§ 308.29 Grounds for cease-and-desist orders.

If, in the opinion of the Board of Directors, any insured State nonmember bank (other than a District bank) or bank which has insured deposits is engaging or has engaged, or the Board of Directors has reasonable cause to believe that the bank is about to engage, in an unsafe or unsound practice in conducting the business of such bank, or is violating or has violated, or the Board of Directors has reasonable cause to believe that the bank is about to violate, a law, rule, or regulation, or any condition imposed in writing by the Board of Directors in connection with the granting of an application or other request by the bank, or any written agreement entered into with the Corporation, the Board of Directors may issue and serve upon the bank a notice of charges in respect thereof.

§ 308.30

Notice of charges and hearing.

The notice referred to in § 308.29 will contain a statement of the facts constituting the alleged violation or violations or the unsafe or unsound practice or practices, and fix a time and place at which 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 for a date not earlier than 30 days nor later than 60 days after service of such notice unless an earlier or a later date is set by the Board of Directors at the request of the bank. Unless the bank appears at the hearing by a duly authorized representative, it will be deemed to have consented to the issuance of the cease-and-desist order.

§ 308.31 Issuance of order.

In the event of such consent, or if upon the record made at any such hearing, the Board of Directors finds that any violation or unsafe or unsound practice specified in the notice of charges has been established, the Board of Directors may issue and serve upon the bank an order to cease and desist from any such violation or practice. Such order may, by provisions which may be mandatory or otherwise, require the bank and its directors, officers, employees, and agents to cease and desist from the same and, further, to take affirmative action to correct the conditions resulting from any such violation or practice.

§ 308.32 Effective date.

A cease-and-desist order will become effective at the expiration of 30 days after the service of such order upon the bank concerned (except in the case of a ceaseand-desist order issued upon consent, which will become effective at the time specified therein), and will remain effective and enforceable as provided therein, except to such extent as it is stayed, modified, terminated, or set aside by action of the Board of Directors or a reviewing court.

§ 308.33 Temporary cease-and-desist orders.

Whenever the Board of Directors determines that the violation or threatened violation or the unsafe or unsound practice or practices, specified in the notice of charges referred to in § 308.28, or the continuation thereof, is likely to cause insolvency or substantial dissipation of assets or earnings of the bank, or is likely to otherwise seriously prejudice the interests of its depositors, the Board of Directors may issue a temporary order requiring the bank to cease and desist from any such violation or practice.

§ 308.34 Effective date of temporary

order.

Such order will become effective upon service upon the bank and, unless set aside, limited, or suspended by a court in proceedings authorized under the Federal Deposit Insurance Act will remain effective and enforceable pending the completion of the administrative proceedings held pursuant to such notice and until such time as the Board of Directors dismisses the charges specified in such notice, or if a cease-and-desist order is issued against the bank pursuant to 308.29, until the effective date of any such order.

Subpart D-Rules and Procedures Applicable to Proceedings Relating to Removal and Suspension Orders § 308.35 Scope.

The rules and procedures set forth in this subpart are applicable to proceedings by the Board of Directors to remove or suspend directors or officers of an insured State nonmember bank (other than a District bank) or any other person participating in the conduct of the affairs of such a bank, and/or prohibit such director, officer or other person from further participation in the conduct of

the affairs of such a bank, upon the grounds set forth in section 8 of the Federal Deposit Insurance Act and enumerated in this subpart. The procedures for issuing such orders prescribed in section 8 of said Act will be followed and hearings required thereunder will be conducted in accordance with the rules and procedures set forth in this subpart and Subpart A of this part.

§ 308.36

Grounds for removal order.

(a) Whenever, in the opinion of the Board of Directors, any director or officer of an insured State nonmember bank (other than a District bank) has committed any violation of law, rule, or regulation, or of a cease-and-desist order which has become final, or has engaged or participated in any unsafe or unsound practice in connection with the bank, or has committed or engaged in any act, omission, or practice which constitutes a breach of his fiduciary duty as such director or officer, and the Board of Directors determines that the bank has suffered or will probably suffer substantial gnancial loss or other damage or that the interests of its depositors could be seriously prejudiced by reason of such violation or practice or breach of fiduciary duty, and that such violation or practice or breach of fiduciary duty is one involving personal dishonesty on the part of such director or officer, the Board of Directors may serve upon such director or officer a written notice of its intention to remove him from office.

(b) Whenever, in the opinion of the Board of Directors, any director or officer of an insured State nonmember bank (other than a District bank), by conduct or practice with respect to another insured bank or other business institution which resulted in substantial financial loss or other damage, has evidenced his personal dishonesty and unfitness to continue as a director or officer and, when ever, in the opinion of the Board of Directors, any other person participating in the conduct of the affairs of an insured State nonmember bank (other than a District bank), by conduct or practice with respect to such bank or other insured bank or other business institution which resulted in substantial financial loss or other damage, has evidenced his personal dishonesty and unfitness to participate in the conduct of the affairs of such insured bank, the Board of Directors may serve upon such director, officer, or other person a written notice of its

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intention to remove him from office and/ or to prohibit his further participation in any manner in the conduct of the affairs of the bank.

§ 308.37 Grounds for suspension order.

In respect to any director or officer of an insured State nonmember bank (other than a District bank) or any other person referred to in § 308.36 (a) or (b)) the Board of Directors may, if it deems it necessary for the protection of the bank or the interests of its depositors, by written notice to such effect served upon such director, officer, or other person, suspend him from office and/or prohibit him from further participation in any manner in the conduct of the affairs of the bank.

§ 308.38 Effective date of suspension order.

Any suspension and/or prohibition which is subject to the notice prescribed in § 308.37, shall become effective upon service of such notice and, unless stayed by a court in proceedings authorized by the Federal Deposit Insurance Act, shall remain in effect pending the completion of the administrative proceedings held pursuant to the notice served under §308.36 (a) or (b) and until such time as the Board of Directors shall dismiss the charges specified in such notice, or, if an order of removal and/or prohibition is issued against the director or officer or other person, until the effective date of any such order. Copies of any such notice will also be served upon the bank of which he is a director or officer or in the conduct of whose affairs he has participated.

§ 308.39

Notice of intention to remove and hearing.

A notice of intention to remove a director, officer, or other person from office and/or to prohibit his participation in the conduct of the affairs of an insured bank, will contain a statement of the facts constituting grounds therefor and will fix a time and place at which a hearing will be held thereon. Such hearing will be fixed for a date not earlier than 30 days nor later than 60 days after the date of service of such notice, unless an earlier or a later date is set by the Board of Directors at the request of (a) such director or officer or other person, and for good cause shown, or (b) the Attorney General of the United States. Unless such director, officer, or other person appears at the hearing in person or by a

In the event of such consent, or if upon the record made at any such hearing the Board of Directors finds that any of the grounds specified in such notice has been established, the Board of Directors may issue such orders of suspension or removal from office, and/or prohibition from participation in the conduct of the affairs of the bank, as it may deem appropriate. Any such order shall become effective at the expiration of 30 days after service upon such bank and the director, officer, or other person concerned (except in the case of an order issued upon consent, which shall become effective at the time specified therein). Such order shall remain effective and enforceable except to such extent as it is stayed, modified, terminated, or set aside by action of the Board of Directors or a reviewing court. § 308.41 Suspension and removal where felony charged.

(a) Whenever any director or officer of an insured State nonmember bank (other than a District bank), or other person participating in the conduct of the affairs of such bank is charged in any information, indictment, or complaint authorized by a U.S. attorney, with the commission of or participation in a felony involving dishonesty or breach of trust, the Board of Directors may, by written notice served upon such director, officer, or other person suspend him from office and/or prohibit him from further participation in any manner in the conduct of the affairs of the bank. A copy of such notice will also be served upon the bank. Such suspension and/or prohibition shall remain in effect until such information, indictment, or complaint is finally disposed of or until terminated by the Board of Directors.

(b) In the event that a judgment of conviction with respect to such offense is entered against such director, officer, or other person, and at such time as such judgment is not subject to further appellate review, the Board of Directors may issue and serve upon such director, officer, or other person an order removing him from office and/or prohibiting him from further participation in any manner in the conduct of the affairs of the bank except with the consent of the

Board of Directors. A copy of such order will also be served upon such bank, whereupon such director or officer shall cease to be a director or officer of such bank. A finding of not guilty or other disposition of the charge will not preclude the Board of Directors from thereafter instituting proceedings to remove such director, officer, or other person from office and/or to prohibit further participation in bank affairs, pursuant to the provisions of this subpart.

Subpart E-Procedures Applicable to Proceedings Pursuant to Section 10(c) of the Federal Deposit Insurance Act SOURCE: 40 FR 28049, July 3, 1975, unless otherwise noted.

§ 308.42 Scope.

The procedures in this part shall be followed in connection with the exercise of those powers specified in section 10 (c) of the Federal Deposit Insurance Act. For purposes of this Part, the exercise of any and all such powers shall be referred to as "proceedings pursuant to section 10 (c)." This term shall also be used to refer to any proceedings conducted pursuant to the exercise of such powers. Proceedings pursuant to section 10(c), which may be conducted by the Federal Deposit Insurance Corporation, or its designated representative in connection with examinations of insured State nonmember banks or their affiliates, include the power to administer oaths and affirmations and to examine and to take and preserve testimony under oath as to any insured bank or affiliate thereof, and to issue subpoenas and subpoenas duces tecum, and, for the enforcement thereof, to apply to the United States District Court for the judicial district or the United States court in any territory in which the main office of the bank or affiliate thereof is located, or in which the witness resides or carries on business. § 308.43 Confidential proceedings.

Unless otherwise provided by § 308.45 (c) of this Part, all proceedings pursuant to section 10(c) shall be confidential. Information or documents obtained by the Corporation in the course of such proceedings shall be disclosed only in accordance with the provisions for disclosure of such information established by Part 309. § 308.44

ings.

Orders to conduct proceed

A proceeding pursuant to section 10 (c) shall be conducted only after the issu

ance of an order authorizing such proceeding. The order shall designate the person or persons duly authorized to conduct the proceeding, which persons are authorized, among other things, to issue subpoenas and subpoenas duces tecum, to administer oaths, and receive affirmations as to any matter under examination by the Federal Deposit Insurance Corporation. Such order may be issued by the Board of Directors, the General Counsel or his designee, the Director of the Division of Bank Supervision or his designee, or each Regional Director, provided that powers relating to the issuance of subpoenas and subpoenas duces tecum and the enforcement thereof shall not be exercised by Regional Directors without prior approval of the Director of the Division of Bank Supervision and the concurrence of the General Counsel. Upon application and for good cause shown, the Board of Directors, or the person issuing such order, may limit, quash, modify, or withdraw such order.

(a) Any person who is compelled or requested to furnish testimony, documentary evidence, or other information with respect to any matter under examination in a proceeding pursuant to section 10(c) shall upon request be shown the order initiating such a proceeding.

(b) Any person who, in a proceeding pursuant to section 10(c), is compelled to appear and testify or who appears and testifies by request or permission of the Federal Deposit Insurance Corporation may be accompanied, represented, and advised by counsel. The right to be accompanied, represented, and advised by counsel shall mean the right of a person testifying to have an attorney present with him at all times while testifying and to have this attorney (1) advise such person before, during and after the conclusion of his testimony, (2) question such person briefly at the conclusion of his testimony to clarify any of the answers such person has given, and (3) make summary notes during such testimony solely for the use of such person.

(c) All persons giving testimony in a proceeding pursuant to section 10 (c), shall be sequestered, and unless permitted in the discretion of the designated representative conducting the proceeding, no such person or the counsel accompanying any such person shall

be permitted to be present at the testimony of any other person.

(d) If the record developed by the Federal Deposit Insurance Corporation in the course of such proceeding contains allegations of wrongdoing by any person with respect to the affairs or ownership of any insured State nonmember bank or affiliate thereof, such person shall be advised of the nature of the alleged wrongdoing and shall be afforded a reasonable opportunity, consistent with administrative efficiency and with the avoidance of undue delay, to produce evidence in rebuttal. Such evidence may be in documentary form, including depositions and statements under oath, or it may consist of testimony given before the designated representative conducting such a proceeding. All such evidence shall be made of the record developed in the course of the proceeding pursuant to section 10(c).

(e) The designated representative conducting the proceeding pursuant to section 10 (c) shall report to the Board of Directors of the Federal Deposit Insurance Corporation any instances where any person has been guilty of dilatory, obstructionist, or contumacious conduct during the course of the proceeding or any other instance involving a violation of these rules. The Board of Directors will thereupon take such further action as the circumstances may warrant, including exclusion of the offending individual or individuals from further participation in the particular proceedings. § 308.46 Transcripts.

Transcripts of testimony, if any, shall be recorded solely by the official reporter, or by any other chosen or means chosen by the person or persons conducting the proceeding pursuant to section 10(c). A person submitting documentary evidence or testimony shall be entitled to procure a copy of his documentary evidence or a copy of the transcript, if any, of his testimony.

at the time of service. Delivery of a copy of a subpoena and tender of the fees to a natural person may be made by handing them to the person; or leaving them at his office with the person in charge thereof; or, if there is no one in charge, leaving them in a conspicuous place therein; or leaving them at his dwelling place or usual place of abode with some person of suitable age or discretion or residing therein, or by mailing them by registered or certified mail to him at his last known address; or by any method whereby actual notice is given to him and the fees are made available prior to the return date. When the person to be served is not a natural person, delivery of a copy of the subpoena and tender of the fees may be effected by handing them to a registered agent for service or to any officer, director, or agent in charge of any office of such person, or by mailing them by registered or certified mail to such representative at his last known address; or by any method whereby actual notice is given to such representative and the fees are made available prior to the return date. § 308.48

Witness fees and mileage.

Witnesses summoned before the Federal Deposit Insurance Corporation shall be paid the same fees and mileage that are paid to witnesses in the courts of the United States. Witness fees and mileage shall be paid by the party at whose instance the witness appears.

§ 308.49 Special examinations.

When proceedings pursuant to section 10(c) are instituted in connection with the special examination of any State member bank or any national or district bank, or the examination of any closed insured bank, the procedures in this Part shall be followed.

PART 309-PUBLISHED AND UNPUBLISHED RECORDS AND INFORMATION

§ 309.1 Published and unpublished information.

(a) Information published or made available to the public-(1) Federal Register publication. To the extent required by sections 3 and 4 of the Administrative Procedure Act, as amended (5 U.S.C. 552, 553), and subject to the exemptions set forth in subsection (e) of section 8 of said Act the Corporation publishes in the FEDERAL REGISTER

for the guidance of the public (i) descriptions of its central and field organization and the established places at which, the officers from whom, and the methods whereby, the public may secure information, make submittals or requests, or obtain decisions; (ii) statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures available; (iii) rules of procedure, descriptions of forms available or the places at which forms may be obtained, and instructions as to the scope and contents of all such papers and reports or examinations; (iv) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the Corporation; (v) every amendment, revision or repeal of the foregoing; and (vi) general notices of proposed rule making, unless the persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law.

information—

(2) Other published annual reports. (1) The Corporation publishes an annual report of its operations to Congress pursuant to the requirements of section 17(a) of the Federal Deposit Insurance Act (12 U.S.C. 1827(a)). The Corporation also publishes an annual report to insured banks as of June 30 of each year which presents the current financial statements of the Corporation and its activities during the preceding 6 months, and an annual report on operating banking offices insured by the Corporation as of January 1 of each year which lists the names and locations of all insured banking offices, grouped by city and State.

(ii) Other information: The Corporation also issues the following publications:

Assets, Liabilities, and Capital Accounts, Commercial and Mutual Savings Banks (semiannually). Presents detailed data from condition statements, by State.

Federal Deposit Insurance Act and Rules and Regulations (of the FDIC). Updates the laws relating to the Federal Deposit Insurance Corporation and rules and regulations made by the Board of Directors.

Your Insured Deposit. Questions and answers on applicability of insurance to particular circumstances.