ate filing on any terms that are just; and

(6) Assessing reasonable expenses, including attorney's fees, incurred by any other party as a result of the improper action or failure to act.

(c) Limits on dismissal as a sanction. No recommendation of dismissal shall be made by the administrative law judge or granted by the Board based on the failure to hold a hearing within the time period called for in this Part 308, or on the failure of an administrative law judge to render a recommended decision within the time period called for in this Part 308, absent a finding that the delay:

(1) Resulted solely or principally from the conduct of the FDIC enforcement counsel;

(2) That the conduct of the FDIC enforcement counsel is unexcused;

(3) That the moving Respondent took all reasonable steps to oppose and prevent the subject delay;

(4) That the moving Respondent has been materially prejudiced or injured; and

(5) That no lesser or different sanction is adequate.

(d) Procedure for imposition of sanctions. (1) The administrative law judge, upon the request of any party, or on his or her own motion, may impose sanctions in accordance with this section, provided that the administrative law judge may only recommend to the Board the sanction of entering a final order determining the case on the merits.

(2) No sanction, other than refusing to accept late papers, authorized by this section shall be imposed without prior notice to all parties and an opportunity for any counsel or party against whom sanctions would be imposed to be heard. Such opportunity to be heard may be on such notice, and the response may be in such form, as the administrative law judge directs. The opportunity to be heard may be limited to an opportunity to respond orally immediately after the act or inaction covered by this section is noted by the administrative law judge.

(3) Requests for the imposition of sanctions by any party, and the imposition of sanctions, shall be treated for

interlocutory review purposes in the same manner as any other ruling by the administrative law judge.

(e) Section not exclusive. Nothing in this section shall be read as precluding the administrative law judge or the Board from taking any other action, or imposing any restriction or sanction, authorized by applicable statute or regulation.

§ 308.50 Suspension and disbarment.

(a) Discretionary suspension and disbarment. (1) The Board may suspend or revoke the privilege of any attorney to appear or practice before the FDIC if, after notice of and opportunity for hearing in the matter, that attorney is found by the Board:

(i) Not to possess the requisite qualifications to represent others,

(ii) To be seriously lacking in character or integrity or to have engaged in material unethical or improper professional conduct,

(iii) To have engaged in, or aided and abetted, a material and knowing violation of the Act, or

(iv) To have engaged in contemptuous conduct before the FDIC. Suspension or revocation on the grounds set forth in paragraphs (ii), (iii), and (iv) of this section shall only be ordered upon a further finding that the attorney's conduct or character was sufficiently egregious as to justify suspension or revocation.

(2) Unless otherwise ordered by the Board, an application for reinstatement by a person suspended or disbarred under paragraph (a)(1) of this section may be made in writing at any time more than three years after the effective date of the suspension or disbarment and, thereafter, at any time more than one year after the person's most recent application for reinstatement. The suspension or disbarment shall continue until the applicant has been reinstated by the Board for good cause shown or until, in the case of a suspension, the suspension period has expired. An applicant for reinstatement under this provision may, in the Board's sole discretion, be afforded a hearing.

(b) Mandatory suspension and disbarment. (1) Any attorney who has

been and remains suspended or disbarred by a court of the United States or of any state, territory, district, commonwealth, or possession; or any person who has been and remains suspended or barred from practice before the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Home Loan Bank Board, the Securities and Exchange Commission, or the Commodity Futures Trading Commission; or any person who has been convicted of a felony, or of a misdemeanor involving moral turpitude, within the last ten years, shall be suspended automatically from appearing or practicing before the FDIC. A disbarment, suspension, or conviction within the meaning of this paragraph (b) shall be deemed to have occurred when the disbarring, suspending, or convicting agency or tribunal enters its judgment or order, regardless of whether an appeal is pending or could be taken, and includes a judgment or an order on a plea of nolo contendere or on consent, regardless of whether a violation is admitted in the consent.

(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 Executive Secretary a copy thereof, together with any related opinion or statement of the agency or tribunal involved. 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 for good cause shown, provided that any person suspended or disbarred under paragraph (b)(1) of this section shall be automatically reinstated by the Executive Secretary, upon appropriate application, if all the grounds for suspension under the provisions of that paragraph 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 disbarre under paragraph (b)(1) of this sectio may be filed at any time not less tha one year after the applicant's mos recent application. An applicant fo reinstatement under this provisio may, in the Board's sole discretion, te afforded a hearing.

(c) Hearings under this section Hearings conducted under this sectio shall be conducted in substantially the same manner as other hearings under this subpart B, provided that in pro ceedings to terminate existing FDIC suspension or disbarment orders, the person seeking the termination of the order shall bear the burden of going forward with an application and with proof, and that the Board may, in it sole discretion, direct that any pro ceeding to terminate an existing sus pension or disbarment by the FDIC be limited to written submissions.

(d) Summary suspension for co temptuous conduct. A finding by the administrative law judge of contemp tuous conduct during the course of any proceeding shall be grounds for summary suspension by the adminis trative law judge of any attorney of other representative from any further participation in that proceeding for the duration of that proceeding.

(e) Practice defined. Unless the Board orders otherwise, for the pur poses of this section, practicing before the FDIC includes, but is not limited to, (1) transacting any business with the FDIC as an attorney or agent for any other person and (2) the preparation of any statement, opinion, or other paper by any attorney, which statement, opinion, or paper is filed with the FDIC in any registration statement, notification, application, report, or other document, with the consent of such attorney.

Subpart C-Rules and Procedures Ap plicable to Proceedings Relating to Disapproval of Acquisition of Control

§ 308.51 Scope.

The rules and procedures in this subpart and subpart B shall apply to proceedings in connection with the disapproval by the Board or its desig

nee of a proposed acquisition of control of an insured nonmember bank.

§ 308.52 Grounds for disapproval.

The following are grounds for disapproval of a proposed acquisition of control of an insured nonmember bank:

(a) The proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the banking business in any part of the United States;

(b) The effect of the proposed acquisition of control in any section of the United States may be to substantially lessen competition or to tend to create a monopoly or would in any other manner be in restraint of trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;

(c) The financial condition of any acquiring person might jeopardize the financial stability of the bank or prejudice the interests of the depositors of the bank;

(d) The competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the bank, or in the interest of the public, to permit such person to control the bank; or

(e) Any acquiring person neglects, fails, or refuses to furnish to the FDIC all the information required by the FDIC.

§ 308.53 Notice of disapproval.

(a) General rule. (1) Within three days of the decision by the Board or its designee to disapprove a proposed acquisition of control of an insured nonmember bank, a written notice of disapproval shall be mailed by first class mail to, or otherwise served upon, the party seeking to acquire control.

(2) The notice of disapproval shall: (i) State the basis for the disapproval, and

(ii) Indicate that (A) a hearing may be requested by filing a written request with the Executive Secretary within ten days after service of the notice of disapproval and (B) if a hearing is requested, that an answer to the notice of disapproval, as required by § 308.54, must be filed within twenty days after service of the notice of disapproval.

(b) Waiver of hearing. Failure to request a hearing pursuant to this section shall constitute a waiver of the opportunity for a hearing and the notice of disapproval shall constitute a final and unappealable order.

§ 308.54 Answer to notice of disapproval.

(a) Contents. An answer to the notice of disapproval of a proposed acquisition of control shall be filed within twenty days after service of the notice of disapproval and shall specifically deny those portions of the notice of disapproval which are disputed. Those portions of the notice of disapproval which are not specifically denied are deemed admitted by the applicant. Any hearing under this subpart C shall be limited to those parts of the notice of disapproval that are specifically denied.

(b) Failure to answer. Failure of a party to file a timely answer pursuant to this section shall be deemed a waiver of the party's right to appear at a hearing and contest the disapproval, and the notice of disapproval shall automatically constitute a final and unappealable order.

Subpart D-Rules and Procedures Applicable to Proceedings Relating to Assessment of Civil Money Penalties for Willful Violations of the Change in Bank Control Act

§ 308.55 Scope.

The rules and procedures of this subpart and subpart B shall apply to proceedings to assess civil penalties against any person for willful violation of the Change in Bank Control Act of 1978, or any regulation or order issued pursuant thereto, in connection with the affairs of an insured nonmember bank.

§ 308.56 Assessment of penalties.

(a) Relevant considerations. The Board or its designee may, in its discretion, assess civil penalties for willful violations of the Change in Bank Control Act after taking into consideration the gravity of the violation and the Respondent's financial resources, good faith, and any other arguments, information, and data submitted by the Respondent.

(b) Amount. The Board or its designee may assess against the Respondent a penalty of not more than $10,000 per day for each day the violation of the Change in Bank Control Act continues.

§ 308.57 Collection of penalties.

The FDIC may collect any civil penalty assessed pursuant to this subpart by agreement with the Respondent, or the FDIC may bring an action against the Respondent to recover the penalty amount in the appropriate United States district court. All penalties collected under this section shall be paid over to the Treasury of the United States.

Subpart E-Rules and Procedures Ap

plicable to Proceedings for Involuntary Termination of Insured Status

§ 308.58 Scope.

(a) Involuntary termination of insurance pursuant to section 8(a) of the Act. The rules and procedures in this subpart and subpart B shall apply to proceedings in connection with the involuntary termination of the insured status of an insured bank or an insured branch of a foreign bank pursuant to section 8(a) of the Act, 12 U.S.C. 1818(a).

(b) Involuntary termination of insurance pursuant to section 8(p) of the Act. The rules and procedures in § 308.63 of this subpart E shall apply to proceedings in connection with the involuntary termination of the insured status of an insured bank or an insured branch of a foreign bank pursuant to section 8(p) of the Act, 12 U.S.C. 1818(p). Subpart B shall not apply to proceedings under section 8(p) of the Act.

§ 308.59 Grounds for termination of insur

ance.

(a) General rule. The following are grounds for involuntary termination of insurance pursuant to section 8(a) of the Act:

(1) An insured bank or its directors or trustees have engaged or are engag ing in unsafe or unsound practices in conducting the business of such bank

(2) An insured bank is in an unsafe or unsound condition such that i should not continue operations as an insured bank; or

(3) An insured bank or its directors or trustees have violated an applicable law, rule, regulation, or order, or any condition imposed in writing by the FDIC in connection with the granting of any application or other request by the bank or have violated any written agreement entered into with the FDIC.

(b) Extraterritorial acts of foreign banks. An act or practice committed outside the United States by a foreign bank or its directors or trustees which would otherwise be a ground for termination of insured status under this section shall be a ground for termination if the Board finds:

(1) The act or practice has been, is or is likely to be a cause of, or carried on in connection with or in furtherance of, an act or practice committed within any state, territory, or posses sion of the United States or the District of Columbia that, in and of itself, would be an appropriate basis for action by the FDIC; or

(2) The act or practice committed outside the United States, if proven. would adversely affect the insurance risk of the FDIC.

(c) Failure of foreign bank to secure removal of personnel. The failure of a foreign bank to comply with any order of removal or prohibition issued by the Board under subpart G of this part or the failure of any person associated with a foreign bank to appear promptly as a party to a proceeding pursuant to subpart G of this part shall be a ground for termination of insurance of deposits in any branch of the bank.

§ 308.60 Order of correction.

(a) Notice to bank. (1) Upon a finding by the Board or its designee pursuant to § 308.59 of an unsafe or unsound practice or condition or of a violation, there shall be served upon the insured bank an Order of Correction specifying the findings and ordering correction of the practices, conditions, or violations within one hundred twenty days after receipt of an Order of Correction.

(2) A shorter period of correction of not less than twenty days may be fixed in any case where the Board or its designee, in its discretion, has determined that the insurance risk of the FDIC is unduly jeopardized, or may be fixed by the Comptroller of the Currency in the case of a national bank, a district bank, or an insured federal branch of a foreign bank, by the state authority in the case of an insured nonmember bank, including an insured State branch of a foreign bank, by the Board of Governors of the Federal Reserve System in the case of a state member bank, or by the Federal Home Loan Bank Board in the case of an insured federal savings bank.

(b) Notice to supervisory authority. The Executive Secretary shall also serve the Order of Correction on the Comptroller of the Currency in the case of a national bank, a district bank, or an insured federal branch of a foreign bank, on the Board of Governors of the Federal Reserve System in the case of a state member bank, on the Federal Home Loan Bank Board in the case of an insured federal savings bank, and on the appropriate state supervisory authority in the case of an insured state bank, including a state branch of a foreign bank, for the purpose of securing correction of the practices or violations of the bank or its directors or trustees, or of the condition of the bank.

§ 308.61 Notice of intent to terminate.

Unless correction of the practices, condition, or violations specified in the Order of Correction is made within the time period provided therein, the Board or its designee, if it determines to proceed further, shall cause to be served upon the insured bank a Notice

of its intention to terminate insured status not less than thirty days after the service of that Notice.

§ 308.62 Notice to depositors.

If the Board enters an order terminating the insured status of a bank or branch, the bank shall, on the day that order becomes final, or on such other day as that order prescribes, mail a notification of termination of insured status to each depositor at the depositor's last address of record on the books of the bank or branch. The bank shall also publish the notification in two issues of a local newspaper of general circulation and shall furnish the FDIC with proof of such publications. The notification to depositors shall include information provided in substantially the following form: Notice

2. Any deposits made by you after that date, either new deposits or additions to existing deposits, will not be insured by the Federal Deposit Insurance Corporation.

3. Insured deposits in the (bank) (branch) on the day of 19, will continue to be insured, as provided by the Federal Deposit Insurance Act, for 2 years after the close of business on the day of 19. Provided, however, that any withdrawals after the close of business on the day of 19_, will reduce the insurance coverage by the amount of such withdrawals.

(Name of bank or branch)

(Address)

The notification may include any additional information the bank deems advisable, provided that the information required by this section shall be set forth in a conspicuous manner on the first page of the notification.