[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Rules and Regulations]
[Pages 20350-20356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10342]
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 509
[No. 96-30]
RIN 1550-AA79
Uniform Rules of Practice and Procedure
AGENCY: Office of Thrift Supervision, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of Thrift Supervision (OTS) is amending its Rules
of Practice and Procedure in Adjudicatory Proceedings. The final rule
is intended to clarify certain provisions and to increase the
efficiency and fairness of administrative hearings.
EFFECTIVE DATE: June 5, 1996.
FOR FURTHER INFORMATION CONTACT: Karen A. Osterloh, Counsel (Banking
and Finance), Regulations and Legislation Division, Chief Counsel's
Office, (202) 906-6639, or Eliot Goldstein, Counsel, Division of
Enforcement, Chief Counsel's Office, (202) 906-7162, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
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 OTS, the Office of the Comptroller of the Currency (OCC),
the Board of Governors of the Federal Reserve System (Board), the
Federal Deposit Insurance Corporation (FDIC) and the National Credit
Union Administration (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 in using
the rules since then, the agencies have identified sections of the
Uniform Rules that should be modified. Accordingly, the agencies
proposed amendments to the Uniform Rules on June 23, 1995 (60 FR
32882). These changes affect OTS Uniform Rules at 12 CFR Part 509
(Subpart A). The OTS also proposed amendments to its agency-specific
procedural rules at 12 CFR Part 509 (Subpart B) (Local Rules).
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\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 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).
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The OTS received one comment which expressed general approval of
the proposal and suggested specific improvements. The OTS has also
considered comments submitted to the other agencies on the proposed
rule.
The final rule implements the proposal with minor changes. The
following section-by-section analysis summarizes the final rule and
highlights the changes that the OTS has made after considering the
commenters' suggestions.
The OCC, FDIC, Board and NCUA are publishing separate final rules
that are substantively identical to the OTS's final rule. The OCC,
FDIC, and Board rules appear elsewhere in this Federal Register.
B. Section-by-Section Summary and Discussion of Amendments to the
Uniform Rules
Section 509.1 Scope
The proposal added two statutory provisions to the list of civil
money penalty provisions to which the Uniform Rules apply. The 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, amended 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 provision, CDRI section 525, amended section 102 of 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 against a regulated lending institution if the
institution has a pattern or practice of committing violations of the
FDPA or the notice requirements of the National Flood Insurance Act of
1968 (NFIA) (42 U.S.C. 4104a). Under the FDPA, the term ``Federal
entity for lending regulation'' includes the agencies and the Farm
Credit Administration.
CDRI Sec. 525 also gave the agencies authority to require a
regulated lending institution to take remedial actions that are
necessary to ensure that the institution complies with the requirements
of the national flood insurance program if: (1) the institution has
engaged in a pattern and practice of noncompliance with regulations
issued pursuant to the FDPA; and (2) has not
[[Page 20351]]
demonstrated measurable improvement in compliance despite the
assessment of civil money penalties. The final rule adds a new
paragraph to the scope section that reflects this additional authority.
The OTS received no comments on this section, which is adopted as
proposed.
Section 509.6 Appearance and Practice in Adjudicatory Proceedings
The proposal permitted the administrative law judge (ALJ) to
require counsel who withdraws from representing a party to accept
service of papers for that party until either: (1) a new counsel has
filed a notice of appearance; or (2) the party indicates that he or she
will proceed on a pro se basis.
One commenter suggested that the proposal does not adequately
address certain situations: for example, when counsel withdraws because
of lack of payment of legal fees or withdraws because the client
discharged him or her. The commenter's implication is that it is unfair
to require counsel to continue to accept service in these situations.
Moreover, the commenter expressed concern that the administrative
proceeding may become involved in a dispute between the client and
counsel when the ALJ requires counsel to continue to accept service
after a client discharges counsel. The commenter suggested that the
rule should require service be given to both the unreplaced counsel and
the party.
The proposal was intended to ensure that a lawyer is always
available to receive service in order to prevent a party from halting
the administrative process simply by evading service. The regulatory
text is clear, however, that the ALJ has the discretion whether to
require former counsel to continue to accept service. Fairness to
counsel is among the factors the ALJ would consider in exercising this
discretion. The OTS, therefore, believes that the provision as proposed
is sufficiently flexible to accommodate the concerns raised by the
commenter.
The final rule changes the proposal's reference from ``service of
process'' to ``service'' to clarify that this section applies to all
papers that the party is entitled to receive. The section is otherwise
adopted as proposed.
Section 509.8 Conflicts of Interest
The proposal sought to improve in two ways the provisions governing
conflicts of interest that arise when counsel represents multiple
persons connected with a proceeding.
First, the proposal sought to protect the interests of individuals
and financial institutions by expanding the circumstances under which
counsel must certify that he or she has obtained a waiver from non-
parties of any potential conflict of interest. The former rule required
counsel to obtain waivers only from non-party institutions ``to which
notice of the proceedings must be given.'' The proposal required
counsel to obtain waivers from all parties and non-parties that counsel
represents on a matter relevant to an issue in the proceeding. It thus
ensured that all appropriate party and non-party individuals and
institutions are informed of potential conflicts.
Second, the proposal simplified this provision by eliminating the
requirement for counsel to certify that each client has asserted that
there are no conflicts of interest. The OTS believes that the former
provision was superfluous because the responsibility for identifying
potential conflicts resides with counsel.
One commenter noted that the proposal may inhibit multiple
representation that otherwise complies with applicable ethics rules.
The commenter suggested that the proposal could inappropriately tilt
the proceeding in favor of the agencies.
The provision does not limit the right of any party to
representation by counsel of the party's choice. Rather, it ensures
that all interested persons are informed of potential conflicts so that
they may avoid the conflict if they choose. In the OTS's view, it is
reasonable to establish a baseline standard requiring the affirmative
waiver of conflicts by all affected persons or entities in order to
ensure the integrity of the administrative adjudication process. State
rules of professional responsibility that impose more stringent ethical
standards are unaffected by this requirement.
In addition, the OTS is unpersuaded by the argument that the
conflicts provision grants the agencies significant advantage in a
proceeding. Persons and parties may be well and vigorously represented
even if they are not all represented by the same counsel.
Therefore, the OTS adopts this section as proposed.
Section 509.11 Service of Papers
The proposal changed this section by permitting parties, the
Director, and ALJs to serve a subpoena on a party by delivering it to a
person of suitable age and discretion at a party's place of work.
One commenter supported the intent of the proposal, but asserted
that permitting service on a person at a person's place of work was too
broad to be effective, particularly where an institution has numerous
branches.
The OTS interpreted the phrase ``person's place of work'' as used
in the proposal to mean the physical location at which an individual
works and not as any office of the corporation or association that
employs the person. To avoid confusion, the OTS has added specific
reference to physical location to the regulatory text. In addition, the
final rule states expressly that only an individual, not a corporation
or association, may be served at a residence or place of work.
The same commenter points out, however, that the former Uniform
Rules do not permit certain methods of service that are useful for
serving a corporation or other association. The final rule, therefore,
permits service on a party corporation or other association by delivery
of a copy of a notice to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
of process. The final rule also provides that, if the agent is one
authorized by statute to receive service and the statute so requires,
the serving party must also mail a copy to the party. The final rule
also restructures this provision for clarity.
Section 509.12 Construction of Time Limits
The proposal clarified that the additional time allotted for
responding to papers served by mail, delivery service, or electronic
media transmission under Sec. 509.12(c) is not included in determining
whether an act is required to be performed within ten days. The
proposal also clarified that additional time allotted for responding to
papers served by mail, delivery, or electronic media transmission is
counted by calendar days and, therefore, a party must count Saturdays,
Sundays, and holidays when calculating a time deadline.
The OTS received no comments on this section, which is adopted as
proposed.
Section 509.20 Amended Pleadings
The proposal changed this section to permit a party to amend its
pleadings without leave of the ALJ and to permit the ALJ to admit
evidence over the objection that the evidence does not fall directly
within the scope of the issues raised by a notice or answer.
One commenter asserted that the change could unduly prejudice a
party if a notice were amended to add or delete allegations immediately
prior to the hearing. The commenter expressed
[[Page 20352]]
concern that the amendment would give a party insufficient time to seek
additional discovery or file for summary judgment.
The regulatory text gives the ALJ discretion to revise the hearing
schedule to ensure that no prejudice results from last minute
amendments to a notice. The OTS believes this approach is adequate to
avoid prejudice to a party and, therefore, adopts this section as
proposed.
Section 509.24 Scope of Document Discovery
The former Uniform Rules were silent on the use of interrogatories.
The proposal expressly prohibited parties from using interrogatories on
grounds that other discovery tools are more efficient and less
burdensome and, therefore, more appropriate to administrative
adjudications.
The proposal also sought to focus document discovery requests so
that they are not unreasonable, oppressive, excessive in scope, or
unduly burdensome to any of the parties.
Accordingly, the proposal preserved the former rule's limitation on
document discovery by permitting discovery only of documents that have
material relevance. However, the proposal specifically provided that a
request should be considered unreasonable, oppressive, excessive in
scope, or unduly burdensome if, among other things: (1) it fails to
include justifiable limitations on the time period covered and the
geographic locations to be searched; (2) the time provided to respond
in the request is inadequate; or (3) the request calls for copies of
documents to be delivered to the requesting party and fails to include
the requestor's written agreement to pay in advance for the copying, in
accordance with Sec. 509.25.
Under the proposal, the scope of permissible document discovery is
not as broad as that allowed under Federal Rule of Civil Procedure
26(b) (28 U.S.C. app.). Historically, given the specialized nature of
enforcement proceedings in regulated industries, discovery in
administrative proceedings has not been as expansive as it is in civil
litigation.
The OTS received no significant comments on this section and,
therefore, adopts it as proposed.
Section 509.25 Request for document discovery from parties
The OTS proposed several changes to Sec. 509.25. First, the
proposal sought to reduce unnecessary burden by permitting a party to:
(1) respond to document discovery either by producing documents as they
are kept in the ordinary course of business or by organizing them to
correspond to the categories in a document request; and (2) identify
similar documents by category when they are voluminous and are
protected by the deliberative process, attorney-client, or attorney
work-product privilege.
The proposal also amended Sec. 509.25 to permit a party to require
payment in advance for the costs of copying and shipping requested
documents; and clarified that, if a party has stated its intention to
file a timely motion for interlocutory review, the ALJ may not release,
or order a party to produce, documents withheld on grounds of privilege
until the motion for interlocutory review has been decided.
The agencies received two comments on this section. One commenter
sought guidance on when, how, and to whom a party must express an
``intention'' to file a timely motion for interlocutory review.
Because the ALJ may not release or order a party to produce
documents, it was implicit in the proposed regulatory text that a party
must make the intention to seek interlocutory review known to the ALJ.
For clarity's sake, the final rule adds language to this effect.
Another commenter suggested that a request for interlocutory review
should automatically stay the proceeding.
Under Sec. 509.28(d) of the Uniform Rules, a party may request that
a proceeding be stayed during the pendency of an interlocutory review.
The ALJ has the discretion to decide whether a stay is appropriate. The
OTS believes that this procedure adequately protects the parties. For
this reason and to avoid adding unnecessary delays in the
administrative proceedings, the OTS declines to provide for an
automatic stay whenever a party requests interlocutory review.
One commenter asserted that permitting the OTS to require payment
in advance for document copying and shipping costs would give the OTS
an advantage over other creditors if the party is bankrupt following
the administrative hearing. The OTS finds that this situation is rare
and therefore does not outweigh the OTS's need to ensure that it
receives payment. Moreover, the provision does not preclude other
creditors from requiring prepayment for products or services.
Accordingly, the OTS adopts this section as proposed.
Section 509.27 Deposition of witness unavailable for hearing
The proposal clarified that a party may serve a deposition subpoena
on a witness who is unavailable by serving the subpoena on the witness
or the witness's authorized representative. The OTS received no
comments on this section.
As amended, section 509.11(d) expressly permits a party to serve a
subpoena by delivering the subpoena to an agent, which would include
delivery to an authorized representative. The proposed change to
section 509.27 is, therefore, redundant and has not been included in
the final rule.
Section 509.33 Public Hearings
The proposal changed this section to specify that a party must file
a motion for a private hearing with the Director and not the ALJ, but
must serve the ALJ with a copy of the motion.
The OTS received no comments on this section, which is adopted as
proposed.
Section 509.34 Hearing Subpoenas
The former Uniform Rules did not specifically require that a party
inform all other parties when a subpoena to a non-party is issued. The
proposal required that, after a hearing subpoena is issued by the ALJ,
the party that applied for the subpoena must serve a copy of it on each
party. Under the proposal, any party may move to quash any hearing
subpoena and must serve the motion on each other party.
The OTS received no comments on this section, which is adopted as
proposed.
Section 509.35 Conduct of Hearings
The proposal limited the number of counsel permitted to examine a
witness and clarified that hearing transcripts may be obtained only
from the court reporter. The former Uniform Rules were silent on these
issues. The OTS received no comments on this section, which is adopted
as proposed.
Section 509.37 Post-Hearing Filings
The proposal changed the title of this section from ``Proposed
findings and conclusions'' to ``Post-hearing filings'' to describe more
accurately the content of the section.
The proposal also moved, from Sec. 509.35(b) to Sec. 509.37(a), the
provision that requires the ALJ to serve each party with notice of the
filing of the certified transcript of the hearing (including hearing
exhibits). The proposal added a requirement that the ALJ must use the
same method of service for this notice.
Finally, the proposal clarified that the ALJ may, when appropriate,
permit parties more than the allotted 30 days to file proposed findings
of fact, proposed conclusions of law, and a proposed order.
[[Page 20353]]
The OTS received no comments on this section, which is adopted with
a minor technical change.
Section 509.38 Recommended decision and filing of record
Under OTS Local Rule Sec. 509.104(h), the ALJ was required to file
an index of the record when he filed the record with the Director. The
proposal added this requirement to the Uniform Rules at Sec. 509.38,
and reorganized this section to improve its clarity.
The OTS received no comments on this section, which is adopted as
proposed.
C. Section-by-Section Summary and Discussion of Proposed Amendments to
the OTS Local Rules
Section 509.102 Discovery
The OTS proposed to revise its local rule at Sec. 509.102(g)(2)
which governs the service of discovery deposition subpoenas. The
current rule permits service of deposition subpoenas only by personal
service, certified mail, or overnight delivery service. The proposed
rule, however, would have permitted parties to serve deposition
subpoenas by any of the methods listed in Uniform Rule Sec. 509.11(d).
The OTS received no comments on this proposal. It is adopted without
change.
Current Sec. 509.102(g)(2) requires a party to serve a deposition
subpoena on ``the person named therein and a copy on that person's
counsel, or on that person's counsel.'' The OTS proposed to revise this
provision to require a party to serve a deposition subpoena on the
person named therein or on that person's counsel. The proposed change
would conform the OTS Local Rule to the OCC Local Rule at 12 CFR
19.171.
One commenter suggested that the OTS should require a party to
serve both the deponent and the deponent's counsel. The OTS rejects
this suggestion. Initially, a party may not be able to comply with the
commenter's proposed requirement. For example, where the witness to be
deposed is a non-party, the party issuing the subpoena may not know
whether the witness is represented by counsel and the identity of
counsel. Where a party is to be deposed, however, counsel of record
will always receive notice of the deposition under Sec. 509.102(a).
This commenter suggests that it may be a violation of an attorney's
ethics for counsel to serve a deponent, but not the deponent's
attorney. The OTS Local Rule does not limit the ability of any party to
make service upon a deponent's attorney where required by local ethics
rules. State rules of professional responsibility that impose more
stringent ethical standards are unaffected by this Local Rule.
The proposed changes to Sec. 509.102(g)(2) are adopted with certain
clarifying changes.
Section 509.104 Additional Procedures
As amended today, Sec. 509.38 incorporates OTS Local Rule at
Sec. 509.104(h). Accordingly, the local rule is deleted.
D. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
OTS hereby certifies that this final rule will not have a significant
economic impact on a substantial number of small entities. Accordingly,
a regulatory flexibility analysis is not required.
This final rule only imposes procedural requirements in
administrative adjudications. It contains no substantive requirements.
It improves the Uniform Rules of Practice and Procedure and facilitates
the orderly determination of administrative proceedings. The changes in
this final rule are primarily clarifications and impose no significant
additional burdens on regulated institutions, parties to administrative
actions, or counsel.
E. Executive Order 12866
The OTS has determined that this final rule is not a significant
regulatory action as defined in Executive Order 12866.
F. Unfunded Mandates Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L.
104-4 (Unfunded Mandates Act) requires that an agency prepare a
budgetary impact statement before promulgating a rule that includes a
Federal mandate that may result in expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, Section 205 of the Unfunded Mandates Act also requires an
agency to identify and consider a reasonable number of regulatory
alternatives before promulgating a rule. As discussed in the preamble,
this final rule is limited in application to procedural amendments to
the rules of administrative practice before the OTS. The OTS has
therefore determined that the final rule will not result in
expenditures by State, local, or tribal governments or by the private
sector of more than $100 million. Accordingly, the OTS has not prepared
a budgetary impact statement or specifically addressed the regulatory
alternatives considered.
G. Effective Date
Section 302 of the Riegle Community Development and Regulatory
Improvement Act of 1994 delays the effective date of regulations
promulgated by the Federal banking agencies that impose additional
reporting, disclosure, or other new requirements to the first day of
the first calendar quarter following publication of the final rule. The
OTS believes that section 302 is not applicable to this final rule,
because the regulation does not impose any additional reporting or
other requirements not already contained in the current version of the
Uniform Rules or the Local Rules.
List of Subjects in 12 CFR Part 509
Administrative practice and procedure, Penalties.
For the reasons set out in the preamble, part 509 of chapter V of
title 12 of the Code of Federal Regulations is amended as set forth
below.
PART 509--RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY
PROCEEDINGS
1. The authority citation for part 509 is revised to read as
follows:
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a,
1468, 1817(j), 1818, 3349, 4717; 15 U.S.C. 78(l), 78o-5, 78u-2; 31
U.S.C. 5321; 42 U.S.C. 4012a.
Subpart A--Uniform Rules of Practice and Procedure
2. Section 509.1 is amended in paragraph (e)(7) by removing the
word ``and'' after the semicolon, adding paragraphs (e)(9) and (e)(10),
redesignating paragraph (f) as paragraph (g) and revising it, and
adding new paragraph (f) read as follows:
Sec. 509.1 Scope.
* * * * *
(e) * * *
(9) Any provision of law referenced in section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder; and
(10) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(f) Remedial action under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g)); and
(g) This subpart also applies to all other adjudications required
by statute to be determined on the record after opportunity for an
agency hearing,
[[Page 20354]]
unless otherwise specifically provided for in the Local Rules.
3. Section 509.6 is amended by revising paragraph (a)(3) to read as
follows:
Sec. 509.6 Appearance and practice in adjudicatory proceedings.
(a) * * *
(3) Notice of appearance. Any individual acting as counsel on
behalf of a party, including the Director, shall file a notice of
appearance with OFIA at or before the time that individual submits
papers or otherwise appears on behalf of a party in the adjudicatory
proceeding. The notice of appearance must include a written declaration
that the individual is currently qualified as provided in paragraph
(a)(1) or (a)(2) of this section and is authorized to represent the
particular party. By filing a notice of appearance on behalf of a party
in an adjudicatory proceeding, the counsel agrees and represents that
he or she is authorized to accept service on behalf of the represented
party and that, in the event of withdrawal from representation, he or
she will, if required by the administrative law judge, continue to
accept service until new counsel has filed a notice of appearance or
until the represented party indicates that he or she will proceed on a
pro se basis.
* * * * *
4. Section 509.8 is amended by revising paragraph (b) to read as
follows:
Sec. 509.8 Conflicts of interest.
* * * * *
(b) Certification and waiver. If any person appearing as counsel
represents two or more parties to an adjudicatory proceeding or also
represents a non-party on a matter relevant to an issue in the
proceeding, counsel must certify in writing at the time of filing the
notice of appearance required by Sec. 509.6(a):
(1) That the counsel has personally and fully discussed the
possibility of conflicts of interest with each such party and non-
party; and
(2) That each such party and non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any non-material conflicts of interest during the course of the
proceeding.
5. Section 509.11 is amended by revising paragraphs (c)(2) and (d)
to read as follows:
Sec. 509.11 Service of papers.
* * * * *
(c) * * *
(2) If a party has not appeared in the proceeding in accordance
with Sec. 509.6 of this subpart, the Director or the administrative law
judge shall make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where
the individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or
to any other agent authorized by appointment or by law to receive
service and, if the agent is one authorized by statute to receive
service and the statute so requires, by also mailing a copy to the
party;
(iv) By registered or certified mail addressed to the person's last
known address; or
(v) By any other method reasonably calculated to give actual
notice.
(d) Subpoenas. Service of a subpoena may be made:
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where
the individual resides or works;
(3) By delivery to an agent, which in the case of a corporation or
other association, is delivery to an officer, managing or general
agent, or to any other agent authorized by appointment or by law to
receive service and, if the agent is one authorized by statute to
receive service and the statute so requires, by also mailing a copy to
the party;
(4) By registered or certified mail addressed to the person's last
known address; or
(5) By any other method reasonably calculated to give actual
notice.
* * * * *
6. Section 509.12 is amended by revising paragraphs (a), (c)(1),
(c)(2), and (c)(3) to read as follows:
Sec. 509.12 Construction of time limits.
(a) General rule. In computing any period of time prescribed by
this subpart, the date of the act or event that commences the
designated period of time is not included. The last day so computed is
included unless it is a Saturday, Sunday, or Federal holiday. When the
last day is a Saturday, Sunday, or Federal holiday, the period runs
until the end of the next day that is not a Saturday, Sunday, or
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays
are included in the computation of time. However, when the time period
within which an act is to be performed is ten days or less, not
including any additional time allowed for in paragraph (c) of this
section, intermediate Saturdays, Sundays, and Federal holidays are not
included.
* * * * *
(c) * * *
(1) If service is made by first class, registered, or certified
mail, add three calendar days to the prescribed period;
(2) If service is made by express mail or overnight delivery
service, add one calendar day to the prescribed period; or
(3) If service is made by electronic media transmission, add one
calendar day to the prescribed period, unless otherwise determined by
the Director or the administrative law judge in the case of filing, or
by agreement among the parties in the case of service.
7. Section 509.20 is revised to read as follows:
Sec. 509.20 Amended pleadings.
(a) Amendments. The notice or answer may be amended or supplemented
at any stage of the proceeding. The respondent must answer an amended
notice within the time remaining for the respondent's answer to the
original notice, or within ten days after service of the amended
notice, whichever period is longer, unless the Director or
administrative law judge orders otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised
in the notice or answer are tried at the hearing by express or implied
consent of the parties, they will be treated in all respects as if they
had been raised in the notice or answer, and no formal amendments are
required. If evidence is objected to at the hearing on the ground that
it is not within the issues raised by the notice or answer, the
administrative law judge may admit the evidence when admission is
likely to assist in adjudicating the merits of the action and the
objecting party fails to satisfy the administrative law judge that the
admission of such evidence would unfairly prejudice that party's action
or defense upon the merits. The administrative law judge may grant a
continuance to enable the objecting party to meet such evidence.
8. Section 509.24 is amended by revising paragraphs (a) and (b) to
read as follows:
Sec. 509.24 Scope of document discovery.
(a) Limits on discovery. (1) Subject to the limitations set out in
paragraphs (b), (c), and (d) of this section, a party to a proceeding
under this subpart may obtain document discovery by serving a written
request to produce documents. For purposes of a request to produce
documents, the term ``documents'' may
[[Page 20355]]
be defined to include drawings, graphs, charts, photographs,
recordings, data stored in electronic form, and other data compilations
from which information can be obtained, or translated, if necessary, by
the parties through detection devices into reasonably usable form, as
well as written material of all kinds.
(2) Discovery by use of deposition is governed by Sec. 509.102 of
this part.
(3) Discovery by use of interrogatories is not permitted.
(b) Relevance. A party may obtain document discovery regarding any
matter, not privileged, that has material relevance to the merits of
the pending action. Any request to produce documents that calls for
irrelevant material, that is unreasonable, oppressive, excessive in
scope, unduly burdensome, or repetitive of previous requests, or that
seeks to obtain privileged documents will be denied or modified. A
request is unreasonable, oppressive, excessive in scope or unduly
burdensome if, among other things, it fails to include justifiable
limitations on the time period covered and the geographic locations to
be searched, the time provided to respond in the request is inadequate,
or the request calls for copies of documents to be delivered to the
requesting party and fails to include the requestor's written agreement
to pay in advance for the copying, in accordance with Sec. 509.25 of
this subpart.
* * * * *
9. Section 509.25 is amended by revising paragraphs (a), (b), (e),
and (g) to read as follows:
Sec. 509.25 Request for document discovery from parties.
(a) General rule. Any party may serve on any other party a request
to produce for inspection any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. The request must identify the documents to be produced either
by individual item or by category, and must describe each item and
category with reasonable particularity. Documents must be produced as
they are kept in the usual course of business or must be organized to
correspond with the categories in the request.
(b) Production or copying. The request must specify a reasonable
time, place, and manner for production and performing any related acts.
In lieu of inspecting the documents, the requesting party may specify
that all or some of the responsive documents be copied and the copies
delivered to the requesting party. If copying of fewer than 250 pages
is requested, the party to whom the request is addressed shall bear the
cost of copying and shipping charges. If a party requests 250 pages or
more of copying, the requesting party shall pay for the copying and
shipping charges. Copying charges are the current per-page copying rate
imposed under 12 CFR 502.7 for requests under the Freedom of
Information Act (5 U.S.C. 552). The party to whom the request is
addressed may require payment in advance before producing the
documents.
* * * * *
(e) Privilege. At the time other documents are produced, the
producing party must reasonably identify all documents withheld on the
grounds of privilege and must produce a statement of the basis for the
assertion of privilege. When similar documents that are protected by
deliberative process, attorney-work-product, or attorney-client
privilege are voluminous, these documents may be identified by category
instead of by individual document. The administrative law judge retains
discretion to determine when the identification by category is
insufficient.
* * * * *
(g) Ruling on motions. After the time for filing responses pursuant
to this section has expired, the administrative law judge shall rule
promptly on all motions filed pursuant to this section. If the
administrative law judge determines that a discovery request, or any of
its terms, calls for irrelevant material, is unreasonable, oppressive,
excessive in scope, unduly burdensome, or repetitive of previous
requests, or seeks to obtain privileged documents, he or she may deny
or modify the request, and may issue appropriate protective orders,
upon such conditions as justice may require. The pendency of a motion
to strike or limit discovery or to compel production is not a basis for
staying or continuing the proceeding, unless otherwise ordered by the
administrative law judge. Notwithstanding any other provision in this
part, the administrative law judge may not release, or order a party to
produce, documents withheld on grounds of privilege if the party has
stated to the administrative law judge its intention to file a timely
motion for interlocutory review of the administrative law judge's order
to produce the documents, and until the motion for interlocutory review
has been decided.
* * * * *
10. Section 509.33 is amended by revising paragraph (a) to read as
follows:
Sec. 509.33 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the Director, in the Director's discretion, determines that holding an
open hearing would be contrary to the public interest. Within 20 days
of service of the notice or, in the case of change-in-control
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)),
within 20 days from service of the hearing order, any respondent may
file with the Director a request for a private hearing, and any party
may file a reply to such a request. A party must serve on the
administrative law judge a copy of any request or reply the party files
with the Director. The form of, and procedure for, these requests and
replies are governed by Sec. 509.23 of this subpart. A party's failure
to file a request or a reply constitutes a waiver of any objections
regarding whether the hearing will be public or private.
* * * * *
11. Section 509.34 is amended by revising paragraphs (a) and (b)(1)
to read as follows:
Sec. 509.34 Hearing subpoenas.
(a) Issuance. (1) Upon application of a party showing general
relevance and reasonableness of scope of the testimony or other
evidence sought, the administrative law judge may issue a subpoena or a
subpoena duces tecum requiring the attendance of a witness at the
hearing or the production of documentary or physical evidence at the
hearing. The application for a hearing subpoena must also contain a
proposed subpoena specifying the attendance of a witness or the
production of evidence from any state, territory, or possession of the
United States, the District of Columbia, or as otherwise provided by
law at any designated place where the hearing is being conducted. The
party making the application shall serve a copy of the application and
the proposed subpoena on every other party.
(2) A party may apply for a hearing subpoena at any time before the
commencement of a hearing. During a hearing, a party may make an
application for a subpoena orally on the record before the
administrative law judge.
(3) The administrative law judge shall promptly issue any hearing
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may
[[Page 20356]]
issue it in a modified form upon any conditions consistent with this
subpart. Upon issuance by the administrative law judge, the party
making the application shall serve the subpoena on the person named in
the subpoena and on each party.
(b) Motion to quash or modify. (1) Any person to whom a hearing
subpoena is directed or any party may file a motion to quash or modify
the subpoena, accompanied by a statement of the basis for quashing or
modifying the subpoena. The movant must serve the motion on each party
and on the person named in the subpoena. Any party may respond to the
motion within ten days of service of the motion.
* * * * *
12. Section 509.35 is amended by redesignating paragraph (a)(3) as
paragraph (a)(4), by adding a new paragraph (a)(3), and by revising
paragraph (b) to read as follows:
Sec. 509.35 Conduct of hearings.
(a) * * *
(3) Examination of witnesses. Only one counsel for each party may
conduct an examination of a witness, except that in the case of
extensive direct examination, the administrative law judge may permit
more than one counsel for the party presenting the witness to conduct
the examination. A party may have one counsel conduct the direct
examination and another counsel conduct re-direct examination of a
witness, or may have one counsel conduct the cross examination of a
witness and another counsel conduct the re-cross examination of a
witness.
* * * * *
(b) Transcript. The hearing must be recorded and transcribed. The
reporter will make the transcript available to any party upon payment
by that party to the reporter of the cost of the transcript. The
administrative law judge may order the record corrected, either upon
motion to correct, upon stipulation of the parties, or following notice
to the parties upon the administrative law judge's own motion.
13. Section 509.37 is amended by revising the section heading and
paragraph (a)(1) to read as follows:
Sec. 509.37 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the administrative law
judge shall serve notice upon each party, that the certified
transcript, together with all hearing exhibits and exhibits introduced
but not admitted into evidence at the hearing, has been filed. Any
party may file with the administrative law judge proposed findings of
fact, proposed conclusions of law, and a proposed order within 30 days
following service of this notice by the administrative law judge or
within such longer period as may be ordered by the administrative law
judge.
* * * * *
14. Section 509.38 is revised to read as follows:
Sec. 509.38 Recommended decision and filing of record.
(a) Filing of recommended decision and record. Within 45 days after
expiration of the time allowed for filing reply briefs under
Sec. 509.37(b) of this subpart, the administrative law judge shall file
with and certify to the Director, for decision, the record of the
proceeding. The record must include the administrative law judge's
recommended decision, recommended findings of fact, recommended
conclusions of law, and proposed order; all prehearing and hearing
transcripts, exhibits, and rulings; and the motions, briefs, memoranda,
and other supporting papers filed in connection with the hearing. The
administrative law judge shall serve upon each party the recommended
decision, findings, conclusions, and proposed order.
(b) Filing of index. At the same time the administrative law judge
files with and certifies to the Director for final determination the
record of the proceeding, the administrative law judge shall furnish to
the Director a certified index of the entire record of the proceeding.
The certified index shall include, at a minimum, an entry for each
paper, document or motion filed with the administrative law judge in
the proceeding, the date of the filing, and the identity of the filer.
The certified index shall also include an exhibit index containing, at
a minimum, an entry consisting of exhibit number and title or
description for: Each exhibit introduced and admitted into evidence at
the hearing; each exhibit introduced but not admitted into evidence at
the hearing; each exhibit introduced and admitted into evidence after
the completion of the hearing; and each exhibit introduced but not
admitted into evidence after the completion of the hearing.
Subpart B--Local Rules
15. Section 509.102 is amended by revising paragraph (g)(2) to read
as follows:
Sec. 509.102 Discovery.
* * * * *
(g) * * *
(2) Service. The party requesting the subpoena must serve it on the
person named therein or upon that person's counsel, by any of the
methods identified in Sec. 509.11(d) of this part. The party serving
the subpoena must file proof of service with the administrative law
judge.
* * * * *
Sec. 509.104 [Amended]
16. Section 509.104 is amended by removing paragraph (h) and by
redesignating paragraph (i) as paragraph (h).
By the Office of Thrift Supervision.
Dated: April 4, 1996.
Jonathan L. Fiechter,
Acting Director.
[FR Doc. 96-10342 Filed 5-3-96; 8:45 am]
BILLING CODE 6720-01-P
