Civil Monetary Penalty Inflation Adjustment, 2029-2032 [2018-00488]
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Rules and Regulations
Federal Register
Vol. 83, No. 10
Tuesday, January 16, 2018
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 747
RIN 3133–AE83
Civil Monetary Penalty Inflation
Adjustment
National Credit Union
Administration (NCUA).
ACTION: Final rule.
AGENCY:
The NCUA Board (Board) is
amending its regulations to adjust the
maximum amount of each civil
monetary penalty (CMP) within its
jurisdiction to account for inflation.
This action, including the amount of the
adjustments, is required under the
Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Debt Collection Improvement Act of
1996 and the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015.
DATES: This final rule is effective
January 15, 2018.
FOR FURTHER INFORMATION CONTACT: Ian
Marenna, Senior Trial Attorney, at 1775
Duke Street, Alexandria, VA 22314, or
telephone: (703) 518–6540.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Legal Background
II. Calculation of Adjustments
III. Regulatory Procedures
I. Legal Background
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A. Statutory Requirements and OMB
Guidance
The Debt Collection Improvement Act
of 1996 1 (DCIA) amended the Federal
Civil Penalties Inflation Adjustment Act
of 1990 2 (FCPIA Act) to require every
federal agency to enact regulations that
adjust each CMP provided by law under
1 Public Law 104–134, 31001(s), 110 Stat. 1321–
373 (Apr. 26, 1996). The law is codified at 28 U.S.C.
2461 note.
2 Public Law 101–410, 104 Stat. 890 (Oct. 5,
1990), codified at 28 U.S.C. 2461 note.
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its jurisdiction by the rate of inflation at
least once every four years.
In November 2015, Congress further
amended the CMP inflation
requirements in the Bipartisan Budget
Act of 2015,3 which contains the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (the 2015 amendments).4 This
legislation provided for an initial
‘‘catch-up’’ adjustment of CMPs in 2016,
followed by annual adjustments. The
catch-up adjustment re-set CMP
maximum amounts by setting aside the
inflation adjustments that agencies
made in prior years and instead
calculated inflation with reference to
the year when each CMP was enacted or
last modified by Congress. Agencies
were required to publish their catch-up
adjustments in an interim final rule by
July 1, 2016 and make them effective by
August 1, 2016.5 The NCUA complied
with these requirements in a June 2016
interim final rule, followed by an
October 2016 final rule to confirm the
adjustments as final.6
The 2015 amendments also specified
how agencies must conduct annual
inflation adjustments after the 2016
catch-up adjustment. Following the
catch-up adjustment, agencies must
make the required adjustments and
publish them in the Federal Register by
January 15 each year.7 The NCUA
issued an interim final rule on January
6, 2017,8 followed by a final rule issued
on June 23, 2017.9 This final rule will
satisfy the agency’s requirement for the
2018 annual adjustments.
The statute provides that the
adjustments shall be made
notwithstanding the section of the
Administrative Procedure Act (APA)
that requires prior notice and public
comment for agency rulemaking.10 The
2015 amendments also specify that each
CMP maximum must be increased by
the percentage by which the consumer
price index for urban consumers (CPI–
3 Public
Law 114–74, 129 Stat. 584 (Nov. 2, 2015).
Stat. 599.
5 Public Law 114–74, Sec. 701(b)(1), 129 Stat. 584,
599 (Nov. 2, 2015).
6 81 FR 40152 (June 21, 2016); 81 FR 78028 (Nov.
7, 2016).
7 Public Law 114–74, Sec. 701(b)(1), 129 Stat. 584,
599 (Nov. 2, 2015).
8 82 FR 7640 (Jan. 23, 2017).
9 82 FR 29710 (June 30, 2017).
10 Public Law 114–74, Sec. 701(b)(1), 129 Stat.
584, 599 (Nov. 2, 2015).
4 129
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U) 11 for October of the year
immediately preceding the year the
adjustment is made exceeds the CPI–U
for October of the prior year.12 For
example, for the adjustment made in
2018, agencies must compare the
October 2016 and 2017 CPI–U figures.
The 2015 amendments also provide
that agencies may forgo the required
annual adjustments in certain
circumstances. Specifically, in a
subsection titled ‘‘Other Adjustments
Made,’’ the statute provides that an
agency is not required to make an
annual adjustment to a CMP if it has
been increased by a greater amount than
the contemplated annual adjustment in
the preceding 12 months.13 When these
criteria are met, the agency has
discretion not to make the adjustments
otherwise required by the statute.
In addition, the 2015 amendments
directed the Office of Management and
Budget (OMB) to issue guidance to
agencies on implementing the inflation
adjustments.14 OMB is required to issue
its guidance each December and did so
on December 15, 2017.15 This OMB
guidance for the 2018 adjustments
includes an inflationary multiplier
(1.02041) to apply to each current CMP
maximum amount to determine the
adjusted maximum. The guidance also
addresses rulemaking procedures and
agency reporting and oversight
requirements for CMPs.16
The next section sets forth the Board’s
calculation of the adjustments for 2018,
in accordance with the foregoing
requirements.
B. Application to the 2018 Adjustments
This section applies the statutory
requirements and OMB’s guidance to
the NCUA’s CMPs.
As explained above, the 2015
amendments require the NCUA to adjust
11 This index is published by the Department of
Labor, Bureau of Labor Statistics, and is available
at its website: https://www.bls.gov/cpi/.
12 Public Law 114–74, Sec. 701(b)(1)(2)(B), 129
Stat. 584, 600 (Nov. 2, 2015).
13 Public Law 114–74, Sec. 701(b)(1), 129 Stat.
584, 600 (Nov. 2, 2015).
14 Public Law 114–74, Sec. 701(b)(4), 129 Stat.
584, 601 (Nov. 2, 2015).
15 Id.; 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
2017 CMP-adjustment multiplier is 1.02041).
16 Id.
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Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Rules and Regulations
the maximum amounts of its CMPs by
the percentage by which the October
2017 CPI–U (246.663) exceeds the
October 2016 CPI–U (241.729). The
percentage change is 2.041. This
percentage increase can be expressed as
an inflation multiplier (the quotient of
the October 2017 figure divided by the
October 2016 figure). Accordingly, each
CMP maximum amount should be
multiplied by 1.02041 to determine the
adjusted maximum amount. OMB’s
guidance identifies the same multiplier.
The Board has considered the
exception in the 2015 amendments for
adjustments made in the preceding 12
months, discussed above, and has
determined that it does not apply. All of
the adjustments calculated below are
equal to or greater than the adjustments
made in January 2017 for each CMP.
Accordingly, the exception for greater
adjustments in the preceding 12 months
does not apply. Thus, the Board lacks
discretion to decline to make the
adjustments calculated below.
The table below presents the
adjustment calculations. The current
maximums are found at 12 CFR
747.1001, as adjusted in January 2017.
This amount is multiplied by the
inflation multiplier to calculate the new
maximum in the far right column. Only
these adjusted maximum amounts, and
not the calculations, will be codified at
12 CFR 747.1001 under this final rule.
The adjusted amounts will be effective
January 15, 2018, and can be applied to
violations that occurred on or after
November 2, 2015, the date the 2015
amendments were enacted. The table to
be published in the CFR adds a separate
row for tier 3 penalties against insured
credit unions under 12 U.S.C. 1786(k).
This is a format change to conform the
table in the CFR with the table below,
which lists the tier 3 penalties against
credit unions and natural persons
separately, following the structure of the
statute.
TABLE—CALCULATION OF MAXIMUM CMP ADJUSTMENTS
Adjusted maximum ($)
(current maximum ×
multiplier, rounded to
nearest dollar)
Citation
Description/tier 17
Current maximum ($)
12 U.S.C. 1782(a)(3) .....
Inadvertent failure to submit a report or the inadvertent submission of a false or misleading
report.
Non-inadvertent failure to submit a report or the
non-inadvertent submission of a false or misleading report.
Failure to submit a report or the submission of
a false or misleading report done knowingly
or with reckless disregard.
Tier 1 CMP for inadvertent failure to submit certified statement of insured shares and
charges due to NCUSIF, or inadvertent submission of false or misleading statement.
Tier 2 CMP for non-inadvertent failure to submit
certified statement or submission of false or
misleading statement.
Tier 3 CMP for failure to submit a certified
statement or the submission of a false or
misleading statement done knowingly or with
reckless disregard.
Non-compliance with insurance logo requirements.
Non-compliance with NCUA security requirements.
Tier 1 CMP for violations of law, regulation, and
other orders or agreements.
Tier 2 CMP for violations of law, regulation, and
other orders or agreements and for recklessly
engaging in unsafe or unsound practices or
breaches of fiduciary duty.
Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (natural person).
Tier 3 (same) (CU) .............................................
3,849 ............................
1.02041
3,928.
38,492 ..........................
1.02041
39,278.
Lesser of 1,924,589 or
1% of total CU assets.
3,519 ............................
1.02041
1.02041
Lesser of 1,963,870 or
1% of total CU assets.
3,591.
35,186 ..........................
1.02041
35,904.
Lesser of 1,759,309 or
1% of total CU assets.
1.02041
Lesser of 1,795,216 or
1% of total CU assets.
120 ...............................
1.02041
122.
279 ...............................
1.02041
285.
9,623 ............................
1.02041
9,819.
48,114 ..........................
1.02041
49,096.
1,924,589 .....................
1.02041
1,963,870.
Lesser of 1,924,589 or
1% of total CU assets.
316,566 ........................
1.02041
1.02041
Lesser of 1,963,870 or
1% of total CU assets.
323,027.
11,053 ..........................
1.02041
11,279.
22,105 ..........................
2,090 ............................
1.02041
1.02041
22,556.
2,133.
12 U.S.C. 1782(a)(3) .....
12 U.S.C. 1782(a)(3) .....
12 U.S.C. 1782(d)(2)(A)
12 U.S.C. 1782(d)(2)(B)
12 U.S.C. 1782(d)(2)(C)
12 U.S.C. 1785(a)(3) .....
12 U.S.C. 1785(e)(3) .....
12 U.S.C. 1786(k)(2)(A)
12 U.S.C. 1786(k)(2)(B)
12 U.S.C. 1786(k)(2)(C)
12 U.S.C. 1786(k)(2)(C)
12 U.S.C.
1786(w)(5)(A)(ii).
15 U.S.C. 1639e(k) .......
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15 U.S.C. 1639e(k) .......
42 U.S.C. 4012a(f)(5) ....
Non-compliance with senior examiner post-employment restrictions.
Non-compliance with appraisal independence
standards (first violation).
Subsequent violations of the same ....................
Non-compliance with flood insurance requirements.
Multiplier
17 The table uses condensed descriptions of CMP
tiers. Refer to the U.S. Code citations for complete
descriptions.
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Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Rules and Regulations
III. Regulatory Procedures
A. Final Rule Under the APA
In the 2015 amendments to the FCPIA
Act, Congress provided that agencies
shall make the required inflation
adjustments in 2017 and subsequent
years notwithstanding 5 U.S.C. 553,18
which requires agencies to follow
notice-and-comment procedures in
rulemaking and to make rules effective
no sooner than 30 days after publication
in the Federal Register. The 2015
amendments provide a clear exception
to these requirements.19 In addition, the
Board finds that notice-and-comment
procedures would be impracticable and
unnecessary under the APA because of
the largely ministerial and technical
nature of the rule, which affords
agencies limited discretion in
promulgating the rule, and the statutory
deadline for making the adjustments.20
In these circumstances, the Board finds
good cause to issue a final rule without
issuing a notice of proposed rulemaking
or soliciting public comments. The
Board also finds good cause to make the
final rule effective upon publication
because of the statutory deadline.
Accordingly, this final rule is issued
without prior notice and comment and
will become effective immediately upon
publication.
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act
requires the Board to prepare an
analysis to describe any significant
economic impact a regulation may have
on a substantial number of small
entities.21 For purposes of this analysis,
the Board considers small credit unions
to be those having under $100 million
in assets.22 This final rule will not have
a significant economic impact on a
substantial number of small credit
unions because it only affects the
maximum amounts of CMPs that may be
assessed in individual cases, which are
not numerous and generally do not
involve assessments at the maximum
level. In addition, several of the CMPs
are limited to a percentage of a credit
union’s assets. Finally, in assessing
CMPs, the Board generally must
consider a party’s financial resources.23
Because this final rule will affect few, if
any, small credit unions, the Board
certifies that the final rule will not have
18 Public Law 114–74, Sec. 701(b)(1), 129 Stat.
584, 599 (Nov. 2, 2015).
19 See 5 U.S.C. 559; Asiana Airlines v. Fed.
Aviation Admin., 134 F.3d 393, 396–99 (D.C. Cir.
1998).
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a significant economic impact on small
entities.
Government Appropriations Act,
1999.25
C. Paperwork Reduction Act
2031
F. Small Business Regulatory
Enforcement Fairness Act
The Paperwork Reduction Act of 1995
(PRA) applies to rulemakings in which
an agency creates a new paperwork
burden on regulated entities or modifies
an existing burden.24 For purposes of
the PRA, a paperwork burden may take
the form of either a reporting or a
recordkeeping requirement, both
referred to as information collections.
This final rule adjusts the maximum
amounts of certain CMPs that the Board
may assess against individuals, entities,
or credit unions but does not require
any reporting or recordkeeping.
Therefore, this final rule will not create
new paperwork burdens or modify any
existing paperwork burdens.
D. Executive Order 13132
Executive Order 13132 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. In adherence to
fundamental federalism principles,
The NCUA, an independent
regulatory agency as defined in 44
U.S.C. 3502(5), voluntarily complies
with the executive order. This final rule
adjusts the maximum amounts of
certain CMPs that the Board may assess
against individuals, entities, and
federally insured credit unions,
including state-chartered credit unions.
However, the final rule does not create
any new authority or alter the
underlying statutory authorities that
enable the Board to assess CMPs.
Accordingly, this final rule will not
have a substantial direct effect on the
states, on the connection between the
national government and the states, or
on the distribution of power and
responsibilities among the various
levels of government. The Board has
determined that this final rule does not
constitute a policy that has federalism
implications for purposes of the
executive order.
E. Assessment of Federal Regulations
and Policies on Families
The Board has determined that this
final rule will not affect family wellbeing within the meaning of Section 654
of the Treasury and General
20 5 U.S.C. 553(b)(3)(B); see Mid-Tex Elec. Co-op.,
Inc. v. Fed. Energy Regulatory Comm’n, 822 F.2d
1123, 1133–34 (D.C. Cir. 1987).
21 5 U.S.C. 603(a).
22 Interpretive Ruling and Policy Statement 15–1,
80 FR 57512 (Sept. 24, 2015).
23 12 U.S.C. 1786(k)(2)(G)(i).
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The Small Business Regulatory
Enforcement Fairness Act of 1996 26
(SBREFA) provides generally for
congressional review of agency rules. A
reporting requirement is triggered in
instances where the Board issues a final
rule as defined by Section 551 of the
APA.27 The Board has submitted this
final rule to OMB for it to determine
whether it is a ‘‘major rule’’ within the
meaning of the relevant sections of
SBREFA.
List of Subjects in 12 CFR Part 747
Credit unions, Civil monetary
penalties.
By the National Credit Union
Administration Board on January 9, 2018.
Gerard S. Poliquin,
Secretary of the Board.
For the reasons stated above, the
NCUA Board amends 12 CFR part 747
as follows:
PART 747—ADMINISTRATIVE
ACTIONS, ADJUDICATIVE HEARINGS,
RULES OF PRACTICE AND
PROCEDURE, AND INVESTIGATIONS
1. The authority for part 747
continues to read as follows:
■
Authority: 12 U.S.C. 1766, 1782, 1784,
1785, 1786, 1787, 1790a, 1790d; 15 U.S.C.
1639e; 42 U.S.C. 4012a; Pub. L. 101–410;
Pub. L. 104–134; Pub. L. 109–351; Pub. L.
114–74.
Subpart K—Inflation Adjustment of
Civil Monetary Penalties
2. Revise § 747.1001 to read as
follows:
■
§ 747.1001 Adjustment of civil monetary
penalties by the rate of inflation.
(a) The NCUA is required by the
Federal Civil Penalties Inflation
Adjustment Act of 1990 (Pub. L. 101–
410, 104 Stat. 890, as amended (28
U.S.C. 2461 note)), to adjust the
maximum amount of each civil
monetary penalty within its jurisdiction
by the rate of inflation. The following
chart displays those adjusted amounts,
as calculated pursuant to the statute:
24 44
U.S.C. 3507(d); 5 CFR part 1320.
Law 105–277, 112 Stat. 2681 (Oct. 21,
25 Public
1998).
26 Public Law 104–121, 110 Stat. 857 (Mar. 29,
1996).
27 5 U.S.C. 551.
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Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Rules and Regulations
U.S. Code citation
CMP description
(1) 12 U.S.C. 1782(a)(3) ....................................
Inadvertent failure to submit a report or the inadvertent submission of a false or misleading report.
Non-inadvertent failure to submit a report or
the non-inadvertent submission of a false or
misleading report.
Failure to submit a report or the submission of
a false or misleading report done knowingly
or with reckless disregard.
Tier 1 CMP for inadvertent failure to submit
certified statement of insured shares and
charges due to NCUSIF, or inadvertent
submission of false or misleading statement.
Tier 2 CMP for non-inadvertent failure to submit certified statement or submission of
false or misleading statement.
Tier 3 CMP for failure to submit a certified
statement or the submission of a false or
misleading statement done knowingly or
with reckless disregard.
Non-compliance with insurance logo requirements.
Non-compliance with NCUA security requirements.
Tier 1 CMP for violations of law, regulation,
and other orders or agreements.
Tier 2 CMP for violations of law, regulation,
and other orders or agreements and for
recklessly engaging in unsafe or unsound
practices or breaches of fiduciary duty.
Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (natural person).
Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (insured credit
union).
Non-compliance with senior examiner postemployment restrictions.
Non-compliance with appraisal independence
requirements.
Non-compliance with flood insurance requirements.
(2) 12 U.S.C. 1782(a)(3) ....................................
(3) 12 U.S.C. 1782(a)(3) ....................................
(4) 12 U.S.C. 1782(d)(2)(A) ................................
(5) 12 U.S.C. 1782(d)(2)(B) ................................
(6) 12 U.S.C. 1782(d)(2)(C) ...............................
(7) 12 U.S.C. 1785(a)(3) ....................................
(8) 12 U.S.C. 1785(e) (3) ...................................
(9) 12 U.S.C. 1786(k)(2)(A) ................................
(10) 12 U.S.C. 1786(k)(2)(A) ..............................
(11) 12 U.S.C. 1786(k)(2)(A) ..............................
(12) 12 U.S.C. 1786(k)(2)(A) ..............................
(13) 12 U.S.C. 1786(w)(5)(ii) ..............................
(14) 15 U.S.C. 1639e(k) .....................................
(15) 42 U.S.C. 4012a(f)(5) .................................
(b) The adjusted amounts displayed in
paragraph (a) of this section apply to
civil monetary penalties that are
assessed after the date the increase takes
effect, including those whose associated
violation or violations pre-dated the
increase and occurred after November 2,
2015.
[FR Doc. 2018–00488 Filed 1–12–18; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 25
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[Docket No. FAA–2017–1141; Special
Conditions No. 25–710–SC]
Special Conditions: Dassault Aviation
Model Falcon 5X Airplanes; NonRechargeable Lithium Battery
Installations
Federal Aviation
Administration (FAA), DOT.
AGENCY:
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New maximum amount
Final special conditions; request
for comment.
ACTION:
These special conditions are
issued for non-rechargeable lithium
battery installations on the Dassault
Aviation (Dassault) Model Falcon 5X
airplane. Non-rechargeable lithium
batteries are a novel or unusual design
feature when compared to the state of
technology envisioned in the
airworthiness standards for transport
category airplanes. The applicable
airworthiness regulations do not contain
adequate or appropriate safety standards
for this design feature. These special
conditions contain the additional safety
standards that the Administrator
considers necessary to establish a level
of safety equivalent to that established
by the existing airworthiness standards.
DATES: This action is effective on
Dassault Aviation on January 16, 2018.
Send your comments by March 2, 2018.
ADDRESSES: Send comments identified
by docket number FAA–2017–1141
using any of the following methods:
SUMMARY:
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$3,928.
$39,278.
$1,963,870 or 1 percent of the total assets of
the credit union, whichever is less.
$3,591.
$35,904.
$1,795,216 or 1 percent of the total assets of
the credit union, whichever is less.
$122.
$285.
$9,819.
$49,096.
$1,963,870.
$1,963,870 or 1 percent of the total assets of
the credit union, whichever is less.
$323,027.
First violation: $11,279.
Subsequent violations: $22,556.
$2,133.
• Federal eRegulations Portal: Go to
https://www.regulations.gov/ and follow
the online instructions for sending your
comments electronically.
• Mail: Send comments to Docket
Operations, M–30, U.S. Department of
Transportation (DOT), 1200 New Jersey
Avenue SE, Room W12–140, West
Building Ground Floor, Washington, DC
20590–0001.
• Hand Delivery or Courier: Take
comments to Docket Operations in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE, Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
• Fax: Fax comments to Docket
Operations at 202–493–2251.
Privacy: The FAA will post all
comments it receives, without change,
to https://www.regulations.gov/,
including any personal information the
commenter provides. Using the search
function of the docket website, anyone
can find and read the electronic form of
all comments received into any FAA
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]]>Agencies
[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Rules and Regulations]
[Pages 2029-2032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00488]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 /
Rules and Regulations
[[Page 2029]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 747
RIN 3133-AE83
Civil Monetary Penalty Inflation Adjustment
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The NCUA Board (Board) is amending its regulations to adjust
the maximum amount of each civil monetary penalty (CMP) within its
jurisdiction to account for inflation. This action, including the
amount of the adjustments, is required under the Federal Civil
Penalties Inflation Adjustment Act of 1990, as amended by the Debt
Collection Improvement Act of 1996 and the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015.
DATES: This final rule is effective January 15, 2018.
FOR FURTHER INFORMATION CONTACT: Ian Marenna, Senior Trial Attorney, at
1775 Duke Street, Alexandria, VA 22314, or telephone: (703) 518-6540.
SUPPLEMENTARY INFORMATION:
I. Legal Background
II. Calculation of Adjustments
III. Regulatory Procedures
I. Legal Background
A. Statutory Requirements and OMB Guidance
The Debt Collection Improvement Act of 1996 \1\ (DCIA) amended the
Federal Civil Penalties Inflation Adjustment Act of 1990 \2\ (FCPIA
Act) to require every federal agency to enact regulations that adjust
each CMP provided by law under its jurisdiction by the rate of
inflation at least once every four years.
---------------------------------------------------------------------------
\1\ Public Law 104-134, 31001(s), 110 Stat. 1321-373 (Apr. 26,
1996). The law is codified at 28 U.S.C. 2461 note.
\2\ Public Law 101-410, 104 Stat. 890 (Oct. 5, 1990), codified
at 28 U.S.C. 2461 note.
---------------------------------------------------------------------------
In November 2015, Congress further amended the CMP inflation
requirements in the Bipartisan Budget Act of 2015,\3\ which contains
the Federal Civil Penalties Inflation Adjustment Act Improvements Act
of 2015 (the 2015 amendments).\4\ This legislation provided for an
initial ``catch-up'' adjustment of CMPs in 2016, followed by annual
adjustments. The catch-up adjustment re-set CMP maximum amounts by
setting aside the inflation adjustments that agencies made in prior
years and instead calculated inflation with reference to the year when
each CMP was enacted or last modified by Congress. Agencies were
required to publish their catch-up adjustments in an interim final rule
by July 1, 2016 and make them effective by August 1, 2016.\5\ The NCUA
complied with these requirements in a June 2016 interim final rule,
followed by an October 2016 final rule to confirm the adjustments as
final.\6\
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\3\ Public Law 114-74, 129 Stat. 584 (Nov. 2, 2015).
\4\ 129 Stat. 599.
\5\ Public Law 114-74, Sec. 701(b)(1), 129 Stat. 584, 599 (Nov.
2, 2015).
\6\ 81 FR 40152 (June 21, 2016); 81 FR 78028 (Nov. 7, 2016).
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The 2015 amendments also specified how agencies must conduct annual
inflation adjustments after the 2016 catch-up adjustment. Following the
catch-up adjustment, agencies must make the required adjustments and
publish them in the Federal Register by January 15 each year.\7\ The
NCUA issued an interim final rule on January 6, 2017,\8\ followed by a
final rule issued on June 23, 2017.\9\ This final rule will satisfy the
agency's requirement for the 2018 annual adjustments.
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\7\ Public Law 114-74, Sec. 701(b)(1), 129 Stat. 584, 599 (Nov.
2, 2015).
\8\ 82 FR 7640 (Jan. 23, 2017).
\9\ 82 FR 29710 (June 30, 2017).
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The statute provides that the adjustments shall be made
notwithstanding the section of the Administrative Procedure Act (APA)
that requires prior notice and public comment for agency
rulemaking.\10\ The 2015 amendments also specify that each CMP maximum
must be increased by the percentage by which the consumer price index
for urban consumers (CPI-U) \11\ for October of the year immediately
preceding the year the adjustment is made exceeds the CPI-U for October
of the prior year.\12\ For example, for the adjustment made in 2018,
agencies must compare the October 2016 and 2017 CPI-U figures.
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\10\ Public Law 114-74, Sec. 701(b)(1), 129 Stat. 584, 599 (Nov.
2, 2015).
\11\ This index is published by the Department of Labor, Bureau
of Labor Statistics, and is available at its website: https://www.bls.gov/cpi/.
\12\ Public Law 114-74, Sec. 701(b)(1)(2)(B), 129 Stat. 584, 600
(Nov. 2, 2015).
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The 2015 amendments also provide that agencies may forgo the
required annual adjustments in certain circumstances. Specifically, in
a subsection titled ``Other Adjustments Made,'' the statute provides
that an agency is not required to make an annual adjustment to a CMP if
it has been increased by a greater amount than the contemplated annual
adjustment in the preceding 12 months.\13\ When these criteria are met,
the agency has discretion not to make the adjustments otherwise
required by the statute.
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\13\ Public Law 114-74, Sec. 701(b)(1), 129 Stat. 584, 600 (Nov.
2, 2015).
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In addition, the 2015 amendments directed the Office of Management
and Budget (OMB) to issue guidance to agencies on implementing the
inflation adjustments.\14\ OMB is required to issue its guidance each
December and did so on December 15, 2017.\15\ This OMB guidance for the
2018 adjustments includes an inflationary multiplier (1.02041) to apply
to each current CMP maximum amount to determine the adjusted maximum.
The guidance also addresses rulemaking procedures and agency reporting
and oversight requirements for CMPs.\16\
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\14\ Public Law 114-74, Sec. 701(b)(4), 129 Stat. 584, 601 (Nov.
2, 2015).
\15\ Id.; 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 2017 CMP-adjustment
multiplier is 1.02041).
\16\ Id.
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The next section sets forth the Board's calculation of the
adjustments for 2018, in accordance with the foregoing requirements.
B. Application to the 2018 Adjustments
This section applies the statutory requirements and OMB's guidance
to the NCUA's CMPs.
As explained above, the 2015 amendments require the NCUA to adjust
[[Page 2030]]
the maximum amounts of its CMPs by the percentage by which the October
2017 CPI-U (246.663) exceeds the October 2016 CPI-U (241.729). The
percentage change is 2.041. This percentage increase can be expressed
as an inflation multiplier (the quotient of the October 2017 figure
divided by the October 2016 figure). Accordingly, each CMP maximum
amount should be multiplied by 1.02041 to determine the adjusted
maximum amount. OMB's guidance identifies the same multiplier.
The Board has considered the exception in the 2015 amendments for
adjustments made in the preceding 12 months, discussed above, and has
determined that it does not apply. All of the adjustments calculated
below are equal to or greater than the adjustments made in January 2017
for each CMP. Accordingly, the exception for greater adjustments in the
preceding 12 months does not apply. Thus, the Board lacks discretion to
decline to make the adjustments calculated below.
The table below presents the adjustment calculations. The current
maximums are found at 12 CFR 747.1001, as adjusted in January 2017.
This amount is multiplied by the inflation multiplier to calculate the
new maximum in the far right column. Only these adjusted maximum
amounts, and not the calculations, will be codified at 12 CFR 747.1001
under this final rule. The adjusted amounts will be effective January
15, 2018, and can be applied to violations that occurred on or after
November 2, 2015, the date the 2015 amendments were enacted. The table
to be published in the CFR adds a separate row for tier 3 penalties
against insured credit unions under 12 U.S.C. 1786(k). This is a format
change to conform the table in the CFR with the table below, which
lists the tier 3 penalties against credit unions and natural persons
separately, following the structure of the statute.
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\17\ The table uses condensed descriptions of CMP tiers. Refer
to the U.S. Code citations for complete descriptions.
Table--Calculation of Maximum CMP Adjustments
----------------------------------------------------------------------------------------------------------------
Adjusted maximum
($) (current
Current maximum maximum x
Citation Description/tier 17 ($) Multiplier multiplier,
rounded to nearest
dollar)
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 1782(a)(3)........... Inadvertent failure to 3,849............. 1.02041 3,928.
submit a report or the
inadvertent submission
of a false or
misleading report.
12 U.S.C. 1782(a)(3)........... Non-inadvertent failure 38,492............ 1.02041 39,278.
to submit a report or
the non-inadvertent
submission of a false
or misleading report.
12 U.S.C. 1782(a)(3)........... Failure to submit a Lesser of 1.02041 Lesser of
report or the 1,924,589 or 1% 1,963,870 or 1%
submission of a false of total CU of total CU
or misleading report assets. assets.
done knowingly or with
reckless disregard.
12 U.S.C. 1782(d)(2)(A)........ Tier 1 CMP for 3,519............. 1.02041 3,591.
inadvertent failure to
submit certified
statement of insured
shares and charges due
to NCUSIF, or
inadvertent submission
of false or misleading
statement.
12 U.S.C. 1782(d)(2)(B)........ Tier 2 CMP for non- 35,186............ 1.02041 35,904.
inadvertent failure to
submit certified
statement or
submission of false or
misleading statement.
12 U.S.C. 1782(d)(2)(C)........ Tier 3 CMP for failure Lesser of 1.02041 Lesser of
to submit a certified 1,759,309 or 1% 1,795,216 or 1%
statement or the of total CU of total CU
submission of a false assets. assets.
or misleading
statement done
knowingly or with
reckless disregard.
12 U.S.C. 1785(a)(3)........... Non-compliance with 120............... 1.02041 122.
insurance logo
requirements.
12 U.S.C. 1785(e)(3)........... Non-compliance with 279............... 1.02041 285.
NCUA security
requirements.
12 U.S.C. 1786(k)(2)(A)........ Tier 1 CMP for 9,623............. 1.02041 9,819.
violations of law,
regulation, and other
orders or agreements.
12 U.S.C. 1786(k)(2)(B)........ Tier 2 CMP for 48,114............ 1.02041 49,096.
violations of law,
regulation, and other
orders or agreements
and for recklessly
engaging in unsafe or
unsound practices or
breaches of fiduciary
duty.
12 U.S.C. 1786(k)(2)(C)........ Tier 3 CMP for 1,924,589......... 1.02041 1,963,870.
knowingly committing
the violations under
Tier 1 or 2 (natural
person).
12 U.S.C. 1786(k)(2)(C)........ Tier 3 (same) (CU)..... Lesser of 1.02041 Lesser of
1,924,589 or 1% 1,963,870 or 1%
of total CU of total CU
assets. assets.
12 U.S.C. 1786(w)(5)(A)(ii).... Non-compliance with 316,566........... 1.02041 323,027.
senior examiner post-
employment
restrictions.
15 U.S.C. 1639e(k)............. Non-compliance with 11,053............ 1.02041 11,279.
appraisal independence
standards (first
violation).
15 U.S.C. 1639e(k)............. Subsequent violations 22,105............ 1.02041 22,556.
of the same.
42 U.S.C. 4012a(f)(5).......... Non-compliance with 2,090............. 1.02041 2,133.
flood insurance
requirements.
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[[Page 2031]]
III. Regulatory Procedures
A. Final Rule Under the APA
In the 2015 amendments to the FCPIA Act, Congress provided that
agencies shall make the required inflation adjustments in 2017 and
subsequent years notwithstanding 5 U.S.C. 553,\18\ which requires
agencies to follow notice-and-comment procedures in rulemaking and to
make rules effective no sooner than 30 days after publication in the
Federal Register. The 2015 amendments provide a clear exception to
these requirements.\19\ In addition, the Board finds that notice-and-
comment procedures would be impracticable and unnecessary under the APA
because of the largely ministerial and technical nature of the rule,
which affords agencies limited discretion in promulgating the rule, and
the statutory deadline for making the adjustments.\20\ In these
circumstances, the Board finds good cause to issue a final rule without
issuing a notice of proposed rulemaking or soliciting public comments.
The Board also finds good cause to make the final rule effective upon
publication because of the statutory deadline. Accordingly, this final
rule is issued without prior notice and comment and will become
effective immediately upon publication.
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\18\ Public Law 114-74, Sec. 701(b)(1), 129 Stat. 584, 599 (Nov.
2, 2015).
\19\ See 5 U.S.C. 559; Asiana Airlines v. Fed. Aviation Admin.,
134 F.3d 393, 396-99 (D.C. Cir. 1998).
\20\ 5 U.S.C. 553(b)(3)(B); see Mid-Tex Elec. Co-op., Inc. v.
Fed. Energy Regulatory Comm'n, 822 F.2d 1123, 1133-34 (D.C. Cir.
1987).
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act requires the Board to prepare an
analysis to describe any significant economic impact a regulation may
have on a substantial number of small entities.\21\ For purposes of
this analysis, the Board considers small credit unions to be those
having under $100 million in assets.\22\ This final rule will not have
a significant economic impact on a substantial number of small credit
unions because it only affects the maximum amounts of CMPs that may be
assessed in individual cases, which are not numerous and generally do
not involve assessments at the maximum level. In addition, several of
the CMPs are limited to a percentage of a credit union's assets.
Finally, in assessing CMPs, the Board generally must consider a party's
financial resources.\23\ Because this final rule will affect few, if
any, small credit unions, the Board certifies that the final rule will
not have a significant economic impact on small entities.
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\21\ 5 U.S.C. 603(a).
\22\ Interpretive Ruling and Policy Statement 15-1, 80 FR 57512
(Sept. 24, 2015).
\23\ 12 U.S.C. 1786(k)(2)(G)(i).
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C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in
which an agency creates a new paperwork burden on regulated entities or
modifies an existing burden.\24\ For purposes of the PRA, a paperwork
burden may take the form of either a reporting or a recordkeeping
requirement, both referred to as information collections. This final
rule adjusts the maximum amounts of certain CMPs that the Board may
assess against individuals, entities, or credit unions but does not
require any reporting or recordkeeping. Therefore, this final rule will
not create new paperwork burdens or modify any existing paperwork
burdens.
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\24\ 44 U.S.C. 3507(d); 5 CFR part 1320.
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D. Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests. In
adherence to fundamental federalism principles,
The NCUA, an independent regulatory agency as defined in 44 U.S.C.
3502(5), voluntarily complies with the executive order. This final rule
adjusts the maximum amounts of certain CMPs that the Board may assess
against individuals, entities, and federally insured credit unions,
including state-chartered credit unions. However, the final rule does
not create any new authority or alter the underlying statutory
authorities that enable the Board to assess CMPs. Accordingly, this
final rule will not have a substantial direct effect on the states, on
the connection between the national government and the states, or on
the distribution of power and responsibilities among the various levels
of government. The Board has determined that this final rule does not
constitute a policy that has federalism implications for purposes of
the executive order.
E. Assessment of Federal Regulations and Policies on Families
The Board has determined that this final rule will not affect
family well-being within the meaning of Section 654 of the Treasury and
General Government Appropriations Act, 1999.\25\
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\25\ Public Law 105-277, 112 Stat. 2681 (Oct. 21, 1998).
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F. Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996 \26\
(SBREFA) provides generally for congressional review of agency rules. A
reporting requirement is triggered in instances where the Board issues
a final rule as defined by Section 551 of the APA.\27\ The Board has
submitted this final rule to OMB for it to determine whether it is a
``major rule'' within the meaning of the relevant sections of SBREFA.
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\26\ Public Law 104-121, 110 Stat. 857 (Mar. 29, 1996).
\27\ 5 U.S.C. 551.
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List of Subjects in 12 CFR Part 747
Credit unions, Civil monetary penalties.
By the National Credit Union Administration Board on January 9,
2018.
Gerard S. Poliquin,
Secretary of the Board.
For the reasons stated above, the NCUA Board amends 12 CFR part 747
as follows:
PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF
PRACTICE AND PROCEDURE, AND INVESTIGATIONS
0
1. The authority for part 747 continues to read as follows:
Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a,
1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L.
104-134; Pub. L. 109-351; Pub. L. 114-74.
Subpart K--Inflation Adjustment of Civil Monetary Penalties
0
2. Revise Sec. 747.1001 to read as follows:
Sec. 747.1001 Adjustment of civil monetary penalties by the rate of
inflation.
(a) The NCUA is required by the Federal Civil Penalties Inflation
Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, as amended (28
U.S.C. 2461 note)), to adjust the maximum amount of each civil monetary
penalty within its jurisdiction by the rate of inflation. The following
chart displays those adjusted amounts, as calculated pursuant to the
statute:
[[Page 2032]]
------------------------------------------------------------------------
U.S. Code citation CMP description New maximum amount
------------------------------------------------------------------------
(1) 12 U.S.C. 1782(a)(3).... Inadvertent failure $3,928.
to submit a report
or the inadvertent
submission of a
false or misleading
report.
(2) 12 U.S.C. 1782(a)(3).... Non-inadvertent $39,278.
failure to submit a
report or the non-
inadvertent
submission of a
false or misleading
report.
(3) 12 U.S.C. 1782(a)(3).... Failure to submit a $1,963,870 or 1
report or the percent of the
submission of a total assets of the
false or misleading credit union,
report done whichever is less.
knowingly or with
reckless disregard.
(4) 12 U.S.C. 1782(d)(2)(A). Tier 1 CMP for $3,591.
inadvertent failure
to submit certified
statement of
insured shares and
charges due to
NCUSIF, or
inadvertent
submission of false
or misleading
statement.
(5) 12 U.S.C. 1782(d)(2)(B). Tier 2 CMP for non- $35,904.
inadvertent failure
to submit certified
statement or
submission of false
or misleading
statement.
(6) 12 U.S.C. 1782(d)(2)(C). Tier 3 CMP for $1,795,216 or 1
failure to submit a percent of the
certified statement total assets of the
or the submission credit union,
of a false or whichever is less.
misleading
statement done
knowingly or with
reckless disregard.
(7) 12 U.S.C. 1785(a)(3).... Non-compliance with $122.
insurance logo
requirements.
(8) 12 U.S.C. 1785(e) (3)... Non-compliance with $285.
NCUA security
requirements.
(9) 12 U.S.C. 1786(k)(2)(A). Tier 1 CMP for $9,819.
violations of law,
regulation, and
other orders or
agreements.
(10) 12 U.S.C. 1786(k)(2)(A) Tier 2 CMP for $49,096.
violations of law,
regulation, and
other orders or
agreements and for
recklessly engaging
in unsafe or
unsound practices
or breaches of
fiduciary duty.
(11) 12 U.S.C. 1786(k)(2)(A) Tier 3 CMP for $1,963,870.
knowingly
committing the
violations under
Tier 1 or 2
(natural person).
(12) 12 U.S.C. 1786(k)(2)(A) Tier 3 CMP for $1,963,870 or 1
knowingly percent of the
committing the total assets of the
violations under credit union,
Tier 1 or 2 whichever is less.
(insured credit
union).
(13) 12 U.S.C. Non-compliance with $323,027.
1786(w)(5)(ii). senior examiner
post-employment
restrictions.
(14) 15 U.S.C. 1639e(k)..... Non-compliance with First violation:
appraisal $11,279.
independence Subsequent
requirements. violations:
$22,556.
(15) 42 U.S.C. 4012a(f)(5).. Non-compliance with $2,133.
flood insurance
requirements.
------------------------------------------------------------------------
(b) The adjusted amounts displayed in paragraph (a) of this section
apply to civil monetary penalties that are assessed after the date the
increase takes effect, including those whose associated violation or
violations pre-dated the increase and occurred after November 2, 2015.
[FR Doc. 2018-00488 Filed 1-12-18; 8:45 am]
BILLING CODE 7535-01-P
