FDIC Rules of Practice and Procedure; Technical Revisions, 2246-2251 [2020-27944]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 86, Number 7 (Tuesday, January 12, 2021)]
[Rules and Regulations]
[Pages 2246-2251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27944]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AF69


FDIC Rules of Practice and Procedure; Technical Revisions

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending 
its rules of practice and procedure to codify the agency's longstanding 
practice of having certain adjudicative functions performed by an 
inferior officer of the United States appointed by the FDIC's Board of 
Directors (Board). Additionally, the FDIC is making other technical 
edits to its rules of practice and procedure to update references to 
certain positions within the FDIC Legal Division whose titles are 
outdated.

DATES: The final rule is effective on January 12, 2021.

FOR FURTHER INFORMATION CONTACT: Romulus A. Johnson, Counsel, Legal 
Division, (202) 898-3820, [email protected]; Josephine M. Bahn, 
Senior Attorney, Legal Division, (202) 898-6576, [email protected]; or 
Nicholas S. Kazmerski, Counsel, Legal Division, (202) 898-3524, 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Administrative enforcement proceedings brought by the FDIC are 
subject to the Administrative Procedure Act (APA), 5 U.S.C. 551 et 
seq., and the FDIC Rules of Practice and Procedure, 12 CFR part 308. 
Under part 308, evidentiary hearings and related proceedings are 
generally presided over by an Administrative Law Judge (ALJ). See 
generally, 5 U.S.C. 556; 12 CFR 308.5, and 308.3. Additionally, part 
308 provides that certain procedural and adjudicative functions are 
reserved to the Executive Secretary of the FDIC. These functions 
include but are not limited to: (1) Serving in place of an ALJ when no 
ALJ has jurisdiction over an administrative proceeding; (2) issuing 
rulings in certain administrative proceedings; and (3) serving as the 
custodian of records for administrative proceedings. See generally, 12 
CFR 308.102(b) and 308.105.
    On June 21, 2018, the U.S. Supreme Court held that the ALJs 
employed by the U.S. Securities and Exchange Commission (SEC) were 
``inferior officers'' of the United States under the Appointments 
Clause of the United States Constitution because these ALJs hold a 
continuing office established by law, and they exercise ``significant 
discretion'' in connection with certain ``important functions'' when 
presiding over administrative hearings. Lucia v. SEC, 138 S. Ct. 2044, 
2053-2054 (2018) (Lucia). As inferior officers, the Supreme Court held 
that the SEC's ALJs are ``subject to the Appointments Clause and as 
such, can only be appointed by the President, ``Courts of Law'' or 
``Heads of Departments.'' See, Lucia, 138 S. Ct. 2044, 2046.
    Although the Lucia decision did not directly affect the FDIC or the 
ALJs for the FDIC, the Board nevertheless elected to formally appoint 
the ALJs that preside over FDIC enforcement proceedings. The ALJs who 
were serving at the time of the Lucia decision were appointed by the 
Board on July 19, 2018. See FDIC Board Resolution 085152. Since that 
time, the Board has appointed all ALJs that preside over FDIC 
enforcement proceedings.
    Since the Lucia decision, the FDIC has received questions regarding 
whether the FDIC's Executive Secretary was also appointed in a manner 
consistent with the Supreme Court's ruling in Lucia. In fact, the Board 
duly appointed the FDIC's current Executive Secretary as an inferior 
officer on June 22, 1997, pursuant to Article II of the United States 
Constitution and 12 U.S.C. 1819(a) (Fifth) (allowing the FDIC to 
``appoint by its Board of Directors such officers and employees as are 
not otherwise provided for in this chapter''). Nonetheless, in the 
interest of transparency and to assuage any outstanding concerns about 
this issue, we are amending part 308 to clarify and to expressly 
provide that such adjudicative functions will continue to be performed 
by an inferior officer of the United States (Administrative Officer) 
that has been duly appointed by the Board.
    In addition to clarifying that these adjudicative functions are 
performed by an Administrative Officer that is duly appointed by the 
Board, the FDIC is making technical changes to part 308 to update 
outdated references to certain position titles.

II. Exemption From Public Notice and Comment

    Section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 
553) sets forth requirements for providing the general public notice 
of, and the opportunity to comment on, proposed agency rules. However, 
unless notice or hearing is required by statute, those requirements do 
not apply to interpretive rules, general statements of policy, or rules 
of agency organization, procedure, or practice. See 5 U.S.C. 553(b)(A).
    The FDIC is updating part 308, its rules of practice and procedure, 
to substitute the Administrative Officer for the Executive Secretary in 
multiple places. Since the changes relate to agency organization, 
procedure, or practice, the rules are being published in final form 
without public notice and comment.

III. Regulatory Analysis

A. Congressional Review Act

    Under the Congressional Review Act (CRA), ``[b]efore a rule can 
take effect, the Federal agency promulgating such rule shall submit to 
each House of the Congress and to the Comptroller General a report 
containing--(i) a copy of the rule; (ii) a concise general statement 
relating to the rule, including whether it is a major rule; and (iii) 
the proposed effective date of the rule.'' \1\ The CRA further defines 
the term ``rule'' as having ``the meaning given such term in section 
551, except that such term does not include--(A) any rule of particular 
applicability . . . ; (B) any rule relating to agency management or 
personnel; or (C) any rule of agency organization, procedure, or 
practice that does not substantially affect the rights or obligations 
of non-agency parties.'' \2\
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    \1\ 5 U.S.C. 801(a)(1)(A).
    \2\ 5 U.S.C. 804(3).
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    The FDIC is updating part 308, its rules of practice and procedure, 
to clarify that certain adjudicative functions, specified in part 308 
as being performed by the FDIC's Executive Secretary or Assistant 
Executive Secretary, will be performed by an ``Administrative Officer'' 
or ``Assistant Administrative Officer'' who has been duly appointed by 
the Board. Additionally, the FDIC is updating outdated references to 
certain position titles in part 308. These amendments do not constitute 
substantive changes, but merely conform the titles in the

[[Page 2247]]

regulation to the current titles of these positions.
    The clarifications relate to agency management and personnel, and 
to agency practice and procedure. Further, to the extent that non-
agency parties are impacted by the amended rules (i.e., they may be 
required to submit requests and documents to the attention of the 
Administrative Officer rather than the Executive Secretary), their 
rights and obligations will not be substantially affected. As such, 
submission to Congress and the Comptroller General is not required for 
the rules to become effective.

B. Paperwork Reduction Act

    This rule does not propose new or revisions to existing 
``collection[s] of information'' as that term is defined under the 
Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. chapter 
35, and its implementing regulations, 5 CFR part 1320.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) does not 
apply to a rulemaking where a general notice of proposed rulemaking is 
not required. (5 U.S.C. 603 and 604). As noted previously, the FDIC has 
determined that it is unnecessary to publish a notice of proposed 
rulemaking for the final rule amending part 308. Accordingly, the RFA's 
requirements relating to an initial and final regulatory flexibility 
analysis do not apply to this rulemaking for part 308.

D. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\3\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with the principle of safety and soundness 
and the public interest, any administrative burdens that the 
regulations would place on depository institutions, including small 
depository institutions and customers of depository institutions, as 
well as the benefits of the regulations. In addition, section 302(b) of 
RCDRIA requires new regulations and amendments to regulations that 
impose additional reporting, disclosures, or other new requirements on 
IDIs generally to take effect on the first day of a calendar quarter 
that begins on or after the date on which the regulations are published 
in final form.\4\ The FDIC has determined that the rule would not 
impose additional reporting, disclosure, or other requirements; 
therefore the requirements of the RCDRIA do not apply.
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    \3\ 12 U.S.C. 4802(a).
    \4\ 12 U.S.C. 4802.
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E. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \5\ requires the Federal 
banking agencies to use ``plain language'' in all proposed and final 
rules published after January 1, 2000. In light of this requirement, 
the FDIC has sought to present the final rule in a simple and 
straightforward manner.
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    \5\ 12 U.S.C. 4809.
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List of Subjects in 12 CFR Part 308

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

12 CFR Chapter III

Authority and Issuance

    For the reasons stated in the preamble, the FDIC amends 12 CFR part 
308 as follows:

PART 308--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 308 continues to read as follows:

    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 
1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s), 
110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 
124 Stat. 1376; Pub. L. 114-74, sec. 701, 129 Stat. 584.


0
2. Amend Sec.  308.3 by:
0
a. Removing the first-level paragraph designations from paragraphs (a) 
through (s);
0
b. Adding definitions of ``Administrative Officer'' and ``Assistant 
Administrative Officer'' in alphabetical order;
0
c. Revising the definition of ``Decisional employee'';
0
d. Removing the definition of ``Executive Secretary''; and
0
e. Revising the definition of ``Person''.
    The additions and revisions read as follows:


Sec.  308.3   Definitions.

* * * * *
    Administrative Officer means an inferior officer of the Federal 
Deposit Insurance Corporation, duly appointed by the Board of Directors 
of the Federal Deposit Insurance Corporation to serve as the Board's 
designee to hear certain motions or requests in an adjudicatory 
proceeding and to be the official custodian of the record for the 
Federal Deposit Insurance Corporation.
* * * * *
    Assistant Administrative Officer means an inferior officer of the 
Federal Deposit Insurance Corporation, duly appointed by the Board of 
Directors of the Federal Deposit Insurance Corporation to serve as the 
Board's designee to hear certain motions or requests in an adjudicatory 
proceeding upon the designation or unavailability of the Administrative 
Officer.
* * * * *
    Decisional employee means any member of the Federal Deposit 
Insurance Corporation's or administrative law judge's staff who has not 
engaged in an investigative or prosecutorial role in a proceeding and 
who may assist the Board of Directors, the administrative law judge, or 
the Administrative Officer, or the Assistant Administrative Officer, in 
preparing orders, recommended decisions, decisions, and other documents 
under the Uniform Rules.
* * * * *
    Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency, or other entity or organization, including an 
institution as defined in this section.
* * * * *

0
3. Amend Sec.  308.18 by revising paragraph (a)(1)(ii) to read as 
follows:


Sec.  308.18   Commencement of proceeding and contents of notice.

    (a) * * *
    (1) * * *
    (ii) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law.
* * * * *

0
4. Amend Sec.  308.23 by revising paragraphs (c) and (d) to read as 
follows:


Sec.  308.23   Motions.

* * * * *
    (c) Filing of motions. Motions must be filed with the 
administrative law judge, except that following the filing of the 
recommended decision, motions must

[[Page 2248]]

be filed with the Administrative Officer for disposition by the Board 
of Directors.
    (d) Responses. (1) Except as otherwise provided in this paragraph 
(d), within ten days after service of any written motion, or within 
such other period of time as may be established by the administrative 
law judge or the Administrative Officer, any party may file a written 
response to a motion. The administrative law judge shall not rule on 
any oral or written motion before each party has had an opportunity to 
file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
* * * * *

0
5. Amend Sec.  308.33 by revising paragraph (a) to read as follows:


Sec.  308.33   Public hearings.

    (a) General rule. All hearings shall be open to the public, unless 
the FDIC, in its 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 
Administrative Officer 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 Administrative Officer. The form of, and procedure for, these 
requests and replies are governed by Sec.  308.23. 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.
* * * * *

0
6. Revise Sec.  308.38 to read as follows:


Sec.  308.38   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.  
308.37(b), the administrative law judge shall file with and certify to 
the Administrative Officer, 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 Administrative Officer for final 
determination the record of the proceeding, the administrative law 
judge shall furnish to the Administrative Officer 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.

0
7. Amend Sec.  308.39 by revising paragraph (a) to read as follows:


Sec.  308.39   Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  308.38, a party may file with the Administrative Officer written 
exceptions to the administrative law judge's recommended decision, 
findings, conclusions, or proposed order, to the admission or exclusion 
of evidence, or to the failure of the administrative law judge to make 
a ruling proposed by a party. A supporting brief may be filed at the 
time the exceptions are filed, either as part of the same document or 
in a separate document.
* * * * *

0
8. Amend Sec.  308.40 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  308.40   Review by Board of Directors.

    (a) Notice of submission to Board of Directors. When the 
Administrative Officer determines that the record in the proceeding is 
complete, the Administrative Officer shall serve notice upon the 
parties that the proceeding has been submitted to the Board of 
Directors for final decision.
    (b) Oral argument before the Board of Directors. Upon the 
initiative of the Board of Directors or on the written request of any 
party filed with the Administrative Officer within the time for filing 
exceptions, the Board of Directors may order and hear oral argument on 
the recommended findings, conclusions, decision, and order of the 
administrative law judge. A written request by a party must show good 
cause for oral argument and state reasons why arguments cannot be 
presented adequately in writing. A denial of a request for oral 
argument may be set forth in the Board of Directors' final decision. 
Oral argument before the Board of Directors must be on the record.
* * * * *

0
9. Amend Sec.  308.102 by revising the section heading and paragraphs 
(a), (b) heading, (b)(1), and (b)(2) introductory text to read as 
follows:


Sec.  308.102   Authority of Board of Directors and Administrative 
Officer.

    (a) The Board of Directors. (1) The Board of Directors may, at any 
time during the pendency of a proceeding, perform, direct the 
performance of, or waive performance of, any act which could be done or 
ordered by the Administrative Officer.
    (2) Nothing contained in this part shall be construed to limit the 
power of the Board of Directors granted by applicable statutes or 
regulations.
    (b) The Administrative Officer. (1) When no administrative law 
judge has jurisdiction over a proceeding, the Administrative Officer 
may act in place of, and with the same authority as, an administrative 
law judge, except that the Administrative Officer may not hear a case 
on the merits or make a recommended decision on the merits to the Board 
of Directors.
    (2) Pursuant to authority delegated by the Board of Directors, the 
Administrative Officer and Assistant Administrative Officer, upon the 
advice and recommendation of the Deputy General Counsel for Litigation 
or, in his absence, the Assistant General Counsel for General 
Litigation, may issue rulings in proceedings under sections 7(j), 8, 
18(j), 19, 32 and 38 of the FDIA (12 U.S.C. 1817(j), 1818, 1828(j), 
1829, 1831i and 1831o) concerning:
* * * * *

0
10. Amend Sec.  308.103 by revising paragraph (b)(1) to read as 
follows:


Sec.  308.103   Appointment of administrative law judge.

* * * * *
    (b) * * *
    (1) The Enforcement Counsel shall promptly after issuance of the 
notice file

[[Page 2249]]

the matter with the Office of Financial Institution Adjudication 
(``OFIA'') which shall secure the appointment of an administrative law 
judge to hear the proceeding.
* * * * *

0
11. Revise Sec.  308.104 to read as follows:


Sec.  308.104   Filings with the Board of Directors.

    (a) General rule. All materials required to be filed with or 
referred to the Board of Directors in any proceedings under this part 
shall be filed with the Administrative Officer, Federal Deposit 
Insurance Corporation, 550 17th Street NW, Washington, DC 20429.
    (b) Scope. Filings to be made with the Administrative Officer 
include pleadings and motions filed during the proceeding; the record 
filed by the administrative law judge after the issuance of a 
recommended decision; the recommended decision filed by the 
administrative law judge following a motion for summary disposition; 
referrals by the administrative law judge of motions for interlocutory 
review; motions and responses to motions filed by the parties after the 
record has been certified to the Board of Directors; exceptions and 
requests for oral argument; and any other papers required to be filed 
with the Board of Directors under this part.

0
12. Revise Sec.  308.105 to read as follows:


Sec.  308.105   Custodian of the record.

    The Administrative Officer is the official custodian of the record 
when no administrative law judge has jurisdiction over the proceeding. 
As the official custodian, the Administrative Officer shall maintain 
the official record of all papers filed in each proceeding.

0
13. Amend Sec.  308.109 by revising paragraphs (b)(2) and (3) to read 
as follows:


Sec.  308.109   Suspension and disbarment.

* * * * *
    (b) * * *
    (2) Any person appearing or practicing before the FDIC who is the 
subject of an order, judgment, decree, or finding of the types set 
forth in paragraph (b)(1) of this section shall promptly file with the 
Administrative Officer a copy thereof, together with any related 
opinion or statement of the agency or tribunal involved. Any person who 
fails to so file a copy of the order, judgment, decree, or finding 
within 30 days after the entry of the order, judgment, decree, or 
finding or the date such person initiates practice before the FDIC, for 
that reason alone may be disqualified from practicing before the FDIC 
until such time as the appropriate filing shall be made. Failure to 
file any such paper shall not impair the operation of any other 
provision of this section.
    (3) A suspension or disbarment under paragraph (b)(1) of this 
section from practice before the FDIC shall continue until the 
applicant has been reinstated by the Board of Directors for good cause 
shown, provided that any person suspended or disbarred under paragraph 
(b)(1) of this section shall be automatically reinstated by the 
Administrative Officer, upon appropriate application, if all the 
grounds for suspension or disbarment under paragraph (b)(1) of this 
section are subsequently removed by a reversal of the conviction (or 
the passage of time since the conviction) or termination of the 
underlying suspension or disbarment. An application for reinstatement 
on any other grounds by any person suspended or disbarred under 
paragraph (b)(1) of this section may be filed no sooner than one year 
after the suspension or disbarment, and thereafter, a new request for 
reinstatement may be made no sooner than one year after the counsel's 
most recent reinstatement application. The application must comply with 
the requirements of Sec.  303.3 of this chapter. An applicant for 
reinstatement under this provision may, in the Board of Directors' sole 
discretion, be afforded a hearing.
* * * * *

0
14. Amend Sec.  308.112 by revising paragraph (a)(2)(ii) to read as 
follows:


Sec.  308.112   Notice of disapproval.

    (a) * * *
    (2) * * *
    (ii) Indicate that a hearing may be requested by filing a written 
request with the Administrative Officer within ten days after service 
of the notice of disapproval; and if a hearing is requested, that an 
answer to the notice of disapproval, as required by Sec.  308.113, must 
be filed within 20 days after service of the notice of disapproval.
* * * * *

0
15. Revise Sec.  308.139 to read as follows:


Sec.  308.139   Application for exemption.

    Any interested person may file a written application for an 
exemption under this subpart with the Administrative Officer, Federal 
Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 
20429. The application shall specify the exemption sought and the 
reason therefor, and shall include a statement indicating why the 
exemption would be consistent with the public interest or the 
protection of investors.

0
16. Amend Sec.  308.140 by revising paragraph (a) to read as follows:


Sec.  308.140   Newspaper notice.

    (a) General rule. If the Board of Directors or its designee, in its 
sole discretion, decides to further consider an application for 
exemption, there shall be served upon the applicant instructions to 
publish one notification in a newspaper of general circulation in the 
community where the main office of the issuer is located. The applicant 
shall furnish proof of such publication to the Administrative Officer 
or such other person as may be directed in the instructions.
* * * * *

0
17. Revise Sec.  308.141 to read as follows:


Sec.  308.141   Notice of hearing.

    Within ten days after expiration of the period for receipt of 
comments pursuant to Sec.  308.140, the Administrative Officer shall 
serve upon the applicant and any person who has requested an 
opportunity to be heard written notification indicating the place and 
time of the hearing. The hearing shall be held not later than 30 days 
after service of the notification of hearing. The notification shall 
contain the name and address of the presiding officer designated by the 
Administrative Officer and a statement of the matters to be considered.

0
18. Amend Sec.  308.154 by revising paragraph (c)(1) to read as 
follows:


Sec.  308.154   Decision on review.

* * * * *
    (c) * * *
    (1) Inform the petitioner that a written request for a hearing, 
stating the relief desired and the grounds therefore, may be filed with 
the Administrative Officer within 15 days after the receipt of the 
denial; and
* * * * *

0
19. Amend Sec.  308.155 by revising paragraphs (a), (c)(1) and (9), and 
(f) to read as follows:


Sec.  308.155   Hearing.

    (a) Hearing dates. The Administrative Officer shall order a hearing 
to be commenced within 30 days after receipt of a request for a hearing 
filed pursuant to Sec.  308.154. Upon request of the petitioner or the 
FDIC, the presiding

[[Page 2250]]

officer or the Administrative Officer may order a later hearing date.
* * * * *
    (c) * * *
    (1) The hearing shall be held in Washington, DC or at another 
designated place, before a presiding officer designated by the 
Administrative Officer. * * *
    (9) The presiding officer shall forward his or her recommendation 
to the Administrative Officer who shall promptly certify the entire 
record, including the recommendation to the Board of Directors or its 
designee. The Administrative Officer's certification shall close the 
record.
* * * * *
    (f) Decision by Board of Directors or its designee. Within 45 days 
following the Administrative Officer's certification of the record to 
the Board of Directors or its designee, the Board of Directors or its 
designee shall notify the affected individual whether the denial of the 
notice will be continued, terminated, or otherwise modified. The 
notification shall state the basis for any decision of the Board of 
Directors or its designee that is adverse to the petitioner. The Board 
of Directors or its designee shall promptly rescind or modify the 
denial where the decision is favorable to the petitioner.

0
20. Revise Sec.  308.157 to read as follows:


Sec.  308.157   Denial of applications.

    If an application is denied under 12 CFR part 303, subpart L, then 
the applicant may request a hearing under this subpart. The applicant 
will have 60 days after the date of the denial to file a written 
request with the Administrative Officer. In the request, the applicant 
shall state the relief desired, the grounds supporting the request for 
relief, and provide any supporting evidence that the applicant believes 
is responsive to the grounds for the denial.

0
21. Amend Sec.  308.158 by revising paragraphs (a), (c)(1) and (9), and 
(f) to read as follows:


Sec.  308.158   Hearings.

    (a) Hearing dates. The Administrative Officer shall order a hearing 
to be commenced within 60 days after receipt of a request for hearing 
on an application filed under Sec.  308.157. Upon the request of the 
applicant or FDIC enforcement counsel, the presiding officer or the 
Administrative Officer may order a later hearing date.
* * * * *
    (c) * * *
    (1) The hearing shall be held in Washington, DC, or at another 
designated place, before a presiding officer designated by the 
Administrative Officer. * * *
    (9) The presiding officer shall forward his or her recommendation 
to the Administrative Officer who shall promptly certify the entire 
record, including the recommendation to the Board of Directors or its 
designee. The Administrative Officer certification shall close the 
record.
* * * * *
    (f) Decision by Board of Directors or its designee. Within 60 days 
following the Administrative Officer's certification of the record to 
the Board of Directors or its designee, the Board of Directors or its 
designee shall notify the affected person whether the person shall 
remain barred under section 19. The notification shall state the basis 
for any decision of the Board of Directors or its designee that is 
adverse to the applicant.

0
22. Amend Sec.  308.163 by revising paragraphs (c)(1) and (d) 
introductory text to read as follows:


Sec.  308.163   Notice of suspension or prohibition, and orders of 
removal or prohibition.

* * * * *
    (c) * * *
    (1) Inform the institution-affiliated party that a written request 
for a hearing, stating the relief desired and grounds therefore, and 
any supporting evidence, may be filed with the Administrative Officer 
within 30 days after service of the written notice or order; and
* * * * *
    (d) To obtain a hearing, the institution-affiliated party shall 
file with the Administrative Officer a written request for a hearing 
within 30 days after service of the notice of suspension or prohibition 
or the order of removal or prohibition, which shall:
* * * * *

0
23. Amend Sec.  308.164 by revising paragraphs (a), (b)(1) and (9), and 
(e) to read as follows:


Sec.  308.164   Hearings.

    (a) Hearing dates. The Administrative Officer shall order a hearing 
to be commenced within 30 days after receipt of a request for hearing 
filed pursuant to Sec.  308.163. Upon the request of the institution-
affiliated party, the presiding officer or the Administrative Officer 
may order a later hearing date.
* * * * *
    (b) * * *
    (1) The hearing shall be held in Washington, DC, or at another 
designated place, before a presiding officer designated by the 
Administrative Officer. * * *
    (9) The presiding officer shall forward his or her recommendation 
to the Administrative Officer who shall promptly certify the entire 
record, including the recommendation to the Board of Directors. The 
Administrative Officer's certification shall close the record.
* * * * *
    (e) Decision by Board of Directors or its designee. Within 60 days 
following the Administrative Officer's certification of the record to 
the Board of Directors or its designee, the Board of Directors or its 
designee shall notify the institution-affiliated party whether the 
notice of suspension or prohibition or the order of removal or 
prohibition will be continued, terminated, or otherwise modified. The 
notification shall state the basis for any decision of the Board of 
Directors or its designee that is adverse to the institution-affiliated 
party. The Board of Directors or its designee shall promptly rescind or 
modify a notice of suspension or prohibition or an order of removal or 
prohibition where the decision is favorable to the institution-
affiliated party.

0
24. Amend Sec.  308.170 by revising paragraphs (a) introductory text 
and (d) to read as follows:


Sec.  308.170   Filing, content, and service of documents.

    (a) Time to file. An application and any other pleading or document 
related to the application shall be filed with the Administrative 
Officer within 30 days after service of the final order of the Board of 
Directors in disposition of the proceeding whenever:
* * * * *
    (d) Referral. Upon receipt of an application, the Administrative 
Officer shall refer the matter to the administrative law judge who 
heard the underlying adversary proceeding, provided that if the 
original administrative law judge is unavailable, or the Administrative 
Officer determines, in his or her sole discretion, that there is cause 
to refer the matter to a different administrative law judge, the matter 
shall be referred to a different administrative law judge.

0
25. Amend Sec.  308.171 by revising paragraph (a)(1) to read as 
follows:


Sec.  308.171   Responses to application.

    (a) * * *
    (1) Within 20 days after service of an application, counsel for the 
FDIC may file with the Administrative Officer and serve on all parties 
an answer to the application. Unless counsel for the FDIC requests and 
is granted an extension of

[[Page 2251]]

time for filing or files a statement of intent to negotiate under Sec.  
308.179, failure to file an answer within the 20-day period will be 
treated as a consent to the award requested.
* * * * *

0
26. Revise Sec.  308.179 to read as follows:


Sec.  308.179   Settlement negotiations.

    If counsel for the FDIC and the applicant believe that the issues 
in a fee application can be settled, they may jointly file with the 
Administrative Officer with a copy to the administrative law judge a 
statement of their intent to negotiate a settlement. The filing of this 
statement shall extend the time for filing an answer under Sec.  
308.171 for an additional 30 days, and further extensions may be 
granted by the administrative law judge upon the joint request of 
counsel for the FDIC and the applicant.

0
27. Revise Sec.  308.181 to read as follows:


Sec.  308.181   Recommended decision.

    The administrative law judge shall file with the Administrative 
Officer a recommended decision on the fee application not later than 90 
days after the filing of the application or 30 days after the 
conclusion of the hearing, whichever is later. The recommended decision 
shall include written proposed findings and conclusions on the 
applicant's eligibility and its status as a prevailing party and an 
explanation of the reasons for any difference between the amount 
requested and the amount of the recommended award. The recommended 
decision shall also include, if at issue, proposed findings on whether 
the FDIC's position was substantially justified, whether the applicant 
unduly protracted the proceedings, or whether special circumstances 
make an award unjust. The administrative law judge shall file the 
record of the proceeding on the fee application and, at the same time, 
serve upon each party a copy of the recommended decision, findings, 
conclusions, and proposed order.

0
28. Revise Sec.  308.182 to read as follows:


Sec.  308.182   Board of Directors action.

    (a) Exceptions to recommended decision. Within 20 days after 
service of the recommended decision, findings, conclusions, and 
proposed order, the applicant or counsel for the FDIC may file with the 
Administrative Officer written exceptions thereto. A supporting brief 
may also be filed.
    (b) Decision of Board of Directors. The Board of Directors shall 
render its decision within 60 days after the matter is submitted to it 
by the Administrative Officer. The Administrative Officer shall furnish 
copies of the decision and order of the Board of Directors to the 
parties. Judicial review of the decision and order may be obtained as 
provided in 5 U.S.C. 504(c)(2).

0
29. Revise Sec.  308.183 to read as follows:


Sec.  308.183   Payment of awards.

    An applicant seeking payment of an award made by the Board of 
Directors shall submit to the Administrative Officer a statement that 
the applicant will not seek judicial review of the decision and order 
or that the time for seeking further review has passed and no further 
review has been sought. The FDIC will pay the amount awarded within 30 
days after receiving the applicant's statement, unless judicial review 
of the award or of the underlying decision of the adversary 
adjudication has been sought by the applicant or any other party to the 
proceeding.

0
30. Amend Sec.  308.602 by revising paragraphs (c)(3) through (6) to 
read as follows:


Sec.  308.602   Removal, suspension, or debarment.

* * * * *
    (c) * * *
    (3) Petition to stay. Any accountant or accounting firm immediately 
suspended from performing audit services in accordance with paragraph 
(c)(1) of this section may, within 10 calendar days after service of 
the notice of immediate suspension, file a petition with the 
Administrative Officer for a stay of such immediate suspension. If no 
petition is filed within 10 calendar days, the immediate suspension 
shall remain in effect.
    (4) Hearing on petition. Upon receipt of a stay petition, the 
Administrative Officer will designate a presiding officer who will fix 
a place and time (not more than 10 calendar days after receipt of the 
petition, unless extended at the request of petitioner) at which the 
immediately suspended party may appear, personally or through counsel, 
to submit written materials and oral argument. Any FDIC employee 
engaged in investigative or prosecuting functions for the FDIC in a 
case may not, in that or a factually related case, serve as a presiding 
officer or participate or advise in the decision of the presiding 
officer or of the FDIC, except as witness or counsel in the proceeding. 
In the sole discretion of the presiding officer, upon a specific 
showing of compelling need, oral testimony of witnesses also may be 
presented. Enforcement counsel may represent the agency at the hearing. 
In hearings held pursuant to this paragraph (c)(4) there shall be no 
discovery, and the provisions of Sec. Sec.  308.6 through 308.12, 
308.16, and 308.21 will apply.
    (5) Decision on petition. Within 30 calendar days after the 
hearing, the presiding officer will issue a decision. The presiding 
officer will grant a stay upon a demonstration that a substantial 
likelihood exists of the respondent's success on the issues raised by 
the notice of intention and that, absent such relief, the respondent 
will suffer immediate and irreparable injury, loss, or damage. In the 
absence of such a demonstration, the presiding officer will notify the 
parties that the immediate suspension will be continued pending the 
completion of the administrative proceedings pursuant to the notice of 
intention. The presiding officer will serve a copy of the decision on, 
and simultaneously certify the record to, the Administrative Officer.
    (6) Review of presiding officer's decision. The parties may seek 
review of the presiding officer's decision by filing a petition for 
review with the Administrative Officer within 10 calendar days after 
service of the decision. Replies must be filed within 10 calendar days 
after the petition filing date. Upon receipt of a petition for review 
and any reply, the Administrative Officer will promptly certify the 
entire record to the Board of Directors. Within 60 calendar days of the 
Administrative Officer's certification, the Board of Directors will 
issue an order notifying the affected party whether or not the 
immediate suspension should be continued or reinstated. The order will 
state the basis of the Board's decision.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on December 15, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020-27944 Filed 1-11-21; 8:45 am]
BILLING CODE 6714-01-P