1519Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
1 Public Law 114–74, sec. 701, 129 Stat. 584.
2 See, e.g., 12 U.S.C. 1972(2)(F) (authorizing the
FDIC to impose CMPs for violations of the Bank
Holding Company Act of 1970 related to prohibited
tying arrangements); 15 U.S.C. 78u–2 (authorizing
the FDIC to impose CMPs for violations of certain
provisions of the Securities Exchange Act of 1934);
42 U.S.C. 4012a(f) (authorizing the FDIC to impose
CMPs for pattern or practice violations of the Flood
Disaster Protection Act).
3 For example, Section 8(i)(2) of the FDIA, 12
U.S.C. 1818(i)(2), provides for three tiers of CMPs,
with the size of such CMPs increasing with the
gravity of the misconduct.
4 Section 2 of the Federal Civil Penalties Inflation
Adjustment Act of 1990 (1990 Adjustment Act).
Public Law 101–410, 104 Stat. 890 (amended 2015)
(codified as amended at 28 U.S.C. 2461 note).
5 Id.
6 See, e.g., 77 FR 74573 (Dec. 17, 2012).
7 See Public Law 114–74, sec. 701, 129 Stat. 584.
8 See id. at sec. 701(b).
9 See Public Law 101–410, sec. 3(2), 104 Stat. 890
(amended 2015) (codified as amended at 28 U.S.C.
2461 note).
10 Public Law 114–74, sec. 701(b), 129 Stat. 584.
11 63 FR 30227 (June 3, 1998).
12 Public Law 114–74, sec. 701(b), 129 Stat. 584
(emphasis added).
13 See OMB, Implementation of Penalty Inflation
Adjustments for 2018, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements
Act of 2015, M–18–03 (Dec. 15, 2017), available at
https://www.whitehouse.gov/wp-content/uploads/
2017/11/M-18-03.pdf (noting that the applicable
2018 CMP-adjustment multiplier is 1.02041).
14 The CPI–U is compiled by the Bureau of Labor
Statistics of the Department of Labor.
§ 109.103 Civil money penalties.
* * * * *
(c) Maximum amount of civil money
penalties—(1) Statutory formula. The
OCC is required by statute to annually
adjust for inflation the maximum
amount of each civil money penalty
within its jurisdiction to administer.
The inflation adjustment is calculated
by multiplying the maximum dollar
amount of the civil money penalty for
the previous calendar year by the cost-
of-living inflation adjustment multiplier
provided annually by the Office of
Management and Budget and rounding
the total to the nearest dollar.
(2) Notice of inflation adjustments.
The OCC will publish notice in the
Federal Register of the maximum
penalties which may be assessed on an
annual basis on, or before, January 15 of
each calendar year based on the formula
in paragraph (a) of this section, for
penalties assessed on, or after, the date
of publication of the most recent notice
related to conduct occurring on or after
November 2, 2015.
Dated: January 9, 2018.
Karen Solomon,
Acting Senior Deputy Comptroller and Chief
Counsel, Office of the Comptroller of the
Currency.
[FR Doc. 2018–00536 Filed 1–11–18; 8:45 am]
BILLING CODE 4810–33–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 308
RIN 3064–AE71
Rules of Practice and Procedure
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The FDIC is adjusting the
maximum amount of each civil money
penalty (CMP) within its jurisdiction to
account for inflation. This action is
required by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 (2015 Adjustment Act).
DATES: This rule is effective January 15,
2018.
FOR FURTHER INFORMATION CONTACT: Seth
P. Rosebrock, Supervisory Counsel,
Legal Division (202) 898–6609, or
Graham N. Rehrig, Senior Attorney,
Legal Division (202) 898–3829.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The Final Rule changes the maximum
limit for CMPs according to inflation as
mandated by Congress in the 2015
Adjustment Act.1 The intended effect of
annually adjusting maximum civil
money penalties in accordance with
changes in the Consumer Price Index is
to minimize any distortion in the real
value of those maximums due to
inflation, thereby promoting a more
consistent deterrent effect in the
structure of CMPs.
II. Background
The FDIC assesses CMPs under
section 8(i) of the Federal Deposit
Insurance Act (FDIA), 12 U.S.C. 1818,
and a variety of other statutes.2 Congress
established maximum penalties that
could be assessed under these statutes.
In many cases, these statutes contain
multiple penalty tiers, permitting the
assessment of penalties at various levels
depending upon the severity of the
misconduct at issue.3
In 1990, Congress determined that the
assessment of CMPs plays ‘‘an
important role in deterring violations
and furthering the policy goals
embodied in such laws and regulations’’
and concluded that ‘‘the impact of many
civil monetary penalties has been and is
diminished due to the effect of
inflation.’’ 4 Consequently, Congress
required federal agencies with authority
to impose CMPs to periodically adjust
by rulemaking the maximum CMPs
which these agencies were authorized to
impose in order to ‘‘maintain the
deterrent effect of civil monetary
penalties and promote compliance with
the law.’’ 5 Under the 1990 Adjustment
Act, the FDIC adjusted its CMP amounts
every four years.6
In 2015, Congress revised the process
by which federal agencies adjust
applicable CMPs for inflation.7 Under
the 2015 Adjustment Act, the FDIC is
required to make annual adjustments for
inflation.8 These adjustments apply to
all CMPs covered by the 2015
Adjustment Act.9 The 2015 Adjustment
Act requires annual adjustments to be
made by January 15 of each year.10
Although the 2015 Adjustment Act
increases the maximum penalty that
may be assessed under each applicable
statute, the FDIC possesses discretion to
impose CMP amounts below the
maximum level in accordance with the
severity of the misconduct at issue. For
example, when making a determination
as to the appropriate level of a penalty
assessed under section 8(i)(2) of the
FDIA, 12 U.S.C. 1818(i)(2), the FDIC is
guided by statutory factors set forth in
section 8(i)(2)(G) of the FDIA, 12 U.S.C.
1818(i)(2)(G), and those factors
identified in the Interagency Policy
Statement Regarding the Assessment of
CMPs by the Federal Financial
Institutions Regulatory Agencies.11 Such
factors include, but are not limited to,
the gravity and duration of the
misconduct, and the intent related to
the misconduct.
The 2015 Adjustment Act notes that
the FDIC ‘‘shall adjust [CMPs] and shall
make the adjustment notwithstanding
section 553 of title 5, United States
Code’’ (the Administrative Procedure
Act).12 The FDIC, therefore, is not
obligated to publish the adjustments
through notice-and-comment
rulemaking, and the FDIC is publishing
the adjustments through a final rule.
III. Description and Expected Effects of
the Final Rule
The Final Rule modifies the
maximum limit for CMPs according to
inflation as mandated by Congress in
the 2015 Adjustment Act. The 2015
Adjustment Act directs federal agencies
to follow guidance issued by the Office
of Management and Budget (OMB) on
December 15, 2017 (OMB Guidance),
when calculating new maximum
penalty levels.13 The adjustments are to
be based on the percent change between
the Consumer Price Index for all Urban
Consumers (CPI–U)14 for October 2016
and the October 2017 CPI–U.
VerDate Sep<11>2014 17:21 Jan 11, 2018 Jkt 244001 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\12JAR1.SGM 12JAR1
sradovich on DSK3GMQ082PROD with RULES
1 Public Law 114–74, sec. 701, 129 Stat. 584.
2 See, e.g., 12 U.S.C. 1972(2)(F) (authorizing the
FDIC to impose CMPs for violations of the Bank
Holding Company Act of 1970 related to prohibited
tying arrangements); 15 U.S.C. 78u–2 (authorizing
the FDIC to impose CMPs for violations of certain
provisions of the Securities Exchange Act of 1934);
42 U.S.C. 4012a(f) (authorizing the FDIC to impose
CMPs for pattern or practice violations of the Flood
Disaster Protection Act).
3 For example, Section 8(i)(2) of the FDIA, 12
U.S.C. 1818(i)(2), provides for three tiers of CMPs,
with the size of such CMPs increasing with the
gravity of the misconduct.
4 Section 2 of the Federal Civil Penalties Inflation
Adjustment Act of 1990 (1990 Adjustment Act).
Public Law 101–410, 104 Stat. 890 (amended 2015)
(codified as amended at 28 U.S.C. 2461 note).
5 Id.
6 See, e.g., 77 FR 74573 (Dec. 17, 2012).
7 See Public Law 114–74, sec. 701, 129 Stat. 584.
8 See id. at sec. 701(b).
9 See Public Law 101–410, sec. 3(2), 104 Stat. 890
(amended 2015) (codified as amended at 28 U.S.C.
2461 note).
10 Public Law 114–74, sec. 701(b), 129 Stat. 584.
11 63 FR 30227 (June 3, 1998).
12 Public Law 114–74, sec. 701(b), 129 Stat. 584
(emphasis added).
13 See OMB, Implementation of Penalty Inflation
Adjustments for 2018, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements
Act of 2015, M–18–03 (Dec. 15, 2017), available at
https://www.whitehouse.gov/wp-content/uploads/
2017/11/M-18-03.pdf (noting that the applicable
2018 CMP-adjustment multiplier is 1.02041).
14 The CPI–U is compiled by the Bureau of Labor
Statistics of the Department of Labor.
§ 109.103 Civil money penalties.
* * * * *
(c) Maximum amount of civil money
penalties—(1) Statutory formula. The
OCC is required by statute to annually
adjust for inflation the maximum
amount of each civil money penalty
within its jurisdiction to administer.
The inflation adjustment is calculated
by multiplying the maximum dollar
amount of the civil money penalty for
the previous calendar year by the cost-
of-living inflation adjustment multiplier
provided annually by the Office of
Management and Budget and rounding
the total to the nearest dollar.
(2) Notice of inflation adjustments.
The OCC will publish notice in the
Federal Register of the maximum
penalties which may be assessed on an
annual basis on, or before, January 15 of
each calendar year based on the formula
in paragraph (a) of this section, for
penalties assessed on, or after, the date
of publication of the most recent notice
related to conduct occurring on or after
November 2, 2015.
Dated: January 9, 2018.
Karen Solomon,
Acting Senior Deputy Comptroller and Chief
Counsel, Office of the Comptroller of the
Currency.
[FR Doc. 2018–00536 Filed 1–11–18; 8:45 am]
BILLING CODE 4810–33–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 308
RIN 3064–AE71
Rules of Practice and Procedure
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The FDIC is adjusting the
maximum amount of each civil money
penalty (CMP) within its jurisdiction to
account for inflation. This action is
required by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 (2015 Adjustment Act).
DATES: This rule is effective January 15,
2018.
FOR FURTHER INFORMATION CONTACT: Seth
P. Rosebrock, Supervisory Counsel,
Legal Division (202) 898–6609, or
Graham N. Rehrig, Senior Attorney,
Legal Division (202) 898–3829.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The Final Rule changes the maximum
limit for CMPs according to inflation as
mandated by Congress in the 2015
Adjustment Act.1 The intended effect of
annually adjusting maximum civil
money penalties in accordance with
changes in the Consumer Price Index is
to minimize any distortion in the real
value of those maximums due to
inflation, thereby promoting a more
consistent deterrent effect in the
structure of CMPs.
II. Background
The FDIC assesses CMPs under
section 8(i) of the Federal Deposit
Insurance Act (FDIA), 12 U.S.C. 1818,
and a variety of other statutes.2 Congress
established maximum penalties that
could be assessed under these statutes.
In many cases, these statutes contain
multiple penalty tiers, permitting the
assessment of penalties at various levels
depending upon the severity of the
misconduct at issue.3
In 1990, Congress determined that the
assessment of CMPs plays ‘‘an
important role in deterring violations
and furthering the policy goals
embodied in such laws and regulations’’
and concluded that ‘‘the impact of many
civil monetary penalties has been and is
diminished due to the effect of
inflation.’’ 4 Consequently, Congress
required federal agencies with authority
to impose CMPs to periodically adjust
by rulemaking the maximum CMPs
which these agencies were authorized to
impose in order to ‘‘maintain the
deterrent effect of civil monetary
penalties and promote compliance with
the law.’’ 5 Under the 1990 Adjustment
Act, the FDIC adjusted its CMP amounts
every four years.6
In 2015, Congress revised the process
by which federal agencies adjust
applicable CMPs for inflation.7 Under
the 2015 Adjustment Act, the FDIC is
required to make annual adjustments for
inflation.8 These adjustments apply to
all CMPs covered by the 2015
Adjustment Act.9 The 2015 Adjustment
Act requires annual adjustments to be
made by January 15 of each year.10
Although the 2015 Adjustment Act
increases the maximum penalty that
may be assessed under each applicable
statute, the FDIC possesses discretion to
impose CMP amounts below the
maximum level in accordance with the
severity of the misconduct at issue. For
example, when making a determination
as to the appropriate level of a penalty
assessed under section 8(i)(2) of the
FDIA, 12 U.S.C. 1818(i)(2), the FDIC is
guided by statutory factors set forth in
section 8(i)(2)(G) of the FDIA, 12 U.S.C.
1818(i)(2)(G), and those factors
identified in the Interagency Policy
Statement Regarding the Assessment of
CMPs by the Federal Financial
Institutions Regulatory Agencies.11 Such
factors include, but are not limited to,
the gravity and duration of the
misconduct, and the intent related to
the misconduct.
The 2015 Adjustment Act notes that
the FDIC ‘‘shall adjust [CMPs] and shall
make the adjustment notwithstanding
section 553 of title 5, United States
Code’’ (the Administrative Procedure
Act).12 The FDIC, therefore, is not
obligated to publish the adjustments
through notice-and-comment
rulemaking, and the FDIC is publishing
the adjustments through a final rule.
III. Description and Expected Effects of
the Final Rule
The Final Rule modifies the
maximum limit for CMPs according to
inflation as mandated by Congress in
the 2015 Adjustment Act. The 2015
Adjustment Act directs federal agencies
to follow guidance issued by the Office
of Management and Budget (OMB) on
December 15, 2017 (OMB Guidance),
when calculating new maximum
penalty levels.13 The adjustments are to
be based on the percent change between
the Consumer Price Index for all Urban
Consumers (CPI–U)14 for October 2016
and the October 2017 CPI–U.
VerDate Sep<11>2014 17:21 Jan 11, 2018 Jkt 244001 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\12JAR1.SGM 12JAR1
sradovich on DSK3GMQ082PROD with RULES
1520 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
15 Under the 1990 Adjustment Act, adjustments
have been made only to CMPs that are for specific
dollar amounts or maximums. CMPs that are
assessed based upon a fixed percentage of an
institution’s total assets are not subject to
adjustment.
16 As noted previously, the FDIC retains
discretion to impose CMPs in amounts below the
referenced maximums.
17 See OMB Guidance at 4.
Summary of the FDIC’s Calculations
During the 12-month period ending
October 2017, the CPI–U was reported
to have increased by 2.041 percent. In
keeping with the OMB Guidance, the
FDIC adjusted each of its CMP
maximum penalty levels by the inflation
factor.15 After applying the adjustment,
the FDIC rounded each penalty level to
the nearest dollar. In making these
calculations, the FDIC consulted with
staff from the Office of the Comptroller
of the Currency, the Board of Governors
for the Federal Reserve System, the
National Credit Union Administration,
and the Bureau of Consumer Financial
Protection to ensure that the FDIC’s
adjusted figures were consistent with
these regulators’ respective amounts.
The Adjusted CMP Amounts
The following chart displays the
adjusted CMP amounts for each CMP
identified in 12 CFR part 308.16 The
following chart reflects the maximum
CMP amounts that may be assessed after
January 15, 2018—the effective date of
the 2018 annual adjustment—including
assessments whose associated violations
occurred on or after November 2,
2015.17
MAXIMUM CIVIL MONEY PENALTY AMOUNTS
U.S. Code citation Current maximum CMP
(through January 14, 2018) Adjusted maximum CMP
(beginning January 15, 2018)
12 U.S.C. 1464(v):
Tier One CMP .................................................................................. $3,849 $3,928
Tier Two CMP .................................................................................. 38,492 39,278
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 1467(d) .................................................................................... 9,623 9,819
12 U.S.C. 1817(a):
Tier One CMP .................................................................................. 3,849 3,928
Tier Two CMP .................................................................................. 38,492 39,278
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 1817(c):
Tier One CMP .................................................................................. 3,519 3,591
Tier Two CMP .................................................................................. 35,186 35,904
Tier Three CMP ................................................................................ 1,759,309 1,795,216
12 U.S.C. 1818(i)(2):
Tier One CMP .................................................................................. 9,623 9,819
Tier Two CMP .................................................................................. 48,114 49,096
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 1820(e)(4) ............................................................................... 8,797 8,977
12 U.S.C. 1820(k)(6) ............................................................................... 316,566 323,027
12 U.S.C. 1828(a)(3) ............................................................................... 120 122
12 U.S.C. 1828(h):
For assessments <$10,000 .............................................................. 120 122
12 U.S.C. 1829b(j) ................................................................................... 20,111 20,521
12 U.S.C. 1832(c) .................................................................................... 2,795 2,852
12 U.S.C. 1884 ........................................................................................ 279 285
12 U.S.C. 1972(2)(F):
Tier One CMP .................................................................................. 9,623 9,819
Tier Two CMP .................................................................................. 48,114 49,096
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 3909(d) .................................................................................... 2,394 2,443
15 U.S.C. 78u-2:
Tier One CMP (individuals) .............................................................. 9,054 9,239
Tier One CMP (others) ..................................................................... 90,535 92,383
Tier Two CMP (individuals) .............................................................. 90,535 92,383
Tier Two CMP (others) ..................................................................... 452,677 461,916
Tier Three CMP (individuals) ........................................................... 181,071 184,767
Tier Three penalty (others) ............................................................... 905,353 923,831
15 U.S.C. 1639e(k):
First violation .................................................................................... 11,053 11,279
Subsequent violations ...................................................................... 22,105 22,556
31 U.S.C. 3802 ........................................................................................ 10,957 11,181
42 U.S.C. 4012a(f) ................................................................................... 2,090 2,133
CFR Citation Current maximum amount
(through January 14, 2018) New maximum amount
(beginning January 15, 2018)
12 CFR 308.132(c)—Late or Misleading Reports of Condition and In-
come (Call Reports):
First Offense:
$25 million or more assets:
1 to 15 days late ................................................................ 527 538
16 or more days late .......................................................... 1,056 1,078
VerDate Sep<11>2014 15:52 Jan 11, 2018 Jkt 244001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\12JAR1.SGM 12JAR1
sradovich on DSK3GMQ082PROD with RULES
15 Under the 1990 Adjustment Act, adjustments
have been made only to CMPs that are for specific
dollar amounts or maximums. CMPs that are
assessed based upon a fixed percentage of an
institution’s total assets are not subject to
adjustment.
16 As noted previously, the FDIC retains
discretion to impose CMPs in amounts below the
referenced maximums.
17 See OMB Guidance at 4.
Summary of the FDIC’s Calculations
During the 12-month period ending
October 2017, the CPI–U was reported
to have increased by 2.041 percent. In
keeping with the OMB Guidance, the
FDIC adjusted each of its CMP
maximum penalty levels by the inflation
factor.15 After applying the adjustment,
the FDIC rounded each penalty level to
the nearest dollar. In making these
calculations, the FDIC consulted with
staff from the Office of the Comptroller
of the Currency, the Board of Governors
for the Federal Reserve System, the
National Credit Union Administration,
and the Bureau of Consumer Financial
Protection to ensure that the FDIC’s
adjusted figures were consistent with
these regulators’ respective amounts.
The Adjusted CMP Amounts
The following chart displays the
adjusted CMP amounts for each CMP
identified in 12 CFR part 308.16 The
following chart reflects the maximum
CMP amounts that may be assessed after
January 15, 2018—the effective date of
the 2018 annual adjustment—including
assessments whose associated violations
occurred on or after November 2,
2015.17
MAXIMUM CIVIL MONEY PENALTY AMOUNTS
U.S. Code citation Current maximum CMP
(through January 14, 2018) Adjusted maximum CMP
(beginning January 15, 2018)
12 U.S.C. 1464(v):
Tier One CMP .................................................................................. $3,849 $3,928
Tier Two CMP .................................................................................. 38,492 39,278
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 1467(d) .................................................................................... 9,623 9,819
12 U.S.C. 1817(a):
Tier One CMP .................................................................................. 3,849 3,928
Tier Two CMP .................................................................................. 38,492 39,278
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 1817(c):
Tier One CMP .................................................................................. 3,519 3,591
Tier Two CMP .................................................................................. 35,186 35,904
Tier Three CMP ................................................................................ 1,759,309 1,795,216
12 U.S.C. 1818(i)(2):
Tier One CMP .................................................................................. 9,623 9,819
Tier Two CMP .................................................................................. 48,114 49,096
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 1820(e)(4) ............................................................................... 8,797 8,977
12 U.S.C. 1820(k)(6) ............................................................................... 316,566 323,027
12 U.S.C. 1828(a)(3) ............................................................................... 120 122
12 U.S.C. 1828(h):
For assessments <$10,000 .............................................................. 120 122
12 U.S.C. 1829b(j) ................................................................................... 20,111 20,521
12 U.S.C. 1832(c) .................................................................................... 2,795 2,852
12 U.S.C. 1884 ........................................................................................ 279 285
12 U.S.C. 1972(2)(F):
Tier One CMP .................................................................................. 9,623 9,819
Tier Two CMP .................................................................................. 48,114 49,096
Tier Three CMP ................................................................................ 1,924,589 1,963,870
12 U.S.C. 3909(d) .................................................................................... 2,394 2,443
15 U.S.C. 78u-2:
Tier One CMP (individuals) .............................................................. 9,054 9,239
Tier One CMP (others) ..................................................................... 90,535 92,383
Tier Two CMP (individuals) .............................................................. 90,535 92,383
Tier Two CMP (others) ..................................................................... 452,677 461,916
Tier Three CMP (individuals) ........................................................... 181,071 184,767
Tier Three penalty (others) ............................................................... 905,353 923,831
15 U.S.C. 1639e(k):
First violation .................................................................................... 11,053 11,279
Subsequent violations ...................................................................... 22,105 22,556
31 U.S.C. 3802 ........................................................................................ 10,957 11,181
42 U.S.C. 4012a(f) ................................................................................... 2,090 2,133
CFR Citation Current maximum amount
(through January 14, 2018) New maximum amount
(beginning January 15, 2018)
12 CFR 308.132(c)—Late or Misleading Reports of Condition and In-
come (Call Reports):
First Offense:
$25 million or more assets:
1 to 15 days late ................................................................ 527 538
16 or more days late .......................................................... 1,056 1,078
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