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2000 - Rules and Regulations
Subpart MProcedures and Standards Applicable to an
Application Pursuant to Section 19 of the FDIA
§ 308.156 Scope.
The rules and procedures set forth in this subpart shall apply to an
application filed pursuant to section 19 of the FDIA
(12 U.S.C. 1829) by an
insured depository institution and a person, who has been convicted of
any criminal offense involving dishonesty or a breach of trust or money
laundering or who has agreed to enter into a pretrial diversion or
similar program in connection with the prosecution of such offense, to
seek the prior written consent of the FDIC to become or continue as an
institution-affiliated party with respect to an insured depository
institution; to own or control directly or indirectly an insured
depository institution; or to participate directly or indirectly in any
manner in the conduct of the affairs of an insured depository
institution.
[Codified to 12 C.F.R. § 308.156]
[Section 308.156 amended at 64 Fed. Reg. 62101, November
16, 1999]
§ 308.157 Relevant considerations.
(a) In proceedings under § 308.156 on an application to become or
continue as an institution-affiliated party with respect to an insured
depository institution; to own or control directly or indirectly an
insured depository institution; or to participate directly or
indirectly in any manner in the conduct of the affairs of an insured
depository institution, the following shall be considered:
(1) Whether the conviction or entry into a pretrial diversion or
similar program is for a criminal offense involving dishonesty or
breach of trust or money laundering;
(2) Whether participation directly or indirectly by the person in
any manner in the conduct of the affairs of the insured depository
institution constitutes a threat to the safety or soundness of the
insured depository institution or the interest of its depositors, or
threatens to impair public confidence in the insured depository
institution;
(3) Evidence of the applicant's rehabilitation;
(4) The position to be held by the applicant;
(5) The amount of influence and control the applicant will be
able to exercise over the affairs and operations of the insured
depository institution;
(6) The ability of the management at the insured depository
institution to supervise and control the activities of the
applicant;
{{12-30-99 p.2166.02}}
(7) The level of ownership which the applicant will have at the
insured depository institution;
(8) Applicable fidelity bond coverage for the applicant; and
(9) Additional factors in the specific case that appear relevant.
(b) The question of whether a person, who was convicted of a crime
or who agreed to enter a pretrial diversion or similar program, was
guilty of that crime shall not be at issue in a proceeding under this
subpart.
[Codified to 12 C.F.R. § 308.157]
[Section 308.157 amended at 64 Fed. Reg. 62101, November
16, 1999]
§ 308.158 Filing papers and effective date.
(a) Filing with the regional office. Applications
pursuant to section 19 shall be filed by in the
appropriate regional office. Unless a
waiver has been granted pursuant to paragraph (c) of this section, only
an insured depository institution may file an application. Persons
meeting the de minimis criteria set forth in the
FDIC's Statement of Policy on
Section 19 of the FDIA (63 FR 66177 (1998)) need not file an
application.
(b) Effective date. An application pursuant to section
19 may be made in writing at any time more than one year after the
issuance of a decision denying an application pursuant to section 19.
The removal and/or prohibition pursuant to section 19 shall continue
until the individual has been reinstated by the Board of Directors or
its designee for good cause shown.
(c) Waiver applications. If an institution does not
file an application regarding an individual, the individual may file a
request for a waiver of the institution filing requirement for section
19 of the FDIA. Such a waiver application shall be filed with the
appropriate regional office and shall set forth substantial good cause
why the application should be granted. The Director of the Division of
Supervision and, where confirmed in writing by the director, a deputy
director or an associate director may grant or deny applications
requesting waivers of the institution filing requirement. The authority
delegated under this section shall be exercised only upon the
concurrent certification of the General Counselor or his designee that
the action to be taken is not inconsistent with section 19 of the FDIA.
[Codified to 12 C.F.R. § 308.158]
[Section 308.158 amended at 64 Fed. Reg. 62101, November
16, 1999]
§ 308.159 Denial of applications.
A denial of an application pursuant to section 19 shall:
(a) Inform the applicant that a written request for a hearing,
stating the relief desired and the grounds therefor and any supporting
evidence, may be filed with the Executive Secretary within 60 days
after the denial; and
(b) Summarize or cite the relevant considerations specified in
§ 308.157 of this subpart.
[Codified to 12 C.F.R.
§ 308.159]
§ 308.160 Hearings.
(a) Hearing dates. The Executive Secretary shall order
a hearing to be commenced within 60 days after receipt of a request for
hearing on an application filed pursuant to § 308.159. Upon the
request of the applicant or FDIC enforcement counsel, the presiding
officer of the Executive Secretary may order a later hearing date.
(b) Burden of proof. The ultimate burden of proof shall
be upon the person proposing to become or continue as an
institution-affiliated party with respect to an insured depository
institution; to own or control directly or indirectly an insured
depository institution; or to participate directly or indirectly in any
manner in the conduct of the affairs of an insured depository
institution. The burden of going forward with a prima facie
case shall be upon the FDIC.
{{12-30-99 p.2166.03}}
(c) Hearing procedure. (1) The hearing shall be held
in Washington, DC, or at another designated place, before a presiding
officer designated by the Executive Secretary.
(2) The provisions of
§§ 308.6 through 308.12,
308.16, and 308.21 of the Uniform Rules and
§§ 308.101 through
308.102 and 308.104 through 308.106 of subpart B of the Local Rules
shall apply to hearings held pursuant to this subpart.
(3) The applicant may appear at the hearing and shall have the
right to introduce relevant and material documents and oral argument.
Members of the FDIC enforcement staff may attend the hearing and
participate as a party.
(4) There shall be no discovery in proceedings under this
subpart.
(5) At the discretion of the presiding officer, witnesses may be
presented within specified time limits, provided that a list of
witnesses is furnished to the presiding officer and to all other
parties prior to the hearing. Witnesses shall be sworn, unless
otherwise directed by the presiding officer. The presiding officer may
ask questions of any witness. Each party shall have the opportunity to
cross-examine any witness presented by an opposing party. The
transcript of the proceedings shall be furnished, upon request and
payment of the cost thereof, to the applicant afforded the hearing.
(6) In the course of or in connection with any hearing under this
subsection, the presiding officer shall have the power to administer
oaths and affirmations, to take or cause to be taken depositions of
unavailable witnesses, and to issue, revoke, quash, or modify subpoenas
and subpoenas duces tecum. Where the presentation of witnesses is
permitted, the presiding officer may require the attendance of
witnesses from any state, territory, or other place subject to the
jurisdiction of the United States at any location where the proceeding
is being conducted. Witness fees shall be paid in accordance with
§ 308.14 of the Uniform Rules.
(7) Upon the request of the applicant afforded the hearing, or
FDIC enforcement staff, the record shall remain open for five business
days following the hearing for the parties to make additional
submissions to the record.
(8) The presiding officer shall make recommendations to the Board
of Directors, where possible, within 20 days after the last day for the
parties to submit additions to the record.
(9) The presiding officer shall forward his or her recommendation
to the Executive Secretary who shall promptly certify the entire
record, including the recommendation to the Board of Directors or its
designee. The Executive Secretary's certification shall close the
record.
(d) Written submissions in lieu of hearing. The
applicant or the bank may in writing waive a hearing and elect to have
the matter determined on the basis of written submissions.
(e) Failure to request or appear at hearing. Failure to
request a hearing shall constitute a waiver of the opportunity for a
hearing. Failure to appear at a hearing in person or through an
authorized representative shall constitute a waiver of hearing. If a
hearing is waived, the person shall remain barred under section 19.
(f) Decision by Board of Directors or its
designee. Within 60 days following the Executive Secretary'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.
[Codified to 12 C.F.R. § 308.160]
[Section 308.160 amended at 64 Fed. Reg. 62101, November
16, 1999]
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