Civil Penalty Inflation Adjustments
Federal Register, Volume 83 Issue 9 (Friday, January 12, 2018)
Federal Register Volume 83, Number 9 (Friday, January 12, 2018)
Rules and Regulations
Pages 1525-1527
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2018-00399
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BUREAU OF CONSUMER FINANCIAL PROTECTION
Civil Penalty Inflation Adjustments
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is adjusting for inflation the maximum amount of each civil penalty within the Bureau's jurisdiction. These adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The inflation adjustments mandated by the Inflation Adjustment Act serve to maintain the deterrent effect of civil penalties and to promote compliance with the law.
DATES: This final rule is effective January 15, 2018.
FOR FURTHER INFORMATION CONTACT: Monique Chenault, Paralegal Specialist, Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
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Background
The Federal Civil Penalties Inflation Adjustment Act of 1990,\1\ as amended by the Debt Collection Improvement Act of 1996 \2\ and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act),\3\ directs Federal agencies to adjust for inflation the civil penalty amounts within their jurisdiction not later than July 1, 2016, and then not later than January 15 every year thereafter.\4\ 28 U.S.C. 2461 note. Each agency was required to make the 2016 one-time catch-up adjustments through an interim final rule published in the Federal Register. On June 14, 2016, the Bureau published its interim final rule to make the initial catch-
up adjustments to civil penalties within the Bureau's jurisdiction.\5\ The June 2016 interim final rule created a new part 1083 and in Sec. 1083.1 established the inflation-adjusted maximum amounts for each civil penalty within the Bureau's jurisdiction.\6\ The Inflation Adjustment Act also requires subsequent adjustments to be made annually, not later than January 15, and notwithstanding section 553 of the Administrative Procedure Act (APA).\7\
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\1\ Public Law 101-410, 104 Stat. 890.
\2\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321, 1321-373.
\3\ Public Law 114-74, section 701, 129 Stat. 584, 599.
\4\ Section 1301(a) of the Federal Reports Elimination Act of 1998, Public Law 105-362, 112 Stat. 3293, also amended the Inflation Adjustment Act by striking section 6, which contained annual reporting requirements, and redesignating section 7 as section 6, but did not alter the civil penalty adjustment requirements.
\5\ 81 FR 38569 (June 14, 2016). Although the Bureau was not obligated to solicit comments for the interim final rule, the Bureau invited public comment and received none.
\6\ See 12 CFR 1083.1.
\7\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 2461 note.
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Specifically, Federal agencies are directed to adjust annually each civil penalty provided by law within the jurisdiction of the agency by the ``cost-of-living adjustment.'' \8\ For annual adjustments after the initial catch up adjustments, the ``cost-of-living adjustment'' is defined as the percentage (if any) by which the Consumer Price Index for All Urban Consumers (CPI-U) for the month of October preceding the date of the adjustment, exceeds the CPI-U for October of the prior year.\9\ The Director of the Office of Management and Budget (OMB) is required to issue guidance (OMB Guidance) every year by December 15 to agencies on implementing the annual civil penalty inflation adjustments.\10\ Pursuant to the Inflation Adjustment Act and OMB Guidance, agencies must apply the multiplier reflecting the ``cost-of-
living adjustment'' to the current penalty amount and then round that amount to the nearest dollar to determine the annual adjustments.\11\
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\8\ Inflation Adjustment Act sections 4 and 5, codified at 28 U.S.C. 2461 note.
\9\ Inflation Adjustment Act sections 3 and 5, codified at 28 U.S.C. 2461 note.
\10\ Inflation Adjustment Act section 7, codified at 28 U.S.C. 2461 note.
\11\ Inflation Adjustment Act section 5, codified at 28 U.S.C. 2461 note; Memorandum to the Exec. Dep'ts & Agencies from Mick Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
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For the 2018 annual adjustment, the multiplier reflecting the ``cost-of-living
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adjustment'' is 1.02041.\12\ Pursuant to the Inflation Adjustment Act and OMB Guidance, the Bureau multiplied each of its civil penalty amounts by the ``cost-of-living adjustment'' multiplier and rounded to the nearest dollar.\13\
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\12\ Memorandum to the Exec. Dep'ts & Agencies from Mick Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
\13\ In rounding to the nearest dollar, the Bureau has rounded down where the digit immediately following the decimal point is less than 5 and has rounded up where the digit immediately following the decimal point is 5 or greater.
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The new penalty amounts that apply to civil penalties assessed after January 15, 2018 are as follows:
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Penalty
amounts OMB ``Cost-of-
Law Penalty description established Living New penalty
under 2017 Adjustment'' amount
final rule multiplier
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Consumer Financial Protection Act, 12 Tier 1 penalty.......... $5,526 1.02041 $5,639
U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12 Tier 2 penalty.......... 27,631 1.02041 28,195
U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, 12 Tier 3 penalty.......... 1,105,241 1.02041 1,127,799
U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure Per violation........... 1,925 1.02041 1,964
Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Annual cap.............. 1,924,589 1.02041 1,963,870
Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act, Per failure............. 90 1.02041 92
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, Annual cap.............. 181,071 1.02041 184,767
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, Per failure, where 181 1.02041 185
12 U.S.C. 2609(d)(2)(A). intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........ Per violation........... 27,904 1.02041 28,474
Truth in Lending Act, 15 U.S.C. First violation......... 11,053 1.02041 11,279
1639e(k)(1).
Truth in Lending Act, 15 U.S.C. Subsequent violations... 22,105 1.02041 22,556
1639e(k)(2).
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Legal Authority
The Bureau issues this final rule under the Federal Civil Penalties Inflation Adjustment Act of 1990,\14\ as amended by the Debt Collection Improvement Act of 1996 \15\ and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,\16\ which requires the Bureau to adjust for inflation the civil penalties within its jurisdiction according to a statutorily prescribed formula.
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\14\ Public Law 101-410, 104 Stat. 890.
\15\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321, 1321-373.
\16\ Public Law 114-74, section 701, 129 Stat. 584, 599.
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Procedural Requirements
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Administrative Procedure Act
Under the APA, notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest.\17\ Pursuant to this final rule, Sec. 1083.1 is amended to update the civil penalty amounts. The 2018 adjustments to the civil penalty amounts are technical and non-discretionary, and they merely apply the statutory method for adjusting civil penalty amounts. These adjustments are required by the Inflation Adjustment Act. Moreover, the Inflation Adjustment Act directs agencies to adjust the civil penalties annually notwithstanding section 553 of the APA,\18\ and OMB Guidance reaffirms that agencies need not complete a notice-and-comment process before making the annual adjustments for inflation.\19\ For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendment is adopted in final form.
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\17\ 5 U.S.C. 553(b)(B).
\18\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 2461 note.
\19\ Memorandum to the Exec. Dep'ts & Agencies from Mick Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
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Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule.\20\ At a minimum, the Bureau believes the annual adjustments to the civil penalty amounts in Sec. 1083.1 fall under the third exception to section 553(d). The Bureau finds that there is good cause to make the amendments effective on January 15, 2018. The amendments to Sec. 1083.1 in this final rule are technical and non-
discretionary, and they merely apply the statutory method for adjusting civil penalty amounts and follow the statutory directive to make annual adjustments by January 15 of each year. Moreover, the Inflation Adjustment Act directs agencies to adjust the civil penalties annually notwithstanding section 553 of the APA,\21\ and OMB Guidance reaffirms that agencies need not provide a delay in effective date for the annual adjustments for inflation.\22\
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\20\ 5 U.S.C. 553(d).
\21\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 2461 note.
\22\ Memorandum to the Exec. Dep'ts & Agencies from Mick Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
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Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.\23\
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\23\ 5 U.S.C. 603(a), 604(a).
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\24\ the Bureau reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule.
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\24\ 44 U.S.C. 3506; 5 CFR part 1320.
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Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), CFPB will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to the rule taking effect. The Office of Information and Regulatory Affairs (OIRA) has designated this rule as not a ``major rule'' as defined by 5 U.S.C. 804(2).
List of Subjects in 12 CFR Part 1083
Administrative practice and procedure, Consumer protection, Penalties.
Authority and Issuance
For the reasons set forth above, the Bureau amends 12 CFR part 1083 as set forth below:
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PART 1083--CIVIL PENALTY ADJUSTMENTS
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The authority citation for part 1083 continues to read as follows:
Authority: 12 U.S.C. 2609(d); 12 U.S.C. 5113(d)(2); 12 U.S.C. 5565(c); 15 U.S.C. 1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461 note.
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Section 1083.1 is revised to read as follows:
Sec. 1083.1 Adjustments of civil penalty amounts.
(a) The maximum amount of each civil penalty within the jurisdiction of the Consumer Financial Protection Bureau to impose is adjusted in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (28 U.S.C. 2461 note), as follows:
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Adjusted
Civil penalty maximum civil
U.S. Code citation description penalty
amount
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12 U.S.C. 5565(c)(2)(A)........ Tier 1 penalty......... $5,639
12 U.S.C. 5565(c)(2)(B)........ Tier 2 penalty......... 28,195
12 U.S.C. 5565(c)(2)(C)........ Tier 3 penalty......... 1,127,799
15 U.S.C. 1717a(a)(2).......... Per violation.......... 1,964
15 U.S.C. 1717a(a)(2).......... Annual cap............. 1,963,870
12 U.S.C. 2609(d)(1)........... Per failure............ 92
12 U.S.C. 2609(d)(1)........... Annual cap............. 184,767
12 U.S.C. 2609(d)(2)(A)........ Per failure, where 185
intentional.
12 U.S.C. 5113(d)(2)........... Per violation.......... 28,474
15 U.S.C. 1639e(k)(1).......... First violation........ 11,279
15 U.S.C. 1639e(k)(2).......... Subsequent violations.. 22,556
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(b) The adjustments in paragraph (a) of this section shall apply to civil penalties assessed after January 15, 2018, regardless of when the violation for which the penalty is assessed occurred.
Dated: January 4, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
FR Doc. 2018-00399 Filed 1-11-18; 8:45 am
BILLING CODE 4810-AM-P
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