Rules of Practice and Procedure in Adjudicatory Proceedings; Civil Money Penalty Inflation Adjustment, 63625-63627 [E8-25453]
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Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Rules and Regulations
to the United States Department of the
Treasury (Treasury) under the Troubled
Asset Relief Program (TARP) established by
the Emergency Economic Stabilization Act of
2008, Division A of Pub. L. No. 110–343
(which for purposes of this appendix shall be
considered qualifying noncumulative
perpetual preferred stock), including related
surplus;
*
*
*
*
*
c. * * *
ii. * * *
(2) * * *
8 Notwithstanding this provision, senior
perpetual preferred stock issued to the
Treasury under the TARP established by the
Emergency Economic Stabilization Act of
2008, Division A of Pub. L. No. 110–343, may
be included in tier 1 capital. In addition,
traditional convertible perpetual preferred
stock, which the holder must or can convert
at a fixed number of common shares at a
preset price, generally qualifies for inclusion
in tier 1 capital provided all other
requirements are met.
*
*
*
*
*
By order of the Board of Governors of the
Federal Reserve System, October 22, 2008.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E8–25489 Filed 10–24–08; 8:45 am]
BILLING CODE 6210–02–P
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
[Docket ID: OTS–2008–0013]
12 CFR Part 509
RIN 1550–AC27
Rules of Practice and Procedure in
Adjudicatory Proceedings; Civil Money
Penalty Inflation Adjustment
Office of Thrift Supervision,
Treasury.
ACTION: Final rule.
sroberts on PROD1PC70 with RULES
AGENCY:
SUMMARY: The Federal Civil Monetary
Penalty Inflation Adjustment Act of
1990 requires all federal agencies with
statutory authority to impose civil
money penalties (CMPs) to evaluate and
adjust those CMPs every four years. OTS
last adjusted its CMP statutes in 2004.
Consequently, OTS is issuing this final
rule to implement the required
adjustments to OTS’s CMP statutes.
DATES: Effective Date: October 27, 2008.
FOR FURTHER INFORMATION CONTACT:
Marvin L. Shaw, Senior Attorney, (202)
906–6639, Regulations and Legislation
Division, Office of the Chief Counsel,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
VerDate Aug<31>2005
17:05 Oct 24, 2008
Jkt 214001
I. Background
The Federal Civil Monetary Penalties
Inflation Adjustment Act of 1990 1
(FCMPIAA) requires each agency to
make inflationary adjustments to the
CMPs in statutes that it administers.2
Under the FCMPIAA, agencies must
make those adjustments at least once
every four years. OTS last adjusted its
CMPs in 2004.3 OTS’s civil money
penalty adjustment regulation is 12 CFR
509.103. An increased CMP applies only
to violations that occur after the
increase takes effect.
While the CMP statutes of many
agencies provide for minimum and
maximum penalty amounts, all of OTS’s
CMP statutes provide only for a daily
maximum amount. Today’s rule
therefore refers only to maximum CMPs.
Today’s increases in maximum CMPs
may not necessarily affect the amount of
any CMP that OTS may seek for a
particular violation. OTS calculates
each CMP on a case-by-case basis based
upon a variety of factors (including the
gravity of the violation, whether the
violation was willful or recurring, and
any harm to the depository institution).
As a result, the maximums merely serve
as a cap.
Under the statute, the agency
determines the inflation adjustment by
increasing the maximum CMP by a
‘‘cost-of-living’’ adjustment. The ‘‘costof-living’’ adjustment is the percentage
by which the Consumer Price Index
(CPI) for the month of June of the
calendar year preceding the adjustment
exceeds the CPI for the month of June
of the calendar year in which the
amount of the CMP was last set or
adjusted. OTS must use the CPI for All
Urban Consumers (CPI–U) published by
the Department of Labor.4
The statute contains specific rules for
rounding any increase.5 Agencies do not
have discretion in choosing whether to
adjust a maximum CMP, how much to
1 28
U.S.C. 2461 note.
of OTS’s CMPs are in a commonly
administered statute, 12 U.S.C. 1818. Each agency
that administers that statute is making identical
adjustments.
3 12 CFR 509.103; 69 FR 64249 (November 4,
2004).
4 https://data.bls.gov/cgi-bin/surveymost.
5 28 U.S.C. 2461 note specifies that ‘‘Any increase
determined under this subsection shall be rounded
to the nearest—‘‘(1) multiple of $10 in the case of
penalties less than or equal to $100; ‘‘(2) multiple
of $100 in the case of penalties greater than $100
but less than or equal to $1,000; ‘‘(3) multiple of
$1,000 in the case of penalties greater than $1,000
but less than or equal to $10,000; ‘‘(4) multiple of
$5,000 in the case of penalties greater than $10,000
but less than or equal to $100,000; ‘‘(5) multiple of
$10,000 in the case of penalties greater than
$100,000 but less than or equal to $200,000; and
‘‘(6) multiple of $25,000 in the case of penalties
greater than $200,000.’’
2 Some
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Fmt 4700
Sfmt 4700
63625
adjust a maximum CMP or the methods
used to determine the adjustment.
II. Summary of Calculation
To explain the inflation adjustment
calculation, we will use the following
example. Under 12 U.S.C. 1818(i), as
adjusted under 12 CFR 509.103, OTS
may impose a daily maximum third-tier
CMP not to exceed $1,250,000 for
violations of certain banking laws.
First, we determine the appropriate
CPI–Us. The statute requires OTS to use
the CPI–U for June of the calendar year
preceding the year of adjustment. Here,
because we are adjusting CMPs in 2008,
we use the CPI–U for June 2007, which
was 208.4. We must also determine the
CPI–U for June of the year the CMP was
last set by law or adjusted for inflation.
Because OTS last adjusted the CMPs
under 12 U.S.C. 1818 in 2004, we use
the CPI–U for June 2004, which was
189.7.
Second, we calculate the cost of living
adjustment or inflation factor. To do
this, we divide the CPI–U for June 2007
(208.4) by the CPI–U for June 2004
(189.7). Our result is 1.098 (i.e., a 9.8
percent increase).6
Third, we calculate the raw inflation
adjustment. To do this, we multiply the
maximum penalty amounts by the
inflation factor. In our example,
$1,250,000 multiplied by the inflation
factor of 1.098 equals $1,372,500.
Fourth, we round the raw inflation
amounts according to the rounding rules
in section 5(a) of the FCMPIAA. Since
we round only the increased amount,
we calculate the increased amount by
the subtracting the current maximum
penalty amounts from the raw
maximum inflation adjustments.
Accordingly, the increased amount for
the maximum penalty in our example is
$122,500 (i.e., $1,372,500 less
$1,250,000). Under the rounding rules,
if the penalty is greater than $200,000,
we round the increase to the nearest
multiple of $25,000. Therefore, the
maximum penalty increase for our
example is $125,000.
Fifth, we add the rounded increase to
the maximum penalty amount last set or
adjusted. In our example, $1,250,000
plus $125,000 yields a maximum
inflation adjusted penalty amount of
$1,375,000.7
6 A few CMPs were not adjusted for inflation in
2004. In such cases, the inflation factor is calculated
from the time that CMP was last adjusted. For a
CMP that was last adjusted in 2000, the inflation
factor would be 20.9 percent. For a CMP that was
last adjusted in 1996, the inflation factor would be
33 percent.
7 Three CMPs are treated slightly differently
because the statutorily mandated computation and
the rounding rules did not result in any adjustment
E:\FR\FM\27OCR1.SGM
Continued
27OCR1
63626
Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Rules and Regulations
III. Need for and Immediately Effective
Final Rule
To issue a final rule without public
notice and comment, an agency must
find good cause that notice and
comment are impracticable,
unnecessary, or contrary to the public
interest.8 Similarly, to issue a rule that
is immediately effective, the agency
must find good cause for dispensing
with the 30-day delay required by the
Administrative Procedure Act.9
Moreover, section 302 of the Riegle
Community Development and
Regulatory Improvement Act of 1994 10
requires that a regulation that imposes
new requirements take effect on the first
day of the quarter following publication
of the final rule. That section provides,
however, that an agency may determine
that the rule should take effect earlier
upon a finding of good cause.
Under the statute, agencies must make
the required CMP inflation adjustments:
(1) According to the very specific
formula in the statute; and (2) within
four years of the last inflation
adjustment, or by October 31, 2008.
Agencies have no discretion as to the
amount or timing of the adjustment. The
regulation is ministerial, technical, and
noncontroversial. OTS is unable to vary
the amounts of the adjustments to
reflect any views or suggestions
provided by commenters. Accordingly,
OTS believes that notice and comment
are unnecessary. For these same
reasons, OTS believes that there is good
cause to make this rule effective
immediately upon publication.
IV. Regulatory Flexibility Act
An initial regulatory flexibility
analysis under the Regulatory
Flexibility Act (RFA) is required only
when an agency must publish a general
notice of proposed rulemaking.11 As
already noted, OTS has determined that
publication of a notice of proposed
rulemaking is not necessary for this
final rule. Accordingly, the RFA does
not require an initial regulatory
flexibility analysis. Nevertheless, OTS
has considered the likely impact of the
rule on small entities and believes that
the rule will not have a significant
impact on a substantial number of small
entities.
V. Executive Order 12866
OTS has determined that this final
rule does not constitute a ‘‘significant
regulatory action’’ for purposes of
Executive Order 12866.
VI. Unfunded Mandates Act of 1995
Section 202 of the Unfunded
Mandates Reform Act of 1995, Public
Law 104–4 (UMRA) requires that an
agency prepare a budgetary impact
statement before promulgating a rule
that includes a Federal mandate that
may result in the expenditure by state,
local, and tribal governments, in the
aggregate, or by the private sector of
$100 million or more (adjusted annually
for inflation) in any one year. If a
budgetary impact statement is required,
section 205 of the UMRA also requires
an agency to identify and consider a
reasonable number of regulatory
alternatives before promulgating a rule.
The OTS has determined that the rule
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sroberts on PROD1PC70 with RULES
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Administrative practice and
procedure, Penalties.
Accordingly, OTS amends chapter V,
title 12, Code of Federal Regulations as
set forth below.
■
PART 509—RULES OF PRACTICE AND
PROCEDURE IN ADJUDICATORY
PROCEEDINGS
1. The authority citation for part 509
continues to read as follows:
■
Authority: 5 U.S.C. 504, 554–557; 12
U.S.C. 1464, 1467, 1467a, 1468, 1817(j), 1818,
3349, 4717; 15 U.S.C. 78(l), 78o–5, 78u–2; 28
U.S.C. 2461 note; 31 U.S.C. 5321; 42 U.S.C.
4012a.
2. Section 509.103(c) is revised to read
as follows:
■
§ 509.103
Civil money penalties.
*
*
*
*
*
(c) Inflation adjustment. Under the
Federal Civil Monetary Penalties
Inflation Adjustment Act of 1990 (28
U.S.C. 2461 note), OTS must adjust for
inflation the civil money penalties in
statutes that it administers. The
following chart displays the adjusted
civil money penalties. The amounts in
this chart apply to violations that occur
after October 27, 2008:
New maximum
amount
Reports of Condition—1st Tier ................................................................................
Reports of Condition—2nd Tier ...............................................................................
Reports of Condition—3rd Tier ................................................................................
Refusal to Cooperate in Exam ................................................................................
Holding Company Act Violation ...............................................................................
Holding Company Act Violation ...............................................................................
Late/Inaccurate Reports—1st Tier ...........................................................................
Late/Inaccurate Reports—2nd Tier .........................................................................
Late/Inaccurate Reports—3rd Tier ..........................................................................
Change in Control—1st Tier ....................................................................................
Change in Control—2nd Tier ...................................................................................
Change in Control—3rd Tier ...................................................................................
Violation of Law or Unsafe or Unsound Practice—1st Tier ....................................
Violation of Law or Unsafe or Unsound Practice—2nd Tier ...................................
Violation of Law or Unsafe or Unsound Practice—3rd Tier ....................................
Violation of Post Employment Restrictions .............................................................
Violation of Security Rules ......................................................................................
Appraisals Violation—1st Tier .................................................................................
in 2004. Two of those penalties—12 U.S.C.
1464(v)(4) and 12 U.S.C. 1467a(r)(1)—were last
adjusted in 2000. For those two penalties, we
compared the CPI–U for June 2000 (172.4) to the
CPI–U for June 2007 (208.4), resulting in an
inflation increase of 20.9%. The third penalty—12
17:05 Oct 24, 2008
List of Subjects in 12 CFR Part 509
CMP description
1464(v)(4) ...............................
1464(v)(5) ...............................
1464(v)(6) ...............................
1467(d) ...................................
1467a(i)(2) ..............................
1467a(i)(3) ..............................
1467a(r)(1) ..............................
1467a(r)(2) ..............................
1467a(r)(3) ..............................
1817(j)(16)(A) .........................
1817(j)(16)(B) .........................
1817(j)(16)(C) .........................
1818(i)(2)(A) ...........................
1818(i)(2)(B) ...........................
1818(i)(2)(C) ...........................
1820(k)(6)(A)(ii) ......................
1884 ........................................
3349(b) ...................................
VerDate Aug<31>2005
will not result in expenditures by state,
local, and tribal governments, or by the
private sector, of $133 million or more.
Accordingly, OTS has not prepared a
budgetary impact statement or
specifically addressed the regulatory
alternatives considered
Jkt 214001
U.S.C. 1984—was last adjusted in 1996.
Accordingly, we compared the CPI–U for June 1996
(156.7) to the CPI–U for June 2007 (208.4), resulting
in an inflation increase of 33%.
In addition, a new CMP related to postemployment restrictions for senior examiners in the
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
$2,200
32,500
1,375,000
7,500
32,500
32,500
2,200
32,500
1,375,000
7,500
37,500
1,375,000
7,500
37,500
1,375,000
275,000
110
7,500
amount of $275,000 has been added to the list of
penalties (12 U.S.C. 1820(k)(6)(A)(ii)).
8 5 U.S.C. 553(b).
9 Id.
10 12 U.S.C. 4802.
11 5 U.S.C. 603.
E:\FR\FM\27OCR1.SGM
27OCR1
Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Rules and Regulations
New maximum
amount
U.S. Code citation
CMP description
12 U.S.C. 3349(b) ...................................
12 U.S.C. 3349(b) ...................................
42 U.S.C. 4012a(f) ..................................
Appraisals Violation—2nd Tier ................................................................................
Appraisals Violation—3rd Tier .................................................................................
Flood Insurance .......................................................................................................
1 Per
2 Per
37,500
1,375,000
1 385
2 135,000
day.
year.
Dated: October 20, 2008.
By the Office of Thrift Supervision.
John M. Reich,
Director.
[FR Doc. E8–25453 Filed 10–24–08; 8:45 am]
BILLING CODE 6720–01–P
SMALL BUSINESS ADMINISTRATION
13 CFR Part 140
RIN 3245–AF72
Debt Collection; Clarification of
Administrative Wage Garnishment
Regulation and Reassignment of
Hearing Official
Small Business Administration.
Direct final rule.
AGENCY:
ACTION:
sroberts on PROD1PC70 with RULES
63627
SUMMARY: The U.S. Small Business
Administration (SBA) is amending its
Debt Collection regulations by clarifying
terminology within the regulation and
streamlining administrative wage
garnishment hearing procedures. These
modifications are few in number and
result in revisions to the definition of
terms and the process by which a debtor
requests a hearing regarding
administrative wage garnishment.
SBA believes that this rule is routine
and noncontroversial, and the Agency
anticipates no significant adverse
comment. If SBA receives a significant
adverse comment, it will withdraw the
rule.
DATES: This rule is effective December
11, 2008, without further action, unless
SBA receives a significant adverse
comment by November 26, 2008. If SBA
receives any significant adverse
comments, the Agency will publish a
timely withdrawal of this rule in the
Federal Register.
ADDRESSES: You may submit comments,
identified by RIN: 3245–AF72, by any of
the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting documents.
• Mail, for paper, disk, or CD–ROM
submissions: Walter C. Intlekofer, Chief,
Portfolio Management Division, 409
Third Street, SW., Mail Code 7024,
Washington, DC 20416.
VerDate Aug<31>2005
17:49 Oct 24, 2008
Jkt 214001
• Hand Delivery/Courier: Walter C.
Intlekofer, Chief, Portfolio Management
Division, 409 Third Street, SW., Mail
Code 7024, Washington, DC 20416.
SBA will post all comments on
https://www.regulations.gov. If you wish
to submit confidential business
information (CBI) as defined in the User
Notice at https://www.regulations.gov,
please submit the information to Walter
C. Intlekofer, Chief, Portfolio
Management Division, 409 Third Street,
SW., Mail Code 7024, Washington, DC
20416, or send an e-mail to
walter.intlekofer@sba.gov. Highlight the
information that you consider to be CBI
and explain why you believe SBA
should hold this information as
confidential. SBA will review the
information and make its final
determination of whether it will publish
the information or not.
FOR FURTHER INFORMATION CONTACT:
Walter C. Intlekofer, Chief, Portfolio
Management Division, 409 Third Street,
SW., Mail Code 7024, Washington, DC
20416, (202) 205–7543 or
walter.intlekofer@sba.gov.
SUPPLEMENTARY INFORMATION: SBA
regulations at 13 CFR 140.11 set forth
the scope and processes by which SBA
may institute administrative wage
garnishment (‘‘AWG’’) against
individuals in the collection of debts, as
well as the process by which an
individual may contest AWG. These
regulations were promulgated in
conjunction with U.S. Department of
Treasury regulations concerning AWG.
The process of AWG is implemented by
Treasury on behalf of SBA through
Treasury’s debt cross-servicing program
(in which Treasury pursues debts on
behalf of SBA). Under the current
§ 140.11, debtors subject to AWG may
request a hearing with SBA’s Office of
Hearings and Appeals (‘‘OHA’’) to
contest the existence or amount of the
debt, or the terms of repayment.
On implementation of AWG through
the cross-servicing program, SBA
became aware of certain issues
regarding hearings requested by debtors
regarding their AWG. First, § 140.11(d)
and (e) refer to the authority of SBA to
initiate AWG against its debtors and
states that ‘‘SBA will send a written
notice’’ of the AWG to the debtor.
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Frm 00007
Fmt 4700
Sfmt 4700
However, through cross-servicing, it is
Treasury and its private contractors, not
SBA, who initiate AWG on SBA’s
behalf, by sending the written notice.
Thus, since § 140.11 was implemented
in part to implement cross-servicing, it
has become necessary to clarify the
terminology throughout § 140.11 to
make clear that not only SBA, but also
public and private entities pursuing
debt on SBA’s behalf, may implement
AWG against SBA’s debtors.
This purpose is accomplished by
redefining the term ‘‘Agency’’ in
§ 140.11, to include not only SBA, but
also public and private entities that
pursue debt on SBA’s behalf. Thereafter,
all other references throughout § 140.11
to ‘‘SBA’’ performing functions related
to the implementation of AWG are
changed to the ‘‘Agency’’ performing
those functions, to make clear that not
only SBA, but also public and private
entities pursuing debt on SBA’s behalf,
may perform those functions under the
regulation.
The second issue that arose on the
implementation of AWG through the
cross-servicing program relates to the
hearing process itself. Under the current
regulation, debtors who wish to contest
the existence or amount of their debt, or
the terms of repayment, must file for a
hearing with an Administrative Judge at
OHA, who is SBA’s currently
designated hearing official for SBA
under § 140.11. Thereafter, those
hearings are governed by the procedural
rules set forth at Part 134 of Title 13 of
the CFR. OHA procedures include full
administrative litigation, with formal
filings, deadlines, and motion practice.
Additionally, SBA and Treasury
discovered that the process of providing
notice to debtors of their rights to
request a hearing necessitated lengthy
descriptions of the debtor’s rights and
duties to be transmitted with the notice
of AWG.
Thus, OHA and SBA’s Office of
Financial Assistance have determined
that by removing OHA’s Administrative
Judges and OHA procedures from the
AWG hearing process, that process can
be greatly simplified for not only
debtors subject to AWG, but also to
SBA. This purpose is accomplished by
replacing references to OHA and the
E:\FR\FM\27OCR1.SGM
27OCR1
]]>Agencies
[Federal Register Volume 73, Number 208 (Monday, October 27, 2008)]
[Rules and Regulations]
[Pages 63625-63627]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25453]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
[Docket ID: OTS-2008-0013]
12 CFR Part 509
RIN 1550-AC27
Rules of Practice and Procedure in Adjudicatory Proceedings;
Civil Money Penalty Inflation Adjustment
AGENCY: Office of Thrift Supervision, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Civil Monetary Penalty Inflation Adjustment Act of
1990 requires all federal agencies with statutory authority to impose
civil money penalties (CMPs) to evaluate and adjust those CMPs every
four years. OTS last adjusted its CMP statutes in 2004. Consequently,
OTS is issuing this final rule to implement the required adjustments to
OTS's CMP statutes.
DATES: Effective Date: October 27, 2008.
FOR FURTHER INFORMATION CONTACT: Marvin L. Shaw, Senior Attorney, (202)
906-6639, Regulations and Legislation Division, Office of the Chief
Counsel, Office of Thrift Supervision, 1700 G Street, NW., Washington,
DC 20552.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Monetary Penalties Inflation Adjustment Act of
1990 \1\ (FCMPIAA) requires each agency to make inflationary
adjustments to the CMPs in statutes that it administers.\2\ Under the
FCMPIAA, agencies must make those adjustments at least once every four
years. OTS last adjusted its CMPs in 2004.\3\ OTS's civil money penalty
adjustment regulation is 12 CFR 509.103. An increased CMP applies only
to violations that occur after the increase takes effect.
---------------------------------------------------------------------------
\1\ 28 U.S.C. 2461 note.
\2\ Some of OTS's CMPs are in a commonly administered statute,
12 U.S.C. 1818. Each agency that administers that statute is making
identical adjustments.
\3\ 12 CFR 509.103; 69 FR 64249 (November 4, 2004).
---------------------------------------------------------------------------
While the CMP statutes of many agencies provide for minimum and
maximum penalty amounts, all of OTS's CMP statutes provide only for a
daily maximum amount. Today's rule therefore refers only to maximum
CMPs. Today's increases in maximum CMPs may not necessarily affect the
amount of any CMP that OTS may seek for a particular violation. OTS
calculates each CMP on a case-by-case basis based upon a variety of
factors (including the gravity of the violation, whether the violation
was willful or recurring, and any harm to the depository institution).
As a result, the maximums merely serve as a cap.
Under the statute, the agency determines the inflation adjustment
by increasing the maximum CMP by a ``cost-of-living'' adjustment. The
``cost-of-living'' adjustment is the percentage by which the Consumer
Price Index (CPI) for the month of June of the calendar year preceding
the adjustment exceeds the CPI for the month of June of the calendar
year in which the amount of the CMP was last set or adjusted. OTS must
use the CPI for All Urban Consumers (CPI-U) published by the Department
of Labor.\4\
---------------------------------------------------------------------------
\4 \ https://data.bls.gov/cgi-bin/surveymost.
---------------------------------------------------------------------------
The statute contains specific rules for rounding any increase.\5\
Agencies do not have discretion in choosing whether to adjust a maximum
CMP, how much to adjust a maximum CMP or the methods used to determine
the adjustment.
---------------------------------------------------------------------------
\5\ 28 U.S.C. 2461 note specifies that ``Any increase determined
under this subsection shall be rounded to the nearest--``(1)
multiple of $10 in the case of penalties less than or equal to $100;
``(2) multiple of $100 in the case of penalties greater than $100
but less than or equal to $1,000; ``(3) multiple of $1,000 in the
case of penalties greater than $1,000 but less than or equal to
$10,000; ``(4) multiple of $5,000 in the case of penalties greater
than $10,000 but less than or equal to $100,000; ``(5) multiple of
$10,000 in the case of penalties greater than $100,000 but less than
or equal to $200,000; and ``(6) multiple of $25,000 in the case of
penalties greater than $200,000.''
---------------------------------------------------------------------------
II. Summary of Calculation
To explain the inflation adjustment calculation, we will use the
following example. Under 12 U.S.C. 1818(i), as adjusted under 12 CFR
509.103, OTS may impose a daily maximum third-tier CMP not to exceed
$1,250,000 for violations of certain banking laws.
First, we determine the appropriate CPI-Us. The statute requires
OTS to use the CPI-U for June of the calendar year preceding the year
of adjustment. Here, because we are adjusting CMPs in 2008, we use the
CPI-U for June 2007, which was 208.4. We must also determine the CPI-U
for June of the year the CMP was last set by law or adjusted for
inflation. Because OTS last adjusted the CMPs under 12 U.S.C. 1818 in
2004, we use the CPI-U for June 2004, which was 189.7.
Second, we calculate the cost of living adjustment or inflation
factor. To do this, we divide the CPI-U for June 2007 (208.4) by the
CPI-U for June 2004 (189.7). Our result is 1.098 (i.e., a 9.8 percent
increase).\6\
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\6\ A few CMPs were not adjusted for inflation in 2004. In such
cases, the inflation factor is calculated from the time that CMP was
last adjusted. For a CMP that was last adjusted in 2000, the
inflation factor would be 20.9 percent. For a CMP that was last
adjusted in 1996, the inflation factor would be 33 percent.
---------------------------------------------------------------------------
Third, we calculate the raw inflation adjustment. To do this, we
multiply the maximum penalty amounts by the inflation factor. In our
example, $1,250,000 multiplied by the inflation factor of 1.098 equals
$1,372,500.
Fourth, we round the raw inflation amounts according to the
rounding rules in section 5(a) of the FCMPIAA. Since we round only the
increased amount, we calculate the increased amount by the subtracting
the current maximum penalty amounts from the raw maximum inflation
adjustments. Accordingly, the increased amount for the maximum penalty
in our example is $122,500 (i.e., $1,372,500 less $1,250,000). Under
the rounding rules, if the penalty is greater than $200,000, we round
the increase to the nearest multiple of $25,000. Therefore, the maximum
penalty increase for our example is $125,000.
Fifth, we add the rounded increase to the maximum penalty amount
last set or adjusted. In our example, $1,250,000 plus $125,000 yields a
maximum inflation adjusted penalty amount of $1,375,000.\7\
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\7\ Three CMPs are treated slightly differently because the
statutorily mandated computation and the rounding rules did not
result in any adjustment in 2004. Two of those penalties--12 U.S.C.
1464(v)(4) and 12 U.S.C. 1467a(r)(1)--were last adjusted in 2000.
For those two penalties, we compared the CPI-U for June 2000 (172.4)
to the CPI-U for June 2007 (208.4), resulting in an inflation
increase of 20.9%. The third penalty--12 U.S.C. 1984--was last
adjusted in 1996. Accordingly, we compared the CPI-U for June 1996
(156.7) to the CPI-U for June 2007 (208.4), resulting in an
inflation increase of 33%.
In addition, a new CMP related to post-employment restrictions
for senior examiners in the amount of $275,000 has been added to the
list of penalties (12 U.S.C. 1820(k)(6)(A)(ii)).
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[[Page 63626]]
III. Need for and Immediately Effective Final Rule
To issue a final rule without public notice and comment, an agency
must find good cause that notice and comment are impracticable,
unnecessary, or contrary to the public interest.\8\ Similarly, to issue
a rule that is immediately effective, the agency must find good cause
for dispensing with the 30-day delay required by the Administrative
Procedure Act.\9\ Moreover, section 302 of the Riegle Community
Development and Regulatory Improvement Act of 1994 \10\ requires that a
regulation that imposes new requirements take effect on the first day
of the quarter following publication of the final rule. That section
provides, however, that an agency may determine that the rule should
take effect earlier upon a finding of good cause.
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\8\ 5 U.S.C. 553(b).
\9\ Id.
\10\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
Under the statute, agencies must make the required CMP inflation
adjustments: (1) According to the very specific formula in the statute;
and (2) within four years of the last inflation adjustment, or by
October 31, 2008. Agencies have no discretion as to the amount or
timing of the adjustment. The regulation is ministerial, technical, and
noncontroversial. OTS is unable to vary the amounts of the adjustments
to reflect any views or suggestions provided by commenters.
Accordingly, OTS believes that notice and comment are unnecessary. For
these same reasons, OTS believes that there is good cause to make this
rule effective immediately upon publication.
IV. Regulatory Flexibility Act
An initial regulatory flexibility analysis under the Regulatory
Flexibility Act (RFA) is required only when an agency must publish a
general notice of proposed rulemaking.\11\ As already noted, OTS has
determined that publication of a notice of proposed rulemaking is not
necessary for this final rule. Accordingly, the RFA does not require an
initial regulatory flexibility analysis. Nevertheless, OTS has
considered the likely impact of the rule on small entities and believes
that the rule will not have a significant impact on a substantial
number of small entities.
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\11\ 5 U.S.C. 603.
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V. Executive Order 12866
OTS has determined that this final rule does not constitute a
``significant regulatory action'' for purposes of Executive Order
12866.
VI. Unfunded Mandates Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law
104-4 (UMRA) requires that an agency prepare a budgetary impact
statement before promulgating a rule that includes a Federal mandate
that may result in the expenditure by state, local, and tribal
governments, in the aggregate, or by the private sector of $100 million
or more (adjusted annually for inflation) in any one year. If a
budgetary impact statement is required, section 205 of the UMRA also
requires an agency to identify and consider a reasonable number of
regulatory alternatives before promulgating a rule. The OTS has
determined that the rule will not result in expenditures by state,
local, and tribal governments, or by the private sector, of $133
million or more. Accordingly, OTS has not prepared a budgetary impact
statement or specifically addressed the regulatory alternatives
considered
List of Subjects in 12 CFR Part 509
Administrative practice and procedure, Penalties.
0
Accordingly, OTS amends chapter V, title 12, Code of Federal
Regulations as set forth below.
PART 509--RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY
PROCEEDINGS
0
1. The authority citation for part 509 continues to read as follows:
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a,
1468, 1817(j), 1818, 3349, 4717; 15 U.S.C. 78(l), 78o-5, 78u-2; 28
U.S.C. 2461 note; 31 U.S.C. 5321; 42 U.S.C. 4012a.
0
2. Section 509.103(c) is revised to read as follows:
Sec. 509.103 Civil money penalties.
* * * * *
(c) Inflation adjustment. Under the Federal Civil Monetary
Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note), OTS
must adjust for inflation the civil money penalties in statutes that it
administers. The following chart displays the adjusted civil money
penalties. The amounts in this chart apply to violations that occur
after October 27, 2008:
------------------------------------------------------------------------
New maximum
U.S. Code citation CMP description amount
------------------------------------------------------------------------
12 U.S.C. 1464(v)(4).......... Reports of Condition-- $2,200
1st Tier.
12 U.S.C. 1464(v)(5).......... Reports of Condition-- 32,500
2nd Tier.
12 U.S.C. 1464(v)(6).......... Reports of Condition-- 1,375,000
3rd Tier.
12 U.S.C. 1467(d)............. Refusal to Cooperate 7,500
in Exam.
12 U.S.C. 1467a(i)(2)......... Holding Company Act 32,500
Violation.
12 U.S.C. 1467a(i)(3)......... Holding Company Act 32,500
Violation.
12 U.S.C. 1467a(r)(1)......... Late/Inaccurate 2,200
Reports--1st Tier.
12 U.S.C. 1467a(r)(2)......... Late/Inaccurate 32,500
Reports--2nd Tier.
12 U.S.C. 1467a(r)(3)......... Late/Inaccurate 1,375,000
Reports--3rd Tier.
12 U.S.C. 1817(j)(16)(A)...... Change in Control-- 7,500
1st Tier.
12 U.S.C. 1817(j)(16)(B)...... Change in Control-- 37,500
2nd Tier.
12 U.S.C. 1817(j)(16)(C)...... Change in Control-- 1,375,000
3rd Tier.
12 U.S.C. 1818(i)(2)(A)....... Violation of Law or 7,500
Unsafe or Unsound
Practice--1st Tier.
12 U.S.C. 1818(i)(2)(B)....... Violation of Law or 37,500
Unsafe or Unsound
Practice--2nd Tier.
12 U.S.C. 1818(i)(2)(C)....... Violation of Law or 1,375,000
Unsafe or Unsound
Practice--3rd Tier.
12 U.S.C. 1820(k)(6)(A)(ii)... Violation of Post 275,000
Employment
Restrictions.
12 U.S.C. 1884................ Violation of Security 110
Rules.
12 U.S.C. 3349(b)............. Appraisals Violation-- 7,500
1st Tier.
[[Page 63627]]
12 U.S.C. 3349(b)............. Appraisals Violation-- 37,500
2nd Tier.
12 U.S.C. 3349(b)............. Appraisals Violation-- 1,375,000
3rd Tier.
42 U.S.C. 4012a(f)............ Flood Insurance...... \1\ 385
\2\ 135,000
------------------------------------------------------------------------
\1\ Per day.
\2\ Per year.
Dated: October 20, 2008.
By the Office of Thrift Supervision.
John M. Reich,
Director.
[FR Doc. E8-25453 Filed 10-24-08; 8:45 am]
BILLING CODE 6720-01-P
