Rules of Practice and Procedure, 1519-1525 [2018-00403]
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
§ 109.103
Civil money penalties.
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(c) Maximum amount of civil money
penalties—(1) Statutory formula. The
OCC is required by statute to annually
adjust for inflation the maximum
amount of each civil money penalty
within its jurisdiction to administer.
The inflation adjustment is calculated
by multiplying the maximum dollar
amount of the civil money penalty for
the previous calendar year by the costof-living inflation adjustment multiplier
provided annually by the Office of
Management and Budget and rounding
the total to the nearest dollar.
(2) Notice of inflation adjustments.
The OCC will publish notice in the
Federal Register of the maximum
penalties which may be assessed on an
annual basis on, or before, January 15 of
each calendar year based on the formula
in paragraph (a) of this section, for
penalties assessed on, or after, the date
of publication of the most recent notice
related to conduct occurring on or after
November 2, 2015.
Dated: January 9, 2018.
Karen Solomon,
Acting Senior Deputy Comptroller and Chief
Counsel, Office of the Comptroller of the
Currency.
[FR Doc. 2018–00536 Filed 1–11–18; 8:45 am]
BILLING CODE 4810–33–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 308
RIN 3064–AE71
Rules of Practice and Procedure
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
AGENCY:
The FDIC is adjusting the
maximum amount of each civil money
penalty (CMP) within its jurisdiction to
account for inflation. This action is
required by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 (2015 Adjustment Act).
DATES: This rule is effective January 15,
2018.
FOR FURTHER INFORMATION CONTACT: Seth
P. Rosebrock, Supervisory Counsel,
Legal Division (202) 898–6609, or
Graham N. Rehrig, Senior Attorney,
Legal Division (202) 898–3829.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
I. Policy Objectives
The Final Rule changes the maximum
limit for CMPs according to inflation as
mandated by Congress in the 2015
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Adjustment Act.1 The intended effect of
annually adjusting maximum civil
money penalties in accordance with
changes in the Consumer Price Index is
to minimize any distortion in the real
value of those maximums due to
inflation, thereby promoting a more
consistent deterrent effect in the
structure of CMPs.
II. Background
The FDIC assesses CMPs under
section 8(i) of the Federal Deposit
Insurance Act (FDIA), 12 U.S.C. 1818,
and a variety of other statutes.2 Congress
established maximum penalties that
could be assessed under these statutes.
In many cases, these statutes contain
multiple penalty tiers, permitting the
assessment of penalties at various levels
depending upon the severity of the
misconduct at issue.3
In 1990, Congress determined that the
assessment of CMPs plays ‘‘an
important role in deterring violations
and furthering the policy goals
embodied in such laws and regulations’’
and concluded that ‘‘the impact of many
civil monetary penalties has been and is
diminished due to the effect of
inflation.’’ 4 Consequently, Congress
required federal agencies with authority
to impose CMPs to periodically adjust
by rulemaking the maximum CMPs
which these agencies were authorized to
impose in order to ‘‘maintain the
deterrent effect of civil monetary
penalties and promote compliance with
the law.’’ 5 Under the 1990 Adjustment
Act, the FDIC adjusted its CMP amounts
every four years.6
In 2015, Congress revised the process
by which federal agencies adjust
applicable CMPs for inflation.7 Under
the 2015 Adjustment Act, the FDIC is
required to make annual adjustments for
inflation.8 These adjustments apply to
all CMPs covered by the 2015
1 Public
Law 114–74, sec. 701, 129 Stat. 584.
e.g., 12 U.S.C. 1972(2)(F) (authorizing the
FDIC to impose CMPs for violations of the Bank
Holding Company Act of 1970 related to prohibited
tying arrangements); 15 U.S.C. 78u–2 (authorizing
the FDIC to impose CMPs for violations of certain
provisions of the Securities Exchange Act of 1934);
42 U.S.C. 4012a(f) (authorizing the FDIC to impose
CMPs for pattern or practice violations of the Flood
Disaster Protection Act).
3 For example, Section 8(i)(2) of the FDIA, 12
U.S.C. 1818(i)(2), provides for three tiers of CMPs,
with the size of such CMPs increasing with the
gravity of the misconduct.
4 Section 2 of the Federal Civil Penalties Inflation
Adjustment Act of 1990 (1990 Adjustment Act).
Public Law 101–410, 104 Stat. 890 (amended 2015)
(codified as amended at 28 U.S.C. 2461 note).
5 Id.
6 See, e.g., 77 FR 74573 (Dec. 17, 2012).
7 See Public Law 114–74, sec. 701, 129 Stat. 584.
8 See id. at sec. 701(b).
2 See,
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Adjustment Act.9 The 2015 Adjustment
Act requires annual adjustments to be
made by January 15 of each year.10
Although the 2015 Adjustment Act
increases the maximum penalty that
may be assessed under each applicable
statute, the FDIC possesses discretion to
impose CMP amounts below the
maximum level in accordance with the
severity of the misconduct at issue. For
example, when making a determination
as to the appropriate level of a penalty
assessed under section 8(i)(2) of the
FDIA, 12 U.S.C. 1818(i)(2), the FDIC is
guided by statutory factors set forth in
section 8(i)(2)(G) of the FDIA, 12 U.S.C.
1818(i)(2)(G), and those factors
identified in the Interagency Policy
Statement Regarding the Assessment of
CMPs by the Federal Financial
Institutions Regulatory Agencies.11 Such
factors include, but are not limited to,
the gravity and duration of the
misconduct, and the intent related to
the misconduct.
The 2015 Adjustment Act notes that
the FDIC ‘‘shall adjust [CMPs] and shall
make the adjustment notwithstanding
section 553 of title 5, United States
Code’’ (the Administrative Procedure
Act).12 The FDIC, therefore, is not
obligated to publish the adjustments
through notice-and-comment
rulemaking, and the FDIC is publishing
the adjustments through a final rule.
III. Description and Expected Effects of
the Final Rule
The Final Rule modifies the
maximum limit for CMPs according to
inflation as mandated by Congress in
the 2015 Adjustment Act. The 2015
Adjustment Act directs federal agencies
to follow guidance issued by the Office
of Management and Budget (OMB) on
December 15, 2017 (OMB Guidance),
when calculating new maximum
penalty levels.13 The adjustments are to
be based on the percent change between
the Consumer Price Index for all Urban
Consumers (CPI–U)14 for October 2016
and the October 2017 CPI–U.
9 See Public Law 101–410, sec. 3(2), 104 Stat. 890
(amended 2015) (codified as amended at 28 U.S.C.
2461 note).
10 Public Law 114–74, sec. 701(b), 129 Stat. 584.
11 63 FR 30227 (June 3, 1998).
12 Public Law 114–74, sec. 701(b), 129 Stat. 584
(emphasis added).
13 See OMB, Implementation of Penalty Inflation
Adjustments for 2018, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements
Act of 2015, M–18–03 (Dec. 15, 2017), available at
https://www.whitehouse.gov/wp-content/uploads/
2017/11/M-18-03.pdf (noting that the applicable
2018 CMP-adjustment multiplier is 1.02041).
14 The CPI–U is compiled by the Bureau of Labor
Statistics of the Department of Labor.
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Summary of the FDIC’s Calculations
During the 12-month period ending
October 2017, the CPI–U was reported
to have increased by 2.041 percent. In
keeping with the OMB Guidance, the
FDIC adjusted each of its CMP
maximum penalty levels by the inflation
factor.15 After applying the adjustment,
the FDIC rounded each penalty level to
the nearest dollar. In making these
calculations, the FDIC consulted with
staff from the Office of the Comptroller
of the Currency, the Board of Governors
for the Federal Reserve System, the
National Credit Union Administration,
and the Bureau of Consumer Financial
Protection to ensure that the FDIC’s
adjusted figures were consistent with
these regulators’ respective amounts.
The Adjusted CMP Amounts
The following chart displays the
adjusted CMP amounts for each CMP
identified in 12 CFR part 308.16 The
following chart reflects the maximum
CMP amounts that may be assessed after
January 15, 2018—the effective date of
the 2018 annual adjustment—including
assessments whose associated violations
occurred on or after November 2,
2015.17
MAXIMUM CIVIL MONEY PENALTY AMOUNTS
Current maximum CMP
(through January 14, 2018)
U.S. Code citation
12 U.S.C. 1464(v):
Tier One CMP ..................................................................................
Tier Two CMP ..................................................................................
Tier Three CMP ................................................................................
12 U.S.C. 1467(d) ....................................................................................
12 U.S.C. 1817(a):
Tier One CMP ..................................................................................
Tier Two CMP ..................................................................................
Tier Three CMP ................................................................................
12 U.S.C. 1817(c):
Tier One CMP ..................................................................................
Tier Two CMP ..................................................................................
Tier Three CMP ................................................................................
12 U.S.C. 1818(i)(2):
Tier One CMP ..................................................................................
Tier Two CMP ..................................................................................
Tier Three CMP ................................................................................
12 U.S.C. 1820(e)(4) ...............................................................................
12 U.S.C. 1820(k)(6) ...............................................................................
12 U.S.C. 1828(a)(3) ...............................................................................
12 U.S.C. 1828(h):
For assessments <$10,000 ..............................................................
12 U.S.C. 1829b(j) ...................................................................................
12 U.S.C. 1832(c) ....................................................................................
12 U.S.C. 1884 ........................................................................................
12 U.S.C. 1972(2)(F):
Tier One CMP ..................................................................................
Tier Two CMP ..................................................................................
Tier Three CMP ................................................................................
12 U.S.C. 3909(d) ....................................................................................
15 U.S.C. 78u-2:
Tier One CMP (individuals) ..............................................................
Tier One CMP (others) .....................................................................
Tier Two CMP (individuals) ..............................................................
Tier Two CMP (others) .....................................................................
Tier Three CMP (individuals) ...........................................................
Tier Three penalty (others) ...............................................................
15 U.S.C. 1639e(k):
First violation ....................................................................................
Subsequent violations ......................................................................
31 U.S.C. 3802 ........................................................................................
42 U.S.C. 4012a(f) ...................................................................................
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$3,849
38,492
1,924,589
9,623
3,849
38,492
1,924,589
15 Under the 1990 Adjustment Act, adjustments
have been made only to CMPs that are for specific
dollar amounts or maximums. CMPs that are
assessed based upon a fixed percentage of an
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3,928
39,278
1,963,870
3,519
35,186
1,759,309
3,591
35,904
1,795,216
9,623
48,114
1,924,589
8,797
316,566
120
9,819
49,096
1,963,870
8,977
323,027
122
120
20,111
2,795
279
122
20,521
2,852
285
9,623
48,114
1,924,589
2,394
9,819
49,096
1,963,870
2,443
9,054
90,535
90,535
452,677
181,071
905,353
9,239
92,383
92,383
461,916
184,767
923,831
11,053
22,105
10,957
2,090
12 CFR 308.132(c)—Late or Misleading Reports of Condition and Income (Call Reports):
First Offense:
$25 million or more assets:
1 to 15 days late ................................................................
16 or more days late ..........................................................
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$3,928
39,278
1,963,870
9,819
11,279
22,556
11,181
2,133
Current maximum amount
(through January 14, 2018)
CFR Citation
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Adjusted maximum CMP
(beginning January 15, 2018)
527
1,056
institution’s total assets are not subject to
adjustment.
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New maximum amount
(beginning January 15, 2018)
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538
1,078
16 As noted previously, the FDIC retains
discretion to impose CMPs in amounts below the
referenced maximums.
17 See OMB Guidance at 4.
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Current maximum amount
(through January 14, 2018)
CFR Citation
Less than $25 million assets
1 to 15 days late ................................................................
16 or more days late ..........................................................
Subsequent Offenses:
$25 million or more assets:
1 to 15 days late ................................................................
16 or more days late ..........................................................
The Expected Effects of the CMP
Adjustments
These CMP adjustments are expected
to minimize any year-to-year distortions
in the real value of the CMP maximums.
Additionally, these adjustments will
promote a more consistent deterrent
effect in the structure of CMPs. As
previously noted, the FDIC retains
discretion to impose CMP amounts
below the maximum level. The actual
number and size of CMPs assessed in
the future will depend on the
propensity and severity of the violations
committed by banks and institutionaffiliated parties, as well as the
particular statute that is at issue. Such
future violations cannot be reliably
forecast. It is expected that the FDIC
will continue to exercise its discretion
to impose CMPs that are appropriate to
their severity.
The 2015 Adjustment Act will likely
result in a minimal increase in
administrative costs for the FDIC in
order to establish new inflation-adjusted
maximum CMPs each year. Because
these calculations are relatively simple,
the number of labor hours necessary to
perform this task is likely to be
insignificant relative to total
enforcement labor hours for the
Corporation.
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IV. Alternatives Considered
The 2015 Adjustment Act mandates
the frequency of the inflation
adjustment and the measure of inflation
to be used in making these adjustments.
This statute also provides that the FDIC
is not required to proceed through
notice-and-comment rulemaking under
the Administrative Procedure Act in
making annual CMP adjustments.
Therefore, the FDIC has not considered
alternatives to the CMP Adjustments.
V. Request for Comment
The 2015 Adjustment Act requires the
FDIC to adjust its maximum CMP
amounts ‘‘notwithstanding section 553
of title 5, United States Code,’’ 18 and
provides the specific adjustments to be
made. Moreover, the CMP Adjustments
and the revisions to the CFR are
Law 114–74, sec. 701(b), 129 Stat. 584.
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New maximum amount
(beginning January 15, 2018)
176
352
ministerial and technical; therefore, the
FDIC is not required to complete a
notice-and-comment rulemaking
process prior to making the adjustments.
VI. Regulatory Analysis
Riegle Community Development and
Regulatory Improvement Act
Section 302 of the Riegle Community
Development and Regulatory
Improvement Act 19 generally requires
that regulations prescribed by federal
banking agencies which impose
additional reporting, disclosures, or
other new requirements on insured
depository institutions take effect on the
first day of a calendar quarter unless the
regulation is required to take effect on
another date pursuant to another act of
Congress or the agency determines for
good cause that the regulation should
become effective on an earlier date.
This Final Rule does not impose any
new or additional reporting, disclosures,
or other requirements on insured
depository institutions. Therefore, the
Final Rule is not subject to the
requirements of this statute.
Regulatory Flexibility Act
An initial regulatory flexibility
analysis under the Regulatory
Flexibility Act 20 (RFA) is required only
when an agency must publish a general
notice of proposed rulemaking. As
noted above, the FDIC determined that
publication of a notice of proposed
rulemaking is not necessary for the
Final Rule. Accordingly, the RFA does
not require an initial regulatory
flexibility analysis. Nevertheless, the
FDIC considered the likely impact of
Final Rule on small entities. From 2011
through 2016, on average, only 1.4
percent of FDIC-supervised institutions
were ordered to pay a CMP each year.
Accordingly, the FDIC believes that the
Final Rule will not have a significant
impact on a substantial number of small
entities.
180
359
879
1,759
897
1,795
Small Business Regulatory Enforcement
Fairness Act
The OMB has determined that the
Final Rule is not a ‘‘major rule’’ within
the meaning of the relevant sections of
the Small Business Regulatory
Enforcement Act of 1996 (SBREFA).21
As required by SBREFA, the FDIC will
submit the Final Rule and other
appropriate reports to Congress and the
Government Accountability Office for
review.
The Omnibus Consolidated and
Emergency Supplemental
Appropriations Act, 1999: Assessment
of Federal Regulations and Policies on
Families
The FDIC determined that the Final
Rule will not affect family wellbeing
within the meaning of section 654 of the
Omnibus Consolidated and Emergency
Supplemental Appropriations Act,
1999.22
Paperwork Reduction Act
The Final Rule does not create any
new, or revise any existing, collections
of information under section 3504(h) of
the Paperwork Reduction Act of 1980.23
Consequently, no information collection
request will be submitted to the OMB
for review.
Plain Language Act
Section 722 of the Gramm-LeachBliley Act requires the FDIC to use plain
language in all proposed and final rules
published after January 1, 2000.24
Accordingly, the FDIC has attempted to
write the Final Rule in clear and
comprehensible language.
List of Subjects in 12 CFR Part 308
Administrative practice and
procedure, Banks, Banking, Claims,
Crime, Equal access to justice, Ex parte
communications, Hearing procedure,
Lawyers, Penalties, State nonmember
banks.
21 5
U.S.C. 801 et seq.
Law 105–277, 112 Stat. 2681 (1998).
23 44 U.S.C. 3501 et seq.
24 Public Law 106–102, 113 Stat. 1338 (Nov. 12,
1999).
22 Public
19 12
18 Public
20 5
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U.S.C. 4802.
U.S.C. 603.
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
For the reasons set forth in the
preamble, the FDIC amends 12 CFR part
308 as follows:
PART 308—RULES OF PRACTICE AND
PROCEDURE
1. The authority citation for part 308
continues to read as follows:
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Authority: 5 U.S.C. 504, 554–557; 12
U.S.C. 93(b), 164, 505, 1464, 1467(d), 1467a,
1468, 1815(e), 1817, 1818, 1819, 1820, 1828,
1829, 1829(b), 1831i, 1831m(g)(4), 1831o,
1831p–1, 1832(c), 1884(b), 1972, 3102,
3108(a), 3349, 3909, 4717, 5412(b)(2)(C),
5414(b)(3); 15 U.S.C. 78(h) and (i), 78o(c)(4),
78o–4(c), 78o–5, 78q–1, 78s, 78u, 78u–2,
78u–3, 78w, 6801(b), 6805(b)(1); 28 U.S.C.
2461 note; 31 U.S.C. 330, 5321; 42 U.S.C.
4012a; Pub. L. 104–134, sec. 31001(s), 110
Stat. 1321; Pub. L. 109–351, 120 Stat. 1966;
Pub. L. 111–203, 124 Stat. 1376; Pub. L. 114–
74, sec. 701, 129 Stat. 584.
2. Revise § 308.116(b)(4) to read as
follows:
■
§ 308.116
Assessment of penalties.
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(b) * * *
(4) Adjustment of civil money
penalties by the rate of inflation
pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015. After January 15, 2018, for
violations that occurred on or after
November 2, 2015:
(i) Any person who has engaged in a
violation as set forth in paragraph (b)(1)
of this section shall forfeit and pay a
civil money penalty of not more than
$9,819 for each day the violation
continued.
(ii) Any person who has engaged in a
violation, unsafe or unsound practice or
breach of fiduciary duty, as set forth in
paragraph (b)(2) of this section, shall
forfeit and pay a civil money penalty of
not more than $49,096 for each day such
violation, practice or breach continued.
(iii) Any person who has knowingly
engaged in a violation, unsafe or
unsound practice or breach of fiduciary
duty, as set forth in paragraph (b)(3) of
this section, shall forfeit and pay a civil
money penalty not to exceed:
(A) In the case of a person other than
a depository institution—$1,963,870 per
day for each day the violation, practice
or breach continued; or
(B) In the case of a depository
institution—an amount not to exceed
the lesser of $1,963,870 or one percent
of the total assets of such institution for
each day the violation, practice or
breach continued.
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■ 3. Revise § 308.132(d) to read as
follows:
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§ 308.132
Assessment of penalties.
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(d) Maximum civil money penalty
amounts. Pursuant to the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015, after January
15, 2018, for violations that occurred on
or after November 2, 2015, the Board of
Directors or its designee may assess civil
money penalties in the maximum
amounts as follows:
(1) Civil money penalties assessed
pursuant to 12 U.S.C. 1464(v) for late
filing or the submission of false or
misleading certified statements by State
savings associations. Pursuant to section
5(v) of the Home Owners’ Loan Act (12
U.S.C. 1464(v)), the Board of Directors
or its designee may assess civil money
penalties as follows:
(i) Late filing—Tier One penalties. In
cases in which an institution fails to
make or publish its Report of Condition
and Income (Call Report) within the
appropriate time periods, a civil money
penalty of not more than $3,928 per day
may be assessed where the institution
maintains procedures in place
reasonably adapted to avoid inadvertent
error and the late filing occurred
unintentionally and as a result of such
error; or the institution inadvertently
transmitted a Call Report that is
minimally late. For penalties assessed
after January 15, 2018, for violations of
this paragraph (d)(1)(i) that occurred on
or after November 2, 2015, the following
maximum Tier One penalty amounts
contained in paragraphs (d)(1)(i)(A) and
(B) of this section shall apply for each
day that the violation continues.
(A) First offense. Generally, in such
cases, the amount assessed shall be $538
per day for each of the first 15 days for
which the failure continues, and $1,078
per day for each subsequent day the
failure continues, beginning on the
sixteenth day. For institutions with less
than $25,000,000 in assets, the amount
assessed shall be the greater of $180 per
day or 1/1000th of the institution’s total
assets (1/10th of a basis point) for each
of the first 15 days for which the failure
continues, and $359 or 1/500th of the
institution’s total assets, 1⁄5 of a basis
point) for each subsequent day the
failure continues, beginning on the
sixteenth day.
(B) Subsequent offense. Where the
institution has been delinquent in
making or publishing its Call Report
within the preceding five quarters, the
amount assessed for the most current
failure shall generally be $897 per day
for each of the first 15 days for which
the failure continues, and $1,795 per
day for each subsequent day the failure
continues, beginning on the sixteenth
day. For institutions with less than
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$25,000,000 in assets, those amounts,
respectively, shall be 1/500th of the
bank’s total assets and 1/250th of the
institution’s total assets.
(C) Lengthy or repeated violations.
The amounts set forth in this paragraph
(d)(1)(i) will be assessed on a case-bycase basis where the amount of time of
the institution’s delinquency is lengthy
or the institution has been delinquent
repeatedly in making or publishing its
Call Reports.
(D) Waiver. Absent extraordinary
circumstances outside the control of the
institution, penalties assessed for late
filing shall not be waived.
(ii) Late-filing—Tier Two penalties.
Where an institution fails to make or
publish its Call Report within the
appropriate time period, the Board of
Directors or its designee may assess a
civil money penalty of not more than
$39,278 per day for each day the failure
continues.
(iii) False or misleading reports or
information—(A) Tier One penalties. In
cases in which an institution submits or
publishes any false or misleading Call
Report or information, the Board of
Directors or its designee may assess a
civil money penalty of not more than
$3,928 per day for each day the
information is not corrected, where the
institution maintains procedures in
place reasonably adapted to avoid
inadvertent error and the violation
occurred unintentionally and as a result
of such error; or the institution
inadvertently transmits a Call Report or
information that is false or misleading.
(B) Tier Two penalties. Where an
institution submits or publishes any
false or misleading Call Report or other
information, the Board of Directors or its
designee may assess a civil money
penalty of not more than $39,278 per
day for each day the information is not
corrected.
(C) Tier Three penalties. Where an
institution knowingly or with reckless
disregard for the accuracy of any Call
Report or information submits or
publishes any false or misleading Call
Report or other information, the Board
of Directors or its designee may assess
a civil money penalty of not more than
the lesser of $1,963,870 or 1 percent of
the institution’s total assets per day for
each day the information is not
corrected.
(iv) Mitigating factors. The amounts
set forth in this paragraph (d)(1) may be
reduced based upon the factors set forth
in paragraph (b) of this section.
(2) Civil money penalties assessed
pursuant to 12 U.S.C. 1467(d) for refusal
by an affiliate of a State savings
association to allow examination or to
provide required information during an
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
examination. Pursuant to section 9(d) of
the Home Owners’ Loan Act (12 U.S.C.
1467(d)), civil money penalties may be
assessed against any State savings
association if an affiliate of such an
institution refuses to permit a dulyappointed examiner to conduct an
examination or refuses to provide
information during the course of an
examination as set forth 12 U.S.C.
1467(d), in an amount not to exceed
$9,819 for each day the refusal
continues.
(3) Civil money penalties assessed
pursuant to 12 U.S.C. 1817(a) for late
filings or the submission of false or
misleading reports of condition.
Pursuant to section 7(a) of the FDIA (12
U.S.C. 1817(a)), the Board of Directors
or its designee may assess civil money
penalties as follows:
(i) Late filing—Tier One penalties. In
cases in which an institution fails to
make or publish its Report of Condition
and Income (Call Report) within the
appropriate time periods, a civil money
penalty of not more than $3,928 per day
may be assessed where the institution
maintains procedures in place
reasonably adapted to avoid inadvertent
error and the late filing occurred
unintentionally and as a result of such
error; or the institution inadvertently
transmitted a Call Report that is
minimally late. For penalties assessed
after January 15, 2018, for violations of
this paragraph (d)(3)(i) that occurred on
or after November 2, 2015, the following
maximum Tier One penalty amounts
contained in paragraphs (d)(3)(i)(A) and
(B) of this section shall apply for each
day that the violation continues.
(A) First offense. Generally, in such
cases, the amount assessed shall be $538
per day for each of the first 15 days for
which the failure continues, and $1,078
per day for each subsequent day the
failure continues, beginning on the
sixteenth day. For institutions with less
than $25,000,000 in assets, the amount
assessed shall be the greater of $180 per
day or 1/1000th of the institution’s total
assets (1/10th of a basis point) for each
of the first 15 days for which the failure
continues, and $359 or 1/500th of the
institution’s total assets, (1⁄5 of a basis
point) for each subsequent day the
failure continues, beginning on the
sixteenth day.
(B) Subsequent offense. Where the
institution has been delinquent in
making or publishing its Call Report
within the preceding five quarters, the
amount assessed for the most current
failure shall generally be $897 per day
for each of the first 15 days for which
the failure continues, and $1,795 per
day for each subsequent day the failure
continues, beginning on the sixteenth
VerDate Sep<11>2014
15:52 Jan 11, 2018
Jkt 244001
day. For institutions with less than
$25,000,000 in assets, those amounts,
respectively, shall be 1/500th of the
bank’s total assets and 1/250th of the
institution’s total assets.
(C) Lengthy or repeated violations.
The amounts set forth in this paragraph
(d)(3)(i) will be assessed on a case-bycase basis where the amount of time of
the institution’s delinquency is lengthy
or the institution has been delinquent
repeatedly in making or publishing its
Call Reports.
(D) Waiver. Absent extraordinary
circumstances outside the control of the
institution, penalties assessed for late
filing shall not be waived.
(ii) Late-filing—Tier Two penalties.
Where an institution fails to make or
publish its Call Report within the
appropriate time period, the Board of
Directors or its designee may assess a
civil money penalty of not more than
$39,278 per day for each day the failure
continues.
(iii) False or misleading reports or
information—(A) Tier One penalties. In
cases in which an institution submits or
publishes any false or misleading Call
Report or information, the Board of
Directors or its designee may assess a
civil money penalty of not more than
$3,928 per day for each day the
information is not corrected, where the
institution maintains procedures in
place reasonably adapted to avoid
inadvertent error and the violation
occurred unintentionally and as a result
of such error; or the institution
inadvertently transmits a Call Report or
information that is false or misleading.
(B) Tier Two penalties. Where an
institution submits or publishes any
false or misleading Call Report or other
information, the Board of Directors or its
designee may assess a civil money
penalty of not more than $39,278 per
day for each day the information is not
corrected.
(C) Tier Three penalties. Where an
institution knowingly or with reckless
disregard for the accuracy of any Call
Report or information submits or
publishes any false or misleading Call
Report or other information, the Board
of Directors or its designee may assess
a civil money penalty of not more than
the lesser of $1,963,870 or 1 percent of
the institution’s total assets per day for
each day the information is not
corrected.
(iv) Mitigating factors. The amounts
set forth in this paragraph (d)(3) may be
reduced based upon the factors set forth
in paragraph (b) of this section.
(4) Civil money penalties assessed
pursuant to 12 U.S.C. 1817(c) for late
filing or the submission of false or
misleading certified statements. Tier
PO 00000
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1523
One civil money penalties may be
assessed pursuant to section 7(c)(4)(A)
of the FDIA (12 U.S.C. 1817(c)(4)(A)) in
an amount not to exceed $3,591 for each
day during which the failure to file
continues or the false or misleading
information is not corrected. Tier Two
civil money penalties may be assessed
pursuant to section 7(c)(4)(B) of the
FDIA (12 U.S.C. 1817(c)(4)(B)) in an
amount not to exceed $35,904 for each
day during which the failure to file
continues or the false or misleading
information is not corrected. Tier Three
civil money penalties may be assessed
pursuant to section 7(c)(4)(C) in an
amount not to exceed the lesser of
$1,795,216 or 1 percent of the total
assets of the institution for each day
during which the failure to file
continues or the false or misleading
information is not corrected.
(5) Civil money penalties assessed
pursuant to section 8(i)(2) of the FDIA.
Tier One civil money penalties may be
assessed pursuant to section 8(i)(2)(A) of
the FDIA (12 U.S.C. 1818(i)(2)(A)) in an
amount not to exceed $9,819 for each
day during which the violation
continues. Tier Two civil money
penalties may be assessed pursuant to
section 8(i)(2)(B) of the FDIA (12 U.S.C.
1818(i)(2)(B)) in an amount not to
exceed $49,096 for each day during
which the violation, practice or breach
continues. Tier Three civil money
penalties may be assessed pursuant to
section 8(i)(2)(C) (12 U.S.C.
1818(i)(2)(C)) in an amount not to
exceed, in the case of any person other
than an insured depository institution
$1,963,870 or, in the case of any insured
depository institution, an amount not to
exceed the lesser of $1,963,870 or 1
percent of the total assets of such
institution for each day during which
the violation, practice, or breach
continues.
(i) Pursuant to 7(j)(16) of the FDIA (12
U.S.C. 1817(j)(16)), a civil money
penalty may be assessed for violations
of change in control of insured
depository institution provisions
pursuant to section 8(i)(2) of the FDIA
(12 U.S.C. 1818(i)(2)) in the amounts set
forth in this paragraph (d)(5).
(ii) Pursuant to the International
Banking Act of 1978 (IBA) (12 U.S.C.
3108(b)), civil money penalties may be
assessed for failure to comply with the
requirements of the IBA pursuant to
section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)), in the amounts set forth in
this paragraph (d)(5).
(iii) Pursuant to section 1120(b) of the
Financial Institutions Recovery, Reform,
and Enforcement Act of 1989 (FIRREA)
(12 U.S.C. 3349(b)), where a financial
institution seeks, obtains, or gives any
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
other thing of value in exchange for the
performance of an appraisal by a person
that the institution knows is not a state
certified or licensed appraiser in
connection with a federally related
transaction, a civil money penalty may
be assessed pursuant to section 8(i)(2) of
the FDIA (12 U.S.C. 1818(i)(2)) in the
amounts set forth in this paragraph
(d)(5).
(iv) Pursuant to the Community
Development Banking and Financial
Institution Act (Community
Development Banking Act) (12 U.S.C.
4717(b)) a civil money penalty may be
assessed for violations of the
Community Development Banking Act
pursuant to section 8(i)(2) of the FDIA
(12 U.S.C. 1818(i)(2)), in the amount set
forth in this paragraph (d)(5).
(v) Civil money penalties may be
assessed pursuant to section 8(i)(2) of
the FDIA in the amounts set forth in this
paragraph (d)(5) for violations of various
consumer laws, including, but not
limited to, the Home Mortgage
Disclosure Act (12 U.S.C. 2804 et seq.
and 12 CFR 203.6), the Expedited Funds
Availability Act (12 U.S.C. 4001 et seq.),
the Truth in Savings Act (12 U.S.C. 4301
et seq.), the Real Estate Settlement
Procedures Act (12 U.S.C. 2601 et seq.),
the Truth in Lending Act (15 U.S.C.
1601 et seq.), the Fair Credit Reporting
Act (15 U.S.C. 1681 et seq.), the Equal
Credit Opportunity Act (15 U.S.C. 1691
et seq.), the Fair Debt Collection
Practices Act (15 U.S.C. 1692 et seq.),
the Electronic Funds Transfer Act (15
U.S.C. 1693 et seq.) and the Fair
Housing Act (42 U.S.C. 3601 et seq.).
(6) Civil money penalties assessed
pursuant to 12 U.S.C. 1820(e) for refusal
to allow examination or to provide
required information during an
examination. Pursuant to section
10(e)(4) of the FDIA (12 U.S.C.
1820(e)(4)), civil money penalties may
be assessed against any affiliate of an
insured depository institution that
refuses to permit a duly-appointed
examiner to conduct an examination or
to provide information during the
course of an examination as set forth in
section 20(b) of the FDIA (12 U.S.C.
1820(b)), in an amount not to exceed
$8,977 for each day the refusal
continues.
(7) Civil money penalties assessed
pursuant to 12 U.S.C. 1820(k) for
violation of one-year restriction on
Federal examiners of financial
institutions. Pursuant to section 10(k) of
the FDIA (12 U.S.C. 1820(k)), the Board
of Directors or its designee may assess
a civil money penalty of up to $323,027
against any covered former Federal
examiner of a financial institution who,
in violation of section 10(k) of the FDIA
VerDate Sep<11>2014
15:52 Jan 11, 2018
Jkt 244001
(12 U.S.C. 1820(k)) and within the oneyear period following termination of
government service as an employee,
serves as an officer, director, or
consultant of a financial or depository
institution, a holding company, or of
any other entity listed in section 10(k)
of the FDIA (12 U.S.C. 1820(k)), without
the written waiver or permission by the
appropriate Federal banking agency or
authority under section 10(k)(5) of the
FDIA (12 U.S.C. 1820(k)(5)).
(8) Civil money penalties assessed
pursuant to 12 U.S.C. 1828(a) for
incorrect display of insurance logo.
Pursuant to section 18(a)(3) of the FDIA
(12 U.S.C. 1828(a)(3)), civil money
penalties may be assessed against an
insured depository institution that fails
to correctly display its insurance logo
pursuant to that section, in an amount
not to exceed $122 for each day the
violation continues.
(9) Civil money penalties assessed
pursuant to 12 U.S.C. 1828(h) for failure
to timely pay assessment—(i) In general.
Subject to paragraph (d)(9)(iii) of this
section, any insured depository
institution that fails or refuses to pay
any assessment shall be subject to a
penalty in an amount of not more than
1 percent of the amount of the
assessment due for each day that such
violation continues.
(ii) Exception in case of dispute.
Paragraph (d)(9)(i) of this section shall
not apply if—
(A) The failure to pay an assessment
is due to a dispute between the insured
depository institution and the
Corporation over the amount of such
assessment; and
(B) The insured depository institution
deposits security satisfactory to the
Corporation for payment upon final
determination of the issue.
(iii) Special rule for small assessment
amounts. If the amount of the
assessment that an insured depository
institution fails or refuses to pay is less
than $10,000 at the time of such failure
or refusal, the amount of any penalty to
which such institution is subject under
paragraph (d)(9)(i) of this section shall
not exceed $122 for each day that such
violation continues.
(iv) Authority to modify or remit
penalty. The Corporation, in the sole
discretion of the Corporation, may
compromise, modify, or remit any
penalty that the Corporation may assess
or has already assessed under paragraph
(d)(9)(i) of this section upon a finding
that good cause prevented the timely
payment of an assessment.
(10) Civil money penalties assessed
pursuant to 12 U.S.C. 1829b(j) for
recordkeeping violations. Pursuant to
section 19b(j) of the FDIA (12 U.S.C.
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
1829b(j)), civil money penalties may be
assessed against an insured depository
institution and any director, officer or
employee thereof who willfully or
through gross negligence violates or
causes a violation of the recordkeeping
requirements of that section or its
implementing regulations in an amount
not to exceed $20,521 per violation.
(11) Civil money penalties pursuant to
12 U.S.C. 1832(c) for violation of
provisions regarding interest-bearing
demand deposit accounts. Pursuant to
12 U.S.C. 1832(c), any depository
institution that violates the prohibition
regarding interest-bearing demand
deposit accounts shall be subject to a
fine of $2,852 per violation.
(12) Civil penalties for violations of
security measure requirements under 12
U.S.C. 1884. Pursuant to 12 U.S.C. 1884,
an institution that violates a rule
establishing minimum security
requirements as set forth in 12 U.S.C.
1882, shall be subject to a civil penalty
not to exceed $285 for each day of the
violation.
(13) Civil money penalties assessed
pursuant to 12 U.S.C. 1972(2)(F) for
prohibited tying arrangements. Pursuant
to the Bank Holding Company Act of
1970, Tier One civil money penalties
may be assessed pursuant to 12 U.S.C.
1972(2)(F)(i) in an amount not to exceed
$9,819 for each day during which the
violation continues. Tier Two civil
money penalties may be assessed
pursuant to 12 U.S.C. 1972(2)(F)(ii) in
an amount not to exceed $49,096 for
each day during which the violation,
practice or breach continues. Tier Three
civil money penalties may be assessed
pursuant to 12 U.S.C. 1972(2)(F)(iii) in
an amount not to exceed, in the case of
any person other than an insured
depository institution $1,963,870 for
each day during which the violation,
practice, or breach continues or, in the
case of any insured depository
institution, an amount not to exceed the
lesser of $1,963,870 or 1 percent of the
total assets of such institution for each
day during which the violation,
practice, or breach continues.
(14) Civil money penalties assessed
pursuant to 12 U.S.C. 3909(d). Pursuant
to the International Lending
Supervision Act (ILSA) (12 U.S.C.
3909(d)), civil money penalties may be
assessed against any institution or any
officer, director, employee, agent or
other person participating in the
conduct of the affairs of such institution
is an amount not to exceed $2,443 for
each day a violation of the ILSA or any
rule, regulation or order issued pursuant
to ILSA continues.
(15) Civil money penalties assessed
for violations of 15 U.S.C. 78u–2.
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
Pursuant to section 21B of the Securities
Exchange Act of 1934 (Exchange Act)
(15 U.S.C. 78u–2), civil money penalties
may be assessed for violations of certain
provisions of the Exchange Act, where
such penalties are in the public interest.
Tier One civil money penalties may be
assessed pursuant to 15 U.S.C. 78u–
2(b)(1) in an amount not to exceed
$9,239 for a natural person or $92,383
for any other person for violations set
forth in 15 U.S.C. 78u–2(a). Tier Two
civil money penalties may be assessed
pursuant to 15 U.S.C. 78u–2(b)(2) in an
amount not to exceed—for each
violation set forth in 15 U.S.C. 78u–
2(a)—$92,383 for a natural person or
$461,916 for any other person if the act
or omission involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement.
Tier Three civil money penalties may be
assessed pursuant to 15 U.S.C. 78u–
2(b)(3) for each violation set forth in 15
U.S.C. 78u–2(a), in an amount not to
exceed $184,767 for a natural person or
$923,831 for any other person, if the act
or omission involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and such act or omission directly or
indirectly resulted in substantial losses,
or created a significant risk of
substantial losses to other persons or
resulted in substantial pecuniary gain to
the person who committed the act or
omission.
(16) Civil money penalties assessed
pursuant to 15 U.S.C. 1639e(k) for
appraisal independence violations.
Pursuant to section 1472(a) of the DoddFrank Wall Street Reform and Consumer
Protection Act (Appraisal Independence
Rule) (15 U.S.C. 1639e(k)), civil money
penalties may be assessed for an initial
violation of the Appraisal Independence
Rule in an amount not to exceed
$11,279 for each day during which the
violation continues and, for subsequent
violations, $22,556 for each day during
which the violation continues.
(17) Civil money penalties assessed
for false claims and statements
pursuant to 31 U.S.C. 3802. Pursuant to
the Program Fraud Civil Remedies Act
(31 U.S.C. 3802), civil money penalties
of not more than $11,181 per claim or
statement may be assessed for violations
involving false claims and statements.
(18) Civil money penalties assessed
for violations of 42 U.S.C. 4012a(f).
Pursuant to the Flood Disaster
Protection Act (FDPA) (42 U.S.C.
4012a(f)), civil money penalties may be
assessed against any regulated lending
institution that engages in a pattern or
practice of violations of the FDPA in an
amount not to exceed $2,133 per
violation.
VerDate Sep<11>2014
17:21 Jan 11, 2018
Jkt 244001
Dated at Washington, DC on December 19,
2017.
By order of the Board of Directors.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 2018–00403 Filed 1–11–18; 8:45 am]
BILLING CODE 6714–01–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1083
Civil Penalty Inflation Adjustments
Bureau of Consumer Financial
Protection.
ACTION: Final rule.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is
adjusting for inflation the maximum
amount of each civil penalty within the
Bureau’s jurisdiction. These
adjustments are 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 (Inflation
Adjustment Act). The inflation
adjustments mandated by the Inflation
Adjustment Act serve to maintain the
deterrent effect of civil penalties and to
promote compliance with the law.
DATES: This final rule is effective
January 15, 2018.
FOR FURTHER INFORMATION CONTACT:
Monique Chenault, Paralegal Specialist,
Office of Regulations, Consumer
Financial Protection Bureau, 1700
G Street NW, Washington, DC 20552, at
(202) 435–7700.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
The Federal Civil Penalties Inflation
Adjustment Act of 1990,1 as amended
by the Debt Collection Improvement Act
of 1996 2 and further amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (Inflation Adjustment Act),3
directs Federal agencies to adjust for
inflation the civil penalty amounts
within their jurisdiction not later than
July 1, 2016, and then not later than
January 15 every year thereafter.4 28
1 Public
Law 101–410, 104 Stat. 890.
Law 104–134, section 31001(s)(1), 110
Stat. 1321, 1321–373.
3 Public Law 114–74, section 701, 129 Stat. 584,
599.
4 Section 1301(a) of the Federal Reports
Elimination Act of 1998, Public Law 105–362, 112
Stat. 3293, also amended the Inflation Adjustment
Act by striking section 6, which contained annual
2 Public
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
1525
U.S.C. 2461 note. Each agency was
required to make the 2016 one-time
catch-up adjustments through an
interim final rule published in the
Federal Register. On June 14, 2016, the
Bureau published its interim final rule
to make the initial catch-up adjustments
to civil penalties within the Bureau’s
jurisdiction.5 The June 2016 interim
final rule created a new part 1083 and
in § 1083.1 established the inflationadjusted maximum amounts for each
civil penalty within the Bureau’s
jurisdiction.6 The Inflation Adjustment
Act also requires subsequent
adjustments to be made annually, not
later than January 15, and
notwithstanding section 553 of the
Administrative Procedure Act (APA).7
Specifically, Federal agencies are
directed to adjust annually each civil
penalty provided by law within the
jurisdiction of the agency by the ‘‘costof-living adjustment.’’ 8 For annual
adjustments after the initial catch up
adjustments, the ‘‘cost-of-living
adjustment’’ is defined as the percentage
(if any) by which the Consumer Price
Index for All Urban Consumers (CPI–U)
for the month of October preceding the
date of the adjustment, exceeds the CPI–
U for October of the prior year.9 The
Director of the Office of Management
and Budget (OMB) is required to issue
guidance (OMB Guidance) every year by
December 15 to agencies on
implementing the annual civil penalty
inflation adjustments.10 Pursuant to the
Inflation Adjustment Act and OMB
Guidance, agencies must apply the
multiplier reflecting the ‘‘cost-of-living
adjustment’’ to the current penalty
amount and then round that amount to
the nearest dollar to determine the
annual adjustments.11
For the 2018 annual adjustment, the
multiplier reflecting the ‘‘cost-of-living
reporting requirements, and redesignating section 7
as section 6, but did not alter the civil penalty
adjustment requirements.
5 81 FR 38569 (June 14, 2016). Although the
Bureau was not obligated to solicit comments for
the interim final rule, the Bureau invited public
comment and received none.
6 See 12 CFR 1083.1.
7 Inflation Adjustment Act section 4, codified at
28 U.S.C. 2461 note.
8 Inflation Adjustment Act sections 4 and 5,
codified at 28 U.S.C. 2461 note.
9 Inflation Adjustment Act sections 3 and 5,
codified at 28 U.S.C. 2461 note.
10 Inflation Adjustment Act section 7, codified at
28 U.S.C. 2461 note.
11 Inflation Adjustment Act section 5, codified at
28 U.S.C. 2461 note; Memorandum to the Exec.
Dep’ts & Agencies from Mick Mulvaney, Director,
Office of Mgmt. & Budget (Dec. 15, 2017), available
at https://www.whitehouse.gov/wp-content/
uploads/2017/11/M-18-03.pdf.
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]]>Agencies
[Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]
[Rules and Regulations]
[Pages 1519-1525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00403]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 308
RIN 3064-AE71
Rules of Practice and Procedure
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The FDIC is adjusting the maximum amount of each civil money
penalty (CMP) within its jurisdiction to account for inflation. This
action is required by the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015 (2015 Adjustment Act).
DATES: This rule is effective January 15, 2018.
FOR FURTHER INFORMATION CONTACT: Seth P. Rosebrock, Supervisory
Counsel, Legal Division (202) 898-6609, or Graham N. Rehrig, Senior
Attorney, Legal Division (202) 898-3829.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The Final Rule changes the maximum limit for CMPs according to
inflation as mandated by Congress in the 2015 Adjustment Act.\1\ The
intended effect of annually adjusting maximum civil money penalties in
accordance with changes in the Consumer Price Index is to minimize any
distortion in the real value of those maximums due to inflation,
thereby promoting a more consistent deterrent effect in the structure
of CMPs.
---------------------------------------------------------------------------
\1\ Public Law 114-74, sec. 701, 129 Stat. 584.
---------------------------------------------------------------------------
II. Background
The FDIC assesses CMPs under section 8(i) of the Federal Deposit
Insurance Act (FDIA), 12 U.S.C. 1818, and a variety of other
statutes.\2\ Congress established maximum penalties that could be
assessed under these statutes. In many cases, these statutes contain
multiple penalty tiers, permitting the assessment of penalties at
various levels depending upon the severity of the misconduct at
issue.\3\
---------------------------------------------------------------------------
\2\ See, e.g., 12 U.S.C. 1972(2)(F) (authorizing the FDIC to
impose CMPs for violations of the Bank Holding Company Act of 1970
related to prohibited tying arrangements); 15 U.S.C. 78u-2
(authorizing the FDIC to impose CMPs for violations of certain
provisions of the Securities Exchange Act of 1934); 42 U.S.C.
4012a(f) (authorizing the FDIC to impose CMPs for pattern or
practice violations of the Flood Disaster Protection Act).
\3\ For example, Section 8(i)(2) of the FDIA, 12 U.S.C.
1818(i)(2), provides for three tiers of CMPs, with the size of such
CMPs increasing with the gravity of the misconduct.
---------------------------------------------------------------------------
In 1990, Congress determined that the assessment of CMPs plays ``an
important role in deterring violations and furthering the policy goals
embodied in such laws and regulations'' and concluded that ``the impact
of many civil monetary penalties has been and is diminished due to the
effect of inflation.'' \4\ Consequently, Congress required federal
agencies with authority to impose CMPs to periodically adjust by
rulemaking the maximum CMPs which these agencies were authorized to
impose in order to ``maintain the deterrent effect of civil monetary
penalties and promote compliance with the law.'' \5\ Under the 1990
Adjustment Act, the FDIC adjusted its CMP amounts every four years.\6\
---------------------------------------------------------------------------
\4\ Section 2 of the Federal Civil Penalties Inflation
Adjustment Act of 1990 (1990 Adjustment Act). Public Law 101-410,
104 Stat. 890 (amended 2015) (codified as amended at 28 U.S.C. 2461
note).
\5\ Id.
\6\ See, e.g., 77 FR 74573 (Dec. 17, 2012).
---------------------------------------------------------------------------
In 2015, Congress revised the process by which federal agencies
adjust applicable CMPs for inflation.\7\ Under the 2015 Adjustment Act,
the FDIC is required to make annual adjustments for inflation.\8\ These
adjustments apply to all CMPs covered by the 2015 Adjustment Act.\9\
The 2015 Adjustment Act requires annual adjustments to be made by
January 15 of each year.\10\
---------------------------------------------------------------------------
\7\ See Public Law 114-74, sec. 701, 129 Stat. 584.
\8\ See id. at sec. 701(b).
\9\ See Public Law 101-410, sec. 3(2), 104 Stat. 890 (amended
2015) (codified as amended at 28 U.S.C. 2461 note).
\10\ Public Law 114-74, sec. 701(b), 129 Stat. 584.
---------------------------------------------------------------------------
Although the 2015 Adjustment Act increases the maximum penalty that
may be assessed under each applicable statute, the FDIC possesses
discretion to impose CMP amounts below the maximum level in accordance
with the severity of the misconduct at issue. For example, when making
a determination as to the appropriate level of a penalty assessed under
section 8(i)(2) of the FDIA, 12 U.S.C. 1818(i)(2), the FDIC is guided
by statutory factors set forth in section 8(i)(2)(G) of the FDIA, 12
U.S.C. 1818(i)(2)(G), and those factors identified in the Interagency
Policy Statement Regarding the Assessment of CMPs by the Federal
Financial Institutions Regulatory Agencies.\11\ Such factors include,
but are not limited to, the gravity and duration of the misconduct, and
the intent related to the misconduct.
---------------------------------------------------------------------------
\11\ 63 FR 30227 (June 3, 1998).
---------------------------------------------------------------------------
The 2015 Adjustment Act notes that the FDIC ``shall adjust [CMPs]
and shall make the adjustment notwithstanding section 553 of title 5,
United States Code'' (the Administrative Procedure Act).\12\ The FDIC,
therefore, is not obligated to publish the adjustments through notice-
and-comment rulemaking, and the FDIC is publishing the adjustments
through a final rule.
---------------------------------------------------------------------------
\12\ Public Law 114-74, sec. 701(b), 129 Stat. 584 (emphasis
added).
---------------------------------------------------------------------------
III. Description and Expected Effects of the Final Rule
The Final Rule modifies the maximum limit for CMPs according to
inflation as mandated by Congress in the 2015 Adjustment Act. The 2015
Adjustment Act directs federal agencies to follow guidance issued by
the Office of Management and Budget (OMB) on December 15, 2017 (OMB
Guidance), when calculating new maximum penalty levels.\13\ The
adjustments are to be based on the percent change between the Consumer
Price Index for all Urban Consumers (CPI-U)\14\ for October 2016 and
the October 2017 CPI-U.
---------------------------------------------------------------------------
\13\ See OMB, Implementation of Penalty Inflation Adjustments
for 2018, Pursuant to the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, M-18-03 (Dec. 15, 2017),
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf (noting that the applicable 2018 CMP-adjustment
multiplier is 1.02041).
\14\ The CPI-U is compiled by the Bureau of Labor Statistics of
the Department of Labor.
---------------------------------------------------------------------------
[[Page 1520]]
Summary of the FDIC's Calculations
During the 12-month period ending October 2017, the CPI-U was
reported to have increased by 2.041 percent. In keeping with the OMB
Guidance, the FDIC adjusted each of its CMP maximum penalty levels by
the inflation factor.\15\ After applying the adjustment, the FDIC
rounded each penalty level to the nearest dollar. In making these
calculations, the FDIC consulted with staff from the Office of the
Comptroller of the Currency, the Board of Governors for the Federal
Reserve System, the National Credit Union Administration, and the
Bureau of Consumer Financial Protection to ensure that the FDIC's
adjusted figures were consistent with these regulators' respective
amounts.
---------------------------------------------------------------------------
\15\ Under the 1990 Adjustment Act, adjustments have been made
only to CMPs that are for specific dollar amounts or maximums. CMPs
that are assessed based upon a fixed percentage of an institution's
total assets are not subject to adjustment.
---------------------------------------------------------------------------
The Adjusted CMP Amounts
The following chart displays the adjusted CMP amounts for each CMP
identified in 12 CFR part 308.\16\ The following chart reflects the
maximum CMP amounts that may be assessed after January 15, 2018--the
effective date of the 2018 annual adjustment--including assessments
whose associated violations occurred on or after November 2, 2015.\17\
---------------------------------------------------------------------------
\16\ As noted previously, the FDIC retains discretion to impose
CMPs in amounts below the referenced maximums.
\17\ See OMB Guidance at 4.
Maximum Civil Money Penalty Amounts
----------------------------------------------------------------------------------------------------------------
Current maximum CMP (through Adjusted maximum CMP (beginning
U.S. Code citation January 14, 2018) January 15, 2018)
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 1464(v):
Tier One CMP............................ $3,849 $3,928
Tier Two CMP............................ 38,492 39,278
Tier Three CMP.......................... 1,924,589 1,963,870
12 U.S.C. 1467(d)........................... 9,623 9,819
12 U.S.C. 1817(a):
Tier One CMP............................ 3,849 3,928
Tier Two CMP............................ 38,492 39,278
Tier Three CMP.......................... 1,924,589 1,963,870
12 U.S.C. 1817(c):
Tier One CMP............................ 3,519 3,591
Tier Two CMP............................ 35,186 35,904
Tier Three CMP.......................... 1,759,309 1,795,216
12 U.S.C. 1818(i)(2):
Tier One CMP............................ 9,623 9,819
Tier Two CMP............................ 48,114 49,096
Tier Three CMP.......................... 1,924,589 1,963,870
12 U.S.C. 1820(e)(4)........................ 8,797 8,977
12 U.S.C. 1820(k)(6)........................ 316,566 323,027
12 U.S.C. 1828(a)(3)........................ 120 122
12 U.S.C. 1828(h):
For assessments <$10,000................ 120 122
12 U.S.C. 1829b(j).......................... 20,111 20,521
12 U.S.C. 1832(c)........................... 2,795 2,852
12 U.S.C. 1884.............................. 279 285
12 U.S.C. 1972(2)(F):
Tier One CMP............................ 9,623 9,819
Tier Two CMP............................ 48,114 49,096
Tier Three CMP.......................... 1,924,589 1,963,870
12 U.S.C. 3909(d)........................... 2,394 2,443
15 U.S.C. 78u-2:
Tier One CMP (individuals).............. 9,054 9,239
Tier One CMP (others)................... 90,535 92,383
Tier Two CMP (individuals).............. 90,535 92,383
Tier Two CMP (others)................... 452,677 461,916
Tier Three CMP (individuals)............ 181,071 184,767
Tier Three penalty (others)............. 905,353 923,831
15 U.S.C. 1639e(k):
First violation......................... 11,053 11,279
Subsequent violations................... 22,105 22,556
31 U.S.C. 3802.............................. 10,957 11,181
42 U.S.C. 4012a(f).......................... 2,090 2,133
----------------------------------------------------------------------------------------------------------------
Current maximum amount (through New maximum amount (beginning
CFR Citation January 14, 2018) January 15, 2018)
----------------------------------------------------------------------------------------------------------------
12 CFR 308.132(c)--Late or Misleading
Reports of Condition and Income (Call
Reports):
First Offense:
$25 million or more assets:
1 to 15 days late............... 527 538
16 or more days late............ 1,056 1,078
[[Page 1521]]
Less than $25 million assets
1 to 15 days late............... 176 180
16 or more days late............ 352 359
Subsequent Offenses:
$25 million or more assets:
1 to 15 days late............... 879 897
16 or more days late............ 1,759 1,795
----------------------------------------------------------------------------------------------------------------
The Expected Effects of the CMP Adjustments
These CMP adjustments are expected to minimize any year-to-year
distortions in the real value of the CMP maximums. Additionally, these
adjustments will promote a more consistent deterrent effect in the
structure of CMPs. As previously noted, the FDIC retains discretion to
impose CMP amounts below the maximum level. The actual number and size
of CMPs assessed in the future will depend on the propensity and
severity of the violations committed by banks and institution-
affiliated parties, as well as the particular statute that is at issue.
Such future violations cannot be reliably forecast. It is expected that
the FDIC will continue to exercise its discretion to impose CMPs that
are appropriate to their severity.
The 2015 Adjustment Act will likely result in a minimal increase in
administrative costs for the FDIC in order to establish new inflation-
adjusted maximum CMPs each year. Because these calculations are
relatively simple, the number of labor hours necessary to perform this
task is likely to be insignificant relative to total enforcement labor
hours for the Corporation.
IV. Alternatives Considered
The 2015 Adjustment Act mandates the frequency of the inflation
adjustment and the measure of inflation to be used in making these
adjustments. This statute also provides that the FDIC is not required
to proceed through notice-and-comment rulemaking under the
Administrative Procedure Act in making annual CMP adjustments.
Therefore, the FDIC has not considered alternatives to the CMP
Adjustments.
V. Request for Comment
The 2015 Adjustment Act requires the FDIC to adjust its maximum CMP
amounts ``notwithstanding section 553 of title 5, United States Code,''
\18\ and provides the specific adjustments to be made. Moreover, the
CMP Adjustments and the revisions to the CFR are ministerial and
technical; therefore, the FDIC is not required to complete a notice-
and-comment rulemaking process prior to making the adjustments.
---------------------------------------------------------------------------
\18\ Public Law 114-74, sec. 701(b), 129 Stat. 584.
---------------------------------------------------------------------------
VI. Regulatory Analysis
Riegle Community Development and Regulatory Improvement Act
Section 302 of the Riegle Community Development and Regulatory
Improvement Act \19\ generally requires that regulations prescribed by
federal banking agencies which impose additional reporting,
disclosures, or other new requirements on insured depository
institutions take effect on the first day of a calendar quarter unless
the regulation is required to take effect on another date pursuant to
another act of Congress or the agency determines for good cause that
the regulation should become effective on an earlier date.
---------------------------------------------------------------------------
\19\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
This Final Rule does not impose any new or additional reporting,
disclosures, or other requirements on insured depository institutions.
Therefore, the Final Rule is not subject to the requirements of this
statute.
Regulatory Flexibility Act
An initial regulatory flexibility analysis under the Regulatory
Flexibility Act \20\ (RFA) is required only when an agency must publish
a general notice of proposed rulemaking. As noted above, the FDIC
determined that publication of a notice of proposed rulemaking is not
necessary for the Final Rule. Accordingly, the RFA does not require an
initial regulatory flexibility analysis. Nevertheless, the FDIC
considered the likely impact of Final Rule on small entities. From 2011
through 2016, on average, only 1.4 percent of FDIC-supervised
institutions were ordered to pay a CMP each year. Accordingly, the FDIC
believes that the Final Rule will not have a significant impact on a
substantial number of small entities.
---------------------------------------------------------------------------
\20\ 5 U.S.C. 603.
---------------------------------------------------------------------------
Small Business Regulatory Enforcement Fairness Act
The OMB has determined that the Final Rule is not a ``major rule''
within the meaning of the relevant sections of the Small Business
Regulatory Enforcement Act of 1996 (SBREFA).\21\ As required by SBREFA,
the FDIC will submit the Final Rule and other appropriate reports to
Congress and the Government Accountability Office for review.
---------------------------------------------------------------------------
\21\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------
The Omnibus Consolidated and Emergency Supplemental Appropriations Act,
1999: Assessment of Federal Regulations and Policies on Families
The FDIC determined that the Final Rule will not affect family
wellbeing within the meaning of section 654 of the Omnibus Consolidated
and Emergency Supplemental Appropriations Act, 1999.\22\
---------------------------------------------------------------------------
\22\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------
Paperwork Reduction Act
The Final Rule does not create any new, or revise any existing,
collections of information under section 3504(h) of the Paperwork
Reduction Act of 1980.\23\ Consequently, no information collection
request will be submitted to the OMB for review.
---------------------------------------------------------------------------
\23\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------
Plain Language Act
Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use
plain language in all proposed and final rules published after January
1, 2000.\24\ Accordingly, the FDIC has attempted to write the Final
Rule in clear and comprehensible language.
---------------------------------------------------------------------------
\24\ Public Law 106-102, 113 Stat. 1338 (Nov. 12, 1999).
---------------------------------------------------------------------------
List of Subjects in 12 CFR Part 308
Administrative practice and procedure, Banks, Banking, Claims,
Crime, Equal access to justice, Ex parte communications, Hearing
procedure, Lawyers, Penalties, State nonmember banks.
[[Page 1522]]
For the reasons set forth in the preamble, the FDIC amends 12 CFR
part 308 as follows:
PART 308--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 308 continues to read as follows:
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505,
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828,
1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b),
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u,
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s),
110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203,
124 Stat. 1376; Pub. L. 114-74, sec. 701, 129 Stat. 584.
0
2. Revise Sec. 308.116(b)(4) to read as follows:
Sec. 308.116 Assessment of penalties.
* * * * *
(b) * * *
(4) Adjustment of civil money penalties by the rate of inflation
pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015. After January 15, 2018, for violations that
occurred on or after November 2, 2015:
(i) Any person who has engaged in a violation as set forth in
paragraph (b)(1) of this section shall forfeit and pay a civil money
penalty of not more than $9,819 for each day the violation continued.
(ii) Any person who has engaged in a violation, unsafe or unsound
practice or breach of fiduciary duty, as set forth in paragraph (b)(2)
of this section, shall forfeit and pay a civil money penalty of not
more than $49,096 for each day such violation, practice or breach
continued.
(iii) Any person who has knowingly engaged in a violation, unsafe
or unsound practice or breach of fiduciary duty, as set forth in
paragraph (b)(3) of this section, shall forfeit and pay a civil money
penalty not to exceed:
(A) In the case of a person other than a depository institution--
$1,963,870 per day for each day the violation, practice or breach
continued; or
(B) In the case of a depository institution--an amount not to
exceed the lesser of $1,963,870 or one percent of the total assets of
such institution for each day the violation, practice or breach
continued.
* * * * *
0
3. Revise Sec. 308.132(d) to read as follows:
Sec. 308.132 Assessment of penalties.
* * * * *
(d) Maximum civil money penalty amounts. Pursuant to the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015,
after January 15, 2018, for violations that occurred on or after
November 2, 2015, the Board of Directors or its designee may assess
civil money penalties in the maximum amounts as follows:
(1) Civil money penalties assessed pursuant to 12 U.S.C. 1464(v)
for late filing or the submission of false or misleading certified
statements by State savings associations. Pursuant to section 5(v) of
the Home Owners' Loan Act (12 U.S.C. 1464(v)), the Board of Directors
or its designee may assess civil money penalties as follows:
(i) Late filing--Tier One penalties. In cases in which an
institution fails to make or publish its Report of Condition and Income
(Call Report) within the appropriate time periods, a civil money
penalty of not more than $3,928 per day may be assessed where the
institution maintains procedures in place reasonably adapted to avoid
inadvertent error and the late filing occurred unintentionally and as a
result of such error; or the institution inadvertently transmitted a
Call Report that is minimally late. For penalties assessed after
January 15, 2018, for violations of this paragraph (d)(1)(i) that
occurred on or after November 2, 2015, the following maximum Tier One
penalty amounts contained in paragraphs (d)(1)(i)(A) and (B) of this
section shall apply for each day that the violation continues.
(A) First offense. Generally, in such cases, the amount assessed
shall be $538 per day for each of the first 15 days for which the
failure continues, and $1,078 per day for each subsequent day the
failure continues, beginning on the sixteenth day. For institutions
with less than $25,000,000 in assets, the amount assessed shall be the
greater of $180 per day or 1/1000th of the institution's total assets
(1/10th of a basis point) for each of the first 15 days for which the
failure continues, and $359 or 1/500th of the institution's total
assets, \1/5\ of a basis point) for each subsequent day the failure
continues, beginning on the sixteenth day.
(B) Subsequent offense. Where the institution has been delinquent
in making or publishing its Call Report within the preceding five
quarters, the amount assessed for the most current failure shall
generally be $897 per day for each of the first 15 days for which the
failure continues, and $1,795 per day for each subsequent day the
failure continues, beginning on the sixteenth day. For institutions
with less than $25,000,000 in assets, those amounts, respectively,
shall be 1/500th of the bank's total assets and 1/250th of the
institution's total assets.
(C) Lengthy or repeated violations. The amounts set forth in this
paragraph (d)(1)(i) will be assessed on a case-by-case basis where the
amount of time of the institution's delinquency is lengthy or the
institution has been delinquent repeatedly in making or publishing its
Call Reports.
(D) Waiver. Absent extraordinary circumstances outside the control
of the institution, penalties assessed for late filing shall not be
waived.
(ii) Late-filing--Tier Two penalties. Where an institution fails to
make or publish its Call Report within the appropriate time period, the
Board of Directors or its designee may assess a civil money penalty of
not more than $39,278 per day for each day the failure continues.
(iii) False or misleading reports or information--(A) Tier One
penalties. In cases in which an institution submits or publishes any
false or misleading Call Report or information, the Board of Directors
or its designee may assess a civil money penalty of not more than
$3,928 per day for each day the information is not corrected, where the
institution maintains procedures in place reasonably adapted to avoid
inadvertent error and the violation occurred unintentionally and as a
result of such error; or the institution inadvertently transmits a Call
Report or information that is false or misleading.
(B) Tier Two penalties. Where an institution submits or publishes
any false or misleading Call Report or other information, the Board of
Directors or its designee may assess a civil money penalty of not more
than $39,278 per day for each day the information is not corrected.
(C) Tier Three penalties. Where an institution knowingly or with
reckless disregard for the accuracy of any Call Report or information
submits or publishes any false or misleading Call Report or other
information, the Board of Directors or its designee may assess a civil
money penalty of not more than the lesser of $1,963,870 or 1 percent of
the institution's total assets per day for each day the information is
not corrected.
(iv) Mitigating factors. The amounts set forth in this paragraph
(d)(1) may be reduced based upon the factors set forth in paragraph (b)
of this section.
(2) Civil money penalties assessed pursuant to 12 U.S.C. 1467(d)
for refusal by an affiliate of a State savings association to allow
examination or to provide required information during an
[[Page 1523]]
examination. Pursuant to section 9(d) of the Home Owners' Loan Act (12
U.S.C. 1467(d)), civil money penalties may be assessed against any
State savings association if an affiliate of such an institution
refuses to permit a duly-appointed examiner to conduct an examination
or refuses to provide information during the course of an examination
as set forth 12 U.S.C. 1467(d), in an amount not to exceed $9,819 for
each day the refusal continues.
(3) Civil money penalties assessed pursuant to 12 U.S.C. 1817(a)
for late filings or the submission of false or misleading reports of
condition. Pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)),
the Board of Directors or its designee may assess civil money penalties
as follows:
(i) Late filing--Tier One penalties. In cases in which an
institution fails to make or publish its Report of Condition and Income
(Call Report) within the appropriate time periods, a civil money
penalty of not more than $3,928 per day may be assessed where the
institution maintains procedures in place reasonably adapted to avoid
inadvertent error and the late filing occurred unintentionally and as a
result of such error; or the institution inadvertently transmitted a
Call Report that is minimally late. For penalties assessed after
January 15, 2018, for violations of this paragraph (d)(3)(i) that
occurred on or after November 2, 2015, the following maximum Tier One
penalty amounts contained in paragraphs (d)(3)(i)(A) and (B) of this
section shall apply for each day that the violation continues.
(A) First offense. Generally, in such cases, the amount assessed
shall be $538 per day for each of the first 15 days for which the
failure continues, and $1,078 per day for each subsequent day the
failure continues, beginning on the sixteenth day. For institutions
with less than $25,000,000 in assets, the amount assessed shall be the
greater of $180 per day or 1/1000th of the institution's total assets
(1/10th of a basis point) for each of the first 15 days for which the
failure continues, and $359 or 1/500th of the institution's total
assets, (\1/5\ of a basis point) for each subsequent day the failure
continues, beginning on the sixteenth day.
(B) Subsequent offense. Where the institution has been delinquent
in making or publishing its Call Report within the preceding five
quarters, the amount assessed for the most current failure shall
generally be $897 per day for each of the first 15 days for which the
failure continues, and $1,795 per day for each subsequent day the
failure continues, beginning on the sixteenth day. For institutions
with less than $25,000,000 in assets, those amounts, respectively,
shall be 1/500th of the bank's total assets and 1/250th of the
institution's total assets.
(C) Lengthy or repeated violations. The amounts set forth in this
paragraph (d)(3)(i) will be assessed on a case-by-case basis where the
amount of time of the institution's delinquency is lengthy or the
institution has been delinquent repeatedly in making or publishing its
Call Reports.
(D) Waiver. Absent extraordinary circumstances outside the control
of the institution, penalties assessed for late filing shall not be
waived.
(ii) Late-filing--Tier Two penalties. Where an institution fails to
make or publish its Call Report within the appropriate time period, the
Board of Directors or its designee may assess a civil money penalty of
not more than $39,278 per day for each day the failure continues.
(iii) False or misleading reports or information--(A) Tier One
penalties. In cases in which an institution submits or publishes any
false or misleading Call Report or information, the Board of Directors
or its designee may assess a civil money penalty of not more than
$3,928 per day for each day the information is not corrected, where the
institution maintains procedures in place reasonably adapted to avoid
inadvertent error and the violation occurred unintentionally and as a
result of such error; or the institution inadvertently transmits a Call
Report or information that is false or misleading.
(B) Tier Two penalties. Where an institution submits or publishes
any false or misleading Call Report or other information, the Board of
Directors or its designee may assess a civil money penalty of not more
than $39,278 per day for each day the information is not corrected.
(C) Tier Three penalties. Where an institution knowingly or with
reckless disregard for the accuracy of any Call Report or information
submits or publishes any false or misleading Call Report or other
information, the Board of Directors or its designee may assess a civil
money penalty of not more than the lesser of $1,963,870 or 1 percent of
the institution's total assets per day for each day the information is
not corrected.
(iv) Mitigating factors. The amounts set forth in this paragraph
(d)(3) may be reduced based upon the factors set forth in paragraph (b)
of this section.
(4) Civil money penalties assessed pursuant to 12 U.S.C. 1817(c)
for late filing or the submission of false or misleading certified
statements. Tier One civil money penalties may be assessed pursuant to
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount
not to exceed $3,591 for each day during which the failure to file
continues or the false or misleading information is not corrected. Tier
Two civil money penalties may be assessed pursuant to section
7(c)(4)(B) of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to
exceed $35,904 for each day during which the failure to file continues
or the false or misleading information is not corrected. Tier Three
civil money penalties may be assessed pursuant to section 7(c)(4)(C) in
an amount not to exceed the lesser of $1,795,216 or 1 percent of the
total assets of the institution for each day during which the failure
to file continues or the false or misleading information is not
corrected.
(5) Civil money penalties assessed pursuant to section 8(i)(2) of
the FDIA. Tier One civil money penalties may be assessed pursuant to
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount
not to exceed $9,819 for each day during which the violation continues.
Tier Two civil money penalties may be assessed pursuant to section
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to
exceed $49,096 for each day during which the violation, practice or
breach continues. Tier Three civil money penalties may be assessed
pursuant to section 8(i)(2)(C) (12 U.S.C. 1818(i)(2)(C)) in an amount
not to exceed, in the case of any person other than an insured
depository institution $1,963,870 or, in the case of any insured
depository institution, an amount not to exceed the lesser of
$1,963,870 or 1 percent of the total assets of such institution for
each day during which the violation, practice, or breach continues.
(i) Pursuant to 7(j)(16) of the FDIA (12 U.S.C. 1817(j)(16)), a
civil money penalty may be assessed for violations of change in control
of insured depository institution provisions pursuant to section
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the amounts set forth in
this paragraph (d)(5).
(ii) Pursuant to the International Banking Act of 1978 (IBA) (12
U.S.C. 3108(b)), civil money penalties may be assessed for failure to
comply with the requirements of the IBA pursuant to section 8(i)(2) of
the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in this
paragraph (d)(5).
(iii) Pursuant to section 1120(b) of the Financial Institutions
Recovery, Reform, and Enforcement Act of 1989 (FIRREA) (12 U.S.C.
3349(b)), where a financial institution seeks, obtains, or gives any
[[Page 1524]]
other thing of value in exchange for the performance of an appraisal by
a person that the institution knows is not a state certified or
licensed appraiser in connection with a federally related transaction,
a civil money penalty may be assessed pursuant to section 8(i)(2) of
the FDIA (12 U.S.C. 1818(i)(2)) in the amounts set forth in this
paragraph (d)(5).
(iv) Pursuant to the Community Development Banking and Financial
Institution Act (Community Development Banking Act) (12 U.S.C. 4717(b))
a civil money penalty may be assessed for violations of the Community
Development Banking Act pursuant to section 8(i)(2) of the FDIA (12
U.S.C. 1818(i)(2)), in the amount set forth in this paragraph (d)(5).
(v) Civil money penalties may be assessed pursuant to section
8(i)(2) of the FDIA in the amounts set forth in this paragraph (d)(5)
for violations of various consumer laws, including, but not limited to,
the Home Mortgage Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR
203.6), the Expedited Funds Availability Act (12 U.S.C. 4001 et seq.),
the Truth in Savings Act (12 U.S.C. 4301 et seq.), the Real Estate
Settlement Procedures Act (12 U.S.C. 2601 et seq.), the Truth in
Lending Act (15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15
U.S.C. 1681 et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691
et seq.), the Fair Debt Collection Practices Act (15 U.S.C. 1692 et
seq.), the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and
the Fair Housing Act (42 U.S.C. 3601 et seq.).
(6) Civil money penalties assessed pursuant to 12 U.S.C. 1820(e)
for refusal to allow examination or to provide required information
during an examination. Pursuant to section 10(e)(4) of the FDIA (12
U.S.C. 1820(e)(4)), civil money penalties may be assessed against any
affiliate of an insured depository institution that refuses to permit a
duly-appointed examiner to conduct an examination or to provide
information during the course of an examination as set forth in section
20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount not to exceed
$8,977 for each day the refusal continues.
(7) Civil money penalties assessed pursuant to 12 U.S.C. 1820(k)
for violation of one-year restriction on Federal examiners of financial
institutions. Pursuant to section 10(k) of the FDIA (12 U.S.C.
1820(k)), the Board of Directors or its designee may assess a civil
money penalty of up to $323,027 against any covered former Federal
examiner of a financial institution who, in violation of section 10(k)
of the FDIA (12 U.S.C. 1820(k)) and within the one-year period
following termination of government service as an employee, serves as
an officer, director, or consultant of a financial or depository
institution, a holding company, or of any other entity listed in
section 10(k) of the FDIA (12 U.S.C. 1820(k)), without the written
waiver or permission by the appropriate Federal banking agency or
authority under section 10(k)(5) of the FDIA (12 U.S.C. 1820(k)(5)).
(8) Civil money penalties assessed pursuant to 12 U.S.C. 1828(a)
for incorrect display of insurance logo. Pursuant to section 18(a)(3)
of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may be
assessed against an insured depository institution that fails to
correctly display its insurance logo pursuant to that section, in an
amount not to exceed $122 for each day the violation continues.
(9) Civil money penalties assessed pursuant to 12 U.S.C. 1828(h)
for failure to timely pay assessment--(i) In general. Subject to
paragraph (d)(9)(iii) of this section, any insured depository
institution that fails or refuses to pay any assessment shall be
subject to a penalty in an amount of not more than 1 percent of the
amount of the assessment due for each day that such violation
continues.
(ii) Exception in case of dispute. Paragraph (d)(9)(i) of this
section shall not apply if--
(A) The failure to pay an assessment is due to a dispute between
the insured depository institution and the Corporation over the amount
of such assessment; and
(B) The insured depository institution deposits security
satisfactory to the Corporation for payment upon final determination of
the issue.
(iii) Special rule for small assessment amounts. If the amount of
the assessment that an insured depository institution fails or refuses
to pay is less than $10,000 at the time of such failure or refusal, the
amount of any penalty to which such institution is subject under
paragraph (d)(9)(i) of this section shall not exceed $122 for each day
that such violation continues.
(iv) Authority to modify or remit penalty. The Corporation, in the
sole discretion of the Corporation, may compromise, modify, or remit
any penalty that the Corporation may assess or has already assessed
under paragraph (d)(9)(i) of this section upon a finding that good
cause prevented the timely payment of an assessment.
(10) Civil money penalties assessed pursuant to 12 U.S.C. 1829b(j)
for recordkeeping violations. Pursuant to section 19b(j) of the FDIA
(12 U.S.C. 1829b(j)), civil money penalties may be assessed against an
insured depository institution and any director, officer or employee
thereof who willfully or through gross negligence violates or causes a
violation of the recordkeeping requirements of that section or its
implementing regulations in an amount not to exceed $20,521 per
violation.
(11) Civil money penalties pursuant to 12 U.S.C. 1832(c) for
violation of provisions regarding interest-bearing demand deposit
accounts. Pursuant to 12 U.S.C. 1832(c), any depository institution
that violates the prohibition regarding interest-bearing demand deposit
accounts shall be subject to a fine of $2,852 per violation.
(12) Civil penalties for violations of security measure
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an
institution that violates a rule establishing minimum security
requirements as set forth in 12 U.S.C. 1882, shall be subject to a
civil penalty not to exceed $285 for each day of the violation.
(13) Civil money penalties assessed pursuant to 12 U.S.C.
1972(2)(F) for prohibited tying arrangements. Pursuant to the Bank
Holding Company Act of 1970, Tier One civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed
$9,819 for each day during which the violation continues. Tier Two
civil money penalties may be assessed pursuant to 12 U.S.C.
1972(2)(F)(ii) in an amount not to exceed $49,096 for each day during
which the violation, practice or breach continues. Tier Three civil
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii)
in an amount not to exceed, in the case of any person other than an
insured depository institution $1,963,870 for each day during which the
violation, practice, or breach continues or, in the case of any insured
depository institution, an amount not to exceed the lesser of
$1,963,870 or 1 percent of the total assets of such institution for
each day during which the violation, practice, or breach continues.
(14) Civil money penalties assessed pursuant to 12 U.S.C. 3909(d).
Pursuant to the International Lending Supervision Act (ILSA) (12 U.S.C.
3909(d)), civil money penalties may be assessed against any institution
or any officer, director, employee, agent or other person participating
in the conduct of the affairs of such institution is an amount not to
exceed $2,443 for each day a violation of the ILSA or any rule,
regulation or order issued pursuant to ILSA continues.
(15) Civil money penalties assessed for violations of 15 U.S.C.
78u-2.
[[Page 1525]]
Pursuant to section 21B of the Securities Exchange Act of 1934
(Exchange Act) (15 U.S.C. 78u-2), civil money penalties may be assessed
for violations of certain provisions of the Exchange Act, where such
penalties are in the public interest. Tier One civil money penalties
may be assessed pursuant to 15 U.S.C. 78u-2(b)(1) in an amount not to
exceed $9,239 for a natural person or $92,383 for any other person for
violations set forth in 15 U.S.C. 78u-2(a). Tier Two civil money
penalties may be assessed pursuant to 15 U.S.C. 78u-2(b)(2) in an
amount not to exceed--for each violation set forth in 15 U.S.C. 78u-
2(a)--$92,383 for a natural person or $461,916 for any other person if
the act or omission involved fraud, deceit, manipulation, or deliberate
or reckless disregard of a regulatory requirement. Tier Three civil
money penalties may be assessed pursuant to 15 U.S.C. 78u-2(b)(3) for
each violation set forth in 15 U.S.C. 78u-2(a), in an amount not to
exceed $184,767 for a natural person or $923,831 for any other person,
if the act or omission involved fraud, deceit, manipulation, or
deliberate or reckless disregard of a regulatory requirement; and such
act or omission directly or indirectly resulted in substantial losses,
or created a significant risk of substantial losses to other persons or
resulted in substantial pecuniary gain to the person who committed the
act or omission.
(16) Civil money penalties assessed pursuant to 15 U.S.C. 1639e(k)
for appraisal independence violations. Pursuant to section 1472(a) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Appraisal Independence Rule) (15 U.S.C. 1639e(k)), civil money
penalties may be assessed for an initial violation of the Appraisal
Independence Rule in an amount not to exceed $11,279 for each day
during which the violation continues and, for subsequent violations,
$22,556 for each day during which the violation continues.
(17) Civil money penalties assessed for false claims and statements
pursuant to 31 U.S.C. 3802. Pursuant to the Program Fraud Civil
Remedies Act (31 U.S.C. 3802), civil money penalties of not more than
$11,181 per claim or statement may be assessed for violations involving
false claims and statements.
(18) Civil money penalties assessed for violations of 42 U.S.C.
4012a(f). Pursuant to the Flood Disaster Protection Act (FDPA) (42
U.S.C. 4012a(f)), civil money penalties may be assessed against any
regulated lending institution that engages in a pattern or practice of
violations of the FDPA in an amount not to exceed $2,133 per violation.
Dated at Washington, DC on December 19, 2017.
By order of the Board of Directors.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 2018-00403 Filed 1-11-18; 8:45 am]
BILLING CODE 6714-01-P
