Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment, 9702-9705 [2019-04943]

Download as PDF 9702 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations E. The Economic Growth and Regulatory FEDERAL HOUSING FINANCE Paperwork Reduction Act AGENCY Under section 2222 of EGRPRA, the FDIC is required to conduct a review at least once every 10 years to identify any outdated or otherwise unnecessary regulations. The FDIC completed its most recent comprehensive review of its regulations under EGRPRA in 2017 and did not receive any comments from the public concerning part 350. The burden reduction evidenced in this final rule is consistent with the objectives of the EGRPRA review process. F. Riegle Community Development and Regulatory Improvement Act Under section 302(b) of the Riegle Community Development and Regulatory Improvement Act, 12 U.S.C. 4802(b), new regulations and amendments to regulations prescribed by a Federal banking agency which impose additional reporting, disclosures, or other new requirements on insured depository institutions shall take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form. Because this rule rescission does not impose additional reporting, disclosures, or other requirements, but rather relieves banks of a disclosure requirement, this rule may take effect prior to the start of the next calendar quarter. List of Subjects in 12 CFR Part 350 Accounting, Banks, Banking, Reporting and recordkeeping requirements. Authority and Issuance PART 350—[REMOVED AND RESERVED] For the reasons stated in the preamble, and under the authority of 12 U.S.C 1817(a)(1), 1819 ‘‘Seventh’’ and ‘‘Tenth,’’ the Board of Directors of the Federal Deposit Insurance Corporation removes and reserves 12 CFR part 350. ■ Dated at Washington, DC, on March 12, 2019. By order of the Board of Directors. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2019–04944 Filed 3–15–19; 8:45 am] BILLING CODE 6714–01–P 12 CFR Parts 1209, 1217, and 1250 RIN 2590–AB01 Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment Federal Housing Finance Agency. ACTION: Final rule. AGENCY: SUMMARY: The Federal Housing Finance Agency (FHFA) is adopting this final rule amending its Rules of Practice and Procedure and other agency regulations to adjust each civil money penalty within its jurisdiction to account for inflation, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. DATES: Effective date: April 17, 2019. FOR FURTHER INFORMATION CONTACT: Stephen E. Hart, Deputy General Counsel, at (202) 649–3053, Stephen.Hart@fhfa.gov, or Frank R. Wright, Assistant General Counsel, at (202) 649–3087, Frank.Wright@fhfa.gov (not toll-free numbers); Federal Housing Finance Agency, 400 7th Street SW, Washington, DC 20219. The telephone number for the Telecommunications Device for the Hearing Impaired is: (800) 877–8339 (TDD only). SUPPLEMENTARY INFORMATION: I. Background FHFA is an independent agency of the Federal government, and the financial safety and soundness regulator of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises), as well as the Federal Home Loan Banks (collectively, the Banks) and the Office of Finance under authority granted by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act).1 FHFA oversees the Enterprises and Banks (collectively, the regulated entities) and the Office of Finance to ensure that they operate in a safe and sound manner and maintain liquidity in the housing finance market in accordance with applicable laws, rules and regulations. To that end, FHFA is vested with broad supervisory discretion and specific civil administrative enforcement powers, similar to such authority granted by Congress to the Federal bank regulatory 1 See Safety and Soundness Act, 12 U.S.C. 4513 and 4631–4641. VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 agencies.2 Section 1376 of the Safety and Soundness Act (12 U.S.C. 4636) empowers FHFA to impose civil money penalties under specific conditions. FHFA’s Rules of Practice and Procedure (12 CFR part 1209) (the Enforcement regulations) govern cease and desist proceedings, civil money penalty assessment proceedings, and other administrative adjudications.3 FHFA’s Flood Insurance regulation (12 CFR part 1250) governs flood insurance responsibilities as they pertain to the Enterprises.4 FHFA’s Implementation of the Program Fraud Civil Remedies Act of 1986 regulation (12 CFR part 1217) sets forth procedures for imposing civil penalties and assessments under the Program Fraud Civil Remedies Act (31 U.S.C. 3801 et seq.) on any person that makes a false claim for property, services or money from FHFA, or makes a false material statement to FHFA in connection with a claim, where the amount involved does not exceed $150,000.5 The Adjustment Improvements Act The Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Adjustment Improvements Act), requires FHFA, as well as other federal agencies with the authority to issue civil money penalties (CMPs), to adjust by regulation the maximum amount of each CMP authorized by law that the agency has jurisdiction to administer.6 The Adjustment Improvements Act required agencies to make an initial ‘‘catch-up’’ adjustment of their CMPs upon the statute’s enactment,7 and further requires agencies to make additional adjustments on an annual basis following the initial adjustment.8 The Adjustment Improvements Act sets forth the formula that agencies must apply when making annual adjustments, based on the percent change between the October Consumer Price Index for All Urban Consumers (the CPI–U) preceding the date of the last adjustment and the October CPI–U for the year before that. 2 Id. 3 See 12 CFR part 1209. 12 CFR part 1250. 5 See generally, 31 U.S.C. 3801 et seq. 6 See 28 U.S.C. 2461 note. 7 FHFA promulgated its catch-up adjustment of its CMPs with an interim final rule published July 1, 2016. 81 FR 43028. 8 FHFA promulgated its first annual adjustment of its CMP with a final rule published August 29, 2018. 83 FR 43965. 4 See E:\FR\FM\18MRR1.SGM 18MRR1 9703 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations II. Description of the Rule This final rule adjusts the maximum penalty amount within each of the three tiers specified in 12 U.S.C. 4636 by amending the table contained in 12 CFR 1209.80 of the Enforcement regulations to reflect the new adjusted maximum penalty amount that FHFA may impose upon a regulated entity or any entityaffiliated party within each tier. The increases in maximum penalty amounts contained in this final rule may not necessarily affect the amount of any CMP that FHFA may seek for a particular violation, which may not be the maximum that the law allows; FHFA would calculate each CMP on a case-by-case basis in light of a variety of factors.9 This rule also adjusts the maximum penalty amounts for violations under the FHFA Flood Insurance regulation by amending the text of 12 CFR 1250.3 to reflect the new adjusted maximum penalty amount that FHFA may impose for violations under that regulation. This rule also adjusts the maximum amounts for civil money penalties under the Program Fraud Civil Remedies Act by amending the text of 12 CFR 1217.3 to reflect the new adjusted maximum penalty amount that FHFA may impose for violations under that regulation. The Adjustment Improvements Act directs federal agencies to calculate each annual CMP adjustment as the percent change between the CPI–U for the previous October and the CPI–U for October of the calendar year before.10 The maximum CMP amounts for FHFA penalties under 12 U.S.C. 4636 were last adjusted in 2018.11 Since FHFA is making this round of adjustments in calendar year 2019, and the maximum CMP amounts were last set in calendar year 2018, the inflation adjustment amount for each maximum CMP amount was calculated by comparing the CPI–U for October 2017 with the CPI–U for October 2018, resulting in an inflation factor of 1.02522. For each maximum CMP calculation, the product of this inflation adjustment and the previous maximum penalty amount was then rounded to the nearest whole dollar as required by the Adjustment Improvements Act, and was then summed with the previous maximum penalty amount to determine the new adjusted maximum penalty amount.12 The tables below set out these items accordingly. ENFORCEMENT REGULATIONS Previous maximum penalty amount U.S. Code citation Description 12 U.S.C. 4636(b)(1) .............. 12 U.S.C. 4636(b)(2) .............. 12 U.S.C. 4636(b)(4) .............. First Tier ................................................................................. Second Tier ............................................................................ Third Tier (Entity-affiliated party or Regulated entity) ............ 11,390 56,947 2,277,875 Rounded inflation increase New adjusted maximum penalty amount 287 1,436 57,448 11,677 58,383 2,335,323 PROGRAM FRAUD CIVIL REMEDIES REGULATION Previous maximum penalty amount U.S. Code citation Description 31 U.S.C. 3802(a)(1) .............. 31 U.S.C. 3802(a)(2) .............. Maximum penalty per false claim .......................................... Maximum penalty per false statement ................................... 11,181 11,181 Rounded inflation increase New adjusted maximum penalty amount 282 282 11,463 11,463 FLOOD INSURANCE REGULATION Previous maximum penalty amount U.S. Code citation Description 42 U.S.C. 4012a(f)(5) ............. 42 U.S.C. 4012a(f)(5) ............. Maximum penalty per violation .............................................. Maximum total penalties assessed against an Enterprise in a calendar year. III. Differences Between the Federal Home Loan Banks and the Enterprises When promulgating any regulation that may have future effect relating to the Banks, the Director is required by section 1313(f) of the Safety and Soundness Act to consider the differences between the Banks and the Enterprises with respect to the Banks’ cooperative ownership structure, mission of providing liquidity to 9 See, e.g., 12 CFR 1209.7(c); FHFA Enforcement Policy, AB 2013–03 (May 31, 2013). 10 28 U.S.C. 2461 note. VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 members, affordable housing and community development mission, capital structure, and joint and several liability (12 U.S.C. 4513(f)).13 The Acting Director considered the differences between the Banks and the Enterprises, as they relate to the above factors, and determined that this final rule is appropriate. The inflation adjustments effected by the final rule are mandated by law, and the special 11 See 12 28 PO 00000 83 FR 43965 (August 29, 2018). U.S.C. 2461 note. Frm 00011 Fmt 4700 Sfmt 4700 554 159,743 Rounded inflation increase New adjusted maximum penalty amount 14 4,029 568 163,772 features of the Banks identified in section 1313(f) of the Safety and Soundness Act can be accommodated, if appropriate, along with any other relevant factors, when determining any actual penalties. IV. Regulatory Impact Administrative Procedure Act FHFA finds good cause that notice and an opportunity to comment on this 13 So in original; no paragraphs (d) and (e) were enacted. See 12 U.S.C.A. 4513 n. 1. E:\FR\FM\18MRR1.SGM 18MRR1 9704 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations final rule are unnecessary under section 553(b) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b). The Adjustment Improvements Act states that the annual civil money penalty adjustments shall be made notwithstanding the rulemaking provisions of 5 U.S.C. 553. Furthermore, this rulemaking conforms with and is consistent with the statutory directive set forth in the Adjustment Improvements Act. As a result, there are no issues of policy discretion about which to seek public comment. Accordingly, FHFA is adopting these amendments as a final rule. Regulatory Flexibility Act Pursuant to the Regulatory Flexibility Act (RFA),14 an agency must prepare a regulatory flexibility analysis for all proposed and final rules that describes the impact of the rule on small entities, unless the head of an agency certifies that the rule will not have ‘‘a significant economic impact on a substantial number of small entities.’’ However, the RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to the APA.15 As discussed above, FHFA has determined for good cause that the APA does not require a general notice of proposed rulemaking for this rule. Thus, the RFA does not apply to this final rule. Reporting and recordkeeping requirements. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) requires that regulations involving the collection of information receive clearance from the Office of Management and Budget (OMB). This rule contains no such collection of information requiring OMB approval under the Paperwork Reduction Act. Consequently, no information has been submitted to OMB for review. Accordingly, for the reasons stated in the SUPPLEMENTARY INFORMATION and under the authority of 12 U.S.C. 4513b and 12 U.S.C. 4526, the Federal Housing Finance Agency hereby amends subchapters A and C of chapter XII of title 12 of the Code of Federal Regulations as follows: Congressional Review Act In accordance with the Congressional Review Act,16 FHFA has determined that this final rule is not a major rule and has verified this determination with OMB. Lists of Subjects 12 CFR Part 1209 Administrative practice and procedure, Penalties. SUBCHAPTER A—ORGANIZATION AND OPERATIONS PART 1209—RULES OF PRACTICE AND PROCEDURE 1. The authority citation for part 1209 continues to read as follows: ■ Authority: 5 U.S.C. 554, 556, 557, and 701 et seq.; 12 U.S.C. 1430c(d); 12 U.S.C. 4501, 4502, 4503, 4511, 4513, 4513b, 4517, 4526, 4566(c)(1) and (c)(7), 4581–4588, 4631–4641; and 28 U.S.C. 2461 note. ■ 2. Revise § 1209.80 to read as follows: § 1209.80 12 CFR Part 1217 Civil remedies, Program fraud. 12 CFR Part 1250 Flood insurance, Governmentsponsored enterprises, Penalties, Inflation adjustments. The maximum amount of each civil money penalty within FHFA’s jurisdiction, as set by the Safety and Soundness Act and thereafter adjusted in accordance with the Inflation Adjustment Act, is as follows: New adjusted maximum penalty amount U.S. Code citation Description 12 U.S.C. 4636(b)(1) ................................ 12 U.S.C. 4636(b)(2) ................................ 12 U.S.C. 4636(b)(4) ................................ First Tier ....................................................................................................................... Second Tier .................................................................................................................. Third Tier (Regulated Entity or Entity-Affiliated party) ................................................. ■ 3. Revise § 1209.81 to read as follows: § 1209.81 Applicability. (b)(1) introductory text to read as follows: § 1217.3 Basis for civil penalties and assessments. The inflation adjustments set out in § 1209.80 shall apply to civil money penalties assessed in accordance with the provisions of the Safety and Soundness Act, 12 U.S.C. 4636, and subparts B and C of this part, for violations occurring after April 17, 2019. PART 1217—PROGRAM FRAUD CIVIL REMEDIES ACT 4. The authority citation for part 1217 continues to read as follows: ■ Authority: 12 U.S.C. 4501; 12 U.S.C. 4526, 28 U.S.C. 2461 note; 31 U.S.C. 3801–3812. (a) * * * (1) A civil penalty of not more than $11,463 may be imposed upon a person who makes a claim to FHFA for property, services, or money where the person knows or has reason to know that the claim: * * * * * (b) * * * (1) A civil penalty of up to $11,463 may be imposed upon a person who makes a written statement to FHFA with respect to a claim, contract, bid or proposal for a contract, or benefit from FHFA that: * * * * * 5. Amend § 1217.3 by revising paragraphs (a)(1) introductory text and ■ 14 5 U.S.C. 603. VerDate Sep<11>2014 15:57 Mar 15, 2019 15 5 Jkt 247001 PO 00000 U.S.C. 603(a), 604(a). Frm 00012 Fmt 4700 SUBCHAPTER C—ENTERPRISES PART 1250—FLOOD INSURANCE 6. The authority citation for part 1250 continues to read as follows: ■ Authority: 12 U.S.C. 4521(a)(4) and 4526; 28 U.S.C. 2461 note; 42 U.S.C. 4001 note; 42 U.S.C. 4012a(f)(3), (4), (5), (8), (9), and (10). 7. Amend § 1250.3 by revising paragraph (c) to read as follows: ■ § 1250.3 Civil money penalties. * * * * * (c) Amount. The maximum civil money penalty amount is $554 for each violation that occurs before April 17, 2019, with total penalties not to exceed $159,743. For violations that occur on or after April 17, 2019, the civil money penalty under this section may not exceed $568 for each violation, with total penalties assessed under this 16 See Sfmt 4700 $11,677 58,383 2,335,323 E:\FR\FM\18MRR1.SGM 5 U.S.C. 804(2). 18MRR1 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations section against an Enterprise during any calendar year not to exceed $163,772. * * * * * Dated: March 7, 2019. Joseph M. Otting, Acting Director, Federal Housing Finance Agency. [FR Doc. 2019–04943 Filed 3–15–19; 8:45 am] BILLING CODE 8070–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 91 [Docket No.: FAA–2019–0200] Operators of Boeing Company Model 737–8 and Boeing Company Model 737–9 Airplanes: Emergency Order of Prohibition Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notification of Emergency Order of Prohibition. AGENCY: SUMMARY: This Emergency Order of Prohibition is issued by the Federal Aviation Administration (FAA). Effective March 13, 2019, this Order prohibits the operation of Boeing Company Model 737–8 and Boeing Company Model 737–9 airplanes by U.S. certificated operators. This Order also prohibits the operation of Boeing Company Model 737–8 and Boeing Company Model 737–9 series airplanes in the territory of the United States. Airplanes covered by this Order, if in flight at the time this Order is issued, may proceed to and complete their soonest planned landing, but may not again takeoff. DATES: The Emergency Order of Prohibition is effective March 13, 2019. FOR FURTHER INFORMATION CONTACT: John Piccola, Federal Aviation Administration, Aircraft Certification Service, System Oversight Division, AIR–800, 2200 South 216th Street, Des Moines, WA 98198 (Email: john.piccola@faa.gov; Tel: 206–231– 3595). The full text of the Emergency Order of Prohibition issued March 13, 2019 is set forth below: SUPPLEMENTARY INFORMATION: Emergency Order of Prohibition This Emergency Order of Prohibition is issued by the Federal Aviation Administration (FAA) pursuant to 49 U.S.C. 40113(a) and 46105(c). Effective immediately, this Order prohibits the VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 9705 operation of Boeing Company Model 737–8 and Boeing Company Model 737– 9 airplanes by U.S. certificated operators. This Order also prohibits the operation of Boeing Company Model 737–8 and Boeing Company Model 737– 9 series airplanes in the territory of the United States. Airplanes covered by this Order, if in flight at the time this Order is issued, may proceed to and complete their soonest planned landing, but may not again takeoff. in accordance with 14 CFR 21.191 to support certification of design changes. This Order remains in effect until the issuance of an applicable FAA order rescinding or modifying this Order. The Administrator will rescind or modify this Order, as appropriate, if the Administrator determines that the prohibitions prescribed herein are no longer necessary to address an emergency related to safety in air commerce. Authority The FAA Administrator promotes the safe flight of civil aircraft by, among other things, prescribing minimum standards for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. 49 U.S.C. 44701(a)(5). The FAA Administrator is authorized to take necessary and appropriate actions to carry out his aviation safety duties and powers under part A (‘‘Air Commerce and Safety’’) of subtitle VII of Title 49 of the United States Code, including conducting investigations, issuing orders, and prescribing regulations, standards, and procedures. 49 U.S.C. 40113(a). When the Administrator determines that an emergency exists related to safety in air commerce and requires immediate action, the Administrator may issue immediately effective orders to meet the emergency. 49 U.S.C. 46105(c). Basis for Order Based on the initial investigations and the reliable and credible evidence presently available, the Acting Administrator finds that: 1. On October 29, 2018, a Boeing Company Model 737–8 operated by Lion Air as flight JT610 crashed after taking off from Soekarno-Hatta Airport in Jakarta, Indonesia. Flight JT610 departed from Jakarta with an intended destination of Pangkal Pinang, Indonesia. It departed Jakarta at 6:20 a.m. (local time), and crashed into the Java Sea approximately 13 minutes later. One hundred and eighty-four passengers and five crewmembers were on board. There were no survivors. An Indonesian-led investigation into the cause of this accident is ongoing, supported by the National Transportation Safety Board (NTSB), FAA, and Boeing. 2. On March 10, 2019, Ethiopian Airlines flight ET302, also a Boeing Company Model 737–8, crashed at 8:44 a.m. (local time), six minutes after takeoff. The flight departed from Bole International Airport in Addis Ababa, Ethiopia with an intended destination of Nairobi, Kenya. The accident site is near Bishoftu, Ethiopia. One hundred and forty-nine passengers and eight crewmembers were on board. None survived. An Ethiopian-led investigation into the cause of this accident is ongoing, supported by the NTSB, FAA, and Boeing. 3. The Boeing Company Model 737– 8 and the Boeing Company Model 737– 9 comprise the Boeing 737 MAX series, sharing nearly identical design features. The Boeing 737 MAX series airplanes are narrow-body airplanes with two high-bypass turbofan engines. The Boeing 737 MAX series airplanes are used for passenger carrying operations and are equipped with new CFM LEAP– 1B engines and larger cockpit displays. Under 49 U.S.C. 46105(c), the Acting Administrator has determined that an emergency exists related to safety in air commerce. On March 13, 2019, the investigation of the ET302 crash developed new information from the wreckage concerning the aircraft’s Scope and Effect This Order applies to all persons operating the Boeing Company Model 737–8 and Boeing Company Model 737– 9 airplanes in the territory of the United States, and to U.S. certificated operators conducting flights with Boeing Company Model 737–8 and Boeing Company Model 737–9 airplanes. These airplanes are hereinafter referred to as the Boeing 737 MAX series airplanes. This Order is effective immediately. This Order prohibits the operation of Boeing 737 MAX series airplanes by U.S. certificated operators. This Order also prohibits the operation of Boeing 737 MAX series airplanes in the territory of the United States. Boeing 737 MAX series airplanes covered by this Order, if in flight at the time this Order is issued, may proceed to and complete their soonest planned landing, but may not again takeoff. Special flight permits may be issued in accordance with 14 CFR 21.197 and 21.199, including to allow non-passenger carrying flights, as needed, for purposes of flight to a base for storage, production flight testing, repairs, alterations, or maintenance. Experimental airworthiness certificates may be issued PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 E:\FR\FM\18MRR1.SGM 18MRR1

Agencies

[Federal Register Volume 84, Number 52 (Monday, March 18, 2019)]
[Rules and Regulations]
[Pages 9702-9705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04943]


-----------------------------------------------------------------------

FEDERAL HOUSING FINANCE AGENCY

12 CFR Parts 1209, 1217, and 1250

RIN 2590-AB01


Rules of Practice and Procedure; Civil Money Penalty Inflation 
Adjustment

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Housing Finance Agency (FHFA) is adopting this 
final rule amending its Rules of Practice and Procedure and other 
agency regulations to adjust each civil money penalty within its 
jurisdiction to account for inflation, pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

DATES: Effective date: April 17, 2019.

FOR FURTHER INFORMATION CONTACT: Stephen E. Hart, Deputy General 
Counsel, at (202) 649-3053, Stephen.Hart@fhfa.gov, or Frank R. Wright, 
Assistant General Counsel, at (202) 649-3087, Frank.Wright@fhfa.gov 
(not toll-free numbers); Federal Housing Finance Agency, 400 7th Street 
SW, Washington, DC 20219. The telephone number for the 
Telecommunications Device for the Hearing Impaired is: (800) 877-8339 
(TDD only).

SUPPLEMENTARY INFORMATION:

I. Background

    FHFA is an independent agency of the Federal government, and the 
financial safety and soundness regulator of the Federal National 
Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage 
Corporation (Freddie Mac) (collectively, the Enterprises), as well as 
the Federal Home Loan Banks (collectively, the Banks) and the Office of 
Finance under authority granted by the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (Safety and Soundness 
Act).\1\ FHFA oversees the Enterprises and Banks (collectively, the 
regulated entities) and the Office of Finance to ensure that they 
operate in a safe and sound manner and maintain liquidity in the 
housing finance market in accordance with applicable laws, rules and 
regulations. To that end, FHFA is vested with broad supervisory 
discretion and specific civil administrative enforcement powers, 
similar to such authority granted by Congress to the Federal bank 
regulatory agencies.\2\ Section 1376 of the Safety and Soundness Act 
(12 U.S.C. 4636) empowers FHFA to impose civil money penalties under 
specific conditions. FHFA's Rules of Practice and Procedure (12 CFR 
part 1209) (the Enforcement regulations) govern cease and desist 
proceedings, civil money penalty assessment proceedings, and other 
administrative adjudications.\3\ FHFA's Flood Insurance regulation (12 
CFR part 1250) governs flood insurance responsibilities as they pertain 
to the Enterprises.\4\ FHFA's Implementation of the Program Fraud Civil 
Remedies Act of 1986 regulation (12 CFR part 1217) sets forth 
procedures for imposing civil penalties and assessments under the 
Program Fraud Civil Remedies Act (31 U.S.C. 3801 et seq.) on any person 
that makes a false claim for property, services or money from FHFA, or 
makes a false material statement to FHFA in connection with a claim, 
where the amount involved does not exceed $150,000.\5\
---------------------------------------------------------------------------

    \1\ See Safety and Soundness Act, 12 U.S.C. 4513 and 4631-4641.
    \2\ Id.
    \3\ See 12 CFR part 1209.
    \4\ See 12 CFR part 1250.
    \5\ See generally, 31 U.S.C. 3801 et seq.
---------------------------------------------------------------------------

The Adjustment Improvements Act

    The Federal Civil Penalties Inflation Adjustment Act of 1990 
(Inflation Adjustment Act), as amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 (Adjustment 
Improvements Act), requires FHFA, as well as other federal agencies 
with the authority to issue civil money penalties (CMPs), to adjust by 
regulation the maximum amount of each CMP authorized by law that the 
agency has jurisdiction to administer.\6\ The Adjustment Improvements 
Act required agencies to make an initial ``catch-up'' adjustment of 
their CMPs upon the statute's enactment,\7\ and further requires 
agencies to make additional adjustments on an annual basis following 
the initial adjustment.\8\
---------------------------------------------------------------------------

    \6\ See 28 U.S.C. 2461 note.
    \7\ FHFA promulgated its catch-up adjustment of its CMPs with an 
interim final rule published July 1, 2016. 81 FR 43028.
    \8\ FHFA promulgated its first annual adjustment of its CMP with 
a final rule published August 29, 2018. 83 FR 43965.
---------------------------------------------------------------------------

    The Adjustment Improvements Act sets forth the formula that 
agencies must apply when making annual adjustments, based on the 
percent change between the October Consumer Price Index for All Urban 
Consumers (the CPI-U) preceding the date of the last adjustment and the 
October CPI-U for the year before that.

[[Page 9703]]

II. Description of the Rule

    This final rule adjusts the maximum penalty amount within each of 
the three tiers specified in 12 U.S.C. 4636 by amending the table 
contained in 12 CFR 1209.80 of the Enforcement regulations to reflect 
the new adjusted maximum penalty amount that FHFA may impose upon a 
regulated entity or any entity-affiliated party within each tier. The 
increases in maximum penalty amounts contained in this final rule may 
not necessarily affect the amount of any CMP that FHFA may seek for a 
particular violation, which may not be the maximum that the law allows; 
FHFA would calculate each CMP on a case-by-case basis in light of a 
variety of factors.\9\ This rule also adjusts the maximum penalty 
amounts for violations under the FHFA Flood Insurance regulation by 
amending the text of 12 CFR 1250.3 to reflect the new adjusted maximum 
penalty amount that FHFA may impose for violations under that 
regulation. This rule also adjusts the maximum amounts for civil money 
penalties under the Program Fraud Civil Remedies Act by amending the 
text of 12 CFR 1217.3 to reflect the new adjusted maximum penalty 
amount that FHFA may impose for violations under that regulation.
---------------------------------------------------------------------------

    \9\ See, e.g., 12 CFR 1209.7(c); FHFA Enforcement Policy, AB 
2013-03 (May 31, 2013).
---------------------------------------------------------------------------

    The Adjustment Improvements Act directs federal agencies to 
calculate each annual CMP adjustment as the percent change between the 
CPI-U for the previous October and the CPI-U for October of the 
calendar year before.\10\ The maximum CMP amounts for FHFA penalties 
under 12 U.S.C. 4636 were last adjusted in 2018.\11\ Since FHFA is 
making this round of adjustments in calendar year 2019, and the maximum 
CMP amounts were last set in calendar year 2018, the inflation 
adjustment amount for each maximum CMP amount was calculated by 
comparing the CPI-U for October 2017 with the CPI-U for October 2018, 
resulting in an inflation factor of 1.02522. For each maximum CMP 
calculation, the product of this inflation adjustment and the previous 
maximum penalty amount was then rounded to the nearest whole dollar as 
required by the Adjustment Improvements Act, and was then summed with 
the previous maximum penalty amount to determine the new adjusted 
maximum penalty amount.\12\ The tables below set out these items 
accordingly.
---------------------------------------------------------------------------

    \10\ 28 U.S.C. 2461 note.
    \11\ See 83 FR 43965 (August 29, 2018).
    \12\ 28 U.S.C. 2461 note.

                                             Enforcement Regulations
----------------------------------------------------------------------------------------------------------------
                                                                     Previous         Rounded      New adjusted
         U.S. Code citation                  Description              maximum        inflation        maximum
                                                                  penalty amount     increase     penalty amount
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 4636(b)(1)...............  First Tier.................          11,390             287          11,677
12 U.S.C. 4636(b)(2)...............  Second Tier................          56,947           1,436          58,383
12 U.S.C. 4636(b)(4)...............  Third Tier (Entity-               2,277,875          57,448       2,335,323
                                      affiliated party or
                                      Regulated entity).
----------------------------------------------------------------------------------------------------------------


                                     Program Fraud Civil Remedies Regulation
----------------------------------------------------------------------------------------------------------------
                                                                     Previous         Rounded      New adjusted
         U.S. Code citation                  Description              maximum        inflation        maximum
                                                                  penalty amount     increase     penalty amount
----------------------------------------------------------------------------------------------------------------
31 U.S.C. 3802(a)(1)...............  Maximum penalty per false            11,181             282          11,463
                                      claim.
31 U.S.C. 3802(a)(2)...............  Maximum penalty per false            11,181             282          11,463
                                      statement.
----------------------------------------------------------------------------------------------------------------


                                           Flood Insurance Regulation
----------------------------------------------------------------------------------------------------------------
                                                                     Previous         Rounded      New adjusted
         U.S. Code citation                  Description              maximum        inflation        maximum
                                                                  penalty amount     increase     penalty amount
----------------------------------------------------------------------------------------------------------------
42 U.S.C. 4012a(f)(5)..............  Maximum penalty per                     554              14             568
                                      violation.
42 U.S.C. 4012a(f)(5)..............  Maximum total penalties             159,743           4,029         163,772
                                      assessed against an
                                      Enterprise in a calendar
                                      year.
----------------------------------------------------------------------------------------------------------------

III. Differences Between the Federal Home Loan Banks and the 
Enterprises

    When promulgating any regulation that may have future effect 
relating to the Banks, the Director is required by section 1313(f) of 
the Safety and Soundness Act to consider the differences between the 
Banks and the Enterprises with respect to the Banks' cooperative 
ownership structure, mission of providing liquidity to members, 
affordable housing and community development mission, capital 
structure, and joint and several liability (12 U.S.C. 4513(f)).\13\ The 
Acting Director considered the differences between the Banks and the 
Enterprises, as they relate to the above factors, and determined that 
this final rule is appropriate. The inflation adjustments effected by 
the final rule are mandated by law, and the special features of the 
Banks identified in section 1313(f) of the Safety and Soundness Act can 
be accommodated, if appropriate, along with any other relevant factors, 
when determining any actual penalties.
---------------------------------------------------------------------------

    \13\ So in original; no paragraphs (d) and (e) were enacted. See 
12 U.S.C.A. 4513 n. 1.
---------------------------------------------------------------------------

IV. Regulatory Impact

Administrative Procedure Act

    FHFA finds good cause that notice and an opportunity to comment on 
this

[[Page 9704]]

final rule are unnecessary under section 553(b) of the Administrative 
Procedure Act (APA), 5 U.S.C. 553(b). The Adjustment Improvements Act 
states that the annual civil money penalty adjustments shall be made 
notwithstanding the rulemaking provisions of 5 U.S.C. 553. Furthermore, 
this rulemaking conforms with and is consistent with the statutory 
directive set forth in the Adjustment Improvements Act. As a result, 
there are no issues of policy discretion about which to seek public 
comment. Accordingly, FHFA is adopting these amendments as a final 
rule.

Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (RFA),\14\ an agency 
must prepare a regulatory flexibility analysis for all proposed and 
final rules that describes the impact of the rule on small entities, 
unless the head of an agency certifies that the rule will not have ``a 
significant economic impact on a substantial number of small 
entities.'' However, the RFA applies only to rules for which an agency 
publishes a general notice of proposed rulemaking pursuant to the 
APA.\15\ As discussed above, FHFA has determined for good cause that 
the APA does not require a general notice of proposed rulemaking for 
this rule. Thus, the RFA does not apply to this final rule.
---------------------------------------------------------------------------

    \14\ 5 U.S.C. 603.
    \15\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) requires that 
regulations involving the collection of information receive clearance 
from the Office of Management and Budget (OMB). This rule contains no 
such collection of information requiring OMB approval under the 
Paperwork Reduction Act. Consequently, no information has been 
submitted to OMB for review.

Congressional Review Act

    In accordance with the Congressional Review Act,\16\ FHFA has 
determined that this final rule is not a major rule and has verified 
this determination with OMB.
---------------------------------------------------------------------------

    \16\ See 5 U.S.C. 804(2).
---------------------------------------------------------------------------

Lists of Subjects

12 CFR Part 1209

    Administrative practice and procedure, Penalties.

12 CFR Part 1217

    Civil remedies, Program fraud.

12 CFR Part 1250

    Flood insurance, Government-sponsored enterprises, Penalties, 
Reporting and recordkeeping requirements.

    Accordingly, for the reasons stated in the SUPPLEMENTARY 
INFORMATION and under the authority of 12 U.S.C. 4513b and 12 U.S.C. 
4526, the Federal Housing Finance Agency hereby amends subchapters A 
and C of chapter XII of title 12 of the Code of Federal Regulations as 
follows:

SUBCHAPTER A--ORGANIZATION AND OPERATIONS

PART 1209--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 1209 continues to read as follows:

    Authority: 5 U.S.C. 554, 556, 557, and 701 et seq.; 12 U.S.C. 
1430c(d); 12 U.S.C. 4501, 4502, 4503, 4511, 4513, 4513b, 4517, 4526, 
4566(c)(1) and (c)(7), 4581-4588, 4631-4641; and 28 U.S.C. 2461 
note.


0
2. Revise Sec.  1209.80 to read as follows:


Sec.  1209.80  Inflation adjustments.

    The maximum amount of each civil money penalty within FHFA's 
jurisdiction, as set by the Safety and Soundness Act and thereafter 
adjusted in accordance with the Inflation Adjustment Act, is as 
follows:

------------------------------------------------------------------------
                                                           New adjusted
       U.S. Code citation              Description            maximum
                                                          penalty amount
------------------------------------------------------------------------
12 U.S.C. 4636(b)(1)...........  First Tier.............         $11,677
12 U.S.C. 4636(b)(2)...........  Second Tier............          58,383
12 U.S.C. 4636(b)(4)...........  Third Tier (Regulated         2,335,323
                                  Entity or Entity-
                                  Affiliated party).
------------------------------------------------------------------------


0
3. Revise Sec.  1209.81 to read as follows:


Sec.  1209.81  Applicability.

    The inflation adjustments set out in Sec.  1209.80 shall apply to 
civil money penalties assessed in accordance with the provisions of the 
Safety and Soundness Act, 12 U.S.C. 4636, and subparts B and C of this 
part, for violations occurring after April 17, 2019.

PART 1217--PROGRAM FRAUD CIVIL REMEDIES ACT

0
4. The authority citation for part 1217 continues to read as follows:

    Authority: 12 U.S.C. 4501; 12 U.S.C. 4526, 28 U.S.C. 2461 note; 
31 U.S.C. 3801-3812.


0
5. Amend Sec.  1217.3 by revising paragraphs (a)(1) introductory text 
and (b)(1) introductory text to read as follows:


Sec.  1217.3  Basis for civil penalties and assessments.

    (a) * * * (1) A civil penalty of not more than $11,463 may be 
imposed upon a person who makes a claim to FHFA for property, services, 
or money where the person knows or has reason to know that the claim:
* * * * *
    (b) * * * (1) A civil penalty of up to $11,463 may be imposed upon 
a person who makes a written statement to FHFA with respect to a claim, 
contract, bid or proposal for a contract, or benefit from FHFA that:
* * * * *

SUBCHAPTER C--ENTERPRISES

PART 1250--FLOOD INSURANCE

0
6. The authority citation for part 1250 continues to read as follows:

    Authority: 12 U.S.C. 4521(a)(4) and 4526; 28 U.S.C. 2461 note; 
42 U.S.C. 4001 note; 42 U.S.C. 4012a(f)(3), (4), (5), (8), (9), and 
(10).


0
7. Amend Sec.  1250.3 by revising paragraph (c) to read as follows:


Sec.  1250.3  Civil money penalties.

* * * * *
    (c) Amount. The maximum civil money penalty amount is $554 for each 
violation that occurs before April 17, 2019, with total penalties not 
to exceed $159,743. For violations that occur on or after April 17, 
2019, the civil money penalty under this section may not exceed $568 
for each violation, with total penalties assessed under this

[[Page 9705]]

section against an Enterprise during any calendar year not to exceed 
$163,772.
* * * * *

    Dated: March 7, 2019.
Joseph M. Otting,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2019-04943 Filed 3-15-19; 8:45 am]
BILLING CODE 8070-01-P