Civil Penalty Inflation Adjustments, 38569-38572 [2016-14031]
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38569
Rules and Regulations
Federal Register
Vol. 81, No. 114
Tuesday, June 14, 2016
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1083
[Docket No.: CFPB–2016–0028]
RIN 3170–AA62
Civil Penalty Inflation Adjustments
Bureau of Consumer Financial
Protection.
ACTION: Interim final rule with request
for public comment.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is
publishing for public comment an
interim final rule to adjust the civil
monetary penalties within the Bureau’s
jurisdiction for inflation, as required by
the Federal Civil Penalties Inflation
Adjustment Act of 1990 (the Inflation
Adjustment Act or the Act), as amended
by the Debt Collection Improvement Act
of 1996 and further amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (2015 Act).
DATES: This rule is effective on July 14,
2016. Comments must be received on or
before July 14, 2016.
ADDRESSES: You may submit comments,
identified by Docket No. CFPB–2016–
0028 or RIN 3170–AA62, by any of the
following methods:
• Email: FederalRegisterComments
@cfpb.gov. Include Docket No. CFPB–
2016–0028 or RIN 3170–AA62 in the
subject line of the email.
• Electronic: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Monica Jackson, Office of the
Executive Secretary, Consumer
Financial Protection Bureau, 1700 G
Street NW., Washington, DC 20552.
• Hand Delivery/Courier: Monica
Jackson, Office of the Executive
Secretary, Consumer Financial
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SUMMARY:
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Protection Bureau, 1275 First Street NE.,
Washington, DC 20002.
Instructions: All submissions should
include the agency name and docket
number or Regulatory Information
Number (RIN) for this rulemaking.
Because paper mail in the Washington,
DC area and at the Bureau is subject to
delay, commenters are encouraged to
submit comments electronically. In
general, all comments received will be
posted without change to https://
www.regulations.gov. In addition,
comments will be available for public
inspection and copying at 1275 First
Street NE., Washington, DC 20002, on
official business days between the hours
of 10 a.m. and 5 p.m. eastern time. You
can make an appointment to inspect the
documents by telephoning (202) 435–
7275.
All comments, including attachments
and other supporting materials, will
become part of the public record and
subject to public disclosure. Sensitive
personal information, such as account
numbers or Social Security numbers,
should not be included. Comments
generally will not be edited to remove
any identifying or contact information.
FOR FURTHER INFORMATION CONTACT:
Kristin Bateman, Counsel, Legal
Division, Consumer Financial
Protection Bureau, at (202) 435–7700.
SUPPLEMENTARY INFORMATION:
I. Background
The Inflation Adjustment Act, as
amended by the 2015 Act, requires
Federal agencies to adjust the civil
penalty amounts within their
jurisdiction for inflation by July 1, 2016,
and then by January 15 every year
thereafter.1 Agencies must make the
initial 2016 adjustments through an
interim final rulemaking published in
the Federal Register.2 Under the
amended Act, any increase in a civil
1 See
28 U.S.C. 2461 note.
statute also provides that, for the initial
2016 adjustment, an agency may adjust a civil
penalty by less than the otherwise required amount
if (1) it determines, after publishing a notice of
proposed rulemaking and providing an opportunity
for comment, that increasing the civil penalty by
the otherwise required amount would have a
negative economic impact or that the social costs
of increasing the civil penalty by the otherwise
required amount outweigh the benefits, and (2) the
Director of the Office of Management and Budget
concurs with that determination. Inflation
Adjustment Act section 4(c), codified at 28 U.S.C.
2461 note. The Bureau has chosen not to make use
of this exception.
2 The
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penalty made under the Act will apply
to penalties assessed after the increase
takes effect, including penalties whose
associated violation predated the
increase.3 The inflation adjustments
mandated by the Act serve to maintain
the deterrent effect of civil penalties and
to promote compliance with the law.
II. Method of Calculation
The Inflation Adjustment Act
prescribes a specific method for
calculating the inflation adjustments.4
As amended by the 2015 Act, the Act
provides that the maximum (and
minimum, if applicable) amounts for
each civil penalty must be increased by
the ‘‘cost-of-living adjustment,’’ a term
that the Act defines. For purposes of the
initial adjustments that agencies must
make by July 1, 2016, the ‘‘cost-of-living
adjustment’’ is defined as the percentage
increase in the Consumer Price Index
between (1) October of the calendar year
during which the civil penalty amount
was established or adjusted under a
provision of law other than the Inflation
Adjustment Act and (2) October 2015.
The Consumer Price Index to be used
for purposes of this calculation is the
Consumer Price Index for all urban
consumers (CPI–U) published by the
Department of Labor.5 The Office of
Management and Budget (OMB) has
published guidance for implementing
this requirement.6 OMB’s guidance
memorandum provides multipliers that
agencies should use to adjust penalty
amounts based on the year the penalty
was established or last adjusted under
authority other than the Inflation
Adjustment Act.
To determine the new penalty
amount, the agency must apply the
multiplier reflecting the ‘‘cost-of-living
adjustment’’ 7 to the penalty amount as
it was most recently established or
adjusted under a provision of law other
3 Inflation Adjustment Act section 6, codified at
28 U.S.C. 2461 note.
4 Inflation Adjustment Act section 5, codified at
28 U.S.C. 2461 note.
5 U.S. Dep’t of Labor, Bureau of Labor Statistics,
CPI Tables, https://www.bls.gov/cpi/#tables.
6 Memorandum from Shaun Donovan, Director,
Office of Management and Budget, to the Heads of
Executive Departments and Agencies (Feb. 24,
2016), https://www.whitehouse.gov/sites/default/
files/omb/memoranda/2016/m-16-06.pdf.
7 The multipliers reflecting the ‘‘cost-of-living
adjustment’’ that OMB provides are rounded to five
decimal places. The Bureau has used the OMB
multipliers in calculating its civil penalty
adjustments.
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III. Description of the Interim Final
Rule
than the Inflation Adjustment Act. The
agency must then round that amount to
the nearest dollar.8 The increase made
by this initial adjustment may not
exceed 150 percent of the penalty
amount in effect on the date the 2015
Act was enacted, November 2, 2015.
This interim final rule establishes the
inflation-adjusted maximum amounts
for each civil penalty within the
Bureau’s jurisdiction. The following
table lists the civil penalties within the
Bureau’s jurisdiction and summarizes
the relevant information needed to
calculate the inflation adjustments
pursuant to the statutory method.
Penalty amount
as established or
last adjusted
under a provision
other than the
inflation
adjustment act
Year penalty
established or
last adjusted
under a provision
other than the
inflation
adjustment act
Penalty amount
in effect on
November 2,
2015
Law
Penalty description
Consumer Financial Protection Act, 12 U.S.C.
5565(c)(2)(A).
Consumer Financial Protection Act, 12 U.S.C.
5565(c)(2)(B).
Consumer Financial Protection Act, 12 U.S.C.
5565(c)(2)(C).
Interstate Land Sales Full Disclosure Act, 15 U.S.C.
1717a(a)(2).
Interstate Land Sales Full Disclosure Act, 15 U.S.C.
1717a(a)(2).
Real Estate Settlement Procedures Act, 12 U.S.C.
2609(d)(1).
Real Estate Settlement Procedures Act, 12 U.S.C.
2609(d)(1).
Real Estate Settlement Procedures Act, 12 U.S.C.
2609(d)(2)(A).
SAFE Act, 12 U.S.C. 5113(d)(2) .....................................
Truth in Lending Act, 15 U.S.C. 1639e(k)(1) ..................
Truth in Lending Act, 15 U.S.C. 1639e(k)(2) ..................
Tier 1 penalty .....................
$5,000
92010
10$5,000
Tier 2 penalty .....................
25,000
112010
1225,000
Tier 3 penalty .....................
1,000,000
132010
141,000,000
Per violation .......................
1,000
151989
161,000
Annual cap .........................
1,000,000
171989
181,000,000
Per failure ..........................
50
191990
2050
Annual cap .........................
100,000
211990
22100,000
Per failure, where intentional.
Per violation .......................
First violation ......................
Subsequent violations ........
100
231990
24100
25,000
10,000
20,000
252008
2625,000
272010
2810,000
292010
3020,000
provision other than the Inflation
Adjustment Act by the OMB multiplier
corresponding to the appropriate year,
and then rounded that amount to the
nearest dollar, to calculate the new,
inflation-adjusted civil penalty amount.
The Bureau then confirmed that the
amount by which each civil penalty
The Bureau followed the procedure
outlined above in part II to calculate the
adjusted civil penalty amounts. In
accordance with the statutory
requirements and OMB guidance, the
Bureau multiplied each penalty amount
as established or last adjusted under a
increased did not exceed 150 percent of
the corresponding civil penalty level in
effect on November 2, 2015. None of the
increases exceeded this 150-percent
threshold. The following chart
summarizes the results of these
calculations:
Penalty amount
as established or
last adjusted
under a provision
other than the
inflation
adjustment act
Year penalty
established or
last adjusted
under a provision
other than the
inflation
adjustment act
OMB
‘‘cost-of-living
adjustment’’
multiplier
New penalty
amount
Penalty description
Consumer Financial Protection Act, 12
U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12
U.S.C. 5565(c)(2)(B).
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Law
Tier 1 penalty ...........
$5,000
2010
1.08745
$5,437
Tier 2 penalty ...........
25,000
2010
1.08745
27,186
8 In rounding to the nearest dollar, the Bureau has
rounded down where the digit immediately
following the decimal point is less than 5 and has
rounded up where the digit immediately following
the decimal point is 5 or greater.
9 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, section
1055(c)(2)(A), 124 Stat. 1376, 2030 (2010).
10 12 U.S.C. 5565(c)(2)(A) (2015).
11 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, section
1055(c)(2)(B), 124 Stat. 1376, 2030 (2010).
12 12 U.S.C. 5565(c)(2)(B) (2015).
13 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, section
1055(c)(2)(C), 124 Stat. 1376, 2030 (2010).
14 12 U.S.C. 5565(c)(2)(C) (2015).
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15 Department of Housing and Urban
Development Reform Act, Public Law 101–235,
section 111, 103 Stat. 1987, 2014 (1989).
16 15 U.S.C. 1717a(a)(2) (2015).
17 Department of Housing and Urban
Development Reform Act, Public Law 101–235,
section 111, 103 Stat. 1987, 2014 (1989).
18 15 U.S.C. 1717a(a)(2) (2015).
19 Cranston–Gonzalez National Affordable
Housing Act, Public Law 101–625, section
942(a)(2), 104 Stat. 4079, 4412 (1990).
20 12 U.S.C. 2609(d)(1) (2015).
21 Cranston–Gonzalez National Affordable
Housing Act, Public Law 101–625, section
942(a)(2), 104 Stat. 4079, 4412 (1990).
22 12 U.S.C. 2609(d)(1) (2015).
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23 Cranston–Gonzalez National Affordable
Housing Act, Public Law 101–625, section
942(a)(2), 104 Stat. 4079, 4412 (1990).
24 12 U.S.C. 2609(d)(2)(A) (2015).
25 Housing and Economic Recovery Act of 2008,
Public Law 110–289, section 1514(d)(2), 122 Stat.
2654, 2823 (2008).
26 12 U.S.C. 5113(d)(2) (2015).
27 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, section
1472(a), 124 Stat. 1376, 2189 (2010).
28 15 U.S.C. 1639e(k)(1) (2015).
29 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, section
1472(a), 124 Stat. 1376, 2190 (2010).
30 15 U.S.C. 1639e(k)(2) (2015).
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Penalty amount
as established or
last adjusted
under a provision
other than the
inflation
adjustment act
Year penalty
established or
last adjusted
under a provision
other than the
inflation
adjustment act
OMB
‘‘cost-of-living
adjustment’’
multiplier
New penalty
amount
Law
Penalty description
Consumer Financial Protection Act, 12
U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure Act,
15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Act,
15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act,
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,
12 U.S.C. 2609(d)(2)(A).
SAFE Act, 12 U.S.C. 5113(d)(2) ...............
Truth in Lending Act, 15 U.S.C.
1639e(k)(1).
Truth in Lending Act, 15 U.S.C.
1639e(k)(2).
Tier 3 penalty ...........
1,000,000
2010
1.08745
1,087,450
Per violation .............
1,000
1989
1.89361
1,894
Annual cap ..............
1,000,000
1989
1.89361
1,893,610
Per failure ................
50
1990
1.78156
89
Annual cap ..............
100,000
1990
1.78156
178,156
Per failure, where intentional.
Per violation .............
First violation ...........
100
1990
1.78156
178
25,000
10,000
2008
2010
1.09819
1.08745
27,455
10,875
20,000
2010
1.08745
21,749
Subsequent violations.
This rule codifies these civil penalty
amounts by adding new part 1083 to
title 12 of the CFR and new § 1083.1
therein.
IV. Legal Authority and Effective Date
The Bureau issues this rule under the
Federal Civil Penalties Inflation
Adjustment Act of 1990,31 as amended
by the Debt Collection Improvement Act
of 1996,32 and further amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015,33 which requires the Bureau to
adjust the civil penalties within its
jurisdiction for inflation according to a
statutorily prescribed formula.
The Administrative Procedure Act
(APA) generally requires an agency to
publish a rule at least 30 days before its
effective date.34 This rule satisfies that
requirement.
V. Request for Comment
Although notice and comment
rulemaking procedures are not required,
the Bureau invites comments on this
notice. Commenters are specifically
encouraged to identify any technical
issues raised by the rule.
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VI. Regulatory Requirements
Notice and Comment
Under the APA, notice and
opportunity for public comment are not
required if the Bureau finds that notice
and public comment are impracticable,
unnecessary, or contrary to the public
31 Public
Law 101–410, 104 Stat. 890 (1990).
Law 104–134, section 31001(s)(1), 110
Stat. 1321, 1321–373 (1996).
33 Public Law 114–74, section 701, 129 Stat. 584,
599 (2015).
34 See 5 U.S.C. 553(d).
32 Public
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interest.35 This interim final rule adjusts
the civil penalty amounts within the
Bureau’s jurisdiction for inflation, as
required by the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended by the Debt Collection
Improvement Act of 1996 and further
amended by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015. The amendments in this
interim final rule are technical, and they
merely apply the statutory method for
adjusting civil penalty amounts. For
these reasons, the Bureau has
determined that publishing a notice of
proposed rulemaking and providing
opportunity for public comment are
unnecessary. Moreover, the statute
expressly requires the Bureau to make
these initial adjustments through an
interim final rulemaking to be published
by July 1, 2016,36 and OMB’s guidance
confirms that agencies need not
complete a notice-and-comment process
before promulgating the rule.37
Therefore, the amendments are adopted
in final form.
Regulatory Flexibility Act
Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis.38
35 5
U.S.C. 553(b)(B).
Adjustment Act, section 4(b)(1)(A),
codified at 28 U.S.C. 2461 note.
37 Memorandum from Shaun Donovan, Director,
Office of Management and Budget, to the Heads of
Executive Departments and Agencies 3 (Feb. 24,
2016), https://www.whitehouse.gov/sites/default/
files/omb/memoranda/2016/m-16-06.pdf.
38 5 U.S.C. 603(a), 604(a).
36 Inflation
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Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995,39 the Bureau
reviewed this interim final rule. No
collections of information pursuant to
the Paperwork Reduction Act are
contained in the interim final rule.
List of Subjects in 12 CFR Part 1083
Administrative practice and
procedure, Consumer protection,
Penalties.
Authority and Issuance
For the reasons set forth in the
preamble, the Bureau adds part 1083 to
chapter X in title 12 of the Code of
Federal Regulations to read as set forth
below:
PART 1083—CIVIL PENALTY
ADJUSTMENTS
Sec.
1083.1 Adjustments of civil penalty
amounts.
Authority: 12 U.S.C. 2609(d); 12 U.S.C.
5113(d)(2); 12 U.S.C. 5565(c); 15 U.S.C.
1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461
note.
§ 1083.1 Adjustments of civil penalty
amounts.
(a) The maximum amount of each
civil penalty within the jurisdiction of
the Consumer Financial Protection
Bureau to impose is adjusted in
accordance with the Federal Civil
Penalties Inflation Adjustment Act of
1990, as amended by the Debt
Collection Improvement Act of 1996
and further amended by the Federal
39 44
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U.S.C. 3506; 5 CFR 1320.
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Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, (28 U.S.C.
2461 note) as follows:
U.S. code citation
12
12
12
15
15
12
12
12
12
15
15
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
Civil penalty description
5565(c)(2)(A) ...........................................................
5565(c)(2)(B) ...........................................................
5565(c)(2)(C) ..........................................................
1717a(a)(2) .............................................................
1717a(a)(2) .............................................................
2609(d)(1) ...............................................................
2609(d)(1) ...............................................................
2609(d)(2)(A) ..........................................................
5113(d)(2) ...............................................................
1639e(k)(1) .............................................................
1639e(k)(2) .............................................................
(b) The adjustments in paragraph (a)
of this section shall apply to civil
penalties assessed after July 14, 2016,
regardless of when the violation for
which the penalty is assessed occurred.
Dated: June 7, 2016.
Richard Cordray,
Director, Bureau of Consumer Financial
Protection.
[FR Doc. 2016–14031 Filed 6–13–16; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 1, 11, 121, 125, and 135
Office of the Secretary
14 CFR Part 382
[Docket No.: FAA–2014–0554; Amdt. Nos.
1–69; 11–60; 121–374, 125–65, 135–133]
RIN 2120–AK32
Acceptance Criteria for Portable
Oxygen Concentrators Used On Board
Aircraft; Correction
Federal Aviation
Administration (FAA) and the Office of
the Secretary (OST), Department of
Transportation (DOT).
ACTION: Final rule; correction.
AGENCY:
This final rule replaces the
existing process by which the Federal
Aviation Administration (Agency or
FAA) approves portable oxygen
concentrators (POC) for use on board
aircraft in air carrier operations,
commercial operations, and certain
other operations using large aircraft. The
FAA currently assesses each POC make
and model on a case-by-case basis and
if the FAA determines that a particular
POC is safe for use on board an aircraft,
the FAA conducts rulemaking to
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SUMMARY:
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Tier 1 penalty ..........................................................................
Tier 2 penalty ..........................................................................
Tier 3 penalty ..........................................................................
Per violation .............................................................................
Annual cap ..............................................................................
Per failure ................................................................................
Annual cap ..............................................................................
Per failure, where intentional ..................................................
Per violation .............................................................................
First violation ...........................................................................
Subsequent violations .............................................................
identify the specific POC model in an
FAA regulation. This final rule replaces
the current process and allows
passengers to use a POC on board an
aircraft if the POC satisfies certain
acceptance criteria and bears a label
indicating conformance with the
acceptance criteria. The labeling
requirement only affects POCs intended
for use on board aircraft that were not
previously approved for use on aircraft
by the FAA. Additionally, this
rulemaking will eliminate redundant
operational requirements and
paperwork requirements related to the
physician’s statement. As a result, this
rulemaking will reduce burdens for POC
manufacturers, passengers who use
POCs while traveling, and affected
aircraft operators. This final rule also
makes conforming amendments to the
Department of Transportation’s
(Department or DOT) rule implementing
the Air Carrier Access Act (ACAA) to
require carriers to accept all POC
models that meet FAA acceptance
criteria as detailed in this rule.
DATES: This correction will become
effective on June 23, 2016.
FOR FURTHER INFORMATION CONTACT: For
technical questions concerning this
action, contact DK Deaderick, 121 Air
Carrier Operations Branch, Air
Transportation Division, Flight
Standards Service, Federal Aviation
Administration, AFS–220, 800
Independence Avenue SW.,
Washington, DC 20591; telephone (202)
267–7480; email dk.deaderick@faa.gov.
For questions regarding the
Department’s disability regulation (14
CFR part 382), contact Clereece Kroha,
Senior Attorney, Office of Aviation
Enforcement and Proceedings,
Department of Transportation, 1200
New Jersey Avenue SE., Washington,
DC 20590; telephone (202) 366–9041;
email clereece.kroha@dot.gov.
SUPPLEMENTARY INFORMATION:
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Adjusted
maximum civil
penalty amount
$5,437
27,186
1,087,450
1,894
1,893,610
89
178,156
178
27,455
10,875
21,749
Background
On May 24, 2016, the FAA published
a final rule entitled, ‘‘Acceptance
Criteria for Portable Oxygen
Concentrators Used On Board Aircraft’’
(81 FR 33098).
This final rule affects the use of POCs
on board aircraft in operations
conducted under title 14 of the Code of
Federal Regulations (14 CFR) parts 121,
125, and 135, by replacing the existing
FAA case-by-case approval process for
each make and model of POC in Special
Federal Aviation Regulation (SFAR) No.
106, with FAA acceptance criteria.
Under SFAR No. 106, each time the
FAA approves a specific model of POC
for use on board aircraft, the agency
updates the list of approved POCs in the
SFAR.
This final rule removes SFAR No. 106
and replaces it with POC acceptance
criteria and specific labeling
requirements to identify POCs that
conform to the acceptance criteria. POCs
that conform to the final rule acceptance
criteria will be allowed on board aircraft
without additional FAA review and
rulemaking.
As with existing requirements for
FAA approval of POCs that may be used
on aircraft, the final rule acceptance
criteria and labeling requirement only
apply to POCs intended for use on board
aircraft. Table 1 provides a comparison
of the final rule acceptance criteria and
labeling requirement with related SFAR
No. 106.
However, the final rule was published
with an incorrect amendment number,
‘‘11–59,’’ which is the same amendment
number as the rule entitled
‘‘Administrative Practices and
Procedures, Reporting and
Recordkeeping Requirements ’’ (81 FR
13969), published on March 16, 2016.
The correct amendment number for this
rule should be ‘‘11–60.’’
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]]>Agencies
[Federal Register Volume 81, Number 114 (Tuesday, June 14, 2016)]
[Rules and Regulations]
[Pages 38569-38572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14031]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 81, No. 114 / Tuesday, June 14, 2016 / Rules
and Regulations
[[Page 38569]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1083
[Docket No.: CFPB-2016-0028]
RIN 3170-AA62
Civil Penalty Inflation Adjustments
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Interim final rule with request for public comment.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
publishing for public comment an interim final rule to adjust the civil
monetary penalties within the Bureau's jurisdiction for inflation, as
required by the Federal Civil Penalties Inflation Adjustment Act of
1990 (the Inflation Adjustment Act or the Act), as amended by the Debt
Collection Improvement Act of 1996 and further amended by the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015
Act).
DATES: This rule is effective on July 14, 2016. Comments must be
received on or before July 14, 2016.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2016-
0028 or RIN 3170-AA62, by any of the following methods:
Email: FederalRegisterComments @cfpb.gov. Include Docket
No. CFPB-2016-0028 or RIN 3170-AA62 in the subject line of the email.
Electronic: https://www.regulations.gov. Follow the
instructions for submitting comments.
Mail: Monica Jackson, Office of the Executive Secretary,
Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC
20552.
Hand Delivery/Courier: Monica Jackson, Office of the
Executive Secretary, Consumer Financial Protection Bureau, 1275 First
Street NE., Washington, DC 20002.
Instructions: All submissions should include the agency name and
docket number or Regulatory Information Number (RIN) for this
rulemaking. Because paper mail in the Washington, DC area and at the
Bureau is subject to delay, commenters are encouraged to submit
comments electronically. In general, all comments received will be
posted without change to https://www.regulations.gov. In addition,
comments will be available for public inspection and copying at 1275
First Street NE., Washington, DC 20002, on official business days
between the hours of 10 a.m. and 5 p.m. eastern time. You can make an
appointment to inspect the documents by telephoning (202) 435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Sensitive personal information, such as account numbers or Social
Security numbers, should not be included. Comments generally will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Kristin Bateman, Counsel, Legal
Division, Consumer Financial Protection Bureau, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I. Background
The Inflation Adjustment Act, as amended by the 2015 Act, requires
Federal agencies to adjust the civil penalty amounts within their
jurisdiction for inflation by July 1, 2016, and then by January 15
every year thereafter.\1\ Agencies must make the initial 2016
adjustments through an interim final rulemaking published in the
Federal Register.\2\ Under the amended Act, any increase in a civil
penalty made under the Act will apply to penalties assessed after the
increase takes effect, including penalties whose associated violation
predated the increase.\3\ The inflation adjustments mandated by the Act
serve to maintain the deterrent effect of civil penalties and to
promote compliance with the law.
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\1\ See 28 U.S.C. 2461 note.
\2\ The statute also provides that, for the initial 2016
adjustment, an agency may adjust a civil penalty by less than the
otherwise required amount if (1) it determines, after publishing a
notice of proposed rulemaking and providing an opportunity for
comment, that increasing the civil penalty by the otherwise required
amount would have a negative economic impact or that the social
costs of increasing the civil penalty by the otherwise required
amount outweigh the benefits, and (2) the Director of the Office of
Management and Budget concurs with that determination. Inflation
Adjustment Act section 4(c), codified at 28 U.S.C. 2461 note. The
Bureau has chosen not to make use of this exception.
\3\ Inflation Adjustment Act section 6, codified at 28 U.S.C.
2461 note.
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II. Method of Calculation
The Inflation Adjustment Act prescribes a specific method for
calculating the inflation adjustments.\4\ As amended by the 2015 Act,
the Act provides that the maximum (and minimum, if applicable) amounts
for each civil penalty must be increased by the ``cost-of-living
adjustment,'' a term that the Act defines. For purposes of the initial
adjustments that agencies must make by July 1, 2016, the ``cost-of-
living adjustment'' is defined as the percentage increase in the
Consumer Price Index between (1) October of the calendar year during
which the civil penalty amount was established or adjusted under a
provision of law other than the Inflation Adjustment Act and (2)
October 2015. The Consumer Price Index to be used for purposes of this
calculation is the Consumer Price Index for all urban consumers (CPI-U)
published by the Department of Labor.\5\ The Office of Management and
Budget (OMB) has published guidance for implementing this
requirement.\6\ OMB's guidance memorandum provides multipliers that
agencies should use to adjust penalty amounts based on the year the
penalty was established or last adjusted under authority other than the
Inflation Adjustment Act.
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\4\ Inflation Adjustment Act section 5, codified at 28 U.S.C.
2461 note.
\5\ U.S. Dep't of Labor, Bureau of Labor Statistics, CPI Tables,
https://www.bls.gov/cpi/#tables.
\6\ Memorandum from Shaun Donovan, Director, Office of
Management and Budget, to the Heads of Executive Departments and
Agencies (Feb. 24, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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To determine the new penalty amount, the agency must apply the
multiplier reflecting the ``cost-of-living adjustment'' \7\ to the
penalty amount as it was most recently established or adjusted under a
provision of law other
[[Page 38570]]
than the Inflation Adjustment Act. The agency must then round that
amount to the nearest dollar.\8\ The increase made by this initial
adjustment may not exceed 150 percent of the penalty amount in effect
on the date the 2015 Act was enacted, November 2, 2015.
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\7\ The multipliers reflecting the ``cost-of-living adjustment''
that OMB provides are rounded to five decimal places. The Bureau has
used the OMB multipliers in calculating its civil penalty
adjustments.
\8\ In rounding to the nearest dollar, the Bureau has rounded
down where the digit immediately following the decimal point is less
than 5 and has rounded up where the digit immediately following the
decimal point is 5 or greater.
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III. Description of the Interim Final Rule
This interim final rule establishes the inflation-adjusted maximum
amounts for each civil penalty within the Bureau's jurisdiction. The
following table lists the civil penalties within the Bureau's
jurisdiction and summarizes the relevant information needed to
calculate the inflation adjustments pursuant to the statutory method.
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Penalty amount Year penalty
as established established or
or last adjusted last adjusted Penalty amount
under a under a in effect on
Law Penalty description provision other provision other November 2,
than the than the 2015
inflation inflation
adjustment act adjustment act
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Consumer Financial Protection Act, Tier 1 penalty....... $5,000 \9\2010 \10\$5,000
12 U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, Tier 2 penalty....... 25,000 \11\2010 \12\25,000
12 U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, Tier 3 penalty....... 1,000,000 \13\2010 \14\1,000,000
12 U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Per violation........ 1,000 \15\1989 \16\1,000
Disclosure Act, 15 U.S.C.
1717a(a)(2).
Interstate Land Sales Full Annual cap........... 1,000,000 \17\1989 \18\1,000,000
Disclosure Act, 15 U.S.C.
1717a(a)(2).
Real Estate Settlement Procedures Per failure.......... 50 \19\1990 \20\50
Act, 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Annual cap........... 100,000 \21\1990 \22\100,000
Act, 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Per failure, where 100 \23\1990 \24\100
Act, 12 U.S.C. 2609(d)(2)(A). intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)..... Per violation........ 25,000 \25\2008 \26\25,000
Truth in Lending Act, 15 U.S.C. First violation...... 10,000 \27\2010 \28\10,000
1639e(k)(1).
Truth in Lending Act, 15 U.S.C. Subsequent violations 20,000 \29\2010 \30\20,000
1639e(k)(2).
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\9\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1055(c)(2)(A), 124 Stat. 1376, 2030
(2010).
\10\ 12 U.S.C. 5565(c)(2)(A) (2015).
\11\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1055(c)(2)(B), 124 Stat. 1376, 2030
(2010).
\12\ 12 U.S.C. 5565(c)(2)(B) (2015).
\13\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1055(c)(2)(C), 124 Stat. 1376, 2030
(2010).
\14\ 12 U.S.C. 5565(c)(2)(C) (2015).
\15\ Department of Housing and Urban Development Reform Act,
Public Law 101-235, section 111, 103 Stat. 1987, 2014 (1989).
\16\ 15 U.S.C. 1717a(a)(2) (2015).
\17\ Department of Housing and Urban Development Reform Act,
Public Law 101-235, section 111, 103 Stat. 1987, 2014 (1989).
\18\ 15 U.S.C. 1717a(a)(2) (2015).
\19\ Cranston-Gonzalez National Affordable Housing Act, Public
Law 101-625, section 942(a)(2), 104 Stat. 4079, 4412 (1990).
\20\ 12 U.S.C. 2609(d)(1) (2015).
\21\ Cranston-Gonzalez National Affordable Housing Act, Public
Law 101-625, section 942(a)(2), 104 Stat. 4079, 4412 (1990).
\22\ 12 U.S.C. 2609(d)(1) (2015).
\23\ Cranston-Gonzalez National Affordable Housing Act, Public
Law 101-625, section 942(a)(2), 104 Stat. 4079, 4412 (1990).
\24\ 12 U.S.C. 2609(d)(2)(A) (2015).
\25\ Housing and Economic Recovery Act of 2008, Public Law 110-
289, section 1514(d)(2), 122 Stat. 2654, 2823 (2008).
\26\ 12 U.S.C. 5113(d)(2) (2015).
\27\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1472(a), 124 Stat. 1376, 2189 (2010).
\28\ 15 U.S.C. 1639e(k)(1) (2015).
\29\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1472(a), 124 Stat. 1376, 2190 (2010).
\30\ 15 U.S.C. 1639e(k)(2) (2015).
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The Bureau followed the procedure outlined above in part II to
calculate the adjusted civil penalty amounts. In accordance with the
statutory requirements and OMB guidance, the Bureau multiplied each
penalty amount as established or last adjusted under a provision other
than the Inflation Adjustment Act by the OMB multiplier corresponding
to the appropriate year, and then rounded that amount to the nearest
dollar, to calculate the new, inflation-adjusted civil penalty amount.
The Bureau then confirmed that the amount by which each civil penalty
increased did not exceed 150 percent of the corresponding civil penalty
level in effect on November 2, 2015. None of the increases exceeded
this 150-percent threshold. The following chart summarizes the results
of these calculations:
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Penalty amount Year penalty
as established established or
or last adjusted last adjusted OMB ``cost-of-
under a under a living New penalty
Law Penalty description provision other provision other adjustment'' amount
than the than the multiplier
inflation inflation
adjustment act adjustment act
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Consumer Financial Protection Act, 12 U.S.C. Tier 1 penalty.................. $5,000 2010 1.08745 $5,437
5565(c)(2)(A).
Consumer Financial Protection Act, 12 U.S.C. Tier 2 penalty.................. 25,000 2010 1.08745 27,186
5565(c)(2)(B).
[[Page 38571]]
Consumer Financial Protection Act, 12 U.S.C. Tier 3 penalty.................. 1,000,000 2010 1.08745 1,087,450
5565(c)(2)(C).
Interstate Land Sales Full Disclosure Act, 15 Per violation................... 1,000 1989 1.89361 1,894
U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Act, 15 Annual cap...................... 1,000,000 1989 1.89361 1,893,610
U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act, 12 Per failure..................... 50 1990 1.78156 89
U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, 12 Annual cap...................... 100,000 1990 1.78156 178,156
U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, 12 Per failure, where intentional.. 100 1990 1.78156 178
U.S.C. 2609(d)(2)(A).
SAFE Act, 12 U.S.C. 5113(d)(2)................ Per violation................... 25,000 2008 1.09819 27,455
Truth in Lending Act, 15 U.S.C. 1639e(k)(1)... First violation................. 10,000 2010 1.08745 10,875
Truth in Lending Act, 15 U.S.C. 1639e(k)(2)... Subsequent violations........... 20,000 2010 1.08745 21,749
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This rule codifies these civil penalty amounts by adding new part
1083 to title 12 of the CFR and new Sec. 1083.1 therein.
IV. Legal Authority and Effective Date
The Bureau issues this rule under the Federal Civil Penalties
Inflation Adjustment Act of 1990,\31\ as amended by the Debt Collection
Improvement Act of 1996,\32\ and further amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015,\33\ which
requires the Bureau to adjust the civil penalties within its
jurisdiction for inflation according to a statutorily prescribed
formula.
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\31\ Public Law 101-410, 104 Stat. 890 (1990).
\32\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321,
1321-373 (1996).
\33\ Public Law 114-74, section 701, 129 Stat. 584, 599 (2015).
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The Administrative Procedure Act (APA) generally requires an agency
to publish a rule at least 30 days before its effective date.\34\ This
rule satisfies that requirement.
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\34\ See 5 U.S.C. 553(d).
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V. Request for Comment
Although notice and comment rulemaking procedures are not required,
the Bureau invites comments on this notice. Commenters are specifically
encouraged to identify any technical issues raised by the rule.
VI. Regulatory Requirements
Notice and Comment
Under the APA, notice and opportunity for public comment are not
required if the Bureau finds that notice and public comment are
impracticable, unnecessary, or contrary to the public interest.\35\
This interim final rule adjusts the civil penalty amounts within the
Bureau's jurisdiction for inflation, as required by the Federal Civil
Penalties Inflation Adjustment Act of 1990, as amended by the Debt
Collection Improvement Act of 1996 and further amended by the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The
amendments in this interim final rule are technical, and they merely
apply the statutory method for adjusting civil penalty amounts. For
these reasons, the Bureau has determined that publishing a notice of
proposed rulemaking and providing opportunity for public comment are
unnecessary. Moreover, the statute expressly requires the Bureau to
make these initial adjustments through an interim final rulemaking to
be published by July 1, 2016,\36\ and OMB's guidance confirms that
agencies need not complete a notice-and-comment process before
promulgating the rule.\37\ Therefore, the amendments are adopted in
final form.
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\35\ 5 U.S.C. 553(b)(B).
\36\ Inflation Adjustment Act, section 4(b)(1)(A), codified at
28 U.S.C. 2461 note.
\37\ Memorandum from Shaun Donovan, Director, Office of
Management and Budget, to the Heads of Executive Departments and
Agencies 3 (Feb. 24, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\38\
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\38\ 5 U.S.C. 603(a), 604(a).
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\39\ the
Bureau reviewed this interim final rule. No collections of information
pursuant to the Paperwork Reduction Act are contained in the interim
final rule.
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\39\ 44 U.S.C. 3506; 5 CFR 1320.
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List of Subjects in 12 CFR Part 1083
Administrative practice and procedure, Consumer protection,
Penalties.
Authority and Issuance
For the reasons set forth in the preamble, the Bureau adds part
1083 to chapter X in title 12 of the Code of Federal Regulations to
read as set forth below:
PART 1083--CIVIL PENALTY ADJUSTMENTS
Sec.
1083.1 Adjustments of civil penalty amounts.
Authority: 12 U.S.C. 2609(d); 12 U.S.C. 5113(d)(2); 12 U.S.C.
5565(c); 15 U.S.C. 1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461
note.
Sec. 1083.1 Adjustments of civil penalty amounts.
(a) The maximum amount of each civil penalty within the
jurisdiction of the Consumer Financial Protection Bureau to impose is
adjusted in accordance with the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by the Debt Collection Improvement
Act of 1996 and further amended by the Federal
[[Page 38572]]
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, (28
U.S.C. 2461 note) as follows:
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Adjusted maximum
U.S. code citation Civil penalty civil penalty
description amount
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12 U.S.C. 5565(c)(2)(A)....... Tier 1 penalty....... $5,437
12 U.S.C. 5565(c)(2)(B)....... Tier 2 penalty....... 27,186
12 U.S.C. 5565(c)(2)(C)....... Tier 3 penalty....... 1,087,450
15 U.S.C. 1717a(a)(2)......... Per violation........ 1,894
15 U.S.C. 1717a(a)(2)......... Annual cap........... 1,893,610
12 U.S.C. 2609(d)(1).......... Per failure.......... 89
12 U.S.C. 2609(d)(1).......... Annual cap........... 178,156
12 U.S.C. 2609(d)(2)(A)....... Per failure, where 178
intentional.
12 U.S.C. 5113(d)(2).......... Per violation........ 27,455
15 U.S.C. 1639e(k)(1)......... First violation...... 10,875
15 U.S.C. 1639e(k)(2)......... Subsequent violations 21,749
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(b) The adjustments in paragraph (a) of this section shall apply to
civil penalties assessed after July 14, 2016, regardless of when the
violation for which the penalty is assessed occurred.
Dated: June 7, 2016.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2016-14031 Filed 6-13-16; 8:45 am]
BILLING CODE 4810-AM-P
