Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment, 1659-1662 [2022-00361]
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Federal Register / Vol. 87, No. 8 / Wednesday, January 12, 2022 / Rules and Regulations
1659
PENALTIES APPLICABLE TO FEDERAL SAVINGS ASSOCIATIONS—Continued
U.S. code citation
12 U.S.C.
1820(k)(6)(A)(ii).
12 U.S.C. 1832(c) ..........
12 U.S.C. 1884 ..............
12 U.S.C. 1972(2)(F) .....
15 U.S.C. 78u–2(b) ........
15 U.S.C. 1639e(k) ........
42 U.S.C. 4012a(f)(5) ....
Maximum
penalty
amount
(in dollars) 8
CMP description
Violation of Post-Employment Restrictions:
Per violation .....................................................................................................................................
Violation of Withdrawals by Negotiable or Transferable Instruments for Transfers to Third Parties:
Per violation .....................................................................................................................................
Violation of the Bank Protection Act .......................................................................................................
Violation of Provisions regarding Correspondent Accounts, Unsafe or Unsound Practices, or Breach
of Fiduciary Duty:
Tier 1 ................................................................................................................................................
Tier 2 ................................................................................................................................................
Tier 3 ................................................................................................................................................
Violations of Various Provisions of the Securities Act, the Securities Exchange Act, the Investment
Company Act, or the Investment Advisers Act:
1st Tier (natural person)—Per violation ...........................................................................................
1st Tier (other person)—Per violation .............................................................................................
2nd Tier (natural person)—Per violation .........................................................................................
2nd Tier (other person)—Per violation ............................................................................................
3rd Tier (natural person)—Per violation ..........................................................................................
3rd Tier (other person)—Per violation .............................................................................................
Violation of Appraisal Independence Requirements:
First violation ....................................................................................................................................
Subsequent violations ......................................................................................................................
Flood Insurance:
Per violation .....................................................................................................................................
362,217
2,907
320
11,011
55,052
2 2,202,123
10,360
103,591
103,591
517,955
207,183
1,035,909
12,647
25,293
2,392
8 The
maximum penalty amount is per day, unless otherwise indicated.
maximum penalty amount for a federal savings association is the lesser of this amount or 1 percent of total assets.
amounts also apply to statutes that cross-reference 12 U.S.C. 1818, such as 12 U.S.C. 2804, 3108, 3349, 4309, and 4717 and 15
U.S.C. 1607, 1681s, 1691c, and 1692l.
2 The
3 These
Benjamin W. McDonough,
Senior Deputy Comptroller and Chief
Counsel, Office of the Comptroller of the
Currency.
FOR FURTHER INFORMATION CONTACT:
Frank R. Wright, Assistant General
Counsel, at (202) 649–3087,
Frank.Wright@fhfa.gov (not a toll-free
number); Federal Housing Finance
Agency, 400 7th Street SW, Washington,
DC 20219. For TTY/TRS users with
hearing and speech disabilities, dial 711
and ask to be connected to any of the
contact numbers above.
SUPPLEMENTARY INFORMATION:
[FR Doc. 2022–00109 Filed 1–11–22; 8:45 am]
BILLING CODE 4810–33–P
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Parts 1209, 1217, and 1250
I. Background
RIN 2590–AA43
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
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 12, 2022, and
applicable beginning January 15, 2022.
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SUMMARY:
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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
2 Id.
1 See
Safety and Soundness Act, 12 U.S.C. 4513
and 4631–4641.
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Fmt 4700
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3 See
4 See
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12 CFR part 1209.
12 CFR part 1250.
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Federal Register / Vol. 87, No. 8 / Wednesday, January 12, 2022 / Rules and Regulations
II. Description of the Rule
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.
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
U.S. Code citation
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 were last adjusted in 2021.11
Since FHFA is making this round of
adjustments in calendar year 2022, and
the maximum CMP amounts were last
set in calendar year 2021, the inflation
adjustment amount for each maximum
CMP amount was calculated by
comparing the CPI–U for October 2020
with the CPI–U for October 2021,
resulting in an inflation factor of
1.06222. 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.
Previous
maximum
penalty amount
Description
Rounded
inflation
increase
New adjusted
maximum
penalty amount
Enforcement Regulations
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) ......
12,023
60,115
2,404,608
748
3,740
149,615
12,771
63,855
2,554,223
11,803
11,803
734
734
12,537
12,537
585
168,631
36
10,492
621
179,123
Program Fraud Civil Remedies Regulation
31 U.S.C. 3802(a)(1) ............
31 U.S.C. 3802(a)(2) ............
Maximum penalty per false claim .....................................
Maximum penalty per false statement ..............................
Flood Insurance Regulation
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.
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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,
5 See
generally, 31 U.S.C. 3801 et seq.
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.
6 See
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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
8 FHFA promulgated its most recent annual
adjustment of its CMP with a final rule published
January 29, 2021. 86 FR 7493.
9 See, e.g., 12 CFR 1209.7(c); FHFA Enforcement
Policy, AB 2013–03 (May 31, 2013).
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Fmt 4700
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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.
10 28
U.S.C. 2461 note.
86 FR 7493 (January 29, 2021).
12 28 U.S.C. 2461 note.
13 So in original; no paragraphs (d) and (e) were
enacted. See 12 U.S.C.A. 4513 n 1.
11 See
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Federal Register / Vol. 87, No. 8 / Wednesday, January 12, 2022 / Rules and Regulations
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.
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
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
12 CFR Part 1250
Flood insurance, Governmentsponsored enterprises, Penalties,
Reporting and record keeping
requirements.
Accordingly, for the reasons stated in
the preamble 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
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.
PART 1209—RULES OF PRACTICE
AND PROCEDURE
Lists of Subjects
§ 1209.80
12 CFR Part 1209
Administrative practice and
procedure, Penalties.
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:
12 CFR Part 1217
Civil remedies, Program fraud.
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:
Inflation adjustments.
TABLE 1 TO § 1209.80
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.
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:
■
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 on or after January
15, 2022.
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New adjusted
maximum
penalty amount
U.S. Code citation
PART 1217—PROGRAM FRAUD CIVIL
REMEDIES ACT
4. The authority citation for part 1217
continues to read as follows:
■
U.S.C. 2461 note, section 4(b)(2).
U.S.C. 603.
§ 1217.3 Basis for civil penalties and
assessments.
(a) * * *
(1) A civil penalty of not more than
$12,537 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:
*
*
*
*
*
14 28
16 5
15 5
17 5
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PO 00000
(b) * * *
(1) A civil penalty of up to $12,537
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
6. The authority citation for part 1250
continues to read as follows:
■
U.S.C. 603(a), 604(a).
U.S.C. 804(2).
Frm 00005
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$12,771
63,855
2,554,223
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Federal Register / Vol. 87, No. 8 / Wednesday, January 12, 2022 / Rules and Regulations
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 $621 for each
violation that occurs before January 15,
2022, with total penalties not to exceed
$179,123. For violations that occur on or
after January 15, 2022, the civil money
penalty under this section may not
exceed $621 for each violation, with
total penalties assessed under this
section against an Enterprise during any
calendar year not to exceed $179,123.
*
*
*
*
*
Sandra L. Thompson,
Acting Director, Federal Housing Finance
Agency.
[FR Doc. 2022–00361 Filed 1–11–22; 8:45 am]
BILLING CODE 8070–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 25
[Docket No. FAA–2021–0484; Special
Conditions No. 25–794–SC]
Special Conditions: Learjet, Inc.;
Electronic System Security Protection
From Unauthorized External Access
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final special conditions; request
for comments.
AGENCY:
These special conditions are
issued for a supplemental type
certificate on certain transport category
airplanes. These airplanes, as modified
by Learjet, Inc. (Learjet), will have a
novel or unusual design feature when
compared to the state of technology
envisioned in the airworthiness
standards for transport-category
airplanes. This design feature is the
installation of a system that allows
connection to airplane electronics and
networks, and access from aircraft
external sources (e.g., operator
networks, wireless devices, internet
connectivity, service provider satellite
communications, electronic flight bags,
etc.) to the previously isolated airplane
electronic assets (networks, systems,
and databases). The applicable
airworthiness regulations do not contain
adequate or appropriate safety standards
for this design feature. These special
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SUMMARY:
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conditions contain the additional safety
standards that the Administrator
considers necessary to establish a level
of safety equivalent to that established
by the existing airworthiness standards.
DATES: This action is effective on Learjet
on January 12, 2022. Send comments on
or before February 28, 2022.
ADDRESSES: Send comments identified
by Docket No. FAA–2021–0484 using
any of the following methods:
• Federal eRegulations Portal: Go to
https://www.regulations.gov/ and follow
the online instructions for sending your
comments electronically.
• Mail: Send comments to Docket
Operations, M–30, U.S. Department of
Transportation (DOT), 1200 New Jersey
Avenue SE, Room W12–140, West
Building Ground Floor, Washington, DC
20590–0001.
• Hand Delivery or Courier: Take
comments to Docket Operations in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE, Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
• Fax: Fax comments to Docket
Operations at 202–493–2251.
Privacy: Except for Confidential
Business Information (CBI) as described
in the following paragraph, and other
information as described in title 14,
Code of Federal Regulations (14 CFR)
11.35, the FAA will post all comments
received without change to https://
www.regulations.gov/, including any
personal information you provide. The
FAA will also post a report
summarizing each substantive verbal
contact received about these special
conditions.
Confidential Business Information:
Confidential Business Information (CBI)
is commercial or financial information
that is both customarily and actually
treated as private by its owner. Under
the Freedom of Information Act (FOIA)
(5 U.S.C. 552), CBI is exempt from
public disclosure. If your comments
responsive to these special conditions
contain commercial or financial
information that is customarily treated
as private, that you actually treat as
private, and that is relevant or
responsive to these special conditions, it
is important that you clearly designate
the submitted comments as CBI. Please
mark each page of your submission
containing CBI as ‘‘PROPIN.’’ The FAA
will treat such marked submissions as
confidential under the FOIA, and the
indicated comments will not be placed
in the public docket of these special
conditions. Send submissions
containing CBI to the person indicated
in the Contact section below. Comments
PO 00000
Frm 00006
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the FAA receives, which are not
specifically designated as CBI, will be
placed in the public docket for this
rulemaking.
Docket: Background documents or
comments received may be read at
https://www.regulations.gov/ at any
time. Follow the online instructions for
accessing the docket or go to Docket
Operations in Room W12–140 of the
West Building Ground Floor at 1200
New Jersey Avenue SE, Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
Varun Khanna, Aircraft Information
Systems Section, AIR–622, Technical
Innovation Policy Branch, Policy and
Innovation Division, Aircraft
Certification Service, Federal Aviation
Administration, 2200 South 216th
Street, Des Moines, Washington 98198;
telephone and fax 206–231–3159; email
varun.khanna@faa.gov.
SUPPLEMENTARY INFORMATION: The
substance of these special conditions
has been published in the Federal
Register for public comment in several
prior instances with no substantive
comments received. Therefore, the FAA
finds, pursuant to § 11.38(b), that new
comments are unlikely, and notice and
comment prior to this publication are
unnecessary.
Comments Invited
The FAA invites interested people to
take part in this rulemaking by sending
written comments, data, or views. The
most helpful comments reference a
specific portion of the special
conditions, explain the reason for any
recommended change, and include
supporting data.
The FAA will consider all comments
received by the closing date for
comments. The FAA may change these
special conditions based on the
comments received.
Background
On May 15, 2020, Learjet applied for
a supplemental type certificate to install
an Aircraft Health Management System
(AHMS) in the airplanes listed on the
approved model list (AML) for STC No.
ST01970WI. These airplanes are supermidsize-category business jets with
maximum passenger capacity of 16.
These airplanes have a maximum
takeoff weight of 38,850 pounds.
Type Certification Basis
Under the provisions of 14 CFR
21.101, Learjet must show that airplanes
for which they make application to
modify by STC no. ST01970WI, as
changed, continue to meet the
applicable provisions of the regulations
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]]>Agencies
[Federal Register Volume 87, Number 8 (Wednesday, January 12, 2022)]
[Rules and Regulations]
[Pages 1659-1662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00361]
=======================================================================
-----------------------------------------------------------------------
FEDERAL HOUSING FINANCE AGENCY
12 CFR Parts 1209, 1217, and 1250
RIN 2590-AA43
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 12, 2022, and applicable beginning January 15,
2022.
FOR FURTHER INFORMATION CONTACT: Frank R. Wright, Assistant General
Counsel, at (202) 649-3087, [email protected] (not a toll-free
number); Federal Housing Finance Agency, 400 7th Street SW, Washington,
DC 20219. For TTY/TRS users with hearing and speech disabilities, dial
711 and ask to be connected to any of the contact numbers above.
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
[[Page 1660]]
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 most recent annual adjustment of its
CMP with a final rule published January 29, 2021. 86 FR 7493.
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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.
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
were last adjusted in 2021.\11\ Since FHFA is making this round of
adjustments in calendar year 2022, and the maximum CMP amounts were
last set in calendar year 2021, the inflation adjustment amount for
each maximum CMP amount was calculated by comparing the CPI-U for
October 2020 with the CPI-U for October 2021, resulting in an inflation
factor of 1.06222. 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 86 FR 7493 (January 29, 2021).
\12\ 28 U.S.C. 2461 note.
----------------------------------------------------------------------------------------------------------------
Rounded New adjusted
U.S. Code citation Description Previous maximum inflation maximum penalty
penalty amount increase amount
----------------------------------------------------------------------------------------------------------------
Enforcement Regulations
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 4636(b)(1)............. First Tier............... 12,023 748 12,771
12 U.S.C. 4636(b)(2)............. Second Tier.............. 60,115 3,740 63,855
12 U.S.C. 4636(b)(4)............. Third Tier (Entity- 2,404,608 149,615 2,554,223
affiliated party or
Regulated entity).
----------------------------------------------------------------------------------------------------------------
Program Fraud Civil Remedies Regulation
----------------------------------------------------------------------------------------------------------------
31 U.S.C. 3802(a)(1)............. Maximum penalty per false 11,803 734 12,537
claim.
31 U.S.C. 3802(a)(2)............. Maximum penalty per false 11,803 734 12,537
statement.
----------------------------------------------------------------------------------------------------------------
Flood Insurance Regulation
----------------------------------------------------------------------------------------------------------------
42 U.S.C. 4012a(f)(5)............ Maximum penalty per 585 36 621
violation.
42 U.S.C. 4012a(f)(5)............ Maximum total penalties 168,631 10,492 179,123
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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[[Page 1661]]
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 preamble 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:
Table 1 to Sec. 1209.80
------------------------------------------------------------------------
New adjusted
U.S. Code citation Description maximum penalty
amount
------------------------------------------------------------------------
12 U.S.C. 4636(b)(1).......... First Tier............ $12,771
12 U.S.C. 4636(b)(2).......... Second Tier........... 63,855
12 U.S.C. 4636(b)(4).......... Third Tier (Regulated 2,554,223
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 on or after January 15, 2022.
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 $12,537 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 $12,537 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:
[[Page 1662]]
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 $621 for each
violation that occurs before January 15, 2022, with total penalties not
to exceed $179,123. For violations that occur on or after January 15,
2022, the civil money penalty under this section may not exceed $621
for each violation, with total penalties assessed under this section
against an Enterprise during any calendar year not to exceed $179,123.
* * * * *
Sandra L. Thompson,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2022-00361 Filed 1-11-22; 8:45 am]
BILLING CODE 8070-01-P
