Civil Penalty Inflation Adjustments, 517-520 [2019-00488]
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Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Rules and Regulations
any new or substantively or materially
revised collections of information
beyond what has been previously
approved by OMB.
VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Bureau
will submit a report containing this rule
and other required information to the
United States Senate, the United States
House of Representatives, and the
Comptroller General of the United
States prior to the rule taking effect. The
Office of Information and Regulatory
Affairs (OIRA) has designated this rule
as not a ‘‘major rule’’ as defined by 5
U.S.C. 804(2).
List of Subjects in 12 CFR Part 1022
Banks, Banking, Consumer protection,
Credit unions, Fair Credit Reporting
Act, Holding companies, National
banks, Privacy, Reporting and
recordkeeping requirements, Savings
associations, State member banks.
Authority and Issuance
For the reasons set forth above, the
Bureau amends Regulation V, 12 CFR
part 1022, as set forth below:
12 CFR Part 1083
1. The authority citation for part 1022
continues to read as follows:
Authority: 12 U.S.C. 5512, 5581; 15 U.S.C.
1681a, 1681b, 1681c, 1681c–1, 1681e, 1681g,
1681i, 1681j, 1681m, 1681s, 1681s–2, 1681s–
3, and 1681t; Sec. 214, Public Law 108–159,
117 Stat. 1952.
Subpart O—Miscellaneous Duties of
Consumer Reporting Agencies
2. Section 1022.141 is added to read
as follows:
§ 1022.141 Reasonable charges for certain
disclosures.
Pursuant to section 612(f) of the
FCRA, 15 U.S.C. 1681j(f), the charge
imposed by a consumer reporting
agency for a disclosure to the consumer
pursuant to section 609 of the FCRA, 15
U.S.C. 1681g, shall not exceed the
maximum allowable charge set by the
Bureau.
■ 3. Appendix O is added to read as
follows:
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[Docket No. CFPB–2018–0034]
RIN 3170–AA62
Civil Penalty Inflation Adjustments
Bureau of Consumer Financial
Protection.
ACTION: Final rule.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is
amending its rule that specifies the time
period for which adjusted civil penalty
amounts would be applied to conduct
within its jurisdiction and is also
adjusting specific civil penalty amounts
in that rule to account for inflation. On
June 14, 2016, the Bureau issued an
interim final rule (IFR) to implement the
Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Debt Collection Improvement Act of
1996 and further amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (Inflation Adjustment Act). On
October 12, 2018, the Bureau sought
notice and comment on a proposed
amendment to the IFR to specify that
the adjusted civil penalties only apply
to assessments whose associated
violations occurred on, or after,
November 2, 2015 (the date the 2015
Inflation Adjustment Act amendments
were signed into law). This rule
SUMMARY:
■
Appendix O to Part 1022—Reasonable
Charges for Certain Disclosures
Section 612(f) of the FCRA, 15 U.S.C.
1681j(f), directs the Bureau to increase the
maximum allowable charge a consumer
reporting agency may impose for making a
disclosure to the consumer pursuant to
section 609 of the FCRA, 15 U.S.C. 1681g, on
January 1 of each year, based proportionally
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[FR Doc. 2018–28372 Filed 1–29–19; 8:45 am]
BUREAU OF CONSUMER FINANCIAL
PROTECTION
■
16:41 Jan 30, 2019
Dated: December 21, 2018.
Kathleen Kraninger,
Director, Bureau of Consumer Financial
Protection.
BILLING CODE 4810–AM–P
PART 1022—FAIR CREDIT
REPORTING (REGULATION V)
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on changes in the Consumer Price Index,
with fractional changes rounded to the
nearest fifty cents. The Bureau will publish
notice of the maximum allowable charge
each year by amending this appendix. For
calendar year 2019, the maximum allowable
charge is $12.50. For historical purposes:
1. For calendar year 2012, the maximum
allowable disclosure charge was $11.50.
2. For calendar year 2013, the maximum
allowable disclosure charge was $11.50.
3. For calendar year 2014, the maximum
allowable disclosure charge was $11.50.
4. For calendar year 2015, the maximum
allowable disclosure charge was $12.00.
5. For calendar year 2016, the maximum
allowable disclosure charge was $12.00.
6. For calendar year 2017, the maximum
allowable disclosure charge was $12.00.
7. For calendar year 2018, the maximum
allowable disclosure charge was $12.00.
8. For calendar year 2019, the maximum
allowable disclosure charge is $12.50.
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517
finalizes the IFR and proposed
amendment; it also adjusts for inflation
the maximum amount of each civil
penalty within the Bureau’s jurisdiction.
DATES: This rule is effective on January
31, 2019.
FOR FURTHER INFORMATION CONTACT:
Shelley Thompson, Counsel or Monique
Chenault, Paralegal Specialist, Office of
Regulations, at (202) 435–7700 or
https://
reginquiries.consumerfinance.gov. If
you require this document in an
alternative electronic format, please
contact CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation
Adjustment Act of 1990,1 as amended
by the Debt Collection Improvement Act
of 1996 2 and further amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (Inflation Adjustment Act),3
directs Federal agencies to adjust for
inflation the civil penalty amounts
within their jurisdiction not later than
July 1, 2016, and then not later than
January 15 every year thereafter.4 Each
agency was required to make the 2016
one-time catch-up adjustments through
an interim final rule published in the
Federal Register. On June 14, 2016, the
Bureau published its interim final rule
(IFR) to make the initial catch-up
adjustments to civil penalties within the
Bureau’s jurisdiction.5 The June 2016
IFR created a new part 1083 and in
§ 1083.1 established the inflationadjusted maximum amounts for each
civil penalty within the Bureau’s
jurisdiction.6 The Bureau received no
comments in response to the IFR, which
became effective on July 14, 2016.
The Inflation Adjustment Act also
requires subsequent adjustments to be
made annually and notwithstanding
section 553 of the Administrative
Procedure Act (APA).7 The Bureau
annually adjusted its civil penalty
1 Public
Law 101–410, 104 Stat. 890.
Law 104–134, section 31001(s)(1), 110
Stat. 1321, 1321–373.
3 Public Law 114–74, section 701, 129 Stat. 584,
599.
4 28 U.S.C. 2461 note. Section 1301(a) of the
Federal Reports Elimination Act of 1998, Public
Law 105–362, 112 Stat. 3293, also amended the
Inflation Adjustment Act by striking section 6,
which contained annual reporting requirements,
and redesignating section 7 as section 6, but did not
alter the civil penalty adjustment requirements.
5 81 FR 38569 (June 14, 2016). Although the
Bureau was not obligated to solicit comments for
the interim final rule, the Bureau invited public
comment and received none.
6 See 12 CFR 1083.1.
7 Inflation Adjustment Act section 4, codified at
28 U.S.C. 2461 note.
2 Public
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amounts, as required by the Act,
through rules issued in January 2017
and January 2018.8
Specifically, the Act directs Federal
agencies to adjust annually each civil
penalty provided by law within the
jurisdiction of the agency by the ‘‘costof-living adjustment.’’ 9 The ‘‘cost-ofliving adjustment’’ is defined as the
percentage (if any) by which the
Consumer Price Index for all-urban
consumers (CPI–U) for the month of
October preceding the date of the
adjustment, exceeds the CPI–U for
October of the prior year.10 The Director
of the Office of Management and Budget
(OMB) is required to issue guidance
(OMB Guidance) every year by
December 15 to agencies on
implementing the annual civil penalty
inflation adjustments. Pursuant to the
Inflation Adjustment Act and OMB
Guidance, agencies must apply the
multiplier reflecting the ‘‘cost-of-living
revise § 1083.1(b) to provide that the
adjustments in paragraph (a) of the
section shall apply to civil penalties
assessed after January 15, 2019, whose
associated violations occurred on or
after November 2, 2015. The Bureau
received one relevant comment, from an
individual commenter, which was
supportive of the proposal. This rule
makes final the 2016 IFR with language
consistent with the 2017 OMB
Guidance.
For the 2019 annual adjustment, the
multiplier reflecting the ‘‘cost-of-living
adjustment’’ is 1.02522.14 Pursuant to
the Inflation Adjustment Act and OMB
Guidance, the Bureau multiplied each of
its civil penalty amounts by the ‘‘costof-living adjustment’’ multiplier and
rounded to the nearest dollar.15
The new penalty amounts that apply
to civil penalties assessed after January
31, 2019, are as follows:
Penalty
amounts
established
under 2018
final rule
OMB
‘‘cost-of-living
adjustment’’
multiplier
Law
Penalty
description
Consumer Financial Protection Act, 12 U.S.C.
5565(c)(2)(A).
Consumer Financial Protection Act, 12 U.S.C.
5565(c)(2)(B).
Consumer Financial Protection Act, 12 U.S.C.
5565(c)(2)(C).
Interstate Land Sales Full Disclosure Act, 15
U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Act, 15
U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act, 12
U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, 12
U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, 12
U.S.C. 2609(d)(2)(A).
SAFE Act, 12 U.S.C. 5113(d)(2) ....................
Truth in Lending Act, 15 U.S.C. 1639e(k)(1) ..
Truth in Lending Act, 15 U.S.C. 1639e(k)(2) ..
Tier 1 penalty .................................................
$5,639
1.02522
$5,781
Tier 2 penalty .................................................
28,195
1.02522
28,906
Tier 3 penalty .................................................
1,127,799
1.02522
1,156,242
Per violation ...................................................
1,964
1.02522
2,014
Annual cap .....................................................
1,963,870
1.02522
2,013,399
Per failure .......................................................
92
1.02522
94
Annual cap .....................................................
184,767
1.02522
189,427
Per failure, where intentional .........................
185
1.02522
190
Per violation ...................................................
First violation ..................................................
Subsequent violations ....................................
28,474
11,279
22,556
1.02522
1.02522
1.02522
29,192
11,563
23,125
II. Legal Authority
The Bureau issues this final rule
pursuant to the Federal Civil Penalties
Inflation Adjustment Act of 1990,16 as
amended by the Debt Collection
Improvement Act of 1996 17 and further
amended by the Federal Civil Penalties
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adjustment’’ to the current penalty
amount and then round that amount to
the nearest dollar to determine the
annual adjustments.11 The adjustments
are designed to keep pace with inflation
so that civil penalties retain their
deterrent effect and promote compliance
with the law.12
In 2017, OMB issued guidance stating
that, ‘‘[f]or the 2018 annual adjustment,
the new penalty amounts should apply
to penalties assessed after the effective
date of the 2018 annual adjustment—
which will be no later than January 15,
2018—including, if consistent with
agency policy, assessments whose
associated violations occurred on, or
after, November 2, 2015’’ (i.e., the date
the 2015 Amendments were signed into
law).13
On October 12, 2018, the Bureau
proposed to finalize the IFR consistent
with the 2017 OMB Guidance.
Specifically, the Bureau proposed to
8 82 FR 3601 (Jan. 12, 2017); 83 FR 1525 (Jan. 12,
2018).
9 Inflation Adjustment Act sections 4 and 5,
codified at 28 U.S.C. 2461 note.
10 Inflation Adjustment Act sections 3 and 5,
codified at 28 U.S.C. 2461 note.
11 Inflation Adjustment Act section 5, codified at
28 U.S.C. 2461 note; see also Memorandum to the
Exec. Dep’ts & Agencies from Mick Mulvaney,
Director, Office of Mgmt. & Budget (Dec. 14, 2018),
available at https://www.whitehouse.gov/wpcontent/uploads/2017/11/m_19_04.pdf.
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New penalty
amount
Inflation Adjustment Act Improvements
Act of 2015,18 which requires the
Bureau to adjust for inflation the civil
penalties within its jurisdiction
according to a statutorily prescribed
formula.
III. Administrative Procedure Act
12 See Inflation Adjustment Act section 2,
codified at 28 U.S.C. 2461 note.
13 Memorandum to the Exec. Dep’ts & Agencies
from Mick Mulvaney, Director, Office of Mgmt. &
Budget, at 4 (Dec. 15, 2017), available at https://
www.whitehouse.gov/wp-content/uploads/2017/11/
M-18-03.pdf. OMB’s guidance issued in December
2016 (https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/memoranda/2017/m-1711_0.pdf) contained similar language.
14 Memorandum to the Exec. Dep’ts & Agencies
from Mick Mulvaney, Director, Office of Mgmt. &
Budget (Dec. 14, 2018), available at https://
www.whitehouse.gov/wp-content/uploads/2017/11/
m_19_04.pdf.
15 In rounding to the nearest dollar, the Bureau
has rounded down where the digit immediately
following the decimal point is less than 5 and has
rounded up where the digit immediately following
the decimal point is 5 or greater.
16 Public Law 101–410, 104 Stat. 890.
17 Public Law 104–134, section 31001(s)(1), 110
Stat. 1321, 1321–373.
18 Public Law 114–74, section 701, 129 Stat. 584,
599.
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A. Notice and Comment
Under the APA, notice and
opportunity for public comment are not
required if the Bureau finds that notice
and public comment are impracticable,
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Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Rules and Regulations
unnecessary, or contrary to the public
interest.19 The Bureau so finds with
respect to the annual adjustment portion
of the amendments in § 1083.1(a). These
adjustments to the civil penalty
amounts are technical and nondiscretionary, and they merely apply the
statutory method for adjusting civil
penalty amounts. These adjustments are
required by the Inflation Adjustment
Act. Moreover, the Inflation Adjustment
Act directs agencies to adjust civil
penalties annually notwithstanding
section 553 of the APA,20 and OMB
Guidance reaffirms that agencies need
not complete a notice-and-comment
process before making the annual
adjustments for inflation.21 For these
reasons, the Bureau has determined that
publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary
with respect to the annual inflation
adjustment portion of this rulemaking.
Therefore, that portion of the
amendment is adopted in final form
without public comment.
As noted above, the Bureau sought
notice and comment to finalize the IFR
with amended language in § 1083.1(b) to
specify that the adjusted civil penalties
only apply to assessments whose
associated violations occurred on, or
after, November 2, 2015 (the date the
2015 amendments to the Inflation
Adjustment Act were signed into law).
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B. Effective Date
Section 553(d) of the APA generally
requires publication of a final rule not
less than 30 days before its effective
date, except (1) a substantive rule which
grants or recognizes an exemption or
relieves a restriction; (2) interpretive
rules and statements of policy; or (3) as
otherwise provided by the agency for
good cause found and published with
the rule.22
At a minimum, the Bureau believes
the annual adjustments to the civil
penalty amounts in § 1083.1(a) fall
under the third exception to section
553(d). The Bureau finds that there is
good cause to make the amendments
effective on January 31, 2019. The
amendments to § 1083.1(a) in this final
rule are technical and nondiscretionary, and they merely apply the
statutory method for adjusting civil
penalty amounts and follow the
19 5
U.S.C. 553(b)(B).
Adjustment Act section 4, codified at
28 U.S.C. 2461 note.
21 Memorandum to the Exec. Dep’ts & Agencies
from Mick Mulvaney, Director, Office of Mgmt. &
Budget (Dec. 14, 2018), available at https://
www.whitehouse.gov/wp-content/uploads/2017/11/
m_19_04.pdf.
22 5 U.S.C. 553(d).
statutory directive to make annual
adjustments each year. Moreover, the
Inflation Adjustment Act directs
agencies to adjust the civil penalties
annually notwithstanding section 553 of
the APA,23 and OMB Guidance
reaffirms that agencies need not provide
a delay in effective date for the annual
adjustments for inflation.24
The amendment to § 1083.1(b), to
finalize the IFR with language to specify
that the adjusted civil penalties only
apply to assessments whose associated
violations occurred on, or after,
November 2, 2015 (the date the 2015
amendments to the Inflation Adjustment
Act were signed into law), similarly
satisfies the requirements of section
553(d) and thus may become effective
on January 31, 2019. Because the
amendment limits penalties that
potentially could have been assessed, it
relieves a restriction against affected
parties by potentially decreasing the
amount of civil penalties an affected
party may have to pay. The Bureau also
finds that there is good cause to make
this amendment effective on January 31,
2019. The amendment does not
establish any requirement but instead
ensures that penalties are not assessed
in a manner inconsistent with OMB
guidance. Effectuating the amendment
to § 1083.1(b) on the same day as
§ 1083.1(a) will also minimize confusion
among affected parties as to which
penalty amounts apply. The Bureau
received no comments on its proposal to
make the amendment to § 1083.1(b)
effective no sooner than January 15,
2019.
FRFA is not required if the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities.25
The Bureau also is subject to certain
additional procedures under the RFA
involving the convening of a panel to
consult with small business
representatives prior to proposing a rule
for which an IRFA is required.26
At the proposed rule stage, the Bureau
determined that an IRFA was not
required because the proposal, if
adopted, would not have had a
significant economic impact on a
substantial number of small entities. No
comments were received with respect to
that determination. For this final rule,
the Bureau continues to believe that that
determination is accurate. The rule
simply specifies that increased penalty
amounts apply only to violations that
occurred on or after November 2, 2015,
rather than also to violations that
occurred prior to November 2, 2015.
Because it would limit the civil
penalties covered persons may pay, the
rule would not impose any additional
costs on them. Nor does the rule impose
any new, affirmative duty on any small
entity or change any existing
requirements on small entities, and thus
no small entity who is currently
complying with the laws that the
Bureau enforces will incur any expense
from the final rule.
Accordingly, the Bureau’s Director, by
signing below, certifies that this rule
will not have a significant economic
impact on a substantial number of small
entities.
IV. Regulatory Flexibility Act
The Regulatory Flexibility Act (the
RFA), as amended by the Small
Business Regulatory Enforcement
Fairness Act of 1996, requires each
agency to consider the potential impact
of its regulations on small entities,
including small businesses, small
governmental units, and small nonprofit
organizations. The RFA defines a ‘‘small
business’’ as a business that meets the
size standard developed by the Small
Business Administration pursuant to the
Small Business Act.
The RFA generally requires an agency
to conduct an initial regulatory
flexibility analysis (IRFA) and a final
regulatory flexibility analysis (FRFA) of
any rule subject to notice-and-comment
rulemaking requirements. An IRFA or
V. Paperwork Reduction Act
Under the Paperwork Reduction Act
of 1995 (PRA) (44 U.S.C. 3501 et seq.),
Federal agencies are generally required
to seek the Office of Management and
Budget (OMB) approval for information
collection requirements prior to
implementation. According to the PRA,
the Bureau may not conduct or sponsor,
and, notwithstanding any other
provision of law, a person is not
required to respond to an information
collection unless the information
collection displays currently a valid
control number assigned by OMB. The
Bureau has determined that this policy
contains no information collections and
that the revisions to this Policy do not
create any new collections of
information.
20 Inflation
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519
23 Inflation Adjustment Act section 4, codified at
28 U.S.C. 2461 note.
24 Memorandum to the Exec. Dep’ts & Agencies
from Mick Mulvaney, Director, Office of Mgmt. &
Budget (Dec. 14, 2018), available at https://
www.whitehouse.gov/wp-content/uploads/2017/11/
m_19_04.pdf.
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VI. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Bureau
25 See
26 See
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5 U.S.C. 601 et seq.
5 U.S.C. 609.
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Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Rules and Regulations
will submit a report containing this rule
and other required information to the
United States Senate, the United States
House of Representatives, and the
Comptroller General of the United
States prior to the rule taking effect. The
Office of Information and Regulatory
Affairs (OIRA) has designated this rule
as not a ‘‘major rule’’ as defined by 5
U.S.C. 804(2).
List of Subjects in 12 CFR Part 1083
Administrative practice and
procedure, Consumer protection,
Penalties.
Authority and Issuance
For the reasons set forth above, the
Bureau amends 12 CFR part 1083 as set
forth below:
PART 1083—CIVIL PENALTY
ADJUSTMENTS
1. The authority citation for part 1083
continues to read as follows:
■
Authority: 12 U.S.C. 2609(d); 12 U.S.C.
5113(d)(2); 12 U.S.C. 5565(c); 15 U.S.C.
1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461
note.
2. Section 1083.1 is revised to read as
follows:
■
§ 1083.1 Adjustments of civil penalty
amounts.
(a) The maximum amount of each
civil penalty within the jurisdiction of
the Bureau of Consumer Financial
Protection to impose is adjusted in
accordance with the Federal Civil
Penalties Inflation Adjustment Act of
1990, as amended by the Debt
Collection Improvement Act of 1996
and further amended by the Federal
Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (28 U.S.C.
2461 note), as follows:
TABLE 1 TO PARAGRAPH (A)
U.S. Code citation
12
12
12
15
15
12
12
12
12
15
15
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
Civil penalty description
5565(c)(2)(A) .............................................................
5565(c)(2)(B) .............................................................
5565(c)(2)(C) .............................................................
1717a(a)(2) ................................................................
1717a(a)(2) ................................................................
2609(d)(1) ..................................................................
2609(d)(1) ..................................................................
2609(d)(2)(A) .............................................................
5113(d)(2) ..................................................................
1639e(k)(1) ................................................................
1639e(k)(2) ................................................................
(b) The adjustments in paragraph (a)
of this section shall apply to civil
penalties assessed after January 31,
2019, whose associated violations
occurred on or after November 2, 2015.
Dated: January 6, 2019.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial
Protection.
[FR Doc. 2019–00488 Filed 1–29–19; 4:15 pm]
BILLING CODE 4810–AM–P
SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 230 and 239
[Release No. 33–10591; File No. S7–29–18]
RIN 3235–AM42
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Conditional Small Issues Exemption
Under the Securities Act of 1933
(Regulation A)
Securities and Exchange
Commission.
ACTION: Final rule.
AGENCY:
The Securities and Exchange
Commission is adopting amendments to
Regulation A under the Securities Act of
1933 (the ‘‘Securities Act’’). Regulation
SUMMARY:
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16:41 Jan 30, 2019
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Tier 1 penalty .............................................................................
Tier 2 penalty .............................................................................
Tier 3 penalty .............................................................................
Per violation ................................................................................
Annual cap .................................................................................
Per failure ...................................................................................
Annual cap .................................................................................
Per failure, where intentional ......................................................
Per violation ................................................................................
First violation ..............................................................................
Subsequent violations ................................................................
A provides an exemption from
registration under the Securities Act for
offerings of securities up to $50 million.
As mandated by the Economic Growth,
Regulatory Relief, and Consumer
Protection Act (the ‘‘Economic Growth
Act’’), the amendments revise
Regulation A to permit entities subject
to the reporting requirements of Section
13 or 15(d) of the Securities Exchange
Act of 1934 (the ‘‘Exchange Act’’) to use
the exemption and provide that entities
meeting the reporting requirements of
the Exchange Act will be deemed to
have met the reporting requirements of
Regulation A. The amendments also
make conforming changes to Form 1–A.
DATES:
Effective date: January 31, 2019.
Comment date: Comments regarding
the collection of information
requirements within the meaning of the
Paperwork Reduction Act of 1995
should be received on or before March
4, 2019.
ADDRESSES: Comments may be
submitted by any of the following
methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/final.shtml); or
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Adjusted
maximum civil
penalty
amount
$5,781
28,906
1,156,242
2,014
2,013,399
94
189,427
190
29,192
11,563
23,125
• Send an email to rule-comments@
sec.gov. Please include File Number S7–
29–18 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number S7–29–18. This file number
should be included on the subject line
if email is used. To help us process and
review your comments more efficiently,
please use only one method. The
Commission will post all comments on
the Commission’s internet website
(https://www.sec.gov/rules/final.shtml).
Comments are also available for website
viewing and printing in the
Commission’s Public Reference Room,
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E:\FR\FM\31JAR1.SGM
31JAR1
]]>Agencies
[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Rules and Regulations]
[Pages 517-520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00488]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1083
[Docket No. CFPB-2018-0034]
RIN 3170-AA62
Civil Penalty Inflation Adjustments
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
amending its rule that specifies the time period for which adjusted
civil penalty amounts would be applied to conduct within its
jurisdiction and is also adjusting specific civil penalty amounts in
that rule to account for inflation. On June 14, 2016, the Bureau issued
an interim final rule (IFR) to implement the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended by the Debt Collection
Improvement Act of 1996 and further amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation
Adjustment Act). On October 12, 2018, the Bureau sought notice and
comment on a proposed amendment to the IFR to specify that the adjusted
civil penalties only apply to assessments whose associated violations
occurred on, or after, November 2, 2015 (the date the 2015 Inflation
Adjustment Act amendments were signed into law). This rule finalizes
the IFR and proposed amendment; it also adjusts for inflation the
maximum amount of each civil penalty within the Bureau's jurisdiction.
DATES: This rule is effective on January 31, 2019.
FOR FURTHER INFORMATION CONTACT: Shelley Thompson, Counsel or Monique
Chenault, Paralegal Specialist, Office of Regulations, at (202) 435-
7700 or https://reginquiries.consumerfinance.gov. If you require this
document in an alternative electronic format, please contact
CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act of 1990,\1\ as
amended by the Debt Collection Improvement Act of 1996 \2\ and further
amended by the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (Inflation Adjustment Act),\3\ directs Federal
agencies to adjust for inflation the civil penalty amounts within their
jurisdiction not later than July 1, 2016, and then not later than
January 15 every year thereafter.\4\ Each agency was required to make
the 2016 one-time catch-up adjustments through an interim final rule
published in the Federal Register. On June 14, 2016, the Bureau
published its interim final rule (IFR) to make the initial catch-up
adjustments to civil penalties within the Bureau's jurisdiction.\5\ The
June 2016 IFR created a new part 1083 and in Sec. 1083.1 established
the inflation-adjusted maximum amounts for each civil penalty within
the Bureau's jurisdiction.\6\ The Bureau received no comments in
response to the IFR, which became effective on July 14, 2016.
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\1\ Public Law 101-410, 104 Stat. 890.
\2\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321,
1321-373.
\3\ Public Law 114-74, section 701, 129 Stat. 584, 599.
\4\ 28 U.S.C. 2461 note. Section 1301(a) of the Federal Reports
Elimination Act of 1998, Public Law 105-362, 112 Stat. 3293, also
amended the Inflation Adjustment Act by striking section 6, which
contained annual reporting requirements, and redesignating section 7
as section 6, but did not alter the civil penalty adjustment
requirements.
\5\ 81 FR 38569 (June 14, 2016). Although the Bureau was not
obligated to solicit comments for the interim final rule, the Bureau
invited public comment and received none.
\6\ See 12 CFR 1083.1.
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The Inflation Adjustment Act also requires subsequent adjustments
to be made annually and notwithstanding section 553 of the
Administrative Procedure Act (APA).\7\ The Bureau annually adjusted its
civil penalty
[[Page 518]]
amounts, as required by the Act, through rules issued in January 2017
and January 2018.\8\
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\7\ Inflation Adjustment Act section 4, codified at 28 U.S.C.
2461 note.
\8\ 82 FR 3601 (Jan. 12, 2017); 83 FR 1525 (Jan. 12, 2018).
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Specifically, the Act directs Federal agencies to adjust annually
each civil penalty provided by law within the jurisdiction of the
agency by the ``cost-of-living adjustment.'' \9\ The ``cost-of-living
adjustment'' is defined as the percentage (if any) by which the
Consumer Price Index for all-urban consumers (CPI-U) for the month of
October preceding the date of the adjustment, exceeds the CPI-U for
October of the prior year.\10\ The Director of the Office of Management
and Budget (OMB) is required to issue guidance (OMB Guidance) every
year by December 15 to agencies on implementing the annual civil
penalty inflation adjustments. Pursuant to the Inflation Adjustment Act
and OMB Guidance, agencies must apply the multiplier reflecting the
``cost-of-living adjustment'' to the current penalty amount and then
round that amount to the nearest dollar to determine the annual
adjustments.\11\ The adjustments are designed to keep pace with
inflation so that civil penalties retain their deterrent effect and
promote compliance with the law.\12\
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\9\ Inflation Adjustment Act sections 4 and 5, codified at 28
U.S.C. 2461 note.
\10\ Inflation Adjustment Act sections 3 and 5, codified at 28
U.S.C. 2461 note.
\11\ Inflation Adjustment Act section 5, codified at 28 U.S.C.
2461 note; see also Memorandum to the Exec. Dep'ts & Agencies from
Mick Mulvaney, Director, Office of Mgmt. & Budget (Dec. 14, 2018),
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/m_19_04.pdf.
\12\ See Inflation Adjustment Act section 2, codified at 28
U.S.C. 2461 note.
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In 2017, OMB issued guidance stating that, ``[f]or the 2018 annual
adjustment, the new penalty amounts should apply to penalties assessed
after the effective date of the 2018 annual adjustment--which will be
no later than January 15, 2018--including, if consistent with agency
policy, assessments whose associated violations occurred on, or after,
November 2, 2015'' (i.e., the date the 2015 Amendments were signed into
law).\13\
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\13\ Memorandum to the Exec. Dep'ts & Agencies from Mick
Mulvaney, Director, Office of Mgmt. & Budget, at 4 (Dec. 15, 2017),
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf. OMB's guidance issued in December 2016 (https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/m-17-11_0.pdf) contained similar language.
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On October 12, 2018, the Bureau proposed to finalize the IFR
consistent with the 2017 OMB Guidance. Specifically, the Bureau
proposed to revise Sec. 1083.1(b) to provide that the adjustments in
paragraph (a) of the section shall apply to civil penalties assessed
after January 15, 2019, whose associated violations occurred on or
after November 2, 2015. The Bureau received one relevant comment, from
an individual commenter, which was supportive of the proposal. This
rule makes final the 2016 IFR with language consistent with the 2017
OMB Guidance.
For the 2019 annual adjustment, the multiplier reflecting the
``cost-of-living adjustment'' is 1.02522.\14\ Pursuant to the Inflation
Adjustment Act and OMB Guidance, the Bureau multiplied each of its
civil penalty amounts by the ``cost-of-living adjustment'' multiplier
and rounded to the nearest dollar.\15\
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\14\ Memorandum to the Exec. Dep'ts & Agencies from Mick
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 14, 2018),
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/m_19_04.pdf.
\15\ In rounding to the nearest dollar, the Bureau has rounded
down where the digit immediately following the decimal point is less
than 5 and has rounded up where the digit immediately following the
decimal point is 5 or greater.
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The new penalty amounts that apply to civil penalties assessed
after January 31, 2019, are as follows:
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Penalty
amounts OMB ``cost-of-
Law Penalty description established living New penalty
under 2018 adjustment'' amount
final rule multiplier
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Consumer Financial Protection Act, 12 Tier 1 penalty.......... $5,639 1.02522 $5,781
U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12 Tier 2 penalty.......... 28,195 1.02522 28,906
U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, 12 Tier 3 penalty.......... 1,127,799 1.02522 1,156,242
U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure Per violation........... 1,964 1.02522 2,014
Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Annual cap.............. 1,963,870 1.02522 2,013,399
Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act, Per failure............. 92 1.02522 94
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, Annual cap.............. 184,767 1.02522 189,427
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, Per failure, where 185 1.02522 190
12 U.S.C. 2609(d)(2)(A). intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........ Per violation........... 28,474 1.02522 29,192
Truth in Lending Act, 15 U.S.C. First violation......... 11,279 1.02522 11,563
1639e(k)(1).
Truth in Lending Act, 15 U.S.C. Subsequent violations... 22,556 1.02522 23,125
1639e(k)(2).
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II. Legal Authority
The Bureau issues this final rule pursuant to the Federal Civil
Penalties Inflation Adjustment Act of 1990,\16\ as amended by the Debt
Collection Improvement Act of 1996 \17\ and further amended by the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015,\18\ which requires the Bureau to adjust for inflation the civil
penalties within its jurisdiction according to a statutorily prescribed
formula.
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\16\ Public Law 101-410, 104 Stat. 890.
\17\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321,
1321-373.
\18\ Public Law 114-74, section 701, 129 Stat. 584, 599.
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III. Administrative Procedure Act
A. Notice and Comment
Under the APA, notice and opportunity for public comment are not
required if the Bureau finds that notice and public comment are
impracticable,
[[Page 519]]
unnecessary, or contrary to the public interest.\19\ The Bureau so
finds with respect to the annual adjustment portion of the amendments
in Sec. 1083.1(a). These adjustments to the civil penalty amounts are
technical and non-discretionary, and they merely apply the statutory
method for adjusting civil penalty amounts. These adjustments are
required by the Inflation Adjustment Act. Moreover, the Inflation
Adjustment Act directs agencies to adjust civil penalties annually
notwithstanding section 553 of the APA,\20\ and OMB Guidance reaffirms
that agencies need not complete a notice-and-comment process before
making the annual adjustments for inflation.\21\ For these reasons, the
Bureau has determined that publishing a notice of proposed rulemaking
and providing opportunity for public comment are unnecessary with
respect to the annual inflation adjustment portion of this rulemaking.
Therefore, that portion of the amendment is adopted in final form
without public comment.
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\19\ 5 U.S.C. 553(b)(B).
\20\ Inflation Adjustment Act section 4, codified at 28 U.S.C.
2461 note.
\21\ Memorandum to the Exec. Dep'ts & Agencies from Mick
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 14, 2018),
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/m_19_04.pdf.
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As noted above, the Bureau sought notice and comment to finalize
the IFR with amended language in Sec. 1083.1(b) to specify that the
adjusted civil penalties only apply to assessments whose associated
violations occurred on, or after, November 2, 2015 (the date the 2015
amendments to the Inflation Adjustment Act were signed into law).
B. Effective Date
Section 553(d) of the APA generally requires publication of a final
rule not less than 30 days before its effective date, except (1) a
substantive rule which grants or recognizes an exemption or relieves a
restriction; (2) interpretive rules and statements of policy; or (3) as
otherwise provided by the agency for good cause found and published
with the rule.\22\
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\22\ 5 U.S.C. 553(d).
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At a minimum, the Bureau believes the annual adjustments to the
civil penalty amounts in Sec. 1083.1(a) fall under the third exception
to section 553(d). The Bureau finds that there is good cause to make
the amendments effective on January 31, 2019. The amendments to Sec.
1083.1(a) in this final rule are technical and non-discretionary, and
they merely apply the statutory method for adjusting civil penalty
amounts and follow the statutory directive to make annual adjustments
each year. Moreover, the Inflation Adjustment Act directs agencies to
adjust the civil penalties annually notwithstanding section 553 of the
APA,\23\ and OMB Guidance reaffirms that agencies need not provide a
delay in effective date for the annual adjustments for inflation.\24\
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\23\ Inflation Adjustment Act section 4, codified at 28 U.S.C.
2461 note.
\24\ Memorandum to the Exec. Dep'ts & Agencies from Mick
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 14, 2018),
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/m_19_04.pdf.
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The amendment to Sec. 1083.1(b), to finalize the IFR with language
to specify that the adjusted civil penalties only apply to assessments
whose associated violations occurred on, or after, November 2, 2015
(the date the 2015 amendments to the Inflation Adjustment Act were
signed into law), similarly satisfies the requirements of section
553(d) and thus may become effective on January 31, 2019. Because the
amendment limits penalties that potentially could have been assessed,
it relieves a restriction against affected parties by potentially
decreasing the amount of civil penalties an affected party may have to
pay. The Bureau also finds that there is good cause to make this
amendment effective on January 31, 2019. The amendment does not
establish any requirement but instead ensures that penalties are not
assessed in a manner inconsistent with OMB guidance. Effectuating the
amendment to Sec. 1083.1(b) on the same day as Sec. 1083.1(a) will
also minimize confusion among affected parties as to which penalty
amounts apply. The Bureau received no comments on its proposal to make
the amendment to Sec. 1083.1(b) effective no sooner than January 15,
2019.
IV. Regulatory Flexibility Act
The Regulatory Flexibility Act (the RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996, requires each
agency to consider the potential impact of its regulations on small
entities, including small businesses, small governmental units, and
small nonprofit organizations. The RFA defines a ``small business'' as
a business that meets the size standard developed by the Small Business
Administration pursuant to the Small Business Act.
The RFA generally requires an agency to conduct an initial
regulatory flexibility analysis (IRFA) and a final regulatory
flexibility analysis (FRFA) of any rule subject to notice-and-comment
rulemaking requirements. An IRFA or FRFA is not required if the agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities.\25\ The Bureau also is subject
to certain additional procedures under the RFA involving the convening
of a panel to consult with small business representatives prior to
proposing a rule for which an IRFA is required.\26\
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\25\ See 5 U.S.C. 601 et seq.
\26\ See 5 U.S.C. 609.
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At the proposed rule stage, the Bureau determined that an IRFA was
not required because the proposal, if adopted, would not have had a
significant economic impact on a substantial number of small entities.
No comments were received with respect to that determination. For this
final rule, the Bureau continues to believe that that determination is
accurate. The rule simply specifies that increased penalty amounts
apply only to violations that occurred on or after November 2, 2015,
rather than also to violations that occurred prior to November 2, 2015.
Because it would limit the civil penalties covered persons may pay, the
rule would not impose any additional costs on them. Nor does the rule
impose any new, affirmative duty on any small entity or change any
existing requirements on small entities, and thus no small entity who
is currently complying with the laws that the Bureau enforces will
incur any expense from the final rule.
Accordingly, the Bureau's Director, by signing below, certifies
that this rule will not have a significant economic impact on a
substantial number of small entities.
V. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), Federal agencies are generally required to seek the Office of
Management and Budget (OMB) approval for information collection
requirements prior to implementation. According to the PRA, the Bureau
may not conduct or sponsor, and, notwithstanding any other provision of
law, a person is not required to respond to an information collection
unless the information collection displays currently a valid control
number assigned by OMB. The Bureau has determined that this policy
contains no information collections and that the revisions to this
Policy do not create any new collections of information.
VI. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau
[[Page 520]]
will submit a report containing this rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the rule taking effect. The Office of Information and Regulatory
Affairs (OIRA) has designated this rule as not a ``major rule'' as
defined by 5 U.S.C. 804(2).
List of Subjects in 12 CFR Part 1083
Administrative practice and procedure, Consumer protection,
Penalties.
Authority and Issuance
For the reasons set forth above, the Bureau amends 12 CFR part 1083
as set forth below:
PART 1083--CIVIL PENALTY ADJUSTMENTS
0
1. The authority citation for part 1083 continues to read as follows:
Authority: 12 U.S.C. 2609(d); 12 U.S.C. 5113(d)(2); 12 U.S.C.
5565(c); 15 U.S.C. 1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461
note.
0
2. Section 1083.1 is revised to read as follows:
Sec. 1083.1 Adjustments of civil penalty amounts.
(a) The maximum amount of each civil penalty within the
jurisdiction of the Bureau of Consumer Financial Protection to impose
is adjusted in accordance with the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by the Debt Collection Improvement
Act of 1996 and further amended by the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015 (28 U.S.C. 2461
note), as follows:
Table 1 to Paragraph (a)
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Adjusted
U.S. Code citation Civil penalty maximum civil
description penalty amount
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12 U.S.C. 5565(c)(2)(A)........... Tier 1 penalty...... $5,781
12 U.S.C. 5565(c)(2)(B)........... Tier 2 penalty...... 28,906
12 U.S.C. 5565(c)(2)(C)........... Tier 3 penalty...... 1,156,242
15 U.S.C. 1717a(a)(2)............. Per violation....... 2,014
15 U.S.C. 1717a(a)(2)............. Annual cap.......... 2,013,399
12 U.S.C. 2609(d)(1).............. Per failure......... 94
12 U.S.C. 2609(d)(1).............. Annual cap.......... 189,427
12 U.S.C. 2609(d)(2)(A)........... Per failure, where 190
intentional.
12 U.S.C. 5113(d)(2).............. Per violation....... 29,192
15 U.S.C. 1639e(k)(1)............. First violation..... 11,563
15 U.S.C. 1639e(k)(2)............. Subsequent 23,125
violations.
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(b) The adjustments in paragraph (a) of this section shall apply to
civil penalties assessed after January 31, 2019, whose associated
violations occurred on or after November 2, 2015.
Dated: January 6, 2019.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-00488 Filed 1-29-19; 4:15 pm]
BILLING CODE 4810-AM-P
