Legal Support Services Deskbook
Conflicts of Interest
2.1 FDIC Regulations and Policies
There are specific reporting requirements contained in the regulations at 12 C.F.R. Part 366, as amended or superseded. These regulations prescribe minimum standards of fitness and integrity for experts or LSS providers or their employees or agents who are used to provide professional services on FDIC matters. For representations and certifications required by the FDIC in accordance with 12 C.F.R. Part 366, see Conflicts of Interest.
In addition, experts and LSS providers should be cognizant of the requirements of the Statement of Policy on Contracting with Firms that Have Unresolved Audit Issues with FDIC, which specifies that all experts and LSS providers may be deemed to have a conflict of interest as a result of unresolved audit issues with the FDIC.
2.2 Required Disclosures
It is important that the expert or LSS provider is screened for conflicts of interest and is eligible to provide services.
Mandatory reporting requirements are contained in the conflicts of interest regulations at 12 C.F.R. Part 366 , as amended or superseded. The expert or LSS provider must disclose in writing all actual or potential conflicts and matters that may present the appearance of a conflict to the Legal Division as soon as an actual or potential conflict has been identified. When in doubt about the existence of a conflict, immediately disclose the matter and seek a waiver. Even after a conflict has been reported or a waiver has been granted, the expert or LSS provider must notify the Legal Division of any material change in facts.
2.3 Conflict Determination
It is solely within the discretion of the Legal Division to determine whether an actual or potential conflict exists. Moreover, even the appearance of a conflict may result in the denial of a waiver or imposition of other corrective actions.
Conflicts of interest may be waived by the Legal Division in writing. Generally, requests for waivers of conflicts of interest are granted or denied on behalf of the FDIC by the Legal Divisions Conflicts Committee in Washington, D.C.
Requests for waivers are considered only on a case-by-case basis.
Failure to disclose promptly actual or potential conflicts of interest, or matters that may present the appearance of a conflict, as well as failure to comply with FDICs conflicts of interest policies and procedures may result in the following:
- Termination of the services;
- Suspension of new referrals;
- Disallowance in whole or in part of fee bill(s) for services rendered;
- Denial of a conflict waiver; or
- Other corrective actions, including referral to the appropriate state licensing authorities or civil or criminal actions.
Experts and LSS providers are not permitted to go forward with legal support services on behalf of parties adverse to the FDIC until the conflict has been waived or the situation otherwise resolved to the satisfaction of the Legal Division.
In the event legal support services are terminated, the expert or LSS provider must follow FDIC policies and procedures, return all files, and otherwise cooperate fully in the orderly transfer of matters as the Legal Division directs.
2.5 Questions Concerning Conflicts
For information, contact the Legal Services Group in Washington, D.C., at (877) ASK-FDIC or (877) 275-3342.