On Wednesday June 6, 2012, the Consumer Financial Protection Bureau ("the Bureau") also issued an interim rule with request for public comment, on the rules drafted to bring the Bureau into compliance with the Equal Access to Justice Act ("EAJA"). The rules set out the guidelines for payment of attorney's fees for certain parties, excluding the United States. The Bureau followed closely to the model rules created by the Administrative Conference of the United States. While the interim rule outlines various modifications made to modernize the model rules, the Bureau adopted the majority of the model rule.
The interim rule provides for qualified individuals to receive an award of legitimate expenses and attorney fees if they prevail in the adversary adjudication or the Bureau's demand is substantially in excess of and unreasonable in comparison to the decision of the adjudicative officer. It applies to any adversary or adjudicative proceeding before the Bureau.
Eligibility under the rules is limited to individuals with a net worth of less than $2 million and corporations, associations and other organizational entities whose net worth is not greater than $ 7 million. The rule delineates various entities that fit this criteria and also outlines how net worth and other relevant criteria (such as number of employees) should be calculated.
Under the interim rule, an eligible, prevailing party can gain fees and expenses incurred after the initiation of an adversary proceeding. The Bureau bears the burden of proof to show that their position was substantially justified even in light of their defeat.
The party must submit an application, a net worth exhibit, and full documentation of fees and expenses. The rule carves out certain exceptions and requirements for each. The application must be filed no later than 30 days after the final disposition. The proceedings for awarding of fees will be stayed until there is a final disposition.
The rule also outlines the process for filing, serving, and answering the application. The rule leaves room for commenting on the application, replying to the Bureau's answer, and for settlement of the award amount. The award is determined using the written record unless further proceedings are required. The hearing officer is to issue a recommended decision within 60 days after time for filing a reply or after further proceedings. The decision can be appealed by the party or the Bureau. Additionally, a party can seek judicial review. If there is no appeal filed, the Director will adopt the recommendation within 30 days. Lastly, the applicant is instructed to submit a copy of the final decision with an accompanying letter waiving the right for judicial review to secure payment.
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