Rules of Practice and Procedure, 38080-38085 [2018-16548]
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Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Proposed Rules
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Signed in Washington, DC, on July 31,
2018.
Cathy Tripodi,
Acting Assistant Secretary, Energy Efficiency
and Renewable Energy.
[FR Doc. 2018–16650 Filed 8–2–18; 8:45 am]
BILLING CODE 6450–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 308 and 327
RIN 3064–AE75
Rules of Practice and Procedure
Federal Deposit Insurance
Corporation.
ACTION: Notice of proposed rulemaking
and request for comments.
AGENCY:
The Federal Deposit
Insurance Corporation (FDIC) proposes
SUMMARY:
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to amend its rules of practice and
procedure to remove duplicative,
descriptive regulatory language related
to civil money penalty (CMP) amounts
that restates existing statutory language
regarding such CMPs, codify Congress’s
recent change to CMP inflationadjustments in the FDIC’s regulations,
and direct readers to an annually
published notice in the Federal
Register—rather than the Code of
Federal Regulations (CFR)—for
information regarding the maximum
CMP amounts that can be assessed after
inflation adjustments. These revisions
are intended to simplify the CFR by
removing unnecessary and redundant
text and to make it easier for readers to
locate the current, inflation-adjusted
maximum CMP amounts by presenting
these amounts in an annually published
chart. Additionally, the FDIC proposes
to correct four errors and revise crossreferences currently found in its rules of
practice and procedure.
DATES: Comments must be received by
October 2, 2018.
ADDRESSES: You may submit comments,
identified by RIN 3064–AE75, by any of
the following methods:
• Agency website: https://
www.fdic.gov/regulations/laws/Federal/.
Follow the instructions for submitting
comments on the Agency website.
• Email: Comments@fdic.gov. Include
the RIN 3064–AE75 in the subject line
of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
• Hand Delivery: Comments may be
hand-delivered to the guard station at
the rear of the 550 17th Street Building
(located on F Street) on business days
between 7 a.m. and 5 p.m.
Public Inspection: All comments
received must include the agency name
and RIN for this rulemaking. All
comments received will be posted
without change to https://www.fdic.gov/
regulations/laws/Federal/—including
any personal information provided—for
public inspection. Paper copies of
public comments may be ordered from
the FDIC Public Information Center,
3501 North Fairfax Drive, Room E–1002,
Arlington, VA 22226 by telephone at
(877) 275–3342 or (703) 562–2200.
FOR FURTHER INFORMATION CONTACT:
Graham N. Rehrig, Senior Attorney,
Legal Division, (202) 898–3829,
grehrig@fdic.gov, or Sydney Mayer,
Attorney, Legal Division, (202) 898–
3669.
SUPPLEMENTARY INFORMATION:
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Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Proposed Rules
I. Policy Objectives
The policy objective of the Proposed
Rule is to simplify the presentation of
maximum CMP amounts within 12 CFR
part 308 to support ease of reference and
public understanding. The Proposed
Rule will amend the presentation of
maximum CMP limits to help ensure
consistency with similar statutes of
other Federal financial regulators.1
Additionally, the Proposed Rule will
implement recent Office of Management
and Budget (OMB) guidance on
simplifying the publication of annual
inflation adjustments.
II. Background
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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
has established maximum penalties that
can be assessed under these statutes. In
many cases, these statutes contain
multiple penalty tiers, permitting the
assessment of penalties at various levels
depending on the severity of the
misconduct at issue.3
Since 1990, Congress has required
Federal agencies with authority to
impose CMPs to periodically adjust the
maximum CMP amounts these agencies
are authorized to impose.4 These
periodic updates have helped to
‘‘maintain the deterrent effect of civil
monetary penalties and promote
compliance with the law.’’ 5 In 2015,
Congress revised the process by which
Federal agencies adjust applicable CMPs
for inflation.6 Under the 2015
1 See 12 CFR 19.240 and 83 FR 1657 (Jan. 12,
2018) (table containing the CMP adjustments
published by the Office of the Comptroller of
Currency); 12 CFR 263.65 (table containing the CMP
adjustments published by the Board of Governors
of the Federal Reserve System); 12 CFR 747.1001
(table containing the CMP adjustments published
by the National Credit Union Association).
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, 12 U.S.C. 1818(i)(2) provides for
three tiers of CMPs, with the size of the CMP
increasing with the gravity of the misconduct.
4 See The Federal Civil Penalties Inflation
Adjustment Act of 1990, Public Law 101–410.
5 See section 2 of the Federal Civil Penalties
Inflation Adjustment Act of 1990. Public Law 101–
410, 104 Stat. 890 (amended 2015) (codified as
amended at 28 U.S.C. 2461 note).
6 See The Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, Public
Law 114–74, sec. 701, 129 Stat. 584 (2015
Adjustment Act). Although the 2015 Adjustment
Act increased the maximum penalty that may be
assessed under each applicable statute, the FDIC
still possesses discretion to impose CMP amounts
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Adjustment Act, the FDIC is required to
make annual adjustments to its
maximum CMP amounts to account for
inflation.7 These adjustments apply to
all CMPs covered by the 2015
Adjustment Act.8 The 2015 Adjustment
Act requires annual adjustments be
made by January 15 of each year.9 The
FDIC’s 2018 adjustments were
published on January 12, 2018.10
The 2015 Adjustment Act directs
Federal agencies to follow guidance
issued by the OMB by December 15 of
each year when calculating new
maximum penalty amounts.11 The OMB
issued guidance for the 2018 CMP
adjustments on December 15, 2017.12
The OMB Guidance noted, ‘‘Some
agencies have chosen to remove their
specific penalty amounts from the CFR
and have instead codified the statutory
formula for inflation adjustments.
Agencies must still calculate and
publish their penalty adjustments in the
Federal Register.’’ 13
III. Description and Expected Effects of
the Proposed Rule
The FDIC proposes amending its rules
of practice and procedure to remove
from the CFR descriptive regulatory
language related to maximum CMP
amounts that duplicates statutory
language, codify the statutory formula
for inflation adjustments to the
maximum CMP amounts, and direct
readers to a table published annually in
the Federal Register, containing the
inflation-adjusted maximum CMP
amounts. These proposed changes
would be consistent with the OMB
below the maximum level in accordance with the
severity of the misconduct at issue. When making
a determination as to the appropriate level of any
given penalty, the FDIC is guided by statutory
factors set forth in 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. See 63 FR 30227 (June 3, 1998). Such
factors include, but are not limited to, the gravity
and duration of the misconduct and the intent
related to the misconduct.
7 See 2015 Adjustment Act at sec. 701(b).
8 See Public Law 101–410, sec. 3(2), 104 Stat. 890
(amended 2015) (codified as amended at 28 U.S.C.
2461 note).
9 Public Law 114–74, sec. 701(b), 129 Stat. 584.
10 See 83 FR 1519, available at https://
www.fdic.gov/news/board/2017/2017-12-19-noticesum-b-fr.pdf.
11 See Public Law 114–74, sec. 701(b), 129 Stat.
584.
12 OMB, Implementation of Penalty Inflation
Adjustments for 2018, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements
Act of 2015, M–18–03 (OMB Guidance), available
at https://www.whitehouse.gov/wp-content/
uploads/2017/11/M-18-03.pdf.
13 OMB Guidance at 4 (citing 81 FR 41438 (June
27, 2016) (Social Security Administration) (codified
at 29 CFR 498.103(g))).
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38081
Guidance and the practices of other
Federal regulators.
Currently, 12 CFR 308.116(b) and
308.132(d) contain the maximum CMP
amounts that may be assessed for
violations of various statutes, along with
lengthy descriptions of these statutes.
Rather than providing any interpretation
of these statutes or providing guidance
regarding the assessment of CMPs for
violations of these statutes, the
descriptive language contained in
§§ 308.116(b) and 308.132(d) merely
restates the enabling statutory language.
The FDIC’s current format for
identifying inflation-adjusted CMP
figures differs significantly from the
formats published by other prudential
regulators 14 and makes it more difficult
for readers to locate applicable
maximum CMP amounts. Accordingly,
the FDIC proposes removing descriptive
language found in §§ 308.116(b) and
308.132(d). The FDIC believes that these
changes will remove unnecessary and
redundant language from the CFR and
improve readability.
A sample annual table containing the
current maximum CMP amounts—
effective as of January 15, 2018—
appears at the end of this section, for
reference. Under the Proposed Rule, the
FDIC would calculate and publish a
similar chart with inflation-adjusted
figures in the Federal Register on or
before January 15 of each calendar year.
The FDIC, however, proposes to retain
language in § 308.116(a), (c), and (d)
concerning violations of the Change in
Bank Control Act. These regulations,
which the FDIC implemented in 1991,
address requests for a hearing,
mitigating factors, and the consequences
of a respondent’s failure to answer.15
The language in current § 308.116(b)(1)
through (3), however, repeats the
relevant statutory language of 12 U.S.C.
1817(j)(16)(A)-(D). Further, current
§ 308.116(b)(4) merely contains inflation
adjustments. Therefore, the FDIC
proposes removing current § 308.116(b)
and instead directing readers to
§ 308.132(d) to determine current
maximum CMP amounts.
The FDIC also proposes to keep
language concerning the late filing of
Call Reports at current § 308.132(d)(1)
and (d)(3). 12 U.S.C. 1817(a) provides
the maximum CMP amounts for the late
14 The OCC, the FRB, and the National Credit
Union Association (NCUA) provide a simplified list
in a tabular format, identifying each enabling
statute and the associated maximum CMP amount,
adjusted for inflation. See 12 CFR 19.240 and 83 FR
1657 (Jan. 12, 2018) (table containing the OCC’s
CMP adjustments); 12 CFR 263.65 (table containing
the FRB’s CMP adjustments); 12 CFR 747.1001
(table containing the NCUA’s CMP adjustments).
15 See 56 FR 37968 (Aug. 9, 1991).
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filing of Call Reports. In 1991, however,
the FDIC issued regulations that further
subdivided these amounts based upon
the size of the institution and the
lateness of the filing.16 These
regulations accordingly differ from other
provisions found in § 308.132(d) that
simply restate relevant statutory
language regarding maximum CMP
amounts. The Proposed Rule would
merge language from current
§ 308.132(d)(1) and (3) into a new
§ 308.132(e), since, aside from the
differing penalty amounts, these two
current subsections contain similar
language. The new § 308.132(e) would
direct readers to the Federal Register to
determine the applicable inflationadjusted penalty amounts.
The FDIC proposes correcting four
errors currently located at
§ 308.132(d)(1) and (3) concerning the
maximum amount that generally will be
assessed for violations of 12 U.S.C.
1464(v) and 1817(a) regarding the late
filing of Call Reports by certain small
institutions. The current text contains
the inadvertent overstatement of four
fractions of an institution’s total assets
that are paired with correctly stated
basis-point figures. These corrections
would align the listed fractions of an
institution’s total assets with the listed
basis-point calculations, and these
corrections would be reflected in the
annual Federal Register CMP notice.17
Lastly, the FDIC proposes to revise
cross-references found at 12 CFR
308.502(a)(6), 12 CFR 308.502(b)(4), 12
CFR 308.530, and 12 CFR 327.3(c) to
reflect the proposed revisions to 12 CFR
308.132(d).
Since the Proposed Rule would
amend the presentation of maximum
CMP levels in the Federal Register, the
FDIC believes the rule will not pose any
regulatory costs to IDIs or cost to the
public in general.
SAMPLE CIVIL MONEY PENALTY TABLE
Adjusted Maximum CMP 18
(Beginning January 15, 2018)
U.S. Code citation
12 U.S.C. 1464(v):
Tier One CMP ........................................................................................................
Tier Two CMP ........................................................................................................
Tier Three CMP 19 ..................................................................................................
12 U.S.C. 1467(d) .........................................................................................................
12 U.S.C. 1817(a):
Tier One CMP 20 ....................................................................................................
Tier Two CMP ........................................................................................................
Tier Three CMP 21 ..................................................................................................
12 U.S.C. 1817(c):
Tier One CMP ........................................................................................................
Tier Two CMP ........................................................................................................
Tier Three CMP 22 ..................................................................................................
12 U.S.C. 1817(j)(16):
Tier One CMP ........................................................................................................
Tier Two CMP ........................................................................................................
Tier Three CMP 23 ..................................................................................................
12 U.S.C. 1818(i)(2) 24
Tier One CMP ........................................................................................................
Tier Two CMP ........................................................................................................
Tier Three CMP 25 ..................................................................................................
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) 26
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 ........................................................................................................
16 See
56 FR 37968, 37992–93 (Aug. 9, 1991).
example, current section
308.132(d)(1)(i)(A) states, ‘‘the amount assessed
shall be the greater of [an inflation-adjusted daily
penalty] or 1⁄1,000th of the institution’s total assets
(1/10th of a basis point)’’ when it should read, ‘‘the
amount assessed shall be the greater of [an
inflation-adjusted daily penalty] or 1/100,000th of
the institution’s total assets (1/10th of a basis
point).’’ (Emphasis added).
18 The maximum penalty amount is per day,
unless otherwise indicated.
19 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
20 12 U.S.C. 1817(a) provides the maximum CMP
amounts for the late filing of Call Reports. In 1991,
however, the FDIC issued regulations that further
subdivided these amounts based upon the size of
the institution and the lateness of the filing. See 56
FR 37968, 37992–93 (Aug. 9, 1991), to be re-
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$3,928
$39,278
$1,963,870
$9,819
$3,928
$39,278
$1,963,870
$3,591
$35,904
$1,795,216
$9,819
$49,096
$1,963,870
$9,819
$49,096
$1,963,870
$8,977
$323,027
$122
$122
$20,521
$2,852
$285
$9,819
$49,096
codified at 12 CFR 308.132(e)(1). These adjusted
subdivided amounts are found at the end of this
chart.
21 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
22 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
23 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
24 These amounts also apply to CMPs in statutes
that cross-reference 12 U.S.C. 1818, such as 12
U.S.C. 2601, 2804(b), 3108(b), 3349(b), 4009(a),
4309(a), 4717(b); 15 U.S.C. 1607(a), 1681s(b),
1691(b), 1691c(a), 1693o(a); 42 U.S.C. 3601.
25 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
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26 The $122-per-day maximum CMP under 12
U.S.C. 1828(h), for failure or refusal to pay any
assessment, applies only when the assessment is
less than $10,000. When the amount of the
assessment is $10,000 or more, the maximum CMP
under section 1828(h) is 1 percent of the amount
of the assessment for each day that the failure or
refusal continues.
27 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
28 The maximum penalty amount for an
institution is the greater of this amount or 1/
100,000th of the institution’s total assets.
29 The maximum penalty amount for an
institution is the greater of this amount or 1/
50,000th of the institution’s total assets.
30 The maximum penalty amount for an
institution is the lesser of this amount or 1 percent
of total assets.
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38083
SAMPLE CIVIL MONEY PENALTY TABLE—Continued
Adjusted Maximum CMP 18
(Beginning January 15, 2018)
U.S. Code citation
Tier Three CMP 27 ..................................................................................................
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)
$1,963,870
$2,443
$9,239
$92,383
$92,383
$461,916
$184,767
$923,831
$11,279
$22,556
$11,181
$2,133
CFR Citation
Adjusted Presumptive CMP
(Beginning January 15, 2018)
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12 CFR 308.132(e)(1)(i):
Institutions with $25 million or more in assets:
1 to 15 days late .............................................................................................
16 or more days late .......................................................................................
Institutions with less than $25 million in assets:
1 to 15 days late 28 .........................................................................................
16 or more days late 29 ...................................................................................
12 CFR 308.132(e)(1)(ii):
Institutions with $25 million or more in assets
1 to 15 days late .............................................................................................
16 or more days late .....................................................................................................
Institutions with less than $25 million in assets
1 to 15 days late ....................................................................................................
16 or more days late ..............................................................................................
12 CFR 308.132(e)(2) ...................................................................................................
12 CFR 308.132(e)(3):
Tier One CMP ........................................................................................................
Tier Two CMP ........................................................................................................
Tier Three CMP 30 ..................................................................................................
IV. Alternatives Considered
During preliminary discussions
regarding the Proposed Rule, the FDIC
considered possible alternatives to
issuing the Proposed Rule. The primary
alternative the FDIC considered was to
maintain the current statutory language
in the CFR and Federal Register as well
as the CMP presentation format. This
alternative (1) keeps the redundant
statutory language in the CFR and
Federal Register, (2) does not improve
the clarity and readability of the
maximum CMPs, and (3) does not
address the fact that the CMP
presentation format is inconsistent with
the other prudential regulators.
Therefore, the FDIC believes the
Proposed Rule will support ease of
reference and public understanding
more so than the alternative.
V. Request for Comment
The FDIC believes that these changes
to Part 308 are ministerial and technical
and that, therefore, notice-and-comment
rulemaking is unnecessary. Nonetheless,
in the interest of transparency, the FDIC
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$538
$1,078
$180
$359
$897
$1,795
1/50,000th of the institution’s total assets.
1/25,000th of the institution’s total assets.
$39,278
$3,928
$39,278
$1,963,870
invites comments on all aspects of this
Proposed Rule. Commenters are
specifically encouraged to identify any
technical issues raised by the Proposed
Rule.
VI. Regulatory Analysis
Riegle Community Development and
Regulatory Improvement Act
Section 302 of the Riegle Community
Development and Regulatory
Improvement Act of 1994 31 requires
that each Federal banking agency, in
determining the effective date and
administrative compliance requirements
for new regulations that impose
additional reporting, disclosure, or other
requirements on insured depository
institutions, consider, consistent with
principles of safety and soundness and
the public interest, any administrative
burdens that such regulations would
place on depository institutions,
including small depository institutions,
and customers of depository
institutions, as well as the benefits of
31 12
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Frm 00011
Fmt 4702
such regulations. In addition, in order to
provide an adequate transition period,
new regulations that impose additional
reporting, disclosures, or other new
requirements on IDIs generally must
take effect on the first day of a calendar
quarter that begins on or after the date
on which the regulations are published
in final form.
The Proposed Rule would not impose
any new or additional reporting,
disclosures, or other requirements on
insured depository institutions.
Therefore, the Proposed Rule is not
subject to the requirements of this
statute.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
generally requires that, in connection
with a rulemaking, an agency prepare
and make available for public comment
an initial regulatory flexibility analysis
describing the impact of the Proposed
Rule on small entities.32 A regulatory
flexibility analysis is not required,
32 5
Sfmt 4702
U.S.C. 601 et seq.
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however, if the agency certifies that the
rule will not have a significant
economic impact on a substantial
number of small entities. The Small
Business Administration has defined
‘‘small entities’’ to include banking
organizations with total assets less than
or equal to $550 million.33 The FDIC
supervises 3,603 depository
institutions,34 of which 2,885 are
defined as small banking entities by the
terms of the RFA. For the reasons
described below and under section
605(b) of the RFA, the FDIC certifies
that the Proposed Rule will not have a
significant economic impact on a
substantial number of small entities.
The FDIC believes the proposed
amendments to 12 CFR part 308 will
have a negligible impact on small
entities. For a detailed description of the
Proposed Rule and its expected effects,
please review Section III above. The
proposed revisions are intended to
simplify the text of the CFR by removing
unnecessary and redundant text in order
to make it easier for readers to reference
and understand the current maximum
CMP amounts.
The Omnibus Consolidated and
Emergency Supplemental
Appropriations Act, 1999: Assessment
of Federal Regulations and Policies on
Families
The FDIC determined that the
Proposed Rule will not affect family
wellbeing within the meaning of section
654 of the Omnibus Consolidated and
Emergency Supplemental
Appropriations Act, 1999.35
Paperwork Reduction Act
The Proposed Rule does not create
any new, or revise any existing,
collections of information under section
3504(h) of the Paperwork Reduction Act
of 1980.36 Consequently, no information
collection request will be submitted to
the OMB for review.
amozie on DSK3GDR082PROD with PROPOSALS1
Plain Language Act
33 13 CFR 121.201 (as amended, effective
December 2, 2014).
34 FDIC-supervised institutions are set forth in 12
U.S.C. 1813(q)(2).
35 Public Law 105–277, 112 Stat. 2681 (1998).
36 44 U.S.C. 3501 et seq.
37 Public Law 106–102, 113 Stat. 1338 (Nov. 12,
1999).
18:01 Aug 02, 2018
12 CFR Part 308
Administrative practice and
procedure, Bank deposit insurance,
Banks, Banking, Claims, Crime, Equal
access to justice, Fraud, Investigations,
Lawyers, Penalties.
12 CFR Part 327
Bank deposit insurance, Banks,
Savings Associations.
For the reasons set forth in the
preamble, the FDIC proposes to amend
12 CFR parts 308 and 327 as follows:
PART 308—RULES OF PRACTICE AND
PROCEDURE
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.
2. Amend § 308.116 by revising
paragraph (b) to read as follows:
■
§ 308.116
Jkt 244001
Assessment of penalties.
*
*
*
*
*
(b) Maximum penalty amounts. Under
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 in the
maximum amounts calculated and
published in accordance with 12 CFR
308.132(d).
*
*
*
*
*
■ 3. Amend § 308.132 by revising
paragraph (d) and adding paragraph (e)
to read as follows:
§ 308.132
Section 722 of the Gramm-LeachBliley Act requires the FDIC to use plain
language in all proposed and final rules
published after January 1, 2000.37
Accordingly, the FDIC has attempted to
write the Proposed Rule in clear and
comprehensible language.
VerDate Sep<11>2014
List of Subjects
Assessment of penalties.
*
*
*
*
*
(d) Maximum civil money penalty
amounts. Under the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015, the Board of
Directors or its designee may assess civil
money penalties in the maximum
amounts using the following framework:
(1) Statutory formula to calculate
inflation adjustments. The FDIC 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
PO 00000
Frm 00012
Fmt 4702
Sfmt 4702
the maximum dollar amount of the civil
money penalty for the previous calendar
year by the cost-of-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. By
January 15 of each calendar year, the
FDIC will announce in the Federal
Register the maximum penalties that
may be assessed after each January 15,
based on the formula in paragraph (d)(1)
of this section, for conduct occurring on
or after November 2, 2015.
(e) Civil money penalties for
violations of 12 U.S.C. 1464(v) and 12
U.S.C. 1817(a)—(1) Late Filing—Tier
One penalties. Where an institution fails
to make or publish its Report of
Condition and Income (Call Report)
within the appropriate time periods, but
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 where the
institution inadvertently transmitted a
Call Report that is minimally late, the
Board of Directors or its designee may
assess a Tier One civil money penalty.
The amount of such a penalty shall not
exceed the maximum amount calculated
and published annually in the Federal
Register under paragraph (d)(2) of this
section. Such a penalty may be assessed
for each day that the violation
continues.
(i) First offense. Generally, in such
cases, the amount assessed shall be an
amount calculated and published
annually in the Federal Register under
paragraph (d)(2) of this section. The
Federal Register document will contain
a presumptive penalty amount per day
for each of the first 15 days for which
the failure continues, and a presumptive
amount per day for each subsequent
days the failure continues, beginning on
the 16th day. The annual Federal
Register notice will also provide penalty
amounts that generally may be assessed
for institutions with less than
$25,000,000 in assets.
(ii) Subsequent offense. The FDIC will
calculate and publish in the Federal
Register a presumptive daily Tier One
penalty to be imposed where an
institution has been delinquent in
making or publishing its Call Report
within the preceding five quarters. The
published penalty shall identify the
amount that will generally be imposed
per day for each of the first 15 days for
which the failure continues, and the
amount that will generally be imposed
per day for each subsequent day the
failure continues, beginning on the 16th
day. The annual Federal Register
E:\FR\FM\03AUP1.SGM
03AUP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Proposed Rules
document will also provide penalty
amounts that generally may be assessed
for institutions with less than
$25,000,000 in assets.
(iii) Lengthy or repeated violations.
The amounts set forth in this paragraph
(e)(1) 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.
(iv) Waiver. Absent extraordinary
circumstances outside the control of the
institution, penalties assessed for late
filing shall not be waived.
(2) 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
Tier Two civil money penalty for each
day the failure continues. The amount
of such a penalty will not exceed the
maximum amount calculated and
published annually in the Federal
Register under paragraph (d)(2) of this
section.
(3) False or misleading reports or
information—(i) 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
Tier One civil money penalty 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 where the
institution inadvertently transmits a
Call Report or information that is false
or misleading. The amount of such a
penalty will not exceed the maximum
amount calculated and published
annually in the Federal Register under
paragraph (d)(2) of this section.
(ii) 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 Tier Two civil
money penalty for each day the
information is not corrected. The
amount of such a penalty will not
exceed the maximum amount calculated
and published annually in the Federal
Register under paragraph (d)(2) of this
section.
(iii) 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 Tier Three civil money penalty for
each day the information is not
VerDate Sep<11>2014
18:01 Aug 02, 2018
Jkt 244001
corrected. The penalty shall not exceed
the lesser of 1 percent of the
institution’s total assets per day or the
amount calculated and published
annually in the Federal Register under
paragraph (d)(2) of this section.
(4) Mitigating factors. The amounts set
forth in paragraphs (e)(1) through (3) of
this section may be reduced based upon
the factors set forth in paragraph (b) of
this section.
■ 4. Amend § 308.502 by revising
paragraphs (a)(6) and (b)(4) to read as
follows:
§ 308.502 Basis for civil penalties and
assessments.
(a) * * *
(6) The amount of any penalty
assessed under paragraph (a)(1) of this
section will be adjusted for inflation in
accordance with section 308.132(d) of
this part.
*
*
*
*
*
(b) * * *
(4) The amount of any penalty
assessed under paragraph (a)(1) of this
section will be adjusted for inflation in
accordance with section 308.132(d) of
this part.
*
*
*
*
*
■ 5. Amend § 308.530 by revising
paragraph (d) to read as follows:
§ 308.530 Determining the amount of
penalties and assessments.
*
*
*
*
*
(d) Civil money penalties that are
assessed under this subpart are subject
to annual adjustments to account for
inflation as required by the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 (Pub. L. 114–
74, sec. 701, 129 Stat. 584) (see also 12
CFR 308.132(d)).
6. The authority citation for part 327
continues to read as follows:
■
Authority: 12 U.S.C. 1441, 1813, 1815,
1817–19, 1821.
*
*
*
*
*
7. Amend § 327.3 by revising
paragraph (c) to read as follows:
■
§ 327.3
Payment of assessments.
*
*
*
*
*
(c) Necessary action, sufficient
funding by institution. Each insured
depository institution shall take all
actions necessary to allow the
Corporation to debit assessments from
the insured depository institution’s
designated deposit account. Each
insured depository institution shall,
prior to each payment date indicated in
paragraph (b)(2) of this section, ensure
that funds in an amount at least equal
PO 00000
Frm 00013
Fmt 4702
Sfmt 4702
to the amount on the quarterly certified
statement invoice are available in the
designated account for direct debit by
the Corporation. Failure to take any
such action or to provide such funding
of the account shall be deemed to
constitute nonpayment of the
assessment. Penalties for failure to
timely pay assessments will be
calculated and published in accordance
with 12 CFR 308.132(d).
*
*
*
*
*
Dated at Washington, DC, on July 19, 2018.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2018–16548 Filed 8–2–18; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Parts 1206 and 1240
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Office of Federal Housing Enterprise
Oversight
12 CFR Part 1750
RIN 2590–AA95
Enterprise Capital Requirements
Federal Housing Finance
Agency; Office of Federal Housing
Enterprise Oversight; Department of
Housing and Urban Development.
ACTION: Notice of proposed rulemaking;
extension of comment period.
AGENCY:
On July 17, 2018, the Federal
Housing Finance Agency (FHFA)
published in the Federal Register a
notice of proposed rulemaking for
public comment that proposes a new
regulatory capital framework for the
Federal National Mortgage Association
(Fannie Mae) and the Federal Home
Loan Mortgage Corporation (Freddie
Mac). The comment period was set to
expire on September 17, 2018. This
notice extends the comment period by
an additional 60 days to allow the
public additional time to comment on
the proposed rule.
DATES: The comment period for the
proposed rule published at 83 FR 33312
(July 17, 2018) is extended. Written
comments must be received on or before
November 16, 2018.
ADDRESSES: You may submit your
comments on the proposed rule,
identified by regulatory information
SUMMARY:
PART 327—ASSESSMENTS
38085
E:\FR\FM\03AUP1.SGM
03AUP1
]]>Agencies
[Federal Register Volume 83, Number 150 (Friday, August 3, 2018)]
[Proposed Rules]
[Pages 38080-38085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16548]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 308 and 327
RIN 3064-AE75
Rules of Practice and Procedure
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking and request for comments.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to
amend its rules of practice and procedure to remove duplicative,
descriptive regulatory language related to civil money penalty (CMP)
amounts that restates existing statutory language regarding such CMPs,
codify Congress's recent change to CMP inflation-adjustments in the
FDIC's regulations, and direct readers to an annually published notice
in the Federal Register--rather than the Code of Federal Regulations
(CFR)--for information regarding the maximum CMP amounts that can be
assessed after inflation adjustments. These revisions are intended to
simplify the CFR by removing unnecessary and redundant text and to make
it easier for readers to locate the current, inflation-adjusted maximum
CMP amounts by presenting these amounts in an annually published chart.
Additionally, the FDIC proposes to correct four errors and revise
cross-references currently found in its rules of practice and
procedure.
DATES: Comments must be received by October 2, 2018.
ADDRESSES: You may submit comments, identified by RIN 3064-AE75, by any
of the following methods:
Agency website: https://www.fdic.gov/regulations/laws/Federal/. Follow the instructions for submitting comments on the Agency
website.
Email: [email protected]. Include the RIN 3064-AE75 in the
subject line of the message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW,
Washington, DC 20429.
Hand Delivery: Comments may be hand-delivered to the guard
station at the rear of the 550 17th Street Building (located on F
Street) on business days between 7 a.m. and 5 p.m.
Public Inspection: All comments received must include the agency
name and RIN for this rulemaking. All comments received will be posted
without change to https://www.fdic.gov/regulations/laws/Federal/--
including any personal information provided--for public inspection.
Paper copies of public comments may be ordered from the FDIC Public
Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington,
VA 22226 by telephone at (877) 275-3342 or (703) 562-2200.
FOR FURTHER INFORMATION CONTACT: Graham N. Rehrig, Senior Attorney,
Legal Division, (202) 898-3829, [email protected], or Sydney Mayer,
Attorney, Legal Division, (202) 898-3669.
SUPPLEMENTARY INFORMATION:
[[Page 38081]]
I. Policy Objectives
The policy objective of the Proposed Rule is to simplify the
presentation of maximum CMP amounts within 12 CFR part 308 to support
ease of reference and public understanding. The Proposed Rule will
amend the presentation of maximum CMP limits to help ensure consistency
with similar statutes of other Federal financial regulators.\1\
Additionally, the Proposed Rule will implement recent Office of
Management and Budget (OMB) guidance on simplifying the publication of
annual inflation adjustments.
---------------------------------------------------------------------------
\1\ See 12 CFR 19.240 and 83 FR 1657 (Jan. 12, 2018) (table
containing the CMP adjustments published by the Office of the
Comptroller of Currency); 12 CFR 263.65 (table containing the CMP
adjustments published by the Board of Governors of the Federal
Reserve System); 12 CFR 747.1001 (table containing the CMP
adjustments published by the National Credit Union Association).
---------------------------------------------------------------------------
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 has established maximum penalties that can be
assessed under these statutes. In many cases, these statutes contain
multiple penalty tiers, permitting the assessment of penalties at
various levels depending on 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, 12 U.S.C. 1818(i)(2) provides for three tiers
of CMPs, with the size of the CMP increasing with the gravity of the
misconduct.
---------------------------------------------------------------------------
Since 1990, Congress has required Federal agencies with authority
to impose CMPs to periodically adjust the maximum CMP amounts these
agencies are authorized to impose.\4\ These periodic updates have
helped to ``maintain the deterrent effect of civil monetary penalties
and promote compliance with the law.'' \5\ In 2015, Congress revised
the process by which Federal agencies adjust applicable CMPs for
inflation.\6\ Under the 2015 Adjustment Act, the FDIC is required to
make annual adjustments to its maximum CMP amounts to account for
inflation.\7\ These adjustments apply to all CMPs covered by the 2015
Adjustment Act.\8\ The 2015 Adjustment Act requires annual adjustments
be made by January 15 of each year.\9\ The FDIC's 2018 adjustments were
published on January 12, 2018.\10\
---------------------------------------------------------------------------
\4\ See The Federal Civil Penalties Inflation Adjustment Act of
1990, Public Law 101-410.
\5\ See section 2 of the Federal Civil Penalties Inflation
Adjustment Act of 1990. Public Law 101-410, 104 Stat. 890 (amended
2015) (codified as amended at 28 U.S.C. 2461 note).
\6\ See The Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, Public Law 114-74, sec. 701, 129 Stat. 584
(2015 Adjustment Act). Although the 2015 Adjustment Act increased
the maximum penalty that may be assessed under each applicable
statute, the FDIC still possesses discretion to impose CMP amounts
below the maximum level in accordance with the severity of the
misconduct at issue. When making a determination as to the
appropriate level of any given penalty, the FDIC is guided by
statutory factors set forth in 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. See 63 FR 30227 (June 3, 1998). Such factors include, but
are not limited to, the gravity and duration of the misconduct and
the intent related to the misconduct.
\7\ See 2015 Adjustment Act at sec. 701(b).
\8\ See Public Law 101-410, sec. 3(2), 104 Stat. 890 (amended
2015) (codified as amended at 28 U.S.C. 2461 note).
\9\ Public Law 114-74, sec. 701(b), 129 Stat. 584.
\10\ See 83 FR 1519, available at https://www.fdic.gov/news/board/2017/2017-12-19-notice-sum-b-fr.pdf.
---------------------------------------------------------------------------
The 2015 Adjustment Act directs Federal agencies to follow guidance
issued by the OMB by December 15 of each year when calculating new
maximum penalty amounts.\11\ The OMB issued guidance for the 2018 CMP
adjustments on December 15, 2017.\12\ The OMB Guidance noted, ``Some
agencies have chosen to remove their specific penalty amounts from the
CFR and have instead codified the statutory formula for inflation
adjustments. Agencies must still calculate and publish their penalty
adjustments in the Federal Register.'' \13\
---------------------------------------------------------------------------
\11\ See Public Law 114-74, sec. 701(b), 129 Stat. 584.
\12\ OMB, Implementation of Penalty Inflation Adjustments for
2018, Pursuant to the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015, M-18-03 (OMB Guidance), available at
https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
\13\ OMB Guidance at 4 (citing 81 FR 41438 (June 27, 2016)
(Social Security Administration) (codified at 29 CFR 498.103(g))).
---------------------------------------------------------------------------
III. Description and Expected Effects of the Proposed Rule
The FDIC proposes amending its rules of practice and procedure to
remove from the CFR descriptive regulatory language related to maximum
CMP amounts that duplicates statutory language, codify the statutory
formula for inflation adjustments to the maximum CMP amounts, and
direct readers to a table published annually in the Federal Register,
containing the inflation-adjusted maximum CMP amounts. These proposed
changes would be consistent with the OMB Guidance and the practices of
other Federal regulators.
Currently, 12 CFR 308.116(b) and 308.132(d) contain the maximum CMP
amounts that may be assessed for violations of various statutes, along
with lengthy descriptions of these statutes. Rather than providing any
interpretation of these statutes or providing guidance regarding the
assessment of CMPs for violations of these statutes, the descriptive
language contained in Sec. Sec. 308.116(b) and 308.132(d) merely
restates the enabling statutory language. The FDIC's current format for
identifying inflation-adjusted CMP figures differs significantly from
the formats published by other prudential regulators \14\ and makes it
more difficult for readers to locate applicable maximum CMP amounts.
Accordingly, the FDIC proposes removing descriptive language found in
Sec. Sec. 308.116(b) and 308.132(d). The FDIC believes that these
changes will remove unnecessary and redundant language from the CFR and
improve readability.
---------------------------------------------------------------------------
\14\ The OCC, the FRB, and the National Credit Union Association
(NCUA) provide a simplified list in a tabular format, identifying
each enabling statute and the associated maximum CMP amount,
adjusted for inflation. See 12 CFR 19.240 and 83 FR 1657 (Jan. 12,
2018) (table containing the OCC's CMP adjustments); 12 CFR 263.65
(table containing the FRB's CMP adjustments); 12 CFR 747.1001 (table
containing the NCUA's CMP adjustments).
---------------------------------------------------------------------------
A sample annual table containing the current maximum CMP amounts--
effective as of January 15, 2018--appears at the end of this section,
for reference. Under the Proposed Rule, the FDIC would calculate and
publish a similar chart with inflation-adjusted figures in the Federal
Register on or before January 15 of each calendar year.
The FDIC, however, proposes to retain language in Sec. 308.116(a),
(c), and (d) concerning violations of the Change in Bank Control Act.
These regulations, which the FDIC implemented in 1991, address requests
for a hearing, mitigating factors, and the consequences of a
respondent's failure to answer.\15\ The language in current Sec.
308.116(b)(1) through (3), however, repeats the relevant statutory
language of 12 U.S.C. 1817(j)(16)(A)-(D). Further, current Sec.
308.116(b)(4) merely contains inflation adjustments. Therefore, the
FDIC proposes removing current Sec. 308.116(b) and instead directing
readers to Sec. 308.132(d) to determine current maximum CMP amounts.
---------------------------------------------------------------------------
\15\ See 56 FR 37968 (Aug. 9, 1991).
---------------------------------------------------------------------------
The FDIC also proposes to keep language concerning the late filing
of Call Reports at current Sec. 308.132(d)(1) and (d)(3). 12 U.S.C.
1817(a) provides the maximum CMP amounts for the late
[[Page 38082]]
filing of Call Reports. In 1991, however, the FDIC issued regulations
that further subdivided these amounts based upon the size of the
institution and the lateness of the filing.\16\ These regulations
accordingly differ from other provisions found in Sec. 308.132(d) that
simply restate relevant statutory language regarding maximum CMP
amounts. The Proposed Rule would merge language from current Sec.
308.132(d)(1) and (3) into a new Sec. 308.132(e), since, aside from
the differing penalty amounts, these two current subsections contain
similar language. The new Sec. 308.132(e) would direct readers to the
Federal Register to determine the applicable inflation-adjusted penalty
amounts.
---------------------------------------------------------------------------
\16\ See 56 FR 37968, 37992-93 (Aug. 9, 1991).
---------------------------------------------------------------------------
The FDIC proposes correcting four errors currently located at Sec.
308.132(d)(1) and (3) concerning the maximum amount that generally will
be assessed for violations of 12 U.S.C. 1464(v) and 1817(a) regarding
the late filing of Call Reports by certain small institutions. The
current text contains the inadvertent overstatement of four fractions
of an institution's total assets that are paired with correctly stated
basis-point figures. These corrections would align the listed fractions
of an institution's total assets with the listed basis-point
calculations, and these corrections would be reflected in the annual
Federal Register CMP notice.\17\
---------------------------------------------------------------------------
\17\ For example, current section 308.132(d)(1)(i)(A) states,
``the amount assessed shall be the greater of [an inflation-adjusted
daily penalty] or \1/1\,000th of the institution's total assets (1/
10th of a basis point)'' when it should read, ``the amount assessed
shall be the greater of [an inflation-adjusted daily penalty] or 1/
100,000th of the institution's total assets (1/10th of a basis
point).'' (Emphasis added).
\18\ The maximum penalty amount is per day, unless otherwise
indicated.
\19\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
\20\ 12 U.S.C. 1817(a) provides the maximum CMP amounts for the
late filing of Call Reports. In 1991, however, the FDIC issued
regulations that further subdivided these amounts based upon the
size of the institution and the lateness of the filing. See 56 FR
37968, 37992-93 (Aug. 9, 1991), to be re-codified at 12 CFR
308.132(e)(1). These adjusted subdivided amounts are found at the
end of this chart.
\21\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
\22\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
\23\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
\24\ These amounts also apply to CMPs in statutes that cross-
reference 12 U.S.C. 1818, such as 12 U.S.C. 2601, 2804(b), 3108(b),
3349(b), 4009(a), 4309(a), 4717(b); 15 U.S.C. 1607(a), 1681s(b),
1691(b), 1691c(a), 1693o(a); 42 U.S.C. 3601.
\25\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
\26\ The $122-per-day maximum CMP under 12 U.S.C. 1828(h), for
failure or refusal to pay any assessment, applies only when the
assessment is less than $10,000. When the amount of the assessment
is $10,000 or more, the maximum CMP under section 1828(h) is 1
percent of the amount of the assessment for each day that the
failure or refusal continues.
\27\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
\28\ The maximum penalty amount for an institution is the
greater of this amount or 1/100,000th of the institution's total
assets.
\29\ The maximum penalty amount for an institution is the
greater of this amount or 1/50,000th of the institution's total
assets.
\30\ The maximum penalty amount for an institution is the lesser
of this amount or 1 percent of total assets.
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Lastly, the FDIC proposes to revise cross-references found at 12
CFR 308.502(a)(6), 12 CFR 308.502(b)(4), 12 CFR 308.530, and 12 CFR
327.3(c) to reflect the proposed revisions to 12 CFR 308.132(d).
Since the Proposed Rule would amend the presentation of maximum CMP
levels in the Federal Register, the FDIC believes the rule will not
pose any regulatory costs to IDIs or cost to the public in general.
Sample Civil Money Penalty Table
----------------------------------------------------------------------------------------------------------------
U.S. Code citation Adjusted Maximum CMP \18\ (Beginning January 15, 2018)
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 1464(v):
Tier One CMP.................. $3,928
Tier Two CMP.................. $39,278
Tier Three CMP \19\........... $1,963,870
12 U.S.C. 1467(d)................. $9,819
12 U.S.C. 1817(a):
Tier One CMP \20\............. $3,928
Tier Two CMP.................. $39,278
Tier Three CMP \21\........... $1,963,870
12 U.S.C. 1817(c):
Tier One CMP.................. $3,591
Tier Two CMP.................. $35,904
Tier Three CMP \22\........... $1,795,216
12 U.S.C. 1817(j)(16):
Tier One CMP.................. $9,819
Tier Two CMP.................. $49,096
Tier Three CMP \23\........... $1,963,870
12 U.S.C. 1818(i)(2) \24\
Tier One CMP.................. $9,819
Tier Two CMP.................. $49,096
Tier Three CMP \25\........... $1,963,870
12 U.S.C. 1820(e)(4).............. $8,977
12 U.S.C. 1820(k)(6).............. $323,027
12 U.S.C. 1828(a)(3).............. $122
12 U.S.C. 1828(h) \26\
For assessments < $10,000..... $122
12 U.S.C. 1829b(j)................ $20,521
12 U.S.C. 1832(c)................. $2,852
12 U.S.C. 1884.................... $285
12 U.S.C. 1972(2)(F):
Tier One CMP.................. $9,819
Tier Two CMP.................. $49,096
[[Page 38083]]
Tier Three CMP \27\........... $1,963,870
12 U.S.C. 3909(d) $2,443
15 U.S.C. 78u-2
Tier One CMP (individuals).... $9,239
Tier One CMP (others)......... $92,383
Tier Two CMP (individuals).... $92,383
Tier Two CMP (others)......... $461,916
Tier Three CMP (individuals).. $184,767
Tier Three penalty (others)... $923,831
15 U.S.C. 1639e(k):
First violation............... $11,279
Subsequent violations......... $22,556
31 U.S.C. 3802 $11,181
42 U.S.C. 4012a(f) $2,133
----------------------------------------------------------------------------------------------------------------
CFR Citation Adjusted Presumptive CMP
0(Beginning January 15, 2018)
----------------------------------------------------------------------------------------------------------------
12 CFR 308.132(e)(1)(i):
Institutions with $25 million
or more in assets:
1 to 15 days late......... $538
16 or more days late...... $1,078
Institutions with less than
$25 million in assets:
1 to 15 days late \28\.... $180
16 or more days late \29\. $359
12 CFR 308.132(e)(1)(ii):
Institutions with $25 million
or more in assets
1 to 15 days late......... $897
16 or more days late.............. $1,795
Institutions with less than
$25 million in assets
1 to 15 days late............. 1/50,000th of the institution's total assets.
16 or more days late.......... 1/25,000th of the institution's total assets.
12 CFR 308.132(e)(2).............. $39,278
12 CFR 308.132(e)(3):
Tier One CMP.................. $3,928
Tier Two CMP.................. $39,278
Tier Three CMP \30\........... $1,963,870
----------------------------------------------------------------------------------------------------------------
IV. Alternatives Considered
During preliminary discussions regarding the Proposed Rule, the
FDIC considered possible alternatives to issuing the Proposed Rule. The
primary alternative the FDIC considered was to maintain the current
statutory language in the CFR and Federal Register as well as the CMP
presentation format. This alternative (1) keeps the redundant statutory
language in the CFR and Federal Register, (2) does not improve the
clarity and readability of the maximum CMPs, and (3) does not address
the fact that the CMP presentation format is inconsistent with the
other prudential regulators. Therefore, the FDIC believes the Proposed
Rule will support ease of reference and public understanding more so
than the alternative.
V. Request for Comment
The FDIC believes that these changes to Part 308 are ministerial
and technical and that, therefore, notice-and-comment rulemaking is
unnecessary. Nonetheless, in the interest of transparency, the FDIC
invites comments on all aspects of this Proposed Rule. Commenters are
specifically encouraged to identify any technical issues raised by the
Proposed Rule.
VI. Regulatory Analysis
Riegle Community Development and Regulatory Improvement Act
Section 302 of the Riegle Community Development and Regulatory
Improvement Act of 1994 \31\ requires that each Federal banking agency,
in determining the effective date and administrative compliance
requirements for new regulations that impose additional reporting,
disclosure, or other requirements on insured depository institutions,
consider, consistent with principles of safety and soundness and the
public interest, any administrative burdens that such regulations would
place on depository institutions, including small depository
institutions, and customers of depository institutions, as well as the
benefits of such regulations. In addition, in order to provide an
adequate transition period, new regulations that impose additional
reporting, disclosures, or other new requirements on IDIs generally
must take effect on the first day of a calendar quarter that begins on
or after the date on which the regulations are published in final form.
---------------------------------------------------------------------------
\31\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
The Proposed Rule would not impose any new or additional reporting,
disclosures, or other requirements on insured depository institutions.
Therefore, the Proposed Rule is not subject to the requirements of this
statute.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires that, in
connection with a rulemaking, an agency prepare and make available for
public comment an initial regulatory flexibility analysis describing
the impact of the Proposed Rule on small entities.\32\ A regulatory
flexibility analysis is not required,
[[Page 38084]]
however, if the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
The Small Business Administration has defined ``small entities'' to
include banking organizations with total assets less than or equal to
$550 million.\33\ The FDIC supervises 3,603 depository
institutions,\34\ of which 2,885 are defined as small banking entities
by the terms of the RFA. For the reasons described below and under
section 605(b) of the RFA, the FDIC certifies that the Proposed Rule
will not have a significant economic impact on a substantial number of
small entities.
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\32\ 5 U.S.C. 601 et seq.
\33\ [thinsp]13 CFR 121.201 (as amended, effective December 2,
2014).
\34\ FDIC-supervised institutions are set forth in 12 U.S.C.
1813(q)(2).
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The FDIC believes the proposed amendments to 12 CFR part 308 will
have a negligible impact on small entities. For a detailed description
of the Proposed Rule and its expected effects, please review Section
III above. The proposed revisions are intended to simplify the text of
the CFR by removing unnecessary and redundant text in order to make it
easier for readers to reference and understand the current maximum CMP
amounts.
The Omnibus Consolidated and Emergency Supplemental Appropriations Act,
1999: Assessment of Federal Regulations and Policies on Families
The FDIC determined that the Proposed Rule will not affect family
wellbeing within the meaning of section 654 of the Omnibus Consolidated
and Emergency Supplemental Appropriations Act, 1999.\35\
---------------------------------------------------------------------------
\35\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------
Paperwork Reduction Act
The Proposed Rule does not create any new, or revise any existing,
collections of information under section 3504(h) of the Paperwork
Reduction Act of 1980.\36\ Consequently, no information collection
request will be submitted to the OMB for review.
---------------------------------------------------------------------------
\36\ 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.\37\ Accordingly, the FDIC has attempted to write the Proposed
Rule in clear and comprehensible language.
---------------------------------------------------------------------------
\37\ Public Law 106-102, 113 Stat. 1338 (Nov. 12, 1999).
---------------------------------------------------------------------------
List of Subjects
12 CFR Part 308
Administrative practice and procedure, Bank deposit insurance,
Banks, Banking, Claims, Crime, Equal access to justice, Fraud,
Investigations, Lawyers, Penalties.
12 CFR Part 327
Bank deposit insurance, Banks, Savings Associations.
For the reasons set forth in the preamble, the FDIC proposes to
amend 12 CFR parts 308 and 327 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. Amend Sec. 308.116 by revising paragraph (b) to read as follows:
Sec. 308.116 Assessment of penalties.
* * * * *
(b) Maximum penalty amounts. Under 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 in the maximum amounts
calculated and published in accordance with 12 CFR 308.132(d).
* * * * *
0
3. Amend Sec. 308.132 by revising paragraph (d) and adding paragraph
(e) to read as follows:
Sec. 308.132 Assessment of penalties.
* * * * *
(d) Maximum civil money penalty amounts. Under the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015, the Board
of Directors or its designee may assess civil money penalties in the
maximum amounts using the following framework:
(1) Statutory formula to calculate inflation adjustments. The FDIC
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 cost-of-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. By January 15 of each calendar
year, the FDIC will announce in the Federal Register the maximum
penalties that may be assessed after each January 15, based on the
formula in paragraph (d)(1) of this section, for conduct occurring on
or after November 2, 2015.
(e) Civil money penalties for violations of 12 U.S.C. 1464(v) and
12 U.S.C. 1817(a)--(1) Late Filing--Tier One penalties. Where an
institution fails to make or publish its Report of Condition and Income
(Call Report) within the appropriate time periods, but 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 where the institution inadvertently
transmitted a Call Report that is minimally late, the Board of
Directors or its designee may assess a Tier One civil money penalty.
The amount of such a penalty shall not exceed the maximum amount
calculated and published annually in the Federal Register under
paragraph (d)(2) of this section. Such a penalty may be assessed for
each day that the violation continues.
(i) First offense. Generally, in such cases, the amount assessed
shall be an amount calculated and published annually in the Federal
Register under paragraph (d)(2) of this section. The Federal Register
document will contain a presumptive penalty amount per day for each of
the first 15 days for which the failure continues, and a presumptive
amount per day for each subsequent days the failure continues,
beginning on the 16th day. The annual Federal Register notice will also
provide penalty amounts that generally may be assessed for institutions
with less than $25,000,000 in assets.
(ii) Subsequent offense. The FDIC will calculate and publish in the
Federal Register a presumptive daily Tier One penalty to be imposed
where an institution has been delinquent in making or publishing its
Call Report within the preceding five quarters. The published penalty
shall identify the amount that will generally be imposed per day for
each of the first 15 days for which the failure continues, and the
amount that will generally be imposed per day for each subsequent day
the failure continues, beginning on the 16th day. The annual Federal
Register
[[Page 38085]]
document will also provide penalty amounts that generally may be
assessed for institutions with less than $25,000,000 in assets.
(iii) Lengthy or repeated violations. The amounts set forth in this
paragraph (e)(1) 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.
(iv) Waiver. Absent extraordinary circumstances outside the control
of the institution, penalties assessed for late filing shall not be
waived.
(2) 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 Tier Two civil money
penalty for each day the failure continues. The amount of such a
penalty will not exceed the maximum amount calculated and published
annually in the Federal Register under paragraph (d)(2) of this
section.
(3) False or misleading reports or information--(i) 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 Tier One civil money penalty 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 where the institution inadvertently transmits a Call Report or
information that is false or misleading. The amount of such a penalty
will not exceed the maximum amount calculated and published annually in
the Federal Register under paragraph (d)(2) of this section.
(ii) 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 Tier Two civil money penalty for
each day the information is not corrected. The amount of such a penalty
will not exceed the maximum amount calculated and published annually in
the Federal Register under paragraph (d)(2) of this section.
(iii) 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 Tier
Three civil money penalty for each day the information is not
corrected. The penalty shall not exceed the lesser of 1 percent of the
institution's total assets per day or the amount calculated and
published annually in the Federal Register under paragraph (d)(2) of
this section.
(4) Mitigating factors. The amounts set forth in paragraphs (e)(1)
through (3) of this section may be reduced based upon the factors set
forth in paragraph (b) of this section.
0
4. Amend Sec. 308.502 by revising paragraphs (a)(6) and (b)(4) to read
as follows:
Sec. 308.502 Basis for civil penalties and assessments.
(a) * * *
(6) The amount of any penalty assessed under paragraph (a)(1) of
this section will be adjusted for inflation in accordance with section
308.132(d) of this part.
* * * * *
(b) * * *
(4) The amount of any penalty assessed under paragraph (a)(1) of
this section will be adjusted for inflation in accordance with section
308.132(d) of this part.
* * * * *
0
5. Amend Sec. 308.530 by revising paragraph (d) to read as follows:
Sec. 308.530 Determining the amount of penalties and assessments.
* * * * *
(d) Civil money penalties that are assessed under this subpart are
subject to annual adjustments to account for inflation as required by
the Federal Civil Penalties Inflation Adjustment Act Improvements Act
of 2015 (Pub. L. 114-74, sec. 701, 129 Stat. 584) (see also 12 CFR
308.132(d)).
PART 327--ASSESSMENTS
0
6. The authority citation for part 327 continues to read as follows:
Authority: 12 U.S.C. 1441, 1813, 1815, 1817-19, 1821.
* * * * *
0
7. Amend Sec. 327.3 by revising paragraph (c) to read as follows:
Sec. 327.3 Payment of assessments.
* * * * *
(c) Necessary action, sufficient funding by institution. Each
insured depository institution shall take all actions necessary to
allow the Corporation to debit assessments from the insured depository
institution's designated deposit account. Each insured depository
institution shall, prior to each payment date indicated in paragraph
(b)(2) of this section, ensure that funds in an amount at least equal
to the amount on the quarterly certified statement invoice are
available in the designated account for direct debit by the
Corporation. Failure to take any such action or to provide such funding
of the account shall be deemed to constitute nonpayment of the
assessment. Penalties for failure to timely pay assessments will be
calculated and published in accordance with 12 CFR 308.132(d).
* * * * *
Dated at Washington, DC, on July 19, 2018.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2018-16548 Filed 8-2-18; 8:45 am]
BILLING CODE 6714-01-P
