United States District Court, D. Delaware
Government filed a motion in regard to the admissibility of a
"Question and Answer" ("Q&A") from
the website of the Office of Thrift Supervision
("OTS") related to the reporting of past due
construction loans. (D.I. 714). The issues are fully briefed.
(D.I. 716, 719, 722, 726, 730).
initial matter, there seems to be no dispute that, during the
relevant time period, Wilmington Trust was required to file
Thrift Financial Reports ("TFR") with OTS, in which
the Bank disclosed its number of past due loans.
like the Federal Reserve Bank, was a member of the Federal
Financial Institutions Examination Council
("FFIEC"). Established in 1979, FFIEC "is a
formal interagency body empowered to prescribe uniform
principles, standards, and report forms for the federal
examination of financial institutions" and "to make
recommendations to promote uniformity in the
supervision" of those institutions. About the
FFIEC, Federal Financial Institutions Examination
Council, https://www.ffiec.gov/about.htm (last
visited April 12, 2018).
Instruction Manual, Schedule PD, provides in relevant part:
2. Report loans ... as past due when either interest or
principal is unpaid in the following circumstances: ...
c) Single payment and demand notes providing for the payment
of interest at stated intervals (such as certain construction
loans) after one interest payment is due and unpaid for 30
days or more.
d) Single payment notes providing for the payment of interest
at maturity if interest or principal remains unpaid for 30
days or more after maturity.
(D.I. 667-1, Exh. A at p. 2 (emphasis omitted)). Defendants
maintain, and I agree, that those two circumstances mirror
circumstances #3 and #4 related to past due loans from the
RC-N Call Report Instructions. (Compare id., with
D.I. 396-5 at pp. 1-2).
Q&A at issue, dated September 5, 2002, can be accessed
through OCC's website. See TFR Questions and
Answers, Office of the Comptroller of the Currency,
(last visited April 12, 2018). The Q&A reads:
Q&A No. 179 SUBJECT: Loans Past
Maturity LINE(S): Schedule PD Dated: September 5,
Question: We have a portfolio of
construction loans that require interest-only payments due
monthly with the principal due at maturity. Some of these
loans are past their maturity date. The borrowers
have continued to pay the contractual monthly interest
payments. Should these loans be excluded from Schedule
Answer: If management has restructured or
extended a loan -formally or informally, then the loan would
not be past due. An informal extension (not the same as a
restructuring) is when the bank has agreed to accept interest
payments until the property is rented or sold. The extension
should be for a limited and reasonable length of time and the
bank should get the extension in writing. From the
borrower's perspective, if he is doing what the bank has
told him, the loan is not in default and does not have to be
reported in Schedule PD.
(D.I. 667-1, Exh. Cat p. 99).
motion, the Government seeks to exclude the OTS Q&A from
jury instructions and at trial. As to jury instructions, it
argues the Call Report Instructions related to past due loans
are unambiguous as a matter of law and that I should so
instruct the jury. (D.I. 714 at 1, 7-8). Further, citing
United States v. Willson,708 F.3d 47, 58 (1st Cir.
2013), the Government argues Defendants are not entitled to
an instruction incorporating the Q&A absent evidence
"they actually held an objectively reasonable belief
that their conduct in reporting past due loans conformed to
the information on the Q and A webpage." (Id.
at 1). As to whether the Q&A is admissible at ...