Some how-to advice regarding the Class Action Fairness Act’s notice requirements is presented in the bulletin issued recently by the Office of the Comptroller of the Currency. Designed to help financial institutions comply with CAFA’s requirements, OCC Bulletin 2006-20 dated April 21, 2006 sums up what covered entities must do when providing notice of a proposed class action settlement. According to the OCC, the list of entities which should pay attention include “federal and state depository institutions, depository institution holding companies, foreign banks, and nondepository institution subsidiaries of any of these entities that are defendants in proposed class action settlements.” The OCC aimed its bulletin at CEO’s, compliance officers, and legal counsel to national banks, all federal branches and agencies, their department and division heads and examining personnel.
Spread the word, the OCC urges: “All institutions supervised by the OCC should establish procedures to ensure that counsel representing them in class action litigation receive this bulletin.”
Those covered by CAFA’s notice provisions have 10 days from the date of filing of the proposed settlement with the court to send notice to the financial institution’s supervisory office and to the director of the OCC’s Litigation Division in Washington, D.C. There are seven items in addition to the actual proposed class action settlement that the notice must include, which are also described in the bulletin, including (1) a copy of the complaint and any materials filed with the complaint; (2) notice of any judicial hearing in the class action which has been scheduled; (3) any proposed or final notification to class members; (4) any side deals, settlements or other agreements contemporaneously made between class counsel and counsel for the defendants; (5) any final
judgment or notice of dismissal; (6) if feasible, the names of class members who reside in each state and their proportional share of the settlement or, if not feasible, a reasonable estimate of the number of class members in the state and their share of the settlement; and (7) any written judicial opinion relating to any of these materials. The court may not issue a final settlement order until 90 days after the appropriate federal and state officials are served. A class member may also refuse to comply with and choose not to be bound by a settlement agreement or consent decree in a class action if the class member can show that the notice requirements of 28 USC Section1715 have not been properly provided.
Need help? The OCC directs those with questions to call the supervisory office or the litigation division at (202) 874-5280.
The FDIC has also alerted thrift institutions as to what they have to do when a proposed class action settlement covered by CAFA is on the table. The FDIC’s Financial Institution Letter of December 21, 2005 provides a broad overview of CAFA’s notice requirements, aimed at “financial institutions for which the FDIC is the primary federal regulator.”
A financial institution must notify its “primary federal regulator” if “some or all of the matters alleged in the class action are subject to regulation or supervision by that regulator,” the FDIC advises. State-chartered depository institutions must notify their state’s bank supervisor, where the relevant matters are under that authority’s umbrella.
The FDIC describes the bare essentials of what notice must issue within CAFA’s 10-day window. “At a minimum, the notice should contain a description of the lawsuit, the proposed settlement, and a point of contact (e.g., bank counsel) should additional information be required.” Notices go to the Regional Director of the regional FDIC office that supervises the relevant financial institution.
Interested parties should also go to the source: CAFA spells out the contents of the notice at 28 USC Section 1715.