such other matters as justice may require.

§ 263.26 Request for formal hearing on as

sessment.

A person being assessed may request a formal hearing to challenge the assessment of a civil penalty. The request must be made within ten business days after issuance of the notice of assessment, and any such request must be filed in writing with the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. If a request for a formal hearing is not filed within this ten-day period, the person being assessed shall be deemed to have waived the right to a formal hearing, and the notice of assessment shall constitute a final and unappealable assessment order.

§ 263.27 Hearing order on assessment.

After the receipt of a timely request for a hearing with respect to the assessment of a civil penalty, the Secretary will promptly issue an order directing a hearing to commence within 30 days from the date of the hearing order at such place as the Secretary may designate with due regard for the interests of all parties. The hearing order may require the person requesting the hearing to file an answer as prescribed in section 263.5 of Subpart A. The procedures of the Administrative Procedure Act (5 U.S.C. 554-557) and Subpart A of these Rules shall apply to the hearing.

§ 263.28 Assessment order.

(a) In the event of consent of the parties concerned to an assessment, or if, upon the record made at a hearing ordered under this subpart, the Board finds that the grounds for having assessed the penalty have been established, the Board may issue an order of assessment of civil penalty. In its order, the Board may reduce the amount of the penalty specified in the notice of assessment. Any party afforded a hearing under this subpart who does not appear at the hearing (personally or by a duly authorized representative) shall be considered to have waived the right to a formal hearing and to have consented to the

assessment of the civil penalty specified in the notice of assessment.

(b) An assessment order is effective immediately upon issuance, or upon such other date as may be specified therein, and shall remain effective and enforceable until it is stayed, modified, terminated, or set aside by action of the Board or a reviewing court.

(c) An assessment order may be served by personal service, by registered or certified mail to the last known address of the person being assessed, or by other appropriate means. § 263.29 Payment of civil penalty.

(a) The date designated in the notice of assessment for payment of the civil penalty will normally be 60 days from the issuance of the notice. If, however. the Board finds, in a specific case, that the purposes of the authorizing statute would be better served if the 60 day period is changed, the Board may shorten or lengthen the period or make the civil penalty payable immediately upon receipt of the notice of assessment. If a timely request for a formal hearing to challenge an assessment of civil penalty is filed, payment of the penalty shall not be required unless and until the board issues a final order of assessment following the hearing. If an assessment order is issued, it will specify the date by which the civil penalty should be paid or collected.

(b) Checks in payment of civil penalties should be made payable to the "Board of Governors of the Federal Reserve System." Upon collection, the board shall forward the amount of the penalty to the Treasury of the United States.

Subpart C-Rules and Procedures Applicable to Suspension or Removal of a Bank Official Where a Felony is Charged or Proven

SOURCE: 44 FR 56690, Oct. 2, 1979, unless otherwise noted.

§ 263.30 Purpose and scope.

The rules and procedures set forth in this subpart apply to informal hearings afforded to any officer, director, or other person participating in the

conduct of the affairs of a State member bank (“bank official"), who has been suspended or removed from office or prohibited from further participation in any manner in the conduct of the bank's affairs by a notice or order issued by the Board upon the grounds set forth in section 8(g) of the Federal Deposit Insurance Act (12 U.S.C. 1818(g)).

§ 263.31 Notice or order of suspension, removal, or prohibition.

(a) Grounds. The Board may suspend a bank official from office or prohibit a bank official from further participation in any manner in the conduct of a bank's affairs when the person is charged in any information, indictment, or complaint authorized by a United States attorney with the commission of, or participation in, a crime involving dishonesty or breach of trust that is punishable by imprisonment for a term exceeding one year under State or Federal law. The Board may remove a bank official from office or prohibit a bank official from further participation in any manner in the conduct of a bank's affairs when the person is convicted of such an offense and the conviction is not subject to further direct appellate review. The Board may suspend or remove a bank official or prohibit a bank official from participation in a bank's affairs in these circumstances if the Board finds that continued service to the bank or participation in its affairs by the bank official may pose a threat to the interests of the bank's depositors or may threaten to impair public confidence in the bank.

(b) Contents. The Board commences a suspension, removal, or prohibition action with the issuance, and service upon a bank official, of a notice of suspension from office, or order of removal from office, or notice or order of prohibition from participation in the bank's affairs. Such a notice or order shall indicate the basis for the suspension, removal, or prohibition and shall inform the bank official of the right to request in writing, within 30 days of service of the notice or order, an opportunity to show at an informal hearing that continued service to, or participation in the conduct of the affairs

of, the bank does not and is not likely to pose a threat to the interests of the bank's depositors or threaten to impair public confidence in the bank. A notice of suspension or prohibition shall remain in effect until the criminal charge upon which the notice is based is finally disposed of or until the notice is terminated by the Board.

(c) Service. The notice or order shall be served upon the bank concerned, whereupon the bank official shall immediately cease service to the bank or further participation in any manner in the conduct of the affairs of the bank. A notice or order of suspension, removal, or prohibition may be served by personal service, by registered or certified mail to the last known address of the person being served, or by other appropriate means.

§ 263.32 Request for informal hearing.

A bank official who is suspended or removed from office or prohibited from participation in the bank's affairs may request an informal hearing. The request shall be filed in writing with the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. The request shall state with particularity the relief desired and the grounds therefor and shall include, when available, supporting evidence. If the bank official desires to present oral testimony or witnesses at the hearing, the bank official must include a request to do so with the request for informal hearing. The request to present oral testimony or witnesses should specify the names of the witnesses and the general nature of their expected testimony.

§ 263.33 Order for informal hearing.

(a) Issuance of hearing order. Upon receipt of a timely request for an informal hearing, the Secretary will promptly issue an order directing an informal hearing to commence within 30 days of the receipt of the request. At the request of the bank official, the Secretary may order the hearing to commence at a time more than 30 days after the receipt of the request for hearing. The hearing shall be held in Washington, D.C., or at such other place as may be designated by the Sec

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retary, before presiding officers designated by the Secretary to conduct the hearing. The presiding officers normally will include representatives from the Board's Legal Division and Banking Supervision and Regulation Division and from the appropriate Federal Reserve Bank.

(b) Waiver of oral hearing. A bank official may waive in writing the official's right to an oral hearing and instead elect to have the matter determined by the Board solely on the basis of written submissions.

(c) Hearing procedures. (1) The bank official may appear at the hearing personally, through counsel, or personally with counsel. The bank official shall have the right to introduce relevant written materials and to present an oral argument. The bank official may introduce oral testimony and present witnesses only if expressly authorized by the Board or the Secretary. Neither the formal rules of evidence nor the adjudicative procedures of the Administrative Procedure Act (5 U.S.C. 554557) or Subpart A of these Rules shall apply to the informal hearing ordered under this subpart unless the Board orders that they apply.

(2) The proceedings shall be recorded and a transcript shall be furnished to the bank official upon request and after the payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officers. The presiding officers may ask questions of any wit

ness.

(3) The presiding officers may order the record to be kept open for a reasonable period following the hearing (normally 5 business days), during which time additional submissions to the record may be made. Thereafter, the record shall be closed.

(d) Authority of presiding officers. In the course of or in connection with any proceeding under this subpart, the Board or the presiding officers are authorized to administer oaths and affirmations, to take or cause to be taken depositions, to issue, revoke, quash, or modify subpenas and subpenas duces tecum, and, for the enforcement thereof, to apply to an appropriate United States district court. All action relating to depositions and subpenas

shall be in accordance with the rules provided in §§ 263.7 and 263.8 of Subpart A of these Rules.

(e) Recommendation of presiding officers. The presiding officers shall make a recommendation to the Board concerning the notice or order of suspension, removal, or prohibition within 20 calendar days following the close of the record on the hearing.

§ 263.34 Decision of the Board.

(a) Within 60 calendar days following the close of the record on the hearing, or receipt of written submissions where a hearing has been waived, the Board shall notify the bank official whether the notice of suspension or prohibition will be continued, terminated, or otherwise modified, or whether the order of removal or prohibition will be rescinded or otherwise modified. The notification shall contain a statement of the basis for any adverse decision by the Board. In the case of a decision favorable to the bank official, the Board shall take prompt action to rescind or otherwise modify the order of suspension, removal or prohibition.

(b) In deciding the question of suspension, removal, or prohibition under this subpart, the Board will not rule on the question of the guilt or innocence of the individual with respect to the crime with which the individual has been charged.

The maintenance of unusually high standards of honesty, integrity, impartiality, and conduct by employees and special employees of the Board is essential to assure the proper performance of Board business and the maintenance of confidence by citizens in their Government. The avoidance of misconduct and conflicts of interest on the part of employees and special employees of the Board through use of informed judgment is indispensable to the maintenance of these standards. To accord with these concepts, this part prescribes standards of conduct and responsibilities, and governs statements reporting employment and financial interests of the Board's employees and special employees of the Board.

For the purposes of this part, including all forms promulgated for use herewith, unless the context requires otherwise:

(a) "Board" means Board of Governors of the Federal Reserve System.

(b) “Employee" means an officer or employee of the Board but does not include a special employee.

(c) "Special Government employee" (herein referred to as special employee) means an officer or employee of the Board who is retained, designated, appointed, or employed to perform, with or without compensation, for not to exceed 130 days during any period of 365 consecutive days, temporary duties either on a full-time or intermittent basis.

(d) "Conflict or apparent conflict of interest" means a conflict or the appearance of a conflict between the interests of an employee or special employee and the performance of his services for the Board.

§ 264.735-3 Effective date, distribution, and counseling.

(a) This part and any amendment thereto shall be effective upon publication in the FEDERAL REGISTER.

(b) The Division of Personnel Administration shall distribute a comprehensive summary of this part to every employee and every special employee within 90 days after the effective date, and to each new employee and special employee at the time of entrance on duty, and distribute to every employee and every special employee each calendar year thereafter a reminder of the basic provisions of this part. A copy of this part shall be made available, upon request, to every employee and special employee by the Division of Personnel Administration, or by the Counselor or any Deputy Counselor.

(c) A Counselor and Deputy Counselors, appointed by the Board, shall be available for counseling and guidance respecting statutes and regulations affecting employee responsibility and conduct, including interpretations of the provisions of this part, and each employee and special employee shall be notified of this service by the Division of Personnel Administration at the time he receives a comprehensive summary of this part.

§ 264.735-4 Financial statements.

(a) Each employee required to do so by § 264.735-8(a) shall complete and file Form FR 264.A in accordance with § 264.735-8. Each special employee shall complete and file Form FR 264.B in accordance with § 264.735-8.

(b) All Forms FR 264.A and FR 264.B shall be received and reviewed by the Director of the Division of Personnel Administration or his designated representative to determine whether there are any conflicts or apparent conflicts of interest or other violations of this part, law, or other regulations. The Director shall be responsible for maintaining all completed forms in confidence pursuant to paragraph (c) of this section and shall not allow access to, or allow information to be disclosed from, a form-except to carry out the purpose of this part. Information obtained from other sources shall be treated as if it was contained in the forms.

(c) All reports, forms, papers, and the information contained therein, filed pursuant to this section shall be confidential, except as the Board or

In addition to any action that may be taken, or penalty imposed, for violations of this part, as prescribed by law:

(a) When conflicts or apparent conflicts of interest or other violations or apparent violations of this part cannot be resolved or explained to the satisfaction of the Director of Personnel Administration, he shall report the matter to the Board through the Counselor.

(b) The employee or special employee concerned shall be given an opportunity to explain such conflicts or apparent conflicts of interest before and after the matter is reported to the Board.

(c) The Board, after consideration of the matter, and after an opportunity for the employee or special employee concerned to appear, shall decide what steps are to be taken to remedy the situation. Among other steps, the Board may:

(1) Attempt to remove any conflict of interest by requiring a change in duties, disqualification for a particular assignment, or divestment of the conflicting interest by the employee or special employee;

(2) Take other corrective action; or (3) Where corrective actions are inadequate, impose disciplinary action. Remedial action, whether disciplinary or otherwise, shall be effected in accordance with any applicable laws, Executive orders, and regulations.

§ 264.735-6 Ethical and other conduct and responsibilities of employees.

(a) An employee shall avoid any action, whether or not specifically prohibited by this section, which might result in, or create the appearance of: (1) Using public office for private gain;

(2) Giving preferential treatment to any person;

(3) Impeding Board efficiency or economy;

(4) Losing complete independence or impartiality;

(5) Making a Board decision outside official channels; or

(6) Affecting adversely the confidence of the public in the integrity of the Board and the Government.

(b) Gifts, entertainment, favors, and loans. (1) Except as provided in paragraph (b)(2) of this section, an employee shall not solicit or accept, directly or indirectly, any gift, gratuity. favor, entertainment, loan, or any other thing of monetary value, from a person who:

(i) Has or is seeking to obtain contractual or other business or financial relations with the Board;

(ii) Conducts operations or activities that are regulated by the Board; or

(iii) Has interests that may be substantially affected by the performance or nonperformance of his official duty. (2) Paragraph (b)(1) of this section shall not apply to the following activities that are necessary to, or compatible with the duties and responsibilities of, the Board and its employees:

(i) The acceptance of loans from, or other financial relations with, banks or other financial institutions, in the ordinary course of business of the bank or other financial institution and the employee, governed by terms no more favorable than would be available in like circumstances to persons who are not employees of the Board, except as provided by law or regulation;

(ii) Obvious family or personal relationships (such as those between the parents, children, or spouse of the employee and the employee) when the circumstances make it clear that it is those relationships rather than the business of the persons concerned that are the motivating factors;

(iii) The acceptance of food, refreshments, or accompanying entertainment in the ordinary course of a luncheon or dinner meeting or other function or inspection tour where an employee is properly in attendance;

(iv) The acceptance of lodging on unusual occasions if an employee is properly in attendance and the circumstances thereof are reported to the Board, or if covered by paragraph (c)(4) of this section; or

(v) The acceptance of unsolicited advertising or promotional materials,