32882 Federal Register / Vol. 60, No. 121 / Friday, June 23, 1995 / Proposed Rules
1 The agencies issued a joint notice of proposed
rulemaking on Monday, June 17, 1991 (56 FR
27790). The agencies promulgated their final rules
on the following dates: OCC on August 9, 1991 (56
FR 38024); Board of Governors on August 9, 1991
(56 FR 38052); FDIC on August 9, 1991 (56 FR
37975); OTS on August 12, 1991 (56 FR 38317); and
NCUA on August 8, 1991 (56 FR 37767).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 19
[Docket No. 95–11]
RIN 1557–AB43
FEDERAL RESERVE SYSTEM
12 CFR Part 263
[Docket No. R–0878]
RIN 7100–AB23
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 308
RIN 3064–AB49
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 509
[Docket No. 95–116]
RIN 1550–AA79
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 747
Uniform Rules of Practice and
Procedure
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; Federal Deposit Insurance
Corporation; Office of Thrift
Supervision, Treasury; and National
Credit Union Administration.
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The Comptroller of the
Currency (OCC), Board of Governors of
the Federal Reserve System (Board of
Governors), Federal Deposit Insurance
Corporation (FDIC), Office of Thrift
Supervision (OTS), and National Credit
Union Administration (NCUA) are
proposing changes to the Uniform Rules
of Practice and Procedure for
Administrative Hearings (Uniform
Rules) and to their agency specific rules
of administrative practice and
procedure (Local Rules).
The proposal is intended to clarify
certain provisions and to increase the
efficiency and fairness of administrative
hearings.
DATES: Comments must be received by
August 22, 1995.
ADDRESSES: Comments should be
directed to: OCC: Communications
Division, Office of the Comptroller of
the Currency, 250 E Street SW.,
Washington, DC 20219, Attention:
Docket No. 95–11. Comments may be
inspected and photocopied at the same
location.
Board of Governors: Mr. William
Wiles, Secretary of the Board, Board of
Governors of the Federal Reserve
System, 20th and Constitution Avenue
NW., Washington, DC 20551, Attention:
Docket No. R–0878 or delivered to
Room B–2222, Eccles Building, between
8:45 a.m. and 5:15 p.m. Comments may
be inspected in Room MP–500 of the
Martin Building between 9 a.m. and 5
p.m. weekdays, except as provided in 12
CFR 261.8 of the Board of Governor’s
rules regarding availability of
information.
FDIC: Robert Feldman, Acting
Executive Secretary, Attention: Room F–
402, Federal Deposit Insurance
Corporation, 550 17th, Street NW.,
Washington, DC 20429. Comments may
be delivered to Room F–400, 1776 F
Street NW., Washington, DC 20429, on
business days between 8:30 a.m. and 5
p.m.; sent by facsimile transmission to
FAX number 202–898–3838; or sent by
Internet E-mail to Comments@Fdic.gov.
Comments will be available for
inspection and photocopying in Room
7118, 550 17th Street NW., Washington,
DC between 8:30 a.m. and 5 p.m. on
business days.
OTS: Chief, Dissemination Branch,
Records Management and Information
Policy, Office of Thrift Supervision,
1700 G Street NW., Washington, DC
20552, Attention Docket No. 95–116.
These submissions may be hand
delivered to 1700 G Street NW., from 9
a.m. to 5 p.m. on business days; they
may be sent by facsimile transmission to
FAX number 202–906–7755. Comments
will be available for inspection at 1700
G Street NW., from 1 p.m. until 4 p.m.
on business days.
NCUA: Becky Baker, Secretary of the
Board, National Credit Union
Administration, 1775 Duke Street,
Alexandria, VA, 22314–3428.
Comments will be available for
inspection at the same location.
FOR FURTHER INFORMATION CONTACT:
OCC: Daniel Stipano, Director,
Enforcement and Compliance Division
202–874–4800, or Daniel Cooke,
Attorney, Legislative and Regulatory
Activities Division 202–874–5090.
Board of Governors: Douglas Jordan,
Senior Attorney, Legal Division 202–
452–3787, Ann Marie Kohlligian, Senior
Counsel, Division of Banking
Supervision and Regulation 202–452–
3528, or Katherine Wheatley, Assistant
General Counsel 202–452–3779. For the
hearing impaired only,
Telecommunication Device for the Deaf
(TDD), Dorothea Thompson 202–452–
3544.
FDIC: Nancy Alper, Counsel, Legal
Division 202–898–3720 or Andrea
Winkler, Counsel, Legal Division 202–
898–3764.
OTS: Eliot Goldstein, Counsel,
Division of Enforcement 202–906–7162;
or Karen Osterloh, Counsel, Banking
and Finance, Regulations and
Legislation Division, Chief Counsel’s
Office 202–906–6639.
NCUA: Steven Widerman, Attorney,
Office of General Counsel 703–518–
6557.
SUPPLEMENTARY INFORMATION:
A. Background
Section 916 of the Financial
Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA), Pub.
L. 101–73, 103 Stat. 183 (1989), required
the OCC, Board of Governors, FDIC,
OTS, and NCUA (agencies) to develop
uniform rules and procedures for
administrative hearings. The agencies
each adopted final Uniform Rules in
August, 1991.1 Based on their
experience since then, the agencies have
identified sections of the Uniform Rules
that should be modified. Amendments
to those provisions are proposed today.
Each agency also has local rules of
administrative adjudication (Local
Rules) that are distinct from the
Uniform Rules and unique to the
individual agency. The OCC and OTS
propose to amend certain sections of
their Local Rules that they believe
should be improved and clarified. The
FDIC, Board of Governors, and NCUA
are not proposing to amend their Local
Rules at this time.
B. Uniform Rules
While most elements of the proposal
are technical modifications or
clarifications, two of the proposed
changes are more substantive: (1)
Proposed § ll.24, which clarifies the
scope of document discovery; and (2)
proposed § ll.35, which prohibits
multiple counsel from examining a
single witness.
The agencies invite comments on all
aspects of this joint proposed rule.
1 The agencies issued a joint notice of proposed
rulemaking on Monday, June 17, 1991 (56 FR
27790). The agencies promulgated their final rules
on the following dates: OCC on August 9, 1991 (56
FR 38024); Board of Governors on August 9, 1991
(56 FR 38052); FDIC on August 9, 1991 (56 FR
37975); OTS on August 12, 1991 (56 FR 38317); and
NCUA on August 8, 1991 (56 FR 37767).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 19
[Docket No. 95–11]
RIN 1557–AB43
FEDERAL RESERVE SYSTEM
12 CFR Part 263
[Docket No. R–0878]
RIN 7100–AB23
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 308
RIN 3064–AB49
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 509
[Docket No. 95–116]
RIN 1550–AA79
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 747
Uniform Rules of Practice and
Procedure
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; Federal Deposit Insurance
Corporation; Office of Thrift
Supervision, Treasury; and National
Credit Union Administration.
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The Comptroller of the
Currency (OCC), Board of Governors of
the Federal Reserve System (Board of
Governors), Federal Deposit Insurance
Corporation (FDIC), Office of Thrift
Supervision (OTS), and National Credit
Union Administration (NCUA) are
proposing changes to the Uniform Rules
of Practice and Procedure for
Administrative Hearings (Uniform
Rules) and to their agency specific rules
of administrative practice and
procedure (Local Rules).
The proposal is intended to clarify
certain provisions and to increase the
efficiency and fairness of administrative
hearings.
DATES: Comments must be received by
August 22, 1995.
ADDRESSES: Comments should be
directed to: OCC: Communications
Division, Office of the Comptroller of
the Currency, 250 E Street SW.,
Washington, DC 20219, Attention:
Docket No. 95–11. Comments may be
inspected and photocopied at the same
location.
Board of Governors: Mr. William
Wiles, Secretary of the Board, Board of
Governors of the Federal Reserve
System, 20th and Constitution Avenue
NW., Washington, DC 20551, Attention:
Docket No. R–0878 or delivered to
Room B–2222, Eccles Building, between
8:45 a.m. and 5:15 p.m. Comments may
be inspected in Room MP–500 of the
Martin Building between 9 a.m. and 5
p.m. weekdays, except as provided in 12
CFR 261.8 of the Board of Governor’s
rules regarding availability of
information.
FDIC: Robert Feldman, Acting
Executive Secretary, Attention: Room F–
402, Federal Deposit Insurance
Corporation, 550 17th, Street NW.,
Washington, DC 20429. Comments may
be delivered to Room F–400, 1776 F
Street NW., Washington, DC 20429, on
business days between 8:30 a.m. and 5
p.m.; sent by facsimile transmission to
FAX number 202–898–3838; or sent by
Internet E-mail to Comments@Fdic.gov.
Comments will be available for
inspection and photocopying in Room
7118, 550 17th Street NW., Washington,
DC between 8:30 a.m. and 5 p.m. on
business days.
OTS: Chief, Dissemination Branch,
Records Management and Information
Policy, Office of Thrift Supervision,
1700 G Street NW., Washington, DC
20552, Attention Docket No. 95–116.
These submissions may be hand
delivered to 1700 G Street NW., from 9
a.m. to 5 p.m. on business days; they
may be sent by facsimile transmission to
FAX number 202–906–7755. Comments
will be available for inspection at 1700
G Street NW., from 1 p.m. until 4 p.m.
on business days.
NCUA: Becky Baker, Secretary of the
Board, National Credit Union
Administration, 1775 Duke Street,
Alexandria, VA, 22314–3428.
Comments will be available for
inspection at the same location.
FOR FURTHER INFORMATION CONTACT:
OCC: Daniel Stipano, Director,
Enforcement and Compliance Division
202–874–4800, or Daniel Cooke,
Attorney, Legislative and Regulatory
Activities Division 202–874–5090.
Board of Governors: Douglas Jordan,
Senior Attorney, Legal Division 202–
452–3787, Ann Marie Kohlligian, Senior
Counsel, Division of Banking
Supervision and Regulation 202–452–
3528, or Katherine Wheatley, Assistant
General Counsel 202–452–3779. For the
hearing impaired only,
Telecommunication Device for the Deaf
(TDD), Dorothea Thompson 202–452–
3544.
FDIC: Nancy Alper, Counsel, Legal
Division 202–898–3720 or Andrea
Winkler, Counsel, Legal Division 202–
898–3764.
OTS: Eliot Goldstein, Counsel,
Division of Enforcement 202–906–7162;
or Karen Osterloh, Counsel, Banking
and Finance, Regulations and
Legislation Division, Chief Counsel’s
Office 202–906–6639.
NCUA: Steven Widerman, Attorney,
Office of General Counsel 703–518–
6557.
SUPPLEMENTARY INFORMATION:
A. Background
Section 916 of the Financial
Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA), Pub.
L. 101–73, 103 Stat. 183 (1989), required
the OCC, Board of Governors, FDIC,
OTS, and NCUA (agencies) to develop
uniform rules and procedures for
administrative hearings. The agencies
each adopted final Uniform Rules in
August, 1991.1 Based on their
experience since then, the agencies have
identified sections of the Uniform Rules
that should be modified. Amendments
to those provisions are proposed today.
Each agency also has local rules of
administrative adjudication (Local
Rules) that are distinct from the
Uniform Rules and unique to the
individual agency. The OCC and OTS
propose to amend certain sections of
their Local Rules that they believe
should be improved and clarified. The
FDIC, Board of Governors, and NCUA
are not proposing to amend their Local
Rules at this time.
B. Uniform Rules
While most elements of the proposal
are technical modifications or
clarifications, two of the proposed
changes are more substantive: (1)
Proposed § ll.24, which clarifies the
scope of document discovery; and (2)
proposed § ll.35, which prohibits
multiple counsel from examining a
single witness.
The agencies invite comments on all
aspects of this joint proposed rule.
32883Federal Register / Vol. 60, No. 121 / Friday, June 23, 1995 / Proposed Rules
2 See, e.g., 12 U.S.C. 1818(e) (requiring the
appropriate Federal banking agency to serve a copy
of a suspension order when an institution-affiliated
party is suspended for engaging in unsafe and
unsound practices, for a breach of fiduciary duty,
or by reason of violation of a law or regulation,
cease-and-desist order, imposed condition, or
written agreement).
C. Local Rules
The OCC’s and OTS’s proposed
changes to their Local Rules are
discussed in separate section-by-section
analyses. Comments on Local Rules
should be sent only to the appropriate
agency.
D. Section-by-Section Summary and
Discussion of Amendments to the
Uniform Rules
Section ll.1 Scope.
The proposal adds two statutory
provisions to the list of civil money
penalty provisions to which the
Uniform Rules apply. These two
provisions were enacted by the Riegle
Community Development and
Regulatory Improvement Act of 1994
(CDRI), Pub. L. 103–325, 108 Stat. 2160.
The first provision, CDRI section 406,
amends the Bank Secrecy Act (BSA) (31
U.S.C. 5321) to require the Secretary of
the Treasury to delegate authority to the
Federal banking agencies (as defined in
section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) to
impose civil money penalties for BSA
violations.
The second, CDRI section 525,
amends section 102 the Flood Disaster
Protection Act of 1973 (FDPA) (42
U.S.C. 4012a) to give each ‘‘Federal
entity for lending regulation’’ authority
to assess civil money penalties under
the FDPA. Under the FDPA, the term
‘‘Federal entity for lending regulation’’
includes the agencies and the Farm
Credit Administration.
Section ll.6 Appearance and
practice in adjudicatory proceedings.
The proposal seeks to ensure that
counsel is always available to accept
service of process for a party even if that
counsel withdraws from representation.
The proposed change clarifies that
counsel who withdraws after filing a
notice of appearance on behalf of a party
may be required by the administrative
law judge (ALJ) to accept service of
process for that party until a new
counsel has filed a notice of appearance
or until the party indicates that he or
she will proceed on a pro se basis.
Section ll.8 Conflicts of interest.
Under the current Uniform Rules,
counsel representing two or more
parties to a proceeding or a party and an
institution to which notice of the
proceeding must be given must certify
that: (1) Counsel has discussed the
possibility of conflicts of interest with
each party or institution; and (2) the
parties and institution have advised
counsel that there are no material or
anticipated conflicts of interest and
have waived the right to assert conflicts
of interest. The proposal makes two
changes to this provision.
First, the proposal expands the
situations in which counsel must obtain
a waiver and provide certification. The
current Uniform Rules recognize the
potential for conflicts for non-party
institutions ‘‘to which notice of the
proceedings must be given.’’ Notice
must be given to a non-party institution
only in very limited circumstances.2
Thus, many situations involving
institutions as to which a genuine
potential for conflict exist are excluded
from the certification and waiver
process. The proposal addresses these
situations by requiring counsel to obtain
a waiver from, and provide certification
for, any non-party that counsel
represents on a matter relevant to an
issue in the proceeding.
The agencies do not intend the
proposal to supersede any state rules of
professional responsibility that impose
more stringent ethical standards.
Second, the proposal removes current
§ ll.8(b)(2), which requires that
counsel certify that each party or
institution has advised counsel that
there are no material conflicts. The
current Uniform Rules require counsel
to certify both that each client has
asserted that there are no conflicts and
that each client has waived any conflict.
The agencies believe that the provision
that requires counsel to certify that each
client has asserted that there are no
material conflicts is superfluous because
the responsibility for identifying
potential conflicts resides with counsel
not with counsel’s client.
Section ll.11 Service of papers.
The current Uniform Rules permit
parties, agency heads, and ALJs to serve
a subpoena by delivering the subpoena
to a person of suitable age and
discretion at the subpoenaed person’s
residence and by any other manner
reasonably calculated to give actual
notice. The current Uniform Rules do
not explicitly permit service to be made
by delivery to the person’s place of
work.
The proposal expressly permits
service by delivery to a person’s place
of work. The proposal adds the words
‘‘or place of work’’ after the word
‘‘residence’’ each time it appears,
thereby clarifying that delivery to a
person of suitable age and discretion at
the subpoenaed person’s place of work
is reasonably calculated to give actual
notice of service. The agencies believe
that permitting service at a person’s
place of work is a more practical and
efficient means of serving the
individual.
Section ll.12 Construction of time
limits.
Under the current Uniform Rules,
intermediate Saturdays, Sundays, and
Federal holidays are not counted in the
computation of time when the time
period within which a party must
perform an act is ten days or less. The
current Uniform Rules also allow
additional time when a party serves
papers by mail, delivery service, or
electronic media transmission. There
has, however, been some confusion
regarding whether this additional time
counts for purposes of determining
whether the time period within which
a party must perform an act comes
within the ten-day threshold.
The proposal clarifies that the
additional time allotted for responding
to papers served by mail, delivery
service, or electronic media
transmission under § ll.12(c) is not
counted in determining whether an act
is required to be performed within ten
days.
In some instances, parties have also
been unsure whether they must count
Saturdays, Sundays, and holidays in the
calculation of the additional time
allotted for responding to papers served
by mail, delivery service, or electronic
media transmission under § ll.12(c).
The proposal clarifies that the
additional time in § ll.12(c) is in
calendar days and, therefore, a party
must count Saturdays, Sundays, and
holidays.
Section ll.20 Amended pleadings.
Under the current Uniform Rules, a
party is required to obtain leave of the
ALJ to amend a notice or answer. In
addition, if a party objects to the
admission of certain evidence on the
ground that the evidence is not within
the issues raised in the notice or answer,
the party seeking admission of the
evidence must obtain leave of the ALJ
to amend the notice or answer. The
agencies believe that a motion to amend
a notice or answer unnecessarily delays
the administrative proceeding because,
while these motions are generally
granted, the opposing party takes time
to respond to the motion and the ALJ
takes time to rule on the motion.
The proposal permits a party to
amend its pleadings without leave of the
ALJ. It also permits the ALJ to admit
2 See, e.g., 12 U.S.C. 1818(e) (requiring the
appropriate Federal banking agency to serve a copy
of a suspension order when an institution-affiliated
party is suspended for engaging in unsafe and
unsound practices, for a breach of fiduciary duty,
or by reason of violation of a law or regulation,
cease-and-desist order, imposed condition, or
written agreement).
C. Local Rules
The OCC’s and OTS’s proposed
changes to their Local Rules are
discussed in separate section-by-section
analyses. Comments on Local Rules
should be sent only to the appropriate
agency.
D. Section-by-Section Summary and
Discussion of Amendments to the
Uniform Rules
Section ll.1 Scope.
The proposal adds two statutory
provisions to the list of civil money
penalty provisions to which the
Uniform Rules apply. These two
provisions were enacted by the Riegle
Community Development and
Regulatory Improvement Act of 1994
(CDRI), Pub. L. 103–325, 108 Stat. 2160.
The first provision, CDRI section 406,
amends the Bank Secrecy Act (BSA) (31
U.S.C. 5321) to require the Secretary of
the Treasury to delegate authority to the
Federal banking agencies (as defined in
section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) to
impose civil money penalties for BSA
violations.
The second, CDRI section 525,
amends section 102 the Flood Disaster
Protection Act of 1973 (FDPA) (42
U.S.C. 4012a) to give each ‘‘Federal
entity for lending regulation’’ authority
to assess civil money penalties under
the FDPA. Under the FDPA, the term
‘‘Federal entity for lending regulation’’
includes the agencies and the Farm
Credit Administration.
Section ll.6 Appearance and
practice in adjudicatory proceedings.
The proposal seeks to ensure that
counsel is always available to accept
service of process for a party even if that
counsel withdraws from representation.
The proposed change clarifies that
counsel who withdraws after filing a
notice of appearance on behalf of a party
may be required by the administrative
law judge (ALJ) to accept service of
process for that party until a new
counsel has filed a notice of appearance
or until the party indicates that he or
she will proceed on a pro se basis.
Section ll.8 Conflicts of interest.
Under the current Uniform Rules,
counsel representing two or more
parties to a proceeding or a party and an
institution to which notice of the
proceeding must be given must certify
that: (1) Counsel has discussed the
possibility of conflicts of interest with
each party or institution; and (2) the
parties and institution have advised
counsel that there are no material or
anticipated conflicts of interest and
have waived the right to assert conflicts
of interest. The proposal makes two
changes to this provision.
First, the proposal expands the
situations in which counsel must obtain
a waiver and provide certification. The
current Uniform Rules recognize the
potential for conflicts for non-party
institutions ‘‘to which notice of the
proceedings must be given.’’ Notice
must be given to a non-party institution
only in very limited circumstances.2
Thus, many situations involving
institutions as to which a genuine
potential for conflict exist are excluded
from the certification and waiver
process. The proposal addresses these
situations by requiring counsel to obtain
a waiver from, and provide certification
for, any non-party that counsel
represents on a matter relevant to an
issue in the proceeding.
The agencies do not intend the
proposal to supersede any state rules of
professional responsibility that impose
more stringent ethical standards.
Second, the proposal removes current
§ ll.8(b)(2), which requires that
counsel certify that each party or
institution has advised counsel that
there are no material conflicts. The
current Uniform Rules require counsel
to certify both that each client has
asserted that there are no conflicts and
that each client has waived any conflict.
The agencies believe that the provision
that requires counsel to certify that each
client has asserted that there are no
material conflicts is superfluous because
the responsibility for identifying
potential conflicts resides with counsel
not with counsel’s client.
Section ll.11 Service of papers.
The current Uniform Rules permit
parties, agency heads, and ALJs to serve
a subpoena by delivering the subpoena
to a person of suitable age and
discretion at the subpoenaed person’s
residence and by any other manner
reasonably calculated to give actual
notice. The current Uniform Rules do
not explicitly permit service to be made
by delivery to the person’s place of
work.
The proposal expressly permits
service by delivery to a person’s place
of work. The proposal adds the words
‘‘or place of work’’ after the word
‘‘residence’’ each time it appears,
thereby clarifying that delivery to a
person of suitable age and discretion at
the subpoenaed person’s place of work
is reasonably calculated to give actual
notice of service. The agencies believe
that permitting service at a person’s
place of work is a more practical and
efficient means of serving the
individual.
Section ll.12 Construction of time
limits.
Under the current Uniform Rules,
intermediate Saturdays, Sundays, and
Federal holidays are not counted in the
computation of time when the time
period within which a party must
perform an act is ten days or less. The
current Uniform Rules also allow
additional time when a party serves
papers by mail, delivery service, or
electronic media transmission. There
has, however, been some confusion
regarding whether this additional time
counts for purposes of determining
whether the time period within which
a party must perform an act comes
within the ten-day threshold.
The proposal clarifies that the
additional time allotted for responding
to papers served by mail, delivery
service, or electronic media
transmission under § ll.12(c) is not
counted in determining whether an act
is required to be performed within ten
days.
In some instances, parties have also
been unsure whether they must count
Saturdays, Sundays, and holidays in the
calculation of the additional time
allotted for responding to papers served
by mail, delivery service, or electronic
media transmission under § ll.12(c).
The proposal clarifies that the
additional time in § ll.12(c) is in
calendar days and, therefore, a party
must count Saturdays, Sundays, and
holidays.
Section ll.20 Amended pleadings.
Under the current Uniform Rules, a
party is required to obtain leave of the
ALJ to amend a notice or answer. In
addition, if a party objects to the
admission of certain evidence on the
ground that the evidence is not within
the issues raised in the notice or answer,
the party seeking admission of the
evidence must obtain leave of the ALJ
to amend the notice or answer. The
agencies believe that a motion to amend
a notice or answer unnecessarily delays
the administrative proceeding because,
while these motions are generally
granted, the opposing party takes time
to respond to the motion and the ALJ
takes time to rule on the motion.
The proposal permits a party to
amend its pleadings without leave of the
ALJ. It also permits the ALJ to admit