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FEDERAL RESERVE BANK OF N EW YORK r L Circular No. 6 0 2 3 August 22, 1967 ~ 1 J Board of Governors’ Rules of Practice for Formal Hearings Revised Effective August 1, 1967 To All Member Banks, and Others Concerned, in the Second Federal Beserve District: The following statement was recently made public by the Board of Governors of the Federal Reserve System: The Board o f Governors of the Federal Reserve System has adopted, effective A ugust 1, 1967, a revision o f its existing “ Rules of Practice for Form al H earings.” The principal impetus to this action was the enactment into law in October 1966 o f the Financial Institutions Supervisory A ct of 1966. The revised regulations are divided into three parts, two o f which are entirely new and are directed exclusively toward implementation o f procedural requirements established by the Supervisory A ct for proceedings initiated pursuant to its provisions. In addition, however, the B oard also took this opportunity to revise its existing procedural rules, which are applicable to all form al hearings held by the Board, including such hearings as may be held in connection with the B o a rd ’s respon sibilities under the Federal Reserve A ct, the Bank M erger A ct o f 1966, and the Bank H olding Company A ct o f 1956. The Financial Institutions Supervisory A ct of 1966 authorizes the Federal bank supervisory agencies to act to prevent unsafe or unsound banking practices and violations o f law, rules, or regulations by banks under their supervision, through the issuance o f orders requiring such banks to “ cease and desist” from engaging in the proscribed activity. In certain aggravated situations, the agencies are also authorized to suspend or remove from office an officer, director, or other person participating in the affairs o f a bank. Generally speaking, these situations are those which threaten serious in ju ry to a bank or its depositors as a result o f actions involving personal dishonesty on the part o f such officials. The procedure fo r issuing a cease-and-desist order under the new regulations is as fo llo w s : The Board would serve a notice to the bank involved containing a statement o f the facts constituting the alleged unsafe or unsound practice or violation and fixing a time and place at which a hearing would be held to determine whether a cease-and-desist order would be issued. The hearing would be held within not less than 30 nor more than 60 days after service o f the notice, unless the bank itself requested an earlier or later date, and would ordinarily take place in the Federal judicial district in which the home office o f the bank is located. Failure o f the bank to appear at the hearing would constitute consent to the issuance o f a cease-and-desist order. I f the hearing is held and the specified charges are established, a cease-and-desist order would ordi narily be issued, to become effective 30 days after the service of the order upon the bank concerned. I f the unsafe or unsound practice specified in the notice o f charges is one that is likely to have a substan tial financial impact on the assets or earnings o f the bank or otherwise seriously prejudice the interests of its depositors, the Board may issue a tem porary order prior to the hearing, which would take effect upon service on the bank and would remain in effect pending the completion o f the administrative proceedings, at which time either a permanent order would be issued or the charges would be dismissed. The area o f direct responsibility o f the Board o f Governors under the Financial Institutions Supervisory A ct is with respect to those state-chartered commercial banks which are members o f the Federal Reserve System. In addition, the A ct also places upon the Board responsibility for proceedings involving removal or suspension o f officials o f national banks in cases where the facts involved are certified to it by the Com ptroller o f the Currency. In the latter cases, the Comptroller is authorized to sit as a member o f the Board. In other cases, the Board is generally required to permit State authorities an opportunity to take corrective action before acting under the authority conferred by the A ct. Enclosed is a copy of the revised regulation; additional copies will be furnished upon request. A lfred H ayes, President. BOARD OF GOVERNORS o f the FEDERAL RESERVE SYSTEM RULES OF PRACTICE FOR FORMAL HEARINGS (12 CFR 263) As revised effective August 1, 1967 INQUIRIES WITH RESPECT TO THESE RULES Any inquiry relating to these rules should be addressed to the Federal Reserve Bank of the Federal Reserve district in which the inquiry arises. S T A T U T O R Y A U T H O R IT Y These rules are issued under authority Federal Reserve A ct (12 U.S.C. 248 ( i ) ) , ancial Institutions Supervisory A ct 1818( n ) ) , section 1 8 (c ) o f the Federal (12 U.S.C. 1 8 2 8 ( c ) ), and section 8 o f the 1 9). o f section 11 (i) o f the section 202 o f the F in o f 1966 (12 U.S.C. D eposit Insurance A ct Clayton A ct (15 U.S.C. CONTENTS S U B P A R T A — R U L E S O F P R A C T IC E A P P L IC A B L E T O ALL F O R M A L H E A R IN G S P age S e c . 2 6 3 .1 -S cope .................................................................................................................... S e c . 2 6 3 .2 -D e f i n i t i o n s ..................................................................................................... S e c . 2 6 3 .3 - A p p e a r a n c e a n d P r a c t ic e B efore t h e B o a r d ......................... 1 1 1 (a ) P ow er o f a tto rn ey and notice o f a p p e a r a n c e ............. 1 (b) S u m m a ry 2 suspension ............................................................... S e c . 2 6 3 .4 - N o tice o f H e a r i n g ...................................................................................... 2 S e c . 2 6 3 .5 - A n s w e r 2 ............................................................................................................... ( a) W h e n required ( b) R equ irem en ts o f a n s w e r; effect o f fa ilu re to d eny . 3 (c ) A d m itte d allegation s ................................................................. 3 ( d ) E ffective o f failu re to an sw er ........................................... 3 (e) .............................................................................. O p p ortu n ity fo r in form al s e t t l e m e n t .............................. S e c . 2 6 3 .6 -C o n d u c t of H e a r in g s .............................................................................. 2 3 4 D esign atio n o f p resid in g o f f i c e r ........................................ 4 ( b ) A u th o rity o f p resid in g o f f i c e r ............................................. 4 ( a) (c) P re h ea rin g conference ( d) A tten d an ce a t h e a r in g s ; rep resentation o f ............................................................ 5 the B oard ...................................................................................... 5 ( e ) T ra n sc r ip t o f t e s t i m o n y .......................................................... 6 ( /) C on tinu an ces and changes or extensions o f tim e and chan ges o f place o f h e a rin g ................................. 6 ( g ) C all fo r fu rth e r evidence, oral argu m en t, b rie fs, reopening o f h e arin g ........................................... S e c . 2 6 3 .7 -S u b p e n a s 7 .......................................................................................................... 7 (a ) Issuance ............................................................................................. 7 (b) M otion to q u a s h ........................................................................... 7 (c ) Service o f s u b p e n a ...................................................................... 8 (d) A tten d an ce o f w itn e sse s............................................................ 8 S e c . 263 .8 — D e p o s it io n s (a ) .................................................................................................. 8 W h e n perm issible ......................................................................... 8 ( b ) N otice and application ............................................................. (c) Procedure on dep osition ; o b je c t i o n s ................................. ( d) Introduction as evidence ....................................................... 8 9 10 ( e ) P aym en t o f f e e s ............................................................................ 10 S ec . 2 6 3 .9 -R u l e s of E v i d e n c e ...................................................................................... 10 (а ) E viden ce (б ) O bjection s (c ) Stip u lation s (d) Official notice S e c . 2 6 3 .1 0 - M o t io n s (а ) ........................................................................................... 10 ........................................................................................ 10 ...................................................................................... ................................................................................ ............................................................................................................ 10 10 10 In w ritin g ........................................................................................ 10 (б ) O bjections ........................................................................................ 11 (c ) O ral a r g u m e n t; b r i e f s ............................................................... 11 (d ) R u lin gs on m otions .................................................................... 11 ( e ) A p p e a l fro m ru lin gs on m o t i o n s ........................................ 11 ( /) Continuation o f h e a r i n g .......................................................... 12 ( g) C losin g o f h earin g 12 .................................................................... CONTENTS P age S e c . 2 6 3 .1 1 -P roposed F in d i n g s a n d C o n c l u s io n s a n d R e c o m m e n d e d D e c is io n (a ) .......................................................................................................... 12 P roposed fin dings and conclusions and su p p o rtin g b r i e f s ................................................................................................ 12 ( b ) Recom m ended decision and filing o f r e c o r d ............... 12 (c ) 13 B o ard as p resid in g office ........................................................ S e c . 2 6 3 .1 2 - E x c e p t io n s ..................................................................................................... ( a) F ilin g ( b) W a iv e r 13 ................................................................................................ 13 ............................................................................................................... S e c . 2 6 3 .1 3 - B r ie f s (a ) 13 ................................................................................................... 13 C on tents ........................................................................................... ( b ) A n s w e r in g b r ie fs ......................................................................... S e c . 2 6 3 .1 4 -O r a l A r g u m e n t B efore t h e B oard ........................................... 13 13 14 S e c . 2 6 3 .1 5 - D e c is io n of B oard .................................................................................... 14 S e c . 2 6 3 .1 6 - F il in g P ap e r s 14 S e c . 2 6 3 .1 7 - S ervice .............................................................................................. ............................................................................................................. (a ) B y the B oard (b) B y the p arties S e c . 2 6 3 .1 8 - C o pies ................................................................................. 14 14 ............................................................................... 15 ............................................................................................................... 15 S e c . 2 6 3 .1 9 -C o m p u t in g T im e ......................................................................................... ( a) G eneral rule ( b) Service by m a i l ............................................................................... S ec . 2 6 3 .2 0 - D o c u m e n t s i n .................................................................................... P r o c eed in g s C o n f i d e n t ia l 15 15 15 ............................ 16 S e c . 2 6 3 .2 1 - F o r m a l R e q u ir e m e n t s a s to P a p e r s F i l e d ............................ 16 (a ) F o rm (b) S ig n a tu re ( c ) C aption ................................................................................................... 16 ................................................................................................ 16 S U B P A R T B — R U L E S A N D P R O C E D U R E S A P P L IC A B L E P R O C E E D IN G S R E L A T IN G T O S e c . 2 6 3 .2 2 - S cope 16 ........................................................................................... TO C E A S E -A N D -D E S IS T O R D E R S .................................................................................................................. 16 S e c . 2 6 3 .2 3 -G r o u n d s for C e a s e - a n d -D e s is t O r d e r s ...................................... 17 S e c . 2 63 .2 4 — N o tice of C h a r g e s a n d H e a r i n g ................................................ 17 S e c . 2 6 3 .2 5 - I s s u a n c e of O rder .................................................................................... 17 S e c . 2 6 3 .2 6 - E f f e c t iv e D a t e ............................................................................................ 18 S e c . 2 6 3 .2 7 - T e m p o r a r y C e a s e - a n d -D e s is t O rders ......................................... 18 S e c . 2 6 3 .2 8 - E f f e c t iv e D a t e o f T e m p o r a r y O r d e r ......................................... 18 S U B P A R T C— R U L E S A N D P R O C E D U R E S A P P L IC A B L E T O P R O C E E D IN G S R E L A T IN G T O S ec . 2 6 3 .2 9 - S cope REM OVAL AND S U S P E N S IO N O R D E R S .................................................................................................................. 19 S e c . 2 6 3 .3 0 -G r o u n d s for R e m o v a l O r d e r ............................................................. 19 S e c . 2 6 3 .3 1 -G r o u n d s for S u s p e n s io n O rder ..................................................... 20 S e c . 2 6 3 .3 2 - E f f e c t iv e D a t e of S u s p e n s io n O r d e r ......................................... 21 S e c . 2 6 3 .3 3 - N o tice o f I n t e n t i o n to R e m o v e a n d H e a r in g .................. 21 S e c . 2 6 3 .3 4 - I s s u a n c e of R e m o v a l O rder a n d E f f e c t iv e D a t e ............... 21 S e c . 2 6 3 .3 5 - S u s p e n s io n a n d R e m o v a l w h e r e F e l o n y C h a r g e d .......... 22 RULES OF PRACTICE FOR FORMAL HEARINGS* (12 CFR 263) As revised effective August 1, 1967 SUBPART A— RULES OF PRACTICE APPLICABLE TO ALL FORMAL HEARINGS SECTION 263.1— SCOPE This subpart prescribes rules o f practice and procedure fo l lowed by the Board w ith respect to adjudications as to w hich a hearing is required by law or is fo r other reason ordered by the Board. A m ong such adjudications are those relating to: Suspen sion o f a m em ber bank fro m the use o f credit facilities o f the Federal Reserve System under section 4 o f the Federal Reserve A ct (12 U.S.C. 3 0 1 ); term ination o f a bank’s m embership in the System pursuant to section 9 o f the Federal Reserve A ct (12 U.S.C. 3 2 7 ); issuance o f a cease-and-desist order under section 11 o f the Clayton A ct (15 U.S.C. 2 1 ); issuance o f a cease-and-desist order or a rem oval or suspension order under section 8 o f the Federal D eposit Insurance A ct (12 U.S.C. 1818); applica tions pursuant to sections 3 and 4 o f the Bank H olding Company A ct o f 1956 (12 U.S.C. 1842, 1843) as to which a hearing is required by the A ct, or fo r other reason is ordered by the Board; and such proceedings as m ay be ordered by the Board w ith re spect to bank m erger applications under section 1 8 (c ) o f the Federal Deposit Insurance A ct (12 U.S.C. 1 8 2 8 (c )). SECTION 263.2— DEFINITIONS A s used in this Part— (a) The term “ Secretary” means the Secretary to the Board; ( b) The term “ presiding officer” means the Board, one or m ore m em bers thereof, or a duly designated hearing exam iner or other duly designated hearing officer, and as used in this Part the term shall be construed to refer to w hichever o f these shall preside at a hearing hereunder, except as otherwise specified in the text; (c ) The term “ party” means a person or agency named or admitted as a party, or any person or agency who has filed a w ritten request and is entitled as o f right to be adm itted as a party; but a person or agency may be admitted fo r a limited purpose. SECTION 263.3— A PP E A R A N C E AND PRACTICE BEFORE THE BOARD ( a) Power of attorney and notice of appearance.— ny person A who is a m em ber in good standing o f the bar o f the highest court o f any State or o f the D istrict o f Columbia, or o f any * The text corresponds to the Code o f Federal Regulations, Title 12, Chapter II, Part 263; cited as 12 C F R 263. The words “ this P art” , as used herein, mean these rules. 1 2 RULES OF PRACTICE §§ 263.3-263.4-263.5 possession, territory, or Com m onwealth o f the U nited States, may represent others b efore the Board upon filing w ith the Secretary a w ritten declaration that he is currently qualified as provided in this paragraph, and is authorized to represent the particular party on whose beh alf he acts. A n y other person de sirin g to appear before or transact business w ith the Board in a representative capacity m ay be required to file with the Secre tary a pow er o f attorney show ing his authority to act in such capacity, and he may be required to show to the satisfaction o f the Board that he has the requisite qualifications. A ttorneys and other representatives o f parties to proceedings shall file a w rit ten notice o f appearance with the Secretary or with the presid ing officer. ( b) Summary suspension.-C ontem ptuous conduct at any hearing to w hich these Rules are applicable, by any person, shall be ground fo r exclusion fr o m any such hearing and fo r such furth er period as the Board m ay prescribe. SECTION 263.4— NOTICE OF HEARING W henever a hearing is ordered by the Board, notice o f such hearing (together w ith a copy o f any docum ent incorporated therein by referen ce) shall be given by the Secretary or other designated officer acting fo r the Board to the party or parties to the proceeding and to the appropriate financial institution su pervisory authority w here required by law. The Board m ay give whatever additional notice is deemed appropriate in any given hearing. Such notice shall state the time, place, and nature o f the hearing, the legal authority and ju risdiction under w hich the hearing is to be held, and the name and address o f the presiding officer, if one has been designated, and shall also contain, or in corporate by appropriate reference, a statement o f the m atters o f fa ct or law constituting the grounds fo r the hearing. Unless otherw ise provided by law or ordered by the Board, notice o f any hearing shall be given not less than 20 days prior to the date set fo r hearing and shall be given general circulation by publica tion in the Federal R egister and, where practical, by release to the press. The Board may amend a notice o f hearing in any manner and to the extent consistent with provisions o f applica ble law. SECTION 263.5— AN SW ER (a) When required.— any notice o f hearing issued by the In Board, the Board m ay direct the party or parties afforded the hearing to file an answ er to the allegations contained in the n o § 263.5 RULES OF PRACTICE 3 tice or referenced documents, and any party to any proceeding m ay file an answer. E xcept where a different period is provided by law or specified by the Board, a party directed to file an answer, or a party who elects to file an answer, shall file the same with the Secretary w ithin 20 days after service upon him o f the notice o f hearing. ( b ) Requirements of answer; effect of failure to deny.-A n answer filed under this section shall specifically admit, deny, or state that the party does not have sufficient inform ation to adm it or deny each allegation in the notice o f hearing. A statement o f lack o f inform ation shall have the effect o f a denial. A n y allega tion not denied shall be deemed to be admitted. W hen a party intends to deny only a part or a qualification o f an allegation, he shall adm it so m uch o f it as is true and shall deny only the remainder. (c ) Admitted allegations.-If a party filing an answer under this section elects not to contest the allegations o f fact set forth in the notice o f hearing or referenced documents, his answer shall consist o f a statement that he adm its all o f the allegations to be true. Such an answer shall constitute a w aiver o f hearing as to the facts alleged, and together w ith the notice and any referenced docum ents will provide a record basis on w hich the presiding officer shall file with the Secretary his recommended decision and his findings o f fa ct and conclusions o f law. Such adm ission shall not constitute a w aiver o f the right o f such party to file with the Secretary exceptions to such recommended decision, findings and conclusions. ( d ) Effect of failure to answer.— Failure o f a party to file an answer required by this section within the time provided shall constitute a w aiver o f his right to appear and contest the allega tions o f the notice o f hearing and shall constitute authorization fo r the presiding officer, without fu rth er notice to the party, to find the facts to be as alleged in the notice and to file with the Secretary a recom mended decision containing such findings and appropriate conclusions. The Board or the presiding officer may, fo r cause shown, perm it the filing o f an answer after the pre scribed time. ( e ) Opportunity for informal settlement.-Any interested party m ay at any time submit to the Secretary, fo r considera tion by the Board, w ritten offers or proposals fo r settlement o f a proceeding, w ithout prejudice to the rights o f the parties. No offer or proposal shall be adm issible in evidence over the ob jec tion o f any party in any hearing in connection with such pro RULES OF PRACTICE 4 §§ 263.5-263.6 ceeding. The foreg oin g provisions o f this paragraph shall not preclude settlement o f any proceeding through the regular a d ju dicatory process by the filing o f an answ er as provided in para graph (c ) o f this section, or by the subm ission o f the case to the presiding officer on a stipulation o f facts and an agreed order. SECTION 263.6— CONDUCT OF HEARINGS (a ) Designation of presiding officer.-When evidence is to be taken in a hearing, either the Board or, when duly designated fo r that purpose, one or m ore o f its m embers, a hearing exam iner, or other law fully appointed hearing officer m ay preside at the hearing. All such hearings, unless otherw ise provided in the notice o f hearing, shall be conducted as hereinafter provided. E xcept as authorized by law, the presiding officer shall not con sult any person or party on any fa ct in issue unless upon notice and opportunity fo r all parties to participate, nor shall he be responsible to or subject to the supervision or direction o f any officer, em ployee, or agent o f the Board engaged in the p e rfo rm ance o f investigative or prosecutive functions. A designated p re siding officer m ay at any time w ithdraw i f he deems him self disqualified; and, upon filing o f a tim ely and sufficient affidavit o f personal bias or disqualification o f such presiding officer, the Board will determ ine the m atter as a part o f the record and decision in the case. ( b ) Authority of presiding officer.-All hearings governed b jr this Part shall be conducted in accordance with the provisions o f chapter 5 o f Title 5 o f the U nited States Code. The presiding officer shall have com plete charge o f the hearing, and he shall have the duty to conduct it in a fa ir and im partial m anner and to take all necessary action to avoid delay in the disposition o f proceedings. Such officer shall have all pow ers necessary to that end, including but not limited to the follow in g: (1 ) To adm inister oaths and affirmations; (2 ) To issue subpenas and subpenas duces tecum, as au thorized by law, and to revoke, quash, or m od ify any such subpena; (3 ) To receive relevant evidence and to rule upon the ad m ission o f evidence and offers o f p ro o f; (4 ) To take or cause depositions to be taken; (5 ) To regulate the course o f the hearing and the con duct o f the parties and their counsel; (6 ) T o hold conferences fo r the settlement or sim plifica tion o f issues or fo r any other proper purpose; and RULES OF PRACTICE § 263.6 5 (7 ) To consider and rule upon, as justice m ay require, all procedural and other m otions appropriate in an adversary proceeding, except that a presiding officer other than the Board shall not have pow er to decide any m otion to dismiss the proceedings or other m otion w hich would result in final determ ination o f the m erits o f the proceedings. W ithout lim itation on the foregoin g, the presiding officer shall, subject to the provisions o f this Part, have all the author ity set fo rth in section 5 5 6 (c ) o f Title 5 o f the United States Code. (c ) Prehearing conference.-The presiding officer may, on his own initiative or at the request o f Board counsel or o f any party, direct all parties or counsel to meet w ith him at a specified time and place prior to the hearing, or to submit suggestions to him in w riting, fo r the purpose o f considering any or all o f the fo llo w in g : (1 ) Sim plification and clarification o f the issues; (2 ) Stipulations and adm issions o f fa ct and o f the con tents and authenticity o f documents; (3 ) M atters o f w hich official notice will be taken; and (4 ) Such other m atters as m ay aid in the orderly disposi tion o f the proceeding, including disclosure o f the names o f witnesses and o f documents or other physical exhibits which will be introduced in evidence in the course o f the proceeding. Such conferences, in the discretion o f the presiding officer, need not be recorded, but the presiding officer shall enter in the record an order which recites the results o f the conference. Such order, a copy o f which shall be served on each party and Board counsel, shall include the officer’s rulings upon m atters consid ered at the conference, together w ith appropriate directions, if any, to the parties and Board counsel; and such order shall control the subsequent course o f the proceedings, unless modified at the hearing, fo r good cause found, by appropriate order o f the presiding officer. ( d ) Attendance at hearings; representation of the B oard.-U nless otherwise specifically provided by statute or by rule o f the Board, a hearing shall ordinarily be private and shall be attended only by the parties, their representatives or counsel, repre sentatives o f the Board, witnesses while testifying, and other persons having an official interest in the p roceed in g s: Provided, hoivever, That on w ritten request by a party or a representative 6 RULES OF PRACTICE § 263.6 o f the Board, or on the B oard’s own m otion, the Board, in its discretion and to the extent perm itted by law, m ay perm it other persons to attend or m ay order the hearing to be public. In connection w ith any such hearing or proceeding related thereto, the Board m ay designate as Board counsel an attorney fro m its staff or other attorney w ho shall represent the Board. F o r the purposes o f these Rules, any attorney so designated is referred to as “ Board counsel” . In case o f adjudication other than initial licensing proceedings, neither Board counsel nor any officer or employee o f the Board who has engaged in the perform ance o f any investigative or prosecutive function in the case, or a fa c tually related case, m ay participate in or advise as to the presid ing officer’s recom m ended decision or the B oard’s decision, ex cept as witness or counsel in such hearing or related proceeding. Proceedings with respect to applications fo r initial licenses shall include, but not be lim ited to, applications fo r Board approval under section 3 o f the Bank H olding Com pany A c t o f 1956 (12 U.S.C. 1842) and such proceedings as m ay be ordered b y the Board w ith respect to applications under section 1 8 (c ) o f the Federal D eposit Insurance A ct (12 U.S.C. 1 8 2 8 ( c ) ) . In such ini tial licensing proceedings, Board counsel shall represent the Board in a nonadversary capacity fo r the purpose o f develop ing fo r the record inform ation relevant to the issues to be deter mined by the presiding officer and the Board. ( e ) Transcript of testim ony.-H earings shall be recorded and transcripts will be made available at prescribed rates to any party and, in the event the hearing is public, to any other in ter ested persons. The presiding officer shall have authority to order the record corrected, either upon m otion to correct, upon stipula tion o f the parties, or, follow in g notice to the parties, upon the presiding officer’s initiative.. The tran script o f testim ony taken at any hearing, duly certified by the reporter, together w ith all exhibits, papers, and requests, b riefs or m em oranda o f law filed in connection w ith the hearing shall be filed in duplicate w ith the Secretary by the presiding officer. The Secretary shall prom ptly serve notice upon each o f the parties o f such filing and transm ittal. F ollow in g the service o f notice o f filing o f the record, the record shall be returned to the presiding officer. ( / ) Continuances and changes or extensions of time and changes of place of hearing.-E x c e p t as otherw ise expressly pro vided by law, the Board m ay by the notice o f hearing or subse quent order provide tim e lim its different from those specified in this Part, and may, on its own initiative or fo r good cause §§ 263.6-263.7 RULES OF PRACTICE 7 shown, change or extend any tim e lim it prescribed by these Rules or the notice o f hearing, or change the tim e or place fo r beginning any hearing hereunder. The presiding officer may, fo r good cause shown, and as perm itted by law, change the tim e or place fo r beginning such hearing and m ay continue or adjourn a hearing from tim e to tim e or from place to place. Extensions o f tim e fo r m aking any filing or p erform in g any act required or allowed to be done w ithin a specified time in the course o f a hearing may be granted b y the presiding officer fo r good cause shown. (g) Call for further evidence, oral argument, briefs, reopen ing of hearing.-The presiding officer m ay call fo r the production o f fu rth er evidence upon any issue, m ay perm it oral argument, the subm ission o f briefs at the hearing and, upon appropriate notice, may reopen any hearing at any tim e p rior to the certification o f his recom m ended decision to the Secretary. The Board m ay reopen the record at any tim e perm itted by law. SECTION 263.7— SUBPENAS ( a) Issuance.-W here authorized by law, subpenas fo r the at tendance o f witnesses or fo r the production o f docum entary evi dence, unless directed by the Board upon its own m otion, will issue only upon application in w ritin g to the presiding officer or, in the event he is unavailable, to the Board, except that during sessions o f a hearing, such application may be made orally on the record b efore the presiding officer. The person seeking the subpena m ay be required, as a condition precedent to the is suance o f the subpena, to show the general relevance and rea sonable scope o f the testim ony or other evidence sought. In the event the presiding officer or the Board, a fter consideration o f all the circum stances, determines that the requested subpena or any o f its term s is unreasonable, oppressive, excessive in scope, unduly burdensom e, or otherw ise im proper, he or it m ay refuse to issue the subpena, or issue it only upon such conditions as fairness requires. ( b ) Motion to quash.-Any person to whom a subpena is di rected may, prior to the time specified therein fo r compliance, but in no event m ore than five days a fter the date o f service o f such subpena, w ith notice to the party requesting the subpena, apply to the presiding officer or, if he is unavailable, to the Board, to revoke, quash, or m od ify such subpena, accom panying such application w ith a statement o f the reasons therefor. 8 RULES OF PRACTICE §§ 263.7-263.8 ( c ) Service of subpena.-In m aking service o f a subpena, a copy th ereof shall be exhibited to and left with the person named therein. I f service is made by a U nited States m arshal or his deputy, such service shall be evidenced by his return thereon. I f made by any other person, such person shall make affidavit thereto, describing the m anner in w hich service was made, and return such affidavit on or with the original subpena. In case o f failure to make service, the reasons fo r the failure shall be stated on the original subpena. The original subpena, bearing or accom panied by the required return, affidavit or statement, shall be returned without delay to the Secretary or, i f so directed on the subpena, to the presiding officer before whom the person named in the subpena is required to appear. ( d ) Attendance of witnesses.-The attendance o f witnesses and the production o f documents pursuant to a subpena, issued in connection w ith a hearing provided fo r in subparts B and C o f this Part, may be required from any place in any State or in any territory at any designated place w here the hearing is being con ducted. W itnesses subpenaed in any proceeding under this Part shall be paid the same fees and m ileage that are paid witnesses in the district courts o f the U nited States, except that when a subpena is issued upon the B oard’s own m otion or at the request o f Board counsel, fees and mileage need not be tendered at the time o f service o f the subpena. Fees required by this paragraph shall be paid by the person upon whose application the subpena is issued. SECTION 263.8— DEPOSITIONS (a) When permissible.-The Board or presiding officer, upon its or his own m otion or upon appropriate application by a party to the proceeding or Board counsel, may, by subpena or subpena duces tecum, order evidence to be taken by deposition at any stage o f any proceeding in w hich such depositions are author ized. Depositions may be taken before the presiding officer or before any person designated in the subpena and having the pow er to adm inister oaths. ( b ) Notice and application.-Unless notice is waived, no deposi tion shall be taken except after at least five days’ w ritten notice to Board counsel and the parties to the proceeding or their attor neys o f record and to the Board. In such notice and application to take evidence by deposition, the party desiring to take the deposition shall state the name and post office address o f the witness, the subject m atter concerning w hich the witness is ex § 263.8 RULES OF PRACTICE 9 pected to testify, its relevance, the time, place, and the name and post office address o f the person b efore whom it is desired the deposition be taken, and the reason w hy such deposition should be taken. Thereupon, the presiding officer or the Board may, in his or its discretion, by subpena or subpena duces tecum, order the oral deposition to be taken. Such subpena will name the w it ness whose deposition is to be taken and sp ecify the tim e when, the place where, and the person b efore whom the witness is to testify, but such tim e and place, and the person before whom the deposition is ordered to be taken, may or m ay not be the same as those named in the notice and application. N otice o f the issuance o f such subpena shall be served upon each o f the parties a rea sonable time in advance o f the time fixed fo r the taking o f the deposition, but in no event less than five days in advance o f such time. (c ) P rocedure on deposition ; ob jection s.-E a ch witness testi fy in g upon oral deposition shall be duly sworn, and Board coun sel and any adverse party shall have the right to cross-exam ine. O bjections to questions or documents shall be in short form , stating the grounds o f objection relied upon; but the person re cording the deposition shall not have pow er to rule upon ques tions o f com petency or m ateriality or relevancy o f evidence. Failure to ob ject to questions or evidence shall not be deemed a w aiver unless the ground o f the objection is one w hich m ight have been obviated or rem oved if presented at that time. The questions propounded and the answers thereto, together with all objection s made (but not including argum ent or d ebate), shall be recorded by the officer before whom the deposition is to be taken, or under his direction. The deposition shall be subscribed by the witness, unless the parties by stipulation waive the sign ing or the witness is ill, cannot be found, or refuses to sign, and certified as a true and com plete transcript th ereof by the person recordin g the testim ony. I f the deposition is not subscribed to by the witness, the person recording the testim ony shall state on the record this fa ct and the reason th erefor. The officer before whom the deposition is taken shall prom ptly send the original and tw o copies o f such deposition, together with the original and tw o copies o f all exhibits, by registered mail to the Secretary unless otherw ise directed in the order authorizing the taking o f the deposition or in the notice o f the issuance thereof. Interested parties shall make their own arrangem ents w ith the person re cordin g the testim ony fo r copies o f the testim ony and the exhib its. RULES OF PRACTICE 10 §§ 263.8-263.9-263.10 ( d ) Introduction as eviden ee.-S u bject to appropriate rulings by the presiding officer on such objection s and answers as w ere noted at the tim e the deposition was taken or as w ould be valid w ere the witness personally present and testifyin g, the deposi tion or any part th ereof m ay be received in evidence by the pre siding officer. Only such part o f a deposition as is received in evidence at a hearing shall constitute a part o f the record in such proceeding upon which a decision m ay be based. ( e ) Payment o f fees.-D eponents whose oral depositions are taken and the reporter taking the same shall be entitled to the same fees as are paid fo r like services in the courts o f the United States, w hich fees shall be paid by the person upon whose application the deposition is taken. SECTION 263.9— RULES OF EVIDEN CE (a) E vid en ce.-E very party shall have the right to present his case or defense by oral and docum entary evidence, to subm it rebuttal evidence and to conduct such cross-exam ination as m ay be required fo r a full and true disclosure o f the facts. Irrelevant, immaterial, or unduly repetitious evidence shall be excluded. ( b) O bjection s.-O bjection s to the adm ission or exclusion o f evidence shall be in short form , stating the grounds o f ob jec tions relied upon, and the transcript shall not include argum ent except as ordered by the presiding officer. Rulings on such ob jec tions and on any other m atters shall be a part o f the transcript. Failure to object to adm ission or exclusion o f evidence or to any ruling shall be considered a w aiver o f such objection, but no exception to a ruling on an ob jection need be noted before the presiding officer in order to urge the same in the consideration o f the m atter by the Board. (c) Stipulations.-Independently o f the orders or rulings is sued as provided by § 263.6 (c) , the parties and Board counsel may stipulate as to any relevant m atters o f fact or the authenti city o f any relevant documents. Such stipulations m ay be re ceived in evidence at a hearing, and when so received shall be binding on the parties and Board counsel w ith respect to the m atters therein stipulated. (cl) Official notice.— ll m atters officially noticed by the p re A siding officer shall appear on the record. SECTION 263.10— MOTIONS (a) In writing.— n application or request fo r an order or rul A ing not otherw ise specifically provided fo r in this Part shall be § 263.10 RULES OF PRACTICE 11 made by m otion. A fte r a presiding officer has been designated and before the filing w ith the Secretary o f his recommended de cision, pursuant to § 263.11, such applications or requests shall be addressed to and filed w ith him. A t all other times m otions shall be addressed to the Board and filed w ith the Secretary. Motions shall be in w riting, except that a m otion made at a session o f a hearing may be made orally upon the record unless the presiding officer directs that it be reduced to w riting. A ll w ritten motions shall state w ith particularity the order or relief sought and the grounds therefor. W hen a m otion is addressed to the presiding officer, an original and tw o copies o f such m otion shall be filed. ( b ) Objections.-Within five days after service o f any written m otion, or w ithin such other period as may be fixed by the pre siding officer or the Board, any party may file a w ritten answer or objection to such m otion, together with tw o copies thereof. The m oving party shall have no righ t to reply, except as perm it ted by the presiding officer or the Board. The presiding officer or the Board, in his or its discretion, m ay w aive the requirements o f this section as to m otions fo r extensions o f time, and m ay rule upon such m otions ex parte. (c ) Oral argument; brief s.-N o oral argum ent will be heard on m otions except as otherw ise directed b y the presiding officer or the Board. W ritten m em oranda or b riefs m ay be filed w ith m o tions or answers or objections, stating the points and authorities relied upon in support o f the position taken. (d) Rulings on m otions.-Except as otherw ise provided in this Part, the presiding officer shall rule upon all m otions properly addressed to him and upon such other m otions as the B oard m ay direct, except that i f the presiding officer finds that a prom pt decision by the Board on a m otion is essential to the proper conduct o f the proceeding, he m ay re fe r such m otion to the Board f o r decision. The Board shall rule upon all motions p rop erly submitted to it fo r decision. ( e ) Appeal from rulings on motions.-All m otions and answers or objection s and rulings thereon shall become part o f the record. The rulings o f a presiding officer on any m otion may not be appealed to the Board p rior to its consideration o f the presiding officer’s recom m ended decision, findings, and conclu sions except by special perm ission o f the Board, but shall be considered by the Board in review ing the record. Requests to the Board fo r special perm ission to appeal fro m such rulings o f the presiding officer shall be filed prom ptly, in w riting, and shall briefly state the grounds relied on. 12 RULES OF PRACTICE §§ 263.10-263.11 ( / ) Continuation of hearing.-Unless otherw ise ordered by the presiding- officer or the Board, the hearing shall continue pend ing the determ ination o f any m otion by the Board. (g ) Closing of hearing.-The record o f the hearing shall be closed by announcem ent to that effect by the presiding officer when the taking o f evidence has been concluded. In the discre tion o f the presiding officer, the record m ay be closed as o f a future date in order to perm it the adm ission into the record, under circum stances determ ined by the presiding officer, o f ex hibits to be prepared. SECTION 263.11— PROPOSED FINDINGS AN D CONCLUSIONS AN D RECOM M ENDED DECISION (a) Proposed findings and conclusions and supporting b riefs.-B oa rd counsel or any party w ho m ay wish to file with the presiding officer proposed findings and conclusions o f law shall file the same, with two copies thereof, within 15 days a fter the receipt o f w ritten notice from the Secretary advising that the transcript has been filed w ith the Secretary. Proposed findings and conclusions shall be supported by citation to any relevant authorities and by page references to any relevant portions o f the record and, in addition, m ay be accom panied b y a b rie f in support thereof. In initial licensing proceedings, in lieu o f p ro posed findings and conclusions o f law, and w ithin such tim e as the presiding officer may allow, Board counsel m ay subm it com ments with respect to the evidence o f record a n d /o r proposed findings and conclusions o f law subm itted by any party. A ll such proposed findings and conclusions o f law, b riefs and other sub missions shall becom e part o f the record. ( b ) Recommended decision and filing of record .-In a p ro ceeding in which the Board or one or m ore o f its m em bers has not presided at the reception o f evidence, the presiding officer shall, w ithin 45 days a fter the expiration o f the time allowed fo r the filing o f proposed findings and conclusions, or w ithin such other time as the Board fo r good cause shall prescribe, file w ith the Secretary and certify to the Board fo r decision the entire record o f the hearing, which shall include his recom m ended de cision and findings o f fa ct and conclusions o f law, the transcript, exhibits (including on request o f any o f the parties any exhibits excluded from evidence or tenders o f p r o o f ) , exceptions, rulings, and all briefs and m em oranda filed in connection w ith the hear ing. Prom ptly upon such filing the Secretary shall serve upon §§ 263.11-263.12-263.13 RULES OF PRACTICE 13 each party to the proceeding a copy o f the presiding officer’s recom m ended decision, and findings and conclusions. (c ) Board as presiding officer.— proceedings in which the In Board or one or m ore o f its m em bers has presided at the recep tion o f evidence, the presiding officer’s recommended decision, findings o f fact, and conclusions o f law will be omitted. In such proceedings the proposed findings and conclusions o f law, briefs and other submissions perm itted under § 263.11 (a) shall be filed with the Secretary fo r consideration by the Board. SECTION 263.12— EXCEPTION S (a) F ilin g.-W ith in 15 days after service o f the recommended decision and findings and conclusions o f the presiding officer, or such fu rth er tim e as the Board fo r good cause shall determine, any party or Board counsel may file w ith the Secretary excep tions thereto or to any part thereof, or to the failure o f the presiding officer to make any recom m endation, finding, or con clusion, or to the adm ission or exclusion o f evidence, or other ruling o f the presiding officer, supported by such b r ie f as may appear advisable. In any proceeding w here the Board or one or m ore o f its m em bers is the presiding officer, the provisions o f this section will not be applicable. ( b) W aiver.-F ailu re to file exceptions to the recommended de cision o f the presiding officer or any portion thereof, or to his failure to adopt a proposed finding or conclusion, or the adm is sion or exclusion o f evidence or other ruling o f the presiding officer, w ithin the tim e prescribed in paragraph (a) o f this sec tion, shall be deemed to be a w aiver o f objection. SECTION 263.13— BRIEFS (a) Contents.— All b riefs shall be confined to the particular matters in issue. E ach proposed finding, conclusion, or exception which is briefed shall be supported by a concise supporting statement or by citation o f relevant statutes, regulations, deci sions, or other authorities and by page reference o f relevant p or tions o f the record or recom mended decision o f the presiding officer. I f the exception relates to the adm ission or exclusion o f evidence, the substance o f the evidence adm itted or excluded shall be set forth in the b r ie f w ith appropriate page references to the transcript. (b) Answering brief s.-A n sw erin g b riefs may be filed within 10 days a fter service o f briefs and shall be confined to m atters 14 RULES OF PRACTICE §§ 263.13-263.14263.15-263.16-263.17 in the original b riefs o f opposing parties. Further b riefs m ay be filed with the presiding officer only w ith his perm ission or that o f the Board, and m ay be filed w ith the Board only w ith its perm ission. SECTION 263.14— ORAL ARG U M EN T BEFORE THE BOARD U pon its ow n initiative, or upon w ritten request by any party or Board counsel, the Board, in its discretion, m ay order the m atter to be set down fo r oral argum ent b efore the Board or one or m ore m em bers thereof. A n y request fo r oral argum ent by a party filing exceptions shall be made w ithin the tim e prescribed fo r filing such exceptions, or, by any other party, within the tim e prescribed fo r the filing o f an answ ering brief. Oral argum ent before the Board shall be recorded unless otherw ise ordered by the Board. SECTION 263.15— DECISION OF BOARD A ppropriate m embers o f the B oard’s staff who are not e n gaged in the perform an ce o f investigative or prosecuting fu n c tions in the case, or in a factually related case, m ay advise and assist the Board in the consideration o f the case and in the prep aration o f appropriate documents fo r its disposition. Copies o f the decision and order o f the B oard shall be served b y the Secre tary upon the parties to the proceedings and furnished to such other persons as the Board m ay direct or the law m ay require. SECTION 263.16— FILIN G PAPERS Recom m ended decisions, exceptions, b riefs and other papers required to be filed w ith the Board or Secretary in any proceed ings shall be filed with the Secretary, Board o f G overnors o f the Federal R eserve System, W ashington, D.C. 20551. A n y such papers m ay be sent to the Secretary by mail o r express but m ust be received in the office o f the Board in W ashington, D.C. within the time lim it fo r such filing. SECTION 263.17— SERVICE (a) By the Board.-A ll documents or papers required to be served by the Board shall be served b y the Secretary unless some other person shall be designated fo r such purpose by the Board. Such service, except fo r service on Board counsel, shall be made by personal service or by registered mail on the attorney or rep resentative o f record o f the party, addressed to the last known §§ 253.17-263.18-263.19 RULES OF PRACTICE 15 address as shown on the records o f the Board, provided that if there is no attorney or representative o f record, such service shall be made upon such party at the last known address as shown on the records o f the Board. Such service m ay also be made in such other m anner reasonably calculated to give actual notice as the Board m ay b y regulation or otherwise provide. ( b) By the parties.-All docum ents or papers filed in a pro ceeding under this P art shall be served by the party filing the same upon Board counsel and the attorneys or representatives o f record o f all other parties, or, i f any party is not so represented, then upon such party. Such service may be made by personal service or by registered, certified, or regular first-class mail ad dressed to the last known address o f such parties, or their attor neys o r representatives o f record. All such documents or papers, when tendered to the Board or the presiding officer fo r filing, shall contain a certificate o f service. SECTION 263.18— COPIES Unless otherw ise specifically provided in the notice o f hearing, an original and seven copies o f all docum ents and papers re quired or perm itted to be filed or served upon the Secretary under this P art shall be furnished to the Secretary, except that an original and only one copy o f the transcript o f testim ony and exhibits shall be filed w ith the Secretary by the presiding officer. A ll documents and papers filed w ith the presiding officer shall be filed in duplicate. SECTION 263.19— COMPUTING TIME (a) General rule.-In com puting any period o f tim e prescribed or allowed by this Part, the date o f the act, event or default from w hich the designated period o f tim e begins to run is not to be included. The last day so com puted is to be included, unless it is a Saturday, Sunday or legal holiday in the D istrict o f Colum bia, in w hich event the period shall run until the end o f the next day w hich is neither a Saturday, Sunday nor legal holiday. In term ediate Saturdays, Sundays, and legal holidays shall be in cluded in the com putation unless the tim e within w hich the act is to be perform ed is 10 days or less, in w hich event Saturdays, Sundays, and legal holidays shall not be included. H alf holidays shall not be considered as holidays. (b) Service by m ail.-W h en ever any party has the right o r is required to do some act w ithin a period o f tim e prescribed in this Part, a fte r the service upon him o f any document or other 16 RULES OF PRACTICE §§ 263.19-263.20263.21-263.22 paper o f any kind, and such service is made by mail, three days shall be added to the prescribed period fr o m the date when the m atter served is deposited in the United States mail. SECTION 263.20— DOCUMENTS IN PROCEEDINGS C O N FID EN TIAL Unless and until otherw ise ordered by the Board or unless otherw ise provided by statute or by Board regulation, the notice o f hearing, the transcript, the proposed findings and conclusions, the recom m ended decision o f the presiding officer, exceptions thereto, the findings and conclusions o f the Board and other papers w hich are filed in connection w ith any hearing shall not be made public, and shall be fo r the confidential use only o f the Board and its staff, the presiding officer, the parties and, w here appropriate, other supervising authorities. SECTION 263.21— FORM AL R EQ U IREM EN TS AS TO PAPERS FILED (a ) F orm s.-A ll papers filed under this subpart shall be printed, typew ritten, or otherw ise reproduced. All copies shall be clear and legible. ( b ) Signature.-All papers shall be dated and signed by the party filing the same, or his duly authorized agent or attorney, or Board counsel, and, except in the case o f B oard counsel, shall indicate the address o f the signer. (c ) Caption.-All papers filed must include at the head thereof, or on a title page, the name o f the Board and o f the filing party, the title o f the proceeding, and the subject o f the particular paper. SURPART R— RULES AND PROCEDURES APPLICARLE TO PROCEED INGS RELATING TO CEASE-AND-DESIST ORDERS SECTION 263.22— SCOPE The rules and procedures set fo rth in this subpart are applica ble to proceedings by the Board w ith a view to orderin g a State m em ber bank (oth er than a D istrict bank) to cease and desist fro m practices and violations described in section 8 o f the F ed eral D eposit Insurance A ct (12 U.S.C. 1818) and enumerated in § 263.23. The procedures fo r issuing such orders prescribed in section 8 o f said A ct w ill be follow ed and hearings required thereunder will be conducted in accordance w ith the rules and procedures set forth in this subpart and Subpart A o f this Part. §§ 263.22-263.23263.24-263.25 RULES OF PRACTICE 17 In connection with any proceeding under this subpart, the Board will provide the appropriate State supervisory authority w ith tim ely notice o f intent to institute such a proceeding and the grounds therefor. Unless w ithin such time as the Board deems appropriate in the circum stances o f the case (w hich time will be specified in the notice) satisfactory corrective action is effectuated by action o f the State supervisory authority, the Board will proceed as provided herein. Copies o f any notice or order served upon any State bank in connection with such proceedings will also be sent to the appropriate State supervisory authority. SECTION 263.23— GROUNDS FOR CEASE -A N D -D E SIST ORDERS If, in the opinion o f the Board, any State mem ber bank (other than a D istrict bank) is engaging or has engaged, or the Board has reasonable cause to believe that the bank is about to engage, in an unsafe or unsound practice in conducting the business o f such bank, or is violating or has violated, or the Board has rea sonable cause to believe that the bank is about to violate, a law, rule, or regulation, or any condition imposed in w ritin g b y the Board in connection with the granting o f an application or other request by the bank, or any w ritten agreem ent entered into with the Board, the Board m ay issue and serve upon the bank a notice o f charges in respect thereof. S E C T IO N 263.24— NO TIC E OF C H A R G E S A N D H E A R IN G The notice referred to in § 263.23 will contain a statement o f the facts constituting the alleged violation or violations or the unsafe or unsound practice or practices, and fix a tim e and place at w hich a hearing will be held to determine whether an order to cease and desist therefrom should issue against the bank. The hearing will be fixed fo r a date not earlier than 30 days nor later than 60 days a fter service o f such notice unless an earlier or a later date is set by the Board at the request o f the bank, and shall be held in the Federal judicial district or in the territory in which the hom e office o f the bank is located, unless the bank consents to another place. Unless the bank appears at the hear ing by a duly authorized representative, it w ill be deemed to have consented to the issuance o f the cease-and-desist order. SECTION 263.25— ISSUANCE OF ORDER In the event o f such consent, or i f upon the record made at any such hearing, the Board finds that any violation or unsafe or RULES OF PRACTICE 18 §§ 263.25-263.26263.27-263.28 unsound practice specified in the notice o f charges has been es tablished, the Board may issue and serve upon the bank an order to cease and desist from any such violation or practice. Such order may, b y provisions which m ay be m andatory or otherw ise, require the bank and its directors, officers, employees, and agents to cease and desist from the same and, fu rther, to take affirmative action to correct the conditions resulting from any such violation or practice. SECTION 263.26— E F F E C T IV E DATE A cease-and-desist order will becom e effective at the expira tion o f 30 days a fter the service o f such order upon the bank concerned (except in the case o f a cease-and-desist order issued upon consent, w hich will becom e effective at the tim e specified th erein ), and will rem ain effective and enforceable as provided therein, except to such extent as it is stayed, modified, term inated, or set aside by action o f the Board or a review ing court. SECTION 263.27— TE M PO R A R Y C E A SE -A N D -D E SIST ORDERS W henever the Board determ ines that the violation o r threat ened violation or the unsafe or unsound practice or practices, specified in the notice o f charges referred to in § 263.23 or the continuation thereof, is likely to cause insolvency or substantial dissipation o f assets or o f earnings o f the bank, or is likely to otherw ise seriously prejud ice the interests o f its depositors, the Board may issue a tem porary order requiring the bank to cease and desist from any such violation or practice. SECTION 263.28— E F F E C T IV E DA TE OF TEM PO R A RY ORDER Such order will becom e effective upon service upon the bank, and, unless set aside, limited, or suspended by a court in p ro ceedings authorized under section 8 (h ) (2) o f the Federal Deposit Insurance A ct, will remain effective and enforceable pending the com pletion o f the adm inistrative proceedings held pursuant to such notice and until such tim e as the Board dism isses the charges specified in such notice, or if a cease-and-desist order is issued against the bank pursuant to § 263.25, until the effective date o f any such order. §§ 263.29-263.30 RULES OF PRACTICE 19 SURPART C— RULES AND PROCEDURES APPLICABLE TO PROCEED INGS RELATING TO REMOVAL AND SUSPENSION ORDERS SECTION 263.29— SCOPE The rules and procedures set forth in this subpart are applica ble to proceedings by the Board to rem ove or suspend a director, officer, or any other person participating in the conduct o f the affairs o f a State m em ber bank (other than a D istrict bank) or o f a national banking association or a D istrict bank w here the facts are certified to the Board pursuant to 12 U.S.C. 1 8 1 8 ( e ) ( 2 ) , 12 U.S.C. 1 8 1 8 ( e ) ( 4 ) , or 12 U.S.C. 1 8 1 8 ( e ) ( 6 ) , a n d /o r prohibit such director, officer, or other person from further participation in the conduct o f the affairs o f such a bank, upon the grounds set forth in section 8 o f the Federal Deposit Insurance A ct (12 U.S.C. 1818) and enumerated in this subpart. The procedures fo r issuing such orders prescribed in section 8 o f said A ct w ill be follow ed and hearings required thereunder will be conducted in accordance w ith the rules and procedures set forth in this subpart and Subpart A o f this Part. In connection w ith any proceeding under this subpart relating to a director, officer, or other person participating in the affairs o f a State m em ber bank (other than a D istrict b a n k ), the Board will provide the appropriate State supervisory authority with tim ely notice o f intent to institute such a proceeding and the grounds th erefor. Unless w ithin such time as the Board deems appropriate in the circum stances o f the case (w hich tim e will be specified in the notice) satisfa ctory corrective action is effectuated by action o f the State supervisory authority, the Board will proceed as provided herein. Copies o f any notice or order served upon any State bank in connection w ith such proceedings will also be sent to the appropriate State supervisory authority. In connection w ith any proceeding under this subpart relating to a director, officer, or other person participating in the affairs o f a national banking association or a D istrict bank where the facts are certified to the Board pursuant to 12 U.S. C .1818(e) ( 2 ) , 12 U.S.C. 18 1 8 (e) ( 4 ) , or 12 U.S.C. 18 1 8 (e) ( 6 ) , the Com ptroller o f the Currency shall be entitled to sit as a m em ber o f the Board and to participate in its deliberations on any such case and to vote thereon in all respects as a m em ber o f the Board. SECTION 263.30— GROUNDS FOR REM OVAL ORDER (a ) W henever, in the opinion o f the Board, any director or officer o f a State m em ber bank (oth er than a D istrict bank) or o f a national banking association or a D istrict bank w here the RULES OF PRACTICE 20 §§ 263.30-263.31 facts are certified to the Board pursuant to 12 U.S.C. 18 18 (e) (2 ) has com m itted any violation o f law, rule or regula tion, or o f a cease-and-desist order w hich has becom e final, or has engaged or participated in any unsafe or unsound practice in connection w ith the bank, or has com m itted or engaged in any act, om ission, or practice which constitutes a breach o f his fidu ciary duty as such director or officer, and the Board determ ines that the bank has suffered or w ill probably suffer substantial financial loss or other dam age or that the interests o f its deposi tors could be seriously prejudiced by reason o f such violation or practice or breach o f fiduciary duty, and that such violation or practice or breach o f fiduciary duty is one involving personal dishonesty on the part o f such director or officer, the Board m ay serve upon such director or officer a w ritten notice o f its inten tion to rem ove him from office. ( b) W henever, in the opinion o f the Board, any director or officer o f a State m em ber bank (other than a D istrict bank) or o f a national banking association or a D istrict bank w here the facts are certified to the Board pursuant to 12 U.S.C. 1 8 1 8 (c) ( 4 ) , by conduct or practice w ith respect to another in sured bank or other business institution w hich resulted in sub stantial financial loss or other damage, has evidenced his personal dishonesty and ■unfitness to continue as a director or officer, and whenever, in the opinion o f the Board, any other person participating in the conduct o f the affairs o f such bank, by con duct or practice w ith respect to such bank or other insured bank or other business institution w hich resulted in substantial finan cial loss or other damage, has evidenced his personal dishonesty and unfitness to participate in the conduct o f the affairs o f such bank, the Board may serve upon such director, officer, or other person a w ritten notice o f its intention to rem ove him fro m office a n d /o r to prohibit his fu rth er participation in any m anner in the conduct o f the affairs o f the bank. SECTION 263.31— GROUNDS FOR SUSPENSION ORDER In respect to any director or officer o f a State m em ber bank (other than a D istrict bank) or any other person referred to in § 263.30 (a) or (b) and in respect to any such director or officer of, or other person participating in the conduct o f the affairs of, a national banking association or a D istrict bank w here the facts are certified to the Board pursuant to 12 U.S.C. 181 8 (e) ( 6 ) , the Board may, if it deems it necessary fo r the protection o f the bank or the interests o f its depositors, by w ritten notice to such RULES OF PRACTICE §§ 263.31-263.32263.33-263.34 21 effect served upon such director, officer, or other person, suspend him fro m office a n d /o r prohibit him from further participation in any m anner in the conduct o f the affairs o f the bank. SECTION 263.32— E FF E C T IV E DATE OF SUSPENSION ORDER A n y suspension a n d /o r prohibition which is subject to the no tice prescribed in § 263.31 shall becom e effective upon service o f such notice and, unless stayed by a court in proceedings author ized by section 8 ( f ) o f the Federal D eposit Insurance A ct, shall remain in effect pending the com pletion o f the adm inistrative proceedings held pursuant to the notice served under § 263.30 (a) or ( b) and until such time as the Board shall dism iss the charges specified in such notice, or, if an order o f removal a n d /o r prohibition is issued against the director o r officer or other person, until the effective date o f any such order. Copies o f any such notice will also be served upon the bank o f which he is a director or officer or in the conduct o f whose affairs he has participated. SECTION 263.33— NOTICE OF IN TEN TIO N TO REMOVE AND HEARING A notice o f intention to remove a director, officer, or other person from office a n d /o r to prohibit his participation in the conduct o f the affairs o f an insured bank will contain a state ment o f the facts constituting grounds th erefor and will fix a time and place at w hich a hearing will be held thereon. Such hearing will be fixed fo r a date not earlier than 30 days nor later than 60 days after the date o f service o f such notice, unless an earlier or a later date is set by the Board at the request o f (a) such director or officer or other person, and fo r good cause shown, or (b ) the A ttorn ey General o f the United States. Such hearing shall be held in the Federal judicial district or in the territory in which the home office o f the bank involved is located, unless the person afforded the hearing consents to another place. Unless such director, officer, or other person appears at the hearing in person or by a duly authorized representative, he shall be deemed to have consented to the issuance o f an order o f such rem oval a n d /o r prohibition. SECTION 263.34— ISSUANCE OF REM OVAL ORDER AND E F F E C T IV E DATE In the event o f such consent, or if upon the record made at any such hearing the Board finds that any o f the grounds 22 RULES OF PRACTICE §§ 263.34-263.35 specified in such notice has been established, the Board m ay is sue such orders o f suspension or rem oval fro m office, a n d /o r prohibition fro m participation in the conduct o f the affairs o f the bank, as it m ay deem appropriate. A n y such order shall be come effective at the expiration o f 30 days a fter service upon such bank and the director, officer, or other person concerned (except in the case o f an order issued upon consent, w hich shall becom e effective at the tim e specified th e r e in ). Such order shall rem ain effective and enforceable except to such extent as it is stayed, modified, term inated, or set aside by action o f the B oard o r a review in g court. SECTION 263.35— SUSPENSION AND R EM O VA L W H E RE FELO N Y CHARGED (a) W henever any director or officer o f an insured State m em ber bank (other than a D istrict b a n k ), or other person p ar ticipating in the conduct o f the affairs o f such bank, is charged in any inform ation, indictm ent, or com plaint authorized by a United States attorney, with the com m ission o f or participation in a felony involving dishonesty or breach o f trust, the Board may, by w ritten notice served upon such director, officer, or other person, suspend him fro m office a n d /o r prohibit him fro m fu rth er participation in any m anner in the conduct o f the affairs o f the bank. A copy o f such notice will also be served upon the bank. Such suspension a n d /o r prohibition shall rem ain in effect until such inform ation, indictm ent, or com plaint is finally dis posed o f or until such suspension a n d /o r prohibition is term inated by the Board. (b) In the event that a judgm ent o f conviction w ith respect to such offense is entered against such director, officer, or other person, at such time as such judgm ent is not subject to fu rth er appellate review , the Board m ay issue and serve upon such di rector, officer, or other person an order rem oving him fro m office a n d /o r proh ibitin g him from fu rth er participation in any m an ner in the conduct o f the affairs o f the bank except w ith the consent o f the Board. A copy o f such order w ill also be served upon such bank, whereupon such director or officer shall cease to be a director or officer o f such bank. A finding o f not guilty or other disposition o f the charge will not preclude the Board fro m thereafter instituting proceedings to rem ove such director, officer, or other person fro m office a n d /o r to prohibit fu rth er participation in bank affairs, pursuant to other provisions o f this subpart.
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