of the recommended decision. Any party may
respond to the opening appeal brief by filing an answering brief within
28 days of service of the opening brief. Any party may file a reply to
an answering brief within seven days of service of the answering brief.
These briefs must conform to the requirements of Sec. 1081.403.
(b) Director review other than pursuant to an appeal. In the event
no party perfects an appeal of the recommended decision, the Director
shall, within 42 days after the date of service of the recommended
decision, either issue a final decision and order adopting the
recommended decision, or order further briefing regarding any portion
of the recommended decision. The Director's order for further briefing
shall set forth the scope of review and the issues that will be
considered and will make provision for the filing of briefs in
accordance with the timelines set forth in paragraph (a)(2) of this
section (except that that opening briefs shall be due within 28 days of
service of the order of review) if deemed appropriate by the Director.
(c) Exhaustion of administrative remedies. Pursuant to 5 U.S.C.
704, a perfected appeal to the Director of a recommended decision
pursuant to paragraph (a) of this section is a prerequisite to the
seeking of judicial review of a final decision and order, or portion of
the final decision and order, adopting the recommended decision.
Sec. 1081.403 Briefs filed with the Director.
(a) Contents of briefs. Briefs shall be confined to the particular
matters at issue. Each exception to the findings or conclusions being
reviewed shall be stated succinctly. Exceptions shall be supported by
citation to the relevant portions of the record, including references
to the specific pages relied upon, and by concise argument including
citation of such statutes, decisions, and other authorities as may be
relevant. If the exception relates to the admission or exclusion of
evidence, the substance of the evidence admitted or excluded shall be
set forth in the brief, in an appendix thereto, or by citation to the
record. Reply briefs shall be confined to matters in answering briefs
of other parties.
(b) Length limitation. Except with leave of the Director, opening
and answering briefs shall not exceed 30 pages, and reply briefs shall
not exceed 15 pages, exclusive of pages containing the table of
contents, table of authorities, and any addendum that consists solely
of copies of applicable cases, pertinent legislative provisions or
rules, and exhibits. Motions to file briefs in excess of these
limitations are disfavored.
Sec. 1081.404 Oral argument before the Director.
(a) Availability. The Director will consider appeals, motions, and
other matters properly before him or her on the basis of the papers
filed by the parties without oral argument unless the Director
determines that the presentation of facts and legal arguments in the
briefs and record and decisional process would be significantly aided
by oral argument, in which case the Director shall issue an order
setting the date on which argument shall be held. A party seeking oral
argument shall so indicate on the first page of its opening or
answering brief.
(b) Public arguments; transcription. All oral arguments shall be
public unless otherwise ordered by the Director. Oral arguments before
the Director shall be reported stenographically, unless otherwise
ordered by the Director. Motions to correct the transcript of oral
argument shall be made according to the same procedure provided in
Sec. 1081.304(b).
Sec. 1081.405 Decision of the Director.
(a) Upon appeal from or upon further review of a recommended
decision, the Director will consider such parts of the record as are
cited or as may be necessary to resolve the issues presented and, in
addition, will, to the extent necessary or desirable, exercise all
powers which he or she could have exercised if he or she had made the
recommended decision. In proceedings before the Director, the record
shall consist of all items part of the record below in accordance with
Sec. 1081.306; any notices of appeal or order directing review; all
briefs, motions, submissions, and other papers filed on appeal or
review; and the transcript of any oral argument held. Review by the
Director of a recommended decision may be limited to the issues
specified in the notice(s) of appeal or the issues, if any, specified
in the order directing further briefing. On notice to all parties,
however, the Director may, at any time prior to issuance of his or her
decision, raise and determine any other matters that he or she deems
material, with opportunity for oral or written argument thereon by the
parties.
(b) Decisional employees may advise and assist the Director in the
consideration and disposition of the case.
(c) In rendering his or her decision, the Director will affirm,
adopt, reverse, modify, set aside, or remand for further proceedings
the recommended decision and will include in the decision a statement
of the reasons or basis for his
[[Page 48759]]
or her actions and the findings of fact upon which the decision is
predicated.
(d) At the expiration of the time permitted for the filing of reply
briefs with the Director, the Office of Administrative Adjudication
will notify the parties that the case has been submitted for final
Bureau decision. The Director will issue and the Office of
Administrative Adjudication will serve the Director's final decision
and order within 90 days after such notice, unless within that time the
Director orders that the adjudication proceeding or any aspect thereof
be remanded to the hearing officer for further proceedings.
(e) Copies of the final decision and order of the Director shall be
served upon each party to the proceeding, upon other persons required
by statute, and, if directed by the Director or required by statute,
upon any appropriate State or Federal supervisory authority. The final
decision and order will also be published on the Bureau's website or as
otherwise deemed appropriate by the Bureau.
Sec. 1081.406 Reconsideration.
Within 14 days after service of the Director's final decision and
order, any party may file with the Director a petition for
reconsideration, briefly and specifically setting forth the relief
desired and the grounds in support thereof. Any petition filed under
this section must be confined to new questions raised by the final
decision or final order and upon which the petitioner had no
opportunity to argue, in writing or orally, before the Director. No
response to a petition for reconsideration shall be filed unless
requested by the Director, who will request such response before
granting any petition for reconsideration. The filing of a petition for
reconsideration shall not operate to stay the effective date of the
final decision or order or to toll the running of any statutory period
affecting such decision or order unless specifically so ordered by the
Director.
Sec. 1081.407 Effective date; stays pending judicial review.
(a) Other than consent orders, which shall become effective at the
time specified therein, an order to cease and desist or for other
affirmative action under section 1053(b) of the Dodd-Frank Act becomes
effective at the expiration of 30 days after the date of service
pursuant to Sec. 1081.113(d)(2), unless the Director agrees to stay
the effectiveness of the order pursuant to this section.
(b) Any party subject to a final decision and order, other than a
consent order, may apply to the Director for a stay of all or part of
that order pending judicial review.
(c) A motion for stay shall state the reasons a stay is warranted
and the facts relied upon, and shall include supporting affidavits or
other sworn statements, and a copy of the relevant portions of the
record. The motion shall address the likelihood of the movant's success
on appeal, whether the movant will suffer irreparable harm if a stay is
not granted, the degree of injury to other parties if a stay is
granted, and why the stay is in the public interest.
(d) A motion for stay shall be filed within 28 days of service of
the order on the party. Any party opposing the motion may file a
response within seven days after receipt of the motion. The movant may
file a reply brief, limited to new matters raised by the response,
within seven days after receipt of the response.
(e) The commencement of proceedings for judicial review of a final
decision and order of the Director does not, unless specifically
ordered by the Director or a reviewing court, operate as a stay of any
order issued by the Director. The Director may, in his or her
discretion, and on such terms as he or she finds just, stay the
effectiveness of all or any part of an order pending a final decision
on a petition for judicial review of that order.
Subpart E--Temporary Cease-and-Desist Proceedings
Sec. 1081.500 Scope.
(a) This subpart prescribes the rules of practice and procedure
applicable to the issuance of a temporary cease-and-desist order
authorized by section 1053(c) of the Dodd-Frank Act (12 U.S.C.
5563(c)).
(b) The issuance of a temporary cease-and-desist order does not
stay or otherwise affect the proceedings instituted by the issuance of
a notice of charges, which are governed by subparts A through D of this
part.
Sec. 1081.501 Basis for issuance, form, and service.
(a) In general. The Director or his or her designee may issue a
temporary cease-and-desist order if he or she determines that one or
more of the alleged violations specified in a notice of charges, or the
continuation thereof, is likely to cause the respondent to be insolvent
or otherwise prejudice the interests of consumers before the completion
of the adjudication proceeding. A temporary cease-and-desist order may
require the respondent to cease and desist from any violation or
practice specified in the notice of charges and to take affirmative
action to prevent or remedy such insolvency or other condition pending
completion of the proceedings initiated by the issuance of a notice of
charges.
(b) Incomplete or inaccurate records. When a notice of charges
specifies, on the basis of particular facts and circumstances, that the
books and records of a respondent are so incomplete or inaccurate that
the Bureau is unable to determine the financial condition of the
respondent or the details or purpose of any transaction or transactions
that may have a material effect on the financial condition of the
respondent, then the Director or his or her designee may issue a
temporary order requiring:
(1) The cessation of any activity or practice which gave rise,
whether in whole or in part, to the incomplete or inaccurate state of
the books or records; or
(2) Affirmative action to restore such books or records to a
complete and accurate state, until the completion of the adjudication
proceeding.
(c) Content, scope, and form of order. Every temporary cease-and-
desist order accompanying a notice of charges shall describe:
(1) The basis for its issuance, including the alleged violations
and the harm that is likely to result without the issuance of an order;
and
(2) The act or acts the respondent is to take or refrain from
taking.
(d) Effective and enforceable upon service. A temporary cease-and-
desist order is effective and enforceable upon service.
(e) Service. Service of a temporary cease-and-desist order shall be
made pursuant to Sec. 1081.113(d).
Sec. 1081.502 Judicial review, duration.
(a) Availability of judicial review. Judicial review of a temporary
cease-and-desist order shall be available solely as provided in section
1053(c)(2) of the Dodd-Frank Act (12 U.S.C. 5563(c)(2)). Any respondent
seeking judicial review of a temporary cease-and-desist order issued
under this subpart must, not later than ten days after service of the
temporary cease-and-desist order, apply to the United States district
court for the judicial district in which the residence or principal
office or place of business of the respondent is located, or the United
States District Court for the District of Columbia, for an injunction
setting aside, limiting, or suspending the enforcement, operation, or
effectiveness of such order.
(b) Duration. Unless set aside, limited, or suspended by the
Director or his or her designee, or by a court in proceedings
authorized under section
[[Page 48760]]
1053(c)(2) of the Dodd-Frank Act (12 U.S.C. 5563(c)(2)), a temporary
cease-and-desist order shall remain effective and enforceable until:
(1) The effective date of a final order issued upon the conclusion
of the adjudication proceeding.
(2) With respect to a temporary cease-and-desist order issued
pursuant to Sec. 1081.501(b) only, the Bureau determines by
examination or otherwise that the books and records are accurate and
reflect the financial condition of the respondent, and the Director or
his or her designee issues an order terminating, limiting, or
suspending the temporary cease-and-desist order.
Russell Vought,
Acting Director, Consumer Financial Protection Bureau.
[FR Doc. 2025-19687 Filed 10-28-25; 8:45 am]
BILLING CODE 4810-AM-P
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</html>Indexed from Federal Register on October 29, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.