Rules of Practice for Adjudication Proceedings

CourtConsumer Financial Protection Bureau
Published date22 February 2022
Record Number2022-02863
Federal Register, Volume 87 Issue 35 (Tuesday, February 22, 2022)
[Federal Register Volume 87, Number 35 (Tuesday, February 22, 2022)]
                [Rules and Regulations]
                [Pages 10028-10056]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-02863]
                [[Page 10027]]
                Vol. 87
                Tuesday,
                No. 35
                February 22, 2022
                Part VIBureau of Consumer Financial Protection-----------------------------------------------------------------------12 CFR Part 1081Rules of Practice for Adjudication Proceedings; Final Rule
                Federal Register / Vol. 87, No. 35 / Tuesday, February 22, 2022 /
                Rules and Regulations
                [[Page 10028]]
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                BUREAU OF CONSUMER FINANCIAL PROTECTION
                12 CFR Part 1081
                [Docket No. CFPB-2022-0009]
                RIN 3170-AB08
                Rules of Practice for Adjudication Proceedings
                AGENCY: Bureau of Consumer Financial Protection.
                ACTION: Procedural rule; request for public comment.
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                SUMMARY: The Consumer Financial Protection Bureau (Bureau) is issuing
                this procedural rule to update its Rules of Practice for Adjudication
                Proceedings (Rules of Practice). This rule expands the opportunities
                for parties in adjudication proceedings to conduct depositions. It also
                contains various amendments regarding timing and deadlines, the content
                of answers, the scheduling conference, bifurcation of proceedings, the
                process for deciding dispositive motions, and requirements for issue
                exhaustion, as well as other technical changes. Overall, the amendments
                will provide the parties with earlier access to relevant information
                and also foster greater procedural flexibility, which should ultimately
                contribute to more effective and efficient proceedings. The Bureau
                welcomes comments on this rule, and the Bureau may make further
                amendments if it receives comments warranting changes.
                DATES: This procedural rule is effective on February 22, 2022. Comments
                must be received on or before April 8, 2022.
                ADDRESSES: You may submit comments, identified by Docket No. CFPB-2022-
                0009 or RIN 3170-AB08, by any of the following methods:
                 Federal eRulemaking Portal: https://www.regulations.gov.
                Follow the instructions for submitting comments.
                 Email: [email protected]. Include Docket No.
                CFPB-2022-0009 or RIN 3170-AB08 in the subject line of the message.
                 Mail/Hand Delivery/Courier: Comment Intake--Rules of
                Practice for Adjudication Proceedings, Consumer Financial Protection
                Bureau, 1700 G Street NW, Washington, DC 20552.
                 Instructions: The Bureau encourages the early submission of
                comments. All submissions should include the agency name and docket
                number or Regulatory Information Number (RIN) for this rulemaking.
                Because paper mail in the Washington, DC area and at the Bureau is
                subject to delay, and in light of difficulties associated with mail and
                hand deliveries during the COVID-19 pandemic, commenters are encouraged
                to submit comments electronically. In general, all comments received
                will be posted without change to https://www.regulations.gov. In
                addition, once the Bureau's headquarters reopens, comments will be
                available for public inspection and copying at 1700 G Street NW,
                Washington, DC 20552, on official business days between the hours of 10
                a.m. and 5 p.m. Eastern Time. At that time, you can make an appointment
                to inspect the documents by telephoning 202-435-7275.
                 All comments, including attachments and other supporting materials,
                will become part of the public record and subject to public disclosure.
                Proprietary information or sensitive personal information, such as
                account numbers or Social Security numbers, or names of other
                individuals, should not be included. Comments will not be edited to
                remove any identifying or contact information.
                FOR FURTHER INFORMATION CONTACT: Kevin E. Friedl or Christopher
                Shelton, Senior Counsels, Legal Division, at 202-435-7700. If you
                require this document in an alternative electronic format, please
                contact [email protected].
                SUPPLEMENTARY INFORMATION:
                I. Background
                 The Consumer Financial Protection Act of 2010 (CFPA) establishes
                the Bureau as an independent bureau in the Federal Reserve System and
                assigns the Bureau a range of rulemaking, enforcement, supervision, and
                other authorities.\1\ The Bureau's enforcement powers under the CFPA
                include section 1053, which authorizes the Bureau to conduct
                adjudication proceedings.\2\ The Bureau finalized the original version
                of the Rules of Practice, which govern adjudication proceedings, in
                2012 (2012 Rule).\3\ The Bureau later finalized certain amendments,
                which addressed the issuance of temporary cease-and-desist orders, in
                2014 (2014 Rule).\4\
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                 \1\ Title X of the Dodd-Frank Wall Street Reform and Consumer
                Protection Act, Public Law 111-203, 124 Stat. 1376, 1955-2113
                (2010).
                 \2\ 12 U.S.C. 5563; see also section 1052(b), 12 U.S.C. 5562(b)
                (addressing subpoenas).
                 \3\ 77 FR 39057 (June 29, 2012); see also 76 FR 45337 (July 28,
                2011) (interim final rule).
                 \4\ 79 FR 34622 (June 18, 2014); see also 78 FR 59163 (Sept. 26,
                2013) (interim final rule).
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                II. Legal Authority
                 Section 1053(e) of the CFPA provides that the Bureau ``shall
                prescribe rules establishing such procedures as may be necessary to
                carry out'' section 1053.\5\ Additionally, section 1022(b)(1) provides,
                in relevant part, that the Bureau's Director ``may prescribe rules . .
                . as may be necessary or appropriate to enable the Bureau to administer
                and carry out the purposes and objectives of the Federal consumer
                financial laws, and to prevent evasions thereof.'' \6\ The Bureau
                issues this rule based on its authority under section 1053(e) and
                section 1022(b)(1).
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                 \5\ 12 U.S.C. 5563(e). As courts have recognized, the term
                ``necessary'' is ``a `chameleon-like' word'' whose meaning can vary
                based on context; in the context of section 1053(e), the Bureau
                interprets `` `necessary' to mean `useful,' `convenient' or
                `appropriate' rather than `required' or `indispensable.' ''
                Prometheus Radio Project v. FCC, 373 F.3d 372, 391-94 (3d Cir.
                2004). Section 1053 sets out the fundamental features of Bureau
                adjudications, but it leaves many details open that can only be
                addressed through more specific Bureau procedures. In turn, those
                Bureau procedures could not be effective, or fair to the parties, if
                they were limited to only the most rudimentary steps that would be
                indispensable to holding a skeletal proceeding. Instead, the Bureau
                believes that Congress gave the Bureau room to adopt procedures that
                are useful in carrying out section 1053.
                 \6\ 12 U.S.C. 5512(b)(1).
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                III. Section-by-Section Analysis
                Overview
                 The Bureau is republishing the entire Rules of Practice in the Code
                of Federal Regulations. The changes that the Bureau is making in this
                rule, compared to the previous version of the Rules of Practice, are
                summarized in the section-by-section analysis below. Also, the Bureau
                will include an unofficial, informal redline of the changes in the
                docket for this rule on https://www.regulations.gov in order to assist
                stakeholders' review.\7\
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                 \7\ In the event of a conflict between the redline and the
                version in the Federal Register, the latter controls.
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                1081.114(a) Construction of Time Limits
                 The Bureau is amending 12 CFR 1081.114(a) (Rule 114(a)) to simplify
                and clarify the provisions describing how deadlines are computed. It
                governs the computation of any time limit in this part, by order of the
                Director or the hearing officer, or by any applicable statute. These
                amendments are based on similar amendments made to Federal Rule of
                Civil Procedure 6(a) in 2009.
                 Under the previous Rule 114(a), a period of ten days or less was
                computed differently than a longer period. Intermediate Saturdays,
                Sundays, and Federal holidays were included in computing longer
                periods, but excluded in computing shorter periods. The previous Rule
                114(a) thus made computing deadlines unnecessarily complicated and led
                to counterintuitive
                [[Page 10029]]
                results. For example, a 10-day period and a 14-day period that started
                on the same day usually ended on the same day--and the 10-day period
                not infrequently ended later than the 14-day period.
                 Under the amended Rule 114(a), all deadlines stated in days are
                computed in the same way. The day of the event that triggers the
                deadline is not counted. All other days--including intermediate
                Saturdays, Sundays, and Federal holidays--are counted, with one
                exception: If the period ends on a Saturday, Sunday, or Federal holiday
                as set forth in 5 U.S.C. 6103(a), then the deadline falls on the next
                day that is not a Saturday, Sunday, or Federal holiday.
                 Periods previously expressed as ten days or less will be shortened
                as a practical matter by the decision to count intermediate Saturdays,
                Sundays, and legal holidays in computing all periods. The Bureau is
                lengthening many of those periods to compensate for the change.\8\
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                 \8\ See, e.g., amended 12 CFR 1081.105(c)(2), 1081.200(c),
                1081.202(a).
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                 The Bureau is also adjusting most of the 10-day periods in the
                Rules of Practice to account for the change in computation method, by
                setting 14 days as the new period. A 14-day period corresponds to the
                most frequent result of a 10-day period under the previous computation
                method--two Saturdays and two Sundays were excluded, giving 14 days in
                all. A 14-day period has an additional advantage. The final day falls
                on the same day of the week as the event that triggered the period--the
                14th day after a Monday, for example, is a Monday. This advantage of
                using week-long periods also led in many cases to adopting 7-day
                periods to replace many of the periods with periods using 7-day
                increments.
                1081.115(b) Considerations in Determining Whether To Extend Time Limits
                or Grant Postponements, Adjournments and Extensions
                 Previously, 12 CFR 1081.115(b) (Rule 115(b)) stated that the
                Director or the hearing officer should adhere to a policy of strongly
                disfavoring granting motions for extensions of time, except in
                circumstances where the moving party makes a strong showing that the
                denial of the motion would substantially prejudice its case. It then
                listed factors that the Director or hearing officer will consider. The
                Bureau is simplifying this provision to state only that such motions
                are generally disfavored, while retaining the same list of factors that
                the Director or hearing officer will consider. The Bureau continues to
                believe that extensions of time should generally be disfavored, but it
                believes that relatively more flexibility than the previous language
                provided may be appropriate.
                1081.201(b) Content of Answer
                 The previous 12 CFR 1081.201(b) (Rule 201(b)) required a respondent
                to file an answer containing, among other things, any affirmative
                defense. The Bureau is amending Rule 201(b) to make clear that this
                includes any avoidance, including those that may not be considered
                ``affirmative defenses.'' As the Securities and Exchange Commission
                (SEC) explained when it adopted a similar amendment to its rules of
                practice, timely assertion of such theories should help focus the use
                of prehearing discovery, foster early identification of key issues and,
                as a result, make the discovery process more effective and
                efficient.\9\
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                 \9\ 81 FR 50211, 50219-20 (July 29, 2016).
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                1081.203 Scheduling Conference
                 The provision at 12 CFR 1081.203 (Rule 203) requires a scheduling
                conference with all parties and the hearing officer for the purpose of
                scheduling the course and conduct of the proceeding. Before that
                scheduling conference, Rule 203 requires the parties to meet to discuss
                the nature and basis of their claims and defenses, the possibilities
                for settlement, as well as the matters that will be discussed with the
                hearing officer at the scheduling conference. The Bureau is making
                certain changes to Rule 203, including renumbering of provisions. This
                discussion cites the provisions as renumbered.
                 First, the Bureau is amending Rule 203(b) to require that the
                parties exchange a scheduling conference disclosure after that initial
                meeting, but before the scheduling conference. That disclosure must
                include a factual summary of the case, a summary of all factual and
                legal issues in dispute, and a summary of all factual and legal bases
                supporting each defense. The disclosure must also include information
                about the evidence that the party may present at the hearing, other
                than solely for impeachment, including (i) the contact information for
                anticipated witnesses, as well as a summary of the witness's
                anticipated testimony; and (ii) the identification of documents or
                other exhibits.
                 The Bureau is also adopting certain amendments to Rules 203(c),
                (d), and (e). Amended Rule 203(c) provides that a party must supplement
                or correct the scheduling conference disclosure in a timely manner if
                the party acquires other information that it intends to rely upon at a
                hearing. Amended Rule 203(d) provides a harmless-error rule for
                failures to disclose in scheduling conference disclosures. Finally, the
                Bureau is adopting certain minor clarifications to Rule 203(e), which
                governs the scheduling conference itself.
                 These amendments to Rule 203 are intended to foster early
                identification of key issues and, as a result, make the adjudication
                process, including any discovery process, more effective and efficient.
                They are also intended to, early in the process, determine whether the
                parties intend to seek the issuance of subpoenas or file dispositive
                motions so that, with input from the parties, the hearing officer can
                set an appropriate hearing date, taking into account the time necessary
                to complete the discovery or decide the anticipated dispositive
                motions.
                 The Bureau recognizes that, in most cases, the deadline for making
                the scheduling conference disclosure will also be the date the Office
                of Enforcement must commence making documents available to the
                respondent under 12 CFR 1081.206 (Rule 206). As the Bureau explained in
                the preamble to the 2012 Rule, it is the Bureau's expectation that the
                Office of Enforcement will make the material available as soon as
                possible in every case.\10\ And even in cases where the Office of
                Enforcement cannot make those documents available within that time, a
                respondent may request a later hearing date and can move the hearing
                officer to alter the dates for either the scheduling conference or the
                scheduling conference disclosure.
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                 \10\ 77 FR 39057, 39072 (June 29, 2012).
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                1081.204(c) Bifurcation
                 The Bureau is adding a new 12 CFR 1081.204(c) (Rule 204(c)) to
                address bifurcation of proceedings. It provides that the Director may
                order that the proceeding be divided into two or more stages, if the
                Director determines that it would promote efficiency in the proceeding
                or for other good cause. For example, the Director may order that the
                proceeding have two stages, so that at the conclusion of the first
                stage the Director issues a decision on whether there have been
                violations of law and at the conclusion of the second stage the
                Director issues a final decision and order, including with respect to
                any remedies. The Director may make an order under Rule 204(c) either
                on the motion of a party or on the Director's own motion after inviting
                submissions by the parties. The Director may
                [[Page 10030]]
                include, in that order or in later orders, modifications to the
                procedures in the Rules of Practice in order to effectuate an efficient
                division into stages, or the Director may assign such authority to the
                hearing officer.\11\
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                 \11\ The new provision also clarifies that only the decision and
                order of the Director after the final stage, and not a decision of
                the Director after an earlier stage, will be a final decision and
                order for purposes of specified provisions of the Rules of Practice
                and section 1053(b) of the CFPA.
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                 Bifurcation is a standard case-management tool available to Federal
                district courts. The new Rule 204(c) will provide the Bureau with the
                flexibility to use bifurcation in adjudication proceedings, if
                warranted by particular cases, and to tailor its procedures to the
                circumstances of those bifurcated cases.
                1081.206 Availability of Documents for Inspection and Copying
                 Rule 206 provides that the Bureau's Office of Enforcement will make
                certain documents available for inspection and copying. The Bureau is
                amending Rule 206 to clarify certain categories of documents that may
                be withheld or information that may be redacted, as well as to make
                clear that the Office of Enforcement may produce those documents in an
                electronic format rather than making the documents available for
                physical inspection and copying.
                 The clarifying amendments regarding documents that may be withheld
                or information that may be redacted are based on amendments the SEC
                recently made to its rules of practice. Amended Rule 206(b)(1)(iv)
                makes clear that the Office of Enforcement need not produce a document
                that reflects only settlement negotiations between the Office of
                Enforcement and a person or entity who is not a current respondent in
                the proceeding. As the SEC explained when it amended its rules of
                practice, this amendment is consistent with the important public policy
                interest in candid settlement negotiations, will help to preserve the
                confidentiality of settlement discussions, and help safeguard the
                privacy of potential respondents with whom the Office of Enforcement
                has negotiated.\12\ Amended Rule 206 also permits the Office of
                Enforcement to redact from the documents it produces information it is
                not obligated to produce (Rule 206(b)(2)(i)) and sensitive personal
                information about persons other than the respondent (Rule
                206(b)(2)(ii)). These amendments also track the SEC's recent amendments
                to its rules of practice and are designed to provide further
                protections for sensitive personal information and to permit the
                redaction of information that is not required to be produced in the
                first place.
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                 \12\ 81 FR 50211, 50222 (July 29, 2016).
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                 The Bureau is also amending Rule 206(d) to change the date by which
                the Office of Enforcement must commence making documents available to
                the respondent, changing that date from seven days after service of the
                notice of charges to fourteen. This clarification harmonizes these
                timing provisions with 12 CFR 1081.119 (Rule 119), which protects the
                rights of third parties who have produced documents under a claim of
                confidentiality. The previous Rule 119 required a party to give a third
                party notice at least ten days prior to the disclosure of information
                obtained from that third party subject to a claim of confidentiality.
                Under the previous Rules of Practice, that meant that the Office of
                Enforcement had to provide notice to third parties before it commenced
                the adjudication proceeding because the Office of Enforcement had to
                give those third parties at least ten days' notice before producing the
                documents and the Office of Enforcement had to commence making
                documents available seven days after filing. Rule 119 is amended to
                require parties to notify the third parties at least seven days prior
                to the disclosure of information the third party produced under a claim
                of confidentiality. Together, Rules 119 and 206 now require the Office
                of Enforcement to commence making documents available fourteen days
                after service of the notice of charges and to notify third parties who
                produced documents subject to that disclosure requirement under a claim
                of confidentiality at least seven days before producing those
                documents.
                 The previous Rule 206(e) provided that the Office of Enforcement
                must make the documents available for inspection and copying at the
                Bureau's office where they are ordinarily maintained. As the preamble
                to the 2012 Rule explained, the Bureau anticipated providing electronic
                copies of documents to respondents in most cases.\13\ The Bureau is
                amending Rule 206(e) to recognize this practice and expressly provide
                that the Office of Enforcement may produce those documents in an
                electronic format rather than making the documents available for
                inspection and copying. Under the amended Rule 206(e), the Office of
                Enforcement retains the discretion to make documents available for
                inspection and copying.
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                 \13\ 77 FR 39057, 39070 (June 29, 2012).
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                1081.208 Subpoenas and 1081.209 Depositions
                 The Bureau is making certain interrelated changes to 12 CFR
                1081.208 and 1081.209 (Rules 208 and 209).
                 Rule 209 previously permitted parties to take depositions only if
                the witness was unable to attend or testify at a hearing. As the Bureau
                noted in the preamble to the 2012 Rule, the Bureau's Rules of Practice
                were modeled in part on the approach that the SEC took in its rules of
                practice.\14\ Since that time, the SEC has amended its rules of
                practice to permit depositions.\15\
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                 \14\ 77 FR 39057, 39058 (June 29, 2012).
                 \15\ 81 FR 50211 (July 29, 2016).
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                 The Bureau is now amending Rule 209 to permit discovery depositions
                in addition to depositions of unavailable witnesses. The amendments to
                Rule 209 allow respondents and the Office of Enforcement to take
                depositions by oral examination pursuant to subpoena. The amended Rule
                209 also permits parties to take a deposition by written questions upon
                motion and pursuant to a subpoena. If a proceeding involves a single
                respondent, the amendment allows the respondent and the Office of
                Enforcement to each depose up to three persons (i.e., up to three
                depositions per side). If a proceeding involves multiple respondents,
                the amendment allows respondents to collectively depose up to five
                persons and the Office of Enforcement to depose up to five persons
                (i.e., up to five depositions per side). This approach is consistent
                with the approach the SEC adopted when it amended its rules of practice
                to allow depositions.\16\ A party may also move to take additional
                depositions, though that motion must be filed no later than 28 days
                prior to the hearing date. Amended Rule 209 also sets forth the
                procedure for requesting to taking additional depositions.
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                 \16\ Id. at 50216.
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                 The above amendments to Rule 209 are intended to provide parties
                with further opportunities to develop arguments and defenses through
                deposition discovery, which may narrow the facts and issues to be
                explored during the hearing. Allowing depositions should facilitate the
                development of the case during the prehearing stage, which may result
                in more focused prehearing preparations, with issues distilled for the
                hearing and post-hearing briefing.
                 Under amendments to Rules 208 and 209, a party must request that
                the hearing officer issue a subpoena for the deposition. If the
                subpoena is issued, the party must also serve written notice of the
                deposition. The amendments to
                [[Page 10031]]
                Rule 208, governing the issuance of subpoenas, correspond with the new
                provisions on depositions in Rule 209 by defining the standards for
                issuing a subpoena requiring the deposition of a witness. The amendment
                adds a new Rule 208(e) governing the standard for issuance of subpoenas
                seeking depositions upon oral examination. Under the amendment, the
                hearing officer will promptly issue any subpoena requiring the
                attendance and testimony of witnesses at a deposition only if the
                subpoena complies with Rule 209 and if the proposed deponent: (i) Is a
                witness identified in the other party's scheduling conference
                disclosure now required under revised Rule 203(b); (ii) a fact witness;
                \17\ (iii) is a designated expert witness under 12 CFR 1081.210(b)
                (Rule 210(b)); or (iv) a document custodian.\18\ Fact witnesses, expert
                witnesses, and document custodians, whose knowledge of relevant facts
                does not arise from the Bureau's investigation, the Bureau's
                examination, or the proceeding, are the individuals most likely to have
                information relevant to the issues to be decided. Because the Bureau
                will also disclose to respondents the documents described in Rule 206
                as well as witness statements upon request under 12 CFR 1081.207 (Rule
                207), deposing Bureau staff whose only knowledge of relevant facts
                arose from the investigation, examination, or proceeding is unlikely to
                shed light on the events underlying the proceeding and will likely lead
                to impermissible inquiries into the mental processes and strategies of
                Bureau attorneys or staff under their direction. Not only does this
                implicate privileges or the work-product doctrine, but deposition of
                Bureau staff in this manner can be burdensome and disruptive because it
                embroils the parties in controversies over the scope of those
                protections.
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                 \17\ Under amended Rule 209, this type of proposed deponent must
                have witnessed or participated in any event, transaction,
                occurrence, act, or omission that forms the basis for any claim
                asserted by the Office of Enforcement, any defense, or anything else
                required to be included in an answer pursuant to Rule 201(b), by any
                respondent in the proceeding (this excludes a proposed deponent
                whose only knowledge of these matters arises from the Bureau's
                investigation, the Bureau's examination, or the proceeding).
                 \18\ This excludes Bureau officers or personnel who have custody
                of documents or data that was produced from the Office of
                Enforcement to the respondent. In most circumstances, the Bureau
                officers or personnel were not the original custodian of the
                documents. Where the Bureau was the original custodian of the
                document--for example, a report of examination under 12 CFR
                1081.303(d)(2) (Rule 303(d)(2))--there is no need to depose a
                document custodian as that report is admissible without a sponsoring
                witness.
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                 The amendments to Rule 208 also provide a process for the hearing
                officer to request more information about the relevance or scope of the
                testimony sought and to refuse to issue the subpoena or issue it only
                upon conditions. This provision is intended to foster use of
                depositions where appropriate and encourage meaningful discovery,
                within the limits of the number of depositions provided per side. This
                provision should encourage parties to focus any requested depositions
                on those persons most likely to yield relevant information and thereby
                make efficient use of time during the prehearing stage.
                 Rule 208 previously permitted parties to request issuance of
                subpoenas requiring the attendance and testimony of witnesses at the
                designated time and place of the hearing, for the production of
                documentary or other tangible evidence, or for the deposition of a
                witness who will be unavailable for the hearing. The Rules of Practice
                also permitted the deposition of expert witnesses under Rule 210. The
                amendments keep those provisions, making conforming amendments to
                account for the new provision permitting discovery depositions. A
                subpoena seeking the deposition of a witness who will be unavailable
                for the hearing does not count against the number of depositions
                permitted under Rule 209(a).
                 These new and amended provisions expand the available legitimate
                mechanisms respondents may use to conduct discovery, providing
                respondents a clearer understanding of the bases of the Bureau's
                factual contentions while reducing the costs and burdens of hearings on
                all parties. Additionally, the grounds for a hearing officer denying a
                request to issue a subpoena under Rule 208--that it is ``unreasonable,
                oppressive, excessive in scope, or unduly burdensome''--are consistent
                with well-established judicial standards, and hearing officers will, in
                their consideration of requests for subpoenas, act diligently and in
                good faith to implement the standards for refusing or modifying
                deposition subpoenas set forth under the amended rule. These combined
                changes are overall less burdensome yet are equally effective in the
                resolution of the case on the merits.
                 Amended Rule 209 also adds procedures governing the taking of
                depositions, including depositions by written question. In general,
                once a subpoena for a deposition is issued, the party seeking the
                deposition must serve written notice of the deposition. That notice
                must include several things, including the time and place of the
                deposition, the identity of the deponent, and the method for recording
                the deposition. These and other procedural provisions track the SEC's
                recent amendments to its rules of practice.\19\ They govern the process
                for seeking depositions by written questions and the taking of all
                depositions, including setting forth the deposition officer's duties,
                the process for stating objections, motions to terminate or limit the
                deposition, and the process for finalizing a transcript.
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                 \19\ 81 FR 50211, 50215-17 (July 29, 2016).
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                 Finally, the Bureau is adding Rule 208(l), which addresses the
                relationship of subpoenas to the scheduling of the hearing. In the 2012
                Rule, one reason why the Bureau did not--as a general matter--permit
                discovery depositions was because the additional time required for
                depositions before the hearing could be in tension with the statutory
                timetable for hearings under section 1053(b) of the CFPA.\20\ As the
                preamble to the 2012 Rule noted, prehearing depositions would present
                extreme scheduling difficulties in those cases in which respondents did
                not request hearing dates outside the default timeframe under section
                1053(b), which provides for the hearing to be held 30 to 60 days after
                service of the notice of charges, unless an earlier or a later date is
                set by the Bureau, at the request of any party so served.\21\ The new
                Rule 208(l) addresses this scheduling obstacle to depositions and other
                discovery, by specifying that a respondent's request for issuance of a
                subpoena constitutes a request that the hearing not be held until after
                a reasonable period, determined by the hearing officer, for the
                completion of discovery.\22\ This is because a request for discovery
                reasonably entails a delay for the discovery process to be completed.
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                 \20\ 12 U.S.C. 5563(b).
                 \21\ 77 FR 39057, 39076 (June 29, 2012).
                 \22\ Rule 208(l) goes on to specify that the hearing officer
                will decide whether to grant such a request. If the request is
                granted, the hearing officer will set a deadline for the completion
                of discovery and schedule the specific date of the hearing, in
                consultation with the parties. Rule 208(l) does not apply to a
                subpoena for the attendance and testimony of a witness at the
                hearing or a subpoena to depose a witness unavailable for the
                hearing.
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                 Given this resolution of the 2012 Rule's scheduling concern, the
                Bureau believes that the benefits of discovery depositions under the
                amended Rule 209, as described earlier, outweigh other concerns
                expressed in the preamble to the 2012 Rule about the time, expense,
                [[Page 10032]]
                and risk of collateral disputes arising from depositions.\23\
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                 \23\ 77 FR 39057, 39076 (June 29, 2012).
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                1081.211 Interlocutory Review
                 The provision at 12 CFR 1081.211 (Rule 211) governs interlocutory
                review. Rule 211(e) previously included language that stated that
                interlocutory review is disfavored, and that the Director will grant a
                petition to review a hearing officer's ruling or order prior to the
                Director's consideration of a recommended decision only in
                extraordinary circumstances. The Bureau is simplifying this language to
                state only that interlocutory review is generally disfavored. This is
                because, although interlocutory review remains disfavored, the Bureau
                believes that there can be situations where interlocutory review can
                contribute to the efficiency of proceedings short of extraordinary
                circumstances.
                1081.212 Dispositive Motions
                 The Bureau is relocating the previous 12 CFR 1081.212(g) and (h)
                (Rule 212(g) and (h)), which addressed oral argument and decisions on
                dispositive motions, respectively, to form part of 12 CFR 1081.213
                (Rule 213). Rule 213 is discussed in the next section of this section-
                by-section analysis.
                 Additionally, the Bureau is adopting a new Rule 212(g) to address
                the relationship of dispositive motions to the scheduling of the
                hearing, which is codified as Rule 212(g) but unrelated to the previous
                Rule 212(g). It is analogous to Rule 208(l), discussed above. It
                specifies that a respondent's filing of a dispositive motion
                constitutes a request that the hearing not be held until after the
                motion is resolved.\24\ This is because the filing of a dispositive
                motion, whose purpose is to avoid or limit the need for a hearing,
                reasonably entails a delay of that hearing so that the motion can be
                resolved.
                ---------------------------------------------------------------------------
                 \24\ Rule 212(g) goes on to state that the hearing officer will
                decide whether to grant such a request. If the request is granted,
                the hearing officer will schedule the specific date of the hearing,
                in consultation with the parties.
                ---------------------------------------------------------------------------
                1081.213 Rulings on Dispositive Motions
                 The Bureau is amending Rule 213 to adopt a new procedure for
                rulings on dispositive motions, based on a procedure used by the
                Federal Trade Commission (FTC). The Bureau is also making related
                technical changes for clarity.
                 Under the Bureau's existing Rules of Practice, the Director ``may,
                at any time, direct that any matter be submitted to him or her for
                review.'' \25\ However, there was previously no specific procedure for
                the Director to exercise this discretion in the context of dispositive
                motions.
                ---------------------------------------------------------------------------
                 \25\ 12 CFR 1081.211(a).
                ---------------------------------------------------------------------------
                 The new Rule 213(a) provides that the Director will either rule on
                a dispositive motion, refer the motion to the hearing officer, or rule
                on the motion in part and refer it in part. This is based on a similar
                process under the FTC's rules of practice.\26\ The Bureau agrees with
                the reasoning of the FTC when it adopted this process a decade ago. The
                FTC explained that the head of the agency has authority and expertise
                to rule initially on dispositive motions, and doing so can improve the
                quality of decision-making and expedite the proceeding.\27\ As the FTC
                further noted, an erroneous decision by an administrative law judge on
                a dispositive motion may lead to unnecessary briefing, hearing, and
                reversal, resulting in substantial costs and delay to the
                litigants.\28\ Adopting this process will give the Director the
                flexibility to decide whether a given dispositive motion would be most
                efficiently addressed by the hearing officer, with ultimate review by
                the Director, or simply by the Director.
                ---------------------------------------------------------------------------
                 \26\ 16 CFR 3.22(a). This FTC provision does not specifically
                discuss a situation where the agency head rules on the motion in
                part and refers it in part. The Bureau has included language in Rule
                213(a) to specifically discuss this situation.
                 \27\ 74 FR 1803, 1809-10 (Jan. 13, 2009).
                 \28\ Id. at 1809-10.
                ---------------------------------------------------------------------------
                 The new Rule 213(b) provides that, if the Director rules on the
                motion, the Director must do so within 42 days following the expiration
                of the time for filing all responses and replies, unless there is good
                cause to extend the deadline. If the Director refers the motion to the
                hearing officer, the Director may set a deadline for the hearing
                officer to rule. This is based on the parallel timing requirements
                under the FTC's rules of practice.\29\ Previously, Rule 212(h) provided
                a 30-day timeframe for the hearing officer to decide dispositive
                motions, subject to extension.\30\ But the Bureau believes that the
                FTC's somewhat more flexible approach to timing is warranted, given
                that the Director must first decide whether or not to refer the motion
                to the hearing officer and also has other responsibilities as the head
                of the agency. The Bureau believes that the overall efficiency gains to
                adjudication proceedings from the new process, as discussed above,
                should generally compensate for any delays associated with a more
                flexible deadline.
                ---------------------------------------------------------------------------
                 \29\ 16 CFR 3.22(a). This FTC provision includes an interval of
                45 days, but as discussed elsewhere in this section-by-section
                analysis the Bureau is generally adopting time intervals in
                increments of seven days.
                 \30\ See 12 CFR 1081.115 (change of time limits).
                ---------------------------------------------------------------------------
                 The new Rule 213(c) provides that, at the request of any party or
                on the Director or hearing officer's own motion, the Director or
                hearing officer (as applicable) may hear oral argument on a dispositive
                motion. Rule 213(c) is identical to the previous Rule 212(g), except
                that it is updated to reflect the fact that the Director would be the
                appropriate official to hear oral argument, if any, to the extent the
                Director is deciding the motion.
                 Finally, the new Rule 213(d) describes the types of rulings that
                the Director or hearing officer may make on a dispositive motion. It
                consolidates language from the previous Rules 212(h) and 213, with
                updates to reflect the fact that the Director may be the official who
                decides the motion, as well as other technical changes for clarity.
                1081.400(a) Time Period for Filing Preliminary Findings and Conclusions
                 Under the previous 12 CFR 1081.400(a) (Rule 400(a)), subject to
                possible extensions, the hearing officer was required to file a
                recommended decision no later than 90 days after the deadline for
                filing post-hearing responsive briefs pursuant to 12 CFR 1081.305(b)
                (Rule 305(b)) and in no event later than 300 days after filing of the
                notice of charges. The Bureau is amending the latter, 300-day interval
                to 360 days, in light of the amendments to Rule 209 that expand the
                opportunities for depositions. Additionally, as explained later in this
                section-by-section analysis, the Bureau is changing terminology from
                ``recommended decision'' to ``preliminary findings and conclusions''
                throughout the Rules of Practice.
                1081.408 Issue Exhaustion
                 The Bureau is adding a new 12 CFR 1081.408 (Rule 408) to address
                issue exhaustion.
                 As the Supreme Court has explained: ``Administrative review schemes
                commonly require parties to give the agency an opportunity to address
                an issue before seeking judicial review of that question.'' \31\ These
                requirements can be ``creatures of statute or regulation'' or else are
                ``judicially created.'' \32\ It is ``common for an agency's regulations
                to require issue exhaustion in administrative appeals. And when
                regulations do so, courts reviewing agency action regularly
                [[Page 10033]]
                ensure against the bypassing of that requirement by refusing to
                consider unexhausted issues.'' \33\ Consistent with the Court's case
                law, the Administrative Conference of the United States has recommended
                that agencies address issue exhaustion requirements in their
                regulations.\34\
                ---------------------------------------------------------------------------
                 \31\ Carr v. Saul, 141 S. Ct. 1352, 1358 (2021).
                 \32\ Id.
                 \33\ Sims v. Apfel, 530 U.S. 103, 108 (2000) (internal citation
                omitted).
                 \34\ 86 FR 6612, 6619 (Jan. 22, 2021) (recommendation 2.k).
                ---------------------------------------------------------------------------
                 The Bureau is now adopting an express regulation on issue
                exhaustion. Section 1053 of the CFPA contemplates that the Bureau will
                conduct a proceeding to decide whether to issue a final order, and then
                parties may petition courts to review the Bureau's decision, based on
                the record that was before the Bureau.\35\ But if parties do not
                adequately present their arguments to the Bureau, it frustrates this
                statutory scheme. Accordingly, the Bureau believes that having
                procedures to address issue exhaustion in adjudication proceedings is
                important to carry out section 1053.\36\ The Bureau also notes that
                having express procedures on this subject should benefit both the
                Bureau and the parties, by avoiding any potential confusion about how
                parties must raise arguments in adjudication proceedings.
                ---------------------------------------------------------------------------
                 \35\ See generally section 1053(b), 12 U.S.C. 5563(b).
                 \36\ Section 1053(e), 12 U.S.C. 5563(e). The issue exhaustion
                provision is also independently authorized by section 1022(b)(1), 12
                U.S.C. 5512(b)(1), based on either of two grounds. First,
                establishing orderly rules for issue exhaustion is appropriate to
                enable the Bureau to ``administer and carry out the purposes and
                objectives of'' section 1053, for the reasons discussed above and
                below. Id. Second, these issue-exhaustion rules ``prevent evasions''
                of section 1053 and the Rules of Practice by some parties, who
                otherwise may not adequately present their arguments to the Bureau.
                Id.; see Woodford v. Ngo, 548 U.S. 81, 90 (2006) (explaining that
                ``exhaustion requirements are designed to deal with parties who do
                not want to exhaust'').
                ---------------------------------------------------------------------------
                 Rule 408(a) defines the new Rule 408's scope. It applies to any
                argument to support a party's case or defense, including any argument
                that could be a basis for setting aside Bureau action under 5 U.S.C.
                706 or any other source of law. This broad scope ensures that the
                Bureau has the opportunity to consider any issue affecting its
                proceedings.
                 Rule 408(b) provides, first, that a party must raise an argument
                before the hearing officer, or else it is not preserved for later
                consideration by the Director. Second, a party must raise an argument
                before the Director, or else it is not preserved for later
                consideration by a court. This is consistent with the roles of the
                hearing officer and Director.\37\
                ---------------------------------------------------------------------------
                 \37\ The Bureau notes that in cases where Rule 408(b) interacts
                with the Bureau's revisions to Rule 213, it yields a common-sense
                result. If the Director rules on a dispositive motion under Rule 213
                rather than referring it to the hearing officer, then the first
                sentence of Rule 408(b)--which normally requires parties to raise
                arguments before the hearing officer in the first instance--would be
                inapplicable to the Director's consideration of the motion. This is
                because the Director's ruling on the motion would not be ``later''
                consideration by the Director after the hearing officer. On the
                other hand, the second sentence of Rule 408(b) would be applicable,
                and arguments not properly raised before the Director in briefing on
                the motion would not be preserved for later consideration by a
                court.
                ---------------------------------------------------------------------------
                 Rule 408(c) provides that an argument must be raised in a manner
                that complies with the Rules of Practice and that provides a fair
                opportunity to consider the argument.
                 Finally, Rule 408(d) clarifies that the Director has discretion to
                consider an unpreserved argument, including by considering it in the
                alternative. It also clarifies that, if the Director considers an
                unpreserved argument in the alternative, the argument remains
                unpreserved. Because issue exhaustion requirements serve to protect the
                agency's processes, it is appropriate for the head of the agency to
                retain discretion to waive those issue exhaustion requirements in
                appropriate cases.\38\ If a party believes that there is good cause for
                the issue exhaustion requirements to not be applied in a particular
                context, the proper course is to timely request that the Director
                exercise this discretion. The Director may also do so on the Director's
                own initiative. On the other hand, if the Director merely considers an
                unpreserved argument in the alternative, that should not be construed
                as a waiver by the Director of the party's failure to appropriately
                raise the argument.
                ---------------------------------------------------------------------------
                 \38\ See, e.g., Am. Farm Lines v. Black Ball Freight Serv., 397
                U.S. 532, 539 (1970) (It ``is always within the discretion of . . .
                an administrative agency to relax or modify its procedural rules
                adopted for the orderly transaction of business before it when in a
                given case the ends of justice require it.'').
                ---------------------------------------------------------------------------
                Global Technical Amendments
                 In addition to the specific changes outlined above, the Bureau is
                making certain technical amendments throughout the Rules of Practice.
                 First, the Bureau is retitling the hearing officer's ``recommended
                decision'' as ``preliminary findings and conclusions.'' The Bureau
                believes that this title is more descriptive of this component of an
                adjudication proceeding. This is a terminological change, and
                preliminary findings and conclusions remain a recommended decision for
                purposes of the Administrative Procedure Act.
                 Second, the Bureau is making changes to ensure that the language of
                the Rules of Practice is gender inclusive. Third, consistent with the
                current Federal Rules of Civil Procedure, the Bureau is replacing use
                of the term ``shall'' with the terms ``must,'' ``may,'' ``will,'' or
                ``should,'' depending on the context, because the term ``shall'' can
                sometimes be ambiguous.\39\ Fourth, the amendments replace certain uses
                of the term ``the Bureau'' with either ``the Director,'' ``the Office
                of Administrative Adjudication,'' or ``the Office of Enforcement,'' in
                order to avoid ambiguity about which Bureau organ is being referenced.
                Fifth, as also discussed in the section-by-section analysis for Rule
                114(a), the Bureau is adjusting various time periods in the Rules of
                Practice. Finally, the Bureau is making technical changes to
                requirements in 12 CFR 1081.111(a), 1081.113(d)(2), and 1081.405(e)
                (Rules 111(a), 113(d)(2), and 405(e)) regarding filing of certain
                papers by the hearing officer and Director and service of those papers
                by the Office of Administrative Adjudication.
                ---------------------------------------------------------------------------
                 \39\ Fed. R. Civ. P. 1, advisory committee's notes to 2007
                amendment.
                ---------------------------------------------------------------------------
                IV. Section 1022(b)(2) Analysis
                 In developing this rule, the Bureau has considered the rule's
                benefits, costs, and impacts in accordance with section 1022(b)(2)(A)
                of the CFPA.\40\ In addition, the Bureau has consulted or offered to
                consult with the prudential regulators and the FTC, including regarding
                consistency of this rule with any prudential, market, or systemic
                objectives administered by those agencies, in accordance with section
                1022(b)(2)(B) of the CFPA.\41\
                ---------------------------------------------------------------------------
                 \40\ 12 U.S.C. 5512(b)(2)(A).
                 \41\ 12 U.S.C. 5512(b)(2)(B). Whether section 1022(b)(2)(A) and
                section 1022(b)(2)(A)(B) are applicable to this rule is unclear, but
                in order to inform the rulemaking more fully the Bureau performed
                the described analysis and consultations.
                ---------------------------------------------------------------------------
                 As with the 2012 Rule, this rule neither imposes obligations on
                consumers, nor is it expected to affect their access to consumer
                financial products or services. For purposes of this 1022(b)(2)
                analysis, the Bureau compares the effect of the rule against the
                baseline of the Rules of Practice as they currently exist, as
                established by the 2012 Rule and amended by the 2014 Rule.
                 The Rules of Practice amended by this rule are intended to provide
                an expeditious decision-making process. An expeditious decision-making
                process may benefit both consumers and
                [[Page 10034]]
                covered persons to the extent that it is used in lieu of proceedings
                initiated in federal district court. A 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, a more efficient process affords covered persons with a
                cost-effective way to have their cases heard. The 2012 Rule adopted an
                affirmative disclosure approach to fact discovery, pursuant to which
                the Bureau makes 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 was intended to substitute for the traditional civil
                discovery process, which can be both time-consuming and expensive. By
                changing this process to allow for a limited number of depositions by
                both the Office of Enforcement and respondents, the rule will increase
                the cost of the process in both time and money, relative to the
                baseline. At the same time, to the extent that a limited number of
                depositions makes hearings proceed more efficiently, the rule may
                reduce costs. In addition, since promulgating the 2012 Rule, the Bureau
                has only brought two cases through the administrative adjudication
                process from start to finish. As such, the Bureau expects there to be
                few cases in the future that would have benefited from the more limited
                deposition procedure in the 2012 Rule. The Bureau expects the amended
                procedure to still be faster and less expensive than discovery through
                a Federal district court. To the extent that adding additional
                discovery enables more cases that would otherwise be initiated in
                Federal court to instead be initiated through the administrative
                adjudication process, both consumers and covered persons will benefit.
                 In addition, in the 1022(b)(2) analysis for the 2012 Rule, the
                Bureau stated that a benefit of the Rule was its similarity to existing
                rules of the prudential regulators, the FTC, and the SEC. The SEC has
                since amended its rules, and many of the changes in these amendments
                will align the Bureau's rules with the new SEC rules and those of other
                agencies. The Rule's similarity to other agencies' rules should further
                reduce the expense of administrative adjudication for covered persons.
                 Further, these amendments have 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 CFPA. Finally,
                the amendments do not have a unique impact on rural consumers.
                V. Regulatory Requirements
                 As a rule of agency organization, procedure, or practice, this rule
                is exempt from the notice-and-comment rulemaking requirements of the
                Administrative Procedure Act.\42\ However, the Bureau is accepting
                comments on the rule. If, based on the comments, the Bureau decides to
                make further amendments, the Bureau requests comment on whether those
                amendments should apply to any adjudication proceedings that may be
                pending at that time.
                ---------------------------------------------------------------------------
                 \42\ 5 U.S.C. 553(b).
                ---------------------------------------------------------------------------
                 Because no notice of proposed rulemaking is required, the
                Regulatory Flexibility Act does not require an initial or final
                regulatory flexibility analysis.\43\ Moreover, the Bureau's Director
                certifies that this rule will not have a significant economic impact on
                a substantial number of small entities. Therefore, an analysis is also
                not required for that reason.\44\ The rule imposes compliance burdens
                only on the handful of entities that are respondents in adjudication
                proceedings or third-party recipients of discovery requests. Some of
                the handful of affected entities may be small entities under the
                Regulatory Flexibility Act, but they would represent an extremely small
                fraction of small entities in consumer financial services markets.
                Accordingly, the number of small entities affected is not substantial.
                ---------------------------------------------------------------------------
                 \43\ 5 U.S.C. 603, 604.
                 \44\ 5 U.S.C. 605(b).
                ---------------------------------------------------------------------------
                 The Bureau has also determined that this rule does not impose any
                new or revise any existing recordkeeping, reporting, or disclosure
                requirements on covered entities or members of the public that would be
                collections of information requiring approval by the Office of
                Management and Budget under the Paperwork Reduction Act.\45\
                ---------------------------------------------------------------------------
                 \45\ 44 U.S.C. 3501-3521.
                ---------------------------------------------------------------------------
                List of Subjects in 12 CFR Part 1081
                 Administrative practice and procedure, Banks, Banking, Consumer
                protection, Credit unions, Law enforcement, National banks, Savings
                associations, Trade practices.
                Authority and Issuance
                0
                For the reasons set forth above, the Bureau revises 12 CFR part 1081 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
                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, severance, or bifurcation of proceedings.
                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 Depositions.
                1081.210 Expert discovery.
                1081.211 Interlocutory review.
                1081.212 Dispositive motions.
                1081.213 Rulings on dispositive motions.
                1081.214 Prehearing conferences.
                1081.215 Prehearing submissions.
                1081.216 Amicus participation.
                Subpart C--Hearings
                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
                1081.400 Preliminary findings and conclusions of the hearing
                officer.
                1081.401 Transmission of documents to Director; record index;
                certification.
                [[Page 10035]]
                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.
                1081.408 Issue exhaustion.
                Subpart E--Temporary Cease-and-Desist Proceedings
                1081.500 Scope.
                1081.501 Basis for issuance, form, and service.
                1081.502 Judicial review, duration.
                 Authority: 12 U.S.C. 5512(b)(1), 5563(e).
                Subpart A--General Rules
                Sec. 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 Consumer
                Financial Protection Act of 2010 (12 U.S.C. 5563). The rules of
                practice in this part do not govern the conduct of Bureau
                investigations, investigational hearings or other proceedings that do
                not arise from proceedings after a notice of charges.
                Sec. 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 must 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 the hearing officer's preliminary findings and conclusions,
                may change any time limit prescribed by this part.
                Sec. 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 Consumer Financial Protection Act of 2010 (12 U.S.C. 5481), such
                terms have the same meaning as set forth therein, unless defined
                differently by Sec. 1081.103.
                Sec. 1081.103 Definitions.
                 For the purposes of this part, unless explicitly stated to the
                contrary:
                 Adjudication proceeding means a proceeding conducted pursuant to
                section 1053 of the Consumer Financial Protection Act of 2010 (12
                U.S.C. 5563) 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 that Act (12 U.S.C. 5563(c)).
                 Bureau means the Consumer Financial Protection Bureau.
                 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 Sec.
                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, preliminary findings and conclusions, 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.
                 Enforcement counsel means any individual who files a notice of
                appearance as counsel on behalf of the Office of Enforcement 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 Sec. 1081.200, except that it does not
                include a stipulation and consent order under Sec. 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 or other laws
                enforceable by the Bureau.
                 Party means the Office of Enforcement, 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 Sec. 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).
                Sec. 1081.104 Authority of the hearing officer.
                 (a) General rule. The hearing officer will have all powers
                necessary to conduct a proceeding in a fair and impartial manner and to
                avoid unnecessary delay. No provision of this part may 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 of this chapter;
                [[Page 10036]]
                 (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 the Director's
                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 preliminary findings and conclusions;
                 (12) To recuse oneself by motion made by a party or on the hearing
                officer's 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 will 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.
                Sec. 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 will be designated by the chief
                hearing officer, who will notify the parties of the hearing officer
                designated.
                 (b) Interference. Hearing officers will 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 must appear in
                and be made part of the record.
                 (c) Disqualification of hearing officers. (1) When a hearing
                officer deems the hearing officer disqualified to preside in a
                particular proceeding, the hearing officer must issue a notice stating
                that the hearing officer 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 must be
                accompanied by an affidavit setting forth the facts alleged to
                constitute grounds for disqualification. Such motion must 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 the hearing officer within
                14 days, the hearing officer must certify the motion to the Director
                pursuant to Sec. 1081.211, together with any statement the hearing
                officer may wish to have considered by the Director. The Director must
                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 will either direct the reassignment of
                the matter or confirm the hearing officer's continued role in the
                matter.
                 (d) Unavailability of hearing officer. If the hearing officer
                withdraws or is otherwise unable to perform the duties of the hearing
                officer, the chief hearing officer or the Director will designate
                another hearing officer to serve.
                Sec. 1081.106 Deadlines
                 The deadlines for action by the hearing officer established by
                Sec. Sec. 1081.203, 1081.205, 1081.211, 1081.212, and 1081.400, or
                elsewhere in this part, confer no substantive rights on respondents.
                Sec. 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 the individual's 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 Enforcement counsel, must 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
                (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 the attorney's 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 counsel is authorized to accept service on behalf
                of the represented party and that, in the event of withdrawal from
                representation, counsel 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 the party will
                proceed on a pro se basis. The notice of appearance must 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 must 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 the attorney should not be suspended or
                disbarred from practice before the Bureau. The alleged offender will be
                granted due opportunity to be heard in
                [[Page 10037]]
                the alleged offender's 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.
                Sec. 1081.108 Good faith certification.
                 (a) General requirement. Every filing or submission of record
                following the issuance of a notice of charges must be signed by at
                least one counsel of record in counsel's individual name and must state
                counsel's address, email address, and telephone number. A party who
                acts as the party's own counsel must sign the party's individual name
                and state the party's 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 will 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
                constitutes a certification that: The counsel or party has read the
                filing or submission of record; to the best of one's 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 must 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 one's knowledge, information, and
                belief formed after reasonable inquiry, one's 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
                Sec. 1081.104(b)(13).
                Sec. 1081.109 Conflict of interest.
                 (a) Conflict of interest in representation. No person may 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 non-party 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 Sec. 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 non-party 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.
                Sec. 1081.110 Ex parte communication.
                 (a) Definitions. (1) For purposes of this section, ex parte
                communication means any material oral or written 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) 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 will commence at
                the time of that person's 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 a 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 is 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 Sec. 1081.406, the matter will 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 will 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
                will 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 must 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 will have an
                opportunity, within 14 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 the party's claim or interest in the
                proceeding should not be dismissed, denied, disregarded, or otherwise
                adversely affected on account of such violation.
                [[Page 10038]]
                 (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, preliminary findings and
                conclusions, or agency review of the preliminary findings and
                conclusions, except as witness or counsel in public proceedings.
                Sec. 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 Sec. 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
                or Director (as applicable) will file all written orders, rulings,
                notices, or requests. Any papers required to be filed must be filed
                with the Office of Administrative Adjudication, except as otherwise
                provided in this section.
                 (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 Director 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 Sec. 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.
                Sec. 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
                single-spaced indented quotations) and printed or typewritten on 8\1/2\
                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
                Sec. 1081.108.
                 (c) Number of copies. Unless otherwise specified by the Director or
                the hearing officer, one copy of all documents and papers must 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
                must 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 this part.
                 (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 must 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 must 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 Sec. 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 will 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 must indicate any omissions with
                brackets or ellipses, and its pagination and depiction of text on each
                page must be identical to that of the sealed version.
                 (g) Certificate of service. Any papers filed in an adjudication
                proceeding must 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 Sec. 1081.108.
                Sec. 1081.113 Service of papers.
                 (a) When required. In every adjudication proceeding, each paper
                required to be filed by Sec. 1081.111 must 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 is
                required for motions which are to be heard ex parte.
                 (b) Upon a person represented by counsel. Whenever service is
                required to
                [[Page 10039]]
                be made upon a person represented by counsel who has filed a notice of
                appearance pursuant to Sec. 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 must 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 Office of Enforcement or the
                Office of Administrative Adjudication--(1) Service of a notice of
                charges by the Office of Enforcement--(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 (d)(1)(i), 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 must 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 Office of Enforcement will 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 must
                state, if 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 Office of Enforcement will
                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 must be accompanied by evidence of the
                appointment.
                 (vi) Waiver of service. In lieu of service as set forth in
                paragraph (d)(1)(i) or (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 papers by the Office of Administrative Adjudication.
                Unless otherwise ordered by the hearing officer or Director, the Office
                of Administrative Adjudication must serve papers filed by the hearing
                officer or Director promptly on each party pursuant to any method of
                service authorized under paragraph (c) or (d)(1) of this section.
                Unless otherwise ordered by the hearing officer or Director, if a party
                is represented by counsel who has filed a notice of appearance pursuant
                to Sec. 1081.107(a)(3), the Office of Administrative Adjudication
                serves that party by serving its counsel.
                Sec. 1081.114 Construction of time limits.
                 (a) General rule. In computing any time period prescribed by this
                part, by order of the Director or a hearing officer, or by any
                applicable statute, exclude the day of the event that triggers the
                period, count every day, including intermediate Saturdays, Sundays, and
                Federal holidays, and include the last day of the period 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.
                 (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.
                Sec. 1081.115 Change of time limits.
                 (a) Generally. 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 Sec. 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
                [[Page 10040]]
                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. Motions for
                extensions of time filed pursuant to paragraph (a) of this section are
                generally disfavored. In determining whether to grant any motions, the
                Director or hearing officer, as appropriate, will 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 Sec. 1081.400(a); and
                 (5) Any other matters as justice may require.
                 (c) Time limit. Postponements, adjournments, or extensions of time
                for filing papers may 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 preliminary findings and conclusions.
                The granting of any extension of time pursuant to this section does not
                affect any deadlines set pursuant to Sec. 1081.400(a).
                Sec. 1081.116 Witness fees and expenses.
                 Respondents must 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 must 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 Office of Enforcement
                is the party requesting the subpoena. The Bureau must 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.
                Sec. 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.
                Sec. 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 will 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 will be excused based on the pendency
                before any court of any interlocutory appeal or collateral attack.
                Sec. 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 seven
                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) of
                this section.
                 (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 Sec. 1081.112(f), and all other applicable rules of
                this chapter.
                 (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 will 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 Sec. 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 seven days from the date of receipt by the movant of a
                notice of the information required will 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
                otherwise orders for good cause shown at or before the expiration of
                such seven-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 will be
                maintained under seal and may be disclosed only in accordance with
                orders of the hearing officer. Any order issued in connection with a
                motion under this section will 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 will be nonpublic.
                [[Page 10041]]
                Sec. 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 must state that it is made
                pursuant to this section; must recite or incorporate as a part of the
                offer the provisions of paragraphs (c)(3) and (4) of this section; must
                be signed by the person making the offer, not by counsel; and must be
                submitted to enforcement counsel.
                 (c) Consideration of offers of settlement. (1) Offers of settlement
                will be considered when time, the nature of the proceedings, and the
                public interest permit.
                 (2) Any settlement offer will be presented to the Director with a
                recommendation, except that, if the recommendation is unfavorable, the
                offer will 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 preliminary findings and conclusions
                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 Consumer Financial Protection Act of 2010 (12 U.S.C. 5563).
                 (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 will be notified of the Director's action and the
                offer of settlement will be deemed withdrawn. The rejected offer will
                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 will be recorded in a written stipulation signed by each
                settling respondent, and a consent order concluding the proceeding as
                to the settling respondents. The stipulation and consent order must be
                filed pursuant to Sec. 1081.111, and must 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 will
                be a final order concluding the proceeding as to the settling
                respondents.
                Sec. 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.
                Subpart B--Initiation of Proceedings and Prehearing Rules
                Sec. 1081.200 Commencement of proceeding and contents of notice of
                charges.
                 (a) Commencement of proceeding. A proceeding governed by subparts A
                through D of this part is commenced when the Bureau, through the Office
                of Enforcement, files a notice of charges in accordance with Sec.
                1081.111. The notice of charges must be served by the Office of
                Enforcement upon the respondent in accordance with Sec.
                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 request for an order granting the relief
                sought;
                 (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 must 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 Director, the notice of charges will be given general circulation
                by release to the public, by publication on the Bureau's website 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 14 days from the date of service except if there is a pending
                motion for a protective order filed pursuant to Sec. 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 must be filed pursuant to Sec. 1081.111.
                The stipulation must contain the information required under Sec.
                1081.120(d), and the consent order must contain the information
                required under paragraphs (b)(1) and (2) of this section. The
                proceeding will be concluded upon issuance of the consent order by the
                Director.
                 (e) Voluntary dismissal--(1) Without an order. The Office of
                Enforcement 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.
                Sec. 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 must 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 is
                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 request for relief or proposed order. A respondent must
                affirmatively state in the answer any avoidance or affirmative defense,
                [[Page 10042]]
                including but not limited to res judicata and statute of limitations.
                Failure to do so will be deemed a waiver.
                 (c) If the allegations of the notice of charges are admitted. If
                the respondent elects not to contest the allegations of fact set forth
                in the notice of charges, the answer will consist of a statement that
                the respondent admits all the material allegations to be true. Such an
                answer constitutes 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 will issue preliminary
                findings and conclusions, 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 Sec. 1081.305.
                 (d) Default. (1) Failure of a respondent to file an answer within
                the time provided will 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 preliminary findings and conclusions containing
                appropriate findings and conclusions. In such cases, respondent will
                have no right to appeal pursuant to Sec. 1081.402, but must instead
                proceed pursuant to paragraph (d)(2) of this section.
                 (2) A motion to set aside a default must 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 preliminary findings and conclusions, 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.
                Sec. 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 14 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 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.
                Sec. 1081.203 Scheduling conference.
                 (a) Meeting of the parties before scheduling conference. As early
                as practicable before the scheduling conference described in paragraph
                (e) of this section, counsel for the parties must 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 must also
                discuss and agree, if possible, on the matters set forth in paragraph
                (e) of this section.
                 (b) Scheduling conference disclosure. After the meeting required in
                paragraph (a) of this section and at least seven days prior to the
                scheduling conference described in paragraph (e) of this section, the
                parties must exchange a scheduling conference disclosure, which must be
                signed by the party or by the party's attorney if one has appeared on
                behalf of the party. The scheduling conference disclosure must include:
                 (1) A factual summary of the case, a summary of all factual and
                legal issues in dispute, and a summary of all factual and legal bases
                supporting each defense; and
                 (2) The following information about the evidence that the party may
                present at the hearing other than solely for impeachment:
                 (i) The name, address, and telephone number of each witness,
                together with a summary of the witness's anticipated testimony; and
                 (ii) An identification of each document or other exhibit, including
                summaries of other evidence, along with a copy of each document or
                exhibit identified unless the document or exhibit has already been
                produced to the other party.
                 (c) Duty to supplement. A party must supplement or correct the
                scheduling conference disclosure in a timely manner if the party
                acquires other information that it intends to rely upon at a hearing.
                 (d) Failure to disclose--harmless error. In the event that
                information required to be disclosed in the scheduling conference
                disclosure is not disclosed, no rehearing or redecision of a proceeding
                already heard or decided will be required unless the other party
                establishes that the failure to disclose was not harmless error.
                 (e) Scheduling conference. Within 21 days of service of the notice
                of charges or such other time as the parties and hearing officer may
                agree, counsel for all parties must appear before the hearing officer
                in person at a specified time and place or by electronic means for the
                purpose of scheduling the course and conduct of the proceeding. This
                meeting is called a scheduling conference. At the scheduling
                conference, counsel for the parties must be prepared to address:
                 (1) Determination of the dates and location of the hearing,
                including, in proceedings under section 1053(b) of the Consumer
                Financial Protection Act of 2010 (12 U.S.C. 5563(b)), whether the
                hearing should commence later than 60 days after service of the notice
                of charges, considering, among other factors, whether the respondent
                intends to file a dispositive motion or to seek the issuance of
                subpoenas;
                 (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 Sec. 1081.206 and of
                witness
                [[Page 10043]]
                statements as set forth in Sec. 1081.207, and prehearing production of
                documents in response to subpoenas duces tecum as set forth in Sec.
                1081.208;
                 (6) Whether the parties intend to file dispositive motions;
                 (7) Whether the parties intend to seek the issuance of subpoenas,
                the identity of any anticipated deponents or subpoena recipients, and a
                schedule for completing that discovery;
                 (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.
                 (f) Transcript. The hearing officer 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 that party's expense.
                 (g) Scheduling order. At or within seven days following the
                conclusion of the scheduling conference, the hearing officer will serve
                on each party an order setting forth the date and location of the
                hearing and any agreements reached and any procedural determinations
                made.
                 (h) 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 the person has been duly notified may be
                deemed in default pursuant to Sec. 1081.201(d)(1). A party may make a
                motion to set aside a default pursuant to Sec. 1081.201(d)(2).
                 (i) Public access. The scheduling conference will be public unless
                the hearing officer determines, based on the standard set forth in
                Sec. 1081.119(c), that the conference (or any part thereof) should be
                closed to the public.
                Sec. 1081.204 Consolidation, severance, or bifurcation of
                proceedings.
                 (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.
                 (c) Bifurcation. The Director may order that the proceeding be
                divided into two or more stages, if the Director determines that it
                would promote efficiency in the proceeding or for other good cause. For
                example, the Director may order that the proceeding have two stages, so
                that at the conclusion of the first stage the Director issues a
                decision on whether there have been violations of law and at the
                conclusion of the second stage the Director issues a final decision and
                order, including with respect to any remedies. The Director may make an
                order under this paragraph (c) either on the motion of a party or on
                the Director's own motion after inviting submissions by the parties.
                The Director may include, in that order or in later orders,
                modifications to the procedures in this part in order to effectuate an
                efficient division into stages, or the Director may assign such
                authority to the hearing officer. Only the decision and order of the
                Director after the final stage, and not a decision of the Director
                after an earlier stage, will be a final decision and order for purposes
                of Sec. Sec. 1081.110, 1081.405(d) and (e), 1081.407, and 1081.502 and
                section 1053(b) of the Consumer Financial Protection Act of 2010 (12
                U.S.C. 5563(b)).
                Sec. 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 must comply with any
                specific requirements of that section and this section to the extent
                the requirements in this section 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 in this
                section, within 14 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 will 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 seven 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 may 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 may 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 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 must 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 must 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 will
                [[Page 10044]]
                rule on non-dispositive motions. Such ruling must 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 does 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.
                Sec. 1081.206 Availability of documents for inspection and copying.
                 For purposes of this section, the term documents includes 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 will 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 will 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 will 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 limits the right of
                the Office of Enforcement to make available any other document, or
                limits the right of a party to seek access to or production pursuant to
                subpoena of any other document, or limits the authority of the hearing
                officer to order the production of any document pursuant to subpoena.
                 (4) Nothing in paragraph (a) of this section requires 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;
                 (vi) The document reflects only settlement negotiations between the
                Office of Enforcement and a person or entity who is not a current
                respondent in the proceeding; or
                 (vii) 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 (vi) of
                this section or to submit to the hearing officer any document withheld,
                except for any documents that are being withheld pursuant to paragraph
                (b)(1)(iii) of this section, in which case the Office of Enforcement
                must inform the other parties of the fact that such documents are being
                withheld, but no further disclosures regarding those documents will 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
                (vi) 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 must commence making
                documents available to a respondent for inspection and copying pursuant
                to this section no later than 14 days after service of the notice of
                charges.
                 (e) Place of inspection and copying. Documents subject to
                inspection and copying pursuant to this section will 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 will 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 must specify the
                documents subject to the agreement, the date they must be returned, and
                such other terms or conditions as are appropriate to provide for the
                safekeeping of the documents. If the Office of Enforcement determines
                that production of some or all the documents required to be produced
                under this section can be produced in an electronic format, the Office
                of Enforcement may instead produce the documents in an electronic
                format.
                 (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 is responsible for the cost of photocopying.
                Unless otherwise ordered, charges for copies made by the Office of
                Enforcement at the request of the respondent will be at the rate
                charged pursuant to part 1070 of this chapter. The respondent will 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.
                [[Page 10045]]
                 (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 must 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 will 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 does 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 will
                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.
                Sec. 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 the witness's 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'' has the meaning set forth in 18 U.S.C. 3500(e). Such
                production will be made at a time and place fixed by the hearing
                officer and will be made available to any party, provided, however,
                that the production must 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 will
                be required unless the respondent establishes that the failure to make
                the statement available was not harmless error.
                Sec. 1081.208 Subpoenas.
                 (a) Availability. In connection with any hearing ordered by the
                hearing officer or any deposition permitted under Sec. 1081.209, a
                party may request the issuance of subpoenas requiring the attendance
                and testimony of witnesses at such depositions or 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 must 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 of subpoenas requiring the attendance
                and testimony of witnesses at the hearing or the production of
                documentary or other tangible evidence. The hearing officer will
                promptly issue any subpoena 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. Where it appears
                to the hearing officer that the subpoena sought may be unreasonable,
                oppressive, excessive in scope, or unduly burdensome, the hearing
                officer may, 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, the
                hearing officer 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 parties
                whether they will stipulate to the facts sought to be proved.
                 (e) Standards for issuance of subpoenas requiring the deposition of
                a witness pursuant to Sec. 1081.209. (1) The hearing officer will
                promptly issue any subpoena requiring the attendance and testimony of
                witnesses at a deposition only if the subpoena complies with Sec.
                1081.209 and if:
                 (i) The proposed deponent is a witness identified in the other
                party's scheduling conference disclosure under Sec. 1081.203(b);
                 (ii) The proposed deponent was a witness of or participant in any
                event, transaction, occurrence, act, or omission that forms the basis
                for any claim asserted by the Office of Enforcement, any defense, or
                anything else required to be included in an answer pursuant to Sec.
                1081.201(b), by any respondent in the proceeding (this excludes a
                proposed deponent whose only knowledge of these matters arises from the
                Bureau's investigation, the Bureau's examination, or the proceeding);
                 (iii) The proposed deponent is designated as an ``expert witness''
                under Sec. 1081.210(b); provided, however, that the deposition of an
                expert who is required to submit a written report under Sec.
                1081.210(b) may only occur after such report is served;
                 (iv) The proposed deponent has custody of documents or electronic
                data relevant to the claims or defenses of any party (this excludes
                officers or personnel of the Bureau who have custody of documents or
                data that was produced by the Office of Enforcement to the respondent);
                or
                 (v) The proposed deponent is unavailable for the hearing as set
                forth in Sec. 1081.209(c).
                 (2) Where it appears to the hearing officer that the subpoena
                sought may be unreasonable, oppressive, excessive in scope, or unduly
                burdensome, the
                [[Page 10046]]
                hearing officer may, 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, the
                hearing officer 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 parties
                whether they will stipulate to the facts sought to be proved.
                 (f) Service. Upon issuance by the hearing officer, the party making
                the request will serve the subpoena on the person named in the subpoena
                and on each party in accordance with Sec. 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.
                 (g) Tender of fees required. When a subpoena compelling the
                attendance of a person at a hearing or 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 Sec. 1081.116.
                 (h) Place of compliance. A subpoena for a deposition may command a
                person to attend a deposition only as follows:
                 (1) Within 100 miles of where the person resides, is employed, or
                regularly transacts business in person;
                 (2) Within the State where the person resides, is employed, or
                regularly transacts business in person, if the person is a party or a
                party's officer;
                 (3) At such other location that the parties and proposed deponent
                stipulate; or
                 (4) At such other location that the hearing officer determines is
                appropriate.
                 (i) Production of documentary material. Production of documentary
                material in response to a subpoena must 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.
                 (j) 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 pursuant to a subpoena, or any
                party may, prior to the time specified therein for compliance, but in
                no event more than seven days after the date of service of such
                subpoena, move that the subpoena be quashed or modified. Such motion
                must be filed and served on all parties pursuant to subpart A of this
                part. Notwithstanding Sec. 1081.205, the party on whose behalf the
                subpoena was issued or enforcement counsel may, within seven 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 must 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 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.
                 (k) Enforcing subpoenas. If a subpoenaed person fails to comply
                with any subpoena issued pursuant to this part 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 the Consumer Financial Protection Act of 2010. 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.
                 (l) Relationship to scheduling of hearing. The parties must
                disclose at the scheduling conference required under Sec. 1081.203(e)
                whether they intend to request the issuance of subpoenas under Sec.
                1081.209. A respondent's request for issuance of a subpoena constitutes
                a request that the hearing not be held until after a reasonable period,
                determined by the hearing officer, for the completion of discovery. The
                hearing officer will decide whether to grant such a request. If the
                request is granted, the hearing officer will set a deadline for the
                completion of discovery and schedule the specific date of the hearing,
                in consultation with the parties. This paragraph (l) does not apply to
                a subpoena for the attendance and testimony of a witness at the hearing
                or a subpoena to depose a witness unavailable for the hearing.
                Sec. 1081.209 Depositions.
                 (a) Depositions by oral examination or by written questions.
                Depositions by oral examination or by written questions may be taken as
                set forth in this section and must be taken pursuant to subpoena issued
                under Sec. 1081.208. Any deposition permitted under this section may
                be taken and submitted on written questions upon motion of any party,
                for good cause shown, or as stipulated by the parties. No other
                depositions will be permitted except as provided in paragraph (c) of
                this section.
                 (1) If the proceeding involves a single respondent, the respondent
                may depose no more than three persons, and the Office of Enforcement
                may depose no more than three persons.
                 (2) If the proceeding involves multiple respondents, the
                respondents collectively may depose no more than five persons, and the
                Office of Enforcement may depose no more than five persons. The
                depositions taken under this paragraph (a)(2) cannot exceed a total of
                five depositions for the Office of Enforcement, and five depositions
                for all respondents collectively.
                 (3) Any side may file a motion with the hearing officer seeking
                leave to take up to two additional depositions beyond those permitted
                pursuant to paragraphs (a)(1) and (2) of this section.
                 (i) Procedure. (A) A motion for additional depositions must be
                filed no later than 28 days prior to the hearing date. If the moving
                side proposes to take the additional deposition(s) by written
                questions, the motion must so state and include the proposed questions.
                Any party opposing the motion may submit an opposition within seven
                days after
                [[Page 10047]]
                service of the motion. No reply will be permitted. The motion and any
                oppositions each must not exceed seven pages in length.
                 (B) Upon consideration of the motion and any opposing papers, the
                hearing officer will issue an order either granting or denying the
                motion. The hearing officer will consider the motion on an expedited
                basis.
                 (ii) Grounds and standards for motion. A motion under paragraph
                (a)(3) of this section will not be granted unless the additional
                depositions satisfy Sec. 1081.208(d) and the moving side demonstrates
                a compelling need for the additional depositions by:
                 (A) Identifying all witnesses the moving side plans to depose under
                this section;
                 (B) Describing the role of all witnesses;
                 (C) Describing the matters concerning which all witnesses are
                expected to be questioned, and why the deposition of all witnesses is
                necessary for the moving side's arguments, claims, or defenses; and
                 (D) Showing that the additional deposition(s) requested will not be
                unreasonably cumulative or duplicative.
                 (b) Additional procedure for depositions by written questions. (1)
                Any motion or stipulation seeking a deposition of a witness by written
                questions must include the written questions the party seeking the
                deposition will ask the witness. Within seven days after service of the
                motion and written questions, any party may file objections to such
                written questions and any party may file cross-questions. When a
                deposition is taken by written questions, no persons other than the
                witness, counsel to the witness, the deposition officer, and, if the
                deposition officer does not act as reporter, a reporter, may be present
                at the examination of the witness. No party may be present or
                represented unless otherwise permitted by order. The deposition officer
                will propound the questions and cross-questions to the witness in the
                order submitted.
                 (2) The order for deposition, filing of the deposition, form of the
                deposition, and use of the deposition in the record will be governed by
                paragraphs (d) through (l) of this section, except that no cross-
                examination will be made.
                 (c) Depositions when witness is unavailable. In addition to
                depositions permitted under paragraph (a) of this section, the hearing
                officer may grant a party's request for issuance of a subpoena if the
                requesting party shows that the prospective witness will likely give
                testimony material to the proceeding; that it is likely the prospective
                witness, who is then within the United States, will be unable to attend
                or testify at the hearing because of age, sickness, infirmity,
                imprisonment, other disability, or absence from the United States,
                unless it appears that the absence of the witness was procured by the
                party requesting the deposition; and that the taking of a deposition
                will serve the interests of justice.
                 (d) Service and contents of notice. Upon issuance of a subpoena for
                a deposition, the party taking the deposition must serve a notice on
                each party pursuant to Sec. 1081.113. A notice of deposition must
                state that the deposition will be taken before a deposition officer
                authorized to administer oaths by the laws of the United States or of
                the place where the deposition is to be held. A notice of deposition
                also must state:
                 (1) The name and address of the witness whose deposition is to be
                taken;
                 (2) The time and place of the deposition; and
                 (3) The manner of recording and preserving the deposition.
                 (e) Method of recording--(1) Method stated in the notice. The party
                who notices the deposition must state in the notice the method for
                recording the testimony. Unless the hearing officer orders otherwise,
                testimony may be recorded by audio, audiovisual, or stenographic means.
                The noticing party bears the recording costs. Any party may arrange to
                transcribe a deposition, at that party's expense. Each party will bear
                its own costs for obtaining copies of any transcripts or audio or
                audiovisual recordings.
                 (2) Additional method. With prior notice to the deponent and other
                parties, any party may designate another method for recording the
                testimony in addition to that specified in the original notice. That
                party bears the expense of the additional record or transcript unless
                the hearing officer orders otherwise.
                 (f) By remote means. The parties and the deponent may stipulate--or
                the hearing officer may on motion order--that a deposition be taken by
                telephone or other electronic means. For the purpose of this section,
                the deposition takes place where the deponent answers the questions.
                 (g) Deposition officer's duties--(1) Before the deposition. The
                deposition officer must begin the deposition with an on-the-record
                statement that includes:
                 (i) The deposition officer's name and business address;
                 (ii) The date, time, and place of the deposition;
                 (iii) The deponent's name;
                 (iv) The deposition officer's administration of the oath or
                affirmation to the deponent; and
                 (v) The identity of all persons present.
                 (2) Conducting the deposition; avoiding distortion. If the
                deposition is recorded non-stenographically, the deposition officer
                must repeat the items in paragraphs (g)(1)(i) through (iii) of this
                section at the beginning of each unit of the recording medium. The
                deponent's and attorneys' appearance or demeanor must not be distorted
                through recording techniques.
                 (3) After the deposition. At the end of a deposition, the
                deposition officer must state on the record that the deposition is
                complete and must set out any stipulations made by the attorneys about
                custody of the transcript or recording and of the exhibits, or about
                any other pertinent matters.
                 (h) Order and record of the examination--(1) Order of examination.
                The examination and cross-examination of a deponent will proceed as
                they would at the hearing. After putting the deponent under oath or
                affirmation, the deposition officer must record the testimony by the
                method designated under paragraph (e) of this section. The testimony
                must be recorded by the deposition officer personally or by a person
                acting in the presence and under the direction of the deposition
                officer. The witness being deposed may have counsel present during the
                deposition.
                 (2) Form of objections stated during the deposition. An objection
                at the time of the examination--whether to evidence, to a party's
                conduct, to the deposition officer's qualifications, to the manner of
                taking the deposition, or to any other aspect of the deposition--must
                be noted on the record, but the examination may still proceed and the
                testimony may be taken subject to any objection. An objection must be
                stated concisely in a nonargumentative and nonsuggestive manner. A
                person may instruct a deponent not to answer only when necessary to
                preserve a privilege, to enforce a limitation ordered by the hearing
                officer, or to present a motion to the hearing officer for a limitation
                on the questioning in the deposition.
                 (i) Waiver of objections--(1) To the notice. An objection to an
                error or irregularity in a deposition notice is waived unless promptly
                served in writing on the party giving the notice.
                 (2) To the deposition officer's qualification. An objection based
                on disqualification of the deposition officer before whom a deposition
                is to be taken is waived if not made:
                 (i) Before the deposition begins; or
                [[Page 10048]]
                 (ii) Promptly after the basis for disqualification becomes known
                or, with reasonable diligence, could have been known.
                 (3) To the taking of the deposition--(i) Objection to competence,
                relevance, or materiality. An objection to a deponent's competence--or
                to the competence, relevance, or materiality of testimony--is not
                waived by a failure to make the objection before or during the
                deposition, unless the ground for it might have been corrected at that
                time.
                 (ii) Objection to an error or irregularity. An objection to an
                error or irregularity at an oral examination is waived if:
                 (A) It relates to the manner of taking the deposition, the form of
                a question or answer, the oath or affirmation, a party's conduct, or
                other matters that might have been corrected at that time; and
                 (B) It is not timely made during the deposition.
                 (4) To completing and returning the deposition. An objection to how
                the deposition officer transcribed the testimony--or prepared, signed,
                certified, sealed, endorsed, sent, or otherwise dealt with the
                deposition--is waived unless a motion to suppress is made promptly
                after the error or irregularity becomes known or, with reasonable
                diligence, could have been known.
                 (j) Duration; cross-examination; motion to terminate or limit--(1)
                Duration. Unless otherwise stipulated or ordered by the hearing
                officer, a deposition is limited to one day of seven hours, including
                cross-examination as provided in this paragraph (j)(1). In a deposition
                conducted by or for a respondent, the Office of Enforcement will be
                allowed a reasonable amount of time for cross-examination of the
                deponent. In a deposition conducted by the Office, the respondents
                collectively will be allowed a reasonable amount of time for cross-
                examination of the deponent. The hearing officer may allow additional
                time if needed to fairly examine the deponent or if the deponent,
                another person, or any other circumstance impedes or delays the
                examination.
                 (2) Motion to terminate or limit--(i) Grounds. At any time during a
                deposition, the deponent or a party may move to terminate or limit it
                on the ground that it is being conducted in bad faith or in a manner
                that unreasonably annoys, embarrasses, or oppresses the deponent or
                party. If the objecting deponent or party so demands, the deposition
                must be suspended for the time necessary to present the motion to the
                hearing officer.
                 (ii) Order. Upon a motion under paragraph (j)(2)(i) of this
                section, the hearing officer may order that the deposition be
                terminated or may limit its scope. If terminated, the deposition may be
                resumed only by order of the hearing officer.
                 (k) Review by the witness; changes--(1) Review; statement of
                changes. On request by the deponent or a party before the deposition is
                completed, and unless otherwise ordered by the hearing officer, the
                deponent must be allowed 14 days after being notified by the deposition
                officer that the transcript or recording is available, unless a longer
                time is agreed to by the parties or permitted by the hearing officer,
                in which:
                 (i) To review the transcript or recording; and
                 (ii) If there are changes in form or substance, to sign a statement
                listing the changes and the reasons for making them.
                 (2) Changes indicated in the deposition officer's certificate. The
                deposition officer must note in the certificate prescribed by paragraph
                (l)(1) of this section whether a review was requested and, if so, must
                attach any changes the deponent makes during the 14-day period.
                 (l) Certification and delivery; exhibits; copies of the transcript
                or recording--(1) Certification and delivery. The deposition officer
                must certify in writing that the witness was duly sworn and that the
                deposition accurately records the witness's testimony. The certificate
                must accompany the record of the deposition. Unless the hearing officer
                orders otherwise, the deposition officer must seal the deposition in an
                envelope or package bearing the title of the action and marked
                ``Deposition of [witness's name]'' and must promptly send it to the
                attorney or party who arranged for the transcript or recording. The
                attorney or party must store it under conditions that will protect it
                against loss, destruction, tampering, or deterioration.
                 (2) Documents and tangible things--(i) Originals and copies.
                Documents and tangible things produced for inspection during a
                deposition must, on a party's request, be marked for identification and
                attached to the deposition. Any party may inspect and copy them. But if
                the person who produced them wants to keep the originals, the person
                may:
                 (A) Offer copies to be marked, attached to the deposition, and then
                used as originals--after giving all parties a fair opportunity to
                verify the copies by comparing them with the originals; or
                 (B) Give all parties a fair opportunity to inspect and copy the
                originals after they are marked--in which event the originals may be
                used as if attached to the deposition.
                 (ii) Order regarding the originals. Any party may move for an order
                that the originals be attached to the deposition pending final
                disposition of the case.
                 (3) Copies of the transcript or recording. Unless otherwise
                stipulated or ordered by the hearing officer, the deposition officer
                must retain the stenographic notes of a deposition taken
                stenographically or a copy of the recording of a deposition taken by
                another method. When paid reasonable charges, the deposition officer
                must furnish a copy of the transcript or recording to any party or the
                deponent, as directed by the party or person paying such charges.
                 (m) Presentation of objections or disputes. Any party or deponent
                seeking relief with respect to disputes over the conduct of a
                deposition may file a motion with the hearing officer to obtain relief
                as permitted by this part.
                Sec. 1081.210 Expert discovery.
                 (a) At a date set by the hearing officer at the scheduling
                conference, each party must serve the other with a report prepared by
                each of its expert witnesses. Each party must 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 must 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 seven 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 the
                expert witness 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 must be signed by the expert and contain a complete
                statement of all opinions to be expressed and the basis and reasons
                therefore; the data,
                [[Page 10049]]
                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 upon subpoena issued
                under Sec. 1081.208. Unless otherwise ordered by the hearing officer,
                a deposition of any expert witness will 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 must be completed no later than 14 days before the
                hearing unless otherwise ordered by the hearing officer. No expert
                deposition will exceed seven hours on the record, absent agreement of
                the parties or an order of the hearing officer for good cause shown.
                Expert depositions will be conducted pursuant to the procedures set
                forth in Sec. 1081.209(d) through (l).
                 (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 has the discretion to dispense with the
                requirement of expert discovery in appropriate cases.
                Sec. 1081.211 Interlocutory review.
                 (a) Availability. The Director may, at any time, direct that any
                matter be submitted to the Director for review. Subject to paragraph
                (c) of this section, the hearing officer may, upon the hearing
                officer's motion or upon the motion of any 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 must be filed with the hearing officer
                within seven days of service of the ruling or order, must specify the
                ruling or order or parts thereof for which interlocutory review is
                sought, must attach any other portions of the record on which the
                moving party relies, and must otherwise comply with Sec. 1081.205.
                Notwithstanding Sec. 1081.205, any response to such a motion must be
                filed within seven days of service of the motion. The hearing officer
                must issue a ruling on the motion within seven 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 will 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 Sec. 1081.105(c)(2);
                 (3) The ruling or order suspended or barred an individual from
                appearing before the Bureau pursuant to Sec. 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 will 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 generally
                disfavored. 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
                the Director determines that interlocutory review is not warranted or
                appropriate under the circumstances, in which case the Director may
                summarily deny the petition. If the Director determines to grant the
                review, the Director will review the matter and issue a 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 the hearing officer's prior rulings
                or orders for interlocutory review or a petition for interlocutory
                review filed with the Director, and the grant of any such review, will
                not stay proceedings before the hearing officer unless the hearing
                officer, or the Director, so orders. The Director will not consider a
                motion for a stay unless the motion was first been made to the hearing
                officer.
                Sec. 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 the moving
                party's favor as a matter of law.
                 (d) Filing of motions for summary disposition and responses. (1)
                After a
                [[Page 10050]]
                respondent's answer has been filed and documents have been made
                available to the respondent for inspection and copying pursuant to
                Sec. 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 the moving party's 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 the opposing party 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 must set forth such
                facts as would be admissible in evidence, must 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) may
                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 21 days after service of a dispositive motion, or within
                such 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 also apply to such responses. Any reply brief filed in response
                to an opposition to a dispositive motion must be filed within seven
                days after service of the opposition. Reply briefs may not exceed ten
                pages.
                 (g) Relationship to scheduling of hearing. A respondent's filing of
                a dispositive motion constitutes a request that the hearing not be held
                until after the motion is resolved. The hearing officer will decide
                whether to grant such a request. If the request is granted, the hearing
                officer will schedule the specific date of the hearing, in consultation
                with the parties.
                Sec. 1081.213 Rulings on dispositive motions.
                 (a) Ruling by Director or hearing officer. The Director will rule
                on a dispositive motion, refer the motion to the hearing officer, or
                rule on the motion in part and refer it in part.
                 (b) Timing of ruling. If the Director rules on the motion, the
                Director must do so within 42 days following the expiration of the time
                for filing all responses and replies, unless there is good cause to
                extend the deadline. If the Director refers the motion to the hearing
                officer, the Director may set a deadline for the hearing officer to
                rule.
                 (c) Oral argument. At the request of any party or on the Director
                or hearing officer's own motion, the Director or hearing officer (as
                applicable) may hear oral argument on a dispositive motion.
                 (d) Types of rulings--(1) Granting motion as to all claims and
                relief. If the Director or hearing officer (as applicable) determines
                that dismissal or summary disposition is warranted as to all claims and
                relief, then (as applicable) the Director will issue a final decision
                and order or the hearing officer will issue preliminary findings and
                conclusions.
                 (2) Granting motion as to some claims or relief. If the Director or
                hearing officer (as applicable) determines that dismissal or summary
                disposition is warranted as to some issues, but not all claims and
                relief, the Director or hearing officer will issue an order that
                directs further proceedings. Where the dispositive motion is a motion
                for summary disposition, the order will specify the facts that appear
                without substantial controversy. The facts so specified are be deemed
                established.
                 (3) Denial of motion. If the Director or hearing officer (as
                applicable) determines that dismissal or summary disposition is not
                warranted, the Director or hearing officer may 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 a motion for summary disposition, the Director or hearing
                officer must deny or defer the motion, or do so in relevant part.
                Sec. 1081.214 Prehearing conferences.
                 (a) Prehearing conferences. The hearing officer may, in addition to
                the scheduling conference, upon the hearing officer's motion or at the
                request of any party, direct counsel for the parties to meet with the
                hearing officer (in person or by electronic means) at a prehearing
                conference for further discussion of the issues outlined in Sec.
                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 Sec. 1081.303(h).
                 (b) Transcript. The hearing officer has discretion to 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 that party's expense.
                 (c) Public access. Any prehearing conferences will be public unless
                the hearing officer determines, based on the standard set forth in
                Sec. 1081.119(c), that the conference (or any part thereof) should be
                closed to the public.
                Sec. 1081.215 Prehearing submissions.
                 (a) Generally. Within the time set by the hearing officer, but in
                no case later than 14 days before the start of the hearing, each party
                must serve on every other party:
                 (1) A prehearing statement, which must include an outline or
                narrative summary of the party's case or defense, and the legal
                theories upon which the party 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 Sec. 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 must also serve, in addition to the information required by
                paragraph (a)(2)
                [[Page 10051]]
                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 co-
                authored by the expert within the preceding ten years, to the extent
                such information has not already been provided pursuant to Sec.
                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.
                Sec. 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 must identify the interest of
                the movant and state the reasons why a brief of an amicus curiae is
                desirable. Except as all parties otherwise consent, any amicus curiae
                must 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. If
                a later filing is allowed, the order granting leave to file must
                specify when an opposing party may reply to the brief.
                 (c) Motions. A motion for leave to file an amicus brief is subject
                to Sec. 1081.205.
                 (d) Formal requirements as to amicus briefs. Amicus briefs must be
                filed pursuant to Sec. 1081.111, comply with the requirements of Sec.
                1081.112, and are be subject to the length limitation in Sec.
                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
                Sec. 1081.300 Public hearings.
                 All hearings in adjudication proceedings will be public unless a
                confidentiality order is entered by the hearing officer pursuant to
                Sec. 1081.119 or unless otherwise ordered by the Director on the
                grounds that holding an open hearing would be contrary to the public
                interest.
                Sec. 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 will file
                preliminary findings and conclusions containing findings of fact and
                addressing the relief sought in the notice of charges.
                Sec. 1081.302 Conduct of hearings.
                 All hearings will be conducted in a fair, impartial, expeditious,
                and orderly manner. Enforcement counsel will present its case-in-chief
                first, unless otherwise ordered by the hearing officer, or unless
                otherwise expressly specified by law or regulation. Enforcement counsel
                will 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 will fix the
                order.
                Sec. 1081.303 Evidence.
                 (a) Burden of proof. Enforcement counsel will 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 will 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 will be admissible and
                may 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, will 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 Consumer
                Financial Protection Act of 2010 (12 U.S.C. 5481(24)), 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
                [[Page 10052]]
                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 will be
                included in the record. Rejected exhibits, adequately marked for
                identification, must be retained pursuant to Sec. 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 must 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 will 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 electronic means 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 will 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 should also be given
                to the convenience of the parties in avoiding unnecessary expense.
                Sec. 1081.304 Record of the hearing.
                 (a) Reporting and transcription. Hearings will be stenographically
                reported and transcribed under the supervision of the hearing officer,
                and the original transcript will 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 will be made part of the record.
                Copies of transcripts will 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 provided in this paragraph (b). 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, will be included in the record, and such stipulations,
                except to the extent they are capricious or without substance, must be
                approved by the hearing officer. Corrections will not be ordered by the
                hearing officer except upon notice and opportunity for the hearing of
                objections. Such corrections must 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 will be retained in the files of the Bureau.
                 (c) Closing of the hearing record. Upon completion of the hearing,
                the hearing officer will issue an order closing the hearing record
                after giving the parties seven days to determine if the record is
                complete or needs to be supplemented. The hearing officer retains the
                discretion to permit or order correction of the record as provided in
                paragraph (b) of this section.
                Sec. 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
                will 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 28 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 14
                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 may 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.
                Sec. 1081.306 Record in proceedings before hearing officer; retention
                of documents; copies.
                 (a) Contents of the record. The record of the proceeding consists
                of:
                [[Page 10053]]
                 (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 Sec. 1081.216;
                 (6) With respect to a request to disqualify a hearing officer or to
                allow the hearing officer's withdrawal under Sec. 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 will not be considered part of the record. The
                Office of Administrative Adjudication will 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
                Sec. 1081.400 Preliminary findings and conclusions of the hearing
                officer.
                 (a) Time period for filing preliminary findings and conclusions.
                Subject to paragraph (b) of this section, the hearing officer must file
                preliminary findings and conclusions no later than 90 days after the
                deadline for filing post-hearing responsive briefs pursuant to Sec.
                1081.305(b) and in no event later than 360 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 preliminary findings and conclusions within the time periods
                specified in paragraph (a) of this section, the hearing officer will
                submit a written request to the Director for an extension of the time
                period for filing the preliminary findings and conclusions. This
                request must be filed no later than 28 days prior to the expiration of
                the time for issuance of preliminary findings and conclusions. 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 seven days of service of the
                hearing officer's request and may not exceed five pages. If the
                Director determines that additional time is necessary or appropriate in
                the public interest, the Director will issue an order extending the
                time period for filing preliminary findings and conclusions.
                 (c) Content. (1) Preliminary findings and conclusions must be based
                on a consideration of the whole record relevant to the issues decided,
                and be supported by reliable, probative, and substantial evidence.
                Preliminary findings and conclusions must 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. Preliminary findings and
                conclusions must also state that a notice of appeal may be filed within
                14 days after service of the preliminary findings and conclusions and
                include a statement that, unless a party timely files and perfects a
                notice of appeal of the preliminary findings and conclusions, the
                Director may adopt the preliminary findings and conclusions 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 preliminary findings and conclusions 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 preliminary findings and
                conclusions.
                 (d) By whom made. Preliminary findings and conclusions must be made
                and filed by the hearing officer who presided over the hearings, except
                when that hearing officer has 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 Sec. 1081.304(c) until the filing of the hearing officer's
                preliminary findings and conclusions, 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 the hearing officer's
                preliminary findings and conclusions 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 preliminary findings and conclusions, the Office of
                Administrative Adjudication will promptly transmit the preliminary
                findings and conclusions to the Director and serve them upon the
                parties.
                Sec. 1081.401 Transmission of documents to Director; record index;
                certification.
                 (a) Filing of index. At the same time the Office of Administrative
                Adjudication transmits preliminary findings and conclusions to the
                Director, the hearing officer will furnish to the Director a certified
                index of the entire record of the proceedings. The certified index must
                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 must 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 will 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.
                Sec. 1081.402 Notice of appeal; review by the Director.
                 (a) Notice of appeal--(1) Filing. Any party may file exceptions to
                the preliminary findings and conclusions of the hearing officer by
                filing a notice of appeal with the Office of Administrative
                Adjudication within 14 days after service of the preliminary findings
                and conclusions. The notice must specify the party or parties against
                whom the appeal is taken and must designate the preliminary findings
                and conclusions or part thereof appealed from. If a timely notice of
                appeal is filed by a party, any
                [[Page 10054]]
                other party may thereafter file a notice of appeal within seven days
                after service of the first notice, or within 14 days after service of
                the preliminary findings and conclusions, 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 28 days of service of the preliminary findings and conclusions.
                Any party may respond to the opening appeal brief by filing an
                answering brief within 28 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 Sec. 1081.403.
                 (b) Director review other than pursuant to an appeal. In the event
                no party perfects an appeal of the hearing officer's preliminary
                findings and conclusions, the Director will, within 42 days after the
                date of service of the preliminary findings and conclusions, either
                issue a final decision and order adopting the preliminary findings and
                conclusions, or order further briefing regarding any portion of the
                preliminary findings and conclusions. The Director's order for further
                briefing must 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 will be due within 28 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 preliminary findings and
                conclusions 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 preliminary
                findings and conclusions.
                Sec. 1081.403 Briefs filed with the Director.
                 (a) Contents of briefs. Briefs must be confined to the particular
                matters at issue. Each exception to the findings or conclusions being
                reviewed should be stated succinctly. Exceptions must 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 must be
                set forth in the brief, in an appendix thereto, or by citation to the
                record. Reply briefs must be confined to matters in answering briefs of
                other parties.
                 (b) Length limitation. Except with leave of the Director, opening
                and answering briefs may not exceed 30 pages, and reply briefs may 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.
                Sec. 1081.404 Oral argument before the Director.
                 (a) Availability. The Director will consider appeals, motions, and
                other matters properly before the Director 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 will issue an order
                setting the date on which argument will be held. A party seeking oral
                argument must so indicate on the first page of that party's opening or
                answering brief.
                 (b) Public arguments; transcription. All oral arguments will be
                public unless otherwise ordered by the Director. Oral arguments before
                the Director will be reported stenographically, unless otherwise
                ordered by the Director. Motions to correct the transcript of oral
                argument must be made according to the same procedure provided in Sec.
                1081.304(b).
                Sec. 1081.405 Decision of the Director.
                 (a) Upon appeal from or upon further review of preliminary findings
                and conclusions, 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 could have exercised if the Director had made the
                preliminary findings and conclusions. In proceedings before the
                Director, the record will consist of all items part of the record in
                accordance with Sec. 1081.306 as follows: 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 preliminary findings and
                conclusions 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 the Director's decision, raise and determine
                any other matters that the Director 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 the Director's decision, the Director will affirm,
                adopt, reverse, modify, set aside, or remand for further proceedings
                the preliminary findings and conclusions and will include in the
                decision a statement of the reasons or basis for the Director's 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) The Office of Administrative Adjudication will serve copies of
                a final decision and order of the Director upon each party to the
                proceeding in accordance with Sec. 1081.113(d)(2); upon other persons
                required by statute, if any; and, if directed by the Director or
                required by statute, upon any appropriate State or Federal supervisory
                authority. A final decision and order will also be published on the
                Bureau's website or as otherwise deemed appropriate by the Bureau.
                Sec. 1081.406 Reconsideration.
                 Within 14 days after service of the Director's 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 decision or 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 may
                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 does not operate to stay the
                effective date of the decision or order or to toll
                [[Page 10055]]
                the running of any statutory period affecting such decision or order
                unless specifically so ordered by the Director.
                Sec. 1081.407 Effective date; stays pending judicial review.
                 (a) Other than consent orders, which become effective at the time
                specified therein, an order to cease and desist or for other
                affirmative action under section 1053(b) of the Consumer Financial
                Protection Act of 2010 (12 U.S.C. 5563(b)) becomes effective at the
                expiration of 30 days after the date of service pursuant to Sec.
                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 must state the reasons a stay is warranted
                and the facts relied upon, and must include supporting affidavits or
                other sworn statements, and a copy of the relevant portions of the
                record. The motion must 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 must be filed within 28 days of service of
                the order on the party. Any party opposing the motion may file a
                response within seven days after receipt of the motion. The movant may
                file a reply brief, limited to new matters raised by the response,
                within seven 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 has discretion, on such
                terms as the Director finds just, to stay the effectiveness of all or
                any part of an order pending a final decision on a petition for
                judicial review of that order.
                Sec. 1081.408 Issue exhaustion.
                 (a) Scope. This section applies to any argument to support a
                party's case or defense, including any argument that could be a basis
                for setting aside Bureau action under 5 U.S.C. 706 or any other source
                of law.
                 (b) Duties to raise arguments. A party must raise an argument
                before the hearing officer, or else it is not preserved for later
                consideration by the Director. A party must raise an argument before
                the Director, or else it is not preserved for later consideration by a
                court.
                 (c) Manner of raising arguments. An argument must be raised in a
                manner that complies with this part and that provides a fair
                opportunity to consider the argument.
                 (d) Discretion to consider unpreserved arguments. The Director has
                discretion to consider an unpreserved argument, including by
                considering it in the alternative. If the Director considers an
                unpreserved argument in the alternative, the argument remains
                unpreserved.
                Subpart E--Temporary Cease-and-Desist Proceedings
                Sec. 1081.500 Scope.
                 (a) This subpart prescribes the rules of practice and procedure
                applicable to the issuance of a temporary cease-and-desist order
                authorized by section 1053(c) of the Consumer Financial Protection Act
                of 2010 (12 U.S.C. 5563(c)).
                 (b) The issuance of a temporary cease-and-desist order does not
                stay or otherwise affect the proceedings instituted by the issuance of
                a notice of charges, which are governed by subparts A through D of this
                part.
                Sec. 1081.501 Basis for issuance, form, and service.
                 (a) In general. The Director or the Director's designee may issue a
                temporary cease-and-desist order if the Director determines that one or
                more of the alleged violations specified in a notice of charges, or the
                continuation thereof, is likely to cause the respondent to be insolvent
                or otherwise prejudice the interests of consumers before the completion
                of the adjudication proceeding. A temporary cease-and-desist order may
                require the respondent to cease and desist from any violation or
                practice specified in the notice of charges and to take affirmative
                action to prevent or remedy such insolvency or other condition pending
                completion of the proceedings initiated by the issuance of a notice of
                charges.
                 (b) Incomplete or inaccurate records. When a notice of charges
                specifies, on the basis of particular facts and circumstances, that the
                books and records of a respondent are so incomplete or inaccurate that
                the Bureau is unable to determine the financial condition of the
                respondent or the details or purpose of any transaction or transactions
                that may have a material effect on the financial condition of the
                respondent, then the Director or the Director's designee may issue a
                temporary order requiring:
                 (1) The cessation of any activity or practice which gave rise,
                whether in whole or in part, to the incomplete or inaccurate state of
                the books or records; or
                 (2) Affirmative action to restore such books or records to a
                complete and accurate state, until the completion of the adjudication
                proceeding.
                 (c) Content, scope, and form of order. Every temporary cease-and-
                desist order accompanying a notice of charges must describe:
                 (1) The basis for its issuance, including the alleged violations
                and the harm that is likely to result without the issuance of an order;
                and
                 (2) The act or acts the respondent is to take or refrain from
                taking.
                 (d) Effective and enforceable upon service. A temporary cease-and-
                desist order is effective and enforceable upon service.
                 (e) Service. Service of a temporary cease-and-desist order will be
                made pursuant to Sec. 1081.113(d).
                Sec. 1081.502 Judicial review, duration.
                 (a) Availability of judicial review. Judicial review of a temporary
                cease-and-desist order is available solely as provided in section
                1053(c)(2) of the Consumer Financial Protection Act of 2010 (12 U.S.C.
                5563(c)(2)). Any respondent seeking judicial review of a temporary
                cease-and-desist order issued under this subpart must, not later than
                ten days after service of the temporary cease-and-desist order, apply
                to the United States district court for the judicial district in which
                the residence or principal office or place of business of the
                respondent is located, or the United States District Court for the
                District of Columbia, for an injunction setting aside, limiting, or
                suspending the enforcement, operation, or effectiveness of such order.
                [[Page 10056]]
                 (b) Duration. Unless set aside, limited, or suspended by the
                Director or the Director's designee, or by a court in proceedings
                authorized under section 1053(c)(2) of the Consumer Financial
                Protection Act of 2010 (12 U.S.C. 5563(c)(2)), a temporary cease-and-
                desist order will remain effective and enforceable until:
                 (1) The effective date of a final order issued upon the conclusion
                of the adjudication proceeding.
                 (2) With respect to a temporary cease-and-desist order issued
                pursuant to Sec. 1081.501(b) only, the Bureau determines by
                examination or otherwise that the books and records are accurate and
                reflect the financial condition of the respondent, and the Director or
                the Director's designee issues an order terminating, limiting, or
                suspending the temporary cease-and-desist order.
                Rohit Chopra,
                Director, Bureau of Consumer Financial Protection.
                [FR Doc. 2022-02863 Filed 2-18-22; 8:45 am]
                BILLING CODE 4810-AM-P
                

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