Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment, 9702-9705 [2019-04943]
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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outdated or otherwise unnecessary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.
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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
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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.
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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
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U.S.C. 2461 note.
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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.
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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.
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U.S.C. 603(a), 604(a).
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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
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$11,677
58,383
2,335,323
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5 U.S.C. 804(2).
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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
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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
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]]>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\
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\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.
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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\
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\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.
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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.
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\9\ See, e.g., 12 CFR 1209.7(c); FHFA Enforcement Policy, AB
2013-03 (May 31, 2013).
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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.
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\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.
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\13\ So in original; no paragraphs (d) and (e) were enacted. See
12 U.S.C.A. 4513 n. 1.
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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.
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\14\ 5 U.S.C. 603.
\15\ 5 U.S.C. 603(a), 604(a).
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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.
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\16\ See 5 U.S.C. 804(2).
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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
