Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 39117 

Enforcement or its successor entity 

should be contacted. 

(3) On the same date that notice is 

provided to the Office of Enforcement 

and the Office of the Executive 

Secretary pursuant to paragraph (a)(1) of 

this section, a copy of the notice shall 

be sent to the relevant prudential 

regulator, if any, or the designee thereof, 

by mail or electronic mail. 

(4) Notice shall be deemed to have 

been provided as of the date of 

transmitting or mailing the materials 

described in paragraph (c) of this 

section. 

(5) The Office of Enforcement, or its 

successor entity, in consultation with a 

State Official, may provide, for good 

cause shown, an alternative deadline for 

the notice described in paragraph (a)(1) 

of this section. 

(b) Emergency actions. (1) Pursuant to 

12 U.S.C. 5552(b), in the event that a 

State Official initiates or intends to 

initiate an action and, in order to protect 

the public interest or prevent irreparable 

and imminent harm, is unable to 

provide timely notice as described in 

paragraph (a) of this section, the State 

Official shall provide the notice 

described in paragraph (c) of this 

section as soon as is practicable and not 

later than 48 hours after initiation of the 

action. 

(2) Notice shall be provided in 

accordance with the procedures set 

forth in paragraphs (a)(2) through (4) of 

this section. 

(3) The Office of Enforcement, or its 

successor entity, in consultation with a 

State Official, may provide, for good 

cause shown, an alternative deadline for 

the notice described in paragraph (b)(1) 

of this section. 

(c) Contents of notice. (1) Pursuant to 

12 U.S.C. 5552(b), the notice required 

under paragraphs (a) and (b) of this 

section shall include a written 

description of the anticipated action, 

including: 

(i) The court or body in which the 

action is to be initiated; 

(ii) The identity of the parties to the 

action; 

(iii) The nature of the action to be 

initiated; 

(iv) The anticipated date of initiating 

the action; 

(v) The alleged facts underlying the 

action; 

(vi) A contact name, electronic mail 

address, and phone number of an 

individual involved with the matter in 

the office of the State Official with 

whom the Bureau may consult; 

(vii) A determination as to whether 

there may be a need to coordinate the 

prosecution of the action so as not to 

interfere with any action, including any 

rulemaking, undertaken by the Bureau, 

a prudential regulator, or another 

Federal agency; and 

(viii) A statement by the State Official 

setting forth any limitations on the 

disclosure of the substance or fact of the 

notice to any person or entity outside of 

the recipient agency. 

(2) The notice required under 

paragraphs (a) and (b) of this section 

shall further include a complete and 

unredacted copy of any complaint, 

motion for relief, or similar document 

that is the subject of the notice, in its 

form as of the date the notice is 

provided. To the extent the complaint, 

motion for relief, or similar document 

contains the information described in 

paragraph (c)(1) of this section, 

provision of the complaint, motion for 

relief, or similar document shall be 

deemed sufficient notice of that 

information. 

(3) In the event that notice is provided 

after the initiation of an action, the 

written description shall also include 

the following, in addition to the 

information described in paragraph 

(c)(1) of this section: 

(i) A brief description of any 

proceeding that occurred as a result of 

the initiation of the action, including 

any orders issued by a court or other 

body; 

(ii) Any case number, matter number, 

or designation assigned to the action; 

and 

(iii) Information on scheduled court 

or other administrative or regulatory 

proceedings. 

(4) In the event that notice is provided 

after the initiation of an action, in 

addition to the requirements set forth in 

paragraph (c)(3) of this section, the 

notice shall further include a complete, 

unredacted copy of any document filed 

by any party in relation to the action 

and any orders issued by the court or 

other body. 

(5) If the State Official, after providing 

the notice described in paragraphs (c)(1) 

and (c)(2) of this section, intends to file 

a complaint, motion for relief, or similar 

document that is materially different 

from the document included with the 

notice, the State Official shall provide a 

copy of that document prior to filing, in 

accordance with the method described 

in paragraph (a)(2) of this section. 

(d) Bureau response. In any action 

described in paragraphs (a) and (b) of 

this section, the Bureau may: 

(1) Intervene in the action as a party; 

(2) Upon intervening, 

(i) Remove the action to the 

appropriate United States district court, 

if the action was not originally brought 

there; and 

(ii) Be heard on all matters arising in 

the action; 

(3) Appeal any order or judgment, to 

the same extent as any other party in the 

proceeding may; and 

(4) Otherwise participate in the action 

as appropriate. 

(e) Confidentiality and privilege. (1) 

The information described in paragraph 

(c) of this section, including the 

complaint, motion for relief, or other 

document, as well as the fact that notice 

has been provided, shall be subject to 

any limitations on disclosure imposed 

by the State Official pursuant to 

paragraph (c)(1)(viii) of this section; 

provided, however, that the recipient 

may disclose such information: 

(i) As required by law; 

(ii) When the information is or 

becomes publicly available; 

(iii) With the consent of the State 

Official; or 

(iv) To another State or Federal 

government entity when necessary to 

protect the public interest, after 

consultation with the State Official who 

provided the notice. 

(2) Provision of notice by a State 

Official and disclosure of information 

pursuant to paragraph (e)(1) of this 

section shall not be deemed a waiver of 

any applicable privilege. 

(f) No private right of action or 

defense. The requirements set forth in 

this section are not intended to, do not, 

and may not be relied upon to create 

any right, benefit, or defense, 

substantive or procedural, enforceable at 

law by a party against the United States 

or any State enforcing the provisions of 

the Dodd-Frank Act or any regulation 

prescribed thereunder. 

Dated: June 4, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–14062 Filed 6–28–12; 8:45 am] 

BILLING CODE 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1071 

[Docket No.: CFPB–2012–0020] 

RIN 3170–AA27 

Equal Access to Justice Act 

Implementation Rule 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Interim final rule with request 

for public comment. 

SUMMARY: The Equal Access to Justice 

Act (EAJA or the Act) requires agencies 


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that conduct adversary adjudications to 

award attorney fees and other litigation 

expenses to certain parties other than 

the United States in certain 

circumstances. EAJA also requires 

agencies that conduct adversary 

adjudications to establish procedures for 

the submission and consideration of 

applications for the award of fees and 

other expenses. The Consumer 

Financial Protection Bureau (Bureau) 

now issues an interim final rule 

establishing such procedures and seeks 

public comments. 

DATES: This interim final rule takes 

effect on June 29, 2012. Comments must 

be received on or before August 28, 

2012 to be assured of consideration. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Electronic: www.regulations.gov. 

Follow the instructions for submitting 

comments. 

• Mail or Hand Delivery/Courier: 

Monica Jackson, Office of the Executive 

Secretary, Consumer Financial 

Protection Bureau, 1700 G Street NW., 

Washington, DC 20552. 

Instructions: All submissions must 

include the agency name and docket 

number or Regulatory Information 

Number (RIN) for this rulemaking. In 

general, all comments received will be 

posted to http://www.regulations.gov. In 

addition, comments will be available for 

public inspection and copying at 1700 

G Street NW., Washington, DC 20552, 

on official business days between the 

hours of 10 a.m. and 5 p.m. Eastern 

Time. An appointment to inspect 

comments can be made by telephoning 

(202) 435–7275. All comments, 

including attachments and other 

supporting materials, will become part 

of the public record and subject to 

public disclosure. Submit only 

information that you wish to make 

publicly available. Sensitive personal 

information, such as account numbers 

or Social Security numbers, should not 

be included. Comments will not be 

edited to remove any identifying or 

contact information such as name and 

address information, email addresses, or 

telephone numbers. 

FOR FURTHER INFORMATION CONTACT: John 

R. Coleman, Office of the General 

Counsel, Consumer Financial Protection 

Bureau, 1700 G Street NW., Washington, 

DC 20552; (202) 435–7254. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Originally enacted in 1980, EAJA 

provides that ‘‘[a]n agency that conducts 

an adversary adjudication shall award, 

to a prevailing party other than the 

United States, fees and other expenses 

incurred by that party in connection 

with that proceeding, unless the 

adjudicative officer of the agency finds 

that the position of the agency was 

substantially justified or that special 

circumstances make an award unjust.’’ 5 

U.S.C. 504(a)(1). The Administrative 

Conference of the United States (ACUS) 

was charged with coordination of the 

procedural rules adopted by various 

agencies to implement EAJA. To carry 

out this responsibility, ACUS issued 

model rules implementing EAJA (46 FR 

32900, June 25, 1981), after receiving 

public comment on draft model rules 

(46 FR 15895, March 10, 1981). ACUS 

published revised model rules in 1986 

that reflected the amendments Congress 

made when it re-authorized the Act in 

1985. 51 FR 16659 (May 6, 1986), 

previously codified at 1 CFR part 315 

(1995); see Administrative Conference 

of the U.S., Federal Administrative 

Procedure Sourcebook at 419 (2d ed. 

1992). ACUS did not publish model 

rules reflecting amendments to the Act 

made since 1985 before ACUS was 

temporarily defunded in 1996. 

In preparing regulations 

implementing the Act, the Bureau has 

used the 1986 ACUS model rules as a 

point of departure, modifying them to 

put them in plain language, to reflect 

more recent amendments to the Act, and 

to make certain changes the Bureau 

believes are warranted for reasons 

explained in the following section-bysection analysis. Since the preamble to 

the draft model rules explained their 

formulation and the preamble to the 

final model rules summarized and 

responded to the public comments 

submitted concerning the draft rules, 

the Bureau does not repeat here the 

rationale of the model rules. Rather, the 

Bureau notes where its rule differs from 

the model rules and explains significant 

provisions, as follows: 

1. The Bureau’s rule is divided into 

three subparts, as are the model rules, 

and maintains the same sequence with 

the following exception: The Bureau’s 

rule starts at § 1071.100 and omits 

model rule § 315.107, ‘‘Rulemaking on 

maximum rates for attorney fees,’’ and 

§ 315.108, ‘‘Awards against other 

agencies.’’ The revised numbering 

causes Bureau § 1071.106 to correspond 

to model rule § 315.109. 

2. Section 1071.100, ‘‘Purpose of this 

rule,’’ inserts a new paragraph (b), 

‘‘When an eligible party will receive an 

award,’’ which reflects amendments to 

EAJA made by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), Pub. L. 104–121, Title 

II, 110 Stat. 857 (1996). This paragraph 

is modeled on the EAJA rules of the 

Federal Trade Commission (FTC), 16 

CFR 3.81(a)(1)(ii), but includes 

additional language to clarify the 

circumstances under which the 

Bureau’s notice of charges may 

constitute a demand. This clarifying 

language is consistent with the 

Congressional intent in promulgating 

SBREFA. Legislative history suggests 

that Congress intended the term 

‘‘demand’’ as used in the SBREFA 

amendments to mean ‘‘an express 

written demand that leads directly to an 

adversary adjudication or civil action.’’ 

See 142 Cong. Rec. E571–01, E573 

(1996) (statement of Rep. Hyde). The 

Congressional Record further clarifies 

that ‘‘the ‘demand’ at issue would be the 

government’s demand that was pending 

upon commencement of the 

adjudication or action.’’ Id. (emphasis 

added). Accordingly, the Bureau’s 

notice of charges would constitute the 

agency’s demand only where it was not 

preceded by an express written demand. 

3. Section 1071.102, ‘‘Proceedings 

covered,’’ is modified and simplified 

from model rule § 315.103 and identifies 

the specific proceedings before the 

Bureau that are covered by EAJA. 

Incorporation of paragraphs (b) and (c) 

of model rule § 315.103 into the Bureau 

rule is not necessary because it is clear 

which Bureau proceedings are covered 

by EAJA. 

4. Section 1071.103(b) inserts 

paragraph (6), which does not appear in 

the corresponding model rule 

§ 315.104(b), in order to conform with 

the SBREFA amendments to EAJA. 

5. Section 1071.104, ‘‘Standards for 

awards,’’ inserts paragraph (b), which 

does not appear in the corresponding 

model rule § 315.105, in order to 

conform with the SBREFA amendments 

to EAJA. The provision in paragraph (b) 

of model rule § 315.105 was moved to 

§ 1071.104(a)(2). The last sentence in 

paragraph (a)(1) is modeled on the 

comparable rule of the Department of 

the Treasury governing the standards for 

awards under EAJA, 31 CFR 6.5, and 

clarifies that although the Bureau bears 

the burden of proof that its position was 

substantially justified, the fact that the 

Bureau did not prevail in the underlying 

proceeding does not create a 

presumption that the its position was 

not substantially justified. 

6. Unlike model rule § 315.106(b), the 

corresponding paragraph (b) of 

§ 1071.105 does not specify a rate for 

attorney fees, but instead refers back to 

the corresponding statutory provision in 

EAJA that sets forth the maximum 

hourly rate for attorney fees. This 

modification is intended to eliminate 

the need to promulgate a revised rule 

whenever the statutory maximum is 

increased. Most recently, the maximum 


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amount of fees that may normally be 

awarded to an attorney or agent was 

increased from $75 per hour to $125 per 

hour pursuant to 1996 amendments to 

EAJA. 5 U.S.C. 504(b)(1)(A)(ii). Section 

1071.105 modifies the model rule to 

permit recovery of expert fees at the 

‘‘reasonable rate at which the Bureau 

pays witnesses with similar expertise’’ 

instead of the ‘‘highest rate’’ paid by the 

Bureau. 

7. Model rule § 315.107, ‘‘Rulemaking 

on maximum rates for attorney fees,’’ 

does not appear in the Bureau rule. 

Since frequent rulemaking on this 

subject is not foreseen, a rule 

concerning it is not deemed necessary. 

8. Section 315.108 of the model rules, 

‘‘Awards against other agencies,’’ does 

not appear in the Bureau rule because 

it is not anticipated that another agency 

of the United States will participate in 

an adversary proceeding before the 

Bureau. In the event another agency did 

so participate, it is anticipated that the 

adjudicative officer would take 

appropriate action in the absence of an 

express rule. 

9. Section 1071.106, ‘‘Delegation of 

authority,’’ is a simplified version of the 

corresponding model rule, § 315.109. 

10. Section 1071.200, ‘‘Contents of 

application,’’ is modeled on the 

corresponding FTC rule governing the 

contents of an application for recovery 

of awards under EAJA, 16 CFR 3.82(a), 

which provides a more comprehensive 

list of requirements than the 

corresponding model rule, § 315.201(a). 

11. The provisions in paragraph (b) of 

model rule § 315.202 have been moved 

to § 1071.201(b) to consolidate the 

provisions relating to the net worth 

exhibit into a single section. The 

provisions in paragraph (b) of 

corresponding model rule § 315.202 

regarding the presumptively public 

nature of the net worth exhibit can be 

found in § 1071.201(c). 

12. Section 1071.202, 

‘‘Documentation of fees and expenses,’’ 

is modified from the corresponding 

model rule, § 315.203, to conform with 

the SBREFA amendments to EAJA. 

13. Section 1071.203, ‘‘When an 

application may be filed,’’ is modified 

from the corresponding model rule, 

§ 315.204, to conform with the SBREFA 

amendments to EAJA. 

14. Paragraph (c) of § 1071.203 defines 

the date of final Bureau disposition. 

This is significant for paragraph (a), 

which makes reference to final 

disposition. In particular, paragraph (a) 

reiterates the statutory provision, set 

forth at 5 U.S.C. 504(a)(2), that a party 

may file an application for an award 

within thirty days of the Bureau’s final 

disposition of the adversary 

adjudication as to which the award is 

sought. 

15. Section 1071.300, ‘‘Filing and 

service of documents,’’ incorporates the 

provisions of §§ 1081.111, 1081.112 and 

1081.113 concerning service and filing 

in adjudication proceedings. The 

section also requires the applicant to 

serve a copy of the application for fees 

and expenses on the General Counsel of 

the Bureau. 

16. Section 1071.304, ‘‘Settlement,’’ 

revises the corresponding model rule, 

§ 315.305, to make explicit that no 

application for recovery of fees and 

expense may be filed if the settlement 

of the underlying proceeding provides 

that each side shall bear its own 

expenses. 

17. Section 1071.306, ‘‘Decision,’’ is 

modified from the corresponding model 

rule, § 315.307, to conform with the 

SBREFA amendments to EAJA. 

18. Section 1071.307, ‘‘Bureau 

review,’’ is modified from the 

corresponding model rule, § 315.308, so 

that Bureau review of an adjudicatory 

officer’s decision concerning a fee 

application follows the same procedures 

as Bureau review of a hearing officer’s 

decision in the underlying matter. 

19. Section 1071.309, ‘‘Payment of 

award,’’ sets forth a 60 day deadline in 

which the Bureau must pay the amount 

awarded to the applicant. 

II. Regulatory Requirements 

The rule relates solely to agency 

procedure and practice and, thus, is not 

subject to the notice and comment 

requirements of the Administrative 

Procedure Act, 5 U.S.C. 553(b). 

Although the rule is exempt from these 

requirements, the Bureau invites 

comment on it. 

Because no notice of proposed 

rulemaking is required, these 

regulations are not a ‘‘rule’’ as defined 

by the Regulatory Flexibility Act, 5 

U.S.C. 601(2). The regulations in this 

part do not contain any information 

collection requirement that requires the 

approval of OMB under the Paperwork 

Reduction Act, 44 U.S.C. 3501 et seq. 

List of Subjects in 12 CFR Part 1071 

Administrative practice and 

procedure, Banking, Banks, Consumer 

protection, Credit, Credit unions, Equal 

access to justice, Law enforcement, 

National banks, Savings associations. 

Authority and Issuance 

■ For the reasons set forth in the 

preamble, the Bureau adds part 1071 to 

Chapter X in Title 12 of the Code of 

Federal Regulations to read as follows: 

PART 1071—RULE IMPLEMENTING 

EQUAL ACCESS TO JUSTICE ACT 

Subpart A—General 

Sec. 

1071.100 Purpose. 

1071.101 When the Act applies. 

1071.102 Proceedings covered. 

1071.103 Eligibility of applicants. 

1071.104 Standards for awards. 

1071.105 Allowable fees and other 

expenses. 

1071.106 Delegations of authority. 

Subpart B—Information Required from 

Applicants 

1071.200 Contents of application. 

1071.201 Net worth exhibit. 

1071.202 Documentation of fees and 

expenses. 

1071.203 When an application may be filed. 

Subpart C—Procedures for Considering 

Applications 

1071.300 Filing and service of documents. 

1071.301 Answer to application. 

1071.302 Reply. 

1071.303 Comments by other parties. 

1071.304 Settlement. 

1071.305 Further proceedings. 

1071.306 Recommended decision. 

1071.307 Bureau review. 

1071.308 Judicial review. 

1071.309 Payment of award. 

Authority: 5 U.S.C. 504. 

Subpart A—General 

§ 1071.100 Purpose. 

(a) In general. The Equal Access to 

Justice Act (the Act), 5 U.S.C. 504, 

provides for the award of attorney fees 

and other expenses to eligible 

individuals and entities who are parties 

to certain administrative proceedings 

(adversary adjudications) before the 

Bureau of Consumer Financial 

Protection (the Bureau). An eligible 

party may receive an award when it 

prevails over the Bureau, unless the 

Bureau’s position in the proceeding was 

substantially justified or special 

circumstances make an award unjust. 

This part describes the parties eligible 

for awards and the proceedings that are 

covered. This part also explains how to 

apply for awards, and the procedures 

and standards that the Bureau will use 

in ruling on those applications. 

(b) When an eligible party will receive 

an award. An eligible party will receive 

an award when: 

(1) It prevails in the adversary 

adjudication, unless the Bureau’s 

position in the proceeding was 

substantially justified or special 

circumstances make an award unjust. 

Whether or not the position of the 

Bureau was substantially justified will 

be determined on the basis of the 

administrative record as a whole that is 

made in the adversary proceeding for 


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39120 Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 

which fees and other expenses are 

sought; or 

(2) The Bureau’s demand is 

substantially in excess of the decision of 

the adjudicative officer and is 

unreasonable when compared with that 

decision, under all the facts and 

circumstances of the case, unless the 

party has committed a willful violation 

of law or otherwise acted in bad faith, 

or special circumstances make an award 

unjust. ‘‘Demand’’ means the express 

final written demand made by the 

Bureau prior to initiation of the 

adversary adjudication, but does not 

include a recitation by the Bureau of the 

statutory penalty in the notice of 

charges or elsewhere when 

accompanied by an express demand for 

a lesser amount. The relief requested in 

the Bureau’s notice of charges issued 

pursuant to 12 CFR 1081.200(b)(3) may 

constitute the Bureau’s demand only 

where the notice of charges was not 

preceded by an express final written 

demand. 

§ 1071.101 When the Act applies. 

The Act applies to any adversary 

adjudication pending before the Bureau 

at any time after July 21, 2011. 

§ 1071.102 Proceedings covered. 

The Act applies to all adjudicative 

proceedings under part 1081 as defined 

in § 1081.103. 

§ 1071.103 Eligibility of applicants. 

(a) To be eligible for an award of 

attorney fees and other expenses under 

the Act, the applicant must be a party 

to the adversary adjudication for which 

it seeks an award. The term ‘‘party’’ is 

defined in 5 U.S.C. 551(3). The 

applicant must show that it meets all 

conditions of eligibility set out in this 

subpart. 

(b) The types of eligible applicants are 

as follows: 

(1) An individual with a net worth of 

not more than $2 million; 

(2) The sole owner of an 

unincorporated business who has a net 

worth of not more than $7 million, 

including both personal and business 

interests, and not more than 500 

employees; 

(3) A charitable or other tax-exempt 

organization described in section 

501(c)(3) of the Internal Revenue Code 

(26 U.S.C. 501(c)(3)) with not more than 

500 employees; 

(4) A cooperative association as 

defined in section 15(a) of the 

Agricultural Marketing Act (12 U.S.C. 

1141j(a)) with not more than 500 

employees; or 

(5) Any other partnership, 

corporation, association, or public or 

private organization with a net worth of 

not more than $7 million and not more 

than 500 employees. 

(6) For purposes of receiving an award 

for fees and expenses for defending 

against an excessive Bureau demand, 

any small entity, as that term is defined 

under 5 U.S.C. 601(6). 

(c) For purposes of eligibility, the net 

worth and number of employees of an 

applicant shall be determined as of the 

date the proceeding was initiated. 

(d) An applicant who owns an 

unincorporated business will be 

considered an ‘‘individual’’ rather than 

a ‘‘sole owner of an unincorporated 

business’’ if the issues on which the 

applicant prevails are related primarily 

to personal interests rather than to 

business interests. 

(e) The employees of an applicant 

include all persons who regularly 

perform services for remuneration for 

the applicant, under the applicant’s 

direction and control. Part-time 

employees shall be included on a 

proportional basis. 

(f) The net worth and number of 

employees of the applicant and all of its 

affiliates shall be aggregated to 

determine eligibility. Any individual or 

group of individuals, corporation or 

other entity that directly or indirectly 

controls or owns a majority of the voting 

shares or other interest of the applicant, 

or any corporation or entity of which 

the applicant directly or indirectly owns 

or controls a majority of the voting 

shares or other interest, will be 

considered an affiliate of that business 

for purposes of this part, unless the 

adjudicative officer determines that 

such treatment would be unjust and 

contrary to the purposes of the Act in 

light of the actual relationship between 

the affiliated entities. In addition, the 

adjudicative officer may determine that 

financial relationships of the applicant 

other than those described in this 

paragraph constitute special 

circumstances that would make an 

award unjust. 

(g) An applicant that participates in a 

proceeding primarily on behalf of one or 

more other persons or entities that 

would be ineligible is not itself eligible 

for an award. 

§ 1071.104 Standards for awards. 

(a) For a prevailing party: 

(1) An eligible prevailing applicant 

may receive an award for fees and 

expenses incurred after initiation of the 

adversary adjudication in connection 

with the entire adversary adjudication, 

or on a substantive portion of the 

adversary adjudication that is 

sufficiently significant and discrete to 

merit treatment as a separate unit, 

unless the position of the Bureau was 

substantially justified. The burden of 

proof that an award should not be made 

to an eligible prevailing applicant 

because the Bureau’s position was 

substantially justified is on counsel for 

the Bureau. However, no presumption 

arises that the Bureau’s position was not 

substantially justified simply because 

the Bureau did not prevail. 

(2) An award will be reduced or 

denied if the applicant has unduly or 

unreasonably protracted the proceeding 

or if special circumstances make the 

award sought unjust. 

(b) For a party defending against an 

excessive demand: 

(1) An eligible applicant will receive 

an award for fees and expenses incurred 

after initiation of the adversary 

adjudication related to defending 

against the portion of a Bureau demand 

that is substantially in excess of the 

decision of the adjudicative officer and 

is unreasonable when compared with 

that decision under all the facts and 

circumstances of the case. 

(2) An award will be denied if the 

applicant has committed a willful 

violation of law or otherwise acted in 

bad faith or if special circumstances 

make an award unjust. 

§ 1071.105 Allowable fees and other 

expenses. 

(a) Subject to the limitations in 

paragraph (b) of this section, awards 

will be based on rates customarily 

charged, in the locale of the hearing, by 

persons engaged in the business of 

acting as attorneys, agents and expert 

witnesses, even if the services were 

made available without charge or at a 

reduced rate to the applicant. 

(b) No award for the fee of any 

attorney or agent under this rule may 

exceed the hourly rate specified in 5 

U.S.C. 504(b)(1)(A). No award to 

compensate an expert witness may 

exceed the reasonable rate at which the 

Bureau pays witnesses with similar 

expertise. However an award may also 

include the reasonable expenses of the 

attorney, agent or witness as a separate 

item, if the attorney, agent or witness 

ordinarily charges clients separately for 

such expenses. 

(c) In determining the reasonableness 

of the fee sought for an attorney, agent 

or expert witness, the adjudicative 

officer shall consider the following: 

(1) If the attorney, agent or witness is 

in private practice, his or her customary 

fee for similar services, or, if an 

employee of the applicant, the fully 

allocated cost of the services; 

(2) The prevailing rate for similar 

services in the community in which the 


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attorney, agent or witness ordinarily 

performs services; 

(3) The time actually spent in the 

representation of the applicant; 

(4) The time reasonably spent in light 

of the difficulty or complexity of the 

issues in the proceeding; and 

(5) Such other factors as may bear on 

the value of the services provided. 

(d) The reasonable cost of any study, 

analysis, engineering report, test, project 

or similar matter prepared on behalf of 

a party may be awarded, to the extent 

that the charge for the services does not 

exceed the prevailing rate for similar 

services, and the study or other matter 

was necessary for preparation of the 

applicant’s case. 

(e) An award of fees or expenses 

under the Act is limited to fees and 

expenses incurred after initiation of the 

adversary adjudication and, with 

respect to excessive demands, the fees 

and expenses incurred in defending 

against the excessive portion of the 

demand. 

§ 1071.106 Delegations of authority. 

The Director may delegate authority 

to take final action on matters pertaining 

to the Equal Access to Justice Act in 

particular cases. 

Subpart B—Information Required from 

Applicants 

§ 1071.200 Contents of application. 

An application for an award of fees 

and expenses under the Act shall 

contain the following: 

(a) Identity of the applicant and the 

proceeding for which the award is 

sought; 

(b) A showing that the applicant has 

prevailed; or, if the applicant has not 

prevailed, a showing that the Bureau’s 

demand was substantially in excess of 

the decision of the adjudicative officer 

and was unreasonable when compared 

with that decision, under the facts and 

circumstances of that case; 

(c) Identification of the Bureau 

position(s) in the proceeding that the 

applicant alleges was (were) not 

substantially justified; or, identification 

of the Bureau’s demand that is alleged 

to be excessive and unreasonable and an 

explanation as to why the demand was 

excessive and unreasonable; 

(d) A brief description of the type and 

purpose of the organization or business 

(unless the applicant is an individual). 

(e) A statement of how the applicant 

meets the eligibility criteria of 

§ 1071.103; 

(f) The amount of fees and expenses 

incurred after the initiation of the 

adversary adjudication, or in the case of 

a claim for defending against an 

allegedly excessive demand, the amount 

of fees and expenses incurred after the 

initiation of the adjudicative proceeding 

attributable to the allegedly excessive 

portion of the demand; 

(g) Any other matter the applicant 

wishes the Bureau to consider in 

determining whether and in what 

amount an award should be made; and 

(h) A written verification under oath 

or under penalty of perjury that the 

information provided is true and 

correct, accompanied by the signature of 

the applicant or an authorized officer or 

attorney. 

§ 1071.201 Net worth exhibit. 

(a) The application shall also include 

a detailed exhibit showing that the 

applicant’s net worth did not exceed $2 

million (if an individual) or $7 million 

(for all other applicants, including their 

affiliates) when the proceeding was 

initiated. The exhibit may be in any 

form convenient to the applicant that 

provides full disclosure of the 

applicant’s and its affiliates’ assets and 

liabilities and is sufficient to determine 

whether the applicant qualifies under 

the standards in this subpart. The 

adjudicative officer may require an 

applicant to file additional information 

to determine its eligibility for an award. 

(b) However, an applicant may omit 

this exhibit if: 

(1) It attaches a copy of a ruling by the 

Internal Revenue Service that it 

qualifies as an organization described in 

section 501(c)(3) of the Internal Revenue 

Code (26 U.S.C. 501(c)(3)) or, in the case 

of a tax-exempt organization not 

required to obtain a ruling from the 

Internal Revenue Service on its exempt 

status, a statement that describes the 

basis for the applicant’s belief that it 

qualifies under such section; 

(2) It states that it is a cooperative 

association as defined in section 15(a) of 

the Agricultural Marketing Act (12 

U.S.C. 1141j(a)); 

(3) In the case of an application for an 

award related to an allegedly excessive 

demand by the Bureau, it demonstrates 

that it is a small entity as that term is 

defined by 5 U.S.C. 601(6). 

(c) Ordinarily, the net worth exhibit 

will be included in the public record of 

the proceeding. However, an applicant 

that objects to public disclosure of 

information in any portion of the exhibit 

and believes there are legal grounds for 

withholding it from disclosure may 

submit that exhibit directly to the 

adjudicative officer in a sealed envelope 

labeled ‘‘Confidential Financial 

Information,’’ accompanied by a motion 

to withhold the information from public 

disclosure. The motion shall describe 

the information sought to be withheld 

and explain, in detail, why it falls 

within one or more of the specific 

exemptions from mandatory disclosure 

under the Freedom of Information Act, 

5 U.S.C. 522(b)(1) through (9), why 

public disclosure of the information 

would adversely affect the applicant, 

and why disclosure is not required in 

the public interest. The material in 

question shall be served on Bureau 

counsel but need not be served on any 

other party to the proceeding. If the 

adjudicative officer finds that the 

information should not be withheld 

from disclosure, it shall be placed in the 

public record of the proceeding. 

Otherwise, any request to inspect or 

copy the exhibit shall be handled in 

accordance with the Bureau’s 

established procedures under the 

Freedom of Information Act, 12 CFR 

subpart B. 

§ 1071.202 Documentation of fees and 

expenses. 

The application shall be accompanied 

by full documentation of the fees and 

expenses incurred after initiation of the 

adversary adjudication, including the 

cost of any study, engineering report, 

test, or project for which an award is 

sought. With respect to a claim for fees 

and expenses involving an excessive 

demand by the Bureau, the application 

shall be accompanied by full 

documentation of the fees and expenses 

incurred after initiation of the adversary 

adjudication, including the cost of any 

study, engineering report, test, or project 

for which an award is sought 

attributable to the portion of the 

demand alleged to be excessive and 

unreasonable. A separate itemized 

statement shall be submitted for each 

professional firm or individual whose 

services are covered by the application, 

showing the hours spent in connection 

with the proceeding by each individual, 

a description of the specific services 

performed, the rate at which each fee 

has been computed, any expenses for 

which reimbursement is sought, the 

total amount claimed, and the total 

amount paid or payable by the applicant 

or by any other person or entity for the 

services provided. The adjudicative 

officer may require the applicant to 

provide vouchers, receipts, or other 

substantiation for any expenses claimed. 

§ 1071.203 When an application may be 

filed. 

(a) An application may be filed not 

later than 30 days after the final 

disposition of the proceeding to which 

the application relates. 

(b) If review or reconsideration is 

sought or taken of a decision, 

proceedings for the award of fees shall 


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be stayed pending final disposition of 

the underlying controversy. 

(c) For purposes of this subpart, final 

disposition means the later of— 

(1) The date that the Director’s final 

order issued pursuant to § 1081.405 is 

final and unappealable, both within the 

agency and to the courts; or 

(2) The date that the Bureau issues 

any other final resolution of a 

proceeding, such as a consent 

agreement, settlement or voluntary 

dismissal, that is not subject to a 

petition for reconsideration. 

Subpart C—Procedures for 

Considering Applications 

§ 1071.300 Filing and service of 

documents. 

(a) Any application for an award or 

other pleading or document related to 

an application shall be filed and served 

on all parties to the proceeding in the 

same manner as other pleadings in 

proceedings under part 1081. 

(b) In addition, a copy of each 

application for fees and expenses shall 

be served on the General Counsel of the 

Bureau. 

§ 1071.301 Answer to application. 

(a) Within 30 days after service of an 

application, counsel representing the 

Bureau may file an answer to the 

application. Unless Bureau counsel 

requests an extension of time for filing 

or files a statement of intent to negotiate 

under paragraph (b) of this section, 

failure to file an answer within the 30- 

day period may be treated as consent to 

the award requested. 

(b) If Bureau counsel and the 

applicant believe that the issues in the 

fee application can be settled, they may 

jointly file a statement of their intent to 

negotiate a settlement. The filing of this 

statement shall extend the time for filing 

an answer for an additional 30 days and 

further extensions may be granted by 

the adjudicative officer upon joint 

request by Bureau counsel and the 

applicant. 

(c) The answer shall explain in detail 

any objections to the award requested 

and identify the facts relied on in 

support of Bureau counsel’s position. If 

the answer is based on any alleged facts 

not already in the record of the 

proceeding, Bureau counsel shall 

include with the answer either 

supporting affidavits or a request for 

further proceedings under § 1071.305 of 

this part. 

§ 1071.302 Reply. 

Within 15 days after service of an 

answer, the applicant may file a reply. 

If the reply is based on any alleged facts 

not already in the record of the 

proceeding, the applicant shall include 

with the reply either supporting 

affidavits or a request for further 

proceedings under § 1071.305 of this 

part. 

§ 1071.303 Comments by other parties. 

Any party to a proceeding other than 

the applicant and Bureau counsel may 

file comments on an application within 

30 days after it is served or on an 

answer within 15 days after it is served. 

A commenting party may not participate 

further in proceedings on the 

application unless the adjudicative 

officer determines that the public 

interest requires such participation in 

order to permit full exploration of 

matters raised in the comments. 

§ 1071.304 Settlement. 

The applicant and Bureau counsel 

may agree on a proposed settlement of 

the award before final action on the 

application, either in connection with a 

settlement of the underlying proceeding 

or after the underlying proceeding has 

been concluded, in accordance with the 

Bureau’s standard settlement 

procedures. If a prevailing party and 

Bureau counsel agree on a proposed 

settlement of an award before an 

application has been filed, the 

application shall be filed with the 

proposed settlement. If a proposed 

settlement of an underlying proceeding 

provides that each side shall bear its 

own expenses and the settlement is 

accepted, no application may be filed. 

§ 1071.305 Further proceedings. 

(a) Ordinarily, the determination of an 

award will be made on the basis of the 

written record. However, on request of 

either the applicant or Bureau counsel, 

or on his or her own initiative, the 

adjudicative officer may order further 

proceedings, such as an informal 

conference, oral argument, additional 

written submissions or an evidentiary 

hearing. Such further proceedings shall 

be held only when necessary for full 

and fair resolution of the issues arising 

from the application, and shall be 

conducted as promptly as possible. 

(b) A request that the adjudicative 

officer order further proceedings under 

this section shall specifically identify 

the information sought or the disputed 

issues and shall explain why the 

additional proceedings are necessary to 

resolve the issues. 

§ 1071.306 Recommended decision. 

The adjudicative officer shall issue a 

recommended decision on the 

application within 60 days after the 

time for filing a reply, or where further 

proceedings are held, within 60 days 

after completion of such proceedings. 

(a) For a decision involving a 

prevailing party: The decision shall 

include written findings and 

conclusions on the applicant’s 

eligibility and status as a prevailing 

party, and an explanation of the reasons 

for any difference between the amount 

requested and the amount awarded. The 

decision shall include, if at issue, 

findings on whether the agency’s 

position was substantially justified, 

whether the applicant unduly 

protracted the proceedings, or whether 

special circumstances make an award 

unjust. 

(b) For a decision involving an 

allegedly excessive Bureau demand: The 

decision on the application shall 

include written findings and 

conclusions on the applicant’s 

eligibility and an explanation of the 

reasons why the Bureau’s demand was 

or was not determined to be 

substantially in excess of the underlying 

decision of the adjudicative officer and 

was or was not unreasonable when 

compared with that decision. That 

determination shall be based upon all 

the facts and circumstances of the case. 

The decision on the application shall 

also include, if at issue, findings on 

whether the applicant has committed a 

willful violation of law or otherwise 

acted in bad faith, or whether special 

circumstances make an award unjust. 

§ 1071.307 Bureau review. 

Either the applicant or Bureau 

counsel may seek review of the 

recommended decision on the fee 

application by filing a notice of appeal 

under § 1081.402(a), or the Director may 

decide to review the decision on his or 

her own initiative, in accordance with 

§ 1081.402(b). If neither the applicant 

nor Bureau counsel seeks review and 

the Director does not take review on his 

or her own initiative, the Director will 

adopt the recommended decision on the 

application as the final decision of the 

Bureau within 30 days of the issuance 

of the recommended decision. Whether 

to review a decision is a matter within 

the discretion of the Director. If review 

is taken, the Director will issue a final 

decision on the application or remand 

the application to the adjudicative 

officer for further proceedings. 

§ 1071.308 Judicial review. 

Judicial review of final Bureau 

decisions on awards may be sought as 

provided in 5 U.S.C. 504(c)(2). 

§ 1071.309 Payment of award. 

An applicant seeking payment of an 

award shall submit to the Bureau a copy 

of the Bureau’s final decision granting 

the award, accompanied by a statement 


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that the applicant will not seek review 

of the decision in the United States 

courts. An applicant shall be paid the 

amount awarded within 60 days of entry 

of the final decision unless judicial 

review of the award or of the underlying 

decision of the adversary adjudication 

has been sought by the applicant or any 

other party to the proceeding. 

Dated: June 4, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–14046 Filed 6–28–12; 8:45 am] 

BILLING CODE 4810–AM–P 


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