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Subject: Class Action Fairness Act of 2005
Date: April 21, 2006
To: Guidance for Filing Notices of Proposed Class Action Settlements
Description: Guidance for Filing Notices of Proposed Class Action Settlements
The Class Action Fairness Act of 2005, 28 USC 1711 et seq., requires notification to appropriate federal and state officials of proposed class action settlements. The asserted purposes of the Act are to assure fair and prompt recoveries for class members with legitimate claims, to provide class action litigants with broader access to federal courts, and to benefit society by encouraging innovation and lowering consumer prices.
The new notification requirements set forth in 28 USC 1715 apply to 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. If a proposed settlement is reached, each institution must provide to its primary federal regulator the notice required by the statute whenever any of the matters alleged in the class action are subject to regulation or supervision by that regulator. The Class Action Fairness Act requires national banks, their operating subsidiaries, and federal branches and agencies to notify the Office of the Comptroller of the Currency of proposed class action settlements involving activities regulated by the OCC, such as deposit-taking or lending practices, or practices associated with other bank products or services.
Within 10 days of filing the proposed settlement with the court, notice should be sent to the institution's supervisory office and to the Director, Litigation Division, 250 E Street, SW, Washington, DC 20219. The notice must include the following eight items:
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 refuse to comply with and may choose not to be bound by a settlement agreement or consent decree in a class action if the class member demonstrates that the notice required under 28 USC 1715 has not been provided.
All institutions supervised by the OCC should establish procedures to ensure that counsel representing them in class action litigation receive this bulletin.
You may direct questions to the supervisory office or to the Litigation Division at (202) 874-5280.
Daniel P. Stipano