Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation
| Citation | 86 FR 8854 |
| Record Number | 2021-01578 |
| Published date | 10 February 2021 |
| Section | Rules and Regulations |
| Court | Farm Credit System Insurance Corporation |
Federal Register, Volume 86 Issue 26 (Wednesday, February 10, 2021)
[Federal Register Volume 86, Number 26 (Wednesday, February 10, 2021)]
[Rules and Regulations]
[Page 8854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01578]
[[Page 8854]]
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FARM CREDIT SYSTEM INSURANCE CORPORATION
12 CFR Part 1411
RIN 3055-AA17
Rules of Practice and Procedure; Adjusting Civil Money Penalties
for Inflation
AGENCY: Farm Credit System Insurance Corporation.
ACTION: Final rule.
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SUMMARY: This rule implements inflation adjustments to civil money
penalties (CMPs) that the Farm Credit System Insurance Corporation
(FCSIC) may impose under the Farm Credit Act of 1971, as amended. These
adjustments are required by 2015 amendments to the Federal Civil
Penalties Inflation Adjustment Act of 1990.
DATES:
Effective date: This regulation is effective on February 10, 2021.
Applicability date: The adjusted amounts of civil money penalties
in this rule are applicable to penalties assessed on or after January
15, 2021, for conduct occurring on or after November 2, 2015.
FOR FURTHER INFORMATION CONTACT: Lynn M. Powalski, General Counsel,
Farm Credit System Insurance Corporation, 1501 Farm Credit Drive,
McLean, Virginia 22102, (703) 883-4380, TTY (703) 883-4390.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (the 2015 Act) amended the Federal Civil Penalties
Inflation Adjustment Act of 1990 (the Inflation Adjustment Act) \1\ to
improve the effectiveness of civil monetary penalties and to maintain
their deterrent effect. The Inflation Adjustment Act provides for the
regular evaluation of CMPs and requires FCSIC, and every other Federal
agency with authority to impose CMPs, to ensure that CMPs continue to
maintain their deterrent values.\2\
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\1\ Public Law 101-410, 104 Stat. 890 (Oct. 5, 1990), as amended
by Public Law 104-134, title III, Sec. 31001(s)(1), 110 Stat. 1321-
373 (Apr. 26, 1996); Public Law 105-362, title XIII, Sec. 1301(a),
112 Stat. 3293 (Nov. 10, 1998); Public Law 114-74, title VII, Sec.
701(b), 129 Stat. 599 (Nov. 2, 2015), codified at 28 U.S.C. 2461
note.
\2\ Under the amended Inflation Adjustment Act, a CMP is defined
as any penalty, fine, or other sanction that: (1) Either is for a
specific monetary amount as provided by Federal law or has a maximum
amount provided for by Federal law; (2) is assessed or enforced by
an agency pursuant to Federal law; and (3) is assessed or enforced
pursuant to an administrative proceeding or a civil action in the
Federal courts. All three requirements must be met for a fine to be
considered a CMP.
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FCSIC must enact regulations that annually adjust its CMPs pursuant
to the inflation adjustment formula of the amended Inflation Adjustment
Act and rounded using a method prescribed by the Inflation Adjustment
Act. The new amounts are applicable to penalties assessed on or after
January 15, 2021, for conduct occurring on or after November 2, 2015.
Agencies do not have discretion in choosing whether to adjust a CMP, by
how much to adjust a CMP, or the methods used to determine the
adjustment.
II. CMPs Imposed Pursuant to Section 5.65 of the Farm Credit Act
First, section 5.65(c) of the Farm Credit Act, as amended (Act),
provides that any insured Farm Credit System bank that willfully fails
or refuses to file any certified statement or pay any required premium
shall be subject to a penalty of not more than $100 for each day that
such violations continue, which penalty FCSIC may recover for its
use.\3\ Second, section 5.65(d) of the Act provides that, except with
the prior written consent of the Farm Credit Administration, it shall
be unlawful for any person convicted of any criminal offense involving
dishonesty or a breach of trust to serve as a director, officer, or
employee of any System institution.\4\ For each willful violation of
section 5.65(d), the institution involved shall be subject to a penalty
of not more than $100 for each day during which the violation
continues, which FCSIC may recover for its use.
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\3\ 12 U.S.C. 2277a-14(c).
\4\ 12 U.S.C. 2277a-14(d).
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FCSIC's current Sec. 1411.1 provides that FCSIC can impose a
maximum penalty of $214 per day for a violation under section 5.65(c)
and (d) of the Act.
III. Required Adjustments
The 2015 Act requires agencies to make annual adjustments for
inflation. Annual inflation adjustments are based on the percent change
between the October Consumer Price Index for all Urban Consumers (CPI-
U) preceding the date of the adjustment, and the prior year's October
CPI-U. Based on the CPI-U for October 2020, not seasonally adjusted,
the cost-of-living adjustment multiplier for 2021 is 1.01182.\5\
Multiplying 1.01182 times the current penalty amount of $214, after
rounding to the nearest dollar as required by the 2015 Act, results in
a new penalty amount of $217.
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\5\ See Office of Mgmt. & Budget, Exec. Office of the President,
OMB Memorandum No. M-21-10, Implementation of Penalty Inflation
Adjustments for 2020, Pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015 (December 23,
2020).
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IV. Notice and Comment Not Required by Administrative Procedure Act
In accordance with the 2015 Act, Federal agencies shall adjust
civil monetary penalties ``notwithstanding'' Section 553 of the
Administrative Procedures Act. This means that public procedure
generally required for agency rulemaking--notice, an opportunity for
comment, and a delay in effective date--is not required for agencies to
issue regulations implementing the annual adjustment.
List of Subjects in 12 CFR Part 1411
Banks, banking, Civil money penalties, Penalties.
For the reasons stated in the preamble, part 1411 of chapter XIV,
title 12 of the Code of Federal Regulations is amended as follows:
PART 1411--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 1411 continues to read as follows:
Authority: Secs. 5.58(10), 5.65(c) and (d) of the Farm Credit
Act (12 U.S.C. 2277a-7(10), 2277a-14(c) and (d)); 28 U.S.C. 2461
note.
0
2. Revise Sec. 1411.1 to read as follows:
Sec. 1411.1 Inflation adjustment of civil money penalties for
failure to file a certified statement, pay any premium required or
obtain approval before employment of persons convicted of criminal
offenses.
In accordance with the Federal Civil Penalties Inflation Adjustment
Act of 1990, as amended, a civil money penalty imposed pursuant to
section 5.65(c) or (d) of the Farm Credit Act of 1971, as amended,
shall not exceed $217 per day for each day the violation continues.
Dated: January 19, 2021.
Dale Aultman,
Secretary, Farm Credit System Insurance Corporation.
[FR Doc. 2021-01578 Filed 2-9-21; 8:45 am]
BILLING CODE 6710-01-P
