Rules of Practice and Procedure, 73153-73158 [E8-28407]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 73, Number 232 (Tuesday, December 2, 2008)]
[Rules and Regulations]
[Pages 73153-73158]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-28407]



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Federal Register / Vol. 73, No. 232 / Tuesday, December 2, 2008 / 
Rules and Regulations

[[Page 73153]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308


Rules of Practice and Procedure

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule; correction.

-----------------------------------------------------------------------

SUMMARY: The Federal Civil Monetary Penalties Inflation Adjustment Act 
of 1990, as amended, requires all Federal agencies with statutory 
authority to impose civil money penalties (CMPs) to evaluate and adjust 
those CMPs every four years. The Federal Deposit Insurance Corporation 
(FDIC) last adjusted the maximum amounts of CMPs under its jurisdiction 
in 2004. The FDIC is issuing this final rule to implement the required 
adjustments to its CMPs, in consultation with the other Federal banking 
agencies and the National Credit Union Administration.

DATES: This rule is effective on December 31, 2008.

FOR FURTHER INFORMATION CONTACT: Philip P. Houle, Counsel, (202) 898-
3722, Enforcement Section, Legal Division, 550 17th Street, Washington, 
DC 20429, and David Chapman, Chief Statistician, (202) 898-7280, 
Division of Insurance and Research, 550 17th Street, NW., Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    The Debt Collection Improvement Act of 1996 (DCIA) amended section 
4 of the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Inflation Adjustment Act) (28 U.S.C. 2461 note), to require the head 
of each Federal agency to enact regulations within 180 days of the 
enactment of the DCIA and at least once every four years thereafter, to 
adjust each CMP provided by law within the jurisdiction of the agency 
(with the exception of certain specifically listed statutes) by the 
inflation adjustment formula set forth in section 5(b) of the Inflation 
Adjustment Act.
    To satisfy the requirements of the DCIA, the FDIC is amending 12 
CFR 308 of its regulations pertaining to its Rules of Practice and 
Procedure which address CMPs. The amount of each CMP which the FDIC has 
jurisdiction to impose has been increased according to the prescribed 
formula. The penalties were last adjusted in 2004 (71 FR 65713). Any 
increase in penalty amounts under the DCIA shall apply only to 
violations which occur after the effective date of the increase.
    The 2004 CMP adjustment incorrectly listed the maximum Tier Two 
CMPs in paragraphs (c)(2)(ii) and (c)(2)(iii)(B) of section 308.132 
(implementing 12 U.S.C. 1817(a) and 1817(c) and relating to false or 
misleading reports of condition and income and statements and other 
information regarding insurance premium assessments, respectively) as 
$27,500 per-day, rather than $27,000 per-day. No CMP assessed under 
either sections 1817(a) or (c) since the 2004 CMP adjustments went into 
effect has exceeded $27,000 per-day. This 2008 correction and 
adjustment of those two Tier Two CMPs for violation of Sec. Sec.  
1817(a) and (c) are based on the now-corrected 2004 maximum CMP amount 
of $27,000, with the 2008 increases limited to maximum CMPs of $32,000 
rather than the higher maximum CMPs of $32,500 that would have resulted 
using the incorrect 2004 amounts. These corrections and adjustments are 
being made simultaneously and prospectively.
    This rulemaking shall become a final rule on publication in the 
Federal Register and shall be effective as of December 31, 2008.

Summary of Calculation

    The Inflation Adjustment Act requires that each CMP amount be 
increased by the ``cost of living'' adjustment, which is defined as the 
percentage by which the Consumer Price Index (CPI-U) \1\ 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 pursuant to law. Any increase is to be 
rounded to the nearest multiple of: (A) $10 in the case of penalties 
less than or equal to $100; (B) $100 in the case of penalties greater 
than $100 but less than or equal to $1,000; (C) $1,000 in the case of 
penalties greater than $1,000 but less than or equal to $10,000; (D) 
$5,000 in the case of penalties greater than $10,000 but less than or 
equal to $100,000; (E) $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and (F) $25,000 in the 
case of penalties greater than $200,000.
---------------------------------------------------------------------------

    \1\ The CPI-U is compiled by the Bureau of Statistics of the 
Department of Labor. To calculate the adjustment, the FDIC used the 
Department of Labor, Bureau of Labor Statistics B All Urban 
Consumers tables to arrive at the CPI-U values.
---------------------------------------------------------------------------

    Under the DCIA, the first time that a CMP was adjusted following 
implementation of the DCIA in 1996, the increase could not exceed ten 
percent of the then-current original penalty amount, even though the 
intervening cost-of-living exceeded ten percent. As a general matter, 
under the DICA, a particular CMP will not be increased for inflation or 
cost-of-living when the ``rounding'' process fails to reach the level 
warranting adjustment, as shown in the Summary of Adjustments chart 
below. In those cases, a particular CMP might be increased at a 
subsequent future quadrennial adjustment, when the level of inflation 
for the years since the last prior adjustment is taken into account. An 
example of the computation steps is found at 71 FR 65713 (Nov. 9, 2004) 
which published the FDIC's adjustments of CMPs in 2004.

Summary of Adjustments

    Under the Federal Civil Penalties Inflation Adjustment Act of 1990 
(28 U.S.C. 2461 note), the FDIC must adjust for inflation the civil 
monetary penalties in statutes under which it has authority to assess 
penalties. The following chart displays the adjusted civil money 
penalty amounts for the enumerated statutes. The amounts in this chart 
apply to violations that occur after December 31, 2008:

[[Page 73154]]



------------------------------------------------------------------------
                                     Current maximum      New maximum
        U.S. Code citation                amount             amount
------------------------------------------------------------------------
 12 U.S.C. 1817(a)
     Tier One CMP.................              2,200              2,200
     Tier Two CMP.................             27,500             32,000
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 1817(c)
     Tier One CMP.................              2,200              2,200
     Tier Two CMP.................             27,500             32,000
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 1817(j)
     Tier One CMP.................              6,500              7,500
     Tier Two CMP.................             32,500             37,500
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 1818(i)(2)
     Tier One CMP.................              6,500              7,500
     Tier Two CMP.................             32,500             37,500
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 1820(e)(4).............              6,500              7,500
 12 U.S.C. 1820(k)(6) (enacted                250,000            275,000
 December 2004)...................
 12 U.S.C. 1828(a)(3).............                110                110
 12 U.S.C. 1828(h) (amended                       100                100
 February 2006) \2\...............
 12 U.S.C. 1829b(j)...............             11,000             16,000
 12 U.S.C. 1832(c)................              1,100              1,100
 12 U.S.C. 1884...................                110                110
 12 U.S.C. 1972(2)(F)
     Tier One CMP.................              6,500              7,500
     Tier Two CMP.................             32,500             37,500
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 3108(b)
     Tier One CMP.................              6,500              7,500
     Tier Two CMP.................             32,500             37,500
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 3349(b)
     Tier One CMP.................              6,500              7,500
     Tier Two CMP.................             32,500             37,500
     Tier Three CMP...............          1,250,000          1,375,000
 12 U.S.C. 3909(d)................              1,100              1,100
 12 U.S.C. 4717(b)
     Tier One CMP.................              6,500              7,500
     Tier Two CMP.................             32,500             37,500
     Tier Three CMP...............          1,250,000          1,375,000
 15 U.S.C. 78u-2
     Tier One CMP (individuals)...              6,500              7,500
     Tier One CMP (others)........             65,000             70,000
     Tier Two CMP (individuals)...             65,000             70,000
     Tier Two CMP (others)........            130,000            140,000
     Tier Three CMP (individuals).            325,000            350,000
     Tier Three penalty (others)..            625,000            675,000
 31 U.S.C. 3802...................              6,500              7,500
 42 U.S.C. 4012a(f)
     Maximum CMP per violation....                385                385
     Maximum CMPs per year........            125,000           135,000
------------------------------------------------------------------------
\2\ The $100 per-day maximum CMP under 12 U.S.C. 1828(h) for failure or
  refusal to pay any assessment, applies only when the assessment is
  less than $10,000. When the amount of the assessment is $10,000 or
  more, the maximum CMP under section 1828(h) is 1% of the amount of the
  assessment, for each day that the failure or refusal continues. The
  ``1% of the assessment'' CMP amount or formula is not subject to a
  periodic cost-of-living adjustment.


------------------------------------------------------------------------
                                     Current maximum      New maximum
           CFR citation                   amount             amount
------------------------------------------------------------------------
       First Offense--Reports of Condition & Income (Call Reports)
------------------------------------------------------------------------
 $25 million or more assets; 1 to                 300                330
 15 days late.....................
 $25 million or more assets; 16 or                600                660
 more days late...................
 Under $25 million assets; 1 to 15                100                110
 days late........................
 Under $25 million assets; 16 or                  200                220
 more days late...................
------------------------------------------------------------------------
    Subsequent Offenses--Reports of Condition & Income (Call Reports)
------------------------------------------------------------------------
 $25 million or more assets; 1 to                 500                550
 15 days late.....................
 $25 million or more assets; 16 or              1,000              1,100
 more days late...................
------------------------------------------------------------------------


[[Page 73155]]

II. Section-by-Section Analysis

    As noted, these increases in maximum CMP amounts will apply to 
violations and other acts and omissions covered by the various laws and 
regulations cited herein, that occur after December 31, 2008.

Section 308.116(b)

    Section 308.116(b) pertains to the amount of CMPs that may be 
assessed for violations of the Change in Bank Control Act of 1978 (12 
U.S.C. 1817(j)). This section has been amended by increasing the: (A) 
Tier One CMP amount from $6,500 for each day the violation continues to 
$7,500 for each day that the violation continues; (B) Tier Two CMP 
amount from $32,500 for each day that the violation continues to 
$37,500 for each day that the violation continues; and (C) Tier Three 
CMP amount from $1,250,000 to $1,375,000 for each day that the 
violation continues or, in the case of a depository institution, 
increasing the CMP from an amount not to exceed the lesser of 
$1,375,000 or one percent of the total assets of the institution for 
each day that the violation continues. Section 308.116(b)(4) has also 
been amended by revising the date after which the adjusted CMPs will 
apply to violations covered by Sec.  308.116 by deleting ``December 31, 
2004'' and replacing it with ``December 31, 2008.''

Section 308.132

    Section 308.132 pertains to the manner in which the FDIC assesses 
CMPs. Paragraph (c)(2) of that section pertains to the CMPs imposed 
pursuant to section 7(a) of the Federal Deposit Insurance Act (FDIA) 
(12 U.S.C. 1817(a)) for the late filing of a bank's Reports of 
Condition and Income (Call Reports) or for the submission of false or 
misleading Call Reports or information. With respect to late filings of 
Call Reports, paragraph (c)(2)(i) of section 308.132 has been amended 
to reflect the increase in the Tier One CMPs by a legally mandated 
maximum of 10% for first-time adjustments, since those CMPs have not 
been adjusted since the FDIC first implemented quadrennial cost-of-
living adjustments in 1996 under the DCIA, as stated in the ``C.F.R. 
Citation'' section of the Summary of Adjustments above. Had the Tier 
One CMPs been adjusted for the full intervening cost-of-living rather 
than limited to the 10% mandated maximum increase when a CMP is 
adjusted for the first time, the increases would have been considerably 
higher. Also, the heading of paragraph (c)(2)(i)(B) is being changed 
from ``Second offense'' to ``Subsequent offenses'' to clarify the scope 
of that paragraph and eliminate or minimize and potential confusion as 
to any and all subsequent offenses other than a second offense.
    Tier Two CMPs for failure to file call reports under paragraph 
(c)(2)(ii) of section 308.132 have been adjusted from $27,500 per day 
to $32,000 per day for each day the violation or failure to file 
continues. Paragraph (c)(2)(ii) of Sec.  308.132 has also been amended 
by revising the date after which the adjusted CMPs will apply to 
violations covered by that paragraph by deleting ``December 31, 2004'' 
and replacing it with ``December 31, 2008.''
    Paragraph (c)(2)(iii) of section 308.132 pertains to CMPs for the 
submission of false or misleading Call Reports or information. 
Paragraph (c)(2)(iii)(B) of that section has been amended to reflect 
the increase in Tier Two CMP amounts from a maximum of $27,000 per day 
for each day that the information is not corrected to a maximum of 
$32,000 per day for each day that the information is not corrected. 
Paragraph (c)(2)(iii)(C) of that section reflects the increase in Tier 
Three CMPs from an amount not to exceed the lesser of $1,250,000 or one 
percent of the total assets of the institution for each day the 
information is not corrected to an amount not to exceed the lesser of 
$1,375,000 or one percent of the total assets of such institution for 
each day the information is not corrected. No change has been made to 
the Tier One CMP amount. Paragraphs (c)(2)(iii)(B) and (C) have also 
been amended by revising the date after which the adjusted CMPs will 
apply to violations covered by paragraph (c)(2)(iii) by deleting 
``December 31, 2004'' in both paragraphs and replacing it in both 
paragraphs with ``December 31, 2008.''
    Paragraph (c)(3)(i) of section 308.132 sets forth the increases for 
CMPs assessed pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 
1818(i)(2)). A Tier One CMP will increase from a maximum of $6,500 per 
day to a maximum of $7,500 per day for each day that the violation 
continues. A Tier Two CMP will increase from a maximum of $32,500 per 
day to a maximum of $37,500 per day for each day that the violation, 
practice, or breach of fiduciary duty continues. A Tier Three CMP will 
increase from an amount not to exceed, in the case of any person other 
than an insured depository institution, $1,250,000 to a maximum of 
$1,375,000 or, in the case of any insured depository institution, the 
amount will increase from a maximum of $1,250,000 to $1,375,000 or an 
amount not to exceed the lesser of $1,375,000 or one percent of the 
total assets of such institution for each day during which the 
violation, practice, or breach continues.
    Paragraph (c)(3)(i)(A) of section 308.132 lists a number of 
statutes which grant jurisdiction to the FDIC to assess CMPs under 
section 8(i)(2) of the FDIA, including the Home Mortgage Disclosure Act 
(12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited Funds 
Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings Act (12 
U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act (12 
U.S.C. 2601 et seq. and 12 CFR 3500), the Truth in Lending Act (15 
U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681 et 
seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.), the 
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the 
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.), and the Fair 
Housing Act (42 U.S.C. 3601 et seq.). Increases in the amount of any 
CMP which the FDIC may assess for violation of those statutes are the 
same as the increases for CMPs under section 8(i)(2) of the FDIA (12 
U.S.C. 1818(i)(2)) cited above. As in section 8(i)(2) of the FDIA, Tier 
One, Tier Two, and Tier Three CMP amounts will increase accordingly.
    Paragraph (c)(3)(ii) of section 308.132 reflects the increases in 
CMP amounts that may be assessed pursuant to section 7(c) of the FDIA 
(12 U.S.C. 1817(c)) for late filing or the submission of false or 
misleading certified statements. A Tier Two CMP pursuant to section 
7(c)(4)(B) of the FDIA (12 U.S.C. 1817(c)(4)(B)) will increase from an 
amount not to exceed $27,000 per day to an amount not to exceed $32,000 
for each day during which the failure to file continues or the false or 
misleading information is not corrected. A Tier Three CMP will increase 
from an amount not to exceed, in the case of any person other than an 
insured depository institution, $1,250,000 to a maximum of $1,375,000 
or, in the case of any insured depository institution, the amount will 
increase from a maximum of $1,250,000 to $1,375,000 or an amount not to 
exceed the lesser of $1,375,000 or one percent of the total assets of 
such institution for each day during which the violation, practice, or 
breach continues. No change has been made to the Tier One CMP amount.
    Paragraph (c)(3)(iii) of section 308.132 sets forth the increases 
in the CMP amounts that may be assessed pursuant to section 10(e)(4) of 
the FDIA (12 U.S.C. 1820(e)(4)) for an affiliate's refusal to allow an 
examination or to provide required information during an examination. 
The maximum CMP

[[Page 73156]]

amount will increase from $6,500 to $7,500.
    Paragraph (c)(3)(v) of section 308.132 was amended in November 2006 
to reflect the 2006 amendment of section 18(h) of the FDIA (12 U.S.C. 
1828(h)) by Congress. Congress' amendment established a maximum CMP of 
$100 per day for failure or refusal to pay any assessment, when the 
assessment was less than $10,000. Prior to Congress' amendment, the 
penalty was $100 per day, regardless of the amount of the assessment, a 
maximum CMP that was increased to $110 before Congress statutorily 
imposed a new maximum of $100 in 2006. This $100 maximum CMP is not 
being adjusted, since the cost-of-living data for the relevant periods 
in 2006 and 2007 do not warrant an increase now. The CMP of 1% for 
unpaid assessments of $10,000 or more for each day the failure or 
refusal continue, remains unchanged and in effect as well.
    Paragraph (c)(3)(vi) of section 308.132 sets forth the increases in 
the CMP amounts that may be assessed pursuant to section 19b(j) of the 
FDIC (12 U.S.C. 1829b(j)) for the willful or grossly negligent 
violation of the recordkeeping requirements of section 19b(j). The 
maximum CMP will increase from $11,000 to $16,000 to reflect the cost-
of-living since this CMP was last adjusted in 1996.
    Paragraph (c)(3)(ix) of Sec.  308.132 sets forth the increases in 
the CMP amounts that may be assessed pursuant to the Bank Holding 
Company Act of 1970 for prohibited tying arrangements. A Tier One CMP 
which may be assessed pursuant to 12 U.S.C. 1972(2)(F)(i) will increase 
from a maximum of $6,500 to a maximum of $7,500. A Tier Two CMP which 
may be assessed under 12 U.S.C. 1972(2)(F)(ii) will increase from a 
maximum of $32,500 to a maximum of $37,500. A Tier Three CMP which may 
be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) will increase from an 
amount not to exceed, in the case of any person other than an insured 
depository institution, $1,250,000 for each day during which the 
violation, practice, or breach continues to an amount not to exceed 
$1,375,000 for each day during which the violation, practice, or breach 
continues. In the case of any insured depository institution, a Tier 
Three CMP will increase from an amount not to exceed the lesser of 
$1,375,000 or one percent of the total assets of such institution for 
each day during which the violation, practice, or breach continues to 
an amount not to exceed the lesser of $1,375,000 or one percent of the 
total assets of such institution for each day during which the 
violation, practice, or breach continues.
    Paragraph (c)(3)(x) of Sec.  308.132 pertains to the assessment of 
CMPs under the International Banking Act of 1978 (IBA) (12 U.S.C. 
3108(b)), for failure to comply with the requirements of the IBA, 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). For 
each day that a violation continues, the amount of a Tier One CMP will 
increase from $6,500 to $7,500, a Tier Two CMP will increase from 
$32,500 to $37,500, and a Tier Three CMP will increase from $1,250,000 
to $1,375,000 as to violations occurring after December 31, 2008.
    Paragraph (c)(3)(xi) of Sec.  308.132 sets forth the increase in 
CMP amounts that may be assessed pursuant to section 8(i)(2) of the 
FDIA (12 U.S.C. 1818(i)(2)), as made applicable by 12 U.S.C. 3349(b), 
where a financial institution seeks, obtains, or gives any other thing 
of value in exchange for the performance of an appraisal by a person 
that the institution knows is not a state certified or licensed 
appraiser in connection with a federally-related transaction. For each 
day that a violation continues, the amount of a Tier One CMP will 
increase from $6,500 to $7,500, a Tier Two CMP will increase from 
$32,500 to $37,500, and a Tier Three CMP will increase from $1,250,000 
to $1,375,000 as to violations occurring after December 31, 2008.
    Paragraph (c)(3)(xiii) of Sec.  308.132 states that pursuant to the 
Community Development Banking and Financial Institution Act (CDBA) (12 
U.S.C. 4717(b)) a CMP may be assessed for violation of the CDBA 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). For 
each day that a violation continues, the amount of a Tier One CMP will 
increase from $6,500 to $7,500, a Tier Two CMP will increase from 
$32,500 to $37,500, and a Tier Three CMP will increase from $1,250,000 
to $1,375,000 as to violations occurring after December 31, 2008.
    Paragraph (c)(3)(xiv) of Sec.  308.132 states that pursuant to 
section 21B of the Securities Exchange Act of 1934 (Exchange Act) (15 
U.S.C. 78u-2), CMPs may be assessed for violations of certain 
provisions of the Exchange Act, where such penalties are in the public 
interest. The Tier One CMP amounts which may be assessed pursuant to 15 
U.S.C. 78u-2(b)(1) will increase from an amount not to exceed $6,500 
for a natural person or $65,000 for any other person for violations set 
forth in 15 U.S.C. 78u-2(a), to $7,500 for a natural person or $70,000 
for any other person. The Tier Two CMP which maybe assessed pursuant to 
15 U.S.C. 78u-2(b)(2) for each violation set forth in 15 U.S.C. 78u-
2(a) will increase from an amount not to exceed $65,000 for a natural 
person to $130,000 for any other person to an amount not to exceed 
$70,000 for a natural person or $140,000 for any other person if the 
act or omission involved fraud, deceit, manipulation, or deliberate or 
reckless disregard of a regulatory requirement. The Tier Three CMP 
which may be assessed pursuant to 15 U.S.C. 78u-2(b)(3) for each 
violation set forth in 15 U.S.C. 78u-2(a), in an amount not to exceed 
$325,000 for a natural person or $625,000 for any other person, if the 
act or omission involved fraud, deceit, manipulation, or deliberate or 
reckless disregard of a regulatory requirement, and such act or 
omission directly or indirectly resulted in substantial losses, or 
created a significant risk of substantial losses to other persons or 
resulted in substantial pecuniary gain to the person who committed the 
act or omission, will be increased to an amount not to exceed $350,000 
for a natural person or $675,000 for any other person.
    Paragraph (c)(3)(xv) of Sec.  308.132 states that a CMP may be 
assessed for violation of the Program Fraud Civil Remedies Act (31 
U.S.C. 3802) for violations involving false claims and statements. The 
maximum CMP amount will increase from $6,500 to $7,500.
    Paragraph (c)(3)(xvi) of Sec.  308.132 states that CMPs may be 
assessed pursuant to the Flood Disaster Protection Act (FDPA)(42 U.S.C. 
4012a(f)) against any regulated lending institution that engages in a 
pattern or practice of violations of the FDPA. The amount of the 
maximum penalty for each violation will remain in an amount not to 
exceed $385. The maximum amount of CMPs which may be assessed annually 
against a regulated lending institution will increase from an amount 
not to exceed a total of $125,000 to an amount not to exceed a total of 
$135,000.
    A new CMP of up to $250,000 was enacted by Congress on December 17, 
2004, by section 10(k) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(k)), which imposes a one-year restriction on Federal examiners of 
financial institutions knowingly accepting compensation as an employee, 
officer, director, or consultant from depository institution and 
holding companies, among other entities listed therein, following 
termination of service or employment with a federal banking agency or 
Federal reserve bank, subject to a CMP of $250,000. A new paragraph 
(c)(3)(xvii) has been added to include this CMP in section 308.132. 
This CMP has been

[[Page 73157]]

adjusted by $25,000 to $275,000, given the cost-of-living since 
enactment of section 10(k), which also equals the 10% maximum imposed 
by law when CMPs are adjusted for the first time.
    Paragraph (c)(3) of section 308.132 has also been amended by 
revising the date after which the adjusted CMPs will apply to 
violations covered by that paragraph by deleting ``December 31, 2004'' 
and replacing it with ``December 31, 2008.''

III. Exemption From Public Notice and Comment

    Since the law requires the FDIC to amend its rules, provides the 
specific adjustments to be made and leaves the FDIC no discretion in 
calculating the amount of those adjustments, the changes are 
ministerial, technical, and noncontroversial. The FDIC has thus 
determined for good cause that public notice and comment is unnecessary 
and impracticable under the Administrative Procedure Act (5 U.S.C. 
553(b)(3)(B)), and that the rule should be published in the Federal 
Register as a final rule.

IV. Effective Date

    For the same reasons that the FDIC for good cause has determined 
that public notice and comment is unnecessary and impractical, the FDIC 
also finds that it has good cause to adopt an effective date that would 
be less than 30 days after the date of publication in the Federal 
Register pursuant to the APA (5 U.S.C. 553(d)). In the interest of 
fairness, however, the increase in the maximum amount of civil money 
penalties in this regulation applies only to violations that occur 
after December 31, 2008, rather than to violations that occurred after 
the date of publication of this rule in the Federal Register. Moreover, 
section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (12 U.S.C. 4802) states that a final rule 
imposing new requirements must take effect on the first day of a 
calendar quarter following its publication. That section provides, 
however, that an agency may determine that the rule should take effect 
earlier upon a finding of good cause.
    The FDIC also finds that the increase in the maximum amounts of 
CMPs under the FDIC's jurisdiction should be effective as of December 
31, 2008, since the rule is ministerial, technical, and 
noncontroversial. Under the statute, agencies must make the required 
CMP inflation adjustments: (A) According to the formula in the statute 
and (B) within four years of the last inflation adjustment. Federal 
agencies have no discretion as to the amount or timing of the 
adjustment.

V. Regulatory Flexibility Act

    An initial regulatory flexibility analysis under the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 603) is required only when an agency 
must publish a general notice of proposed rulemaking. As already noted, 
the FDIC 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, the FDIC 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.

VI. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) (Pub. L. 104-121, 110 Stat. 857) provides generally for 
agencies to report rules to Congress and for Congress to review such 
rules. The reporting requirement is triggered in instances where the 
FDIC issues a final rule as defined by the APA (5 U.S.C. 551 et seq.). 
Because the FDIC is issuing a final rule as defined by the APA, the 
FDIC will file the reports required by the SBREFA.
    The Office of Management and Budget has determined that this final 
revision to 12 CFR 308 does not constitute a ``major'' rule as defined 
by the statute.

VII. The Treasury and General Government Appropriations Act, 1999 
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that this final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999 (Pub. L. 105-277, 112 Stat. 
2681 (1998)).

VIII. Paperwork Reduction Act

    No collection of information pursuant to section 3504(h) of the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) is contained 
in this rule. Consequently, no information has been submitted to the 
Office of Management and Budget for review.

IX. Authority for the Regulation

    This regulation is authorized by the FDIC's general rulemaking 
authority and pursuant to its fundamental responsibilities to ensure 
the safety and soundness of insured depository institutions. 
Specifically, 12 U.S.C. 1819(a)(Tenth) provides the FDIC with general 
authority to issue such rules and regulations as it deems necessary to 
carry out the statutory mandates of the FDIA and other laws that the 
FDIC is charged with administering or enforcing.

List of Subjects in 12 CFR Part 308

    Administrative practice and procedure, Banks, Banking, Claims, 
Crime, Equal access to justice, Ex parte communications, Hearing 
procedure, Lawyers, Penalties, State nonmember banks.

0
For the reasons set out in the preamble, the FDIC amends 12 CFR part 
308 as follows:

PART 308--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 308 continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1815(e), 1817, 1818, 1819, 1820, 1828, 1829, 1831i, 1831m(g)(4), 
1831o, 1831p-1, 1832(c), 1884(b), 1972, 3102, 3108(a), 3349, 3909, 
4717; 15 U.S.C. 78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Sec. 3100(s), Pub. L. 104-134, 
110 Stat. 1321-358.


Sec.  308.116  [Amended]

0
1. Section 308.116 is amended as follows:
0
a. Paragraph (b)(4) introductory text is amended by removing ``December 
31, 2004'' and adding ``December 31, 2008'' in its place.
0
b. Paragraph (b)(4)(i) is amended by removing $6,500 and adding $7,500 
in its place.
0
c. Paragraph (b)(4)(ii) is amended by removing $32,500 and adding 
$37,500 in its place.
0
d. Paragraph (b)(4)(iii)(A) is amended by removing $1,250,000 and 
adding $1,375,000 in its place.
0
e. Paragraph (b)(4)(iii)(B) is amended by removing $1,250,000 and 
adding $1,375,000 in its place.


Sec.  308.132  [Amended]

0
2. Section 308.132 is amended as follows:
0
a. Paragraph (c)(2)(i) introductory text is amended by adding a 
sentence at the end of the paragraph to read as set forth below.
0
b. Paragraph (c)(2)(i)(A) is amended by removing $300 and adding $330 
in its place, by removing $600 and adding $660 in its place, by 
removing $100 and adding $110 in its place, and by removing $200 and 
adding $220 in its place.
0
c. Paragraph (c)(2)(i)(B) is amended by removing $500 and adding $550 
in its place, and by removing $1,000 and adding $1,100 in its place.
0
d. Paragraph (c)(2)(i)(B) is amended by removing the italicized heading

[[Page 73158]]

``Second offense.'' and adding ``Subsequent offenses.'' in its place.
0
e. Paragraph (c)(2)(ii) is amended by removing ``December 31, 2004'' 
and adding ``December 31, 2008'' in its place.
0
f. Paragraph (c)(2)(ii) is amended by removing $27,500 and adding 
$32,000 in its place.
0
g. Paragraph (c)(2)(iii)(B) is amended by removing $27,500 and adding 
$32,000 in its place.
0
h. Paragraph (c)(2)(iii)(B) is amended by removing ``December 31, 
2004'' and adding ``December 31, 2008'' in its place.
0
i. Paragraph (c)(2)(iii)(C) is amended by removing $1,250,000 and 
adding $1,375,000 in its place.
0
j. Paragraph (c)(2)(iii)(C) is amended by removing ``December 31, 
2004'' and adding ``December 31, 2008'' in its place.
0
k. Paragraph (c)(3) introductory text is amended by removing ``December 
31, 2004'' and adding ``December 31, 2008'' in its place.
0
l. Paragraph (c)(3)(i) introductory text is amended by removing $6,500 
and adding $7,500 in its place, by removing $32,500 and adding $37,500 
in its place, and by removing $1,250,000 wherever it appears and adding 
$1,375,000 in its place.
0
m. Paragraph (c)(3)(ii) is amended by removing $27,000 and adding 
$32,000 in its place and by removing $1,250,000 and adding $1,375,000 
in its place.
0
n. Paragraph (c)(3)(iii) is amended by removing $6,500 and adding 
$7,500 in its place.
0
o. Paragraph (c)(3)(vi) is amended by removing $11,000 and adding 
$16,000 in its place.
0
p. Paragraph (c)(3)(ix) is amended by removing $6,500 and adding $7,500 
in its place, by removing $32,500 and adding $37,500 in its place, and 
by removing $1,250,000 wherever it appears and adding $1,375,000 in its 
place.
0
q. Paragraph (c)(3)(xiv) is amended by removing $6,500 and adding 
$7,500 in its place, by removing $65,000 wherever it appears and adding 
$70,000 in its place, by removing $325,000 and adding $350,000 in its 
place, by removing $130,000 and adding $140,000 in its place, and by 
removing $625,000 and adding $675,000 in its place.
0
r. Paragraph (c)(3)(xv) is amended by removing $6,500 and adding $7,500 
in its place.
0
s. Paragraph (c)(3)(xvi) is amended by removing $125,000 and adding 
$135,000 in its place.
0
t. A new paragraph (c)(3)(xvii) is added as set forth below:


Sec.  308.132  Assessment of penalties.

* * * * *
    (c) * * *
    (2) * * *
    (i) * * * Pursuant to the Debt Collection Improvement Act of 1996, 
for violations of paragraph (c)(2)(i) which occur after December 31, 
2008, the following maximum Tier One penalty amounts contained in 
paragraphs (c)(2)(i)(A) and (B) of this section shall apply for each 
day that the violation continues.
* * * * *
    (3) * * *
    (xvii) Civil money penalties assessed for violation of one-year 
restriction on Federal examiners of financial institutions. Pursuant to 
section 10(k) of the Federal Deposit Insurance Act (12 U.S.C. 1820(k)), 
the Board of Directors or its designee may assess a civil money penalty 
of up to $250,000 against any covered former Federal examiner of a 
financial institution who, in violation of section 1820(k) and within 
the one-year period following termination of government service as an 
employee, serves as an officer, director, or consultant of a financial 
or depository institution, a holding company, or of any other entity 
listed in section 10(k), without the written waiver or permission by 
the appropriate Federal banking agency or authority under section 
1820(k)(5). Pursuant to the Debt Collection Improvement Act of 1996, 
for any violation of section 10(k) which occurs after December 31, 
2008, the maximum penalty amount will increase to $275,000.

    By order of the Board of Directors, Federal Deposit Insurance 
Corporation.
Robert E. Feldman,
Executive Secretary.
 [FR Doc. E8-28407 Filed 12-1-08; 8:45 am]
BILLING CODE 6714-01-P