Civil Monetary Penalty Inflation Adjustment, 57284-57289 [2015-24157]

Download as PDF 57284 Federal Register / Vol. 80, No. 184 / Wednesday, September 23, 2015 / Rules and Regulations 2. Paperwork Reduction Act. The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden or increases an existing burden.4 For purposes of the PRA, a paperwork burden may take the form of a reporting or recordkeeping requirement, both referred to as information collections. This rule does not create any new burdens or increase any existing burdens. Therefore, a PRA analysis is not required. 3. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The rule does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has, therefore, determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order. 4. Assessment of Federal Regulations and Policies on Families NCUA has determined that this rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105–277, 112 Stat. 2681 (1998). mstockstill on DSK4VPTVN1PROD with RULES 5. Small Business Regulatory Enforcement Fairness Act The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedure Act. NCUA does not believe this final rule is a ‘‘major rule’’ within the meaning of the relevant sections of SBREFA. NCUA has submitted the rule to the Office of Management and Budget for its determination in that regard. 4 44 U.S.C. 3507(d); 5 CFR part 1320. VerDate Sep<11>2014 16:11 Sep 22, 2015 Jkt 235001 List of Subjects in 12 CFR Part 704 Credit unions, Corporate credit unions, Reporting and recordkeeping requirements. Gerard Poliquin, Secretary of the Board. For the reasons discussed above, the National Credit Union Administration amends 12 CFR part 704 as follows: PART 704—CORPORATE CREDIT UNIONS 1. The authority citation for part 704 continues to read as follows: ■ Authority: 12 U.S.C. 1766(a), 1781, and 1789. 2. Amend § 704.2 by adding a definition for CLF-related bridge loan in alphabetical order and revising the definitions of Net assets and Net riskweighted assets to read as follows: ■ § 704.2 Definitions. * * * * * CLF-related bridge loan means interim financing, extending up to ten business days, that a corporate credit union provides for a natural person credit union from the time the CLF approves a loan to the natural person credit union until the CLF funds the loan. To repay a CLF-related bridge loan, the borrowing natural person credit union assigns the proceeds of the CLF advance to the corporate credit union making the CLF-related bridge loan for the duration of the bridge loan. * * * * * Net assets means total assets less Central Liquidity Facility (CLF) stock subscriptions, CLF-related bridge loans, loans guaranteed by the National Credit Union Share Insurance Fund (NCUSIF), and member reverse repurchase transactions. For its own account, a corporate credit union’s payables under reverse repurchase agreements and receivables under repurchase agreements may be netted out if the GAAP conditions for offsetting are met. Also, any amounts deducted in calculating Tier 1 capital are also deducted from net assets. * * * * * Net risk-weighted assets means riskweighted assets less CLF stock subscriptions, CLF-related bridge loans, loans guaranteed by the NCUSIF, and member reverse repurchase transactions. For its own account, a corporate credit union’s payables under reverse repurchase agreements and receivables under repurchase agreements may be netted out if the GAAP conditions for offsetting are met. Also, any amounts deducted in PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 calculating Tier 1 capital are also deducted from net risk-weighted assets. * * * * * ■ 3. Amend § 704.7 by revising paragraph (c)(1)(i) and revising paragraph (d)(1) to read as follows: § 704.7 Lending. * * * * * (c) * * * (1) * * * (i) The maximum aggregate amount in unsecured loans and lines of credit from a corporate credit union to any one member credit union, excluding CLFrelated bridge loans and pass-through and guaranteed loans from the CLF and the NCUSIF, must not exceed 50 percent of the corporate credit union’s total capital. * * * * * (d) * * * (1) Credit unions. A loan to a nonmember credit union, other than through a loan participation with another corporate credit union or a CLFrelated bridge loan, is only permissible if the loan is for an overdraft related to the providing of correspondent services pursuant to § 704.12. Generally, such a loan will have a maturity of one business day. * * * * * [FR Doc. 2015–24160 Filed 9–22–15; 8:45 am] BILLING CODE 7535–01–P NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Parts 740, 741, 747, and 796 RIN 3133–AE56 Civil Monetary Penalty Inflation Adjustment National Credit Union Administration (NCUA). ACTION: Final rule. AGENCY: The NCUA Board (Board) is amending its regulations to adjust the maximum amount of each civil monetary penalty (CMP) within its jurisdiction to account for inflation. This action, including the amount of the adjustments, is required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996. DATES: This rule is effective September 23, 2015. FOR FURTHER INFORMATION CONTACT: Ian Marenna, Trial Attorney, Office of General Counsel, 1775 Duke Street, Alexandria, VA 22314, or by telephone (703) 518–6540. SUMMARY: E:\FR\FM\23SER1.SGM 23SER1 57285 Federal Register / Vol. 80, No. 184 / Wednesday, September 23, 2015 / Rules and Regulations SUPPLEMENTARY INFORMATION: I. Legal Background II. Mathematical Calculation of the Adjustments III. Regulatory Procedures I. Legal Background The Debt Collection Improvement Act of 1996 1 (DCIA) amended the Federal Civil Penalties Inflation Adjustment Act of 1990 2 (FCPIA Act) to require every federal agency to enact regulations that adjust each CMP provided by law under its jurisdiction by the rate of inflation at least once every four years. These periodic adjustments are to be calculated pursuant to the inflation adjustment formula in section 5(b) of the FCPIA Act. Section 6 of the FCPIA Act specifies that inflation-adjusted CMPs will only apply to violations that occur after the effective date of the adjustment. The inflation adjustment is based on the percentage increase in the Consumer Price Index for all urban customers (CPI–U) published by the Department of Labor.3 Specifically, section 5(b) of the FCPIA Act defines the term ‘‘cost-ofliving adjustment’’ as ‘‘the percentage (if any) for each civil monetary penalty by which—(1) the Consumer Price Index for the month of June of the calendar year preceding the adjustment, exceeds (2) the Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.’’ The amount of each inflation adjustment must then be rounded to a number prescribed by section 5(a) of the FCPIA Act, depending on the amount of the CMP. In some cases, this rounding results in no increase to a particular CMP maximum amount. II. Mathematical Calculation of the Adjustments A. Inflation Percentage and Penalty Adjustment Calculations The Board recently became aware that NCUA last reviewed CMPs within its jurisdiction for inflation and made corresponding adjustments in 2009,4 and that three CMPs have not previously been adjusted by NCUA. This failure to adjust the CMPs within the appropriate timeframe was inadvertent. The Board notes, however, that because NCUA has never assessed any CMPs at the maximum level, this delay has not affected any CMP assessed by the agency. As noted above, in this final rule, the Board is correcting NCUA’s oversight by reviewing and adjusting, as appropriate, all relevant CMPs. In addition, the Board is publishing a new maximum amount for an existing CMP that Congress modified in 2012. For this CMP and the three CMPs that have not previously been adjusted, the Board refers to the CPI–U for June of the year in which Congress set the amount of the CMP. For all other CMPs, the Board refers to the year that it last adjusted the maximum amount. Consistent with NCUA’s 2009 CMP adjustments, the Board provides the inflation calculations in a table below. Following the table, the Board describes the three CMPs that it is adjusting for the first time and the CMP that Congress modified. The table to be published at 12 CFR 747.1001 shows only the adjusted CMPs, not the calculations. The dollar amount in the far right column of the table is the new maximum for each CMP or the existing maximum for those CMPs that NCUA is not increasing because the rounding procedure in the FCPIA Act results in no increase to those maximums. CALCULATION OF MAXIMUM CMP ADJUSTMENTS Current maximum ($) Citation Description/Tier 5 12 U.S.C. 1782(a)(3) ........................ Inadvertent failure to submit a report or the inadvertent submission of a false or misleading report. Non-inadvertent failure to submit a report or the non-inadvertent submission of a false or misleading report. Failure to submit a report or the submission of a false or misleading report done knowingly or with reckless disregard. Tier 1 CMP for inadvertent failure to submit certified statement of insured shares and charges due to NCUSIF, or inadvertent submission of false or misleading statement. Tier 2 CMP for non-inadvertent failure to submit certified statement or submission of false or misleading statement. Tier 3 CMP for failure to submit a certified statement or the submission of a false or misleading statement done knowingly or with reckless disregard. Non-compliance with insurance logo requirements. Non-compliance with NCUA security requirements. 12 U.S.C. 1782(a)(3) ........................ 12 U.S.C. 1782(a)(3) ........................ 12 U.S.C. 1782(d)(2)(A) ................... 12 U.S.C. 1782(d)(2)(B) ................... 12 U.S.C. 1782(d)(2)(C) ................... mstockstill on DSK4VPTVN1PROD with RULES 12 U.S.C. 1785(a)(3) ........................ 12 U.S.C. 1785(e)(3) ........................ 1 Public Law 104–134, section 31001(s), 110 Stat. 1321–373 (Apr. 26, 1996). The provision is codified at 28 U.S.C. 2461 note. 2 Public Law 101–410, 104 Stat. 890 (Oct. 5, 1990), also codified at 28 U.S.C. 2461 note. VerDate Sep<11>2014 16:11 Sep 22, 2015 Jkt 235001 Percentage increase (%) 6 Frm 00003 Adjusted increase ($) 7 Adjusted maximum ($) 2,200 .................. 38.3 (2000) 843 1,000 3,200. 22,000 ................ 38.3 (2000) 8,426 5,000 32,000. Lesser of 1,300,000 or 1% of total CU assets. 2,200 .................. 10.5 (2009) 136,500 125,000 38.3 (2000) 843 1,000 Lesser of 1,425,000 or 1% of total CU assets. 3,200. 22,000 ................ 38.3 (2000) 8,426 5,000 32,000. Lesser of 1,300,000 or 1% of total CU assets. 10.5 (2009) 136,500 125,000 100 ..................... 14.4 (2007) 14 10 110. 110 ..................... 38.3 (2000) 42 0 110. 3 The CPI–U is published by the Department of Labor, Bureau of Labor Statistics, and is available at its Web site: http://www.bls.gov/cpi/. 4 74 FR 9349 (Mar. 4, 2009). NCUA also reviewed CMPs for inflation and made corresponding adjustments in 2000 and 2004. 65 FR 57277 (Sept. PO 00000 Raw increase ($) Fmt 4700 Sfmt 4700 Lesser of 1,425,000 or 1% of total CU assets. 22, 2000), 69 FR 60077 (Oct. 7, 2004). All of the CMPs that were increased in 2004 were also increased in 2009. Because of the rounding procedure, not all CMPs that are reviewed for inflation are increased. E:\FR\FM\23SER1.SGM 23SER1 57286 Federal Register / Vol. 80, No. 184 / Wednesday, September 23, 2015 / Rules and Regulations CALCULATION OF MAXIMUM CMP ADJUSTMENTS—Continued Current maximum ($) Citation Description/Tier 5 12 U.S.C. 1786(k)(2)(A) ................... Tier 1 CMP for violations of law, regulation, and other orders or agreements. Tier 2 CMP for violations of law, regulation, and other orders or agreements and for recklessly engaging in unsafe or unsound practices or breaches of fiduciary duty. Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (natural person). Tier 3 (same) (CU) ......................... 12 U.S.C. 1786(k)(2)(B) ................... 12 U.S.C. 1786(k)(2)(C) ................... 12 U.S.C. 1786(k)(2)(C) ................... 12 U.S.C. 1786(w)(5)(A)(ii) .............. 15 U.S.C. 1639e(k) .......................... 15 U.S.C. 1639e(k) .......................... 42 U.S.C. 4012a(f)(5) ....................... Non-compliance with senior examiner post-employment restrictions. Non-compliance with appraisal independence standards (first violation). Subsequent violations of the same Non-compliance with flood insurance requirements. Percentage increase (%) 6 10.5 (2009) 788 1,000 8,500. 37,500 ................ 10.5 (2009) 3,938 5,000 42,500. 1,375,000 ........... 10.5 (2009) 144,375 150,000 1,525,000. Lesser of 1,375,000 or 1% of total CU assets. 250,000 .............. 10.5 (2009) 144,375 150,000 22.5 (2005) 56,250 25,000 Lesser of 1,525,000 or 1% of total CU assets. 275,000. 10,000 ................ 5.6 (2011) 560 1,000 11,000. 20,000 ................ 2,000 .................. 5.6 (2011) 2.9 (2012) 1,120 78 0 0 20,000. 2,000. mstockstill on DSK4VPTVN1PROD with RULES Below, the Board describes the three CMPs that NCUA is reviewing for adjustment for the first time and the additional CMP that Congress changed in 2012. The Board does not describe the other CMPs included in the table above, as NCUA reviewed all of the other CMPs for inflation in 2009 and made adjustments as appropriate under the rounding procedure. 5 The table uses shorthand descriptions of CMP tiers. Refer to the U.S. Code citations for complete descriptions. 6 The year that NCUA last adjusted the CMP or that Congress set it is shown in parentheses. With the exception of 12 U.S.C. 1785(a)(3), 12 U.S.C. 1786(w)(5)(A)(ii), and 15 U.S.C. 1639e(k), NCUA reviewed all of the CMPs in the table for inflation in 2009. The rounding procedure described in the next footnote resulted in some of these CMPs remaining at the same level. The year in parentheses is the last year the maximum CMP was actually increased, or, for 15 U.S.C. 1639e(k) and 42 U.S.C. 4012a(f)(5), the year that Congress set the maximum CMP amounts. The percentage change used in this column to determine the raw increase in each CMP is the difference between the June 2014 CPI–U (238.343) and the CPI–U for June of the relevant year noted in parentheses, divided by the CPI–U for June of the relevant year. The CPI–U figures are available at http://www.bls.gov/cpi/. 7 The FCPIA Act’s rounding rules require that an increase of a CMP be rounded to the nearest multiple of: $10 in the case of penalties less than or equal to $100; $100 in the case of penalties greater than $100 but less than or equal to $1,000; $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000; $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000; $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000; and $25,000 in the case of penalties greater than $200,000. Section 5(a) of the FCPIA Act, 28 U.S.C. 2461 note. Also, the first adjustment of any penalty is limited to 10 percent of the maximum penalty amount. Public Law 104–134, § 31001(s)(2), codified at 28 U.S.C. 2461 note. The 10 percent cap only affects the increase of the CMP under 12 U.S.C. 1786(w)(5)(A)(ii). 1. 12 U.S.C. 1785(a)(3) Federally insured credit unions must display signs relating to the insurance of share accounts.8 Under the Federal Credit Union Act, the Board may impose a penalty of $100 for each day that a federally insured credit union violates this requirement or the Board’s implementing regulations.9 The Board has prescribed regulations on this subject.10 Congress added this penalty to the Federal Credit Union Act in 2006,11 but it was not effective until 2007.12 16:11 Sep 22, 2015 Jkt 235001 2. 12 U.S.C. 1786(w)(5)(A)(ii) Congress amended the Federal Credit Union Act in 2004 to impose post8 12 U.S.C. 1785(a)(1). U.S.C. 1785(a)(3). 10 12 CFR 740.4. 11 Public Law 109–173, section 2, 119 Stat. 3604– 605 (Feb. 15, 2006). 12 Congress set the effective date for section 2 of Public Law 109–173, including the penalty provision, as the date on which the final regulations required by section 2109(a)(2) of the Federal Insurance Reform Act of 2005 took effect. Id. Section 2(e). These regulations took effect on January 1, 2007. 71 FR 69323–01 (Nov. 30, 2006). Accordingly, the Board refers to the CPI–U for June 2007 to adjust this CMP for inflation. 9 12 PO 00000 Frm 00004 Adjusted maximum ($) Adjusted increase ($) 7 7,500 .................. B. Description of Initial Adjustments and Modified CMP NCUA recently determined that three penalties that it has not previously adjusted for inflation meet the definition of CMPs. Also, Congress has changed the amount and structure of one additional penalty that the Board has previously adjusted for inflation. VerDate Sep<11>2014 Raw increase ($) Fmt 4700 Sfmt 4700 NCUA employment restrictions on NCUA senior examiners.13 The provision authorizes the Board to impose a CMP of not more than $250,000 in an administrative proceeding or civil action against former NCUA senior examiners who violate conflict-of-interest restrictions that apply to their post-NCUA employment.14 The Board has prescribed regulations to implement these restrictions and is making a conforming amendment to the penalty amount set forth in that part.15 3. 15 U.S.C. 1639e(k) The Dodd-Frank Wall Street Reform and Consumer Protection Act 16 13 Public Law 108–458, section 6303(c), 118 Stat. 3753–754 (Dec. 17, 2004). Section 6303(d) stated that this provision would take effect at the end of the 12-month period following its enactment. The public law was enacted on December 17, 2004, so the CMP became effective in 2005. The Board uses the June 2005 CPI–U to adjust this CMP for inflation. 14 12 U.S.C. 1785(w)(5)(A)(ii). 15 12 CFR 796.5. 16 Public L.aw 111–203, title XIV, section 1472(a), 124 Stat. 2187–190 (Jul. 21, 2010). Title XIV, Section 1400(c) stated that any section or provision of that title would become effective once the regulation implementing the section or provision became effective. On October 28, 2010, the Board of Governors of the Federal Reserve System published an interim final rule to implement the appraisal independence section, as required by 15 U.S.C. 1639e(g)(2). 75 FR 66554 (Oct. 28, 2010). The interim final rule had an effective date of December 27, 2010. Compliance with the new standards, however, was optional until April 2011, which means that the Board and other agencies could not have imposed a penalty for violating this law before 2011. Therefore, the Board refers to the June 2011 CPI–U to adjust this CMP for inflation. E:\FR\FM\23SER1.SGM 23SER1 Federal Register / Vol. 80, No. 184 / Wednesday, September 23, 2015 / Rules and Regulations amended the Truth in Lending Act to establish independence standards for property appraisals. The provision authorizes the Board and other federal agencies to assess a civil penalty against persons who violate regulations implementing this law.17 4. 42 U.S.C. 4012a(f)(5) The Board is authorized to impose CMPs against a credit union that is found to have a pattern or practice of committing certain specified actions in violation of the National Flood Insurance Program. The Board first adjusted this CMP for inflation in 2000.18 At that time, 42 U.S.C. 4012a(f)(5) authorized a $350 penalty for each violation, subject to an annual cap of $100,000. The Board also adjusted this CMP for inflation in 2004 19 and 2009.20 Congress amended this CMP in 2012 to increase the amount per violation to $2,000 and eliminate the annual cap.21 NCUA’s calculation of inflation results in no increase to this modified CMP, but the Board includes this description to explain that the CMP has changed. C. Conforming Amendments The Board is also making conforming amendments to other parts of NCUA’s regulations that state a specific maximum dollar amount for a CMP.22 The final rule replaces the current specific dollar amounts with a nonnumerical reference to the inflationadjusted maximum amounts table at 12 CFR 747.1001. III. Regulatory Procedures A. Final Rule Under the Administrative Procedure Act mstockstill on DSK4VPTVN1PROD with RULES The FCPIA Act requires adjustments of CMPs for inflation to occur at least every four years. Federal agencies have no discretion in calculating the adjustments. Thus, the Board cannot vary the amount of the adjustments to reflect any views or suggestions submitted by commenters. Further, the regulation is ministerial and technical. For all these reasons, public notice and comment for this new regulation is unnecessary, impracticable, and 17 15 U.S.C. 1639e(k) refers to 15 U.S.C. 1607(a), which authorizes the Board to enforce the appraisal independence requirements, among other provisions. 18 65 FR 57277 (Sept. 22, 2000). 19 69 FR 60077 (Oct. 7, 2004). 20 74 FR 9349 (Mar. 4, 2009). 21 Public Law 112–141, section 100208, 126 Stat. 919 (Jul. 6, 2012). The Board refers to the June 2012 CPI–U to adjust this CMP because Congress set the modified CMP in 2012. 22 12 CFR 740.4(f); 12 CFR 741.4(k)(4)(i); 12 CFR 796.5(a)(2). VerDate Sep<11>2014 16:11 Sep 22, 2015 Jkt 235001 contrary to the public interest under the Administrative Procedure Act (APA).23 For the same reasons, there is no good cause to impose a 30-day delayed effective date requirement under the APA.24 B. Regulatory Flexibility Act The Regulatory Flexibility Act requires the Board to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small entities.25 For purposes of this analysis, the Board considers small credit unions to be those having under $50 million in assets.26 This final rule would not have a significant economic impact on a substantial number of small credit unions because it only affects the maximum amounts of CMPs that may be assessed in individual cases, which are not numerous and generally do not involve assessments at the maximum level. In addition, several of the CMPs are limited to a percentage of a credit union’s assets. Finally, in assessing CMPs, the Board generally must consider a party’s financial resources.27 Because this final rule would affect few, if any, small entities, the Board certifies that the final rule will not have a significant economic impact on small entities. C. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency creates a new paperwork burden on regulated entities or modifies an existing burden.28 For purposes of the PRA, a paperwork burden may take the form of either a reporting or a recordkeeping requirement, both referred to as information collections. This final rule adjusts the maximum amounts of certain CMPs that the Board may assess against individuals, entities, or credit unions but does not require any reporting or recordkeeping. Therefore, this final rule will not create new paperwork burdens or modify any existing paperwork burdens. D. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, 23 5 U.S.C. 553(b)(3)(B). 24 5 U.S.C. 553(d)(3). 25 5 U.S.C. 603(a). 26 Interpretive Ruling and Policy Statement 03–2, 68 FR 31949 (May 29, 2003), as amended by Interpretive Ruling and Policy Statement 13–1, 78 FR 4032 (Jan. 18, 2013). 27 12 U.S.C. 1786(k)(2)(G)(i). 28 44 U.S.C. 3507(d); 5 CFR part 1320. PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 57287 NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. This final rule adjusts the maximum amounts of certain CMPs that the Board may assess against individuals, entities, and federally insured credit unions, including statechartered credit unions. However, the final rule does not create any new authority or alter the underlying statutory authorities that enable the Board to assess CMPs. Accordingly, this rule will not have a substantial direct effect on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The Board has determined this rule does not constitute a policy that has federalism implications for purposes of the executive order. E. Assessment of Federal Regulations and Policies on Families The Board has determined that this final rule will not affect family wellbeing within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.29 F. Small Business Regulatory Enforcement Fairness Act The Small Business Regulatory Enforcement Fairness Act of 1996 30 (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where the Board issues a final rule as defined by Section 551 of the Administrative Procedure Act.31 The Office of Management and Budget has determined that this final rule is not a ‘‘major rule’’ within the meaning of the relevant sections of SBREFA. List of Subjects 12 CFR Part 740 Advertisements, Credit unions. 12 CFR Part 741 Credit, Credit unions, Reporting and recordkeeping requirements, Share insurance. 12 CFR Part 747 Credit unions, Civil monetary penalties. 29 Public Law 105–277, 112 Stat. 2681 (Oct. 21, 1998). 30 Public Law 104–121, 110 Stat. 857 (Mar. 29, 1996). 31 5 U.S.C. 551. E:\FR\FM\23SER1.SGM 23SER1 57288 Federal Register / Vol. 80, No. 184 / Wednesday, September 23, 2015 / Rules and Regulations 12 CFR Part 796 Conflicts of interest, Credit unions, Ethical conduct, Government employees. official sign, 12 U.S.C. 1785(a), or any requirement in this part is subject to a daily penalty in the amount set forth in § 747.1001 of this chapter. PART 747—ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF PRACTICE AND PROCEDURE, AND INVESTIGATIONS By the National Credit Union Administration Board on September 17, 2015. Gerard S. Poliquin, Secretary of the Board. PART 741—REQUIREMENTS FOR INSURANCE ■ 3. The authority citation for part 741 continues to read as follows: ■ For the reasons stated above, the NCUA Board amends 12 CFR parts 740, 741, 747, and 796 as follows: PART 740—ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS 4. In § 741.4, paragraph (k)(4)(i) is revised to read as follows: ■ § 741.4 Insurance premium and one percent deposit. * 1. The authority citation for part 740 continues to read as follows: ■ Authority: 12 U.S.C. 1766, 1781, 1785, and 1789. 2. In § 740.4, paragraph (f) is revised to read as follows: ■ § 740.4 Authority: 12 U.S.C. 1757, 1766(a), 1781– 1790, and 1790d; 31 U.S.C. 3717. Requirements for the official sign. * * * * * (f) An insured credit union that fails to comply with Section 205(a) of the Federal Credit Union Act regarding the * * * * (k) * * * (4) * * * (i) Section 202(d)(2)(B) of the Act (12 U.S.C. 1782(d)(2)(B)) provides that the Board may assess and collect a penalty from an insured credit union, up to the amount specified in § 747.1001 of this chapter, for each day the credit union fails or refuses to pay any deposit or premium due to the fund; and * * * * * 5. The authority for part 747 is revised to read as follows: Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101–410; Pub. L. 104–134; Pub. L. 109–351; 120 Stat. 1966. 6. Section 747.1001 is revised to read as follows: ■ § 747.1001 Adjustment of civil monetary penalties by the rate of inflation. (a) NCUA is required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101–410, 104 Stat. 890, as amended (28 U.S.C. 2461 note)) to adjust the maximum amount of each civil monetary penalty within its jurisdiction by the rate of inflation. The following chart displays those adjustments, as calculated pursuant to the statute: U.S. Code citation CMP description (1) 12 U.S.C. 1782(a)(3) ................. Inadvertent failure to submit a report or the inadvertent submission of a false or misleading report. Non-inadvertent failure to submit a report or the non-inadvertent submission of a false or misleading report. Failure to submit a report or the submission of a false or misleading report done knowingly or with reckless disregard. (2) 12 U.S.C. 1782(a)(3) ................. (3) 12 U.S.C. 1782(a)(3) ................. (4) 12 U.S.C. 1782(d)(2)(A) ............ (5) 12 U.S.C. 1782(d)(2)(B) ............ (6) 12 U.S.C. 1782(d)(2)(C) ............ (7) 12 U.S.C. 1785(a)(3) ................. (8) 12 U.S.C. 1785(e) (3) ................ (9) 12 U.S.C. 1786(k)(2)(A) ............ (10) 12 U.S.C. 1786(k)(2)(A) .......... (11) 12 U.S.C. 1786(k)(2)(A) .......... New maximum amount Tier 1 CMP for inadvertent failure to submit certified statement of insured shares and charges due to NCUSIF, or inadvertent submission of false or misleading statement. Tier 2 CMP for non-inadvertent failure to submit certified statement or submission of false or misleading statement. Tier 3 CMP for failure to submit a certified statement or the submission of a false or misleading statement done knowingly or with reckless disregard. Non-compliance with insurance logo requirements .............................. Non-compliance with NCUA security requirements .............................. Tier 1 CMP for violations of law, regulation, and other orders or agreements. Tier 2 CMP for violations of law, regulation, and other orders or agreements and for recklessly engaging in unsafe or unsound practices or breaches of fiduciary duty. Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (natural person). mstockstill on DSK4VPTVN1PROD with RULES (12) 12 U.S.C. 1786(w)(5)(ii) .......... (13) 15 U.S.C. 1639e(k) .................. Non-compliance with senior examiner post-employment restrictions ... Non-compliance with appraisal independence requirements ................ (14) 42 U.S.C. 4012a(f)(5) .............. Non-compliance with flood insurance requirements ............................. VerDate Sep<11>2014 16:11 Sep 22, 2015 Jkt 235001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\23SER1.SGM $3,200. $32,000. $1,425,000 or 1 percent of the total assets of the credit union, whichever is less. $3,200. $32,000. $1,425,000 or 1 percent of the total assets of the credit union, whichever is less. $110. $110. $8,500. $42,500. For a person other than an insured credit union: $1,525,000; For an insured credit union: $1,525,000 or 1 percent of the total assets of the credit union, whichever is less. $275,000. First violation: $11,000 Subsequent violations: $20,000. $2,000. 23SER1 Federal Register / Vol. 80, No. 184 / Wednesday, September 23, 2015 / Rules and Regulations (b) The adjustments displayed in paragraph (a) of this section apply to acts occurring after the date of publication in the Federal Register. PART 796—POST-EMPLOYMENT RESTRICTIONS FOR CERTAIN NCUA EXAMINERS 7. The authority citation for part 796 continues to read as follows: ■ Authority: 12 U.S.C. 1786(w). 8. In § 796.5, paragraph (a)(2) is revised to read as follows: ■ § 796.5 What are the penalties for violating these special post-employment restrictions? (a) * * * (2) Assessed a civil monetary penalty up to the amount specified in § 747.1001 of this chapter. * * * * * [FR Doc. 2015–24157 Filed 9–22–15; 8:45 am] BILLING CODE 7535–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 23 [Docket No. FAA–2015–3881; Special Conditions No. 23–267–SC] Special Conditions: Cirrus Design Corporation, SF50; Full Authority Digital Engine Control (FADEC) System Federal Aviation Administration (FAA), DOT. ACTION: Final special conditions; request for comments. AGENCY: These special conditions are issued for the Cirrus Design Corporation SF50 airplane. This airplane will have a novel or unusual design feature(s) associated with the use of an electronic engine control system instead of a traditional mechanical control system. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. DATES: The effective date of these special conditions is September 23, 2015. We must receive your comments by October 23, 2015. ADDRESSES: Send comments identified by docket number FAA–2015–3881 using any of the following methods: mstockstill on DSK4VPTVN1PROD with RULES SUMMARY: VerDate Sep<11>2014 16:11 Sep 22, 2015 Jkt 235001 • Federal eRegulations Portal: Go to http://www.regulations.gov and follow the online instructions for sending your comments electronically. • Mail: Send comments to Docket Operations, M–30, U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room W12–140, West Building Ground Floor, Washington, DC, 20590–0001. • Hand Delivery of Courier: Take comments to Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m., and 5 p.m., Monday through Friday, except Federal holidays. • Fax: Fax comments to Docket Operations at 202–493–2251. Privacy: The FAA will post all comments it receives, without change, to http://regulations.gov, including any personal information the commenter provides. Using the search function of the docket Web site, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT’s complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477–19478), as well as at http://DocketsInfo.dot.gov. Docket: Background documents or comments received may be read at http://www.regulations.gov at any time. Follow the online instructions for accessing the docket or go to the Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m., and 5 p.m., Monday through Friday, except Federal holidays. Jeff Pretz, Federal Aviation Administration, Small Airplane Directorate, ACE–111, 901 Locust, Room 301, Kansas City, MO 64106; telephone (816) 329–3239; facsimile (816) 329–4090. FOR FURTHER INFORMATION CONTACT: The FAA has determined, in accordance with 5 U.S.C. 553(b)(3)(B) and 553(d)(3), that notice and opportunity for prior public comment hereon are unnecessary because the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance. SUPPLEMENTARY INFORMATION: PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 Special condition number 23–237–SC 23–246–SC 23–253–SC 57289 Company/airplane model Spectrum Aeronautical Model S–40. Cirrus Design Corporation Model SF50. Diamond Aircraft Industries Model DA–40NG. Comments Invited We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments. We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive. Background On September 9, 2008, Cirrus Design Corporation applied for a type certificate for their new Model SF50. On December 11, 2012, Cirrus Design Corporation requested to revise the SF50 part 23 certification basis to include amendment 23–62. The Cirrus Design Corporation SF50 is a low-wing, seven-seat, single-engine turbofanpowered airplane. It incorporates an Electronic Flight Information System (EFIS), pressurized cabin, retractable gear, and a V-tail. The turbofan engine is mounted on the upper fuselage/tail cone along the aircraft centerline. It is constructed largely of carbon and fiberglass composite materials. Like other Cirrus products, the SF50 includes an airframe ballistic parachute system. The model SF50 has a maximum operating altitude of 28,000 feet, where it cruises at speeds up to 300 knots true airspeed. Its maximum operating limit speed (VMO) will not exceed 0.62 Mach. The maximum takeoff weight will be at or below 6,000 pounds with a range at economy cruise of roughly 1,000 nautical miles. Cirrus intends for the SF50 to be certified for single-pilot operations under 14 CFR parts 91 and 135 operating rules. The following operating conditions will be included: • Day and Night VFR • IFR • Flight Into Known Icing The Cirrus Design Corporation SF50 airplane is equipped with a Williams International FJ33–5A turbofan engine, which uses an Electronic Engine Control E:\FR\FM\23SER1.SGM 23SER1

Agencies

[Federal Register Volume 80, Number 184 (Wednesday, September 23, 2015)]
[Rules and Regulations]
[Pages 57284-57289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24157]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Parts 740, 741, 747, and 796

RIN 3133-AE56


Civil Monetary Penalty Inflation Adjustment

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: The NCUA Board (Board) is amending its regulations to adjust 
the maximum amount of each civil monetary penalty (CMP) within its 
jurisdiction to account for inflation. This action, including the 
amount of the adjustments, is required under the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Debt 
Collection Improvement Act of 1996.

DATES: This rule is effective September 23, 2015.

FOR FURTHER INFORMATION CONTACT: Ian Marenna, Trial Attorney, Office of 
General Counsel, 1775 Duke Street, Alexandria, VA 22314, or by 
telephone (703) 518-6540.

[[Page 57285]]


SUPPLEMENTARY INFORMATION:

I. Legal Background
II. Mathematical Calculation of the Adjustments
III. Regulatory Procedures

I. Legal Background

    The Debt Collection Improvement Act of 1996 \1\ (DCIA) amended the 
Federal Civil Penalties Inflation Adjustment Act of 1990 \2\ (FCPIA 
Act) to require every federal agency to enact regulations that adjust 
each CMP provided by law under its jurisdiction by the rate of 
inflation at least once every four years. These periodic adjustments 
are to be calculated pursuant to the inflation adjustment formula in 
section 5(b) of the FCPIA Act. Section 6 of the FCPIA Act specifies 
that inflation-adjusted CMPs will only apply to violations that occur 
after the effective date of the adjustment.
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    \1\ Public Law 104-134, section 31001(s), 110 Stat. 1321-373 
(Apr. 26, 1996). The provision is codified at 28 U.S.C. 2461 note.
    \2\ Public Law 101-410, 104 Stat. 890 (Oct. 5, 1990), also 
codified at 28 U.S.C. 2461 note.
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    The inflation adjustment is based on the percentage increase in the 
Consumer Price Index for all urban customers (CPI-U) published by the 
Department of Labor.\3\ Specifically, section 5(b) of the FCPIA Act 
defines the term ``cost-of-living adjustment'' as ``the percentage (if 
any) for each civil monetary penalty by which--(1) the Consumer Price 
Index for the month of June of the calendar year preceding the 
adjustment, exceeds (2) the Consumer Price Index for the month of June 
of the calendar year in which the amount of such civil monetary penalty 
was last set or adjusted pursuant to law.'' The amount of each 
inflation adjustment must then be rounded to a number prescribed by 
section 5(a) of the FCPIA Act, depending on the amount of the CMP. In 
some cases, this rounding results in no increase to a particular CMP 
maximum amount.
---------------------------------------------------------------------------

    \3\ The CPI-U is published by the Department of Labor, Bureau of 
Labor Statistics, and is available at its Web site: http://www.bls.gov/cpi/.
---------------------------------------------------------------------------

II. Mathematical Calculation of the Adjustments

A. Inflation Percentage and Penalty Adjustment Calculations

    The Board recently became aware that NCUA last reviewed CMPs within 
its jurisdiction for inflation and made corresponding adjustments in 
2009,\4\ and that three CMPs have not previously been adjusted by NCUA. 
This failure to adjust the CMPs within the appropriate timeframe was 
inadvertent. The Board notes, however, that because NCUA has never 
assessed any CMPs at the maximum level, this delay has not affected any 
CMP assessed by the agency.
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    \4\ 74 FR 9349 (Mar. 4, 2009). NCUA also reviewed CMPs for 
inflation and made corresponding adjustments in 2000 and 2004. 65 FR 
57277 (Sept. 22, 2000), 69 FR 60077 (Oct. 7, 2004). All of the CMPs 
that were increased in 2004 were also increased in 2009. Because of 
the rounding procedure, not all CMPs that are reviewed for inflation 
are increased.
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    As noted above, in this final rule, the Board is correcting NCUA's 
oversight by reviewing and adjusting, as appropriate, all relevant 
CMPs. In addition, the Board is publishing a new maximum amount for an 
existing CMP that Congress modified in 2012. For this CMP and the three 
CMPs that have not previously been adjusted, the Board refers to the 
CPI-U for June of the year in which Congress set the amount of the CMP. 
For all other CMPs, the Board refers to the year that it last adjusted 
the maximum amount.
    Consistent with NCUA's 2009 CMP adjustments, the Board provides the 
inflation calculations in a table below. Following the table, the Board 
describes the three CMPs that it is adjusting for the first time and 
the CMP that Congress modified. The table to be published at 12 CFR 
747.1001 shows only the adjusted CMPs, not the calculations. The dollar 
amount in the far right column of the table is the new maximum for each 
CMP or the existing maximum for those CMPs that NCUA is not increasing 
because the rounding procedure in the FCPIA Act results in no increase 
to those maximums.

                                                         Calculation of Maximum CMP Adjustments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Percentage                       Adjusted
             Citation                 Description/Tier \5\     Current maximum ($)   increase (%)    Raw increase    increase ($)   Adjusted maximum ($)
                                                                                          \6\             ($)             \7\
--------------------------------------------------------------------------------------------------------------------------------------------------------
12 U.S.C. 1782(a)(3).............  Inadvertent failure to     2,200...............     38.3 (2000)             843           1,000  3,200.
                                    submit a report or the
                                    inadvertent submission
                                    of a false or misleading
                                    report.
12 U.S.C. 1782(a)(3).............  Non-inadvertent failure    22,000..............     38.3 (2000)           8,426           5,000  32,000.
                                    to submit a report or
                                    the non-inadvertent
                                    submission of a false or
                                    misleading report.
12 U.S.C. 1782(a)(3).............  Failure to submit a        Lesser of 1,300,000      10.5 (2009)         136,500         125,000  Lesser of 1,425,000
                                    report or the submission   or 1% of total CU                                                     or 1% of total CU
                                    of a false or misleading   assets.                                                               assets.
                                    report done knowingly or
                                    with reckless disregard.
12 U.S.C. 1782(d)(2)(A)..........  Tier 1 CMP for             2,200...............     38.3 (2000)             843           1,000  3,200.
                                    inadvertent failure to
                                    submit certified
                                    statement of insured
                                    shares and charges due
                                    to NCUSIF, or
                                    inadvertent submission
                                    of false or misleading
                                    statement.
12 U.S.C. 1782(d)(2)(B)..........  Tier 2 CMP for non-        22,000..............     38.3 (2000)           8,426           5,000  32,000.
                                    inadvertent failure to
                                    submit certified
                                    statement or submission
                                    of false or misleading
                                    statement.
12 U.S.C. 1782(d)(2)(C)..........  Tier 3 CMP for failure to  Lesser of 1,300,000      10.5 (2009)         136,500         125,000  Lesser of 1,425,000
                                    submit a certified         or 1% of total CU                                                     or 1% of total CU
                                    statement or the           assets.                                                               assets.
                                    submission of a false or
                                    misleading statement
                                    done knowingly or with
                                    reckless disregard.
12 U.S.C. 1785(a)(3).............  Non-compliance with        100.................     14.4 (2007)              14              10  110.
                                    insurance logo
                                    requirements.
12 U.S.C. 1785(e)(3).............  Non-compliance with NCUA   110.................     38.3 (2000)              42               0  110.
                                    security requirements.

[[Page 57286]]

 
12 U.S.C. 1786(k)(2)(A)..........  Tier 1 CMP for violations  7,500...............     10.5 (2009)             788           1,000  8,500.
                                    of law, regulation, and
                                    other orders or
                                    agreements.
12 U.S.C. 1786(k)(2)(B)..........  Tier 2 CMP for violations  37,500..............     10.5 (2009)           3,938           5,000  42,500.
                                    of law, regulation, and
                                    other orders or
                                    agreements and for
                                    recklessly engaging in
                                    unsafe or unsound
                                    practices or breaches of
                                    fiduciary duty.
12 U.S.C. 1786(k)(2)(C)..........  Tier 3 CMP for knowingly   1,375,000...........     10.5 (2009)         144,375         150,000  1,525,000.
                                    committing the
                                    violations under Tier 1
                                    or 2 (natural person).
12 U.S.C. 1786(k)(2)(C)..........  Tier 3 (same) (CU).......  Lesser of 1,375,000      10.5 (2009)         144,375         150,000  Lesser of 1,525,000
                                                               or 1% of total CU                                                     or 1% of total CU
                                                               assets.                                                               assets.
12 U.S.C. 1786(w)(5)(A)(ii)......  Non-compliance with        250,000.............     22.5 (2005)          56,250          25,000  275,000.
                                    senior examiner post-
                                    employment restrictions.
15 U.S.C. 1639e(k)...............  Non-compliance with        10,000..............      5.6 (2011)             560           1,000  11,000.
                                    appraisal independence
                                    standards (first
                                    violation).
15 U.S.C. 1639e(k)...............  Subsequent violations of   20,000..............      5.6 (2011)           1,120               0  20,000.
                                    the same.
42 U.S.C. 4012a(f)(5)............  Non-compliance with flood  2,000...............      2.9 (2012)              78               0  2,000.
                                    insurance requirements.
--------------------------------------------------------------------------------------------------------------------------------------------------------

B. Description of Initial Adjustments and Modified CMP

    NCUA recently determined that three penalties that it has not 
previously adjusted for inflation meet the definition of CMPs. Also, 
Congress has changed the amount and structure of one additional penalty 
that the Board has previously adjusted for inflation. Below, the Board 
describes the three CMPs that NCUA is reviewing for adjustment for the 
first time and the additional CMP that Congress changed in 2012. The 
Board does not describe the other CMPs included in the table above, as 
NCUA reviewed all of the other CMPs for inflation in 2009 and made 
adjustments as appropriate under the rounding procedure.
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    \5\ The table uses shorthand descriptions of CMP tiers. Refer to 
the U.S. Code citations for complete descriptions.
    \6\ The year that NCUA last adjusted the CMP or that Congress 
set it is shown in parentheses. With the exception of 12 U.S.C. 
1785(a)(3), 12 U.S.C. 1786(w)(5)(A)(ii), and 15 U.S.C. 1639e(k), 
NCUA reviewed all of the CMPs in the table for inflation in 2009. 
The rounding procedure described in the next footnote resulted in 
some of these CMPs remaining at the same level. The year in 
parentheses is the last year the maximum CMP was actually increased, 
or, for 15 U.S.C. 1639e(k) and 42 U.S.C. 4012a(f)(5), the year that 
Congress set the maximum CMP amounts. The percentage change used in 
this column to determine the raw increase in each CMP is the 
difference between the June 2014 CPI-U (238.343) and the CPI-U for 
June of the relevant year noted in parentheses, divided by the CPI-U 
for June of the relevant year. The CPI-U figures are available at 
http://www.bls.gov/cpi/.
    \7\ The FCPIA Act's rounding rules require that an increase of a 
CMP be rounded to the nearest multiple of: $10 in the case of 
penalties less than or equal to $100; $100 in the case of penalties 
greater than $100 but less than or equal to $1,000; $1,000 in the 
case of penalties greater than $1,000 but less than or equal to 
$10,000; $5,000 in the case of penalties greater than $10,000 but 
less than or equal to $100,000; $10,000 in the case of penalties 
greater than $100,000 but less than or equal to $200,000; and 
$25,000 in the case of penalties greater than $200,000. Section 5(a) 
of the FCPIA Act, 28 U.S.C. 2461 note. Also, the first adjustment of 
any penalty is limited to 10 percent of the maximum penalty amount. 
Public Law 104-134, Sec.  31001(s)(2), codified at 28 U.S.C. 2461 
note. The 10 percent cap only affects the increase of the CMP under 
12 U.S.C. 1786(w)(5)(A)(ii).
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1. 12 U.S.C. 1785(a)(3)
    Federally insured credit unions must display signs relating to the 
insurance of share accounts.\8\ Under the Federal Credit Union Act, the 
Board may impose a penalty of $100 for each day that a federally 
insured credit union violates this requirement or the Board's 
implementing regulations.\9\ The Board has prescribed regulations on 
this subject.\10\ Congress added this penalty to the Federal Credit 
Union Act in 2006,\11\ but it was not effective until 2007.\12\
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    \8\ 12 U.S.C. 1785(a)(1).
    \9\ 12 U.S.C. 1785(a)(3).
    \10\ 12 CFR 740.4.
    \11\ Public Law 109-173, section 2, 119 Stat. 3604-605 (Feb. 15, 
2006).
    \12\ Congress set the effective date for section 2 of Public Law 
109-173, including the penalty provision, as the date on which the 
final regulations required by section 2109(a)(2) of the Federal 
Insurance Reform Act of 2005 took effect. Id. Section 2(e). These 
regulations took effect on January 1, 2007. 71 FR 69323-01 (Nov. 30, 
2006). Accordingly, the Board refers to the CPI-U for June 2007 to 
adjust this CMP for inflation.
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2. 12 U.S.C. 1786(w)(5)(A)(ii)
    Congress amended the Federal Credit Union Act in 2004 to impose 
post-NCUA employment restrictions on NCUA senior examiners.\13\ The 
provision authorizes the Board to impose a CMP of not more than 
$250,000 in an administrative proceeding or civil action against former 
NCUA senior examiners who violate conflict-of-interest restrictions 
that apply to their post-NCUA employment.\14\ The Board has prescribed 
regulations to implement these restrictions and is making a conforming 
amendment to the penalty amount set forth in that part.\15\
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    \13\ Public Law 108-458, section 6303(c), 118 Stat. 3753-754 
(Dec. 17, 2004). Section 6303(d) stated that this provision would 
take effect at the end of the 12-month period following its 
enactment. The public law was enacted on December 17, 2004, so the 
CMP became effective in 2005. The Board uses the June 2005 CPI-U to 
adjust this CMP for inflation.
    \14\ 12 U.S.C. 1785(w)(5)(A)(ii).
    \15\ 12 CFR 796.5.
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3. 15 U.S.C. 1639e(k)
    The Dodd-Frank Wall Street Reform and Consumer Protection Act \16\

[[Page 57287]]

amended the Truth in Lending Act to establish independence standards 
for property appraisals. The provision authorizes the Board and other 
federal agencies to assess a civil penalty against persons who violate 
regulations implementing this law.\17\
---------------------------------------------------------------------------

    \16\ Public L.aw 111-203, title XIV, section 1472(a), 124 Stat. 
2187-190 (Jul. 21, 2010). Title XIV, Section 1400(c) stated that any 
section or provision of that title would become effective once the 
regulation implementing the section or provision became effective. 
On October 28, 2010, the Board of Governors of the Federal Reserve 
System published an interim final rule to implement the appraisal 
independence section, as required by 15 U.S.C. 1639e(g)(2). 75 FR 
66554 (Oct. 28, 2010). The interim final rule had an effective date 
of December 27, 2010. Compliance with the new standards, however, 
was optional until April 2011, which means that the Board and other 
agencies could not have imposed a penalty for violating this law 
before 2011. Therefore, the Board refers to the June 2011 CPI-U to 
adjust this CMP for inflation.
    \17\ 15 U.S.C. 1639e(k) refers to 15 U.S.C. 1607(a), which 
authorizes the Board to enforce the appraisal independence 
requirements, among other provisions.
---------------------------------------------------------------------------

4. 42 U.S.C. 4012a(f)(5)
    The Board is authorized to impose CMPs against a credit union that 
is found to have a pattern or practice of committing certain specified 
actions in violation of the National Flood Insurance Program. The Board 
first adjusted this CMP for inflation in 2000.\18\ At that time, 42 
U.S.C. 4012a(f)(5) authorized a $350 penalty for each violation, 
subject to an annual cap of $100,000. The Board also adjusted this CMP 
for inflation in 2004 \19\ and 2009.\20\ Congress amended this CMP in 
2012 to increase the amount per violation to $2,000 and eliminate the 
annual cap.\21\ NCUA's calculation of inflation results in no increase 
to this modified CMP, but the Board includes this description to 
explain that the CMP has changed.
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    \18\ 65 FR 57277 (Sept. 22, 2000).
    \19\ 69 FR 60077 (Oct. 7, 2004).
    \20\ 74 FR 9349 (Mar. 4, 2009).
    \21\ Public Law 112-141, section 100208, 126 Stat. 919 (Jul. 6, 
2012). The Board refers to the June 2012 CPI-U to adjust this CMP 
because Congress set the modified CMP in 2012.
---------------------------------------------------------------------------

C. Conforming Amendments

    The Board is also making conforming amendments to other parts of 
NCUA's regulations that state a specific maximum dollar amount for a 
CMP.\22\ The final rule replaces the current specific dollar amounts 
with a non-numerical reference to the inflation-adjusted maximum 
amounts table at 12 CFR 747.1001.
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    \22\ 12 CFR 740.4(f); 12 CFR 741.4(k)(4)(i); 12 CFR 796.5(a)(2).
---------------------------------------------------------------------------

III. Regulatory Procedures

A. Final Rule Under the Administrative Procedure Act

    The FCPIA Act requires adjustments of CMPs for inflation to occur 
at least every four years. Federal agencies have no discretion in 
calculating the adjustments. Thus, the Board cannot vary the amount of 
the adjustments to reflect any views or suggestions submitted by 
commenters. Further, the regulation is ministerial and technical. For 
all these reasons, public notice and comment for this new regulation is 
unnecessary, impracticable, and contrary to the public interest under 
the Administrative Procedure Act (APA).\23\ For the same reasons, there 
is no good cause to impose a 30-day delayed effective date requirement 
under the APA.\24\
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    \23\ 5 U.S.C. 553(b)(3)(B).
    \24\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act requires the Board to prepare an 
analysis to describe any significant economic impact a regulation may 
have on a substantial number of small entities.\25\ For purposes of 
this analysis, the Board considers small credit unions to be those 
having under $50 million in assets.\26\ This final rule would not have 
a significant economic impact on a substantial number of small credit 
unions because it only affects the maximum amounts of CMPs that may be 
assessed in individual cases, which are not numerous and generally do 
not involve assessments at the maximum level. In addition, several of 
the CMPs are limited to a percentage of a credit union's assets. 
Finally, in assessing CMPs, the Board generally must consider a party's 
financial resources.\27\ Because this final rule would affect few, if 
any, small entities, the Board certifies that the final rule will not 
have a significant economic impact on small entities.
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    \25\ 5 U.S.C. 603(a).
    \26\ Interpretive Ruling and Policy Statement 03-2, 68 FR 31949 
(May 29, 2003), as amended by Interpretive Ruling and Policy 
Statement 13-1, 78 FR 4032 (Jan. 18, 2013).
    \27\ 12 U.S.C. 1786(k)(2)(G)(i).
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C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in 
which an agency creates a new paperwork burden on regulated entities or 
modifies an existing burden.\28\ For purposes of the PRA, a paperwork 
burden may take the form of either a reporting or a recordkeeping 
requirement, both referred to as information collections. This final 
rule adjusts the maximum amounts of certain CMPs that the Board may 
assess against individuals, entities, or credit unions but does not 
require any reporting or recordkeeping. Therefore, this final rule will 
not create new paperwork burdens or modify any existing paperwork 
burdens.
---------------------------------------------------------------------------

    \28\ 44 U.S.C. 3507(d); 5 CFR part 1320.
---------------------------------------------------------------------------

D. Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. In 
adherence to fundamental federalism principles, NCUA, an independent 
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies 
with the executive order. This final rule adjusts the maximum amounts 
of certain CMPs that the Board may assess against individuals, 
entities, and federally insured credit unions, including state-
chartered credit unions. However, the final rule does not create any 
new authority or alter the underlying statutory authorities that enable 
the Board to assess CMPs. Accordingly, this rule will not have a 
substantial direct effect on the states, on the connection between the 
national government and the states, or on the distribution of power and 
responsibilities among the various levels of government. The Board has 
determined this rule does not constitute a policy that has federalism 
implications for purposes of the executive order.

E. Assessment of Federal Regulations and Policies on Families

    The Board 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.\29\
---------------------------------------------------------------------------

    \29\ Public Law 105-277, 112 Stat. 2681 (Oct. 21, 1998).
---------------------------------------------------------------------------

F. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 \30\ 
(SBREFA) provides generally for congressional review of agency rules. A 
reporting requirement is triggered in instances where the Board issues 
a final rule as defined by Section 551 of the Administrative Procedure 
Act.\31\ The Office of Management and Budget has determined that this 
final rule is not a ``major rule'' within the meaning of the relevant 
sections of SBREFA.
---------------------------------------------------------------------------

    \30\ Public Law 104-121, 110 Stat. 857 (Mar. 29, 1996).
    \31\ 5 U.S.C. 551.
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 740

    Advertisements, Credit unions.

12 CFR Part 741

    Credit, Credit unions, Reporting and recordkeeping requirements, 
Share insurance.

12 CFR Part 747

    Credit unions, Civil monetary penalties.

[[Page 57288]]

12 CFR Part 796

    Conflicts of interest, Credit unions, Ethical conduct, Government 
employees.

    By the National Credit Union Administration Board on September 
17, 2015.
Gerard S. Poliquin,
Secretary of the Board.

    For the reasons stated above, the NCUA Board amends 12 CFR parts 
740, 741, 747, and 796 as follows:

PART 740--ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS

0
1. The authority citation for part 740 continues to read as follows:

    Authority:  12 U.S.C. 1766, 1781, 1785, and 1789.

0
2. In Sec.  740.4, paragraph (f) is revised to read as follows:


Sec.  740.4  Requirements for the official sign.

* * * * *
    (f) An insured credit union that fails to comply with Section 
205(a) of the Federal Credit Union Act regarding the official sign, 12 
U.S.C. 1785(a), or any requirement in this part is subject to a daily 
penalty in the amount set forth in Sec.  747.1001 of this chapter.

PART 741--REQUIREMENTS FOR INSURANCE

0
3. The authority citation for part 741 continues to read as follows:

    Authority:  12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31 
U.S.C. 3717.


0
4. In Sec.  741.4, paragraph (k)(4)(i) is revised to read as follows:


Sec.  741.4  Insurance premium and one percent deposit.

* * * * *
    (k) * * *
    (4) * * *
    (i) Section 202(d)(2)(B) of the Act (12 U.S.C. 1782(d)(2)(B)) 
provides that the Board may assess and collect a penalty from an 
insured credit union, up to the amount specified in Sec.  747.1001 of 
this chapter, for each day the credit union fails or refuses to pay any 
deposit or premium due to the fund; and
* * * * *

PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF 
PRACTICE AND PROCEDURE, AND INVESTIGATIONS

0
5. The authority for part 747 is revised to read as follows:

    Authority:  12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 
1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 
104-134; Pub. L. 109-351; 120 Stat. 1966.

0
6. Section 747.1001 is revised to read as follows:


Sec.  747.1001  Adjustment of civil monetary penalties by the rate of 
inflation.

    (a) NCUA is required by the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, as amended (28 
U.S.C. 2461 note)) to adjust the maximum amount of each civil monetary 
penalty within its jurisdiction by the rate of inflation. The following 
chart displays those adjustments, as calculated pursuant to the 
statute:

------------------------------------------------------------------------
                                                           New maximum
      U.S. Code citation            CMP description          amount
------------------------------------------------------------------------
(1) 12 U.S.C. 1782(a)(3)......  Inadvertent failure to  $3,200.
                                 submit a report or
                                 the inadvertent
                                 submission of a false
                                 or misleading report.
(2) 12 U.S.C. 1782(a)(3)......  Non-inadvertent         $32,000.
                                 failure to submit a
                                 report or the non-
                                 inadvertent
                                 submission of a false
                                 or misleading report.
(3) 12 U.S.C. 1782(a)(3)......  Failure to submit a     $1,425,000 or 1
                                 report or the           percent of the
                                 submission of a false   total assets of
                                 or misleading report    the credit
                                 done knowingly or       union,
                                 with reckless           whichever is
                                 disregard.              less.
(4) 12 U.S.C. 1782(d)(2)(A)...  Tier 1 CMP for          $3,200.
                                 inadvertent failure
                                 to submit certified
                                 statement of insured
                                 shares and charges
                                 due to NCUSIF, or
                                 inadvertent
                                 submission of false
                                 or misleading
                                 statement.
(5) 12 U.S.C. 1782(d)(2)(B)...  Tier 2 CMP for non-     $32,000.
                                 inadvertent failure
                                 to submit certified
                                 statement or
                                 submission of false
                                 or misleading
                                 statement.
(6) 12 U.S.C. 1782(d)(2)(C)...  Tier 3 CMP for failure  $1,425,000 or 1
                                 to submit a certified   percent of the
                                 statement or the        total assets of
                                 submission of a false   the credit
                                 or misleading           union,
                                 statement done          whichever is
                                 knowingly or with       less.
                                 reckless disregard.
(7) 12 U.S.C. 1785(a)(3)......  Non-compliance with     $110.
                                 insurance logo
                                 requirements.
(8) 12 U.S.C. 1785(e) (3).....  Non-compliance with     $110.
                                 NCUA security
                                 requirements.
(9) 12 U.S.C. 1786(k)(2)(A)...  Tier 1 CMP for          $8,500.
                                 violations of law,
                                 regulation, and other
                                 orders or agreements.
(10) 12 U.S.C. 1786(k)(2)(A)..  Tier 2 CMP for          $42,500.
                                 violations of law,
                                 regulation, and other
                                 orders or agreements
                                 and for recklessly
                                 engaging in unsafe or
                                 unsound practices or
                                 breaches of fiduciary
                                 duty.
(11) 12 U.S.C. 1786(k)(2)(A)..  Tier 3 CMP for          For a person
                                 knowingly committing    other than an
                                 the violations under    insured credit
                                 Tier 1 or 2 (natural    union:
                                 person).                $1,525,000; For
                                                         an insured
                                                         credit union:
                                                         $1,525,000 or 1
                                                         percent of the
                                                         total assets of
                                                         the credit
                                                         union,
                                                         whichever is
                                                         less.
(12) 12 U.S.C. 1786(w)(5)(ii).  Non-compliance with     $275,000.
                                 senior examiner post-
                                 employment
                                 restrictions.
(13) 15 U.S.C. 1639e(k).......  Non-compliance with     First violation:
                                 appraisal               $11,000
                                 independence            Subsequent
                                 requirements.           violations:
                                                         $20,000.
(14) 42 U.S.C. 4012a(f)(5)....  Non-compliance with     $2,000.
                                 flood insurance
                                 requirements.
------------------------------------------------------------------------


[[Page 57289]]

    (b) The adjustments displayed in paragraph (a) of this section 
apply to acts occurring after the date of publication in the Federal 
Register.

PART 796--POST-EMPLOYMENT RESTRICTIONS FOR CERTAIN NCUA EXAMINERS

0
7. The authority citation for part 796 continues to read as follows:

    Authority:  12 U.S.C. 1786(w).


0
8. In Sec.  796.5, paragraph (a)(2) is revised to read as follows:


Sec.  796.5  What are the penalties for violating these special post-
employment restrictions?

    (a) * * *
    (2) Assessed a civil monetary penalty up to the amount specified in 
Sec.  747.1001 of this chapter.
* * * * *
[FR Doc. 2015-24157 Filed 9-22-15; 8:45 am]
 BILLING CODE 7535-01-P