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FDIC Enforcement Decisions and Orders

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{{4-1-90 p.A-1303}}
   [5117] Docket No. FDIC-83-153e (8-9-88).

   Request for reconsideration of application for permission to serve as an employee of Bank was denied. The FDIC found that Respondent did not satisfy the regulatory requirements applicable to a Petition for Reconsideration. (Related proceedings in this docket appear at [5026]).

   [.1] Practice and Procedure—Petition for Reconsideration—Contents
   Petitions for Reconsideration must include: (1) specific reasons why actions should be reconsidered; and (2) relevant, substantive information that for good cause was not included in the original application.

   [.2] Practice and Procedure—Petitions to FDIC—Burden of Submitting a Complete Record
   The burden of submitting a complete application falls upon the Petitioner, and FDIC is not obligated to request additional information.

   [.3] Prohibition, Removal, or Suspension—Consent by FDIC—Denied
   FDIC would deny Respondent's request for written consent to participate in the conduct of the affairs of Bank from which he was removed upon considering his opportunity to exercise substantial influence and control over the operations of the Bank, especially in light of the current conditions and circumstances of the Bank.

   [.4] Practice and Procedure—Petition for Reconsideration—Further Petitions Limited
   Considering Respondent's numerous Petitions for Reconsideration, and FDIC's findings relating thereto, FDIC will not entertain additional petitions from Respondent for one year.

In the Matter of *** BANK *** ***
(Insured State Nonmember Bank)


DECISION AND ORDER DENYING
REQUEST FOR RECONSIDERATION
OF DENIAL OF APPLICATION FOR
SERVICE AS BANK EMPLOYEE

STATEMENT OF THE CASE

   On September 30, 1986, *** or "Respondent") filed an application pursuant to Section 8(j) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §1818(j), seeking to obtain for a third time in less than two years from the date of his removal pursuant to Section 8(e) of the Act, 12 U.S.C. 1818(e), the written approval of the Federal Deposit Insurance Corporation ("FDIC") to serve as an employee of the Bank ***, *** ("Bank"). On January 20, 1987, the Board of Directors ("Board") of the FDIC issued its Decision and Order Denying Request for Approval of Service as Bank Employee ("Decision and Order") denying the application of *** to serve as an employee of the Bank. On February 19, 1987, *** invoked 12 C.F.R. §303.6(e) and petitioned the Board for reconsideration of its Order ("Reconsideration"). Further processing of the Reconsideration was not possible until a completed application for reconsideration, which was filed in July 1987, was received from ***, and until an analysis of the condition of the Bank was made based upon an examination of the Bank completed in December, 1987, and an assessment of a Notice of Acquisition of Control, which was filed by ***, president of the Bank, was completed.
   *** sought reconsideration on the grounds that the Board denied his September 30, 1986 application because it had inadequate evidence before it to make its determination. Specifically, Respondent asserted that the Board issued its Order denying ***'s application because it did not have sufficient information concerning the proposed position of employment and the accompanying job duties. *** further argued that the Board issued its denial because it failed to consider the letter from the Banking Commissioner of the State of *** interposing no objections to ***'s return to em- {{4-1-90 p.A-1304}}ployment at the Bank as evidence that *** is now fit to participate in the conduct of the affairs of the Bank.
   In support of his position, Respondent submitted a letter dated February 18, 1987 from President ***. That letter contained enclosures consisting of copies of letters dated November 27, 1984 and June 27, 1985, which described the position for which *** would be hired and the job duties which *** would perform. These latter two letters formed the basis of the two previous applications, which *** had filed on June 19, 1985, and March 21, 1986, and in which he had requested approval to serve as an employee of the Bank. The enclosed copy of the November 27, 1984 letter contained handwritten notations dated February 18, 1987 from President *** which modified certain of the job duties which *** would perform if allowed to participate in the conduct of the affairs of the Bank.
   In addition to these grounds for reconsideration, Respondent submitted a letter from the bonding company of the Bank stating that the bonding company would cover *** under the Bank's bond insurance so long as *** job duties do not extend beyond those set forth in the February 18, 1987 letter and its attachments. Finally, as evidence of his rehabilitation and fitness to participate in the conduct of the affairs of the Bank, Respondent stated that he was hired for 200 hours by the FHA in connection with the processing of loan applications.
DECISION AND ORDER

   Upon review of the record as a whole, including inter alia, the administrative and court of appeals proceedings, the documents before the Board of Directors when it issued its Decision and Order on January 20, 1987, including the documentation in support of the March 21 and September 30, 1986 applications, and the documents submitted with Respondent *** Reconsideration, including the February 18, 1987 letter from Bank President *** and its attachments, the Board of Directors of the Federal Deposit Insurance Corporation finds that Respondent *** failed to meet his burden for petitioning the Board of Directors for reconsideration pursuant to 12 C.F.R. §303.6(e).

   [.1] 12 C.F.R. §303.6(e) provides in pertinent part as follows:

    (e) Opportunity to petition for reconsideration of a denied application, petition, or request. (1) Within 15 days of its receipt of notice that its application, petition, or other request has been denied, any applicant may petition the FDIC for reconsideration of such application, petition, or request (except an application, petition or request already previously denied upon reconsideration). The petition must be in writing and should (i) specify reasons why the FDIC should reconsider its action and (ii) set forth relevant, substantive information that for good cause was not previously set forth in the application, petition or request to be reconsidered. . .. (Emphasis in original)

   [.2] To meet this burden, *** asserted in his Reconsideration that the Board not only did not have sufficient information before it to issue its Decision and Order, but that the Board failed to request additional information from the applicant to help it in rendering its decision. This is a most unusual position for an applicant to take. When an individual is making application to obtain Board or Regional Office approval for a particular action, it is incumbent upon that applicant to provide a complete record to the Board or the Regional Office in order to obtain that approval.
   The FDIC's Rules and Regulations are very specific with respect to this requirement. 12 C.F.R. §303.5(a) sets forth the criteria which must be met when an application is made.
    (a) Except as otherwise provided by rule or regulation, all applications, requests, and submittals for which no form of application has been prescribed by the [[FDIC]] should. . ... (3) Contain a statement of the applicant's interest therein, a complete and concise statement of the action requested, and the reasons and facts relied upon as the basis for such requested action. . .. (Emphasis supplied.)
Here, Respondent *** has attempted to shift the burden to the FDIC for his failure to submit a complete record to support his application to return to participate in the conduct of the affairs of the Bank ***

   [.3] Despite Respondent's incomplete application, however, the Board would have held in the same manner. At the time it was rendering its Orders on Respondent ***'s first two applications submitted on June 19, 1985, and March 21, 1986, the Board had before it the same letters that have been submitted now for ***'s Reconsideration. The Board, however, has consistently found ***'s participation in the conduct of the affairs of the Bank *** unacceptable. As the {{4-1-90 p.A-1305}}Board has repeatedly stated, the involvement of *** and his family in the Bank over an extensive period of time, in conjunction with ***'s proposed position and job duties, would place *** in the position of having an opportunity of exercising substantial influence and control over the affairs and operations of the Bank. ***'s participation in the Bank is even more untenable now in light of the present condition of the Bank, as revealed by the most current examination, and the current uncertainty and controversy over the ownership of the Bank given the status of the Notice of Acquisition of Control filed by Bank President ***.

   [.4] While the Board finds that ***'s participation in the conduct of the affairs of the Bank *** would not be in the best interests of the Bank or its depositors, it expresses no opinion as to the appropriateness of respondent's participation in the conduct of the affairs of another financial institution. This Decision and Order does not preclude the Respondent from submitting an application demonstrating his fitness to participate in the conduct of the affairs of another financial institution provided such an application meets the criteria set forth in 12 C.F.R. § 303.5, including presenting a complete record upon which such a determination may be made. In view of all of the various applications, including the June 19, 1985 and March 21, 1986 applications and this request for reconsideration, being submitted within approximately two years from the date of Respondent's removal, and in view of the findings and opinions expressed herein, the Board will not entertain further applications or rerd of Directors of the Federal Deposit Insurance Corporation finds that Respondent ***'s participation in the conduct of the affairs of the Bank ***, *** would not be in the interests of the Bank or its depositors and would undermine public confidence in the regulatory process.
   Upon consideration of Respondent's application for reconsideration pursuant to 12 C.F.R. §303.6(e), the Board of Directors of the Federal Deposit Insurance COrporation finds that Respondent ***'s participation in the conduct of the affairs of the Bank ***, 888 would not be in the interests of the Bank or its depositors and would undermine public confidence in the regulatory process.
   Accordingly, the application for reconsideration is denied.
   By direction of the Board of Directors.
   Dated at Washington, D.C., this 9th day of August, 1988.

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