Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment, 43028-43031 [2016-15619]
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43028
Federal Register / Vol. 81, No. 127 / Friday, July 1, 2016 / Rules and Regulations
Maximum penalty amount
(in dollars) 1
U.S. Code citation
CMP description
15 U.S.C. 1639e(k) ..........................
2nd Tier (natural person)—Per violation ...............................................................................
2nd Tier (other person)—Per violation .................................................................................
3rd Tier (natural person)—Per violation ...............................................................................
3rd Tier (other person)—Per violation ..................................................................................
Violation of Appraisal Independence Requirements:
First violation .........................................................................................................................
Subsequent violations ...........................................................................................................
Flood Insurance:
Per violation ..........................................................................................................................
42 U.S.C. 4012a(f)(5) ......................
Dated: June 23, 2016.
Thomas J. Curry,
Comptroller of the Currency.
[FR Doc. 2016–15376 Filed 6–30–16; 8:45 am]
BILLING CODE 4810–33–P
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Parts 1209 and 1250
RIN 2590–AA88
Rules of Practice and Procedure; Civil
Money Penalty Inflation Adjustment
Federal Housing Finance
Agency.
ACTION: Interim final rule.
AGENCY:
The Federal Housing Finance
Agency (FHFA) is issuing this interim
final rule amending its Rules of Practice
and Procedure and other agency
regulations to adjust each civil money
penalty within its jurisdiction to
account for inflation, pursuant to the
Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015. If, prior to the effective date of the
interim final rule, FHFA does not
receive any comments from which
FHFA concludes that the rule should be
revised, this rule will become final
without further action by FHFA.
DATES: Effective date: August 1, 2016.
Comment date: Comments on the
interim final rule must be received prior
to August 1, 2016.
ADDRESSES: You may submit your
comments, identified by regulatory
information number (RIN) 2590–AA88,
by any of the following methods:
asabaliauskas on DSK3SPTVN1PROD with RULES
SUMMARY:
1 The maximum penalty amount is per day,
unless otherwise indicated.
2 The maximum penalty amount for a savings
association is the lesser of this amount or 1 percent
of total assets.
3 These amounts also apply to statutes that crossreference 12 U.S.C. 1818, such as 12 U.S.C. 2804,
3108, 3349, 4309, and 4717 and 15 U.S.C. 1607,
1639e(k), 1693o, 1681s, 1691c, and 1692l.
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Agency Web site: www.fhfa.gov/openfor-comment-or-input.
Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments. If
you submit your comments to the
Federal eRulemaking Portal, please also
send it by email to FHFA at
RegComments@FHFA.gov to ensure
timely receipt by the agency. Please
include ‘‘RIN 2590–AA88’’ in the
subject line of the message.
Hand Delivery/Courier: The hand
delivery address is: Alfred M. Pollard,
General Counsel, Attention: Comments/
RIN 2590–AA88, Federal Housing
Finance Agency, Constitution Center,
(OGC) Eighth Floor, 400 Seventh Street
SW., Washington, DC 20219. The
package should be delivered to the
Seventh Street entrance Guard Desk,
First Floor, on business days between 9
a.m. and 5 p.m.
U.S. Mail, United Parcel Service,
Federal Express, or Other Mail Service:
The mailing address for comments is:
Alfred M. Pollard, General Counsel,
Attention: Comments/RIN 2590–AA88,
Federal Housing Finance Agency,
Constitution Center, (OGC) Eighth Floor,
400 Seventh Street SW., Washington,
DC 20219.
Copies of all comments will be posted
without change, including any personal
information you provide, such as your
name, address, or phone number, on the
FHFA Internet Web site at https://
www.fhfa.gov. In addition, copies of all
comments received will be available for
examination by the public on business
days between the hours of 10 a.m. and
3 p.m., at the Federal Housing Finance
Agency, Eighth Floor, 400 Seventh
Street SW., Washington, DC 20219. To
make an appointment to inspect
comments, please call the Office of
General Counsel at (202) 649–3804.
FOR FURTHER INFORMATION CONTACT:
Stephen E. Hart, Deputy General
Counsel, at (202) 649–3053,
Stephen.Hart@fhfa.gov, or Frank R.
Wright, Senior Counsel, at (202) 649–
3087, Frank.Wright@fhfa.gov (not tollfree numbers); Federal Housing Finance
PO 00000
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89,078
445,390
178,156
890,780
10,875
21,749
2,056
Agency, 400 7th Street SW.,
Washington, DC 20219. The telephone
number for the Telecommunications
Device for the Hearing Impaired is: (800)
877–8339 (TDD only).
SUPPLEMENTARY INFORMATION:
I. Background
FHFA is an independent agency of the
Federal government and the financial
safety and soundness regulator of the
Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan
Mortgage Corporation (Freddie Mac)
(collectively, the Enterprises), the
Federal Home Loan Banks (collectively,
the Banks), and the Banks’ Office of
Finance under authority granted by the
Federal Housing Enterprises Financial
Safety and Soundness Act of 1992
(Safety and Soundness Act).1 FHFA
oversees the Enterprises and Banks
(collectively, the regulated entities) to
ensure that they operate in a safe and
sound manner and maintain liquidity in
the housing finance market in
accordance with applicable laws, rules,
and regulations. To that end, FHFA is
vested with broad supervisory
discretion and specific civil
administrative enforcement powers,
similar to such authority granted by
Congress to the Federal bank regulatory
agencies.2
Section 1376 of the Safety and
Soundness Act (12 U.S.C. 4636)
empowers FHFA to impose civil money
penalties under specific conditions.
FHFA’s Rules of Practice and Procedure
regulation (12 CFR part 1209) govern
cease and desist proceedings, civil
money penalty assessment proceedings,
and other administrative adjudications.3
FHFA’s Flood Insurance regulation (12
CFR part 1250) governs flood insurance
responsibilities as they pertain to the
1 See Federal Housing Enterprises Financial
Safety and Soundness Act of 1992, Public Law 102–
550, 106 Stat. 4078 (Oct. 28, 1992) as amended by
the Federal Housing Finance Regulatory Reform Act
of 2008, Public Law 110–289, 122 Stat. 2654,
sections 1101 et seq. (July 30, 2008).
2 See Safety and Soundness Act, 12 U.S.C. 4513
and 4631–4641.
3 See 12 CFR part 1209.
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Federal Register / Vol. 81, No. 127 / Friday, July 1, 2016 / Rules and Regulations
Enterprises.4 FHFA’s Implementation of
the Program Fraud Civil Remedies Act
of 1986 regulation (12 CFR part 1217)
sets forth procedures for imposing civil
penalties and assessments under the
Program Fraud Civil Remedies Act (31
U.S.C. 3801 et seq.) on any person that
makes a false claim for property,
services or money from FHFA, or makes
a false material statement to FHFA in
connection with a claim, where the
amount involved does not exceed
$150,000.5
The Adjustment Improvements Act
The Federal Civil Penalties Inflation
Adjustment Act of 1990 (‘‘Inflation
Adjustment Act’’), as amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (‘‘Adjustment Improvements
Act’’), requires FHFA, as well as other
Federal agencies with the authority to
issue civil money penalties (CMPs), to
adjust by regulation the maximum
amount of each CMP authorized by law
that the agency has jurisdiction to
administer.6 The Adjustment
Improvements Act requires agencies to
make an initial ‘‘catch-up’’ adjustment
of their CMPs upon the statute’s
enactment, and further requires agencies
to make additional adjustments on an
annual basis following the initial
adjustment.7
The Adjustment Improvements Act
provides that the initial catch-up
adjustment must be implemented by an
interim final rule and will be based on
the percent change between the
Consumer Price Index for all Urban
Consumers (CPI–U) for October 2015
and the CPI–U for the month of October
in the year that the civil money penalty
was established or adjusted under a
provision of law other than the Inflation
Adjustment Act. Previous inflation
adjustments made under the Inflation
Adjustment Act prior to the Adjustment
Improvements Act are not considered in
making the catch-up adjustment.8 In the
future, annual inflation adjustments will
be based on the percent change between
the October CPI–U preceding the date of
the adjustment and the October CPI–U
for the year before that.
II. Differences Between the Federal
Home Loan Banks and the Enterprises
When promulgating any regulation
that may have future effect relating to
the Banks, the Director is required by
section 1313(f) of the Safety and
Soundness Act to consider the
differences between the Banks and the
Enterprises with respect to the Banks’
cooperative ownership structure;
mission of providing liquidity to
members; affordable housing and
community development mission;
capital structure; and joint and several
liability (12 U.S.C. 4513(f)).9 The
Director considered the differences
between the Banks and the Enterprises,
as they relate to the above factors, and
determined that this interim final rule is
appropriate. In sum, the five differences
identified in section 1313(f) of the
Safety and Soundness Act do not
require a different enforcement
regulation for the Banks than for the
Enterprises, and in any event, the
inflation adjustments effected by the
interim final rule are mandated by law.
III. Description of the Rule
This interim final rule adjusts the
maximum penalty amount within each
of the three tiers specified in 12 U.S.C.
4636 by amending the table contained
in 12 CFR 1209.80 to reflect the new
adjusted maximum penalty amount that
FHFA may impose upon a regulated
entity or any entity-affiliated party
within each tier. The increases in
maximum penalty amounts contained in
this interim final rule may not
necessarily affect the amount of any
12 U.S.C. 4636(b)(1) ......................................
12 U.S.C. 4636(b)(2) ......................................
12 U.S.C. 4636(b)(4) ......................................
asabaliauskas on DSK3SPTVN1PROD with RULES
Description
First Tier .........................................................
Second Tier ....................................................
Third Tier (Entity-affiliated party and Regulated entity).
4 See
12 CFR part 1250.
generally, 31 U.S.C. 3801 et seq.
6 See 28 U.S.C. 2461 note.
7 The Adjustment Improvements Act superseded
the Debt Collection Improvement Act of 1996,
which was used to prepare FHFA’s Civil Money
Penalty Inflation Adjustment rule, published at 81
FR 8369 (February 22, 2016.).
5 See
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8 Earlier inflation adjustments such as those
issued in 81 FR 8369 are not considered in
determining the amount of the catch-up adjustment.
9 So in original; no paragraphs (d) and (e) were
enacted. See 12 U.S.C.A. 4513 n 1.
10 See, e.g., 12 CFR 1209.7(c); FHFA Enforcement
Policy, AB 2013–03 (May 31, 2013).
PO 00000
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CMP that FHFA may seek for a
particular violation, which may not be
the maximum that the law allows;
FHFA would calculate each CMP on a
case-by-case basis in light of a variety of
factors.10 This rule also adjusts the
maximum penalty amounts for
violations under the FHFA Flood
Insurance regulation by amending the
text of 12 CFR 1250.3 to reflect the new
adjusted maximum penalty amount that
FHFA may impose for violations under
that regulation. FHFA has adjusted the
maximum amounts for penalties under
the Program Fraud Civil Remedies Act
in a separate rule required by that Act,
which was also published today in this
edition of the Federal Register.
The Adjustment Improvements Act
directs federal agencies to calculate each
initial catch-up CMP adjustment as the
percent change between the CPI–U for
October 2015 and the CPI–U for October
of the calendar year in which the
amount of each CMP was set.11 The
maximum CMP amounts for FHFA
penalties under 12 U.S.C. 4636 were set
in 2008.12 Since FHFA is making this
round of catch-up adjustments in
calendar year 2016, and the maximum
CMP amounts were last set in calendar
year 2008, the inflation adjustment
amount for each maximum CMP amount
was calculated by comparing the CPI–U
for October 2008 with the CPI–U for
October 2015, resulting in an inflation
factor of 1.09819. For each maximum
CMP amount, the product of this
inflation adjustment and the previous
maximum penalty amount was then
rounded to the nearest whole dollar as
required by the Adjustment
Improvements Act, and was then
summed with the previous maximum
penalty amount to determine the new
adjusted maximum penalty amount.13
The table below sets out these items
accordingly.
Previous
maximum
penalty
amount
U.S. Code citation
43029
10,000
50,000
2,000,000
Rounded
inflation
increase
982
4910
196,380
New adjusted
maximum
penalty
amount
10,982
54,910
2,196,380
11 For the initial adjustment under the
Adjustment Improvements Act a CMP is considered
to have been set in the calendar year during which
the amount of such CMP was established or
adjusted under a provision of law other than the
Inflation Adjustment Act.
12 See 12 U.S.C. 4636.
13 28 U.S.C. 2461 note.
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Federal Register / Vol. 81, No. 127 / Friday, July 1, 2016 / Rules and Regulations
The CMP for FHFA penalties under
the Flood Insurance regulation were set
in 2009.14 Since FHFA is making this
round of adjustments in calendar year
2016, and the maximum CMP amounts
were last set in calendar year 2009, the
inflation adjustment amount for each
maximum CMP amount was calculated
by comparing the CPI–U for October
2009 with the CPI–U for October 2015,
resulting in an inflation factor of
1.10020. The table below sets out these
items accordingly.
Previous
maximum
penalty
amount
U.S. Code citation
Description
42 U.S.C. 4012a(f)(5) .....................................
42 U.S.C. 4012a(f)(5) .....................................
Maximum penalty per violation ......................
Maximum total penalties assessed against
an Enterprise in a calendar year.
IV. Regulatory Impact
Administrative Procedure Act
FHFA finds good cause that notice
and an opportunity to comment on this
interim final rule are unnecessary under
section 553(b) of the Administrative
Procedure Act (APA), 5 U.S.C. 553(b).
This rulemaking conforms with and is
consistent with the statutory directive
set forth in the Inflation Adjustment
Act. As a result, there are no issues of
policy discretion about which to seek
public comment. Furthermore, the rule
is mandated by the Adjustment
Improvements Act to be adopted in
interim final form. Accordingly, FHFA
is issuing the amendments as an interim
final rule.
In addition, FHFA finds good cause to
make this rule effective thirty days after
publication of this document in the
Federal Register under the APA. The
rule adjusts the amount of each CMP
tier as dictated by the Inflation
Adjustment Act, and, as noted above, is
mandated by the Adjustment
Improvements Act to be adopted as an
interim final rule, presumptively with
no greater delayed effective date than
the APA otherwise provides.
Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (RFA),15 an agency must prepare a
regulatory flexibility analysis for all
proposed and final rules that describes
the impact of the rule on small entities,
unless the head of an agency certifies
that the rule will not have ‘‘a significant
economic impact on a substantial
number of small entities.’’ However, the
RFA applies only to rules for which an
agency publishes a general notice of
proposed rulemaking pursuant to the
APA,16 and FHFA is required by statute
to issue this rule as an interim final rule.
As a result FHFA has determined for
good cause that the APA does not
require a general notice of proposed
rulemaking for this rule. Thus, the RFA
does not apply to this interim final rule.
Paperwork Reduction Act
The Paperwork Reduction Act (44
U.S.C. 3501 et seq.) requires that
regulations involving the collection of
information receive clearance from the
Office of Management and Budget
(OMB). This rule contains no such
collection of information requiring OMB
approval under the Paperwork
Reduction Act. Consequently, no
information has been submitted to OMB
for review.
List of Subjects
12 CFR Part 1209
Administrative practice and
procedure, Penalties.
Rounded
inflation
increase
485
140,000
49
14,028
Flood insurance, Governmentsponsored enterprises, Penalties,
Reporting and record keeping
requirements.
Accordingly, for the reasons stated in
the SUPPLEMENTARY INFORMATION and
under the authority of 12 U.S.C. 4513b
and 12 U.S.C. 4526, the Federal Housing
Finance Agency hereby amends
subchapters A and C of chapter XII of
Title 12 of the Code of Federal
Regulations as follows:
PART 1209—RULES OF PRACTICE
AND PROCEDURE
1. The authority citation for part 1209
continues to read as follows:
■
Authority: 5 U.S.C. 554, 556, 557, and 701
et seq.; 12 U.S.C. 1430c(d); 12 U.S.C. 4501,
4502, 4503, 4511, 4513, 4513b, 4517, 4526,
4566(c)(1) and (c)(7), 4581–4588, 4631–4641;
and 28 U.S.C. 2461 note.
■
2. Revise § 1209.80 to read as follows:
§ 1209.80
Inflation adjustments.
The maximum amount of each civil
money penalty within FHFA’s
jurisdiction, as set by the Safety and
Soundness Act and thereafter adjusted
in accordance with the Inflation
Adjustment Act, is as follows:
New adjusted
maximum
penalty
amount
12 U.S.C. 4636(b)(1) ..................................................................
12 U.S.C. 4636(b)(2) ..................................................................
12 U.S.C. 4636(b)(4) ..................................................................
asabaliauskas on DSK3SPTVN1PROD with RULES
Description
First Tier .....................................................................................
Second Tier ................................................................................
Third Tier (Regulated Entity or Entity-Affiliated party) ...............
3. Revise § 1209.81 to read as follows:
§ 1209.81
Applicability.
The inflation adjustments set out in
§ 1209.80 shall apply to civil money
penalties assessed in accordance with
14 See
74 FR 2347, 2349 (Jan. 15, 2009).
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the provisions of the Safety and
Soundness Act, 12 U.S.C. 4636, and
subparts B and C of this part, for
violations occurring after August 1,
2016.
15 5
PO 00000
U.S.C. 603.
Frm 00048
Fmt 4700
$10,982
54,910
2,196,380
PART 1250—FLOOD INSURANCE
4. The authority citation for part 1250
continues to read as follows:
■
16 5
Sfmt 4700
534
154,028
12 CFR Part 1250
U.S. Code citation
■
New adjusted
maximum
penalty
amount
E:\FR\FM\01JYR1.SGM
U.S.C. 603(a), 604(a).
01JYR1
Federal Register / Vol. 81, No. 127 / Friday, July 1, 2016 / Rules and Regulations
Authority: 12 U.S.C. 4521(a)(4) and 4526;
28 U.S.C. 2461 note; 42 U.S.C. 4001 note; 42
U.S.C. 4012a(f)(3), (4), (5), (8), (9), and (10).
5. Revise § 1250.3(c) to read as
follows:
■
§ 1250.3
Civil money penalties.
*
*
*
*
*
(c) Amount. The maximum civil
money penalty amount is $485 for each
violation that occurs before August 1,
2016, with total penalties not to exceed
$140,000. For violations that occur on or
after August 1, 2016, the civil money
penalty under this section may not
exceed $534 for each violation, with
total penalties assessed under this
section against an Enterprise during any
calendar year not to exceed $154,028.
*
*
*
*
*
Dated: June 27, 2016.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2016–15619 Filed 6–30–16; 8:45 am]
BILLING CODE 8070–01–P
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Part 1217
RIN 2590–AA76
Implementation of the Program Fraud
Civil Remedies Act of 1986
Federal Housing Finance
Agency.
ACTION: Interim final rule.
AGENCY:
The Federal Housing Finance
Agency (FHFA) is adopting an interim
final rule to implement the Program
Fraud Civil Remedies Act of 1986 (31
U.S.C. 3801 et seq.) (PFCRA), by
establishing administrative procedures
for imposing civil penalties and
assessments against persons who make
false, fictitious, or fraudulent claims or
written statements to FHFA in the
context of its contracting or employment
activities, where the amount of money
or the value of property or services
involved or requested from FHFA is
$150,000 or less. FHFA previously
issued a notice of proposed rulemaking
to implement PFCRA. This rule is
issued as an interim final rule rather
than as a final rule because it increases
the maximum penalty amount set forth
in the proposed rule as required by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (Adjustment Improvements Act),
and that Act also requires that such
‘‘catch up’’ adjustments be published in
the form of an interim final rule. If, prior
to the effective date of the interim final
asabaliauskas on DSK3SPTVN1PROD with RULES
SUMMARY:
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rule, FHFA does not receive any
comments from which FHFA concludes
that the rule should be revised, this rule
will become final without further action
by FHFA.
DATES: Effective Date: August 1, 2016.
Comment Date: Comments on the
interim final rule must be received prior
to August 1, 2016.
ADDRESSES: You may submit your
comments, identified by regulatory
information number (RIN) 2590–AA76,
by any of the following methods:
Agency Web site: www.fhfa.gov/openfor-comment-or-input.
Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments. If
you submit your comments to the
Federal eRulemaking Portal, please also
send it by email to FHFA at
RegComments@FHFA.gov to ensure
timely receipt by the agency. Please
include ‘‘RIN 2590–AA76’’ in the
subject line of the message.
Hand Delivery/Courier: The hand
delivery address is: Alfred M. Pollard,
General Counsel, Attention: Comments/
RIN 2590–AA76, Federal Housing
Finance Agency, Constitution Center,
(OGC) Eighth Floor, 400 Seventh Street
SW., Washington, DC 20219. The
package should be delivered to the
Seventh Street entrance Guard Desk,
First Floor, on business days between 9
a.m. and 5 p.m.
U.S. Mail, United Parcel Service,
Federal Express, or Other Mail Service:
The mailing address for comments is:
Alfred M. Pollard, General Counsel,
Attention: Comments/RIN 2590–AA76,
Federal Housing Finance Agency,
Constitution Center, (OGC) Eighth Floor,
400 Seventh Street SW., Washington,
DC 20219.
Copies of all comments will be posted
without change, including any personal
information you provide, such as your
name, address, or phone number, on the
FHFA Internet Web site at https://
www.fhfa.gov. In addition, copies of all
comments received will be available for
examination by the public on business
days between the hours of 10 a.m. and
3 p.m., at the Federal Housing Finance
Agency, Eighth Floor, 400 Seventh
Street, SW., Washington, DC 20219. To
make an appointment to inspect
comments, please call the Office of
General Counsel at (202) 649–3804.
FOR FURTHER INFORMATION CONTACT:
Maura Dundon, Assistant General
Counsel, Office of the General Counsel,
(202) 649–3961, Maura.Dundon@
fhfa.gov, or Ellen Bailey, Managing
Associate General Counsel, Office of
General Counsel, (202) 649–3056,
Ellen.Bailey@fhfa.gov, 400 Seventh
PO 00000
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43031
Street SW., Eighth Floor, Washington,
DC 20219 (not toll free numbers). The
telephone number for the
Telecommunications Device for the
Hearing Impaired is (800) 877–8339.
SUPPLEMENTARY INFORMATION:
I. Background
A. General
The Program Fraud Civil Remedies
Act of 1986 (31 U.S.C. 3801 et seq.)
(PFCRA) requires FHFA, as an
‘‘authority,’’ to establish by rule
procedures for imposing civil penalties
and assessments on any person who
makes a false claim for property,
services, or money from FHFA, or
makes a false material statement to
FHFA in connection with a claim,
where the amount involved does not
exceed $150,000.1 A ‘‘claim’’ as defined
in the Act includes a request, demand,
or submission for property, services, or
money from FHFA or a party to a
contract with FHFA, including money
representing benefits.2 A ‘‘statement’’ is
any representation, certification,
affirmation, document, record, or
accounting or bookkeeping entry with
respect to a claim, a contract or a bid or
proposal for a contract with FHFA, or a
benefit from FHFA.3 For covered claims
and statements, PFCRA provides an
administrative remedy as an alternative
to judicial action, where the Department
of Justice (DOJ) has declined to
prosecute under the civil False Claims
Act, 31 U.S.C. 3729.4
PFCRA establishes a process of (a)
investigation by the ‘‘investigating
official,’’ who, by statute, is the
Inspector General (IG) of the agency or
a designee of the IG; (b) review by the
agency’s ‘‘reviewing official,’’
designated by the agency head, to
determine if adequate evidence of
liability exists; 5 and (c) review by DOJ.
If the Attorney General approves use of
the PFCRA process, PFCRA authorizes
the reviewing official to initiate an
action by providing notice to the person
alleged to be liable; if a hearing on the
record is requested, it is before a
‘‘presiding official,’’ which by statute is
1 See 31 U.S.C. 3801(a)(1)(C) and 3803(g); see also
5 U.S.C., App. 3, 11(2).
2 31 U.S.C. 3801(a)(3).
3 Id. at section 3801(a)(9).
4 See S.Rep. No. 99–212 at 6, 99th Cong., 1st Sess.
6 (1985) (‘‘[E]xisting remedies are not adequate to
cope with the problem of fraud in Federal
programs. The Committee [of Governmental Affairs
of the Senate], therefore, believes that an alternative
administrative remedy is needed to adjudicate
small-dollar false claim and statement cases that
otherwise would not be initiated civilly.’’).
5 31 U.S.C. 3801(a)(8)(A) and 3803. The Director
of FHFA has designated the General Counsel of
FHFA as FHFA’s reviewing official. See 80 FR
79719, 79719 n.5 (Dec. 23, 2015).
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]]>Agencies
[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Rules and Regulations]
[Pages 43028-43031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15619]
=======================================================================
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Parts 1209 and 1250
RIN 2590-AA88
Rules of Practice and Procedure; Civil Money Penalty Inflation
Adjustment
AGENCY: Federal Housing Finance Agency.
ACTION: Interim final rule.
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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing this
interim final rule amending its Rules of Practice and Procedure and
other agency regulations to adjust each civil money penalty within its
jurisdiction to account for inflation, pursuant to the Federal Civil
Penalties Inflation Adjustment Act of 1990, as amended by the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. If,
prior to the effective date of the interim final rule, FHFA does not
receive any comments from which FHFA concludes that the rule should be
revised, this rule will become final without further action by FHFA.
DATES: Effective date: August 1, 2016.
Comment date: Comments on the interim final rule must be received
prior to August 1, 2016.
ADDRESSES: You may submit your comments, identified by regulatory
information number (RIN) 2590-AA88, by any of the following methods:
Agency Web site: www.fhfa.gov/open-for-comment-or-input.
Federal eRulemaking Portal: https://www.regulations.gov. Follow the
instructions for submitting comments. If you submit your comments to
the Federal eRulemaking Portal, please also send it by email to FHFA at
RegComments@FHFA.gov to ensure timely receipt by the agency. Please
include ``RIN 2590-AA88'' in the subject line of the message.
Hand Delivery/Courier: The hand delivery address is: Alfred M.
Pollard, General Counsel, Attention: Comments/RIN 2590-AA88, Federal
Housing Finance Agency, Constitution Center, (OGC) Eighth Floor, 400
Seventh Street SW., Washington, DC 20219. The package should be
delivered to the Seventh Street entrance Guard Desk, First Floor, on
business days between 9 a.m. and 5 p.m.
U.S. Mail, United Parcel Service, Federal Express, or Other Mail
Service: The mailing address for comments is: Alfred M. Pollard,
General Counsel, Attention: Comments/RIN 2590-AA88, Federal Housing
Finance Agency, Constitution Center, (OGC) Eighth Floor, 400 Seventh
Street SW., Washington, DC 20219.
Copies of all comments will be posted without change, including any
personal information you provide, such as your name, address, or phone
number, on the FHFA Internet Web site at https://www.fhfa.gov. In
addition, copies of all comments received will be available for
examination by the public on business days between the hours of 10 a.m.
and 3 p.m., at the Federal Housing Finance Agency, Eighth Floor, 400
Seventh Street SW., Washington, DC 20219. To make an appointment to
inspect comments, please call the Office of General Counsel at (202)
649-3804.
FOR FURTHER INFORMATION CONTACT: Stephen E. Hart, Deputy General
Counsel, at (202) 649-3053, Stephen.Hart@fhfa.gov, or Frank R. Wright,
Senior Counsel, at (202) 649-3087, Frank.Wright@fhfa.gov (not toll-free
numbers); Federal Housing Finance Agency, 400 7th Street SW.,
Washington, DC 20219. The telephone number for the Telecommunications
Device for the Hearing Impaired is: (800) 877-8339 (TDD only).
SUPPLEMENTARY INFORMATION:
I. Background
FHFA is an independent agency of the Federal government and the
financial safety and soundness regulator of the Federal National
Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage
Corporation (Freddie Mac) (collectively, the Enterprises), the Federal
Home Loan Banks (collectively, the Banks), and the Banks' Office of
Finance under authority granted by the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (Safety and Soundness
Act).\1\ FHFA oversees the Enterprises and Banks (collectively, the
regulated entities) to ensure that they operate in a safe and sound
manner and maintain liquidity in the housing finance market in
accordance with applicable laws, rules, and regulations. To that end,
FHFA is vested with broad supervisory discretion and specific civil
administrative enforcement powers, similar to such authority granted by
Congress to the Federal bank regulatory agencies.\2\
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\1\ See Federal Housing Enterprises Financial Safety and
Soundness Act of 1992, Public Law 102-550, 106 Stat. 4078 (Oct. 28,
1992) as amended by the Federal Housing Finance Regulatory Reform
Act of 2008, Public Law 110-289, 122 Stat. 2654, sections 1101 et
seq. (July 30, 2008).
\2\ See Safety and Soundness Act, 12 U.S.C. 4513 and 4631-4641.
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Section 1376 of the Safety and Soundness Act (12 U.S.C. 4636)
empowers FHFA to impose civil money penalties under specific
conditions. FHFA's Rules of Practice and Procedure regulation (12 CFR
part 1209) govern cease and desist proceedings, civil money penalty
assessment proceedings, and other administrative adjudications.\3\
FHFA's Flood Insurance regulation (12 CFR part 1250) governs flood
insurance responsibilities as they pertain to the
[[Page 43029]]
Enterprises.\4\ FHFA's Implementation of the Program Fraud Civil
Remedies Act of 1986 regulation (12 CFR part 1217) sets forth
procedures for imposing civil penalties and assessments under the
Program Fraud Civil Remedies Act (31 U.S.C. 3801 et seq.) on any person
that makes a false claim for property, services or money from FHFA, or
makes a false material statement to FHFA in connection with a claim,
where the amount involved does not exceed $150,000.\5\
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\3\ See 12 CFR part 1209.
\4\ See 12 CFR part 1250.
\5\ See generally, 31 U.S.C. 3801 et seq.
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The Adjustment Improvements Act
The Federal Civil Penalties Inflation Adjustment Act of 1990
(``Inflation Adjustment Act''), as amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015
(``Adjustment Improvements Act''), requires FHFA, as well as other
Federal agencies with the authority to issue civil money penalties
(CMPs), to adjust by regulation the maximum amount of each CMP
authorized by law that the agency has jurisdiction to administer.\6\
The Adjustment Improvements Act requires agencies to make an initial
``catch-up'' adjustment of their CMPs upon the statute's enactment, and
further requires agencies to make additional adjustments on an annual
basis following the initial adjustment.\7\
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\6\ See 28 U.S.C. 2461 note.
\7\ The Adjustment Improvements Act superseded the Debt
Collection Improvement Act of 1996, which was used to prepare FHFA's
Civil Money Penalty Inflation Adjustment rule, published at 81 FR
8369 (February 22, 2016.).
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The Adjustment Improvements Act provides that the initial catch-up
adjustment must be implemented by an interim final rule and will be
based on the percent change between the Consumer Price Index for all
Urban Consumers (CPI-U) for October 2015 and the CPI-U for the month of
October in the year that the civil money penalty was established or
adjusted under a provision of law other than the Inflation Adjustment
Act. Previous inflation adjustments made under the Inflation Adjustment
Act prior to the Adjustment Improvements Act are not considered in
making the catch-up adjustment.\8\ In the future, annual inflation
adjustments will be based on the percent change between the October
CPI-U preceding the date of the adjustment and the October CPI-U for
the year before that.
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\8\ Earlier inflation adjustments such as those issued in 81 FR
8369 are not considered in determining the amount of the catch-up
adjustment.
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II. Differences Between the Federal Home Loan Banks and the Enterprises
When promulgating any regulation that may have future effect
relating to the Banks, the Director is required by section 1313(f) of
the Safety and Soundness Act to consider the differences between the
Banks and the Enterprises with respect to the Banks' cooperative
ownership structure; mission of providing liquidity to members;
affordable housing and community development mission; capital
structure; and joint and several liability (12 U.S.C. 4513(f)).\9\ The
Director considered the differences between the Banks and the
Enterprises, as they relate to the above factors, and determined that
this interim final rule is appropriate. In sum, the five differences
identified in section 1313(f) of the Safety and Soundness Act do not
require a different enforcement regulation for the Banks than for the
Enterprises, and in any event, the inflation adjustments effected by
the interim final rule are mandated by law.
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\9\ So in original; no paragraphs (d) and (e) were enacted. See
12 U.S.C.A. 4513 n 1.
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III. Description of the Rule
This interim final rule adjusts the maximum penalty amount within
each of the three tiers specified in 12 U.S.C. 4636 by amending the
table contained in 12 CFR 1209.80 to reflect the new adjusted maximum
penalty amount that FHFA may impose upon a regulated entity or any
entity-affiliated party within each tier. The increases in maximum
penalty amounts contained in this interim final rule may not
necessarily affect the amount of any CMP that FHFA may seek for a
particular violation, which may not be the maximum that the law allows;
FHFA would calculate each CMP on a case-by-case basis in light of a
variety of factors.\10\ This rule also adjusts the maximum penalty
amounts for violations under the FHFA Flood Insurance regulation by
amending the text of 12 CFR 1250.3 to reflect the new adjusted maximum
penalty amount that FHFA may impose for violations under that
regulation. FHFA has adjusted the maximum amounts for penalties under
the Program Fraud Civil Remedies Act in a separate rule required by
that Act, which was also published today in this edition of the Federal
Register.
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\10\ See, e.g., 12 CFR 1209.7(c); FHFA Enforcement Policy, AB
2013-03 (May 31, 2013).
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The Adjustment Improvements Act directs federal agencies to
calculate each initial catch-up CMP adjustment as the percent change
between the CPI-U for October 2015 and the CPI-U for October of the
calendar year in which the amount of each CMP was set.\11\ The maximum
CMP amounts for FHFA penalties under 12 U.S.C. 4636 were set in
2008.\12\ Since FHFA is making this round of catch-up adjustments in
calendar year 2016, and the maximum CMP amounts were last set in
calendar year 2008, the inflation adjustment amount for each maximum
CMP amount was calculated by comparing the CPI-U for October 2008 with
the CPI-U for October 2015, resulting in an inflation factor of
1.09819. For each maximum CMP amount, the product of this inflation
adjustment and the previous maximum penalty amount was then rounded to
the nearest whole dollar as required by the Adjustment Improvements
Act, and was then summed with the previous maximum penalty amount to
determine the new adjusted maximum penalty amount.\13\ The table below
sets out these items accordingly.
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\11\ For the initial adjustment under the Adjustment
Improvements Act a CMP is considered to have been set in the
calendar year during which the amount of such CMP was established or
adjusted under a provision of law other than the Inflation
Adjustment Act.
\12\ See 12 U.S.C. 4636.
\13\ 28 U.S.C. 2461 note.
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Previous New adjusted
maximum Rounded maximum
U.S. Code citation Description penalty inflation penalty
amount increase amount
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12 U.S.C. 4636(b)(1).................. First Tier.............. 10,000 982 10,982
12 U.S.C. 4636(b)(2).................. Second Tier............. 50,000 4910 54,910
12 U.S.C. 4636(b)(4).................. Third Tier (Entity- 2,000,000 196,380 2,196,380
affiliated party and
Regulated entity).
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[[Page 43030]]
The CMP for FHFA penalties under the Flood Insurance regulation
were set in 2009.\14\ Since FHFA is making this round of adjustments in
calendar year 2016, and the maximum CMP amounts were last set in
calendar year 2009, the inflation adjustment amount for each maximum
CMP amount was calculated by comparing the CPI-U for October 2009 with
the CPI-U for October 2015, resulting in an inflation factor of
1.10020. The table below sets out these items accordingly.
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\14\ See 74 FR 2347, 2349 (Jan. 15, 2009).
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Previous New adjusted
maximum Rounded maximum
U.S. Code citation Description penalty inflation penalty
amount increase amount
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42 U.S.C. 4012a(f)(5)................. Maximum penalty per 485 49 534
violation.
42 U.S.C. 4012a(f)(5)................. Maximum total penalties 140,000 14,028 154,028
assessed against an
Enterprise in a
calendar year.
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IV. Regulatory Impact
Administrative Procedure Act
FHFA finds good cause that notice and an opportunity to comment on
this interim final rule are unnecessary under section 553(b) of the
Administrative Procedure Act (APA), 5 U.S.C. 553(b). This rulemaking
conforms with and is consistent with the statutory directive set forth
in the Inflation Adjustment Act. As a result, there are no issues of
policy discretion about which to seek public comment. Furthermore, the
rule is mandated by the Adjustment Improvements Act to be adopted in
interim final form. Accordingly, FHFA is issuing the amendments as an
interim final rule.
In addition, FHFA finds good cause to make this rule effective
thirty days after publication of this document in the Federal Register
under the APA. The rule adjusts the amount of each CMP tier as dictated
by the Inflation Adjustment Act, and, as noted above, is mandated by
the Adjustment Improvements Act to be adopted as an interim final rule,
presumptively with no greater delayed effective date than the APA
otherwise provides.
Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (RFA),\15\ an agency
must prepare a regulatory flexibility analysis for all proposed and
final rules that describes the impact of the rule on small entities,
unless the head of an agency certifies that the rule will not have ``a
significant economic impact on a substantial number of small
entities.'' However, the RFA applies only to rules for which an agency
publishes a general notice of proposed rulemaking pursuant to the
APA,\16\ and FHFA is required by statute to issue this rule as an
interim final rule. As a result FHFA has determined for good cause that
the APA does not require a general notice of proposed rulemaking for
this rule. Thus, the RFA does not apply to this interim final rule.
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\15\ 5 U.S.C. 603.
\16\ 5 U.S.C. 603(a), 604(a).
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Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) requires that
regulations involving the collection of information receive clearance
from the Office of Management and Budget (OMB). This rule contains no
such collection of information requiring OMB approval under the
Paperwork Reduction Act. Consequently, no information has been
submitted to OMB for review.
List of Subjects
12 CFR Part 1209
Administrative practice and procedure, Penalties.
12 CFR Part 1250
Flood insurance, Government-sponsored enterprises, Penalties,
Reporting and record keeping requirements.
Accordingly, for the reasons stated in the SUPPLEMENTARY
INFORMATION and under the authority of 12 U.S.C. 4513b and 12 U.S.C.
4526, the Federal Housing Finance Agency hereby amends subchapters A
and C of chapter XII of Title 12 of the Code of Federal Regulations as
follows:
PART 1209--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 1209 continues to read as follows:
Authority: 5 U.S.C. 554, 556, 557, and 701 et seq.; 12 U.S.C.
1430c(d); 12 U.S.C. 4501, 4502, 4503, 4511, 4513, 4513b, 4517, 4526,
4566(c)(1) and (c)(7), 4581-4588, 4631-4641; and 28 U.S.C. 2461
note.
0
2. Revise Sec. 1209.80 to read as follows:
Sec. 1209.80 Inflation adjustments.
The maximum amount of each civil money penalty within FHFA's
jurisdiction, as set by the Safety and Soundness Act and thereafter
adjusted in accordance with the Inflation Adjustment Act, is as
follows:
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New adjusted
U.S. Code citation Description maximum
penalty amount
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12 U.S.C. 4636(b)(1).............. First Tier.......... $10,982
12 U.S.C. 4636(b)(2).............. Second Tier......... 54,910
12 U.S.C. 4636(b)(4).............. Third Tier 2,196,380
(Regulated Entity
or Entity-
Affiliated party).
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0
3. Revise Sec. 1209.81 to read as follows:
Sec. 1209.81 Applicability.
The inflation adjustments set out in Sec. 1209.80 shall apply to
civil money penalties assessed in accordance with the provisions of the
Safety and Soundness Act, 12 U.S.C. 4636, and subparts B and C of this
part, for violations occurring after August 1, 2016.
PART 1250--FLOOD INSURANCE
0
4. The authority citation for part 1250 continues to read as follows:
[[Page 43031]]
Authority: 12 U.S.C. 4521(a)(4) and 4526; 28 U.S.C. 2461 note;
42 U.S.C. 4001 note; 42 U.S.C. 4012a(f)(3), (4), (5), (8), (9), and
(10).
0
5. Revise Sec. 1250.3(c) to read as follows:
Sec. 1250.3 Civil money penalties.
* * * * *
(c) Amount. The maximum civil money penalty amount is $485 for each
violation that occurs before August 1, 2016, with total penalties not
to exceed $140,000. For violations that occur on or after August 1,
2016, the civil money penalty under this section may not exceed $534
for each violation, with total penalties assessed under this section
against an Enterprise during any calendar year not to exceed $154,028.
* * * * *
Dated: June 27, 2016.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2016-15619 Filed 6-30-16; 8:45 am]
BILLING CODE 8070-01-P
