Vol. 77 Friday, 

No. 126 June 29, 2012 

Part III 

Bureau of Consumer Financial Protection 

12 CFR Part 1071, 1080, 1081, et al. 

Rules of Practice for Adjudication Proceedings 


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39058 Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 

1The ‘‘prudential regulators’’ are defined by 

section 1002(24) of the Dodd-Frank Act as the 

Office of the Comptroller of the Currency (OCC), the 

Board of Governors of the Federal Reserve System 

(Board), the Federal Deposit Insurance Corporation 

(FDIC), the former Office of Thrift Supervision 

(OTS), and the National Credit Union 

Administration (NCUA). 12 U.S.C. 5481(24). For 

ease of reference, citations to the Uniform Rules 

herein are to the Uniform Rules as adopted by the 

OCC, which are codified at 12 CFR part 19, subpart 

A. 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1081 

[Docket No. CFPB–2011–0006] 

RIN 3170–AA05 

Rules of Practice for Adjudication 

Proceedings 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: The Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

requires the Bureau of Consumer 

Financial Protection (Bureau) to 

prescribe rules establishing procedures 

for the conduct of adjudication 

proceedings. On July 28, 2011, the 

Bureau published an interim final rule 

establishing these procedures with a 

request for comment. This final rule 

responds to the comments received by 

the Bureau and amends the Bureau’s 

regulations accordingly. 

DATES: This final rule is effective on 

June 29, 2012. 

FOR FURTHER INFORMATION CONTACT: John 

R. Coleman, Office of the General 

Counsel, Consumer Financial Protection 

Bureau, 1700 G Street NW., Washington, 

DC 20552, (202) 435–5724. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) was signed into law 

on July 21, 2010. Title X of the DoddFrank Act established the Bureau to 

regulate the offering and provision of 

consumer financial products or services 

under the Federal consumer financial 

laws. On July 28, 2011, the Bureau 

promulgated its Rules of Practice 

Governing Adjudication Proceedings 

(Interim Final Rule), pursuant to section 

1053(e) of the Dodd-Frank Act, 12 

U.S.C. 5563(e). The Bureau promulgated 

the Interim Final Rule with a request for 

comment at 76 FR 45338. The comment 

period on the Interim Final Rule ended 

on September 26, 2011. After reviewing 

and considering the issues raised by the 

comments, the Bureau is now 

promulgating, in final form, its Rules of 

Practice Governing Adjudication 

Proceedings (Final Rule) establishing 

procedures for the conduct of 

adjudication proceedings conducted 

pursuant to section 1053 of the DoddFrank Act. 12 U.S.C. 5563. 

Section 1053 of the Dodd-Frank Act 

authorizes the Bureau to conduct 

administrative adjudications to ensure 

or enforce compliance with (a) the 

provisions of Title X of the Dodd-Frank 

Act, (b) the rules prescribed by the 

Bureau under Title X of the Dodd-Frank 

Act, and (c) any other Federal law or 

regulation that the Bureau is authorized 

to enforce. 12 U.S.C. 5563(a). The Final 

Rule does not apply to proceedings 

governing the issuance of a temporary 

order to cease and desist pursuant to 

section 1053(c) of the Dodd-Frank Act. 

12 U.S.C. 5563(c). As discussed in 

greater detail below, the Bureau 

currently intends to address such 

proceedings in a future rulemaking. 

II. Summary of the Final Rule 

Like the Interim Final Rule, the Final 

Rule is modeled on the uniform rules 

and procedures for administrative 

hearings adopted by the prudential 

regulators pursuant to section 916 of the 

Financial Institutions Reform, Recovery, 

and Enforcement Act of 1989, 56 FR 

38024 (Aug. 9, 1991) (Uniform Rules); 1

the Rules of Practice for Adjudicative 

Proceedings adopted by the Federal 

Trade Commission, 16 CFR part 3 (FTC 

Rules); and the Rules of Practice 

adopted by the Securities and Exchange 

Commission (SEC), 17 CFR part 201 

(SEC Rules). The Bureau also 

considered the Model Adjudication 

Rules (MARs) prepared by the 

Administrative Conference of the 

United States. See Michael P. Cox, The 

Model Adjudication Rules (MARs), 11 

T.M. Cooley L. Rev. 75 (1994). 

In drafting the Final Rule, the Bureau 

endeavored to create an adjudicatory 

process that provides for the 

expeditious resolution of claims while 

ensuring that parties who appear before 

the Bureau receive a fair hearing. 

Notably, in the last several decades, 

both the SEC and the FTC revised their 

rules of practice relating to 

administrative proceedings to make the 

adjudicatory process more efficient. In 

1990, the SEC created a task force ‘‘to 

review the rules and procedures relating 

to [SEC] administrative proceedings, to 

identify sources of delay in those 

proceedings and to recommend steps to 

make the adjudicatory process more 

efficient and effective.’’ 60 FR 32738 

(June 23, 1995). The result was a 

comprehensive revision of the SEC 

Rules in 1995. See id. Similarly, when 

the FTC proposed revisions to the FTC 

Rules in 2008, the FTC’s Notice of 

Proposed Rulemaking stated: ‘‘In 

particular, the [FTC’s] Part 3 

adjudicatory process has long been 

criticized as being too protracted * * *. 

The [FTC] believes that these 

comprehensive proposed rule revisions 

would strike an appropriate balance 

between the need for fair process and 

quality decision-making, the desire for 

efficient and speedy resolution of 

matters, and the potential costs imposed 

on the Commission and the parties.’’ 73 

FR 58832–58833 (Oct. 7, 2008). 

In drafting the Final Rule, the Bureau 

considered and attempted to improve 

upon these and other agencies’ efforts to 

streamline their processes while 

protecting parties’ rights to fair and 

impartial proceedings. The following 

discussion outlines some significant 

aspects of the Final Rule. 

Like the Interim Final Rule, the Final 

Rule adopts a decision-making 

procedure that incorporates elements of 

the SEC Rules, the FTC Rules, and the 

Uniform Rules. The Final Rule 

implements a procedure, like that in the 

Uniform Rules, whereby a hearing 

officer will issue a recommended 

decision in each administrative 

adjudication. Like the FTC Rules, the 

Final Rule provides any party the right 

to contest the recommended decision by 

filing a notice of appeal and perfecting 

the appeal by later filing an opening 

brief. In the event a party fails to timely 

file a notice of appeal or perfect an 

appeal, the Director may either adopt 

the recommended decision as the 

Bureau’s final decision or order further 

briefing with respect to any findings of 

fact or conclusions of law contained in 

the recommended decision. The Bureau 

believes this approach best balances the 

need for expeditious decision-making 

with the parties’ right to ultimate 

consideration of a matter by the 

Director. 

In keeping with this approach, the 

Final Rule also provides that the hearing 

officer will decide dispositive motions 

in the first instance, subject to the same 

right of review provided for 

recommended decisions in the event 

that the ruling upon such a motion 

disposes of the case. Again, the Bureau 

has adopted this model because it 

provides for the most expeditious 

resolution of matters while preserving 

all parties’ rights to review by the 

Director. 

The Final Rule sets deadlines for both 

the recommended decision of the 

hearing officer and the final decision of 

the Director. The Bureau has adopted an 

approach, similar to that used by the 

SEC, wherein the hearing officer is 


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2See www.consumerfinance.gov/pressrelease/ 

consumer-financial-protection-bureau-plans-toprovide-early-warning-of-possible-enforcementactions. 

permitted a specified period of time— 

300 days from service of the notice of 

charges or 90 days after briefing is 

complete—to issue a recommended 

decision. The Final Rule also requires 

the hearing officer to convene a 

scheduling conference soon after the 

respondent files its answer to craft a 

schedule appropriate to the particular 

proceeding. This construct gives the 

hearing officer considerable discretion 

in conducting proceedings and 

flexibility to respond to the nuances of 

individual matters while ensuring that 

each case concludes within a fixed 

number of days. The Final Rule permits 

the hearing officer to request an 

extension of the 300-day deadline, but 

the Bureau’s intent is that such 

extensions will be requested by hearing 

officers and granted by the Director only 

in rare circumstances. 

The section of the Final Rule 

governing the timing of the Director’s 

decision on appeal or review is 

consistent with the language of section 

1053 of the Dodd-Frank Act. If a 

recommended decision is appealed to 

the Director, or the Director orders 

additional briefing regarding the 

recommended decision, the Final Rule 

provides that the Office of 

Administrative Adjudication must 

notify the parties that the case has been 

submitted for final Bureau decision at 

the expiration of the time permitted for 

filing reply briefs with the Director. The 

Director then must issue his or her final 

decision within 90 days. See 12 U.S.C. 

5563(b)(3). To further the goal of 

providing for the expeditious resolution 

of claims, the Final Rule also adopts the 

SEC’s standard governing extensions of 

time, which makes clear that such 

extensions are generally disfavored. 

The Bureau has adopted the SEC’s 

affirmative disclosure approach to fact 

discovery in administrative 

adjudications. See 17 CFR 201.230. 

Thus, the Final Rule provides that the 

Office of Enforcement will provide any 

party in an adjudication proceeding an 

opportunity to inspect and copy certain 

categories of documents obtained by the 

Office of Enforcement from persons not 

employed by the Bureau, as that term is 

defined in the Final Rule, in connection 

with the investigation leading to the 

institution of the proceedings, and 

certain categories of documents created 

by the Bureau, provided such material 

is not privileged or otherwise protected 

from disclosure. The Office of 

Enforcement’s obligation under the 

Final Rule relates only to documents 

obtained by the Office of Enforcement; 

documents located only in the files of 

other divisions or offices of the Bureau 

are beyond the scope of the affirmative 

disclosure obligation. As set forth in 

greater detail in the section-by-section 

analysis below, the Bureau has modified 

the SEC Rules slightly by eliminating 

any reference to Brady v. Maryland 

while retaining a general obligation to 

turn over material exculpatory 

information in the Office of 

Enforcement’s possession, by providing 

that nothing in paragraph (a) of 

§ 1081.206 shall require the Office of 

Enforcement to provide reports of 

examination to parties if they are not the 

subject of the report, and by providing 

an exception for information provided 

by another government agency upon 

condition that it not be disclosed. 

The goal in adopting the SEC’s basic 

approach is to ensure that respondents 

have prompt access to the nonprivileged documents underlying 

enforcement counsel’s decision to 

commence enforcement proceedings, 

while eliminating much of the expense 

and delay often associated with pre-trial 

discovery in civil matters. Recognizing 

that administrative adjudications will 

take place after a Bureau investigation 

intended to gather relevant evidence, 

and in light of the affirmative obligation 

that the Final Rule places on 

enforcement counsel to provide access 

to materials gathered in the course of 

the investigation, the Final Rule does 

not provide for certain other traditional 

forms of pre-trial discovery, such as 

interrogatories and discovery 

depositions. The Final Rule does 

provide for the deposition of witnesses 

unavailable for trial, the use of 

subpoenas to compel the production of 

documentary or tangible evidence, and 

in appropriate cases, expert discovery, 

thus ensuring that respondents have an 

adequate opportunity to marshal 

evidence in support of their defense. 

The Bureau believes this approach will 

promote the fair and speedy resolution 

of claims while ensuring that parties 

have access to the information necessary 

to prepare a defense. 

III. Public Comment on the Interim 

Final Rule 

In response to the Interim Final Rule, 

the Bureau received seven comment 

letters. Four letters were received from 

trade associations representing sectors 

of the financial industry, one letter was 

received from a mortgage company, and 

two letters were received from 

individual consumers. 

Trade associations’ comments 

generally fell into several categories. 

Several comments suggested that the 

Bureau revisit the deadlines contained 

in the Interim Final Rule. Two trade 

association comment letters objected to 

the affirmative disclosure approach to 

discovery, and requested that the 

Bureau allow respondents to conduct 

additional forms of traditional civil 

discovery. Two trade associations 

requested that the Bureau adopt a 

process to notify potential respondents 

that the Bureau is contemplating an 

enforcement action, similar to the Wells 

Notice process used by the SEC. One 

trade association commenter expressed 

concern about the confidentiality of 

adjudication proceedings and filings. 

Trade associations made other specific 

comments as well, all of which are 

addressed in part V below in connection 

with the section of the Interim Final 

Rule to which they pertain. 

The comment letter received from the 

mortgage company related to the Rules 

Relating to Investigations, see 12 CFR 

part 1080, not the Interim Final Rule. 

The comment letter is addressed in the 

Final Rule establishing part 1080. 

The comment letters from consumers 

did not contain any specific comments 

or suggestions pertaining to the Interim 

Final Rule. 

In part IV of this preamble, the Bureau 

addresses general comments that were 

not directly related to particular 

sections of the Interim Final Rule. In 

part V, the Bureau describes each 

section of the Interim Final Rule, 

responds to significant issues raised by 

the comments pertaining to each 

section, and explains any changes made 

to the Interim Final Rule that are 

reflected in the Final Rule. Many 

sections of the Interim Final Rule 

received no comment and, as noted, are 

being finalized without change. 

IV. General Comments 

The Bureau received several 

comments that were not directed at 

specific sections of the Interim Final 

Rule. Those comments are addressed 

here. 

Two commenters suggested that the 

Bureau adopt a process for a prospective 

respondent to be given the opportunity 

to respond to the Bureau’s allegations 

before an action is filed or a notice of 

charges is issued, similar to the Wells 

Process adopted by the SEC. 

The Bureau announced on November 

7, 2011 that it has adopted a process 

similar to the Wells Process.2 The 

process will allow the subject of an 

investigation, in most cases, to respond 

to any potential legal violations that 

Bureau enforcement counsel believe 

have been committed before the Bureau 

decides whether to initiate an 


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enforcement proceeding. The Bureau’s 

process for providing advance notice of 

a possible legal action is not required by 

law, but the Bureau believes it will 

promote even-handed enforcement of 

Federal consumer financial law. 

The Bureau received several 

comments raising concern about the 

disclosure of confidential material 

contained in administrative filings. 

The Final Rule provides that filings 

containing confidential information 

subject to a protective order or a 

pending motion for a protective order 

may not be published or otherwise 

disclosed. In addition, the Bureau will 

adopt a policy providing for a ten-day 

delay before publishing filings, in order 

to allow any party an opportunity to 

object to the disclosure of allegedly 

confidential information contained 

within such filings. This policy is 

intended to protect confidential 

information from inadvertent disclosure 

in public documents. The comments 

regarding the Bureau’s treatment of 

confidential information are addressed 

in more detail below in connection with 

the specific rules to which they were 

directed. 

One commenter asked the Bureau to 

identify the official authorized to 

initiate enforcement proceedings in the 

absence of a Bureau Director. This 

commenter also suggested that once a 

Director is in place, only the Director 

should be authorized to initiate 

enforcement proceedings. 

The President appointed a Director to 

the Bureau on January 4, 2012. The 

Director, or any official to whom the 

Director has delegated his authority 

pursuant to section 1012 of the DoddFrank Act, 12 U.S.C. 5492(b), will 

authorize the initiation of enforcement 

proceedings through the issuance of a 

notice of charges. 

One commenter asserted that section 

1052(c)(1) of the Dodd-Frank Act 

prohibits the Bureau from issuing civil 

investigative demands after the 

institution of any proceedings under a 

Federal consumer financial law, 

including proceedings initiated by a 

State or a private party. 12 U.S.C. 

5562(c)(1). The commenter argued that 

a civil investigative demand should be 

accompanied by a certification that the 

demand will have no bearing on any 

proceeding then in process. 

Section 1052(c)(1) provides, in 

relevant part, that ‘‘the Bureau may, 

before the institution of any proceedings 

under the Federal consumer financial 

law, issue in writing, and cause to be 

served upon such person, a civil 

investigative demand.’’ The language 

‘‘before the institution of any 

proceeding under Federal consumer 

financial law’’ refers to the institution of 

proceedings by the Bureau related to the 

investigation that results in the 

proceeding. It does not limit the 

Bureau’s authority to issue civil 

investigative demands based upon the 

commencement of a proceeding by other 

parties, such as a State or a private 

party. Nor does it limit the Bureau’s 

authority to issue civil investigative 

demands to investigate potential 

violations of Federal consumer law not 

at issue in a pending proceeding. 

In addition, the Bureau notes that any 

limitations placed upon it by section 

1052(c)(1) of the Dodd-Frank Act are 

incorporated in 12 CFR 1080.6, which 

provides that civil investigative 

demands will be issued in accordance 

with section 1052(c) of the Dodd-Frank 

Act, 12 U.S.C. 5562(c). 

One commenter argued the Right to 

Financial Privacy Act (RFPA), 12 U.S.C. 

3401 et seq., limits the Bureau’s ability 

to bring administrative enforcement 

proceedings without a Director. The 

commenter contended RFPA restricts 

the Bureau’s authority to share 

information protected under RFPA with 

the Secretary of the Treasury. The 

commenter therefore recommended that 

the Bureau revise the Interim Final Rule 

to provide that, until the Bureau has a 

Director, the Bureau will not commence 

or continue adjudication proceedings in 

cases where material information 

includes information that RFPA 

purportedly does not permit to be 

disclosed to the Secretary of the 

Treasury. 

As noted above, the President 

appointed a Director to the Bureau on 

January 4, 2012. The Bureau will 

comply with RFPA, but the 

commenters’ particular concern about 

the sharing of information with the 

Secretary of the Treasury is moot. 

V. Section-by-Section Analysis 

Subpart A—General Rules 

Section 1081.100 Scope of the Rules of 

Practice 

This section of the Interim Final Rule 

sets forth the scope of the Interim Final 

Rule and states that it applies to 

adjudication proceedings brought under 

section 1053 of the Dodd-Frank Act. The 

Interim Final Rule does not apply to 

Bureau investigations, rulemakings, or 

other proceedings. As drafted and 

pursuant to the definition of the term 

‘‘adjudication proceeding’’ in 

§ 1081.103, the Interim Final Rule does 

not apply to the issuance, pursuant to 

section 1053(c) of the Dodd-Frank Act, 

of a temporary order to cease-and-desist 

pending completion of the underlying 

cease-and-desist proceedings. 

The Bureau invited comments as to 

whether special rules governing such 

proceedings are necessary and, if so, 

what the rules should provide. One 

commenter recommended that the 

Bureau undertake a new rulemaking to 

promulgate rules governing temporary 

cease-and-desist proceedings initiated 

pursuant to section 1053(c) of the DoddFrank Act and suggested that such 

proceedings should be based on 

findings made on specific criteria. The 

commenter pointed to the Federal 

Deposit Insurance Corporation’s rules 

governing temporary cease-and-desist 

proceedings, 12 CFR 308.131, as an 

example of such rules. 

The Bureau agrees that there should 

be specific rules governing temporary 

cease-and-desist proceedings initiated 

pursuant to section 1053(c) of the DoddFrank Act, and currently intends to 

issue separate rules governing such 

proceedings. 

One commenter also sought 

clarification as to whether the Interim 

Final Rule was intended to apply to 

proceedings in which the Bureau is 

seeking civil money penalties available 

under section 1055(c) of the Dodd-Frank 

Act. 12 U.S.C. 5565(c). The commenter 

noted that in many instances, the 

Bureau is likely to seek both an order to 

cease-and-desist and a civil money 

penalty based on the same facts. The 

commenter stated it would be more 

efficient to have both hearings 

combined into one hearing on the 

record. 

To provide further guidance to 

covered persons, the Bureau clarifies 

that it will rely on the Final Rule when 

seeking civil money penalties in 

adjudication proceedings. The Bureau 

agrees with the commenter that there 

will be many instances where the 

Bureau will simultaneously seek civil 

money penalties, a cease-and-desist 

order, and potentially other available 

remedies. The Bureau will periodically 

be reviewing its experience under the 

Final Rule to consider whether 

additional changes may be warranted, 

including whether additional rules 

governing the imposition of civil money 

penalties pursuant to section 1055(c) of 

the Dodd-Frank Act would be 

beneficial. 

With the exception of a technical 

change in the citation to the Dodd-Frank 

Act, the Bureau adopts § 1081.100 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.101 Expedition and 

Fairness of Proceedings 

This section of the Interim Final Rule, 

which is modeled on the FTC Rules, 16 

CFR 3.1, sets forth the Bureau’s policy 


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to avoid delays in any stage of an 

adjudication proceeding while still 

ensuring fairness to all parties. It 

permits the hearing officer or the 

Director to shorten time periods 

established by the Interim Final Rule 

with the parties’ consent. This authority 

could be used in proceedings where 

expedited hearings would serve the 

public interest or where the issues do 

not require expert discovery or extended 

evidentiary hearings. 

One commenter noted its strong 

support for fair and impartial 

adjudication proceedings, but indicated 

that whether such proceedings should 

also be ‘‘expeditious’’ depends on the 

meaning of that term, and on the facts 

and circumstances of individual cases. 

The Bureau notes that expeditious 

proceedings are contemplated under 

section 1053(b) of the Dodd-Frank Act, 

12 U.S.C. 5563(b), which requires that 

the hearing be held no earlier than 30 

days nor later than 60 days after the date 

of service of the notice of charges, 

unless an earlier or later date is set by 

the Bureau at the request of any party 

so served. The Bureau believes that, in 

drafting the Interim Final Rule, it 

created a process that simultaneously 

provides for the prompt and efficient 

resolution of claims and ensures that 

parties who appear before the Bureau 

receive a fair hearing. 

The Bureau adopts § 1081.101 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.102 Rules of 

Construction 

This section of the Interim Final Rule, 

drawn from the Uniform Rules, 12 CFR 

19.2, makes clear that the use of any 

term in the Interim Final Rule includes 

either its singular or plural form, as 

appropriate, and that the use of the 

masculine, feminine, or neuter gender 

shall, if appropriate, be read to 

encompass all three. This section also 

explicitly states that, unless otherwise 

indicated, any action required to be 

taken by a party to a proceeding may be 

taken by the party’s counsel. Finally, 

this section to the Final Rule provides 

that terms not otherwise defined by 

§ 1081.103 should be defined in 

accordance with section 1002 of the 

Dodd-Frank Act, 12 U.S.C. 5481; the 

Interim Final Rule did not specifically 

reference section 1002. 

The Bureau adopts § 1081.102 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.103 Definitions 

This section of the Interim Final Rule 

sets forth definitions of certain terms 

used in the Interim Final Rule. 

This section defines ‘‘adjudication 

proceeding’’ to include any proceeding 

conducted pursuant to section 1053 of 

the Dodd-Frank Act, except for 

proceedings related to the issuance of a 

temporary order to cease and desist 

pursuant to section 1053(c) of the DoddFrank Act. As previously noted, the 

Bureau currently intends to issue rules 

governing the issuance of temporary 

orders to cease and desist in the future. 

The Bureau intends for the term 

‘‘counsel’’ to include any individual 

representing a party, including, as 

appropriate, an individual representing 

himself or herself. The term ‘‘Director’’ 

has been defined to include the 

Director, as well as any person 

authorized to perform the functions of 

the Director in accordance with the law. 

This is intended to allow the Deputy 

Director, or a delegee of the Director, as 

appropriate, to perform the functions of 

the Director. The term ‘‘person 

employed by the Bureau’’ is defined to 

include Bureau employees and 

contractors as well as others working 

under the direction of Bureau 

personnel, and is intended to 

encompass, among other things, 

consulting experts. 

On its own initiative, the Bureau 

replaced the defined term ‘‘Act,’’ which 

had been defined as the Consumer 

Financial Protection Act of 2010, with 

the defined term ‘‘Dodd-Frank Act’’ and 

defined ‘‘Dodd-Frank Act’’ to mean the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010. 

On its own initiative, the Bureau has 

included a new definition in the Final 

Rule for the ‘‘Office of Administrative 

Adjudication.’’ The Interim Final Rule 

provided that the receipt of filings and 

certain other administrative tasks 

related to the Director’s review of 

recommended decisions would be 

performed by the Bureau’s Executive 

Secretary. After publication of the 

Interim Final Rule, the Bureau formed 

an Office of Administrative 

Adjudication to perform these 

functions. The Final Rule has been 

amended to reflect the creation of the 

Office of Administrative Adjudication 

and the transfer of the Executive 

Secretary’s duties in adjudication 

proceedings to this Office. The defined 

term ‘‘Executive Secretary’’ has been 

removed from § 1081.103 as 

unnecessary. 

On its own initiative, the Bureau also 

amended the definitions of ‘‘party’’ and 

‘‘respondent’’ to account for persons 

that intervene in a proceeding for the 

limited purpose of seeking a protective 

order pursuant to amended 

§ 1081.119(a). 

Finally, the Bureau changed the term 

‘‘Division of Enforcement’’ to ‘‘Office of 

Enforcement’’ to accurately reflect the 

Bureau’s organizational nomenclature. 

The Bureau adopts § 1081.103 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.104 Authority of the 

Hearing Officer 

This section of the Interim Final Rule 

enumerates powers granted to the 

hearing officer subsequent to 

appointment. The hearing officer has 

the powers specifically enumerated in 

paragraph (b) of this section, as well as 

the power to take any other action 

necessary and appropriate to discharge 

the duties of a presiding officer. All 

powers granted by this provision are 

intended to further the Bureau’s goal of 

an expeditious, fair, and impartial 

hearing process. The powers set forth in 

this section are generally drawn from 

the Administrative Procedure Act 

(APA), 5 U.S.C. 556, 557, and are 

similar to the powers granted to hearing 

officers and administrative law judges 

under the Uniform Rules, the SEC 

Rules, and the FTC Rules. 

This section provides the hearing 

officer with the explicit authority to 

issue sanctions against parties or their 

counsel as may be necessary to deter 

sanctionable conduct, provided that any 

person to be sanctioned first has an 

opportunity to show cause as to why no 

sanction should issue. The Bureau 

believes such authority is included 

within the hearing officer’s authority to 

regulate the course of the hearing, 5 

U.S.C. 556(c)(5), but considers it 

appropriate to explicitly authorize the 

exercise of such authority in the Final 

Rule. The Bureau notes that the MARs 

provide adjudicators with the authority 

‘‘to impose appropriate sanctions 

against any party or person failing to 

obey her/his order, refusing to adhere to 

reasonable standards of orderly and 

ethical conduct, or refusing to act in 

good faith.’’ See MARs, 11 T. M. Cooley 

L. Rev. at 83. 

One commenter recommended that 

this section be revised to make clear that 

the hearing officer has the authority to 

provide a person requesting confidential 

treatment of information the time to 

come into compliance with applicable 

requirements before making a 

determination regarding confidentiality. 

The commenter expressed concern that 

the section as drafted authorized the 

hearing officer to immediately make 

public purportedly confidential material 

if the applicable requirements were not 

met. 

The Bureau believes that the section 

as drafted adequately addresses this 


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circumstance. The hearing officer is 

authorized to ‘‘deny confidential status 

to documents and testimony without 

prejudice until a party complies with all 

relevant rules’’ (emphasis added). The 

inclusion of the ‘‘without prejudice’’ 

language authorizes the hearing officer 

to treat material as confidential while 

the party attempts to comply with the 

relevant rules. It also provides the 

hearing officer the authority to deny 

confidential status to documents when 

appropriate; for example, if a party 

repeatedly and/or willfully fails to 

comply with the requirements of the 

Final Rule. 

The section permits the hearing 

officer to deny confidential status 

without prejudice until a party complies 

with ‘‘all relevant rules.’’ The 

commenter stated that the reference to 

‘‘all relevant rules’’ is vague because the 

adjudication proceeding could be based 

on a respondent’s alleged 

noncompliance with other rules. The 

commenter questioned whether the 

respondent would have to comply with 

those other rules before the hearing 

officer will treat material as confidential 

for the purposes of the adjudication 

proceeding. 

The Bureau does not anticipate that 

the hearing officer will confuse the 

substantive rules the respondent is 

alleged to have violated with the 

procedural rules governing the 

treatment of purportedly confidential 

material. In light of this comment, 

however, and in the interest of 

providing covered persons additional 

guidance, the Bureau directs parties to 

§§ 1081.111, 1081.112, and 1081.119, as 

well as any applicable orders of the 

Director or hearing officer and any 

guidance issued by the Office of 

Administrative Adjudication, as the 

relevant rules with which persons 

seeking confidential treatment of 

material must comply. 

Finally, the commenter stated that the 

hearing officer’s authority to ‘‘reject 

written submissions that fail to comply 

with the requirements of this part, and 

to deny confidential status to 

documents and testimony without 

prejudice until a party complies with all 

relevant rules’’ was unclear. The 

commenter suggested that the hearing 

officer should only be permitted to 

reject filings that ‘‘materially’’ fail to 

comply with applicable requirements, 

so as not to elevate form over substance. 

The Bureau has revised the Interim 

Final Rule to address this comment. 

Rejection of submissions merely 

because they fail to comply with this 

part in an immaterial fashion would be 

inconsistent with the Bureau’s policy of 

encouraging fair and expeditious 

proceedings. Accordingly, the Bureau 

has revised § 1081.104(b)(6). The Final 

Rule provides that the hearing officer 

has the authority to ‘‘reject written 

submissions that materially fail to 

comply with the requirements of this 

part.’’ The Bureau adopts § 1081.104 of 

the Interim Final Rule with the changes 

discussed above. 

Section 1081.105 Assignment, 

Substitution, Performance, 

Disqualification of Hearing Officer 

This section of the Interim Final Rule 

is modeled on the FTC and the SEC 

Rules setting forth the process for 

assigning hearing officers in the event 

that more than one hearing officer is 

available to the Bureau. See 16 CFR 

3.42(b), (e); 17 CFR 201.110, 201.112, 

201.120. Consistent with 5 U.S.C. 3105, 

hearing officers will be ‘‘assigned to 

cases in rotation so far as practicable.’’ 

This section also sets forth the process 

by which hearing officers may be 

disqualified from presiding over an 

adjudication proceeding. The APA, 5 

U.S.C. 556(b), provides that a hearing 

officer may disqualify himself or herself 

at any time. The standard for making a 

motion to disqualify requires that the 

movant have a reasonable, good faith 

basis for the motion. This standard is 

intended to emphasize that there must 

be an objective reason to seek a 

disqualification, not just a subjective, 

though sincerely held, belief. If a 

hearing officer does not withdraw in 

response to a motion for withdrawal, the 

motion is certified to the Director for his 

or her review in accordance with the 

Interim Final Rule’s interlocutory 

review provision. Finally, this section 

provides the procedure for reassignment 

of a proceeding in the event a hearing 

officer becomes unavailable. 

No comments were received 

specifically relating to this section, but 

commenters strongly supported a policy 

that adjudications should be fair and 

impartial. To that end, the Bureau has 

amended § 1081.201 of the Interim Final 

Rule by adding a new paragraph (e), 

which will require respondents, 

nongovernmental amici, and 

nongovernmental intervenors under 

§ 1081.119(a) to file a disclosure 

statement and notification of financial 

interest. This disclosure statement and 

notification, discussed in more detail 

below, will provide the hearing officer 

and the parties with information to 

determine actual or potential bases for 

financial disqualification of the hearing 

officer early in the proceeding. 

The Bureau adopts § 1081.105 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.106 Deadlines 

This section of the Interim Final Rule 

provides that deadlines for action by the 

hearing officer established by the 

Interim Final Rule do not confer any 

substantive rights on respondents. The 

SEC Rules, 17 CFR 201.360(a)(2), 

contain similar language regarding the 

timelines set out for certain hearing 

officer actions in SEC proceedings. 

The Bureau received no comment on 

§ 1081.106 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.107 Appearance and 

Practice in Adjudication Proceedings 

This section of the Interim Final Rule 

is largely based on the Uniform Rules, 

12 CFR 19.6, and prescribes who may 

act in a representative capacity for 

parties in adjudication proceedings. A 

notice of appearance is required to be 

filed by an individual representing any 

party, including an individual 

representing the Bureau, simultaneously 

with or before the submission of papers 

or other act of representation on behalf 

of a party. Any counsel filing a notice 

of appearance is deemed to represent 

that he or she agrees and is authorized 

to accept service on behalf of the 

represented party. The section also sets 

forth the standards of conduct expected 

of attorneys and others practicing before 

the Bureau. It provides that counsel may 

be excluded or suspended from 

proceedings, or disbarred from 

practicing before the Bureau, for 

engaging in sanctionable conduct during 

any phase of the adjudication 

proceeding. 

The Bureau received no comments on 

§ 1081.107, and the Final Rule is 

substantially similar to the Interim Final 

Rule. On the Bureau’s own initiative, 

however, the Bureau amended 

§ 1081.107(a)(1) to clarify that an 

attorney who is currently suspended or 

debarred from practicing in any 

jurisdiction may not appear before the 

Bureau or a hearing officer. This 

clarification is consistent with the SEC 

Rules, 17 CFR 201.102(e)(2), which 

provide for the suspension of any 

attorney who has been suspended or 

debarred by a court of the United States 

or of any State, and is designed to 

prohibit the appearance before the 

Bureau by a person who is authorized 

to practice in one State, but has been 

debarred or suspended in another 

jurisdiction. 

The Bureau adopts § 1081.107 of the 

Interim Final Rule with the changes 

discussed above. 


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Section 1081.108 Good Faith 

Certification 

This section of the Interim Final Rule 

is based on the Uniform Rules, 12 CFR 

19.7, and requires that all filings and 

submissions be signed by at least one 

counsel of record, or the party if 

appearing on his or her own behalf. This 

section provides that, by signing a filing 

or submission, the counsel or party 

certifies and attests that the document 

has been read by the signer, and, to the 

best of his or her knowledge, is well 

grounded in fact and is supported by 

existing law or a good faith argument for 

the extension or modification of the 

existing law. In addition, the 

certification attests that the filing or 

submission is not for purposes of 

unnecessary delay or any improper 

purpose. Oral motions or arguments are 

also subject to the good faith 

certification: The act of making the oral 

motion or argument constitutes the 

required certification. Finally, this 

section makes clear that a violation of 

the good faith certification requirement 

would be grounds for sanctions under 

§ 1081.104(b)(13). This section, which 

also mirrors the requirements of Federal 

Rule of Civil Procedure 11, is intended 

to ensure that parties and their counsel 

do not abuse the administrative process 

by making filings that are factually or 

legally unfounded or intended simply to 

delay or obstruct the proceeding. 

The Bureau received no comment on 

§ 1081.108 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.109 Conflict of Interest 

This section of the Interim Final Rule 

provides that, in general, conflicts of 

interest in representing parties to 

adjudication proceedings are prohibited. 

The hearing officer is empowered to 

take corrective steps to eliminate such 

conflicts. If counsel represents more 

than one party to a proceeding, counsel 

is required to file at the time he or she 

files his or her notice of appearance a 

certification that: (1) The potential for 

possible conflicts of interest has been 

fully discussed with each such party; 

and (2) the parties individually waive 

any right to assert any conflicts of 

interest during the proceeding. This 

approach is modeled after the Uniform 

Rules, 12 CFR 19.8, which were based 

upon the Model Code of Conduct for 

attorneys and the District of Columbia 

Ethics Rule. See 56 FR 27790, 27793 

(June 17, 1991). 

The Bureau received no comment on 

§ 1081.109 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.110 Ex Parte 

Communication 

This section of the Interim Final Rule 

implements the APA’s prohibition on ex 

parte communications. See 5 U.S.C. 

554(d)(1), 557(d)(1). Paragraphs (a)(1), 

(a)(2), and (b) are based on the Uniform 

Rules, 12 CFR 19.9(a), (b), and prohibit 

an ex parte communication relevant to 

the merits of an adjudication proceeding 

between a person not employed by the 

Bureau and the Director, hearing officer, 

or any decisional employee during the 

pendency of an adjudication 

proceeding. Paragraph (a)(3) defines the 

term ‘‘pendency of an adjudication 

proceeding,’’ and provides that if the 

person responsible for the 

communication has knowledge that a 

notice of charges will or is likely to be 

issued, the pendency of an adjudication 

shall be deemed to have commenced at 

the time of his or her acquisition of such 

knowledge. This provision implements 

5 U.S.C. 557(d)(1)(E). 

Consistent with the MARs and the 

practice of other agencies, 

communications regarding the status of 

the proceeding are expressly excluded 

from the definition of ex parte 

communications. See MARs, 11 T.M. 

Cooley L. Rev. at 87; 12 CFR 19.9(a)(2); 

16 CFR 4.7(a). If an ex parte 

communication does occur, the 

document itself, or if oral, a 

memorandum describing the substance 

of the communication must be placed in 

the record. All other parties to the 

proceeding may have the opportunity to 

respond to the prohibited 

communication, and such response may 

include a recommendation for 

sanctions. The hearing officer or the 

Director, as appropriate, may determine 

whether sanctions are appropriate. 

Finally, paragraph (e) of this section 

provides that the hearing officer is not 

permitted to consult an interested 

person or a party on any matter relevant 

to the merits of the adjudication, except 

to the extent required for the disposition 

of ex parte matters. Consistent with 5 

U.S.C. 554(d), this paragraph also 

provides that Bureau employees 

engaged in an investigational or 

prosecutorial function, other than the 

Director, may not participate in the 

decision-making function in the same or 

a factually related matter. 

The Bureau received several 

comments regarding this section. One 

commenter expressed the concern that it 

may be difficult to determine whether a 

notice of charges ‘‘will be’’ or is ‘‘likely 

to be’’ issued for the purpose of 

determining when the prohibition on ex 

parte communications begins. The 

commentator stated that, because an 

individual makes the final decision to 

issue a notice of charges and the 

individual’s thinking could change 

unexpectedly, anything short of 

respondent’s actual knowledge that a 

notice of charges has actually been 

issued should be insufficient to begin 

the prohibition on ex parte 

communications. The commentator 

stated that it would not be appropriate 

to sanction someone for an ex parte 

communication when the person does 

not know whether a notice of charges 

has been issued. The commenter 

proposed that the Bureau revise this 

section of the Interim Final Rule to 

begin the ban on ex parte 

communications upon notice of actual 

issuance and service of a notice of 

charges, regardless of whether the 

person has knowledge that a notice of 

charges will be issued. Similarly, in 

cases in which a court has vacated a 

final decision and order and remanded 

a matter for further adjudication 

proceedings, the commenter proposed 

that this section of the Interim Final 

Rule be revised to prohibit ex parte 

communications after remand beginning 

when the party actually knows the 

Bureau will not file an appeal because 

the time for filing an appeal has lapsed 

and the party has not been served with 

a notice of appeal. 

The Bureau has revised the section 

after considering these comments. The 

APA provides that the prohibition on ex 

parte communications ‘‘shall apply 

beginning at such time as the agency 

may designate, but in no case shall they 

begin to apply later than the time at 

which a proceeding is noticed for 

hearing unless the person responsible 

for the communication has knowledge 

that it will be noticed, in which case the 

prohibitions shall apply beginning at 

the time of his acquisition of such 

knowledge.’’ 5 U.S.C. 557(d)(1)(E). The 

APA does not, however, prohibit ex 

parte communications from the time a 

party knows a proceeding ‘‘is likely to 

be’’ issued. Accordingly, the Bureau has 

struck the phrase ‘‘is likely to be’’ from 

§ 1081.110(a)(3). 

The Bureau has also revised 

§ 1081.110(a)(3) with respect to the 

timing of the respondent’s knowledge of 

whether the Bureau will file an appeal. 

The Final Rule removes that provision 

of the Interim Final Rule stating that ‘‘an 

order of remand by a court of competent 

jurisdiction shall be deemed to become 

effective when the Bureau determines 

not to file an appeal or a petition for a 

writ of certiorari,’’ and slightly revises 

the rest of the section to reflect the fact 

that review of an appellate court’s 

decision may only be had upon the 

grant of a petition for rehearing by the 


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panel or an en banc panel, or the grant 

of a petition for a writ of certiorari. This 

amendment responds to the 

commenter’s concern that a respondent 

will not know whether the Bureau 

intends to appeal until the Bureau 

provides notice of its intention. 

Finally, paragraph (e) provides that 

Bureau employees engaged in an 

investigational or prosecutorial 

function, other than the Director, may 

not participate in the decision-making 

function in the same or a factually 

related matter. The commenter 

expressed concern that this section 

would permit the Director to engage in 

ex parte communications with Bureau 

enforcement counsel regarding the 

decision, recommended decision, or 

agency review of the recommended 

decision in the same or factually related 

case. The commenter therefore 

recommended that this section be 

revised to prohibit enforcement counsel 

from communicating with the Director 

under these circumstances. 

The Bureau notes that, while this 

section of the Interim Final Rule does 

not bar enforcement counsel from 

communicating with the Director 

regarding matters unrelated to the 

Director’s adjudicatory functions, this 

section expressly prohibits enforcement 

counsel from participating or advising 

in the decision, recommended decision, 

or agency review of the recommended 

decision, except as witness or counsel 

in a public proceeding. The Bureau 

believes that these prohibitions are 

consistent with the separation of 

functions provision of the APA, 5 U.S.C. 

554(d), and address the commenter’s 

concern. Accordingly, the Bureau 

declines to revise paragraph (e). 

The Bureau adopts § 1081.110 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.111 Filing of Papers 

This section of the Interim Final Rule 

requires the filing of papers in an 

adjudication proceeding. It specifies the 

papers that must be filed and addresses 

the time and manner of filing. The 

Bureau received no comments regarding 

this section. In the interest of clarity and 

to provide further guidance to parties, 

however, the Bureau has amended the 

Interim Final Rule in several respects. 

First, the Final Rule makes technical 

revisions to paragraph (a) to require the 

filing of the disclosure statement and 

notification of financial interest 

required under the new § 1081.201(e). 

The Final Rule also includes a slight 

revision to paragraph (a) intended to 

clarify that the Bureau must file the 

proof of service of the notice of charges. 

Among other things, the filing of the 

proof of service will provide notice of 

the beginning of the ten-day period after 

which the Bureau will publish the 

notice of charges under § 1081.200(c). 

The Final Rule makes non-substantive 

changes to paragraph (b) of the Interim 

Final Rule to make uniform the 

references to the United States Postal 

Service and the different mail services. 

The Bureau also revised paragraph (b) to 

reflect the transfer of certain authorities 

to the newly-created Office of 

Administrative Adjudication. As a 

result, the section provides for filing by 

electronic transmission upon the 

conditions specified by the Office of 

Administrative Adjudication, 

recognizing that while the Bureau 

anticipates the development of an 

electronic filing system, it may adopt 

other means of electronic filing in the 

interim (e.g., email transmission). The 

section authorizes other methods of 

filing if a respondent demonstrates, in 

accordance with guidance issued by the 

Office of Administrative Adjudication, 

that filing via electronic transmission is 

not practical. 

Finally, the Bureau added a new 

paragraph (c), providing that unless 

otherwise ordered by the Bureau or the 

hearing officer, or in the absence of a 

pending motion seeking such an order, 

all papers filed in connection with an 

adjudication proceeding are presumed 

to be open to the public. This paragraph 

is consistent with the Bureau’s 

commitment to making adjudication 

proceedings as transparent as 

reasonably possible, as reflected in 

§§ 1081.119(c) and 1081.300, which 

both recognize a presumption that 

documents and testimony in 

adjudication hearings are public. 

The Bureau adopts § 1081.111 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.112 Formal 

Requirements as to Papers Filed 

This section of the Interim Final Rule 

sets forth the formal requirements for 

papers filed in adjudication 

proceedings. It sets forth formatting 

requirements, requires that all 

documents be signed in accordance 

with § 1081.108, and requires the 

redaction of sensitive personal 

information from filings where the filing 

party determines that such information 

is not relevant or otherwise necessary 

for the conduct of the proceeding. This 

section also sets forth the method of 

filing documents containing information 

for which confidential treatment has 

been granted or is sought, and requires 

that in addition to filing the confidential 

information under seal, an expurgated 

copy of the filing be made on the public 

record. Section 1081.119 governs the 

filing of motions seeking confidential 

treatment of information and sets forth 

the standard to be applied by the 

hearing officer in determining whether 

to grant such treatment. 

One commenter suggested that the 

Bureau remove the requirement in 

paragraph (e) that sensitive personal 

information be redacted from filings. 

The commenter believed that this 

requirement was not workable because 

the Interim Final Rule did not define 

‘‘sensitive personal information’’ and 

only provided examples of such 

information. The commenter also 

pointed out that the Uniform Rules and 

the SEC Rules do not require the 

redaction of sensitive personal 

information. 

The Bureau declines to omit the 

requirement that sensitive personal 

information be redacted from filings. 

The Bureau continues to believe that it 

is improper to file Social Security 

numbers, financial account numbers, 

and other sensitive personal information 

in an adjudication proceeding where the 

information is not relevant or otherwise 

necessary for the conduct of the 

proceeding. The Bureau notes that this 

section is modeled on the FTC Rules, 16 

CFR 3.45(b), and is also similar to 

Federal Rule of Civil Procedure 5.2, 

which require filers to redact certain 

personal information, including Social 

Security numbers and financial account 

numbers, from filings. The Bureau 

agrees, however, that the term ‘‘sensitive 

personal information’’ should be 

defined and has therefore revised 

paragraph (e) to define that term. 

The commenter also recommended 

the removal of paragraph (f)(2), which 

requires a party seeking confidential 

treatment of information in a filing to 

file an expurgated copy of the filing 

with the allegedly confidential material 

redacted. Specifically, the commenter 

stated that paragraph (f)(2)’s 

requirement that the redacted version 

show the size and location of the 

redactions could, in effect, disclose 

what was redacted and may be 

impractical when redactions are made 

electronically. The commenter stated 

that the SEC Rules and Uniform Rules 

do not include this requirement. The 

Bureau notes that paragraph (f)(2) is 

modeled on the FTC Rules, 16 CFR 

3.45(e), and that the commenter did not 

identify how this redaction requirement 

could disclose confidential information 

or would be impractical. Accordingly, 

the Bureau declines to omit this 

requirement. 

Section 1081.112(e) has been revised 

to include a definition of sensitive 

personal information, and to clarify the 


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obligations of a party filing a document 

containing sensitive personal 

information. Section 1081.112(f) has 

been revised to clarify the obligation of 

parties to comply with any applicable 

order of the hearing officer or the 

Director when seeking confidential 

treatment of information in a filing. 

The Bureau adopts § 1081.112 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.113 Service of Papers 

This section of the Interim Final Rule 

requires that every paper filed in a 

proceeding be served on all other parties 

to the proceeding in the manner set 

forth in this section. Service by 

electronic transmission is encouraged, 

but is conditioned upon the consent of 

the parties. The section also sets forth 

specific methods for the Bureau to serve 

notices of charges, as well as 

recommended decisions and final 

orders. In this regard, the section 

provides that such service cannot be 

made by First Class mail, but also 

provides that service may be made on 

authorized agents for service of process. 

The section also provides that the 

Bureau may serve persons at the most 

recent business address provided to the 

Bureau in connection with a person’s 

registration with the Bureau. Although 

no such registration requirements 

currently exist, the Bureau has included 

this provision to account for any such 

requirements in the future. In the event 

that a party is required to register with 

the Bureau and maintain the accuracy of 

such registration information, the 

Bureau should be entitled to rely upon 

such information for service of process. 

This provision is modeled on the SEC 

Rules, 17 CFR 201.141(a)(2)(iii). 

The Bureau did not receive comments 

specifically related to § 1081.113. 

However, the Bureau made technical 

revisions to clarify and make this 

section of the Final Rule consistent with 

other sections of the Final Rule. The 

Bureau revised paragraph (d)(1)(v), 

which requires the Bureau to maintain 

a record of service of the notice of 

charges on parties, to also require the 

Bureau to file the certificate of service 

consistent with revised § 1081.111(a) to 

give notice of the beginning of the tenday period after which the Bureau will 

publish the notice of charges under 

§ 1081.200(c). 

In addition, the Bureau revised 

paragraph (a) of this section to make it 

clear that the parties must comply with 

any applicable order of the hearing 

officer or the Director governing the 

service of papers. 

Finally, as it did with § 1081.111(b), 

the Bureau made non-substantive 

changes to paragraphs (c) and (d) to 

make uniform the references to the 

United States Postal Service and the 

different mail services. 

The Bureau adopts § 1081.113 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.114 Construction of Time 

Limits 

This section of the Interim Final Rule 

provides for the manner of computing 

time limits, taking into account the 

effect of weekends and holidays on time 

periods that are ten days or less. This 

section also sets forth when filing or 

service is effective. With regard to time 

limits for responsive pleadings or 

papers, this section incorporates a threeday extension for mail service, similar 

to the Federal Rules of Civil Procedure, 

and a one-day extension for overnight 

delivery, as contained in some agencies’ 

existing rules. A one-day extension for 

service by electronic transmission is 

consistent with the Uniform Rules and 

reflects that electronic transmission may 

result in delays in actual receipt by the 

person served. 

Although the Bureau did not receive 

comments specifically related to 

§ 1081.114, the Bureau made technical, 

non-substantive revisions to this 

section. As it did with §§ 1081.111 and 

1081.113, the Bureau made nonsubstantive changes to make uniform 

the references to the United States 

Postal Service and the different mail 

services. 

The Bureau adopts § 1081.114 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.115 Change of Time 

Limits 

This section of the Interim Final Rule 

is modeled on the SEC Rules, 17 CFR 

201.161, and is intended to limit 

extensions of time to those necessary to 

prevent substantial prejudice. The 

section is intended to further the 

Bureau’s goal of ensuring the timely 

conclusion of adjudication proceedings. 

The section generally provides the 

hearing officer and the Director the 

authority to extend the time limits 

prescribed by the Interim Final Rule in 

certain defined circumstances. In 

keeping with the goal of expeditious 

resolution of proceedings, this section 

provides that motions for extension of 

time are strongly disfavored and may 

only be granted after consideration of 

various enumerated factors, provided 

that the requesting party makes a strong 

showing that denial of the motion 

would substantially prejudice its case. 

The section also provides that any 

extension of time shall not exceed 21 

days unless the hearing officer or 

Director, as appropriate, states on the 

record or in a written order the reasons 

why a longer extension of time is 

necessary. Finally, the section provides 

that the granting of a motion for an 

extension of time does not affect the 

deadline for the recommended decision 

of the hearing officer, which must be 

filed no later than the earlier of 300 days 

after the filing of the notice or charges 

or 90 days after the end of post-hearing 

briefing (unless separately extended by 

the Director as provided for in 

§ 1081.400). 

Commenters expressed concern over 

paragraph (b) of this section, which sets 

forth a policy strongly disfavoring 

motions for extensions of time. The 

commenters recommended that the 

Bureau delete paragraph (b). 

The Bureau believes the policy 

reflected in paragraph (b) ensures 

fairness to both the parties and the 

hearing officer by allowing an 

administrative matter to proceed within 

the timeframes provided by the Interim 

Final Rule, which were designed to 

provide sufficient time to both the 

litigants and the hearing officer. The 

Bureau believes that mandatory 

deadlines for the completion of certain 

stages of administrative proceedings, 

and a policy strongly disfavoring 

extensions, postponements or 

adjournments, is necessary to ensure 

that these proceedings are expeditious 

and fair. 

The Bureau notes that the SEC 

amended its rules in 2003 to improve 

the timeliness of its administrative 

proceedings. The SEC Rules, 17 CFR 

201.161, on which this section is 

modeled, were revised in 2003 to 

incorporate a policy strongly disfavoring 

extensions, postponements or 

adjournments except in circumstances 

where the requesting party makes a 

strong showing that the denial of the 

request or motion would substantially 

prejudice its case. The SEC stated that 

this provision was necessary in light of 

another amendment to the SEC Rules 

that changed the suggested guidelines 

for completion of administrative matters 

to mandatory deadlines. See 68 FR 

35787 (June 17, 2003). The Bureau finds 

the SEC’s experience instructive, and 

declines to delete paragraph (b) of this 

section. 

The Bureau adopts § 1081.115 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.116 Witness Fees and 

Expenses 

This section of the Interim Final Rule 

provides that fees and expenses for nonparty witnesses subpoenaed pursuant to 


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the Interim Final Rule shall be the same 

as for witnesses in United States district 

courts. 

The Bureau received no comment on 

§ 1081.116 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.117 Bureau’s Right To 

Conduct Examination, Collect 

Information 

This section of the Interim Final Rule, 

which is modeled on the Uniform Rules, 

12 CFR 19.16, states that nothing 

contained in the Interim Final Rule 

shall be construed to limit the right of 

the Bureau to conduct examinations or 

visitations of any person, or the right of 

the Bureau to conduct any form of 

investigation authorized by law, or to 

take other actions the Bureau is 

authorized to take outside the context of 

conducting adjudication proceedings. 

This section is intended to clarify that 

the pendency of an adjudication 

proceeding with respect to a person 

shall not affect the Bureau’s authority to 

exercise any of its powers with respect 

to that person. 

One commenter asserted that section 

1052(c)(1) of the Dodd-Frank Act 

prohibits the Bureau from issuing civil 

investigative demands after the 

institution of any proceedings under 

Federal consumer financial law, 

including proceedings initiated by a 

State law enforcement agency or a 

private party. The commenter asked the 

Bureau to amend the Interim Final Rule 

to require every civil investigative 

demand to be accompanied by a 

certification that the demand will have 

no bearing on any proceeding then in 

process. 

This comment arguably should have 

been directed to the Rules of 

Investigation, 12 CFR part 1080, but the 

Bureau addresses it here. The Bureau 

notes that this section of the Interim 

Final Rule did not purport to implement 

or interpret section 1052(c)(1) of the 

Dodd-Frank Act. Rather, it states that 

nothing within ‘‘this part’’ (i.e., the 

Interim Final Rule) should be construed 

as limiting the Bureau’s supervisory, 

investigatory, or other authority to 

gather information in accordance with 

law. The Bureau does not agree with the 

commenter’s interpretation of section 

1052(c)(1) of the Dodd-Frank Act, but 

notes that any limitations placed upon 

it by that section are incorporated in 12 

CFR 1080.6, which provides that civil 

investigative demands will be issued in 

accordance with section 1052(c) of the 

Dodd-Frank Act. 

The Bureau adopts § 1081.117 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.118 Collateral Attacks on 

Adjudication Proceedings 

This section of the Interim Final Rule, 

which is modeled on the Uniform Rules, 

12 CFR 19.17, is intended to preclude 

the use of collateral attacks to 

circumvent or delay the administrative 

process. 

The Bureau received no comment on 

§ 1081.118 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.119 Confidential 

Information; Protective Orders 

This section of the Interim Final Rule 

sets forth the means by which a party or 

another person may seek a protective 

order shielding confidential 

information. While generally modeled 

on the SEC Rules, 17 CFR 201.322, this 

section of the Interim Final Rule adopts 

the substantive standard set forth in the 

FTC Rules, 16 CFR 3.45(b), which 

provides that the hearing officer may 

grant a protective order only upon a 

finding that public disclosure will likely 

result in a clearly defined, serious injury 

to the person requesting confidential 

treatment, or after finding that the 

material constitutes sensitive personal 

information. The Bureau adopted the 

FTC’s standard in order to provide as 

much transparency in the adjudicative 

process as possible, while also 

protecting confidential business 

information or other sensitive 

information of parties appearing before 

the Bureau or third parties whose 

information may be introduced into 

evidence. The Bureau expects that the 

standard set forth in this section will be 

met in cases where the disclosure of 

trade secrets or other information to the 

public or to parties is likely to result in 

harm, but that the standard will not be 

met simply because the information at 

issue is deemed ‘‘confidential’’ or 

‘‘proprietary’’ by the movant. To the 

extent that a movant can identify a 

clearly defined, serious injury likely to 

result from the disclosure of such 

particular information, it will be 

protected; generalized claims of 

competitive or other injury generally 

will not suffice. This section provides 

that documents subject to a motion for 

confidential treatment will be 

maintained under seal until the motion 

is decided. 

One commenter expressed concern 

that the Interim Final Rule may not 

accommodate a situation where the 

person seeking confidential treatment is 

not the same as the person who would 

be harmed by the disclosure of the 

material. In order to clarify the rights of 

third parties whose confidential 

information may be disclosed during the 

adjudicative process, the Bureau added 

a new paragraph (a), providing that a 

party may not disclose confidential 

information obtained from a third party 

without providing the third party at 

least ten days notice prior to the 

disclosure. In response to this notice, 

the third party has the option to consent 

to the disclosure of such information, 

which may be conditioned on the entry 

of a protective order, or may intervene 

in the proceeding for the limited 

purpose of moving for a protective order 

pursuant to this section. The new 

paragraph (a) further provides that a 

party must certify that proper notice 

was provided for any written filing or 

oral motion or argument that contains 

confidential information obtained from 

a third party. 

In order to streamline the process for 

disclosing confidential information 

obtained from third parties, the Bureau 

revised paragraph (b) of the Interim 

Final Rule (paragraph (c) of the Final 

Rule) to provide for the mandatory entry 

of a stipulated protective order that has 

been agreed to by all parties, including 

third parties to the extent their 

information is at issue. However, the 

Office of Enforcement reserves the right 

to refuse to stipulate to a protective 

order that does not meet the substantive 

standards set forth in this section. 

One commenter recommended that 

the Bureau adopt the SEC’s standard for 

granting a protective order and revise 

paragraph (b) of the Interim Final Rule 

to provide that a ‘‘motion for a 

protective order shall be granted only 

upon a finding that the harm resulting 

from disclosure would outweigh the 

benefits of disclosure.’’ 

As noted above, the Bureau 

considered the SEC’s standard, but 

ultimately decided to adopt the FTC’s 

standard because it comports with the 

Bureau’s goals of providing 

transparency in the adjudicative process 

while also protecting confidential 

business information or other sensitive 

information. The Bureau believes the 

standard it adopts in this section serves 

the public interest by balancing the 

need for a public understanding of the 

Bureau’s adjudication proceedings with 

the interests of respondents in avoiding 

competitive injury from public 

disclosure of information. See In re Gen. 

Foods Corp., 95 F.T.C. 352 (1980). 

The commenter raised a number of 

specific concerns regarding the Bureau’s 

adoption of the FTC’s standard. First, 

the commenter stated that the standard 

prevents a financial institution from 

seeking confidential treatment of its 

customers’ personal information. 

However, the Interim Final Rule 


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provides that a protective order shall be 

issued after finding that the material 

constitutes sensitive personal 

information. There is no prohibition on 

persons seeking confidential treatment 

of sensitive personal information of 

other persons. On the contrary, the 

Bureau contemplates that the sensitive 

personal information of consumers will 

regularly be protected under 

§§ 1081.112(e) and 1081.119(b), whether 

because of a motion for a protective 

order filed by a person other than the 

consumer or stipulated to by the parties, 

or because of the requirement that 

sensitive personal information generally 

be redacted under § 1081.112(e). 

The commenter also objected to this 

standard because it does not define the 

terms ‘‘serious injury,’’ ‘‘likely,’’ or 

‘‘clearly defined.’’ The commenter 

identified the unpredictable possibility 

of identity theft as a possibility of injury 

that may not be ‘‘likely.’’ The Bureau 

believes that the commenter’s concerns 

regarding potential identity theft should 

be addressed by § 1081.112(e), which 

generally requires the redaction of 

sensitive personal information. The 

Bureau reiterates that it anticipates that 

sensitive personal information of 

consumers will regularly be protected 

from public disclosure. The Bureau 

again notes that § 1081.112(e) is based 

on the FTC Rules, 16 CFR 3.45(b), and 

that the FTC has significant experience 

applying these standards in many types 

of cases. The Bureau believes leaving 

these terms undefined provides the 

hearing officer with the necessary 

flexibility to address confidentiality 

concerns on a case-by-case basis based 

on the relevant facts and circumstances. 

At the same time, this standard is 

consistent with the Bureau’s goal of 

transparency and avoids granting 

confidential status based on 

unsupported and generalized claims of 

competitive or other injury. 

The commenter also stated that the 

Interim Final Rule does not 

accommodate the possibility that the 

public disclosure of information may be 

illegal under laws unrelated to the 

adjudication proceeding. The Bureau 

agrees and has therefore revised 

paragraph (b) of this section (now 

paragraph (c)) to break up the bases for 

issuance of protective orders into 

subsections and to include a new 

subsection making clear that the hearing 

officer shall grant a protective order 

where public disclosure is prohibited by 

law. 

Finally, consistent with the Bureau’s 

commitment to transparency and open 

government, the Bureau clarified 

paragraph (b) of the Interim Rule 

(paragraph (c) of the Final Rule) to 

recognize that documents and testimony 

filed in connection with an adjudication 

proceeding are presumed to be public. 

This clarification is consistent with 

§ 1081.300 and the revised 

§ 1081.111(c), both of which recognize a 

presumption that documents, testimony, 

and hearings are public. 

The Bureau adopts § 1081.119 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.120 Settlement 

This section of the Interim Final Rule 

is based on the SEC Rules, 17 CFR 

201.240. The Bureau on its own 

initiative revised this section to make it 

consistent with § 1081.100 of this part 

regarding the scope of the Interim Final 

Rule. Section 1081.100 makes clear that 

the Interim Final Rule applies only to 

adjudication proceedings authorized by 

section 1053 of the Dodd-Frank Act and 

not to Bureau investigations, 

investigational hearings or other 

proceedings that do not arise from 

proceedings after the issuance of a 

notice of charges. As revised, this 

section governs only offers of settlement 

made after the institution of 

adjudication proceedings under this 

part. Under this section, any respondent 

in a proceeding may make an offer of 

settlement in writing at any time. Any 

settlement offer shall be presented to the 

Director with a recommendation, except 

that, if the recommendation is 

unfavorable, the offer shall not be 

presented to the Director unless the 

person making the offer so requests. 

The section requires that each offer of 

settlement recite or incorporate as part 

of the offer the provisions of paragraphs 

(c)(3) and (4). Because certain facts 

necessary for the Director to make a 

reasoned judgment as to whether a 

particular settlement offer is in the 

public interest will often be available 

only to the Bureau employee that 

negotiated the proposed settlement, 

paragraph (c)(4)(i) requires waiver of 

any provisions, under the Interim Final 

Rule or otherwise, that may be 

construed to prohibit ex parte 

communications regarding the 

settlement offer between the Director 

and Bureau employee involved in 

litigating the proceeding. Paragraph 

(c)(4)(ii) requires waiver of any right to 

claim bias or prejudgment by the 

Director arising from the Director’s 

consideration or discussions concerning 

settlement of all or any part of the 

proceeding. If the Director rejects the 

offer of settlement, the person making 

the offer shall be notified of the 

Director’s action. The rejection of the 

offer of settlement shall not affect the 

continued validity of the waivers 

pursuant to paragraph (c)(4). 

The Bureau also revised this section 

to include a new paragraph (d) 

governing the content of stipulations 

and consent orders and providing a 

process for resolving an adjudication 

proceeding through a consent order. 

This process requires the respondent 

and the Bureau to reduce the terms of 

any settlement into a written stipulation 

and consent order memorializing the 

terms of the settlement and including 

certain required provisions. The Bureau 

will then issue an order with the 

consent of the respondent. 

The Bureau adopts § 1081.120 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.121 Cooperation With 

Other Agencies 

This section of the Interim Final Rule 

sets forth the Bureau’s policy to 

cooperate with other governmental 

agencies to avoid unnecessary 

overlapping or duplication of regulatory 

functions. 

The Bureau received no comment on 

§ 1081.121 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Subpart B—Initiation of Proceedings 

and Prehearing Rules 

Section 1081.200 Commencement of 

Proceedings and Contents of Notice of 

Charges 

This section of the Interim Final Rule, 

similar to the comparable section of the 

Uniform Rules, 12 CFR 19.18, contains 

the requirements relating to the 

initiation of adjudication proceedings, 

including the required content of a 

notice of charges initiating a hearing. In 

provisions modeled on the MARs and 

the Federal Rules of Civil Procedure, see 

MARs, 11 T.M. Cooley L. Rev. at 96; 

Fed. R. Civ. P. 41(a), this section also 

sets forth the circumstances under 

which the Bureau may voluntarily 

dismiss an adjudication proceeding, 

either on its own motion before the 

respondent(s) serve an answer, or by 

filing a stipulation of dismissal signed 

by all parties who have appeared. 

Unless the notice or stipulation of 

dismissal states otherwise, a dismissal 

pursuant to this section is without 

prejudice. In keeping with the principle 

that Bureau proceedings are presumed 

to be public, this section also provides 

that a notice of charges shall be released 

to the public after affording the 

respondent or others an opportunity to 

seek a protective order to shield 

confidential information. 

On its own initiative, the Bureau 

amended this section to include a new 


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paragraph (d) to conform with the 

revisions made to § 1081.120 and to 

provide a procedural mechanism to 

commence an adjudication proceeding 

to effectuate a settlement agreed to 

before the filing of a notice of charges. 

As noted above, § 1081.120 has been 

revised to clarify that the settlement 

procedure laid out in that section 

applies only after a notice of charges has 

been issued. The Bureau recognizes, 

however, that settlement negotiations 

may commence prior to the filing of a 

notice of charges. In those 

circumstances, the Bureau may 

determine that an adjudication 

proceeding—rather than litigation 

elsewhere—is the most appropriate 

forum in which to enter a consent order. 

New paragraph (d) therefore provides 

that, where the parties agree to 

settlement before the filing of a notice 

of charges, a proceeding may be 

commenced by filing a stipulation and 

a consent order concluding the 

proceeding. Paragraph (d) also requires 

that certain information be included in 

the stipulation, tracking the information 

required under § 1081.120(d). Finally, in 

the interest of transparency, paragraph 

(d) requires that the consent order set 

forth the legal authority for the 

proceeding and for the Bureau’s 

jurisdiction over the proceeding, and a 

statement of the matters of fact and law 

showing that the Bureau is entitled to 

relief. See § 1081.200(b)(1) and (2). 

The Bureau adopts § 1081.200 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.201 Answer and 

Disclosure Statement and Notification of 

Financial Interest 

This section of the Interim Final Rule 

requires a respondent to file an answer 

in all cases. The Bureau considered, but 

rejected, the approach set forth in the 

SEC Rules, 17 CFR 201.220(a), whereby 

an answer is required only if specified 

in the notice of charges. The Bureau 

believes that an answer can help focus 

and narrow the matters at issue. 

Pursuant to paragraph (a) of this 

section, respondents must file an 

answer within 14 days of service of the 

notice of charges. The 14-day time 

period is adopted from the FTC Rules, 

16 CFR 3.12. Two commenters 

requested that paragraph (a) of this 

section be amended to provide 20 days 

from service of the notice of charges, 

rather than 14 days, to file an answer. 

One commenter stated that it takes a 

considerable amount of time to review 

the notice of charges, investigate the 

factual and legal allegations, determine 

the appropriate response, and draft an 

answer. That commenter also stated that 

more than 14 days will be necessary to 

prepare an answer because the Bureau 

is not required to provide affirmative 

disclosures pursuant to § 1081.206(d) 

until seven days after service of the 

notice of charges. Both commenters note 

that the Federal banking agencies and 

the SEC allow 20 days to file an answer. 

Finally, one commentator stated that the 

14-day requirement may cause 

respondents to answer with repeated 

assertions that they lack information, 

leading to fewer stipulations, and 

undercutting the Bureau’s goal of timely 

adjudications. 

The Bureau declines to amend the 

Interim Final Rule as requested. The 

statutory requirement that a hearing be 

held between 30 to 60 days after the 

service of the notice of charges, unless 

an earlier date is set at the request of any 

party so served, necessitates a 

compressed timeline for litigating 

adjudication proceedings. The Bureau is 

not alone in setting a 14-day deadline 

for an answer. As noted above, the FTC 

requires respondents in administrative 

proceedings to file an answer within 14 

days of service of the complaint. 

Further, as noted above, the Bureau 

has adopted a policy pursuant to which 

it will generally provide advance notice 

of a possible enforcement action to 

prospective respondents before filing a 

notice of charges. Recipients of such 

notices will have an opportunity to 

submit a response in writing. As a 

result, many respondents will have 

considered and responded to most or all 

of the Bureau’s allegations before 

receiving the notice of charges. The 

advance notice will also give 

respondents a prior opportunity to 

identify facts to which they may 

stipulate, addressing the expressed 

concern that a 14-day deadline to 

answer may lead to fewer factual 

stipulations. 

Likewise, the Bureau is not persuaded 

that respondents need additional time to 

answer after receiving the Bureau’s 

affirmative disclosure documents. In 

typical civil litigation, and in 

administrative proceedings before the 

prudential regulators and the FTC, 

respondents file an answer before 

conducting any discovery. The Bureau’s 

affirmative disclosure obligation will be 

triggered before a respondent’s answer 

is due. Thus, respondents will have 

access to more information prior to 

filing an answer than is available to 

most respondents in other civil and 

administrative proceedings. 

Finally, pursuant to § 1081.115, a 

respondent may ask for an extension of 

time to file an answer. While such 

extensions are strongly disfavored, they 

may be granted if the respondent makes 

a strong showing that the denial of its 

motion for an extension of time would 

substantially prejudice its case. For all 

of these reasons, the Bureau declines to 

amend the deadline for filing an answer 

contained in paragraph (a) of § 1081.201 

of the Interim Final Rule. 

As in the Uniform Rules, 12 CFR 

19.19(c), paragraph (d) of this section 

provides that failure to file a timely 

answer is deemed to be a waiver of the 

right to appear and a consent to the 

entry of an order granting the relief 

sought by the Bureau in the notice of 

charges. This section provides that in 

the case of default, the hearing officer is 

authorized, without further proceedings, 

to find the facts to be as alleged in the 

notice of charges and to enter a 

recommended decision containing 

appropriate findings and conclusions. 

Paragraph (d)(2) of this section adopts 

the procedure from the SEC Rules for a 

motion to set aside a default, 17 CFR 

201.155. It also provides that the 

hearing officer, prior to the filing of the 

recommended decision, or the Director, 

at any time, may set aside a default for 

good cause shown. 

In the discussion of § 1081.105 above, 

the Bureau noted the addition of a new 

§ 1081.201(e) requiring the filing of a 

disclosure statement and notification of 

financial interest. Consistent with the 

Bureau’s goal of an expeditious, fair, 

and impartial hearing process, the 

Bureau seeks to provide the parties and 

the hearing officer with information to 

identify potential or actual bases for 

disqualification early in the process. 

Section 1081.201(e) is modeled on the 

disclosure statements required under 

Federal Rule of Civil Procedure 7.1, 

Federal Rule of Appellate Procedure 

26.1, Third Circuit Local Appellate Rule 

26.1.1, and Sixth Circuit Rule 26.1. This 

disclosure is calculated to reach a 

majority of the circumstances that are 

likely to call for disqualification on the 

basis of financial information that a 

hearing officer may not know or 

recollect; however, the disclosure does 

not cover all of the circumstances that 

may call for disqualification. In addition 

to requiring a respondent, a 

nongovernmental amicus, or a 

nongovernmental intervenor to identify 

any parent corporation or any publicly 

owned corporation owning 10% or more 

of its stock, § 1081.201(e) also requires 

the identification of ‘‘any publicly 

owned corporation not a party to the 

proceeding that has a financial interest 

in the outcome of the proceeding and 

the nature of that interest.’’ The types of 

financial interests that must be 

disclosed under this section include, for 

example, insurance, franchise, or 

indemnity agreements giving a publicly 


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owned corporation a financial interest 

in the outcome of the proceeding. See, 

e.g., Sixth Circuit Rule 26.1(b)(2). 

The Bureau adopts § 1081.201 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.202 Amended Pleadings 

This section of the Interim Final Rule 

provides that a notice of charges or an 

answer may be amended or 

supplemented as a matter of course at 

any stage of the proceeding. 

The Bureau did not receive comment 

on § 1081.202, but the Bureau has 

amended paragraph (a) of this section 

on its own initiative to require a party 

who wishes to amend a pleading to 

obtain the consent of the other party or 

leave of the hearing officer. By requiring 

written consent or leave of the hearing 

officer to amend pleadings, the revised 

section encourages parties to plead their 

case fully, as opposed to reserving 

claims and defenses for last minute 

amendments. This section continues to 

reflect a liberal standard of permitting 

amendments of pleadings, but 

implements an appropriate limit for 

amendments that are unduly 

prejudicial. 

The Bureau adopts paragraph (b) of 

§ 1081.202 of the Interim Final Rule 

without change. As a result, when a 

party seeks to introduce evidence at a 

hearing that is outside the scope of 

matters raised in the notice of charges 

or answer, the hearing officer may admit 

the evidence when admission is likely 

to assist in adjudicating the merits of the 

action unless the objecting party 

demonstrates that admission of such 

evidence would unfairly prejudice that 

party’s action or defense upon the 

merits. 

The Bureau adopts § 1081.202 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.203 Scheduling 

Conference 

Section 1081.203 of the Interim Final 

Rule sets forth the requirements related 

to scheduling conferences. Paragraph (a) 

of this section requires the parties to 

meet before the initial scheduling 

conference to discuss the nature and 

basis of their claims and defenses, the 

possibilities for a prompt settlement or 

resolution of the case, and other matters 

to be determined at the scheduling 

conference. 

Paragraph (b) of § 1081.203 of the 

Interim Final Rule provides that within 

20 days of the service of the notice of 

charges, or at another time if the parties 

agree, the hearing officer and the parties 

are to have a scheduling conference. 

The Bureau revised paragraph (b) to 

clarify that a scheduling conference is to 

be held, not just scheduled, within 20 

days of service of the notice of charges. 

This clarification is intended to reflect 

the Bureau’s original intent with respect 

to the timing of the scheduling 

conference. 

Paragraph (b) of this section also sets 

forth the issues to be discussed at the 

scheduling conference. These issues are 

drawn from those the parties are 

required to discuss at scheduling and 

prehearing conferences under the 

Uniform Rules, 12 CFR 19.31, the SEC 

Rules, 17 CFR 201.221, and the FTC 

Rules, 16 CFR 3.21. Paragraph (b)(1) 

provides that the parties shall be 

prepared to address the determination 

of hearing dates and location, and 

whether, in proceedings under section 

1053(b) of the Dodd-Frank Act, the 

hearing should commence later than 60 

days after service of the notice of 

charges. This provision is intended to 

account for the requirement in section 

1053(b) of the Dodd-Frank Act that the 

hearing be held no earlier than 30 days 

nor later than 60 days after the date of 

service of the notice of charges, unless 

an earlier or later date is set by the 

Bureau at the request of any party so 

served. It is expected that the parties 

will discuss a hearing date at the 

scheduling conference, and that this 

would afford respondents the 

opportunity to request a hearing date 

outside the 30-to-60 day timeframe. 

It is also expected that at or before the 

scheduling conference, the parties will 

discuss any issues related to the 

production of documents pursuant to 

§ 1081.206, any anticipated motions for 

witness statements pursuant to 

§ 1081.207, whether either party intends 

to issue documentary subpoenas, and 

whether either party believes that 

depositions will be necessary to 

preserve the testimony of witnesses who 

will be unavailable for the hearing. The 

parties are also expected to discuss the 

need and a schedule for any expert 

discovery. 

Pursuant to paragraph (d) of 

§ 1081.203, the hearing officer is 

required to issue a scheduling order at 

or within five days of the conclusion of 

the scheduling hearing, setting forth the 

date and location of the hearing, as well 

as other procedural determinations 

made. It is expected that the hearing 

officer will establish any dates for 

expert discovery in the scheduling 

order, or else expressly find that such 

discovery is not necessary or reasonable 

in a particular case. This scheduling 

order will govern the course of the 

proceedings, unless later modified by 

the hearing officer. 

Provision for a prompt scheduling 

conference followed by prompt issuance 

of a scheduling order is necessary in 

order to allow for the orderly course of 

proceedings on the timeline set forth 

elsewhere in the Interim Final Rule. 

Particularly in cases brought pursuant to 

section 1053(b) of the Dodd-Frank Act 

in which the respondent does not 

request a hearing date outside the 30-to60 day timeframe set forth in the statute, 

it is essential that the hearing officer 

and the parties have a clear 

understanding of the applicable 

schedule at the earliest possible date. 

As provided for in the SEC Rules, 

17 CFR 201.221(f), paragraph (e) of this 

section provides that any person named 

as a respondent in a notice of charges 

who fails to appear at a scheduling 

conference may be deemed in default 

pursuant to § 1081.201(d)(1). Finally, 

like the FTC Rules, 16 CFR 3.21(g), this 

section provides that scheduling 

conferences are presumptively public 

unless the hearing officer determines 

otherwise based on the standard set 

forth in § 1081.119(c). 

The Bureau received no comment on 

§ 1081.203 of the Interim Final Rule and 

adopts it with the single clarification 

discussed above in the Final Rule. 

Section 1081.204 Consolidation and 

Severance of Actions 

This section of the Interim Final Rule, 

modeled after the Uniform Rules, 

12 CFR 19.22, allows the consolidation 

of actions if the proceedings arise out of 

the same transaction, occurrence, or 

series of transactions or occurrences or 

if the proceedings involve at least one 

common respondent or a material 

common question of law or fact. 

Proceedings are not to be consolidated 

if doing so would unreasonably delay 

the proceeding or cause injustice. 

Severance, on the other hand, may be 

granted by the hearing officer only if he 

or she determines that undue prejudice 

or injustice would result from a 

consolidated proceeding and if such 

prejudice or injustice would outweigh 

the interests of judicial economy and 

speed in the adjudication of actions. 

This is a higher standard than is 

required for the consolidation of 

actions. 

The Bureau received no comments on 

§ 1081.204 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.205 Non-Dispositive 

Motions 

This section of the Interim Final Rule 

governs all motions other than motions 

to dismiss or motions for summary 

disposition, which are governed by 


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§ 1081.212. The section generally sets 

forth the requirements for filing a nondispositive motion, and requires that all 

such motions must be in writing, state 

with particularity the relief sought, and 

include a proposed order. This section 

also makes clear that motions filed 

pursuant to sections that impose 

different requirements should follow 

those requirements, and the 

requirements of § 1081.205 to the extent 

they are not inconsistent. For example, 

§ 1081.208(g) of the Interim Final Rule 

(paragraph (h) of the Final Rule), which 

relates to motions to quash subpoenas, 

provides for a shorter time period for 

the filing of a responsive brief and 

prohibits the filing of a reply unless 

requested by the hearing officer. These 

conditions govern motions to quash, but 

such motions are still subject to other 

provisions of § 1081.205, including, 

inter alia, the need to meet and confer, 

deadlines for the hearing officer’s 

ruling, and length limitations of the 

briefs. 

Like the Uniform Rules and the FTC 

Rules, 12 CFR 19.23(d)(1); 16 CFR 

3.22(d), this section gives a party ten 

days after service of a non-dispositive 

motion to respond to such a motion in 

writing. It also provides for reply briefs, 

which must be filed within three days 

after service of the response. A party’s 

failure to respond to a motion shall 

waive that party’s right to oppose such 

motion and constitutes consent to the 

entry of an order substantially in the 

form of the order accompanying that 

motion. This section adopts the SEC’s 

15-page length limitation for nondispositive motions and oppositions, 17 

CFR 201.154(c), and a six page length 

limitation for reply briefs. The Bureau 

has adopted these time and length 

limitations because they provide parties 

ample opportunity to express their 

views on matters that do not concern 

the ultimate disposition of the action. 

This section also requires parties to 

make a good faith effort to meet and 

confer prior to the filing of a nondispositive motion in an effort to resolve 

the controversy by agreement. The 

Bureau has included the meet-andconfer requirement because it believes 

such conferences can help obviate the 

need for, or narrow the scope of, 

disputed motions, thus saving both the 

parties and the hearing officer time and 

resources. 

This section provides that the hearing 

officer shall rule on a non-dispositive 

motion within 14 days after the 

expiration of the time for filing of all 

motions papers authorized by this 

section, and that the pendency of a 

motion shall not stay proceedings. This 

time limitation is based on the FTC 

Rules, 16 CFR 3.22(e), and is intended 

to ensure the timely resolution of 

disputes so that the proceeding as a 

whole can conclude in a fair and 

expeditious manner. As noted above, 

both the FTC and the SEC have revised 

their rules of practice to provide for the 

more expeditious resolution of 

administrative adjudications, and the 

incorporation of a time period in which 

the hearing officer must rule on a nondispositive motion is, in the view of the 

Bureau, a critical part of that effort. See 

73 FR 58832, 58836 (Oct. 7, 2008) (FTC 

expects that provision requiring ALJs to 

decide motions within 14 days will 

expedite cases). 

The Bureau received no comment on 

§ 1081.205 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.206 Availability of 

Documents for Inspection and Copying 

Modeled primarily after the SEC 

Rules, 17 CFR 201.230, this section of 

the Interim Final Rule adopts the SEC’s 

affirmative disclosure approach to fact 

discovery in administrative 

adjudications. Generally, this section 

requires that the Office of Enforcement 

make available for inspection and 

copying certain categories of documents 

obtained by the Office of Enforcement 

prior to the institution of proceedings 

from persons not employed by the 

Bureau, in connection with the 

investigation leading to the institution 

of proceedings, and certain categories of 

documents produced by persons 

employed by the Bureau. 

The Bureau received several 

comments requesting amendment to this 

section. Before addressing each specific 

comment, the Bureau sets forth its 

understanding of this provision in order 

to provide guidance to both the public 

and future respondents regarding how it 

intends to comply with the affirmative 

disclosure obligations of § 1081.206. 

As the Bureau stated when it issued 

the Interim Final Rule, this section is 

intended to promote the fair and 

efficient resolution of adjudicatory 

proceedings. A respondent has an 

automatic right to inspect and copy 

documents under this section at the 

outset of the proceeding. The 

respondent is not required to make a 

formal request or wait until after the 

scheduling conference to gain access to 

documents underlying the Bureau’s 

decision to initiate proceedings. Instead, 

the Bureau will provide the respondent 

with access to, in effect, the documents 

they would likely seek and obtain in the 

course of a protracted discovery period 

soon after service of the notice of 

charges. 

This approach has several advantages. 

By automatically providing respondents 

with the factual information gathered by 

the Office of Enforcement in the course 

of the investigation leading to the 

institution of proceedings, this 

provision helps ensure that respondents 

have a complete understanding of the 

factual basis for the Bureau’s action and 

can more accurately and efficiently 

determine the nature of their defenses or 

whether they wish to seek settlement. 

Because this approach renders 

traditional document discovery largely 

unnecessary, it will lead to a faster and 

more efficient resolution of Bureau 

administrative proceedings, saving both 

the Bureau and respondents the 

resources typically expended in the 

civil discovery process. 

Section 1081.206 adopts most of the 

procedures and conditions set forth in 

the SEC Rules, as discussed below. 

Pursuant to paragraph (a)(1), the 

Office of Enforcement’s obligation under 

this section relates to documents 

obtained by the Office of Enforcement. 

Documents located only in the files of 

other divisions or offices of the Bureau 

are beyond the scope of paragraph (a). 

The term ‘‘documents’’ has been defined 

in the same manner as the term 

‘‘documentary material’’ in section 

1051(4) of the Dodd-Frank Act, 

12 U.S.C. 5561(4), and encompasses, 

among other things, electronic files or 

other data or data compilations stored in 

any medium. 

Paragraph (a)(1) also provides that the 

Office of Enforcement will make the 

documents available for inspection and 

copying. This provision is modeled after 

the SEC Rules and the Federal Rules of 

Civil Procedure. The Bureau anticipates 

that in most cases it will simply provide 

either paper or electronic copies of the 

material at issue to respondents, but has 

adopted the formulation in this section 

to preserve flexibility and the Office of 

Enforcement’s right to require 

inspection and copying in appropriate 

cases. 

Paragraphs (a)(1)(i), (ii), and (iii) 

describe the types of documents that are 

subject to the disclosure requirement of 

paragraph (a)(1). The Bureau interprets 

its obligation under paragraph (a)(1)(iii) 

to include both records obtained by the 

Office of Enforcement directly from 

persons not employed by the Bureau, as 

well as documents obtained by the 

Office of Enforcement indirectly from 

persons not employed by the Bureau. 

For example, if the Office of 

Enforcement obtains information from 

the Bureau’s supervisory staff in 

connection with an investigation that 

the supervisory staff obtained from 

persons not employed by the Bureau, 


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the Office of Enforcement will disclose 

such information, provided it is not 

privileged or otherwise protected from 

disclosure. 

Paragraph (a)(2) provides that the 

Office of Enforcement shall also make 

available each civil investigative 

demand or other written request to 

provide documents or to be interviewed 

issued by the Office of Enforcement in 

connection with the investigation 

leading to the institution of proceedings. 

The Office of Enforcement shall also 

make available any final examination or 

inspection reports prepared by any 

other office of the Bureau if the Office 

of Enforcement either intends to 

introduce any such report into evidence 

or to use any such report to refresh the 

recollection of, or impeach, any witness. 

The provisions of paragraph (a)(2) are 

included in the SEC Rules, but have 

been broken out into a separate 

paragraph of this section because they 

do not comprise documents that the 

Office of Enforcement obtained from 

persons not employed by the Bureau, 

and thus do not technically fall within 

the scope of paragraph (a)(1). 

Pursuant to § 1081.208, a respondent 

may seek production of other 

documents pursuant to subpoena. 

Paragraph (a)(3) is intended to make 

clear that the affirmative disclosure 

obligation set forth in paragraphs (a)(1) 

and (a)(2) does not preclude the 

availability of subpoenas as separately 

provided by § 1081.208. 

Paragraph (a)(4) provides that this 

section does not require the Office of 

Enforcement to produce a final 

examination or inspection report 

prepared by any other Office of the 

Bureau to a respondent who is not the 

subject of that report. The Bureau has 

included this provision, which does not 

appear in the SEC Rules, out of concern 

for the privileged and confidential 

nature of examination and inspection 

reports and to make clear that 

respondents cannot rely upon the 

Bureau’s affirmative disclosure 

obligation to require the production of 

supervision or examination reports 

concerning other persons. Although the 

disclosure obligation as drafted would 

not require the production of such 

reports, the Bureau included this 

provision to remove any question 

regarding the issue. 

Paragraph (a)(4) of the Interim Final 

Rule did not explicitly apply to final 

inspection or examination reports 

obtained from other government 

agencies. The Final Rule has been 

amended to clarify that such reports, to 

which the confidentiality and privilege 

concerns discussed above apply equally, 

are also excluded from the Bureau’s 

disclosure obligation. 

Paragraph (b)(1) of the Interim Final 

Rule permitted the Office of 

Enforcement to withhold documents 

that would otherwise be produced 

under paragraph (a) under five 

exceptions. The Final Rule retains these 

exceptions and adds an additional 

exception, paragraph (b)(1)(iii), as 

described below. 

The first exception, in paragraph 

(b)(1)(i) shields information subject to a 

claim of privilege. The second 

exception, in paragraph (b)(1)(ii), 

protects as work product internal 

documents prepared by persons 

employed by the Bureau, including 

consulting experts, which will not be 

offered in evidence. Work product 

includes any notes, working papers, 

memoranda or other similar materials, 

prepared by an attorney or under an 

attorney’s direction in anticipation of 

litigation. See Hickman v. Taylor, 329 

U.S. 495 (1947); see also Fed. R. Civ. 

P. 26(b)(3) and (b)(5). Accountants, 

paralegals, investigators, and consulting 

experts who work on an investigation 

do so at the direction of the Director, an 

associate director, or another 

supervisory attorney, and their work 

product is therefore not subject to the 

affirmative disclosure obligation. 

Although such material would not fall 

within the purview of paragraphs (a)(1) 

and (a)(2), the Bureau has retained this 

provision of the SEC Rules to make clear 

that such work product is not subject to 

the affirmative disclosure obligation. An 

examination or inspection report 

prepared by one of the Bureau’s 

supervision offices, which the Office of 

Enforcement intends to introduce into 

evidence or to use to refresh the 

recollection of, or impeach, a witness, is 

explicitly excluded from the materials 

that may be withheld pursuant to this 

exception. 

The third exception, contained in 

paragraph (b)(1)(iii), is added to the 

Final Rule. Modeled upon a similar 

provision in the Rules of Practice of the 

Commodity Futures Trading 

Commission, 17 CFR 10.42, this 

paragraph protects documents obtained 

from other governmental entities that 

are either not relevant to the proceeding 

or were provided to the Bureau on the 

condition that the information not be 

disclosed. The Bureau has added this 

provision to accommodate any 

agreements limiting the disclosure of 

documents received from other 

governmental entities. To the extent the 

Bureau withholds documents pursuant 

to this exception, it will not rely upon 

those documents at the hearing. 

The fourth exception, contained in 

paragraph (b)(1)(iv) of the Final Rule, 

protects the identity of a confidential 

source. See 5 U.S.C. 552(b)(7)(C) and 

(D). The fifth exception, contained in 

paragraph (b)(1)(v) of the Final Rule, 

provides that documents need not be 

produced where applicable law 

prohibits their production. The final 

exception protects any other document 

or category of documents that the 

hearing officer determines may be 

withheld as not relevant to the subject 

matter of the proceeding, or otherwise 

for good cause shown. This exception is 

intended to provide the hearing officer 

with the flexibility to adjust the 

Bureau’s affirmative disclosure 

obligation to the particular contours of 

a proceeding. For example, this 

exception could be used in a situation 

where a single investigation involves 

other industry participants that are 

related only indirectly, or not at all, to 

the recommendations ultimately made 

to the Director with respect to the 

particular respondents in a specific 

proceeding. To require that documents 

not relevant to the proceeding be made 

available, simply because they were 

obtained as part of a broad investigation, 

burdens the respondent as well as the 

Office of Enforcement with unnecessary 

costs and delay. 

Paragraph (b)(2) of this section 

provides that paragraph (b) does not 

authorize the Office of Enforcement to 

withhold material exculpatory evidence 

in the possession of the Office of 

Enforcement that would otherwise be 

subject to disclosure pursuant to 

paragraph (a). Pursuant to this section, 

the Office of Enforcement will provide 

respondents with material exculpatory 

evidence it has obtained from persons 

not employed by the Bureau even if 

such evidence is contained in 

documents that the Office of 

Enforcement is otherwise permitted to 

withhold pursuant to paragraph (b)(1). 

The Bureau declines to adopt the SEC 

Rules’ explicit reference to Brady v. 

Maryland, 373 U.S. 83 (1963) in this 

context. Proceedings under this part are 

civil in nature, not criminal, and the 

requirements of Brady are therefore 

inapplicable. The Office of Enforcement 

will turn over information from its 

investigatory file obtained from persons 

not employed by the Bureau as part of 

the investigation resulting in the 

Bureau’s decision to institute 

proceedings, including any material 

exculpatory evidence so obtained. The 

Bureau understands this approach to be 

consistent with that provided for in the 

SEC Rules. 

The Bureau also adds the clause ‘‘that 

would otherwise be required to be 


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3As discussed below, information provided by a 

confidential source, and in some cases even that 

source’s identity, will be made available to the 

extent the Bureau plans to call that source as a 

witness, rely upon information he or she provided, 

or to the extent the information is exculpatory. 

produced pursuant to paragraph (a) of 

this section’’ to paragraph (b) to make 

clear that the material exculpatory 

evidence provision works in concert 

with paragraph (a). Paragraph (b) does 

not impose a separate, free-standing 

obligation to disclose exculpatory 

evidence that is not otherwise within 

the scope of paragraph (a). 

Paragraph (c) provides that the 

hearing officer may require the Office of 

Enforcement to submit a withheld 

document list, and may order that a 

withheld document be made available 

for inspection and copying. Paragraph 

(c) has been amended to incorporate a 

provision from the Rules of Practice of 

the Commodity Futures Trading 

Commission, 17 CFR 10.42. This 

provision limits the disclosures that the 

Bureau will make with respect to 

documents withheld pursuant to 

paragraph (b)(1)(iii). The Bureau will 

inform the other parties of the fact that 

such documents are being withheld, but 

will not make further disclosures 

regarding those documents. Like 

paragraph (b)(1)(iii), this provision was 

added to enable the Bureau to comply 

with agreements limiting the disclosure 

of documents received from other 

governmental entities. 

Pursuant to paragraph (d), the Office 

of Enforcement is required to make the 

material governed by this section 

available for inspection and copying no 

later than seven days after service of the 

notice of charges unless otherwise 

ordered by the hearing officer. The 

Bureau has considered requiring 

production of the covered material at 

the time the notice of charges is served, 

but has decided against such an 

approach. A provision for a delay of no 

more than seven days will allow parties 

to move for any appropriate protective 

orders and is consistent with the SEC’s 

approach in this regard. See 17 CFR 

201.230(d). The Bureau notes that, if 

seven days after the service of a notice 

of charges a motion for a protective 

order is pending but has not yet been 

ruled upon, production of the 

documents that are the subject of the 

motion could be delayed. The hearing 

officer could order temporary remedies 

where appropriate, such as the 

production of redacted copies pending a 

decision on the motion for a protective 

order. It is the Bureau’s expectation that 

the Office of Enforcement will make the 

material available as soon as possible in 

every case. 

Paragraphs (e) and (f) set forth the 

procedure to obtain copies of 

documents and the costs of such copies. 

As noted above, the Bureau anticipates 

providing electronic copies of the 

documents to respondents in most 

cases, and paragraph (f) accounts for 

such a provision of electronic 

documents. In order to preserve the 

discretion of the Office of Enforcement, 

however, this paragraph includes 

provisions governing the inspection and 

copying of documents. In order to 

provide for the safekeeping of 

documents subject to inspection, and to 

control costs associated with the 

implementation of this section, 

paragraph (e) provides that documents 

shall be made available for inspection 

and copying at the Bureau office where 

they are ordinarily maintained, or at 

such other place as the parties may 

agree. In cases in which electronic 

production is unwarranted, this process 

appears more likely to result in prompt 

access to documents obtained by the 

Office of Enforcement that are the basis 

of the allegations contained in the 

notice of charges. 

Paragraph (g) of this section imposes 

upon the Office of Enforcement a duty 

to supplement its disclosures under 

paragraph (a)(1) of this section if it 

acquires information after making its 

disclosures that it intends to rely upon 

at a hearing. Although the SEC Rules do 

not include an analogous provision, the 

Bureau believes that imposing a duty to 

supplement will reduce the need for 

unnecessary discovery requests. 

Like the SEC Rules, 17 CFR 

201.230(h), paragraph (h) provides for a 

‘‘harmless error’’ standard in the event 

the Office of Enforcement fails to make 

available to a respondent a document 

required to be made available by this 

section. 

Finally, paragraph (i) is modeled on 

the FTC Rules, 16 CFR 3.31(g), and 

provides a ‘‘claw back’’ mechanism 

whereby inadvertent disclosure of 

privileged or protected information or 

communications shall not constitute a 

waiver of the privilege or protection, 

provided that the party took reasonable 

steps to prevent disclosure and 

promptly took reasonable steps to 

rectify the error. Furthermore, paragraph 

(i) provides that disclosure of privileged 

or protected information or 

communications shall waive the 

privilege only if the waiver was 

intentional and that the scope of such 

waiver is limited to the undisclosed 

information or communications 

concerning the same subject matter, 

which in fairness ought to be considered 

together with the disclosed information 

or communications. Paragraph (i) 

expressly applies to disclosures made 

by any party during an adjudication 

proceeding. 

The Bureau received several 

comments to this section, and will 

address them in turn. 

Comment: One commenter asserted 

that the ‘‘affirmative disclosure’’ 

approach puts respondents at a 

significant disadvantage to the Bureau, 

because the Bureau, unlike the 

respondent, will have already gathered 

all of the information it needs to prepare 

for the hearing through examinations 

and investigation proceedings as well as 

through its ability to collect consumer 

complaints and collect information from 

covered persons. 

Response: While the Bureau will have 

already conducted an investigation prior 

to filing its notice of charges, the 

‘‘affirmative disclosure’’ approach will 

give a respondent automatic access to 

the vast majority of the documents 

gathered as part of that investigation. 

Production to respondents will include 

any consumer complaints or documents 

from covered persons that enforcement 

counsel obtained in connection with the 

investigation, provided that production 

of those documents would not reveal 

the identity of a confidential source or 

otherwise fall within the scope of one of 

the relevant exceptions. 

This approach will provide 

respondents automatic access to the 

factual information gathered by the 

Office of Enforcement in the course of 

the investigation leading to the 

institution of proceedings. As a result, 

the process will help ensure that 

respondents have a complete 

understanding of the basis for the 

Bureau’s action, and can assess their 

defenses accordingly. If necessary, 

respondents may seek to obtain 

additional information through 

subpoena. 

Furthermore, the exceptions to the 

Bureau’s affirmative disclosure 

obligation do not disadvantage 

respondents as compared to traditional 

civil discovery because the exceptions 

protect documents that often would be 

protected in traditional civil discovery. 

When producing documents in 

traditional discovery, litigants routinely 

seek protection for documents that (i) 

are privileged; (ii) constitute work 

product; (iii) are irrelevant or required 

to be kept confidential; (iv) would 

reveal the identity of a confidential 

source; 3 (v) are prohibited from 

production by applicable law; or (vi) are 

deemed by the hearing officer or judge 

to be not relevant to the subject matter 

or otherwise not subject to production 

for good cause shown. 


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In short, the Bureau believes the 

affirmative disclosure process will 

promote a fair and efficient resolution of 

administrative proceedings without 

placing the respondent at an unfair 

disadvantage. 

Comment: Respondents should be 

permitted to (a) depose third parties 

who have direct knowledge of relevant 

matters; (b) issue and enforce subpoenas 

for documents and testimony, and (c) 

serve third parties with interrogatories. 

Response: The Bureau declines to 

make these changes. The Bureau 

considered allowing third-party 

depositions or interrogatories but 

declined to do so because the need for 

these third-party discovery tools will 

likely be met through the discovery 

mechanisms that are available under the 

Final Rule, and because of the potential 

for third-party depositions and 

interrogatories to delay the proceedings. 

Even without third-party discovery 

depositions, respondents will be able to 

present testimony of third-parties with 

knowledge of relevant matters at the 

hearing to support their defense. 

Pursuant to § 1081.208, respondents 

may request the issuance of a subpoena 

for the attendance and testimony of a 

witness at the hearing. If a witness is 

unavailable for the hearing, a 

respondent may take that witness’s 

deposition and introduce that testimony 

on the record at a hearing. 

The Bureau believes that the marginal 

benefit of permitting third-party 

interrogatories is not justified in light of 

the likelihood that disputes over 

interrogatories may delay the 

proceedings. The Bureau notes that 

neither the SEC’s Rules nor the Uniform 

Rules permit prehearing discovery 

depositions or interrogatories. 

As drafted, § 1081.208 requires a party 

to request the issuance of a subpoena 

from the hearing officer, and generally 

requires the Bureau to seek judicial 

enforcement of subpoenas. The Bureau 

considered whether to permit parties to 

issue subpoenas. The Bureau declined 

to do so because a hearing officer can 

help ensure that subpoenas are not 

‘‘unreasonable, oppressive, excessive in 

scope, or unduly burdensome.’’ The 

commenter requested that respondents 

be permitted to enforce subpoenas, but 

the Dodd-Frank Act requires the Bureau 

to do so. 12 U.S.C. 5562(b)(2). The 

Bureau’s General Counsel will enforce 

subpoenas on relation of a respondent, 

provided such enforcement is consistent 

with the law and the policies of the 

Dodd-Frank Act. 

The third-party discovery permitted 

by the Interim Final Rule is consistent 

with the practice of the SEC, which 

shares a common approach to discovery 

with the Bureau. See 17 CFR 201.230– 

234. It is also consistent with the 

Uniform Rules, which, like the Interim 

Final Rule, allow third-party 

depositions only when a witness is 

unavailable for hearing, see 12 CFR 

19.27, and require parties to apply to the 

administrative law judge for a thirdparty document subpoena, which may 

be granted only if the administrative law 

judge determines the subpoena is not 

‘‘unreasonable, oppressive, excessive in 

scope, or unduly burdensome.’’ See 12 

CFR 19.26. Like the SEC, the Bureau 

will make documents available to 

respondents through the affirmative 

disclosure process. As a result, 

traditional discovery is limited, and it is 

appropriate to require parties to request 

issuance of a subpoena in order to 

ensure that the Bureau’s subpoena 

power is exercised appropriately and 

not for purposes of delay or obstruction. 

This practice is also appropriate 

considering that respondents must 

demonstrate that a witness is 

unavailable for the hearing in order to 

obtain a deposition subpoena. This 

standard is more easily enforced if a 

party has to request, and a hearing 

officer has to issue, those subpoenas. 

The SEC and the Uniform Rules both 

restrict depositions to circumstances 

when a witness will not be available for 

the hearing, and both require parties to 

request or apply for a deposition 

subpoena. 

Comment: It is unclear whether the 

affirmative disclosure process limits the 

right of respondents to seek other 

documents from the Bureau through 

subpoena. Respondents may be 

prevented from seeking certain 

documents through subpoena on the 

grounds that it could physically inspect 

and copy those same documents 

through the affirmative disclosure 

process. 

Response: Section 1081.208 permits a 

respondent to seek other documents 

from the Bureau through subpoena. 

Such a subpoena would presumably not 

be necessary if the documents sought by 

the respondent were included in the 

affirmative disclosure production, but 

the existence of that process does not 

negate a respondent’s right to request a 

subpoena for other relevant documents 

in the possession of the Bureau, as the 

Interim Final Rule makes clear in 

paragraph (a)(3) of § 1081.206. 

Comment: The affirmative disclosure 

process covers documents that are 

‘‘obtained by the Office of 

Enforcement.’’ Whether documents are 

relevant and should be discoverable is 

unrelated to who at the Bureau 

‘‘obtained’’ the documents. This could 

lead to protracted litigation over who 

‘‘obtained’’ a document that a Bureau 

employee sees and reads but does not 

touch. 

Response: The affirmative disclosure 

process outlined in § 1081.206 is based 

upon the SEC’s affirmative disclosure 

approach to fact discovery in 

administrative adjudications. The 

‘‘obtained by’’ the Office of Enforcement 

language is taken directly from the SEC 

Rules. Section 1081.206 is intended to 

give respondents access to the material 

facts underlying enforcement counsel’s 

decision to recommend the 

commencement of enforcement 

proceedings. It is not intended to create 

an obligation for enforcement counsel to 

search the files of other divisions or 

offices in the Bureau. As explained 

above, the Bureau will include in its 

affirmative disclosure documents 

obtained by other elements of the 

Bureau from persons not employed by 

the Bureau and later provided to the 

Office of Enforcement for its use ‘‘in 

connection with the investigation 

leading to the institution of 

proceedings.’’ § 1081.206(a)(1). 

Comment: Disclosure should not be 

limited to documents obtained ‘‘in 

connection with the investigation.’’ The 

Bureau might have come across 

relevant, discoverable information 

without an investigation. For example, a 

State may conduct an investigation and 

turn its findings over to the Bureau and 

the Bureau could bring charges based on 

the State’s findings. Or the Bureau may 

issue a notice of charges based upon 

examination findings without an 

investigation. 

Response: The Office of Enforcement 

will not interpret the phrase ‘‘in 

connection with the investigation’’ in 

the manner contemplated by this 

commenter. Through the affirmative 

disclosure process, the Office of 

Enforcement will turn over the 

documents that informed its decision to 

recommend the institution of 

proceedings, except to the extent those 

documents meet an exception outlined 

in § 1081.206. In the first example 

offered by this commenter, the Office of 

Enforcement would consider documents 

turned over by a State that formed the 

basis for the Office’s recommendation to 

bring charges against a respondent to 

have been obtained ‘‘in connection with 

the investigation.’’ The Bureau would 

disclose those documents to the 

respondent unless they were provided 

to the Bureau on the condition that they 

not be disclosed, see 

§ 1081.206(b)(1)(iii), or unless the State 

obtained a protective order to prevent 

their disclosure, see § 1081.119(a). If 

documents were withheld from the 

respondent for either of these reasons, 


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the Bureau would not rely upon those 

documents in the proceeding. 

Likewise, the Bureau would consider 

information obtained by the Office of 

Enforcement through the Bureau’s 

supervisory channels to be obtained ‘‘in 

connection with the investigation’’ if 

such information formed the factual 

basis of an enforcement action. 

Comment: The section excludes from 

discovery, in all cases, final 

examination ‘‘or inspection’’ reports to 

respondents who are not the subject of 

the report. Such an absolute limit on 

discovery, regardless of the significance 

of the information, is not appropriate. 

Further, the term ‘‘inspection’’ could 

mean almost anything, such as notes a 

Bureau employee takes when asking 

anyone a question about a covered 

person. 

Response: Paragraph (a)(4) is intended 

to make clear that respondents have no 

automatic right to examination or 

inspection reports related to other 

entities. Nothing in the Interim Final 

Rule prevents a respondent from 

seeking a final examination or 

inspection report regarding another 

entity through subpoena, although given 

the confidential nature of such reports 

the Bureau would anticipate that such 

subpoena requests would generally be 

denied. Finally, the Bureau does not 

intend for the term ‘‘inspection report’’ 

to cover interview notes, for purposes of 

this section. 

Comment: The Interim Final Rule 

requires the Bureau to turn over 

documents ‘‘obtained’’ by the Bureau’s 

Office of Enforcement before the notice 

of charges issued. When the Bureau 

obtained documents is not relevant to 

whether they should be discoverable. 

Response: The Bureau agrees that 

relevant documents upon which the 

Bureau intends to rely should be made 

available to the respondent even if they 

are obtained after the issuance of a 

notice of charges. Paragraph (g) obligates 

the Bureau to supplement its 

disclosures with any additional 

information that it intends to rely upon 

at the hearing. 

Comment: The Interim Final Rule 

creates an incentive for Bureau 

employees to withhold material 

exculpatory evidence from the Office of 

Enforcement because delivering it could 

make it discoverable. 

Response: The Bureau has no 

independent legal obligation to produce 

material exculpatory evidence sua 

sponte. Section 1081.206 of the Interim 

Final Rule provides for such 

production, but does so in a manner that 

is workable and practical. It is intended 

to ensure that respondents are in 

possession of material exculpatory 

information obtained from persons not 

employed by the Bureau that 

enforcement counsel has considered in 

its determination to recommend 

enforcement action. Extending the scope 

of the Interim Final Rule to cover 

exculpatory evidence that is not in the 

Office of Enforcement’s possession 

would impose an unworkable and 

legally unfounded obligation on 

enforcement counsel and the rest of the 

Bureau. Furthermore, § 1081.208 

enables respondents to subpoena 

additional documents that they believe 

are relevant to their defense. 

Comment: This section is based upon 

the SEC Rules, but the SEC does not 

examine all of the institutions it 

regulates so does not necessarily have 

relevant, nonpublic materials outside of 

the Office of Enforcement. The Bureau 

should not be able to declare all of these 

materials to be per se beyond the scope 

of discovery without allowing 

respondent to seek a determination as to 

whether any of the materials are 

relevant. 

Response: The Bureau does not 

believe that its supervisory powers 

require further amendment of this 

section. Aside from privileged internal 

notes and working papers generated by 

Bureau employees, the documents 

obtained by the Bureau through the 

exercise of its supervisory authority will 

come almost exclusively from the 

institution itself. The institution will 

have provided the documents to the 

Bureau, and cannot claim to be deprived 

of access to such documents in 

discovery. The purpose of affirmative 

disclosure is to give the respondent 

access to all of the material evidence 

underlying enforcement counsel’s 

decision to commence enforcement 

proceedings. Rather than provide the 

respondent with access to all of the 

documents that in any way relate to it 

or its business—including many 

completely unrelated to the 

proceeding—enforcement counsel will 

turn over those documents that 

enforcement counsel obtained or 

considered in its decision to proceed in 

the particular action. 

In addition, respondents will have the 

ability to conduct some limited 

discovery, including document 

subpoenas, depositions of third-parties 

who are unavailable for the hearing, 

and, in some circumstances, limited 

expert discovery. 

Comment: This section permits the 

Bureau to withhold documents that 

‘‘would disclose the identity of a 

confidential source,’’ which is 

inappropriate and not based upon the 

Uniform Rules or the SEC Rules. The 

respondent should be permitted to 

impeach the credibility of all witnesses. 

This section should be deleted, and in 

its place the Bureau should be required 

to produce ‘‘a list identifying all persons 

or entities that have made allegations or 

accusations relevant to any matters 

being heard.’’ If the person or entity is 

not sufficiently identified to be called as 

a witness, all evidence relating to or 

derived from the allegations or 

accusations is inadmissible. 

Response: The commenter is incorrect 

in asserting that this exception to the 

affirmative disclosure obligation is not 

based upon the SEC Rules—the 

language is identical to the SEC Rules. 

See 17 CFR 201.230(b)(1)(iii). A 

respondent’s ability to impeach the 

credibility of a witness will not be 

impacted by this exception to the 

affirmative disclosure obligation. The 

Bureau will identify any individual on 

whose testimony the Bureau intends to 

rely at the hearing, whether or not that 

individual came to the Bureau as a 

confidential source. The Bureau must 

prove all of its assertions at the hearing, 

and the respondent will have the ability 

to challenge all evidence offered. 

Comment: The Office of Enforcement 

should be required to produce relevant 

materials without the hearing officer 

ordering production, and the Interim 

Final Rule should be revised to require 

the Office of Enforcement to produce a 

detailed log of the bases for withholding 

any privileged materials. 

Response: The Office of Enforcement 

is required by § 1081.206 to disclose the 

documents described in the section 

without a separate order from the 

hearing officer. The Bureau does not 

believe that the affirmative disclosure 

obligation, which is based upon and 

substantively the same as that found in 

the SEC Rules, should be broadened 

further. The material subject to 

affirmative disclosure will provide 

respondents with access to all, or nearly 

all, of the information obtained by 

enforcement counsel in the 

investigation leading to the institution 

of proceedings. With respect to privilege 

logs, the Bureau adopts language from 

the SEC Rules, 17 CFR 201. 230(c). The 

hearing officer may require that the 

Office of Enforcement submit a list of 

documents or categories of documents 

withheld pursuant to paragraphs 

(b)(1)(i) and (ii) and (iv) through (vi), 

and the hearing officer may so order 

when appropriate. (As discussed above, 

with respect to documents withheld 

pursuant to paragraph (b)(1)(iii), the 

Bureau must inform respondent that 

such documents are being withheld, but 

no further disclosure is required.) To 

require the Bureau to produce a 

withheld document list in all cases, 


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even when not deemed appropriate by 

the hearing officer, would be 

unnecessary and unduly burdensome. 

Comment: The Bureau should 

complete, rather than commence, 

production of the affirmative disclosure 

documents within seven days. 

Response: The Bureau fully intends to 

supply all affirmative disclosure 

documents to respondents within seven 

days except in extraordinary 

circumstances (such as when a motion 

for protective order is pending on the 

seventh day). The Bureau adopted the 

language of this section from the SEC 

Rules, and has decided to retain the 

language in order to allow flexibility in 

those rare circumstances where a full 

production within seven days is not 

feasible, such as when a motion for a 

protective order is pending with respect 

to some of the documents. The Bureau 

expects these situations to arise very 

infrequently if at all, and expects to 

complete production within seven days 

in most cases. 

Comment: The Bureau should be 

required to produce all documents 

electronically. Photocopying should not 

be required. 

Response: The Bureau adopted the 

language regarding photocopying from 

the SEC Rules, but as indicated in the 

preamble to § 1081.206, the Bureau 

anticipates providing electronic copies 

of documents to respondents in most 

cases. The Bureau is retaining the 

language regarding photocopying in 

order to retain its discretion, 

particularly in cases where the 

safekeeping of documents subject to 

inspection and the cost of production 

may be of particular concern. The 

Bureau expects these cases to be rare. 

The Bureau adopts § 1081.206 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.207 Production of 

Witness Statements 

Modeled after the SEC Rules, 17 CFR 

201.231, this section of the Interim Final 

Rule provides that a respondent may 

request for inspection and copying any 

statement of a witness to be called by 

the Office of Enforcement that (1) 

pertains to or is expected to pertain to 

his or her direct testimony; and (2) 

would be required to be produced 

pursuant to the Jencks Act, 18 U.S.C. 

3500, if the adjudication proceeding 

were a criminal proceeding. This 

section is intended to promote the 

principles of transparency and 

efficiency discussed with respect to 

§ 1081.206. Note, however, that the 

respondent is required to move for the 

production of these statements. The 

Bureau notes that the requirements set 

forth in paragraph (a) of this section do 

not overcome the limitations on 

discovery related to expert 

communications set forth in 

§ 1081.210(e). 

The Jencks Act does not require 

production of a witness’s prior 

statement until the witness takes the 

stand. The Bureau expects that in most 

cases, the Office of Enforcement will 

provide prehearing production 

voluntarily. Submission of a witness’s 

prior statement, however, may provide 

a motive for intimidation of that witness 

or improper contact by a respondent 

with the witness. This section provides, 

therefore, that the time for delivery of 

witness statements is to be determined 

by the hearing officer, so that a casespecific determination of such risks can 

be made if necessary. Upon a showing 

that there is substantial risk of improper 

use of a witness’s prior statement, the 

hearing officer may take appropriate 

steps. For example, a hearing officer 

may delay production of a prior 

statement, or prohibit parties from 

communicating with particular 

witnesses. 

Like § 1081.206 and the SEC Rules, 

this section provides for a ‘‘harmless 

error’’ standard in the event the Office 

of Enforcement fails to make available a 

statement required to be made available 

by this section. 

The Bureau received no comment on 

§ 1081.207 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.208 Subpoenas 

This section of the Interim Final Rule 

is modeled after the SEC Rules, 17 CFR 

201.232, and provides that, in 

connection with a hearing, a party may 

request the issuance of a subpoena for 

the attendance and testimony of a 

witness or the production of documents. 

The availability of subpoenas for 

witnesses and documents ensures that 

respondents have available to them the 

necessary tools to adduce evidence in 

support of their defenses. A subpoena 

may only be issued by the hearing 

officer (as opposed to counsel) and the 

section sets forth procedures to prevent 

the issuance of subpoenas that may be 

unreasonable, oppressive, excessive in 

scope, or unduly burdensome. The 

section also sets forth procedures and 

standards applicable to a motion to 

quash or modify a subpoena. 

Paragraph (i) (which was paragraph 

(h) in the Interim Final Rule) of this 

section also provides that, if a 

subpoenaed person fails to comply, the 

Bureau, on its own motion or on the 

motion of the party at whose request the 

subpoena was issued, may seek a 

judicial order requiring compliance. In 

accordance with section 1052(b)(2) of 

the Dodd-Frank Act, which authorizes 

the Bureau or a Bureau investigator to 

seek enforcement of a subpoena, 

paragraph (i) only authorizes the 

Bureau—and not the party at whose 

request the subpoena was issued—to 

seek judicial enforcement of the 

subpoena. Compare 12 U.S.C. 1818(n) 

(authorizing any party to proceedings 

brought pursuant to 1818 to bring an 

action to enforce a subpoena issued in 

connection with the proceeding); 12 

CFR 19.26(c) (authorizing the 

‘‘subpoenaing party or any other 

aggrieved party’’ to seek judicial 

enforcement). In a provision added by 

the Bureau, this section also sets forth 

that failure to request that the Bureau 

seek enforcement of a subpoena 

constitutes waiver of any claim of 

prejudice predicated upon the 

unavailability of the testimony or 

evidence sought. This provision was 

added to prevent a respondent from 

declining to request that the Bureau 

seek to enforce the subpoena of a 

witness who fails to comply, and later 

claiming that his or her defense was 

prejudiced based upon the 

unavailability of that witness. The 

Bureau amended § 1081.208(h) of the 

Interim Final Rule (which is paragraph 

(i) in the Final Rule) to clarify that the 

General Counsel will initiate actions to 

enforce subpoenas on behalf of 

respondents, with the expectation that 

respondents will intervene to litigate on 

their own behalf. This will prevent 

conflicts that could arise were 

enforcement counsel required to enforce 

a subpoena sought by respondents in a 

proceeding. 

One commenter asserted that 

respondents should be permitted to 

issue and enforce subpoenas. The 

Bureau’s substantive response to this 

comment is discussed above in the 

context of a similar comment addressing 

§ 1081.206. 

Another commenter stated that the 

hearing officer should not be permitted 

to delegate the manual signing of 

deposition subpoenas, as there needs to 

be a basic check on the issuance of 

subpoenas, such as review by the 

hearing officer. This section provides 

that a hearing officer must issue a 

subpoena only upon the request of a 

party, which includes either 

respondents or the Bureau, and only if 

the hearing officer determines that the 

subpoena is not ‘‘unreasonable, 

oppressive, excessive in scope, or 

unduly burdensome.’’ 

Paragraph (c) of the Interim Final Rule 

permitted the hearing officer to delegate 

the manual signing of the subpoena to 


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‘‘any other person authorized to issue 

subpoenas,’’ which includes 

enforcement counsel. The Bureau has 

revised paragraph (c) to provide that the 

hearing officer may delegate the manual 

signing of the subpoena ‘‘to any other 

person.’’ This will give the hearing 

officer, in the interests of efficiency, the 

option of allowing counsel for either 

party to manually sign subpoenas after 

they have been issued by the hearing 

officer. But this delegation, should it 

occur, does not permit the issuance of 

subpoenas without the hearing officer’s 

independent review and consent. 

The Bureau on its own initiative 

added new paragraph (g) to § 1081.208. 

This paragraph requires a person 

responding to a subpoena for 

documentary material to file a sworn 

certificate of compliance with the 

subpoena response. This is intended to 

confirm that all of the documentary 

material required by the subpoena and 

in the possession, custody, or control of 

the person to whom the subpoena is 

directed has been produced and made 

available to the custodian. 

The Bureau adopts § 1081.208 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.209 Deposition of 

Witness Unavailable for Hearing 

This section of the Interim Final Rule, 

generally modeled after the Uniform 

Rules, 12 CFR 19.27, and the SEC Rules, 

17 CFR 201.233, provides that parties 

may seek to depose material witnesses 

unavailable for the hearing upon 

application to the hearing officer for a 

deposition subpoena. The application 

must state that the witness is expected 

to be unavailable due to age, illness, 

infirmity or other reason and that the 

petitioning party was not the cause of 

the witness’s unavailability. The Bureau 

has adopted the Uniform Rules’ 

formulation of this standard, which 

provides for such depositions when the 

witness is ‘‘otherwise unavailable,’’ to 

account for the possible unavailability 

of witnesses for reasons other than those 

specified in the SEC Rules. 

Paragraph (a)(2) requires a party 

seeking to record a deposition by audiovisual means to so note in the request 

for a deposition subpoena. This 

provision is modeled on Federal Rule of 

Civil Procedure 30(b)(3). Paragraph 

(a)(4) also provides that a deposition 

cannot be taken on less than 14 days’ 

notice to the witness and all parties, 

absent an order to the contrary from the 

hearing officer. 

Paragraph (g) incorporates several 

provisions from the SEC Rules. It 

provides that the witness being deposed 

may have an attorney present during the 

deposition; that objections to questions 

of evidence shall be noted by the 

deposition officer, but that only the 

hearing officer shall have the power to 

decide on the competency, materiality, 

or relevance of evidence; and that 

transcripts shall be available to the 

deponent and each party for purchase. 

Paragraph (g) of the Final Rule was 

amended slightly to provide that the 

deposition shall be filed with the Office 

of Administrative Adjudication (as 

opposed to the Executive Secretary as 

set forth in the Interim Final Rule). 

Paragraph (h) of this section also 

incorporates certain procedures from 

§ 1081.208 of the Interim Final Rule 

pertaining to subpoenas. Those 

procedures are intended to protect 

against deposition requests that may be 

unreasonable, oppressive, excessive in 

scope, or unduly burdensome, and to 

provide a mechanism for signing and 

service of a deposition subpoena, the 

filing of a motion to quash, and for 

enforcing subpoenas. This paragraph 

was amended slightly to conform to the 

amendments to § 1081.208. 

One commenter suggested that 

respondents should be permitted to 

conduct pre-hearing depositions of third 

parties with relevant information, even 

if such witnesses will be available for 

the hearing. In promulgating the Interim 

Final Rule, the Bureau considered 

whether respondents should be allowed 

to issue subpoenas for the purpose of 

compelling prehearing discovery 

depositions as is allowed in actions 

under the Federal Rules of Civil 

Procedure. The Bureau believes 

expanding the scope of prehearing 

discovery to permit discovery 

depositions is not warranted for several 

reasons. 

First, the Bureau believes that even if 

limitations were placed on the 

availability of discovery depositions, 

there remains a significant potential for 

extensive collateral litigation over their 

use. Second, use of discovery 

depositions is in tension with the 

statutory timetable for hearings in ceaseand-desist proceedings under section 

1053(b) of the Dodd-Frank Act. Indeed, 

in part for these reasons, the Final Rule, 

like the Interim Final Rule, allows the 

hearing officer to decide whether and to 

what extent to permit expert discovery 

in adjudication proceedings. Allowing 

prehearing depositions would present 

extreme scheduling difficulties in those 

cases in which respondents did not 

request hearing dates outside the 30-to60 day timeframe set forth in the DoddFrank Act. 

Finally, the Final Rule includes three 

provisions that address in significant 

part a respondent’s interest in obtaining 

discovery prior to the start of the 

hearing. Section 1081.206 mandates that 

the Office of Enforcement generally 

make available not only transcripts of 

testimony, but documents obtained from 

persons not employed by the Bureau 

during the investigation leading to the 

initiation of the proceeding, as well as 

certain documents of the Bureau. 

Section 1081.208 authorizes the 

issuance of subpoenas duces tecum for 

the production of documents returnable 

at any designated time or place. In 

addition, § 1081.210 provides for expert 

discovery in appropriate cases. Given 

these discovery mechanisms, the ability 

to subpoena witnesses to testify at the 

hearing, the ability to take the 

deposition of material witnesses 

unavailable for hearing, and the ability 

of respondents to conduct informal 

discovery, the Bureau continues to 

believe that the marginal benefits of 

prehearing depositions are not justified 

by their likely cost in time, expense, 

collateral disputes and scheduling 

complexities. 

The Bureau adopts § 1081.209 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.210 Expert Discovery 

This section of the Interim Final Rule 

is modeled after the FTC Rules, 16 CFR 

3.31A. Neither the Uniform Rules nor 

the SEC Rules provide for expert 

discovery. The Bureau has provided for 

expert discovery in appropriate cases so 

that the parties may fully understand 

the other side’s position prior to the 

hearing, which will enable a clearer and 

more efficient airing of the issues at the 

hearing, and which may also clarify the 

issues for a possible prehearing 

settlement. It will also enable the parties 

to identify rebuttal expert witnesses, if 

needed, prior to the hearing. 

Paragraph (a) provides that the 

hearing officer shall establish a date for 

the exchange of expert reports in the 

scheduling order. This provision is 

intended to allow flexibility in 

scheduling expert discovery depending 

on the complexity of the case and the 

date of the hearing. 

Like the FTC Rules, 16 CFR 3.31A, 

paragraph (b) limits parties to five 

expert witnesses, including any rebuttal 

or surrebuttal experts, except in 

extraordinary circumstances. The 

Bureau believes this limitation will 

provide the parties with a sufficient 

opportunity to present expert testimony 

without unduly delaying the 

proceedings. Paragraph (b) also provides 

that no party may call an expert witness 

unless that witness has been identified 

and has provided a report in accordance 

with this section, unless the hearing 


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officer provides otherwise at a 

scheduling conference. The last clause 

is intended to reflect a hearing officer’s 

discretion, at a scheduling conference, 

to dispense with or otherwise limit 

expert discovery in a particular case (as 

expressly provided for in paragraph (e) 

of this section). 

Paragraph (c) sets forth the required 

contents of an expert report. This 

section is based upon the corresponding 

provisions of the FTC Rules. 

Paragraph (d) provides for expert 

depositions, which are not to exceed 

eight hours absent agreement of the 

parties or an order by the hearing 

officer. These limitations are intended 

to provide adequate time to prepare for 

expert testimony without unduly 

delaying the proceedings. Paragraph (d) 

also provides that expert depositions 

shall be conducted pursuant to the 

procedures set forth in § 1081.209. 

Finally, paragraph (d) provides that an 

expert’s deposition shall be conducted 

after submission of the expert’s report 

but no later than seven days prior to the 

deadline for submission of rebuttal 

expert reports. This provision is 

intended to allow parties to rely upon 

the deposition of an opposing party’s 

expert in the preparation of a rebuttal 

expert report. Because, pursuant to 

paragraph (a), rebuttal reports are due 

28 days after the exchange of expert 

reports, expert depositions will need to 

take place within that 28-day period. 

Finally, paragraph (e) (paragraph (f) of 

the Final Rule) authorizes the hearing 

officer to dispense with expert 

discovery in appropriate cases. For 

example, the Bureau envisions hearing 

officers relying on this provision in 

cease-and-desist proceedings brought 

pursuant to section 1053(b) of the DoddFrank Act, where the respondent has 

not requested a hearing date outside the 

statutory 30-to-60 day timeframe. In 

such cases, it may be appropriate to 

dispense with expert discovery for 

timing reasons, while allowing the 

parties to call expert witnesses. 

After the Bureau promulgated the 

Interim Final Rule, the FTC amended its 

rule governing expert discovery. See 76 

FR 52249 (Aug. 22, 2011). The FTC 

added a new paragraph to its expert 

discovery rule regarding materials that 

the parties cannot discover, including 

language nearly identical to language 

recently added to Federal Rule of Civil 

Procedure 26(b)(4)(B) and (C). The 

Bureau has similarly revised § 1081.210 

to adopt these recent enhancements to 

the FTC Rules and the Federal Rules of 

Civil Procedure. The Bureau is therefore 

adding a new paragraph (e) to 

§ 1081.210 and renumbering former 

paragraph (e) as paragraph (f). Under 

new paragraph (e), parties may not 

discover drafts of any report required by 

this section, regardless of the form in 

which the draft is recorded. In addition, 

the new language prohibits parties from 

discovering any communications, 

regardless of form, between another 

party’s attorney and any of its expert 

witnesses, unless the communication: 

(1) Relates to the testifying expert’s 

compensation for the study or 

testimony; (2) identifies facts or data 

provided by the party’s attorney and 

considered by the testifying expert in 

forming the opinions to be expressed; or 

(3) identifies assumptions provided by 

the party’s attorney and relied on by the 

testifying expert in forming the opinions 

to be expressed. The Bureau has also 

adopted the portion of the FTC Rules 

providing that a party may not discover 

facts known or opinions held by an 

expert who has been retained or 

specifically employed by another party 

in anticipation of litigation or 

preparation for the hearing and who is 

not listed as a witness for the hearing. 

The Bureau believes this section, which 

is consistent with Federal Rule of Civil 

Procedure 26(b)(4)(D), appropriately 

limits the ability of parties to discover 

opinions held by experts who will not 

offer opinions at the hearing. 

The Bureau did not receive comments 

on § 1081.210 of the Interim Final Rule, 

and with exception to the changes 

discussed above, adopts it without 

change in the Final Rule. 

Section 1081.211 Interlocutory Review 

This section of the Interim Final Rule 

sets forth the procedure and standards 

applicable to interlocutory review by 

the Director of a ruling or order of the 

hearing officer. 

Paragraph (a) of this section provides 

that the Director may take up a matter 

on his or her own motion at any time, 

even if a hearing officer does not certify 

it for interlocutory review, and that this 

section is the exclusive means for 

reviewing a hearing officer’s ruling prior 

to the issuance of a recommended 

decision by the hearing officer. 

Paragraph (b) provides that any party 

may file a motion for certification of a 

ruling or order for interlocutory review 

within five days of service of the order 

or ruling. Responses to such motions are 

due within three days, and the hearing 

officer is required to rule upon such a 

motion within five days thereafter. 

Paragraph (c) sets forth the 

permissible bases for certifying a ruling 

or order. Certification is appropriate if 

the hearing officer’s ruling would 

compel testimony or production of 

documents from Bureau officers or 

employees, or officers or employees 

from another governmental agency. This 

is consistent with the SEC Rules, 17 

CFR 201.400. Like the FTC Rules, 16 

CFR 3.23(a)(1), however, this provision 

includes officers and employees from 

other governmental agencies, and not 

just the Bureau, in order to afford the 

same treatment to other government 

agencies. Paragraph (c) also provides for 

certification of rulings or orders where 

there is a substantial ground for 

difference of opinion and an immediate 

review may materially advance the 

completion of the proceeding or 

subsequent review will be an 

inadequate remedy. The hearing officer 

may also certify a ruling or order where 

the ruling or order involves a motion for 

disqualification of the hearing officer or 

the suspension of an individual from 

appearing before the Bureau. 

Paragraph (d) provides that a party 

whose motion for certification is denied 

by the hearing officer may petition the 

Director directly for interlocutory 

review. This provision is intended to 

guard against a hearing officer’s 

unwillingness to certify a ruling that 

appears to meet the standards set forth 

in the section. The Bureau expects such 

direct petitions to the Director to be 

used sparingly. 

Paragraph (e) governs the Director’s 

review of matters certified pursuant to 

paragraph (c) or for which review is 

sought pursuant to paragraph (d). It sets 

forth the policy of the Bureau that 

interlocutory review is disfavored and 

provides that the Director will grant 

such review only in extraordinary 

circumstances. 

Paragraph (f) provides that 

proceedings will not be stayed by the 

filing of a motion for certification for 

interlocutory review or a grant of such 

review unless the hearing officer or the 

Director shall so order. This is intended 

to promote the expeditious resolution of 

proceedings and to deter frivolous 

motions for certification or review. 

The Bureau did not receive comment 

on § 1081.211 of the Interim Final Rule 

and adopts it without change in the 

Final Rule. 

Section 1081.212 Dispositive Motions 

This section of the Interim Final Rule 

establishes the procedures and 

standards for motions to dismiss and 

motions for summary disposition. 

Section 1081.212 expressly provides for 

the filing of motions to dismiss, but 

makes clear that filing such a motion 

does not affect a party’s obligation to file 

an answer or take any other action. This 

is intended to ensure that motions to 

dismiss do not delay the proceedings 

unnecessarily. The timelines for 

decisions on dispositive motions, 


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discussed below, should help ensure 

that a party ultimately determined to be 

entitled to dismissal is not required to 

engage in the adjudicative process for a 

lengthy period of time. 

Paragraph (b) provides that a 

respondent may file a motion to dismiss 

asserting that, even assuming the truth 

of the facts alleged in the notice of 

charges, it is entitled to dismissal as a 

matter of law. Neither the SEC Rules, 

the FTC Rules, nor the Uniform Rules 

specifically set forth procedures or a 

standard applicable to motions to 

dismiss, although the FTC Rules and 

Uniform Rules appear to contemplate 

such motions. See 16 CFR 3.22(a) 

(referencing motions to dismiss); 12 CFR 

19.5(b)(7) (same). The Bureau has 

determined that such motions are 

appropriate and should be provided for 

in the Rules, but should not serve to 

delay the proceedings. 

Paragraphs (c) and (d) govern the 

filing of motions for summary 

disposition. They adopt standards 

similar to those set forth in the Uniform 

Rules, the SEC Rules, and the FTC Rules 

for such motions. Any party to a 

proceeding may file a motion for 

summary disposition of a proceeding or 

for partial summary disposition of a 

proceeding if: (1) There is no genuine 

issue as to any material fact; and (2) the 

moving party is entitled to a favorable 

decision as a matter of law. The motion, 

which may be filed after a respondent’s 

answer has been filed and documents 

have been made available for inspection 

and copying pursuant to § 1081.206, 

must be accompanied by a statement of 

the uncontested material facts, a brief, 

and any documentary evidence in 

support of the motion. 

Any party opposing such a motion 

must file a statement setting forth those 

material facts as to which he or she 

contends a genuine dispute exists, 

supported by the same type of evidence 

permitted with a motion for summary 

disposition, and a brief in support of the 

contention that summary disposition 

would be inappropriate. These 

paragraphs are modeled after the 

Uniform Rules, 12 CFR 19.29. 

Pursuant to paragraphs (e), (f), and (g), 

motions to dismiss and for summary 

disposition are subject to a 35-page limit 

(modeled on the SEC Rules, 17 CFR 

201.250(c)), responses to such motions 

are due within 20 days and are subject 

to a 35-page limit (modeled on the 

Uniform Rules, 12 CFR 19.29(b)(1)), and 

reply briefs are due within five days of 

the response and shall not exceed ten 

pages. Oral argument is permitted at the 

request of any party or by motion of the 

hearing officer. 

Paragraph (h) provides that the 

hearing officer must decide a dispositive 

motion within 30 days of the expiration 

of the time for filing all oppositions and 

replies. The Uniform Rules do not set a 

deadline for a decision on dispositive 

motions. The FTC Rules provide for the 

Commission to decide substantive 

motions within 45 days, 16 CFR 3.22(a), 

and the SEC Rules state that motions for 

summary disposition are to be decided 

‘‘promptly’’ by the hearing officer, 17 

CFR 201.250(b). The Bureau has 

adopted the 30-day timeframe for 

decisions on dispositive motions in 

keeping with its emphasis on 

expeditious decision-making in 

administrative proceedings. The Bureau 

believes that 30 days affords sufficient 

time for the hearing officer to properly 

assess the merits of the motion and draft 

either a ruling denying the motion or a 

recommended decision granting it. 

If the hearing officer finds that a party 

is not entitled to dismissal or summary 

disposition, he or she shall make a 

ruling denying that motion. This ruling 

would not be subject to interlocutory 

appeal unless such an appeal was 

granted pursuant to the procedures and 

standards set forth in § 1081.211. If the 

hearing officer determines that 

dismissal or summary adjudication is 

appropriate, he or she will issue a 

recommended decision to that effect. If 

a party, for good cause shown, cannot 

yet present facts essential to justify 

opposition to the motion, the hearing 

officer is to deny or defer the motion. 

The Bureau received no comments on 

§ 1081.212 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.213 Partial Summary 

Disposition 

Section 1081.213 is modeled on the 

FTC Rules, 16 CFR 3.24(a)(5). It permits 

a hearing officer who denies summary 

adjudication of the whole case 

nevertheless to issue an order specifying 

the facts that appear without substantial 

controversy. Those facts will be deemed 

established in the proceeding. This 

section enables the hearing officer to 

narrow the dispute between the parties 

so that the hearing can proceed as 

efficiently as possible. 

The Bureau received no comment on 

§ 1081.213 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.214 Prehearing 

Conferences 

This section of the Interim Final Rule 

sets forth the procedures for a 

prehearing conference, which the 

hearing officer may convene on his own 

motion or at the request of a party. It 

sets forth matters that may be discussed 

at a prehearing conference. As with a 

scheduling conference pursuant to 

§ 1081.203, the conference is 

presumptively public unless the hearing 

officer determines otherwise under the 

standard set forth in § 1081.119. 

The Bureau received no comment on 

§ 1081.214 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.215 Prehearing 

Submissions 

This section of the Interim Final Rule 

was modeled primarily after the 

Uniform Rules, 12 CFR 19.32, which 

provide for mandatory prehearing 

submissions by the parties. Section 

1081.215 requires that the following 

documents be served upon the other 

parties no later than ten days prior to 

the start of the hearing: a prehearing 

statement; a final list of witnesses to be 

called to testify that includes a 

description of the expected testimony of 

each witness; any prior sworn 

statements that a party intends to admit 

into evidence pursuant to § 1081.303; a 

list of exhibits along with a copy of each 

exhibit; and any stipulations of fact or 

liability. The failure of a party to 

comply with this provision will 

preclude the party from presenting any 

witnesses or exhibits not listed in its 

prehearing submission at the hearing, 

except for good cause shown. To 

account for cases in which the hearing 

officer has dispensed with expert 

discovery, this section also requires that 

a statement of any expert’s 

qualifications and other information 

concerning the expert be turned over if 

it has not been provided pursuant to 

§ 1081.210. 

The FTC Rules do not provide for a 

prehearing submission, and the SEC 

Rules, 17 CFR 201.222, do not make 

such a submission mandatory. The 

Bureau has followed the Uniform Rules’ 

model as it believes that prehearing 

submissions will assist the parties in 

clarifying and narrowing the issues to be 

adjudicated at the hearing, which is 

especially important under the 

expedited hearing schedule provided for 

by section 1053(b) of the Dodd-Frank 

Act and this Final Rule. 

The Bureau received no comment on 

§ 1081.215 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.216 Amicus Participation 

This section of the Interim Final Rule, 

based upon the SEC Rules, 17 CFR 

201.210, allows for amicus briefs in 

proceedings under this part, but only 


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under certain circumstances. 

Specifically, under paragraph (a) of this 

section, an amicus brief may be allowed 

when a motion for leave to file the brief 

has been granted; the brief is 

accompanied by written consent of all 

parties; the brief is filed at the request 

of the Director or the hearing officer, as 

appropriate; or the brief is presented by 

the United States or an officer or agency 

thereof, or by a State, or a political 

subdivision thereof. 

One commenter expressed concern 

that the authorization for governmental 

agencies to file amicus briefs without 

receiving prior permission will result in 

the filing of numerous amicus briefs. 

The Bureau believes that amicus briefs 

from governmental entities are likely to 

make a valuable contribution to the 

adjudicative process, and are unlikely to 

become overwhelming or detrimental. 

The Bureau will consider revisiting this 

section if this belief proves incorrect, 

but the Final Rule adopts paragraph (a) 

of the Interim Final Rule without 

change. 

A motion to file an amicus brief is 

subject to the procedural requirements 

set forth in § 1081.205. An amicus will 

be granted oral argument only for 

extraordinary reasons. In order to 

provide additional guidance to parties 

seeking to file amicus briefs, 

§ 1081.216(d) provides that amicus 

briefs shall be filed pursuant to 

§ 1081.111 and shall comply with the 

requirements of § 1081.112. Amicus 

briefs shall also be subject to the length 

limitations set forth in § 1081.212(e). 

The Bureau received no comments 

regarding the rest of § 1081.216 of the 

Interim Final Rule, and adopts the 

remaining paragraphs without change in 

the Final Rule. 

Subpart C—Hearings 

Section 1081.300 Public Hearings 

This section of the Interim Final Rule 

provides that hearings before the Bureau 

will be presumptively public, a practice 

that is consistent with the provisions of 

the FTC Rules, 16 CFR 3.41(a), the SEC 

Rules, 17 CFR 201.301, and the Uniform 

Rules, 12 CFR 19.33(a). Specifically, the 

Interim Final Rule provides that 

hearings will be public unless a 

confidentiality order is entered by the 

hearing officer according to the standard 

set forth in § 1081.119, or unless the 

Director otherwise orders a non-public 

hearing on the ground that holding an 

open hearing would be contrary to the 

public interest. 

One commenter stated that the 

hearing officer needs greater flexibility 

in limiting the public nature of 

adjudication hearings. This commenter 

argued that allowing the hearing officer 

to limit the public nature of the 

proceeding in accordance with the 

standard set forth in § 1081.119 was 

problematic and advocated for the 

hearing officer to be permitted to 

establish time, place and manner 

limitations on the attendance of the 

public and the media for any public 

hearing. This commenter also 

recommended that the Director be 

permitted to close a hearing. 

The Bureau has considered this 

comment but determined to retain its 

articulated standard and presumption of 

public hearings. Incorporating the 

standard set forth in § 1081.119 into the 

standard for limiting the public nature 

of a hearing provides meaningful 

guidance to the hearing officer as to the 

types of hearings that should not be 

public, and promotes consistency in 

adjudication proceedings. With respect 

to the commenter’s recommendation 

that the Director have the authority to 

close a public hearing, this section as 

previously promulgated allows the 

Director to limit the public nature of an 

adjudication proceeding on the grounds 

that holding an open hearing would be 

contrary to the public interest. 

The Bureau adopts § 1081.300 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.301 Failure To Appear 

This section of the Interim Final Rule 

is modeled after the Uniform Rules, 12 

CFR 19.21. It provides that the failure of 

a respondent to appear in person or by 

duly authorized counsel at the hearing 

may constitute a waiver of the 

respondent’s right to a hearing and may 

be deemed an admission of the facts 

alleged and a consent to the relief 

sought in the notice of charges. This 

section directs the hearing officer to file 

a recommended decision addressing the 

relief sought in the notice of charges, 

without further notice to the 

respondent, when respondents fail to 

appear at the hearing. 

The Bureau received no comments on 

§ 1081.301 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.302 Conduct of Hearings 

This section of the Interim Final Rule 

provides general principles for the 

conduct of hearings and the order in 

which the parties are to present their 

cases. The first sentence emphasizing 

the goals of fairness, impartiality, 

expediency, and orderliness is drawn 

from the SEC Rules, 17 CFR 201.300. 

The remainder of the section, which 

governs the order in which the parties 

are to present their cases, is modeled 

after the Uniform Rules, 12 CFR 19.35. 

The Bureau received no comment on 

§ 1081.302 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.303 Evidence 

This section of the Interim Final Rule 

sets forth the provisions governing the 

offering and admissibility of evidence at 

hearings, and adopts evidentiary 

standards similar to those set forth in 

the FTC Rules, the SEC Rules, and the 

Uniform Rules. 

Paragraph (a) of this section provides 

that enforcement counsel shall bear the 

burden of proving the ultimate issue(s) 

of the Bureau’s claims at the hearing. 

Consistent with general administrative 

practice, paragraph (b) of § 1081.303 

provides that evidence that is relevant, 

material, reliable, and not unduly 

repetitive shall be admissible to the 

fullest extent authorized by the APA 

and other applicable law, and that 

evidence shall not be excluded solely on 

the basis of its being hearsay if it is 

otherwise admissible and bears 

satisfactory indicia of reliability. 

Paragraph (c) of this section provides 

that official notice may be taken of any 

material fact that is not subject to 

reasonable dispute in that it is either 

generally known or capable of accurate 

and ready determination by resort to 

sources whose accuracy cannot 

reasonably be questioned. 

Paragraph (d)(1) provides that 

duplicate copies of documents are 

admissible to the same extent as 

originals unless a genuine issue is raised 

about the veracity or legibility of a 

document. Paragraph (d)(2) of this 

section provides that, subject to 

paragraph (b), any document prepared 

by a prudential regulator or by a State 

regulatory agency is presumptively 

admissible either with or without a 

sponsoring witness. On its own 

initiative, the Bureau is revising 

paragraph (d)(2) of this section to add 

the Bureau to the list of regulators 

whose documents are presumptively 

admissible with or without a sponsoring 

witness. The Uniform Rules, 12 CFR 

19.36(c)(2), on which this paragraph is 

modeled, is promulgated by each of the 

prudential regulators, and therefore the 

intent of this paragraph is, in part, for 

each regulator to have its own 

documents be deemed presumptively 

admissible. Consistent with the 

intended purpose of this paragraph, the 

Bureau adds itself as a regulator under 

paragraph (d)(2). Finally, paragraph 

(d)(4) of this section provides that 

documents generated by respondents 

that come from their own files are 


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presumed authentic and kept in the 

regular course of business. Respondents 

bear the burden of proof to introduce 

evidence to rebut this presumption. 

Paragraph (e) of this section of the 

Interim Final Rule provides that 

objections to the admissibility of 

evidence must be timely made and that 

a failure to object to the admission of 

evidence shall constitute a waiver of the 

objection. 

Pursuant to paragraph (f) of this 

section of the Interim Final Rule, parties 

may, at any stage of the proceeding, 

stipulate as to any relevant matters of 

fact or the authentication of any relevant 

documents. Such stipulations may be 

received in evidence at the hearing and 

are binding on the parties. 

Paragraph (g) of this section of the 

Interim Final Rule provides that 

witnesses at a hearing are required to 

testify under oath or affirmation. Parties 

are entitled to present their cases or 

defenses by sworn oral testimony and 

documentary evidence, including 

through the testimony of a witness 

appearing via videoconference or 

teleconference. 

Paragraph (h) of this section, which 

relates to the admissibility of prior 

sworn statements of witnesses, is 

modeled after the SEC Rules, 17 CFR 

201.235. Under paragraph (h) prior 

sworn statements may be admitted if a 

witness is dead, outside of the United 

States, unable to attend because of age, 

sickness, infirmity, imprisonment or 

other disability, or if the party offering 

the sworn statement is unable to 

procure the attendance of the witness by 

subpoena. Even if these conditions are 

not met, a prior sworn statement may be 

introduced into the record at the 

discretion of the hearing officer. 

The Bureau adopts § 1081.303 of the 

Interim Final Rule with the changes 

discussed above. 

Section 1081.304 Record of the 

Hearing 

Modeled on the FTC Rules, 16 CFR 

3.44, this section of the Interim Final 

Rule provides that hearings will be 

stenographically reported and 

transcribed and that the original 

transcript shall be part of the record. It 

outlines the procedure by which a party 

may request correction of the transcript. 

Finally, it states that upon completion 

of the hearing, the hearing officer will 

issue an order closing the record after 

giving the parties three days to 

determine whether the record is 

complete or requires supplementation. 

The Bureau received no comment on 

§ 1081.304 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.305 Post-Hearing Filings 

This section of the Interim Final Rule 

is drawn largely from the Uniform 

Rules, 12 CFR 19.37, and provides that 

the parties may file proposed findings of 

fact, proposed conclusions of law, and 

a proposed order within 30 days 

following service of a notice on the 

parties that the transcript has been 

properly filed or within such longer 

period as the hearing officer may order. 

Proposed findings and conclusions must 

be supported by citation to any relevant 

authorities, and by page references to 

any relevant portions of the record. 

Responsive briefs may be filed to these 

proposed findings and conclusions 

within 15 days after the deadline for the 

proposed findings and conclusions, 

provided that the party responding has 

filed its own proposed findings and 

conclusions. The hearing officer shall 

not order the filing by any party of any 

post-hearing brief or responsive brief in 

advance of the other party’s filing of its 

post-hearing brief. 

The Bureau received no comment on 

§ 1081.305 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.306 Record in 

Proceedings Before Hearing Officer; 

Retention of Documents; Copies 

This section of the Interim Final Rule, 

drawn from the SEC Rules, 17 CFR 

201.350, lists the documents that 

comprise the record of a proceeding 

before the hearing officer. It provides 

that those documents excluded from 

evidence should be excluded from the 

record but retained until either a 

decision of the Bureau has become final, 

or the conclusion of any judicial review 

of the Director’s final order. This section 

also states that a copy of a document in 

the record may be substituted for an 

original. 

The Bureau has amended this section 

to reflect the transfer of certain 

functions to the Office of Administrative 

Adjudications. 

The Bureau adopts § 1081.306 of the 

Interim Final Rule with the changes 

discussed above. 

Subpart D—Decision and Appeal 

Section 1081.400 Recommended 

Decision of the Hearing Officer 

This section of the Interim Final Rule 

adopts the general framework of the SEC 

Rules, 17 CFR 201.360, governing 

decisions by the hearing officer. Section 

1081.400 provides that the hearing 

officer will file a recommended decision 

in each case within a specified time 

frame. Unlike the SEC Rules, which 

provide that the hearing officer will 

issue an ‘‘initial decision,’’ this section 

provides that the hearing officer’s 

decision will be a ‘‘recommended 

decision’’ to the Director. 

This section also deviates from the 

analogous SEC Rules in that it provides 

for only one timeline, rather than 

multiple ‘‘tracks’’ or timelines. 

Paragraph (a) of this section provides 

that the hearing officer will file a 

recommended decision in each case no 

later than 90 days after the deadline for 

filing post-hearing responsive briefs and 

in no event later than 300 days after 

service of the notice of charges. The 

300-day timeframe is taken from the 

SEC Rules, 17 CFR 201.360(a)(2), and 

the 90-day timeframe is modeled on the 

FTC Rules, 16 CFR 3.51(a). 

Paragraph (b) of this section provides 

that requests by the hearing officer for 

extensions of this time frame must be 

made to the Director and will be granted 

only if the Director determines that 

additional time is necessary or 

appropriate in the public interest. The 

Bureau anticipates such requests and 

extensions to be rare. As noted above, 

this provision was adopted to ensure the 

timely resolution of adjudication 

proceedings in light of the experience of 

other agencies. The Bureau believes that 

the 90-day and 300-day timelines set 

forth in this section provide sufficient 

time for the hearing officer to conduct 

appropriate proceedings and issue an 

informed recommended decision. 

Paragraph (c) of this section is 

modeled on the SEC Rules, 17 CFR 

201.360(b), and sets forth the contents of 

the recommended decision, providing 

that the recommended decision shall 

include a statement of findings of fact 

and conclusions of law, as well as the 

reasons or basis therefore, and an 

appropriate order, sanction, relief or 

denial thereof. The recommended 

decision shall also state that a notice of 

appeal may be filed within ten days 

after service of the recommended 

decision, and shall include a statement 

that the Director may issue a final 

decision and order adopting the 

recommended decision, unless a party 

timely files and perfects a notice of 

appeal. The recommended decision 

shall be filed with the Office of 

Administrative Adjudication (as 

opposed to the Executive Secretary as 

set forth in the Interim Final Rule), 

which will promptly serve the 

recommended decision on the parties. 

Drawing from the FTC Rules, 16 CFR 

3.51(d), paragraph (d) of this section 

provides that the recommended 

decision shall be made by the hearing 

officer who presided over the hearing, 

except when he or she has become 

unavailable to the Bureau. In such 


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instances, the Bureau expects the matter 

to be reassigned pursuant to 

§ 1081.105(d). Paragraph (e) of this 

section provides that the hearing officer 

may reopen proceedings for receipt of 

further evidence upon a showing of 

good cause until the close of the hearing 

record. With the exception of correcting 

clerical errors or addressing a remand 

from the Director, the hearing officer’s 

jurisdiction terminates upon the filing 

of the recommended decision. 

The Bureau received no comment on 

§ 1081.400 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.401 Transmission of 

Documents to Director; Record Index; 

Certification 

This section of the Interim Final Rule 

is modeled on the Uniform Rules, 12 

CFR 19.38(b), and the SEC Rules, 17 

CFR 201.351(c). It directs the hearing 

officer to furnish to the Director a 

certified index for the case at the same 

time that the hearing officer files the 

recommended decision. It also 

establishes the process by which the 

record is transmitted to the Director for 

review. 

The Bureau received no comment 

relating to this section of the Interim 

Final Rule and adopts it without change 

in the Final Rule. 

Section 1081.402 Notice of Appeal; 

Review by the Director 

This section of the Interim Final Rule 

sets forth the process for review of a 

recommended decision by the Director. 

Paragraph (a) of this section is drawn 

from the FTC Rules, 16 CFR 3.52(b), and 

states that any party may object to the 

recommended decision of the hearing 

officer by filing a notice of appeal to the 

Director within ten days of the 

recommended decision and perfecting 

that notice of appeal by filing an 

opening brief within 30 days of the 

recommended decision. Any party may 

respond to the opening brief by filing an 

answering brief within 30 days of 

service of the opening brief, and reply 

briefs may be filed within seven days 

after that. Appeals to the Director are 

available as of right in all cases where 

the hearing officer has issued a 

recommended decision. 

A commenter noted that the ten-day 

deadline by which a party must file a 

notice of appeal is shorter than the 30- 

day deadline required by the prudential 

regulators, and urged the Bureau to 

extend its deadline to 30 days. The 

Bureau has considered this suggestion 

but has decided to keep the ten-day 

deadline. The burden on a party to file 

a proper notice of appeal is minimal. A 

party need only specify the party or 

parties against whom the appeal is 

taken, and designate the recommended 

decision or part thereof appealed from. 

The ten-day timeline provides adequate 

time to make these initial 

determinations. The more 

comprehensive document in the appeals 

process, the opening brief, is not due 

until 30 days from the service of the 

recommended decision. Moreover, an 

extension of the deadline for a notice of 

appeal would require extension of other 

deadlines in the appeal process, such as 

the Director’s review in the absence of 

a notice of appeal. 

This section also provides that within 

40 days after the date of service of the 

recommended decision, the Director, on 

his or her own initiative, may order 

further briefing or argument with 

respect to any recommended decision or 

portion of any recommended decision 

or may issue a final decision and order 

adopting the recommended decision. 

The 40-day time period is intended to 

provide the Director with the benefit of 

knowing whether any party has filed 

and perfected an appeal before 

determining whether further briefing 

and argument regarding a recommended 

decision is necessary. Any such order 

shall set forth the scope of further 

review and the issues that will be 

considered and will provide for the 

filing of briefs if the Director deems 

briefing appropriate. 

Finally, this section provides that, 

pursuant to 5 U.S.C. 704, a perfected 

appeal to the Director of a 

recommended decision is a prerequisite 

to the seeking of judicial review of a 

final decision and order, unless the 

Director issues a final decision and 

order that does not incorporate the 

recommended decision, in which case 

judicial review shall be limited to that 

portion of the Director’s final decision 

and order that does not adopt the 

recommended decision. 

The Bureau adopts § 1081.402 of the 

Interim Final Rule without change in 

the Final Rule. 

Section 1081.403 Briefs Filed With the 

Director 

This section of the Interim Final Rule 

outlines the requirements for briefs filed 

with the Director. Paragraph (a) of this 

section is modeled on the SEC Rules, 17 

CFR 201.450(b), and governs the content 

of briefs. Paragraph (b) is also drawn 

from the SEC Rules, 17 CFR 201.450(c), 

and sets forth length limitations for 

briefs. Unlike the SEC and the FTC, the 

Bureau has placed page limits—rather 

than word limits—on briefs. This 

change is intended to simplify practice 

before the Director. 

The Bureau received no comment on 

§ 1081.403 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.404 Oral Argument 

Before the Director 

This section of the Interim Final Rule 

adopts the SEC’s policy for oral 

argument on appeal wherein the 

Director will consider appeals, motions, 

and other matters on the basis of the 

papers filed without oral argument 

unless the Director determines that the 

presentation of facts and legal 

arguments in the briefs and record and 

the decisional process would be 

significantly aided by oral argument. A 

party who seeks oral argument is 

directed to indicate such a request on 

the first page of its opening or 

answering brief. Oral argument shall be 

public unless otherwise ordered by the 

Director. 

The Bureau received no comment on 

§ 1081.404 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.405 Decision of the 

Director 

This section of the Interim Final Rule 

sets forth the provisions regarding the 

final decision and order of the Director. 

Paragraph (a) provides for the scope of 

the Director’s review and defines the 

record before the Director as consisting 

of all items that were part of the record 

below in accordance with § 1081.306; 

any notices of appeal or order directing 

review; all briefs, motions, submissions, 

and other papers filed on appeal or 

review; and the transcript of any oral 

argument held. 

Paragraph (b) provides that the 

Director may have the advice and 

assistance of decisional employees in 

considering and disposing of a case. 

Paragraph (c) provides that the 

Director’s final decision will affirm, 

adopt, modify, set aside, or remand for 

further proceedings the hearing officer’s 

recommended decision and will include 

a statement of the reasons or basis for 

the Director’s actions and the findings of 

fact relied upon. 

In accordance with section 1053 of 

the Dodd-Frank Act, paragraph (d) of 

this section provides that, at the 

expiration of the time permitted for the 

filing of reply briefs with the Director, 

the Office of Administrative 

Adjudication will notify the parties that 

the case has been submitted for final 

Bureau decision by the Director. The 

Director will then issue a final decision 

and order within 90 days of such 

notification to the parties. This policy 


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4Section 1022(b)(2)(A) of the Dodd-Frank Act 

addresses the consideration of the potential benefits 

and costs of regulation to consumers and covered 

persons, including the potential reduction of access 

by consumers to consumer financial products or 

services; the impact on depository institutions and 

credit unions with $10 billion or less in total assets 

as described in section 1026 of the Dodd-Frank Act; 

and the impact on consumers in rural areas. Section 

1022(b)(2)(B) addresses consultation between the 

Bureau and other Federal agencies during the 

rulemaking process. The manner and extent to 

which these provisions apply to procedural rules 

and benefits, costs and impacts that are compelled 

by statutory changes rather than discretionary 

Bureau action is unclear. Nevertheless, to inform 

this rulemaking more fully, the Bureau performed 

the described analyses and consultations. 

ensures a timely final resolution to all 

administrative adjudications. 

Paragraph (e) provides that copies of 

final decisions and orders by the 

Director will be served upon each party, 

upon other persons required by statute, 

and, if directed by the Director or 

required by statute, upon any 

appropriate State or Federal supervisory 

authority. The final decision and order 

will also be published on the Bureau’s 

Web site or as otherwise deemed 

appropriate by the Bureau. 

The Bureau received no comments on 

§ 1081.405 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.406 Reconsideration 

This section of the Interim Final Rule 

permits parties to file petitions for 

reconsideration of a final decision and 

order within 14 days after service of the 

decision and order. The Bureau adopts 

the practice set forth in the SEC Rules, 

17 CFR 201.470, pursuant to which no 

response to a petition for 

reconsideration will be filed unless 

requested by the Director, and the 

Bureau adds a provision providing that 

the Director will request such a 

response before granting any motion for 

reconsideration. This is intended to 

lessen the burden on prevailing parties 

while preserving their opportunity to be 

heard if the Director is considering 

granting a motion for reconsideration. 

The Bureau received no comments on 

§ 1081.406 of the Interim Final Rule and 

adopts it without change in the Final 

Rule. 

Section 1081.407 Effective Date; Stays 

Pending Judicial Review 

Paragraph (a) of this section of the 

Interim Final Rule governs the effective 

date of the Director’s final orders, other 

than consent orders. Consistent with 

section 1053(b) of the Dodd-Frank Act, 

orders to cease and desist and for other 

affirmative relief shall become effective 

30 days after the date of service of the 

Director’s final decision and order, 

unless stayed by the Director under 

paragraph (b) of this section. 

Paragraph (b) of this section contains 

the procedures regarding stays of 

Bureau orders. Any party subject to a 

final order, other than a consent order, 

may apply to the Director for a stay of 

all or part of that order pending judicial 

review. Such a motion must be made 

within 30 days of service of the 

Director’s final decision and order. A 

motion for a stay shall address the 

likelihood of the movant’s success on 

appeal, whether the movant will suffer 

irreparable harm if a stay is not granted, 

the degree of injury to other parties if a 

stay is granted, and why the stay is in 

the public interest. 

Finally, paragraph (d) of this section 

adopts the provision from the Uniform 

Rules, 12 CFR 19.41, providing that the 

commencement of proceedings for 

judicial review of a final decision and 

order of the Director does not, unless 

specifically ordered by the Director or a 

reviewing court, operate as a stay of any 

order issued by the Director. 

The Bureau received no comments on 

§ 1081.407 of the Interim Final Rule and 

adopts it in the Final Rule without 

change. 

VI. Legal Authority 

The Bureau promulgates the Final 

Rule pursuant to its authority to 

implement section 1053 of the DoddFrank Act, 12 U.S.C. 5563(e), as well as 

its general rulemaking authority to 

promulgate rules necessary or 

appropriate to carry out the Federal 

consumer financial laws, 12 U.S.C. 

5512(b)(1). 

VII. Section 1022(b)(2) Provisions 

In developing the Final Rule, the 

Bureau has considered the potential 

benefits, costs, and impacts and has 

consulted or offered to consult with the 

prudential regulators, the Department of 

Housing and Urban Development, the 

SEC, the Department of Justice, and the 

FTC before and after issuing the Interim 

Final Rule, including with regard to 

consistency with any prudential, 

market, or systemic objectives 

administered by such agencies.4

The Dodd-Frank Act requires the 

Bureau to prescribe rules necessary to 

conduct hearings and adjudicatory 

proceedings. The Final Rule neither 

imposes obligations on consumers, nor 

is it expected to affect their access to 

consumer financial products or services. 

The Final Rule is intended to provide 

an expeditious decision-making process, 

which will benefit both consumers and 

covered persons. The Final Rule adopts 

an affirmative disclosure approach to 

fact discovery, pursuant to which the 

Bureau will make available to 

respondents the information obtained 

by the Office of Enforcement from 

persons not employed by the Bureau 

prior to the institution of proceedings, 

in connection with the investigation 

leading to the institution of proceedings 

that is not otherwise privileged or 

protected from disclosure. This 

affirmative disclosure obligation 

substitutes for the traditional civil 

discovery process, which can be both 

time-consuming and expensive. This 

clear and efficient process for the 

conduct of adjudication proceedings 

benefits consumers by providing a 

systematic process for protecting them 

from unlawful behavior. At the same 

time, this process will afford covered 

persons with a cost-effective way to 

have their cases heard. The Final Rule 

is based upon, and drawn from, existing 

rules of the prudential regulators, the 

FTC, and the SEC. The Final Rule’s 

similarity to existing rules should 

further reduce the expense of 

administrative adjudication for covered 

persons. 

Further, the Final Rule has no unique 

impact on insured depository 

institutions or insured credit unions 

with less than $10 billion in assets 

described in section 1026(a) of the 

Dodd-Frank Act. Finally, the Final Rule 

does not have a unique impact on rural 

consumers. 

A commenter stated that the four 

interim final rules that the Bureau 

promulgated together on July 28, 2011 

failed to satisfy the rulemaking 

requirements under section 1022 of the 

Dodd-Frank Act. Specifically, the 

commenter stated that ‘‘the CFPB’s 

analysis of the costs and benefits of its 

rules does not recognize the significant 

costs the CFPB imposes on covered 

persons.’’ The Bureau believes that it 

appropriately considered the benefits, 

costs, and impacts of the Interim Final 

Rule pursuant to section 1022 of the 

Dodd-Frank Act. Notably, the 

commenter did not identify any specific 

costs to covered persons imposed by the 

Rules of Practice for Adjudication 

Proceedings that are not discussed in 

Part C of the SUPPLEMENTARY

INFORMATION to the Interim Final Rule. 

VIII. Procedural Requirements 

As noted in publishing the Interim 

Final Rule, under the Administrative 

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

and comment is not required for rules 

of agency organization, procedure, or 

practice. As discussed in the preamble 

to the Interim Final Rule, the Bureau 

confirms its finding that this is a 

procedural rule for which notice and 

comment is not required. In addition, 


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because the Final Rule relates solely to 

agency procedure and practice, it is not 

subject to the 30-day delayed effective 

date for substantive rules under section 

553(d) of the Administrative Procedure 

Act, 5 U.S.C. 551 et seq. 

Because no notice of proposed 

rulemaking is required, the 

requirements of the Regulatory 

Flexibility Act, 5 U.S.C. 601(2) do not 

apply. Finally, the Bureau has 

determined that this Final Rule does not 

impose any new recordkeeping, 

reporting, or disclosure requirements on 

covered entities or members of the 

public that would be collections of 

information requiring approval under 44 

U.S.C. 3501 et seq. 

List of Subjects in 12 CFR Part 1081 

Administrative practice and 

procedure, Banking, Banks, Consumer 

protection, Credit, Credit unions, Law 

enforcement, National banks, Savings 

associations, Trade practices. 

Authority and Issuance 

For the reasons set forth above, the 

Bureau of Consumer Financial 

Protection revises part 1081 to 12 CFR 

chapter X to read as follows: 

PART 1081—RULES OF PRACTICE 

FOR ADJUDICATION PROCEEDINGS 

Subpart A—General Rules 

Sec. 

1081.100 Scope of the rules of practice. 

1081.101 Expedition and fairness of 

proceedings. 

1081.102 Rules of construction. 

1081.103 Definitions. 

1081.104 Authority of the hearing officer. 

1081.105 Assignment, substitution, 

performance, disqualification of hearing 

officer. 

1081.106 Deadlines. 

1081.107 Appearance and practice in 

adjudication proceedings. 

1081.108 Good faith certification. 

1081.109 Conflict of interest. 

1081.110 Ex parte communication. 

1081.111 Filing of papers. 

1081.112 Formal requirements as to papers 

filed. 

1081.113 Service of papers. 

1081.114 Construction of time limits. 

1081.115 Change of time limits. 

1081.116 Witness fees and expenses. 

1081.117 Bureau’s right to conduct 

examination, collect information. 

1081.118 Collateral attacks on adjudication 

proceedings. 

1081.119 Confidential information; 

protective orders. 

1081.120 Settlement. 

1081.121 Cooperation with other agencies. 

Subpart B—Initiation of Proceedings and 

Prehearing Rules 

Sec. 

1081.200 Commencement of proceeding 

and contents of notice of charges. 

1081.201 Answer and disclosure statement 

and notification of financial interest. 

1081.202 Amended pleadings. 

1081.203 Scheduling conference. 

1081.204 Consolidation and severance of 

actions. 

1081.205 Non-dispositive motions. 

1081.206 Availability of documents for 

inspection and copying. 

1081.207 Production of witness statements. 

1081.208 Subpoenas. 

1081.209 Deposition of witness unavailable 

for hearing. 

1081.210 Expert discovery. 

1081.211 Interlocutory review. 

1081.212 Dispositive motions. 

1081.213 Partial summary disposition. 

1081.214 Prehearing conferences. 

1081.215 Prehearing submissions. 

1081.216 Amicus participation. 

Subpart C—Hearings 

Sec. 

1081.300 Public hearings. 

1081.301 Failure to appear. 

1081.302 Conduct of hearings. 

1081.303 Evidence. 

1081.304 Record of the hearing. 

1081.305 Post-hearing filings. 

1081.306 Record in proceedings before 

hearing officer; retention of documents; 

copies. 

Subpart D—Decision and Appeals 

Sec. 

1081.400 Recommended decision of the 

hearing officer. 

1081.401 Transmission of documents to 

Director; record index; certification. 

1081.402 Notice of appeal; review by the 

Director. 

1081.403 Briefs filed with the Director. 

1081.404 Oral argument before the Director. 

1081.405 Decision of the Director. 

1081.406 Reconsideration. 

1081.407 Effective date; stays pending 

judicial review. 

Authority: Pub. L. 111–203, Title X. 

Subpart A—General Rules 

§ 1081.100 Scope of the rules of practice. 

This part prescribes rules of practice 

and procedure applicable to 

adjudication proceedings authorized by 

section 1053 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act of 2010 (Dodd-Frank Act) to ensure 

or enforce compliance with the 

provisions of Title X of the Dodd-Frank 

Act, rules prescribed by the Bureau 

under Title X of the Dodd-Frank Act, 

and any other Federal law or regulation 

that the Bureau is authorized to enforce. 

These rules of practice do not govern 

the conduct of Bureau investigations, 

investigational hearings or other 

proceedings that do not arise from 

proceedings after a notice of charges. 

§ 1081.101 Expedition and fairness of 

proceedings. 

To the extent practicable, consistent 

with requirements of law, the Bureau’s 

policy is to conduct such adjudication 

proceedings fairly and expeditiously. In 

the conduct of such proceedings, the 

hearing officer and counsel for all 

parties shall make every effort at each 

stage of a proceeding to avoid delay. 

With the consent of the parties, the 

Director, at any time, or the hearing 

officer at any time prior to the filing of 

his or her recommended decision, may 

shorten any time limit prescribed by 

this part. 

§ 1081.102 Rules of construction. 

For the purposes of this part: 

(a) Any term in the singular includes 

the plural, and the plural includes the 

singular, if such use would be 

appropriate; 

(b) Any use of a masculine, feminine, 

or neutral gender encompasses all three, 

if such use would be appropriate; 

(c) Unless context requires otherwise, 

a party’s counsel of record, if any, may, 

on behalf of that party, take any action 

required to be taken by the party; and 

(d) To the extent this part uses terms 

defined by section 1002 of the DoddFrank Act, such terms shall have the 

same meaning as set forth therein, 

unless defined differently by § 1081.103. 

§ 1081.103 Definitions. 

For the purposes of this part, unless 

explicitly stated to the contrary: 

Dodd-Frank Act means the DoddFrank Wall Street Reform and Consumer 

Protection Act of 2010, Public Law 111– 

203 (July 21, 2010). 

Adjudication proceeding means a 

proceeding conducted pursuant to 

section 1053 of the Dodd-Frank Act and 

intended to lead to the formulation of a 

final order other than a temporary order 

to cease and desist issued pursuant to 

section 1053(c) of the Dodd-Frank Act. 

Bureau means the Bureau of 

Consumer Financial Protection. 

Chief hearing officer means the 

hearing officer charged with assigning 

hearing officers to specific proceedings, 

in the event there is more than one 

hearing officer available to the Bureau. 

Counsel means any person 

representing a party pursuant to 

§ 1081.107. 

Decisional employee means any 

employee of the Bureau who has not 

engaged in an investigative or 

prosecutorial role in a proceeding and 

who may assist the Director or the 

hearing officer, respectively, in 

preparing orders, recommended 

decisions, decisions, and other 

documents under this part. 

Director means the Director of the 

Bureau or a person authorized to 

perform the functions of the Director in 

accordance with the law. 


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Enforcement counsel means any 

individual who files a notice of 

appearance as counsel on behalf of the 

Bureau in an adjudication proceeding. 

Final order means an order issued by 

the Bureau with or without the consent 

of the respondent, which has become 

final, without regard to the pendency of 

any petition for reconsideration or 

review. 

General Counsel means the General 

Counsel of the Bureau or any Bureau 

employee to whom the General Counsel 

has delegated authority to act under this 

part. 

Hearing officer means an 

administrative law judge or any other 

person duly authorized to preside at a 

hearing. 

Notice of charges means the pleading 

that commences an adjudication 

proceeding, as described in § 1081.200, 

except that it does not include a 

stipulation and consent order under 

§ 1081.200(d). 

Office of Administrative Adjudication 

means the office of the Bureau 

responsible for conducting adjudication 

proceedings. 

Office of Enforcement means the 

office of the Bureau responsible for 

enforcement of Federal consumer 

financial law. 

Party means the Bureau, any person 

named as a party in any notice of 

charges issued pursuant to this part, 

and, to the extent applicable, any person 

who intervenes in the proceeding 

pursuant to § 1081.119(a) to seek a 

protective order. 

Person means an individual, 

partnership, company, corporation, 

association (incorporated or 

unincorporated), trust, estate, 

cooperative organization, or other 

entity. 

Person employed by the Bureau 

means Bureau employees, contractors, 

agents, and others acting for or on behalf 

of the Bureau, or at its direction, 

including consulting experts. 

Respondent means the party named in 

the notice of charges. 

State means any State, territory, or 

possession of the United States, the 

District of Columbia, the 

Commonwealth of Puerto Rico, the 

Commonwealth of the Northern Mariana 

Islands, Guam, American Samoa, or the 

United States Virgin Islands or any 

federally recognized Indian tribe, as 

defined by the Secretary of the Interior 

under section 104(a) of the Federally 

Recognized Indian Tribe List Act of 

1994, 25 U.S.C. 479a–1(a). 

§ 1081.104 Authority of the hearing officer. 

(a) General Rule. The hearing officer 

shall have all powers necessary to 

conduct a proceeding in a fair and 

impartial manner and to avoid 

unnecessary delay. No provision of this 

part shall be construed to limit the 

powers of the hearing officers provided 

by the Administrative Procedure Act, 5 

U.S.C. 556, 557. 

(b) Powers. The powers of the hearing 

officer include but are not limited to the 

power: 

(1) To administer oaths and 

affirmations; 

(2) To issue subpoenas, subpoenas 

duces tecum, and protective orders, as 

authorized by this part, and to quash or 

modify any such subpoenas or orders; 

(3) To take depositions or cause 

depositions to be taken; 

(4) To receive relevant evidence and 

to rule upon the admission of evidence 

and offers of proof; 

(5) To regulate the course of a 

proceeding and the conduct of parties 

and their counsel; 

(6) To reject written submissions that 

materially fail to comply with the 

requirements of this part, and to deny 

confidential status to documents and 

testimony without prejudice until a 

party complies with all relevant rules; 

(7) To hold conferences for 

settlement, simplification of the issues, 

or any other proper purpose and require 

the attendance at any such conference of 

at least one representative of each party 

who has authority to negotiate 

concerning the resolution of issues in 

controversy; 

(8) To inform the parties as to the 

availability of one or more alternative 

means of dispute resolution, and to 

encourage the use of such methods; 

(9) To certify questions to the Director 

for his or her determination in 

accordance with the rules of this part; 

(10) To consider and rule upon, as 

justice may require, all procedural and 

other motions appropriate in 

adjudication proceedings; 

(11) To issue and file recommended 

decisions; 

(12) To recuse himself or herself by 

motion made by a party or on his or her 

own motion; 

(13) To issue such sanctions against 

parties or their counsel as may be 

necessary to deter repetition of 

sanctionable conduct or comparable 

conduct by others similarly situated, as 

provided for in this part or as otherwise 

necessary to the appropriate conduct of 

hearings and related proceedings, 

provided that no sanction shall be 

imposed before providing the 

sanctioned person an opportunity to 

show cause why no such sanction 

should issue; and 

(14) To do all other things necessary 

and appropriate to discharge the duties 

of a presiding officer. 

§ 1081.105 Assignment, substitution, 

performance, disqualification of hearing 

officer. 

(a) How assigned. In the event that 

more than one hearing officer is 

available to the Bureau for the conduct 

of proceedings under this part, the 

presiding hearing officer shall be 

designated by the chief hearing officer, 

who shall notify the parties of the 

hearing officer designated. 

(b) Interference. Hearing officers shall 

not be subject to the supervision or 

direction of, or responsible to, any 

officer, employee, or agent engaged in 

the performance of investigative or 

prosecuting functions for the Bureau, 

and all direction by the Bureau to the 

hearing officer concerning any 

adjudication proceedings shall appear 

in and be made part of the record. 

(c) Disqualification of hearing officers. 

(1) When a hearing officer deems 

himself or herself disqualified to preside 

in a particular proceeding, he or she 

shall issue a notice stating that he or she 

is withdrawing from the matter and 

setting forth the reasons therefore. 

(2) Any party who has a reasonable, 

good faith basis to believe that a hearing 

officer has a personal bias, or is 

otherwise disqualified from hearing a 

case, may make a motion to the hearing 

officer that the hearing officer withdraw. 

The motion shall be accompanied by an 

affidavit setting forth the facts alleged to 

constitute grounds for disqualification. 

Such motion shall be filed at the earliest 

practicable time after the party learns, or 

could reasonably have learned, of the 

alleged grounds for disqualification. If 

the hearing officer does not disqualify 

himself or herself within ten days, he or 

she shall certify the motion to the 

Director pursuant to § 1081.211, 

together with any statement he or she 

may wish to have considered by the 

Director. The Director shall promptly 

determine the validity of the grounds 

alleged, either directly or on the report 

of another hearing officer appointed to 

conduct a hearing for that purpose, and 

shall either direct the reassignment of 

the matter or confirm the hearing 

officer’s continued role in the matter. 

(d) Unavailability of hearing officer. 

In the event that the hearing officer 

withdraws or is otherwise unable to 

perform the duties of the hearing officer, 

the chief hearing officer or the Director 

shall designate another hearing officer 

to serve. 


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§ 1081.106 Deadlines. 

The deadlines for action by the 

hearing officer established by 

§§ 1081.203, 1081.205, 1081.211, 

1081.212, and 1081.400, or elsewhere in 

this part, confer no substantive rights on 

respondents. 

§ 1081.107 Appearance and practice in 

adjudication proceedings. 

(a) Appearance before the Bureau or 

a hearing officer. (1) By attorneys. Any 

member in good standing of the bar of 

the highest court of any State may 

represent others before the Bureau if 

such attorney is not currently 

suspended or debarred from practice 

before the Bureau or by a court of the 

United States or of any State. 

(2) By non-attorneys. So long as such 

individual is not currently suspended or 

debarred from practice before the 

Bureau: 

(i) An individual may appear on his 

or her own behalf; 

(ii) A member of a partnership may 

represent the partnership; 

(iii) A duly authorized officer of a 

corporation, trust or association may 

represent the corporation, trust or 

association; and 

(iv) A duly authorized officer or 

employee of any government unit, 

agency, or authority may represent that 

unit, agency, or authority. 

(3) Notice of appearance. Any 

individual acting as counsel on behalf of 

a party, including the Bureau, shall file 

a notice of appearance at or before the 

time that the individual submits papers 

or otherwise appears on behalf of a 

party in the adjudication proceeding. 

The notice of appearance must include 

a written declaration that the individual 

is currently qualified as provided in 

paragraph (a)(1) or (a)(2) of this section 

and is authorized to represent the 

particular party, and if applicable, must 

include the attorney’s jurisdiction of 

admission or qualification, attorney 

identification number, and a statement 

by the appearing attorney attesting to 

his or her good standing within the legal 

profession. By filing a notice of 

appearance on behalf of a party in an 

adjudication proceeding, the counsel 

agrees and represents that he or she is 

authorized to accept service on behalf of 

the represented party and that, in the 

event of withdrawal from 

representation, he or she will, if 

required by the hearing officer, continue 

to accept service until a new counsel 

has filed a notice of appearance or until 

the represented party indicates that he 

or she will proceed on a pro se basis. 

The notice of appearance shall provide 

the representative’s email address, 

telephone number and business address 

and, if different from the 

representative’s addresses, electronic or 

other address at which the represented 

party may be served. 

(b) Sanctions. Dilatory, obstructionist, 

egregious, contemptuous or 

contumacious conduct at any phase of 

any adjudication proceeding may be 

grounds for exclusion or suspension of 

counsel from the proceeding. An order 

imposing a sanction must describe the 

sanctioned conduct and explain the 

basis for the sanction. 

(c) Standards of conduct; disbarment. 

(1) All attorneys practicing before the 

Bureau shall conform to the standards of 

ethical conduct required by the bars of 

which the attorneys are members. 

(2) If for good cause shown, the 

Director believes that any attorney is not 

conforming to such standards, or that an 

attorney or counsel to a party has 

otherwise engaged in conduct 

warranting disciplinary action, the 

Director may issue an order requiring 

such person to show cause why he 

should not be suspended or disbarred 

from practice before the Bureau. The 

alleged offender shall be granted due 

opportunity to be heard in his or her 

own defense and may be represented by 

counsel. Thereafter, if warranted by the 

facts, the Director may issue against the 

attorney or counsel an order of 

reprimand, suspension, or disbarment. 

§ 1081.108 Good faith certification. 

(a) General requirement. Every filing 

or submission of record following the 

issuance of a notice of charges shall be 

signed by at least one counsel of record 

in his or her individual name and shall 

state counsel’s address, email address, 

and telephone number. A party who 

acts as his or her own counsel shall sign 

his or her individual name and state his 

or her address, email address, and 

telephone number on every filing or 

submission of record. Papers filed by 

electronic transmission may be signed 

with an ‘‘/s/’’ notation, which shall be 

deemed the signature of the party or 

representative whose name appears 

below the signature line. 

(b) Effect of signature. (1) The 

signature of counsel or a party shall 

constitute a certification that: the 

counsel or party has read the filing or 

submission of record; to the best of his 

or her knowledge, information, and 

belief formed after reasonable inquiry, 

the filing or submission of record is 

well-grounded in fact and is warranted 

by existing law or a good faith argument 

for the extension, modification, or 

reversal of existing law; and the filing or 

submission of record is not made for 

any improper purpose, such as to harass 

or to cause unnecessary delay or 

needless increase in the cost of 

litigation. 

(2) If a filing or submission of record 

is not signed, the hearing officer shall 

strike the filing or submission of record, 

unless it is signed promptly after the 

omission is called to the attention of the 

filer. 

(c) Effect of making oral motion or 

argument. The act of making any oral 

motion or oral argument by any counsel 

or party constitutes a certification that 

to the best of his or her knowledge, 

information, and belief formed after 

reasonable inquiry, his or her statements 

are well-grounded in fact and are 

warranted by existing law or a good 

faith argument for the extension, 

modification, or reversal of existing law, 

and are not made for any improper 

purpose, such as to harass or to cause 

unnecessary delay or needless increase 

in the cost of litigation. 

(d) Sanctions. Counsel or a party that 

fails to abide by the requirements of this 

section may be subject to sanctions 

pursuant to § 1081.104(b)(13). 

§ 1081.109 Conflict of interest. 

(a) Conflict of interest in 

representation. No person shall appear 

as counsel for another person in an 

adjudication proceeding if it reasonably 

appears that such representation may be 

materially limited by that counsel’s 

responsibilities to a third person or by 

the counsel’s own interests. The hearing 

officer may take corrective measures at 

any stage of a proceeding to cure a 

conflict of interest in representation, 

including the issuance of an order 

limiting the scope of representation or 

disqualifying an individual from 

appearing in a representative capacity 

for the duration of the proceeding. 

(b) Certification and waiver. If any 

person appearing as counsel represents 

two or more parties to an adjudication 

proceeding or also represents a nonparty on a matter relevant to an issue in 

the proceeding, counsel must certify in 

writing at the time of filing the notice 

of appearance required by 

§ 1081.107(a)(3): 

(1) That the counsel has personally 

and fully discussed the possibility of 

conflicts of interest with each such 

party and non-party; and 

(2) That each such party and/or nonparty waives any right it might 

otherwise have had to assert any known 

conflicts of interest or to assert any 

conflicts of interest during the course of 

the proceeding. 

§ 1081.110 Ex parte communication. 

(a) Definitions. (1) For purposes of 

this section, ex parte communication 

means any material oral or written 


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communication relevant to the merits of 

an adjudication proceeding that was 

neither on the record nor on reasonable 

prior notice to all parties that takes 

place between: 

(i) An interested person not employed 

by the Bureau (including such person’s 

counsel); and 

(ii) The hearing officer handling the 

proceeding, the Director, or a decisional 

employee. 

(2) Exception. A request for status of 

the proceeding does not constitute an ex 

parte communication. 

(3) Pendency of an adjudication 

proceeding means the time from when 

the Bureau issues a notice of charges, 

unless the person responsible for the 

communication has knowledge that a 

notice of charges will be issued, in 

which case the pendency of an 

adjudication shall commence at the time 

of his or her acquisition of such 

knowledge, or from when an order by a 

court of competent jurisdiction 

remanding a Bureau decision and order 

for further proceedings becomes 

effective, until the time the Director 

enters his or her final decision and 

order in the proceeding and the time 

permitted to seek reconsideration of that 

decision and order has elapsed. For 

purposes of this section, an order of 

remand by a court of competent 

jurisdiction shall be deemed to become 

effective when the Bureau’s right to 

petition for review or for a writ of 

certiorari has lapsed without a petition 

having been filed, or when such a 

petition has been denied. If a petition 

for reconsideration of a Bureau decision 

is filed pursuant to § 1081.406, the 

matter shall be considered to be a 

pending adjudication proceeding until 

the time the Bureau enters an order 

disposing of the petition. 

(b) Prohibited ex parte 

communications. During the pendency 

of an adjudication proceeding, except to 

the extent required for the disposition of 

ex parte matters as authorized by law or 

as otherwise authorized by this part: 

(1) No interested person not employed 

by the Bureau shall make or knowingly 

cause to be made to the Director, or to 

the hearing officer, or to any decisional 

employee, an ex parte communication; 

and 

(2) The Director, the hearing officer, 

or any decisional employee shall not 

make or knowingly cause to be made to 

any interested person not employed by 

the Bureau any ex parte communication. 

(c) Procedure upon occurrence of ex 

parte communication. If an ex parte 

communication prohibited by paragraph 

(b) of this section is received by the 

hearing officer, the Director, or any 

decisional employee, that person shall 

cause all such written communications 

(or, if the communication is oral, a 

memorandum stating the substance of 

the communication) to be placed on the 

record of the proceeding and served on 

all parties. All other parties to the 

proceeding shall have an opportunity, 

within ten days of receipt of service of 

the ex parte communication, to file 

responses thereto and to recommend 

any sanctions, in accordance with 

paragraph (d) of this section, that they 

believe to be appropriate under the 

circumstances. 

(d) Sanctions. (1) Adverse action on 

claim. Upon receipt of an ex parte 

communication knowingly made or 

knowingly caused to be made by a party 

and prohibited by paragraph (b) of this 

section, the Director or hearing officer, 

as appropriate, may, to the extent 

consistent with the interests of justice 

and the policy of the underlying 

statutes, require the party to show cause 

why his claim or interest in the 

proceeding should not be dismissed, 

denied, disregarded, or otherwise 

adversely affected on account of such 

violation. 

(2) Discipline of persons practicing 

before the Bureau. The Director may, to 

the extent not prohibited by law, 

censure, suspend, or revoke the 

privilege to practice before the Bureau 

of any person who makes, or solicits the 

making of, an unauthorized ex parte 

communication. 

(e) Separation of functions. Except to 

the extent required for the disposition of 

ex parte matters as authorized by law, 

the hearing officer may not consult a 

person or party on any matter relevant 

to the merits of the adjudication, unless 

upon notice and opportunity for all 

parties to participate. An employee or 

agent engaged in the performance of 

investigative or prosecuting functions 

for the Bureau in a case, other than the 

Director, may not, in that or a factually 

related case, participate or advise in the 

decision, recommended decision, or 

agency review of the recommended 

decision, except as witness or counsel 

in public proceedings. 

§ 1081.111 Filing of papers. 

(a) Filing. The following papers must 

be filed by parties in an adjudication 

proceeding: the notice of charges, proof 

of service of the notice of charges, 

notices of appearance, answer, the 

disclosure statement required under 

§ 1081.201(e), motion, brief, request for 

issuance or enforcement of a subpoena, 

response, opposition, reply, notice of 

appeal, or petition for reconsideration. 

The hearing officer shall file all written 

orders, rulings, notices, or requests. Any 

papers required to be filed shall be filed 

with the Office of Administrative 

Adjudication, except as otherwise 

provided herein. 

(b) Manner of filing. Unless otherwise 

specified by the Director or the hearing 

officer, filing may be accomplished by: 

(1) Electronic transmission in 

accordance with guidance issued by the 

Office of Administrative Adjudication; 

or 

(2) Any of the following methods if 

respondent demonstrates, in accordance 

with guidance issued by the Office of 

Administrative Adjudication, that 

electronic filing is not practicable: 

(i) Personal delivery; 

(ii) Delivery to a reliable commercial 

courier service or overnight delivery 

service; or 

(iii) Mailing the papers through the 

U.S. Postal Service by First Class Mail, 

Registered Mail, Certified Mail or 

Express Mail. 

(c) Papers filed in an adjudication 

proceeding are presumed to be public. 

Unless otherwise ordered by the Bureau 

or the hearing officer, all papers filed in 

connection with an adjudication 

proceeding are presumed to be open to 

the public. The Bureau may provide 

public access to and publish any papers 

filed in an adjudication proceeding 

except if there is a pending motion for 

a protective order filed pursuant to 

§ 1081.119, or if there is an order from 

the Director, hearing officer, or a Federal 

court authorizing the confidential 

treatment of the papers filed. 

§ 1081.112 Formal requirements as to 

papers filed. 

(a) Form. All papers filed by parties 

must: 

(1) Set forth the name, address, 

telephone number, and email address of 

the counsel or party making the filing; 

(2) Be double-spaced (except for 

single-spaced footnotes and singlespaced indented quotations) and printed 

or typewritten on 81⁄2 x 11 inch paper 

in 12-point or larger font; 

(3) Include at the head of the paper, 

or on a title page, a caption setting forth 

the title of the case, the docket number 

of the proceeding, and a brief 

descriptive title indicating the purpose 

of the paper; 

(4) Be paginated with margins at least 

one inch wide; and 

(5) If filed by other than electronic 

means, be stapled, clipped or otherwise 

fastened in a manner that lies flat when 

opened. 

(b) Signature. All papers must be 

dated and signed as provided in 

§ 1081.108. 

(c) Number of copies. Unless 

otherwise specified by the Director or 

the hearing officer, one copy of all 


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documents and papers shall be filed if 

filing is by electronic transmission. If 

filing is accomplished by any other 

means, an original and one copy of all 

documents and papers shall be filed, 

except that only one copy of transcripts 

of testimony and exhibits must be filed. 

(d) Authority to reject document for 

filing. The Office of Administrative 

Adjudication or the hearing officer may 

reject a document for filing that 

materially fails to comply with these 

rules. 

(e) Sensitive personal information. 

Sensitive personal information means 

an individual’s Social Security number, 

taxpayer identification number, 

financial account number, credit card or 

debit card number, driver’s license 

number, State-issued identification 

number, passport number, date of birth 

(other than year), and any sensitive 

health information identifiable by 

individual, such as an individual’s 

medical records. Sensitive personal 

information shall not be included in, 

and must be redacted or omitted from, 

filings unless the person filing the paper 

determines that such information is 

relevant or otherwise necessary for the 

conduct of the proceeding. If the person 

filing a paper determines the sensitive 

personal information contained in the 

paper is relevant or necessary to the 

proceeding, the person shall file the 

paper in accordance with paragraph (f) 

of this section, including filing an 

expurgated copy of the paper with the 

sensitive personal information redacted. 

(f) Confidential treatment of 

information in certain filings. A party 

seeking confidential treatment of 

information contained in a filing must 

contemporaneously file either a motion 

requesting such treatment in accordance 

with § 1081.119 or a copy of the order 

from the Director, hearing officer, or 

Federal court authorizing such 

confidential treatment. The filing must 

comply with any applicable order of the 

Director or hearing officer and must be 

accompanied by: 

(1) A complete, sealed copy of the 

documents containing the materials as 

to which confidential treatment is 

sought, with the allegedly confidential 

material clearly marked as such, and 

with the first page of the document 

labeled ‘‘Under Seal.’’ If the movant 

seeks or has obtained a protective order 

against disclosure to other parties as 

well as the public, copies of the 

documents shall not be served on other 

parties; and 

(2) An expurgated copy of the 

materials as to which confidential 

treatment is sought, with the allegedly 

confidential materials redacted. The 

redacted version shall indicate any 

omissions with brackets or ellipses, and 

its pagination and depiction of text on 

each page shall be identical to that of 

the sealed version. 

(g) Certificate of service. Any papers 

filed in an adjudication proceeding shall 

contain proof of service on all other 

parties or their counsel in the form of a 

statement of the date and manner of 

service and of the names of the persons 

served, certified by the person who 

made service. The certificate of service 

must be affixed to the papers filed and 

signed in accordance with § 1081.108. 

§ 1081.113 Service of papers. 

(a) When required. In every 

adjudication proceeding, each paper 

required to be filed by § 1081.111 shall 

be served upon each party in the 

proceeding in accordance with the 

provisions of this section; provided, 

however, that absent an order to the 

contrary, no service shall be required for 

motions which are to be heard ex parte. 

(b) Upon a person represented by 

counsel. Whenever service is required to 

be made upon a person represented by 

counsel who has filed a notice of 

appearance pursuant to § 1081.107(a)(3), 

service shall be made pursuant to 

paragraph (c) of this section upon 

counsel, unless service upon the person 

represented is ordered by the Director or 

the hearing officer, as appropriate. 

(c) Method of service. Except as 

provided in paragraph (d) of this section 

or as otherwise ordered by the hearing 

officer or the Director, service shall be 

made by delivering a copy of the filing 

by one of the following methods: 

(1) Transmitting the papers by 

electronic transmission where the 

persons so serving each other have 

consented to service by specified 

electronic transmission and provided 

the Bureau and the parties with notice 

of the means for service by electronic 

transmission (e.g., email address or 

facsimile number); 

(2) Handing a copy to the person 

required to be served; or leaving a copy 

at the person’s office with a clerk or 

other person in charge thereof, or, if 

there is no one in charge, leaving it in 

a conspicuous place therein; or, if the 

office is closed or the person to be 

served has no office, leaving it at the 

person’s dwelling or usual place of 

abode with some person of suitable age 

and discretion then residing therein; 

(3) Mailing the papers through the 

U.S. Postal Service by First Cass Mail, 

Registered Mail, Certified Mail or 

Express Mail delivery addressed to the 

person; or 

(4) Sending the papers through a 

third-party commercial courier service 

or express delivery service. 

(d) Service of certain papers by the 

Bureau. Service of the notice of charges, 

recommended decisions and final 

orders of the Bureau shall be effected as 

follows: 

(1) Service of a notice of charges. (i) 

To individuals. Notice of a proceeding 

shall be made to an individual by 

delivering a copy of the notice of 

charges to the individual or to an agent 

authorized by appointment or by law to 

receive such notice. Delivery, for 

purposes of this paragraph, means 

handing a copy of the notice to the 

individual; or leaving a copy at the 

individual’s office with a clerk or other 

person in charge thereof; or leaving a 

copy at the individual’s dwelling house 

or usual place of abode with some 

person of suitable age and discretion 

then residing therein; or sending a copy 

of the notice addressed to the individual 

through the U.S. Postal Service by 

Registered Mail, Certified Mail or 

Express Mail delivery, or by third-party 

commercial carrier, for overnight 

delivery and obtaining a confirmation of 

receipt. 

(ii) To corporations or entities. Notice 

of a proceeding shall be made to a 

person other than a natural person by 

delivering a copy of the notice of 

charges to an officer, managing or 

general agent, or any other agent 

authorized by appointment or law to 

receive such notice, by any method 

specified in paragraph (d)(1)(i) of this 

section. 

(iii) Upon persons registered with the 

Bureau. In addition to any other method 

of service specified in paragraph 

(d)(1)(i) or (ii) of this section, notice may 

be made to a person currently registered 

with the Bureau by sending a copy of 

the notice of charges addressed to the 

most recent business address shown on 

the person’s registration form by U.S. 

Postal Service certified, registered or 

Express Mail and obtaining a 

confirmation of receipt or attempted 

delivery. 

(iv) Upon persons in a foreign 

country. Notice of a proceeding to a 

person in a foreign country may be 

made by any method specified in 

paragraph (d)(1) of this section, or by 

any other method reasonably calculated 

to give notice, provided that the method 

of service used is not prohibited by the 

law of the foreign country. 

(v) Record of service. The Bureau 

shall maintain and file a record of 

service of the notice of charges on 

parties, identifying the party given 

notice, the method of service, the date 

of service, the address to which service 

was made, and the person who made 

service. If service is made in person, the 

certificate of service shall state, if 


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available, the name of the individual to 

whom the notice of charges was given. 

If service is made by U.S. Postal Service 

Registered Mail, Certified Mail or 

Express Mail, the Bureau shall maintain 

the confirmation of receipt or attempted 

delivery. If service is made to an agent 

authorized by appointment to receive 

service, the certificate of service shall be 

accompanied by evidence of the 

appointment. 

(vi) Waiver of service. In lieu of 

service as set forth in paragraph (d)(1)(i) 

or (d)(1)(ii) of this section, the party may 

be provided a copy of the notice of 

charges by First Class Mail or other 

reliable means if a waiver of service is 

obtained from the party and placed in 

the record. 

(2) Service of recommended decisions 

and final orders. Recommended 

decisions issued by the hearing officer 

and final orders issued by the Bureau 

shall be served promptly on each party 

pursuant to any method of service 

authorized under paragraph (d)(1) of 

this section. Such decisions and orders 

may also be served by electronic 

transmission if the party to be served 

has agreed to accept such service in 

writing, signed by the party or its 

counsel, and has provided the Bureau 

with information concerning the 

manner of electronic transmission. 

§ 1081.114 Construction of time limits. 

(a) General rule. In computing any 

period of time prescribed by this part, 

by order of the Director or a hearing 

officer, or by any applicable statute, the 

date of the act or event that commences 

the designated period of time is not 

included. The last day so computed is 

included unless it is a Saturday, 

Sunday, or Federal holiday as set forth 

in 5 U.S.C. 6103(a). When the last day 

is a Saturday, Sunday, or Federal 

holiday, the period runs until the end of 

the next day that is not a Saturday, 

Sunday, or Federal holiday. 

Intermediate Saturdays, Sundays, and 

Federal holidays are included in the 

computation of time, except when the 

time period within which an act is to be 

performed is ten days or less, not 

including any additional time allowed 

for in paragraph (c) of this section. 

(b) When papers are deemed to be 

filed or served. Filing and service are 

deemed to be effective: 

(1) In the case of personal service or 

same day commercial courier delivery, 

upon actual receipt by person served; 

(2) In the case of overnight 

commercial delivery service, Express 

Mail delivery, First Class Mail, 

Registered Mail, or Certified Mail, upon 

deposit in or delivery to an appropriate 

point of collection; or 

(3) In the case of electronic 

transmission, upon transmission. 

(c) Calculation of time for service and 

filing of responsive papers. Whenever a 

time limit is measured by a prescribed 

period from the service of any notice or 

paper, the applicable time limits are 

calculated as follows: 

(1) If service is made by First Class 

Mail, Registered Mail, or Certified Mail, 

add three calendar days to the 

prescribed period; 

(2) If service is made by Express Mail 

or overnight delivery service, add one 

calendar day to the prescribed period; or 

(3) If service is made by electronic 

transmission, add one calendar day to 

the prescribed period. 

§ 1081.115 Change of time limits. 

(a) Except as otherwise provided by 

law, the hearing officer may, in any 

proceeding before him or her, for good 

cause shown, extend the time limits 

prescribed by this part or by any notice 

or order issued in the proceedings. After 

appeal to the Director pursuant to 

§ 1081.402, the Director may grant 

extensions of the time limits for good 

cause shown. Extensions may be 

granted on the motion of a party after 

notice and opportunity to respond is 

afforded all non-moving parties or on 

the Director’s or the hearing officer’s 

own motion, as appropriate. 

(b) Considerations in determining 

whether to extend time limits or grant 

postponements, adjournments and 

extensions. In considering all motions 

for extensions of time filed pursuant to 

paragraph (a) of this section, the 

Director or the hearing officer should 

adhere to a policy of strongly 

disfavoring granting such motions, 

except in circumstances where the 

moving party makes a strong showing 

that the denial of the motion would 

substantially prejudice its case. In 

determining whether to grant any 

motions, the Director or hearing officer, 

as appropriate, shall consider, in 

addition to any other relevant factors: 

(1) The length of the proceeding to 

date; 

(2) The number of postponements, 

adjournments or extensions already 

granted; 

(3) The stage of the proceedings at the 

time of the motion; 

(4) The impact of the motion on the 

hearing officer’s ability to complete the 

proceeding in the time specified by 

§ 1081.400(a); and 

(5) Any other matters as justice may 

require. 

(c) Time limit. Postponements, 

adjournments, or extensions of time for 

filing papers shall not exceed 21 days 

unless the Director or the hearing 

officer, as appropriate, states on the 

record or sets forth in a written order 

the reasons why a longer period of time 

is necessary. 

(d) No effect on deadline for 

recommended decision. The granting of 

any extension of time pursuant to this 

section shall not affect any deadlines set 

pursuant to § 1081.400(a). 

§ 1081.116 Witness fees and expenses. 

Respondents shall pay to witnesses 

subpoenaed for testimony or 

depositions on their behalf the same 

fees for attendance and mileage as are 

paid in the United States district courts 

in proceedings in which the United 

States is a party, provided that, in the 

case of a deposition subpoena addressed 

to a party, no witness fees or mileage 

need be paid. Fees for witnesses shall be 

tendered in advance by any respondent 

requesting the issuance of a subpoena, 

except that fees and mileage need not be 

tendered in advance where the Bureau 

is the party requesting the subpoena. 

The Bureau shall pay to witnesses 

subpoenaed for testimony or 

depositions on behalf of the Office of 

Enforcement the same fees for 

attendance and mileage as are paid in 

the United States district courts in 

proceedings in which the United States 

is a party, but the Bureau need not 

tender such fees in advance. 

§ 1081.117 Bureau’s right to conduct 

examination, collect information. 

Nothing contained in this part limits 

in any manner the right of the Bureau 

to conduct any examination, inspection, 

or visitation of any person, to conduct 

or continue any form of investigation 

authorized by law, to collect 

information in order to monitor the 

market for risks to consumers in the 

offering or provision of consumer 

financial products or services, or to 

otherwise gather information in 

accordance with law. 

§ 1081.118 Collateral attacks on 

adjudication proceedings. 

Unless a court of competent 

jurisdiction, or the Director for good 

cause, so directs, if an interlocutory 

appeal or collateral attack is brought in 

any court concerning all or any part of 

an adjudication proceeding, the 

challenged adjudication proceeding 

shall continue without regard to the 

pendency of that court proceeding. No 

default or other failure to act as directed 

in the adjudication proceeding within 

the times prescribed in this part shall be 

excused based on the pendency before 

any court of any interlocutory appeal or 

collateral attack. 


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§ 1081.119 Confidential information; 

protective orders. 

(a) Rights of third parties. Any party 

that intends to disclose information 

obtained from a third party that is 

subject to a claim of confidentiality 

must provide notice to the third party at 

least ten days prior to the proposed 

disclosure of such information. In 

response to such notice, the third party 

may consent to the disclosure of such 

information, which may be conditioned 

on the entry of an appropriate protective 

order, or may intervene in the 

proceeding for the limited purpose of 

moving for a protective order pursuant 

to this section. Any written filing by a 

party that contains such confidential 

information must be accompanied by a 

certification that proper notice was 

provided. The act of making any oral 

motion or oral argument by any counsel 

or party which contains such 

confidential information constitutes a 

certification that proper notice was 

provided. A third party wishing to 

intervene for purposes of protecting its 

confidential information may file a 

single motion, in conformity with all 

applicable rules, setting forth the basis 

of both the third party’s right to 

intervene and the basis for the 

protective order, in conformity with 

paragraph (b). 

(b) Procedure. In any adjudication 

proceeding, a party, including a third 

party who has intervened pursuant to 

paragraph (a) of this section, may file a 

motion requesting a protective order to 

limit from disclosure to other parties or 

to the public documents or testimony 

that contain confidential information. 

The motion should include a general 

summary or extract of the documents or 

testimony without revealing 

confidential details, and a copy of the 

proposed protective order. A motion for 

confidential treatment of documents 

should be filed in accordance with 

§ 1081.112(f), and all other applicable 

rules. 

(c) Basis for issuance. Documents and 

testimony introduced in a public 

hearing, or filed in connection with an 

adjudication proceeding, are presumed 

to be public. A motion for a protective 

order shall be granted: 

(1) Upon a finding that public 

disclosure will likely result in a clearly 

defined, serious injury to the party or 

third party requesting confidential 

treatment; 

(2) After finding that the material 

constitutes sensitive personal 

information, as defined in § 1081.112(e); 

(3) If all parties, including third 

parties to the extent their information is 

at issue, stipulate to the entry of a 

protective order; or 

(4) Where public disclosure is 

prohibited by law. 

(d) Requests for additional 

information supporting confidentiality. 

The hearing officer may require a 

movant under paragraph (b) of this 

section to furnish in writing additional 

information with respect to the grounds 

for confidentiality. Failure to supply the 

information so requested within five 

days from the date of receipt by the 

movant of a notice of the information 

required shall be deemed a waiver of the 

objection to public disclosure of that 

portion of the documents to which the 

additional information relates, unless 

the hearing officer shall otherwise order 

for good cause shown at or before the 

expiration of such five-day period. 

(e) Confidentiality of documents 

pending decision. Pending a 

determination of a motion under this 

section, the documents as to which 

confidential treatment is sought and any 

other documents that would reveal the 

confidential information in those 

documents shall be maintained under 

seal and shall be disclosed only in 

accordance with orders of the hearing 

officer. Any order issued in connection 

with a motion under this section shall 

be public unless the order would 

disclose information as to which a 

protective order has been granted, in 

which case that portion of the order that 

would reveal the protected information 

shall be nonpublic. 

§ 1081.120 Settlement. 

(a) Availability. Any respondent in an 

adjudication proceeding instituted 

under this part, may, at any time, 

propose in writing an offer of 

settlement. 

(b) Procedure. An offer of settlement 

shall state that it is made pursuant to 

this section; shall recite or incorporate 

as a part of the offer the provisions of 

paragraphs (c)(3) and (4) of this section; 

shall be signed by the person making 

the offer, not by counsel; and shall be 

submitted to enforcement counsel. 

(c) Consideration of offers of 

settlement. (1) Offers of settlement shall 

be considered when time, the nature of 

the proceedings, and the public interest 

permit. 

(2) Any settlement offer shall be 

presented to the Director with a 

recommendation, except that, if the 

recommendation is unfavorable, the 

offer shall not be presented to the 

Director unless the person making the 

offer so requests. 

(3) By submitting an offer of 

settlement, the person making the offer 

waives, subject to acceptance of the 

offer: 

(i) All hearings pursuant to the 

statutory provisions under which the 

proceeding has been instituted; 

(ii) The filing of proposed findings of 

fact and conclusions of law; 

(iii) Proceedings before, and a 

recommended decision by, a hearing 

officer; 

(iv) All post-hearing procedures; 

(v) Judicial review by any court; and 

(vi) Any objection to the jurisdiction 

of the Bureau under section 1053 of the 

Dodd-Frank Act. 

(4) By submitting an offer of 

settlement the person further waives: 

(i) Such provisions of this part or 

other requirements of law as may be 

construed to prevent any Bureau 

employee from participating in the 

preparation of, or advising the Director 

as to, any order, opinion, finding of fact, 

or conclusion of law to be entered 

pursuant to the offer; and 

(ii) Any right to claim bias or 

prejudgment by the Director based on 

the consideration of or discussions 

concerning settlement of all or any part 

of the proceeding. 

(5) If the Director rejects the offer of 

settlement, the person making the offer 

shall be notified of the Director’s action 

and the offer of settlement shall be 

deemed withdrawn. The rejected offer 

shall not constitute a part of the record 

in any proceeding against the person 

making the offer, provided, however, 

that rejection of an offer of settlement 

does not affect the continued validity of 

waivers pursuant to paragraph (c)(4) of 

this section with respect to any 

discussions concerning the rejected 

offer of settlement. 

(d) Consent orders. If the Director 

accepts the offer of settlement, all terms 

and conditions of a settlement entered 

into under this section shall be recorded 

in a written stipulation signed by all 

settling parties, and a consent order 

concluding the proceeding. The 

stipulation and consent order shall be 

filed pursuant to § 1081.111, and shall 

recite or incorporate as a part of the 

stipulation the provisions of paragraphs 

(c)(3) and (4) of this section. The 

Director will then issue a consent order, 

which shall be a final order concluding 

the proceeding. 

§ 1081.121 Cooperation with other 

agencies. 

It is the policy of the Bureau to 

cooperate with other governmental 

agencies to avoid unnecessary overlap 

or duplication of regulatory functions. 


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Subpart B—Initiation of Proceedings 

and Prehearing Rules 

§ 1081.200 Commencement of proceeding 

and contents of notice of charges. 

(a) Commencement of proceeding. A 

proceeding governed by this part is 

commenced by filing of a notice of 

charges by the Bureau in accordance 

with § 1081.111. The notice of charges 

must be served by the Bureau upon the 

respondent in accordance with 

§ 1081.113(d)(1). 

(b) Contents of a notice of charges. 

The notice of charges must set forth: 

(1) The legal authority for the 

proceeding and for the Bureau’s 

jurisdiction over the proceeding; 

(2) A statement of the matters of fact 

and law showing that the Bureau is 

entitled to relief; 

(3) A proposed order or prayer for an 

order granting the requested relief; 

(4) The time and place of the hearing 

as required by law or regulation; 

(5) The time within which to file an 

answer as required by law or regulation; 

(6) That the answer shall be filed and 

served in accordance with subpart A of 

this part; and 

(7) The docket number for the 

adjudication proceeding. 

(c) Publication of notice of charges. 

Unless otherwise ordered by the Bureau, 

the notice of charges shall be given 

general circulation by release to the 

public, by publication on the Bureau’s 

Web site and, where directed by the 

hearing officer or the Director, by 

publication in the Federal Register. The 

Bureau may publish any notice of 

charges after ten days from the date of 

service except if there is a pending 

motion for a protective order filed 

pursuant to § 1081.119. 

(d) Commencement of proceeding 

through a consent order. 

Notwithstanding paragraph (a) of this 

section, where the parties agree to 

settlement before the filing of a notice 

of charges, a proceeding may be 

commenced by filing a stipulation and 

consent order. The stipulation and 

consent order shall be filed pursuant to 

§ 1081.111. The stipulation shall 

contain the information required under 

§ 1081.120(d), and the consent order 

shall contain the information required 

under paragraphs (b)(1) through (b)(2) of 

this section. The proceeding shall be 

concluded upon issuance of the consent 

order by the Director. 

(e) Voluntary dismissal. (1) Without 

an order. The Bureau may voluntarily 

dismiss an adjudication proceeding 

without an order entered by a hearing 

officer by filing either: 

(i) A notice of dismissal before the 

respondent(s) serves an answer; or 

(ii) A stipulation of dismissal signed 

by all parties who have appeared. 

(2) Effect. Unless the notice or 

stipulation states otherwise, the 

dismissal is without prejudice, and does 

not operate as an adjudication on the 

merits. 

§ 1081.201. Answer and disclosure 

statement and notification of financial 

interest. 

(a) Time to file answer. Within 14 

days of service of the notice of charges, 

respondent shall file an answer as 

designated in the notice of charges. 

(b) Content of answer. An answer 

must specifically respond to each 

paragraph or allegation of fact contained 

in the notice of charges and must admit, 

deny, or state that the party lacks 

sufficient information to admit or deny 

each allegation of fact. A statement of 

lack of information has the effect of a 

denial. Denials must fairly meet the 

substance of each allegation of fact 

denied; general denials are not 

permitted. When a respondent denies 

part of an allegation, that part must be 

denied and the remainder specifically 

admitted. Any allegation of fact in the 

notice of charges which is not denied in 

the answer shall be deemed admitted for 

purposes of the proceeding. A 

respondent is not required to respond to 

the portion of a notice of charges that 

constitutes the prayer for relief or 

proposed order. The answer must set 

forth affirmative defenses, if any, 

asserted by the respondent. 

(c) If the allegations of the complaint 

are admitted. If the respondent elects 

not to contest the allegations of fact set 

forth in the notice of charges, the 

answer shall consist of a statement that 

the respondent admits all of the material 

allegations to be true. Such an answer 

shall constitute a waiver of hearings as 

to the facts alleged in the notice of 

charges, and together with the notice of 

charges will provide a record basis on 

which the hearing officer shall issue a 

recommended decision containing 

appropriate findings and conclusions 

and a proposed order disposing of the 

proceeding. In such an answer, the 

respondent may, however, reserve the 

right to submit proposed findings of fact 

and conclusions of law under 

§ 1081.305. 

(d) Default. (1) Failure of a respondent 

to file an answer within the time 

provided shall be deemed to constitute 

a waiver of the respondent’s right to 

appear and contest the allegations of the 

notice of charges and to authorize the 

hearing officer, without further notice to 

the respondent, to find the facts to be as 

alleged in the notice of charges and to 

enter a recommended decision 

containing appropriate findings and 

conclusions. In such cases, respondent 

shall have no right to appeal pursuant 

to § 1081.402, but must instead proceed 

pursuant to paragraph (d)(2) of this 

section. 

(2) A motion to set aside a default 

shall be made within a reasonable time, 

state the reasons for the failure to appear 

or defend, and specify the nature of the 

proposed defense in the proceeding. In 

order to prevent injustice and on such 

conditions as may be appropriate, the 

hearing officer, at any time prior to the 

filing of the recommended decision, or 

the Director, at any time, may for good 

cause shown set aside a default. 

(e) Disclosure statement and 

notification of financial interest. (1) 

Who must file; contents. A respondent, 

nongovernmental intervenor, or 

nongovernmental amicus must file a 

disclosure statement and notification of 

financial interest that: 

(i) Identifies any parent corporation, 

any publicly owned corporation owning 

ten percent or more of its stock, and any 

publicly owned corporation not a party 

to the proceeding that has a financial 

interest in the outcome of the 

proceeding and the nature of that 

interest; or 

(ii) States that there are no such 

corporations. 

(2) Time for filing; supplemental 

filing. A respondent, nongovernmental 

intervenor, or nongovernmental amicus 

must: 

(i) File the disclosure statement with 

its first appearance, pleading, motion, 

response, or other request addressed to 

the hearing officer or the Bureau; and 

(ii) Promptly file a supplemental 

statement if any required information 

changes. 

§ 1081.202 Amended pleadings. 

(a) Amendments before the hearing. 

The notice of charges, answer, or any 

other pleading may be amended or 

supplemented only with the opposing 

party’s written consent or leave of the 

hearing officer. The respondent must 

answer an amended notice of charges 

within the time remaining for the 

respondent’s answer to the original 

notice of charges, or within ten days 

after service of the amended notice of 

charges, whichever is later, unless the 

hearing officer orders otherwise for good 

cause. 

(b) Amendments to conform to the 

evidence. When issues not raised in the 

notice of charges or answer are tried at 

the hearing by express or implied 

consent of the parties, they will be 

treated in all respects as if they had 

been raised in the notice of charges or 

answer, and no formal amendments are 


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required. If evidence is objected to at the 

hearing on the ground that it is not 

within the issues raised by the notice of 

charges or answer, the hearing officer 

may admit the evidence when 

admission is likely to assist in 

adjudicating the merits of the action and 

the objecting party fails to satisfy the 

hearing officer that the admission of 

such evidence would unfairly prejudice 

that party’s action or defense upon the 

merits. The hearing officer may grant a 

continuance to enable the objecting 

party to meet such evidence. 

§ 1081.203 Scheduling conference. 

(a) Meeting of the parties before 

scheduling conference. As early as 

practicable before the scheduling 

conference described in paragraph (b) of 

this section, counsel for the parties shall 

meet to discuss the nature and basis of 

their claims and defenses and the 

possibilities for a prompt settlement or 

resolution of the case. The parties shall 

also discuss and agree, if possible, on 

the matters set forth in paragraph (b) of 

this section. 

(b) Scheduling conference. Within 20 

days of service of the notice of charges 

or such other time as the parties and 

hearing officer may agree, counsel for all 

parties shall appear before the hearing 

officer in person at a specified time and 

place or by telephone for the purpose of 

scheduling the course and conduct of 

the proceeding. This meeting or 

telephone conference is called a 

scheduling conference. At the 

scheduling conference, counsel for the 

parties shall be prepared to address: 

(1) Determination of the dates and 

location of the hearing, including, in 

proceedings under section 1053(b) of 

the Dodd-Frank Act, whether the 

hearing should commence later than 60 

days after service of the notice of 

charges; 

(2) Simplification and clarification of 

the issues; 

(3) Amendments to pleadings; 

(4) Settlement of any or all issues; 

(5) Production of documents as set 

forth in § 1081.206 and of witness 

statements as set forth in § 1081.207, 

and prehearing production of 

documents in response to subpoenas 

duces tecum as set forth in § 1081.208; 

(6) Whether or not the parties intend 

to move for summary disposition of any 

or all issues; 

(7) Whether the parties intend to seek 

the deposition of witnesses pursuant to 

§ 1081.209; 

(8) A schedule for the exchange of 

expert reports and the taking of expert 

depositions, if any; and 

(9) Such other matters as may aid in 

the orderly disposition of the 

proceeding. 

(c) Transcript. The hearing officer, in 

his or her discretion, may require that 

a scheduling conference be recorded by 

a court reporter. A transcript of the 

conference and any materials filed, 

including orders, becomes part of the 

record of the proceeding. A party may 

obtain a copy of the transcript at his or 

her expense. 

(d) Scheduling order. At or within five 

days following the conclusion of the 

scheduling conference, the hearing 

officer shall serve on each party an 

order setting forth the date and location 

of the hearing and any agreements 

reached and any procedural 

determinations made. 

(e) Failure to appear; default. Any 

person who is named in a notice of 

charges as a person against whom 

findings may be made or sanctions 

imposed and who fails to appear, in 

person or through counsel, at a 

scheduling conference of which he or 

she has been duly notified may be 

deemed in default pursuant to 

§ 1081.201(d)(1). A party may make a 

motion to set aside a default pursuant to 

§ 1081.201(d)(2). 

(f) Public access. The scheduling 

conference shall be public unless the 

hearing officer determines, based on the 

standard set forth in § 1081.119(c), that 

the conference (or any part thereof) shall 

be closed to the public. 

§ 1081.204 Consolidation and severance of 

actions. 

(a) Consolidation. (1) On the motion 

of any party, or on the hearing officer’s 

own motion, the hearing officer may 

consolidate, for some or all purposes, 

any two or more proceedings, if each 

such proceeding involves or arises out 

of the same transaction, occurrence or 

series of transactions or occurrences, or 

involves at least one common 

respondent or a material common 

question of law or fact, unless such 

consolidation would cause 

unreasonable delay or injustice. 

(2) In the event of consolidation under 

paragraph (a)(1) of this section, 

appropriate adjustment to the 

prehearing schedule may be made to 

avoid unnecessary expense, 

inconvenience, or delay. 

(b) Severance. The hearing officer 

may, upon the motion of any party, 

sever the proceeding for separate 

resolution of the matter as to any 

respondent only if the hearing officer 

finds that: 

(1) Undue prejudice or injustice to the 

moving party would result from not 

severing the proceeding; and 

(2) Such undue prejudice or injustice 

would outweigh the interests of judicial 

economy and expedition in the 

complete and final resolution of the 

proceeding. 

§ 1081.205 Non-dispositive motions. 

(a) Scope. This section applies to all 

motions except motions to dismiss and 

motions for summary disposition. A 

non-dispositive motion filed pursuant to 

another section of this part shall comply 

with any specific requirements of that 

section and this section to the extent 

these requirements are not inconsistent. 

(b) In writing. (1) Unless made during 

a hearing or conference, an application 

or request for an order or ruling must be 

made by written motion. 

(2) All written motions must state 

with particularity the relief sought and 

must be accompanied by a proposed 

order. 

(3) No oral argument may be held on 

written motions except as otherwise 

directed by the hearing officer. Written 

memoranda, briefs, affidavits or other 

relevant material or documents may be 

filed in support of or in opposition to a 

motion. 

(c) Oral motions. The Director or the 

hearing officer, as appropriate, may 

order that an oral motion be submitted 

in writing. 

(d) Responses and replies. (1) Except 

as otherwise provided herein, within 

ten days after service of any written 

motion, or within such other period of 

time as may be established by the 

hearing officer or the Director, as 

appropriate, any party may file a written 

response to a motion. The hearing 

officer shall not rule on any oral or 

written motion before each party has 

had an opportunity to file a response. 

(2) Reply briefs, if any, may be filed 

within three days after service of the 

response. 

(3) The failure of a party to oppose a 

written motion or an oral motion made 

on the record is deemed consent by that 

party to the entry of an order 

substantially in the form of the order 

accompanying the motion. 

(e) Length limitations. No motion 

subject to this section (together with the 

brief in support of the motion) or brief 

in response to the motion shall exceed 

15 pages in length, exclusive of pages 

containing the table of contents, table of 

authorities, and any addendum that 

consists solely of copies of applicable 

cases, pertinent legislative provisions or 

rules, and exhibits. No reply brief shall 

exceed six pages in length, exclusive of 

pages containing the table of contents, 

table of authorities, and any addendum 

that consists solely of copies of 

applicable cases, pertinent legislative 


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provisions or rules, and exhibits. 

Motions for leave to file motions and 

briefs in excess of these limitations are 

disfavored. 

(f) Meet and confer requirements. 

Each motion filed under this section 

shall be accompanied by a signed 

statement representing that counsel for 

the moving party has conferred or made 

a good faith effort to confer with 

opposing counsel in a good faith effort 

to resolve by agreement the issues raised 

by the motion and has been unable to 

reach such an agreement. If some of the 

matters in controversy have been 

resolved by agreement, the statement 

shall specify the matters so resolved and 

the matters remaining unresolved. 

(g) Ruling on non-dispositive motions. 

Unless otherwise provided by a relevant 

section of this part, a hearing officer 

shall rule on non-dispositive motions. 

Such ruling shall be issued within 14 

days after the expiration of the time 

period allowed for the filing of all 

motion papers authorized by this 

section. The Director, for good cause, 

may extend the time allowed for a 

ruling. 

(h) Proceedings not stayed. A motion 

under consideration by the Director or 

the hearing officer shall not stay 

proceedings before the hearing officer 

unless the Director or the hearing 

officer, as appropriate, so orders. 

(i) Dilatory motions. Frivolous, 

dilatory, or repetitive motions are 

prohibited. The filing of such motions 

may form the basis for sanctions. 

§ 1081.206 Availability of documents for 

inspection and copying. 

For purposes of this section, the term 

documents shall include any book, 

document, record, report, 

memorandum, paper, communication, 

tabulation, chart, logs, electronic files, 

or other data or data compilations stored 

in any medium. 

(a) Documents to be available for 

inspection and copying. (1) Unless 

otherwise provided by this section, or 

by order of the hearing officer, the 

Office of Enforcement shall make 

available for inspection and copying by 

any respondent documents obtained by 

the Office of Enforcement prior to the 

institution of proceedings, from persons 

not employed by the Bureau, in 

connection with the investigation 

leading to the institution of proceedings. 

Such documents shall include: 

(i) Any documents turned over in 

response to civil investigative demands 

or other written requests to provide 

documents or to be interviewed issued 

by the Office of Enforcement; 

(ii) All transcripts and transcript 

exhibits; and 

(iii) Any other documents obtained 

from persons not employed by the 

Bureau. 

(2) In addition, the Office of 

Enforcement shall make available for 

inspection and copying by any 

respondent: 

(i) Each civil investigative demand or 

other written request to provide 

documents or to be interviewed issued 

by the Office of Enforcement in 

connection with the investigation 

leading to the institution of proceedings; 

and 

(ii) Any final examination or 

inspection reports prepared by any 

other Office of the Bureau if the Office 

of Enforcement either intends to 

introduce any such report into evidence 

or to use any such report to refresh the 

recollection of, or impeach, any witness. 

(3) Nothing in paragraph (a) of this 

section shall limit the right of the Office 

of Enforcement to make available any 

other document, or shall limit the right 

of a respondent to seek access to or 

production pursuant to subpoena of any 

other document, or shall limit the 

authority of the hearing officer to order 

the production of any document 

pursuant to subpoena. 

(4) Nothing in paragraph (a) of this 

section shall require the Office of 

Enforcement to produce a final 

examination or inspection report 

prepared by any other Office of the 

Bureau or any other government agency 

to a respondent who is not the subject 

of that report. 

(b) Documents that may be withheld. 

(1) The Office of Enforcement may 

withhold a document if: 

(i) The document is privileged; 

(ii) The document is an internal 

memorandum, note or writing prepared 

by a person employed by the Bureau or 

another government agency, other than 

an examination or supervision report as 

specified in paragraph (a)(2)(ii) of this 

section, or would otherwise be subject 

to the work product doctrine and will 

not be offered in evidence; 

(iii) The document was obtained from 

a domestic or foreign governmental 

entity and is either not relevant to the 

resolution of the proceeding or was 

provided on condition that the 

information not be disclosed; 

(iv) The document would disclose the 

identity of a confidential source; 

(v) Applicable law prohibits the 

disclosure of the document; or 

(vi) The hearing officer grants leave to 

withhold a document or category of 

documents as not relevant to the subject 

matter of the proceeding or otherwise, 

for good cause shown. 

(2) Nothing in paragraph (b)(1) of this 

section authorizes the Office of 

Enforcement in connection with an 

adjudication proceeding to withhold 

material exculpatory evidence in the 

possession of the Office that would 

otherwise be required to be produced 

pursuant to paragraph (a) of this section. 

(c) Withheld document list. The 

hearing officer may require the Office of 

Enforcement to produce a list of 

documents or categories of documents 

withheld pursuant to paragraphs 

(b)(1)(i) through (v) of this section or to 

submit to the hearing officer any 

document withheld, except for any 

documents that are being withheld 

pursuant to section (b)(1)(iii), in which 

case the Office of Enforcement shall 

inform the other parties of the fact that 

such documents are being withheld, but 

no further disclosures regarding those 

documents shall be required. The 

hearing officer may determine whether 

any withheld document should be made 

available for inspection and copying. 

When similar documents are withheld 

pursuant to paragraphs (b)(1)(i) through 

(v) of this section, those documents may 

be identified by category instead of by 

individual document. The hearing 

officer retains discretion to determine 

when an identification by category is 

insufficient. 

(d) Timing of inspection and copying. 

Unless otherwise ordered by the hearing 

officer, the Office of Enforcement shall 

commence making documents available 

to a respondent for inspection and 

copying pursuant to this section no later 

than seven days after service of the 

notice of charges. 

(e) Place of inspection and copying. 

Documents subject to inspection and 

copying pursuant to this section shall be 

made available to the respondent for 

inspection and copying at the Bureau 

office where they are ordinarily 

maintained, or at such other place as the 

parties, in writing, may agree. A 

respondent shall not be given custody of 

the documents or leave to remove the 

documents from the Bureau’s offices 

pursuant to the requirements of this 

section other than by written agreement 

of the Office of Enforcement. Such 

agreement shall specify the documents 

subject to the agreement, the date they 

shall be returned and such other terms 

or conditions as are appropriate to 

provide for the safekeeping of the 

documents. 

(f) Copying costs and procedures. The 

respondent may obtain a photocopy of 

any documents made available for 

inspection or, at the discretion of the 

Office of Enforcement, electronic copies 

of such documents. The respondent 

shall be responsible for the cost of 

photocopying. Unless otherwise 

ordered, charges for copies made by the 


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Office of Enforcement at the request of 

the respondent will be at the rate 

charged pursuant to part 1070. The 

respondent shall be given access to the 

documents at the Bureau’s offices or 

such other place as the parties may 

agree during normal business hours for 

copying of documents at the 

respondent’s expense. 

(g) Duty to supplement. If the Office 

of Enforcement acquires information 

that it intends to rely upon at a hearing 

after making its disclosures under 

paragraph (a)(1) of this section, the 

Office of Enforcement shall supplement 

its disclosures to include such 

information. 

(h) Failure to make documents 

available—harmless error. In the event 

that a document required to be made 

available to a respondent pursuant to 

this section is not made available by the 

Office of Enforcement, no rehearing or 

redecision of a proceeding already heard 

or decided shall be required unless the 

respondent establishes that the failure to 

make the document available was not 

harmless error. 

(i) Disclosure of privileged or 

protected information or 

communications; scope of waiver; 

obligations of receiving party. (1) The 

disclosure of privileged or protected 

information or communications by any 

party during an adjudication proceeding 

shall not operate as a waiver if: 

(i) The disclosure was inadvertent; 

(ii) The holder of the privilege or 

protection took reasonable steps to 

prevent disclosure; and 

(iii) The holder promptly took 

reasonable steps to rectify the error, 

including notifying any party that 

received the information or 

communication of the claim and the 

basis for it. 

(2) After being notified, the receiving 

party must promptly return, sequester, 

or destroy the specified information and 

any copies it has; must not use or 

disclose the information until the claim 

is resolved; must take reasonable steps 

to retrieve the information if the party 

disclosed it before being notified; and 

may promptly present the information 

to the hearing officer under seal for a 

determination of the claim. The 

producing party must preserve the 

information until the claim is resolved. 

(3) The disclosure of privileged or 

protected information or 

communications by any party during an 

adjudication proceeding shall waive the 

privilege or protection, with respect to 

other parties to the proceeding, as to 

undisclosed information or 

communications only if: 

(i) The waiver is intentional; 

(ii) The disclosed and undisclosed 

information or communications concern 

the same subject matter; and 

(iii) They ought in fairness to be 

considered together. 

§ 1081.207 Production of witness 

statements. 

(a) Availability. Any respondent may 

move that the Office of Enforcement 

produce for inspection and copying any 

statement of any person called or to be 

called as a witness by the Office of 

Enforcement that pertains, or is 

expected to pertain, to his or her direct 

testimony and that would be required to 

be produced pursuant to the Jencks Act, 

18 U.S.C. 3500, if the adjudication 

proceeding were a criminal proceeding. 

For purposes of this section, the term 

‘‘statement’’ shall have the meaning set 

forth in 18 U.S.C. 3500(e). Such 

production shall be made at a time and 

place fixed by the hearing officer and 

shall be made available to any party, 

provided, however, that the production 

shall be made under conditions 

intended to preserve the items to be 

inspected or copied. 

(b) Failure to produce—harmless 

error. In the event that a statement 

required to be made available to a 

respondent pursuant to this section is 

not made available by the Office of 

Enforcement, no rehearing or redecision 

of a proceeding already heard or 

decided shall be required unless the 

respondent establishes that the failure to 

make the statement available was not 

harmless error. 

§ 1081.208 Subpoenas. 

(a) Availability. In connection with 

any hearing ordered by the hearing 

officer, a party may request the issuance 

of one or more subpoenas requiring the 

attendance and testimony of witnesses 

at the designated time and place of the 

hearing, or the production of 

documentary or other tangible evidence 

returnable at any designated time or 

place. 

(b) Procedure. Unless made on the 

record at a hearing, requests for issuance 

of a subpoena shall be made in writing, 

and filed and served on each party 

pursuant to subpart A of this part. The 

request must contain a proposed 

subpoena and a brief statement showing 

the general relevance and 

reasonableness of the scope of testimony 

or documents sought. 

(c) Signing may be delegated. A 

hearing officer may authorize issuance 

of a subpoena, and may delegate the 

manual signing of the subpoena to any 

other person. 

(d) Standards for issuance. The 

hearing officer shall promptly issue any 

subpoena requested pursuant to this 

section. However, where it appears to 

the hearing officer that the subpoena 

sought may be unreasonable, 

oppressive, excessive in scope, or 

unduly burdensome, he or she may, in 

his or her discretion, as a condition 

precedent to the issuance of the 

subpoena, require the person seeking 

the subpoena to show further the 

general relevance and reasonable scope 

of the testimony or other evidence 

sought. If after consideration of all the 

circumstances, the hearing officer 

determines that the subpoena or any of 

its terms is unreasonable, oppressive, 

excessive in scope, or unduly 

burdensome, he or she may refuse to 

issue the subpoena, or issue it only 

upon such conditions as fairness 

requires. In making the foregoing 

determination, the hearing officer may 

inquire of the other participants 

whether they will stipulate to the facts 

sought to be proved. 

(e) Service. Upon issuance by the 

hearing officer, the party making the 

request shall serve the subpoena on the 

person named in the subpoena and on 

each party in accordance with 

§ 1081.113(c). Subpoenas may be served 

in any State, territory, possession of the 

United States, or the District of 

Columbia, on any person or company 

doing business in any State, territory, 

possession of the United States, or the 

District of Columbia, or as otherwise 

permitted by law. 

(f) Tender of fees required. When a 

subpoena compelling the attendance of 

a person at a hearing is issued at the 

request of anyone other than an officer 

or agency of the United States, service 

is valid only if the subpoena is 

accompanied by a tender to the 

subpoenaed person of the fees for one 

day’s attendance and mileage specified 

by § 1081.116. 

(g) Production of documentary 

material. Production of documentary 

material in response to a subpoena shall 

be made under a sworn certificate, in 

such form as the subpoena designates, 

by the person to whom the subpoena is 

directed or, if not a natural person, by 

any person having knowledge of the 

facts and circumstances relating to such 

production, to the effect that all of the 

documentary material required by the 

subpoena and in the possession, 

custody, or control of the person to 

whom the subpoena is directed has been 

produced and made available to the 

custodian. 

(h) Motion to quash or modify. (1) 

Procedure. Any person to whom a 

subpoena is directed, or who is an 

owner, creator, or the subject of the 

documents that are to be produced 


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39094 Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 

pursuant to a subpoena, or any party 

may, prior to the time specified therein 

for compliance, but in no event more 

than ten days after the date of service of 

such subpoena, move that the subpoena 

be quashed or modified. Such motion 

shall be filed and served on all parties 

pursuant to subpart A of this part. 

Notwithstanding § 1081.205, the party 

on whose behalf the subpoena was 

issued or enforcement counsel may, 

within five days of service of the 

motion, file a response to the motion. 

Reply briefs are not permitted unless 

requested by the hearing officer. Filing 

a motion to modify a subpoena does not 

stay the movant’s obligation to comply 

with those portions of the subpoena that 

the person has not sought to modify. 

(2) Standards governing motion to 

quash or modify. If compliance with the 

subpoena would be unreasonable, 

oppressive, or unduly burdensome, the 

hearing officer shall quash or modify the 

subpoena, or may order return of the 

subpoena only upon specified 

conditions. These conditions may 

include but are not limited to a 

requirement that the party on whose 

behalf the subpoena was issued shall 

make reasonable compensation to the 

person to whom the subpoena was 

addressed for the cost of copying or 

transporting evidence to the place for 

return of the subpoena. 

(i) Enforcing subpoenas. If a 

subpoenaed person fails to comply with 

any subpoena issued pursuant to this 

section or any order of the hearing 

officer which directs compliance with 

all or any portion of a subpoena, the 

Bureau’s General Counsel may, on its 

own motion or at the request of the 

party on whose behalf the subpoena was 

issued, apply to an appropriate United 

States district court, in the name of the 

Bureau but on relation of such party, for 

an order requiring compliance with so 

much of the subpoena as the hearing 

officer has not quashed or modified, 

unless, in the judgment of the General 

Counsel, the enforcement of such 

subpoena would be inconsistent with 

law and the policies of Title X of the 

Dodd-Frank Act. Failure to request that 

the Bureau’s General Counsel seek 

enforcement of a subpoena constitutes a 

waiver of any claim of prejudice 

predicated upon the unavailability of 

the testimony or evidence sought. 

§ 1081.209 Deposition of witness 

unavailable for hearing. 

(a) General rules. (1) If a witness will 

not be available for the hearing, a party 

desiring to preserve that witness’s 

testimony for the record may request in 

accordance with the procedures set 

forth in this section that the hearing 

officer issue a subpoena, including a 

subpoena duces tecum, requiring the 

attendance of the witness at a 

deposition. The hearing officer may 

issue a deposition subpoena under this 

section upon a showing that: 

(i) The witness will be unable to 

attend or may be prevented from 

attending the hearing because of age, 

sickness, or infirmity, or will otherwise 

be unavailable; 

(ii) The witness’s unavailability was 

not procured or caused by the 

subpoenaing party; 

(iii) The testimony is reasonably 

expected to be material; and 

(iv) Taking the deposition will not 

result in any undue burden to any other 

party and will not cause undue delay of 

the proceeding. 

(2) In addition to making a showing 

as required by paragraph (a)(1) of this 

section, the request for a deposition 

subpoena must contain a proposed 

deposition subpoena and a brief 

statement showing the general relevance 

and reasonableness of the scope of 

testimony and documents sought, and 

the time and place for taking the 

deposition. Any request to record the 

deposition by audio-visual means must 

be made in the request for a deposition 

subpoena. 

(3) Any requested deposition 

subpoena that sets forth a valid basis for 

its issuance must be promptly issued, 

unless the hearing officer on his or her 

own motion requires a written response 

or requires attendance at a conference 

concerning whether the requested 

subpoena should be issued. However, 

where it appears to the hearing officer 

that the deposition subpoena sought 

may be unreasonable, oppressive, 

excessive in scope, or unduly 

burdensome, he or she may, in his or 

her discretion, as a condition precedent 

to the issuance of the deposition 

subpoena, require the person seeking 

the deposition subpoena to show further 

the general relevance and reasonable 

scope of the testimony or other evidence 

sought. If after consideration of all the 

circumstances, the hearing officer 

determines that the deposition 

subpoena or any of its terms is 

unreasonable, oppressive, excessive in 

scope, or unduly burdensome, he or she 

may refuse to issue the deposition 

subpoena, or issue it only upon such 

conditions as fairness requires. In 

making the foregoing determination, the 

hearing officer may inquire of the other 

participants whether they will stipulate 

to the facts sought to be proved. 

(4) Unless the hearing officer orders 

otherwise, no deposition under this 

section shall be taken on fewer than 14 

days’ notice to the witness and all 

parties. 

(b) Procedure. Unless made on the 

record at a hearing, requests for issuance 

of a deposition subpoena shall be made 

in writing, and filed and served on each 

party pursuant to subpart A of this part. 

(c) Signing may be delegated. A 

hearing officer may authorize issuance 

of a deposition subpoena, and may 

delegate the manual signing of the 

deposition subpoena to any other 

person. 

(d) Service. Upon issuance by the 

hearing officer, the party making the 

request shall serve the subpoena on the 

person named in the subpoena and on 

each party in accordance with 

§ 1081.113(c). Deposition subpoenas 

may be served in any State, territory, 

possession of the United States, or the 

District of Columbia, on any person or 

company doing business in any State, 

territory, possession of the United 

States, or the District of Columbia, or as 

otherwise permitted by law. 

(e) Tender of fees required. When a 

subpoena compelling the attendance of 

a person at a deposition is issued at the 

request of anyone other than an officer 

or agency of the United States, service 

is valid only if the subpoena is 

accompanied by a tender to the 

subpoenaed person of the fees for one 

day’s attendance and mileage specified 

by § 1081.116. 

(f) Motion to quash or modify. (1) 

Procedure. Any person to whom a 

deposition subpoena is directed, or who 

is an owner, creator, or the subject of the 

documents that are to be produced 

pursuant to a deposition subpoena, or 

any party may, prior to the time 

specified therein for compliance, but in 

no event more than ten days after the 

date of service of such subpoena, move 

that the deposition subpoena be 

quashed or modified. Such motion must 

include a statement of the basis for the 

motion to quash or modify the 

deposition subpoena, and shall be filed 

and served on all parties pursuant to 

subpart A of this part. Notwithstanding 

§ 1081.205, the party on whose behalf 

the deposition subpoena was issued or 

enforcement counsel may, within five 

days of service of the motion, file a 

response to the motion. Reply briefs are 

not permitted unless requested by the 

hearing officer. 

(2) Standards governing motion to 

quash or modify. If compliance with the 

deposition subpoena would be 

unreasonable, oppressive or unduly 

burdensome, or the deposition 

subpoena does not meet the 

requirements set forth in paragraph 

(a)(1) of this section, the hearing officer 

shall quash or modify the deposition 


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subpoena, or may order return of the 

deposition subpoena only upon 

specified conditions. These conditions 

may include but are not limited to a 

requirement that the party on whose 

behalf the deposition subpoena was 

issued shall make reasonable 

compensation to the person to whom 

the deposition subpoena was addressed 

for the cost of copying or transporting 

evidence to the place for return of the 

deposition subpoena. 

(g) Procedure upon deposition. (1) 

Depositions shall be taken before any 

person before whom a deposition may 

be taken pursuant to the Federal Rules 

of Civil Procedure (the ‘‘deposition 

officer’’). 

(2) The witness being deposed may 

have an attorney present during the 

deposition. 

(3) Each witness testifying pursuant to 

a deposition subpoena must be duly 

sworn, and each party shall have the 

right to examine the witness. Objections 

to questions or documents must be in 

short form, stating the grounds for the 

objection. Objections to questions of 

evidence shall be noted by the 

deposition officer upon the deposition, 

but a deposition officer other than the 

hearing officer shall not have the power 

to decide on the competency, 

materiality, or relevance of evidence. 

Failure to object to questions or 

documents is not deemed a waiver 

except where the ground for the 

objection might have been avoided if the 

objection had been timely presented. All 

questions, answers, and objections must 

be recorded. 

(4) The deposition must be subscribed 

by the witness, unless the parties and 

the witness, by stipulation, have waived 

the signing, or the witness is ill, cannot 

be found, or has refused to sign. If the 

deposition is not subscribed by the 

witness, the court reporter taking the 

deposition shall certify that the 

transcript is a true and complete 

transcript of the deposition. 

(5) The original deposition transcript 

and exhibits shall be filed with the 

Office of Administrative Adjudication. 

The cost of the transcript shall be paid 

by the party requesting the deposition. 

A copy of the deposition shall be 

available to the deponent and each party 

for purchase at prescribed rates. 

(h) Enforcing subpoenas. Any party 

may move before the hearing officer for 

an order compelling the witness to 

answer any questions the witness has 

refused to answer or submit any 

evidence the witness has refused to 

submit during the deposition. If a 

subpoenaed person fails to comply with 

any order of the hearing officer which 

directs compliance with all or any 

portion of a deposition subpoena under 

this section, the Bureau’s General 

Counsel may, on its own motion or at 

the request of the party on whose behalf 

the subpoena was issued, apply to an 

appropriate United States district court, 

in the name of the Bureau but on 

relation of such party, for an order 

requiring compliance with so much of 

the subpoena as the hearing officer has 

not quashed or modified, unless, in the 

judgment of the General Counsel, the 

enforcement of such subpoena would be 

inconsistent with law and the policies 

of Title X of the Dodd-Frank Act. 

Failure to request that the Bureau seek 

enforcement of a subpoena constitutes a 

waiver of any claim of prejudice 

predicated upon the unavailability of 

the testimony or evidence sought. 

§ 1081.210 Expert discovery. 

(a) At a date set by the hearing officer 

at the scheduling conference, each party 

shall serve the other with a report 

prepared by each of its expert witnesses. 

Each party shall serve the other parties 

with a list of any rebuttal expert 

witnesses and a rebuttal report prepared 

by each such witness not later than 28 

days after the deadline for service of 

expert reports, unless another date is set 

by the hearing officer. A rebuttal report 

shall be limited to rebuttal of matters set 

forth in the expert report for which it is 

offered in rebuttal. If material outside 

the scope of fair rebuttal is presented, a 

party may file a motion not later than 

five days after the deadline for service 

of rebuttal reports, seeking appropriate 

relief with the hearing officer, including 

striking all or part of the report, leave 

to submit a surrebuttal report by the 

party’s own experts, or leave to call a 

surrebuttal witness and to submit a 

surrebuttal report by that witness. 

(b) No party may call an expert 

witness at the hearing unless he or she 

has been listed and has provided reports 

as required by this section, unless 

otherwise directed by the hearing officer 

at a scheduling conference. Each side 

will be limited to calling at the hearing 

five expert witnesses, including any 

rebuttal or surrebuttal expert witnesses. 

A party may file a motion seeking leave 

to call additional expert witnesses due 

to extraordinary circumstances. 

(c) Each report shall be signed by the 

expert and contain a complete statement 

of all opinions to be expressed and the 

basis and reasons therefore; the data, 

materials, or other information 

considered by the witness in forming 

the opinions; any exhibits to be used as 

a summary of or support for the 

opinions; the qualifications of the 

witness, including a list of all 

publications authored or co-authored by 

the witness within the preceding ten 

years; the compensation to be paid for 

the study and testimony; and a listing of 

any other cases in which the witness 

has testified or sought to testify as an 

expert at trial or hearing, or by 

deposition within the preceding four 

years. A rebuttal or surrebuttal report 

need not include any information 

already included in the initial report of 

the witness. 

(d) A party may depose any person 

who has been identified as an expert 

whose opinions may be presented at 

trial. Unless otherwise ordered by the 

hearing officer, a deposition of any 

expert witness shall be conducted after 

the disclosure of a report prepared by 

the witness in accordance with 

paragraph (a) of this section, and at least 

seven days prior to the deadline for 

submission of rebuttal expert reports. A 

deposition of an expert witness shall be 

completed no later than 14 days before 

the hearing unless otherwise ordered by 

the hearing officer. No expert deposition 

shall exceed eight hours on the record, 

absent agreement of the parties or an 

order of the hearing officer for good 

cause shown. Expert depositions shall 

be conducted pursuant to the 

procedures set forth in § 1081.209(g). 

(e) A party may not discover facts 

known or opinions held by an expert 

who has been retained or specifically 

employed by another party in 

anticipation of litigation or preparation 

for the hearing and who is not listed as 

a witness for the hearing. A party may 

not discover drafts of any report 

required by this section, regardless of 

the form in which the draft is recorded, 

or any communications between 

another party’s attorney and any of that 

other party’s experts, regardless of the 

form of the communications, except to 

the extent that the communications: 

(1) Relate to compensation for the 

testifying expert’s study or testimony; 

(2) Identify facts or data that the other 

party’s attorney provided and that the 

testifying expert considered in forming 

the opinions to be expressed; or 

(3) Identify assumptions that the other 

party’s attorney provided and that the 

testifying expert relied on in forming the 

opinions to be expressed. 

(f) The hearing officer shall have the 

discretion to dispense with the 

requirement of expert discovery in 

appropriate cases. 

§ 1081.211 Interlocutory review. 

(a) Availability. The Director may, at 

any time, direct that any matter be 

submitted to him or her for review. 

Subject to paragraph (c) of this section, 

the hearing officer may, on his or her 

own motion or on the motion of any 


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party, certify any matter for 

interlocutory review by the Director. 

This section is the exclusive remedy for 

review of a hearing officer’s ruling or 

order prior to the Director’s 

consideration of the entire proceeding. 

(b) Procedure. Any party’s motion for 

certification of a ruling or order for 

interlocutory review shall be filed with 

the hearing officer within five days of 

service of the ruling or order, shall 

specify the ruling or order or parts 

thereof for which interlocutory review is 

sought, shall attach any other portions 

of the record on which the moving party 

relies, and shall otherwise comply with 

§ 1081.205. Notwithstanding § 1081.205, 

any response to such a motion must be 

filed within three days of service of the 

motion. The hearing officer shall issue 

a ruling on the motion within five days 

of the deadline for filing a response. 

(c) Certification process. Unless the 

Director directs otherwise, a ruling or 

order may not be submitted to the 

Director for interlocutory review unless 

the hearing officer, upon the hearing 

officer’s motion or upon the motion of 

a party, certifies the ruling or order in 

writing. The hearing officer shall not 

certify a ruling or order unless: 

(1) The ruling or order would compel 

testimony of Bureau officers or 

employees, or those from another 

governmental agency, or the production 

of documentary evidence in the custody 

of the Bureau or another governmental 

agency; 

(2) The ruling or order involves a 

motion for disqualification of the 

hearing officer pursuant to 

§ 1081.105(c)(2); 

(3) The ruling or order suspended or 

barred an individual from appearing 

before the Bureau pursuant to 

§ 1081.107(c); or 

(4) Upon motion by a party, the 

hearing officer is of the opinion that: 

(i) The ruling or order involves a 

controlling question of law as to which 

there is substantial ground for difference 

of opinion; and 

(ii) An immediate review of the ruling 

or order is likely to materially advance 

the completion of the proceeding or 

subsequent review will be an 

inadequate remedy. 

(d) Interlocutory review. A party 

whose motion for certification has been 

denied by the hearing officer may 

petition the Director for interlocutory 

review. 

(e) Director review. The Director shall 

determine whether or not to review a 

ruling or order certified under this 

section or the subject of a petition for 

interlocutory review. Interlocutory 

review is disfavored, and the Director 

will grant a petition to review a hearing 

officer’s ruling or order prior to his or 

her consideration of a recommended 

decision only in extraordinary 

circumstances. The Director may 

decline to review a ruling or order 

certified by a hearing officer pursuant to 

paragraph (c) of this section or the 

petition of a party who has been denied 

certification if he or she determines that 

interlocutory review is not warranted or 

appropriate under the circumstances, in 

which case he or she may summarily 

deny the petition. If the Director 

determines to grant the review, he or 

she will review the matter and issue his 

or her ruling and order in an 

expeditious fashion, consistent with the 

Bureau’s other responsibilities. 

(f) Proceedings not stayed. The filing 

of a motion requesting that the hearing 

officer certify any of his or her prior 

rulings or orders for interlocutory 

review or a petition for interlocutory 

review filed with the Director, and the 

grant of any such review, shall not stay 

proceedings before the hearing officer 

unless he or she, or the Director, shall 

so order. The Director will not consider 

a motion for a stay unless the motion 

shall have first been made to the hearing 

officer. 

§ 1081.212 Dispositive motions. 

(a) Dispositive motions. This section 

governs the filing of motions to dismiss 

and motions for summary disposition. 

The filing of any such motion does not 

obviate a party’s obligation to file an 

answer or take any other action required 

by this part or by an order of the hearing 

officer, unless expressly so provided by 

the hearing officer. 

(b) Motions to dismiss. A respondent 

may file a motion to dismiss asserting 

that, even assuming the truth of the facts 

alleged in the notice of charges, it is 

entitled to dismissal as a matter of law. 

(c) Motion for summary disposition. A 

party may make a motion for summary 

disposition asserting that the 

undisputed pleaded facts, admissions, 

affidavits, stipulations, documentary 

evidence, matters as to which official 

notice may be taken, and any other 

evidentiary materials properly 

submitted in connection with a motion 

for summary disposition show that: 

(1) There is no genuine issue as to any 

material fact; and 

(2) The moving party is entitled to a 

decision in its favor as a matter of law. 

(d) Filing of motions for summary 

disposition and responses. (1) After a 

respondent’s answer has been filed and 

documents have been made available to 

the respondent for inspection and 

copying pursuant to § 1081.206, any 

party may move for summary 

disposition in its favor of all or any part 

of the proceeding. 

(2) A motion for summary disposition 

must be accompanied by a statement of 

the material facts as to which the 

moving party contends there is no 

genuine issue. Such motion must be 

supported by documentary evidence, 

which may take the form of admissions 

in pleadings, stipulations, depositions, 

investigatory depositions, transcripts, 

affidavits and any other evidentiary 

materials that the moving party 

contends support his or her position. 

The motion must also be accompanied 

by a brief containing the points and 

authorities in support of the contention 

of the moving party. Any party opposing 

a motion for summary disposition must 

file a statement setting forth those 

material facts as to which he or she 

contends a genuine dispute exists. Such 

opposition must be supported by 

evidence of the same type as may be 

submitted in support of a motion for 

summary disposition and a brief 

containing the points and authorities in 

support of the contention that summary 

disposition would be inappropriate. 

(3) Any affidavit or declaration 

submitted in support of or in opposition 

to a motion for summary disposition 

shall set forth such facts as would be 

admissible in evidence, shall show 

affirmatively that the affiant is 

competent to testify to the matters stated 

therein, and must be signed under oath 

and penalty of perjury. 

(e) Page limitations for dispositive 

motions. A motion to dismiss or for 

summary disposition, together with any 

brief in support of the motion (exclusive 

of any declarations, affidavits, or 

attachments) shall not exceed 35 pages 

in length. Motions for extensions of this 

length limitation are disfavored. 

(f) Opposition and reply response 

time and page limitation. Any party, 

within 20 days after service of a 

dispositive motion, or within such time 

period as allowed by the hearing officer, 

may file a response to such motion. The 

length limitations set forth in paragraph 

(e) of this section shall also apply to 

such responses. Any reply brief filed in 

response to an opposition to a 

dispositive motion shall be filed within 

five days after service of the opposition. 

Reply briefs shall not exceed ten pages. 

(g) Oral argument. At the request of 

any party or on his or her own motion, 

the hearing officer may hear oral 

argument on a dispositive motion. 

(h) Decision on motion. Within 30 

days following the expiration of the 

time for filing all responses and replies 

to any dispositive motion, the hearing 

officer shall determine whether the 

motion shall be granted. If the hearing 


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officer determines that dismissal or 

summary disposition is warranted, he or 

she shall issue a recommended decision 

granting the motion. If the hearing 

officer finds that no party is entitled to 

dismissal or summary disposition, he or 

she shall make a ruling denying the 

motion. If it appears that a party, for 

good cause shown, cannot present by 

affidavit, prior to hearing, facts essential 

to justify opposition to the motion, the 

hearing officer shall deny or defer the 

motion. 

§ 1081.213 Partial summary disposition. 

If on a motion for summary 

disposition under § 1081.212 a decision 

is not rendered upon the whole case or 

for all the relief asked and a hearing is 

necessary, the hearing officer shall issue 

an order specifying the facts that appear 

without substantial controversy and 

directing further proceedings in the 

action. The facts so specified shall be 

deemed established. 

§ 1081.214 Prehearing conferences. 

(a) Prehearing conferences. The 

hearing officer may, in addition to the 

scheduling conference, on his or her 

own motion or at the request of any 

party, direct counsel for the parties to 

meet with him or her (in person or by 

telephone) at a prehearing conference 

for further discussion of the issues 

outlined in § 1081.203, or for discussion 

of any additional matters that in the 

view of the hearing officer will aid in an 

orderly disposition of the proceeding, 

including but not limited to: 

(1) Identification of potential 

witnesses and limitation on the number 

of witnesses; 

(2) The exchange of any prehearing 

materials including witness lists, 

statements of issues, exhibits, and any 

other materials; 

(3) Stipulations, admissions of fact, 

and the contents, authenticity, and 

admissibility into evidence of 

documents; 

(4) Matters of which official notice 

may be taken; and 

(5) Whether the parties intend to 

introduce prior sworn statements of 

witnesses as set forth in § 1081.303(h). 

(b) Transcript. The hearing officer, in 

his or her discretion, may require that 

a prehearing conference be recorded by 

a court reporter. A transcript of the 

conference and any materials filed, 

including orders, becomes part of the 

record of the proceeding. A party may 

obtain a copy of the transcript at his or 

her expense. 

(c) Public access. Any prehearing 

conferences shall be public unless the 

hearing officer determines, based on the 

standard set forth in § 1081.119(c), that 

the conference (or any part thereof) shall 

be closed to the public. 

§ 1081.215 Prehearing submissions. 

(a) Within the time set by the hearing 

officer, but in no case later than ten days 

before the start of the hearing, each 

party shall serve on every other party: 

(1) A prehearing statement, which 

shall include an outline or narrative 

summary of its case or defense, and the 

legal theories upon which it will rely; 

(2) A final list of witnesses to be 

called to testify at the hearing, including 

the name and address of each witness 

and a short summary of the expected 

testimony of each witness; 

(3) Any prior sworn statements that a 

party intends to admit into evidence 

pursuant to § 1081.303(h); 

(4) A list of the exhibits to be 

introduced at the hearing along with a 

copy of each exhibit; and 

(5) Any stipulations of fact or liability. 

(b) Expert witnesses. Each party who 

intends to call an expert witness shall 

also serve, in addition to the 

information required by paragraph (a)(2) 

of this section, a statement of the 

expert’s qualifications, a listing of other 

proceedings in which the expert has 

given or sought to give expert testimony 

at trial or hearing or by deposition 

within the preceding four years, and a 

list of publications authored or coauthored by the expert within the 

preceding ten years, to the extent such 

information has not already been 

provided pursuant to § 1081.210. 

(c) Effect of failure to comply. No 

witness may testify and no exhibits may 

be introduced at the hearing if such 

witness or exhibit is not listed in the 

prehearing submissions pursuant to 

paragraph (a) of this section, except for 

good cause shown. 

§ 1081.216 Amicus participation. 

(a) Availability. An amicus brief may 

be filed only if: 

(1) A motion for leave to file the brief 

has been granted; 

(2) The brief is accompanied by 

written consent of all parties; 

(3) The brief is filed at the request of 

the Director or the hearing officer, as 

appropriate; or 

(4) The brief is presented by the 

United States or an officer or agency 

thereof, or by a State or a political 

subdivision thereof. 

(b) Procedure. An amicus brief may be 

filed conditionally with the motion for 

leave. The motion for leave shall 

identify the interest of the movant and 

shall state the reasons why a brief of an 

amicus curiae is desirable. Except as all 

parties otherwise consent, any amicus 

curiae shall file its brief within the time 

allowed the party whose position the 

amicus will support, unless the Director 

or hearing officer, as appropriate, for 

good cause shown, grants leave for a 

later filing. In the event that a later filing 

is allowed, the order granting leave to 

file shall specify when an opposing 

party may reply to the brief. 

(c) Motions. A motion for leave to file 

an amicus brief shall be subject to 

§ 1081.205. 

(d) Formal requirements as to amicus 

briefs. Amicus briefs shall be filed 

pursuant to § 1081.111 and shall comply 

with the requirements of § 1081.112 and 

shall be subject to the length limitation 

set forth in § 1081.212(e). 

(e) Oral argument. An amicus curiae 

may move to present oral argument at 

any hearing before the hearing officer, 

but such motions will be granted only 

for extraordinary reasons. 

Subpart C—Hearings 

§ 1081.300 Public hearings. 

All hearings in adjudication 

proceedings shall be public unless a 

confidentiality order is entered by the 

hearing officer pursuant to § 1081.119 or 

unless otherwise ordered by the Director 

on the grounds that holding an open 

hearing would be contrary to the public 

interest. 

§ 1081.301 Failure to appear. 

Failure of a respondent to appear in 

person or by a duly authorized counsel 

at the hearing constitutes a waiver of 

respondent’s right to a hearing and may 

be deemed an admission of the facts as 

alleged and consent to the relief sought 

in the notice of charges. Without further 

proceedings or notice to the respondent, 

the hearing officer shall file a 

recommended decision containing 

findings of fact and addressing the relief 

sought in the notice of charges. 

§ 1081.302 Conduct of hearings. 

All hearings shall be conducted in a 

fair, impartial, expeditious, and orderly 

manner. Enforcement counsel shall 

present its case-in-chief first, unless 

otherwise ordered by the hearing officer, 

or unless otherwise expressly specified 

by law or regulation. Enforcement 

counsel shall be the first party to 

present an opening statement and a 

closing statement, and may make a 

rebuttal statement after the respondent’s 

closing statement. If there are multiple 

respondents, respondents may agree 

among themselves as to their order of 

presentation of their cases, but if they 

do not agree, the hearing officer shall fix 

the order. 


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§ 1081.303 Evidence. 

(a) Burden of proof. Enforcement 

counsel shall have the burden of proof 

of the ultimate issue(s) of the Bureau’s 

claims at the hearing. 

(b) Admissibility. (1) Except as is 

otherwise set forth in this section, 

relevant, material, and reliable evidence 

that is not unduly repetitive is 

admissible to the fullest extent 

authorized by the Administrative 

Procedure Act and other applicable law. 

Irrelevant, immaterial, and unreliable 

evidence shall be excluded. 

(2) Evidence, even if relevant, may be 

excluded if its probative value is 

substantially outweighed by the danger 

of unfair prejudice or confusion of the 

issues; if the evidence would be 

misleading; or based on considerations 

of undue delay, waste of time, or 

needless presentation of cumulative 

evidence. 

(3) Evidence that constitutes hearsay 

may be admitted if it is relevant, 

material, and bears satisfactory indicia 

of reliability so that its use is fair. 

Hearsay is a statement, other than one 

made by the declarant while testifying 

at the hearing, offered in evidence to 

prove the truth of the matter asserted. If 

otherwise meeting the standards for 

admissibility described in this section, 

transcripts of depositions, 

investigational hearings, prior testimony 

in Bureau or other proceedings, and any 

other form of hearsay shall be 

admissible and shall not be excluded 

solely on the ground that they are or 

contain hearsay. 

(4) Evidence that would be admissible 

under the Federal Rules of Evidence is 

admissible in a proceeding conducted 

pursuant to this part. Evidence that 

would be inadmissible under the 

Federal Rules of Evidence may not be 

deemed or ruled to be inadmissible in 

a proceeding conducted pursuant to this 

part solely on that basis. 

(c) Official notice. Official notice may 

be taken of any material fact that is not 

subject to reasonable dispute in that it 

is either generally known or capable of 

accurate and ready determination by 

resort to sources whose accuracy cannot 

reasonably be questioned. If official 

notice is requested or is taken of a 

material fact not appearing in the 

evidence in the record, the parties, upon 

timely request, shall be afforded an 

opportunity to disprove such noticed 

fact. 

(d) Documents. (1) A duplicate copy 

of a document is admissible to the same 

extent as the original, unless a genuine 

issue is raised as to whether the copy is 

in some material respect not a true and 

legible copy of the original. 

(2) Subject to the requirements of 

paragraph (b) of this section, any 

document, including a report of 

examination, supervisory activity, 

inspection or visitation, prepared by the 

Bureau, a prudential regulator, as that 

term is defined in section 1002(24) of 

the Dodd-Frank Act, or by a State 

regulatory agency, is presumptively 

admissible either with or without a 

sponsoring witness. 

(3) Witnesses may use existing or 

newly created charts, exhibits, 

calendars, calculations, outlines or other 

graphic material to summarize, 

illustrate, or simplify the presentation of 

testimony. Such materials may, subject 

to the hearing officer’s discretion, be 

used with or without being admitted 

into evidence. 

(4) As respondents are in the best 

position to determine the nature of 

documents generated by such 

respondents and which come from their 

own files, the burden of proof is on the 

respondent to introduce evidence to 

rebut a presumption that such 

documents are authentic and kept in the 

regular course of business. 

(e) Objections. (1) Objections to the 

admissibility of evidence must be timely 

made and rulings on all objections must 

appear on the record. 

(2) Whenever evidence is excluded 

from the record, the party offering such 

evidence may make an offer of proof, 

which shall be included in the record. 

Rejected exhibits, adequately marked for 

identification, shall be retained 

pursuant to § 1081.306(b) so as to be 

available for consideration by any 

reviewing authority. 

(3) Failure to object to admission of 

evidence or to any ruling constitutes a 

waiver of the objection. 

(f) Stipulations. (1) The parties may, 

at any stage of the proceeding, stipulate 

as to any relevant matters of fact or the 

authentication of any relevant 

documents. Such stipulations must be 

received in evidence at a hearing and 

are binding on the parties with respect 

to the matters therein stipulated. 

(2) Unless the hearing officer directs 

otherwise, all stipulations of fact and 

law previously agreed upon by the 

parties, and all documents, the 

admissibility of which have been 

previously stipulated, will be admitted 

into evidence upon commencement of 

the hearing. 

(g) Presentation of evidence. (1) A 

witness at a hearing for the purpose of 

taking evidence shall testify under oath 

or affirmation. 

(2) A party is entitled to present its 

case or defense by sworn oral testimony 

and documentary evidence, to submit 

rebuttal evidence, and to conduct such 

cross-examination as, in the discretion 

of the hearing officer, may be required 

for a full and true disclosure of the facts. 

(3) An adverse party, or an officer, 

agent, or employee thereof, and any 

witness who appears to be hostile, 

unwilling, or evasive, may be 

interrogated by leading questions and 

may also be contradicted and 

impeached by the party calling him or 

her. 

(4) The hearing officer shall exercise 

reasonable control over the mode and 

order of interrogating witnesses and 

presenting evidence so as to: 

(i) Make the interrogation and 

presentation effective for the 

ascertainment of the truth; 

(ii) Avoid needless consumption of 

time; and 

(iii) Protect witnesses from 

harassment or undue embarrassment. 

(5) The hearing officer may permit a 

witness to appear at a hearing via video 

conference or telephone for good cause 

shown. 

(h) Introducing prior sworn 

statements of witnesses into the record. 

At a hearing, any party wishing to 

introduce a prior, sworn statement of a 

witness, not a party, otherwise 

admissible in the proceeding, may make 

a motion setting forth the reasons 

therefore. If only part of a statement is 

offered in evidence, the hearing officer 

may require that all relevant portions of 

the statement be introduced. If all of a 

statement is offered in evidence, the 

hearing officer may require that portions 

not relevant to the proceeding be 

excluded. A motion to introduce a prior 

sworn statement may be granted if: 

(1) The witness is dead; 

(2) The witness is out of the United 

States, unless it appears that the absence 

of the witness was procured by the party 

offering the prior sworn statement; 

(3) The witness is unable to attend or 

testify because of age, sickness, 

infirmity, imprisonment or other 

disability; 

(4) The party offering the prior sworn 

statement has been unable to procure 

the attendance of the witness by 

subpoena; or 

(5) In the discretion of the hearing 

officer, it would be desirable, in the 

interests of justice, to allow the prior 

sworn statement to be used. In making 

this determination, due regard shall be 

given to the presumption that witnesses 

will testify orally in an open hearing. If 

the parties have stipulated to accept a 

prior sworn statement in lieu of live 

testimony, consideration shall also be 

given to the convenience of the parties 

in avoiding unnecessary expense. 


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§ 1081.304 Record of the hearing. 

(a) Reporting and transcription. 

Hearings shall be stenographically 

reported and transcribed under the 

supervision of the hearing officer, and 

the original transcript shall be a part of 

the record and the sole official 

transcript. The live oral testimony of 

each witness may be video recorded 

digitally, in which case the video 

recording and the written transcript of 

the testimony shall be made part of the 

record. Copies of transcripts shall be 

available from the reporter at prescribed 

rates. 

(b) Corrections. Corrections of the 

official transcript may be made only 

when they involve errors affecting 

substance and then only in the manner 

herein provided. Corrections ordered by 

the hearing officer or agreed to in a 

written stipulation signed by all counsel 

and parties not represented by counsel, 

and approved by the hearing officer, 

shall be included in the record, and 

such stipulations, except to the extent 

they are capricious or without 

substance, shall be approved by the 

hearing officer. Corrections shall not be 

ordered by the hearing officer except 

upon notice and opportunity for the 

hearing of objections. Such corrections 

shall be made by the official reporter by 

furnishing substitute type pages, under 

the usual certificate of the reporter, for 

insertion in the official record. The 

original uncorrected pages shall be 

retained in the files of the Bureau. 

(c) Closing of the hearing record. 

Upon completion of the hearing, the 

hearing officer shall issue an order 

closing the hearing record after giving 

the parties three days to determine if the 

record is complete or needs to be 

supplemented. The hearing officer shall 

retain the discretion to permit or order 

correction of the record as provided in 

paragraph (b) of this section. 

§ 1081.305 Post-hearing filings. 

(a) Proposed findings and conclusions 

and supporting briefs. (1) Using the 

same method of service for each party, 

the hearing officer shall serve notice 

upon each party that the certified 

transcript, together with all hearing 

exhibits and exhibits introduced but not 

admitted into evidence at the hearing, 

has been filed promptly after that filing. 

Any party may file with the hearing 

officer proposed findings of fact, 

proposed conclusions of law, and a 

proposed order within 30 days 

following service of this notice by the 

hearing officer or within such longer 

period as may be ordered by the hearing 

officer. 

(2) Proposed findings and conclusions 

must be supported by citation to any 

relevant authorities and by page 

references to any relevant portions of 

the record. A post-hearing brief may be 

filed in support of proposed findings 

and conclusions, either as part of the 

same document or in a separate 

document. 

(b) Responsive briefs. Responsive 

briefs may be filed within 15 days after 

the date on which the parties’ proposed 

findings, conclusions, and order are 

due. Responsive briefs must be strictly 

limited to responding to matters, issues, 

or arguments raised in another party’s 

papers. A party who has not filed 

proposed findings of fact and 

conclusions of law or a post-hearing 

brief may not file a responsive brief. 

Unless directed by the hearing officer, 

reply briefs are not permitted. 

(c) Order of filing. The hearing officer 

shall not order the filing by any party 

of any post-hearing brief or responsive 

brief in advance of the other party’s 

filing of its post-hearing brief or 

responsive brief. 

§ 1081.306 Record in proceedings before 

hearing officer; retention of documents; 

copies. 

(a) Contents of the record. The record 

of the proceeding shall consist of: 

(1) The notice of charges, the answer, 

and any amendments thereto; 

(2) Each motion, submission, or other 

paper filed in the proceedings, and any 

amendments and exceptions to or 

regarding them; 

(3) Each stipulation, transcript of 

testimony, and any document or other 

item admitted into evidence; 

(4) Any transcript of a conference or 

hearing before the hearing officer; 

(5) Any amicus briefs filed pursuant 

to § 1081.216; 

(6) With respect to a request to 

disqualify a hearing officer or to allow 

the hearing officer’s withdrawal under 

§ 1081.105(c), each affidavit or 

transcript of testimony taken and the 

decision made in connection with the 

request; 

(7) All motions, briefs, and other 

papers filed on interlocutory appeal; 

(8) All proposed findings and 

conclusions; 

(9) Each written order issued by the 

hearing officer or Director; and 

(10) Any other document or item 

accepted into the record by the hearing 

officer. 

(b) Retention of documents not 

admitted. Any document offered into 

evidence but excluded shall not be 

considered part of the record. The Office 

of Administrative Adjudication shall 

retain any such document until the later 

of the date upon which an order by the 

Director ending the proceeding becomes 

final and not appealable, or upon the 

conclusion of any judicial review of the 

Director’s order. 

(c) Substitution of copies. A true copy 

of a document may be substituted for 

any document in the record or any 

document retained pursuant to 

paragraph (b) of this section. 

Subpart D—Decision and Appeals 

§ 1081.400 Recommended decision of the 

hearing officer. 

(a) Time period for filing 

recommended decision. Subject to 

paragraph (b) of this section, the hearing 

officer shall file a recommended 

decision no later than 90 days after the 

deadline for filing post-hearing 

responsive briefs pursuant to 

§ 1081.305(b) and in no event later than 

300 days after filing of the notice of 

charges. 

(b) Extension of deadlines. In the 

event the hearing officer presiding over 

the proceeding determines that it will 

not be possible to issue the 

recommended decision within the time 

periods specified in paragraph (a) of this 

section, the hearing officer shall submit 

a written request to the Director for an 

extension of the time period for filing 

the recommended decision. This request 

must be filed no later than 30 days prior 

to the expiration of the time for issuance 

of a recommended decision. The request 

will be served on all parties in the 

proceeding, who may file with the 

Director briefs in support of or in 

opposition to the request. Any such 

briefs must be filed within three days of 

service of the hearing officer’s request 

and shall not exceed five pages. If the 

Director determines that additional time 

is necessary or appropriate in the public 

interest, the Director shall issue an order 

extending the time period for filing the 

recommended decision. 

(c) Content. (1) A recommended 

decision shall be based on a 

consideration of the whole record 

relevant to the issues decided, and shall 

be supported by reliable, probative, and 

substantial evidence. The recommended 

decision shall include a statement of 

findings of fact (with specific page 

references to principal supporting items 

of evidence in the record) and 

conclusions of law, as well as the 

reasons or basis therefore, as to all the 

material issues of fact, law, or discretion 

presented on the record and the 

appropriate order, sanction, relief or 

denial thereof. The recommended 

decision shall also state that a notice of 

appeal may be filed within ten days 

after service of the recommended 

decision and include a statement that, 

unless a party timely files and perfects 


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a notice of appeal of the recommended 

decision, the Director may adopt the 

recommended decision as the final 

decision and order of the Bureau 

without further opportunity for briefing 

or argument. 

(2) Consistent with paragraph (a) of 

this section, when more than one claim 

for relief is presented in an adjudication 

proceeding, or when multiple parties 

are involved, the hearing officer may 

direct the entry of a recommended 

decision as to one or more but fewer 

than all of the claims or parties only 

upon an express determination that 

there is no just reason for delay and 

upon an express direction for the entry 

of a recommended decision. 

(d) By whom made. The 

recommended decision shall be made 

and filed by the hearing officer who 

presided over the hearings, except when 

he or she shall have become unavailable 

to the Bureau. 

(e) Reopening of proceeding by 

hearing officer; termination of 

jurisdiction. (1) At any time from the 

close of the hearing record pursuant to 

§ 1081.304(c) until the filing of his or 

her recommended decision, a hearing 

officer may reopen the proceeding for 

the receipt of further evidence for good 

cause shown. 

(2) Except for the correction of clerical 

errors or pursuant to an order of remand 

from the Director, the jurisdiction of the 

hearing officer is terminated upon the 

filing of his or her recommended 

decision with respect to those issues 

decided pursuant to paragraph (c) of 

this section. 

(f) Filing, service, and publication. 

Upon filing by the hearing officer of the 

recommended decision, the Office of 

Administrative Adjudication shall 

promptly transmit the recommended 

decision to the Director and serve the 

recommended decision upon the 

parties. 

§ 1081.401 Transmission of documents to 

Director; record index; certification. 

(a) Filing of index. At the same time 

the Office of Administrative 

Adjudication transmits the 

recommended decision to the Director, 

the hearing officer shall furnish to the 

Director a certified index of the entire 

record of the proceedings. The certified 

index shall include, at a minimum, an 

entry for each paper, document or 

motion filed in the proceeding, the date 

of the filing, and the identity of the filer. 

The certified index shall also include an 

exhibit index containing, at a minimum, 

an entry consisting of exhibit number 

and title or description for each exhibit 

introduced and admitted into evidence 

and each exhibit introduced but not 

admitted into evidence. 

(b) Retention of record items by the 

Office of Administrative Adjudication. 

After the close of the hearing, the Office 

of Administrative Adjudication shall 

retain originals of any motions, exhibits 

or any other documents filed with, or 

accepted into evidence by, the hearing 

officer, or any other portions of the 

record that have not already been filed 

with the Office of Administrative 

Adjudication. 

§ 1081.402 Notice of appeal; review by the 

Director. 

(a) Notice of appeal. (1) Filing. Any 

party may file exceptions to the 

recommended decision of the hearing 

officer by filing a notice of appeal with 

the Office of Administrative 

Adjudication within ten days after 

service of the recommended decision. 

The notice shall specify the party or 

parties against whom the appeal is taken 

and shall designate the recommended 

decision or part thereof appealed from. 

If a timely notice of appeal is filed by 

a party, any other party may thereafter 

file a notice of appeal within five days 

after service of the first notice, or within 

ten days after service of the 

recommended decision, whichever 

period expires last. 

(2) Perfecting a notice of appeal. Any 

party filing a notice of appeal must 

perfect its appeal by filing its opening 

appeal brief within 30 days of service of 

the recommended decision. Any party 

may respond to the opening appeal brief 

by filing an answering brief within 30 

days of service of the opening brief. Any 

party may file a reply to an answering 

brief within seven days of service of the 

answering brief. These briefs must 

conform to the requirements of 

§ 1081.403. 

(b) Director review other than 

pursuant to an appeal. In the event no 

party perfects an appeal of the 

recommended decision, the Director 

shall, within 40 days after the date of 

service of the recommended decision, 

either issue a final decision and order 

adopting the recommended decision, or 

order further briefing regarding any 

portion of the recommended decision. 

The Director’s order for further briefing 

shall set forth the scope of review and 

the issues that will be considered and 

will make provision for the filing of 

briefs in accordance with the timelines 

set forth in paragraph (a)(2) of this 

section (except that that opening briefs 

shall be due within 30 days of service 

of the order of review) if deemed 

appropriate by the Director. 

(c) Exhaustion of administrative 

remedies. Pursuant to 5 U.S.C. 704, a 

perfected appeal to the Director of a 

recommended decision pursuant to 

paragraph (a) of this section is a 

prerequisite to the seeking of judicial 

review of a final decision and order, or 

portion of the final decision and order, 

adopting the recommended decision. 

§ 1081.403 Briefs filed with the Director. 

(a) Contents of briefs. Briefs shall be 

confined to the particular matters at 

issue. Each exception to the findings or 

conclusions being reviewed shall be 

stated succinctly. Exceptions shall be 

supported by citation to the relevant 

portions of the record, including 

references to the specific pages relied 

upon, and by concise argument 

including citation of such statutes, 

decisions, and other authorities as may 

be relevant. If the exception relates to 

the admission or exclusion of evidence, 

the substance of the evidence admitted 

or excluded shall be set forth in the 

brief, in an appendix thereto, or by 

citation to the record. Reply briefs shall 

be confined to matters in answering 

briefs of other parties. 

(b) Length limitation. Except with 

leave of the Director, opening and 

answering briefs shall not exceed 30 

pages, and reply briefs shall not exceed 

15 pages, exclusive of pages containing 

the table of contents, table of 

authorities, and any addendum that 

consists solely of copies of applicable 

cases, pertinent legislative provisions or 

rules, and exhibits. Motions to file briefs 

in excess of these limitations are 

disfavored. 

§ 1081.404 Oral argument before the 

Director. 

(a) Availability. The Director will 

consider appeals, motions, and other 

matters properly before him or her on 

the basis of the papers filed by the 

parties without oral argument unless the 

Director determines that the 

presentation of facts and legal 

arguments in the briefs and record and 

decisional process would be 

significantly aided by oral argument, in 

which case the Director shall issue an 

order setting the date on which 

argument shall be held. A party seeking 

oral argument shall so indicate on the 

first page of its opening or answering 

brief. 

(b) Public arguments; transcription. 

All oral arguments shall be public 

unless otherwise ordered by the 

Director. Oral arguments before the 

Director shall be reported 

stenographically, unless otherwise 

ordered by the Director. Motions to 

correct the transcript of oral argument 

shall be made according to the same 

procedure provided in § 1081.304(b). 


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Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 39101 

§ 1081.405 Decision of the Director. 

(a) Upon appeal from or upon further 

review of a recommended decision, the 

Director will consider such parts of the 

record as are cited or as may be 

necessary to resolve the issues 

presented and, in addition, will, to the 

extent necessary or desirable, exercise 

all powers which he or she could have 

exercised if he or she had made the 

recommended decision. In proceedings 

before the Director, the record shall 

consist of all items part of the record 

below in accordance with § 1081.306; 

any notices of appeal or order directing 

review; all briefs, motions, submissions, 

and other papers filed on appeal or 

review; and the transcript of any oral 

argument held. Review by the Director 

of a recommended decision may be 

limited to the issues specified in the 

notice(s) of appeal or the issues, if any, 

specified in the order directing further 

briefing. On notice to all parties, 

however, the Director may, at any time 

prior to issuance of his or her decision, 

raise and determine any other matters 

that he or she deems material, with 

opportunity for oral or written argument 

thereon by the parties. 

(b) Decisional employees may advise 

and assist the Director in the 

consideration and disposition of the 

case. 

(c) In rendering his or her decision, 

the Director will affirm, adopt, reverse, 

modify, set aside, or remand for further 

proceedings the recommended decision 

and will include in the decision a 

statement of the reasons or basis for his 

or her actions and the findings of fact 

upon which the decision is predicated. 

(d) At the expiration of the time 

permitted for the filing of reply briefs 

with the Director, the Office of 

Administrative Adjudication will notify 

the parties that the case has been 

submitted for final Bureau decision. The 

Director will issue and the Office of 

Administrative Adjudication will serve 

the Director’s final decision and order 

within 90 days after such notice, unless 

within that time the Director orders that 

the adjudication proceeding or any 

aspect thereof be remanded to the 

hearing officer for further proceedings. 

(e) Copies of the final decision and 

order of the Director shall be served 

upon each party to the proceeding, upon 

other persons required by statute, and, 

if directed by the Director or required by 

statute, upon any appropriate State or 

Federal supervisory authority. The final 

decision and order will also be 

published on the Bureau’s Web site or 

as otherwise deemed appropriate by the 

Bureau. 

§ 1081.406 Reconsideration. 

Within 14 days after service of the 

Director’s final decision and order, any 

party may file with the Director a 

petition for reconsideration, briefly and 

specifically setting forth the relief 

desired and the grounds in support 

thereof. Any petition filed under this 

section must be confined to new 

questions raised by the final decision or 

final order and upon which the 

petitioner had no opportunity to argue, 

in writing or orally, before the Director. 

No response to a petition for 

reconsideration shall be filed unless 

requested by the Director, who will 

request such response before granting 

any petition for reconsideration. The 

filing of a petition for reconsideration 

shall not operate to stay the effective 

date of the final decision or order or to 

toll the running of any statutory period 

affecting such decision or order unless 

specifically so ordered by the Director. 

§ 1081.407 Effective date; stays pending 

judicial review. 

(a) Other than consent orders, which 

shall become effective at the time 

specified therein, an order to cease and 

desist or for other affirmative action 

under section 1053(b) of the Dodd-Frank 

Act becomes effective at the expiration 

of 30 days after the date of service 

pursuant to § 1081.113(d)(2), unless the 

Director agrees to stay the effectiveness 

of the order pursuant to this section. 

(b) Any party subject to a final 

decision and order, other than a consent 

order, may apply to the Director for a 

stay of all or part of that order pending 

judicial review. 

(c) A motion for stay shall state the 

reasons a stay is warranted and the facts 

relied upon, and shall include 

supporting affidavits or other sworn 

statements, and a copy of the relevant 

portions of the record. The motion shall 

address the likelihood of the movant’s 

success on appeal, whether the movant 

will suffer irreparable harm if a stay is 

not granted, the degree of injury to other 

parties if a stay is granted, and why the 

stay is in the public interest. 

(d) A motion for stay shall be filed 

within 30 days of service of the order on 

the party. Any party opposing the 

motion may file a response within five 

days after receipt of the motion. The 

movant may file a reply brief, limited to 

new matters raised by the response, 

within three days after receipt of the 

response. 

(e) The commencement of 

proceedings for judicial review of a final 

decision and order of the Director does 

not, unless specifically ordered by the 

Director or a reviewing court, operate as 

a stay of any order issued by the 

Director. The Director may, in his or her 

discretion, and on such terms as he or 

she finds just, stay the effectiveness of 

all or any part of an order pending a 

final decision on a petition for judicial 

review of that order. 

Dated: June 4, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–14061 Filed 6–28–12; 8:45 am] 

BILLING CODE 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1080 

[Docket No.: CFPB–2011–0007] 

RIN 3170–AA03 

Rules Relating to Investigations 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: After considering the public 

comments on its interim final rule for 

the Rules Relating to Investigations, the 

Bureau of Consumer Financial 

Protection (Bureau), pursuant to the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010 (DoddFrank Act), is making revisions to its 

procedures for investigations under 

section 1052 of the Dodd-Frank Act. 

DATES: The final rule is effective June 

29, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Peter G. Wilson, Office of the General 

Counsel, Consumer Financial Protection 

Bureau, 1700 G Street NW., Washington, 

DC 20552, (202) 435–7585. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) was signed into law 

on July 21, 2010. Title X of the DoddFrank Act established the Bureau of 

Consumer Financial Protection (Bureau) 

to regulate the offering and provision of 

consumer financial products or services 

under the Federal consumer financial 

laws. The Dodd-Frank Act transferred to 

the Bureau the consumer financial 

protection functions formerly carried 

out by the Federal banking agencies, as 

well as certain authorities formerly 

carried out by the Department of 

Housing and Urban Development (HUD) 

and the Federal Trade Commission 

(FTC). As required by section 1062 of 

the Dodd-Frank Act, 12 U.S.C. 5582, the 

Secretary of the Treasury selected a 


sroberts on DSK5SPTVN1PROD with RULES