Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment, 4903-4905 [2020-01025]
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4903
Rules and Regulations
Federal Register
Vol. 85, No. 18
Tuesday, January 28, 2020
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Parts 1209, 1217, and 1250
RIN 2590–AB07
Rules of Practice and Procedure; Civil
Money Penalty Inflation Adjustment
Federal Housing Finance
Agency.
ACTION: Final rule.
AGENCY:
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 January 28, 2020, and is
applicable beginning January 15, 2020.
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 Deaf is: (800) 877–8339
(TDD only).
SUPPLEMENTARY INFORMATION:
SUMMARY:
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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
VerDate Sep<11>2014
15:55 Jan 27, 2020
Jkt 250001
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
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
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.
6 See 28 U.S.C. 2461 note.
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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.
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
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 most recent annual
adjustment of its CMP with a final rule published
March 18, 2019. 84 FR 9702.
9 See, e.g., 12 CFR 1209.7(c); FHFA Enforcement
Policy, AB 2013–03 (May 31, 2013).
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Federal Register / Vol. 85, No. 18 / Tuesday, January 28, 2020 / Rules and Regulations
October of the calendar year before.10
The maximum CMP amounts for FHFA
penalties were last adjusted in 2019.11
Since FHFA is making this round of
adjustments in calendar year 2020, and
the maximum CMP amounts were last
set in calendar year 2019, the inflation
adjustment amount for each maximum
CMP amount was calculated by
comparing the CPI–U for October 2018
with the CPI–U for October 2019,
resulting in an inflation factor of
1.01764. For each maximum CMP
calculation, the product of this inflation
adjustment and the previous maximum
penalty amount was then rounded to the
U.S. code citation
Program Fraud Civil Remedies regulation:
31 U.S.C. 3802(a)(1) ...............................
31 U.S.C 3802(a)(2) ................................
Flood Insurance regulation:
42 U.S.C. 4012a(f)(5) ..............................
42 U.S.C. 4012a(f)(5) ..............................
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
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.
IV. Regulatory Impact
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Administrative Procedure Act
FHFA finds good cause that notice
and an opportunity to comment on this
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
10 28
U.S.C. 2461 note.
84 FR 9702 (March 18, 2019).
12 28 U.S.C. 2461 note.
11 See
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15:55 Jan 27, 2020
Previous
maximum
penalty
amount
Description
Enforcement regulations:
12 U.S.C. 4636(b)(1) ...............................
12 U.S.C. 4636(b)(2) ...............................
12 U.S.C. 4636(b)(4) ...............................
Jkt 250001
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.
Rounded
inflation
increase
New adjusted
maximum
penalty
amount
First Tier .........................................................
Second Tier ....................................................
Third Tier (Entity-affiliated party or Regulated
entity).
11,677
58,383
2,335,323
206
1,030
41,195
11,883
59,413
2,376,518
Maximum penalty per false claim ..................
Maximum penalty per false statement ...........
11,463
11,463
202
202
11,665
11,665
Maximum penalty per violation ......................
Maximum total penalties assessed against
an Enterprise in a calendar year.
568
163,772
10
2,889
578
166,661
adjustments shall be made
notwithstanding the rulemaking
provisions of 5 U.S.C. 553.14
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),15 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.16 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.
Congressional Review Act
The rule is not a ‘‘major rule’’ as
defined by the Congressional Review
Act, codified at 5 U.S.C. 801 et seq. The
rule will not result in: (1) An annual
effect on the economy of $100,000,000
13 So in original; no paragraphs (d) and (e) were
enacted. See 12 U.S.C.A. 4513 n 1.
14 28 U.S.C. 2461 note, section 4(b)(2).
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Fmt 4700
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or more; (2) a major increase in costs or
prices; or (3) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
the ability of United States-based
companies to compete with foreignbased companies.17
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.
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, Governmentsponsored enterprises, Penalties,
Reporting and record keeping
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
15 5
U.S.C. 603.
U.S.C. 603(a), 604(a).
17 5 U.S.C. 804(2).
16 5
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Federal Register / Vol. 85, No. 18 / Tuesday, January 28, 2020 / Rules and Regulations
4566(c)(1) and (c)(7), 4581–4588, 4631–4641;
and 28 U.S.C. 2461 note.
Subchapter A—Organization and
Operations
Finance Agency hereby amends
subchapters A and C of chapter XII of
Title 12 of the Code of Federal
Regulations as follows:
■
PART 1209—RULES OF PRACTICE
AND PROCEDURE
§ 1209.80
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,
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.
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 January 15,
2020.
7. Amend § 1250.3 by revising
paragraph (c) to read as follows:
§ 1250.3
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.
5. Amend § 1217.3 by revising
paragraphs (a)(1) introductory text and
(b)(1) introductory text to read as
follows:
■
Subchapter C—Enterprises
PART 1250—FLOOD INSURANCE
6. The authority citation for part 1250
continues to read as follows:
Jkt 250001
Dated: January 16, 2020.
Mark A. Calabria,
Director, Federal Housing Finance Agency.
BILLING CODE 8070–01–P
(a) * * *
(1) A civil penalty of not more than
$11,665 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 $11,665
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:
*
*
*
*
*
16:17 Jan 27, 2020
*
*
*
*
(c) Amount. The maximum civil
money penalty amount is $568 for each
violation that occurs before January 15,
2020, with total penalties not to exceed
$163,772. For violations that occur on or
after January 15, 2020, the civil money
penalty under this section may not
exceed $578 for each violation, with
total penalties assessed under this
section against an Enterprise during any
calendar year not to exceed $166,661.
*
*
*
*
*
[FR Doc. 2020–01025 Filed 1–27–20; 8:45 am]
§ 1217.3 Basis for civil penalties and
assessments.
VerDate Sep<11>2014
Civil money penalties.
*
■
■
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).
■
PART 1217—PROGRAM FRAUD CIVIL
REMEDIES ACT
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2. Revise § 1209.80 to read as follows:
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
15 CFR Part 902
50 CFR Part 679
[200113–0012]
RIN 0648–BI53
Fisheries of the Exclusive Economic
Zone Off Alaska; Halibut Deck Sorting
Monitoring Requirements for Trawl
Catcher/Processors Operating in NonPollock Groundfish Fisheries Off
Alaska
National Marine Fisheries
Service (NMFS), National Oceanic and
AGENCY:
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Frm 00003
Fmt 4700
Sfmt 4700
$11,883
59,413
2,376,518
Atmospheric Administration (NOAA),
Commerce.
ACTION: Final rule; lift of stay; date of
effectiveness for collection-ofinformation requirements.
NMFS announces approval by
the Office of Management and Budget
(OMB) of collection-of-information
requirements, which were contained in
regulations to implement catch handling
and monitoring requirements to allow
Pacific halibut (halibut) bycatch to be
sorted on the deck of trawl catcher/
processors (C/Ps) and motherships
participating in the non-pollock
groundfish fisheries off Alaska, in a
final rule published on October 15,
2019. The intent of this rule is to inform
the public of the effectiveness of the
collection-of-information requirements
associated with the catch handling and
monitoring requirements included in
the October 15, 2019, final rule.
DATES: This rule is effective January 28,
2020. The stays of 50 CFR 679.28(d)(9)
and (10) and (l) and 679.120(b), (c), (d),
and (e) are lifted effective January 28,
2020. The collection-of-information
requirements in 50 CFR 679.28(d)(9)
and (10) and (l) and 679.120(b), (c), (d),
and (e) were effective December 16,
2019.
ADDRESSES: Written comments
regarding the burden-hour estimates or
other aspects of the collection-ofinformation requirements contained in
this rule may be submitted by mail to
NMFS Alaska Region, P.O. Box 21668,
Juneau, AK 99802–1668; by email to
OIRA_Submission@omb.eop.gov; or by
fax to 202–395–5806.
FOR FURTHER INFORMATION CONTACT:
Joseph Krieger, 907–586–7228 or
joseph.krieger@noaa.gov.
SUPPLEMENTARY INFORMATION: NMFS
manages the groundfish fisheries in the
SUMMARY:
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]]>Agencies
[Federal Register Volume 85, Number 18 (Tuesday, January 28, 2020)]
[Rules and Regulations]
[Pages 4903-4905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01025]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 85, No. 18 / Tuesday, January 28, 2020 /
Rules and Regulations
[[Page 4903]]
FEDERAL HOUSING FINANCE AGENCY
12 CFR Parts 1209, 1217, and 1250
RIN 2590-AB07
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 January 28, 2020, and is applicable beginning January
15, 2020.
FOR FURTHER INFORMATION CONTACT: Stephen E. Hart, Deputy General
Counsel, at (202) 649-3053, [email protected], or Frank R. Wright,
Assistant General Counsel, at (202) 649-3087, [email protected]
(not toll-free numbers); Federal Housing Finance Agency, 400 7th Street
SW, Washington, DC 20219. The telephone number for the
Telecommunications Device for the Deaf 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 most recent annual adjustment of its
CMP with a final rule published March 18, 2019. 84 FR 9702.
---------------------------------------------------------------------------
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.
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
[[Page 4904]]
October of the calendar year before.\10\ The maximum CMP amounts for
FHFA penalties were last adjusted in 2019.\11\ Since FHFA is making
this round of adjustments in calendar year 2020, and the maximum CMP
amounts were last set in calendar year 2019, the inflation adjustment
amount for each maximum CMP amount was calculated by comparing the CPI-
U for October 2018 with the CPI-U for October 2019, resulting in an
inflation factor of 1.01764. 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 84 FR 9702 (March 18, 2019).
\12\ 28 U.S.C. 2461 note.
----------------------------------------------------------------------------------------------------------------
Previous Rounded New adjusted
U.S. code citation Description maximum inflation maximum
penalty amount increase penalty amount
----------------------------------------------------------------------------------------------------------------
Enforcement regulations:
12 U.S.C. 4636(b)(1).............. First Tier.............. 11,677 206 11,883
12 U.S.C. 4636(b)(2).............. Second Tier............. 58,383 1,030 59,413
12 U.S.C. 4636(b)(4).............. Third Tier (Entity- 2,335,323 41,195 2,376,518
affiliated party or
Regulated entity).
Program Fraud Civil Remedies
regulation:
31 U.S.C. 3802(a)(1).............. Maximum penalty per 11,463 202 11,665
false claim.
31 U.S.C 3802(a)(2)............... Maximum penalty per 11,463 202 11,665
false statement.
Flood Insurance regulation:
42 U.S.C. 4012a(f)(5)............. Maximum penalty per 568 10 578
violation.
42 U.S.C. 4012a(f)(5)............. Maximum total penalties 163,772 2,889 166,661
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
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 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.\14\ 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.
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\14\ 28 U.S.C. 2461 note, section 4(b)(2).
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Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (RFA),\15\ 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.\16\ 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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\15\ 5 U.S.C. 603.
\16\ 5 U.S.C. 603(a), 604(a).
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Congressional Review Act
The rule is not a ``major rule'' as defined by the Congressional
Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result
in: (1) An annual effect on the economy of $100,000,000 or more; (2) a
major increase in costs or prices; or (3) significant adverse effects
on competition, employment, investment, productivity, innovation, or
the ability of United States-based companies to compete with foreign-
based companies.\17\
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\17\ 5 U.S.C. 804(2).
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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.
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 record keeping 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
[[Page 4905]]
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.......... $11,883
12 U.S.C. 4636(b)(2).............. Second Tier......... 59,413
12 U.S.C. 4636(b)(4).............. Third Tier 2,376,518
(Regulated 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 January 15, 2020.
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 $11,665 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 $11,665 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 $568 for each
violation that occurs before January 15, 2020, with total penalties not
to exceed $163,772. For violations that occur on or after January 15,
2020, the civil money penalty under this section may not exceed $578
for each violation, with total penalties assessed under this section
against an Enterprise during any calendar year not to exceed $166,661.
* * * * *
Dated: January 16, 2020.
Mark A. Calabria,
Director, Federal Housing Finance Agency.
[FR Doc. 2020-01025 Filed 1-27-20; 8:45 am]
BILLING CODE 8070-01-P
